CONTENTS

Board of Directors Corporate Information Directors Report Condensed Interim Financial Information Condensed Interim Statement of Financial Position Condensed Interim Statement of Comprehensive Income Condensed Interim Statement of Cash Flows Condensed Interim Statement of Changes in Equity Notes to and Forming Part of the Condensed Interim Financial Information Condensed Consolidated Interim Financial Information Condensed Consolidated Interim Statement of Financial Position Condensed Consolidated Interim Statement of Comprehensive Income Condensed Consolidated Interim Statement of Cash Flows Condensed Consolidated Interim Statement of Changes in Equity Notes to and Forming Part of the Condensed Consolidated Interim Financial Information

01 02 03-04

06-07 08 09 10 11-14

16-17 18 19 20 21-24

Pakistan Telecommunication Company Limited

BOARD OF DIRECTORS

Saeed Ahmad Khan

Chairman PTCL Board

Abdulrahim A. Al Nooryani
Member PTCL Board

Dr. Waqar Masood Khan

Member PTCL Board

Abdulaziz A. Al Sawaleh
Member PTCL Board

Jamil Ahmed Khan

Member PTCL Board

Fadhil Al Ansari
Member PTCL Board

Dr. Syed Ismail Shah

Member PTCL Board

Abdulaziz H. Taryam
Member PTCL Board

Dr. Ahmed Al Jarwan

Member PTCL Board

Farah Qamar
Company Secretary

Pakistan Telecommunication Company Limited

CORPORATE INFORMATION

Management
Walid Irshaid President & Chief Executive Officer Muhammad Nehmatullah Toor SEVP (Finance) / CFO Syed Mazhar Hussain SEVP (HR / Admin & Procurement) Sikandar Naqi SEVP (Corporate Development) Naveed Saeed SEVP (Commercial) Muhammad Nasrullah Chief Technical Officer (CTO) Abdulla Yousef SEVP (Business Zone South) Hamid Farooq SEVP (Business Development) Javed Mushtaq Chief Information Officer (CIO) Furqan Habib Qureshi SEVP (Corporate Services) Company Secretary Farah Qamar Legal Affairs Zahida Awan Ghulam Mustafa Bankers Allied Bank Limited Askari Bank Limited Bank Alfalah Limited Bank Al Habib Limited Citibank, N.A. Dubai Islamic Bank Faysal Bank Limited Habib Metropolitan Bank Limited MCB Bank Limited Meezan Bank Limited National Bank of Pakistan NIB Bank Limited Silkbank Limited SME Bank Limited Standard Chartered Bank (Pakistan) Limited The Bank of Punjab United Bank Limited Auditors A.F. Ferguson & Co.
Chartered Accountants

Ernst & Young Ford Rhodes Sidat Hyder

Chartered Accountants

Registered Office PTCL Headquarters, Sector G-8/4, Islamabad-44000, Pakistan. Tel: +92-51-2263732 & 34 Fax: +92-51-2263733 E-mail: company.secretary@ptcl.net.pk Web: www.ptcl.com.pk Share Registrar M/s FAMCO Associates (Pvt.) Limited Ground Floor, State Life Building No. 1-A, I.I. Chundrigar Road, Karachi - 74000, Pakistan. Tel: +92-21-32422344, 32467406 & +92-21-32420755 Fax: +92-21-32428310

