2012-Ful - Report PDF

YOU FIRST
annual report
2012
Grameenphone
Contents
Performance at a Glance - 2012 (Consolidated)
Corporate Information
Business Review - 2012
This is Grameenphone
Our Vision, Mission & Values
02
03
09
10
11
33 Corporate Governance in Grameenphone
42 Corporate Responsibility at Grameenphone
44 Climate Change & Green Endeavor for Green Business
The Shareholders
Organisational Structure
Directors Profile
Management Teams Profile
Chairmans Message
CEOs Message
15
18
19
24
28
30
Five Years Financial Summary
Financial Review - 2012
Value Added Statement - 2012
Contribution to National Exchequer
Directors Report
Audit Committee Report
Auditors Report & Audited Financial Statements
of Grameenphone Ltd.
47
49
50
51
52
77
78
History & Milestones
Products & Services
Accolades in 2012
05
06
07
Useful Information for Shareholders
Notice of the 16
th
Annual General Meeting
Proxy Form and Attendance Slip
160
164
165
134
137
Subsidiary Profile: Grameenphone IT Ltd.
- Directors Report
- Auditors Report & Audited Financial Statements
This is Grameenphone
After sixteen years
of operation
November 11
1996
Awarded a cellular license in
Bangladesh by the Ministry of Posts
and Telecommunications.
March 26
1997
Launched its service
on the Independence Day of
Bangladesh.
November 11
2009
Successfully listed
on the Stock Exchanges in Bangladesh.
August 07
2012
Awarded 2G License by
Bangladesh Telecommunication
Regulatory Commission
40.02 million customers and
more than 67 thousand Shareholders as of December 2012 are now
empowered under a single network and touched by
the magic of closeness.
|
PAGE 02
| Grameenphone Annual Report 2012
Our Vision
Mission &
Values
Grameenphone Annual Report 2012 |
PAGE 03
|
You dream of a better life, we put
our best to make it a reality
History & Milestones
PAGE 05
|
Awarded license for 2G operation for 15 years effective from November 2011; two new affordable packages
Amontron and Nishchinto were launched, 10-second pulse was introduced for all products including helplines; A
GP App was launched to facilitate mobile self service; Reached 40.02 million Subscribers.
Launched My zone- location based discount on usage, Micro SIM cards for iPhone, Spondon Package with 1-sec
pulse; Grameenphone Branded Handset (C200, QWERTY handset Q100 and Android Handset Crystal), Customer
Experience Lab, eCare solution; Completed swapping of 7,272 nos. of BTS; Reached 36.5 Million Subscribers
Launched New Tariff Plan, MobiCash Financial Service Brand, Ekota for SME, Baadhon Package, Mobile Application
Development Contest & Network Campaign; Reached 29.97 Million Subscribers
Listed on Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd.; Launched Internet Modem, Special
Olympic Regional Talent Hunt, Stay Green Campaign, Internet Package P5 & P6, Grameenphone Branded Handset
& Studyline; Reached 21 Million Subscribers
Introduced BlackBerry Service; Commissioned Brand Positioning & launched Stay Close & Customer Care Campaign;
Reached 20 Million Subscribers
Converted to a Public Limited Company; Re-launched Business Solutions; Launched New VAS, Bull Stock
Information, Missed Call Alert & PayForMe Service; Re-branded djuice; Reached 16 Million Subscribers
Launched HealthLine, Smile Prepaid & Xplore Postpaid, Cellbazaar, Business Solutions for Business Class &
Community; Introduced new GP Logo Following Maiden Decade of Operation; Reached 10 Million Subscribers
Launched Electronic Recharge System, djuice Brand Targeting Youth Segment, EDGE & Voice SMS for the first time
in Bangladesh; Reached 4 Million Subscribers
Reached 2 Million Subscribers
Launched Prepaid Product with PSTN Connectivity; Reached 1 Million Subscribers
Achieved BD Business Award for Best Joint Venture Enterprise
Launched WAP Service
Launched First Prepaid Service in the Country
Launched Mobile to Mobile Service (without PSTN Access)
Commenced Operation on the Independence Day of Bangladesh
Incorporated as a Private Limited Company
2012
2010
2008
2006
2004
2002
1999
1997
2011
2009
2007
2005
2003
2001
1998
1996
Products & Services

Wholesale
Business*
Financial
Services**
GP IT

Minipack Pay Per Use
(Max 20 Tk/Day)
Pay As You Go Pack
Monthly Heavy Internet
Browsing Pack
Monthly Night Time
Heavy Internet
Browsing Pack
Daily 150 MB Pack
3 GB Monthly Pack
1 GB Monthly Pack
Minipack 15 MB
Minipack 99 MB
Minipack 3 MB
Minipack 1 MB
Adjacent
Businesses
Outbound
Roaming
Inbound Roaming
International SMS
International MMS
Handset (Basic,
Feature &
Smartphone)
Modem
Value Added
Services (VAS)
Enterprise Solution
Prepaid Postpaid Internet Device
Bondhu
Nishchinto
Adjusted djuice
Smile
Amontron
Shohoj
Aapon
Spondon
Business Solutions
Ekota
GP Public Phone
Village Phone
Internet SIM
Xplore
Business Solutions
Ekota
GP Public Phone
Internet SIM
Roaming

Tracking

Vehicle Tracking
Team Tracker
Messaging

Web SMS
Business SMS
Corporate
Bulk SMS
Web Office
Web Hosting
Enterprise
Security
Mobile Office
Mobile Security
M- Reporting
mCentrex
BlackBerry
Office Connectivity
GP Connect
In compliance with BTRC guidelines, GP is sharing its passive infrastructure with other
operators under Wholesale Business.
Introduced different Financial Services in electronic ticketing, bill collection,
electronic lottery and remittance disbursement under the brand MobiCash.
*
**
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PAGE 06
Welcome Tune
Music News
Music Radio
News Services
Media Services
Sports Services
Religious Services
Directory Services
Matrimony Service
Partner Services
Education Service
Career Service
Corporate Services
Social Media Service
Jokes Services
Mobile Backup
Call Block
Voice Chat
SMS Chat
GP World
Downloadable Contents
Infotainment
Instant Messaging
Mobile Applications
Healthline
Studyline
Messaging
Missed call alert
Pay For Me
Mobile Reporting
Stock Update
Entertainment Box
Single Short Code 123
Online Games
Quick Search
Power USSD Menu
Buddy Tracker
Enablers
E-care
Co-Branded Opera Mini
GP App
Facebook Services (SMS,
USSD, Java App)
Twitter SMS
Accolades in 2012
In 2012, Grameenphone, with its hard work and determination, was recognized with multiple awards. We always
thrive to move forward and be better as each year passes by. It is recognition such as these that inspires us to move
beyond:
Best Presented Annual Report 2011
Won the award from the Institute of Chartered Accountants of
Bangladesh (ICAB), for publishing transparent reports and
maintaining high standards of Corporate Governance.
Best Employer Award 2012
Received the award from BDjobs.com - the largest online job site in Bangladesh.
Emerging Market Service Provider of the Year
Won Frost & Sullivan Asia Pacific ICT Awards for second time for
delivering exceptional business performance in 2011.
Connected World Awards
Received the award for SMS based Mobile Health Tips
service at Connected World Forum.
BESL Investor Relations Award 2012
Awarded by the BRAC EPL Stock Brokerage Ltd.
(BESL) for best Investor Relation Practice.
PAGE 07
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You can achieve higher
when there is a helping hand
Figures in BDT
Performance at a Glance - 2012 (Consolidated)
NAV- Net Asset Value; NOCF- Net Operating Cash Flow
Revenue
91.9 Bn
+
3.2%
Gross Profit
52.4 Bn
+
2.3%
Operating Profit
33.6 Bn
+
3.2%
NAV Per Share
26.26
-8.8%
Profit Before Tax
30.2 Bn
-8.5%
PAGE 09
|
Net Profit After Tax
17.5 Bn
-7.3%
NOCF Per Share
22.23
-26.1%
Earnings Per Share
12.96
-7.3%
|
PAGE 10
Corporate Information
Company Name
Grameenphone Ltd.
Company Registration No.
C-31531 (652)/96
Legal Form
A public listed company with limited liability. Incorporated as private limited company on October 10, 1996 and subsequently
converted to a public limited company on June 25, 2007. Listed on the Dhaka and Chittagong Stock Exchange Ltd. on
November 11, 2009.
Board of Directors
Chairman
Sigve Brekke
Directors
M Shahjahan
Md. Ashraful Hassan
Per Erik Hylland
Parveen Mahmud
Morten Tengs
Hakon Bruaset Kjol
Lars Erik Tellmann
Independent Directors
Dr. Jamaluddin Ahmed FCA
Rokia Afzal Rahman
Company Secretary
Hossain Sadat
Audit Committee
Dr. Jamaluddin Ahmed FCA (Chairman)
M Shahjahan
Per Erik Hylland
Hossain Sadat (Secretary)
Treasury Committee
M Shahjahan (Chairman)
Pal Stette
Fridtjof Rusten
Imdadul Haque (Secretary)
Human Resources Committee
Per Erik Hylland (Chairman)
M Shahjahan
Quazi Mohammad Shahed
Hossain Sadat (Secretary)
Health, Safety, Security
& Environment Committee
Per Erik Hylland (Chairman)
M Shahjahan
Dr. Mohammad Shahnawaz
Hasanur Rahman Rakib (Secretary)
Management Team
Vivek Sood, Chief Executive Officer
Fridtjof Rusten, Chief Financial Officer
Tanveer Mohammad, Chief Technology Officer
Quazi Mohammad Shahed, Chief Human Resources Officer
Allan Bonke, Chief Marketing Officer
Mahmud Hossain, Chief Corporate Affairs Officer
Head of Internal Audit
Emadul Hannan
Statutory Auditors
ACNABIN
Chartered Accountants
Legal Advisors
Hasan & Associates
Sheikh & Chowdhury
Registered Office
GPHouse
Bashundhara, Baridhara
Dhaka-1229, Bangladesh
Business Review - 2012
A YEAR OF MODERATE GROWTH
2012 ended with number of
achievements despite fierce market
competition and regulatory
uncertainties. In the year, GP got its
operating license for 2G services for the
next 15 years after a long delay.
Despite challenges from various corners,
we added a total of 3.5 million
subscribers to our network in 2012. As a
result, our subscriber base reached
40.02 million at the end of the year and
we continued to remain the most
preferred operator with 41.2% market
share.
GP earned BDT 9,192 crore revenues in
2012 with a 3.2% rise, compared to the
previous year. Net profit after taxes for
2012 was BDT 17.5 billion with 19.0%
margin compared to BDT 18.9 billion
with 21.2% margin of 2011. Lower net
profit for this period was mainly due to
recognition of amortization cost of 2G
License, notional interest cost on
payments of 2G License fees and
interest payments on borrowings.
Underlying net profit excluding above
impacts, however, shows positive
development from last year as a result of
continuous cost efficiency measures and
top line growth.
The Company has so far invested BDT
213.4 billion (BDT 21,343 crore) for
network expansion, upgradation and 2G
license & spectrum fees since its
inception in 1997. In 2012 GP invested
BDT 12.6 billion (BDT 1,263 crore) to
retain its preferred network position.
With that GP still remains the largest
cellular network in the country, covering
99.16% of the population and more than
89.10% of land areas.
INNOVATION IN PRODUCTS AND
SERVICES
On the back of our Customer-centric
drive, we continued our efforts to bring
innovation and excellence in our
products and services to offer new
experiences to our customers.
To improve consumer value proposition
and to remain competitive in the market,
GP introduced attractive products in
2012.
An amazing package of GP was 25
Paisa Offer, which enables GP prepaid
subscribers to talk for 40 minutes at BDT
10 (excluding VAT) only and enjoy the
effective call rate of 25 paisa/minute to
any GP number.
GP also introduced a unique offer
named Wholesale Recharge. A
customer needs to recharge BDT 25 or
more to avail the special call rate of 7
paisa/10 second from 12am-4pm for any
GP-GP call.
Two other major products were
Nishchinto and Amontron.
Nishchinto gives the users the
opportunity to make any local voice
calls, with a call rate of 15 paisa/10
second. Customers also enjoy 20%
instant money back on local voice call
usage. Amontron gives the facility to talk
to other operators at a call rate of 11
paisa/10 second round the clock. In
addition, our product Bondhu has
been very popular with 1 super FnF
number within GP network with a call
rate of 5 paisa/10 second and 9 FnF
numbers for any operator.
In line with a regulatory decision, GP
also completed the migration of all its
customers to the new tariff plans built
on 10-second pulse for all voice and IVR
calls independent of all packages.
To make mobile handsets affordable to
rural customers, Grameenphone
partnered with Symphony to offer
Symphony B3 handsets with GPs new
connections at a very attractive price.
As the people around the country are
becoming more internet savvy,
Grameenphone took another initiative
with Symphony to make Tablet
computers available at a very affordable
price.
CUSTOMER FIRST
Being the largest telecom family, with
customer centricity at the core of its
heart, GP observed Customer First Day
on November 05, 2012. More than 1,000
employees of the Company, including its
management members, went out to the
markets to attend customers directly
and get closer to people who use GP
services. The day was celebrated across
all Telenor Business Units, to know what
people think about their service
standards and to better understand the
expectations of the customers.
PREPARING THE NATION FOR THE
INTERNET ERA
GP in collaboration with the leading
Bangla daily newspaper Prothom Alo
launched the second round of
Grameenphone-Prothom Alo Internet
Utshab, a sequel to the immensely
successful program that began in 2011.
It is an initiative to empower the youth
with one of the biggest power tools- the
internet. In 2012, the initiative delved
further by hosting 120 events in schools
and colleges of divisional cities as well
as those in rural and semi-urban areas.
The Ministry of Education and Support to
Digital Bangladesh (A2I) Project, Prime
Ministers Office, have endorsed the
program in view of its potentials in
contributing to building Digital
PAGE 11
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Bangladesh. Other brand giants such as
Google, Wikipedia, Facebook, Opera and
Nokia also proudly backed this grand
initiative.
To spread the power of knowledge and
promote the Bangla version of
Wikipedia, GP also came up with an
initiative to enable Opera Mini users to
access all the contents of Bangla
Wikipedia. GP also signed agreement
with the Ministry of Education to supply,
service and install 20,500 internet
modems to set up multimedia
classrooms in around 20,000
educational institutions across the
country.
A JOURNEY TOWARDS FINANCIAL
INCLUSION
As more and more people are getting
used to mobile phones and the
government aims to strengthen financial
inclusion by bringing more people in the
mainstream banking, GP in association
of bKash, an initiative of BRAC Bank,
launched bKash mobile financial
services for the customers. The service
enables a GP customer to access and
enjoy mobile financial services like
money transfer and payment from his or
her mobile handset, from anywhere in
Bangladesh.
GP also signed an agreement with
Dutch-Bangla Bank Ltd. (DBBL) to
provide DBBL Mobile Banking Services to
its customers, who can use it directly
from their handsets by utilizing a fully
managed selective network of GP
Mobicash agents.
WIDENING THE REACH TO REMOTE
AREAS
To increase its engagement with all
segments of customers and
communities, GP organized and
sponsored a number of festivals in
different remote areas of the country
throughout the year. One of such
festivals was Rajpunnah, which is the
traditional royal festival of the tribal
Bomang community in Bandarban, to
uphold the tradition and customs of the
indigenous people.
GP also organized a two-week Jasim Polli
Mela in Faridpur to commemorate the
109th birth anniversary of the renowned
poet of Bangladesh, Jasimuddin. GP also
sponsored a seven-day Sultan Mela in
Narail to mark the 87th birth anniversary
of renowned artist SM Sultan and to
cherish the local art and culture of
Bangladesh.
STANDING BY THE COMMUNITY
As a responsible company, GP always
stands beside the community and the
environment through various
sustainable programs.
GP partnered with Jaago Foundation to
expand its venture named Online
Classroom with the aim to ensure high
quality education in both sub-urban and
rural areas, the countrys first online
school being in Tongi as a pilot phase.
To bring dermatology care to rural
communities, GP partnered with the
Telemedicine Working Group of
Bangladesh, where around 30% of the
population suffers from a skin disease at
one point during their lifetime. GP is
conducting this pilot project at four of its
Community Information Centers (CIC).
Another notable initiative is Special
Olympics across the country. GP in
association with Special
Olympics-Bangladesh organized the 1st
Special Olympic South Asian 5-A-Side
Football Festival 2012 in May.
RECOGNITION OF ENDEAVOR
A number of awards in recognition of our
continuous efforts to bring excellence
have made the year very special for us.
GP won the Award for Best Presented
Annual Reports-2011 in the
communication and information
technology sector from the Institute of
Chartered Accountants of Bangladesh
(ICAB), for publishing transparent reports
and maintaining high standards of
Corporate Governance.
GP also received the Emerging Market
Service Provider of the Year award at
the 2012 Frost & Sullivan Asia Pacific ICT
Awards for the second time for its efforts
in delivering exceptional business
performance.
Other recognitions were the prestigious
Connected World Award for GPs SMS
based Mobile Health Tips service at
Connected World Forum, Best Employer
Award 2012 in the telecom sector by
bdjobs.com and Best Investor Relations
Award 2012 by the BRAC EPL Stock
Brokerage Ltd.
OUR EXPECTATIONS
We have already built a future-proof
network and upgraded our infrastructure
to fulfill the expectations of our
subscribers, who are all set to experience
the charm of 3G technology. We have to
win and win every day to give our
customers the thrill and excitement that
they dreamt for long. We are also
constantly working to improve our
regulatory climate. We have come a long
way with successful resolution in some
areas but we look forward to achieving
more in this area.
February 10, 2013
Business Review 2012
|
PAGE 12
You drive us to be better each day,
to improve and to innovate
The shareholding structure comprises mainly two sponsor Shareholders namely Telenor Mobile Communications AS (55.80%)
and Grameen Telecom (34.20%). The rest 10.00% shareholding includes General public & other Institutions.
Telenor Mobile Communications AS (TMC)
TMC, a company established under the laws of the Kingdom of Norway, seeks to develop and invest in telecommunication
solutions through direct and indirect ownership of companies and to enter into national and international alliances relating to
telecommunications. It is a subsidiary of Telenor Mobile Holdings AS and an affiliate of Telenor. Telenor ASA is the leading
Telecommunications Company of Norway listed on the Oslo Stock Exchange. It owns 55.80% shares of Grameenphone Ltd.
Telenor's strong international expansion in recent years has been based on leading-edge expertise, acquired in the Norwegian
and Nordic markets, which are among the most highly developed technology markets in the world. It has substantial
International operations in mobile telephony, satellite operations and pay Television services. In addition to Norway and
Bangladesh, Telenor owns mobile telephony companies in Sweden, Denmark, Hungary, Serbia, Montenegro, Thailand,
Malaysia, Pakistan and India. Telenor has 148 million consolidated mobile subscriptions worldwide as of December 31, 2012.
Telenor Mobile
Communications AS
(55.80%)
Grameen
Telecom
(34.20%)
General Public &
other Institutions
(10.00%)
The Shareholders
PAGE 15
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Telenor uses the expertise it has gained at its home and international markets for the development of emerging markets like
Bangladesh.
As part of the conversion of Grameenphone from a private limited to a public limited company, Telenor Mobile Communications
AS transferred 10 shares each on May 31, 2007 to its three (3) affiliate organizations namely Nye Telenor Mobile
Communications II AS, Norway; Telenor Asia Pte. Ltd., Singapore; and Nye Telenor Mobile Communications III AS, Norway.
Grameen Telecom (GTC)
Grameen Telecom, which owns 34.20% of the shares of Grameenphone, is a not-for-profit company in Bangladesh established
by Professor Muhammad Yunus, winner of the Nobel Peace Prize 2006.
GTCs mandate is to provide easy access to GSM cellular services in rural Bangladesh and create new opportunities for income
generation through self-employment by providing villagers, mostly the poor rural women, with access to modern information
and communication-based technologies.
Grameen Telecom, with its field network, administers the Village Phone Program, through which Grameenphone provides its
services to the fast growing rural customers. Grameen Telecom trains the operators and handles all service-related issues.
GTC has been acclaimed for the innovative Village Phone Program. GTC & its Chairman Nobel Peace prize laureate Professor
Muhammad Yunus have received several awards which include; First ITU World information Society Award in 2005; Petersburg
Prize for Use of the IT to improve Poor Peoples Lives in 2004; GSM Association Award for GSM in Community Service in 2000.
As part of the conversion of Grameenphone from a private limited to a public limited company, Grameen Telecom transferred 1
share each on May 31, 2007 to its two affiliate organizations namely Grameen Kalyan and Grameen Shakti.
The Shareholders
|
PAGE 16
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The Shareholders
Top Twenty Shareholders as on December 31, 2012
(as per CDBL records)
1 Telenor Mobile Communications AS 753,407,724 55.80%
2 Grameen Telecom 461,766,409 34.20%
3 Grameen Bank Borrowers Investment Trust 11,037,221 0.82%
4 Investment Corporation of Bangladesh 8,848,000 0.66%
5 AB Investment Limited Investors Discretionary Account 5,470,700 0.41%
6 IDLC Investment Limited 4,570,114 0.34%
7 ICB Unit Fund 3,827,200 0.28%
8 A.K. Khan & Co. Limited 2,398,200 0.18%
9 SSBT For SSB LUX Morgan Stanley Asset Management 2,149,328 0.16%
10 United Commercial Bank Ltd. 2,096,700 0.16%
11 Bangladesh Fund 1,740,000 0.13%
12 NTC A/C Prince Street Opportunities Ltd. 1,474,000 0.11%
13 NTC A/C Prince Street Institutional Ltd. 1,366,000 0.10%
14 Rupali Bank Limited 1,283,800 0.10%
15 SSBT For SS LUX A/C Goldman Sachs Funds Goldman 1,254,000 0.09%
Sachs N-11 (R) Equity Portfolio
16 Sonali Bank 1,151,400 0.09%
17 Delta Life Insurance Co. Ltd. 1,130,400 0.08%
18 BRAC Bank Limited 1,097,600 0.08%
19 BRAC EPL Investments Limited 978,800 0.07%
20 The City Bank Ltd. 975,600 0.07%
Total 1,268,023,196 93.93%
Sl No. Name of Shareholders Percentage Number of Ordinary Shares Held
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PAGE 18
Organisational Structure
Board of Directors
Vivek Sood
Chief Executive Officer
Hossain Sadat
Company Secretary
Fridtjof Rusten
Chief Financial
Officer
Allan Bonke
Chief Marketing
Officer
Mahmud Hossain
Chief Corporate
Affairs Officer
Tanveer Mohammad
Chief Technology
Officer
Quazi Mohammad Shahed
Chief Human Resources
Officer
Vacant
Chief Communications
Officer
PAGE 19
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Directors Profile
Mr. Morten Tengs was appointed to the Board on July 18, 2011. He joined the Telenor Asia
office as a director in June 2011. He is currently a Board member of Telenor in Pakistan and
Total Access Communication PLC (dtac) in Thailand. He has been in the Telenor Group
since 1995, and held a number of management positions such as: Finance Director of
Telenor Global Services, CEO of Telenor Global Services, CEO of Telenor Satellite Services,
CEO of Telenor Cinclus and Senior Vice President of Telenor Corporate Development.
Mr. Tengs holds a Master of Business Administration degree from the Norwegian School
of Management (BI) and an Engineering degree in construction from the Norwegian
Engineer High School.
Mr. Sigve Brekke was appointed to the Board on September 1, 2008 and is also the
Chairman of Grameenphone Board. Mr. Brekke has held a number of positions in the
Telenor Group. He joined Telenor Asia Pte. Ltd. in 1999 as Manager of Business
Development and later became the Managing Director. He served as the Co-Chief Executive
Officer (Co-CEO) of Total Access Communication PLC (dtac) from 2002 to 2005, was the
sole CEO and Director from 2006 to 2008 and was elected as the Vice Chairman of dtac
Board in 2008. He also served as Director and CEO of United Communication Industry PLC
from 2005 to 2008. In July 2008, he was appointed as Director and Executive Vice
President of Telenor Group, Head of Asia Region, Telenor. In 2009, Mr. Brekke was elected
as Director of Unitech Wireless Ltd. (Uninor) and the Chairman of DiGi.Com Berhad Board.
He was appointed Managing Director of Uninor in July 2010. Prior to joining Telenor,
Mr. Brekke served as the Deputy Minister (State Secretary) of Defence in Norway
in 1993 and was also an associate research fellow at the John F. Kennedy School of
Government, Harvard University. Mr. Brekke obtained Masters degree in Public
Administration from John F. Kennedy School of Government, Harvard University.
Sigve Brekke
Morten Tengs
M Shahjahan
Mr. M Shahjahan was appointed to the Board on June 26, 2006 and is also Chairman of the
Companys Treasury Committee. He was appointed as Deputy Managing Director of Grameen Bank
on July 26, 2011. In addition, he has been made responsible to act as Managing Director of the
same organization. Earlier, he served as the General Manager and Head of the Accounts, Finance,
Planning, Monitoring and Evaluation Division of Grameen Bank. Prior to joining the Company, he
served in several executive management positions in Grameen Bank, including Chief of the Audit
Department and Zonal Manager. Mr. Shahjahan is a member of the Board of Directors of
several companies that work in the fields of health, education, agriculture, welfare,
renewable energy and telecommunications. He obtained a Bachelor of Commerce
(Honours) degree in Accounting from the University of Dhaka in 1976, as well as a
Masters degree in Accounting in 1977 and a Masters degree in Finance in 1981. He
was awarded ICAB Medal (Silver) for passing the C.A. Intermediate examination at the
earliest eligible chance in 1981.
Directors Profile
|
PAGE 20
Mr. Per Erik Hylland was appointed to the Board on June 25, 2007 and is also Chairman of the
Companys Human Resources Committee and Health, Safety, Security & Environment
Committee. He is the Senior Vice President in Telenor Asia and serves as Chief
Representative Officer for Bangladesh and Myanmar. Mr. Hylland has professional
experiences in the banking, information technology and telecommunications industries.
He joined Telenor in 1994 and since then has held several senior management positions.
During the past 14 years, he has worked in several countries as a Telenor representative
in Central and Eastern Europe and Asia. During this period, Mr. Hylland acted as a
Director for Telenor companies in Austria, the Czech Republic, Hungary and Slovakia. He
is an engineer in information technology and was educated in the Norwegian Ministry of
Defence.
Per Erik Hylland
Md. Ashraful Hassan
Lars Erik Tellmann
Mr. Md. Ashraful Hassan was appointed to the Board on January 20, 2010. He currently serves as Managing
Director of Grameen Telecom, and is engaged in promoting and providing easy access to GSM cellular services in
rural Bangladesh. He also serves as Managing Director of Grameen Knitwear Ltd., Grameen Distribution Ltd.
and Grameen Fabrics & Fashions Ltd. He gained extensive and diversified knowledge in various industrial
sectors especially in the field of textile focusing on resource efficient production and energy saving
products having wide exposures in the industrial management, export market, labour management and so
on. Mr. Hassan also acquired wide range of experience for different kinds of project development and
industrial setup. He started his career in Grameen Bank, the Nobel Peace Prize winning organization, in
1984. During his 16 years of tenure with the Bank, he held various key positions including the Chief of
Engineering section. He has gained extensive knowledge in the field of construction engineering
and extended notable contribution to the infrastructural development of Grameen Bank. He
serves as a member of the Board of Directors of several enterprises that play commendable role
in the fields of renewable energy, health care, food & nutrition, information and communication
technology and so forth. He holds Bachelor of Science in Civil Engineering from Khulna
University of Engineering and Technology, Bangladesh.
Mr. Lars Erik Tellmann was appointed to the Board on December 6, 2011. He is currently the
Senior Vice President for Strategic Development, Telenor Region Asia. He joined Telenor Asia
as Vice President of Performance Management in 2010, after serving as Vice President of
Operational Efficiency in Telenor Group, and previously was a Manager in the Finance division of
DiGi. He has more than 12 years of international ICT experience after having worked in
Scandinavia, Central Eastern-Europe and South East Asia. He joined Telenor Groups
Business Development Division in 2001 with a primary focus on building and scaling
operational excellence concepts. Currently, he is a Board member of Telenor Pakistan,
Total Access Communication PLC (dtac), Thailand, and DiGi.Com Berhad, Malaysia.
He holds a Masters Degree in Business Administration (MBA) from Edinburgh
University in Scotland, UK, and a Masters in Business of Science (M.Sc./Sivilokonom)
from Bodo Business School, Norway.
PAGE 21
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Directors Profile
Parveen Mahmud
Hakon Bruaset Kjol
Mr. Hakon Bruaset Kjol was appointed to the Board on September 14, 2011. He is the Senior Vice
President and Head of Corporate Affairs of Asia Region, Telenor Group. Mr. Kjol joined the Telenor
Group in 1995, beginning his career in the domestic mobile operations in Norway. Since then, he
contributed to the Groups growing international presence through his strategic involvement in
Telenors international mobile activities where he played significant roles in operational
development and merger and acquisition activities both in Europe and Asia. For the last 12 years,
Mr. Kjol has been based in Asia where he continues to assume a key role in the development of
the Group strategy for Asia, and managing the Asia business environment to include the areas
of public affairs, regulatory management, government relations, strategic communications
and corporate responsibility. He has been a key member of several management
committees and currently the Director of Total Access Communication PLC (dtac),
Thailand; Telenor Asia Pte Ltd, Singapore; Digi.Com Berhad, Malaysia and Telenor India
Pvt. Ltd., India. Mr. Kjol is a former student of the Norwegian School of Management
majoring in Marketing and Communications.
Dr. Jamaluddin Ahmed FCA was appointed to the Board on March 19, 2010 as an Independent Director and is also Chairman of
the Board Audit Committee. He is a Partner at Hoda Vasi Chowdhury & Co., Chartered Accountants, which is the associate firm
of Deloitte & Touche in Bangladesh. Dr. Jamal was the President (2010) of the Institute of Chartered Accountants of
Bangladesh (ICAB). He is the elected Vice President of the countrys independent think tank-Bangladesh Economic
Association. He is engaged in assignments in Financial, Banking and Energy Sector industries. He
worked as country specialist in Migrant Remittance Management. He was involved in DFID funded
Cheque Automation, Automated Clearing System and in the development of National Payment
System in Bangladesh. Currently, he is involved with Bangladesh Energy Regulatory Commission for
introducing Uniform Energy Accounting in Bangladesh. Over his professional career,
Dr. Jamal has written copious publications and conducted numerous research papers on
various aspects. Recently, he completed his paper Demutualization of Stock
Exchanges-Rationale, Comparative Practice and a Roadmap for Bangladesh and
Transparency in Financial Reporting of Central Banks-A Comparison of Practices.
He holds Masters degree in Accounting from the University of Dhaka, PhD from the
Cardiff Business School, under the University of Wales, United Kingdom, and
is also a fellow of the ICAB.
Ms. Parveen Mahmud FCA was appointed to the Board on October 17, 2012. She is the Managing Director of Grameen Telecom
Trust, which facilitates Social Business for a poverty free world. She is a chartered accountant and a fellow member of the
Institute of Chartered Accountants of Bangladesh (ICAB). In her diversified professional career, Ms. Mahmud worked for a
substantial amount of time with national and international development agencies and was a practicing chartered accountant.
Ms. Mahmud started her career with BRAC, and was the Deputy Managing Director of Palli Karma-Sahayak Foundation
(PKSF), an apex financing institution that works for poverty alleviation through employment
generation, where microcredit plays a key role as a tool for economic and gender empowerment.
She was a partner of ACNABIN, Chartered Accountants. She was the first female President of the
ICAB for the year 2011 and also the first female Board member in the South Asian Federation of
Accountants (SAFA), the apex accounting professional body of the SAARC. Ms. Mahmud was a
Working Group Member of Consultative Group on Social Indicators, UNCTAD/ISAR. She was
the member of National Advisory Panel for SME Development of Bangladesh and founding
board member of SME Foundation and was Convenor, SME Womens Forum. She has given
inputs to the Technical committee when Microcredit Regulatory Authority (MRA)
in Bangladesh was established. Ms. Mahmud serves in various Boards, and was
the Chairperson of Acid Survivors Foundation. She was awarded Begum Rokeya Shining
Personality Award 2006 for womens empowerment by the
Narikantha Foundation, Bangladesh.
Directors Profile
|
PAGE 22

