Nt c Annual 2007 | Short Message Service | Roaming

Bridging the Rural and Urban Gap

Committee Members
Kanhaiya Lal Gupta (DMD) Nara Narayan Manandhar (Manager) Narahari Das Joshi (Manager) Surya Bhakta Pokharel Ananta Man Singh Ram Prasad Upadhyaya Pratibha Vaidya Surendra Nath Bastola Rajesh Joshi Padma Raj Karki Jinendra Manandhar Dinesh Kumar Regmi Umesh Karna

2O

ANNUAL REPORT

7

Nepal Doorsanchar Company Limited
Center Office, Bhadrakali Plaza, Kathmandu, Nepal Tel: +977 1 4 210202, 4210301, Fax: 4 226260

Nepal Telecom
www.ntc.net.np

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000 PSTN subscribers. we need to keep a close eye on this changing condition of environment and build a strong Nepal Telecom capable to serve and satisfy ever increasing expectation of our valued customers through a balance of "quantitative expansion" .000 CDMA subscribers and 25. I take this opportunity to express my hearty thanks to all Nepal Telecom family and well-wishers for their valuable contribution to the organization. 12. "qualitative enhancement" and price comfort ability for all the services we offer. Hence. in Nepal Telecom. By the end of the year 2006/07. which made Nepal the first country in South Asia to introduce 3G mobile (WCDMA) service. The result was investment decisions amounting to more than Rs1200 crores in the past four years resulting cumulative total investment of Rs 4400 crores in the year ending Ashad 2064. Sugat Ratna Kansakar Managing Director Nepal Telecom c2 1 . Similarly. Finally. including remotest villages. Until the year 2002/03. which is sure to bring revolutionary changes in the socio-economic life-style in those remote villages. This demands not only sincere commitment from the entire workforce of the company. knowledge and attitude to get the job done in time . expansion of PSTN and value added services) we have undertaken in all sectors of services. the Nepalese.5 million GSM. Increase in productivity is also indicated from the fact that staff per 1000 lines has decreased from 13 in the year 2002/03 to 3 by the end of the year 2006/07. Nepal Telecom had 5. In Nepal Telecom.000 mobile subscribers. and accordingly Nepal Telecom has initiated steps to go along with fast-paced technological development in the rest of the world. out of total 75 districts. We. 71 districts are being served with CDMA system and 55 districts with GSM mobile. Consequently. more than 50% of VDCs did not have any kind of telecom services. As per this strategy. In order to diffuse the possible challenges and harness the opportunities. more effective and truly inspiring leadership and follow better management practices and principles to take the organization with better business practices that foster market growth and above all to prove to our nation and society that we. with a new vigor and with “value-driven” broader corporate purpose. have also come to believe strongly that growth in telecom infrastructure will greatly contribute in the economic progress of the country. The operating revenue of the company increased from about Rs 720 crores in the fiscal year 2002/03 to Rs 1300 crores in the fiscal year 2006/07. the Nepal Telecom family has decided to play an important role in the nation building endeavor by rapidly deploying all kinds of telecom services throughout the country. Similarly. The ultimate goal of "Mission 2010" is to achieve the set target of our 3 year development program (additional new 3. Nepal Telecom alone succeeded to increase total tele-density to the present ratio of 7.VDCs with telecom service increased from 1900 to 2850. To achieve our sustained business growth we all must realize that the coming 3 years are extremely crucial and of great significance in shaping up our organization's future through "Mission 2010". This means 71 districts and about 2006 VDCs have connectivity for both voice and Internet access. 3. Presently.8%. can also be as successful as any country of the world in effectively managing big organizations like Nepal Telecom. triple play service. tele-density was just 2% with huge gap between supply and demand of telecom services in urban as well as rural areas.to provide stronger.Contents Message from the Managing Director Board of Directors Introductory Profile Comparative Growth Financial Highlights Activities Organization Chart Financial Section Telecom Services Farewell to Senior Executives 1 2 3 4 5 6 16 19 32 32 The existing ICT (Information and Communication Technology) scenario in the country clearly shows that the Nepalese telecom market is poised for significant growth. Nepal Telecom introduced 3G Mobile (WCDMA) in the first quarter of the year 2007. broadband service. but also it is highly desired from the top and mid-level management to demonstrate the skill.19. in the same period. On urban front.000 Internet subscribers. Nepal Telecom is equally aware of ever-increasing demand for latest technologies and newer services. attain 2 million CDMA. Financial and economic sustainability of the company could be easily judged as “comfortable” due to the fact that net profit available for appropriation has increased from Rs 300 crores in the fiscal year Message from the Managing Director 2002/03 to about Rs 600 crores in the year 2006/07. A clear sign of tougher competitive environment is emerging.11. we pride ourselves on the timely forecast of the scale of business opportunities few years back and subsequently embarking upon the vision of having big-sized telecom infrastructure projects catering both urban and rural markets.20. My special thanks goes to our valued customers for their encouraging support to bring Nepal Telecom to its present status as a leading telecom operator in Nepal. and host of other value-added services are in the offing in near future.

the Company name was officially effective from 1st Baisakh 2061(13th April 2004) and is also known to general public by the name NEPAL TELECOM as registered trademark. Sushil Ghimire Joint secretary. Kumar Jang Karki Business Officer Nepal Telecom Nepal Doorsanchar Company Limited (Nepal Telecom) was registered on 22th Magh 2060 under company act 2053 and the notice to this effect was published in Nepal Gazette dated 26th Chaitra 2060. Bhesh Raj Sharma "Nepal Telecom." Member Mr. as a progressive. is committed to provide nation-wide reliable telecommunication services to serve as an impetus to the social. Yuba Raj Pandey Mission Member Mr." Vision "Vision of Nepal Telecom is to remain a leading player in telecommunication sector in the country while also extending reliable and cost effective services to all. Bimal Prasad Wagle Joint Secretary Ministry of Finance Member Mr." Board of Directors Secretary Ministry of Information & Communication Chairman Mr. However. political and economic development of the country. Nandan Hari Sharma Executive Director Citizen Investment Trust Member Mr. after dissolving then Nepal Telecommunications Corporation (NTC). customer spirited and consumer responsive entity. Ministry of Law Justice & Parliamentary Affairs Member Mr.Goal NEPAL TELECOM "Goal of Nepal Telecom is to provide cost effective telecommunication services to every nook and corner of the country. Nepal Telecom Annual Report 2007 3 2 Nepal Telecom Annual Report 2007 . Sugat Ratna Kansakar Managing Director Nepal Telecom Joint Secretary Ministry of Information & Communication Member Mr.

86 225 72 602252 485997 316546 3140 622737 23579 2322 1.Comparative Growth Human Resource Approved post Man power per 1000 line of PSTN Manpower per 1000 line (including mobile) Working man power 2001/02 6001 14.57 19% Rs In Million of Rs Technical Complaints per 100 Line Installed telephone exchanges Districts having exchanges Installed telephone lines Distributed telephone lines Waiters International circuits in operation Mobile Subscribers CDMA Subscribers MARTS Subscribers Telephone Penetration (PSTN) Telephone Penetration(Overall) 2001/02 7.02 231 72 656070 509873 3423 909483 161155 2014 1.160 25281 14% 6% 63% 37% 2002/03 7.72 15% 2004-05 8584 610 4922 3701 5876 9040 24 20826 57% 40% 12268 6107 1. Nepal Telecom Annual Report 2007 5 4 Nepal Telecom Annual Report 2007 .4% 2005/06 8.8% 62% 38%% 2003/04 8312 33221 15% ( 5% ) 68% 32% 2004/05 8584 35572 18% 24% 66% 34% 2005/06 10414 39351 19% 24% 67% 33% 12000 Including inter-administration Excluding Inter-administration 160 102 147 102 127 95 In days Operating Revenue and Operating Expenses Operating Revenue Operating Expenses 10414 Total fixed & Current Assets Capital Work in Progress Net Current Assets Net Fixed Assets 12000 In Millions Rupees In Millions Rupees 10000 8584 10000 8000 6000 4000 2000 0 2452 5876 10088 9040 6861 8000 6000 4000 2000 0 2004/05 4272 4215 2443 Source Wise Revenue Composition of Nepal Telecom (F.National Revenue Contribution .40% - 2002/03 7.88% 4. 2005 / 06) Fiscal Year 2005/06 2004/05 Fiscal Year 2005/06 Equity & Borrowed Fund Loan Equity & Reserve 23686 Net profit before tax & Net Profit after tax Net profit before tax Net profit after tax 6844 25000 7000 In Millions Rupees 20000 15000 10000 5000 0 24 In Millions Rupees 20826 6000 5000 4000 3000 2000 1000 0 4922 4937 3542 0 2004/05 Source Wise Revenue Composition of Nepal Telecom (F.44 231.76 5.69 171 67 445537 371816 319514 1306 50367 3001 1. 2005/06) Fiscal Year 2005/06 2004/05 Fiscal Year 2005/06 Note: Currency in Graph are in Millions of Nepali Rs.40 0.001 395.05 5717 2005/06 6984 11.93% 7.60 0.79 2.) Total Assets (in Million Rs.International 2001/02 6.83 4772 2003/04 5759 12.80% - 2003/04 7.69% 2004/05 6. Reserve & Surplus Operating Profit Ratio Net Profit Ratio Operating Revenue/DEL Operating Expenses/DEL Current Ratio Debt / Equity Ratio Debt service Coverage Ratio Return on Investment Debt Collection 8312 543 4551 2524 7584 8094 11 20580 55% 34% 14192 7345 1.001 17.) Return on Investment Increase in Net Profit Revenue Contribution .83 18% 2005-06 10414 645 6844 4593 6861 10088 0 23686 66% 42% 8972 3632 1.59 8.208 29893 16% 34. 2005 and 2006 2003-04 Operating Revenue Non -Operating Revenue Net Profit before Tax Net Profit Available for Appropriation Net Current Assets Net Fixed Assets Long-term Debts Total Equity.Y.77% Financial Operating Revenue (in Million Rs.34 151 66 389400 327673 317293 1100 21881 2958 1.Y.38 5709 2004/05 6095 11.2 204 71 552057 453475 314406 2606 227316 2659 1.18 3.61 5699 Financial Highlights For the year ended in mid July 2004.3 4687 2002/03 6000 12.

