Sri Lanka Telecom PLC Annual Report 2018
DIGITALLY BEING Vision
All Sri Lankans seamlessly connected with world-class information, communication and entertainment services
Mission Your trusted and proven partner for innovative and exciting communication experiences delivered with passion, quality and commitment.
Values Customer Caring Teamwork We put our customers at the centre of We are one team with a common everything we do purpose to achieve common goals
Trustworthy Excellence We are true to our promises We are committed to exceptional performance Innovative We continuously invent new Results Driven opportunities through creative thinking We are committed to enhancing shareholder value Responsive We are ready to listen and act promptly DIGITALLY BEING...
SLT is in the vanguard of an emerging “digital existence” that is already changing life in Sri Lanka. This new way of life leverages the technology of today...and tomorrow...providing era changing detail, perspective and opportunity across the gamut of life.
In journeying towards our goal of becoming Sri Lanka’s preferred digital lifestyle provider by 2022, we’re honoured to guide the Nation and its people into an exciting new digital world. 02 Sri Lanka Telecom PLC | Annual Report 2018 Contents CONTENTS Regulatory capital –68 Social andenvironmentalcapital –64 Employee capital–60 Business partnercapital–58 Customer capital–51 Investor capital–48 Awards –46 Institutional capital–42 Financial capital–34 Management discussionandanalysis 34-69 Stakeholders 30 Our valuecreationmodel 28 Our strategy 25 Operating environment 21-24 A SmarterSriLankawithSLT 18 Chief OperatingOfficer’sreview 16 Chief ExecutiveOfficer’sreview 14 Group Chairman’sreview 12 Highlights oftheyear 10 About SLT 04 Introducing thereport 03 Notes totheConsolidatedFinancialStatements–119 Cash FlowStatement–118 Statement ofChangesinEquity–Company117 Statement ofChangesinEquity–Group116 Statement ofFinancialPosition–115 OtherComprehensiveIncome–114 Statement ofProfitorLossand Independent Auditors’Report–110 forthePreparationofFinancialStatements–109 Statement ofDirectorsinRelationtotheirResponsibility theAffairsofCompany–104 Annual ReportoftheBoardDirectorson Financial reports 103 Risk management–99 transactionsreviewcommittee–98 Report oftherelatedparty Remuneration andnominationcommitteereport–97 Audit CommitteeReport95 Corporate Governance–84 Leadership Team–74 Board ofDirectors–70 Stewardship 70-102 Corporate Information–InnerBackCover Form ofProxy–Enclosed Notice ofAnnualGeneralMeeting–184 Abbreviations –183 GRI contentindex–179 Portfolio oflands–175 Ten yearprogress–Group174 Supplementary information 174
presented intwoprimaryformats. a few).OurAnnualReportthusis disclosures (thatwouldinterestonly comprehensive compliance-related while atthesametimeproviding large anddiversestakeholdergroup), concise, relevantinformation(toa communicate effectivelythrough have adoptedbalancestheneedto The approachtoreportingwe creating valueovertime. and prospects–inthecontextof strategy, governance,performance aspects ofourbusiness–suchas and interdependenceofthemany communicates therelationships This integratedAnnualReport THE REPORT INTRODUCING Online report Scan toviewthe in print,PDFandCD formats A conciseintegrated annualreport – – – given inthefollowingwhereapplicable: on concepts,principlesandguidance In preparingthisReportwehavedrawn and standards. with allapplicablelaws,regulations, as inthepast,iscompliance The informationcontainedherein, sustainability reporting. reporting cycleforfinancialand is consistentwithourusualannual 1 Januaryto31December2018and This Reportcoversthe12-monthperiod appropriate anddulyidentifiedassuch. separately orasone‘ICTbusiness’ thus treatsthesetwosegmentseither Management DiscussionandAnalysis and mobileICToperations.Our segments, namely,fixedICToperations business isdominatedbytwoprincipal Company andtheGroup.SLTGroup’s are discussedinthecontextof previous year,keyfinancialaspects with theframeworkadoptedin and “Group”collectively.Consistent as “SLT”orthe“Company”individually, PLC anditssubsidiaries,dulyidentified Report comprisesSriLankaTelecom The overallboundaryofthisAnnual and compliance Report boundary Methodology™ Smart IntegratedReporting Framework (IIRC) International IntegratedReporting GRI Standards Sustainability ReportingGuidelines Global ReportingInitiative(GRI)
http://slt.lk/en/about-us/investors/financial-reports/annual available onourwebsite isalso This AnnualReport You maycontact: questions onthisReport. We welcomeyourcommentsor Queries alleviate suchrisks. we takeallnecessaryactionsto on societyandtheenvironment, operations causereciprocalimpacts We arehighlycognisantthatour social andenvironmentalsustainability. precautionary principlewithregardsto The Companyappliesastringent Precautionary principle
www.slt.lk [email protected]
+94 112399478 Sri Lanka. Lotus Road,Colombo01, Sri LankaTelecom, Company Secretary, Mr MaheshAthukorale,
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Sri Lanka Telecom PLC | Annual Report 2018 04 Sri Lanka Telecom PLC | Annual Report 2018 lifestyle provider. nation’s preferreddigital provider andbecomethe provider intoadigitalservice a communicationsservice journey totransitionfrom is onatransformational industry today.Today,SLT that distinguishtheICT range ofapplications to anever-evolving delivering basicconnectivity of allSriLankans–from the dreamsandaspirations opportunities andfulfilling years, SLThasbeenenabling Sri Lanka.Forover160 services providerin backbone infrastructure the leadingbroadbandand (ICT) solutionsproviderand Communications Technology the nationalInformationand (“SLT” orthe“Company”)is Sri LankaTelecomPLC ABOUT SLT Group structure Total HRsolutionsprovider (Private) Limited SLT HumanCapitalSolutions real estateresources Managing SLT’s (Private) Limited SLT PropertyManagement Healthcare industry ICT serviceprovider– Software developmentand eChannelling IPTV supportservices SLT VisionCom(Private)Limited Mobile serviceprovider Mobitel (Private)Limited 87.59%
100% 100% 100% 100% 99.99% 99.94% 40% 100% 100% Network solutionsforcorporate customers andsmallbusinesses Wireless broadbandoperations Sky Network(Private)Limited management &activationsand Cable Depot(Private)Limited SLT Campus(Private)Limited Directory information,event Higher educationservices SLT DigitalInfoServices Submarine cabledepot Sri LankaTelecom (Services) Limited (Private) Limited Galle Submarine service provider digitalservices SERVICES
international, andIPTV. wholesale, enterprise,cloud, include voice,data,broadband, ICT facilitiesandservicesprovided domestic customers. public sectorinstitutions,and Internet ServiceProviders(ISPs), telecommunications operatorsand across alleconomicsectors,other services toorganisationsofallsizes provides telecomnetworksandICT operates inthefixedICTbusiness.It The Group’sholdingcompany,SLT, Fixed ICToperations Products andmarkets expenditure oftheSLTGroup. total assets,andnearly100%ofcapital accounted for95%ofrevenue,98% business. In2018,theycollectively constitute theSLTGroup’score Fixed andmobileICToperations y y y Group’s strategicsegments: three operatingsegmentswhicharethe The SLTGroupprimarilyfocuseson technologies. to itsvariedcustomersviathelatest services, andnetworkingsolutions (IPTV), cloudcomputing,hosting services, InternetProtocolTelevision mobile telephony,broadband,data of ICTsolutionsthatcoverfixedand diversified servicesandanentirerange The SriLankaTelecomGroupprovides Principal linesofbusiness y y y Other segmentoperations Mobile ICToperations Fixed ICToperations y y y y pioneer inSouthAsia: services. SLTMobitelhasbeenthe services, andarangeofvalue-added enterprise solutions,international services, high-speedbroadband, services includingmobiletelephony subsidiary ofSLT,offersmobileICT Limited (Mobitel),afully-owned Sri LankaTelecomMobitel(Private) Mobile ICToperations global playerinthetelecomindustry. services, securingitspositionasakey networks toofferstate-of-the-artglobal multiple internationalsubmarinecable technologies. TheCompanyalsousesits and bothfixedmobile4GLTE ADSL2+, VDSL2,carrier-gradeWi-Fi, of technologiesincludingopticalfibre, efforts aresupplementedbyanarray Backbone Network(NBN).These Generation Network(NGN)andNational broadband footprintthroughtheNext enterprise servicesbyexpandingthe broadband-based consumerand objectives istodriveadoptionof One oftheSLTGroup’skeystrategic y y y y 4.5G/4G+ mobilenetwork To launchthefirstcommercial Advanced Protechnology,and To successfullytrial4.5GLTE- technology MIMO (MultipleInputMultipleOutput) To successfullydemonstrateHSPA+ To launchaSuper3.5GHSPAnetwork time inSriLanka. container terminaloperatorforthefirst Communications solutiontoaleading provided astate-of-the-artLTECritical the digitaltransformation,Mobitel Taking anotherinnovativesteptowards deployment over3.5GHzspectrum. Sri Lanka’sfirst5GMassiveMIMO Mobitel publiclydemonstrated Leading thewayin5GSriLanka, customers. voice callsovertheLTEnetworkforits enables theabilitytomakehighquality VoLTE (VoiceoverLTE)servicewhich sites acrossthenationtogetherwith Expansion Projectwithover1,600LTE rolling outitslargestever4GLTE In theyear2018Mobitelcommenced using 900MHzspectruminSriLanka. a Sub-1GMobileBroadbandNetworkby Further Mobitelwasthefirsttodeploy network experience. SLT Mobitel’sunparalleledbroadband Mobile NetworkinSriLankaatteststo Ookla SpeedtestforbeingtheFastest country. Theawardreceivedfrom the fastestbroadbandspeedsin in SriLanka,SLTMobitelpossesses the only4.5G/4G+MobileNetwork With thisintroductionandbeing About SLT 05
Sri Lanka Telecom PLC | Annual Report 2018 06 Sri Lanka Telecom PLC | Annual Report 2018 About SLT Mobile ICT of bothfixedandmobileICTsegments. enterprises, households,andindividuals enterprise solutions,TV,andfor revenue wereaccountedbybroadband, the fastestgrowthrateswithregardsto SLT Mobitel.Intermsofbusinesslines, and acorresponding6.5%growthat driven by6.4%revenuegrowthSLT by 7.5%toLKR81.4Bn.duringtheyear, Total revenueoftheSLTGroupgrew SLT group revenue in2018 Scale ofoperations to SriLankansinthenearfuture. commercially deployinga5GNetwork equipment. Welookforwardto and commerciallyavailablenetwork commercially availableuserdevices 64x64 MIMOconfigurationwith technology demonstrationutilized (Multiple InputMultipleOutput) band for5G.This5GMassiveMIMO recognized astheprimaryfrequency 3.5GHz spectrumwhichisglobally Sri Lanka’sfirst5Gdeploymentover Mobitel publiclydemonstrated Leading thewayin5GSriLanka, Towards 5G global webofover650networks. roaming withthepartnershipofa nationwide andincludesinternational SLT Mobitel’scoverageextends Composition ofgrouprevenue 43.0% various pointsintheisland. which accumulatesalltrafficfrom connected throughoutthecountry We equallypossessover300nodes the island,constituting2.5millionloops. optical fibredispersedthroughout We possessnearly30,000kmof Network connectivity nearly 45,000kmsacrosstheisland. speeds ofupto100Mbps,extends Our fibreopticnetwork,withbroadband wholesale customers. as wellotheroperatorsand enterprises, publicsectorinstitutions, retail customers,multinationalsand small andmediumenterprises(SMEs), customers includedomesticusers, fixed andmobileICTservices.Our of oversevenmillionaccountsacross country andservesacustomerbase The SLTGroupcoversthewhole Our reach Exchange. companies ontheColomboStock ranking 16thamongthelisted LKR 2.33Bn.asat31December2018, adjusted marketcapitalisationof blue-chip companieswithafloat SLT isoneofSriLanka’smostvaluable Market capitalisation 5.0% Other 52.0% Fixed ICT The National Broadband computing resourcesin-house. to deployingtheirowndedicated scalable andcost-effectivealternative cloud platformoffersenterprisesa network. SLT’sdatacentresandAkaza are interconnectedviaSLT’sfibreoptic computing services.Thedatacentres and reliabledatahostingcloud Welikada tooffercustomerssecure data centresatSLTheadquartersand in 2018,whichjoinsSLT’sestablished SLT launchedthe“NationalDataCentre” centres Multiple inter-connected data the country. the futureneedsofallICToperatorsin the country.TheNBNaimstocater a veritableassetinthedevelopmentof Sri Lankawiththelowestlatencyandis offers thefastestbroadbandspeedsin 1+2 redundancysystem.Ournetwork functioning duetoacomprehensive SLBN nodes.Itisalwaysavailableand 100G technology,300nodes,and64 Our backbonenetworkisbuilton network mobile arm. (4G/4.5G) technologiesviaour (3G/3.5G/3.75G), LTE/LTE-Advanced UMTS/HSPA/HSPA+/DC-HSPA+ connect usingGSM/EDGE(2G/2.5G), services. Mobilesubscriberscan with voiceandbroadbandwireless 7.6 millionsubscribersacrossSriLanka Our mobilenetworkconnectsover cutting-edge routers. with anultrahigh-speedcapacityand transmission networkisequallybuilt place inafewmilliseconds.Thecore route informationtotherequired Thus, basedonrequirementswecan IP network speed andcapacitythatcomprises our networkisofhighquality, Optical Network(ASON).Further such asAutomaticallySwitched comprehensive Protectionschemes at alltimesduetoavailabilityof 64 SLBNnodeswhicharefunctioning main backbonenetworkcomprises nation-wide telecommunication Our advancedfibreopticbased National BackboneNetwork carrier business.Itisalso,connected connecting government,enterpriseand (Broadband, PEOTV,4GandWiFi) delivering SLT’sretailproducts platforms, whicharerelatedto IP transportservicesforallvarious SLT’s IPNetworkprovidesintelligent country’s development. and isaveritableassetinthe 8Tbps backedwithalowlatency; largest networkintheIsland. service segregationnodes,makingitthe high-capacity nodesandover3,000 access ringsconsistingofover400 backbone, metrorings,andmultiple network iscomprisedofann*100Gbps connectivity forbusinesses.The back-up pathstoprovideglobal to internationalcarrierswithmultiple About SLT 07
Sri Lanka Telecom PLC | Annual Report 2018 08 Sri Lanka Telecom PLC | Annual Report 2018 About SLT SLBN network Havelock Town Negombo Mannar Colombo Gampaha Kaluthara Mount Lavinia Chilaw Madawachchiya Kotte Maradana Kelaniya Welikada Kegalle Horana Jaffna Kurunegala Galle Avissawella Nawalapitiya Chettikulam Ratnapura Matara Kilinochchi Matale Nuwara Eliya Hatton Horowpathana Vavuniya Anuradhapura Kandy Habarana Tangalle Embilipitiya Bandarawela Polonnaruwa Badulla Hambanthota Trincomalee Batticaloa Monaragala Ampara Kalmunai maintenance fortheregion,reducingservicerestorationtimesandrenderingSLTakeyglobalplayerintelecomindustry. Singapore-based IndianOceanCableShipPrivateLimited,GalleSubmarineDepothandlessubmarinecable landing stationatMatarawithacapacitytoconnecttheEastandWestcablesegments24Tbpseach.Ourjointventure WE 5,Bharat-Lanka,andtheDhiraagu-SLTsystem.SLTisakeymemberofSEA-ME-WE5cableconsortiumwithfull SLT connectsSriLankatotheworldthroughfiveinternationalsubmarinecablesystems:SEA-ME-WE3,4,SEA-ME- Global connectivity Mount Lavinia opened inMarch2019. operational from1stofJan2019 onwardsandtheDepotwillbeceremonially (SEAIOCMA) zone.TheSubmarinecabledepotwillbecommercially operators underSouthEastAsiaIndianOceanCableMaintenance Agreement for providingsubmarinecablesparestoragefacilitiesthe regionaltelecom to operatetheSouthAsia’sfirstSubmarineCableDepotin Gallededicated Indian OceanCableshipPrivateLimited(IOCPL)andSriLanka Telecom(SLT) Galle SubmarineCableDepotPrivateLimitedisajointventure formedwith South asia’s first submarine cabledepotingalle About SLT 09
Sri Lanka Telecom PLC | Annual Report 2018 10 Sri Lanka Telecom PLC | Annual Report 2018 Highlights oftheYear HIGHLIGHTS OF THE YEAR Mobile subscribergrowth 800,000 New fixedlineconnections 1,717,200 operating profitgrowth 94.3% Touch points 270+ island-wide Group First-Call Resolution(FCR) Quality levelreachedfor 86.99% segment growth Non-voice andenterprise 33% PEO TVconnections 415,000 LKR 81.4 Bn. LKR 81.4Bn. Group revenue Million calls received 10.1 customer satisfactionsurveys Positive feedbackfrom 95% LKR 30.0 Bn. LKR 30.0Bn. contributed inlevies,taxes, New recruits 623 Broadband connections 966,925 Government ofSriLanka and licensefeestothe satisfaction
86% Customer
Profit aftertax Revenue 1,500 3,000 4,500 6,000 7,500 (LKR Mn.) 100,000 (LKR Mn.) Earnings pershare(LKR) Profit aftertax(LKRMn.) Profit beforetax(LKRMn.) Operating profit(LKRMn.) EBITDA (LKRMn.) Revenue (LKRBn.) Company Earnings pershare(LKR) Profit aftertax(LKRMn.) Profit beforetax(LKRMn.) Operating profit(LKRMn.) EBITDA (LKRMn.) Revenue (LKRBn.) Group 20,000 40,000 60,000 80,000 Company Company 0 0 2014 2014 Mobitel Mobitel 2015 2015 Group Group 2016 2016 2017 2017 2018 2018 (LKR) 10,000 (LKR Mn.) 0.75 1.50 2.25 3.00 3.75 Earnings pershare(EPS) Profit beforetax 2,000 4,000 6,000 8,000 Company Company 0 0 2014 2014 Group Mobitel 2015 2015 13,457 25,561 1,841 4,948 7,169 7,613 1,906 3,142 47.39 81.44 2.74 1.06 2018 Group 2016 2016 11,379 21,205 3,940 5,528 3,918 1,428 2,129 44.54 75.74 2.18 0.79 2017 258 Highlights oftheYear 2017 2017 Change 2018 613.6 2018 25.6 33.5 25.6 29.7 94.3 18.3 20.5 33.5 47.6 6.4 7.5 (%) 11 Sri Lanka Telecom PLC | Annual Report 2018 GROUP CHAIRMAN’S
REVIEW SLT, as the incumbent operator in Sri Lanka with a legacy spanning over 160 years and still encompassed with traditional layouts and procedures faces a real challenge in taking on a transformation of this scale. The usage of smart devices continues to rise and brings with it a new kind of customer who demands the latest, the fastest, the best; telecom operators are compelled to expand their focus from traditional telco services onto next-generation digital services. SLT has had to revamp and transform itself to face these challenges and convert these threats into opportunities.