Sl No. Name of Director Member of Board committees Directorship
Companies (other than Grameenphone Ltd.) in which GP Directors hold directorship and committee memberships:
Rokia Afzal Rahman
Ms. Rokia Afzal Rahman was appointed to the Board on December 6, 2012 as an Independent Director.
A leading woman entrepreneur and a former Adviser to the Caretaker Government of Bangladesh,
Ms. Rahman started her agro-based company in 1980 and further diversified her business into insurance,
media, financial institution and real estate. She is currently the President of Metropolitan Chamber
of Commerce and IndustriesMCCI, Dhaka; Vice President of International Chamber of Commerce-ICC
Bangladesh; Trustee Board Member of Transparency International BangladeshTIB. Ms. Rahman is
founder President of Bangladesh Federation of Women EntrepreneursBFWE. Her commitment
to development brought her to the Boards of a number of development organizations. She is
also Chair and Managing Director of R. R. Group of Companies; Chair and Managing
Director of Arlinks Group of Companies. Ms Rahman did her post graduate diploma
in Banking from Pakistan.
1 Mr. Sigve Brekke Unitech Wireless Ltd.(Uninor), India DiGi.Com Berhad, Malaysia
DiGi.Com Berhad, Malaysia Remuneration Committee
Total Access Communication PLC (dtac), Thailand
2 Mr. M Shahjahan Grameen Telecom None
Grameen Shakti
Grameen Uddog
Grameen Fund
Grameen Krishi Foundation
Grameen Kalyan
Grameen Fabrics & Fashions Ltd.
Grameen Credit Agricole Microfinance Foundation
Grameen Employment Services Limited (GES)
Grameen Knitwear Ltd.
Grameen Shikkha
Grameen Communications
Grameen Shakti Samajik Byabosa Ltd.
Member of Board of Trustees
Nobel Laureate Trust
Grameen Trust
Grameen Telecom Trust
3 Mr. Morten Tengs Telenor Pakistan dtac, Thailand
Total Access Communication PLC (dtac), Thailand Remuneration Committee
DiGi.Com Berhad,Malaysia Nomination Committee
4 Mr. Md. Ashraful Hassan Grameen Solutions Ltd. None
Grameen Danone Foods Ltd.
Grameen Health Care Services Ltd.
Grameen CyberNet Ltd.
Grameen Veolia Water Ltd.
Grameen Shakti
Grameen Shakti Samajik Byabosa Ltd.
Grameen Employment Services Ltd.
Grameen Telecom Trust
5 Mr. Per Erik Hylland None None
6 Mr. Lars Erik Tellmann Telenor Pakistan None
Total Access Communication PLC (dtac), Thailand
DiGi.Com Berhad, Malaysia
PAGE 23
|
Directors Profile
Sl No. Name of Director Member of Board committees Directorship
7 Ms. Parveen Mahmud Grameen Krishi Foundation
Grameen Fisheries and Livestock Foundation
Grameen Capital Management
Grameen Health Care Services Ltd.
Grameen Fabrics & Fashions Ltd.
Grameen Distribution Ltd.
Underprivileged Childrens Educational Program (UCEP)
Manusher Jonno Foundation (MJF)
Actionaid International Bangladesh
BRAC
BRAC Sticthing International
MIDAS Financing Ltd.
Linde Bangladesh Ltd.
8 Mr. Hakon Bruaset Kjol DiGi.Com Berhad, Malaysia DiGi.Com Berhad, Malaysia
Telenor Pakistan Nomination Committee and
Telenor Asia Pte Ltd., Singapore Remuneration Committee
Telenor India Pvt. Ltd., India
9 Dr. Jamaluddin Ahmed FCA Janata Bank Limited Janata Bank Limited
Power Grid Company of Bangladesh Ltd. Audit Committee
Essential Drugs Company Limited Power Grid Company of Bangladesh Ltd.
Dhaka WASA Audit Committee
Essential Drugs Company Limited
Audit Committee
10 Ms. Rokia Afzal Rahman R. R. Cold Storage Ltd. None
Imaan Cold Storage Ltd.
R. R. Estates Ltd.
Aris Holdings Ltd.
Arlinks Limited
Mediaworld Ltd. (owning company of The Daily Star)
MIDAS Financing Ltd.
Mediastar Ltd. (owning company of Prothom Alo)
ABC Radio
MIDAS Investment Ltd.
BRAC
Small & Medium Enterprise Foundation (SMEF)
Manusher Jonno Foundation (MJF)
Banchte Shekha, Jessore
Transparency International Bangladesh (TIB)
UCEP- Bangladesh
Finance and Audit Committee
Actionaid International Bangladesh
BRAC
Linde Bangladesh Ltd.
Vivek Sood | CEO Tanveer Mohammad | CTO Fridtjof Rusten | CFO Allan Bonke | CMO Quazi Mohammad Shahed | CHRO Mahmud Hossain | CCAO Management Team
|
PAGE 26
Mr. Vivek Sood was appointed as Chief Executive Officer (CEO), effective from January 07, 2013. Before
joining Grameenphone he was Executive Vice President and Chief Financial Officer (CFO) of the Indian
mobile operator Uninor. As CFO of Uninor, he was responsible for setting performance measures and
achieving financial goals. His 22 years of experience also includes executive positions in companies
like Tata AIG life Insurance, Hutchison Telecom, Tupperware India and Hindustan Lever Limited
(Unilever). He is a Chartered Accountant by profession.
Mr. Tanveer Mohammad was appointed as Chief Technology Officer (CTO), effective from July 01, 2010.
Tanveer has been working with Grameenphone since 1997. In this long journey with Grameenphone, he
has worked with Roll out, Operation and overall network responsibilities. He has played pivotal roles in
developing local entrepreneurs in civil works, tower fabrication, installation and commissioning,
ensuring speed and efficiency for the coverage and capacity expansion of the network. He has also
contributed towards creating the efficiency focus in the operational activities while upholding the
network leadership, through aggressive service level agreements, high customer focus, steep
cost efficiency targets and strengthening the operational teams. He has successfully led the
network modernization bringing in huge efficiency in energy consumption and overall opex
efficiency. Through this process, the network also became ready for future technology. He is
also taking active part in CTO/CMO board in Telenor. Before joining GP, Tanveer worked with
Hyundai Engineering and Construction. He holds a graduation in Engineering from the
Bangladesh University of Engineering and Technology (BUET).
Vivek Sood | CEO
Tanveer Mohammad | CTO
Fridtjof Rusten | CFO
Mr. Fridtjof Rusten was appointed as Chief Financial Officer (CFO), effective from April 11, 2012.
Prior to joining Grameenphone, he held the position of CFO in Telenor Hungary, where he has also
served as CMO. He has over 22 years of experience in Finance, Marketing and Strategy in Telecom
and Energy Industries. He was also a Senior Vice president with Telenor ASA in Central &
Eastern European Region, and has served as member of Board of Directors of Vimpelcom Ltd.
from 2005-2008. He holds a Master of Science degree in Industrial Economics from
Norwegian University of Science and Technology, Trondheim.
Allan Bonke | CMO
Mr. Allan Bonke was appointed as Chief Marketing Officer (CMO), effective from August 05, 2012.
Before joining Grameenphone, he was Executive Vice President in Uninor, India. While with Uninor, he
was responsible for Uttar Pradesh west (UP) circle operation. He joined Telenor in 2006 and worked as
Director, Business Sales in Telenor Denmark before joining Uninor. Before joining Telenor, he held
senior positions in different Danish ICT companies. He has a financial background from the Danish
banking sector. He holds a diploma education in business economics from Copenhagen Business
School-CBSI with strategy as line of specialization.
PAGE 27
|
Mr. Quazi Mohammad Shahed was appointed as Chief Human Resources Officer (CHRO), effective from
November 01, 2012. Before joining Grameenphone, he was employed by British American Tobacco
(BAT) as Human Resources Lead, Global SAP, Template & Pilot Project in United Kingdom. After
obtaining his Bachelors Degree in Mechanical Engineering from Bangladesh University of Engineering
and Technology (BUET), he started his career in BAT Bangladesh. During the early part of his career, he
worked in different roles within Operations and subsequently moved to HR as the Head of HR of BAT
Bangladesh in Dec 2001. He later worked in Iran, Pakistan, Malaysia and UK in different HR
leadership and global project roles. He has an MBA from North South University, Bangladesh.
Quazi Mohammad Shahed | CHRO
Mahmud Hossain | CCAO
Mr. Mahmud Hossain was appointed as Chief Corporate Affairs Officer (CCAO), effective from March 08,
2010. He started his career in 1990 at the very outset of liberalization of mobile telephony industry in
Bangladesh, when he joined the technical team of the erstwhile Hutchison BD Telecom Ltd.
(presently CityCell). He worked for Grameenphone, at his first spell with the company, as Additional
General Manager at the Network Operations during 2000-2001. In his credibly long career, he also
worked for few other telecom operators before rejoining GP in August 2009. He obtained his
B.Sc. in Electrical & Electronic Engineering from Bangladesh University of Engineering and
Technology (BUET). He obtained his MBA (major in Finance) from the Institute of Business
Administration (IBA), Bangladesh. He also holds a Masters (Telecom) Degree from Concordia
University, Canada.
Hossain Sadat | Company Secretary
Mr. Hossain Sadat was appointed as Company Secretary effective from July 01, 2010. Prior to taking up
the above role, he has also worked in Finance of the same organization for several years where he led
Financial Reporting, Budgeting and Control functions among others. Before joining
Grameenphone in mid 2001, he worked in a number of multinational organizations including
Shell Oil & Gas, Cairn Energy PLC and KPMG Bangladesh. He has worked in the areas of financial
management, stakeholder relations, public communications, internal control & compliance
for around sixteen years. Mr. Sadat holds a Masters degree in Accounting and
is a Chartered Secretary by profession.
Profile of Company Secretary
Message
from the Chairman
A successful 3G licensing will open a new era of high
speed data communication which will benefit the
customers with superior speed, quality and content.
This will fuel the growth of the sector and ultimately
help the government in its vision towards a digital
Bangladesh. Consequently, 3G has opportunities
around it. We look forward to a 3G licensing at a
rationale price and through fair process ensuring
deployment of future investment that results in new
services for the benefit of our customers.
PAGE 29
|
Message from the Chairman
Sigve Brekke
Chairman
February 10, 2013
We have passed a challenging year in a
fiercely competitive market. However,
the year ended with an optimistic note
as we have started to gain a strong
footing to tackle the challenges more
efficiently on the back of continuous
support of our customers, employees
and valued shareholders.
We have further strengthened our
subscriber base in 2012 amid an
unpredictable regulatory regime. GP
witnessed a moderate growth in revenue
in addition to our relentless efforts to
strengthen operational efficiency,
product innovation and market
diversification.
Our revenue increased by 3.2% to BDT
91.9 billion (BDT 9,192 crore) in 2012,
compared to the previous year, backed
by the growth in revenues from voice,
non-voice, data and adjacent
businesses.
In 2012, we got our operating license for
2G services for the next 15 years despite
a long delay resulted from various legal
and administrative complexities. On this
occasion, I would like to thank the
Bangladesh Telecommunication
Regulatory Commission (BTRC) and the
Ministry of Posts and
Telecommunications (MoPT) for
providing us with the 2G license, which, I
believe is a gesture of goodwill for us
towards future investment and network
expansion. However, the VAT rebate
issue is still pending with the court.
There are other regulatory issues which
remained unresolved for a long time.
Such unsettled issues create
unpredictable investment climate and
could influence our decision on further
investment and licensing process.
A successful 3G licensing will open a
new era of high speed data
communication which will benefit the
customers with superior speed, quality
and content. This will fuel the growth of
the sector and ultimately help the
government in its vision towards a digital
Bangladesh. Consequently, 3G has
opportunities around it. We look forward
to a 3G licensing at a rationale price and
through fair process ensuring
deployment of future investment that
results in new services for the benefit of
our customers.
Although the capital market has been on
a continuous downtrend throughout the
year, the price of GP shares remained
almost stable. I am pleased to report
that for the financial year 2012, we were
able to give you a 90% Interim Cash
Dividend. The Board of Directors also
recommended 50% Final Cash Dividend
for Shareholders approval.
We believe what our employees say
about their company to their friends and
families brings us all the appreciations
and accolades. Their relentless
commitments and best efforts have
earned all the success over the years.
Today, I would like to congratulate this
winning team for their persistent
achievements and care for the Company.
At the end, I would also like to thank all
our valued shareholders and
stakeholders for being with us in our
journey towards a better tomorrow.
Dear Shareholders,
Message
from the CEO
Grameenphone has passed
the year 2012 with notable successes on
different fronts despite various challenges and
intense competition. We made progress in terms of
both revenue and subscription growth,
and remained as the preferred operator.
PAGE 31
|
Message from the CEO
On behalf of the Management Team, I
am pleased to report to you that
Grameenphone (GP) has passed the
year 2012 with notable successes on
different fronts despite various
challenges and intense competition. We
made progress in terms of both revenue
and subscription growth, and remained
as the preferred operator.
A total of 3.5 million new subscribers
were added to our network in 2012 and
our subscription base reached 40.02
million to continue our lead with a 41.2%
market share.
GP earned BDT 91.9 billion (BDT 9,192
crore) revenue in 2012 with a 3.2% rise
compared to the previous year. The
growth in revenue was mainly in voice,
non-voice and data revenues due to
subscription growth and revenues from
adjacent businesses.
However, net profit margin for 2012 was
19.0% compared to 21.2% of 2011.
Despite growth in operating profit
margin, net profit after tax decreased by
7.3% mainly due to recognition of
amortization cost of 2G license and
spectrum fees, and notional interest
expenses against payments of above
fees.
During 2012, the Company contributed
BDT 63.6 billion (BDT 6,359 crore) to the
National Exchequer. Since its inception
till December 2012, GP contributed a
total of BDT 308.8 billion (BDT 30,876
crore) to the National Exchequer and
remained one of the largest contributors
for the last several consecutive years.
This year, GP took a massive initiative to
revamp its product portfolio with three
hero products (i.e. Bondhu, Amontron,
Nishchinto) targeting three usage
segments under the theme of Clear
Cut, making price plans simpler and
competitive. Besides, we have also
launched diversified promotional offers
and innovative value-added services.
Our adjacent businesses such as GPIT,
Wholesale Business and Financial
Services also brought notable results for
us. GPIT had been profitable in 2012.
Wholesale Business retained the
leading position by providing Shared
Telecom Infrastructure to other
operators and businesses. We have
partnered with bKash and DBBL to offer
financial services .
GP so far has invested BDT 213,435
million in network, which is currently
covering 99.16% population. The
network platform has been prepared for
3G and new technologies to win the
business in future. Despite energy price
hike, we have been able to achieve 42%
energy cost saving. We also have built
up 72 solar powered sites taking the
total number to 162 at the end of 2012.
GP reshaped its Corporate Responsibility
policy to create an ever-lasting impact
on the community and to support
sustenance of the projects by creating
shared value. Tele Dermatology,
Ensuring Safe Drinking Water through
SMS Based Solution, Online School and
Earth Hour are a few such projects.
Another bright spot was the Award for
Best Presented Annual Reports-2011 in
the communication and information
technology sector given by the Institute
of Chartered Accountants of Bangladesh
(ICAB).
Despite the unpredictable regulatory
regime and the VAT rebate issue being
un-resolved till now, we want to move
ahead and keep growing to meet the
expectations of our customers.
Finally, I would like to express my sincere
appreciation to all our shareholders and
stakeholders for helping us to make
2012 a success. As you have elevated us
to new heights, we are proud to have
your patronage and support in our
journey towards further excellence and
to Go Beyond.
Dear Shareholders,
Vivek Sood
CEO
February 10, 2013
We are there when you
need to take a step up
in your career
PAGE 33
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Corporate Governance in Grameenphone
Grameenphone (GP) throughout its entire business operations puts
persistent efforts to ensure stakeholders' trust and confidence as
governance and stakeholders' value are interconnected. With this end in
view, GP has been providing and maintaining innovative, user-friendly
and best-value telecommunications services to create sustainable
stakeholders' value. To reach these objectives, the Board of Directors of
the Company is dedicated to ensuring higher standards of Corporate
Governance to keep the Company's business integrity and performance
on the right track. Being a responsible corporate entity, GP maintains
adequate transparency and encouraging sound business conduct both
in its in-house practices and in its external relationship with the community as well as suppliers, customers and
business partners. The Company, at the same time, expects acts of honesty and integrity from its Board of Directors,
employees and suppliers.
GP being a public listed company, its Board of Directors plays a crucial role in upholding the interests of all its
stakeholders. The Board of Directors and the Management Team are also dedicated to maintaining a
well-established culture of accountability, transparency, easy-to-understand policies and procedures to ensure
effective Corporate Governance at every level of its operations. The Board of Directors and the Management Team
also put their best efforts to comply with all the laws of the country and all the internal regulations, policies and
procedures to make GP a thoroughly transparent company. Moreover, recognizing the fact that compliance has been
the corner stone of good governance, the Company meticulously undergoes through the process of statutory audit
and compliance certification as required by laws of the land. As a result, GP has been able to maintain the highest
level of integrity and accountability of global standards over the years.
Board Organization & Structure
a) Role of the Board
The Directors of the Board are appointed by the Shareholders at the Annual General Meeting (AGM) and
accountable to the Shareholders. The Board is responsible for ensuring that the business activities are
soundly administered and effectively controlled. The Directors keep themselves informed about the
Company's financial position and ensure that its activities, accounts and asset management are subject to
adequate control. The Board also ensures that Grameenphone Policies & Procedures and Codes of Conduct
are implemented and maintained and the Company adheres to generally accepted principles for good
governance and effective control of Company activities.
In addition to other legal guidelines, the Board has also adopted Rules of Procedure for the Board of
Directors for ensuring better governance in the work and the administration of the Board. The Board is also
guided by a Delegation of Authority which spells out the practices and processes in discharging its
responsibilities.
b) Board Composition
The Board in GP is comprised of ten (10) Directors, including the Chairman who is elected from amongst the
members. In compliance with the Corporate Governance Guidelines issued by the Bangladesh Securities
and Exchange Commission (BSEC) the Board of Directors has appointed two (2) Independent Directors. We
believe that our Board has the optimum level of knowledge, composure and technical understanding about
the Companys business which, combined with its diversity of culture and background, stands as the perfect
platform to perform and deliver.
Commitment
P
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P
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o
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n
o
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Transparency Accountability Compliance
Community Economy Authority Industry Culture
Grameenphone Governance
|
PAGE 34
c) Board Meetings
The AoA of the Company requires the Board to meet at least four times a year or more when duly called for
in writing by a Board member. Dates for Board Meetings in a year are decided in advance and notice of each
Board Meeting is served in writing well in advance. Such notice contains detailed statement of business to
be transacted at each meeting. The Board meets for both scheduled meetings and on other occasions to
deal with urgent and important matters that require attention.
d) Division of work for the Board and Chief Executive Officer (CEO)
The roles of the Board and Chief Executive Officer are separate and delineation of responsibilities is clearly
established, set out in writing and agreed by the Board to ensure transparency and better corporate
governance. To that end, GP has also adopted Rules of Procedure for Chief Executive Officer. The CEO is
the authoritative head for day-to-day management in GP. He acts to reasonably ensure that GP operates
business as per the Articles of Association, decisions made by the Board and Shareholders, as well as
according to Grameenphone Policies and Procedures and applicable regulatory legislations.
e) Subsidiarys Relationship
The Board of Directors of the subsidiary company of GP is obliged to provide the Board of Directors of GP
with any information which is necessary for an evaluation of the Companys position and the result of the
Companys activities. GP notifies the subsidiary companys Board of Directors about the matters which may
be of importance to the Company as a whole. GP also notifies the subsidiary companys Board of Directors
about decisions which may be of importance to the subsidiary company before a final decision is made. As
per regulatory guidelines, the minutes of the GP subsidiary Board of Directors are routinely placed before
GP Board meeting and those are reviewed and assessed by the GP Board for regular evaluation and
governance.
f) Access to Information
The Board recognizes that the decision-making process is highly dependent on the quality of information
furnished. In furtherance to this, every Director has access to all information within the Company.
Throughout their tenure in office, the Directors are continually updated on the Companys business and the
regulatory and industry specific environments in which it operates. These updates are by way of written
briefings and meetings with senior executives and, where appropriate, external sources.
Board Committees
For better, quicker and furnished flow of information and thereby exercising effective governance, the Board has also
constituted a number of Committees and has delegated certain responsibilities to the Board Committees to assist in
the discharge of its responsibilities. The role of Board Committees is to advise and make recommendations to the
Board. Each Committee operates in accordance with the Terms of Reference (TOR) approved by the Board. The Board
reviews the TOR of the committees from time to time. The Board appoints the members and the Chairman of each
committee. A brief description of each Committee is presented below:
Audit
Committee
Treasury
Committee
Human Resources
Committee
Health, Safety,
Security &
Environment Committee
Board of Directors
PAGE 35
|
a) Audit Committee
The Grameenphone Audit Committee was established in late 2008 as a sub-committee of the Board and has
jurisdiction over Grameenphone and its subsidiaries. The Audit Committee is comprised of three members of
the Board. The Chairman of the committee is an Independent Director. The Chief Executive Officer, the Chief
Financial Officer, the Company Secretary and the Head of Internal Audit are permanent invitees to the Audit
Committee meetings.
The Audit Committee assists the Board in discharging its supervisory responsibilities with respect to internal
control, financial reporting, risk management, auditing matters and GPs processes of monitoring
compliance with applicable legal & regulatory requirements and the Codes of Conduct. The Audit
Committee Charter, as approved by the Board, defines the purpose, authority, composition, meetings, duties
and responsibilities of the Audit Committee.
The Audit Committee met 5 (five) times during the year and attendance of the Committee members in the
meetings was as follows:
Name Attendance
M Shahjahan 4/5
Per Erik Hylland 5/5
Dr. Jamaluddin Ahmed FCA 5/5
b) Treasury Committee
This committee consists of three members who are appointed by the GP Board. All significant financial
matters which concern the Board are discussed in this committee meeting in detail. Upon endorsement of
the Treasury Committee, such issues are forwarded to the Board for their final review and approval.
The Treasury Committee met 4 (four) times during the year and attendance of the Committee members in
the meetings was as follows:
Name Attendance
M Shahjahan 3/4
Pal Stette 4/4
Raihan Shamsi (replaced by Mr. Fridtjof Rusten) 1/1
Fridtjof Rusten (effective from April 2012) 3/3
c) Human Resources Committee
This Committee consists of three members who are appointed by the GP Board. The Committee supports the
Board in discharging its supervisory responsibilities with respect to Companys Human Resources policy,
including employee performance, motivation, retention, succession matters, rewards and Codes of Conduct.
The Human Resources Committee met 1 (one) time during the year and attendance of the Committee
members in the meeting was as follows:
Name Attendance
Per Erik Hylland 1/1
M Shahjahan 1/1
Haroon Bhatti (replaced by Mr. Quazi Mohammad Shahed) 0/1
Quazi Mohammad Shahed (effective from December 2012) 0/0
d) Health, Safety, Security and Environment Committee
This Committee consists of three members who are appointed by the GP Board. The Committee meets
|
PAGE 36
whenever necessary and supports the Board in fulfilling its legal and other obligations with respect to
Health, Safety, Security and Environment (HSSE) issues. The Committee also assists the Board in obtaining
assurance that appropriate systems are in place to mitigate HSSE risks in relation to the general
environment, company, employees, vendors, etc.
Company Secretary
To ensure effective assimilation and timely flow of information required by the Board and to maintain necessary
liaison with internal organs as well as external agencies, the Board has appointed a Company Secretary. The
Corporate Governance Guidelines issued by the Bangladesh Securities and Exchange Commission (BSEC) also
require a listed company to appoint a full fledged Company Secretary, as distinct from other managers of the
Company. In pursuance of the same, the Board of Directors has appointed Company Secretary and defined his roles
& responsibilities. In GP, among other functions, the Company Secretary:
l performs as the bridge between the Board, Management and Shareholders on strategic and statutory
decisions and directions.
l acts as a quality assurance agent in all information streams towards the Shareholders/Board.
l is responsible for ensuring that appropriate Board procedures are followed and advises the Board on
Corporate Governance matters.
l acts as the Disclosure Officer of the Company and monitors the compliance of the Acts, rules,
regulations, notifications, guidelines, orders/directives, etc. issued by BSEC or Stock Exchange(s)
applicable to the conduct of the business activities of the Company so as to protect the interests of the
investors and other stakeholders.
Management Team (MT)
The Management Team is the Executive Committee of Grameenphone managing and running the affairs of the
Company. The Management Team consists of the CEO and other key Managers across the Company. The CEO is the
leader of the team. The Management Team endeavors to achieve the strategic goals & mission of the Company set
by the Board of Directors. The Management Team meets on a weekly basis to monitor the business performance of
the Company.
Control Environment in Grameenphone
In implementing and ensuring the right Governance in Grameenphone, the Board and Management Team ensures
the following:
a) Beyond Budgeting Management Model
GP employs a Beyond Budgeting strategic management model whereby the company reviews its strategy for
the next three years and sets annual and quarterly targets on key KPIs for the upcoming year. The
targets/KPIs are set on relative terms to reflect the changes in business environment and thus ensuring a
performance culture focused on attaining the targets and steering the company towards fulfilling its
strategic ambitions. In every quarter the company also prepares forecast for the next five quarters. These
forecasts are realistic projections of future directions.
The model focuses on initiatives to minimize the gap between the targets (KPIs) and forecasts. The
corporate level initiatives are cascaded down to divisional as well as individual levels. The forecasts on the
key KPIs which serve as radar screen on future directions are reviewed and monitored against targets. This
is a forward-looking and action-oriented approach towards managing the business. The resource
allocations are dynamic and are based on the intended actions linked with the target and strategy. It aims
to build a culture of freedom through responsibility and thereby leading to increased responsiveness to
surrounding changes.
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b) Financial Reporting
Grameenphone has strong financial reporting procedures. Financial statements are prepared in accordance
with International/Bangladesh Financial Reporting Standards (IFRS/BFRS), the Companies Act 1994, the
Securities and Exchange Rules 1987 and other applicable financial legislations. The financial data are
captured from the financial reports generated from Oracle ERP (Enterprise Resource Planning) system.
These financial statements, once prepared, are reviewed by CFO and CEO on a regular basis. Upon
submission to Group in the form of Management Accounts, these financial statements are reviewed by
Group Accounting and Group Finance.
At every quarter, external auditors review the quarterly financial statements prepared in accordance with
local financial reporting policies and company procedures, which consist of the financial performance and
position of Grameenphone as a group. Separate sets of financial statements for both Grameenphone Ltd.
and Grameenphone IT Ltd. are also prepared.
The annual audit is conducted by the external auditors, who are appointed by the Board of Directors
followed by the shareholders approval in the annual general meeting.
Apart from the statutory reporting of financial statements, Grameenphone also maintains regular reporting
to its group company Telenor, which consolidates all its subsidiaries financial information in its
consolidated financial statements.
c) Operational Excellence
To ensure better shareholder return on investment, cost efficiency plays a vital role in any organization. In
view of that, Grameenphone keeps operational excellence as one of the key focus areas.
One of its major cost and operational efficiency initiatives has been the swapping of network equipment with
energy efficient equipment and future ready technology. Swapping of the entire network equipment of
7,272 base stations was completed in November 2011. This initiative has not only improved the network
performance in terms of quality and capacity, but also has significantly reduced fuel and power
consumptions by taking out air conditioners from the base stations as well as lowered power requirement of
the equipments.
Moving to its corporate headquarter GPHouse and associated benefits such as waste water recycling,
reduced illumination requirement, paperless approval systems and various scale effects are some of the
notable efficiency drives in addition to numerous large and small efficiency initiatives across the company.
Grameenphone has also made significant advancements in green initiatives which have reduced its carbon
footprint and led to increased utilization of solar energy. Since 2011, Grameenphone has undertaken a
company wide cost transformation project which aims towards streamlining GP processes thereby
optimizing costs and making the company more efficient in the years to come. This has given notable
contribution to cost efficiency, along with a structured operational efficiency method that helped the
company to save as high as BDT 2.4 billion in operational cost in the year 2012.
d) Business Reviews and Financial Reviews
Business reviews and financial reviews are conducted on a quarterly basis by the Group. The purpose of
business review is to ensure strategic control and follow-up of results based on the prevailing strategic
objectives, value drivers and key changes to risk exposure. Financial reviews provide the internal quarterly
results follow-up for the Company. The purpose is to provide an analysis of the economic and financial
situations, which will then form the basis for external reporting and presentations, and to provide quality
assurance for the financial reporting. In addition to quarterly business and financial review with Group, CEO and
CFO review financial results on a monthly basis and set action points to achieve the company business goals.
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PAGE 38
e) Management of Assets
Grameenphone, in its pursuit of best quality network for its subscribers, has been investing in cutting edge
telecom technology since its inception. Transparency and accountability is ensured at all stages from
acquisition to disposal to protect the interest of Shareholders. Internationally accepted safety measures
have been implemented and periodic physical verification is undertaken on a test basis to safeguard the
assets and to ensure representational faithfulness of reported numbers. All the assets are adequately
insured against industrial risks with local and international insurance companies.
f) Statutory Audit and Certification
Statutory Audit of the Company is governed by the Companies Act, 1994 and Securities and Exchange Rules
1987. As per these regulations, auditors are appointed by Shareholders at each Annual General Meeting
(AGM) and their remuneration is also fixed by the Shareholders at the AGM. Appropriate structure is in place
as per corporate governance best practices to ensure independence of statutory auditors. In addition to the
audit of annual financial statements, the auditors also carry out audit of half-yearly financial statements of
the Company.
Further, to ensure adequate regulatory discharge, a Compliance Certificate is also obtained from licensed
practicing professionals who certify that the Company has duly complied with all the regulatory
requirements as stipulated by the Bangladesh Securities and Exchange Commission (BSEC).
g) Internal Audit
Internal Audit supports the Company in achieving its objectives by bringing a systematic and disciplined
approach to evaluate and improve the effectiveness of its risk management, control and governance
processes. In order to ensure organizational independence of Internal Audit, the Head of Internal Audit
reports functionally to the Audit Committee and administratively to the Chief Executive Officer.
Grameenphone Internal Audit is empowered to carry out its activities in Grameenphone and its subsidiaries.
Internal Audit activity is governed by the Internal Audit Charter, which is approved by the Board.
Grameenphone Internal Audit department discharges its assurance and consulting activities through
management of three distinct audit streams: Finance, Technology and General Business processes.
Additionally, a separate team is responsible for quality assurance of internal audit activity. A risk-based
annual audit plan is in place, which takes into consideration the strategic imperatives and major risks
surrounding Grameenphone, while considering pervasive audit needs. Grameenphone Internal Audit also
works closely with Telenor Group Internal Audit in sharing knowledge and resources to ensure achievement
of internal audit deliverables.
h) Internal Control over Financial Reporting (ICFR)
Corporate Governance is well-built in GP and is reached to even greater height in terms of sound internal
control pursuits. In 2012, the practice has been strengthened as control owner/performers are getting more
involved, aware and proactive rather than being enforced. Partnering among Board of Directors,
Management and Employees of the Company has made this continuous success story of pursuing Sarbanes
Oxley Act in GP since 2006. The outcome of the effort is award winning true fair representation of financial
report.
The scope of ICFR includes Company Level Control (CLC) along with General Computer Control (GCC) as well
to ascertain operational efficacy, consistent and dependable financial reporting, information security and
legal compliance. This reasonable assurance has become even more crucial after being a listed company in
the countrys Stock Exchanges.
i) Related Party Transactions
The Board through its Audit Committee reviews all the related party transactions time to time. Abiding to the
laws, a Director who has an interest in a transaction abstains from deliberation and voting on the relevant
resolutions in respect of the transactions at the Board meetings. Details of theses transactions are set out
under Notes to the Financial Statements.
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j) Dividend Policy
The Board of Directors has established a consistent dividend policy which forms the basis for the proposals
on dividend payments that it makes to the Shareholders taking into consideration the business performance
of the Company and its strategic initiatives. The Board believes that it is in the best interest of
Grameenphone to draw up a long-term and predictable dividend policy. The objective of the policy is to
allow the shareholders to make informed investment decisions.
k) Strategic Risk Management & Risk Mitigation
Risk Management at GP is concerned with earning competitive returns from the Companys various business
activities at acceptable risk level. It supports the Companys competitiveness by developing a culture,
practice and structure that systematically recognizes and addresses future opportunities whilst managing
adverse effects (i.e. threats) through recognizing risk and acting appropriately upon it. The Company has
well defined risk management manual and processes to mitigate strategic and enterprise level risks.
l) Revenue Assurance and Fraud Management
Revenue Assurance function secures the revenue generated by any business activity and its realization
through preventing or fixing any possible revenue leakages. This function also supports in revenue reporting
accuracy. In place Fraud Management system and processes ensure innovative & effective defense
mechanisms to prevent losses from internal / external Telecom fraud.
m) Compliance with Rules & Regulations of the Country
Compliance helps to build trust among the Board Members, Shareholders, Customers and other
stakeholders. As the leaders of a compliant Company, the Management Team of Grameenphone adopted
strategies that assure compliance with all legal and regulatory requirements. This ensures that good
governance cascades right throughout the Company. Grameenphone is subject to close monitoring process
of regulatory bodies that focus on transparency and require that Grameenphone provides accurate and
periodic reporting of issues/events and certification where necessary. In this context, Grameenphone
regularly provides a complete set of financial statements and relevant documents to the Bangladesh
Securities and Exchange Commission (BSEC), Stock Exchanges, National Board of Revenue (NBR), Registrar
of Joint Stock Companies & Firms (RJSC), Bangladesh Telecommunication Regulatory Commission (BTRC),
the Board of Investment (BOI) and all other relevant bodies and authorities. Further, in order to conduct
day-to-day business in a compliant way, Grameenphone renders its best efforts to comply with the existing
applicable laws of the country as well as with the directives/guidelines/ regulations of various Government
Authorities. Grameenphone also takes various initiatives to conduct awareness sessions on existing and
proposed laws and regulations of the country to ensure compliance throughout the Company. Overall,
Grameenphone has always strived to remain a fully compliant Company accommodating every possible ways
and strategies to ensure the same.
n) Business Continuity and Crisis Management (BCCM)
Grameenphone has adopted Business Continuity and Crisis Management (BCCM) program as part of
corporate governance. Business Continuity Management is a holistic process of identifying potential threats
and consequent proactive preparation for creating organizational resilience. This is to enable
Grameenphone to avoid threats or if it happens, to respond effectively. It aims the objective that threats are
not escalated to crisis rather managed at earlier stage.

Policy
Procedure
Guidelines
Assist in formulating, aligning & implementing Group &
Local Policies, Procedures, Guideline & other governance
documents to guide the way of workGovernance
GPBoard
CEO
CFO
Local Risk Manager
Risk Assessment Supervisor
Risk Owner
Capture, Coordinate, Assess and Escalate company
level risks & ensure strong strategic risk management
process to secure possible unearthing loss
The Risk Management Framework High-level Governance Framework
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PAGE 40
Crisis management process requires being ready with Business Continuity Plan (BCP) and Crisis
Management Plan (CMP). BCPs are made to run the business at minimum acceptable level in case of any
threat in real life. The CMP documents procedures to be followed in case of an incident escalated to crisis.
It is expected from such readiness that Grameenphone would be able to deliver critical services at an
acceptable level and to bring the business back to normal within an acceptable time period.
BCCM approach encompasses all enterprise-wise critical business processes. Risk Assessment (RA),
Business Impact Analysis (BIA), Creating & updating BCP & CMP, exercising & review are the key
process-cycle followed as BCCM practice at Grameenphone.
o) Ethics and Behavior
i) Codes of Conduct
GP has adopted Code of Conduct (Code) approved by the Board of Directors, which reflects GPs core
values, integrity, respect, trust and openness. It provides clear direction on conducting business,
interacting with the community, government, business partners and general workplace behavior. It also
includes guidance on disclosure of conflict of interest situations, maintaining confidentiality and
disclosure of information, good international practices and internal control and the duty to report
where there is a breach against the Code. The Codes are properly communicated to all the employees
including its Board members and others acting on behalf, who are strictly required to abide by it. All of
them have certified in writing that they have read and understood the Codes.
ii) Restrictions on dealings in GP Shares by Insiders
The Company has established a detailed policy relating to trading of GP shares by Directors, Employees
and other Insiders. The securities laws also impose restrictions on similar transactions. All the Insiders are
prohibited from trading in the GP shares, while in possession of unpublished price sensitive information
in relation to the Company during prescribed restricted trading period. Directors and Employees are also
required to notify their intention to trade in the GP shares prior to initiating the same.
iii) Supplier Conduct Principles
The Supplier Conduct Principles (SCP) outline the standards for ethical and business conduct
expected for suppliers and contractors in their relationship with the Company. The SCP are binding on
the Companys suppliers through the confirmation and signing of the Agreement on Responsible
Business Conduct to ensure high standards of business ethics amongst all suppliers of the Company.
p) Investor Relations (IR)
As the largest public listed corporate house in Bangladesh, Grameenphone has always placed high
importance to the investor community and catering to their various information requirements. With a vision
of establishing the most effective two-way communication between the investors and the Company, a
dedicated Investor Relations Department started its journey in 2010. IR as a specialized department has
maintained contact with both local and international investors, analysts, market experts and financial
community on a proactive basis. This also reflects GPs commitment towards developing the Capital Market
of the country by introducing global best practices and ensuring transparency and accountability from the
general investors perspective. Notable events that IR conducted during the year are Asian Road Shows in
Hong Kong & Singapore, quarterly financial publications and press conferences, institutional investors
nights & analyst call conferences, Annual Investor Night 2012 and Financial Journalist Workshop on Capital
Market.
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q) Shareholders
i) Communications with Shareholders
We believe good Corporate Governance involves openness and trustful cooperation between all
stakeholders involved in the Company, including the owners of the Company the Shareholders.
Information is communicated to the Shareholders regularly through a number of forums and
publications. The Company has adopted a detailed policy on information disclosure and
communication. In compliance with continuous disclosure requirements, the Companys policy is that
Shareholders will be informed in a routine manner of all major developments that impact the business
of the Company and also be able to make informed decisions.

ii) Information Disclosure
In accordance with the disclosure requirements, the Company follows these three main forms of
information disclosure:
l Continuous disclosure which is its core disclosure and primary method of informing the
market and Shareholders;
l Periodic disclosure in the form of quarterly and yearly reporting of financial results and
other issues; and
l Event based disclosure as and when required, of administrative and corporate
developments, usually in the form of stock exchanges & press releases.
All information provided to BSEC and stock exchanges are immediately made available to Shareholders
and the market on the Companys Investor Relations section of the website: www.grameenphone.com.
iii) General Meeting
The General Meeting is the supreme governing body in Grameenphone. The Company recognizes the
rights of Shareholders and the Shareholders interests are primarily ensured through GPs Annual
General Meeting (AGM). The Company requires its Board and auditor to attend each AGM so as to be
available to answer Shareholders queries on the result of the Company.
iv) Website
All financial results and key performance indicators as well as other relevant financial and
non-financial data are posted on the Investor Relations section of the Companys website:
www.grameenphone.com.
v) Shareholders Queries
Whilst the Company aims to provide sufficient information to Shareholders and Investors about the
Company and its activities, it also recognizes that Shareholders may have specific queries relating to
their shareholding. To ensure that Shareholders can obtain all relevant information to assist them in
exercising their rights as Shareholders, these queries may be directed at 01711555888 or mailed to GP
Share Office at shareoffice@grameenphone.com.
Grameenphone believes in transparency and accountability to the society as a whole through establishment of an
efficient and effective Corporate Governance regime. It also believes that Corporate Governance is a journey and not
a destination and it needs to be continuously developed, nurtured and adapted to meet the varying needs of a
modern business house as well as the justified aspirations of our valued investors and other stakeholders.
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PAGE 42
Corporate Responsibility (CR) in Grameenphone (GP) is integrated with Company strategy. GP revamped its CR strategy in 2012,
with the goal to ensure long-term sustainability of the CR initiatives. Under the refurbished strategy, CR initiatives will be related
to the Companys main strength - communication technology. Besides, GP will extend its hands to support the victims of any
natural disaster as and when required. Following are some of the projects running under the new policy.
Corporate Responsibility at Grameenphone
Sustainable community development to serve the community better
Online School
Being a socially responsible company, GP strives to find a
way to intervene through which quality education can be
ensured even in deep rural areas of the country. With this
objective in mind, Grameenphone launched Online
School (pilot) initiative.
The concept of Online School is that, a teacher
conducts classes from a distant location using video
conferencing technology and in the class, there are
moderators who help the teacher in operational issues.
These moderators are from the local community and
have no teaching background. At present, there are 120
students in two classes (Elementary & KG) and the
school is located in Gazipur.
Teledermatology
GP launched Teledermatology Pilot Initiative
in partnership with Telemedicine Working
Group Bangladesh Ltd. (TWGBD) to provide
quality skin disease consultations to the
underprivileged community. The prime
objective of this project is to enhance the
quality of life of vulnerable and underserved
community of peri-urban/urban slums and
rural Bangladesh. An innovative device has
been developed, named DICOT (Digital
Imaging & Communication on
Telemedicine), which is supported by TIMES
(Telemedicine Information Management &
Education System) software.
The initiative was undertaken as a pilot project in three rural communities in mid-February 2012. Till December 2012, 1490
patients took services from 3 centers. GP is looking forward to expand the service in 2013.
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Corporate Responsibility at Grameenphone
Response to Natural Disaster
Natural disasters are part of life of the people of
Bangladesh. One such disaster in the form of a
tornado hit the coastal belts of Noakhali on the
11th October 2012. To support the affected
community and to mitigate peoples sufferings,
GP distributed relief materials in Hatiya.
In order to support distressed population to fight
against extreme cold, Grameenphone
distributed a total of 9045 blankets, mostly at
the northen part of the country and Khulna.
Besides, Grameenphone and GPIT employees
donated more than 4000 clothes that were
distributed amoung the underprevilleged
community.
Earth Hour
Earth Hour is a global call for action by every
individual, every business and every government
throughout the world to come forward and be
responsible towards the environment.
Grameenphone took a step forward and switched off
the lights of its state-of-the-art business facility -
GPHouse - for one hour. During this one hour
blackout, the Grameenphone employees and their
family members lit candles to naturally light up the
surrounding environment.
Ensuring Safe Drinking water through SMS Based Solution
Lack of access to safe drinking water and adequate sanitation facilities is a significant barrier to improving the health and
wellbeing and reducing poverty in Bangladesh. HYSAWA, an international organization, in partnership with the LGRD Ministry
installed approximately 30,000 tubewells in around 300 unions.
GP as a responsible corporate citizen has come forward to make this mammoth administrative task easy through the
introduction of an SMS based solution. Through this solution, if a tubewell becomes nonfunctional, the caretaker will generate
an SMS and send it to a port. This SMS will go to HYSAWA Head Office as well as to the local mechanics. The mechanics will
then come and repair the tubewell and send SMS to the same port.
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PAGE 44
Climate Change & Green Endeavor for Green Business
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Corporate
Climate
Initiatives
Goals
l Lower 40% CO2
Emission by 2015 [From
Business As Usual]
l Green Company
Measures
l Internal Optimization &
modernization in-NW, IT,
and Offices
l Green Network & IT
l Env. Mgt. Systems
l Employee Awareness
Management
controls
l Climate Change Strategy
l Green Champions
l Business Reviews
Climate change has become an issue of intense importance for
Bangladesh, as according to National Geographic, Bangladesh will remain
the most vulnerable nation to the impacts of climate change in the coming
decades. As a responsible corporate entity, Grameenphones endeavor to
become a Green company by Building a Greener Network was initiated
back in 2007 to transform GPs Network and Office Building into
environment friendly effective solutions, and to reduce carbon emissions by
saving energy and fuel consumptions. To that end, GP unveiled a Climate
Change Program in 2008 to gain sustainability and to help the community
and people. GP has a specific environmental roadmap to help build a
low-carbon society. The Company has also set a target to bring down carbon
emission (CO2) by 40% within 2015 and has taken a number of other
initiatives to reduce its carbon footprint individually and collectively.
Green Initiatives:

a. Initiatives undertaken to reduce power consumption from Network
Network Modernization and Obsolute Node Power Down Project
As Grameenphone (GP) Network is responsible for 90% of its overall energy consumption, the Company took a network
modernization project to reduce its energy consumption by 50% from the network. GP has also done its obsolute equipments
power shutdown program after the swap which also saves a significat amount of energy and reduces CO2 emissions.
Core Site Consolidation and Optimization Project
GP initiated a scheme named NANO Project to consolidate and optimize core locations throughout the country to reduce
energy consumption and increase work efficiency.
Deployment of DC Ventilation
GPs another initiative is to dismantle the existing Air Conditioner systems and to install DC Ventilation Systems instead to
regulate room temperature to an acceptable level. DC Ventilation System is also known as free cooling system. This unique
system reduces the operating hour of the Air Conditioner units and hence electricity cost. The DVS proves extremely viable
with prospects of saving 40%-50% of energy of the entire site and reducing huge CO2 emissions.
Reduction in number of Generators and Generator Run Hours
By increasing battery backups, GP has reduced its generators runnnig hours significantly. GP has also offloaded a lot of
generators from its existing network to save fuel consumptions.
Development of renewable enegry through Solar Sites and Wind Turbines
In December 2007, GP deployed its first two Solar Sites in Ajmiriganj, Sylhet on an experimental basis. Currently GP has 165
Solar Sites, including 1 Humming Bird Solar Site (very small solar site; number of TRX is only 2) and 2 LCCS Solar Sites (Low
Cost Coverage Solution; number of TRX is 4-6) and 1 Wind Turbine running on renewable energy.
PAGE 45
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Climate Change & Green Endeavor for Green Business
b. Initiatives undertaken in the Head Office
GPHouse A Green Workplace
GP's Head Office building, known as GPHouse, has a gas-based CoGen system, which helps the building save
approximately 60% energy compared to the traditional building system. The building has a waste water treatment plant
which is now saving up to 31% of the regular water consumption.
Implementation of Environmental Management System (EMS)
As per ISO 14001:2004 standards, GP established an Environmental Management System where proper disposal
guidelines are being imposed, resources are being trained and certified, used batteries are being refurbished and recycled,
e-waste management system is being engaged, and regular audits are being carried out to ensure energy conservation.
Transport Initiatives
To cover the full spectrum of GPs operations, a number of initiatives have been taken by GPs Transport team such as fleet
management, CNG conversion, fleet optimization and pooling, fuel management, optimized route for shortest travel,
sourcing fuel efficient vehicle, and awareness building about vehicle usage among the employees, etc.
Recycle, Reuse, Reduce, Dispose off Project
GP has signed agreements with local and foreign vendors to recycle its old telecom equipments. As a green company, GP
is proud to be the pioneer in this type of recycling in Bangladesh by recycling not only its old network equipments but also
the batteries. GP also has taken initiatives to dispose of its old IT equipments, power and electrical materials, scrap
wastage materials and used lubricant left by generators.
c. Initiatives undertaken for underprivileged segments
Community Power Project
GP partnered with the University of Oslo to develop an advanced Community Power Project. A mini-grid has been
developed in a remote village named Paharpur at the northeast of Bangladesh and around 136 households have been
connected to this grid to get power from 5 pm to midnight. GP rolled out a Community Information Center in this off-grid
region where computer, printer, scanner are running on solar power during daytime providing internet services.
d. Initiatives undertaken for awareness/conciousness purposes
Awareness Programs
GP always encourages and promotes various Employee awareness and engagement programs to enable the Employees to
make a difference. A few such initiatives are: Promoting Renewable Energy through GP Sponsored ICDRET12, Celebrating
Earth Hour 2012, Sharing Knowledge with Young School Students, Sponsoring as a CoHost the GSMA GPM Working
Program for promoting Renewable Energy in Bangladesh, and Knowledge Based articles, etc.
Click Green A Photography Competition
GP has successfully completed the third year of a photography competition which is launched every year on 5
th
June on
World Environment Day. The aim is to engage Employees, GP Facebook fans & journalists to act and reflect on what
climate change means to them.
Everyday we push ourselves so that we can
make it an enjoyable experience
for you
PAGE 47
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Operational Results in million BDT
Revenue 91,920 89,060 74,733 65,300 61,359
Gross Profit 52,391 51,221 38,730 32,222 28,667
Operating Profit 33,625 32,572 20,207 20,518 15,350
Profit before tax 30,193 33,006 20,913 18,596 11,579
Net Profit after tax 17,505 18,891 10,705 14,968 2,984
Financial Position in million BDT
Paid-up Capital 13,503 13,503 13,503 13,503 12,152
Shareholders' equity 35,458 38,883 50,374 50,154 27,588
Total assets 117,665 108,905 109,502 109,162 108,194
Total liabilities 82,207 70,022 59,129 59,008 80,606
Current assest 14,005 32,421 30,802 22,182 14,430
Current liabilities 63,060 51,469 42,300 38,952 50,231
Non current assets 103,660 76,484 78,700 86,981 93,765
Non current liabilities 19,148 18,552 16,828 20,056 30,375
Financial Ratios
Current Asset to Current Liability 0.22 0.63 0.73 0.57 0.29
Debt to Equity 0.16 0.13 0.10 0.14 0.68
Gross Profit Margin 57% 58% 52% 49% 47%
Operating Profit Margin 37% 37% 27% 31% 25%
Net Profit Margin 19% 21% 14% 23% 5%
Return on Equity 47% 42% 21% 39% 11%
Return on Total Assets 15% 17% 10% 14% 3%
Ordinary Shares Information
Ordinary Shares outstanding (in million) 13,503 13,503 13,503 13,503 12,152
Face Value per share 10 10 10 10 1
Cash Dividend on paid up capital* 140% 205% 120% 60% 13%
Dividend payout* 108% 147% 151% 54% 53%
NAV per Share ** 26.26 28.80 37.31 37.14 22.70
Net Operating Cash Flow per Share *** 22.23 30.09 23.16 24.77 20.24
Earnings Per Share *** 12.96 13.99 7.93 12.08 2.46
*Including proposed dividend
**Based on Tk. 10 equivalent ordinary share outstanding at 31 December.
*** Based on weighted average number of share of Tk. 10 each.
2012 2011 2010 2009 2008
Consolidated Individual
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PAGE 48
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Revenue (Million BDT)
* ARPU - Average Revenue Per User ** AMPU - Average Minutes Per User
61,359
65,300
74,733
89,060
91,920
27,351
10,369
8,456
12,963
42,508
Net Operating Cash Flow/Share (BDT)
20.24
24.77
23.16
30.09
22.23
ROA %
3.0%
13.8%
9.8%
17.3%
15.5%
Market Share %
47%
44%
44%
43%
41%
Operating Profit (Million BDT)
15,350
20,518 20,207
32,572
33,625
108,194
109,162 109,502
108,905
117,665
NAV/Share (BDT)
22.70
37.14 37.31
28.80
26.26
ROE %
11.1%
38.5%
21.3%
42.3%
47.1%
*ARPU (BDT)
262
250
231
214
191
NPAT (Million BDT)
2,984
14,968
10,705
18,891
17,505
Capex (Million BDT) Total Assets (Million BDT) Total Equity (Million BDT)
27,588
50,154 50,374
38,883
35,458
EPS (BDT)
2.46
12.08
7.93
13.99
12.96
Subscriber ('000)
20,993
23,259
29,970
36,493
40,021
**AMPU (Minutes)
309 306
279
258
236
PAGE 49
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Financial Review - 2012
Grameenphone ended the year 2012 with 40.02 million subscription base having 41.2% market share. Regulatory directive on
new SIM activation involving subscriber identity verification has resulted market contraction in the second half of the year and
reduced the industry growth to 14% in 2012 compared to 24% in 2011.
Grameenphone managed a moderate top line growth in 2012 amid intense competition and regulatory directives on 10-second
pulse tariff structure. Introducing simpler price plans with a clear cut message, user friendly innovative offers and impressive
growth in non voice revenues have been the key points behind the revenue growth. However, revenues from adjacent business
i.e. wholesale business and Grameenphone IT Ltd. have given a good uplift in total revenue.
In the opex front, increase in regulatory opex and market spending was partly compensated by lower subsidy expenses and
continuous cost optimization initiatives, that resulted a fairly stable EBITDA margin of 53% level for both 2012 and 2011 with a
3.2% growth in operating profit. However, amortization cost of 2G License and interest expenses have led the net profit after
taxes to decrease by 7.3%. However, the underlying profit from business shows positive trend without considering costs
recognized for the 2G license.
Subscriptions
Operating Expenditure
Net Profit after Taxes
Total Assets
Revenue
Subscription base reached 40.02 million at the end of 2012.
Subscription base increased by 9.7% during the year with 3.5 million additions.
Active internet users increased to 6.3 million from 3.9 million in 2011.
In a competitive market, GP managed to retain its subscriber market leadership with 41.2% share.
Total operating expenditure in 2012 increased by 4% (BDT 166 crore) from 2011.
The increase was mainly from regulatory opex as per 2G license and increased market spending.
The increase in opex was partly offset by lower subsidy due to SIM tax reduction from July 2011.
To compensate for the growth in business opex, GP continued with operational efficiency in 2012 which resulted in
savings of BDT 240 crore during the year.
In 2012, GP recognized investment for 2G icense and spectrum fees in asset base. In this connection, GP booked amortization
cost of BDT 227 crore and notional interest cost of BDT 205 crore on payments made against license fees.
In addition, GP had to pay interests on short term borrowings to finance the payments related to 2G license fees during the year.
Due to the above, despite BDT 105 crore higher operating profits, net profit after tax for 2012 decreased by 7.3% (BDT 139 crore)
compared to 2011.
Total asset base increased by BDT 876 crore in 2012 compared to 2011, mainly due to recognition of 2G license and
spectrum, partly offset by reduced cash balance.
Cash balance decreased due to payment of 2
nd
installment of 2G license and spectrum fees, final dividend for the year 2011,
interim dividend for the year 2012 and higher payment against interest and income taxes.
Capital expenditure during 2012 was BDT 1,262 crore (excluding investment recognized for 2G license fees), spent for
enhancement of network capacity and quality.
Total Liabilities
Total liabilities increased by BDT 1,219 crore during the year mainly due to recognition of 3
rd
installment of 2G license fees as
liability and borrowings related to payment of 2
nd
installment of 2G license fees.
The increase was partly offset by payments made to government against VAT and SIM tax.
Total Equity
Total equity decreased by BDT 342 crore during the year 2012 due to payment of final dividend for the year 2011 and interim
dividend for the year 2012.
This was partly offset by BDT 1,750 crore net profits generated from operations during the year.
Revenue increased by 3.2% (BDT 286 crore).
Competitive market throughout the year and regulatory tariff directives implemented from September 2012 led a
slowdown in revenue growth compared to previous years.
In 2012, revenue growth was driven by higher usage and contributions from non-voice services eg. SMS/Data/VAS.
Wholesale business and Grameenphone IT Ltd also had considerable contribution to yearly revenue growth.
Impressive 35% growth in data revenues driven by low-cost mini-pack internet packages.
Simplified price plans Bondhu, Nishchinto and Amontron introduced as the hero products during the year have
gained popularity among the users.
2012 2011
3.53
36.49
40.02
2012 2011
2012 2011
2012 2011
286
8,906
9,192
166
4,153
4,319
1,889
13.99
1,750
12.96
EPS
2012 2011
139
10,890
11,767
876
2012 2011
7,002
8,221
1,219
3,888 342
2012 2011
3,546
|
PAGE 50
Value Added 2012 % 2011 %
Revenue 91,920,446 89,059,617
Other income including interest income 740,591 2,040,421
VAT on revenue and other income 13,799,076 13,371,190
106,460,113 104,471,228
Less: Cost of network and services 24,599,324 23,779,978
Available for distribution 81,860,789 100% 80,691,250 100%
Distributions
Employees 6,858,404 8.4% 6,580,608 8.2%
Government 38,347,305 46.8% 39,212,430 48.6%
Providers of finance:
Financial institutions 3,973,411 4.9% 969,175 1.2%
Shareholders* 17,504,770 21.4% 18,891,102 23.4%
66,683,890 81.5% 65,653,315 81.4%
Value reinvested and retained:
Depreciation and amortization 15,176,899 18.5% 15,037,935 18.6%
Retained profit - - - -
15,176,899 18.5% 15,037,935 18.6%
81,860,789 100% 80,691,250 100%

* Distribution for 2012 was BDT 18,904,200,308 (including the proposed dividend) out of which BDT 17,504,769,573 was from the wealth created during the
current year. The rest of the distribution was from wealth accumulated in earlier years.
in '000 BDT
Value Added Statement - 2012
Government (49%)
Employees (8%)
Shareholders (23%)
Financial Institutions (1%)
Value reinvested and retained (19%)
Government (47%)
Employees (8%)
Shareholders (21%)
Financial Institutions (5%)
Value reinvested and retained (19%)
Distribution of Value Added (2012)
Distribution of Value Added (2011)
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Contribution to National Exchequer
The collective contribution to the National Exchequer from inception up to December 2012 was BDT 308.8 billion (BDT 30,876
crore), of which, BDT 63.6 billion (BDT 6,359 crore) was made in 2012 alone. Out of total BDT 308.8 billion (BDT 30,876 crore),
BDT 231.9 billion (BDT 23,189 crore) was made on account of direct tax, VAT and duties through National Board of Revenue
(NBR) and Bangladesh Telecommunication Regulatory Commission (BTRC), BDT 30.2 billion (BDT 3,023 crore) on account of
fees of 2G license and spectrum in 2011-12, purchase of additional spectrum in 2008 and equipments for Lawful Interception
Compliance for the government, BDT 23.1 billion (BDT 2,307 crore) through commercial agreements with Bangladesh Railway
(BR) and Bangladesh Telecommunications Company Limited (BTCL) and BDT 23.6 billion (BDT 2,358 crore) as indirect
payments on account of local and foreign staff income taxes and withholding taxes on operating expenditure payments.
Grameenphone has been the largest corporate taxpayer in the country for the last six years.
Grameenphone has also generated direct and indirect employment for a large number of people over the years. The company
presently has about 5,000 employees while more than 400,000 people are directly dependent on Grameenphone for their
livelihood, working for the dealers, retailers, electronic reload and scratch card retail outlets, suppliers, vendors, contractors
and other business partners.
With the payment of taxes and the investment in the network, Grameenphone is making a significant contribution to the
countrys development and growth.
Year-wise Contribution to National Exchequer
as of December 31, 2012
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Withholding Taxes - 1 2 2 3 4 8 14 26 44 75 113 119 140 257 711 840
BTCL/BR - 13 18 23 50 43 123 147 147 256 278 403 335 180 114 86 92
License & Spectrum - - - - - - - - - - - - 259 333 - 1,350 1,081
BTRC 1 3 3 7 21 57 71 65 117 124 252 477 620 384 431 514 666
NBR - 30 12 27 39 103 200 357 535 872 1,213 1,851 2,174 2,014 2,913 3,354 3,680
Total Payment 1 47 35 59 113 208 402 584 824 1,296 1,818 2,843 3,507 3,050 3,715 6,015 6,359
1
47 35 59
113
208
402
584
824
1,296
1,818
2,843
3,507
3,050
3,715
6,015
6,359
In BDT crore
|
PAGE 52
Directors Report
Dear Shareholders,
On behalf of the Board of Directors and Management, I welcome you all to the 16
th
Annual General Meeting (AGM) of
Grameenphone Ltd. (GP). We have the pleasure to place herewith the Directors' Report and the Auditors' Report together with
the Audited Financial Statements of the Company for the year ended December 31, 2012 for your valued consideration,
approval and adoption.
A journey of success through challenges
In 2012, GP made progress in many areas amid regulatory unpredictability and a fierce competition in the six-operator market
along with the WiMAX players. Though challenges of diverse natures came from various directions, our company and our
infrastructures remained vibrant in the daily life of our customers. We would like to thank the Bangladesh Telecommunication
Regulatory Commission (BTRC) & the Ministry of Posts and Telecommunications (MoPT) for finally providing us the 2G license.
With the 2G license, not only telecom operators are believed to be on track towards positive investment for future network
expansion but also a positive intention of the government towards building a sustainable telecom market in Bangladesh is
ensured.
Though our winning streak came under strains in the first half of the year, we were finally back on the right track and sharpened
our competitive edge even further through superior service quality, innovative products, improving price perception and our
customer-centric approach. Throughout the year, we put our efforts to deliver the best telecommunication services to the
remotest corners of the country.
As a result, more than 3.5 million new customers put their trust on us, lifting our subscriber base to a new height of 40.02 million
at the end of the year. And we remained the most preferred mobile operator of the mobile users with a 41.2% subscriber market
share.
Outside our core cellular business, we have interesting activities going on related to GPIT, Wholesale and Financial Services as
those are now more organized and more revenue oriented than before.
Socio-economic scenario
Bangladesh rang in 2013 on a positive note due to a number of achievements on the socio-economic front in 2012 despite a
recession in some major world economies. Bangladesh has been able to maintain a GDP growth rate at around 6% amid
political uncertainties and deficient energy and infrastructure. Also, the 12-month average inflation fell by two percentage
points, compared to 2011, to a single digit at 8.74%. However, cost of living went up by 6.4%, excluding expenditures on the
areas such as education, treatment and transportation. Forex reserves crossed the USD 13 billion mark for the first time, backed
by healthy remittance flows and negative import growth.
Bangladesh also ranked third among the top FDI recipient countries in 2012. The continuation of the prevailing optimism about
the macroeconomic stability and growth prospects would depend on quicker solutions to energy and infrastructure crises, and
political stability.
Telecommunication Industry Scenario
In 2012, the mobile industry added another 15 million new subscribers, taking the overall figure to almost 100 million. The
operators were keen to expand their customer base through new acquisition and campaigns in the fiercely competitive market.
The majority market share is owned by four key operators and GP retained the lead with a 41.2% share.
FOR THE YEAR ENDED DECEMBER 31, 2012
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Directors Report
The long cherished 3G services once again eluded the telecommunication market in 2012 due to inconclusive progress in the
licensing process. However, Teletalk was given a head start by the Government, allowing them to launch 3G services without the
formal license and ahead of the private operators. The licensing guidelines issued in July 2012 contained provisions not
acceptable to operators and these were voiced out by GP and other industry players. Regulatory uncertainty, safeguarding of
investment and clarity on scope of license were the key concerns. Pursuant to three rounds of discussion, we are positive that
the MoPT will provide safeguards in the license conditions. The success of the licensing process will depend upon fruitful
resolution of those concerns.
The interconnection regime was further complicated with the issuance of additional 79 new licenses - 22 new ICX (total 25), 23
new IGW (total 27), and 34 new IIG (total 36), making the interconnection architecture extremely difficult to manage. It is
anticipated that the overall interconnection cost would increase and the quality would also suffer as a result of too many
players and this would ultimately affect the consumers.
Six licenses were issued for International Terrestrial Cable (ITC) in 2012, out of which only one operator declared the launch of
its services in December 2012. These alternate routes are extremely crucial to reduce dependency on the lone BSCCL
submarine cable for internet and international data connectivity.
Illegal international VoIP call termination remained a major concern for the industry as the country kept losing international call
revenues. According to BTRC statistics, out of total 55-60 million minutes a day, approximately 10 million minutes are
terminated illegally. The newly issued commercially unviable gateway licenses seem to be further intensifying the already
looming concern for the Govt. The country is estimated to be deprived of almost BDT 8 billion revenue per year due to illegal
VoIP. GP has been involved in proactive dialogue and actions propagating curbing of the illegal VoIP traffic.
Mobile banking got some footing and the coverage of the service was widened as the large operators signed deals with banks
and other financial service providers like bKash to offer their infrastructure for domestic money transfer and payment services.
Regulatory Environment
The impasse related to 2G license of GP and 3 other operators was finally broken after the initiative taken by the Finance
Minister to resolve the MCF and VAT issues outside the court. All four operators got their licenses in August 2012. Unfortunately,
the 15% VAT rebate as agreed in the meeting convened by the Finance Minister in July 2012 was later disregarded by the NBR.
After the payment of the second installment of the license fees, the NBR declined to offer the rebate and the renewing
operators had to take an unaccounted 15% additional cost in their P&L. The operators and AMTOB continued to convince the
relevant authorities to get the promised VAT rebate without any success, and had to ultimately seek judicial remedy.
In general, the regulatory environment remained unpredictable in absence of a long-term roadmap and a much-needed
formal consultation process. Five major guidelines and directives including 3G/4G/LTE were issued but none of them could be
concluded and finalized. Among them, Value Added Service (VAS) guidelines were found to be against the mobile industry and
containing provisions that violate the operators right to provide VAS and Content. The other guidelines and directives published
e.g. Competition Regulation, NEIR and WiFi were found to be not following international best practices and not suitably crafted
in the local market context.
A new subscriber registration process was introduced on security grounds from October 2012 and the operators were asked to
stop selling pre-activated SIMs. This had a negative impact on the overall gross addition in the market and slowed down the
growth. Operators have expressed skepticism about the success of this initiative without the required counter verification of
subscriber information with the national ID database. If implemented properly, it should improve the quality of subscribers thus
helping industry.
The BTRC unilaterally pushed for the implementation of 10-second pulse and flat tariff much to the displeasure of the
operators. Operators had to take a hit on their top line due to the implementation of this new directive.
Directors Report
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PAGE 54
Industry outlook and possible future developments in the industry
With the successful 3G licensing, now planned in 2013, it is believed that a new era of broadband communication would start in
the country which would benefit the consumers by offering them superior speed, quality and content. This will fuel the growth
of the sector through the introduction of high speed internet, innovative services and rich contents based on 3G/4G/LTE
technology. This would also help the Government goal of digital Bangladesh.
In Bangladesh, there is still room to grow in the voice market since the real subscriber penetration is around 40% because of the
multi SIM phenomenon. Since the unaddressed subscriber segment belongs to the low income group, it would require an
innovative and economical service delivery model to make the service affordable to this particular segment.
In the coming years, the telecommunication industry would increasingly extend its scope of services beyond traditional voice
and SMS services. Because of the competitive market landscape and ever declining Average Revenue Per User (ARPU),
operators will have to explore adjacent markets to continue the growth. We would experience significant growth in other sectors
like mobile broadband, banking, e-commerce, health and education.
A new and smart operating model would be adopted by the industry to reduce cost and ensure added efficiency. Specific
initiatives will be taken to get sourcing partners to manage some parts of operation, increase network sharing and effectively
implement operational excellence programs.
The new National Telecom Policy is expected to be forward looking addressing the major impediments of the sector's growth,
encouraging investment, fostering innovation and opening up the possibility of convergence of different technologies and
services. A policy reform of such magnitude would require proper amendment and revision of the relevant laws and regulations
which have to be supported positively by the Govt. and the regulators. GPs endeavor is allowing a framework that is forward
looking and allows a level playing field. Technology has been changing rapidly worldwide and regulation should favor ability for
a quick adoption for the betterment of economy and consumers.
An Unexciting Capital Market
Bangladeshs Capital Market had been on a continuous downtrend throughout 2012. A relentless slide in the benchmark index
coupled with a persistent fall in the turnover value was well reflected in an erosion of investor confidence. DGEN, the market
tracking index of the Dhaka Stock Exchange (DSE), witnessed a staggering 19.7% decline compared to 2011 and closed at
4,219.31 points.
The announcement of a compensation package, leadership change in the DSE, legal tangles regarding directors shareholding
in listed companies, confusion over financing of Padma bridge, confrontational political environment and a bleak earnings
declaration by many companies were the major influencing factors in the market.
During 2012, GPs performance was better relative to the DSE General Index. Good earnings declaration, growth opportunities
and enhancing financial strength placed GP as a value-driven investment vehicle. GP stood 3
rd
on the list of top-traded stocks
in terms of value. Most of the price fluctuation of GP was attributable to market-driven sentiments, dividend declaration,
sponsor lock in expiry and regulatory issues.
Overall, the GP price soared by 7.03%, closing at BDT 175 at the year-end with a daily average turnover value worth BDT 137
million (BDT 13.70 crore). GP stocks experienced the highest value at BDT 228 and the lowest at BDT 104.80 during the year.
GPs market capitalization on 30 December 2012 stood at BDT 236.30 billion (BDT 23,630 crore) on the DSE, representing
13.07% of the total market capitalization.
Very competitive products with diversified offers
In a time of macro-economic challenges, GP put its best efforts to make the customers life easy, giving the best value for money
while maintaining the best mobile network in the country. We took a massive and bold initiative to revamp our product portfolio
to make it more simple and transparent in the spirit of our core value Make it Easy. Under the tag line of Clear Cut Offer, GP
has made the product USPs (unique selling point) more attractive and competitive for different customer segments which will
also help transform customers price perception about GP. We now offer the best F&F package in the country Bondhu; the
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Directors Report
most comfortable package to help subscribers call at any other operator at a very low call rate Amontron; the best flat rate
product Nishchinto, and many more.
During the year 2012, on top of competitive price plans, diversified promotional offerings and innovative value-added services
(VAS) were launched e.g. Voice Sachet offer, Special rate on recharge, Bonus campaign for GP Stars, GP App-Mobile self service,
GP Game store, Facebook-USSD to use Facebook without internet and Mobile twitting with SMS. GP also acquired the largest,
latest and legal music collection in its Welcome Tune and Music Radio library to give the best music experience to the
customers. Other than that, to continue with our drive to grow internet awareness, GP for the 2nd time organized Internet
Festival jointly with the daily Prothom Alo.
Further Excellence in Customer Experience
Being a customer-centric organization, GP strives for continuous improvement to deliver the best for its customers in line with
our motto Make it Easy. As our business grows, we will continue to strengthen our efforts to delight our customers in every
interaction by providing them with their desired services. In this endeavor, the year 2012 was one step ahead. In our effort to
bring comfort to our customers lives, an 1800-member Customer Service team ran 24/7, 365 days a year. A total of 75 million
customers received services throughout 2012 from Customer Service (over phone) touch points, the number being significantly
higher compared to the previous years.
Our Adjacent Businesses
i) Grameenphone IT Ltd.
Grameenphone IT Ltd. (GPIT) is a wholly-owned subsidiary of GP, providing state-of-the-art and end-to-end IT solutions
locally and to some international markets. With its 400 dedicated employees, presently it provides fully outsourced IT
services to GP and focuses its business on 4 verticals namely Banking, Financial Institutions, Government Enterprises, and
Telecommunications. The company had been profitable in 2012 and achieved its business targets with satisfaction of its
growing customer base. GPIT is preparing to pioneer Business Process Outsourcing (BPO) opportunities from Bangladesh to
global markets and is a strong promoter of Bangladesh as the next IT-outsourcing destination globally.
GPIT is an ISO-certified company with CMMI Level 3. With a more sharpened focus on innovation and efficiency, GPIT will
continue its endeavor to capture a greater market audience going forward.
ii) Wholesale Business
Wholesale Business is dedicated to provide Shared Telecom Infrastructure products and services, as per BTRC guidelines,
to other telecom operators as well as other businesses like WiMAX operators, ISPs, etc. Its prime objective is to make
optimum use of resources and reduce costs, by sharing the infrastructures, transmission capacity and OPEX with the
customers. Since the inception in 2010, it has shared more than 2,600 sites.
Currently, Wholesale Business has agreements with all the major Telecom operators, WiMAX operators; and ISP operators.
With its widest and well-maintained network infrastructure, GP has retained the leading role in infrastructure sharing.
iii) Financial Services
GP Financial Services enjoyed greater acceptance and growth of mobile financial services for executing basic transactional
services via mobile phone infrastructure from our existing services. GPs BillPay service, which allows customers to pay their
bills at GP-authorized outlets or via their mobile phones, processed and settled several million utility bills for all major utility
companies in the country and continued to grab a significant market share in its areas of operation. For Mobile Railway
Ticketing, we have experienced significant demand and acceptance from GP customers, but due to unilateral quota
imposition of 20% by Railway for all electronic ticketing and barring electronic tickets for six most desired trains, the growth
became stagnant resulting in customer dissatisfaction.
Directors Report
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PAGE 56
We have also partnered with bKash and DBBL to offer financial services that are enjoying expected growth. We have also
opened GPs MobiCash agent network to deliver approved mobile financial services, which we believe will bring positive
experience for GP customers and better revenue results for GP. Mobile financial services remain a priority area and GP plans
to introduce and enable other innovative transactional and mCommerce services in the year to come in line with the existing
and evolving regulatory environment.
Maximizing the benefits from the renewed network
We started 2012 with a renewed and advanced technology platform after the network swap. Major ambitions and focuses of
2012 were on maintaining the quality leadership, capitalizing gains from renewed network, catering business growth, improving
efficiency, and fortifying network security. Despite energy price hike, we have been able to achieve 42% energy cost saving. We
have also built up 72 sites with solar power in 2012. Our Annual Maintenance Cost (AMC) has been reduced by 28%.
Structured transformation initiatives through operational efficiency were taken in 2012. Reduced site development cost,
resource consolidation & optimization and efficient vendor management are some of the examples in this regard.
GP so far has invested BDT 213.4 billion (BDT 21,343 crore) in network expansion, upgradation and 2G license & spectrum fees,
which is currently covering 99.16% population with its 8,120 sites across the country. Timely investment has ensured network
expansion in areas of increasing network usage to cater for the business demand. The network platform has been prepared to
embrace 3G, and new technologies to win the business in future. A future-ready core, an agile access network and the ongoing
IP transformation are the key strengths of GP network to stay competitive and future-ready. GP will continue to invest in network
retaining high score in network quality.
Winning everyday through high performance and engagement
We believe we are built around people, and our success revolves around the skills, commitment, and drive of our employees.
GPs success also depends on our ability to adapt to changing socio-economic environments.
To meet the needs for the future, in 2012 GP heavily invested in organizational change management, talent development,
improving operational efficiency and people processes. We also realized that to become a world-class organization, we need to
invest in building the right culture around performance and engagement. This led to HR initiatives that cut across a wide range
of activities from organizational development to business-employee friendly policies.
We will continue our drives to become a best-in-class organization as well as remain a preferred employer for talented
Bangladeshis.
Corporate Responsibility Moving Ahead
GP has been practicing responsible corporate behavior since its inception. Our long experience in Corporate Responsibility has
given us in-depth knowledge on this sector. In 2012, GP reshaped its Corporate Responsibility policy and came up with a new
policy that supports sustenance of the projects by creating shared value. We have identified our key competence areas and
decided to employ them as the vehicle of our Corporate Responsibility. Moreover, this new CR philosophy has been integrated
with GPs corporate strategy. Detailed information on the initiatives of the Company towards CR activities is provided in the
Corporate Responsibility section of the Annual Report.
For a Green Business and a Green Planet
As part of our climate change mitigation efforts, GP aims to promote a low-carbon society, and GP's first priority is to cut the
excess CO2 emissions generated by its own operations. GP has set a target to reduce 40% carbon emission (CO2) within 2015
from its business. GPs endeavor to become a Green company by Building a Greener Network initiative was taken in 2007 to
transform GPs Network and Office Building into environmentally friendly solutions. This is why GP launched Climate Change
Program in 2008. The Company has taken a lot of other green initiatives to reduce its carbon footprint individually and
collectively. Detailed information on the initiatives of the Company towards climate initiatives is provided in the Climate Change
section of the Annual Report.
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Directors Report
Health, Safety, Security and Environment (HSSE)
GP always strives for a strong HSSE compliance approach through its HSSE Management system review and aligning its value
chain for HSSE standards. This year GP focused on continuous improvement within our supply chain area of social
accountability, anti-corruption and set a standard guideline of anti-corruption for our business partners. GP tried to ground
anti-corruption concept strongly in the industry & beyond through an interactive panel discussion comprising diversified
experts of different local corporate bodies. On the internal HSSE part GP has run extensive occupational health & safety
awareness sessions and e-awareness for risky target groups, TOT (Training of Trainers) for line functions to build up an HSSE
ownership mindset among line functions.
Directors Responsibilities for Financial Statements
The Directors are responsible for the governance of the Company, and in that capacity, the Directors confirm, to the best of their
knowledge that
(a) the financial statements, prepared by the Management of the Company, present fairly its state of affairs, the result of its
operations, cash flows and change in equity;
(b) proper books of account of the Company have been maintained;
(c) appropriate accounting policies have been consistently applied in preparation of the financial statements and that the
accounting estimates are based on reasonable and prudent judgment;
(d) the International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial
statements and any departure therefrom has been adequately disclosed;
(e) the system of internal control is sound in design and has been effectively implemented and monitored;
(f) there is no doubt, whatsoever, upon the Companys ability to continue as a going concern.
Corporate Governance
Integrity, transparency, openness and efficiency have been our key principles to establish good Corporate Governance in GP.
Being a public listed company, we have implemented sound governance structure and measures, and the Board of Directors
and the Management are pledge-bound to continue implementation of the higher standards of Corporate Governance in the
days to come.
The Company has complied with the conditions as stipulated in the Corporate Governance Guidelines issued on 7 August, 2012
by the Bangladesh Securities and Exchange Commission (BSEC). In this connection, status of compliance has been annexed to
this report as Annexure-I. A certificate from M/s Al-Muqtadir Associates, Chartered Secretaryies confirming compliance of
conditions of Corporate Governance Guidelines as stipulated under condition 7(i) is also annexed to this report as Annexure-IV.
Other Disclosures/Statements Pursuant to the Provisions of the BSECs Corporate Governance Guidelines 2012
l Segment/Product wise performance
Business activities of GP are not organized on the basis of differences in related products and services or variations in
geographical areas of operations. GP essentially provides similar products and services to customers across the country. GP,
however, reviews revenue performance of different services, which have been disclosed under note 34 of the financial
statements.
Directors Report
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PAGE 58
In the year under review, total Revenue was BDT 91.9 billion (BDT 9,192 crore) with 3.2% increase compared to the previous year.
The growth in revenue was mainly in voice, non-voice and data revenues due to subscription growth and revenues from
adjacent business i.e. wholesale business and GPIT.
l Review on Cost of Goods sold, Gross Profit Margin and Net Profit Margin
Direct costs of network revenue mainly consist of 6.5% revenue sharing & frequency charges to regulator, interconnection
charges for other operators, dealers commissions & material costs for mobile devices, SIM cards and scratch cards. In 2012,
direct costs increased by 5.2%, which was mainly driven by increase in revenue sharing with regulator from 5.5% to 6.5% and
increase in spectrum frequency usage fees based on the 2G license.
As a combined effect of the revenue growth and higher direct cost of network revenue as discussed above, gross profit for the
year 2012 increased by 2.3% from 2011.
General and administration expenses increased mainly from higher personnel cost reflecting annual inflation adjustment in
salary and higher consultancy expenses while selling and distribution cost decreased due to reduced subsidy on SIM tax. As a
result, operating profit for the year 2012 increased by 3.2% while the operating profit margin remained steady at 36.6%.
Net profit margin for the year 2012 was 19.0% compared to 21.2% of 2011. Despite steady operating profit margin, net profit after
tax decreased by 7.3% mainly due to increased net interest expenses due to recognition of notional interest cost against 2G
license payments. As a result, Earnings Per Share (EPS) for the year 2012 stood at BDT 12.96 compared to BDT 13.99 of 2011.
Voice traffic revenues for the year 2012 increased by 1.4% compared to 2011, mainly
contributed by the subscription growth. However, directives from the regulator
regarding implementation of 10-second pulse in voice tariff and elimination of call
setup charges from September 2012 have posted a dent in revenue growth for GP, as
well as the entire mobile industry.
Revenues from data services are increasing over the period, which is mainly driven by
low cost internet mini-packs. In 2012, growth in SMS and MMS revenue was 8.5%.
However, growth in revenues from data usage was 34.9% and revenues from value
added services were 48.3%.
Interconnection revenue is generated from the incoming traffic through the calls
generated from outside GP network. Interconnection revenue increased by 5.7% as a
result of increase in incoming interconnection traffic from other mobile and PSTN
operators.
Other mobile revenue includes customer support, connection fees, voice and non voice subscription fees, both inbound and
outbound roaming services and other miscellaneous mobile revenues.
Non mobile revenue mainly includes revenue from sale of mobile device, i.e. handsets and branded EDGE modems, revenues
from infrastructure sharing, commission income and revenue from IT consultancy services rendered by GPIT.
72,419
8,676
2011
+3.2%
+34.0%
+5.7%
+1.4%
2012
4,100
89,060
73,414
9,173
5,492
91,920
Voice Traffic Interconnection SMS, VAS, DATA
Other Mobile Non Mobile
32,572
2011
Operating Profit Operating Profit margin
2012
33,625
36.6% 36.6%
51,221
2011
Gross Profit Gross Profit margin
2012
52,391
57.5% 57.0%
18,891
2011
NPAT NPAT Margin
2012
17,505
21.2% 19.0%
In million BDT
Total Revenue
(in million BDT)
PAGE 59
|
Directors Report
All transactions with related parties have been made on a commercial basis. Details of related party and related party
transactions have been disclosed under note 48 of the financial statements as per IFRS.
The GP IPO was made in 2009 and the fund raised thereby has already been utilized by 30 June, 2010 as reported to the
regulators. No further issue of any instrument was made during the year.
Ever since the floatation of GP IPO in 2009, the financial results of the Company have continued to grow as reflected in the
yearly financial statements.
As per IAS 1 Presentation of Financial Statements, no items of income and expense are to be presented as extraordinary gain
or loss in the financial statements. Accordingly, no extraordinary gain or loss has been recognized in the financial
statements.
No significant variations have occurred between quarterly and final financial results of the Company during 2012.
No remuneration was paid to the Directors apart from their Board meeting attendance fees. During the year, the Company
has paid a total amount of BDT 252,320 as Board meeting attendance fees. However, payments to Foreign Directors, not
remitted as yet, have been provided for in the accounts of the relevant year.
There are no significant deviations in operating results from last years operating results.
The key operating and financial data for the last five years have been disclosed in the Annual Report at Page 47.
GP has declared both interim and final dividend for the year 2012.
During 2012, a total of 12 (twelve) Board meetings were held, which met the regulatory requirements in this respect. The
attendance records of the Directors are shown in Annexure-II to this report.
Shareholding patterns of the Company as on December 31, 2012 are shown in Annexure-III to this report.
Annual Results and Allocation
The Directors take pleasure in reporting the financial results of the Company for the year ended 31 December, 2012 and
recommend the appropriation as mentioned in the Appropriation of Profit (excluding Grameenphone IT Ltd.) table below:
2012 2011
Profit available for Appropriation
Profit/ (Loss) after tax 17,354,535,376 19,052,697,592
Add: Un-appropriated profit brought forward from previous year 15,419,028,177 26,748,081,080
Total Amount available for Appropriation 32,773,563,553 45,800,778,672
Appropriation
Final Dividend Paid for Previous Year (8,776,950,143) (11,477,550,187)
Interim Dividend Paid for Current Year (12,152,700,198) (18,904,200,308)
Closing Retained Earnings at year end (before Proposed Final Dividend) 11,843,913,212 15,419,028,177
Proposed Final Dividend for the year 2012 (50% cash) (6,751,500,110) (8,776,950,143)
(In 2011: 65% cash)
Retained Earnings after Proposed Dividend 5,092,413,102 6,642,078,034
Figures in BDT
Directors Report
|
PAGE 60
Growth in Contributions to the National Exchequer
GP has been one of the largest contributors to the National Exchequer for the last several consecutive years. The collective
contribution to the National Exchequer from inception up to December 2012 was BDT 308.8 billion (BDT 30,876 crore). During
2012 alone, the Company contributed BDT 63.6 billion (BDT 6,359 crore) to the National Exchequer including BDT 10.8 billion
as 2
nd
installment on account of 2G license and spectrum fees, compared to BDT 60.1 billion (BDT 6,015 crore) of 2011, which
represent about 69% of GPs total revenue of 2012. Notably, GP has paid BDT 13.6 billion (BDT 1,356 crore) in corporate taxes
during 2012, which was BDT 2.9 billion (BDT 290 crore) more compared to 2011. Such contribution is expected to grow further
with the expansion and growth of the Company in the years ahead.
Dividend
For the year ended December 31, 2012, the Board of Directors paid an Interim Cash Dividend @ 90% of the paid-up capital
amounting to BDT 12,152,700,198 which was BDT 9 per share of BDT 10.00 each. Now, the Directors are pleased to recommend
a Final Cash Dividend @ 50% of the paid-up capital amounting to BDT 6,751,500,110 which is BDT 5 per share of BDT 10.00 each
out of the divisible profits of the Company for the year 2012 for consideration and approval of the Shareholders for distribution.
Inclusive of the Interim Dividend of 90% paid already, this would make a cumulative total dividend @ 140% of the paid-up
capital amounting to BDT 18,904,200,308 which was BDT 14 per share for the year 2012.
The above recommendation of dividend is as per the Board approved dividend policy which is Minimum 50% of the Net Profit
After Tax to be allocated for dividend payment depending on the financial health and capital requirement of the Company with
an aim to have a relatively steady growth in per share dividend.
Board of Directors
The composition of the Board of Directors who held office during the year was as below:
1. Mr. Sigve Brekke, Telenor Mobile Communications AS, Director & Chairman
2. Mr. Per Erik Hylland, Telenor Mobile Communications AS, Director
3. Mr. Morten Tengs, Telenor Mobile Communications AS, Director
4. Mr. Hakon Bruaset Kjol, Telenor Mobile Communications AS, Director
5. Mr. Lars Erik Tellmann, Telenor Mobile Communications AS, Director
6. Mr. M Shahjahan, Grameen Telecom, Director
7. Mr. Md. Ashraful Hassan, Grameen Telecom, Director
8. Ms. Parveen Mahmud, Grameen Telecom, Director [appointed on October 17, 2012]
9. Dr. Jamaluddin Ahmed FCA, Independent Director
10. Ms. Rokia Afzal Rahman, Independent Director [appointed on December 06, 2012]
We would like to thank Ms. Nurjahan Begum for being part of the Board of Directors in the past years and for her contribution.
Directors Appointment & Re-appointment
With regard to the appointment, retirement and re-appointment of Directors, the Company is governed by its Articles of
Association, the Companies Act. 1994 and other related legislations. Accordingly, the following Directors of the Board will retire
at the Annual General Meeting. They are, however, eligible for re-appointment:
1. Mr. Lars Erik Tellmann
2. Ms. Parveen Mahmud
3. Dr. Jamaluddin Ahmed FCA
4. Ms. Rokia Afzal Rahman
Brief profiles of the directors being proposed for re-appointment are given at page 19 of the Annual Report, which fulfill
condition 1.5 (xxii) of the Corporate Governance Guidelines of BSEC.
PAGE 61
|
Directors Report
Appointment of Chief Executive Officer
The Board of Directors has appointed Mr. Vivek Sood as the Chief Executive Officer (CEO) with effect from January 07, 2013 in
place of Mr. Tore Johnsen, who served the Company for around two years. On this occasion, the Board of Directors would like to
thank Mr. Tore Johnsen for his dedication to GP. Under his leadership, the Company has continued its growing performance and
secured 2G licenses for 15 more years of operation. The Board also congratulates Mr. Vivek Sood and wishes him success in
further developing GPs position as the leading mobile operator in Bangladesh.
Grameenphone launches Go Beyond
We are living in a fast changing world, where the day starts with a click and connects us with the entire world. Bangladesh as a
nation is also moving at the same pace with a dynamic population that intends to move ahead in all aspects of life. This nation
has defied many odds in the past. It has high ambitions, just as generations past. Our ambition is not to stay behind. We want to
keep growing. In January 2013 the brand shift that we have made by launching Go Beyond is intended to secure our position
as the market leader. By being the best to deliver on the expectations of our customers we are to ensure progress. We are now
geared to deliver future proof communication supports to make Bangladesh move ahead. As we elevate to new heights and new
ambitions, we are proud to have your patronage and support as we Go Beyond.
Appointment of Auditors
As per the Companies Act 1994 and the Articles of Association of GP, the statutory auditors of the Company, ACNABIN, Chartered
Accountants, shall retire in this AGM. The Firm, being eligible, has offered their willingness to be re-appointed. The Board
recommends their re-appointment for the year 2013 and continuation till the next AGM at a fee of BDT 1.8 million (Taka one
million and eight hundred thousand only) plus VAT.
Risks & Concerns
Like the competitors and other companies, our business is also exposed to diverse risks that arise out of the internal and
external fronts. In addition to constant regulatory risks from an unstable regulatory regime, we remain prepared for other risks
from market, operation, legal issues, interest rate and exchange rate volatility, and potential changes in policies at the national
or global level.
In GP, we have a well-defined risk management policy and a periodic monitoring system to address the strategic and
enterprise-level risks that may affect our business, operations, liquidity, financial position or future performance. Our
comprehensive risk management system is devised to enable the Company to recognize risks on a real-time basis and in
accordance with the risk management framework.
Moving forward in 2013
The challenges in 2012 indicate that the market is maturing as customers are having better options to choose from and the
market players are getting better at their activities. To perform better during 2013, our mindset will be to win in the market every
day to Move Ahead. Keeping its Customer-centric approach on top of all, GP will bring the highest value to its customers by
creating customer loyalty, putting the greatest value in each of its products and making them available through an ever
expanding distribution network.
We are also committed to give our customers a new experience of innovation and excellence through the upcoming 3G and to
tap every nook and corner of rural Bangladesh.
Directors Report
|
PAGE 62
Acknowledgements
The Board of Directors would like to extend its heartiest gratitude to the valued Shareholders and stakeholders of the Company
for their persistent support and guidance to the Company that led to the cumulative achievements. The Board also recognizes
that its journey to attainments during the year was possible because of the cooperation, positive support, and guidance that it
had received from the Government of Bangladesh, the Ministry of Posts and Telecommunications (MoPT), Bangladesh
Telecommunication Regulatory Commission (BTRC), Bangladesh Railway (BR), National Board of Revenue (NBR), Bangladesh
Bank (BB), Board of Investment (BOI), Registrar of Joint Stock Companies and Firms (RJSC), Chief Controller of Export & Import,
Bangladesh Securities and Exchange Commission (BSEC), Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE),
Central Depository Bangladesh Limited (CDBL), GPs bankers and financial institutions, vendors and other business partners.
As the customers remain at the core of all our successes and achievements, the Board takes the opportunity to thank each of
GP subscribers who kept us in their hearts as their most preferred operator. We were able to deliver our services with excellence
as our employees put their best efforts to value our customers to create enthusiasm that multiplied through the organization
and impacted positively on a range of areas. Here, we also extend our warmest greetings to our employees. With the continuous
supports from you all, we are determined to excel through all the challenges towards a better future and a prosperous
Bangladesh.
Thank you all and with best regards.
For and on behalf of the Board of Directors of Grameenphone Ltd.
Sigve Brekke
Chairman
February 10, 2013
PAGE 63
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PAGE 65
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KgKvi cvkvcvwk Kgxi Rb bxwZgvjv cbqYi gvag cvwZvwbK AMMwZi PvweKvwV|
Avgiv wbRìK miv cwZvb wnme ai ivLvi Pv AevnZ iL GB `ki gavexì wbKU mePq cQì Kgj wnme wbRì Aevb ai ivLev|
eemvwqK `vqeZvi GwMq Pjv
MvgxYdvb i _KB `vwqZkxj cwZvb wnme KvR Ki AvmQ| eemvwqK `vqeZvi `xN AwfZv GB LvZ mcK Avgvì Mfxi aviYv w`qQ| 2012 mvj MvgxYdvb
eemvwqK `vqeZvi bxwZgvjv bZzb Ki mvwRqQ hv mKji Rb mydj mwi gvag Avgvì MnxZ cvRjvi vwqZ wbwZ Kie| Avgiv Avgvì g~j Kg`Zvi w`Kjv
wPwZ KiwQ Ges mjvK Avgvì eemvwqK `vqeZvi PvwjKvkw wnme cqvM Kivi wmv wbqwQ| Dci GB bZzb eemvwqK `vqeZvi `kb MvgxYdvbi eemvwqK
Kkji mv_ GKxfZ Kiv nqQ| G mcwKZ wevwiZ Z_ evwlK cwZe`bi eemvwqK `vqeZv AbyQ` c`vb Kiv nqQ|
GKwU meyR eemv Ges meyR cw_exi Rb
Rjevqyi cwieZb ivaK GKwU Kg Kveb eenviKvix mgvR cwZvi Ask wnmve MvgxYdvbi AMvwaKvi nQ wbR^ Kvhg evowZ KvebWvBAvBW wbMgbi gvv Kwgq
Avbv| MvgxYdvb 2015 mvji ga Kveb wbMgb 40% Kwgq Avbvi jgvv wbaviY KiQ| cwiekeve bUIqvK I Awdm vcbi D`vMi ga w`q 2007 G MvgxYdvbi
cwiekeve KvcvwbZ cwiYZ nevi cPv nvZ bqv nqwQj| GB Rb MvgxYdvb 2008 mvj KvBgU P cvMvg Gi m~Pbv Ki| mBmv_ Kveb wbMgb KgvZ GKK
Ges `jMZfve Aviv AbK cwiekeve Kvhgi D`vM wbqQ MvgxYdvb| evwlK cwZe`bi Rjevqyi cwieZb AbyQ` G mcwKZ wevwiZ Z_ `qv nqQ|
^v, myiv, wbivcv Ges cwiek (GBPGmGmB)
MvgxYdvb GBPGmGmB gvbRgU wmg chvjvPbv Ges Gi vvWi mv_ Kvcvwbi fvjy PBb mc Ki memgq GKwU kwkvjx GBPGmGmB wmg eRvq ivLvi
Pv Ki| GeQi MvgxYdvb mvgvwRK `vqeZv I `ybxwZ `gbi mvcvB PBbi gvbwZi Dci Rvi w`qQ Ges mB mv_ Avgvì eemvwqK Askx`viì Rb `ybxwZ
`gb vvW MvBWjvBb wbaviY KiQ| MvgxYdvb Bvw Ges Bvwi evBi wewfb aiYi Awf vbxq KcviU ewZì wbq cici AvjvPbvi gvag `ybxwZ `gbi
bxwZ `pfve vcb KiZ PqQ| AvfixY GBPGmGmB-Gi jvBb dvskbì gvS GBPGmGmB AwaKvix gbvfve mw Kivi Dk SzuwKc~Y UvMU Mc Ges wUIwU
(UBwbs Ae UBbvm)-ì Rb MvgxYdvb weZfve ^v I wbivcv welqK mPZbZv Awaekb Ges BjKUwbK mPZbZv Kgm~Px cvjb Ki AvmQ|
Avw_K weeiYxi evcvi cwiPvjKgjxi `vwqZ
MvgxYdvbi cwiPvjKgjx Kvcvwbi myz I h_vh_ cwiPvjbvi Rb `vqe| Zuvì RvbvgZ Zuviv wbwZ KiQb h-
K) cwZvbwUi eevcbv KZc KZK cZKZ Avw_K weeiYxZ Gi KgKv, Kvhgi djvdj, bM` A_i cevn Ges BKzBwUi cwigvb cwieZb mcK h_v_ wP DcvwcZ nqQ ;
L) cwZvbwUi wnmvei ewnmg~ni h_vh_ msiY Kiv nqQ ;
M) Avw_K weeiYx mg~n cZ Kivi mgq h_vh_ wnmveiY cwZ cqvM Kiv nqQ Ges wnmvei cvvjb Kiv nqQ hywmsMZ I we wePvievai wfwZ ;
N) Avw_K weeiYxmg~n cZ Kivi mgq AvRvwZK wnmve gvb` I evsjv`ki Avw_K weeiYxi gvb` AbymiY Kiv nqQ Ges Zv _K hKvb eZq h_vh_ fve cKvk
Kiv nqQ ;
O) AvfixY wbqY cwZ wQj ewj Ges Zv KvhKifve evevqb I cheY (gwbUwis) Kiv nqQ ;
P) GKwU Pjgvb cwZvb wnmve Kvhg AevnZ ivLvi welq Kvcvwbi mvg_i evcvi Kvb mskq bB|
KcviU mykvmb
MvgxYdvb GKwU KvhKi KcviU mykvmb eev Mo Zvjvi j Avgvì g~j bxwZ nj mZZv, ^QZv, DyZv Ges `Zv| kqvievRvi ZvwjKvfy GKwU cwZvb wnme
Avgiv myz mykvmb KvVvgv MVb I cYqb KvR KiwQ, mBmv_ cwiPvjbv cl` I eevcbv KZcI cwZvwbK mykvmbK fwelZ AviI DPgvb wbq hvevi Rb
cwZkwZe|
2012 mvji 7 AvM evsjv`k wmwKDwiwUR Gv GP Kwgkb (weGmBwm) KZK cKvwkZ KcviU Mfb MvBWjvBbi kZmg~n Kvcvwb cwZcvjb KiQ, hv mshyw
1-G `Lvbv nqQ| gmvm Avj-gyvwì AvmvwmqUm, PvUvW mUvwiR Gi GKwU cZqbc mshyw 4-G c`vb Kiv nqQ, hv kZ 7(1) Abymvi KcviU Mfb
MvBWjvBbi kZmg~n cwZcvjbi GKwU mvîc|
weGmBwm-Gi KcviU Mfb MvBWjvBb 2012 Abyhvqx Abvb cKvkbv/cwZe`b
wefvM/cYi wfwZ Ae`vb
MvgxYdvbi eemvwqK KgKv wewfbfve mcKhy cY, mevi ZviZg A_ev fMvwjK cv_Ki mevi KgKvi
wfwZ mvRvbv nq bv| MvgxYdvbi cY I mev mgM `kB GKB iKg| MvgxYdvb wewfb mevi gybvdvi Ae`vb
wewfbfve cheY Ki _vK, hv Avw_K cwZe`bi bvU 34-G cKvk Kiv nqQ|
MZ eQi megvU ivR^ Avq nqwQj 91.9 wewjqb (9,192 KvwU) UvKv, hv AvMi eQii Zzjbvq 3.2% ewk| ivRî
G cew nqQ g~jZ MvnKmsLvi cewi dj, fqm, bb-fqm Ges WvUv mev c`vb _K cv Avq Ges Abvb
mnhvMx eemv hgb- nvjmj eemv I wRwcAvBwU _K cv Avq _K|
MvnK cewi cfve 2012 mvj fqm UvwdK Avq 2011 mvji Zzjbvq 1.4% ch ew cqQ | hwÌ, wbqK msv
AvivwcZ fqm Uvwidi 10 mK cvjm myweavi evevqb Ges mî 2012 _K AvivwcZ Kj mUAvc
PvR DwVq bqvi dj mgM gvevBj dvb LvZi cvkvcvwk MvgxYdvbiI cew nvm cvq|
4,100
5,492
fqm Uvwid BUviKvbKkb GmGgGm, wfGGm, WvUv
Abvb gvevBj bb-gvevBj
91,920
9,173 8,676
73,414
+3.2%
+34.0%
+5.7%
+1.4%
72,419
89,060
2011 2012
gvU Avq
(wgwjqb UvKvq)
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|
Kgg~ji BUvibU wgwbcvK myweavi KviY WvUv mev LvZ Avqi cwigvY eoQ| 2012 mvj SMS Ges MMS _K cv Avq ew cqQ 8.5%| hwÌ WvUv eenvii
Avqi cew wQj 34.9% Ges g~j mshvRb mev _K Avq eoQ 48.3%|
Avt mshvM Avq GmQ g~jZ wRwc bUIqvK Gi evBi _K Avmv Kj _K| Abvb gvevBj Ges wcGmwUGb AcviUiì _K AvMZ AvtmshvM BbKvwgs Kji KviY
Avq eoQ 5.7% |
Abvb gvevBj Avqi gvS iqQ MvnK mev, KvbKkb wd, fqm Ges bb-fqm mvewckb wd, AvfixY I ewnMvgx ivwgs mev mn wewea gvevBj mevg~jK Avq|
bb-gvevBj Avqi gvS iqQ gvevBj wWfvBm weqg~jK Avq hgb- nvmU, EDGE gWg, AeKvVvgv fvMvfvwM Ges wRwcAvBwUi wewfb civgkK mev _K cvIqv Avq|
wewZcYi LiPi weeiY, gvU gybvdv Ges bxU gybvdv
cZ ivR^ eqi 6.5% nQ wbqK msvi mv_ ivR^ fvMvfvwM I Zi eevcbvi LiP, Abvb AcviUiì AvtmshvM wd c`vb, wWjviì Rb Kwgkb, wmg KvW,
gvevBj wWfvBm I vPKvWi Dcv`vbg~jK LiP| wbqK msvi mv_ ivR^ fvMvfvwMi nvi 5.5% _K eo 6.5% nIqv Ges 2G jvBmi Rb Zi eenvii wd c`vbi
dj 2012 mvj cZ LiP 5.2% eo hvq|
ivR^ Avq ew Ges Dci DwjwLZ KviYi mwwjZ cfve 2012 mvj gvU gybvdv 2011 mvj _K 2.3% eoQ|
evrmwiK gy`vxwZi mg^qmvabi Rb Kgxì eZbfvZv ew Ges DPZi KbmvjUw LiP c`vbi dj mvaviY Ges ckvmwbK LiP eoQ| Abw`K wmg Uv fZzwKi
cwigvY Kwgq Ìqvq weq Ges weZiY LiP nvm cqQ| djîc 2012 mvji Rb cwiPvjbv gybvdv 3.2% ch ewi dj cwiPvjbv gybvdv gvwRb 36.6% G wwZkxj
iqQ|
2012 mvji Rb bxU gybvdv gvwRb wQj 19.0% hv 2011 mvj wQj 21.2%| cwiPvjbv gybvdv gvwRb wwZkxj _vKv mI, 2G jvBm msv aviYvMZ myì LiP eo
hvIqvq bxU myì LiPi cwigvb ew cvq Ges Ki cieZx bxU gybvdv 7.3% Kg hvq| djvdjîc 2012 mvj kqvi cwZ Avq (EPS) `vuovq 12.96 UvKv hv 2011 mvj wQj
13.99 UvKv|
mswk ci mv_ hveZxq jb`b eemvwqK wfwZ mcvw`Z nqQ| mswk mKj c Ges Zvì mv_ mwKZ jb`bi weeiY Avw_K cwZe`bi bvU 48-G
AvRvwZK Avw_K cwZe`b gvb (IFRS) Abyhvqx c`vb Kiv nqQ|
MvgxYdvbi cv_wgK MYcve (AvBwcI) 2009 mvj mb nq Ges DvwjZ Znwej 30 Ryb, 2010 ZvwiLi ga eenvi Kiv nq Ges G msv cwZe`b cieZxZ
wbqK msvK c`vb Kiv nqQ| 2012 mvj G aibi Avi Kvb BUygU kqvi evRvi Qvov nqwb|
2009 mvj wRwc AvBwcI Dby Kivi ci _K KvvwbwUi Avw_K djvdj gkt ew cvQ Ges hv Kvvwbi Avw_K weeiYxZI cwZdwjZ nQ|
AvRvwZK Avw_K gvb (IAS) 1 Abyhvqx Avq-eqi Kvb AskB A^vfvweK jvfwZ wnme Avw_K weeiYxZ `Lvbv nq bv| GKBfve, Kvb A^vfvweK
jvfwZ Avw_K weeiYxZ `Lvbv nqwb|
2012 mvj gvwmK Ges mekl evwlK Avw_K djvdj Kvb DjLhvM cv_K cwijwZ nqwb|
cl` mfvq AskMnY wd ewZZ cwiPvjKì Avi Kvb cvwikwgK `qv nqwb| G eQi Kvcvwb megvU 252,320 UvKv cwiPvjK cl` mfvq AskMnY wd eve`
cwiPvjKì cwikva KiQ| Ze we`kx cwiPvjKì cl` mfvq AskMnY wd GLbI cwikva Kiv nqwb, hv mswk eQii wnme msvb Kiv nqQ|
c~eeZx eQii Khg cwiPvjbv msv djvdji Zzjbvq AvjvP eQii Khg cwiPvjbv ms djvdj Zgb Kvb DjLhvM cv_K cwijwZ nqwb|
evwlK cwZe`bi 47 bs cvq c~eeZx cvuP eQii Kvhg cwiPvjbv msv I Avw_K welqK cavb cavb Dcvmg~n c`vb Kiv nqQ|
MvgxYdvb 2012 mvji Rb AeZxKvjxb Ges Pov Dfq jfvsk NvlYv KiQ|
2012 mvj cwiPvjbv clì megvU 12 (eviv) wU mfv AbywZ nq, hv G wewaMZ evaevaKZv c~iY KiQ| mfvmg~n cwiPvjKì DcwwZi Z_ GB cwZe`bi mshyw
2-G Ìqv nqQ|
wWmî 31, 2012 ZvwiL kqvinvws-Gi aib GB cwZe`bi mshyw 3-G `Lvbv nqQ|
32,572 33,625
2011 2012 2011 2012 2011 2012
36.6% 36.6%
cwiPvjbv gybvdv cwiPvjbv gybvdv gvwRb
gvU gybvdv Ki cieZx bxU gybvdv Ki cieZx bxU gybvdv gvwRb gvU gybvdv gvwRb
57.5% 57.0%
51,221 52,391
21.2% 19.0%
18,891 17,505
wgwjqb UvKvq
|
PAGE 68
evwlK djvdj Ges eb
cwiPvjKgjx 31 wWmî 2012 ZvwiL mgv eQii Rb Kvcvwbi evwlK Avw_K djvdj cKvk KiZ ci AZ Avbw`Z Ges Zviv wbgv gybvdv eb (MvgxYdvb
AvBwU wjt eZxZ) mviYxZ DjwLZ ebi mycvwik KiQbt
ivxq KvlvMvi DjLhvM Ae`vb I Zvi AMMwZ
weMZ KqK eQi ai MvgxYdvb ivxq KvlvMvi mePq ewk Ae`vb iL AvmQ| cwZvi ci nZ 2012 ch ivxq KvlvMvi MvgxYdvbi gvU Ae`vbi cwigvY nQ
308.8 wewjqb (30,876 KvwU) UvKv| aygv 2012 mvjB ivxq KvlvMvi Rgv `qv nqQ 63.6 wewjqb (6,359 KvwU ) UvKv, hvi ga 2G jvBm I cKUvg msv
wd Gi wZxq wKw 10.8 wewjqb (1,081 KvwU) UvKv Afz, hv 2011 mvj wQj 60.1 wewjqb (6,015 KvwU) UvKv| GwU 2012 mvj MvgxYdvbi gvU ivRî cvq 69%|
DjL, 2012 mvj MvgxYdvb 13.6 wewjqb (1,356 KvwU) UvKv KcviU Uv c`vb Ki, hv 2011 mvji Zzjbvq 2.9 wewjqb (290 KvwU) UvKv ewk| AvMvgx eQijvZ
Kvcvwbi DbwZi mv_ mv_ GB Ae`vbi cwigvYI ew cve ej Avkv Kiv hvq|
jfvsk
cwiPvjKgjx 31 wWmî, 2012 mvji Rb cwikvwaZ g~jabi wecixZ 90% nvi 12,152,700,198 UvKv bM` AeZxKvjxb jfvsk c`vb KiQb, A_vr cwZwU 10
UvKv AwfwnZ g~ji kqvii wecixZ 9 UvKv bM` jfvsk c`vb Kiv nqQ| cwiPvjKe` Avbì mv_ 2012 mvji Rb cwikvwaZ g~jabi wecixZ 50% nvi
6,751,500,110 UvKv bM` Pov jfvsk cve KiQb, A_vr cwZwU 10 UvKv AwfwnZ gyji kqvii wecixZ 5 UvKv bM` jfvsk cve Kiv nqQ| DjL, BwZga
cwikvwaZ 90% AeZxKvjxb jfvskmn gvU 18,904,200,308 UvKv, A_vr kqvi cwZ megvU 14 UvKv jfvsk kqvinvviì Abygv`bi Rb cve Kiv njv|
Dciv jfvsk c`vbi nvi cwiPvjKgjx Abygvw`Z jfvsk bxwZi mv_ mwZc~Y hLvb ejv nqQ h, kqvi cwZ jfvski AevnZ wwZkxj cewi j Kvcvwbi
Avw_K Aev I g~jabi Pvwn`v mvc Ki cieZx bxU gybvdvi b~bZg 50% jfvsk AvKvi c`vb Kiv ne|
cwiPvjbv cl`
AvjvP eQi cwiPvjbv clì MVb wQj wbgic:
1) Rbve wmM&f eK&K, Uwjbi gvevBj KwgDwbKk GGm, cwiPvjK I Pqvigvb
2) Rbve cvi GwiK nvBj, Uwjbi gvevBj KwgDwbKk GGm, cwiPvjK
3) Rbve giUb Usm, Uwjbi gvevBj KwgDwbKk GGm, cwiPvjK
4) Rbve nvKb evmU KRj, Uwjbi gvevBj KwgDwbKk GGm, cwiPvjK
5) Rbve jvi&m GwiK Ujgvb, Uwjbi gvevBj KwgDwbKk GGm, cwiPvjK
6) Rbve Gg kvnRvnvb, MvgxY UwjKg, cwiPvjK
7) Rbve gvt Avkivdzj nvmvb, MvgxY UwjKg, cwiPvjK
8) Rbvev cviwfb gvngy`, MvgxY UwjKg, cwiPvjK (Avei 17, 2012 ZvwiL wbqvMcv)
9) W. RvgvjDwb Avng` GdwmG, ^Z cwiPvjK
10) Rbvev ivKqv AvdRvj ingvb, ^Z cwiPvjK (wWmî 06, 2012 ZvwiL wbqvMcv )
Avgiv Rbvev byiRvnvb eMg-K weMZ eQi cwiPvjbv clì m`m _vKvi Rb Ges mB mv_ iZc~Y Ae`vb ivLvi Rb AvwiK abev` RvbvB|
cwiPvjKgjxi wbqvM I cybtwbqvM
cwiPvjKgjxi wbqvM, Aemi Ges cybtwbqvMi Kvvbx Zvi AvwUKj&m Ae Avmvwmqkb, Kvcvwb AvBb 1994 Ges G msv Abvb AvBb AbymiY Ki| m
Abymvi Avmb evwlK mvaviY mfvq cwiPvjbv clì wbgewYZ cwiPvjKe` Aemi MnY Kieb Ges cybtwbqvMi hvM nebt
1. Rbve jvi&m GwiK Ujgvb
2. Rbvev cviwfb gvngy`
3. W. RvgvjDwb Avng` GdwmG
4. Rbvev ivKqv AvdRvj ingvb
cybtwbqvMi Rb Dvcb Kiv cwiPvjKeì msw Rxebx evwlK cwZe`bi 19 bs cvq `qv njv, hv weGmBwm KcviU Mfb MvBWjvBbi kZ 1.5(xxii) K cwZcvjb Ki|
2012 2011
ebhvM gybvdv
Ki cieZx gybvdv/(wZ) 17,354,535,376 19,052,697,592
hvM: c~eeZx eQii AewZ gybvdv 15,419,028,177 26,748,081,080
ebi Rb cv gvU cwigvY 37,773,563,553 45,800,778,672
eb
MZ eQii P~ov jfvsk (8,776,950,143) (11,477,550,187)
GeQii AeZxKvjxb jfvsk (12,152,700,198) (18,904,200,308)
eQi kl msiwZ Avq (cvweZ P~ov jfvski c~e) 11,843,913,212 15,419,028,177
cvweZ P~ov jfvsk 2012 (50% bM`) (2011 mvj: 65% bM`) (6,751,500,110) (8,776,950,143)
cvweZ jfvski ci msiwZ Avq 5,092,413,102 6,642,078,034
UvKvq
PAGE 69
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wmM&f eK&K
Pqvigvb
deqvwi 10, 2013
cavb wbevnx KgKZvi wbqvM
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MvgxYdvb DbvPb Kij Pjv e`~i
Avgiv GK `Z cwieZbkxj RMZ evm KiwQ, hLvb w`bi i nq GKwU wKKi gvag hv AvgvìK mgM weki mv_ mshy Ki| iv wnme evsjv`kI cMwZkxj
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Avgiv gkt DbwZ KiZ PvB| Rvbyqvwi 2013 Z Avgiv Avgvì evi cwieZb NUvB Pjv e`yi- Gi gvag hv AvgvìK evRvi kxlvbwU wbwZ Ki ai ivLZ
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Directors Report
|
PAGE 70
Annexure-I
Status of compliance with the conditions imposed by the Bangladesh Securities and Exchange Commissions Notification No
SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 issued under section 2CC of the Securities and Exchange
Ordinance, 1969 is presented below:
1
1.1
1.2
1.2 (i)
1.2 (ii)
1.2 (ii) (a)
1.2 (ii) (b)
1.2 (ii) (c)
1.2 (ii) (d)
1.2 (ii) (e)
1.2 (ii) (f)
1.2 (ii) (g)
1.2 (ii) (h)
1.2 (ii) (i)
1.2 (iii)
1.2 (iv)
1.2 (v)
1.2 (vi)
1.3 (i)
Board of Directors (BoD)
Boards Size
(number of Board members minimum 5 and Maximum 20)
Independent Directors
At least one fifth (1/5) of the total number of Directors shall be Independent
Directors
Independent Director means a director:
who either does not hold any share in the company or holds less than one
percent (1%) shares of the total paid-up shares of the company
who is not a sponsor of the company and is not connected with the
companys any sponsor or director or shareholder who holds one percent
(1%) or more shares of the total paid-up shares of the company on the basis
of family relationship. His/her family members also should not hold above
mentioned shares in the company
who does not have any other relationship, whether pecuniary or otherwise,
with the company or its subsidiary/associated companies
who is not a member, director or officer of any stock exchange
who is not a shareholder, director or officer of any member of stock exchange
or an intermediary of the capital market
who is not a partner or executive or was not a partner or an executive during
the preceding 3 (three) years of the companys statutory audit firm
who shall not be an independent director in more than 3 (three) listed
companies
who has not been convicted by a court of competent jurisdiction as a
defaulter in payment of any loan to a bank or a Non-Bank Financial
Institution (NBFI)
who has not been convicted for a criminal offence involving moral turpitude
Independent Director(s) shall be appointed by BoD approved by the
shareholders in the Annual General Meeting (AGM)
The post of independent director(s) cannot remain vacant for more than 90
(ninety) days
The Board shall lay down a code of conduct of all Board members and annual
compliance of the code to be recorded
The tenure of office of an independent director shall be for a period of 3
(three) years, which may be extended for 1 (one) term only
Independent Director shall be a knowledgeable individual with integrity who
is able to ensure compliance with financial, regulatory and corporate laws
and can make meaningful contribution to business
Condition
No.
Title
(Report under Condition No. 7.00)
Remarks
(If any)
Complied
Not
Complied
Compliance Status
( has been put in the
appropriate column)