through IVR service dialing 1609 or by sending SMS to 1455. 200. Point Of Sales recharge option requires a special POS machine which is GPRS enabled or CDMA data service enabled. Information about the songs such as artist name.7% to 16% with the population coverage of about 45%. CRBT Catering to the growing public demand for new mobile services. 5 per minute while using IVR service for registration or downloading the songs and Rs 1 per SMS. i. When there is an incoming call. In the near future. All the information regarding the registration process is available in Nepal Telecom’s Home page www. the Western Development Region (WDR). Birgunj. 200. NT has a total of 12. GSM GPRS To serve its valued customers with the latest technologies in its services. even of Rs 10 or Rs12 etc. CRBT is set on the mobile number of the called subscriber. Network II and Network III and shall be implemented fully on turn-key basis. such as recharging through ATM Booths.The tariff for GPRS service includes an initial one time activation charge of Rs.np The registration of CRBT service is completely free. as per the amount received from the customer. On successful registration. a piece of music. 600 for unlimited data access and a charge of Rs 4 per multimedia message. commercial centers and highways within the respective development regions. as done previously for applying for the service. NT introduced Caller Ring Back Tone (CRBT) service for its postpaid and prepaid mobile users of Kathmandu valley from 15th Falgun 2063. The subscribers are required to submit the slip or give details printed on the slip when the Pre-paid mobile lines are issued. To date there are currently about 140. subscribers from NT can roam into 73 different networks outside Nepal). such as Rs 100. subscribers from 116 networks from different countries can roam in Nepal). Registration of CRBT service can be done through NT's website.000 mobile subscribers in the country and its demand has been growing tremendously since the past few years. In future.19. Currently two operators namely Honey Enterprises and Music Nepal are providing caller ring back tones for Nepal Telecom GSM mobile users under contract on revenue sharing basis. One can also purchase and gift ring back tones to their near and dear ones.The remaining parts of the country. the Internet. NIB ATM card holders can now retrieve the mobile Recharge PIN Code worth Rs.e. NT has 116 inbound roaming partners (i. a slip appears on the screen with details of registration. Nepalgunj.The Recharge retailer should have the POS machine with username and password to access the service provider's server through the Internet. Initially the service was started in Kathmandu valley. i. Rs 500 or Rs. or music clips can be purchased and downloaded online from the web at the rate of Rs. Using the Internet. Previously recharging was done merely by recharge cards. NT has bilateral roaming with 73 partners (i.net. NT started this service from 2001 and currently NT has agreements with 136 partners in 41 countries for international roaming service and about 20 partners in 15 countries are in queue for new agreements. Using the ATM Booth option. instead of the previously monotonous “dudu” sound. which will allow retailers of NT to sell recharge card coupons of any denomination. Similarly. song category and price of the song can be viewed on the web or can be requested through IVR or SMS. Nepal Telecom Annual Report 2007 7 Online Registration for GSM Prepaid Service To ease and facilitate its valued customers. Banepa. NAMASTE Mobile users holding Nepal Investment Bank ATM cards can now recharge their mobiles using NT's Electronic Recharge Card Service. emails. NIB also offers buying of recharge card number online. major towns.e. the demand for recharging these prepaid mobile phone accounts also became ver y high. Point of Sales. postpaid mobile users can access the internet. the service provider can only sell recharge card coupons of standard denominations. Out of these 116 partners. Call rate is Rs. TV and send & receive multimedia messages online on their mobile sets. Since then the service has been expanded to various cities throughout the country. Favourite hit songs Caller Ring Back Tone International Roaming Service International Roaming Service is one of the added features of GSM technology which enables a subscriber to roam around the world with a single subscription in the Home Public Mobile Network (HPMN). In the current 11th Plan. 10 per song/music clip and the validity period of each song or music clip is15 days from the date of purchase. NT intends to expand the existing GSM network by adding another 3.5 millions subscriber lines to make the GSM penetration from the current 2. Each network shall cover the district headquarters. etc. The project has been divided into three different regions namely. Mid-Western Development Region (MWDR) and Far-Western Development Region (FWDR) whereas Network III shall cover Eastern Development Region (EDR). this year NT introduced on-line registration applications for GSM NAMASTE Pre-paid mobile lines. advertisement or message preset by the called subscriber will be played to the calling party before the called party picks up the phone. But now NT has facilitated its valued subscribers by opening various new options for recharging their prepaid mobile phone accounts.e. Using GPRS service. Network I.The retailer collects cash from NT customer and after entering a valid username and password requests the POS machine to print the recharge card number. he or she can login from the NIB bank website and purchase recharge cards of standard denominations offered by NT. after notice for the same is published on the daily newspapers. NT introduced General Packet Radio Service (GPRS) to its postpaid mobile users from 15th Falgun 2063. 6 Nepal Telecom Annual Report 2007 . 1000 from their nearest ATM booths. whenever they want it. Dhulikhel and Panauti. Registration from the web is very easy and it provides lots of options for the users to personalize their CRBT account.e. A total of 253 BTSs have been installed in the Kathmandu Valley and 317 BTSs in Biratnagar. all the inbound roaming partners will be converted into bilateral roaming partners extending coverage throughout the world. Using the above mentioned options. the caller hears the caller ring back tone set in the system by the called party. The access to the internet is available from the POS machine and hence there is no need to have a separate computer to access the internet. The expansion project has a provision of 5% WCDMA services as per 3GPP standards. i. Network II shall cover three development regions i. GSM Mobile Network Expansion NT started GSM cellular Mobile Service in the year 1999.e. If a subscriber of NT has a NIB bank account with Internet banking facility. Normal registration forms can be submitted at the concerned Telecom offices also.. Dhangadi and Pokhara region to expand its network. NT is planning to operate USSD gateway service provider.e. Bhairahawa.ntc. At present.Activities GSM Electronic Recharge Service After the successful commercial launch of GSM NAMASTE prepaid mobile service. the Central Development Region shall be covered by Network I. monthly rental of Rs. with the existing network elements and new expansions. 100. 000 subscribers of CRBT service.. no matter where they are. 500 and 1000.

Such results can also be queried from NT's PSTN or mobile set through IVR service just by dialing 1600. 2064).International Credit Card PSTN VMS PSTN VMS service was put into operation on 3rd Jestha. NT's 188 IVR Service In December 2007.net. Though initially for the first time in NT's history. by sending SMS to 1400. FM stations. Nepal Telecom is expanding its Internet Gateway Backbone link by connecting with Bharti Airtel via Bhairahawa. from 10:00 am to 6:00 pm. Moreover.000 PCC Service Activation License Capacity (with generation license capacity 5 times that of activation license capacity) was done on 14th August 2007(Shrawan 29. airlines. At present. At present. From 2063 this service has been extended to 10 + 2 Results as well with the dialing number 1601.The results' query service is also available through NT's mobile SMS service. NT had to resort to door to door marketing for the service. It is possible to make international calls via this service to all countries of the world by using international credit cards (like VISA. large business houses and organizations. Media publications. The system has been extended all over the country. which is thriving throughout the country. In order to enhance the Internet system. Implementation of addition of 200. a new tender for Internet Billing System has already been floated which will take care of the billing needs of all the services related to Internet services. It is expected that this leased bandwidth will reach 140 Mbps by the end of this fiscal year. NT introduced "VOIP call Complain" (188) Service allowing our valued customers to complain about telephone numbers used for illegal services for incoming and outgoing International calls. the scheme has not affected the traffic volume of calls to USA and Canada through Budget Calls (using international access code 1425 and 1445) and ISD Calls (using international access code 00).). 2006). Also now you can query results online with the mark sheet as well. PSTN fault complaint registration "198 Service" To provide good quality service to its valued customers. A new access code 1424 for introduced for this scheme with a pulse rate of Rs 1/7. NT is planning to extend such cheap rate calls to other countries apart from USA and Canada in the near future. Both of these services do not require any human operator. NT requests the general public to register complaints dialing 188 when telephone number of Nepal is displayed on the Caller ID of their telephone sets when receiving an international call from abroad. NT has been publishing SLC results ONLINE on its website www. The target customers of this "BluePhone" service are the foreign travelers. 7 days a week. The complain is then immediately dispatched to the fault recovery team using Automatic Fault Retrieval & Handling Service "192 IVR Service". NT has more than 14. there are 6 terminals inside the Tribhuvan International Airport (TIA) and one terminal in the Domestic Airport in Kathmandu. Expansion of Prepaid Calling Card (EasyCall) Service With the increase in the popularity of Prepaid Calling Cards and its growing demands. its subscribers have more than doubled in number (increased from 22 to 54). As a matter of fact the number of calls nearly doubled in the second month of its launching. in September 2006. In addition. etc as well as social organizations are also among the other popular subscribers of this service. implementation of addition of 20 CAPS in system was carried out on 16th August 2007 (Shrawan 31. Nepal Telecom Annual Report 2007 9 8 Nepal Telecom Annual Report 2007 . Likewise. etc. In order to meet the ever increasing demand of Internet bandwidth. free of charge. Internet Services and Data Network Result Query through NT’s various services Since the past four years. now its subscription rate is gaining the tempo and as a result in the past one year only. hence giving 24 hours' service. EasyCall Prepaid Calling Cards NT Introduces cheap calls to USA and Canada NT introduced a new scheme for calling USA and Canada at extremely cheap rates @ Rs 8 per minute using Prepaid Calling Cards (EasyCall) starting from 1st Ashoj 2064 (18th September 2007).np. The instructions for making such call are available in a number of international languages and are provided near the terminals. Initially 16 Mbps link has been provisioned which will be upgraded to STM-1 by the end of this fiscal year. The scheme has proved to be very popular and its call volume is increasing rapidly. banks. a Contract was signed for additional 200.000 Activation License Capacity (with generation license capacity 5 times that of activation license capacity) for PCC service and addition of 20 CAPS in system on 31st July 2007 (Shrawan 15. From April 2007 NT has started international credit card call facility in a joint venture with BBG Holdings Limited.000 dial-up customers. process has been initiated for provisioning of one more STM-1 link by the end of this fiscal year. Customers just have to dial 198 and follow the voice prompt instructions to register the fault complaint of their PSTN fixed phone line.ntc. 2064). It has indeed generated additional 75% call traffic to USA and Canada through EasyCall cards. Available services in PSTN VMS system • Voicemail Service • Fax mail service • Voice/Fax mail service • Notice Board service NT plans to distribute Notice Board service in the near future for the following services: • Foreign Exchange Rates updates • Daily gold/silver price updates • Daily weather updates • Flight schedules/updates for airlines • Daily Stock exchange price updates • Daily wholesale prices of vegetables and fruits • Recorded News of FM and radio stations • Recorded Programs of FM. there are about 90 leased line connections that use up about 44 Mbps of bandwidth. MasterCard. Based on these complaints NT can curb people who are causing huge revenue loss to NT as well as the Government of Nepal. NT introduced automatic PSTN fault complaint registration "198 IVR Service". It has been a major requirement especially for the money transfer businesses. TV stations • Currently Running picture updates for cinema halls • Similar type of offices can use it for their business and public services Notice message can be heard by dialing special access codes.5 seconds' pulse. The service is free of charge. 2064). Other business sectors like manpower/education consultancies.The current system capacity is 2 Lakhs and its final capacity is 5 Lakhs subscribers. Moreover. 2063 (17th May. Blue Phone Advanced FreePhone Service (AFS) gaining popularity Nepal Telecom's Advanced FreePhone (Toll-Free) Service is gaining major popularity these days.

