PAKISTAN TELECOMMUNICATION COMPANY LTD.

CONTENTS

Board of Directors 2

4-5

Condensed Interim Financial Statements

8-9

10

11

12

13-15

Condensed Consolidated Interim Financial Statements

18-19

20

21

22

23-25

1st Quarter Report

 PAKISTAN TELECOMMUNICATION COMPANY LTD.

Board of Directors
Naguibullah Malik
Chairman PTCL Board
Secretary (IT & Telecom Division)
Ministry of Information Technology
Government of Pakistan
Islamabad.

Abdulrahim A. Al Nooryani
Chairman & Chief Executive Officer
Etisalat International Pakistan L.L.C
Executive Vice President (Contracts & Administration)
Etisalat, UAE.

Mushtaq Ahmad Bhatti

Member (Telecom)
Ministry of Information Technology
Government of Pakistan
Islamabad.

Khurshed Ahmed Junejo

Ambassador
Embassy of Pakistan
Abu Dhabi, UAE.

Salman Siddique
Secretary (Finance)
Ministry of Finance
Government of Pakistan
Islamabad.

Abdulaziz A. Al Sawaleh
Chief Human Resources Officer
Etisalat, UAE.

Fadhil Al Ansari
Executive Vice President (Engineering)
Etisalat, UAE.

Abdulaziz H. Taryam
General Manager (Northern Emirates)
Etisalat, UAE.

Dr. Ahmed Al Jarwan

General Manager/eRE
Etisalat, UAE.

Farah Qamar
Company Secretary

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PAKISTAN TELECOMMUNICATION COMPANY LTD.

Corporate Information
Management
Walid Irshaid
President & Chief Executive Officer

Muhammad Nehmatullah Toor

S.E.V.P (Finance) / CFO

Syed Mazhar Hussain

S.E.V.P (HR / Admin & Procurement)

Sikandar Naqi
S.E.V.P (Corporate Development)

Naveed Saeed
S.E.V.P (Commercial)

Muhammad Nasrullah
Chief Technical Officer (C.T.O)

Tariq Salman
S.E.V.P (Business Zone North)

Abdulla Yousef
S.E.V.P (Business Zone South)

Hamid Farooq
S.E.V.P (Special Projects)

Javed Mushtaq
Chief Information Officer (C.I.O)

Company Secretary
Farah Qamar

Legal Affairs Auditors

Zahida Awan A.F. Ferguson & Co.
Ghulam Mustafa Chartered Accountants

Ernst & Young Ford Rhodes Sidat Hyder

Bankers Chartered Accountants

Allied Bank Limited

Askari Bank Limited Registered Office
Bank Alfalah Limited PTCL Headquarters, Sector G-8/4,
Bank Al Habib Limited Islamabad-44000, Pakistan.
The Bank of Punjab Tel: +92-51-2263732 & 34
Citibank, N.A. Fax: +92-51-2263733
Dubai Islamic Bank E-mail: company.secretary@ptcl.net.pk
Faysal Bank Limited Web: www.ptcl.com.pk
Habib Metropolitan Bank Limited
MCB Bank Limited Share Registrar
Meezan Bank Limited M/s FAMCO Associates (Pvt.) Limited
National Bank of Pakistan Ground Floor,
NIB Bank Limited State Life Building No. 1-A,
Royal Bank of Scotland I.I. Chundrigar Road, Karachi - 74000
Silkbank Limited Pakistan
SME Bank Limited Tel: +92-21-32422344, 32467406 &
Standard Chartered Bank (Pakistan) Limited 32420755
United Bank Limited Fax: +92-21-32428310

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1st Quarter Report
 PAKISTAN TELECOMMUNICATION COMPANY LTD.

Directors' Report
The Directors are pleased to present their report together with the un-
audited financial statements of the Company for the three months ended
September 30, 2010.

During the period under review, PTCL Group revenue at Rs. 25.4 billion was
4% higher than the same period last year. However, because of
catastrophic floods in most part of the country, PTCL revenue at Rs. 13.9
billion declined by 4% during this period as compared to same period last
year. The attrition was mostly witnessed in revenue from PSTN,
International Business and Carrier & Wholesale segments. On the other
hand, revenue from Broadband services (wireline and wireless) showed
promising increase in this period.