First Quarter Report 2011

DIRECTORS REPORT

The Directors of Pakistan Telecommunication Company Limited (PTCL) are pleased to present to the shareholders the un-audited financial information of the Company for the three months period ended September 30, 2011. During the period under review, your Company continued with the momentum to maximize the revenues and adding value to shareholders investment by augmenting the products portfolio, revamping of network and enhanced customer care. Financial Performance The PTCL Group revenue at Rs. 27.2 billion during the period under review increased by 7% compared to same period last year. Of these, the revenues earned by PTCL registered an increase of 5% whereas revenues of PTML (Ufone), the wholly owned subsidiary of PTCL, rose by 7%. The Groups net profit after tax at Rs. 2.2 billion was 8% lower as compared to corresponding period last year. PTCLs net profit after tax at Rs. 1.4 billion was 32% lower mainly because of decreased level of Other Operating Income. Commercial Performance During the first quarter of 2011-12, your Company maintained the growth trajectory in Broadband services both in DSL (wireline) and EVO (wireless). The DSL customer base increased by 9% upholding PTCLs dominant position of 95% market share. Rationalization of a variety of DSL packages, offering services from 256 Kbps to 50 Mbps commensurate with requirements of a wide array of customer base in urban and rural localities, contributed in achieving the above-stated growth. Smart TV has also been made more attractive by offering popular channels as well as expanding the Video on Demand Content. PTCLs efforts in DSL business expansion were instrumental in making Pakistan one of the fastest growing countries in the world in terms of broadband growth. The success and growth of multi-media and broadband services contributed to sustain the voice business as well thus helping to retain the land line subscribers with additional data revenues. The customer base of EVO the wireless broadband based on 3G technology, grew by 19% during the period under review. On the Independence Day of 14th August 2011, your Company launched countrys first 3G enabled EVDO tablet at attractive bundled pricing. PTCL also launched a mid-tier unlimited package on 256 Kbps on its flagship EVO service. An attractive and affordable package was also offered on the EVO Cloud the product enabling simultaneous 3G wireless broadband connectivity through Wi-Fi on multiple devices. For the PTCL V-fone customers, new package with flexible tariff and attractive mobile calling rate was introduced in the first quarter of current financial year. Further, airtime incentives were offered to encourage customers in purchasing V-fixed wireless phones. Your Company continued to expand services to the Corporate customers during the period under review. The Data Centre infrastructure was leased for data hosting to some of the large public and private enterprises of repute. PTCL also made contractual arrangements to provide managed servers and their hosting in our Data Centers to numerous provincial education governing bodies. Technical Performance During the period under review, PTCL further expanded the Broadband DSL by adding over 200K lines thus bringing the total installed capacity to 1.2 million lines. Your Company now provides DSL coverage in all the major cities and towns of the country including lesser developed and remote areas under the Universal Services Fund projects. To augment broadband services in line with customer preferences, PTCL also introduced cutting-edge technologies like MSAG (Multi Service Access Gateways) and Ultra Broadband VDSL-2 service. VDSL-2 Bonding Technology enables delivery up to 50 Mbps bandwidth on existing copper pair and has, therefore, facilitated offering of broadband packages from 256 Kbps to 50 Mbps thereby widening the choice for broadband customers.

Pakistan Telecommunication Company Limited

EVO - the wireless broadband, is now being provided through 1,150 sites all over the country with speed ranging from 3.1 Mbps to 9.3 Mbps making PTCL the first operator in the world to offer such technology on commercial basis. In order to extend the reach of broadband services to remote and far-flung sites of Corporate customers, 134 DVB-S2 based VSATs were installed during the period under review. Also, over 1,500 dedicated circuits were added in the network to further facilitate the Enterprise segment. With the objective to facilitate growing data traffic, necessary enhancement in the infrastructure was carried out by adding 290 Km optical fiber on the parallel backbone with the total length thereof at 1,990 Km now. Further, another 120 Km optical fiber cable (OFC) was laid in Baluchistan thus making available a total of 2,100 Km OFC providing connectivity to remote towns and tehsils in the province. The conventional microwave back haul links are also being transformed to IP technology to improve the transmission capability. As part of Network Transformation, 100K TDM (Time Division Multiplexing) lines have been replaced with Class-5 NGN (Next Generation Switching Network) using MSAGs, while replacement of another 1.2 million lines is in progress. Metro network in major places is being upgraded with Carrier Ethernet technology adding new IP based high capacity metro nodes in broadband core infrastructure. PTCL has also undertaken a pilot project to transform its network at selected places by deploying 15K GPON (Gigabit Passive Optic Network) based lines utilizing optical fiber technology in the access network up to subscriber premises. At the same time, service quality was enhanced by improving the existing Access network through rehabilitation of related network elements. The Access network was also extended to green field areas to provide for expanded PSTN and Broadband connectivity. Customer Care During the period under review, your Company continued to further improve various processes with the objective to enhance customer satisfaction levels. The Web-Services portal was reinforced enabling customers not only to get all information about PTCLs services but also to subscribe for them at their convenience. Your Company has also installed Public Cash Payment Machines (PCPM) at prominent public places facilitating bill payment by customers. The ambience and working of OSS (One Stop Shops) throughout the country is being further improved and professional training of customer handling is being imparted to OSS staff. Besides, data relating to customers experience is being captured and analyzed regularly by conducting surveys. Based on this data, continual improvement of processes and services is being driven allowing PTCL to closely align with the customers expectations. Corporate Social Responsibility Similar to the catastrophic floods of last year, Pakistan faced the calamity of floods in current year too. In line with the help extended by PTCL Group in the previous year, a donation of Rs. 50 million was made by PTCL Group in Prime Minister Flood Relief Fund. For this purpose, the cheques were presented to the President of Pakistan by CEOs of PTCL and Ufone. The management and employees of PTCL remain committed to provide quality services at competitive prices through optimal use of resource for achieving enhanced revenue and improved shareholders value. On behalf of the Board,