mobile directory. DSL. Besides. NGN technology is based on packet switched transport network and employs the concept of “Open Architecture” by the use of IP technology. NT introduced fund raising program for the flood victims via SMS to 1410 and 1450. Since trainings are an important part of every institution. customers’ telephone devices will be physically connected to the multi-service access node called Access Gateway (AG) that will be installed at different appropriate locations. foreign currency exchange rates. SMS chats. for transport medium/backbone. Proposed Next Generation Network Telecom Training Centre Activities Telecom Training Centre was established in the year 2033 B. national.The PSTN and GSM network or other operators with TDM (circuit switched) technology will be connected to NGN Trunk gateway and Signaling gateway via N7-signaling. CDMA and GSM technologies to its fixed and mobile subscribers. Charges of these value added services are different for different services provided by various content providers.S with the joint effort of International Telecommunication Union and NT. sports. transaction enquiry. data services and high bandwidth video streams over IP.The program was very much successful and Nepal Telecom collected a fund amounting to Rs 7. Data and Video services SMS VAS system In its continuous effort to provide latest value added services to its customers. etc. SMS polls. NG-SDH has already been deployed outside Kathmandu Valley and the IP core backbone is being designed for Kathmandu valley. games. International news). even meager contributions of Rs 10 and Rs 50 was thus made possible by sending SMS to 1410 and 1450 respectively. Deployment of NGN will provide unified resources for voice and multi-media communications. Using SMS VAS system.768 which was deposited in the prime minister’s relief fund account for the flood victims on 2064-06-09 At present. Interactive Voice Response (IVR) service and Intelligent Network (IN) services such as Prepaid-Calling-Card (PCC) service. NT plans to implement a new convergent system for billing and customer care. Some of these services such as banking services are non revenue sharing based services. SMS VAS provides • informational services such as daily horoscopes. Ever since. weather forecasts. The first three years of the 11th Plan covers the implementation of Next Generation Network (NGN) to expand around 500K voice and 125K DSL lines and deploy various access nodes throughout the country. etc. as their salary is deposited in the bank is another example of SMS VAS which has been successfully tested. With the transformation from a corporation to a company. the system will provide more Information and entertainment based Services such as telephone directory. The AG is a kind of media gateway that provides multi-service capability to customers and supports Voice. Basic components of NGN are Soft-switch. NGN has emerged as an alternative technology for replacing Public Switched Telephone Network.The new billing system will have integrated common platform for pre-paid and postpaid subscribers and billing will be done on real time basis. Using the SMS VAS system. AdvancedFreephone (AFS) service. which gives security to adapt to change and induces wisdom & power to take advantage of the opportunities that change creates. The training offered learning solutions to assist professionals and organizations in achieving sustained superior performance through individual and group effectiveness. By introducing such a scheme. NT has launched mobile to mobile SMS VAS for GSM mobile users. etc • Entertainment Services such as SMS contests.Next Generation Network As per the framework of the currently running 11th Plan. Recently. users can send text messages to the assigned short message number to access and subscribe various Value Added Services. NT is using separate transport networks like TDM transport and Packet switched transport network. the need for transformation in the attitude of NT's workforce towards work in office and at home is highly crucial. which is not cost effective from CAPEX and OPEX point of view. Signaling Gateways. For voice and data services. NT plans to increase its basic telephony penetration by around 4% and to provide broadband services in the form of High Speed Internet (HSI). etc • Promotional & Broadcast Services such as product and service promotion broadcasts. The system also provides interactive SMS queries. HomeCountry-Direct (HCD) service. Interface from content provider to NT SMSC is IP based and interface from SMSC to customers is SS7 based. PSTN-Credit-Limit (PCL) service. transaction alert. news updates (breaking news. In addition. In order to enhance its customer care services. NT is providing voice services via PSTN. song dedication on radio /TV channels. In future. fax. As such. For NGN deployment. Media Gateways. The training reveals a step by step framework for living and working on the basis of fundamental principles or natural laws. NT's highly reliable and resilient IP Backbone network will play a vital role for providing connectivity between all network elements of NGN across the country.35. Keeping this in mind. • Customization Services such as ring tones. calendar services. Core routers and LAN Switches. for the first time. the new network will have various facilities like Customer Self-Care service via the web and via IVR. NT also provides internet service to its fixed/mobile subscribers and data services to corporate customers via leased lines. Logos. every employee has been trained regularly to update their skills and knowledge in order to strengthen NT in this competitive environment. • SMS banking such as balance enquiry. based upon the contract made between the content provider and NT on revenue sharing basis. It has been providing other Value Added Services (VAS) like Voice Mail (VMS) service. Birthday alerts. At present. Telecom Training Center conducted special trainings on "Seven Habits of the Highly Effective People” for NT's senior management officers. TTC has been conducting regular Technical and Management trainings for new recruits and working employees to enhance the service quality of NT. Event based SMS polls. product and service promotion contests. Benefits of NGN technology: • common network for “transport” and “access” of voice/data/video • open architecture to expand various components • convenient and easy addition of third party enhanced/supplementary services in the application layer • single access network equipment for Voice. SMS Salary alerts issued for MSD employees. Altogether 241 NT staffs were trained in 8 batches. building leadership capabilities and the ability to evaluate and execute more important matters first. Trainings on “Seven Habits of the Highly Effective People” 10 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 11 .

volume based dynamic assignment mode. NT (then Nepal Telecommunication Corporation) had established Sagarmatha Satellite Earth Station in 1982 with only six SCPC channels for international communication and this year it is celebrating 25 years' of its establishment. Biratnagar and Nepalgunj with 2 MB satellite links giving priority to E1s serving NT’s mobile services. It is assumed that each BTS of CDMA/GSM connected via VSAT shall serve 250 subscribers with 0. 8448 Kb/s for data and 4xSTM1 or equivalent number of E1s for CDMA/GSM backhaul links in the future. After the completion of this project NT can provide reliable voice. Expansion of Spur Links in Rural areas In its continuous effort in modernizing the overall national telecommunication network structure in Nepal. shall be integrated into the existing SDH/PDH based network. Ranimatta. Presently DCME from Memotec. to meet up with the expansion of CDMA/GSM coverage. 4096 Kb/s for data and 2xSTM1 or equivalent number of E1s for CDMA/GSM backhaul links.000 direct circuits for international telephony. The overall network will comprise of a minimum of 500 VSAT terminals and a Hub Station installed at the Earth Station Complex in Balambu.8 kb/s data access in Ku band. Dadeldhura and Baitadi.125 Erlang i. Then all five directorates will be connected with the rural northern stations via radio links.. whenever they fail. Demand assignment scheme shall be able to assign traffic in constant bit rate mode. are ever increasing.These networks shall be operated in Demand Assigned MF-TDMA -TDM access modes. Antenna & feeder system and accessories. These links shall be installed in Aitabare.This network will serve as a Radio Backbone link for Western. This network will also be used for various high traffic Spur links throughout the country. At first Kathmandu will be connected with Bhairahawa. NT plans to use both of its satellite and radio links.The 500 VSAT terminals will comprise of 100 thin route terminating VSAT terminals with data rate scalable from 128 Kb/s to 2048 Kb/s for CDMA/GSM backhaul links and 400 terminals with 4-channel voice and minimum 28. To meet this demand NT intends to implement SDH based Microwave Radio Network for Backbone along with Spur links having Ethernet feature. Chamere. which can be upgraded later to 500 Erlang of simultaneous voice.The proposed SDH STM-1 radio link which has 62 hops and operates on 1+1 to 3+1 configurations. Bhedetar. Taplejung. Balambu Proposed PDH RADIO LINKS Extension of Ku-Band VSAT Terminals To provide reliable telecommunications voice and data services as well as to provide CDMA/GSM backhaul links in various remote sites of Nepal. Bharatalagna. Kathmandu. VSAT services to more than 300 remote locations of the country and satellite links to major cities for national trunk service are in operation. PDH-Digital Microwave Radio relay system comprising of Radio Equipment. NT aims to replace some of the existing rural telecommunication network which is now obsolete or existing with exhausted capacity. such as the district headquarters and to the GSM/CDMA BTSs. Kathmandu –Dhangadhi and Kathmandu -Biratnagar sectors on 2MB satellite links and Kathmandu -Bhairahawa sector on 1MB satellite link. Khandabari covering the eastern part of the country whereas the western part covers Nepalgunj. Mid-Western and Far Western Region of the country.. All the efforts in its 25 years of service to the nation has enhanced good quality telecommunications service to our valued customers of domestic and International sectors. altogether 50 PDH hops shall be added. Sagarmatha Earth Station. rate based dynamic assignment mode. data services and video news service. Bittapakha. Bhojpur. 12 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 13 . Silaute. This will help in providing backups for the optical/terrestrial links. Canada having compression ratio of 16:1 are in operation for Kathmandu-Nepalgunj. NT also plans to build a backhaul link with Medium haul 8 GHz free rate (8Mbps 28 hops and 34 Mbps 22 hops) Point to Point digital radio links. data and GSM/CDMA backhaul links. As of today this station is operating more than 3. according to E1 requirements in those locations. The growing demands for higher transmission backbone to provide interconnection in the hilly areas. In addition. The DSAT is intended for providing satellite connectivity to various district headquarters and remote locations for extension of GSM and CDMA mobile services. Kaphali. NT plans to install DCME from Veraz (Israel) having compression ratio of 16:1 for expansion of its domestic trunk capacity. As per the project schedule. 250 Erlang simultaneous voice traffic.Implementation of Digital Circuit Multiplication Equipment NT intends to implement Digital Circuit Multiplication Equipment (DCME) as a step forward in the expansion of its domestic trunk capacity. NT intends to deploy VSAT terminals in Ku-Band using satellite in IOR. At the same time.e. Ganeshtar.05 Erlang per subscriber. The VSAT will operate in Demand Assigned mode for space segment utilization efficiency. available volume based dynamic assignment mode and free capacity assignment mode for the subscribers. In the second phase. Multiplexing equipment. SDH Microwave Backbone Optical Fiber network has been the main source of transmission backbone along the southern region of the country. Silver Jubilee of Sagarmatha Satellite Earth Station The challenging geographic topography of the country has added increased importance to satellite technology in communications. The Regional Satellite Trunk (RSAT) System was implemented in the year 2000 and the District Satellite Trunk (DSAT) is currently in implementation phase. The Hub Station shall be able to handle a minimum of 2000 voice subscribers at 0. Dhangadi. Buretola.

