Lahore September 1 2022: The External Auditors have given their unqualified opinion on the financial statements of the World Call Limited, on standalone basis, for the year ended December 31, 2021 wherein they have given a ‘Material Uncertainty relating to Going Concern’.
Going concern indicating that the Company has accumulated losses of Rs. 14,023 million and current liabilities exceeds current assets by Rs. 6,324 million.
These conditions, along with other factors like declining revenue and contingencies and commitments to the financial statements, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The Company’s management however has carried out a going concern assessment of the Company and believes that the going concern assumption used for the preparation of these financial statements is appropriate.
Auditor raised concern regarding revenue recognition, recoverability of Trade Debts and contingencies.
Revenue Recognition: The Company has reported revenue amounting to Rs 2,114 Million for the year ended December 31, 2021 for details refer note 38 to the financial statements. There is a risk around the accuracy and completeness of revenue recorded. The complex billing system that involves processing a large volume of data making it inherent industry risk. We identified recognition of revenue as a key audit matter because (i) revenue is one of the key performance indicator of the Company (ii) it gives rise to an inherent risk that revenue could be subject to misstatement to meet expectations or targets and (iii) recognition and measurement of revenue and contract related assets may involve significant judgement as per IFRS-15 ‘Revenue from Contracts from Customers’
Recoverability of Trade Debts: As at December 31, 2021, the Company’s gross trade debtors were Rs 3,462.22 Million against which allowances for doubtful debts of Rs 3,005.68 Million were recorded for details refer note 32 of the financial statements. We identified the recoverability of trade debtors as a key audit matter because it involves significant management judgment in assessing the amount likely to be received and estimates in determining the allowance of expected credit loss.
Contingencies: There are a number of threatened and actual legal, regulatory and tax cases against the Company for details refer note 21 of the financial statements. The contingencies require management to make judgments and estimates in relation to the interpretation of laws and regulations and the recognition and measurement of any provisions that may be required against such contingencies Involvement of subjectivity, inherent uncertainty and the time period such matters may take to resolve, the management judgments and estimates in relation to such contingencies may be complex and can significantly impact the financial statements. For such reasons we have considered contingencies as a key audit matter.
Worldcall Telecom Limited is a public limited Company incorporated in Pakistan on March 15, 2001. The Company commenced its operations on December 01, 2004 and is engaged in providing Wireless Local Loop (“WLL”) and Long Distance & International (“LDI”) services in Pakistan; re-broadcasting international/national satellite/terrestrial wireless and cable television and radio signals; interactive communication and to establish, maintain and operate the licensed telephony services. The Company has been licensed by Pakistan Telecommunication Authority (“PTA”) and Pakistan Electronic Media Regulatory Authority (“PEMRA”) for these purposes.
