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1999 Annual Report
Independent Auditors' Report
To the Shareholders of
Palestine Telecommunications Company P.L.C.
Nablus - Palestine
We have audited the accompanying balance sheets of Palestine Telecommunications
Company P.L.C. (the "Company") as of December 31, 1999 and 1998 and the related statements
of profit and loss, changes in equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit,
and the information
and explanations that we obtained, which we considered necessary for our audit.
We conducted our audit in accordance with International Standards on Auditing.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The Company maintains proper books of account and the accompanying financial statements are in agreement
therewith.
As further explained in Note 28 to the accompanying financial statements,
as of the financial statements date, the legal registration of the cellular
phone company has not been completed and the ownership structure has not been finalized yet.
As a result, the cellular phone net loss for 1999 are included in the statement of profit and loss.
In our opinion, except for the effect of the preceding paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Palestine Telecommunications Company P.L.C. as of December 31, 1999 and 1998 and the results of its operations,
changes in equity and cash flows for the years then ended in conformity with International
Accounting Standards.
Arthur Andersen
Ramallah - Palestine
February 29, 2000
BALANCE SHEETS
| Assets |
Notes |
1999 |
1998 |
| Current Assets |
|
|
|
| Cash |
4 |
6,936,870 |
10,346,887 |
| Accounts receivable, net |
5 |
18,600,391 |
14,202,465 |
| Other current assets |
6 |
11,042,270 |
3,251,625 |
| Total Current Assets |
1 |
36,579,531 |
27,800,977 |
| Inventory, net |
7 |
8,733,837 |
5,942,729 |
| Projects in progress |
8 |
23,130,814 |
16,260,287 |
| Property, plant and equipment, net |
9 |
105,433,791 |
43,330,813 |
| Licence, concession and lines cost, net |
10 |
16,153,214 |
17,093,348 |
| Establishment and preoperating expenses, net |
11 |
1 |
209,693 |
| Total Assets |
1 |
190,031,187 |
110,637,847 |
LIABILITIES AND SHAREHOLDERS' EQUITY
| Current Liabilities |
|
|
|
| Due to banks |
12 |
27,330,951 |
7,202,208 |
| Notes payable |
13 |
3,722,181 |
4,579,997 |
| Accounts payable |
14 |
29,906,120 |
17,018,623 |
| Dividends payable |
15 |
3,828,203 |
1 |
| Other current liabilities |
16 |
5,325,721 |
2,478,923 |
| Total Current Liabilities |
1 |
70,113,176 |
31,279,751 |
| Notes payable |
13 |
19,854,940 |
1 |
| Long term loans |
17 |
27,371,779 |
14,881,118 |
| Provision for employees' indemnity |
18 |
2,177,634 |
1,359,229 |
| Total Liabilities |
1 |
119,517,529 |
47,520,098 |
| Shareholders' Equity |
1 |
1 |
1 |
| Paid-in share capital |
19 |
49,891,349 |
44,422,504 |
| Statutory reserve |
20 |
2,506,618 |
1,869,524 |
| Voluntary reserve |
20 |
2,506,618 |
1,869,524 |
| Special reserve |
20 |
2,024,394 |
2,024,394 |
| Retained earnings |
1 |
13,584,679 |
12,931,803 |
| Total Shareholders' Equity |
1 |
70,513,658 |
63,117,749 |
| Total Liabilities and Shareholders' Equity |
1 |
190,031,187 |
110,637,847 |
STATEMENTS OF PROFIT AND LOSS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
|
Notes |
1999 |
1998 |
|
|
|
|
| Telecommunication services revenues |
1 |
64,751,529 |
54,141,062 |
| Telecommunication services costs |
1 |
17,256,959 |
17,951,613 |
| Operating expenses |
21 |
31,933,222 |
19,666,858 |
| Income from operations |
1 |
15,561,348 |
16,522,591 |
| Licence and concession fees |
22 |
3,938,041 |
3,396,399 |
| Provision for doubtful accounts |
1 |
1,534,203 |
(1,443,936 |
| Bank interest, net |
23 |
4,056,903 |
885,994 |
| Foreign exchange gain (loss) |
24 |
48,832 |
2,534,720 |
| Other revenues, net |
25 |
289,911 |
311,729 |
| Net profit for the year |
1 |
6,370,944 |
8,573,271 |
| Earnings per share |
1 |
0.14 |
0.19 |
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