Model of proposed New KRD Building 14 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 15 . providing reliable network. Regarding sale of shares to general public. at the site where old office buildings of Kathmandu Regional Directorate and Telecom Office Sundhara existed previously. The six floor building complex shall accommodate exchange rooms for 50. whereas the designing and supervision part shall be carried out by Multi Disciplinary Consultants Pvt. The benefits of CDMA services has empowered all sectors of the economy through improved access to telecommunication facilities as well as improved service quality. China to lay Optical Fiber Cable and SDH Equipment along the Arkino Highway which is under the grant assistance provided by the Government of PR China. especially the laptop users.The project shall be completed within nine months from the date of contract signing. Rambazzar. its popularity is rising day by day.000. Banepa and Lamosang are STM-16 backbone links. The project consists of laying OFC cables in a route distance of 115 km from Sundhara to Friendship Bridge. Network II shall cover three regions namely. two stations namely Thimi. At the same time NT has leased Optical Ground Wire (OPGW) with Nepal Electricity Authority between Patan – Marshyangdi – Damauli – Pokhara .90 per share. Currently paid up capital of NT is Nepalese Rupees 15 Billion (150. participation of employees and general public in company's ownership would strengthen its mission of remaining leading telecom operator in Nepal. At these stations.CDMA 2000 1X Network Expansion Ever since the successful launching of CDMA 2000 1X service (both Fixed and Mobile) in 2006. Sanga. the optical network had been extended from Lamahi to Tulsipur of route distance 50 km and Lamahi to Kohalpur of route distance 110 km section. NT has distributed this SKY PHONE mobile service in 13 out of 14 zones within a year of receiving license for full mobility service. Two HDPE Duct of 40/33 mm size have been installed along the highway and the optical fiber cable of 24F core has been installed in one duct and the other one is spared for future use.000 number of ordinary shares @ Rs. Within 2 years of its operation.e.Only Data Service C-PHONE Post-Paid was the first CDMA service introduced to provide Basic Telephone Service as a substitute for PSTN. Optical network will connect Ranipauwa. 6 ledger counters. Ltd. An individual or organization is allowed to buy minimum 100 shares and maximum 5000 shares. CITCC. Samsergunj and Kohalpur have been completed. HDPE ducts and accessories have been delivered to sites at Lamosangu and Nalinckowk and further other equipment are in process for delivery. As decided by Nepal Government. C-PHONE Post-Paid service is available in 40 Districts.000 telephone lines including 16 cash counters. China has started the project work. Koteswor. 7. After these arrangements. Similarly. minimum price of each share is fixed at Rs. SKY PHONE is the service which Nepal Telecom introduced in 2006 as a Limited Mobile service in the Kathmandu valley. Another big achievement is the installation of a SMSC gateway bridging the GSM and CDMA network which shall definitely boost the regular earned revenue through the P2P (including international SMS) and SMS based Mobile Value Added services. Nokia PDH 140Mb/s will be installed which shall be relocated from Kathmandu. The link capacity of Lamahi-Kohalpur section is of 140Mb/s of Nokia PDH (64E1 plus 4E1 Auxiliary) and that of Lamahi-Tulsipur section is STM -1 (63E1) of Siemens. Construction of New Telecom Building in Sundhara Government divesting shares of NT In an attempt to privatize the hundred percent state owned NT. CDMA service has covered 71 out of 75 districts and 2006 VDCs out of 3914 VDCs in Nepal. Pardi. Kusum. Hopefully. Two HDPE Duct of 40/33 mm size shall be installed along the highway and the optical fiber cable of 36F core shall be installed in one duct and the other one shall be used as a spare in future. Network II and Network III. Four stations along the Lamahi-Tulsipur section namely Lamahi. Bhaktapur are STM-4 links and nine stations namely Nalinchowk. Rihar.Hetauda and from Hetauda – Patan again on OPGW. Under the CDMA Project a total of one million lines shall be installed and divided into three Networks namely Network I. NT has already installed around 250 BTS all over Nepal for the CDMA network coverage. The Pre-Paid service users do not have to pay monthly rental and the Pre-paid account can be recharged through recharge Cards. Tatopani. Dhulikhel. SKYDATA Pre-Paid service was introduced in order to serve only data subscribers.The construction part shall be carried out by United Builders.Kali Gandaki . Ghorahi. Expansion of Optical Fiber Network In its continued effort to complete the laying of optical fiber in the remaining East-West Highway. Narayanpur and Tulsipur and five stations along Lamahi-Kohalpur section namely Lamahi. telecommunication services in rural areas provides a partial substitute for physical transportation. Danphe Construction Company and Shyam Sunder Construction Service Pvt.Tinpiple. a contract has been signed on 23rd September 2007 between Nepal Telecom and CITCC. distant education and other administrative and/or business activities. Another service which will to be commercialized within a couple of months' time is the SKYPHONE full mobility service in postpaid mode. Dolalghat. 600 for public bidding. Recently. The focus on rural development and use of ICT (Information and Communication Technology) in poverty alleviation program is considered as an important part of the overall ICT development program in the country. With the implementation of this system. the government has decided to offload its holding in NT by providing 5 % of total shares to employees of NT and 10 % of total shares to general public. It is believed that the use of Internet and email will not only empower the rural population to enlarge their choices and opportunities.500. out of which five stations namely Sundhara. C-PHONE Pre-Paid was introduced to provide quick and easy distribution of the Basic Telephone Service to customers even in remote hilly areas. Mahendra pool.. NT has built a self-healing ring of STM-64 capacity. Lehknath and Sisuwa. The major achievement of year 2007 is the conversion of the limited mobile service to the full mobility service nationwide. Barhabise and Tatopani are STM-1 spur links. As per Nepal Government decision. optical fiber ring in Pokhara valley has been planned and the installation work is in progress. 4 sales counters for offices of Kathmandu Regional Directorate and Telecom office Sundhara.000 square feet in Sundhara. TTC. these shares will be allotted to applicants who quote the highest price (Higher bidder winning more shares). Western Development Region (WDR). Ltd. Lamachaur.The CDMA Project is therefore giving substantial impetus to the overall development of the rural sector of Nepal.Mobile Service SKYDATA Pre-Paid . Contract signing for optical fiber cable link The network is designed for 16 stations along the highway. While the building complex is under construction the office of Kathmandu Regional Directorate has been shifted to Central Telegraph Office building at Tripureswor and the office of Telecom Office Sundhara has been shifted to Telecom office in Teku temporarily. the incumbent and leading telecom operator in Nepal. Lamidanda. which is especially valuable in a country like Nepal having difficult topography.000 number of shares would be distributed to employees at a discounted rate of Rs. CDMA services have widened the reach of emergency and other government services and helped tremendously to uplift the quality of life. Mid Western Development Region (MWDR) and Far Western Development Region (FWDR) whereas Network III shall cover the Eastern Development Region (EDR). the total number of CDMA subscribers has reached 300K. Balephi. Nepal Telecom is constructing a new Technical cum Administrative Complex spanning 58. 5 % of total shares i. 100 per share). To date. The contract for the construction was made on 14th January 2007 with the target of completing the Complex within a period of two years. NT will have employees as well as general public participation in its ownership structure. Network I shall cover the Central Development Region (CDR).Butwal which has been connected to NT’s optical network from Butwal – Bharatpur . but also help them in instant information delivery.Apart from ICT activities. The Project intends to expand over all the 75 District Headquarters and all of the 3914 Village Development Committees (VDCs). Nepal Telecom is providing four types of CDMA services to subscribers: C-PHONE Post-Paid C-PHONE Pre-Paid SKYPHONE Pre-Paid .

Pandey Legend Computer Department Guna K. RSD SM Dept TTC WRD WTD S. Lal ANP Dept Narahari Das Joshi MM Dept Swoyambhu Bajracharya Power Department Krishna Ghimire Revenue Department Murari Pd. Bhairahawa Wireless Telephone Directorate Director FWRD Director MWRD Business Management Department Surendra P. Thike Pramod K. Acharya HRD Department Narayan Mahat Switching Planning Department Kamini Rajbhandari Civil Department Madan Sharma SM Dept Subash Chandra Shah Financial Planming & Mgmt Dept Binay K. R. R. Chalise Recruitment Committee Yagya B.I. L. Kansakar Managing Director DMD Planning & Business R. M. Haldar DMD Development S.D Subash Bajracharya Int’l Service Department Babu Kaji Shakya FWRD HRD KRD MM Dept MWRD D. Madhu Sudan Karmacharya MSD O&M P. Kasaju Transmission Department Hari Gopal Shrestha Billing Department Niraj Adhikari Director WRD A. R.I. Pradhan Network P. Shrestha ANP Dept Access Network Planning Department CRD DMD ERD Central Regional Directorate.P. N. Bastola DMD Internal Audit & Inspection Internal Audit & Inspection Binod Sharma Y. Bhattarai Director RSD H.Organization Chart Board of Directors S. B.D Bishnu P. Biratnagar Far-Western Regional Directorate. R. M. Singh Director MSD L. Nepalgunj Mobile Services Directorate Operation & Maintenance Department Project Implementation Department Rural Services Directorate Switching Maintenance Department Telecom Training Center Western Regional Directorate. Gupta R. N.D. Pradhan Director ERD Transmission Planning Department Sidha Pratap Bharati Development Department Shyam Sundar Yadav O & M Dept Nara Narayan Manandhar Finance Department Budhi P. Parmar Switching P. P.K. Singh DMD Operation & Maintenance K. Sundhara Material Management Department Mid-Western Regional Directorate. Sharma A.P. S.Yadav Optical Network Project Imp. Goel Director WTD A. S. Bhattarai Director KRD B. Karki Director CRD S. Sharma Director TTC V. Birgunj Deputy Managing Director Eastern Regional Directorate. Karmacharya DMD Finance DMD Administration B. Adhikari 16 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 17 . Dhangadhi Human Resource Department Kathmandu Regional Directorate. Dept. N.I.