Saeed Ahmad Khan Chairman Islamabad: October 18, 2011

Walid Irshaid President & CEO PTCL

First Quarter Report 2011

CONDENSED INTERIM FINANCIAL INFORMATION

Pakistan Telecommunication Company Limited

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2011 (UN-AUDITED)

Note

September 30, 2011 Rs 000 (Un-Audited)

June 30, 2011 Rs 000 (Audited)

Equity and liabilities Equity Share capital and reserves Share capital Revenue reserves Insurance reserve General reserve Unappropriated profit Unrealized gain on available-for-sale investments 51,000,000 2,385,532 30,500,000 15,778,822 48,664,354 39,217 99,703,571 Liabilities Non-current liabilities Long-term security deposits Deferred taxation Employees retirement benefits Deferred government grants 729,886 5,187,854 17,729,135 3,607,843 27,254,718 Current liabilities Trade and other payables Dividend payable Total equity and liabilities Contingencies and commitments 5 24,528,481 97,188 24,625,669 151,583,958 24,644,683 3,375,631 28,020,314 152,519,860 740,744 5,011,731 16,823,015 3,631,585 26,207,075 51,000,000 2,385,532 30,500,000 14,376,349 47,261,881 30,590 98,292,471

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chairman

First Quarter Report 2011

Note

September 30, 2011 Rs 000 (Un-Audited)

June 30, 2011 Rs 000 (Audited)

Assets Non-current assets Fixed assets Property, plant and equipment Intangible assets Long-term investments Long-term loans 89,462,897 2,970,707 92,433,604 6,607,439 11,398,884 110,439,927 Current assets Stores, spares and loose tools Trade debts Loans and advances Accrued interest Recoverable from tax authorities Receivable from Government of Pakistan Other receivables Short-term investments Cash and bank balances 3,646,518 10,330,115 918,582 524,930 13,384,699 2,164,072 565,394 6,222,788 3,386,933 41,144,031 3,369,488 9,171,851 586,124 508,863 12,572,963 2,164,072 366,997 2,642,378 7,628,907 39,011,643 92,377,276 3,036,127 95,413,403 6,607,439 11,487,375 113,508,217

Total assets

151,583,958

152,519,860

President & CEO

Pakistan Telecommunication Company Limited

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

September 30, 2011 Rs 000

September 30, 2010 Rs 000

Revenue Cost of services Gross profit Administrative and general expenses Selling and marketing expenses Other operating income Operating profit Finance costs Profit before tax Taxation Current Deferred Profit for the period Other comprehensive income for the period Unrealized gain on available-for-sale investments -net of tax
Total comprehensive income for the period

14,482,756 (10,852,107) 3,630,649 (1,819,176) (569,411) 978,637 (1,409,950) 2,220,699 (65,701) 2,154,998 (576,402) (176,123) (752,525) 1,402,473

13,856,284 (10,185,427) 3,670,857 (1,763,490) (533,407) 1,894,008 (402,889) 3,267,968 (69,787) 3,198,181 (1,243,544) 126,739 (1,116,805) 2,081,376

8,627 1,411,100 0.28

2,081,376 0.41

Earnings per share - basic and diluted (Rupees)