With Vision 2022, SLT embarked on a five-year journey to tackle the challenges of this new era while balancing our social responsibility with business opportunities in a sustainable manner. By carefully understanding the national socio-economic requirements and clearly communicating our Vision to our stakeholders, we have left no space for surprises as we go through a cultural change to transform from a communications service provider to a digital services provider.
As the only operator in Sri Lanka in whom the Government has a stake, our strategies are closely aligned to that of the National Policy, digitally empowering the citizens, to make Digital technology is Sri Lanka the Digital Hub in this region. advancing at a rapid By working closely with the Ministry pace with innovative apps of Telecommunication and Digital and software out-pacing Infrastructure and other ministries, hardware which in turn catch up TRC and ICTA, we fulfil our social to ably support the new innovative responsibility by taking leadership applications, becoming a never- in establishing key infrastructure ending speedy cycle where Digital development projects to connect Disruption is the order of the day. schools, government offices, post Telecommunications service providers offices, hospitals, and other key must “unlearn” the traditional telco institutions, and create further value business models and transform and for all stakeholders by establishing key adapt to this rapid change in order to national platforms such as the Lanka survive, let alone sustain and grow. Government Network. Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
12 y y I wishtohighlight: SLT undertooksomeinitiatives During theperiodunderreview, manner. in asustainable opportunities with business responsibility our social while balancing of thisnewera the challenges journey totackle on afive-year SLT embarked With Vision2022, y y increasing convenienceandefficiency. to theNationandeconomyby This initiativewillcontributegreatly (LGN 2.0)initiativeinjustsixmonths. the LankaGovernmentNetwork high-speed fibreconnectivityunder institutions island-widewith SLT connected850Government Product (GDP). drivers ofcountry’sGrossDomestic broadband speedandpenetrationas economy; studieshaveidentified a positiveimpactontheSriLankan infrastructure forthecountrywillhave ADSL coverage.Arobustdigital along withexpanding4GLTEand to TheHome(FTTH)initiative Policy, SLTacceleratedtheFibre In linewiththeNationalICT in newopportunitiesandeconomic where newtechnologieswillbring in infrastructureatthiscrucialnexus, challenges onhowtheGroupinvests for SLT.Theweakercurrencyposed are alreadyverychallengingodds played theirhandinstackingwhat conditions andpoliticalinstabilityhave cellular operators.Challengingeconomic higher operationalcoststhanmost As afixedlineoperator,SLTfaced carried itsfairshare. As always,challengesexistand2018 customer retention. of ourcustomers,thusincreasing be akeyenablerofthedigitallifestyles Internet ofThings(IoT)willserveto Over-The-Top services(OTT),and Internet ProtocolTelevision(IPTV), while valueaddedservicessuchas help toexpandourcustomerbase, and reliabilityofthefibrenetworkwill business. Increasingthereach,speed vital tothesustainabilityofSLT’s Vision. Theseinvestmentsarealso strategy, whichalignswiththeNational digital hubandourglobalnetwork transform SriLankaintoaregional fundamental partofSLT’seffortsto These strategicinvestmentsarea y y y y Sri Lanka’sinternationalconnectivity. during cablefailuresandthusimprove reduce servicerestorationtimes Limited willservetodramatically with IndianOceanCableShipPrivate November 2018.Thejointventure was declaredreadyforservicein The GalleSubmarineCableDepot cable landedinMatara. of-the-art SEA-ME-WE5submarine backbone totheworldviastate- through ournationalfibreoptic four otherdatacentresareconnected in January2018.Thisdatacentreand Data CentreinPitipana,Homagama We launchedtheTierIIINational 21 February2019 Group Chairman P GKumarasingheSirisena and theNationasawhole. assured benefitsforallourstakeholders to achievecommongoalsformutually dialogues onhowwecanworktogether country andlookforwardtomoreopen development oftheICTindustryin agencies foroverseeingthecontinued of SriLanka,Ministryandregulatory I wouldliketothanktheGovernment add valuetotheirinvestments.Finally, support andfaithinourendeavoursto goals, andourshareholdersfortheir and theircontributiontoourcollective employees fortheirtirelessdedication customers fortheirpatronage,our express mysinceregratitudetoour As weheadinto2019,Iwouldliketo Sri Lankain2018. taxes andleviestotheGovernmentof contributed LKR30.0Bn.individend, its partindevelopingtheNationand Nevertheless, SLTcontinuedtoplay 2019 addsyettoourlistofchallenges. tower levythattookeffectinJanuary continued investment.Thecellular through timelyintervention, benefits, whichcanbeharnessedonly Group Chairman’sreview 13 Sri Lanka Telecom PLC | Annual Report 2018 CHIEF EXECUTIVE OFFICER’S
REVIEW Digitalisation SLT’s drive to usher in the digital economy in Sri Lanka is not just limited to initiatives like the communications infrastructure and projects such as the Lanka Government Network (LGN 2.0), but also within SLT itself. 2018 saw more prominence given to internal digitalisation initiatives by assigning staff dedicated exclusively to digitalisation projects. Significant strides have been taken to cultivate a DevOps-style culture within SLT through the ECO BRIDGE (Excel Core Operation and Boost Revenue with Innovative Development and Grow the Enterprise) platform. ECO BRIDGE is an innovation platform wherein SLT employees are empowered and encouraged to contribute to the digitalisation of SLT with their knowledge, capabilities, and skills by developing solutions to automate processes and reduce costs and process turnover time, or even introduce novel products for our customers. In effect, we have taken steps to streamline operations and even innovation within SLT.
National data centre SLT continues The National Data Centre is the next onwards with its step in our drive to empower the digital digital transformation economy in Sri Lanka. In January 2018, journey to become the SLT launched the first purpose-built Nation’s most preferred Tier III National Data Centre in Pitipana, digital lifestyle provider. The Homagama connected to the world structural changes made as through the SEA-ME-WE 5 submarine part of the Centre of Excellence cable system. The facility is the first of initiatives have enabled efficient its kind in the region with an Uptime decision-making processes by uniting Tier III design certification and has the Group to work together towards received Gold Rated Green building a singular set of goals. The pursuit of certification by the Green Building progress is one that never ends, so I Council of Sri Lanka as part of SLT’s would like to take this opportunity to commitment towards sustainability highlight some of the most significant initiatives to reduce carbon footprint. milestones for SLT in 2018. Launching with a capacity of 500 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
14 operating environment. competition andtheturbulent reached LKR81.4Bn.despitethestiff revenue crossedLKR80Bn.and the growthinrevenueof7.5%.Group operational coststo2.5%compared efficiencies limitingtheincreasein This wasasaresultofoperational LKR 25.6Bn.from21.2in2017. (EBITDA) improvedby20.5%to Tax DepreciationandAmortisation Operating ProfitBeforeInterest During thereportingyear,Group Financial performance private servers,andvirtualLANs. managed virtualdatacentres, computing resourcesandoffering cost-effective alternativetoin-house Sri Lankabyprovidingascalable, ushering inthedigitaleconomy Centres andCloudplatformaretruly reliability andflexibility.SLT’sData and maintenancecostswhileincreasing their owninfrastructureinvestment services andCloudtoreduce are startingtoadopthostedmanaged when publicandprivateenterprises racks, thefacilitylaunchesatatime and skills. capabilities, their knowledge, digitalisation with contribute toSLT’s and resourcesto with thetools SLT employees empowering We are 21 February2019 Chief ExecutiveOfficer K AKiththiPerera part ofit. of ourjourneyandcontinuetobea all stakeholdersofSLTforbeingapart work. SLTisready.Iwouldliketothank as doalotofchallengesand A lotofpromiseliesaheadin2019, lifestyle poweredbySLT. the benefitsofahigh-speed,high-tech technology. Ourcustomerswillreap advancements notpossiblewithcurrent revolution thatpromisestobringabout connectivity. Mobitelwillusherinthe5G new propertieswithultra-fastfibre fibre infrastructureandempower Port City,thatwillseeusextendour developments inSriLanka,including for severalprestigiousupcoming telecommunications serviceprovider been selectedastheexclusive for adigitalSriLanka.Wehave SLT isbuildingthedigitalinfrastructure profit aftertaxoftheGroup. revenue, 44%toEBITDAand72% performance andcontributed48%to Mobitel improveditsoverall is anYoYincreaseof25.6%. for theyear2018wasLKR4.9Bn.which & Equipment.TheGroupprofitaftertax reflected inincreaseProperty,Plant services toourcustomerswhichis infrastructure toprovideworld-class investments instate-of-the-art We continuedtomakesignificant LKR 7.6Bn.comparedto3.9 in operatingprofitwhichreached commendable improvementof94.3% Consequently, theGrouprecordeda Chief executiveofficer’sReview 15 Sri Lanka Telecom PLC | Annual Report 2018 CHIEF OPERATING OFFICER’S
REVIEW An issue that most incumbent telecom operators around the world currently face is having to address their ageing infrastructure in the face of an evolving customer and market. As a developing nation, Sri Lanka’s technology is on par with developed countries, but the country lacks the geographical distribution of network infrastructure that advanced countries have. For SLT, this has been an opportunity to implement fibre connectivity especially in undeveloped and developing areas of the country, as the only operator who has given legal rights. Whereas other players in the developed countries who had bad copper network coverage are 100% looking to superfast copper technologies to utilise their existing copper networks. Therefore, the past few years have seen that SLT has been laid over 45,000 kms of fibre infrastructure in the country. Since we have been able to provide reliable and unique products that are unmatched in the region, this fibre network has given us a competitive advantage over our competitors, who are generally cellular technology-based.
Today, our customers can avail of 2018 has been a SLT FTTH service in many areas and turning point for enjoy 100 Mbps download speeds, SLT. The execution upgradable to 1G unmatched by any of our 5-year strategic other service provider. We have several plan for the digital business partners with whom we have transformation of SLT established agreements to extend our has seen a lot of action fibre connectivity; the Colombo City being taken, resulting in some Centre Residencies, the upcoming significant changes. The entire Port City, Phases 3 and 4 of Havelock structure of our Management has City, and several other condominium been overhauled to make SLT more projects will be supercharged by SLT’s proactive in an industry that is seeing cutting-edge FTTH network. But beyond incumbent telecom operators such that, our fibre connectivity provides as ourselves having to adapt to new a framework and a platform which circumstances. We find ourselves in a unlocks a plethora of opportunities time where the fundamental technology for providing useful services to of our industry is rapidly changing, our customers. and investment is required to ensure that we can keep up with the country’s We have invested heavily in our growing requirements. As the National network infrastructure, but by itself, that ICT Solutions provider, we must address does not mean much. That is why now the demand for data and speeds, as we have recognised and redeployed well as boost the penetration rate of the entire architecture of the network Internet in the country. while investing the development of Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
16 present thefeaturesinanautomated represent entireproductportfolio to layer andapplicationwill network andTechnologyplatforms journey. Eventuallyourconverged platforms aswecontinueonour digital advantage ofourinfrastructureand to developapplicationsthattake to establishbusinesspartnerships will bevirtuallyinfinite.Welook Wi-Fi connectivity,andouravailability them, eventhroughourisland-wide smart devicewillbeabletoaccess will beakeydifferentiatorforus–any fact, accessibilitytoourOTTservices that theycantakeadvantageof.In introduce over-the-top(OTT)services platform, andweintendtouseit today canalreadyavailofourPEOTV and Governmentcustomers.Customers more toourhome,business,Enterprise data centreservices,smartfeatureand services, clouddataanalytics, IoT services,fintechIPTV fibre connectivityenablesustobring services throughourplatforms.Our transform ourbusinessbydrivingdigital forward, wewillhavetogrowand new technologyandplatforms.Going circumstances. adapt tonew having to such asourselves telecom operators seeing incumbent industry thatis proactive inan to makeSLTmore been overhauled Management has structure ofour The entire – throughbespokesoftwaresolutions – tourism,healthcare,education, etc. our customersinvariousindustries customers. Addressingtheneeds of resources intoeffortstosupport our we willnowrefocusourvery capable used tofocusoninternalsupport, Provider (DSP).WhereasourITefforts our transformationintoaDigitalService being focusedaroundournewreality, Our internalstructuralchangesarealso for aperiodoffiveyears. 40 regionalsubmarinecableoperators provide warehousingfacilitiesforover in 2018thatwillseetheCableDepot Maintenance Agreement(SEAIOCMA) East AsiaandIndianOceanCable global presence:SLTsignedtheSouth highlights SLT’smovestoexpandour more reliable.TheCableDepotalso has significantlyimprovedandbecome Sri Lanka’sinternationalconnectivity with theabilitytodeployrepairship, several backupsystemsinplaceand for afewdays,buttodaywehave failure wouldhaveisolatedthecountry cable failure.Justoveradecadeago, times intheeventofaninternational dramatically reduceservicerestoration the region,CableDepotwillhelpto attend tosubmarinecablerepairsin a cableshiponstandbyinGalleto in ourglobalnetworkstrategy.With Cable ShipPvtLtdisanothermilestone with Singapore-basedIndianOcean be launchedin2019,ourjointventure The GalleSubmarineCableDepot,will West cablesegmentsat24Tbpseach. capability ofconnectingtotheEastand cable landingstationinMatarawiththe SEA-ME-WE 5cablewhichhasafull submarine cablesystems,includingthe SLT isconnectedtotheworldviafive supported byourglobalconnectivity; services. Ourdatacentresare data hostingandcloudcomputing country, providingsecureandreliable Centre isthefirstofitskindin our fibrebackbone.TheTierIIIData in 2018,anotherinitiativepoweredby We launchedthe“NationalDataCentre” requirement. self-care portalstoconfiguretheirown environment wherecustomerwilluse 21 February2019 Chief OperatingOfficer M BPFernandez years tocome. quality servicesandexperiencesfor we continuetodeliverinnovative,high with ourcustomersandensuringthat way toestablishinglastingrelationships customers. Theseeffortswillgoalong provide exemplaryservicetoour our employeesareempoweredto to buildaworkingenvironmentwhere customer experience.Wewillcontinue Operation Centre(SoC)tofocuson Centre willbeupliftedtoService first call.FurtherourNetworkOperation addressing customerissueswithintheir operations aregearedtowards For instance,our1212ContactCentre to achievethedesiredoutcomes. everyone collaborateswitheachother driven bycustomersatisfactionwherein now adoptedaconvergedapproach to operateintheirownsoils,wehave previously ourvariousoperationsused to serveourcustomersbetter.Whereas empowering ouremployeestobeable therefore, wearefocusingon if youdon’thavedelightedemployees; you cannothavedelightedcustomers our digitaljourney.Weunderstandthat The customerexperienceisalsovitalto internal andexternalrequirements. including softwaresolutionstoaddress developing innovativenewproducts, encourage andsupportourstaffin platforms likeECOBRIDGEthatwill ushered inaDevOpsculturethrough strategic focus.Tothisextent,wehave and ourplatformswillbecomeamajor Chief operatingofficer’sReview 17 Sri Lanka Telecom PLC | Annual Report 2018 A SMARTER SRI LANKA WITH SLT
The world is in the middle of a digital revolution. Several factors have come together to spark this revolution: the proliferation of smart devices that can connect to the Internet, advances in cost-effective storage technology, wireless access to high-speed Internet, apps that can use smart devices and the Internet to accomplish or speed up tasks – the only limitation that exists is human imagination.