Nepalgunj Nagarkot Repeater Station GSM BTS installation at Jomsom 20 21 22 22 23 24-28 29 Schedule 1-14 Notes forming parts of the accounts 18 Nepal Telecom Annual Report 2007 . Pandey.Financial Section ADSL system equipment Training closing ceremony "The 7 Habits of Highly Effective People" ONU System Mr. Seceretary of MoIC and Chairman of NT at progress review Contents Summary of Balance Sheet Summary of income statement Balance Sheet for the year Profit and loss account for the year Cash flow statement DMD (O&M) with staffs of Mid Western Regional Directorate Office. R. Y.

436.00) 3.00 14.068.071.098.500.00 132.452.00 30.00 534.695.260.770.00) 2.00 3.00 7.558.917.003.00 166.00 961.00 111.00 Operation andManintenance Cost Administrative Expenses Interest on Subscriber's Deposit Interest on Loan Depreciation Bonus Incentive Package Loss(Gain) on Foreign Currency Royalty Loss on sales of Telephone & others goods Licence fee & Deffered expenses Total Operating Expenses Net Profit before tax Income Tax Provision Net Profit after tax Income Tax Adjustment Prior Year(s) Adjustment inc/exp Profit available for distribution Proposed Dividend Transfer to Sinking Fund Net Profit after Dividend & S.00 425. Bank Balance Cash Balance Deferred Expenditure Total Capital & Liabilities Equity Capital NG's Original Contribution Contribution From Govt.330.00 35.047.00 24.00 11.2247.113.00 806.00 (253.920.00 1.762.394.812.938.807.000.214.00 18.098.386.427.00 330.599.00) 89.108.293.00 7.654.326.00 404.666.00 3.063.111.00 39.00 9.00 2.212.949.00 3.639.468.763.563.614.00 100.00) 20.205.00 509.00 910.00 348.00 (1.00 12.626.239.340.053.00 6.00 1.882.194.080.00 3.00 8.00) 569.00 1.147.00 8.234.00 2003/04 ( April 13.00 1.905.00 6.964.00 (12.00 32.00 3.00 85.998.249.00 12.338.00 329.821.497.873.00 120.578.000.287.00 318.00 73.00 309.917.453.003.053.691.863.00 3.598.225.228.00 757.675.857.00 154.063.00 209.079.00 15.00 134.00 174.00 3.00 (1.822.685.449.547.685.00 60.655 2.337.780.256.000.876.00 577.235.236.406.00 567.472.353.968.00 47.693.00 18.00 2.00 1.00 58.576.192.00 3.325.00 251.291.216.453.319.990.723.00 48.602.00 270.002.731.997.231.00 160.428.522.00 2.208.00 2.00 706.227.Claims etc.00 113.916.157.130.00 (161.070.00 1.00 18.00 144.00 1.00) 85.00 282.00 991.587.993 389.00 75.00 86.930.00 1.090.363.053.481.422.230.090.227.000.00 655.455.00 1.132.00) 1.00 126.00 412.910.036.652.805.883.576.203.00 308.00 40.00 12.00 150.725.609.00 180.030.00 30.225.221.315.907.00 610.223.00 345.00) 2.00 457.892.00 140.00 3.124.000.234.00 14.00 9.00 284.00 552.474.927.700.999.144.00 438.00 1.00 950.221.369.00 696.747.00) 1.00 931.153.963.542.445.846.00 1.936.448.00 (848.369.415.904.00 4.00 64.00 172.993.076.00 1.00 7.658.00 29.632.00 453.00 442.00 4.982.848.639.00 260.235.00 57.408.265.404.993.000.255.686.00 717.00 3.943.2004) (Nine Months) (2060 chaitra) 6.00 10.00 15.012.00 3.278.819.922.00 4.2004)) (Three Months (2061 Ashadh) 8.590.569.422.00 49.607.00 76.00 266.448.411.00) 591.00 73.00 (280.00 493.582.00 78.787.478.00 730.00 319.610.366.772.00 12.00 136.843.535.00 24.469.00 7.2004 to July16.00 Income Operating Local Telephone Domestic Trunk Telephone International Telephone Domestic Telegraph International Telegraph International Telex Leased Circuits Telefax Mobile & Internet Interconection PCC Card CDMA Others Non-Operating Interest on Bonds/T.00 1.784.00 1.206.00 162.00 57.00 592.00 94.798.943.578.00 18.149.00 107.389.00 20.00 42.00 172.818.00 15.00 20.00 301.00 32.094.00 251.00 24.00 3.00) 2.00 38.463.299.952.872.239.496.653.00 70.00 308.00 8.407.713.732.472.992.00 29.00 7.00 9.735.136.404.500.307.166.00 5.00 308.00 4.768.00 21.069.287.00 1. Advances & Prepaid expenses Advances & Loans to Employees Inter -branch Balance.334.00 106.529.00 754.651.00 42.00) 3.00 93.026.979.00 15.00 3.035.00 209.972.00 889.00 2.00 601.500.693.00 5.038.490. Loans & Advances Stores & Spares Sundry Debtors Interest Accrued on Inv.656.00 6.281.00 570.00 1.230.00 47.782.457.929.448.309.323.685.00 266.574.192.00 503.136. of FRG Contribution From Govt.825.381.00 160.753.00 3.00 (6.00 39.339.685.825.693.717.805.369.351.466.00 633.577.767.164.012.00 74.080.225.780.872.814.938.00 394.00 2.00) 126.505.598.2004)) (Three Months (2061 Ashadh) 2.00 233.000.249.080.238.921.00 3.948.00 269.00 37.502.00 768.457.00 340.361.00) (1.00) 1.00 20.00 2004/005 (2061/62) 2005/006 (2062/63) Assets Fixed Assets Land Building Plant & Machinary Heating & Lighting Furniture Office Equipment Vehicles Capital Work-In-Progress Work-In-Progress Capital Stock Advance.460.613.156.645.753.273.945.749.00) 1.000.633.999.00 1.390.602.450.303.461.615.445.639.110.00 202.00 5.166.330.040.231.00 17.772.194.026.00 719.925.265.068.00 10.00 275. Advance Income Tax adjusted to retained earnings Capital reserve adjusted to retained earnings Retained Earning Trfd to Balance Sheet 337.559.00 1.00 2.00 8.572.980.00 200.145.908.668.852.144.00 263.000.197.658.00 874.137.00 55.027.027.289.337.904.00 (344.163.442.00 6.00 117.00 10.00 576.00 17.00 (412.705.00 113.00 1.854.00 (222.626.00 308.727.00 255.681.00 85.808.156.819.864.00 191.467.668.020.202.134.308.00 306.00 5.787.099.092.00 3.911.369.164.00 401.515.476.070.00 20.00) 1.252.213.572.00 408.700.00 137.256.703.00 1.320.00 7.947.327.00 750.00 399.764.551.00 (555.843.762.106.058.136.155.798.446.00 112.648.00 2.974.256.188.00 29.00) 1.387.725.133. of Finland Contribution From UNDP Reserve & Surplus Capital Reserve Sinking Fund for Repayment of Loans Retained Earning Loans Loans from Govt.452.349.00 113.00 54.394.00 8.00 7.900.728.00) (5.529.392.449.408.000.00 158.00 260.422.352.00) (538.281.00 10.695.639.00 5.00 1.843.218.00 477.461.606.00 1.696.00 607.210.00 448.00 1.165.377.00 3.334.647.00 9.472.543.00 852.00 6.406.227.535.00 40.00 14.00) (1. Investments Govement Securities Pension Fund Intelsat Fixed Deposit at Bank Current Assets.00 485.00 1.858. of Denmark Contribution From Govt.00 46.584.529.00 428.00 3.526.666.584.558.00 3.00) (5.00 63.00 142.00 1.190.724.00 153.00 496.580.476.355.596.504.00 2.721.00 82.00 496.968.701.284.846.572.00 1.664.000.048.00 135.546.251.397.423.00 2.693.700.00 18.00 6.664.00 57.00 1.269.00 35.00 174.588.00 493.119.00 10.00 5.742.695.00 163.212.602.00 491.892.00) 3.00 949.00 160.611.00 473.424.00 155.2004 to July16.111.00 4.00 461.737.00 6.00 4.00 16.00 28.00 5.159.520.00 2.833.272.183.00 20.00 12.00 11.00 20.186.2003 to April 12.00 4.00 90.821.00 183.924.353.00 6.00 6.00 4.468.729.027.170.00 20 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 21 .00 161.005.395.215.00 163.413.00 59.952.297.094.701.00 334.00 1.00 2.723.00 128.049.00 17.723. of Nepal Against Belgium Loan Danish Government Current Liabilities Sundry Creditors Sundry Creditors-Interadministration Interest Accrued & Due Other Liabilities Deposits & Advances Provisions Income Tax Proposed Dividend Pension & Gratuity Accumulated Leave Royalty Bonus Provision Incentive Provision Total 6.000.00) 55.254.614.915.00 (852.105.00 134.406.081.00 593.00 396.00 (15.407.195.00 8.00 (1.935.577.148.753.352.941.943.00 755.993.648.818.00 5.00 15.00 19.957.00 159.634.593.137.00 32.00 1.473.00 57.045.00 1.00 682.00 5.00 39.375.00 146.00 4.000.475.00 (217.379.00 1.00 11.587.628.765.00 14.189.000.742.00 74.819.00 4.00 251.00 731.00 526.412.00 143.00 17.162.470.00 2.00) 4.162.305.00 645.354.00 1.366.00 35.00 33.308.996.000.051.728.00 (348.334.334.00 2.472.303.160.587.2003 to April 12.005.060.886.365.351.00 863.00 4.584.00 15.00 995.2004) (Nine Months) (2060 chaitra) 7.853. of India Contribution From Govt.302.00 6.00 46.969.730.572.00 2004/005 (2061/62) 2005/006 (2062/63) Profit & Loss statement for the last five years (In Thousand of Nepalese Rupees) 2001/02 (2058/59) 2002/03 (2059/60) 2003/04 (July 17.00 6.00 38.864.363.012.00 7.00 163.733.550.00 2.00 208.00 389.136.417.00 11.737.108.791.112.00 19.00 83.00 552.00 2.407.241.343.00 2.376.00 3.000.150.00 5.00 5.595.008.421.336.227.600.00 187.00 6.00 22.00 490.452.990.166.00 6.200.631.00 15.00 14.665.923.00 80.889.630.00 463.088.250.00 47.352.975.00 7.005.280.00 7.00 9.00 299.457.00 11.000.00 1.787.824.011.00 2.830.00 24.675.00 168.864.639.00 2.533.670.734.574.00 2.00 299.966.460.864.00 9.432.00 198.291.00 544.087.00 2.556.956.669.301.00 68.665.443.00 67.385.00 (688.840.00 5.00) 3.226.00 684.00 137.00 514.834.00 7.476.00 5.00 55.005.254.00 114.923.002.652.938.320.00 156.197.00 11.079.053.042.00 1.413.855.00 120.385.816.00 9.093.943.00 1.00 80.00 153.00 442.00 1.094.550.307.968.087.955.280.00 28.00 18.00 159.00 968.00 6.00 283.00 22.00 5.943.00 1.819.00 (256.949.239.00 (157.787.00 56.556.00 2.628.000.209.609.968.044.00 57.00 4.00 629.00 110.077.787.520.00 131.00 207.555.484.416.197.00 19.641.00 1.00 10.760.00 25.00 19.863.00 18.Balance Sheet of last five years (In thousand of Nepalese Rupees) 2001/02 (2058/59) 2002/03 (2059/60) 2003/04 (July 17.279.162.088.377. of Japan Contribution From Govt.00 129.127.00 57.00 654.434.00 1.745.400.827.00 103.00 139.00 2.407.870.Fund Opening Balance Capitalization of reserves Repayment of retained earnings to Nepal Govt.00 17.00 8.00 4.00 6.00 4.00 33.734.824.308.00 528.00 231.00 2.613.320.061.915.662.725.00 58.00 38.857.00 400.00 160.860.095.278.00 466.00 1.00 421.751.281.952.00 212.00 151.00 53.826.473.00 468.419.00 997.305.665.00 3.00 10.115.277.00 25.938.00 233.375.453.00) 818. Bills Interest from Bank Deposits Interest from Pension Fund Income from Intelsat Investment Others Total Income Expenditure Employees Cost 664.415.00 483.873.242.00 1.049.000.247.516.00 75.509.00 1.00 22.090.811.00 13.00 378.00 8.234.00 41.448.00 505.039.00 195.00 2003/04 ( April 13.475.249.00 755.00 2.00 59.615.00 282.597.067.486.00 12.454.00 102.979.942.979.00 (2.816.00 (544.082.00) (5.00 3.353.00 6.00 232.