The
appointment of
Independent
Director will be
vetted at the
ensuing AGM.
No vacancy
occurred
None
PAGE 71
|
Directors Report
Condition
No.
Title
Remarks
(If any)
Complied
Not
Complied
Compliance Status
appropriate column)

1.3 (ii)
1.3 (iii)
1.4
1.5
1.5 (i)
1.5 (ii)
1.5 (iii)
1.5 (iv)
1.5 (v)
1.5 (vi)
1.5 (vii)
1.5 (viii)
1.5 (ix)
1.5 (x)
1.5 (xi)
1.5 (xii)
1.5 (xiii)
1.5 (xiv)
1.5 (xv)
1.5 (xvi)
1.5 (xvii)
1.5 (xviii)
1.5 (ix)
1.5 (xx)
1.5 (xxi)
1.5 (xxi) (a)
Independent Director should be a Business Leader/Corporate
leader/Bureaucrat/University Teacher with Economics or Business Studies or
Law background/Professionals like Chartered Accountants, Cost & Management
Accountants, Chartered Secretaries. The independent director must have at
least 12 (twelve) years of corporate management/professional experiences
In special cases the above qualifications may be relaxed subject to prior
approval of Commission
The Chairman of the Board and the Chief Executive Officer (CEO) shall be
different individuals. The Chairman shall be elected from among the
directors. The Board of Directors shall clearly define respective roles and
responsibilities of the Chairman and the CEO
The Directors Report shall include the following additional statements:
Industry outlook and possible future developments in the industry
Segment-wise or product-wise performance
Risks and concerns
A discussion on Cost of Goods sold, Gross Profit Margin and Net Profit Margin
Discussion on continuity of any Extra-Ordinary gain or loss
Basis for related party transactions - a statement of all related party
transactions should be disclosed in the annual report
Utilization of proceeds from public issues, rights issues and/or through any
other instrument
An explanation if the financial results deteriorate after the company goes for
Initial Public Offering (IPO)
If significant variance occurs between Quarterly Financial performance and
Annual Financial Statements, the management shall explain about the variance
Remuneration to directors including independent directors
The financial statements present fairly its state of affairs, the result of its
operations, cash flows and changes in equity
Proper books of account have been maintained
Adaptation of appropriate accounting policies & estimates
IAS/BAS/IFRS/BFRS, as applicable in Bangladesh, have been followed and
adequate disclosure for any departure
The system of internal control is sound in design and has been effectively
implemented and monitored
Going Concern (ability to continue as a going concern)
Highlight and explain significant deviations from the last years operating
results
Key operating and financial data of at least preceding 5 (five) years shall be
summarized
Reason for non declaration of Dividend
The number of Board meetings held during the year and attendance by each
director
Pattern of shareholding and name wise details (disclosing aggregate
number of shares):
Parent/Subsidiary/Associated Companies and other related parties
Please refer to
Page 47 of the
Annual Report
None
None
None
None
Directors Report
1.5 (xxi) (b)
1.5 (xxi) (c)
1.5 (xxi) (d)
1.5 (xxii)
1.5 (xxii) (a)
1.5 (xxii) (b)
1.5 (xxii) (c)
2.1
2.2
3
3 (i)
3 (ii)
3 (iii)
3.1 (i)
3.1 (ii)
3.1 (iii)
3.1 (iv)
3.1 (v)
3.1 (vi)
3.2 (i)
3.2 (ii)
3.3
3.3 (i)
3.3 (ii)
3.3 (iii)
3.3 (iv)
3.3 (v)
3.3 (vi)
3.3 (vii)
Directors, Chief Executive Officer (CEO), Company Secretary (CS), Chief
Financial Officer (CFO), Head of Internal Audit (HIA) and their spouses and
minor children
Executives
Shareholders holding ten percent (10%) or more voting interest in the company
In case of the appointment/re-appointment of a director, disclose:
a brief resume of the director
nature of his/her expertise in specific functional areas
names of companies in which the person also holds the directorship and the
membership of committees of the board
Appointment of CFO, HIA and CS and defining their respective roles,
responsibilities & duties
The CFO and the CS shall attend the meetings of the Board of Directors
Audit Committee
The company shall have an Audit Committee as a sub-committee of the BoD
The Audit Committee shall assist the BoD in ensuring that the financial
statements reflect true and fair view of the state of affairs of the company
and in ensuring a good monitoring system within the business
The Audit Committee shall be responsible to the BoD. The duties of the Audit
Committee shall be clearly set forth in writing
The Audit Committee shall be composed of at least 3 (three) members
The BoD shall appoint members of the Audit Committee who shall be directors
of the company and shall include at least 1 (one) Independent Director
All members of the audit committee should be financially literate and at
least 1 (one) member shall have accounting or related financial
management experience
Expiration of the term of service of Audit Committee members making the
number lower than 3 (three) and fill up the vacancy (ies) by the Board not
later than 1 (one) month from the date of vacancy(ies)
The Company Secretary shall act as the secretary of the Audit Committee
The quorum of the Audit Committee meeting shall not constitute without at
least 1 (one) independent director
The BoD shall select the Chairman of the Audit Committee, who shall be an
Independent Director
Chairman of the audit committee shall remain present in the AGM
Role of Audit Committee
Oversee the financial reporting process
Monitor choice of accounting policies and principles
Monitor Internal Control Risk management process
Oversee hiring and performance of external auditors
Review the annual financial statements before submission to the board for approval
Review the quarterly and half yearly financial statements before submission
to the board for approval
Review the adequacy of internal audit function
Condition
No.
Title
Remarks
(If any)
Complied
Not
Complied
Compliance Status
appropriate column)

|
PAGE 72
No vacancy
occurred
None
PAGE 73
|
Directors Report
3.3 (viii)
3.3 (ix)
3.3 (x)
3.4.1 (i)
3.4.1 (ii) (a)
3.4.1 (ii) (b)
3.4.1 (ii) (c)
3.4.1 (ii) (d)
3.4.2
3.5
4.00
4.00 (i)
4.00 (ii)
4.00 (iii)
4.00 (iv)
4.00 (v)
4.00 (vi)
4.00 (vii)
4.00 (viii)
5
5 (i)
5 (ii)
5 (iii)
5 (iv)
5 (v)
Review statement of significant related party transactions submitted by the
management
Review Management Letters/Letter of Internal Control weakness issued by
statutory auditors
Disclosure to the Audit Committee about the uses/applications of IPO funds
by major category (capital expenditure, sales and marketing expenses,
working capital, etc), on a quarterly basis, as a part of their quarterly
declaration of financial results. Further, on an annual basis, shall prepare a
statement of funds utilized for the purposes other than those stated in the
prospectus
Reporting to BoD on the activities of the Audit Committee
Reporting to BoD on conflicts of interests
Reporting to BoD on any fraud or irregularity or material defect in the
internal control system
Reporting to BoD on suspected infringement of laws
Reporting to BoD on any other matter
Reporting to BSEC (if any material impact on the financial condition & results
of operation, unreasonably ignored by the management)
Reporting to the Shareholders of Audit Committee activities, which shall be
signed by the Chairman and disclosed in the Annual Report
External / Statutory Auditors
Non- engagement in appraisal or valuation services or fairness opinions
Non-engagement in designing and implementation of Financial Information
System
Non-engagement in Book Keeping or other services related to the
accounting records or financial statements
Non- engagement in Broker-Dealer services
Non- engagement in Actuarial services
Non- engagement in Internal Audit services
Non- engagement in any other services that the Audit Committee
determines
No partner or employees of the external audit firms shall possess any share
of the company during the tenure of their assignment
Subsidiary Company
Provisions relating to the composition of the BoD of the holding company shall
be made applicable to the composition of the BoD of the subsidiary company
At least 1 (one) Independent Director on the BoD of the holding company
shall be a director on the BoD of the subsidiary company.
The minutes of the Board meeting of the subsidiary company shall be placed
for review at the following Board meeting of the holding company
The minutes of the respective Board meeting of the holding company shall
state that they have reviewed the affairs of the subsidiary company also
The Audit Committee of the holding company shall also review the financial
statements, in particular the investments made by the subsidiary company
Please refer to
Page 77 of the
Annual Report
None
None
None
None
None
None
Condition
No.
Title
Remarks
(If any)
Complied
Not
Complied
Compliance Status
appropriate column)

Directors Report
|
PAGE 74
6
6 (i) (a)
6 (i) (b)
6 (ii)
7 (i)
7 (ii)
The CEO and CFO shall certify to the Board that they have reviewed financial
statements for the year and that to the best of their knowledge and belief:
these statements do not contain any materially untrue statement or omit
any material fact or contain statements that might be misleading
these statements together present a true and fair view of the companys
affairs and are in compliance with existing accounting standards and
applicable laws
there are, to the best of knowledge and belief, no transactions entered into
by the company during the year which are fraudulent, illegal or violation of
the companys code of conduct
Obtaining certificate from a practicing Professional Accountant/Secretary
regarding compliance of conditions of Corporate Governance Guidelines of
the BSEC and include in the Annual Report
Directors statement in the directors' report whether the company has
complied with these conditions
Name of Directors
Number of meetings
held whilst a Board member
Meetings
attended
Remarks
Annexure II
Board Meeting and attendance during the year ended December 31, 2012
Mr. Sigve Brekke 12 10
Mr. Per Erik Hylland 12 12
Mr. Morten Tengs 12 12
Mr. Hakon Bruaset Kjol 12 10
Mr. Lars Erik Tellmann 12 12
Mr. M Shahjahan 12 10
Mr. Md. Ashraful Hassan 12 12
Ms. Nurjahan Begum 9 6
Ms. Parveen Mahmud 3 2
Dr. Jamaluddin Ahmed FCA 12 10
Ms. Rokia Afzal Rahman 1 0
(Nomination withdrawn on October 17, 2012)
(Appointed on October 17, 2012)
(Appointed on December 06, 2012)
Condition
No.
Title
Remarks
(If any)
Complied
Not
Complied
Compliance Status
appropriate column)

PAGE 75
|
Directors Report
Annexure-III
The Pattern of Shareholding as on December 31, 2012
i) Parent/Subsidiary/Associate Companies
Telenor Mobile Communications AS - 753,407,724 55.80%
Nye Telenor Mobile Communications II AS - 215 0.00%
Nye Telenor Mobile Communications III AS - 215 0.00%
Telenor Asia Pte. Ltd. - 215 0.00%
Grameen Telecom - 461,766,409 34.20%
Grameen Kalyan - 22 0.00%
Grameen Shakti - 22 0.00%
ii) Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary, Head of Internal Audit and their
spouses and minor children
Mr. Sigve Brekke Chairman - -
Mr. Per Erik Hylland Board Member - -
Mr. Morten Tengs Board Member - -
Mr. Hakon Bruaset Kjol Board Member - -
Mr. Lars Erik Tellmann Board Member - -
Mr. M Shahjahan Board Member - -
Mr. Md. Ashraful Hassan Board Member 6,000 0.00%
Ms. Parveen Mahmud Board Member - -
Dr. Jamaluddin Ahmed FCA Board Member - -
Ms. Rokia Afzal Rahman Board Member - -
Mr. Vivek Sood Chief Executive Officer - -
Mr. Fridtjof Rusten Chief Financial Officer - -
Mr. Hossain Sadat Company Secretary 28,576 0.00%
Mr. Emadul Hannan Head of Internal Audit - -
iii) Executives (as explained in the BSECs Notification No. SEC/CMRRCD/2006-158/134/Admin/44 dated 07 August, 2012 )
Mr. Allan Bonke Chief Marketing Officer - -
Mr. Michael Malvebo Head of Product, Commercial - -
Mr. Tor Harald Stromsnes Head of Direct Sales, Commercial - -
Mr. Morten Saugnes Head of Brands, Commercial - -
Mr. Arne Viggo Aronsen Head of Sourcing - -
iv) Shareholders holding ten percent or More Voting Interest
Telenor Mobile Communications AS - 753,407,724 55.80%
Grameen Telecom - 461,766,409 34.20%
Name of Shareholders Status Shares Held Percentage
Directors Report
|
PAGE 76
Annexure-IV
Certificate of Compliance to the Shareholders of
Grameenphone Ltd.
(As required under the BSEC Corporate Governance Guidelines)
We have examined compliance to the BSEC guidelines on Corporate Governance by Grameenphone Ltd. for the year ended 31st
December 2012. These guidelines relate to the Notification no. SEC/CMRRCD/2006-158/134/Admin/44 dated 7th August 2012
of Bangladesh Securities and Exchange Commission (BSEC) on Corporate Governance.
Such compliance to the codes of Corporate Governance is the responsibility of the Company. Our examination was limited to the
procedures and implementation thereof as adopted by the Management in ensuring compliance to the conditions of Corporate
Governance. This is a scrutiny and verification only and not an expression of opinion or audit on the financial statements of the
Company.
In our opinion and to the best of our information and according to the explanations provided to us, we certify that the Company
has complied with the conditions of Corporate Governance as stipulated in the above mentioned guidelines issued by BSEC.
We also state that such compliance is neither an assurance as to the future viability of the Company nor a certification on the
efficiency or effectiveness with which the Management has conducted the affairs of the Company.