This has spurred about a “smartening” of virtually every aspect of the lives of people: smart televisions, smart homes, Technology spending into smart smart lighting, smart voice-activated city initiatives worldwide assistants, smart watches – nothing is (USD Bn.) left untouched by the digital revolution. Smart cities are emerging, fuelled by data and technology, to create cities 158 that are more efficient and sustainable, bringing about economic development and improved quality of life for inhabitants. There are over 250 smart 95.8 city projects underway in 178 cities 81 around the world. Emerging countries are modernising their public sectors and transforming how they deliver services to their citizens; India alone has embarked on the ambitious “Smart City Mission” to transform 100 urban areas across the country into “smart cities”. Smart cities require smart governments, 2018 2019* 2022* and they are rising to take advantage of technology and data and provide better, Source: Statista more convenient lives for their citizens. * Projection
18 A Smarter Sri Lanka with SLT
What is a smart the need for a digital economy in The first phase of LGN 2.0 saw government? the country and the role a smart SLT having to establish the main government will play in it in Virtual Private Network (VPN) Smart governments are those that order to face future economic core and connect 860 Government embrace and utilise technology to and social challenges. organisations. SLT had to interact and inform their decision-making and coordinate with an incredible number strategies to take more informed A smart government is a connected of stakeholders, including the 860 courses of action. A smart government. LGN 2.0 will help the Government organisations, hospitals, Government is one that is: Government of Sri Lanka to fulfil local Government offices, SLT regional yy Citizen-centric its vision of digitising the economy offices, SLT solution teams, international A smart government understands through a dedicated, high-speed, vendors, local product suppliers, and that its citizens play an important secure, reliable, and centrally managed dozens of island-wide sub-contractor role in the cities and communities government network that will tie all teams for laying out the fibre network they govern, and that they tend to be government institutions into a singular and indoor network implementation. highly informed. Therefore, a smart digital infrastructure. Through LGN 2.0, government removes the silos that ICTA aims to usher public sector SLT took on the design and deployment exist between it and its citizens and employees into the digital era and bring of this challenging project within a tight integrates their input and feedback about efficiency and the smooth flow timeframe and successfully achieved the into its processes. The outcome is an of information, thereby improving the project objectives, all within six months. effective user experience for citizens standards of service in the public and improved efficiency and results in sector and providing citizens with government-citizen interactions. efficient service. SLT took on the design yy Data-driven and deployment of this The role of SLT in smart A smart government gathers data challenging project within from all possible sources – citizens, government public workers, sensors, surveys, a tight timeframe and SLT is the strategic partner for the statistics – and analyses them to successfully achieved infrastructure deployment and solution derive useful information to make implementation for LGN 2.0. SLT is the project objectives, data-driven decisions. perfectly suited for this role due to its all within six months. yy Performance-focused role as the national ICT solution provider A smart government focuses on of the country and its extensive fibre achieving optimal outcomes for optic network that provides ultra-fast LGN 2.0 has effectively removed the all stakeholders. Effective Key and reliable broadband connectivity. physical boundaries that exist between Performance Indicators (KPIs) for a Government institutions and moves smart government will focus on the the Government closer to its objective outcomes rather than the inputs. of offering effective and efficient services to the public. Citizens in rural yy Long-term GOVERNMENT 860 areas of the country now have easier A smart government takes into ORGANISATIONS and convenient access to Government consideration that the return on services, opening up opportunities investment and realisation of benefits to them including making it easier to from smart government initiatives establish businesses, without having to will take course over the long term. Divisional Secretariats 331 travel long distances and incur costs. Management and fiscal planning will have to be plotted out accordingly, beyond election cycles, to fully realise District Secretariats 25 A global Sri Lanka the benefits of a smart government. With Vision 2025, the Government of Sri Lanka envisions the Lanka Government Ministries 50 transformation of the country into Network 2.0 the hub of the Indian Ocean by building a knowledge-based, highly The Lanka Government Network 2.0 Departments 87 competitive, social-market economy. (LGN 2.0) is an initiative launched by The environment of an empowered the Information and Communication Sri Lanka will be one where all citizens Technology Agency of Sri Lanka (ICTA), have the opportunity to achieve higher Hospitals which functions under the Ministry 46 incomes and better standards of living. of Telecommunication and Digital Infrastructure. The strategic project To transform into the hub of the Indian Other Government is aligned to the national policy of Ocean, SLT has launched initiatives
Organisations 321 | Annual Report 2018 PLC Telecom Sri Lanka “Digitisation of the Economy”, wherein such as the SEA-ME-WE 5 cable station the Government of Sri Lanka recognises in Matara, the Galle Submarine Cable 19 A Smarter Sri Lanka with SLT
Depot, and the National Data Centre. And SLT is propelling business The Matara submarine cable landing SLT’s efforts to assist the institutions in the country into the station, with its capacity to connect cloud through platforms such as the East and West segments of the Government of Sri Lanka the Entution Enterprise Resourcing SEA-ME-5 cable at 24 Tbps each, build a smarter Sri Lanka Planning solution and the Akaza Cloud enables operators to terminate traffic go beyond infrastructure platform. Businesses of any size can in Sri Lanka, cross-connect with other take advantage of big data analytics systems, and enhance their carrying and technology. and business intelligence solutions to capacity. The Galle Submarine Cable generate insights at half the cost and Depot is crucial to maintaining the SLT recognises that citizens of all ages time of legacy solutions without the integrity of the complex submarine need to be empowered to help build the upfront investment costs that they cable networks that connect Sri Lanka smart cities of a digital Sri Lanka. SLT would entail. SLT is an enabler for to the world, greatly reducing service aids the country’s vision of building a large and small businesses to benefit restoration times and increasing smart education system by providing from the global digital revolution. service reliability in the Middle East the infrastructure and facilities required and Asia Pacific region. The National for the next generation of Sri Lankans Data Centre takes advantage of SLT’s to engage in their studies with modern SLT continues to build extensive fibre optic network and global technology and access to the wealth of connectivity through the Matara cable information and knowledge available the foundation for a station to provide flexible, scalable, and through the Internet. Ensuring that smarter Sri Lanka. cost-effective data hosting and cloud senior citizens are not left behind on the services to enterprises. Through this country’s digital journey, SLT reaches As SLT transitions into a Digital Services trifecta, SLT leaves it mark on out to them through workshops that aim Provider, with the aim of becoming the world and establishes Sri Lanka to build their ICT skills, thus improving the preferred digital lifestyle provider as a key regional player. their wellbeing and independence. by 2022, we understand the role we play in assisting the Government and SLT ushers in a SLT empowers the nation’s healthcare the citizens of the country to enter the smarter Sri Lanka system through the eChannelling digital era in a digital Sri Lanka. We are platform. Connecting over 210 hospitals ready to meet all the challenges of a A smarter Sri Lanka, one that embraces and 4,500 medical professionals across digital tomorrow. digitalisation, is one that will be the island, SLT is bridging the gap sustainable and globalised, ensuring between healthcare providers and that the country and its citizens citizens through an effective, efficient, are prepared for education and and user-friendly platform that any employment that are reshaped by user can access via their mobile phones digital technologies. SLT, in its capacity through any network, landline, the as the national ICT service provider, eChannelling Mobile App, and over is building the infrastructure and will 2,000 agents around the country. deliver real-time data analytics and Mobitel’s “DengueFreeChild” app takes smart solutions to the Government a grassroots approach in enabling users and other stakeholders. SLT Group to monitor and control the spread of Vision 2022 has already seen SLT dengue in their neighbourhoods. embark on a digital journey, ready for digital Sri Lanka.
The LGN 2.0 project exemplifies how SLT is ready to bring in the digital future in Sri Lanka. SLT is helping to ensure the pieces for a digital economy in Sri Lanka are falling into place through the National Broadband Network and our expertise in planning and executing complex ICT projects, and LGN 2.0 is only the beginning. The future will see SLT develop and implement the digital backbone and smart solutions for Colombo Port City and elevate it to be South-East Asia’s premier smart city. Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
20 growth inthesecountries. there remainsscopefor developed countries(LDCs), 20% ofindividualsinleast- developing countriesand using theInternetin with 45%ofindividuals saturation levels.However, penetration ratesreaching developed countriesdueto moderated formost technologies (ICTs)have and communication and usageofinformation associated withtheaccess rates inmostindicators using theInternet.Growth world’s population–now people –51.2%ofthe in 2018with3.9Billion The worldhitamilestone ENVIRONMENT OPERATING
100 125 (Per 100inhabitants) Global ICTsubscriptiongrowth2005-2018 which peopleaccesstelecommunication access asthedominantmeans through mobile deviceshasrendered mobile or betternetwork.Theprevalenceof can accesstheInternetthrougha3G network signal.Today,mostpeople lives withintheproximityofamobile almost theentireworld’spopulation It isalsoreflectiveofthefactthat means ofICTaccessforthesecountries. tend tobetheprimary,ifnotonly, support it,whereasmobilenetworks cost andneedforinfrastructureto in developingcountriesduetothehigh connections athomebeingproblematic could beduetohavingfixedbroadband growth indevelopingcountries.This 69.3% bytheendof2018,withfaster 4.0% in2007,thatratehadreached whereas theglobalpenetrationratewas since 2007withaCAGRof31.1%– experienced almostexponentialgrowth broadband subscriptionshave of 14.1%bytheend2018.Mobile of 13.0%,reachingapenetrationrate compound annualgrowthrate(CAGR) has grownsteadilysince2005ata Globally, fixedbroadbandpenetration definition streamingvideogrows. data-intensive contentsuchashigh to increaseasthedemandfor Access tobroadbandcontinues * ITUestimate Source: InternationalTelecommunicationUnion 25 50 75 0 Activemobile-broadbandsubscriptions IndividualsusingtheInternet Mobile-cellulartelephonesubscriptions 2005 2006 2007 2008 2009 2010 2011 Fixed-broadbandsubscriptions Fixed-telephonesubscriptions developed countries. less developedcountriesthaninmore contribution toGDPbeingobservedin GDP byasmuch0.15%,withahigher broadband penetrationcanincrease countries. A1%increaseinmobile countries thanlessdeveloped broadband ishigherinmoredeveloped although theeconomicimpactoffixed (GDP) byasmuch0.08%onaverage, can increasegrossdomesticproduct increase infixedbroadbandpenetration impact ontheworldeconomy–a1% penetration rateshaveasignificant Research indicatesthatfixedbroadband the penetrationratestillstandsat32%. the countrytogrowhowever,giventhat remains scopeforInternetadoptionin subscriptions inthecountry.There fixed broadbandandnarrowband broadband subscriptionsasthereare are nearlyfourtimesasmanymobile desktop marketsharesince2014;there Internet accessagainstthedeclinein surge inmobilemarketsharefor this realityisreflectedinthedramatic there arepeopleonEarth.InSriLanka, are moremobilesubscriptionsthan services, includingtheInternet–there 2012 2013 2014 2015 2016 2017 107.0 2018* 69.3 51.2 12.4 14.1
21 Sri Lanka Telecom PLC | Annual Report 2018 22 Sri Lanka Telecom PLC | Annual Report 2018 Operating Environment (people whoarecuttingtheir fixed rate, theincreasein“cord-cutters” reasons forthisdecliningpenetration developing countriesandLDCs are fixed telephoneinfrastructurein And whilethehighcostofimplementing Voice overInternetProtocol(VoIP). Messaging (IM)applicationsand of communicationthroughInstant which hasenabledalternativemeans the massadoptionofInternet, be attributedtomobiledevicesand 12.4% bytheendof2018.Thiscould rate continuestodecline,sittingat The fixedtelephonepenetration Desktop vsMobilemarketshareinSriLanka2013-2018 in SriLanka2014-2018(September) Fixed internetandmobilesubscriptions Source: StatCounter 15 30 45 60 75 (Market share–%) * Projection Source: TelecommunicationsRegulatoryCommissionofSriLanka 1.5 3.0 4.5 6.0 7.5 (Number ofsubscribers–Mn.) 0 0 Mobile MobileBroadband 2005 2013 2006 2007 2014 2008 2009 2010 2015 2011 Desktop FixedBroadband+Narrowband during 2014toSeptember2018. with aCAGRof-1.5%beingobserved decline neverthelesscanbeobserved in fixedtelephonesubscriptions,a not experiencedasdramaticadecline 2005 to2018.AlthoughSriLankahas subscriptions witha42.2%declinefrom largest reductioninfixedtelephone Asia andthePacificexperienced compounded thisissueevenfurther. in developedcountrieshas never hadafixedlinesubscription) “cord-nevers” (peoplewhohave telephone subscriptions)and 2012 2016 2013 2014 2015 2017 2016 2017 2018* 2018* 2.3 2.4 2.5 2.6 2.7 2.8 (Number ofsubscribers–Mn.) 2014-2018 (September) subscriptions inSriLanka Fixed telephone have evenobservedadecline. levels; EuropeandtheArabStates have beguntoapproachsaturation subscriptions indevelopedcountries personal subscription.However,mobile plans orhavingaprofessionaland advantage ofcompetingvoiceordata for variousreasonssuchastaking having morethanonesubscription mobile phone,withmanyindividuals of theworld’spopulationownsa have estimatedthatasmuch76.4% saturation. ICThouseholdsurveys although thisisnotindicativeofmarket 135 subscriptionsper100people, penetration increasingfrom131to saw aslightgrowthwithmobile and geographicallyisolated.SriLanka particularly forthosewhoaresocially opportunities fordevelopment, Africa. Mobileserviceshaveenabled countries inAsiaandthePacific, subscriptions wasdrivenprimarilyby Alternatively, growthinmobile * Projection Commission ofSriLanka Source: TelecommunicationsRegulatory 2014 2015 2016 2017 (Sep) 2018 anticipation ofa2020launch. technology inthefield2017 trialled Pre-5GLTEAdvancedPro services in2019.SLTsuccessfully many as25operatorscouldlaunch5G are deployedonalargescale;as that 5Gwide-areawirelessnetworks in 2018,2019isexpectedtobetheyear approximately 72operatorstesting5G education, andhealthcare.With critical toSriLankasuchasagriculture, vehicles, robotics,andevensectors transformational impactoncities, 5G technologywillhaveaglobally spending powerwillhaveanimpact. expenditure, andlowerconsumer trying toconvertitintooperating significant capitalexpenditureand through. Theindustryisdealingwith difficult economicconditionstoweather of Things(IoT),cybersecurity,and 5G networksandsolutions,theInternet occupied withthelaunchofcommercial 2019 will see the global telecom industry Commission ofSriLanka Source: TelecommunicationsRegulatory 14 21 28 35 (Number ofsubscribers–Mn.) 2014-2018 (September) subscriptions inSriLanka Mobile telephone 0 7 2014 2015 2016 2017 (Sep) 2018 Mobile subscriptionprices 100 (USD) Fixed broadbandsubscriptionprices Source: InternationalTelecommunicationUnion 100 (USD) Source: InternationalTelecommunicationUnion 20 40 60 80 20 40 60 80 0 0 LeastDevelopedCountries Developing SriLanka LeastDevelopedCountries Developing SriLanka 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 World Developed World Developed 2014 2014 2015 2015 Operating Environment 2016 2016 2017 2017 2018* 2018* 23