598.085.413.083 10.907.489.332 2.188.682 (2.921.872. 2005 Adjustment relating to earlier years Tax Adjustment relating to earlier years (net) Profit available for appropriation Proposed Dividend Adjustment Dividend relating to earlier years (net) Profit after appropriation Advance Income tax adjusted to retained earnings Capital Reserve adjusted to retained earnings Repayment of retained earnings to Nepal Govt.194.819) 8.807.531.590.338.461.000.084.726.243.287.893) (42.905.850.690) 8.500.712.026.484.452.556 (1.017 24.000 8.827.834.412.409.817 4.122 3.671 Cash flow statement of financial year 2062/63 (July 15 .127.914.Fund Interest on Subscriber's Deposit Interest on Loan Depreciation Loss/(Gain) on Foreign Exchange Licence fee & Deffered expenses Loss on sales of Telephone & others goods Bonus Incentive Package Total Expenditure Net profit before Tax Provision for Income Tax Net profit after tax Balance of Profit up to July 15.707) 4.025 463.379.079.189.632.000) (3.824.417 329.200 1.654) (433.807.881 23.000) (2.938.762 655.980.406.949 12.082.979 9. 2006) July 16 .475.106) (818.668) 5.602.178.000 5.817.830 57.867 24.855.685 (344.666 2.005.093.136.665.655.301.569.190.528 408.010.124.931) (955.096 10.674.000 5.2005 Rs 8.118.213 (157.002 (280.837.368.757 11.200 1.134) (24.669.888.316 24.375 696.745.155 65.061.497.656 10.500.168.115) 2.258.058.995.2006) July 16.360.506 16 17 18 1.650) 491.448.297.856.356 40.656 (1.827.651.564 2.843.082 11.684.124.940 11 12 (273.046 20.463.764 251.272 (34.685 (2.044.001 618.764 2.382) 158.584.673 241.301.196.585) (300.144.787.251 (301.646 9.559) 10.916 20.686.263 4.356 281.526.023 4.764 3.810.303) (34.943 696.733.820.007 6.796 280.206 4. Transfer from Sinking Fund Balance Transfered to Balance Sheet Schedule 14 15 July 15.005.471.535 3.104) 55.026.780.654 20.722.011.349.685 (2.000.2005 Rs 15.798.Advance & Others Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Deferred Revenue Expenditure TOTAL Significant Accounting Policies & Notes to the Accounts Particulars Cash Flow from Operating Activities Net Profit before Tax Adjustment Depreciation 1.026.908 6.742) (2.259.827.900.665.397 18.089.499 8.624.544.750 93.356) 9.000.495.768.850.940 9.2006 (Rs) July 15 .678.480.318.268.921.565) 4.711 (251.510) 9.268.238.109 158.495.099.067.088) (384.998.749 11.000.530.528.155 63.503) 8.075.911.000) 85.406.849 (1.491) (54.825.441 591.611.671) 2.292) 221.824 1.522.606.753.335.021.711.510) 1.651.936.899) 1.457 552.463) (23.503) (2.041. 2006) As at July 16.671 - Deffered expenses Foreign Exchange Gain/ Loss Provision for staff Bonus & Incentive Provision for Pension & Gratuity Interest on loan Fixed Assets Written off Income from Investment & Bank Deposit Expenses on lost of goods Royalty Provision for earned leave Operating Profit before Working Capital Changes Adjustment for Working Capital Changes Increase in account receivable Increase in Stock Decrease in Interest accrued Increase in Advance-Tax Decrease in Advance Branch Account (adjust) Increase in Payable Payment of interest/Adjustment Payment of Royalty 1.626.249.455.603.719.817 (1.777) (30.796 7.071.647.2005 to July 16.148 (450.051.682) 8. Capital Reserve adjusted to retained earnings Net Cash Flow From Financing Activities © Net Increase in Cash (A+B+C) Cash at beginning Foreign Exchange Gain/( Loss) Cash at the end (2.812) (1.406.246 (2.2005 (Rs) Schedule 1 2 3 SOURCES OF FUND Share Capital Reserve and Surplus Medium and Term loan Loan TOTAL APPLICATION OF FUND Fixed Assets Gross Block Less : Accumulated Depreciation Net Block Capital Work-in-Progress Investments Current Asset Inventory Sundry Debtors Cash & Bank Balance Loan.830 4 5 6 7 8 9 10 21.606.574.695) 6.624.500.067 645.001.192 Year ended Payment of Earned leave Payment of Pension Gratuity Received Payment of Bonus & Incentive Last year Adjustment Working Capital Changes Net Cash flow from Operating Activities (A) Cash Flow from Investing Activities Purchase of Fixed Assets Decrease in cwip Increase in deffered expenses Increase in investment Income from Investment & Bank Deposit Net Cash Flow from Investing Activities (B) Cash Flow From Financing Activities Receipt inLong term Debt Payment of long term debt Payment of dividend Repayment of retained earnings to Nepal Govt.645.861.375 (555.714.063 142.215.150 23.433.612.272.000.261 312.389.339.393) 382.650 126.662) 3.796 22 Nepal Telecom Annual Report 22 Nepal Telecom Annual Report 2007 2007 22 Nepal Telecom Annual Report 2007 2007 22 Nepal Telecom Annual Report 22 Nepal Telecom Annual Report 2007 22 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 23 .711.527) (1.011 (4.457.092) 322.219) (22.847 Year ended INCOME Operating Income Non Operating Income Total Income EXPENDITURE Employees Costs Operation and Maintenance Costs Administrative Expenses Royalty / Contibution on Rural Dev.005.050.435.236.001 (280.107.443.136.800 (463.179 195.496.452.036.426.881 As at July 15.194.578.048.837.083 (688.843.326 5.542.000.221 74.352.510.722) 596.611.025 10.050.058.943.088.238.686.997.142.2006 Rs 10.484.710.204 4.764 9.485.001 491.000.821 6.036) 226.992 (596.258.040.528.435 3.Balance Sheet As at Ashadh 32.695 309.722.164.034 14.988 1.621 13 19 Profit and Loss Account For the Year ended on Ashadh 32.574.686.825.966 251.035.900.665.152.038.092 12.726.595.654 (11.048.439 6.040.323.483.124.081.216) (1.238.988 (1.834 (1.319 40.510.2006 Rs 15.522.780 473.195.813 40.385 136.089.574.000.093.167. 2063 (July 16.181) (370.638.252 5.511 4.573 569.864.053 442.156.161.000) (21.641.691.955 22.739 15.076.653) 15.214.335 610.948.907.187.021.791.092) 40.107.867 7.992 1.315.937.466 187.917.029.875. 2063(July 16.552.650 (2.693 1.413.817.059 5.446 1.611.881 - 19.005.858.334.224.000.819.017.602.379.127.000 591.857 9.097.