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chairman

President & CEO

First Quarter Report 2011

CONDENSED INTERIM STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

Note

September 30, 2011 Rs 000

September 30, 2010 Rs 000

Cash flows from operating activities Cash generated from operations Long term security deposits Employees retirement benefits paid Payment of other VSS components Finance costs paid Income tax paid Net cash inflows from operating activities Cash flows from investing activities Capital expenditure Proceeds from disposal of property, plant and equipment Long-term loans - net PTA WLL license fee Loan to the wholly owned subsidiary - PTML Return on long-term loans and short-term investments Net cash inflows from investing activities Cash flows from financing activities Dividend paid Net cash outflows from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 10 (3,351,120) (3,351,120) (661,564) 10,271,285 9,609,721 (3,356,350) (3,356,350) (9,009,526) 19,916,009 10,906,483 (2,432,220) 26,817 610,995 (1,794,408) (2,510,083) 7,613 20,815 (1,894,950) (4,000,000) 753,621 (7,622,984) 5,804,810 (10,859) (75,618) (1,091) (42,859) (1,190,419) 4,483,964 2,607,308 817 (116,226) (1,646) (49,688) (470,757) 1,969,808

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chairman

President & CEO

Pakistan Telecommunication Company Limited

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

Issued, subscribed and paid-up capital Class A Rs 000 Class B Rs 000 Insurance reserve Rs 000

Revenue reserves Unrealized gain on General Unappropriated available-for- sale reserve profit investments Rs 000 Rs 000 Rs 000

Total Rs 000

Balance as at July 01, 2010 Total comprehensive income for the period Profit for the period Other comprehensive income Balance as at September 30, 2010 Balance as at July 01, 2011 Total comprehensive income for the period Profit for the period Other comprehensive income Balance as at September 30, 2011

37,740,000

13,260,000

2,113,704

30,500,000

16,145,007

99,758,711

37,740,000 37,740,000

13,260,000 13,260,000

2,113,704 2,385,532

30,500,000 30,500,000

2,081,376 2,081,376 18,226,383 14,376,349

2,081,376 2,081,376

101,840,087 30,590 98,292,471

37,740,000

13,260,000

2,385,532

30,500,000

1,402,473 1,402,473 15,778,822

8,627 8,627 39,217

1,402,473 8,627 1,411,100 99,703,571

The annexed notes from 1 to 11 form an integral part of this condensed interim financial information.

Chairman

President & CEO

10

First Quarter Report 2011

NOTES TO AND FORMING PART OF THE NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL STATEMENTS CONDENSED INTERIM FINANCIAL INFORMATION

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

1.

The Company and its operations Pakistan Telecommunication Company Limited (the Company) was incorporated in Pakistan on December 31, 1995 and commenced business on January 1, 1996. The Company, which is listed on the Karachi, Lahore and Islamabad stock exchanges, was established to undertake the telecommunication business formerly carried on by the Pakistan Telecommunication Corporation (PTC). PTCs business was transferred to the Company on January 1, 1996 under the Pakistan Telecommunication (Reorganization) Act, 1996, on which date, the Company took over all the properties, rights, assets, obligations and liabilities of PTC, except those transferred to the National Telecommunication Corporation (NTC), the Frequency Allocation Board (FAB), the Pakistan Telecommunication Authority (PTA) and the Pakistan Telecommunication Employees Trust (PTET). The registered office of the Company is situated at PTCL Headquarters, G-8/4, Islamabad. The Company provides telecommunication services in Pakistan. It owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan. The Company has also been licensed to provide such services in territories of Azad Jammu and Kashmir and Gilgit-Baltistan.

2.

Statement of Compliance This condensed interim financial information of the Company for the three months period ended September 30, 2011 has been prepared in accordance with the requirements of International Accounting Standard (IAS) 34 - Interim Financial Reporting and provisions of and directives issued under the Companies Ordinance, 1984. In case where requirements differ, the provisions of or directives issued under the Companies Ordinance, 1984 have been followed.

3.

Significant accounting policies The accounting policies and the methods of computations adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of annual audited financial statements of the Company for the year ended June 30, 2011.

4.

Significant accounting judgements and estimates The preparation of this condensed interim financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Companys accounting policies. Estimates and judgements are continually evaluated and are based on historic experience including expectation of future events that are believed to be reasonable under the circumstances. Estimates and judgements made by the management in preparation of this condensed interim financial information are the same as those used in the preparation of annual audited financial statements of the Company for the year ended June 30, 2011.