Sri Lanka Telecom PLC | Annual Report 2018 24 Sri Lanka Telecom PLC | Annual Report 2018 Operating Environment price-sensitive market. is alreadyahighlycompetitiveand costs andincreasemarketshareinwhat infrastructure developmentandtax efforts byplayersseekingtoreduce industry isalsoseeingconsolidation seen elsewhereintheworld,local from voicecalls.Similartotrends Viber, andSkypeeatingintorevenues OTT applicationssuchasWhatsApp, impact ongrowthduetotheof move isexpectedtohavelimited in expandingmarketshare;yet,this cost optimisationandassisttheindustry on voicecallsinanefforttopromote Government alsoremovedfloorrates up theICTsectorinNation.The burden oncustomersandhelptoprop telco levyfrom25%to15%willeasethe the Nation.Therecentreductionof competitiveness andICTadoptionof the industry’spushtoboost the ICTsectorcontinuestochallenge The heavyregulationandtaxationof 109th outof140forICTadoption. Competitiveness Reportin2018and the WorldEconomicForum’sGlobal Sri Lankaranked85thoutof140on Total EffectiveTax Effective ValueAddedTax(VAT) Other GovernmentLevy NationBuildingTax(NBT) Recovery inlieuof Telecommunication Levy
Services (VAS) bolster economicgrowth. Nation’s ICTcompetitivenessand the industry’spushtostrengthen receive themaximumbenefitfrom development. Customersultimately has notsloweddownthespeedof although challengingfortheindustry, with highcompetitionandlowtariffs, infrastructure developmentcombined The capitalexpenditurerequiredfor 70,000 toaboutonemillionhomes. of connectedhomesfromtheexisting the objectiveofincreasingnumber will continuewellinto2020-2021,with expansion ofthefibreopticnetwork monthly maintenance.Moreover,the LKR 10Mn.tobuildand115,000in a costlyinvestment:towercostsover future. Thelevyaddstowhatisalready invest in5Gtechnologythenear coverage andlookingtoadopt when theindustryisexpanding4G at aparticularlyinopportunetime that tookeffectinJanuary2019comes LKR 200,000pertowerannum industry. Thecellulartowerlevyof Other challengespersistforthe Value-Added Voice and 37.70% 17.96% 15.31% 2.04% 2.39% Dialling (IDD)callsand Data-related services Mobile andfixedline International direct Internet –19.74% Internet –15.62% Internet –2.08% IDD –23.26% IDD –16.08% IDD –2.14% 2.04% – provider by2022. preferred digitallifestyle becoming thenation’s (DSP) withthegoalof to adigitalserviceprovider service provider(CSP) from acommunications 2017 totransitiontheGroup Vision 2022wasinitiatedin journey. TheSLTGroup on atransformational it mustplayandembarked SLT hasrecognisedtherole provider ofSriLanka, national ICTsolutions they operatein.Asthe countries andcommunities economic growthofthe ensuring thecontinued of responsibilitytowards shoulder alargeamount growth, telecomoperators change, innovation,and that willgoontofuel fundamental infrastructure By layingoutthe industry attheheartofit. the telecommunication digital transformation,with currently undergoinga The globaleconomyis OUR STRATEGY education, andtransport. infrastructure development,health, provider inallsectors,including infrastructure providertoICTsolutions exclusive telecommunication in manycapacitiesrangingfrom several nationalandstrategicprojects We havepartneredwiththeGoSLon efficiency, andeconomicgrowth. are vitaltostimulatinginnovation, technology acrosstheislandthat infrastructure andcutting-edge sophisticated telecommunications the Governmentthroughdeploying into adigitaleconomy.SLTsupports help theGoSLtransformSriLanka national ICTsolutionsproviderto SLT iscommittedtoitsroleasthe small andmediumenterprises(SMEs). empowering theself-employedand through reducedtransactioncostsand inclusive growthandjobcreation digital ecosystemswillstimulate economy inthenation.Enhanced and thusnurtureadigitallyempowered become competitiveonagloballevel adoption ofemergenttechnologiesto that encouragedigitalisationandthe this visionbydevelopingstrategies Indian ocean.Thecountrywillachieve Sri Lankatobecomethehubof social marketeconomythatcanlead knowledge-based, highlycompetitive national vision,then,seekstocreatea sustainable long-termgrowth.The beyond itsbordersinordertoensure competitiveness, itneedstolook order toboostthecountry’sglobal The nationalvisionrecognisesthatin the countrybecomemoreprosperous. aims tobringaboutreformshelp launched itsvision2025initiativewhich The GovernmentofSriLanka(GoSL) the nationalvision Aligning SLT’svisionwith franchised entities. telecommunications offices,and plant maintenancecentres,regional through newTeleshops,outside to increasecustomerinteraction times, andrestructuredtheorganisation automate processes/reduceprocess employees todevelopsolutions automating processes,encourageour To accomplishthis,wehavesetabout vital tothesuccessofourstrategies. to achieveoperationalexcellenceis Improving ourperformanceefficiency aimed atimprovingcustomerrelations. (CRM) systemanddigitalapplications new customerrelationshipmanagement efforts throughtheintroductionofa back customersandhavebackedour excellence tomanagechurnandwin towards maximisingcustomerservice timely manner.Werenewedourefforts to meetcustomerrequirementsina have beendevelopedandempowered regional operationalandsalesteams a keydrivingforceforallactivities.Our organisation; customercentricityisnow becoming amorecustomercentric 2018, wefocusedoureffortsaround (LTE) networkexpansionprojects.In projects andLong-TermEvolution through acceleratedfibredeployment improved ourcoverageandcapacity presence acrosstheisland.Wehave development, andexpandingourmarket increased marketpenetration, We havegrownourrevenuethrough responsible corporatecitizen. customers andemployees,beinga of ourstakeholders–particularly shareholders, protectingtheinterests improving thereturnoninvestmentfor achieve organisationalgrowthwhile financial andnon-financialgoalsto scorecard principlesthatemphasise SLT’s strategiesevolvearoundbalanced and strategies Strategic imperatives 25
Sri Lanka Telecom PLC | Annual Report 2018 26 Sri Lanka Telecom PLC | Annual Report 2018 Our Strategy a digitalserviceprovider Transformation into People andoperations transformation, includingits Customer experience determine howSLTenacts The peopleinvolvedinthe roles, processes,systems, digital transformationwill Processes andstrategies change andmanagesits entire customerjourney touchpoints alongthe aimed atimproving and supporting models Completing theDSPtransformation leadership philosophiesthatwill processes tosupportaholistic SRI LANKATELECOM Implementing technologythat Technology integration unites groups,functions,and determine howSLTevolves An infrastructuredrivenby customer experience Governance and leadership The waysinwhichnewexpertiseis The applicationofinsightsintothe introduced intotheorganisation organisation obtainedfrom Data andanalytics Digital literacy data gatheredand measured bySLT declining demandforvoiceservices. even thoughglobaltrendsindicate maintained ourvoicesubscriptions, 20% over the previous year and wehave Broadband subscriptionsincreasedby have reachednearly2Mn.subscriptions. voice, broadband,andpay-TVservices The resulthasbeenthatSLT’srangeof increasing itsedu-infotainmentvalue. the platform’sproductportfolioand introduced duringtheyear,addingto and entertainmentchannelswere subscribers; severalneweducational new anduniqueexperiencesto grow thePEOTVplatformtoprovide all familymembers.Wecontinueto packages thatcatertotheneedsof households asaresultofaffordable wireless technologieshaveattracted span therangeofcopper,fibre,and operators. Ourbroadbandsolutionsthat competition fromdomesticmobile growth inthefaceofintense The retailsectorhasalsoexperienced business entities. services andexperiencestolocal has enabledustoprovidenovel with internationalenterprises,which by establishingstrategicpartnerships We haveimprovedourglobalpresence SME andEnterpriselinesofbusiness. competitive rates,wehavegrownour to localenterprisesatattractive, efforts toprovideworld-classservices growth in2018.Throughourincreased SLT recordedremarkableyear-on-year strategy in2018 Performance ofour services willsupportthisstrategy. broadband anddemandfordigital see growthopportunitiesforfixed the digitalliteracyofcitizenswill solutions forSMEs.Theincreasein managing churn,andlaunchingnew penetration, introducingdigitalservices, through aggressiveconsumermarket can leverageourfibreconnectivity and carrier-gradeWi-Fifacilities.We technologies suchasfast-backhauling TVs havecreatedopportunitiesfor smartphone penetrationratesandsmart to newmarketconditions.Therisein perceive tobeessentialcatering one ofthekeystrategiesthatwe Our “fibreeverywhere”strategyis digital ecosystem. quickly totherapidlychanging and BPOservicesectorsareadapting the manufacturing,financialservices, is notimmunetotheseglobaltrends; intelligence. Ourdomesticmarket visual-voice search,andartificial blockchain technology,service-bots, communication, cryptocurrencies, (IoT) andmachine-to-machine(M2M) the emergenceofInternetThings been observedinrecenttimesinclude Some oftheglobaltrendsthathave and bringingalongnewopportunities. how businessisdone,andlifestyles, trends emergingincommunication, the ICTecosystem,leadingtonew Disruptive technologiesarealtering Our evolvingstrategy transformation ofSLT. will bedriventhroughthedigital excellent projectmanagement employee empowerment,and insights-driven approachwith a KPI-drivenculture,dynamic Operational excellencethrough to realiseanyofourstrategies. transformation, wewillnotbeable and innovation;withoutourdigital new apps,processautomation, our digitaltransformationthrough Our thirdkeystrategyistocomplete journey andthatofourcustomers. that willfurtherfacilitateourdigital digital products,services,andsolutions will seeusutilisingbigdatatocraft for companies.Ournextkeystrategy big databecomingauniqueresource growth inconnecteddeviceshasledto seek toexperience.Theexponential facilitate thedigitaljourneythatthey entities, andthereforeweneedto lifestyles ofourcustomersandbusiness a keyroleasenablersofthedigital infrastructure. Weseeourselvesplaying on providingthetechnologyor SLT’s effortscannotrestsolely Our Strategy 27
Sri Lanka Telecom PLC | Annual Report 2018 28 Sri Lanka Telecom PLC | Annual Report 2018 CREATION MODEL OUR VALUE Inputs joint ventures Strategic alliancesand CAPITAL BUSINESS PARTNER International customers Business customers Domestic customers CUSTOMER CAPITAL Shareholders INVESTOR CAPITAL Submarine cableconnectivity Mobile networkinfrastructure Fibre infrastructure Innovation platforms Teleshops including Customer touchpoints Corporate values CAPITAL INSTITUTIONAL Service revenues Subscriber revenues Assets FINANCIAL CAPITAL across SLTGroup 6,650 employees EMPLOYEE CAPITAL Activities
REGULATORY FRAMEWORK
GOVERNMENT TELECOMMUNICATIONS COLOMBO STOCK OF SRI LANKA REGULATORY COMMISSION EXCHANGE
y y y y y y y y y y y y y y y y y y y y y y y y y y Value-added services Digital platforms mCash platform Cellular services Cloud solutions Web hostingservices Data centresolutions Broadband services IPTV services Data services Voice services deployment Infrastructure FIBRE INFRASTRUCTURE FTTH speeds Upto100Mbps Low latencydownload y y y y y y y y y y y y Wholesale products products International data Networking solutions Managed services services Contact centre maintenance Submarine cable Broadband speeds up to21Mbps
xDSL
COPPER INFRASTRUCTURE
WIRELESS INFRASTRUCTURE Burst speedsupto40Mbps Average speedsof8Mbps 3G 4G Beyond
STRATEGY GOVERNANCE CORPORATE VALUES MISSION VISION GOVERNANCE FRAMEWORK GOVERNANCE Outputs Digital Forums ventures collaborations, andjoint Strategic alliances, Responsibility activities Corporate Social Growth, Profits,Taxes BPO services Value-added services Akaza Cloudplatform SLT eSportsplatform Data centreservices platform eChannelling healthcare infrastructure 45,000+ kmsoffibreoptic PEO TVIPTVservices technologies via FTTH,xDSL,3G+4G Voice anddataservices Outcomes and healthcare gap betweenthepublic services thatbridgethe Healthcare channelling our communities Responsibility initiativesfor Corporate Social development ofthecountry Job creationandeconomic for Government Tax revenueandlevies for cableoperators warehousing facilities maintenance and Submarine cable Enterprise Customers services forBusinessand Reliable, world-class for thecountryandregion Reliable globalconnectivity the country infrastructure for communications Sophisticated training forEmployees Remuneration, benefits,and capital gainsforInvestors Dividends, interest,and IPTV servicesforCustomers High-quality voice,data,and Our ValueCreationModel 29
Sri Lanka Telecom PLC | Annual Report 2018 30 Sri Lanka Telecom PLC | Annual Report 2018 Our ValueCreationModel all stakeholders. optimal outcomesfor and servicestoachieve strategies, products, may accordinglyadjustour impact eachothersowe better understandhowwe through variousmeansto with ourstakeholders operate. Weseektoengage environment inwhichwe and thecommunities and advocacygroups, industry regulators,media Government authorities, partners, employees, customers, business include ourshareholders, SLT’s keystakeholders and achieveourobjectives. implement ourstrategies our abilitytosuccessfully may beexpectedtoaffect services; andwhoseactions our activities,products,and significantly affectedby may beexpectedto and organisationsthat Stakeholders areindividuals STAKEHOLDERS long-term expectations. both short-termneedsand is thereforeessentialtomeet identification processandprioritisation conflict withoneanother.Stakeholder different interests,whichsometimes Different stakeholdergroupshave all SriLankansinonewayoranother. SLT Group,touchesonthelivesof The executionofouroperations,at engagement Identification and stakeholders Our primary Government Employees authorities Investors environment Society and Customers Media them, andrespondtotheirconcerns. views, communicateeffectivelywith we seektounderstandourstakeholders’ platforms thatwehaveestablished, Through thevariousengagement engagement processes. and threats,whichinturnshapeour best suitedtoaddressopportunities operating environment,strategies was precededbyananalysisofthe our interactions.Themappingprocess mapping thusformsthebasisofall A systematicapproachtostakeholder regulators Advocacy Business partners Industry groups Stakeholder engagement industry growth innovation and Better return, Business partners and retention customer relationship Improve enterprise and retention relationship customer Improve SME retention relationship and Improve customer Customers industry growth innovation and Dividend, shareprice, Investors to thestakeholder Material issuespertaining
Engagement y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y Post evaluationreviews Projects andevents Partner meetings Newsletters Customer visitsandmeetings Enterprise customerforums Proposals bysalesstaff Newsletters Market surveys owners andITmanagers ICT workshopsforSMEbusiness Product awarenessprogrammes Customer visitsandmeetings SME customerforums Proposals byregionalsalesstaff Customer satisfactionsurvey Brochures Newsletters Mailers social media Engage andinteractthroughthewebsite Contact centre One-to-one interactions Rating reviews Media releases CSE disclosures Annual GeneralMeetings Annual report Quarterly results
engagement Frequency of y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y Need based Need-based Regular basis Annually Regular basis Quarterly Quarterly Monthly Regular basis Regular basis Quarterly Regular basis need based Quarterly and Need-based Need-based through thebill Monthly basis Regular basis Regular basis Regular basis Annually Regular basis Need-based Annually Annually Quarterly Stakeholders