889.435 629.000.6-6.424.906 7.000.495.973.238. Debenture D.585 281.058.168.110.202 1.363.183 76.253 10.094.145.000.840 Additions during the period 0 30.000.367.015.001 1.206 66.000 5.113.(previous year 150.326.471 9.294 55.000.Belgium Loan Retained Earnings shares @ Rs.435 943.999.351 0 1.745.549 19.127.368.021.069.of shares @ Rs.190 150.493.695 24.338.733.332 8.966 21.539.551 282.000 708.645 161.412.000.101.379 2.362 86.735.of Ordinary Shares 150.138.364 343.174 10.2006 Rs Capital Works Capital Stock Less : Provision for Doubtful Stock Capital Advance Less : Provision for Doubtful Advance Total 2.966.000.332 July 15.578.602.229 877.000.134.000 270.444 378.685 160. Pension Fund C.000 8.316 Previous year Adjustment 0 0 0 0 0 0 0 0 (7.2006 191.000 no.019.945.2005 15.551 As at July 15.752.) 15.770 11.000 426.2006 July 16.614.426.489.002. Government Securities at Cost National Saving Bonds B.757.250 7.881 8.096 17.332 Net Block (Rs.931 59.654 As at As at Rs Rs Gross Block (Rs.296 8.924.2006 15.083 10.000.078.342.500.2005 Schedule 5: Capital Work-in-Progress As at July 16.692.243.641 77.585 425.665.227.983.000.2005 Rs 275.917.452. Schedule 2: Reserve and Surplus Schedule 3 : Medium and Term loan 25.495.100/share) 24 Nepal Telecom Annual Report 2007 Schedule 1: Share Capital 100 per share.731.385.891.958 Previous year Adjustment As at July 16.764 July 16.714.017 5.406.583 1.168.000 As at Rs Nepal Telecom Annual Report 2007 25 Nepal Telecom Annual Report 2007 25 .650 0 136.947 7.245 10 20 20 20 Total Previous Year 123.071 52.156.288.323.213.646 1.156.448.Total Total Total Capital Reserve (A) Authorised Capital shares @ Rs.363. Fixed Deposit at Bank Total 212.000 25.613.645.460.917.000 3.000 As at As at As at Rs Rs Rs Schedule 4: Fixed Assets Accumulated Depreciation (Rs.016.604 46.2006 Rs A.000.080 557.654.032 2.470.244.656 142.948.057.040.749 19.2005 284.162.847 83.000.096 As at July 15.002.848 1.116.984 21.366.2005 July 15.042 9.563.400.882.009 505.729.613.000 no.930 1.025 30.435.244 17.000 3.000.700.443.000 269.692 257.997.609.130.000 4.238.448.413.000 1. 100 per share.485 16.316 227.724.765.026.192.676.216 19.2005 24.2005 Rs July 15.514.768 2.338 9.(previous year 250.000.) Additions during the year 183.599.116 64.954 706.763.104.280.825.113 Description Rate 0 2.666 9.055.858.173.081.088.196.968.890 407. 2006 0 314.335.417 1.855.040.954 287.2005 183.067 890.214 10.961.195.7 4-20 Land Building Plant and Machinery Heating and Lighting Furniture Office Equipment Vehicles Original Cost July 15.596.973 8.729.535 Schedule 6: Investments As at July 16.100 per share) Loans from Govt of Nepal against: .653 2.318 573. 2006 191.061.000.000.048.869.000 no.380.764 9.263 1.880.) July 15.358.193) Cost as at July 16.729.417 20.632.112.000.000 no.686.411 18.723 13.654 73.601 80.485.945 74.000.200.452.752 120.229 593.127.000 15.099.of shares @ Rs.000.007.034 July 16.514.596 1.413.305 2.500.633.of (B) Issued / Subscribed / Paid up Capital Ordinary Shares 250.695 20.535 4.499 304.2006 July 16.526 63.658.654 As at July 15.

237.365.211.108 1.2006 Rs 806.050.819.2005 Rs 47.287.523 16.549 1.577.914 31.164.089.440.475.515.265.910.052.979 654.835.2006 Rs 3.705.975 200.946.199.777 8.829.630.763 12.408.787.000 28.531 36.541 1.236.2005 Rs 42.655.762.2006 Rs 39.753.550.320.908.202.104.658.897.627 40.264.444 56. Mobile & CDMA Total Others Grand Total Year ended July 16.646 Schedule 14 : Operating Revenue Sources Basic Telephone Local Domestic Trunk Int.840.027.796 16.588 1.606.335 Sundry Debtors Less : Provision for Doubtful Debt Total Schedule 9 : Cash & Bank Balance Bank Balances Cash in hand Less: Provision for lostcash Cash in Transit Less : Provision for doubtful balance Total July 16.308 24. 82.491.967.633.000.745.308 0 0 0 0 0 8.234.128 345.803 116.2005 Rs 2.2005 Rs.916 - Interest Accrued Advances IncomeTax& Value Added Tax Prepaid Exp.016.872.588 550.234.104.653.405 961.655 9.968. Trunk Leased Circuits Telex.114.624.115.122 5. Inmarsat Interadministration Payphone.367 2.433.810.888.030 3. 6.102.484.235.747.839 1.479 10.856.432 889.947 0 389.693 601.104 47.030 2.875 Schedule 11 : Current Liabilities As at July 16.581 96.469.915 48.003.255 108.723.075 645.748 1.649 4.700.764 Schedule 13 Deferred Revenue Expenditure Description Licence Fee Training & Othres Total Balance as on July 15./Loans/Advances and Others Advances/Loans to Employees Less : Provision for Doubtful Advances Inter-Branch Balance Less : Provision for Expenses Total 606.863 12.217.814 1.739 7.139 10.000.191.521 65.724.2005 Rs 3. Trunk SMS Data Services Sub Total PSTN .378.197.025.421.207 663.496 633.850 156.858.500.480.814.525 11.358 5.885 538.599.524.293 1.409 20.289.413.743.875 513.034 Schedule 16 : Employees Costs Year ended July 16.207 610.189 198.237.724.980.227.078.259 3.626.825.144.394.300.655.239 6.557 755.363.359 4.000 560.349.277 191.435 As at July 15.439 257.865.949 As at July 15.987 84.893.748.044 1.856.729 53.764 268.943 1.275 12.097.129.804.823.375.852.834 146.908.157.329 34.642 66.168 55.489.942.2006 Rs 485.025 Schedule 15 : Non Operating Revenue Year ended July 15.441.348 2.928 12.863.958 50.864.2005 Rs 757.421 136.773 44.237.988.413 115.959 7.495.067 Year ended July 15.992.693.767.568 818.700 139.698.031.994.046 Addition during the year Rs.325.466 340.731 4.432.259.001 505.Advances & Others As at July 16.085.964 8.942 142. 94.448 1.305.694 7.943.088.915.2006 Rs 612.014 567. Trunk Air time Email/ Internet Roaming Pre-paid card Re-charge card Sub Total CDMA Local Domestic Trunk Int.188.000 402.493 8.626 552. 17.568.2006 Rs 2.076.2005 Rs 9.305.501 9.PCC card Sub Total Mobile & Internet Rental Domestic Trunk Int.070.225 24.933.892.225.780.663.766 10.122 10.806 441.693 73.980.337.207 100.099.097.002 Balance as at July 16.203 1.998 95.704 89.574.842 395.122 Schedule 10 : Loan.742 6.422.893 6.240 9.504.414.328.757 Year ended July 15.562 241.992 1.236.627.000 309.693 1.362 538.389.150 Stores & Spares Less :Provision for Doubtful Stock Total Schedule 8 : Sundry Debtors As at July 16.435 282.2006 Rs.457 Salaries & Wages PFContribition Earned leave salary Clothing & other allowances Overtime Allowances Medical Expenses Pension & Gratuity Total 26 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 27 Nepal Telecom Annual Report 2007 27 .860.824 668.753.674 97.299.546.136.476 11.664.374.856.742 25.762 Year ended July 15.693 7.583.2006 Rs 21.955 As at July 15.315.907 65.082 As at July 15.954.298 3.754 24.584.661.375 22.452.194.287.000 329.2005 Rs 419.786.574.542 7.884.2006 Rs 11.643 534.680.632.152. ritten off during the year Rs.635.587 231.836 1.021.475.700.908 284.712.Telegraph.169.867 July 15.029.106 Last Year Adjustment Written off Rs.857 Sundry Creditors Sundry Creditors (inter-administration) Interest payable Others Liabilities Subscriber Deposit Others Advances Total Interest from National Saving Bond / T.234.153 65.647.Bill Interest from Debenture Interest from Bank Deposits Interest from Pension fund Others Total Schedule 12 :Provisions Income Tax Royalty Proposed Dividend Pension & Gratuity Accumulated Leave Incentive Bonus Total 6.346 97.710 57.068 28.106 34.676 654.035.189.335 312.111.047.444.534 279.408.246 1.798.569 818.364.594.2005 Rs 577.453.800.074 41.190.953 225.399 7.345 553.338.982 271.Schedule 7 : Inventory As at July 16.448.

Debenture and is stated at cost.053 Year ended July 15.510) (344.602.453 49.040 5.742) 23.850. Fixed Assets a.000 (76.181.820.540 1.082.161.2005 Rs 15.332 39.820.165 41.976 13.847 Total 20.197.704 54.000.971 552.541 1. Value Added Tax and Telecom service charge are accounted for on cash basis.567 151.904 171. Treasury Bills.556 8.191.161 20.063 408.Plants/ Machinery Power. Rates Taxes Meeting Fees Printing and Stationery Advertisement Bank Charges Training Expenses Entertainment Office Furnishing Insurance Statutary & Tax Audit Fee and Expenses Commission Postage Books & Periodicals Legal and Professional fees Expenses on loss of goods Obsolete and Damaged Fixed Assets Security Expenses Membership fee Telephone expenses Anniversary Expenses Miscelleneous Expenses Total 36.212.368.156.863.658.773 3.197 73. F. E.686. These types of revenues are accounted for on accrual basis.268.Schedule : 17 Operation and Maintenance Costs Year ended July 16.656 (688.000.Buildings Maintenance .155. Heating & Lighting Fuel for Vehicles Vehicles Maintenance Freight & Carriages International Channel Rent Total 13.685 4. Payphone card services.394 1.630 1.704. b. OYT Fees are accounted for on cash basis.221 (2.2006 Rs Travelling Expenses Rent. which are damaged beyond economic repair or become obsolete due to change in technology.122.510) (1.665.651.341.091.671 3.469 1.442. c.503) 569.995.601 3.038. Recharge card. Depreciation on assets has been charged from the following month of capitalization for assets.208 20.520.179 5. Depreciation a.925.052 43. C.758 23.936. Inter administration revenue is accounted for as per statement/ invoice provided/ received to/ from inter administrator. b.503) 569.881 a.Office Equipment Maintenance . are written off wherever identifiable.409. Year ended July 15.615 14. Basis of Accounting The financial statements are prepared under the historical cost convention in accordance with Nepal Accounting Standards.189 159.404 56. Gain and/or loss on disposal of fixed assets arising in the ordinary course of business are taken into profit and loss account as non-operating income/expenditure for the year.2006 Rs Maintenance .312 2.728.576 1.407 32.690.280. Revenue earned from telephone related services is operating income and non-operating income comprises mainly interest on investments and bank deposits.322 3.2005 Rs 43.641.807 668.361 1.859.612. which are incidental to commissioning/ putting the assets to use.658.000.716.583.591 8.830.510) (1.398.773 19.804.493.067 10.176.585.918 1. gain or loss. d.561. Depreciation is provided on the straight-line method on all the items of fixed assets at the rates shown in schedule 4 of the balance sheet which have been determined by the management based on the useful life of the assets.701.471.298) 83.985.166.198. In the case of long-term liabilities incurred for the acquisition of assets.647. Otherwise the gain or loss is dealt with in the profit and loss account.170 655.754.936. Prepaid Card. which are added during the year. G. Foreign currency balances relating to current assets. Revenue from Internet.460.341.855. E-Mail. and Fixed Deposits with banks.252 1.825.844. B.406.687.382.651.111 24. Significant Accounting Policies A. Foreign Currency Conversion a.656 (688. advances to contractor and suppliers on capital account.647. Loan are booked at original value and any profit or loss arising from exchange rate fluctuation on such assets at balance sheet date is recorded in the profit and loss account as foreign exchange loss/gain.044.837 10. 28 Nepal Telecom Annual Report 28 Nepal Telecom Annual Report 2007 2007 Nepal Telecom Annual Report 2007 29 .916 196.592.224.145 Schedule 18 :Administrative Expenses Year ended July 16.878 9.138. Tax Adjustment to retained earnings Capital reserves adjusted to retained earnings Closing Balance of 2062/63 15. such as Furniture and Office Equipment costing less than Rs 5000.268. No depreciation is charged on the assets under work-in-progress until they are transferred to fixed assets.280 184.001 Statement of Changes in of F/Y 2062/63 Statement of Changes in Equity Equity of F/Y 2062/63 Particulars Opening Balance Net profit after tax for the year 2062/63 Adjustment relating to earlier years Proposed Dividend Tax Adjustment Repayment of retained earnings to Nepal Govt.910 9.791.318.611. Assets.039 50.834. Fixed assets are stated at cost and are inclusive of all expenses.363.000.227 3.671.000 22. Revenue a.448.441 c.386 28.155 13.633 38.131 8.887.995. Investment comprises of National Saving Bonds.791 22.505 442.200.397 2.790.800 58.702. Capital work-in-progress Capital work in progress includes capital stock.078 151.127.528 Schedule-19 NOTES FORMING PART OF THE ACCOUNTS I.828 60.961.154. Assets.00 per unit are fully changed to expenses.026. b.612. Quantitative records of such assets are maintained.017 4.834. Investment 8.696.221 74. D. b.510) (344.611.105.000 Capital Reserve Capital Reserve 160. c.034 Share Capital 15.252 1.332 Retained Earning Retained Earning 5.115 1.649. if more than 2% is normally regarded as an adjustment of cost and included in the carrying amount of the related fixed assets.