Al-Muqtadir Associates
Dhaka, February 10, 2013 Chartered Secretaries & Consultants
Company Secretaries & Consultants
Company Secretaries & Consultants
Circle Zareen, Block - A, Road -16
House # 413 (5-B), Bashundhara R/A
Dhaka - 1229, Bangladesh
Mobile +880 173 0340340
Email akamuqtadir@gmail.com
muqtadir@muqtadirbd.com
PAGE 77
|
Grameenphone (GP) Board Audit Committee, a sub-committee of the Board, supports the Board in fulfilling its oversight
responsibilities. The jurisdiction of GP Board Audit Committee extends over Grameenphone Ltd. and its subsidiaries.
Composition and Meetings
Dr. Jamaluddin Ahmed FCA, Chairman
Mr. M Shahjahan, Member
Mr. Per Erik Hylland, Member
Following Corporate Governance Guidelines promulgated by the Bangladesh Securities and Exchange Commission (BSEC), the
Board appointed the Independent Director, Dr. Jamaluddin Ahmed FCA as the Chairman and the Company Secretary as the
Secretary to the Committee with effect from 7 December, 2012. Till this date Mr. M Shahjahan acted as the Chairman and the Head
of Internal Audit acted as the Secretary to the Committee.
A total of 5 (five) meetings were held during 2012. Mr. Md. Ashraful Hassan (Managing Director, Grameen Telecom) attended the
meetings as a special invitee. Permanent invitees to the meetings were the Chief Executive Officer, Chief Financial Officer,
Company Secretary and Head of Internal Audit. Relevant heads of divisions and other members of Management also attended the
meetings as required.
Major Responsibilities of the Audit Committee
The purpose, authority, composition, duties and responsibilities of the Audit Committee are delineated in its Charter. Some of the
major responsibilities of the Audit Committee are as follows:
l Review the annual, half-yearly and quarterly financial statements and other financial results, and upon its satisfaction
of the review, recommend the same to the Board.
l Review the adequacy and effectiveness of financial reporting process, internal control system, risk management,
auditing matters, and the Companys processes for monitoring compliance with laws and regulations and the Codes of
Conduct.
l Recommend appointment, termination and determination of audit fees for statutory auditors. Consider the scope of
work, and oversee and evaluate the work performed by statutory auditors. Review permitted non-audit services
performed by statutory auditors.
l Exercise its oversight of the work of GP Internal Audit. Review the effectiveness of internal audit function including
performance, structure, adequacy of resources, and compliance with professional standards. Examine audit findings
and material weaknesses and monitor implementation of audit action plans.
Major Activities of the Audit Committee in 2012
l Reviewed the quarterly and annual financial statements for the year ended December 31, 2012.
l Considered and made recommendation to the Board on the appointment and remuneration of external auditors,
ACNABIN, Chartered Accountants for the year 2013.
l Approved the Internal Audit Plan for 2012, monitored progress and effected revisions when necessary.
l Discussed Internal Audit reports and findings in detail with auditors and members of Management and monitored the
status of implementation of audit action plans and provided guidance to ensure timely completion of action plans.
l Reviewed the Board Audit Committee Charter.
l Reviewed and received report on the matters as per requirement from the Bangladesh Securities and Exchange
Commission (BSEC). The above matters are significant recommendations for continuous improvement and therefore
duly noted.
Chairman
Audit Committee
February 10, 2013
Audit Committee Report
Auditors Report &
Audited Financial
Statements of
Grameenphone Ltd.
PAGE 79
|
Independent Auditors Report
to the shareholders of
Grameenphone Ltd.
We have audited the accompanying financial statements of Grameenphone Ltd, which comprise the statement of financial
position as at 31 December 2012, and the statement of comprehensive income, statement of changes in equity and statement of
cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes and all related
consolidated financial statements of Grameenphone Ltd. and its subsidiary (together referred to as the group).
The financial statements of the companys subsidiary Grameenphone IT Limited for the year ended 31 December 2012, as
incorporated in the consolidated financial statements, have been audited by another firm of chartered accountants whose report has
been furnished to us. The assets, liabilities, revenue and expenses of the subsidiary included in the consolidated financial statements
of Grameenphone Ltd. are not material in the context of consolidated figures given in the consolidated financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards (IFRSs) and Bangladesh Financial Reporting Standards (BFRSs), the Companies Act
1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations 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.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with International Standards on Auditing (ISA) and Bangladesh Standards on Auditing (BSA). Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the
entitys preparation and fair presentation of the financial statements 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 entitys internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements including consolidated financial statements, prepared in accordance with International
Financial Reporting Standards (IFRSs) and Bangladesh Financial Reporting Standards (BFRSs), give a true and fair view of the state
of the company's/group's affairs as at 31 December 2012 and of the results of its operations and cash flows for the year then ended
and comply with the Companies Act 1994, the Securities and Exchange Rules 1987 and other applicable laws and regulations.
Emphasis of matter
Without qualifying our opinion above, we draw attention to Notes 52 (a), 52 (b) to the financial statements, where management
explains the circumstances of claim from Bangladesh Telecommunication Regulatory Commission (BTRC) and claim from National
Board of Revenue (NBR) for SIM tax on replacement SIMs, and management's position on the same.
We also report that
a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our
examination of these books;
c) the statement of financial position (balance sheet) and statement of comprehensive income (profit and loss account) dealt
with by the report are in agreement with the books of account and returns; and
d) the expenditure incurred was for the purposes of the company's business.

ACNABIN
Dhaka, February 10, 2013
Telephone +880 (2) 8144347-52
Fax +880 (2) 8144353
Email acnabin@bangla.net
Web www.acnabin-bd.com
ACNABIN
BDBL Bhaban ( Level 13), 12 Kawran Bazar C/A
Dhaka-1215, Bangladesh
|
PAGE 80
Grameenphone Ltd.
Consolidated Statement of Financial Position
as at 31 December 2012
Notes Assets
31 December 2011
Taka
31 December 2012
Taka
Non current assets
Property, plant and equipment, net 4 69,584,900,470 69,461,932,244
Intangible assets, net 5 34,075,142,618 7,021,940,747
103,660,043,088 76,483,872,991
Current assets
Inventories 7 416,896,349 354,023,249
Deferred cost of connection revenue 8 382,103,171 422,857,544
Accounts receivable, net 9 6,215,168,032 5,361,944,431
Other receivables 10 1,089,586,172 916,325,024
Advances, deposits and prepayments 11 2,192,613,608 17,129,182,496
Short-term investment 12 143,711,912 181,856,969
Cash and cash equivalents 13 3,565,230,374 8,054,596,992
14,005,309,618 32,420,786,705
Total assets 117,665,352,706 108,904,659,696
Equity and Liabilities
Equity attributable to owners of the company
Share capital 14 13,503,000,220 13,503,000,220
Share premium 15 7,840,225,942 7,840,225,942
Capital reserve 16 14,446,452 14,446,452
Deposit from shareholders 17 1,880,178 1,880,178
General reserve 18 2,139,729,365 2,139,729,365
Retained earnings 11,958,726,570 15,383,607,640
35,458,008,727 38,882,889,797
Non controlling interest 19 382 80
Total Equity 35,458,009,109 38,882,889,877
Non current liabilities
Deposit from agents and subscribers 20 459,383,246 455,775,978
Finance lease obligation 21 5,019,805,838 5,019,805,838
Deferred tax liabilities 22 9,275,456,760 10,242,988,130
Other liabilities 23 4,392,921,027 2,833,908,207
19,147,566,871 18,552,478,153
Current liabilities
Trade and other payables 24 17,169,333,829 10,840,334,043
Short-term bank loan 25 8,195,000,000 -
Payable to government and autonomous bodies 26 2,875,397,038 4,814,105,945
Unearned revenue 27 2,676,884,016 2,486,767,295
VAT payable 28 27,855,533 2,699,959,350
Income tax provision 29 17,897,485,962 17,806,349,160
Accrued interest 30 779,651,771 226,869,648
Other liabilities 31 133,569,360 98,549,866
Deferred connection revenue 32 486,754,928 542,973,536
Provisions 33 12,817,844,289 11,953,382,823
63,059,776,726 51,469,291,666
Total equity and liabilities 117,665,352,706 108,904,659,696
The annexed notes 1 to 53 form an integral part of these financial statements.
Director Director Chief Executive Officer Company Secretary
As per our report of same date
Auditors
PAGE 81
|
Grameenphone Ltd.
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2012
Notes
2012
Taka
2011
Taka
Revenue 34 91,920,445,756 89,059,616,926
Cost of network operations
Direct cost of revenue 35 (18,564,682,248) (17,652,504,844)
Network operation and maintenance expenses 36 (6,945,662,794) (6,486,131,957)
Depreciation and amortisation 37 (14,019,598,372) (13,700,217,335)
(39,529,943,414) (37,838,854,136)
Gross profit 52,390,502,342 51,220,762,790
Other income, net 38 73,395,688 81,649,697
Operating expenses
General and administrative expenses 39 (9,894,261,604) (9,309,840,841)
Selling and distribution expenses 40 (7,787,744,377) (8,082,356,764)
(18,839,306,481) (18,729,914,886)
Operating profit 33,624,591,549 32,572,497,601

Finance income/(expense), net 41 (3,306,216,292) 989,596,123
Foreign exchange gain/(loss) 42 (175,433,570) (648,552,533)
Gain on disposal of property, plant and equipment 43 50,475,362 92,720,963
(3,431,174,500) 433,764,553
Profit before income tax 30,193,417,049 33,006,262,154
Income tax expense 44 (12,688,647,476) (14,115,160,260)
Profit for the year 17,504,769,573 18,891,101,894
Other comprehensive income - -
Total comprehensive income for the year 17,504,769,573 18,891,101,894
Profit for the year attributable to:
Owners of the company 17,504,769,271 18,891,102,082
Non-controlling interest 302 (188)
17,504,769,573 18,891,101,894
Total comprehensive income attributable to:
Owners of the company 17,504,769,271 18,891,102,082
Non-controlling interest 302 (188)
17,504,769,573 18,891,101,894
Earnings per share
Basic and diluted earnings per share (par value Tk. 10 each) 45 12.96 13.99
Auditors
|
PAGE 82
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PAGE 83
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Grameenphone Ltd.
Consolidated Statement of Cash Flows
2011
Taka
2012
Taka
Cash flows from operating activities
Cash receipts from customers 91,340,091,678 89,180,282,352
Payroll and other payments to employees (5,752,105,688) (5,786,478,150)
Payments to suppliers, contractors and others (39,327,831,005) (33,346,912,823)
Interest received 681,060,322 2,092,898,027
Interest paid (3,353,583,175) (846,259,360)
Income tax paid (13,565,042,041) (10,663,600,360)
(61,317,501,587) (48,550,352,666)
Net cash generated by operating activities 30,022,590,091 40,629,929,686
Cash flows from investing activities
Payment for acquisition of property, plant and equipment (13,859,593,353) (9,405,803,195)
Proceeds on sale of property, plant and equipment 215,049,104 45,346,713
Payment for Telecom licence and spectrum-2011 (7,755,395,764) (13,584,598,000)
Payment for acquisition of other intangible assets (448,112,348) (777,252,430)
Proceeds from/(investment in) long-term deposits - 12,594,949
Proceeds from sale of short-term investments 38,145,057 2,571,872,141
Net cash used in investing activities (21,809,907,304) (21,137,839,822)
Cash flows from financing activities
Proceeds from short-term bank loan 8,195,000,000 -
Payment of dividend (20,896,517,203) (30,365,699,043)
Amount refunded to IPO share applicants (532,202) (3,296,381)
Net cash used in financing activities (12,702,049,405) (30,368,995,424)
Net change in cash and cash equivalents (4,489,366,618) (10,876,905,560)
Cash and cash equivalents as at 1 January 8,054,596,992 18,931,502,552
Cash and cash equivalents as at 31 December 3,565,230,374 8,054,596,992
|
PAGE 84
Grameenphone Ltd.
Statement of Financial Position
Notes Assets
31 December 2011
Taka
31 December 2012
Taka
Non current assets
Property, plant and equipment, net 4 69,048,151,960 68,954,986,787
Intangible assets, net 5 34,080,765,296 7,013,607,468
Investment in subsidiary 6 74,999,900 74,999,900
103,203,917,156 76,043,594,155
Current assets
Inventories 7 409,530,921 331,379,759
Deferred cost of connection revenue 8 382,103,171 422,857,544
Accounts receivable, net 9 5,797,875,122 5,350,043,235
Other receivables 10 1,162,244,016 1,154,555,501
Advances, deposits and prepayments 11 2,483,521,142 17,486,245,071
Short-term investment 12 143,711,912 181,856,969
Cash and cash equivalents 13 3,301,851,879 7,628,173,494
13,680,838,163 32,555,111,573
Total assets 116,884,755,319 108,598,705,728
Equity and Liabilities
Shareholders' equity:
Share capital 14 13,503,000,220 13,503,000,220
Share premium 15 7,840,225,942 7,840,225,942
Capital reserve 16 14,446,452 14,446,452
Deposit from shareholders 17 1,880,178 1,880,178
General reserve 18 2,139,729,365 2,139,729,365
Retained earnings 11,843,913,212 15,419,028,177
35,343,195,369 38,918,310,334
Non current liabilities
Deposit from agents and subscribers 20 459,383,246 455,775,978
Finance lease obligation 21 5,019,805,838 5,019,805,838
Deferred tax liabilities 22 9,275,456,760 10,242,988,130
Other liabilities 23 4,392,921,027 2,833,908,207
19,147,566,871 18,552,478,153
Current liabilities
Trade and other payables 24 16,993,714,910 10,723,625,931
Short-term bank loan 25 8,195,000,000 -
Payable to government and autonomous bodies 26 2,875,397,038 4,814,105,945
Unearned revenue 27 2,676,788,418 2,485,682,907
VAT payable 28 - 2,696,138,778
Income tax provision 29 17,896,436,568 17,805,122,197
Accrued interest 30 779,651,771 226,869,648
Other liabilities 31 117,095,633 80,973,694
Deferred connection revenue 32 486,754,928 542,973,536
Provisions 33 12,373,153,813 11,752,424,605
62,393,993,079 51,127,917,241
Auditors
PAGE 85
|
Grameenphone Ltd.
Statement of Comprehensive Income
Notes
2012
Taka
2011
Taka
Revenue 34 91,488,936,343 89,006,700,775
Cost of network operations
Direct cost of revenue 35 (18,583,574,226) (17,669,029,979)
Network operation and maintenance expenses 36 (7,264,941,204) (6,763,599,444)
(39,710,580,980) (38,057,164,864)
Gross profit 51,778,355,363 50,949,535,911
Other income, net 38 100,759,228 109,013,237
Operating expenses
General and administrative expenses 39 (9,544,442,897) (8,954,458,359)
Selling and distribution expenses 40 (7,728,400,027) (8,037,021,580)
(18,404,755,225) (18,317,338,290)
Operating profit 33,474,359,366 32,741,210,858
Finance income/(expense), net 41 (3,314,646,616) 982,380,903
Foreign exchange gain/(loss) 42 (171,377,061) (651,424,847)
Gain on disposal of property, plant and equipment 43 51,425,195 92,776,720
(3,434,598,482) 423,732,776
Profit before income tax 30,039,760,884 33,164,943,634
Income tax expense 44 (12,685,225,508) (14,112,246,042)
Profit for the year 17,354,535,376 19,052,697,592
Total comprehensive income for the year 17,354,535,376 19,052,697,592
Earnings per share
Basic and diluted earnings per share (par value Tk. 10 each) 45 12.85 14.11
Auditors
|
PAGE 86
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PAGE 87
|
Grameenphone Ltd.
Statement of Cash Flows
2011
Taka
2012
Taka
Cash flows from operating activities
Cash receipts from customers 91,342,326,309 89,140,210,778
Payroll and other payments to employees (5,143,687,111) (5,196,283,125)
Payments to suppliers, contractors and others (40,020,018,831) (34,329,207,490)
Interest received 671,935,075 2,085,126,783
Interest paid (3,352,888,252) (845,703,336)
Income tax paid (13,561,442,504) (10,661,380,622)
(61,406,101,623) (48,947,447,790)
Net cash generated by operating activities 29,936,224,686 40,192,762,988
Cash flows from investing activities
Payment for acquisition of property, plant and equipment (13,521,601,954) (9,151,452,166)
Proceeds on sale of property, plant and equipment 214,672,205 45,307,859
Payment for Telecom licence and spectrum-2011 (7,755,395,764) (13,584,598,000)
Payment for acquisition of other intangible assets (536,316,441) (764,248,679)
Proceeds from/(investment in) long-term deposits - 12,594,949
Proceeds from sale of short-term investments 38,145,057 2,571,872,141
Net cash used in investing activities (21,560,496,897) (20,870,523,896)
Cash flows from financing activities
Proceeds from short-term bank loan 8,195,000,000 -
Payment of dividend (20,896,517,202) (30,365,699,043)
Amount refunded to IPO share applicants (532,202) (3,296,381)
Net cash used in financing activities (12,702,049,404) (30,368,995,424)
Net change in cash and cash equivalents (4,326,321,615) (11,046,756,332)
Cash and cash equivalents as at 1 January 7,628,173,494 18,674,929,826
Cash and cash equivalents as at 31 December 3,301,851,879 7,628,173,494
|
PAGE 88
1. Corporate information
Grameenphone Ltd. (hereinafter referred to as "GP"/"Grameenphone"/"the company") is a public limited company
incorporated in Bangladesh in 1996 under the Companies Act 1994 and has its registered address at GPHOUSE,
Bashundhara, Baridhara, Dhaka 1229. GP was initially registered as a private limited company and subsequently converted
into a public limited company on 25 June 2007. During November 2009, GP listed its shares with both Dhaka and Chittagong
Stock Exchanges. The immediate parent of GP is Telenor Mobile Communications AS and the ultimate parent is Telenor ASA;
both the companies are incorporated in Norway. On 28 January 2010, Grameenphone formed a subsidiary, namely
Grameenphone IT Ltd. (hereinafter referred to as "GPIT"/ "the subsidiary company"), to provide IT services to GP and to
external customers. GPIT launched its commercial operation on 1 April 2010.
These financial statements as at and for the year ended 31 December 2012 include consolidated and separate financial
statements. The consolidated financial statements comprise the financial statements of the company and its subsidiary
(together referred to as "GP group"/"the group"). The separate financial statements present the financial position and
performance of Grameenphone Ltd.
The group is primarily involved in providing mobile telecommunication services (voice, data and other related services) in
Bangladesh and IT related services. The company also provides international roaming services through international roaming
agreements with various operators of different countries across the world.
2. Basis of preparation
2.1 Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS),
Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Securities and Exchange Rules 1987 and
other applicable laws in Bangladesh.
The Articles of Association of Grameenphone require that the financial statements to be prepared in accordance with
International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS). The requirements of IFRS and
BFRS, to the extent relevant to these financial statements, do not vary from each other.
Authorisation for issue
These financial statements were authorised for issue by the Board of Directors of the company on 10 February 2013.
2.2 Basis of measurement
These financial statements have been prepared on historical cost basis except for the following items in the statement of
financial position:
(a) Defined post-employment benefit plan is measured on the basis of projected unit credit method.
(b) Finance lease obligation is measured at present value of minimum lease payments.
(c) Asset retirement obligations (ARO) are measured at present value of expected future expenditure.
2.3 Functional and presentation currency
Items included in these financial statements are measured using the currency of the primary economic environment in which
the group operates (the functional currency). These financial statements are presented in Bangladesh Taka (Taka/Tk./BDT)
which is also the functional currency of the group. The amounts in these financial statements have been rounded off to the
nearest Taka.
2.4 Use of estimates and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Grameenphone Ltd.
Notes to the Financial Statements
as at and for the year ended 31 December 2012
PAGE 89
|
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision of accounting estimates is recognised in
the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future periods
if the revision affects both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have the most significant effect on the amount recognised in the financial statements are described in the
following notes:
Note 8: Deferred cost of connection revenue (estimation of subscribers' relationship period)
Note 21: Finance lease obligation (classification and measurement)
Note 22: Deferred tax liabilities (manner of recovery of temporary differences for determination of deferred tax liabilities)
Note 23: Other liabilities (estimation of future cash outflow and determination of appropriate discount rate)
Note 32: Deferred connection revenue (estimation of subscribers' relationship period)
Note 33: Provisions
Note 34: Revenue (allocation of revenue among multiple elements, determination of percentage of completion for
services rendered)
Note 44: Income tax expense
In addition to the above, determination of the group's liability for gratuity involves the use of assumptions regarding
demographic variables (such as employee turnover and mortality) and financial variables (such as salary growth, return on
plan assets and discount rate).
3. Significant accounting policies
Accounting policies set out below have been applied consistently to all periods presented in these financial statements.
Comparative information has been rearranged wherever considered necessary to conform to the current years presentation.
3.1 Basis of consolidation
(a) Subsidiaries
Subsidiaries are entities controlled by the group. Control is achieved where the company has the power to govern the
financial and operating policies so as to obtain benefits from its activities. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the group controls another entity.
Control normally exists when the group has more than 50% of the voting power through ownership or agreements, except
where non-controlling interests are such that a non-controlling shareholder is able to prevent the group from exercising
control. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are
de-consolidated from the date on which control ceases.
(b) Consolidation procedure
The financial statements of the subsidiary is prepared for the same reporting periods as the parent company. Consistent
accounting policies are used. The results of subsidiaries acquired or disposed of during the year are included in the income
statement from the date when control is obtained and until the control ceases, respectively. Intra-group balances and
transactions, and any unrealised gains or losses arising from intra-group transactions are eliminated in preparing the
consolidated financial statements. Total comprehensive income of subsidiary is attributed to owners of the company and to
the non-controlling interest even if this results in the non-controlling interest having a deficit balance. Non-controlling
interests in subsidiaries are presented within equity separately from the equity attributable to the owners of the parent.
Financial statements of subsidiary are adjusted where necessary to ensure consistency with the policies adopted by the group.
3.2 Property, plant and equipment
(a) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses, if any.
|
PAGE 90
2012
Year
2011
Year
The cost of an item of property, plant and equipment comprises its purchase price, import duties and non-refundable taxes,
after deducting trade discount and rebates, and any costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the intended manner. Cost also includes initial estimate of the costs
of dismantling and removing the item and restoring the site on which it is located and capitalised borrowing costs. The
obligations for costs of dismantling and removing the item and restoring the site (generally called 'asset retirement
obligation') are recognised and measured in accordance with IAS/BAS 37: Provisions, Contingent Liabilities and Contingent
Assets. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
When major parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
(b) Subsequent costs
The cost of replacing or upgradation of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the item will flow to the group and its cost can be
measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day to day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
(c) Depreciation
No depreciation is charged on land and capital work in progress (CWIP) as the land has unlimited useful life and CWIP has not
yet been placed in service.
Depreciation on other items of property, plant and equipment is recognised on a straight-line basis over the estimated useful
lives of each item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and
their useful lives unless it is reasonably certain that the group will obtain ownership by the end of the lease term. For addition
to property, plant and equipment, depreciation is charged from the date of capitalisation up to the month immediately
preceding the month of disposal. Depreciation method, useful lives and residual values are reviewed at each year-end and
adjusted if appropriate. The estimated useful lives of the items of property, plant and equipment for the current and
comparative periods are as follows:
Own assets
Building 10 -50 10 -50
Base station - equipments 3-10 3-10
Base station - tower, fibre optic network and related assets 7- 20 7- 20
Transmission equipments 5-10 5-10
Computers and other IT equipment 4 4
Furniture and fixtures (including office equipment) 3-5 3-5
Vehicles 4 4
Leased asset
Fibre Optic Network (FON) 22.5 22.5
(d) Gains or losses on disposal
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss on derecognition of an item of property, plant and equipment is determined as the
difference between the net disposal proceeds and the carrying amount of the asset and is recognised in profit or loss.
(e) Capital work in progress
Capital work in progress consists of unfinished work at sites and capital inventory. Spare parts expected to be used for more
than one year are treated as capital work in progress. In case of import of components, capital work in progress is recognised
when risks and rewards associated with such assets are transferred to the group.
PAGE 91
|
2012
Year
2011
Year
(f) Capitalisation of borrowing costs
As per the requirements of IAS/BAS 23: Borrowing Costs, directly attributable borrowing costs are capitalised during
construction period for all qualifying assets. A qualifying asset is an asset that necessarily takes a substantial period of time
to get ready for its intended use or sale. The borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying asset are those borrowing costs that would have been avoided if the expenditure on the qualifying
asset had not been made. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
3.3 Intangible assets
Intangible assets that are acquired by the group and have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment loss, if any. Intangible assets are recognised when all the conditions for
recognition as per IAS/BAS 38: Intangible Assets are met. The cost of an intangible asset comprises its purchase price, import
duties and non-refundable taxes and any directly attributable cost of preparing the asset for its intended use.
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in the profit or loss as incurred.
Development activities involve a plan or design for the production of new and substantially improved products and
processes. Development expenditures, on an individual project, are recognised as an intangible asset when the group can
demonstrate all of the following:
(a) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
(b) its intention to complete the intangible asset and use or sell it;
(c) its ability to use or sell the intangible asset;
(d) how the intangible asset will generate probable future economic benefits. Among other things, the entity can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be
used internally, the usefulness of the intangible asset;
(e) the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset;
(f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.
Other development expenditure is recognised in profit or loss as incurred. Development costs previously recognised as an
expense are not recognised as an asset in a subsequent period. Following initial recognition of the development expenditure
as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and
accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is placed in
service. It is amortised over the period of expected future benefit. During the period of development, the asset is tested for
impairment annually.
Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is
reflected in profit or loss in the year in which the expenditure is incurred.
Subsequent costs are capitalised only when they increase the future economic benefits embodied in the specific asset to
which they relate. All other costs are recognised in profit or loss as incurred.
(c) Amortisation
Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives of intangible assets, from the
date that they are available for use. The estimated useful lives are as follows:

Pulse Code Modulation (PCM) 5 5
Software and others
Billing software 5 5
Other operational software 3-7 3-7
Network management software 7 7
Spectrum-2008 18 18
Telecom licence and spectrum-2011 15 -
Amortisation methods, useful lives and residual values are reviewed at each year-end and adjusted, if appropriate.
|
PAGE 92
(d) Derecognition
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of intangible assets, measured as the difference between the net disposal
proceeds and the carrying amount of the assets, are recognised in profit or loss.
3.4 Financial instruments
3.4.1 Financial assets
The group initially recognises receivables and deposits on the date that they are originated. All other financial assets are
recognised initially on the date at which the group becomes a party to the contractual provisions of the transaction.
The group derecognises a financial asset when the contractual rights or probabilities of receiving the cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred
financial assets that is created or retained by the group is recognised as a separate financial asset or liability.
Financial assets and liabilities are offset and the net amount is presented in the statement of financial position when, and only
when, the group has a legal right to offset the amounts and intends either to settle them on a net basis or to realize the asset
and settle the liability simultaneously.
The group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit
or loss, held-to-maturity financial assets, loans and receivables and available-for-sale financial assets.
i. Financial assets at fair value through profit or loss
A financial asset is classified as fair value through profit or loss if it is classified as held-for-trading or designated as such on
initial recognition. A financial asset is designated as fair value through profit or loss if the group manages such investments
and make purchase and sale decisions based on their fair value in accordance with group's documented risk management or
investment strategy. Attributable transaction costs are recognised in the profit or loss as incurred. Financial assets at fair value
through profit or loss are measured at fair value and changes there in, which takes into account any dividend income, are
recognised in the profit or loss.
As at the balance sheet date the group had no financial assets at fair value through profit or loss which is either classified as
held-for-trading or designated.
ii. Held-to-maturity financial assets
If the group has positive intent and ability to hold debt securities to maturity, then such financial assets are classified as
held-to-maturity financial assets. Held-to-maturity financial assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets are measured at amortized
cost using the effective interest method, less any impairment losses.
Short-term investments are classified as held-to-maturity financial assets. Short term investments comprise investment in
Fixed Deposit Receipts (FDR) with original maturity of more than three months.
iii. Loans and receivables
Loans and receivables are financial assets with fixed and determinable payments that are not quoted in the active market.
Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment
losses.
Loans and receivables comprise accounts receivable and other receivables.
(a) Accounts receivable
Accounts receivable represent the amounts due from subscribers for telecom services, other operators for interconnection
services and infrastructure sharing, customers for FON connectivity and receivables for IT related services. Accounts
receivable with no stated interest rate are measured at the original invoice amount. Accounts receivables are stated net of
allowance for doubtful debts.
(b) Other receivables
Other receivables comprise other non-mobile receivables and interest receivables. Other receivables are stated net of
provision for doubtful debts, if any.
PAGE 93
|
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with maturity of three months or less from the date of
acquisition that are subject to an insignificant risk of changes in their fair value, and are used by the group in the management
of its short term commitments. Bank overdraft that are repayable on demand and form an integral part of group's cash
management are included as a component of cash and cash equivalents for the statement of cash flows.
iv. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not
classified in any of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair
value plus any directly attributable transaction costs.
Subsequent to initial recognition, they are measured at fair value and changes there in, other than impairment losses and
foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and
presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is
reclassified to profit or loss.
Available-for-sale financial assets comprise deposit for bank guarantee and security deposit for utilities and services.
3.4.2 Financial liabilities
The group initially recognises financial liabilities on the transaction date at which the group becomes a party to the
contractual provisions of the liability.
The group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired.
Financial liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities
include finance lease obligation, trade and other payables, short-term bank loan, payable to government and autonomous
bodies, deposits from agents and subscribers, VAT payables, accrued interests and other payables.
(a) Finance lease obligation
Leases in terms of which the group assumes substantially all the risks and rewards of ownership are classified as finance
leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present
value of minimum lease payments. The discount rate used in calculating the present value of the minimum lease payments is
the interest rate implicit in the lease, if this is practicable to determine; if not, the lessees incremental borrowing rate is used.
(b) Accounts payable and other financial liabilities
Accounts payable and other financial liabilities (payable to government and autonomous bodies, accrued interest, VAT
payables and other liabilities) are recognised when there is a present obligation arising from past event, it is probable that
resources embodying economic benefit will be required to settle the obligation and the obligation can be measured reliably.
3.4.3 Share capital
Ordinary shares are classified as equity. Incremental cost directly attributable to the issue of ordinary shares are recognised
as deduction from equity, net of any tax effect.
3.5 Impairment
(a) Financial assets
A financial asset, not classified as fair value through profit or loss, is assessed at each reporting date to determine whether
there is a objective evidence that it is impaired. A financial asset is impaired if there is objective evidence of impairment as a
result of one or more events that occurred after the initial recognition of the assets, and the loss event(s) had an impact on
the estimated future cash flows of that assets that can be estimated reliably.
i. Financial assets measured at amortized cost
The group considers evidence of impairment for financial assets (loans and receivables and held-to-maturity investment
securities) at both a specific asset and collective asset level. All individually significant receivables and held-to-maturity
investment securities are assessed for specific impairment. All individually significant loans and receivables and
held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any
impairment that has been incurred but not yet identified. Loans and receivables and held-to-maturity investment securities
that are not individually significant are collectively assessed for impairment by grouping together loans and receivables and
held-to-maturity investment securities with similar risk characteristics.
|
PAGE 94
In assessing collective impairment, the group uses historical trend of probability of default, timing of recoveries and amount
of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that
the actual losses are likely to be greater or lesser than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its
carrying amount and the present value of estimated future cash flows discounted at the asset's original effective interest rate.
Losses are recognised in the profit or loss and reflected in the allowance account against loans and receivables or
held-to-maturity investment securities. Interest on the impaired assets continues to be recognised. When an event occurring
after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is
reversed through profit or loss.
As per the existing credit policy, 100% impairment allowance is recognised on receivables from permanently disconnected
post-paid subscribers. Post-paid subscribers are permanently disconnected if they fail to make any payment within 90 days
of temporary disconnection. Any post-paid receivables remaining uncollected after one year of allowance creation are
written-off. Other accounts receivable are written-off when there is no reasonable expectation of future recovery.
ii. Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair
value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference
between the acquisition cost, net of any principal repayment and amortization, and the current fair value, less any
impairment loss recognised previously in profit or loss. Changes in cumulative impairment losses attributable to application
of the effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of
an impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after
the impairment loss was recognised, then the impairment loss is reversed, with the amount of reversal recognised in profit or
loss.
(b) Non-financial assets
The carrying amounts of the groups non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets
recoverable amount is estimated in order to determine the extent of impairment loss (if any). Where it is not possible to
determine the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash generating
unit (CGU) to which the asset belongs. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds
its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of
impairment testing, the group considers GP and GPIT as the smallest identifiable groups of assets (CGU).
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated to reduce
the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
3.6 Inventories
Inventories consisting of scratch cards, SIM cards, mobile handsets, data cards, other devices and IT accessories are valued
at lower of cost and net realisable value. Costs of inventories include expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred in bringing them to their existing location and condition. Cost of
inventories is determined by using the weighted average cost formula. Where necessary, allowance is provided for damaged,
obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value. Net
realisable value is based on estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
PAGE 95
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3.7 Employee benefits
The group maintains both defined contribution plan and defined benefit plan for its eligible permanent employees. The
eligibility is determined according to the terms and conditions set forth in the respective deeds. Both of the plans are funded
and are registered under Income Tax Ordinance 1984.
(a) Defined contribution plan (provident fund)
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate
entity and has no legal or constructive obligation to pay further amounts. Obligations for contribution to defined contribution
plans are recognised as an employee benefit expense in profit or loss in the period during which related services are rendered
by employees. Advance contributions are recognised as an asset to the extent that a cash refund or a reduction in future
payment is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the
period in which employee render the services are discounted to the present value.
Both GP and GPIT have separate recognised provident fund schemes. All permanent employees of GP and GPIT contribute
10% of their basic salary to the respective provident funds and the companies also make equal contribution.
The group recognises contribution to defined contribution plan as an expense when an employee has rendered related
services in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to
contribute to the fund.
(b) Defined benefit plan (gratuity)
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The group's net obligation
in respect of defined benefit plan is calculated separately for each plan by estimating the amount of future benefit that
employees have earned in return for their services in the current and prior periods; that benefit is discounted to determine its
present value. Any unrecognised past service cost and the fair value of any plan assets are deducted. The rate used to
discount post employment benefit obligations is determined by reference to market yields at the reporting date on treasury
bonds.
The employee gratuity plan is considered as defined benefit plan as it meets the recognition criteria. The group's obligation
is to provide the agreed benefits to current and former employees as per condition of the fund.
Present value of defined benefit obligation is determined by professional actuary. Projected Unit Credit method is used to
measure the present value of defined benefit obligations and related current and past service cost by using mutually
compatible actuarial assumptions about demographic and financial variables. The difference between fair value of the plan
assets and present value of obligation is recognised as a liability or an asset in the statement of financial position. When the
calculation results in a benefit to the group, the recognised asset is limited to the total of any unrecognised past service cost
and the present value of economic benefit available in the form of any future refunds from the plan or reductions in future
contribution to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum
funding requirements that apply to any plan in the group. An economic benefit is available to the group if it is realizable
during the life of the plan, or on settlement of the plan liabilities.
The expected return on plan assets is based on market expectation and is one of the components of expenses recognised in
profit or loss. Total expenses recognised in profit or loss comprise current service cost, interest cost and expected return on
plan assets.
Past-service costs are recognised immediately in profit or loss, unless the changes to the plan are conditional on the
employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are
amortised on a straight-line basis over the vesting period.
The group recognises gains or loss on the curtailment or settlement of a defined benefit plan when the curtailment or
settlement occurs. The gain or loss on curtailment or settlement comprises any resulting change in the fair value of plan
assets, any changes in the present value of defined benefit obligation, any related actuarial gains or losses and past service
cost that had not previously been recognised.
Actuarial gains and losses are recognised as income or expense when the net cumulative unrecognised actuarial gains and
losses for each individual plan at the end of the previous reporting period exceed 10% of the higher of the defined benefit
obligation and the fair value of plan assets at that date. These gains or losses are recognised over the expected average
remaining working lives of the employees participating in the plans.
|
PAGE 96
(c) Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided. Provision is created for the amount of annual leave encashment based on the latest basic salary.
3.8 Income tax
Income tax expenses comprise current and deferred taxes. Income tax expenses are recognised in profit or loss except to the
extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
(a) Current tax
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous periods. The tax rate used for the reporting
periods is as follows:
Year Tax rate
2011 35%
2012 35%
Being a private limited company, applicable tax rate for GPIT is 37.5%. However IT enabled services provided by GPIT are
exempted from income taxes until 30 June 2015 as per Finance Act 2012.
(b) Deferred tax
Deferred tax is recognised in compliance with IAS/BAS 12: Income Taxes, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. Deferred
tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by the date of statement of financial position. Deferred tax assets and
liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same taxable entity.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the
deductible temporary difference can be utilised. Deferred tax assets are reviewed at each year-end and are reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
3.9 Provisions
A provision is recognised in the statement of financial position when the group has a legal or constructive obligation as a
result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provision is ordinarily measured at the best estimate of the
expenditure required to settle the present obligation at the reporting date. Where the group expects some or all of a provision
to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time
value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks
specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
Asset retirement obligations (ARO)
Asset retirement obligations (ARO) are recognised when there is a legal or constructive obligation as a result of past event for
dismantling and removing an item of property, plant and equipment and restoring the site on which the item is located and it
is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of
obligation can be made. A corresponding amount equivalent to the provision is recognised as part of the cost of the related
property, plant and equipment. The amount recognised is the estimated expected cost of decommissioning, discounted to its
present value. Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with
prospectively by recording an adjustment to the provision, and a corresponding adjustment to property, plant and equipment.
The group recognises ARO in respect of roof-top base station and office space. The periodic unwinding of the discount is
recognised in profit or loss as a finance cost as it occurs.
3.10 Contingencies
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group; or a present
obligation that arises from past events but is not recognised because 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 cannot be measured
with sufficient reliability.
PAGE 97
|
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the group.
Contingent liabilities and assets are not recognised in the statement of financial position of the group.
3.11 Revenue recognition, measurement and presentation
Revenues are recognised when goods are delivered or services rendered, to the extent that it is probable that the economic
benefits from the transactions will flow to the group and the revenues can be reliably measured. Revenues are measured at the
fair value of the consideration received or receivable, net of discounts and sales related taxes. These taxes are regarded as
collected on behalf of the authorities.
Revenues primarily comprise sale of:

Services: subscription and traffic fees, connection fees, interconnection fees, roaming charges, fees for leased lines and
leased networks.

Customer equipment is primarily mobile devices/phones and data card.