Our ValueCreationModel for theyear Key initiatives forums Enterprise campaigns Field sales SME forums gatherings Customer Management Account Regional Study Health Track Annual Brand agencies reviews torating AGM andrating 31 Sri Lanka Telecom PLC | Annual Report 2018 32 Sri Lanka Telecom PLC | Annual Report 2018 Our ValueCreationModel development and infrastructure Community investment at large) and theenvironment Community (society services smart SriLanka digital servicesor compliances and industry growth, return, innovationand development, better infrastructure Investment and regulatory authorities Government and development training and satisfaction, retention, Employee welfare, Employees industry growth innovation and for betterreturn, Suppliers looking improving sales brand presenceand for strengthening Dealers looking to thestakeholder Material issuespertaining
Engagement y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y Events andactivations Social media Website Media releases Community projects Customer forums Media releases Strategy andoperationalpresentations Annual reportandquarterlyreports and otherregulatorybodies Meetings withTreasury,TRCSL,BOI,Customs Involvement incommunityprojects Award ceremonies Cultural andreligiousassociations Notice boards Emails Transfer handling Grievance handling Employee affinity Information sharingthroughintranet Group meetingsandone-to-one Employee satisfactionsurvey Quality improvements Vendor rewardprogrammes Vendor reviewandawarenesssessions Vendor satisfactionsurveys Procurement policyandvendorselectionprocess Dealer rewardprogrammes Dealer awarenesssessions Dealer review Dealer satisfactionsurveys Dealer meetings Stakeholders engagement Frequency of y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y Need-based Regular basis Regular basis Regular basis Monthly Annually Regular basis Need-based quarterly Annually and Need-based Need-based Annually Annually Need-based Regular basis Annually Need-based Need-based Throughout theyear Regular basis Quarterly Regular basis Annually Annually Annually Need-based Annually Monthly Biannually Quarterly Monthly for theyear Key initiatives forums the regulator meetings with Monthly culture strategy and new business Awareness on Publications convention Dealer engagement withourstakeholders. facilitated asaresultofoureffective The identificationoftheseaspects are the impact. of occurrenceandthemagnitude of being determinedbytheprobability relevance andsignificance,thelatter is “important”ajudgementbasedon as wellthatofthestakeholder.What of ourtelecombusiness(SLTGroup) that areimportant,fromtheperspective Our businessmodelfocusesonaspects Materiality International National Key membershipsarelistedbelow: participate intheirrespectiveactivities. and membersofstaffactively SLT isamemberofseveralassociations External initiatives y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y International InternetSociety Carrier GradeWi-FiForum Carrier EthernetForum Fibre-to-the-Home Community Union (ITU) International Telecommunication Organisation (CTO) Commonwealth Telecommunications International PoPCommunity Global InternetExchangeNetwork IPv6 ExecutionCommittee from itsinception SEA-ME-WE connectivityconsortium Sri LankaInternetSociety eGovernment programme programme (LEARN) Online universityeducation (SchoolNet) programme Online secondaryschooleducation programme Government initiativeoffreeWi-Fi Next GenerationNetworkCommittee National ChamberofCommerce National BroadbandCommittee Materiality matrix importance tothebusinessanditsstakeholders. and canconsequentlybeidentifiedasbeingof“medium”,“high”,or“veryhigh” As such,theseaspectscanberepresentedinatabulatedformasshownbelow;
Importance to Stakeholders No. 10. 14. 19. 16. 18. 13. 15. 12. 17. 11. 4. 9. 6. 8. 3. 5. 2. 7. 1. Medium Very High Procurement practices Indirect economicimpacts Economic performance Socioeconomic compliance Customer privacy Diversity andequalopportunity Training andeducation Occupational healthandsafety Employment Environmental compliance Effluents andwaste Emissions Biodiversity Energy Anti-competitive behaviour Anti-corruption Marketing andlabelling Local communities collective bargaining Freedom ofassociationand High Topic Medium 6, 7 Importance to SLT 9, 10,12, 3, 4,5,8 16, 17 15, 19 High Very High 13, 14,18 1, 2,11, Stakeholders High Very high Very high High Very high Very high Very high High Very high High High High Medium Medium High High High High High Importance toSLT Our ValueCreationModel High Very high Very high High Very high Very high Very high High Very high High High High High High High High Medium Medium High stakeholder Importance to 33
Sri Lanka Telecom PLC | Annual Report 2018 34 Sri Lanka Telecom PLC | Annual Report 2018 Statements andNotes. with theFinancial below isdulysupplemented information presented Company level.The at bothGroupand for theyearunderreview, of ourfinancialperformance This sectionisanoverview stakeholders. for theCompanyandour medium, andlong-term derive valuefortheshort, the othercapital,we our financialcapitalwith infrastructure. Bycombining as ourpropertyand assets wepossess,such monetary valueofthe It alsopertainstothe products andservices. borrowings, toofferour shareholders’ fundsand SLT utilises,suchasour the monetaryassets Financial capitalrefersto FINANCIAL CAPITAL DISCUSSION AND ANALYSIS MANAGEMENT in 2018whichwas anincreaseof2.3%. LKR 33.2Bn.in 2017toLKR33.9Bn. excluding depreciationincreased from efficiently. Theoperatingcosts ofSLT largely contributedtomanage costs of theoperatingexpenseshave controls andcontinuousmonitoring 2.5% toLKR55.9Bn.in2018. Rigorous LKR 54.5Bn.in2017increasedby depreciation oftheGroup The operatingcostexcluding Operating expenses 100,000 (LKR Mn.) Revenue in 2017. LKR 38.8Bn.in2018from36.5 growth of6.5%,torecordarevenue Our mobilearm,Mobitel,recordeda global trends. provider, inordertobeabreastofthe provider fromacommunicationservice SLT wasrealignedtoadigitalservice review theoverallbusinessfocusof LKR 47.4Bn.Duringtheyearunder 6.4% YoYwithrevenuein2018being operations. SLTcompany’sgrowthwas related servicestogetherwithmobile related businesses,FTTH,IPTVanddata driven bytheEnterpriseandCarrier LKR 75.7Bn.in2017whichwaslargely of LKR81.4Bn.in2018comparedto of 7.5%theGrouptorecordafigure The impressiveYoYrevenuegrowth Revenue Profitability 20,000 40,000 60,000 80,000 Company 0 2014
2015 Mobitel 2016 Group 2017 2018 12,000 24,000 36,000 48,000 60,000 (LKR Mn.) Operating expenses interest ratesin thatyear. average over2018andrising currency depreciationof19% on business environmentsuchas notwithstanding challengesin the These growthswereexperienced recorded intheprecedingyear. in 2018,comparedtoLKR3.3Bn. Mobitel recordedaPATofLKR3.6Bn. the sameperiod. LKR 1.4Bn.to1.9during in 2018,whilethePATgrewfrom LKR 2.1Bn.in2017to3.1 YoY. ThecompanyPBTgrewfrom of 47.6%,whilePATgrewby33.5% review, resultinginYoYPBTgrowth and revenuegrowthintheyearunder through efficientcostmanagement company wasaccomplishedprimarily The operationalefficiencyofthe the sameperiod. from LKR3.9Bn.to4.9during LKR 7.2Bn.in2018,whilethePATgrew PBT grewfromLKR5.5Bn.in2017to Group grewby25.6%YoY.The Dollar. Theprofitaftertax(PAT)ofthe the depreciationofLKRagainstUS profit beforetax(PBT)of29.7%,despite rise tohealthyYoYgrowthinGroup’s proper costmanagementhadgiven The growthinrevenuecoupledwith Profits Company 0 2014 2015 Group 2016 2017 2018 Group andcompany levelsrespectively. were recorded as28.0%and25.5%at respectively. In2017thesame numbers and 28.4%atGroupcompany levels Margin in2018wasreportedas 31.38% Following thesametrendEBITDA whole toimproveEBITDA. year, havebenefitedtheGroupasa across theGroupduringfinancial and thecostsavinginitiativesadopted in 2017.Thedecentgrowthrevenue LKR 13.5Bn.in2018from11.4 EBITDA increasedby18.3%to to LKR25.6Bn.in2018.Thecompany movement fromLKR21.2Bn.in2017 was recordedas20.5%witha The improvementinGroupEBITDA EBITDA 1,500 3,000 4,500 6,000 7,500 (LKR Mn.) Profit aftertax 10,000 (LKR Mn.) Profit beforetax 2,000 4,000 6,000 8,000 Company Company 0 0 2014 2014 2015 2015 Mobitel Mobitel 2016 2016 Group Group 2017 2017 2018 2018
Return onequity(ROE) 15 19 23 27 31 35 (%) EBITDA Margin 12,000 18,000 24,000 30,000 (LKR Mn.) EBITDA equity inthecompany. shareholders asapercentageoftheir measures theprofitattributableto profitability inthatyear.Thisratio in 2018canbeattributedtoimproved in 2018from2.4%2017.Theprogress Company, achievedanincreaseto3.3% 2018 from5.5%in2017whileSLTasa The GroupROEincreasedto6.7%in 6,000 Company Company 0 2014 2014 2015 2015 Mobitel Group 2016 2016 Group 2017 2017 Financial capital 2018 2018 0.1 0.2 0.3 0.4 0.5 (Times) 10 (%) Return onequity Gearing ratio escalation ingearing. year of2018hadcausedthis capital expenditureinthefinancial equity. Substantialinvestmentsin funds tothesumofborrowingsand proportion ofacompany’sborrowed 2017. Thegearingratiomeasuresthe of 0.44in2018comparisonto0.4 while theCompanyrecordedaratio was 0.43comparedto0.37in2017 In 2018theGearingRatioforGroup Gearing 0 2 4 6 8 Company Company 0 2014 2014 Management discussionandanalysis 2015 2015 Group Group 2016 2016 2017 2017 2018 2018 35
Sri Lanka Telecom PLC | Annual Report 2018 36 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Assets turnover 0.12 0.24 0.36 0.48 0.60 (Times) in arrivingattheratio. the valueofTotalAssetsisconsidered and theNetAssetsPerShare,where trends intheratiosofAssetTurnover The graphsshownbelowdepictthe recorded in2017. in 2018,comparedtoLKR91.5Bn. The companyaccountedforLKR96Bn. includes networkrolloutexpenses. cables andotheroutsideplantswhich in 2017,withheavyinvestmentsducts, LKR 123.9 Bn. in 2018, from LKR 117.0 Bn. equipment oftheGroupincreasedto Moreover, property,plantand an increaseof4.3%. recorded in2017;whichrepresents at LKR114.6Bn.,from109.9Bn. non-current assetswererecorded 2018. ForSLTasacompany,thetotal 2017 toLKR135.1Bn.asat31December from LKR128.2Bn.asat31December was 5.4%withthesameincreasing of theGroupasat31December2018 The increaseintotalnon-currentassets Non-current assets Assets 0.78 timesrespectively. 2018 werereportedat1.77timesand ratio oftheGroupandcompanyduring capitalised. However,InterestCover the relatedinterestcostshavebeen used tofundcapitalexpenditure, Since majorityoftheborrowingsare Company 0 2014 2015 Group 2016 2017 2018 Financial capital
mobile ICToperations. more capitalintensivethanthe in fixedICToperationsareby nature, represented only28%.Theinvestments assets inmobileICToperationssegment to 70%inthatsegment,whilethe resulted intheassetbaseamounting years infixedICToperationshave Heavy investmentsoverthepastfew Mobile ICT segment revenue Reportable generated fromothersegments. 43% respectively.Thebalance5%is revenue percentagesas52%and by Mobitel),withthecontributing and mobileICToperations(overseen be classifiedunderfixedICToperations The Group’smainstreamoperationscan Segmental performance 10 20 30 40 50 (LKR) Net assetspershare 0 Company 43.0% 2014 2015 Group 2016 2017 Fixed ICT 52.0% 5.0% 2018 Other segment assets Reportable to theFinancialStatements. performance isavailableunderNote5 Additional informationonsegmental Mobile ICT capital expenditure Reportable segment Mobile ICT 38.0% 28.0% Fixed ICT Fixed ICT 61.0% 70.0% 1.0% 2.0% Other Other To Employees To providers Distribution ofvalueadded To Lenders Value AddedStatement – RetainedIncome – Depreciation To BusinessExpansionandGrowth – Interest&Relatedcharges To Lenders – TaxesandRegulatoryfees To Government – Dividendtoshareholders To providersofcapital – Salaries,wagesandotherbenefits To Employees Distribution ofValueAdded Value creation Goods andServicespurchasedfromothersources Other Income Revenue Value Added of capital 4.2% 36.2% 3.3%
2018 expansion andgrowth To Government To business 12.8% 43.5%
To Employees To providers To Lenders of capital 1.4% 38.2% 3.6%
2017 expansion andgrowth To Government To business Financial capital 43.8% 13.1% (34,065) LKR Mn. 48,984 83,049 81,445 17,948 17,750 48,984
1,604 3,342 2,048 6,290 1,606 2018 36.64 12.84 36.24 6.82 4.18 3.28 Management discussionandanalysis 100 % LKR Mn. (33,152) 44,836 77,988 75,741 17,287 17,117 44,836 2,247 5,855 2,334 1,606 2017 637 13.06 38.56 38.18 1.42 5.21 3.58 100 % 37
Sri Lanka Telecom PLC | Annual Report 2018 38 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Subscriber growth 100 200 300 400 500 (Nos. ’000) previous year. increased from8%to9%overthe SLT PLCfromallPEOTVproducts, (17% YoY).Revenuecontributionto subscriber base(18%YoY)andrevenue PEO TVrecordedrobustgrowthin Business growth and commercialindustries. the leisureandeducationalsectors, serving thelocalresidentialmarket, the Companywillfocusonbetter To strengthenitsleadingposition, y y y y y y Sri Lanka: of thefollowingforfirsttimein differentiators includetheintroduction TV servicestosubscribers.Market in thebusiness,providingSLTPEO group, VisionComcelebrated10years A fullyownedsubsidiaryoftheSLT provider withover400,000subscribers. Internet ProtocolTelevisionservices VisionCom isthecountry’spioneering (Private) Limited SLT VisionCom Subsidiaries Review y y y y y y 0 Subscription VideoonDemand Education onDemand Music onDemand Video onDemand Picture-in-Picture Rewind TV 2014 2015 2016 2017 2018 Financial capital Channels andcontent Performance review y y y y y y y y y y y y y y for Videsachannels is onparwiththeschoolcurriculum Dharmawahini providescontentthat by theMinistryofEducation, students ingrade6to11.Endorsed of educationalchannelsdedicatedto Newly launched“Videsa”,isaseries their branches,membersorstudents video ondemand(VOD)servicewith content onaclosedchannelthrough who arenowabletosharetheirvideo hospitals andeducationalinstitutes, larger institutions,suchashotels, A newproductwasintroducedfor per unitgenerated and toincreasetheaveragerevenue launched toattractfansofthegenre video ondemand)moviepackwas ever BollywoodSVOD(subscription Bollywood byShemaroo,Thefirst bringing tuitiontothedoorstep learning fromthecomfortofhome, on Demand),facilitateshasslefree latest introduction,EOD(Education In supportofyounglearners,the addition ofmoresportschannels bouquet wasenhancedwiththe SLT fibrecustomers’HDchannel novel content an enhancedprogrammeline-upwith period. Thechannelwillsoonprovide TV subscriberbaseinaveryshort September, reachingtheentirePEO television channelwaslaunchedin Charana, thefirstSLT-ownedvariety hotels/leisure markets multilingual channelsespeciallyfor added newchannelcategoriesand content genrestheCompany To pluggapsinmoredemand in higherrevenuegeneration. advertising ofcricketingeventsresulted Novel initiativesimplementedfor fifteen (15)prestigiousmediaagencies. client accountsandreachingmorethan by securingoverten(10)corporate Impressive revenuegrowthwasreached Advertising Sales revenue targets. fulfilment andgearingofPEOTV’s installations unitshelpedsecureservice the expansionofSalesandPEOTV in non-traditionalrevenue,while subsidiaries, contributingtoanincrease consolidated tocaterSLTPLCand the creativeproductionsagencywere The newbusinessofmediabuyingand New Business attracting over75newaccountsin2018. extension ofcustomisedIPTVsolutions increased significantlythroughthe enterprise customers.Totalrevenue hospitals, sportscentresandother covering awideningnetworkofhotels, to nearly12,000TVpointsislandwide PEO TVCorporateSegmentincreased Enterprise solutions Performance Review competent employees. more,” cateringtoclientswhorequire talent building,HCSoffers“morefor strong focusonemployeewelfareand from recruitmenttoretirement.Witha automation ofallHR-relatedprocesses provides HRITsolutionssuchasthe based eMpowersystem,theCompany anniversary in2018.Throughtheweb- and publicsectors,celebratingits10th and othercompaniesinbothprivate as aheadhunterfortheSLTGroup foreign markets.TheCompanyacts support servicesforbothlocaland resourcing andsharedservicestoHR Human Resources(HR)solutionsfrom HCS providesthewholegamutof Solutions (HCS) SLT HumanCapital features andgames. including attractiveinteractive island withaspecialtruckpromotion attracted footballfansacrossthe aligned withtheFIFAWorldCup2018 PEO TVKick,anallislandpromotion Customer Engagement y y y y y y – – – – – – awards including: Secured anumberoflocalandglobal with permanentemployment and providedafurther530employees 10 yearsofservicetotheorganisation, Honoured nearly300employeesfor Recorded revenueofoverLKR2.2Bn. “CEO oftheyear” Brand Award–for Sri Lanka’sBestEmployer Award for“EmployerofChoice” HR TechConferenceAward– Provider inHR” Award forthe“BestService Sri Lanka’sHRLeadershipAward– Quality inBPOIndustry” Award for“Excellenceand Asia PacificHRMAward– Excellence Award