The overall operating expenses during the period under review increased
by 9% compared to corresponding quarter last year. Main reason for the
higher expenses is the effect of increase in employees' compensation.
Accordingly, the Cost of Services increased by 9% and the Administrative
and General Expenses were higher by 5%. The Selling and Marketing
Expenses increased by 21% because of continued focus on enhancing
public awareness of various new packages introduced specially to promote
the Broadband services.

The Other Operating Income at Rs. 1.9 billion increased by 71%; main
reason being healthy returns on Company's investments and enhanced
availability of funds as is evident from decreased levels of trade debts
compared to the respective amount as of September 2009. Accordingly, the
better management of available funds also decreased the Finance cost by
46%.

During the quarter under review, your Company earned profit after tax of Rs.
2.1 billion (EPS Rs.0.41).

We are also pleased to report that Ufone, the wholly owned subsidiary of
your Company, maintained its high performance and growth in the cellular
sector and accordingly its revenue and profitability was 16% and 92%
higher respectively than the same period last year.

Taking cognizance of loss of business and infrastructure because of floods,

your Company’s employees made hectic efforts to restore its services even
at times risking their lives and also ensured that the targets to install new
connections and faults removal are achieved to the maximum even in these
trying times. As a result of the all out company-wide efforts, your Company
was successful in regaining the operational normalcy within the period
under review.

The Company introduced many new and exciting packages and historical
milestone was crossed by offering 10MB Broadband connection for the first
time in Pakistan. Besides, the speed of other Broadband packages was
increased many folds without extra burden to the consumers. To attract new
PSTN business, the installation charges for new connections were
substantially reduced; bundled packages for international dialing were
introduced and new campaigns like free telephone sets for new
connections during Ramadan and gift schemes for usage enhancement
etc. were launched.

In order to keep your Company fully abreast of the technological

advancement in telecom field PTCL further improved its networking and

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1st Quarter Report
PAKISTAN TELECOMMUNICATION COMPANY LTD.

infrastructure capabilities. A new Data Centre has been established in

Lahore which is similar to the one earlier set up in Karachi. Commensurate
with the launch of Rev-B technology for EVO wireless broadband, whereby
the internet speed has been tripled to 9.3 Mbps, the respective network in all
the major cities was upgraded. Further expansion in existing capacity of
DSL Broadband was carried out. Country-wide availability of bandwidth to
support the segment of Broadband (DSL and EVO) and Corporate Services
was enhanced by augmenting the Metro Ethernet Network. Major work on
phase II of Optical fibre (OFC) network was completed besides increasing
the OFC resilience in smaller cities. The Access Network in Greenfield
areas was expanded to provide for increased PSTN and Broadband
connectivity. To curb the menace of grey traffic, the project of Revenue
Assurance and Fraud Management based on latest available technological
solution is underway. Besides, work on various USF projects to provide
telecommunication facilities in rural and under developed areas is being
completed in line with the contractual obligations.

The management and employees of PTCL are committed to provide quality

services at competitive prices through optimal use of resources for
achieving enhanced revenue and improved shareholders' value.

On behalf of the Board,

Naguibullah Malik Walid Irshaid

Chairman PTCL Board President & CEO PTCL

Islamabad: October 27, 2010

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1st Quarter Report
feel the difference
Condensed
Interim
Financial
Statements
PAKISTAN TELECOMMUNICATION COMPANY LTD.

CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2010 (UN-AUDITED)

September 30, June30,

2010 2010
Note Rs ‘000 Rs ‘000
(Un-audited) (Audited)

The annexed notes from 1 to 13 form an integral part of these condensed interim financial statements.

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1st Quarter Report
 PAKISTAN TELECOMMUNICATION COMPANY LTD.

September 30, June30,

2010 2010
Rs ‘000 Rs ‘000
(Un-audited) (Audited)

Fixed assets

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PAKISTAN TELECOMMUNICATION COMPANY LTD.