5. 5.1

Contingencies and commitments Contingencies There has been no material change in contingencies as disclosed in the last annual audited financial statements of the Company. Commitments Commitments, in respect of contracts for capital expenditure, amount to Rs 16,194,021 thousand (June 30, 2011: Rs 15,106,081 thousand).

5.2

Pakistan Telecommunication Company Limited

11

Note

September 30, 2011 (Un-Audited) Rs 000

June 30, 2011 (Audited) Rs 000

6.

Property, plant and equipment Operating assets Capital work-in-progress 6.1 75,054,505 14,408,392 89,462,897 73,788,459 18,588,817 92,377,276

6.1

Operating assets Opening book value Additions during the period / year - at cost Disposals during the period / year at book value Depreciation for the period / year Closing book value 73,788,459 6.2 4,155,291 77,943,750 (2,889,245) (2,889,245) 75,054,505 73,960,689 11,459,584 85,420,273 (977) (11,630,837) (11,631,814) 73,788,459

6.2

Details of additions during the period / year: Land - freehold Buildings on freehold land Lines and wires Apparatus, plant and equipment Office equipment Computer equipment Furniture and fittings Vehicles Submarine cables 203,479 648,200 3,287,656 8,015 1,846 6,095 4,155,291 233 339,793 1,878,997 4,937,900 14,451 45,959 6,478 148,035 4,087,738 11,459,584

7.

Long term loans These include unsecured loans of Rs 11,000,000 thousand (June 30, 2011: Rs 11,000,000 thousand) to Pak Telecom Mobile Limited, a wholly owned subsidiary of the Company, under subordinated debt agreements. These loans are recoverable in eight equal quarterly installments commencing after a grace period of 3 to 4 years by 2015, carrying mark-up at the rate of three months KIBOR plus 82 to 180 basis points.

12

First Quarter Report 2011

Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs 000 Rs 000

8.

Transactions with related parties

Relationship with the Company Nature of transaction

i.

Subsidiaries

Purchase of goods and services Sale of goods and services Mark-up on long term loans Disbursement of loans Technical services fee - note 8.1 Purchase of goods and services Sale of goods and services Contribution to Pakistan Telecommunication Employees Trust (PTET) PTCL employees GPF Trust Fees, remuneration including benefits and perquisites

359,188 1,162,733 408,818 466,090 248,910 408,305

392,718 1,299,530 361,559 4,000,000 437,386 347,128 1,400,787

ii.

Associated undertakings

iii. Employees benefit plans

643 2,611 256,401

992 4,136 239,674

June 30, 2011 (Audited) Rs 000

iv. Directors, Chief Executive and Executives

September 30, 2011 (Un-Audited) Rs 000

Period-end balances Receivables from related parties Long term loans to subsidiary Trade debtors - Subsidiary - Associated undertakings Accrued interest receivable - Subsidiary Other receivables - PTCL employees GPF Trust - Pakistan Telecommunication Employees Trust (PTET) Payables to related parties Trade payables - Subsidiary - Associated undertakings Technical services fee payable to Etisalat Pakistan Telecommunication Employees Trust (PTET) 8.1 15,125 418,884 922,489 6,090,374 14,878 343,800 456,399 5,618,852 11,000,000 843,579 325,623 286,857 187,143 96,333 11,000,000 924,074 176,021 279,082 125,469 95,691

This represents PTCLs share of fee payable to Emirates Telecommunication Corporation (Etisalat) under an agreement for technical services, effective October 01, 2006, at the rate of 3.5% of PTCL groups consolidated annual revenue.

Pakistan Telecommunication Company Limited

13

Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs 000 Rs 000

9.

Cash generated from operations Profit before tax Adjustments for non-cash charges and other items: Depreciation and amortization 2,954,665 Provision for doubtful trade debts 405,744 Employees retirement benefits 981,738 Imputed interest on consideration payable on MAXCOM 1,101 Interest on long-term loans (408,818) Gain on disposal of property, plant and equipment Unrealized gain on available-for-sale investments 8,627 Dividend income Return on bank placements (218,243) Provision for obsolete stores, spares and loose tools Amortization of USF grants (23,742) Finance costs 42,859 5,898,929 Effect on cash flows due to working capital changes: (Increase) / decrease in current assets: Stores, spares and loose tools Trade debts Loans and advances Recoverable from tax authorities Other receivables Increase / (decrease) in current liabilities: Trade and other payables (277,030) (1,564,007) (270,784) (197,721) (198,396) (2,507,938) 2,413,819 5,804,810 107,908 (3,351,475) (263,175) 165,872 (99,614) (3,440,484) (46,500) 2,607,308 2,879,345 435,931 810,996 2,166 (335,413) (7,344) (6,994) (644,000) (355,259) 49,062 67,621 6,094,292 2,154,998 3,198,181

10.