Asia’s TrainingandDevelopment Organisation oftheyear” Overall RecruitingandStaffing Award –for“Best Asia’s BestEmployerBrand Company isfocusingonstrengthening Company’s competitivestrategies, the businesses. Withtherealignment ofthe to corporatecustomersandsmall and actsasasystemintegrator ICT-based infrastructuresolutions Sri LankaTelecom(Services)provides (Services) Limited Sri Lanka Telecom the countryby2021. top totalHRsolutionsproviderin The Companyaimstobecomethe telecommunications companies. and informationexchangewithforeign synergy throughtraining,crosslearning HCS planstodiversifywhileimproving With a3,000-strongemployeecadre, Future Aspirations y y y y y y y y y y Customer CareandSalesemployees motivational trainingprogrammesfor field whileofferingnewtailormade Level 04qualificationsinthetechnical opportunity andfullfundingforNVQ developing foremployees,providing Continuously investedintrainingand and Akuressa operations inButtala,Ganemulla Business unitandcommencedits Established theFranchiseTeleshop FMCG andconstructionsectors prominent companiesintheretail, sector banksinSriLankaandseveral agreements withtworenownedstate contact centreoutsourcingservice outsourcing, headhuntingand Successfully enteredintoHR client markets business operationsforexternal Capital Solutionsprovidingallnew fully ownedsubsidiaryofSLTHuman Established Talentfort(Pvt)Ltd,a systems to thenewqualitymanagement from itspredecessor,ISO9001:2008, organisation tosuccessfullytransition the firstSriLankanHRoutsourcing Management Systemscertification– Received ISO9001:2015Quality – the Year” Award –for“CEOof Asia’s BestEmployerBrand Financial capital 2018 Highlights synergy initiative. Group underthe significant amountoffundsforthe OSP unitratecontractors;savinga verifications ofotherSLTregistered operation, andQualityQuantity PSTN andBroadbandfaults-clearing to that,thecompanyhasundertaken OSP developmentprojectsetc.Further and Fibrenewconnections,PEOTV They aremainlyundertakingPSTN contributing totheSLTGroupsuccess. in telecommunicationprojects, Telecom ServicesLtd.isengaged business ofthecompany,SriLanka Besides theSystemIntegration(SI) Operations island-wide. Servers andtheexpansionofRegional Storage Solutions,ManagedServices, systems, PABX,NetworkingandData enterprise solutions,CCTV/Surveillance its businessareas,suchasproviding y y y y y y y y y y y y Profit andLossAccount. a greatcontributortotheCompany’s OSP divisionhasbeen118%,whichis Revenue growthachievedfromthe was about45%in2017. country’s geographicalareawhich expanded, covering70%ofthe The company’sOSPoperations contractor intheCentralProvince. SLTS wasselectedastheBestOSP cost-effective solutionsforcustomers. and Ericsson-LGfordesigning Grandstream Networks,CPPlus, global manufacturersincluding strategic partnershipswithleading The businessunitestablished Ranagala Mawatha,Colombo08. established at148/15Lesly state-of-the-art facilitieswas A newheadofficewith project outsourcingmodel. business unitadopteda costs werereducedasthe year-over-year in2018.Highoperation Business revenuegrew54% Management discussionandanalysis 39
Sri Lanka Telecom PLC | Annual Report 2018 40 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Revenue journey towardsdigitaltransformation. (Pvt) Limitedasafirststepinits Limited toSLTDigitalInfoServices its namefromSLTPublications(Private) timely. In2018,SLTDSofficiallychanged the Company’splansforexpansionare usage inthecountrysettoriserapidly, device unaided)isat33.8%.Withdigital literacy rate(abilitytouseadigital approximately 22-24%,itsdigital (computer ownership)rateisat while SriLanka’scomputerliteracy of CensusandStatisticsshowedthat A 2016surveybytheDepartment y y y Provider. TheCompany’sremitincludes: Services andDigitalMarketingSolutions (SLTDS) isapioneeringDirectory Telecom PLC,SLTDigitalInfoServices A whollyownedsubsidiaryofSriLanka (Private) Limited SLT DigitalInfo Services 1,000 1,250 (LKR Mn.) OutSidePlant(OSP) SystemIntegration(SI) y y y 250 500 750 Managing eventsandactivations businesses solutions forsmallandmidsized Provision ofdigitalmarketing formats business directoryinprintanddigital Publication ofSLTRainbowPages 0 2017 2018 Financial capital (Mobitel andPEOTV). company (SLT)andothersubsidiaries acquire newcustomersforthe parent Additional benefitsincludethe abilityto however, thepotentialisvery high. digital servicesportfolio.Inrural areas, potential customersfortheCompany’s 20% ofbusinessescanbeidentifiedas range. Withinurbanareasonly,about several digitalplatformstoitsproduct revenue generationin2019byadding SLTDS willbestrengtheningitsdigital 2019 aswell. the highestportionofrevenuein business isexpectedtocontribute Despite challenges,thedirectory Future Aspirations Performance review y y y y -200 (LKR Mn.) Profit afterTax(PAT)trend Revenue and 200 400 600 800 y y y y events forSLTPLC Successfully organisedarangeof and websitecreation email campaigns,SEOconsultation campaigns, WhatsApp search engineadvertising,SMS including socialmediaadvertising, offering productsandservices Established digitalmarketingarm Western Province for the2019SLTRainbowPages Launched successfulsalescampaign edition, theflagshipdirectory Rainbow PagesWesternProvince Published anddistributedSLT Revenue 0 2016 PAT 2017 2018 the USA). at IEEEconferences(includingtwoin scientific journalsandeightpublications publications ininternationallyrenowned programme hasproducedfourscientific Over thepasttwoandhalfyears, high calibreandinternationalrepute. collaboration withlocalresearchersof postgraduate researchprogrammesin Services (ORIS),continuestoconduct the OfficeofResearchandInnovative In addition,theresearcharmofSLTC, y y y schools ofstudy: over 25academicprogrammesatthree knowledge hubofAsia,SLTCoffers the country’svisionofbecoming Established withthegoalofrealising and postgraduateeducationprovider. corporate powered,undergraduate SLT Campus(SLTC)isSriLanka’sfirst with anacademicstaffofover80, A fullyownedsubsidiaryofSLTPLC, (Private) Limited SLT Campus 150 300 450 600 750 (Nos.) student population Growth in towards digitalisation. already embarkedonitsjourney for SLTDSandtheCompanyhas 2019 issettobeayearofgrowth organisations apartfromtheSLTGroup. more opportunitiesfromother business arm,SLTDSplanstocapture Strengthening itseventsandactivations y y y 0 School ofProfessionalStudies School ofTechnology School ofEngineering 2016 2017 2018 academic programmes Growth in Performance Review 120 180 240 300 (LKR Mn.) Net Revenue 12 18 24 30 (Nos.) y y y 60 0 6 y y y 0 – – – – Operations – Finance – Marketing currently onofferincluding: in December2018withsubjects Launched SLTCBusinessSchool enrolled inMarch2018 over 700,withthefourthbatch Increased studentpopulationto Secured netrevenueofLKR300Mn. Management Tourism andHospitality Supply ChainManagement Human ResourceManagement 2016 2016 2017 2017 2018 2018 2018 Highlights efficient, anduser-friendlyplatform. and thepublicthroughaneffective, the gapbetweenhealthcareproviders telecommunications network,bridging and 2,000+outletsaccessiblefromany recognised hospitals,5,500+doctors, largest channellingnetworkwith200+ the ColomboStockExchange.Itis public quotedtechnologycompanyin service inthehealthsector,andfirst to offeracompletee-commerce-based industry, thefirstcompanyinSriLanka provider totheSriLankanhealthcare software developmentandICTservice eChannelling PLCisthepioneer eChannelling y y y y y y channelling counters. of waitinginlongqueuesat appointments withoutthehassle patients andcustomerstomake which canbeoperatedbywalk-in kiosk machinesatLankaHospitals, eChannelling introducedself-help to studentsandstaff to promoteawork-life-learnbalance and afullyequippedfitnesscentre multi gamescourt,amphitheatre, Completed theconstructionof 400 students a state-of-the-arthostelfacilityfor campus withtheconstructionof Transitioned toafullyresidential Financial capital y y y y y y y y y y y y y y y y y y hotline grewby70.43% Revenue throughthe“SLT–1225” Total Assets–LKR317,872,136 ROI –13.80% NPAT –LKR33,720,150 Revenue –LKR132,805,602 consulting doctors. reduce waitingtimeofpatientswhen the doctortherebyenablingto patient numberinconsultationwith system whichshowsthecurrent we introducedtherunningnumber To increaseconvenienceforpatients, innovations fordevelopment. 2018 forexcellenceinmobile at theSouthAsiamBillionthAwards “Best digitalhealthcareplatform” eChannelling wasrecognisedasthe SLIM BrandExcellenceAwards2018. of theYear–Silveraccoladeat eChannelling ownedtheOnlineBrand at governmenthospitals. department (OPD)timereservation a serviceproviderforoutpatient for GovernmentHospitals”,tobe national endeavour,“eChannelling of SriLanka(ICTA)embarkedona Communication TechnologyAgency Mobitel andtheInformation eChannelling togetherwith Management discussionandanalysis 41 Sri Lanka Telecom PLC | Annual Report 2018 42 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis emerging regionalplayer. service providerandan country’s leadingdigital asserts itspositionasthe how SLTestablishesand in natureandarevitalto are primarilynon-financial intellectual property.They systems, processes,and organisational knowledge, corporate values,ethics, its culture,including Company andpermeate that areuniquetothe encompasses theaspects SLT’s institutionalcapital CAPITAL INSTITUTIONAL registers, andbrainstormingsessions. culture throughsuggestionschemes, make theirowncontributionstoour culture. Employeesareencouragedto enrich andupholdouruniquecorporate and refresherprogrammesthathelpto host avarietyofteambuildingactivities through ourinductionschemesandwe are inculcatedintothisenvironment with employees.Newemployees communication andengagement of professionalismthatencourages The corporatecultureofSLTisone and ethicalstandards. and reputation,ourinternalsystems, as organisationalknowledge,ourbrand SLT Group,includingcomponentssuch corporate culturethatpermeatesthe encompass everyaspectofthe of ourinstitutionalcapitaland SLT. Thesevaluesarethefoundation Seven corevalueslieattheheartof the Enterprise(ECOBRIDGE) with InnovativeDevelopment andGrow Excel CoreOperation&Boost Revenue ECO BRIDGE Innovation Platform everything wedo We arecommittedtoenhancingshareholdervalue We aretrueto Trustworthy our promises customers at customers at the center of the centerof We put our We putour Customer Caring Results Driven We continuously through creative to listenandact We areready opportunities Responsive Innovative invent new promptly thinking devices throughouttheisland. omni channelcommunication acrossall connectivity andconvenience through and rewardingthemwithseamless model isvitaltoacquiringcustomers business modelandagileoperational a customercentric/market-oriented Provider (DSP),theimplementationof into themostpreferredDigitallifestyle Technology (ICT)solutionsprovider, Information andCommunication to transformSLTfromaNational As partoftheongoingprocess Transformation Organisational business domains. for theconsumer,SME,andenterprise or evenintroducenovelICTproducts excellence andcustomerconvenience, turnover timethatresultinoperational automation, costreduction,orprocess teams canproposesolutionsforprocess within theOrganisation.Individualsor thereby enablingrapidinnovation development andcustomersatisfaction, solutions thatfacilitateorganisational employees todevelopsoftware platform. Theplatformenables In 2018,SLTlaunchedtheECOBRIDGE
We areoneteam with acommon common goals committed to performance Excellence Teamwork exceptional to achieve purpose We are societal good.Togetherwith the life andmovementtowardsgreater potential toimprovethequality of Digitalisation bringsaboutwith itthe Digital Health of operatorstotacklefuturedemands. and thesoftwarisationvirtualisation digital services,competitorbehaviour, implementation, hyperconnectivity, initiatives, InternetofThings(IoT) including globaltrends,DigitalSriLanka Digital Economywerediscussed, as academics.Topicsrelatedtothe public sectorsofSriLanka,aswell the corporate,IT,BPO,BPM,and various techsavvyprofessionalsin the programmewasattendedby the DigitalEconomy,Together”, Under thetheme“Empowering e-commerce marketdevelopment. greater agilityrequiredtoaccelerate programme thataimstocreatethe “TelcoNext”, aknowledgesharing in SriLanka.In2018,SLTintroduced e-commerce marketdevelopment provider, SLTiskeentoaccelerate economy. AsthenationalICTsolutions is pavingthewayforaglobaldigital in today’sworld;thedigitalmarket is akeydriverforsweepingchange infrastructure. Digitaltransformation prevalence ofaccesstoICTanddigital economy isinexorablytiedtothe The developmentoftheNation’s Digital Economy Empowering the and marketpenetration. efforts toincreasecustomerreach and highlyurbanisedareasaspartof will seearenewedfocusondeveloping requirements. Therevisedstructure more effectivelyin-linewithstakeholder initiatives anddevelopmentprojects SLT tocontributenationwidedigital synchronisation ofwhichwillenable administrative districts,theresulting aligned withSriLankagovernment regional administrationwillnowbe revised structureattheC-level.SLT and RegionalGroupsmergeda effect inJanuary2019thatsawSales A neworganisationalstructuretook digital arena. exceptional contributionsinthe presented toindividualsfortheir Three LifetimeAwardswerealso or Microsite,andBestUseofMobile. Digital MediaAgency,BestWebsite Empowerment Programme,Best Campaign, BestCommunity Product/Service, BestDigital-Integrated in theareasofBestDigital-enabled awarded businessesandindividuals in themarketplace.The2018edition in thecountrythatfulfilunmetneeds rewards excellenceindigitalinitiatives The programmerecognisesand consecutive yearin2018. Digital Excellence”forthesecond SLT hostedthe“ZeroOneAwardsfor Digital Excellence digital transformationofSriLanka. data electronically,andpartneringthe country widedataontheincidenceof using smartphones,gathering monitoring childreninthecommunity Hospital InformationSystem(HISL), health projectsandtopicsincludingthe experiences andinsightsondigital in SriLanka.Speakersshared and healthindustryrelatedstakeholders experts, softwaredevelopers,vendors, tech savvymedicalprofessionals,ICT Possibility toReality”forvarious programme, “DigitalHealth:From (HISSL), SLTheldaknowledgesharing Health InformationSocietyofSriLanka Institutional Capital first timeinSriLanka. container terminaloperatorforthe Communications solutiontoaleading provided astate-of-the-artLTECritical the digitaltransformation,Mobitel Taking anotherinnovativesteptowards with burstspeedsofupto300Mbps. significantly enhanceuserexperience 4.5G networktechnologythatwill in thecountry,aswelldeploying deployment overthe3.5GHzspectrum a publicdemonstrationofthefirst5G groundwork forits5Gdeploymentwith Mobitel hasalsobeenlayingthe the SriLankanpopulationin2019. its ruralLTEcoverageforupto91%of LTE network.Mobitelseekstoexpand make highqualityvoicecallsoverthe functionality thatwillenablethemto 105 MbpsandVoiceoverLTE(VoLTE) from peakbroadbandspeedsof population. Customerswillbenefit reaching 76%oftheSriLankan sites inthecountrybymid-2019, footprint toapproximately2,600LTE in Mobitelincreasingitstotal4GLTE the island.Theprojectwillculminate to installover1,600LTEsitesacross largest 4GLTEexpansionprojectyet Mobitel commencedtherolloutofits Network Development Management discussionandanalysis 43