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

September 30, September 30,

2010 2009
Rs ‘000 Rs ‘000

13

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 PAKISTAN TELECOMMUNICATION COMPANY LTD.

CONDENSED INTERIM STATEMENT OF CASH FLOWS

September 30, September 30,

2010 2009
Note Rs ‘000 Rs ‘000

10

11

13

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1st Quarter Report
 CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY

12
FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)

1st Quarter Report

PAKISTAN TELECOMMUNICATION COMPANY LTD.
 PAKISTAN TELECOMMUNICATION COMPANY LTD.

NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (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 01, 1996. The Company is listed on Karachi, Lahore and Islamabad
stock exchanges. The Company was established to undertake the
telecommunication business formerly carried on by Pakistan
Telecommunication Corporation (PTC). The business was transferred to the
Company on January 01, 1996 under the Pakistan Telecommunication (Re-
organization) Act, 1996 at which date the Company took over all the properties,
rights, assets, obligations and liabilities of PTC except those transferred to
National Telecommunication Corporation (NTC), Frequency Allocation Board
(FAB), Pakistan Telecommunication Authority (PTA) and 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 to territories of
Azad Jammu & Kashmir and Gilgit-Baltistan.

2. Basis of preparation

These condensed interim financial statements are unaudited and are 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'. These condensed interim financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the annual
audited financial statements of the Company for the year ended June 30, 2010.

3. Significant accounting policies

The accounting policies adopted in the preparation of these condensed interim

financial statements are the same as those applied in the preparation of annual
audited financial statements of the Company for the year ended June 30, 2010.

4. Accounting judgement and estimates

The preparation of financial statements 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
Company's 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 prevailing circumstances.

Estimates and judgements made by the management in preparation of these

condensed interim financial statements are the same as those used in the
preparation of annual audited financial statements of the Company for the year
ended June 30, 2010.

5. Contingencies and commitments

5.1 Contingencies

There has been no material change in contingencies since the last annual
audited financial statements of the Company.

5.2 Commitments

Commitments in respect of contracts for capital expenditure amount to Rs.

15,280,902 thousand (June 30, 2010: Rs. 14,127,643 thousand).

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PAKISTAN TELECOMMUNICATION COMPANY LTD.

September 30, June 30,

2010 2010
Rs ‘000 Rs ‘000
(Un-audited) (Audited)
6. Property, plant and equipment
7

7. Operating assets

7.1

8. Long term loans

This includes unsecured loans of Rs. 11,000,000 thousand (June 30, 2010:
Rs. 7,000,000 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 instalments commencing after a
grace period of 3 to 4 years by 2015 and carry mark-up at the rate of three
months KIBOR plus 82 to 180 basis points.

September 30, September 30,

2010 2009
Rs ‘000 Rs ‘000
(Un-audited) (Un-audited)
9. Transactions with related parties

9.1

September 30, June 30,

2010 2010
Rs ‘000 Rs ‘000
(Un-audited) (Audited)

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 PAKISTAN TELECOMMUNICATION COMPANY LTD.

9.1 This represents PTCL's 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 group's consolidated annual
revenue.

September 30, September 30,

2010 2009
Rs ‘000 Rs ‘000
(Un-audited) (Un-audited)
10. Cash generated from operations

Effect on cash flows due to working capital changes:

11. Cash and cash equivalents

12. Date of authorisation for issue of financial statements

These condensed interim financial statements were authorised for issue on

October 27, 2010 by the Board of Directors of the Company.

13. General

Figures presented in these condensed interim financial statements have been

rounded off to the nearest thousand rupees.