Cash and cash equivalents Short term investments Cash and bank balances 6,222,788 3,386,933 9,609,721 7,038,553 3,867,930 10,906,483

11. Date of authorisation for issue of financial information This condensed interim financial information for the three months period ended September 30, 2011 was authorised for issue on October 18, 2011 by the Board of Directors of the Company.

Chairman

President & CEO

14

First Quarter Report 2011

CONDENSED INTERIM CONSOLIDATED FINANCIAL INFORMATION

Pakistan Telecommunication Company Limited

15

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2011 (UN-AUDITED)

Note

September 30, 2011 Rs 000 (Un-Audited)

June 30, 2011 Rs 000 (Audited)

Equity and liabilities Equity Share capital and reserves Share capital Revenue reserves Insurance reserve General reserve Unappropriated profit Unrealized gain on available-for-sale investments 51,000,000 2,385,532 30,500,000 25,895,112 58,780,644 39,217 109,819,861 Liabilities Non-current liabilities Long-term loans from banks Liability against assets subject to finance lease Payable to PTA against license fee Long-term security deposits Deferred taxation Employees retirement benefits Deferred government grants Long-term vendor liability 13,000,000 81,584 145,111 1,681,485 16,229,983 17,867,841 3,607,843 1,346,066 53,959,913 Current liabilities Trade and other payables Interest accrued Short-term running finance Current portions of: Long-term loans from banks Liability against assets subject to finance lease Payable to PTA against license fee Long-term vendor liability Unearned income Dividend payable Total equity and liabilities Contingencies and commitments 5 34,542,481 99,795 32,075 41,870 3,016,502 1,703,409 97,188 39,533,320 203,313,094 34,306,442 387,114 234,676 9,000,000 32,075 42,984 3,232,951 1,592,680 3,375,631 52,204,553 211,995,372 11,000,000 83,439 138,246 1,646,400 15,498,413 17,018,391 3,631,585 3,188,375 52,204,849 51,000,000 2,385,532 30,500,000 23,669,848 56,555,380 30,590 107,585,970

The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.

Chairman

16

First Quarter Report 2011

Note

September 30, 2011 Rs 000 (Un-Audited)

June 30, 2011 Rs 000 (Audited)

Assets Non-current assets Fixed assets Property, plant and equipment Intangible assets Long-term investments Long-term loans 152,181,971 3,895,200 156,077,171 107,553 478,784 156,663,508 Current assets Stores, spares and loose tools Stock-in-trade Trade debts Loans and advances Deposits and prepayments Accrued interest Recoverable from tax authorities Receivable from Government of Pakistan Other receivables Short-term investments Cash and bank balances 3,646,518 532,075 10,681,762 1,103,367 1,578,708 243,710 14,154,674 2,164,072 565,394 6,222,788 5,756,518 46,649,586 3,369,488 577,434 9,434,885 773,746 1,295,348 377,822 13,317,194 2,164,072 504,042 2,642,378 16,797,906 51,254,315 156,173,748 3,906,996 160,080,744 107,553 552,760 160,741,057

Total assets

203,313,094

211,995,372

President & CEO

Pakistan Telecommunication Company Limited

17

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

September 30, 2011 Rs 000

September 30, 2010 Rs 000

Revenue Cost of services Gross profit Administrative and general expenses Selling and marketing expenses Other operating income Operating profit Finance costs Profit before tax Taxation Current Deferred Profit for the period Other comprehensive income for the period Unrealized gain on available-for-sale investments -net of tax
Total comprehensive income for the period

27,199,049 (17,958,647) 9,240,402 (3,592,202) (1,926,835) 652,299 (4,866,738) 4,373,664 (702,757) 3,670,907 (714,073) (731,570) (1,445,643) 2,225,264

25,357,600 (16,573,324) 8,784,276 (3,208,877) (1,779,700) 942,829 (4,045,748) 4,738,528 (413,481) 4,325,047 (1,376,519) (525,641) (1,902,160) 2,422,887

8,627 2,233,891 0.44

2,422,887 0.48

Earnings per share - basic and diluted (Rupees)

The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.