Sri Lanka Telecom PLC | Annual Report 2018 44 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis repairs intheregion, servicerestoration port toattend to submarinecable ship toremainonstandbyat the Galle January 2019.Withplansfora cable GSCDPL declaredreadyforservice in other formalitieswerecompleted and consortiums. Constructionwork and for over40regionalsubmarine cable GSCDPL providewarehousingfacilities period offiveyearsthatwillsee was signedin2018foraneffective Maintenance Agreement(SEAIOCMA) South EastAsia&IndianOceanCable SLT’s globalnetworkstrategy.The is oneofthecrucialcomponents Cable DepotPrivateLimited(GSCDPL) Limited (IOCPL),GalleSubmarine Indian OceanCableShipPrivate between SLTandSingaporebased Formed aspartofajointventure Depot SubmarineCable Galle Middle EastandFarEast. latency sensitivetrafficbetweenthe act asanalternativetoSingaporefor global datacentreinMatarathatwill India, andtheestablishmentofanew cable systembetweenSriLankaand Gbps upgradetotheBharat-Lanka Other initiativesfor2019willseea100 (PoPs) morequicklyatalowercost. of newvirtualIPPointsPresence IP network,enablingthedeployment in awideareanetwork)itsglobal SD-WAN (softwaredefinednetworking regional digitalhub,SLTwillimplement enabling SLT’seffortstobecomea Utilising globalconnectivityand regional connectivityhub. necessary infrastructuretobecomea as well,providingSriLankawiththe with otherregionalcablesystems at Mataraiscapableofinterconnecting 24 Tbpseach.Thecablelandingstation the EastandWestcablesegmentsat Matara withacapacitytoconnect with afullcablelandingstationat the SEA-ME-WE5cableconsortium Dhiraagu-SLT. SLTisakeymemberof SEA-ME-WE 5,Bharat-Lankaand SEA-ME-WE 3,4, five submarinecablesystems: SLT isconnectedgloballythrough Global NetworkStrategy Institutional Capital with globalindustry expertstoshare makers intheindustry andGovernment to connectinnovatorsanddecision (NB-IoT). Theindustryforum aimed on NarrowbandInternetofThings ever industryforumandhackathon Mobitel hostedSriLanka’sfirst Hackathon NB-IoT IndustryForumand day oftheevent. the participant’sregistrationon point inverifyingtheauthenticityof contract wasthenusedastheanchor with theregistrationdetails.Thissmart Ethereum basedblockchainnetwork event, asmartcontractiscreatedinthe based system.Uponregisteringforthe Extended 2018utilisedablockchain the registrationprocessforGoogleI/O experience withblockchaintechnology; Ledger togiveparticipantsafirst-hand applications bypartneringwithRadical technology canbeusedinrealworld demonstrate howblockchain Mobitel alsousedtheeventto Google relatedtechnologies. APIs, GoogleWebToolkitandother Android, Chrome,ChromeOS,Google with Googleandtechnologiesincluding mobile, andenterpriseapplications keynote, focusingonbuildingweb, Technical in-depthsessionsfollowthe and platforminnovationsatGoogle. session, highlightingthelatestproduct conducts theGoogleI/Okeynote Francisco. GoogleCEOSundarPichai the eventviaalivestreamfromSan and techsavvyinnovatorstoexperience industry leaders,universitystudents, 2,300 developers,ICTprofessionals, extension eventbroughttogetherover global developereventandthelocal Ratmalana. GoogleI/Oisanannual at theSteinStudioComplexin highly anticipatedI/Oeventin2018 hosted theextendedeventofGoogle’s For thefifthtimeinSriLanka,Mobitel Sri Lanka2018 Google I/OExtended South AsianRegion. international connectivityserviceinthe will dramaticallyreduce,thusimproving times duringsubmarinecablefailures Brand Image SLT positionsitself asadigitallifestyle Mobitel willplay asignificantroleas National mobileserviceprovider. Mobitel isequallyrenownedas the y y y y y digital era. uplift theNationanditspeopleinto work SLThasperformedinitsdutyto upon SLTareatestamenttothe Numerous accoladesbestowed and strongregionalpresence. through ourislandwideconnectivity livelihoods ofthepeopleweserve products andservices.Weboostthe reputation asaproviderofhigh-quality business partnershaveestablishedour Government ofSriLankaandvarious and ournumerouspartnershipswiththe edge NationalBackboneNetwork(NBN) have helpedtoestablishthecutting amongst SriLankans.Ourinvestments solutions provider,isheldinhighregard SLT, initscapacityastheNationalICT Parking Spotymizer. of LKR150,000withtheirUberstyle Team wonthehackathongrandprize the technology.TheSASNinjaLabs’ by creatingsolutionsbasedaround offered bytheInternetofThings take advantageoftheopportunities and inspireSriLankandevelopersto hackathon thataimedtochallenge The seconddayoftheeventwasa that wouldimpactstakeholdersglobally. NB-IoT technologyandemergingtrends insights intothelatestdevelopmentsin Speakers fromaroundtheworldgave knowledge, experience,andinspiration. y y y y y Business TodayTop302017-2018 16th BestPerformingCorporate – LMD MostRespectedEntities 2018 20th MostRespectedEntity– Awards 2018 Best CorporateCitizenSustainability Improvement –Economiccategory Commitment andContinuous and awardforConsistent Sector Awardforbestperformance Interbrand 2017 12th BestSriLankanBrand– rating “AA+(lka)” Fitch RatingsNationallong-term excellence award. award, andNationalbusiness SLT alsoreceivedtheCNCIachievers Leadership Excellence. Brand Leadership,andWomen for TelecommunicationsSector, Employer BrandAwardsin2018 the prestigiousSriLankaBest SLT alsoreceivedthreeawardsat and theories. concepts, techniques,bestpractices, of advancedprojectmanagement the countrythroughintroduction contributions tothedevelopmentof organisations whomakeoutstanding awards aimtorecogniseindividualsand Cable LandingStationProject.The the MataraSEA-ME-WE5Submarine in TelecommunicationsSector”for award forthe“BestManagedProject Lanka ChapterawardedSLTtheGold Project ManagementInstitute(PMI)Sri Excellence Awardsconductedbythe The NationalProjectManagement SLT wonnumerousaccoladesin2018. Awards andRecognition the servicesweprovide. it workorhomeandbeyond,through to integrateallaspectsoftheirlives,be power theinfrastructuretoenablethem lead atrulyconnecteddigitallifeaswe services provider.Ourcustomerswill making contributionstoEmployees’ of outsourcedoperations,suchas take stepstoensurethecompliance via theSLTIntranetportal.Wealso informed ofrelevantdevelopments statutory collateral,andemployeesare with labourregulationsandrelevant Our humanresourcepracticescomply the ColomboStockExchange(CSE). imposed onitasalistedcompanyby adheres totherulesandregulations with allGovernmentregulationsand statutory ratifications.SLTcomplies divisions monitorallregulatoryand and separateregulatorylegal regulatory andstatutoryrequirements, are developedincompliancewith policies, procedures,andguidelines where applicable.Allcompany all rules,regulations,andstandards SLT takeseveryefforttocomplywith Compliance to maintainingcompliance. the appropriatemeasuresnecessary evaluates itsinfrastructureandtakes International Standard.SLTcontinually complies withtheISO/IEC27001:2013 SLT’s informationsecuritypolicy Information Security Institutional Capital Financial Statementsonpage168. discussed underNote32tothe Any otherextraneousaspectsare Statements commencingonpage133 covered underNote4totheFinancial of financialriskmanagementare management processes.Aspects of compliancewiththeGroup’srisk inspects management’smonitoring (page 99).TheAuditCommittee Risk ManagementFramework and monitoringoftheGroup’s responsibility fortheestablishment The BoardofDirectorsbearstotal Risks andcontingencies customer privacy. received regardingdiscordanceson and services.Nocomplaintswere the provisionanduseofourproducts with lawsandregulationspertainingto in relationtoissuesofnon-compliance period underreview,SLTdidnotdefault internally andexternally,forthe Our complianceisauditedbyauditors on environmentalprotection. compliant withestablishedguidelines Trust Funds(ETFs).Ouractivitiesare Provident Funds(EPFs)andEmployees’ Management discussionandanalysis 45
Sri Lanka Telecom PLC | Annual Report 2018 Management discussion and analysis AWARDS
Best Performance Medal for Excellence 2018 Honours – Written text Sector Award/Consistent Commitment SLT Training Centre – City & Guilds (Recognition) Telecommunications category and Continuous Improvement – High Standard of Teaching and Training – International ARC Awards Economic category Winner Outstanding Performance in Level Best Corporate Citizen Sustainability Awards 3 Diploma in Engineering – Electronic Engineering The Ceylon Chamber of Commerce Medal for Excellence 2018 SLT Training Centre - City & Guilds (Recognition) ISO 22301:2012 High Standard of Teaching and Training – Certification Outstanding Performance as a lecturer Winner Bureau Veritas Telecommunications sector Best Employer Brand Awards Silver award Specialised annual report ISO/IEC 27001:2013 Certification Integrated annual report and CSR category International Bureau Veritas ARC Awards
16th Place Gold winner Business Today Top 30 Telecommunication sector – 2017 CA Sri Lanka Annual Report Awards Asian HR leadership award Joint 2nd Runner Up – Organisational category Corporate Governance Disclosure Dream Company to Work For Technology Sector South Asian Federation of Accountants (SAFA) Bronze winner – Interior design Telecommunications category Runner up International ARC Awards National Business Excellence Awards National Chamber of Commerce of SL Medal for Excellence 2018 SLT Training Centre - City & Guilds (Recognition) High Standard of Teaching Gold Award and Training – Outstanding Performance Best managed project in Telecommunications Sector in Level Award winner – Service sector Project Management Institute (PMI National Project 5 Advanced Diploma in Applied CNCI Achievers of Industrial Management Excellence Awards Telecommunications Excellence 2018 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
46 Awards Management discussion and analysis
1st runner up Silver Best Employer brand awards Education and Health promotion Innovative loyalty programme The Employer Branding Institute, World HRD Stoma care app Cash Bonanza Congress & Stars of the Industry Group, India Commonwealth Digital Conference ACEF Global Customer Engagement and Awards Forum and Awards Silver Digital advertising Data Mart ACEF Global Customer Engagement Forum and Awards
Gold award Best display of engineering services Best IoT solution Techno Sri Lanka Awards in the IoT pavilion Infotel Awards
Finalist award - The internet expert Effie awards
Gold - Service brand of the year SLIM Brand excellence award
Award for Excellence of the year Finalist award - Don’t wait for good for innovation and leadership things (4G campaign) Mobile telecommunications Effie award Le Fonti Awards
Merit award Winner - Best community Best aligned with techno theme – Gold - Best use of technology empowerment programme “Engineering the Greener Future” Wesak map Information sector SLT Zero Techno Sri Lanka Awards ACEF Global Customer Engagement One Award Forum and Awards Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
47 48 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Distribution ofshares and accountability. through mutualtrust with ourinvestors to nurtureourrelationships stakeholders. Wework deliver valuetoourkey Company andinturn we createvalueforthe value addingprocesses, long-term. Throughour in theshort,medium,and returns ontheirinvestment investors seekreciprocal development. Inreturn,our for investmentsand financial capitalweutilise who provideuswiththe individuals andinstitutions SLT’s investorsconstitute CAPITAL INVESTOR
Shareholdings 100,001 – 10,001 – 1,001 – Over 1,000,000 1 – 1,000,000 100,000 10,000 1,000 shares shares shares shares shares
shareholders Resident 12,308 2,280 9,800 No. of 214 8 6 992,592,985 975,118,180 assistance toSLT. and telecommunicationexpertise company. Maxisprovidestechnical the Malaysia-basedtelecommunication N.V. istheholdingcompanyofMaxis, Global TelecommunicationsHoldings Holdings N.V. Global Telecommunication service weoffer. quality ofourproductsandthelevel of reassuranceandconfidenceinthe which offersmanyconsumersafeeling is theprimaryshareholderofSLT, The GovernmentofSriLanka(GoSL) Government ofSriLanka traded ontheColomboStockExchange. remaining 5.52%ofsharesarepublicly (GTH), holdinga44.98%stake.The Telecommunications HoldingsN.V. Secretary totheTreasury,andGlobal holding a49.50%stakethroughthe 2018 weretheGovernmentofSriLanka, Telecom PLC(SLT)asat31December The twomajorshareholdersofSriLanka Shareholder profile 1,040,890 4,623,113 8,903,271 2,907,531 shares No. of 55.00 54.03 0.06 0.26 0.49 0.16 (%) Non-resident shareholders No. of 45 23 13 1 1 7 812,267,015 811,757,869 135,447 252,977 116,075 shares 4,647 No. of ‘AAA(lka)’. debt programmeto‘AA+(lka)’from SLT’s LKR7billionseniorunsecured has downgradedthenationalratingon Stable Outlook.Simultaneously,Fitch Rating (IDR)to‘B’from‘B+’witha Term Foreign-CurrencyIssuerDefault downgrade ofthesovereign’sLong- from ‘AAA(lka)’,whichreflectsthe Long-Term Ratingto‘AA+(lka)’ Lanka TelecomPLC’s(SLT)National Fitch RatingshasdowngradedSri Fitch Ratings the entirecountry. great importancetostakeholdersand long-term viabilityoftheCompanyis country’s development,thestabilityand Given theroleSLTplaysin financial andnon-financialinformation. comprehensive detailsonallrelevant Exchange. SLT’sAnnualReportoffers announcements ontheColomboStock General Meeting,ourwebsite,and interim financialresults,theAnnual means includingpressreleases, and associatedpartiesviavarious SLT engageswithitsshareholders Investor relations Stability 45.00 44.98 0.00 0.01 0.01 0.00 (%) Total shareholders 12,353 2,303 9,813 No. of 221 9 7 1,804,860,000 1,786,876,049 1,176,337 4,876,090 9,019,346 2,912,178 shares No. of 100.00 99.01 0.06 0.27 0.50 0.16 (%) per CSERuleNo.7.13.1.(a) Company hasagreedinprinciple tocarryoutaprivateplacementinordercomplywith theminimumpublicshareholdingas The Companydoesnotcomply withtheminimumpublicholdingrequirementsofCSE. However,theBoardofDirectors Number ofshareholdersrepresenting thepublicholdingasat31December2018–12,353 Percentage ofpublicholding as at31December2018–5.52% Float adjustedMarketCapitalisationasat31December2018 –LKR2.33Bn. List of20majorshareholders asat 31December 2018 Categories ofshareholders Category Institution Individual 20. 10. 14. 19. 16. 13. 15. 12. 17. 17. 11. 4. 9. 6. 8. 3. 5. 2. 7. 1. Name Mr VanStarrex Sri LankaInsuranceCorporationLtd–GeneralFund Employees TrustFund Sri LankaInsuranceCorporationLtd–LifeFund Bank ofCeylonA/CCeybankUnitTrust Employees ProvidentFund Global TelecommunicationsHoldingsNV Mr Tanaka Mrs Edirisinghe Ceylon BiscuitsLimited Pinnacle Trust(Pvt)Limited The IncorporatedTrusteesoftheChurchCeylon Bank ofCeylonA/CCeybankCenturyGrowthFund National SavingsBank Secretary totheTreasury Elgin InvestmentLimited People's Leasing&FinancePLC/MrCNJayasooriya Sampath BankPLC/MrDKLChandrsena Sinharaja HillsPlantationPvtLimited Bank ofCeylonNo.1Account Investor Capital Management discussionandanalysis shareholders Number of 1,788,449,929 Shareholding 893,405,709 811,757,869 12,353 12,210 13,158,700 17,713,735 18,632,709 25,324,104 1,539,497 2,041,538 3,302,188 143 100,000 100,000 107,491 135,447 150,000 161,825 183,984 214,000 223,590 97,638 99,905 1,804,860,000 1,789,063,875 15,796,125 Number of shares 99.09 49.50 44.98 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.09 0.11 0.18 0.73 0.98 1.03 1.40 % 49
Sri Lanka Telecom PLC | Annual Report 2018 50 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Debt information (Company) Equity (Group) Trading activity Share price trend Ratio andmarketpriceinformation Dividend pershare(LKR) Dividend pay-outratio(%) (Earningsbeforeinterestandtaxesdividedbyexpense) Interest cover Quick assetratio(No.oftimescurrentliabilities) Gearing ratio(DebttoLKR1oftotalequity) Net assetspershare(LKR) Earnings pershare(LKR) Value ofsharestraded(LKR) No. ofsharestraded No. oftransactions Market capitalisation(LKRBn.) Last tradedprice(LKR) Lowest value(LKR) Highest value(LKR) Any changesincreditrating Market pricesandyieldduringtheyear(Ex-interest) Quick AssetRatio(%) Interest cover(%) Debt/Equity ratio(GearingRatio)(%) Interest rateofcomparableGovernmentSecurity(%) Last tradedprice Low Highest DebenturePrice