15
1st Quarter Report
 1. The most robust & capable network 6. Only service provider to introduce interactive IPTV
2. Biggest Network – 1000 cities 7. Quadplay packages offering IPTV, Broadband, PSTN & online security surveillance
3. Most flexible bandwidth packages 8. Online “BUZZ” gaming and infotainment portal
4. Economical student packages for online education 9. “Easy Learning”- education portal with internationally recognized diploma
5. The largest satisfied customer base 10 . 10 Mbps with true download & upload speeds like no one else

For subscription or activation call 0800 8 0800

Pakistan Telecommunication Company Ltd. feel the difference

www.ptcl.com.pk
Condensed
Consolidated Interim
Financial Statements
PAKISTAN TELECOMMUNICATION GROUP

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

AS AT SEPTEMBER 30, 2010 (UN-AUDITED)

September 30, June 30,

2010 2010
Rs ‘000 Rs ‘000
(Un-audited) (Audited)

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

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1st Quarter Report
 PAKISTAN TELECOMMUNICATION GROUP

September 30, June 30,

2010 2010
Note Rs ‘000 Rs ‘000
(Un-audited) (Audited)

Fixed assets

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PAKISTAN TELECOMMUNICATION GROUP

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)

September 30, September 30,

2010 2009
Rs ‘000 Rs ‘000

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

20
1st Quarter Report
 PAKISTAN TELECOMMUNICATION GROUP

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)

September 30, September 30,

2010 2009
Note Rs ‘000 Rs ‘000

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

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1st Quarter Report
 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

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1st Quarter Report
PAKISTAN TELECOMMUNICATION GROUP

The annexed notes from 1 to 10 form an integral part of these condensed consolidated interim financial statements.
 PAKISTAN TELECOMMUNICATION GROUP

NOTES TO AND FORMING PART OF THE CONDENSED CONSOLIDATED

INTERIM FINANCIAL STATEMENTS
FOR THE QUARTER ENDED SEPTEMBER 30, 2010 (UN-AUDITED)
1. Constitution and ownership

The consolidated financial statements of the Pakistan Telecommunication

Group ("the Group") comprise of the financial statements of:

Pakistan Telecommunication Company Limited (PTCL)

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 of Azad Jammu & Kashmir and Gilgit-Baltistan.

Pak Telecom Mobile Limited (PTML)

PTML provides cellular mobile telephony services throughout Pakistan under

the brand name of Ufone.

Maskatiya Communications (Private) Limited (MAXCOM)

MAXCOM provides broadband services in the cities of Karachi & Hyderabad.

2. Basis of preparation

These condensed interim financial statements are unaudited and are 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'. These condensed interim financial
statements do not include all the information and disclosures required in the
annual financial statements and should be read in conjunction with the annual
audited financial statements of the Group for the year ended June 30, 2010.

3. Significant accounting policies

The accounting policies adopted in the preparation of these condensed interim

financial statements are the same as those applied in the preparation of annual
audited financial statements of the Group for the year ended June 30, 2010.

4. Accounting judgement and estimates

The preparation of financial statements 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
Group's 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 these

condensed interim financial statements are the same as those used in the
preparation of annual audited financial statements of the Group for the year
ended June 30, 2010.

5. Contingencies and commitments

5.1 Contingencies

There has been no material change in contingencies since last audited financial
statements of the Group.

5.2 Commitments

Commitments in respect of contracts for capital expenditure amount to

Rs.26,584,279 thousand (June 2010: Rs. 18,967,439 thousand).

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PAKISTAN TELECOMMUNICATION GROUP

September 30, September 30,

2010 2009
Rs ‘000 Rs ‘000

non-cash charges & other items:

Effect on cash flows due to working capital changes:

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 arm's length basis in a manner similar to
transactions with third parties.

8.1 Revenue information regarding the Group's operating segments for the quarter
ended September 30, 2010 and 2009 is tabulated below:

Rs ‘000 Rs ‘000 Rs ‘000

8.1.1 Inter segment revenues are eliminated on consolidation.

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PAKISTAN TELECOMMUNICATION GROUP

8.2 Assets & liabilities of the Group's operating segments as at September 30,
2010 and June 30, 2010 are tabulated below.

Rs ‘000 Rs ‘000 Rs ‘000

9. Date of authorisation for issue of financial statements

These condensed interim financial statements were authorised for issue on

October 27, 2010 by the Board of Directors of the Group.

10. General

Figures presented in these condensed interim financial statements have been

rounded off to the nearest thousand rupees.

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Notes

1st Quarter Report