17th May 2006 07:00
Telecom Egypt S.A.E17 May 2006 Auditor's Limited Review Report to the Board of Directors of Telecom EgyptCompany We have performed a limited review on the accompanying consolidated balancesheet of Telecom Egypt Company - an Egyptian joint stock company - as of March31, 2006 and the related consolidated statements of income, cash flows andchanges in equity for the financial period then ended. These financialstatements are the responsibility of the company's management. Ourresponsibility is to issue a report on these financial statements based on ourreview. Our review was made in accordance with the Egyptian Standards on Auditingrelating to the limited review. This standard requires that we plan and performthe review to obtain reasonable assurance that the financial statements are freeof material misstatement. Our review work is limited to obtaining the requiredinformation from company's personnel and analytical procedures applied forfinancial data and thus provide less assurance than the audit procedures appliedaccording to the Egyptian Standards on Auditing for the purpose of issuing anopinion on the financial statements and accordingly, we do not express thisopinion. Based on our limited review for the consolidated financial statements of TelecomEgypt Company for the period ended March 31, 2006 nothing has come to ourattention that causes us to believe that the accompanying consolidated financialstatements are not presented fairly in all material respects in accordance withEgyptian Accounting Standards. KPMG Hazem Hassan Public Accountants & Consultants Cairo, May 14, 2006 Telecom Egypt Consolidated Financial Statements Consolidated Financial Position As of March 31, 2006 Note 31/3/2006 31/12/2005 No. LE(000) LE(000)Long-Term AssetsFixed assets (net) (4) 21 496 621 21 833 589Projects in progress (5) 1 125 939 1 146 797Investments in affiliates (3-6), (6-1) 1 301 785 1 301 785Available for sale investments (3-7), (6-2) 95 305 95 197Long-term receivables (7) 921 101 1 422 901Other assets (net) (3-9), (8) 146 846 126 769Total Long Term Assets 25 087 597 25 927 038Current AssetsInventories (9) 464 542 494 776Trade and notes receivable (10) 3 038 243 2 559 673Debtors and other debit accounts (11) 2 259 070 2 250 735Investments held for trading 1 003Cash at banks and on hand (12) 1 219 402 768 016Total Current Assets 6 982 260 6 073 200Current LiabilitiesLoan installments and facilities due within one year (13) 420 683 476 487Banks - credit accounts 219 789 419 061Banks overdraft 23 735 158 474Suppliers & notes payable (14) 78 156 103 768Creditors and other credit accounts (15-1) 3 967 968 2 963 170Provisions (16) 1 260 780 1 255 653Total Current Liabilities 5 971 111 5 376 613Working capital 1 011 149 696 587Total investments 26 098 746 26 623 625Financed as follows:-EquityPaid up capital (17) 17 070 716 17 070 716Reserves (18) 4 159 838 3 416 774Retained earnings 565 544 403 611Translation difference adjustments (130) (78)Net profit for the period / year 535 486 1 858 019Total equity attributable to equity holders of the 22 331 454 22 749 042parentMinority Interest 31 807 22 031Total Equity 22 363 261 22 771 073 Long-Term LiabilitiesLoans and credit facilities (13) 1 616 387 1 734 821Bonds loan (33) 2 000 000 2 000 000Creditors and other credit balances (15-2) 56 806 56 459Deferred tax liabilities (3-21), (19) 62 292 61 272Total Long Term Liabilities 3 735 485 3 852 552Total Equity and Long-Term Liabilities 26 098 746 26 623 625 The accompanying notes from No. (1) to No. (37) form an integral part of thesefinancial statements. Consolidated Income Statement For The Financial Period Ended March 31, 2006 For the For the financial period financial period from 1/1/2006 from 1/1/2005 Note to 31/3/2006 to 31/3/2005 No. LE(000) LE(000)Operating RevenuesSales of services (20) 2 158 102 1 982 849Sales of telephone sets & directories 14 644 30 191 2 172 746 2 013 040Operating ExpensesInterconnection fees (21) 294 180 283 446Fuel 11 929 10 479Spare parts 44 355 40 744Maintenance 11 985 16 294Satellite subscriptions 5 514 6 193Depreciation (4) 661 415 682 874Amortization (8) 6 979 7 294Cost of telephone sets & directories sold 29 165 40 765Other operating costs (22) 244 892 224 530 1 310 414 1 312 619Gross Operating Profit 862 332 700 421Administrative expensesGeneral & administrative expenses (23) 211 692 176 454Selling & distribution expenses (24) 56 196 32 570Provisions (16) 5 127 12 189Impairment loss on trade and other receivables (16) 31 850 1 498 304 865 222 711Net Operating Profit 557 467 477 710Other Income / (Expenses)Interest income 11 139 6 010Income from investments 154 697 25 800Interest expenses (76 319) (107 452)Other revenues (expenses) (25) 46 887 (23 202)Reversal of impairment loss on long-term investments 108Gain on sale of fixed assets 20 941Foreign exchange ( loss) gain (25 962) 179 562Release of unused provision 157 110 550 101 816Net profit for the period before tax & minority 668 017 579 526interestLess:Current