(a) Subscription and traffic fees
Revenues from subscription fees are recognised over the subscription period while revenues from voice and non-voice services
are recognised upon actual use. Consideration from the sale of prepaid cards to customers where services have not been
rendered at the reporting date is deferred until actual usage or when the cards are expired or forfeited.
(b) Connection fees
Connection fees that are charged and not allocated to the other elements of an arrangement are deferred and recognised
over the periods in which the fees are expected to be earned. The earning period is the expected period of the customer
relationship and is based on past history of churn.
(c) Customer equipment
Revenues from sales of customer equipment are normally recognised when the equipment, including the related significant
risks and rewards of ownership, is transferred to the buyer and the group retains neither continuing managerial involvement to
the degree usually associated with ownership nor effective control over the goods sold.
(d) Discounts
Discounts are often provided in the form of cash discounts or free products and services delivered by the group or by external
parties. Discounts are recognised on a systematic basis over the period the discount is earned. Cash discounts or free products
and services given as part of sales transactions are recognised as a reduction of revenue. Free products or services provided
that are not related to sales transactions are recognised as expenses.
(e) Rendering IT service
Revenue from IT service is recognised on a percentage of completion basis. Percentage of completion of service is determined
upon periodic review and usually evidenced by work completion certificate. Revenue is recognised only when it is probable
that the economic benefits associated with the transaction will flow to the entity.
(f) Revenue from construction contracts
When the outcome of a construction contract can be estimated reliably, revenue from construction contracts is recognised by
reference to the stage of completion of the contract activity at the end of the reporting period. The stage of completion of a
contract is determined in a variety of ways depending on the nature of the contract. The group uses the method that measures
reliably the work performed. The methods include cost-to-cost, survey of work performed and completion of physical
proportion of the contract work.
If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion,
estimates are revised. These revisions may result in increases or decreases in estimated revenues or costs and are reflected in
income in the period in which the circumstances that give rise to the revision become known by management.
When the outcome of a construction contract cannot be estimated reliably, revenue is recognised only to the extent of
recoverable contract costs incurred and contract costs are recognised as an expense in the period in which they are incurred.
An expected loss on the construction contract is recognised as an expense immediately.
|
PAGE 98
Presentation:
The determination of whether the group is acting as a principal or as an agent in a transaction is based on an evaluation of the
substance of the transaction, the responsibility for providing the goods or services and setting prices and the underlying
financial risks and rewards. Where the group acts as a principal, the revenues are recognised on a gross basis. This requires
revenue to comprise the gross value of the transaction billed to the customers, after trade discounts, with any related
expenses charged as operating costs. Where the group acts as an agent, the expenses are offset against the revenues and
the resulting net revenues represent the margins or commissions earned for providing services in the capacity of an agent.
Revenues from roaming are recognised gross in line with general accepted accounting principles within the
telecommunications industry.
License fees payable to Bangladesh Telecommunication Regulatory Commission (BTRC) that are calculated on the basis of
revenue share arrangements are not offset against the revenues. Instead, they are recognised as operating costs because the
group is considered to be the primary obligor.
3.12 Deferred connection revenue
Deferred connection revenue represents the portion of connection revenue which is deferred over the period of estimated
customer relationship.
3.13 Deferred cost of connection revenue
Connection costs in excess of connection revenue are charged as expenses when incurred. Connection costs up to connection
revenue are deferred and amortised over the period of estimated customer relationship.
3.14 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at the
inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement. Leases are
classified as finance leases whenever the terms of lease transfer substantially all the risk and rewards of ownership to the
lessee. All other leases are classified as operating leases.
(a) The group as lessee
Assets held under finance leases are initially recognised as asset of the group at their fair value at the inception of the lease
or, if lower, at the present value of minimum lease payments. The corresponding liability to the lessor is included in the
statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of lease obligation so as to achieve a constant
rate of interest on the remaining balance of liability. Finance expenses are immediately recognised in profit or loss, unless
they are directly attributable to qualifying assets, in which case they are capitalised. Contingent rentals are recognised as
expenses in the period in which they incur.
Operating lease payments are recognised as an expense on straight line basis over the lease term, except where another
systemic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as liability. The
aggregate benefit of incentives is recognised as a reduction of rental expenses on a straight line basis, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
(b) The group as lessor
Amounts due from lessees under finance leases are recognised as receivables at the amount of group's net investment in the
leases. Finance lease income is allocated to accounting period so as to reflect a constant periodic rate of return on the group's
net investment outstanding in respect of the leases.
Rental income from operating lease is recognised on straight line basis over the term of relevant lease. Initial direct costs
incurred in negotiating and arranging an operating lease are added to carrying amount of leased assets and recognised on a
straight line basis over the lease term.
PAGE 99
|
3.15 Foreign currency transactions
The consolidated financial statements are presented in Taka/Tk./BDT, which is group's functional currency. Transactions in
foreign currencies are recorded in the books at the exchange rate prevailing on the date of the transaction. Monetary assets
and liabilities in foreign currencies at the date of statement of financial position are translated into taka at the exchange rate
prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the initial transaction. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rate at the date when the fair value was determined. Exchange differences arising
on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in
profit or loss as per IAS/BAS 21: The Effects of Changes in Foreign Exchange Rates.
3.16 Earnings per share
The group/company presents basic and diluted (when dilution is applicable) earnings per share (EPS) for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the group/company by the
weighted average number of ordinary shares outstanding during the period, adjusted for the effect of change in number of
shares for bonus issue, share split and reverse split. Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding, for the effects of all dilutive
potential ordinary shares. However, dilution of EPS is not applicable for these financial statements as there was no dilutive
potential ordinary shares during the relevant periods.
3.17 Events after the reporting period
Amounts recognised in the financial statements are adjusted for events after the reporting period that provide evidence of
conditions that existed at the end of the reporting period. No adjustment is given in the financial statements for events after
the reporting period that are indicative of conditions that arose after the reporting period. Material non-adjusting events are
disclosed in the financial statements.
|
PAGE 100
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PAGE 101
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PAGE 102
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PAGE 103
|
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PAGE 104
4.1 Land
Land represents freehold land acquired for office premises and base stations.
4.2 Base station and transmission equipment
Base station and transmission equipment which form the major part of the telecommunication network include Radio Base Station
(RBS) and related accessories, Base Station Controllers (BSC), Trans-Receiver Unit (TRU), GSM antenna, tower, site infrastructure,
civil works, microwave links, Mobile Switching Centres (MSC), Home Location Register (HLR) and other equipment and accessories.
In September 2010, an agreement was signed between Grameenphone and Huawei for supply of network equipment and related
maintenance services. Under the agreement, existing base stations and transmission equipment of Grameenphone were replaced
by new equipment supplied by Huawei. The above transaction has commercial substance in terms of its impact on configuration of
future cash flows. However in absence of reliable information regarding fair value of the assets acquired or the assets given up, cost
of the assets acquired were measured at the carrying amount of the assets given up plus any cash consideration paid.
Exchange of assets under the contract started in February 2011 and completed in January 2012.
4.3 Capital work in progress (CWIP)
This represents primarily the cost of network equipment under construction and capital inventory.
4.3.1 Capital work in progress transferred
The amount of CWIP completed and transferred during the year to the corresponding items of property, plant and
equipment was as follows:
Consolidated Separate
Name of assets 2012 2011 2012 2011
Taka Taka Taka Taka
Land 293,225 317,400 293,225 317,400
Building - - - -
Base station 10,081,054,913 19,172,340,529 10,081,054,913 19,172,340,529
Transmission equipment 3,263,635,479 10,838,905,993 3,263,635,479 10,838,905,993
Computers and other IT equipment 663,955,122 562,423,707 474,977,948 14,798,184
Furniture and fixtures 116,268,649 135,112,118 113,951,290 121,717,234
Vehicles 88,376,118 263,297,572 82,421,118 239,297,572
Total transfer of CWIP 14,213,583,506 30,972,397,319 14,016,333,973 30,387,376,912
4.3.2 Capital work in progress - components
Consolidated capital work in progress as at 31 December 2012 includes capital inventory of Tk. 3,197,018,118 (2011: Tk.
2,443,958,253 ) of Grameenphone and Tk. 4,702,080 (2011: nil) of GPIT , and work-in-progress of Tk. 3,801,272,214 (2011:
Tk. 3,808,736,758 ).
4.4 Fibre Optic Network under finance lease
This represents the fibre optic network acquired under finance lease from Bangladesh Railway (BR). The lease agreement
with BR is valid until June 2027.
4.5 Allocation of depreciation charged during the year

2012 2011 2012 2011
Taka Taka Taka Taka
Cost of network operation (Note 37) 11,206,346,880 13,113,781,076 11,066,313,175 13,039,469,227
Operating expenses (Note 37) 548,522,952 727,048,292 522,900,664 715,189,362
11,754,869,832 13,840,829,368 11,589,213,839 13,754,658,589
PAGE 105
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PAGE 107
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5.1 Software and others
Software includes business software and network management software. Business software includes mainly billing
software, Oracle financial software and other business software. Network management software represents PPS, NERM,
HNMS, Paso link, minilink etc.
5.2 Telecom licence and spectrum-2011
TThe tenure of Mobile Cellular Licence and 14.6 MHz of spectrum acquired in 1996 expired on 10 November 2011. The
tenure of the licence and spectrum was renewed for another 15 years on 7 August 2012. The license and spectrum was
recognised in accordance with IAS/BAS: 38 "Intangible Assets" and was measured at the cash equivalent price being the
present value of the installments. The difference between total payment and the cash equivalent price is recognised as
finance cost over the period of payment.
5.3 Spectrum-2008
This represents cost of 7.4 MHz of spectrum acquired in 2008 for 18 years.
5.4 Capital work in progress (CWIP)
CWIP includes cost of software in process of installation/implementation and also software under testing phase awaiting
users' acceptance.
5.5 Allocation of amortisation expense during the year
2012 2011 2012 2011
Taka Taka Taka Taka
Cost of network operation (Note 37) 2,813,251,492 586,436,259 2,795,752,375 585,066,214
Operating expenses (Note 37) 608,777,548 610,668,989 609,011,637 610,668,989
3,422,029,040 1,197,105,248 3,404,764,012 1,195,735,203
6 Investment in subsidiary
This represents GP's investment in GPIT, a subsidiary of GP. GPIT was incorporated on 28 January 2010 with the objective of
providing IT related services to GP and other external parties. GPIT is registered as a private limited company with an authorised
share capital of Tk. 7,500,000,000 divided into 75,000,000 shares of Tk. 100 each. As at 31 December 2012, paid up capital of
GPIT was Tk. 75,000,000 representing 750,000 shares, out of which 749,999 shares (99.99% of total share capital) were
subscribed by GP at face value.
7 Inventories
2012 2011 2012 2011
Taka Taka Taka Taka
Handset, data card and other devices 89,897,220 50,293,444 89,897,220 50,293,444
SIM card 223,666,480 247,653,281 223,666,480 247,653,281
Scratch card 95,967,221 33,433,034 95,967,221 33,433,034
IT accessories and services 7,365,428 22,643,490 - -
416,896,349 354,023,249 409,530,921 331,379,759
|
PAGE 108
7.1 Movement of inventories IT accessories Handset, data card SIM card Scratch card
and other device
Taka Taka Taka Taka
Balance as at 1 January 2011 - 133,374,666 633,598,995 67,381,665
Purchase during 2011 48,550,100 1,067,056,791 747,608,518 155,826,699
Issue during 2011 (25,906,610) (1,064,955,334) (1,130,416,634) (189,775,330)
22,643,490 135,476,123 250,790,879 33,433,034
Adjustment/write-off - (85,182,679) (3,137,598) -
Balance as at 31 December 2011 22,643,490 50,293,444 247,653,281 33,433,034
Purchase during 2012 901,251,261 291,999,696 638,174,469 286,438,130
Issue during 2012 (916,529,323) (239,019,230) (661,375,209) (210,031,912)
7,365,428 103,273,910 224,452,541 109,839,252
Adjustment/write-off - (13,376,690) (786,061) (13,872,031)
Balance as at 31 December 2012 7,365,428 89,897,220 223,666,480 95,967,221
7.2 Number of inventories
2012 2011 2012 2011
Units Units Units Units
Handset, data card and other device 53,762 34,238 53,762 34,238
SIM card 3,961,472 4,342,348 3,961,472 4,342,348
Scratch card 133,927,959 52,583,288 133,927,959 52,583,288
7.3 SIM card
As at 31 December 2012, GP had 3,961,472 SIM cards (2011: 4,342,348 SIM cards) out of which 671,205 SIM cards (2011: 1,231,296
SIM cards) are intended to be issued with new connection to subscribers. Each new connection currently attracts Tk. 605 as VAT
and Supplementary Duty to be paid to Govt. exchequer.
8 Deferred cost of connection revenue
2012 2011 2012 2011
Taka Taka Taka Taka
Opening balance 422,857,544 484,842,481 422,857,544 484,842,481
Addition during the year 189,262,527 155,771,288 189,262,527 155,771,288
612,120,071 640,613,769 612,120,071 640,613,769
Amortisation during the year (230,016,900) (217,756,225) (230,016,900) (217,756,225)
Closing balance 382,103,171 422,857,544 382,103,171 422,857,544
9 Accounts receivable, net
Receivables for interconnection (Note 9.1) 5,017,905,585 4,573,833,235 5,017,905,585 4,573,833,235
Receivables for post paid and others (Note 9.2) 345,009,382 430,164,458 345,009,382 430,164,458
Receivables for infrastructure sharing (Note 9.3) 384,615,911 311,685,379 384,615,911 311,685,379
Receivables for sub lease of fibre optic network (Note 9.4) 40,286,317 29,062,072 40,286,317 29,062,072
Other receivables for non-mobile service (Note 9.5) 427,350,837 17,199,287 10,057,927 5,298,091
6,215,168,032 5,361,944,431 5,797,875,122 5,350,043,235
9.1 Receivables for interconnection
Accounts receivable 5,159,654,077 4,791,993,644 5,159,654,077 4,791,993,644
Provision for doubtful debts (141,748,492) (218,160,409) (141,748,492) (218,160,409)
5,017,905,585 4,573,833,235 5,017,905,585 4,573,833,235
9.2 Receivables for post paid and others
Accounts receivable 388,543,217 474,547,063 388,543,217 474,547,063
Provision for doubtful debts (43,533,835) (44,382,605) (43,533,835) (44,382,605)
345,009,382 430,164,458 345,009,382 430,164,458

Receivables for post paid and others include receivables from post paid subscribers, content providers, and channel partners.
PAGE 109
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9.3 Receivables for infrastructure sharing
2012 2011 2012 2011
Taka Taka Taka Taka
Accounts receivable 384,615,911 311,685,379 384,615,911 311,685,379
Provision for doubtful debts - - - -
384,615,911 311,685,379 384,615,911 311,685,379
9.4 Receivables for sub lease of fibre optic network
Accounts receivable- sublease 45,706,102 34,947,224 45,706,102 34,947,224
Provision for doubtful debt (5,419,785) (5,885,152) (5,419,785) (5,885,152)
40,286,317 29,062,072 40,286,317 29,062,072
9.5 Other receivables for non-mobile service
Other receivables for non-mobile service include receivables for broadband internet service, bill pay service of GP and IT services provided by GPIT.
9.6 Provision for doubtful debts
Opening Balance 268,428,166 280,349,798 268,428,166 280,349,798
Provision made during the year (32,752,703) 42,622,969 (32,752,703) 42,622,969
235,675,463 322,972,767 235,675,463 322,972,767
Written off during the year (44,973,351) (54,544,601) (44,973,351) (54,544,601)
Closing balance 190,702,112 268,428,166 190,702,112 268,428,166
9.7 Security against accounts receivable
Good and secured 409,868,246 410,160,978 409,868,246 410,160,978
Good with personal security/unsecured 5,805,299,786 4,951,783,453 5,388,006,876 4,939,882,257
Doubtful and bad 190,702,112 268,428,166 190,702,112 268,428,166
Gross accounts receivable 6,405,870,144 5,630,372,597 5,988,577,234 5,618,471,401
Provision for bad and doubtful debts (190,702,112) (268,428,166) (190,702,112) (268,428,166)
Accounts receivable, net 6,215,168,032 5,361,944,431 5,797,875,122 5,350,043,235
9.8 Debts due by directors, officers and other related parties
As at 31 December 2012, accounts receivable do not include any receivable from:
(a) the directors and other officers of the company/group;
(b) firms or private limited companies respectively in which any director of the group is a partner, director or member, other than
those disclosed in note 48.2; and
(c) companies under the same management.
10 Other receivables
Interest receivable 8,277,180 22,142,478 8,277,180 22,142,478
Receivable from Ericsson 538,104,189 462,964,658 538,104,189 462,964,658
Receivable from other Telenor entities (Note 10.1) 366,830,344 260,695,250 366,830,344 260,695,250
Receivable from GPIT (Note 10.2) - - 90,821,937 250,767,772
Receivable from other external parties 176,374,459 170,522,638 158,210,366 157,985,343
1,089,586,172 916,325,024 1,162,244,016 1,154,555,501
10.1 Receivable from other Telenor entities
Receivable from other Telenor entities includes reimbursable expenses incurred on behalf of Telenor and its subsidiaries as well as
other inter company receivables.
10.2 Receivable from GPIT
Receivable from GPIT includes mainly receivable for reimbursable operating expenses.
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11 Advances, deposits and prepayments
2012 2011 2012 2011
Taka Taka Taka Taka
Advances
Advance to employees (Note 11.1) 27,999,477 5,051,544 25,211,505 1,755,828
Advance to Bangladesh Railway 490,003 560,002 490,003 560,002
Advance for capital expenditure 274,748,686 16,294,938,758 274,748,686 16,291,728,470
Advance VAT (Note 11.2) 851,089,682 - 851,089,682 -
Other advances 28,667,513 853,156 28,667,513 853,156
1,182,995,361 16,301,403,460 1,180,207,389 16,294,897,456
Deposits
Deposits for bank guarantee (Note 11.3) 123,972,426 129,157,944 109,947,426 126,457,944
Security deposit for utilities and services 82,355,578 77,353,046 73,550,075 73,321,638
206,328,004 206,510,990 183,497,501 199,779,582
Prepayments
Prepayment against rent (Note 11.4) 392,095,588 333,766,889 392,095,588 333,766,889
Prepayment against expenses (Note 11.5) 411,194,655 287,501,157 727,720,664 657,801,144
803,290,243 621,268,046 1,119,816,252 991,568,033
2,192,613,608 17,129,182,496 2,483,521,142 17,486,245,071
11.1 Advance to employees
This includes advances made to employees in relation to official travel, training, office utility bills, other office running expenses etc.
11.2 Advance VAT
This represents the excess of VAT payment over VAT liabilities.
11.3 Deposits for bank guarantee
This represents the guarantee margins with different banks against guarantee provided by them in favor of Commissioner of
Customs and other parties.
11.4 Prepayment against rent
This represents payment of rent in advance for base stations and office locations.
11.5 Prepayment against expenses
This includes prepaid insurance premium, payment to suppliers for operating inventories, spare parts, software support
maintenance and others.
11.6 Security against advances
Good and secured 274,748,686 309,848,470 274,748,686 309,848,470
Good with personal security/unsecured 908,246,675 15,991,554,990 905,458,703 15,985,048,986
Doubtful and bad - - - -
1,182,995,361 16,301,403,460 1,180,207,389 16,294,897,456
Provision for bad and doubtful amount - - - -
Total advances 1,182,995,361 16,301,403,460 1,180,207,389 16,294,897,456
11.7 Loans and advances to subsidiaries, directors, officers and other related parties
Other than those mentioned in note 11.1 and 48.2, there were no loans or advances to-
(a) Directors of the company/group;
(b) Firms or private limited companies respectively in which any director of Grameenphone Ltd. is a partner, director or member; and
(c) Subsidiaries or companies under the same management.
12 Short-term investment
This includes the amount of Fixed Deposits Receipts (FDR) of Tk. 93,882,537 (2011: Tk. 98,897,594) with Southeast Bank Limited,
Tk. 46,132,500 (2011: 46,132,500) with One Bank Ltd and Tk. 3,696,875 (2011: Tk. 36,826,875) with other banks as at the
statement of financial position date having original maturity of three months or more. The interest rates on these FDRs range from
12.00% to 14.5% (2011: 8.25% to 13.75% ). Out of this total amount, Tk. 133,595,625 (2011: Tk. 135,459,375) is restricted to the
settlement of bills pay liabilities.
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13 Cash and cash equivalents
2012 2011 2012 2011
Taka Taka Taka Taka
Cash in hand 6,329,261 4,424,850 6,329,261 4,424,850
Cash at bank (Note-13.1) 3,558,901,113 8,050,172,142 3,295,522,618 7,623,748,644
3,565,230,374 8,054,596,992 3,301,851,879 7,628,173,494
13.1 Cash at bank
Cash at bank includes bank overdraft of Tk. 403,580,129 from The Premier Bank Limited and Tk. 239,111,764 from Bank Alfalah
Limited. Bank overdrafts that form an integral part of group's cash management are included as a component of cash and cash
equivalents as mentioned in note 3.4.1.
13.2 Restricted cash balance
Cash at bank includes utility bill pay service collection accounts amounting to Tk. 368,353,869 (2011: Tk. 416,563,884 ). Use of this
amount is restricted to settlement of payable for bills pay receipts as mentioned in note 26.
13.3 Non-cash transaction
During the current year, the group entered into the following non-cash investing and financing activities which are not included in
the consolidated statement of cash flows:
Grameenphone capitalised its renewed 'Telecom licence and spectrum 2011' at Tk. 29,880,383,450 during the current year, for
which it paid Tk. 7,755,395,764 in 2012 and Tk. 13,584,598,000 in 2011. The rest of the amount is shown as liability (Note 24.1).
14 Share capital
4,000,000,000 ordinary shares of Tk. 10 each 40,000,000,000 40,000,000,000 40,000,000,000 40,000,000,000
40,000,000,000 40,000,000,000 40,000,000,000 40,000,000,000

Issued, subscribed, called up and paid up:
1,350,300,022 ordinary shares of Tk. 10 each 13,503,000,220 13,503,000,220 13,503,000,220 13,503,000,220
13,503,000,220 13,503,000,220 13,503,000,220 13,503,000,220
The company was initially registered with ordinary shares of Tk. 43.00 each. These shares were subsequently converted into Tk. 10
shares through a 43:1 split at the 16th EGM (held on 15 July 2008) and 1:10 reverse split at the 19th EGM (held on 2 July 2009).
There has been no change in share capital during the current and comparative periods.
14.1 Shareholding position
a) Percentage of shareholdings
% of holding Value of shares (Taka)
As at As at As at As at
Name of shareholders 31 December 2012 31 December 2011 31 December 2012 31 December 2011
Telenor Mobile Communications AS, Norway 55.8% 55.8% 7,534,077,240 7,534,077,240
Nye Telenor Mobile Communications II AS, Norway 0.0% 0.0% 2,150 2,150
Nye Telenor Mobile Communications III AS, Norway 0.0% 0.0% 2,150 2,150
Telenor Asia Pte Ltd, Singapore 0.0% 0.0% 2,150 2,150
Grameen Telecom, Bangladesh 34.2% 34.2% 4,617,664,090 4,617,664,090
Grameen Kalyan, Bangladesh 0.0% 0.0% 220 220
Grameen Shakti, Bangladesh 0.0% 0.0% 220 220
General public, GP employees and institutions 10.0% 10.0% 1,351,252,000 1,351,252,000
100% 100% 13,503,000,220 13,503,000,220
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b) Classification of shareholders by range of number of shares held
No. of shareholders No. of shares
As at As at As at As at
Shareholding range 31 December 2012 31 December 2011 31 December 2012 31 December 2011
1-500 53,842 68,470 11,862,686 15,227,428
501-5,000 12,376 16,547 17,971,537 23,941,792
5,001-10,000 842 1,099 6,124,087 7,980,838
10,001-20,000 381 524 5,388,878 7,324,730
20,001-30,000 103 141 2,481,795 3,458,975
30,001-40,000 63 82 2,201,994 2,849,538
40,001-50,000 41 46 1,893,983 2,118,778
50,001-100,000 78 89 5,473,513 6,403,346
100,001-1,000,000 98 93 30,392,153 26,703,195
1,000,001-1,000,000,000 19 14 1,266,509,396 1,254,291,402
67,843 87,105 1,350,300,022 1,350,300,022
15 Share premium
Total amount of Tk. 8,384,003,437 was received as share premium in respect of shares issued to shareholders. Net issue cost of
Tk. 543,777,495 was set off against share premium as per IAS/BAS 32: Financial Instruments: Presentation.
16 Capital reserve
In 1999, Grameenphone issued 5,086,779 preference shares of Tk. 45.84 each, which were converted into ordinary shares of Tk.
43.00 each in 2004. The balance Tk. 2.84 per share was transferred to capital reserve account. The conversion was in accordance
with clauses 41 to 44 of Memorandum and Articles of Association of GP. This amount is not distributable as dividend as per the
Companies Act 1994.
17 Deposit from shareholders
Deposit from shareholders as at the statement of financial position date represents balance of the share money received from
Telenor Mobile Communications AS, Norway, which has not been used against issuance of shares.
18 General reserve
Grameenphone availed tax holiday benefits from 1 June 2001 to 31 May 2006 as per the provisions of Income Tax Ordinance 1984.
A tax holiday reserve was created during the Tax Holiday period to ensure investment in compliance with the said Ordinance. The
reserve was subsequently transferred to general reserve upon fulfilment of necessary conditions.
19 Non-controlling interest
Non-controlling interest is the equity in GPIT not attributable, directly or indirectly, to GP. This includes the amount of paid up
capital and proportionate share of accumulated profit/loss of GPIT attributable to shareholders of GPIT other than GP.
20 Deposit from agents and subscribers
2012 2011 2012 2011
Taka Taka Taka Taka
Security deposits from subscribers (Note 20.1) 409,868,246 410,160,978 409,868,246 410,160,978
Security deposits from dealers and agents (Note 20.2) 49,515,000 45,615,000 49,515,000 45,615,000
459,383,246 455,775,978 459,383,246 455,775,978
20.1 Security deposits from subscribers
This represents security money obtained from post paid subscribers and can be used in full or in part to adjust any unpaid portion
of dues from them. Any unadjusted amount of security deposits is refundable to subscribers on termination of customer
relationship.
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20.2Security deposits from dealers and agents
Security deposits from dealers and agents represent security money obtained from channel partners (i.e. dealer, distributor, outlet
agent). These deposits can be used in full or in part to adjust any amount due and are refundable at the termination of contract.
21 Finance lease obligation
Grameenphone entered into a lease agreement with Bangladesh Railway (BR) in 1997 for the right to use the optical fibre network
along with its ancillary facilities. The lease was treated as operating lease until the end of 2004. Following an amendment to the
lease agreement in 2004, it has been reclassified as finance lease and has been treated as such since 1 January 2005. The lease
agreement was further amended on 13 June 2007 with Guaranteed Annual Rental (GAR) being revised and lease term being
extended up to June 2027.
Obligation under finance lease was initially measured at an amount equal to the present value of minimum lease payments. The
effect of change in lease agreement in 2007 was accounted for as an adjustment of the leased asset and obligation by the amount
equal to the difference between the present value of revised minimum lease payments and the carrying amount of lease
obligation at that date. GP's incremental borrowing rate, which was 15% at the inception of the lease, was used to calculate the
present value of minimum lease payments, as it was impracticable to determine the implicit interest rate at that time.

2012 2011 2012 2011
Taka Taka Taka Taka
Finance lease obligation 5,019,805,838 5,019,805,838 5,019,805,838 5,019,805,838
Less: Current portion (Note 21.1) - - - -
5,019,805,838 5,019,805,838 5,019,805,838 5,019,805,838
Finance lease obligation as at 31 December 2012 is payable as follows:
Present value of
Future minimum minimum lease
lease payments Interest payments
Taka Taka Taka
(i) Not later than one year 768,431,458 768,431,458 -
(ii) Later than one year but not later than five years 3,375,071,504 3,375,071,504 -
(iii) Later than five years 9,944,407,110 4,924,601,272 5,019,805,838
14,087,910,072 9,068,104,234 5,019,805,838
Finance lease obligation as at 31 December 2011 is payable as follows:
Present value of
Future minimum minimum lease
lease payments Interest payments
Taka Taka Taka
(i) Not later than one year 738,296,891 738,296,891 -
(ii) Later than one year but not later than five years 3,254,533,236 3,254,533,236 -
(iii) Later than five years 10,833,376,835 5,813,570,997 5,019,805,838
14,826,206,962 9,806,401,124 5,019,805,838
21.1 Current portion of finance lease obligation
Current portion of finance lease obligation represents the principal amount of lease obligation included in the minimum lease
payments falling due within 12 months from the end of the reporting period. Minimum lease payments for fibre optic network were
revised in June 2007 with an annual escalation clause resulting in higher lease payments in later parts of the lease tenure. Such
increasing cash flow pattern has led to higher amount of interest expense being recognised in the earlier periods and minimum
lease payments falling short of the interest amount. Accordingly, current portion of finance lease obligation was nil for 2012 and
2011.
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22 Deferred tax liabilities
Deferred tax assets and liabilities have been recognised and measured in accordance with the provisions of IAS/BAS 12: Income
Taxes. Related deferred tax expense/(income) have been disclosed in note 44. Deferred tax assets and liabilities for separate
financial statements are attributable to the following:
Taxable/(deductible)
temporary
Carrying amount Tax base difference
Taka Taka Taka
As at 31 December 2012
Property, plant and equipment (excluding land and
CWIP and leased assets) (Note 4) 56,421,391,525 25,009,966,910 31,411,424,615
Property, plant and equipment under finance lease (Note 4) 4,821,493,804 - 4,821,493,804
Difference for vehicle (Note 22.1) (65,890,590) - (65,890,590)
36,167,027,829
Accounts receivable (Note 9) 5,797,875,122 5,844,167,319 (46,292,197)
Finance lease obligation (Note 21) (5,019,805,838) - (5,019,805,838)
Accrued interest on finance lease obligation (265,962,156) - (265,962,156)
Asset retirement obligations (51,693,048) - (51,693,048)
Provision for incidental expenses (4,281,969,561) - (4,281,969,561)
Net taxable temporary difference 26,501,305,029
Applicable tax rate (Note 3.8) 35%
Deferred tax liabilities 9,275,456,760

Property, plant and equipment (excluding land and
CWIP and leased assets) (Note 4) 56,717,406,917 24,371,533,908 32,345,873,009
Property, plant and equipment under finance lease (Note 4) 5,156,017,162 - 5,156,017,162
Difference for vehicle (Note 22.1) (74,547,280) - (74,547,280)
37,427,342,891
Accounts receivable (Note 9) 5,350,043,235 5,499,444,974 (149,401,739)
Finance lease obligation (Note 21) (5,019,805,838) - (5,019,805,838)
Accrued interest on finance lease obligation (215,643,579) - (215,643,579)
Asset retirement obligations (47,619,576) - (47,619,576)
Provisions (14,481,616,392) (11,752,424,605) (2,729,191,787)
Net taxable temporary difference 29,265,680,372
Applicable tax rate (Note 3.8) 35%
Deferred tax liabilities 10,242,988,130
As per the provisions of Income Tax Ordinance 1984 (ITO), any income derived from the business of software development and
Information Technology Enabled Services (ITES) is subject to tax exemption until 30 June 2015 and hence deferred tax liability for
GPIT is not considered.
22.1 Difference for vehicle
This represents the permanent difference related to sedan cars, not plying for hire, owned by GP. As per the provisions of Income
Tax Ordinance 1984, depreciation on such cars is allowed only up to certain limit of cost (currently Tk. 2 million per car) of such cars
for tax purpose. Difference for vehicle represents the amount of depreciated cost exceeding such limits.
23 Other Liabilites
2012 2011 2012 2011
Taka Taka Taka Taka
Asset retirement obligations (Note 23.1) 110,951,466 104,716,420 110,951,466 104,716,420
Provision for incidental expenses 4,281,969,561 2,729,191,787 4,281,969,561 2,729,191,787
Employee benefits - provision for gratuity (Note 23.2) - - - -
4,392,921,027 2,833,908,207 4,392,921,027 2,833,908,207
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23.1 Asset retirement obligations (ARO)
2012 2011 2012 2011
Taka Taka Taka Taka
Opening balance 104,716,420 162,876,392 104,716,420 162,876,392
Provision made during the year 10,711,824 24,189,972 10,711,824 24,189,972
115,428,244 187,066,364 115,428,244 187,066,364
Adjustment/payment made during the year (4,476,778) (82,349,944) (4,476,778) (82,349,944)
Closing balance 110,951,466 104,716,420 110,951,466 104,716,420
Grameenphone recognises asset retirement obligations (ARO) in respect of roof-top base stations and office space for any
constructive and/or legal obligations for dismantling, removal or restoration incurred by the company as a consequence of
installing or constructing the sites. ARO is measured at the present value of expected cash out flows required to settle such
obligations. Unwinding of the discount is charged as financial expense in the profit or loss.
23.2 Employee benefits - provision for gratuity
Opening balance - - - -
Provisions made during the year 393,488,710 365,599,706 364,452,293 345,240,164
393,488,710 365,599,706 364,452,293 345,240,164
Transfer to fund during the year (393,488,710) (365,599,706) (364,452,293) (345,240,164)
Closing balance - - - -
24 Trade and other payables
Liability for capital expenditure (Note 24.1) 11,097,944,186 5,666,817,629 11,075,188,078 5,645,629,609
Payable for expenses:
Interconnection charges 58,089,894 32,468,286 58,089,894 32,468,286
Revenue sharing with content providers 83,580,845 211,002,698 126,647,436 233,864,396
International roaming services 61,811,271 69,331,739 61,811,271 69,331,739
Training and travel expenses 33,217,288 38,141,067 31,303,572 36,481,195
Sales and promotional expenses 206,975,908 151,785,409 206,975,908 150,195,815
Consultancy and professional fees 4,594,131,200 3,381,308,109 4,428,194,013 3,278,699,664
Cost of SIM card, scratch card, handsets etc. 134,041,239 249,980,238 134,041,239 249,980,238
Office and general expenses 206,828,711 203,824,590 193,236,942 194,689,584
PCM related expenses 30,036,864 56,996,185 30,036,864 56,996,185
Network operations and maintenance 389,376,322 364,378,386 374,889,592 360,989,513
5,798,089,542 4,759,216,707 5,645,226,731 4,663,696,615
Payable for others:
Tax deducted at source from suppliers 128,661,975 244,368,578 128,661,975 244,368,578
VAT deducted at source from suppliers 86,822,610 105,660,831 86,822,610 105,660,831
Payables for bills pay receipt 33,412,027 21,236,584 33,412,027 21,236,584
Retention money from suppliers 24,403,489 43,033,714 24,403,489 43,033,714
273,300,101 414,299,707 273,300,101 414,299,707
17,169,333,829 10,840,334,043 16,993,714,910 10,723,625,931
24.1 This includes liability for the renewal of Telecom licence and spectrum-2011.
25 Short-term bank loan
Short-term bank loan includes loan of Tk. 1,295,000,000 from Citibank N.A., Tk. 1,500,000,000 from Eastern Bank Ltd., Tk.
1,000,000,000 from Hongkong and Shanghai Banking Corp. and Tk. 2,000,000,000 from Souteast Bank Ltd. for various
operational purposes. Interest rates for these loans vary from 13.50% to 14.75%.
26 Payable to government and autonomous bodies
Bangladesh Telecommunication Regulatory Commission (BTRC)
Frequency and spectrum charges (Note 25.1) 389,029,443 295,992,451 389,029,443 295,992,451
Revenue sharing (Note 25.2) 1,927,617,475 1,620,995,267 1,927,617,475 1,620,995,267
2,316,646,918 1,916,987,718 2,316,646,918 1,916,987,718
Supplementary duty on SIM card 180,587,886 2,535,910,188 180,587,886 2,535,910,188
Share of sub-lease rent payable to Bangladesh Railway 10,808,338 7,516,089 10,808,338 7,516,089
Payable for Bills Pay receipt 367,353,896 353,691,950 367,353,896 353,691,950
2,875,397,038 4,814,105,945 2,875,397,038 4,814,105,945
26.1 Frequency and spectrum charges
This relates to charges payable to BTRC for use of frequency and spectrum allocated to the company and roaming line rent.
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26.2 Revenue sharing
As per the operating licence agreement as amended on 16 April 2006, GP shares 5.5 % of its collected rent and call charges with
BTRC. Under the 2G licence renewal guidelines, additional 1% of revenue is to be contributed to Social Obligation Fund. Revenue
sharing and Social Obligation Fund under the renewal guidelines is effective from the date of licence renewal.
27 Unearned revenue
This includes mainly the unused portion of scratch cards, flexi load and advance post paid bills received for which services have
not yet been provided.
28 VAT payable
This represents VAT amount payable to NBR arising from provision of services by the company that are subject to VAT.
29 Income tax provision
2012 2011 2012 2011
Taka Taka Taka Taka
Movement of income tax provision is shown as under:
Opening balance 17,806,349,160 13,396,693,877 17,805,122,197 13,396,161,393
Provision made during the year 13,656,178,843 15,073,255,644 13,652,756,875 15,070,341,426
31,462,528,003 28,469,949,521 31,457,879,072 28,466,502,819
Paid during the year (incl. tax deducted at source) (13,565,042,041) (10,663,600,361) (13,561,442,504) (10,661,380,622)
Closing balance 17,897,485,962 17,806,349,160 17,896,436,568 17,805,122,197
30 Accrued interest
Accrued interest includes Tk. 265,962,156 (2011 : Tk. 215,643,579 ) representing interest on finance lease obligation.
31 Other liabilities
Unclaimed dividend 85,948,797 52,815,658 85,948,797 52,815,658
Other external liabilities (Note 31.1) 47,620,563 45,734,208 31,146,836 28,158,036
133,569,360 98,549,866 117,095,633 80,973,694
31.1 Other external liabilities
Other external liabilities include group's payables to Telenor Start II AS for Cellbazaar operations, withholding tax and VAT,
liabilities for share money refund, advance from customers etc.
32 Deferred connection revenue
Opening balance 542,973,536 581,904,397 542,973,536 581,904,397
Addition during the year 224,013,663 221,969,943 224,013,663 221,969,943
766,987,199 803,874,340 766,987,199 803,874,340
Recognised as revenue during the year (280,232,271) (260,900,804) (280,232,271) (260,900,804)
Closing balance 486,754,928 542,973,536 486,754,928 542,973,536
33 Provisions
Commission and other operational expenses 112,324,637 86,210,595 112,324,637 86,210,595
Cost of SIM card, scratch card, handsets etc. 1,022,449,774 1,467,605,297 1,022,449,774 1,467,605,297
Interconnection and roaming cost 1,893,806,815 1,987,871,149 1,893,806,815 1,987,871,149
Personnel expenses (Note 33.1) 967,587,854 1,088,055,366 845,651,658 992,202,647
Training and travelling expenses 59,606,809 71,457,383 56,208,767 70,906,726
Sales and promotional expenses 1,563,032,206 837,556,535 1,563,032,206 837,556,535
Consultancy and professional fees 499,636,192 254,114,389 483,674,968 231,153,891
Network operations and maintenance 2,549,008,032 1,884,811,891 2,196,553,471 1,808,695,969
Capital expenditure 2,378,970,930 3,376,793,523 2,432,327,399 3,376,793,523
Office and general expenses (Note 33.2) 1,758,009,426 889,188,708 1,753,712,504 883,710,286
Lease rent to Power Grid Company of Bangladesh Ltd. 13,411,614 9,717,987 13,411,614 9,717,987
12,817,844,289 11,953,382,823 12,373,153,813 11,752,424,605
33.1 Personnel expenses
This includes provision for bonus, earned leave encashment, any unpaid salary and other personnel related expenses.
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33.2 Office and general expenses
Provision for office and general expenses includes provision for vehicle running expenses, stationery, utility, communication
expenses etc.
34 Revenue
2012 2011 2012 2011
Taka Taka Taka Taka
Traffic revenue
-Post paid 2,762,717,491 2,671,896,715 2,762,717,491 2,671,896,715
-Pre paid 70,651,009,703 69,746,817,670 70,651,009,703 69,746,817,670
73,413,727,194 72,418,714,385 73,413,727,194 72,418,714,385
Subscription revenue
-Post paid 558,861,471 566,479,749 558,861,471 566,479,749
Connection revenue
-Post paid 3,961,339 3,902,385 3,961,339 3,902,385
-Pre paid 275,582,188 262,344,039 275,582,188 262,344,039
279,543,527 266,246,424 279,543,527 266,246,424
Roaming revenue
-Inbound 470,577,725 417,108,357 470,577,725 417,108,357
-Outbound 320,221,749 321,584,002 320,221,749 321,584,002
790,799,474 738,692,359 790,799,474 738,692,359
Interconnection revenue
-Post paid 156,364,541 132,963,093 156,364,541 132,963,093
-Pre paid 9,016,600,368 8,543,517,399 9,016,600,368 8,543,517,399
9,172,964,909 8,676,480,492 9,172,964,909 8,676,480,492
Other mobile revenue
-Customer support revenue 11,589,718 11,715,274 11,589,718 11,715,274
-SMS and MMS revenue 1,034,076,513 953,238,279 1,034,076,513 953,238,279
-Internet and data revenue 2,105,209,551 1,560,131,157 2,105,209,551 1,560,131,157
-VAS and other revenue (Note 34.1) 2,352,775,354 1,586,704,168 2,352,775,354 1,586,704,168
5,503,651,136 4,111,788,878 5,503,651,136 4,111,788,878
Non- mobile revenue
-Sale of handset 10,006,363 826,107,532 10,006,363 826,107,532
-Sale of data card 249,165,370 279,900,439 249,165,370 279,900,439
-Sale of vehicle tracking systems 15,938,907 18,929,131 15,938,907 18,929,131
-Infrastructure sharing revenue 1,456,810,024 1,086,281,712 1,456,810,024 1,086,281,712
-Commissions 4,291,590 1,945,796 4,291,590 1,945,796
-Broadband internet revenue 2,199,434 387,996 2,199,434 387,996
-Bills pay service 30,976,944 14,745,882 30,976,944 14,745,882
-IT service maintenance fee (Note 34.2) 431,509,413 52,916,151 - -
2,200,898,045 2,281,214,639 1,769,388,632 2,228,298,488
91,920,445,756 89,059,616,926 91,488,936,343 89,006,700,775
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PAGE 118
34.1 VAS and other revenue
Value Added Service (VAS) revenue includes revenue from content sale (e.g. medical services and music download services, news
service, and other contents), call block service, mobile back-up service etc.
34.2 IT service maintenance fee
This represents revenue earned by the group on account of IT services provided to external customers, both foreign and local.
35 Direct cost of revenue
2012 2011 2012 2011
Taka Taka Taka Taka
Cost of interconnection (Note 35.1) 3,924,000,684 3,816,501,489 3,924,000,684 3,816,501,489
Cost of SIM card, scratch card, handset etc. (Note 35.2) 1,238,539,246 2,362,735,807 1,238,539,246 2,362,735,807
International roaming cost (Note 35.3) 247,696,544 226,833,866 247,696,544 226,833,866
Licence fees and spectrum charges 1,277,984,381 775,692,609 1,277,984,381 775,692,609
Revenue sharing with BTRC 5,878,277,626 4,779,925,045 5,878,277,626 4,779,925,045
Dealers' and agents' commission 5,578,580,587 5,427,228,305 5,578,580,587 5,427,228,305
Revenue sharing with content providers and others 419,603,180 263,587,723 438,495,158 280,112,858
18,564,682,248 17,652,504,844 18,583,574,226 17,669,029,979
35.1 Cost of interconnection
This represents the amount payable to the other operators (including interconnection exchange and international gateway
operators) for outgoing off-net calls (including international calls) made by GP subscribers.
Rates for interconnection charges are guided by BTRC directives. Cost of interconnection is measured on the basis of actual
outgoing off-net traffic information.
35.2 Cost of SIM card, scratch card, handset etc.
SIM card 716,447,681 1,128,784,262 716,447,681 1,128,784,262
Scratch card 251,170,669 146,622,839 251,170,669 146,622,839
Handset, data card and other devices 270,920,896 1,087,328,706 270,920,896 1,087,328,706
1,238,539,246 2,362,735,807 1,238,539,246 2,362,735,807
35.3 International roaming cost
This represents the roaming charges payable to the roaming partners for use of roaming partners' network by GP subscribers.
36 Network operation and maintenance expenses
Rent (Note 36.1) 906,407,229 730,650,954 906,407,229 730,650,954
Electricity charges 1,328,436,508 1,298,616,406 1,328,436,508 1,298,616,405
Operation and maintenance - base station 903,444,052 916,432,229 903,444,052 916,432,229
Operation and maintenance - switch 858,635,204 1,374,529,390 858,635,204 1,374,529,390
Operation and maintenance - optical fibre network 90,421,869 50,967,789 90,421,869 50,967,789
Network quality maintenance expenses 2,636,969,685 1,924,216,734 2,956,248,095 2,201,684,222
PCM operation and maintenance 8,106,744 8,519,947 8,106,744 8,519,947
Lease rent for submarine cable 213,241,503 182,198,508 213,241,503 182,198,508
6,945,662,794 6,486,131,957 7,264,941,204 6,763,599,444
PAGE 119
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36.1 Rent
Rent includes location rent for base stations, mobile switching centres (switch) and other locations. Future minimum lease payments under
non cancellable operating lease agreements for such locations are payable as follows:
2012 2011 2012 2011
Taka Taka Taka Taka
(i) Not later than one year 489,449,041 494,108,833 489,449,041 494,108,833
(ii) Later than one year but not later than five years 1,469,681,797 1,818,562,622 1,469,681,797 1,818,562,622
(iii) Later than five years 3,777,419,776 3,423,705,657 3,777,419,776 3,423,705,657
5,736,550,614 5,736,377,112 5,736,550,614 5,736,377,112
37 Depreciation and amortisation
Cost of network operation
Depreciation of property, plant and equipment 11,206,346,880 13,113,781,076 11,066,313,175 13,039,469,227
Amortisation of intangible assets 2,813,251,492 586,436,259 2,795,752,375 585,066,214
14,019,598,372 13,700,217,335 13,862,065,550 13,624,535,441
Operating expenses
Depreciation of property, plant and equipment 548,522,952 727,048,292 522,900,664 715,189,362
Amortisation of intangible assets 608,777,548 610,668,989 609,011,637 610,668,989
1,157,300,500 1,337,717,281 1,131,912,301 1,325,858,351
15,176,898,872 15,037,934,616 14,993,977,851 14,950,393,792
38 Other income, net
Rental income from sublease of fibre optic network, net 70,071,621 75,212,038 70,071,621 75,212,038
Rental income from GPIT - - 27,363,540 27,363,540
Franchisee fees and others 3,324,067 6,437,659 3,324,067 6,437,659
73,395,688 81,649,697 100,759,228 109,013,237
39 General and administrative expenses
Personnel expenses 6,759,496,388 6,482,742,826 6,549,913,896 6,240,380,887
Employee training and ancillary expenses 98,907,851 97,865,470 98,907,851 97,865,470
Rent (Note 39.1) 279,577,864 288,626,433 277,115,152 279,334,425
Office maintenance and running expenses 709,955,309 698,916,489 698,827,550 690,932,783
Travelling expenses 217,095,809 130,876,971 187,964,532 119,269,855
Vehicle running expenses 593,326,777 507,164,688 557,537,746 483,160,790
Telephone and communication 81,718,333 77,522,440 81,718,333 77,522,440
Printing, postage and stationery 104,334,364 138,663,492 95,341,643 132,232,634
Legal and professional fees (Note 39.2) 125,113,507 98,839,798 74,453,993 46,274,429
Consultancy fees 899,266,567 670,682,365 899,266,567 670,682,365
Audit fees 2,260,000 2,325,000 1,800,000 1,800,000
Meeting expenses (Note 39.3) 52,095,686 67,602,757 52,095,686 67,602,757
Entertainment expenses 17,460,423 18,819,621 15,847,222 18,207,033
Revenue collection charges 11,788,917 13,891,795 11,788,917 13,891,795
Bad debt expense (Note 39.4) (58,136,191) 15,300,696 (58,136,191) 15,300,696
9,894,261,604 9,309,840,841 9,544,442,897 8,954,458,359
39.1 Rent
Rent includes rent for office, warehouse, Grameenphone Center (GPC), Grameenphone Service Desk (GPSD), info-centre and guest houses.
Future minimum lease payments under non cancellable operating lease agreements for such locations are payable as follows:
(i) Not later than 1 year 271,860,208 242,291,241 271,860,208 239,828,522
(ii) Later than 1 year but not later than 5 years 811,320,467 777,732,575 811,320,467 769,215,673
(iii) Later than 5 years 480,064,337 550,358,799 480,064,337 550,358,799
1,563,245,011 1,570,382,615 1,563,245,011 1,559,402,994
39.2 Legal and professional fees
Legal and professional fees include fees for legal advice and other professional services received time to time from lawyers, auditors and
other professionals.
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PAGE 120
39.3 Meeting expenses
These include expenses for board meetings of the group amounting to Tk. 3,792,570 (2011: Tk. 2,720,704), and other meetings of
the group (including AGM) Tk. 48,303,116 (2011: Tk. 64,882,053).
39.4 Bad debt expense
2012 2011 2012 2011
Taka Taka Taka Taka
Provision made/(reversed) during the year (32,752,703) 42,622,969 (32,752,703) 42,622,969
Recovery of bad debt during the year (25,383,488) (27,322,273) (25,383,488) (27,322,273)
Bad debt expense (58,136,191) 15,300,696 (58,136,191) 15,300,696
Provision for doubtful debts has been made as per policy of the group mentioned in Note 3.5.
40 Selling and distribution expenses
Sales, marketing and representation costs (Note 40.1) 5,968,028,058 6,555,229,928 5,968,028,058 6,555,229,928
Advertisements 1,235,712,917 988,117,456 1,207,205,348 956,851,883
Business development and promotional expenses 584,003,402 539,009,380 553,166,621 524,939,769
7,787,744,377 8,082,356,764 7,728,400,027 8,037,021,580
40.1 Sales, marketing and representation costs
This primarily includes subsidies provided by GP in connection with acquiring new subscribers.
41 Finance income/(expense), net
Finance charge - lease (788,615,469) (779,099,154) (788,615,469) (779,099,154)
Other finance charges (Note 41.1) (3,184,795,847) (190,075,708) (3,184,100,924) (189,519,684)
(3,973,411,316) (969,174,862) (3,972,716,393) (968,618,838)
Finance income 667,195,024 1,958,770,985 658,069,777 1,950,999,741
(3,306,216,292) 989,596,123 (3,314,646,616) 982,380,903
41.1 This includes mainly interest charged in relation to the periodic unwinding of liability to acquire Telecom licence and
spectrum-2011 and interest on short-term bank loan.
42 Foreign exchange gain/(loss)
Realised gain/ (loss) 44,588,768 (140,512,723) 43,028,786 (140,401,481
Unrealised gain/ (loss) (220,022,338) (508,039,810) (214,405,847) (511,023,366)
(175,433,570) (648,552,533) (171,377,061) (651,424,847)
43 Gain on disposal of property, plant and equipment
Disposal proceeds 204,121,264 118,220,726 203,744,365 118,181,872
Carrying amount of the assets disposed off (153,645,902) (25,499,763) (152,319,170) (25,405,152)
50,475,362 92,720,963 51,425,195 92,776,720
44 Income tax expense
Current tax expenses (Note 3.8) 13,656,178,843 15,073,255,644 13,652,756,875 15,070,341,426
Deferred tax expenses/(income) (967,531,367) (958,095,384) (967,531,367) (958,095,384)
12,688,647,476 14,115,160,260 12,685,225,508 14,112,246,042
45 Earnings per share
Profit for the year (Taka) 17,504,769,271 18,891,102,082 17,354,535,376 19,052,697,592
Weighted average number of shares (Note 45.1) 1,350,300,022 1,350,300,022 1,350,300,022 1,350,300,022
Basic and diluted earnings per share (Note 3.16) 12.96 13.99 12.85 14.11
PAGE 121
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45.1 Weighted average number of ordinary shares
The weighted average number of ordinary shares outstanding during the period is the number of ordinary shares outstanding at
the beginning of the period, adjusted by the number of ordinary shares issued during the period multiplied by a time-weighting
factor. The time-weighting factor is the number of days that the shares are outstanding as a proportion of the total number of days
in the period.
45.2 Diluted earnings per share
No diluted earnings per share is required to be calculated for the periods presented as GP has no dilutive potential ordinary shares.
46 Financial risk management
The management has overall responsibility for the establishment and oversight of the group's risk management framework. The
group's risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies, procedures and systems are reviewed
regularly to reflect changes in market conditions and the group's activities. This note presents information about the group's
exposure to each of the above risks, the group's objectives, policies and processes for measuring and managing risk, and the
group's management of capital. The company has exposure to the following risks from its use of financial instruments:

l Credit risk
l Liquidity risk
l Market risk
46.1 Credit risk
Credit risk is the risk of a financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the group's receivables from subscribers, interconnect operators, roaming partners, dealers and
IT service customers.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
In monitoring credit risk, debtors are grouped according to their risk profile, i.e. their legal status, financial condition, ageing profile etc.
Accounts receivable are mainly related to the group's subscribers/customers, interconnect operators and roaming partners for provision
of services, while other receivables represent receivable for accrued interest and receivables arising from external parties other than for
services. The group's exposure to credit risk on accounts receivables is mainly influenced by the individual payment characteristics of
post paid subscribers and interconnect operators. Interconnection receivables are normally realised within 3 months from when they
are invoiced. The group employs financial clearing house to minimise credit risk involving collection of roaming receivables.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.
a) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
2012 2011 2012 2011
Taka Taka Taka Taka
Accounts receivable, net
Receivables for interconnection 5,017,905,585 4,573,833,235 5,017,905,585 4,573,833,235
Receivables for post paid and others 345,009,382 430,164,458 345,009,382 430,164,458
Receivables for infrastructure sharing 384,615,911 311,685,379 384,615,911 311,685,379
Receivables for sub lease of fibre optic network 40,286,317 29,062,072 40,286,317 29,062,072
Others receivable for non-mobile service 427,350,837 17,199,287 10,057,927 5,298,091
6,215,168,032 5,361,944,431 5,797,875,122 5,350,043,235
Other receivables
Other receivables- other than Telenor entities 722,755,828 655,629,774 795,413,672 893,860,251
Receivable from other Telenor entities 366,830,344 260,695,250 366,830,344 260,695,250
1,089,586,172 916,325,024 1,162,244,016 1,154,555,501
Deposit for bank guarantee 123,972,426 129,157,944 109,947,426 126,457,944
Security deposits for utilities and services 82,355,578 77,353,046 73,550,075 73,321,638
Short term investment 143,711,912 181,856,969 143,711,912 181,856,969
Cash at bank 3,558,901,113 8,050,172,142 3,295,522,618 7,623,748,644
11,213,695,233 14,716,809,556 10,582,851,169 14,509,983,931
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PAGE 122
Exposure to credit risk (Contd..)
The maximum exposure to credit risk for accounts receivable as at the statement of financial position date by geographic regions was:
2012 2011 2012 2011
Taka Taka Taka Taka
Domestic 5,749,375,071 5,075,800,911 5,348,919,342 5,071,087,730
Asia 223,764,185 103,373,043 222,903,185 103,373,043
Europe 178,020,929 120,732,219 162,044,748 113,544,204
Australia 6,119,156 25,303,518 6,119,156 25,303,518
America 54,857,961 34,551,809 54,857,961 34,551,809
Africa 3,030,730 2,182,931 3,030,730 2,182,931
6,215,168,032 5,361,944,431 5,797,875,122 5,350,043,235
b) Ageing of receivables
i) The ageing of gross interconnection receivables as at the statement of financial position date was:
Not past due 821,056,038 807,439,188 821,056,038 807,439,188
0-30 days past due 801,990,626 815,513,748 801,990,626 815,513,748
31-60 days past due 661,001,756 668,525,928 661,001,756 668,525,928
61-90 days past due 304,555,058 258,366,626 304,555,058 258,366,626
91-180 days past due 845,966,122 683,144,151 845,966,122 683,144,151
181-365 days past due 778,086,669 1,068,850,713 778,086,669 1,068,850,713
over 365 days past due 946,997,809 490,153,290 946,997,809 490,153,290
5,159,654,077 4,791,993,644 5,159,654,077 4,791,993,644
ii) The ageing of gross receivable for post paid and others as at the statement of financial position date was:
Not past due 98,942,840 133,455,022 98,942,840 133,455,022
0-30 days past due 55,930,221 35,564,149 55,930,221 35,564,149
31-60 days past due 35,014,144 78,401,168 35,014,144 78,401,168
61-90 days past due 16,674,179 34,172,586 16,674,179 34,172,586
91-180 days past due 31,452,855 44,291,898 31,452,855 44,291,898
181-365 days past due 39,058,412 45,531,535 39,058,412 45,531,535
388,543,217 474,547,063 388,543,217 474,547,063
iii) The ageing of gross receivables for infrastructure sharing as at the statement of financial position date was:
Not past due 298,449,199 205,715,835 298,449,199 205,715,835
0-30 days past due 42,320,121 84,955,412 42,320,121 84,955,412
31-60 days past due 38,879,961 10,428,967 38,879,961 10,428,967
61-90 days past due - 7,619,721 - 7,619,721
91-180 days past due 2,483,315 455,620 2,483,315 455,620
181-365 days past due 2,483,315 2,419,409 2,483,315 2,419,409
over 365 days past due - 90,415 - 90,415
384,615,911 311,685,379 384,615,911 311,685,379
iv) The ageing of gross receivables for sub lease of fibre optic network as at the statement of financial position date was:
Not past due 6,705,784 293,166 6,705,784 293,166
0-30 days past due 7,348,519 8,359,316 7,348,519 8,359,316
31-60 days past due 10,634,292 9,232,431 10,634,292 9,232,431
61-90 days past due 1,631,238 2,796,388 1,631,238 2,796,388
91-180 days past due 3,898,182 6,197,015 3,898,182 6,197,015
181-365 days past due 4,586,320 708,182 4,586,320 708,182
45,706,102 34,947,224 45,706,102 34,947,224
c) Impairment losses
Impairment losses on the above receivables were recognised as per the group policy mentioned in Note 3.5. Quantitative
disclosure for such impairment losses has been given in Note 9.1 to Note 9.6 of these financial statements.
PAGE 123
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|
PAGE 124

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PAGE 126
Market risk (Contd..)
ii) Foreign exchange rate sensitivity analysis for foreign currency expenditures
A change of 10 basis points in foreign currencies would have increased/ (decreased) equity and profit or loss of the group by the
amounts shown below. This analysis assumes that all other variables, in particular interest rates remain constant.
Profit or loss Equity
10 bp increase 10 bp decrease 10 bp increase 10 bp decrease
2012 Taka Taka Taka Taka
Expenditures denominated in USD (1,027,601) 1,027,601 (1,027,601) 1,027,601
Expenditures denominated in NOK (3,672,530) 3,672,530 (3,672,530) 3,672,530
Expenditures denominated in GBP 4,718 (4,718) 4,718 (4,718)
Expenditures denominated in EURO (37,101) 37,101 (37,101) 37,101
Expenditures denominated in JPY (19,516) 19,516 (19,516) 19,516
Exchange rate sensitivity (4,752,029) 4,752,029 (4,752,029) 4,752,029
2011
Expenditures denominated in USD (1,709,768) 1,709,768 (1,709,768) 1,709,768
Expenditures denominated in NOK (184,432) 184,432 (184,432) 184,432
Expenditures denominated in GBP 5,966 (5,966) 5,966 (5,966)
Expenditures denominated in EURO (70,786) 70,786 (70,786) 70,786
Expenditures denominated in JPY (6,327) 6,327 (6,327) 6,327
Exchange rate sensitivity (1,965,347) 1,965,347 (1,965,347) 1,965,347
b) Interest rate risk
Interest rate risk is the risk that arises due to changes in interest rates on borrowings. The group is not significantly exposed to
fluctuation in interest rates as it has neither floating interest rate bearing financial liabilities nor entered into any type of derivative
instrument in order to hedge interest rate risk as at the reporting date.
Profile
As at 31 December 2012, the interest rate profile of the group's interest bearing financial instruments was:
Carrying amount
As at As at
31 December 2012 31 December 2011
Taka Taka
Fixed rate instruments
Financial assets
Short term investment 143,711,912 181,856,969
Financial liabilities
Short term bank loan 8,195,000,000 -
PAGE 127
|
Fair value of financial assets and liabilities of the group together with carrying amount shown in the statement of financial position
are as follows:
As at 31 December 2012 As at 31 December 2011
Carrying amount Fair value Carrying amount Fair value
Taka Taka Taka Taka
Financial assets
Assets carried at fair value
through profit or loss - - - -
Held to maturity assets
Short term investment 143,711,912 143,711,912 181,856,969 181,856,969

Loans and receivables
Accounts receivable, net 6,215,168,032 6,215,168,032 5,361,944,431 5,361,944,431
Other receivables 1,089,586,172 1,089,586,172 916,325,024 916,325,024
Available-for-sale financial assets
Deposit for bank guarantee 123,972,426 123,972,426 129,157,944 129,157,944
Security deposit for utilities and services 82,355,578 82,355,578 77,353,046 77,353,046

Financial liabilities
Liabilities carried at fair value
through profit or loss - - - -
Liabilities carried at amortised costs
inance lease obligation 5,019,805,838 5,019,805,838 5,019,805,838 5,019,805,838
Short-term bank loan 8,195,000,000 8,195,000,000 - -
Accounts payable 17,169,333,829 N/A* 10,840,334,043 N/A*
Payable to government and
autonomous bodies 2,875,397,038 N/A* 4,814,105,945 N/A*
VAT payable 27,855,533 N/A* 2,699,959,350 N/A*
Accrued interest 779,651,771 N/A* 226,869,648 N/A*
Deposit from agents and subscribers 459,383,246 N/A* 455,775,978 N/A*
Other liabilities 133,569,360 N/A* 98,549,866 N/A*
Interest rates used for determining amortised cost
The interest rates used to discount estimated cash flows, when applicable were as follows:
2012 2011 2012 2011
Finance lease obligations 15.00% 15.00% 15.00% 15.00%
Short term investment 12.00%-14.5% 8.50%-13.75% 12.00%-14.5% 8.50%-13.75%
* Determination of fair value is not required as per the requirements of IFRS/BFRS 7 : Financial Instruments: Disclosure. However,
fair value of such instruments is not likely to be significantly different from the carrying amounts of such instruments.
47 Capital management
Groups policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future
development of the business. Capital consists of total equity attributable to the equity holders of the parent. The Board of
Directors monitors the level of capital as well as the level of dividend to the ordinary shareholders.
In order to maintain or adjust the capital structure, the group may adjust the amount of dividend, return capital to shareholders,
issue new shares or obtain long-term debt.
No changes were made in the objectives, policies or processes for managing capital during the year ended 2012 and 2011.
The group is not subject to any externally imposed capital requirement.
|
PAGE 128
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PAGE 129
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PAGE 130
4
8
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2

R
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PAGE 131
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PAGE 132
49 Expense/expenditure and (revenue) in foreign currency during the year
2012 2011 2012 2011
Taka Taka Taka Taka
CIF value of imports
SIM card and scratch card 270,875,964 564,982,116 270,875,964 564,982,116
Telecommunication equipment 6,471,203,316 6,100,542,456 6,456,800,816 6,100,542,456
NERM software and other equipment 823,078,669 50,312,157 - -
Expenditure in foreign currency
Consultancy fee 965,611,921 949,647,478 898,866,003 817,259,881
Consultancy fee - expatriate 816,334,241 594,659,938 816,334,241 594,659,938
Other fee (travel and training) 38,273,700 41,851,812 36,875,408 33,212,941
Technical know how 555,669,340 566,933,450 555,669,340 566,933,450
International roaming cost 236,156,243 275,719,219 236,156,243 275,719,219
Foreign earnings
Revenue from roaming partners (442,124,663) (432,180,316) (442,124,663) (432,180,316)
IT service revenue (25,504,973) (19,092,656) - -
50 Credit facilities available as at 31 December 2012
The group enjoys both funded and non-funded short term working capital facilities with 18 banks and 1 non-bank financial
institution (2011: 15 banks). The non-funded facilities include Letters of Credit (LC), Shipping Guarantee, Letters of Guarantee and
Foreign Exchange Forward Contracts. The funded facilities include overdraft facility, short term loan and import loan. The
aggregate amount of available short-term working capital facilities is Tk. 37,657 million (2011: Tk. 26,085 million) of which
non-funded limit is Tk. 23,684 million (2011: Tk. 23,097 million) and funded limit is Tk. 20,993 million (2011: Tk. 11,978 million).

As per the approval of Board of Directors of GP, the total amount of short-term credit facilities from the above banks is limited to a
maximum outstanding limit of USD 250 million (2011: USD 210 million) equivalent for funded portion.
Security against short term credit facilities
The short-term credit facilities are unsecured and backed by standard charge documents as per terms and conditions set by
respective banks and financial institutions.
51 Capital commitments
As at the reporting date the group had the following capital commitments:
Purchase orders 4,122,943,253 4,591,538,463 3,859,557,477 4,227,036,267
Telecom licence and spectrum-2011 - 16,530,120,000 - 16,530,120,000
52 Contingencies
The Company and its subsidiary are currently, and may be from time to time, involved in a number of legal proceedings, including
inquiries from, or discussions with, governmental authorities that are incidental to their operations. However, save as disclosed
below, the Company and its subsidiary are not currently involved in any legal or arbitration proceedings which may have a
significant effect on the financial position or profitability of the group but for which any provision has not been recognised in these
financial statements.
(a) BTRC audit
BTRC had an audit carried out of the information system of Grameenphone from April 2011 and issued a letter on 3 October 2011
claiming an amount of Tk. 30,341,108,581 on various grounds. Grameenphone during and after the audit clarified to both BTRC
and auditors appointed by BTRC that those observations were framed on wrong basis. Grameenphone disagrees to the claim made
by BTRC and responded to the letter requesting BTRC to review the notice. GP also took the issue to the court and the High Court
passed an order of status quo valid till 21 May 2013.
PAGE 133
|
(b) NBR's claim for SIM tax on replacement SIMs
National Board of Revenue (NBR) by a letter dated 16 May 2012 claimed SIM tax of Tk. 15,804,391,570 for all replacement SIMs
issued during the period from July 2007 to December 2011 alleging that Grameenphone evaded SIM tax by selling new
connections in the name of replacement SIMs. GP challenged the demand by a writ petition and the High Court passed a stay
order on the operation of the demand valid till 1 April 2013.
(c) VAT rebate on 2G licence renewal fee
2G licence of Grameenphone was renewed on 7 August 2012 for the next 15 years effective from November 2011. 100% of the
licence renewal fee has been capitalised based on the assumption that GP's VAT exposure will be nil. This assumption is based on
the High Court's verdict in February 2012.
However, the lawsuit over the VAT rebate mechanism is still pending before the Appellate Division. If Appellate Division ruled that
GP would be required to pay VAT and would not get rebate for this VAT, GP's financial exposure for this licence would increase by
15% (i.e. BDT 4,876,800,000) of the licence renewal fee.
53 Other disclosures
53.1 Segment information
Business activities of Grameenphone are not organized on the basis of differences in related products and services or differences
in geographical areas of operations. Grameenphone essentially provides similar products and services to customers across the
country. Management, however, reviews revenue performance of different services as disclosed in these financial statements.
53.2 Number of employees
As at 31 December 2012 number of regular employees receiving remuneration of Tk. 36,000 or above per annum was 3,458 (2011:
3,887) for GP and 3,866 (2011: 4,267) for the group.
The Board of Directors of Grameenphone Ltd. at its 131st meeting held on 10 February 2013 proposed final dividend in cash at 50%
of the paid-up capital (i.e. BDT 5 per share) for the year 2012. Total cash dividend including the interim dividend at 90% of the
paid-up capital thus stands at 140% of the paid-up capital (i.e. BDT 14 per share) for the year 2012. These dividends are subject
to final approval by the shareholders at the forthcoming Annual General Meeting of the company.
|
PAGE 134
Grameenphone IT Ltd.
DIRECTORS REPORT FOR THE YEAR ENDED DECEMBER 31, 2012
Dear Shareholders,
On behalf of the Board of Directors, Management Team and myself, I welcome you all to the 3rd Annual General Meeting of
Grameenphone IT Ltd. (GPIT). We have the pleasure to place herewith the Directors Report and Auditors Report together with the
Audited Financial Statements of the Company for the year ended December 31, 2012 for your consideration, approval and adoption.
Positive Macroeconomic Perspective
The recent global recession has distressed many economies around the world. Despite an unfavorable global economy,
economic growth in Bangladesh is projected to be at 6%, and inflation is expected to calm down to around 7.5 percent in fiscal
year 2013. The total ICT spending in Bangladesh in 2011 was 1.09 billion USD which includes spending on software at 73 million
USD and spending on IT Services at 248 million USD.
Analysis indicates that the total market size of Bangladeshi software and Information Technology Enabled Services (ITES) will be 310
million USD in 2012 with a steady growth (CAGR) of 18% in the coming years. The domestic market is expected to witness a robust
20%-30% growth in the coming years driven by industry maturity, increased competition and the recent regulatory requirements.
Although the market is still dominated by hardware, industries like BFSI, Telecom, Enterprise and government sectors are expected
to increase their automation and thereby investment in IT services. Recent market surveys conducted by the United Nations, World
Bank and Gartner have identified Bangladesh as an upcoming destination for global BPO with huge potentials.

Regulatory Environment and Road Map
The IT sector continued to receive attention from the government as a thrust sector. The government extended the tax
exemption period for IT enabled Services till 2015. However the ICT Policy is yet to be fully implemented. The government
continued to emphasize on digitalization initiatives of different public authorities. With the initiation of commercial operation
by the International Terrestrial Cable operators, the long pending need for a backup connectivity has been met, and this has
opened up a great new opportunity for outsourcing business. The Information and Communication Technology Ministry and
Access to Information (A2I) continued to support the IT business sector through a number of initiatives. Several ICT events at the
national and international level, including BASIS Soft Expo, Digital World and Positioning Bangladesh, took place in the year
and were highly appreciated and participated by international and local companies alike.
Though the Government is trying to materialize the Digital Bangladesh promises at every level, poor infrastructure and complex
regulatory environment have directly or indirectly slowed down the growth of this sector. The foreign payment policy and
process remain as another major challenge for the potential growth of the IT companies. A uniform approach to showcase the
strength of the local IT companies to attract international companies to procure more IT and IT enabled solutions from
Bangladesh is still absent and requires more attention from the Government and industry associations.
Promising Business Result in the Year 2012
The year 2012 brought a major transformation in GPIT in terms of making a footprint in the domestic market. Three focus areas
have paved the way: Inspire GPIT Team, Drive business to the sustainable growth, Delight Customer. The Company has focused
more on providing stable, high quality services to its largest customer (GP) with 99.9% service availability in the second half of
the year. Customer Centricity was identified as a key tenet of GPITs culture and business mindset. GPIT has delivered BDT
450Mn external revenue in 2012 which was significantly higher than the previous year. GPIT also started making profit in 2012.
GPIT Standardization
GPIT achieved CMMI Maturity Level 3 rating appraisal by SEI in March 2012. CMMI Maturity Level 3 conformance confirms
the companys ability to provide its customers with the highest quality IT development, infrastructure solutions and services.
GPIT achieved ISO 20000:2005 and 27001 Certifications in the year 2011. ISO 27001 ensures protection of customer rights and
information security, and ISO 20000 establishes quality in the processes to deliver IT services of higher standards. To enhance
the maturity of the processes GPIT has initiated the transition of ISO 20000:2005 to ISO 20000:2011 which will be completed
by March 2013.
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GPIT Directors Report
Our Products & Services
GPIT offers end-to-end IT solutions and services to customers for all their IT needs. On broad category GPIT is focusing on the
following products for 2012:
1. System Integration of Enterprise Solutions ERP, HRMS, Core Banking System, Contact Center, Business Intelligence,
Revenue Assurance & Fraud Management (RAFM), Network Inventory Management System (NIMS)
2. Infrastructure Solutions Server, Storage, Networking, Data Center implementations and management
3. Managed service Application Development & Maintenance (AD & AM) and Infrastructure Management (IM)
For 2013, GPIT is building readiness for BPO, Cloud & Hosted solutions.
Global Partnership
GPIT aims to be a System Integrator (SI) company to gradually provide end-to-end IT solutions and services in the near future.
To become an effective SI company and end-to-end IT services provider, we have fostered partnerships with key OEM vendors
like Oracle, Huawei, IBM, Drishti, Temenos, Cisco, and SI partners like PwC and Tech Mahindra. In addition to these focused
partners, GPIT has an array of local partners who play an important role in GPITs business.
Our Employees
Our employees are at our top priority. We aim to offer an excellent working environment and a career for our talented resources.
Our People Policies and engagement culture have been highly appreciated by all the employees as seen in the recent surveys
(77%); and we can also see a reflection of this in our steady retention rate. We continue to provide globally recognized trainings
to our employees. And this year we have also taken a blended approach in our competence development process by
introducing the Online Learning concept. This year we have expanded our Academic Alliance portfolio and continued to
engage talented young graduates from reputed public and private universities. GPITs work culture remains an inspiration for
all, and thus innovation is being driven in an open and collaborative manner. Being in the forefront of IT revolution in
Bangladesh, we understand our role in developing the future IT leaders of this country. And thus our Leadership Training
programs foster structured and continuous learning activities. We remain focused on our people, give them the tools to develop
their potentials to the fullest extent, and continue to offer career paths accordingly.
Investment Risk & Concerns
Though the country has witnessed a constant GDP growth rate at around 6% over the last few years and inflation eased to
around 7.5% at the end of 2012, some investment risks have been identified. According to the World Banks Bangladesh
Economic Update, possible intensification of the euro area crisis may deepen Bangladeshs export slump. Banks are susceptible
to credit and market risks due to the global economic vulnerabilities and the capital market volatility has continued. Looming
political instability and unrest may depress investments further.
GPIT has identified some key risks and uncertainties as listed below, which may hinder its business:
1. Currency fluctuation
2. Regulatory vice and uncertainties
3. Unhealthy practices in the competition field.
Contribution to the National Exchequer
GPIT had paid a significant contribution to the National Exchequer in 2012. The collective contribution to the National
Exchequer up to December 2012 was BDT 147 Million in the form of Income Tax and VAT.
Enhanced Value of Shareholders Investment
The Directors present the financial results of the Company for the year ended December 31, 2012 and the table below:
2012 2011
Profit available for appropriation (14,554,475) 126,175,141
Profit /(Loss) during the year 226,379,516 (140,729,616)
Total amount available for appropriation 211,825,041 (14,554,475)
Profit/(Loss) carried forward 211,825,041 (14,554,475)
Figures in BDT
GPIT Directors Report
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Dividend
Though there is an accumulated profit of BDT 211,825,041 for the year ending at December 31, 2012, the Board has decided to
retain the same in the company in order to further improve the working capital. Accordingly, no dividend has been considered
for the year.
Board of Directors & Board Meetings
The composition of the Board of Directors who held office during the year was as below:
1. Mr. Tore Johnsen
2. Mr. Frode Stoldal
3. Mr. Tanveer Mohammad
4. Mr. Fridtjof Rusten
5. Dr. Jamaluddin Ahmed FCA, Independent Director
We would like to thank Mr. Haroon Bhatti, Mr. Kazi Monirul Kabir, and Mr. Arild Kaale for being part of the Board of Directors in
the past years and the Board wishes them the very best in their future. Mr. Fridtjof Rusten was appointed as a Director on 4th
June, 2012 in replacement of Mr. Raihan Shamsi. The Board of Directors appointed Mr. Raihan Shamsi as Chief Executive Officer
(CEO) in place of Mr. Peter Anthony Dindial with effect from May 1, 2012. In addition to that, GPs Independent Director Dr.
Jamaluddin Ahmed FCA was appointed as an Independent Director in GPIT Board on December 13, 2012 to comply with
Corporate Governance Guidelines of BSEC Notification dated August 07, 2012.
During 2012, a total of 16 (sixteen) Board meetings were held, which met the regulatory requirement in this respect.
Directors appointment & Re-appointment
With regard to the appointment, retirement and re-appointment of Directors, the Company is governed by its Articles of
Association, the Companies Act, 1994 and other related legislations. Accordingly, the following Directors of the Board will retire
at the Annual General Meeting. They are, however, eligible for re-appointment:
1. Mr. Frode Stoldal
2. Mr. Tanveer Mohammad
3. Dr. Jamaluddin Ahmed FCA
Appointment of Auditors
As per the Companies Act and the Articles of Association of the Company, the statutory auditors of the Company, Rahman
Rahman Huq, Chartered Accountants, a member firm of KPMG, shall retire at this AGM. The Firm, being eligible, has expressed
their willingness to be re-appointed. The Board recommends their re-appointment for the year 2013 and to continue till the
next AGM at the existing fee of BDT 4,00,000 (Four lacs) plus VAT.
Acknowledgements
The Board of Directors would like to thank the valued Shareholders and other stakeholders of the Company for their persistent
support and guidance to the Company that led to its accomplishments.
The Board also records its appreciation for the employees at all levels for their dedicated services, innovation, and strong
commitment which enabled the Company to advance towards a sustainable growth path.
Thanking you all and with best regards.
For and on behalf of the Board of Directors of Grameenphone IT Ltd.
Tore Johnsen
Chairman
February 19, 2013
Auditors Report &
Audited Financial
Statements of
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Independent Auditors Report
to the Shareholders of Grameenphone IT Ltd.
Report on the Financial Statements
We have audited the accompanying financial statements of Grameenphone IT Ltd. ("the company") which comprise the
statement of financial position as at 31 December 2012, and the statement of comprehensive income, statement of changes in
equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other
explanatory information.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
Bangladesh Financial Reporting Standards (BFRS) and the Companies Act 1994 and for such internal control as management
determines is necessary to enable the preparation of these financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Bangladesh Standards on Auditing (BSA). Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entitys preparation of the financial statements that give a true and fair view 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 entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2012
and of its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting
Standards (BFRS).
Report on Other Legal and Regulatory Requirements
In accordance with the Companies Act 1994, we report that:
a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for
the purpose of our audit and made due verification thereof;
b) in our opinion, proper books of account as required by law have been kept by the company so far as it appeared from our
examination of those books; and
c) the statement of financial position and statement of comprehensive income dealt with by the report are in agreement with
the books of account.
Auditors
Rahman Rahman Huq
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2012
Taka
2011
Taka
Statement of Financial Position
Non-current assets
Property, plant and equipment, net 4 541,298,466 506,945,456
Intangible assets, net 5 86,838,766 28,084,997
628,137,232 535,030,453

Current assets
Inventories 6 7,365,428 23,757,854
Accounts receivable 7 603,993,534 173,575,301
Advances, deposits and prepayments 8 44,651,124 34,052,375
Other receivables 9 28,163,115 16,536,405
Cash and cash equivalents 10 263,378,495 426,423,498
947,551,696 674,345,433
Total assets 1,575,688,928 1,209,375,886

Equity and liabilities
Shareholders' equity
Share capital 11 75,000,000 75,000,000
Accumulated profit/(loss) 211,825,041 (14,554,475)
286,825,041 60,445,525
Non-current liabilities - -
Current liabilities
Advance from customers 12 335,654,255 392,199,338
Payable for operating expenses 13 290,653,257 239,909,445
Payable for capital expenditure 14 59,072,902 259,820,110
Income tax provision 15 1,049,393 1,226,963
Provisions 16 558,104,820 234,377,762
VAT liability 17 27,855,533 3,820,572
Other current liabilities 18 16,473,727 17,576,171
1,288,863,887 1,148,930,361
Notes Assets
Chairman Director Chief Executive Officer Company Secretary
Auditors
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Statement of Comprehensive Income
Notes 2012
Taka
2011
Taka
Revenue 19 2,443,021,793 1,176,717,464
Cost of services rendered 20 (1,753,879,329) (884,624,503)
Gross profit 689,142,464 292,092,961
Operating expenses:
General and administrative expenses 21 (431,281,148) (425,520,025)
Selling and distribution expenses 22 (31,483,814) (14,420,111)
(462,764,962) (439,940,136)
Operating profit/(loss) 226,377,502 (147,847,175)

Finance income, net 23 8,430,324 7,215,220
Loss on disposal of property, plant and equipment 24 (949,833) (55,757)
Foreign exchange gain/(loss) (4,056,509) 2,872,314
3,423,982 10,031,777
Profit/(loss) before income tax 229,801,484 (137,815,398)
Income tax expenses 3.8 (3,421,968) (2,914,218)
Profit/(loss) for the year 226,379,516 (140,729,616)
Total comprehensive income 226,379,516 (140,729,616)
Chairman Director Chief Executive Officer Company Secretary
Auditors
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Statement of Changes in Equity
Balance as at 1 January 2011 75,000,000 126,175,141 201,175,141
Total comprehensive income for 2011:
Loss for the year - (140,729,616) (140,729,616)
Other comprehensive income - - -
Balance as at 31 December 2011 75,000,000 (14,554,475) 60,445,525

Balance as at 1 January 2012 75,000,000 (14,554,475) 60,445,525
Total comprehensive income for 2012:
Profit for the year - 226,379,516 226,379,516
Other comprehensive income - - -
Balance as at 31 December 2012 75,000,000 211,825,041 286,825,041
Total
Taka
Accumulated
profit/(loss)
Taka
Share
capital
Taka
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PAGE 142
Statement of Cash Flows
2012
Taka
2011
Taka
Cash flows from operating activities:

Cash receipts from performance of services 1,956,058,477 1,455,531,219
Payment to suppliers, contractors and others (1,037,248,483) (334,446,886)
Payroll and other payments to employees (608,418,577) (590,195,025)
Finance income received 9,125,247 7,771,244
Finance costs paid (694,923) (556,024)
Income tax paid (3,599,537) (2,219,739)
Net cash flow from operating activities 315,222,204 535,884,789
Cash flows from investing activities:

Payment for acquisition of property, plant and equipment (383,037,441) (353,069,121)
Payment for acquisition of intangible assets (95,606,665) (13,003,750)
Proceeds from sale of property, plant and equipment 376,899 38,854
Net cash used in investing activities (478,267,207) (366,034,017)
Cash flows from financing activities - -

Net changes in cash and cash equivalents (163,045,003) 169,850,772
Opening balance of cash and cash equivalents 426,423,498 256,572,726
Closing balance of cash and cash equivalents 263,378,495 426,423,498
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Notes to the financial statements
as at and for year ended 31 December 2012
1. Reporting entity
Grameenphone IT Ltd. (hereinafter referred to as "GPIT"/"the company") is a private limited company incorporated in
Bangladesh under the Companies Act 1994 with an authorised share capital of Tk 7,500,000,000 divided into
75,000,000 ordinary shares of Tk 100 each. The company was registered on 28 January 2010. The company is a wholly
owned subsidiary of Grameenphone Ltd. ("Grameenphone"/"GP"). Registered office of the company is GPHOUSE,
Bashundhara, Baridhara, Dhaka-1229, Bangladesh.
The company launched its commercial operation on 1 April 2010
The purpose of this company is to provide IT services to Grameenphone Ltd. and other external parties.
2. Basis of preparation
2.1 Statement of compliance
These financial statements have been prepared in accordance with Bangladesh Financial Reporting Standards (BFRS) and
the Companies Act 1994
These financial statements have been authorised for issue by the board of directors on February 10, 2013.
2.2 Basis of measurement
Except for the employee benefit plan, which is measured on the basis of actuarial valuation, these financial statements
have been prepared on the basis of historical cost convention.