Chairman

President & CEO

18

First Quarter Report 2011

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

Note

September 30, 2011 Rs 000

September 30, 2010 Rs 000

Cash flows from operating activities Cash generated from operations Long term security deposits Employees retirement benefits paid Payment of other VSS components Finance costs paid Income tax paid Net cash inflows from operating activities Cash flows from investing activities Capital expenditure Proceeds from disposal of property, plant and equipment Long-term loans - net PTA license fee Return on long-term loans and short-term investments Net cash inflows from investing activities Cash flows from financing activities Long-term loan received Long-term vendor liability Liabilities against assets subject to finance lease Long-term loan paid Dividend paid Net cash outflows from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 7 2,000,000 (2,058,758) (1,855) (9,000,000) (3,351,120) (12,411,733) (7,226,302) 19,205,608 11,979,306 2,000,000 (9,072,440) (3,356,350) (10,428,790) (8,517,943) 23,566,425 15,048,482 (3,989,552) 25,288 26,817 414,790 (3,522,657) (3,788,222) 7,631 20,815 (1,894,950) 549,366 (5,105,360) 6 11,151,810 35,084 (156,763) (1,091) (967,120) (1,353,832) 8,708,088 8,025,484 62,013 (189,570) (1,646) (313,685) (566,389) 7,016,207

The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.

Chairman

President & CEO

Pakistan Telecommunication Group

19

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

Issued, subscribed and paid-up capital Class A Rs 000 Class B Rs 000 Insurance reserve Rs 000

Revenue reserves Unrealized gain on General Unappropriated available-for- sale reserve profit investments Rs 000 Rs 000 Rs 000

Total Rs 000

Balance as at July 01, 2010 Total comprehensive income for the period Profit for the period Other comprehensive income Balance as at September 30, 2010 Balance as at July 01, 2011 Total comprehensive income for the period Profit for the period Other comprehensive income Balance as at September 30, 2011

37,740,000

13,260,000

2,113,704

30,500,000

24,461,054

108,074,758

37,740,000 37,740,000

13,260,000 13,260,000

2,113,704 2,385,532

30,500,000 30,500,000

2,422,887 2,422,887 26,883,941 23,669,848

2,422,887 2,422,887

110,497,645 30,590 107,585,970

37,740,000

13,260,000

2,385,532

30,500,000

2,225,264 2,225,264 25,895,112

8,627 8,627

2,225,264 8,627 2,233,891

39,217 109,819,861

The annexed notes from 1 to 10 form an integral part of this condensed consolidated interim financial information.

Chairman

President & CEO

20

First Quarter Report 2011

NOTES TO AND FORMING PART OF THE CONDENSED NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED) FOR THE THREE MONTHS PERIOD ENDED SEPTEMBER 30, 2011 (UN-AUDITED)

1.

Constitution and ownership The condensed consolidated interim financial information of the Pakistan Telecommunication Company Limited and its subsidiaries (the Group) comprise of the financial information of: Pakistan Telecommunication Company Limited (PTCL) PTCL provides telecommunication services in Pakistan. PTCL owns and operates telecommunication facilities and provides domestic and international telephone services and other communication facilities throughout Pakistan. PTCL has also been licensed to provide such services to territories in Azad Jammu & Kashmir and Gilgit-Baltistan. Pak Telecom Mobile Limited (PTML) PTML provides cellular mobile telephone services throughout Pakistan under the brand name of Ufone.

2.

Basis of preparation This condensed consolidated interim financial information is un-audited and is being submitted to the members in accordance with the requirements of Section 245 of the Companies Ordinance, 1984 and International Accounting Standard (IAS) 34 Interim Financial Reporting. This condensed consolidated interim financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements of the Group for the year ended June 30, 2011.

3.

Significant accounting policies The accounting policies adopted in the preparation of this condensed consolidated interim financial information are the same as those applied in the preparation of annual audited financial statements of the Group for the year ended June 30, 2011.