tax expense 131 056 213 187Deferred tax expense 867Net profit before minority interest 536 094 366 339Less:Minority interest 608 778Net profit for the period after tax & minority 535 486 365 561interestEarnings per share (LE/Share) (28) 0.31 0.21 The accompanying notes from No. (1) to No. (37) form an integral part of these financial statements. Consolidated Statement of Cash Flows For The Financial Period Ended March 31, 2006 For the For the financial period financial period from 1/1/2006 from 1/1/2005 Note to 31/3/2006 to 31/3/2005 No. LE(000) LE(000)Cash flows from operating activitiesCash receipts from trade receivables 1 527 317 1 642 551Sales tax collected from receivables 114 928 105 150Stamp tax and fees collected (from third party) 55 855 52 242Deposits received from receivables 12 573 18 706Cash paid to suppliers (212 373) (247 765)Cash paid to employees (230 223) (233 816)Cash paid on behalf of employees (74 651) (65 774)Dividends paid to shareholders & employees (51 451) (207 078)Net cash from operating activities 1 141 975 1 064 216 Interest paid (96 937) (173 335)Payments to Tax Authority (77 705) (81 189)Payments to Sales Tax Authority (108 230) (140 149)Other proceeds /(payments) net 289 631 (57 057)Net cash provided by operating activities 1 148 734 612 486Cash flows from investing activitiesPayment for purchase of property, plant and equipment (346 231) (401 052) and projects in progressPayments for purchase of investments (539 254)Payments for purchase of held for trading investments (1 000)Interest received 8 662 2 391Dividends received 154 207 76 801Net cash used in investing activities (184 362) (861 114)Cash flows from financing activitiesRepayment of borrowings & facilities relating to (174 240) (264 895) acquisition of property, plant and equipment and intangible assets.Repayment of other borrowings & facilities (1 414 608)Payments by minority for capital increase in 9 615 subsidiary companiesProceeds from long - term loans 29 531Proceeds from long - term bonds issued 2 000 000Change in banks credit accounts (201 832) (773 529)Repayment of financial lease obligations (11 358) (6 001)Payments of long-term obligations (346)Net cash used in financing activities (378 161) (429 502)Translation difference adjustments (86) (180)Net Increase (Decrease) in cash and cash equivalents during the 586 125 (678 310)periodCash and cash equivalents at the beginning of the period (29) 609 542 1 156 526Cash and cash equivalents at the end of the period (29) 1 195 667 478 216 The accompanying notes from No.(1) to No. (37) form an integral part of these financial statements. Consolidated Statement Of Changes In Equity For The Financial Period Ended March 31, 2006 Share Legal Other Revaluation Retained Translation Net Total equity Minority Total capital reserve reserves reserve earnings difference profit attributable interest equity adjustments to equity holders of the parent LE(000) LE(000) LE(000) LE(000) LE(000) LE(000) LE(000) LE(000) LE(000) LE(000) Balance as of 1/1/2005 17 112 149 322 347 4 308 086 16 819 415 281 (34) 1 025 167 23 199 815 17 940 23 217 755 Adjustments to retained earnings (11 742) (11 742) (11 742) Minority interest'sshare incapitalincrease 2 661 2 661 Transferred to reserves 51 390 410 014 (461 404) Dividends for the year 2004 (25 901) (548 312) (574 213) (834) (575 047)Adjustment to revaluation surplus of soldinvestments (10 005) 10 005 Reducing of other reserves against decrease in the land &other assetsaccording tothe Extra-ordinaryGeneral Assemblyresolution on21/9/2005 (1 723 339) (1 723 339) (1 723 339) Reducing the share capital according tothe Extra-ordinaryGeneral Assemblyresolution on21/9/2005 (41 433) 41 433 Transferred from minorityinterest dueto the changein capitalshareholdingpercentage 29 455 484 (484) Transferred to retained earnings 15 504 (53) (15 451) Translation differenceadjustments 9 9 18 (6) 12 Net profit for the year 2005 1 858 019 1 858 019 2 754 1 860 773 Balance as of 31/12/2005 17 070 716 373 766 3 036 194 6 814 403 611 (78) 1 858 019 22 749 042 22 031 22 771 073 Adjustments to retainedearnings (80) (80) (76) (156) Minority interest'sshare incapitalincrease ofsubsidiarycompany 9 615 9 615 Transferred to reserves 93 064 650 000 (743 064) Dividends for the year 2005 (1 394) (951 576) (952 970) (370) (953 340) Transferred to retained earnings 163 407 (28) (163 379) Translation differenceadjustments (24) (24) (1) (25) Net profit for the period 535 486 535 486 608 536 094 Balance as of 17 070 716 466 830 3 686 194 6 814 565 544 (130) 535 486 22 331 454 31 807 22 363 26131/3/2006 The accompanying notes from No. (1) to No. (37) form an integral part of these financial statements To access the accompanying notes to these financial statements from No. (1) to No. (37), please copy and paste the following link into your web browser: http://www.rns-pdf.londonstockexchange.com/rns/0698D_-2006-5-16.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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