50% and 100% respectively. OYT.Letter of Credit .287.332 74.106 40. cash and cash equivalent is equal to cash balance. financial impact may occur which has not been evaluated. deferred expenditure like license fees and similar expenses are amortized over the period covered. Inventory is valued at cost on the basis of the FIFO method of inventory accounting. Events after the balance sheet date Head office land has been registered in company's name in financial year 2063/64.277 could arise in respect of Income tax assessment of F. E.742 83. Particulars Opening Balance Less: Intelsat Reserve adjusted to Retained Earnings Less: Damage Tower compensation received from Necon Air Closing Balance H.826 6.034 Amount (Rs) 142. assessments of income tax was completed.850 241. D. Particulars related to deferred expenditure for financial year 2062/63 is as follows: Deferred Revenue Expenditure Balance as on Shrawan 2062 Addition during the year 2062/63 Expensed during the year Balance as on Ashadh 2063 F. Provision for doubtful debt/advances/Transit items a. Provision for Accumulated leave A provision has been made to meet the cost of home and sick leave accumulated up to the year on actual basis. 30 Nepal Telecom Annual Report 2007 Nepal Telecom Annual Report 2007 31 .165 Amount(Rs.448.583. Interest Interest payable on subscriber's deposits is provided at the rate of 3%.632. • Contingent liability amounting Rs.85.I Other Notes: H. Provision is made against doubtful advances.00 is directly charged to profit and loss account at the time of purchase. • Capital Commitment Commitments on capital account not provided for: Amount Rs . non-moving and obsolete items at the rate of 25%. Cost of spare parts.) 160. Foreign currency bank balances are converted into Nepalese rupees at the exchange rate prevailing on the balance sheet date and the difference is adjusted in Profit/Loss account. Deferred Expenditure Deferred expenditures like system and equipment training are amortized over the average period of 3-5 years in which the related benefits are expected to realize. K. Provision for Incentives Provision for Incentives has been made at the rate of 5% on the amount arrived after subtracting nonoperating Income.029. B.234.118. and 10% of share capital from Profit after tax.556 2.046 34. Previous year's figures are regrouped/ reclassified in line with current year figures. K. a.318.693 8. hence registration fee has been capitalized in that financial year only. c.Y. J. advances amounting Rs.389. a. Insurance Insurance of assets has been made by the management considering the value and importance of assets and also after considering the review and recommendations made by the senior management committee. All amounts are rounded off to nearest rupee.975 b. c.819 1. wherever deemed necessary.448. Provision for gratuity has been made on actual basis. cash-in-transit.190.Y. the unit price of which is less than Rs 100. stock-in. Prior year Adjustments Transactions relating to previous years are shown separately in profit and Loss account. L. Income Tax Income Tax advances related to F. G. C. O. J.Building construction contract 872. II Other Notes A.421. I. In current financial year. Amount(Rs.221 is booked as advance by adjusting the retained earnings. Debtors are reviewed each year and one hundred percent provision is made in respect of debtors outstanding for more than a year except the dues from the government and inter-administrations. N. • Seven cases against the company are lying with Supreme Court for which if decision is made against the company. b. Provision is made for slow moving.2058/59 against which administrative review petition to Director General (IRD) has been made by the company. Inventory a.741.048.) 1. However.002 136. Cash and Bank Balances I. Capital Commitment and Contingent liability M. Transaction related to Provision for pension and gratuity in financial year 2062/63 is as follows: Provision for Pension & Gratuity Balance as on Shrawan 2062 Addition during the year 2062/63 Gratuity Refund Payment made during the year Balance as on Ashadh 2063 b. 834. For reporting of Cash flows.569. Provision for Bonus Provision for bonus has been calculated on lower basis of 6% of profit or bonus receivable calculation done by multiplying number of eligible employees by average monthly salary and number of bonus receivable months as per the bonus act. Royalty: Royalty has been calculated at 4% and 2% for Contribution to Rural Development Fund on operating revenue including sharing items.251 30.2050/51 to 2057/58 were incorrectly booked as expenses. Pension & Gratuity Provision for pension eligible employees has been made on the basis of approved years fixed by the company. Adjustments in capital reserves Following adjustments were made in capital reserves in this financial year.150 b. 51.658. A quantitative record of such items is maintained. Dividend Dividend has been provided at the rate of 15% of net profit after tax.transit and claims if management deems it necessary.184. Margin money on L/C has been shown under the head Supplier Advances. bank balance and transit balances.

1600. CRBT.00/min to USA & Canada using PCC Service 188 IVR Service Farewell to Senior Executives Hari Karmacharya DMD Laxmi Kanta Shrestha Director Babu Ram Sharma Director (2036-07-19 to 2064-06-22) (2031-06-10 to 2064-03-20) (2034-11-11 to 2063-10-24) 32 Nepal Telecom Annual Report 2007 . India through Optical fibre In Birgunj-Raxual GSM NTC Mobile service Implementation of SDH Microwave Radio Internet Service Payphone Service East West Highway Optical Fiber Project GSM Namaste Pre-paid Service Transformation to NEPAL TELECOM (Nepal Doorsanchar Company Limited) from NTC corporation Prepaid Calling Card (PCC) Service (Intelligent Network Services) Advanced FreePhone (AFS) Service (Intelligent Network Services) Soft launch of CDMA Access Network Services Outsourcing of Enquiry Service (197) PSTN Credit Limit Service – PCL Service (Intelligent Network Services) Home Country Direct Service – NepalDirect (Intelligent Network Services) MCC (198) Complain Registration via IVR in Kathmandu Valley CDMA Limited Mobility Service in Kathmandu Valley CDMA Full Mobility Service Cheap calls @NRS 8. 1606 E-mail and Internet Yearly email Package Dial-up Internet Access PSTN Dial-up Fixed hour Package Night Surfing package Fixed hour / month Package Unlimited Single User Package PSTN Bills in the Internet Post-Paid Mobile Bills Telephone Inquiry Leased Line Connectivity (n*64Kbps) Milestones 1913 1914 1935 1936 1950 1950 1950 1951 1955 1957 1962 1964 1965 1974 1982 1982 1983 1984 1984 1987 1995 1996 1996 1996 1996 1997 1999 2000 2000 2001 2002 2003 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 Establishment of first telephone lines in Kathmandu Establishment of Open Wire Trunk Link from Kathmandu to Raxaul (India) Installation of 25 lines automatic exchange in Palace Installation of Open Wire Trunk line form Kathmandu to Dhankuta Establishment of Telegram service Introduction to High Frequency Radio System (AM) Establishment of CB telephone exchange (100 lines) in Kathmandu Installation of Open Wire Trunk line from Kathmandu to Palpa Distribution of telephone line to general public Registered as an ITU State member on 5th December 1957 First Public Telephone Exchange in Kathmandu (300 lines CB) Beginning of International Telecommunications Service using HF Radio to India and Pakistan First Automatic exchange In Nepal (1000 lines in Kathmandu) Microwave transmission links establishment for internal trunk Establishment of Standard “B” Type Earth Station for international circuits Establishment of SPC telex exchange Establishment of Digital Telephone Exchange Commencement of STD service Reliable Rural Telecom Service (JICA) Commencement of ISD service Installation of Optical Fibre Network Conversion of all Transmission link to Digital transmission link Automation of the entire Telephone Network Independent Int.O. Gateway Exchange established Introduction of VSAT services Digital Link with D. 188. WebSMS CDMA Post-paid C-Phone Pre-paid C-Phone Post-paid SkyPhone Pre-paid SkyPhone SkyData Service Domestic Roaming SMS PSTN IVR Services 198.T. 1601. GPRS.Telecom Services Local Calls Domestic Telex Local Leased Lines National Trunk Calls International Trunk Calls International Telegram International Telex Operator-Assisted Int'l Telephone ISDN (Integrated Services Digital Network) Pay Phone Intelligent Network Services PCC (EasyCall Prepaid Calling Card Service) AFS (Advanced Freephone Service) PCL (PSTN Credit limit Service) HCD (Home Country Direct Service) GSM Post-paid NTC Mobile Pre-paid Namaste Mobile Roaming (Incoming & Outgoing) SMS.

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