4.

Significant accounting judgements and estimates The preparation of financial information in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Groups accounting policies. Estimates and judgements are continually evaluated and are based on historic experience including expectation of future events that are believed to be reasonable under the circumstances. Estimates and judgements made by the management in preparation of this condensed consolidated interim financial information are the same as those used in the preparation of annual audited financial statements of the Group for the year ended June 30, 2011.

5. 5.1

Contingencies and commitments Contingencies There has been no material change in contingencies since last audited financial statements of the Group. Commitments Commitments in respect of letter of credit for purchase of stock amount to Rs.162,634 thousand (June 30, 2011: 256,867 thousand) and contracts for capital expenditure amount to Rs.18,225,472 thousand (June 30, 2011: Rs. 17,721,554 thousand).

5.2

Pakistan Telecommunication Group

21

Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs 000 Rs 000

6.

Cash generated from operations Profit before tax Adjustments for non-cash charges and other items: Depreciation and amortization Provision for doubtful trade debts Provision for stock-in-trade Employees retirement benefits Imputed interest Gain on disposal of property, plant and equipment Unrealised gain on available-for-sale investments Return on bank placements Amortization of USF grants Finance costs 5,520,863 411,814 1,006,213 1,101 (10,380) 8,627 (290,343) (23,742) 679,915 10,974,975 Effect on cash flows due to working capital changes: ( Increase) / decrease in current assets: Stores, spares and loose tools Stock in trade Trade debts Loans and advances Deposits and prepayments Recoverable from tax authorities Other receivables Increase / (decrease) in current liabilities: Trade and other payables Unearned income 1,813,582 110,731 1,924,313 11,151,810 656,846 (4,753) 652,093 8,025,484 (277,030) 45,359 (719,738) (282,462) (117,490) (197,721) (198,396) (1,747,478) 107,908 (74,900) (3,497,076) (244,748) 123,603 165,872 (99,614) (3,518,955) 5,205,332 446,552 49,062 837,248 2,166 (7,362) (6,994) (396,165) 437,460 10,892,346 3,670,907 4,325,047

22

First Quarter Report 2011

Three months period ended September 30, September 30, 2011 2010 (Un-Audited) (Un-Audited) Rs 000 Rs 000

7.

Cash and cash equivalents Short-term investments Cash and bank balances 6,222,788 5,756,518 11,979,306 7,038,553 8,009,929 15,048,482

8.

Segment Information For Management purposes, the Group is organized into business units based on their services and has two reportable operating segments. Transfer prices between operating segments are on an arms length basis in a manner similar to transactions with third parties.

8.1

Revenue information regarding the Groups operating segments for the quarter ended September 30, 2011 and 2010 is tabulated below:
Wireline Rs 000 Wireless Rs 000 Total Rs 000

Note

Quarter ended September 30, 2011 Segment revenue Inter segment revenue Revenue from external customers Quarter ended September 30, 2010 Segment revenue Inter segment revenue Revenue from external customers 8.1.1 13,224,654 (1,359,530) 11,865,124 13,960,976 (468,500) 13,492,476 27,185,630 (1,828,030) 25,357,600 8.1.1 13,708,547 (1,162,733) 12,545,814 15,040,116 (386,881) 14,653,235 28,748,663 (1,549,614) 27,199,049

8.1.1 Inter segment revenues are eliminated on consolidation. 8.2 Assets & liabilities of the Groups operating segments as at September 30, 2011 and June 30, 2011 are tabulated below.
Wireline Rs 000 Wireless Rs 000 Total Rs 000

As at September 30, 2011 Segment assets Segment liabilities As at June 30, 2011 Segment assets Segment liabilities 126,586,343 54,111,570 85,409,029 50,297,832 211,995,372 104,409,402 125,545,727 51,778,346 77,767,367 41,714,887 203,313,094 93,493,233

Pakistan Telecommunication Group

23

9.

Date of authorisation for issue of financial information This condensed consolidated interim financial information was authorised for issue on October 18, 2011 by the Board of Directors of the holding Company.

10.

General Figures presented in this condensed consolidated interim financial information have been rounded off to the nearest thousand rupees.

Chairman

President & CEO

24

First Quarter Report 2011