2.3 Functional and presentation currency
These financial statements are presented in Bangladesh Taka (Taka/Tk/BDT) which is both functional currency and
presentation currency of the company. The amounts in these financial statements have been rounded off to the nearest Taka.
2.4 Use of estimates and judgments
The preparation of these financial statements requires management to make judgments, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognised in
the period in which the estimates are revised if the revision affects only that period, or in the period of revision and future
periods if the revision affects both current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting
policies that have significant effect on the amount recognised in the financial statements are described in the following
notes:
Note 15 Income taxes
Note 16 Provisions
Note 19 Revenue
3. Significant accounting policies
Accounting policies set out below have been applied consistently to all periods presented in these financial statements.
Comparative information has been rearranged wherever considered necessary to conform to the current years
presentation.
GPIT - Notes to the Financial Statements
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3.1 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment
losses, if any.
The cost of an item of property, plant and equipment comprises its purchase price, import duties and non-refundable
taxes, after deducting trade discount and rebates, and any costs directly attributable to bringing the asset to the location
and condition necessary for it to be capable of operating in the intended manner. Purchased software that is integral to the
functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.

The cost of replacing or upgrading an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the item will flow to the company and its cost can
be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day to day
servicing of property, plant and equipment are recognised in the statement of comprehensive income as incurred.
(c) Depreciation
No depreciation is charged on capital work in progress.
Depreciation on property, plant and equipment is recognized on a straight-line basis over the estimated useful lives of
each item of property, plant and equipment. For addition to property, plant and equipment, depreciation is charged from
the date of capitalisation up to the month immediately preceding the month of disposal. Depreciation method, useful lives
and residual values are reviewed at each reporting date and adjusted if appropriate. The estimated useful lives of the items
of property, plant and equipment for the current and comparative periods are as follows:

2012 2011
Computer and other IT equipment 4 years 4 years
Vehicles 4 years 4 years
Furniture and fixtures 3 years 3 years
(d) Gains or losses on disposal
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Gains or losses on disposals are determined by comparing the disposal
proceeds with the carrying amounts and are recognised net.
(e) Capital work-in-progress
Capital work in progress consists of acquisition costs of plant, machinery, capital components of other equipment and
related installation costs incurred until the date placed in service. In case of purchase of components, capital work in
progress is recognised when risks and rewards associated with such assets are transferred to the company.
3.2 Intangible assets
Intangible assets that are acquired by the company and have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses, if any. Intangible assets are recognised when all the conditions for
recognition as per BAS 38: Intangible assets are met. The cost of an intangible asset comprises its purchase price, import
duties and non-refundable taxes and any directly attributable cost of preparing the asset for its intended use.
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Subsequent costs are capitalised only when they increase the future economic benefits embodied in the specific asset to
which they relate. All other costs are recognised in profit or loss as incurred.

(c) Amortisation
Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives of intangible assets, from
the date that they are available for use. The estimated useful lives are as follows:
2012 2011
Software 3 years 3 years
Amortisation methods, useful lives and residual values are reviewed yearly and adjusted, if appropriate.
(d) Derecognition
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from its continued use.
Gains or losses on disposals are determined by comparing the disposal proceeds with the carrying amounts and are
recognised net.
3.3 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
3.3.1 Financial assets
Financial assets of the company include cash and cash equivalents, accounts receivable and other receivables and
deposits.
The company initially recognises receivables on the date they are originated. All other financial assets are recognised
initially on the date at which the company becomes a party to the contractual provisions of the transaction. The company
derecognises a financial asset when the contractual rights or probabilities of receiving the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred.
(a) Accounts receivable
Accounts receivable represents the amounts due from customers for IT related services, and includes both billed and
unbilled portion of such services at the reporting date. Accounts receivable is stated net of provision for doubtful debts., if
any.
(b) Cash and cash equivalents
Cash and cash equivalents comprise cash balances on hand and balances with various banks. Bank overdrafts that are
repayable on demand, form an integral part of the companys cash management are included as a component of cash and
cash equivalents.
(c) Other receivables
Other receivables includes reimbursable expenses from Grameenphone, Telenor Consult AS, Telenor Start II AS, and others.
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(d) Deposits
This represents amounts deposited in connection with participation in tenders as earnest money and/or bank guarantee.
The amounts are refundable upon fulfilment of performance conditions if contract is awarded. For unsuccessful bids, the
amounts are refundable immediately.
3.3.2 Financial liabilities
Financial liabilities are recognised initially on the transaction date at which the company becomes a party to the
contractual obligations arising from the past events and the settlement of which is expected to result in an outflow of
resources embodying economic benefit. The company derecognises a financial liability when its contractual obligations
are discharged or cancelled or expire.
Financial liabilities include payable for operating expenses, payable for capital expenditure, provisions, advance from
customers and other current liabilities.
3.4 Impairment
(a) Financial assets
Financial assets are assessed at each reporting date to determine whether there is any objective evidence of impairment.
Financial assets are impaired if objective evidence indicates that a loss event has occurred after the initial recognition of
the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be
estimated reliably. Objective evidence that financial assets are impaired can include default or delinquency by a debtor,
indications that a debtor or issuer will enter bankruptcy, etc
(b) Non-financial assets
An asset is impaired when its carrying amount exceeds its recoverable amount. The company assesses yearly whether there
is any indication that an asset or a Cash Generating Unit (CGU) may be impaired. If any such indication exists, the company
estimates the recoverable amount of the asset or CGU. The recoverable amount of an asset or a CGU is the higher of its fair
value less costs to sell and its value in use. Carrying amount of the asset is reduced to its recoverable amount by
recognising an impairment loss, if and only if, the recoverable amount of the asset is less than its carrying amount.
Impairment loss is recognised immediately in profit or loss, unless the asset is carried at revalued amount. Any impairment
loss of a revalued asset is treated as a revaluation decrease.
3.5 Revenue
Revenues are measured at fair value of the consideration received or receivable, net of discount and sales related taxes
(e.g. VAT). Revenues are reported gross with separate recording of expenses to vendors of products or services. However,
when the company acts only as an agent or broker on behalf of suppliers of products or services, revenues are reported on
a net basis. Revenues of Grameenphone IT Ltd. arise from:
(a) Sale of software
Revenue from the sale of software is recognised when significant risks and rewards associated with the software is
transferred and the entity retains neither significant managerial involvement nor effective control over the software. The
other criteria for revenue recognition, i.e. availability of reliable measure for revenue and associated costs and probable
flow of economic benefits to the entity must also be met.
Accordingly delivery of a software is not considered complete and revenue is not recognised when the software is shipped
subject to installation and the installation is a significant part of the contract which has not yet been completed by the
company.
(b) IT service revenue
Revenue from IT service is recognised on a percentage of completion basis. Percentage of completion of service is
determined upon periodic review and usually evidenced by work completion certificate. Revenue is recognised only when
it is probable that the economic benefits associated with the transaction will flow to the entity.
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(c) Revenue from Construction contracts
When the outcome of a construction contract can be estimated reliably, revenue from construction contracts is recognized
by reference to the stage of completion of the contract activity at the end of the reporting period. The stage of completion
of a contract is determined in a variety of ways depending on the nature of the contract. The entity uses the method that
measures reliably the work performed. The methods include cost-to-cost, survey of work performed and completion of
physical proportion of the contract work.
If circumstances arise that may change the original estimates of revenues, costs or extent of progress toward completion,
estimates are revised. These revisions may result in increases or decreases in estimated revenues or costs and are reflected
in the profit or loss for the period in which the circumstances that give rise to the revision become known by management.
When the outcome of a construction contract cannot be estimated reliably, revenue is recognized only to the extent of
recoverable contract costs incurred and contract costs are recognized as an expense in the period in which they are
incurred. An expected loss on the construction contract is recognized as an expense immediately.

3.6 Foreign currency transactions
Transactions in foreign currencies are recorded in the books at the rate of exchange prevailing on the date of the
transaction. Monetary assets and liabilities in foreign currencies at the date of statement of financial position are
translated into Bangladesh taka at the rate of exchange prevailing at that date. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at
the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on
translating monetary items at the end of the reporting period are recognised in profit or loss as per BAS 21: The Effects of
Changes in Foreign Exchange Rates.

3.7 Inventories
Cost of inventories include expenditure incurred in acquiring the inventories, and other costs incurred in bringing them to
their existing location and condition. Net realisable value is based on estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs necessary to make the sale.
Grameenphone IT Ltd. measures service related inventories at the lower of cost or net realizable value. Inventory costs
consist primarily of cost for the personnel directly engaged in providing the service, including supervisory personnel, other
direct costs and attributable overheads.
Cost of software inventory for customers is specifically identified on a item by item basis since these items are not
interchangeable with each other.
3.8 Income tax expense
Income tax expense is recognised in the statement of comprehensive income except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.
As per the provisions of Income Tax Ordinance 1984 (ITO), IT enabled services are subject to tax exemption until 30 June
2015. However, income from sources other than IT enabled services are taxable as per Income Tax Ordinance 1984.
Applicable income tax rate for such other income was 37.5% in the year under audit.
3.9 Employee benefits
The company maintains both defined contribution plan and defined benefit plan for its eligible permanent employees.
(a) Defined contribution plan (provident fund)
The company contributes 10% of basic salary of all eligible permanent employees to a provident fund (defined contribution
plan) constituted under an irrevocable trust, while the employees also contribute an equal amount to the fund as per the
rules of the trust deed.
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PAGE 148

The company recognises contribution to defined contribution plan as an expense when an employee has rendered services
in exchange for such contribution. The legal and constructive obligation is limited to the amount it agrees to contribute to
the fund.
(b) Defined benefit plan (gratuity)
The company provides retirement benefit in the form of gratuity payments determined by reference to employees' earnings
and years of service to each eligible employees at the time of retirement/separation. Gratuity obligation at the reporting
date is measured on the basis of actuary valuation.
(c) Short term employee benefits
Short term employee benefits include salary, bonuses, leave encashment. Obligations for such benefits are measured on
an undiscounted basis and are expensed as the related service is provided.

3.10 Provisions
A provision is recognised in the statement of financial position when the company has a legal or constructive obligation as
a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Provision is ordinarily measured at the best estimate of the
expenditure required to settle the present obligation at the date of statement of financial position. Where the effect of time
value of money is material, the amount of provision is measured at the present value of the expenditures expected to be
required to settle the obligation.
Events after the reporting period that provide additional information about the company's position at the date of
statement of financial position or those that indicate the going concern assumption is not appropriate are reflected in the
financial statements. Events after the reporting period that are not adjusting events are disclosed when material.

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PAGE 150
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PAGE 151
|
2012
Taka
2011
Taka
2012
Taka
2011
Taka
6 Inventories
Inventories include software and hardware for different projects for GP and other customers.

Software and service inventories 4,239,900 1,178,506
IT hardware 3,125,528 22,579,348
7,365,428 23,757,854
6.1 Movement of inventories

Software/service
inventories IT hardware
Taka Taka
Balance as at 1 January 2011 103,488,179 -
Addition during 2011 144,864,768 47,979,931
Issue during 2011 (247,174,441) (25,400,583)
Balance as at 31 December 2011 1,178,506 22,579,348
Addition during 2012 240,110,099 661,141,162
Issue during 2012 (237,048,705) (680,594,982)
Balance as at 31 December 2012 4,239,900 3,125,528
7 Accounts receivable

IT services to Grameenphone 196,955,988 161,674,105
IT services to other Telenor entities 5,720,817 5,682,397
IT services to other external customers (Note 7.1) 401,316,729 6,218,799
603,993,534 173,575,301
7.1 It includes receivables from Global Brand Pvt. Ltd Tk. 157,928,064 (2011: nil), from RM Systems Ltd Tk. 114,704,127 (2011: nil), from Bangladesh
Telecommunications Company Ltd (BTCL) Tk. 60,182,500 (2011: nil) and from Green Planet Resort Ltd Tk. 37,174,577 (2011: nil)
As at the statement of financial position date, the above receivables do not include any receivable from:

(a) the directors and other officers of the company; and
(b) firms or private limited companies respectively in which any director of the Company is a partner, director or member.

The entire amount of the above receivable is considered good. However, no security was received against the amount.

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PAGE 152
2012
Taka
2011
Taka
2012
Taka
2011
Taka
8 Advances, deposits and prepayments
Advances
Advance to employees (Note 8.1) 2,787,972 3,295,716
Deposits
Deposit for bank guarantee 14,025,000 2,700,000
Security deposits 8,805,503 4,031,408
22,830,503 6,731,408
Prepayments
Group insurance premium 8,282,223 4,955,131
Service maintenance fees 10,750,426 19,070,120
19,032,649 24,025,251
44,651,124 34,052,375
8.1 Advance to employees
Advance to employees represents advances made to employees for foreign travel, training, meeting, workshop, presentation etc in. No
advances were made to the shareholder directors during the year.
9 Other receivables
Other receivables include receivable for reimbursable expenses from Telenor Consult AS, Grameenphone and others.
10 Cash and cash equivalents
Cash at bank 263,378,495 426,423,498
263,378,495 426,423,498

As at the reporting date the company did not have any restriction on its cash balances.
PAGE 153
|
2012
Taka
2011
Taka
2012
Taka
2011
Taka
2012
Taka
2011
Taka
As at
31 December 2011
As at
31 December 2012
As at
31 December 2011
As at
31 December 2012
% of holding Value of shares (Taka)
11 Share capital
Authorised:
75,000,000 ordinary shares of Tk. 100 each 7,500,000,000 7,500,000,000
Issued, subscribed and paid-up:
750,000 ordinary shares of Tk. 100 each 75,000,000 75,000,000
Shareholding position of the company was as follows:
Name of shareholders

Grameenphone Ltd. 99.9999% 99.9999% 74,999,900 74,999,900
Mr. Raihan Shamsi 0.0001% 0.0001% 100 100
100% 100% 75,000,000 75,000,000

12 Advance from customers

Advance from Grameenphone: 335,558,657 391,114,950
Advance from external customers 95,598 1,084,388
335,654,255 392,199,338
13 Payable for operating expenses
Payable to Grameenphone (Note 13.1) 88,919,037 121,527,655
Payable to others:
Service maintenance 14,486,730 3,388,873
Office running expenses 18,141,448 7,042,118
Employee travel and training expenses 1,913,716 1,659,872
Consultancy and professional fees 165,937,188 102,608,445
Other operating expenses 1,255,138 3,682,482
201,734,220 118,381,790
290,653,257 239,909,445
13.1 Payable to Grameenphone
This represents the amount payable to Grameenphone on account of rent for head office at GPHOUSE Tk. 20,841,884 (2011:
Tk.46,958,869) and other expenses paid by GP on behalf of GPIT.
14 Payable for capital expenditure
Payable to Grameenphone (Note 14.1) - 127,337,217
Payable to others 59,072,902 132,482,893
59,072,902 259,820,110
14.1 Payable to Grameenphone
This represents the cost of computer and other IT equipment transferred from GP to GPIT. The purchase process was facilitated by GP in
terms of execution of the transaction (including arrangement with vendors, inspection, etc.).
|
PAGE 154
2012
Taka
2011
Taka
15 Income tax provision
Opening balance 1,226,963 532,484
Provision made during the year 3,421,968 2,914,218
4,648,931 3,446,702
Advance income tax paid (3,599,537) (2,219,739)
Closing balance 1,049,394 1,226,963
16 Provisions
Short term employee benefits (Note 16.1) 121,936,196 95,852,719
Cost of IT support materials (Note 16.2) 316,460,450 -
IT service maintenance charge (Note 16.3) 96,051,986 109,535,466
Training and travel expenses 3,398,042 550,657
Audit fee 460,000 525,000
Consultancy and professional fees 15,961,224 22,960,498
Other operating expenses 3,836,922 4,953,422
558,104,820 234,377,762
16.1 Short term employee benefits
This represents provision for employee salary, bonus and leave encashment outstanding at the reporting date.

16.2 Cost of IT support materials
This represents provision for purchase of various hardwares, softwares and other IT materials from various parties to provide IT support to
GP and other external customers.
16.3 IT service maintenance charge
This represents mainly provision for IT maintenance service, software support service and other IT related services received by the company
during 2012. The amount includes Tk 1,902,900 (2011: Tk. 1,902,900) payable as a reimbursement of IT service cost borne by GP on behalf
of GPIT.
17 VAT liability
This represents balance of VAT current account maintained with NBR.
18 Other current liabilities
Other current liabilities include payables to Telenor, taxes deducted at source from employees and suppliers, etc.
PAGE 155
|
2012
Taka
2011
Taka
19 Revenue

IT service revenue from:
Grameenphone Ltd (Note 19.1) 2,011,512,380 1,123,863,435
Other Telenor entities 23,311,223 16,973,803
External customers (Note 19.2) 408,198,190 35,880,226
2,443,021,793 1,176,717,464
19.1 IT service revenue from Grameenphone
This represents the amount of service charge earned against IT services provided to Grameenphone Ltd. These services include
maintenance of IT equipment, maintenance of billing, financial and other software, IT project implementation, supervision and other
related services.
19.2 IT service revenue from external customers
It includes revenue from Global Brand Pvt. Ltd Tk. 151,853,908 (2011: nil), from RM Systems Ltd Tk. 110,292,429 (2011: nil), from Bangladesh
Telecommunications Company Ltd (BTCL) Tk. 57,590,909 (2011: nil) and from Green Planet Resort Ltd Tk. 43,468,495 (2011: nil) for IT
related service.
20 Cost of services rendered
Personnel expenses (Note 20.1) 424,919,562 377,495,728
Service maintenance fees 226,988,402 158,871,856
Cost of IT support materials 941,536,056 272,575,024
Depreciation and amortisation 160,435,309 75,681,895
1,753,879,329 884,624,503
20.1 Personnel expenses
This includes salary, bonus, contribution to provident fund and other employee related expenses. Personnel expenses were allocated to
cost of service rendered and general and administrative expenses in the following manner:
Cost of service rendered 424,919,562 377,495,728
General and administrative expenses 209,582,492 242,361,939
634,502,054 619,857,667
21 General and administrative expenses
Personnel expenses (Note 20.1) 209,582,492 242,361,939
Legal and consultancy fees 50,659,514 52,565,369
Statutory audit fee 460,000 525,000
Office rent 29,826,252 36,655,548
Utility and maintenance 11,127,759 7,983,706
Vehicle running expenses 35,789,031 24,003,898
Office stationery, printing materials, etc. 8,992,721 6,430,858
Entertainment expenses 1,613,201 612,588
Advertisement, travel, training and others 56,991,813 42,522,189
Depreciation 26,238,365 11,858,930
431,281,148 425,520,025
22 Selling and distribution expenses

Advertisement and promotional expense 18,341,767 6,344,674
Corporate branding and sponsorship 13,142,047 8,075,437
31,483,814 14,420,111
23 Finance income, net
Finance income 9,125,247 7,771,244
Finance expense (694,923) (556,024)
8,430,324 7,215,220
Finance income represents interest earned on bank deposits, while finance expense represents mainly bank charges, LC related charges, etc.
|
PAGE 156
25 Financial risk management
The company management has overall responsibility for the establishment and oversight of the company's risk management framework.
Risk management policies, procedures and systems are reviewed regularly to reflect changes in market conditions and the company's
activities. The company has exposure to the following risks from its use of financial instruments.
l Credit risk
l Liquidity risk
l Market risk
25.1 Credit risk
Credit risk is the risk of a financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the company's receivables.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. As at 31 December 2012,
substantial part of the receivables are those from Grameenphone and other Telenor entities and subject to insignificant credit risk. Risk
exposures from other financial assets, i.e. Cash at bank and other external receivables are also nominal.
(a) Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date
was:
Accounts receivable:
IT services to Grameenphone 196,955,988 161,674,105
IT services to other Telenor entities 5,720,817 5,682,397
IT services to other external customers 401,316,729 6,218,799
603,993,534 173,575,301

Other receivables 28,163,115 16,536,405
Deposits 22,830,503 6,731,408
Cash at bank 263,378,495 426,423,498
314,372,113 449,691,311
918,365,647 623,266,612
The maximum exposure to credit risk for accounts receivable as at the reporting date by geographic region was:
Domestic 597,411,717 166,387,286
Foreign 6,581,817 7,188,015
603,993,534 173,575,301
(b) Ageing of receivables
The aging of gross accounts receivable as at the statement of financial position date was as follows:

0-90 days past due 571,006,947 155,129,776
90-180 days past due 31,986,587 5,531,215
over 180 days past due 1,000,000 12,914,310
603,993,534 173,575,301
2012
Taka
2011
Taka
24 Loss on disposal of property, plant and equipment

Disposal proceeds 376,899 38,854
Carrying amount of the assets disposed off (1,326,732) (94,611)
(949,833) (55,757)
PAGE 157
|
25.2 Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to
managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company's
reputation. Typically, the company ensures that it has sufficient cash and cash equivalents to meet expected operational expenses,
including financial obligations through preparation of the cash flow forecast, prepared based on time line of payment of the financial
obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date.

In extreme stressed conditions, the company may get support from the parent company in the form of short term financing.
The carrying amount of financial liabilities represent the maximum exposure to liquidity risk. The maximum exposure to liquidity risk as at 31
December was:

2012 2011
Carrying amount Maturity period Carrying amount Maturity period
Taka Months Taka Months
Payable for operating expenses 290,653,257 6 months or less 239,909,445 6 months or less
Payable for capital expenditure 59,072,902 -do- 259,820,110 -do-
Other current liabilities 16,473,727 -do- 17,576,171 -do-
366,199,886 517,305,726
25.3 Market risk
Market risk is the risk that any change in market prices, such as foreign exchange rates and interest rates will affect the company's income
or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters.
(a) Currency risk
The company is exposed to currency risk on certain revenues and purchases such as IT service revenue from foreign customers and import
of IT equipment, software and software support services.
The Company's exposure to foreign currency risk was as follows based on notional amounts (in Taka):

USD NOK EUR
Foreign currency denominated assets
Accounts receivable 3,981,879 1,738,938 -
Other receivables 18,164,093 - -
Cash at bank 3,085,801 - -
25,231,773 1,738,938 -

Foreign currency denominated liabilities
Payable to other Telenor entities (11,583,657) (111,281,108) -
Trade and other payables for expenses - - -
(11,583,657) (111,281,108) -
Net exposure 13,648,116 (109,542,170) -
USD NOK EUR
Accounts receivable 5,682,397 - 1,505,618
Cash at bank 607,645 - -
16,885,093 - 1,505,618
(11,583,657) (111,281,108) -
Net exposure 5,301,436 (111,281,108) 1,505,618
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PAGE 158
Currency risk (Contd)
The following exchange rates have been applied:
Exchange rate as at
31 December 2012 31 December 2011
Taka Taka
US Dollar (USD) 80.30 82.40
Norwegian Kroner (NOK) 16.60 15.64
EURO (EUR) 107.98 108.03
2012
Taka
2011
Taka

Foreign exchange rate sensitivity analysis-
An increase/(decrease) of 10 basis points in exchange rates would have increased/(decreased) equity and profit or loss by the amounts
shown below. This analysis assumes that all other variables, in particular interest rates remain constant.
Profit or loss Equity
10 bp increase 10 bp decrease 10 bp increase 10 bp decrease
2012 Taka Taka Taka Taka
Expenditures denominated in:
USD 13,648 (13,648) 13,648 (13,648)
NOK (109,542) 109,542 (109,542) 109,542
EURO - - - -
(95,894) 95,894 (95,894) 95,894
2011
Expenditures denominated in:
USD 5,301 (5,301) 5,301 (5,301)
NOK (111,281) 111,281 (111,281) 111,281
EURO 1,506 (1,506) 1,506 (1,506)
(104,474) 104,474 (104,474) 104,474
(b) Interest rate risk
The only interest bearing financial instrument for the company is the short notice deposit (SND) account maintained by the company with
its banks. Historically, interest rates for such instruments show little fluctuation. Interest rate risk for the company is therefore insignificant.
26 Related party disclosures
During the period, the company entered into a number of transactions with related parties in the normal course of business. The names of
the related parties and nature of these transactions have been set out below in accordance with the provisions of BAS 24: Related Party
Disclosures.
Related party transactions during the year
Name of related parties
and nature of relationship Nature of transaction

Grameenphone Ltd. Revenue from IT services (1,381,192,890) (856,328,939)
(parent company) Sale of IT equipments and softwares (630,319,490) (267,534,496)
Office rent 29,826,253 29,826,253

Telenor Broadcast Holding AS Revenue from IT service - (6,068,558)
Telenor Serbia Revenue from IT service (6,889,617) (9,327,210)
Telenor Start II AS Cell Bazaar and IT service revenue (8,507,074) (1,578,035)
Telenor Consult AS Consultancy expenses 52,420,463 102,740,233
Telenor Shared Service Revenue from IT services (6,166,099) -
Telenor ASA Revenue from IT services (1,748,431) -
PAGE 159
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2012
Taka
2011
Taka
2012
Taka
2011
Taka
Receivable from/(payable to) related parties
Name of related parties
and nature of relationship Nature of transaction
Grameenphone Ltd. Receivable for IT services 186,700,624 161,674,105
(parent company) Receivable for reimbursable expenses 9,999,022 3,999,110
Advance received (335,558,658) (391,114,950)
Liabilities for operating expenses (69,980,053) (76,471,686)
Office rent payable (20,841,884) (46,958,869)
Payable for capital expenditure - (127,337,217)
Telenor Broadcast Holding AS Other payables (745,000) (745,000)
Telenor Start II AS Receivable for cell Bazaar revenue sharing 10,255,364 1,942,244
Payable for cell Bazaar revenue sharing (2,577,097) (710,395)
Telenor Serbia Receivable for IT services - 5,581,187
Telenor ASA Receivable for IT services 4,771,893 101,210
Telenor Shared Service Receivable for IT services 948,924 -
Telenor Consult AS Payable for consultancy (165,928,579) (102,605,001)
Other receivable 18,164,093 10,595,051
26.1 Key management personnel compensation

Short-term employee benefits (salary and other allowances) 157,618,205 124,667,722
Post employment benefits (provident fund, gratuity, etc.) 19,955,641 15,981,060
Other long-term benefits 1,459,389 2,096,025
179,033,235 142,744,807
Key management personnel includes employees of the rank of Deputy General Manager (DGM), DGM equivalent and above.
27 Expenses/expenditures and (revenue) in foreign currency during the year
CIF value of imports:
Capital inventory 14,402,500 4,293,661
Other operating inventory 823,078,669 46,019,196
Consultancy expenses 66,745,918 132,387,597
Travel and Training expense 1,398,292 8,638,171
IT service revenue (25,504,973) (19,092,656)
28 Capital commitments
As at 31 December 2012, Grameenphone IT Ltd had a capital commitment of Tk. 263,385,776 (2011: Tk 364,502,196) for purchase of IT
equipment, installation of such equipment and other implementation services.
29 Other disclosures
29.1 As at 31 December 2012, number of regular employees receiving remuneration of Tk. 36,000 or above per annum was 408 (2011: 386).
There was no event after the reporting period that requires either disclosure of or adjustment to these financial statements.
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PAGE 160
1. General
Authorized Capital : BDT 40,000,000,000
Issued and Fully Paid-up Capital : BDT 13,503,000,220
Class of Shares : Ordinary Shares of BDT 10.00 each
Voting Rights : One vote per Ordinary Share
2. Stock Exchange Listing
The Ordinary Shares of the Company are listed in the Dhaka and Chittagong Stock Exchange Ltd. Company trading code is
[GP].
3. Distribution Schedule of the Shares as on December 31, 2012
4. Dividend

* In 2008, we capitalized a portion of our retained earnings through the issuance of bonus shares. The issuance was approved by our Shareholders at the
Extra-Ordinary General Meeting of Shareholders on July 15, 2009 and subsequently by the Bangladesh Securities and Exchange Commission.
Range of Shareholdings Number of Shareholders Total Number of Shares Percentage
001 to 500
501 to 5,000
5,001 to 10,000
10,001 to 20,000
20,001 to 30,000
30,001 to 40,000
40,001 to 50,000
50,001 to 100,000
100,001 to 1,000,000
1,000,001 to 1,000,000,000
Total
53,842
12,376
842
381
103
63
41
78
98
19
67,843
11,862,686
17,971,537
6,124,087
5,388,878
2,481,795
2,201,994
1,893,983
5,473,513
30,392,153
1,266,509,396
1,350,300,022
1.13%
1.77%
0.59%
0.54%
0.26%
0.21%
0.16%
0.47%
1.98%
92.89%
100%
2012
2011
2010
2009
2008
In 2008*
50 % (Proposed Final Dividend)
90 % (Interim Dividend)
65 % (Final Dividend)
85 % (Final Dividend)
60 %
13 %
400 %
5.00
9.00
6.50
14.00
8.50
3.50
6.00
0.13
0
10.00
10.00
10.00
10.00
10.00
10.00
10.00
1.00
-
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Bonus Share
For the Year Dividend Rate Dividend Type
Dividend Per
Share (BDT)
Par Value
Per Share (BDT)
PAGE 161
|
5. GP Share Performance at Stock Exchanges
I. Monthly Open, Close, High and Low share price and volume of the Companys Shares traded at Dhaka Stock Exchange Ltd.
(DSE) during the year 2012:
Note:
a. The highest share price of Grameenphone Ltd. at Dhaka Stock Exchange Ltd. (DSE) was BDT 228.0 in April 2012 and the lowest share price was
BDT 104.8 in July 2012.
II. Monthly Open, Close, High and Low share price and volume of the Companys Shares traded at Chittagong Stock
Exchange (CSE) during the year 2012:
Note:
a. The highest share price of Grameenphone Ltd. at Chittagong Stock Exchange Ltd. (CSE) was BDT 222.8 in April 2012 and the lowest share price
was BDT 146.9 in February 2012.
Month Total Volume Open
(BDT)
High
(BDT)
Low
(BDT)
Close
(BDT)
Month Total Volume Open
(BDT)
High
(BDT)
Low
(BDT)
Close
(BDT)
January 164.4 182.0 149.1 155.5 20,745,800
February 152.2 163.0 144.8 160.1 18,532,200
March 160.9 196.0 150.2 191.7 18,969,200
April 191.0 228.0 183.6 214.7 36,777,800
May 217.8 222.4 196.2 206.4 13,304,400
June 207.0 212.9 195.0 208.8 9,633,400
July 209.9 209.9 104.8 204.8 12,150,800
August 195.0 195.9 172.0 180.3 9,171,200
September 183.8 183.8 165.0 166.3 14,392,600
October 175.1 178.4 158.4 174.8 6,726,600
November 174.0 182.5 164.2 170.9 6,299,400
December 173.0 175.9 165.4 175.0 4,671,800
Total Shares traded during the year 171,375,200
January 164.0 180.6 150.5 154.7 7,065,600
February 154.7 162.8 146.9 159.1 6,585,418
March 159.1 192.7 150.4 191.2 4,089,228
April 191.2 222.8 184.9 214.8 5,670,088
May 214.8 218.9 200.2 205.6 2,651,254
June 205.6 210.5 196.2 208.1 2,513,218
July 206.8 209.5 192.1 204.9 2,987,128
August 204.9 204.9 173.1 180.8 2,938,800
September 180.8 180.8 165.7 165.7 3,400,800
October 165.7 176.4 161.1 174.9 1,686,552
November 174.9 177.7 164.9 171.2 2,182,800
December 171.2 174.9 165.6 174.9 1,166,800
Total Shares traded during the year 42,937,686
|
PAGE 162
III. Quarterly high-low price history of the Companys share for the year 2012
IV. GP Share Price Trend Year wise
V. GP Share Price & Transaction Volume in DSE:
6. Subsidiary Company
Name of the Company Holding Activity
Grameenphone IT Ltd. 100% IT Company
(The Grameenphone IT Ltd. was incorporated on January 28, 2010)
7. Credit Rating
The Companys credit rating was reaffirmed by Credit Rating Agency of Bangladesh Ltd. (CRAB) on January 30, 2013.
8. Company Website
Anyone can get information regarding Companys activities, products & services or can view Annual Report 2012 at
www.grameenphone.com.
9. Investor Relations
Institutional investors, security analysts and other members of the professional financial community requiring additional
financial information can visit the Investor Relations section of the Company website: www.grameenphone.com
10. Shareholder Services
If you have any queries relating to your shareholding, please contact at 01711555888 or mail to GP Share Office at
shareoffice@grameenphone.com.
DSE CSE
High Low High Low
(BDT) (BDT) (BDT) (BDT)
High Low High Low
(BDT) (BDT) (BDT) (BDT)
Period
DSE CSE
2012 2011 2012 2011
Highest Price (BDT) 228.0 259.0 222.8 257.0
Lowest Price (BDT) 104.8 135.8 146.9 136.5
Long Term Short Term
AAA ST-1
Quarter 1 196.0 144.8 259.0 136.2 192.7 146.9 257.0 137.0
Quarter 2 228.0 183.6 177.0 137.9 222.8 184.9 176.8 138.0
Quarter 3 209.9 104.8 219.0 154.2 209.5 165.7 220.0 154.0
Quarter 4 182.5 158.4 178.0 135.8 177.7 161.1 171.6 136.5
2012 2011 2012 2011
Standalone Performance Relative Performance
G
P
P
r
i
c
e
%
o
f
D
S
E
T
u
r
n
o
v
e
r
S
h
a
r
e
s
T
r
a
d
e
d
R
e
b
a
s
e
d
S
c
a
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2010 2011 2012
2010 2011 2012
Grameenphone Ltd.
Registered Office: GPHouse, Bashundhara, Baridhara, Dhaka-1229
Share Office: Zahurul Tower, Plot#9, Road#113/A, Gulshan-2, Dhaka-1212
Notice of the 16
th
Annual General Meeting
Notice is hereby given that the 16
th
Annual General Meeting of Grameenphone Ltd. will be held on Wednesday, April 10, 2013
at 10:00 am at Shaheed Suhrawardy National Indoor Stadium, Mirpur, Dhaka to transact the following businesses:
AGENDA
1. Consideration and adoption of the Directors Report and the Audited Financial Statements of the Company for the year
ended December 31, 2012 together with the Auditors Report thereon.
2. Declaration of Dividend for the year ended December 31, 2012 as recommended by the Board of Directors.
3. Election/Re-election of Directors.
4. Appointment of Auditors and fixation of their remuneration.
By order of the Board of Directors
Sd/-
Hossain Sadat
March 19, 2013 Company Secretary
Notes:
Members whose names appeared on the Members/Depository Register as on Record Date i.e. February 20, 2013 are eligible to attend
the Annual General Meeting (AGM) and receive dividend.
A Member entitled to attend and vote at the AGM may appoint a Proxy to attend and vote in his/her stead.
The Proxy Form, duly filled and stamped at Tk. 8 must be deposited at the Companys Share Office located at Zahurul Tower, Road
#113/A, Plot #9, Gulshan-2, Dhaka-1212 not later than 72 hours before commencement of the AGM.
Members/Proxies are requested to record their entry in the AGM well in time on April 10, 2013. The registration counter will open at 8:00
am on the AGM date.
In case of non-receipt of Annual Report 2012 of the Company sent through courier, Members may collect the same from the Companys
Share Office within April 09, 2013. No additional Annual Report will be distributed at AGM venue. Annual Report will also be posted on the
Investor Relations section of the Companys website: www.grameenphone.com
Members are requested to submit to the Companys Share Office on or before April 01, 2013, their written option to receive dividend. In
case of non-submission of such option within the stipulated time, the dividend will be paid off as deemed appropriate by the Company.
Grameenphone is concerned about the environment and utilizes natural resources in a sustainable way. We request the members to
update their email address and contact number (mobile/fixed phone) with their respective Depository Participant (DP) for quicker and
easier communication. Such cooperation will help conserve paper and minimize the impact on the environment.

//
Grameenphone Ltd.
Attendance Slip
I/We do hereby record my/our attendance at the 16
th
Annual General Meeting of the Company being held on Wednesday, April
10, 2013 at 10:00 am at Shaheed Suhrawardy National Indoor Stadium, Mirpur, Dhaka.
Signature Verified by
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signature of the Member/Proxy Authorised Signatory of the Company
Note: Please present this Attendance Slip at the registration counter on the AGM date.
Grameenphone Ltd.
Proxy Form
I/We . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . being Member of Grameenphone Ltd. do hereby appoint
Mr./Ms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
as my/our PROXY to attend and vote on my/our behalf at the 16
th
Annual General Meeting of the Company to be held on
Wednesday, April 10, 2013 at 10:00 am at Shaheed Suhrawardy National Indoor Stadium, Mirpur, Dhaka and at any
adjournment thereof.
Signed this . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2013.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signature of the Member(s) Signature of the PROXY
Number of Shares held . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes:
The Proxy Form, duly filled and stamped, must be deposited at the Companys Share Office located at Zahurul Tower, Plot#9, Road
#113/A. Gulshan-2, Dhaka-1212 not later than 72 hours before commencement of the AGM.
Signature of the Member(s) must be in accordance with the Specimen Signature recorded with the Company.
Signature Verified by
Authorised Signatory of the Company
25.2 Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company's approach to
managing liquidity (cash and cash equivalents) is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company's
reputation. Typically, the company ensures that it has sufficient cash and cash equivalents to meet expected operational expenses,
including financial obligations through preparation of the cash flow forecast, prepared based on time line of payment of the financial
obligation and accordingly arrange for sufficient liquidity/fund to make the expected payment within due date.

In extreme stressed conditions, the company may get support from the parent company in the form of short term financing.
The carrying amount of financial liabilities represent the maximum exposure to liquidity risk. The maximum exposure to liquidity risk as at 31
December was:

2012 2011
Carrying amount Maturity period Carrying amount Maturity period
Taka Months Taka Months
Payable for operating expenses 290,653,257 6 months or less 239,909,445 6 months or less
Payable for capital expenditure 59,072,902 -do- 259,820,110 -do-
Other current liabilities 16,473,727 -do- 17,576,171 -do-
366,199,886 517,305,726
25.3 Market risk
Market risk is the risk that any change in market prices, such as foreign exchange rates and interest rates will affect the company's income
or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters.
(a) Currency risk
The company is exposed to currency risk on certain revenues and purchases such as IT service revenue from foreign customers and import
of IT equipment, software and software support services.
The Company's exposure to foreign currency risk was as follows based on notional amounts (in Taka):

USD NOK EUR
Accounts receivable 3,981,879 1,738,938 -
Cash at bank 3,085,801 - -
25,231,773 1,738,938 -

(11,583,657) (111,281,108) -
Net exposure 13,648,116 (109,542,170) -
USD NOK EUR
Accounts receivable 5,682,397 - 1,505,618
Cash at bank 607,645 - -
16,885,093 - 1,505,618
(11,583,657) (111,281,108) -
Net exposure 5,301,436 (111,281,108) 1,505,618
Grameenphone wants to contribute to meet climate challenges and aims to reduce
the consumption of resources and overall impact on the environment. In an effort to
minimize paper consumption, we limit the scope of the printed annual report within
regulatory requirement. Grameenphones website provides extensive information
about the Company and its current activities: www.grameenphone.com
Concept & Design by Benchmark PR | www.benchmarkpr.com.bd
Grameenphone Ltd.
GPHouse
Bashundhara, Baridhara, Dhaka-1229, Bangladesh
Tel: +880-2-9882990, Fax: +880-2-9882970
Website: www.grameenphone.com

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