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Financial Reports

  Annual Report of the Board of directors for the year    ended 31 december 2008
  Statement of the Directors’ Responsibility for the    preparation of Financial Statements
  Audit Committee Report
  Independent Auditors' Report
  Income Statement
  Balance Sheet
  Consolidated Statement of Changes in Equity
  Cash Flow Statement
  Notes to the consolidated Financial Statements
  Ten Year Progress
 
 
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16. Intangible assets
Group Goodwill Licences Software Others Total
           
At 1 January 2007          
Cost 388 602 738 764 2,492
Accumulated amortisation and impairment (247) (77) (93) (487) (904)
Net book amount 141 525 645 277 1,588
Year ended 31 December 2007
Opening net book amount 141 525 645 277 1,588
Additions at cost 222 222
Amortisation charge (14) (112) (70) (196)
Closing net book amount 141 511 755 207 1,614
At 31 December 2007
Cost 388 602 960 764 2,714
Accumulated amortisation and impairment (247) (91) (205) (557) (1,100)
Net book amount 141 511 755 207 1,614
Year ended 31 December 2008
Opening net book amount 141 511 755 207 1,614
Additions at cost 6 144 438 295 883
Amortisation charge (60) (190) (82) (332)
Closing net book amount 147 595 1,003 420 2,165
At 31 December 2008
Cost 394 746 1,398 1,059 3,597
Accumulated amortisation and impairment (247) (151) (395) (639) (1,432)
Net book amount 147 595 1,003 420 2,165
 
Company Goodwill Licences Software Others Total
At 1 January 2007
Cost 272 330 602
Accumulated amortisation and impairment (49) (293) (342)
Net book amount 223 37 260
Year ended 31 December 2007
Opening net book amount 223 37 260
Additions at cost 210 210
Amortisation charge (64) (30) (94)
Closing net book amount 369 7 376
At 31 December 2007
Cost 482 330 812
Accumulated amortisation and impairment (113) (323) (436)
Net book amount 369 7 376
Year ended 31 December 2008
Opening net book amount 369 7 376
Additions at cost 393 393
Transferred to related company (1) (1)
Amortisation charge (131) (5) (136)
Closing net book amount 630 2 632
At 31 December 2008
Cost 874 330 1,204
Accumulated amortisation and impairment (244) (328) (572)
Net book amount 630 2 632
           
Goodwill
As stated in Accounting Policy 2.6 (a), the Company has measured goodwill acquired in business combinations at cost less accumulated impairment losses. Such accounting policy has been prospectively applied with effect from 1 January 2006 in conformity with Revised SLAS 25 - Business Combinations. Others As explained in Accounting Policy 2.6 (d), insurance premium paid by the Company to secure foreign loans under the 150K Project Scheme has been deferred on the basis that the benefit of this expenditure is not exhausted in the period in which it is incurred and will be written off to the income statement over a period of 10 years. Impairment tests for goodwill

Goodwill is allocated to the Group’s Cash-Generating Units (CGUs). A summary of the goodwill allocation is presented below:
  2008 2007
Mobitel (Pvt) Limited 141 141
Sky Network (Pvt) Limited 6
Total 147 141
 
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates.

The key assumptions used for value-in-use calculations are as follows:
  Mobitel (Pvt)
Limited
Sky Network
(Pvt) Limited
Gross margin 75% 75%
Growth rate 29% 80%
Discount rate 20% 20%
 
Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments. No impairment charge has been recognised for the year ended 31 December 2008 for the above CGUs (2007 - Rs. Nil).
 
 
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