Investor Capital 42.23 23.40 18.90 30.00 2018 51.43 28.50 27.00 36.70 2017 64.97 36.00 31.20 46.40 See noteonpage 48 2016 not tradedduring Debentures were the year2018 Fitch rating– 84.83 47.00 43.00 54.90 2015 11.87 0.62 0.78 0.44 90.00 49.90 33.33 57.30 2014 26,852,883 1,113,157 0.75 1.50 2.25 3.00 3.75 (LKR) (Group) Earnings pershare(EPS)– 40.82 3,195 2018 Company 2018 1.06 38.7 1.77 0.82 0.43 2.74 66.78 37.00 36.10 50.00 0 2013 2014 46,137,965 80.32 44.50 34.00 50.00 1,463,787 2012 2015 Group 39.56 3,149 2017 2017 0.89 40.8 2.02 0.48 0.37 2.18 2016 86.63 48.00 44.00 64.50 2011 3,082,282 2017 112,724, 38.05 3,328 88.44 49.00 35.00 51.00 2010 2016 2016 0.89 33.5 4.53 0.57 0.32 2.65 2018 experience goingforward. an enhanced customer laying thegroundwork for 2018 sawSLTfocuson loyalty andretention, and fundamental tocustomer customer experiencesare service andoutstanding choice. Highqualitycustomer digital serviceproviderof transformation intothe it. ThisisallpartofSLT’s want nextbeforetheyknow predicting whatcustomers its potentialcustomers,and understanding theneedsof its existingcustomers, dedicated itselftoservicing customer service.SLThas a focusedapproachto transformation requires subject todisruptionand competitive marketthatis of customersinanintensely Serving suchabroadrange and thepublicsector. multinational corporates, medium enterprises(SMEs), individuals tosmalland across thecountryfrom seven millioncustomers The SLTGroupservesover CAPITAL CUSTOMER Broadband Product portfolio applications. and manyotherTV Education onDemand, Music onDemand, Video onDemand, as Picture-in-Picture, amazing featuressuch differentiated by offering isfurther 48 hours.Theproduct programmes upto customers torewind Rewind TV,allowing market byintroducing TV revolutionisedthe entertainment. PEO and globalnews 140 channelsoflocal now offersover by customers, sought-after products one ofthemost which hasbecome in thecountry (IPTV) service Protocol Television pioneering Internet PEO TV,the PEO TV up to3TB. data volumesof the highestmonthly up to100Mbpsand download speedsof SLT offersthefastest FIBRE (FTTx) 4G LTE these hotspots. seamlessly to to easilyconnect app enablesusers Public Wi-Fimobile newly launchedSLT for purchase.The are alsoavailable Prepaid accesscards as shoppingmalls. public areassuch high-speed datain them toaccess credentials, enabling with theirexisting around thecountry SLT Wi-Fihotspots customers canaccess SLT broadband volumes ofupto3TB. and monthlydata speeds upto40Mbps 8 Mbpsandburst speeds ofupto average download SLT 4GLTEoffers Wi-Fi Carrier-grade Management discussionandanalysis ADSL many more. of Legends,and Offensive, League Strike: Global Minecraft, Counter of gamesincluding prizes inavariety tournaments andwin in freeandpremium well asparticipate tournaments, as and managegame customers tocreate platform allows performance. The factor inaplayer’s play adetermining where latencycan multiplayer games experience inonline a lowlatency customers toenjoy network thatenables dedicated gaming eSports Platform,a SLT launchedthe 3 TB. data volumesofupto 21 Mbpsandmonthly offers speedsofupto SLT ADSLBroadband Platform SLT eSports 51 Sri Lanka Telecom PLC | Annual Report 2018 52 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Digital Loans viamCash Mobitel data+credit card Insurance Telehealth Hospitalisation Value addedservices National Data Centre and more. smart alarms,motiondetectors, homes throughIPcameras,wireless to transformtheirhomesintosmart SLT Digisolutionsenablescustomers SLT Digisolutions Customer Capital significant amount oftime.Oncea process, thussaving customersa simplification oftheloanapplication platform enablesthedigitalisation and extending financialinclusion. ThemCash electronic paymentslandscape and by revolutionisingthecountry’s in Mobitel’saimtoempowercustomers financial solutionisanotherstepforward platform, afirstforSriLanka.The to offerdigitalloansthroughitsmCash Mobitel partneredwithLOLCFinance 50 MBofdatavalidfor30dayswith of bonusdatauponcardactivation,and entities. Mobitelcustomersreceive2GB offers customersbenefitsfromboth the firstofitskindinSriLankathat Bank tolaunchtheData+CreditCard, Mobitel partneredwithCommercial registered privatehospitalsandnursing are admittedtoGovernmenthospitals, allowance forinsuredcustomerswho LKR 100.Thepolicywillpayoutadaily premiums startingfromaslittle hospital admittancewithmonthly affordable financialassistancefor Telehealth providescustomerswith computing servicesandisSouthAsia’s and reliabledatahostingcloud “National DataCentre”,providessecure in 2018.Thefacility,recognisedasthe Data CentreinPitipana,Homagama purpose builtstate-of-the-artTierIII Infrastructure launchedSriLanka’sfirst of TelecommunicationsandDigital SLT incollaborationwiththeMinistry Cloud hosting server solutions. domain nameregistration,andmail business needs,includingDNShosting, meet adiverserangeofpersonaland hosting solutionsforcustomersthat SLT state-of-the-artdatacentreoffers 16,000 mCash retailers islandwide. and SisilWorld showrooms,orover Singer Mega,Plus, Homes, SLT Teleshops,Singeroutlets including Sampath BankATMs,Mobitel branches, from over1,000Commercial Bank or mCash, whichcanbewithdrawn incash will bedisbursedtothecustomer via through theirphone.Theapprovedloan can checkfortheireligibilityaloan for aloanofuptoLKR25,000,they registered mCashcustomerapplies airport loungeaccessandotherservices. international MasterCardofferssuchas Rewards” andavailthemselvesof earn CommercialBank“MAXLoyalty card. Furthermore,cardholderswillalso every LKR1,000swipeofthecredit added totheirSLTbill. applications andhavingthepremium convenience ofnothavingtofilloutany from additionaldenguecoverandthe bodily injury.Subscribersalsobenefit any sicknessorsurgeryaccidental and privateAyurvedahospitalsfor homes, andapprovedGovernment resources in-house. to deployingdedicatedcomputing scalable andcosteffectivealternative and cloudplatformofferenterprisesa (SDN) environments.SLT’sdatacentres and SoftwaredefinedNetworking Network FunctionVirtualisation(NFV) first datacentrecapableofsupporting SLT Intelligent Solutions managed services. data services,hosting,and include nextgenerationvoiceand them intheglobalmarket.Solutions range ofICTsolutionstoempower enterprise andSMEcustomersafull SLT IntelligentSolutionsoffer the CPCCplanningteam. Smart CitySolution,incoordinationwith infrastructure ofPortCity,includinga programme forthetelecommunication a strategyandimplementation period of15years.SLTwilldevelop infrastructure serviceproviderfora the exclusivetelecommunications Ltd (CPCC)torecogniseSLTas and CHECPortCityColombo(Pvt) Understanding (MoU)withtheMinistry SLT signedaMemorandumof Port CityProject and MoUs Government partnerships digital revolution. small businessestobenefitfromthe SLT servesasanenablerforlargeand last-mile andFTTHfibreinfrastructure, to VMwareandotherVMinfrastructure, MPLS networksandtotalVPNnetworks, to theirrequirements.FromIP-based them witharangeofsolutionscatered transformation journeybyempowering customers toacceleratetheirdigital SLT collaborateswithEnterprise enterprise solutions Comprehensive usage reportsandpurchaseextradata. their broadbandusageandbalance,aswellviewdetailed Broadband servicesonthemovebybeingabletomonitor devices. TheappenablescustomerstomanagetheirSLT SLT launchedtheSelfcareappforAndroidandiOS SLT Selfcare App Initiatives undertakenin2018 the SLTCentrexplatform. networking andvoicesolutionfrom Council. Thesolutionincludeda complex fortheWesternProvince solution foramultistoriedoffice SLT providedatotalcommunications Western Province Council fibre lines. provide servicesviacopperand infrastructure serviceproviderand as theexclusivetelecommunications built inurbanareas.SLTwillserve new condominiumprojectstobe infrastructure facilitiesforseven undertake thedevelopmentofICT Development Authority(UDA)to SLT signedanMoUwiththeUrban Authority Urban Development and webinterface. data fromanywherethroughauserfriendlymobileapp solution thatoffersusersasecuremeansofaccessingtheir SLT Storageisacloudstorageandfilesyncsharing SLT Akaza Cloudstorage Customer Capital Museum Polonnaruwa Technological historical milestones. them throughourcountry’simportant visitors withanexperiencethattakes Centre toprovidelocalandforeign Mobitel alsoestablishedanInnovation showcase themuseum’sexhibitions. systems, andaSmartsolutionto building withCCTV,AV,andconference LAN cablingandnetworkingofthe (ELV) solutionthatcoversthetotal The solutionisanextralowvoltage Technological MuseuminPolonnaruwa. total ICTsolutionforthenewlybuilt SLT andMobiteljointlydevelopeda Management discussionandanalysis 53
Sri Lanka Telecom PLC | Annual Report 2018 54 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis Kalutara Gampaha Colombo Province Western Puttalam Kurunegala Province Western North Teleshops inPottuvil,Mawanella, products. In2018,SLTopenednew they canavailofourservicesand convenient reachofcustomers,where the islandincentrallocationswithin telecommunication officesacross SLT hasTeleshopsandregional Market presence Hambantota Matara Galle Province Southern Vavuniya Mannar Mullaitivu Kilinochchi Jaffna Province Northern
SLT MOBITEL SLT Regional offices Teleshops online Dealer Teleshops Maintenance centres Customer Capital 69 45 network acrosstheislandthatenables we haveanextensivedealerandreseller customer convenience.Additionally, expanding ourreachandincreasing small anddevelopingtownships,thus continue toexpandourpresencein Akurana, andGampola,will 17 33 25 5 14 4 9 1 12 2 14 4 5 4 3 4 4 3 Mini-branch Branch / 1 8 1 2 5 2 2 4 4 4 2 4 1 3 1 5 1 6 1 7 1 1 6 3 Offices Regional 17 2 4 MOBITEL 3 3 1 3 Branch/Mini-branch Dealer online 3 3 4 SL Telecom 48 4 supermarkets, andselectretailoutlets. bills atmostmajorbankinginstitutions, LTE services.Customerscanpaytheir cards andregisterforbroadband customers toeasilypurchaserecharge 38 Centres Maintenance Singer Mega SL Telecom Mega Singer Sabaragamuwa Anuradhapura Nuwera-Eliya Polonnaruwa Trincomalee Monaragala 42 15 Batticaloa Ratnapura Province Province Province Province Ampara Eastern Central Badulla Central Kegalle Matale Kandy North Uva with theserviceoffered;SLTrecorded customer expectationswereaddressed quality ofserviceprovided,andhow time takentoprovidetheservice, new serviceofferings,SLTmeasuresthe service includingassurance.For on ourcustomerserviceandaftersales daily tomeasurecustomersatisfaction SLT conductsacustomervoicesurvey Customer Voice Survey action torectifythem. would experienceandtakeprompt identify thepainpointsacustomer engage withacustomerinterfaceto employees wereencouragedtodirectly the importanceofcustomerservice, to theseefforts.Furtherhighlighting critical superiorcustomerserviceis raised companywideabouthow and retention,awarenesswas SLT’s effortsoncustomerloyalty rewarded fortheircontributionsto the Companywererecognisedand life. Customerservicechampionsin for theirbusinessand/orday-to-day their telecommunicationsprovider loyal customersforchoosingSLTas by showingappreciationandrewarding Service Weekforthefirsttimein2018 company-wide celebrationofCustomer Experience Divisionspearheadedthe the customerexperience,Customer With SLT’srenewedfocusonenhancing Customer Service Week 2018 management Customer Experience approximately 800,000. its subscriberbasegrowby PEO TVconnections.Mobitelsaw broadband connections,and415,000 fixed lineconnections,966,925 In 2018,SLTprovidedover1,717,200 Customer base Experience Customer Identification of Customer Pain Points
solutions totacklethem. in ordertocomeupwitheffective the painpointsthataffectcustomers then conductedtoraiseawarenessof Internal awarenesssessionswere all stakeholdersoftheCompany. and theresultsweresharedamong followed byanextensivequestionnaire, a 45-minuteone-on-oneinterview geographical areas.Thestudyentailed Government), businessverticals,and (consumer, enterprise,SME,and represented allcustomersegments amongst asamplesizeof2,500that research agencyconductedthestudy affect customers.Areputedmarket points, andidentifyotherissuesthat satisfaction levelsacrossalltouch expectations ofcustomers,evaluate 2018 toidentifyandmeasurethekey Satisfaction Index(CSI)studyin SLT continuedtoconductitsCustomer Index 2018 Customer Satisfaction customer satisfaction. attend toissues;SLTmeasured86% satisfaction onthetimetakento service primarilymeasurecustomer Voice surveysconductedforaftersales over 87%customersatisfactionin2018. Pain Points Action on Customer Customer Capital CEO forum action at Review 60 66 72 78 84 90 % index rating Customer satisfaction period underreview. increase incustomersatisfactionforthe stakeholders, contributingtothe had beenaddressedbytherespective points thathadbeenidentifiedin2017 telecommunications businesses.Pain with globalstandardsforfixed 2017. Thisisanachievementonpar a significantgrowthcomparedto In 2018,theCSIindexgrewto83%, Enterprises 2015 Management discussionandanalysis 2016 SMEs World Class Experience 2017 Customer Consumers 2018 55
Sri Lanka Telecom PLC | Annual Report 2018 56 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis was aqualitylevelof86.99% being FCR duringacall.Theoutcome received trainingonhowtoachieve was introducedin2018andagents metric for“FirstCallResolution” (FCR) for SLTcustomers;anewperformance high qualityofservicewasmaintained out in-househelpedtoensurethata Continuous qualitymonitoringcarried commitment anddedication. serve customerswithcomplete Each dayin2018sawover270agents to servicedisruptions. calls duetoinclementweatherthatlead exceeded 80%asaresultofincreased the averagecallanswerratebyagents of 8.3millioncallsreceivedtoagents, via automatedIVR.Inthiscontext,out queries thatcouldnotbeaddressed agents tohandleothercustomer for the1212ContactCentre,allowing contributed toefficiencyimprovements and additionaldatarequirements for faultreporting,billinquiries, Automated IVRservicesenabled 1212 customersupportservice. the geographicalredundancyof Bandarawela inJanuary2018,improving Contact Centrewasestablishedin 13 stationsaroundthecountry.Anew SLT 1212ContactCentreoperatesin services tootherbusinessclients.The Outsourcing (BPO)forcontactcentre secondly, tofacilitateBusinessProcess queries onSLTproductsandservices; the 1212hotlinetoaddresscustomer perspectives: serveSLTcustomersvia The SLTContactCentreoperatesintwo Contact centre performance by firstresponders Calls handled 22% IVR Calls 18%
Customer Capital services ecosystem. experiences oftheevolvingdigital academia todiscusstheirideasand organisations, publicinstitutions,and representatives fromprivatesector bring togetherdomainexpertsand services space.SLTDigitalForums the Companywithindigital and networkingplatformthatpositions are intendedasaknowledge-sharing SLT hostsarangeofdigitalforumsthat SLT DigitalForums customers acrosstheIsland. service. Afeaturegreatlyvaluedby free-of-charge doorstepmaintenance SLT isalsotheonlyTelcothatmaintains of feedbackasbeing“satisfied”. satisfaction surveysrecordedover95% achieved in2018.Automatedcustomer first leveltechnicians Calls escalatedto 60% every newFibreconnection. customers, and100GBoffreedatafor connection forexistingMegaline connections, afreeupgradetoFibre with newMegalineVoice+Broadband connections, afree4-portWi-Firouter 50% discountonnewSLTMegaline gift voucherthatentitledthemtoa Infotel 2018exhibitionreceiveda Championship eventheldduringthe data bundles.AttendeesoftheeSports over LKR1Mn.,includingattractivefree youth. Thewinnersprizepoolwasworth and thepreferredInternetservicefor the premierInternetserviceforgaming in theNation,SLTpositioneditselfas offers thefastestbroadbandnetwork Highlighting togamersthatonlySLT 2018 Broadband promotions SLT eSportsChampionship Marketing Campaigns First CallResolution escalated toachieve Over 6millioncalls agents in2018 handled dailyby 27,000 calls Average of received in2018 10.1 millioncalls post paidbillpayment. every LKR50cashrecharge,reload,or customers areeligibleforthedrawwith Prepaid, Postpaid,andBroadband quarterly draws.AllSLTMobitel throughout theyearindailyand LKR 190Mn.worthincashprizes Mercedes-Benz carsandover with valuableprizessuchasnew Bonanza’ programmein2018 Mobitel reneweditspopular‘Cash Mobitel CashBonanza2018 commitment toeSportsinSriLanka. in March2018andreaffirmedMobitel’s Mobitel XstationeSportsLeagueheld youth. Thetournamentfollowedthe World CupseasontoSriLankan bring theexcitementofFootball key objectivesoftheinitiativeswasto 380 registeredparticipants.Oneofthe Championship inJuly2018withover kicked offtheMobitelXstationFootball Mobitel inpartnershipwithGamer.lk Championship Mobitel Xstation Football Customer Capital awarded sportsmountainbikes. The topthreeparticipantswere sessions toclimbtheleaderboard. and participantsplayedover45,000 Up &Win”,washeldsimultaneously The onlinecyclecompetition,“Speed for thewinnerofparacyclingrace. of thewomen’srace,andLKR150,000 men’s race,LKR250,000forthewinner included LKR1Mn.forthewinnerof history, washeldonSeptember8.Prizes another firstinSriLanka’scycling cyclists. A75kmparacyclingevent, a two-dayeventwasheldforwomen in thecyclinghistoryofSriLankathat September. 2018markedthefirsttime women’s racewasheldduring7-8 between 4-8September,anda175km 2018. The820kmmen’sracewasheld cross-country cyclerace,inSeptember Speed UpCycleSawariya,thelongest held thethirdeditionofpopularSLT Federation ofSriLanka(CFSL),SLT In collaborationwiththeCycle Sawariya SLT SpeedUpCycle Management discussionandanalysis 57
Sri Lanka Telecom PLC | Annual Report 2018 58 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis digital marketplace. empower customersinthe and innovativesolutionsto Sri Lankanmarketnew partners tobringthe join handswithseveral 2018 continuedtoseeSLT enjoyed mutualsuccesses. and collaboration, coexistence, co-innovation, relationships thatentail whom wesharereciprocal business partnerswith established tieswithseveral in SriLanka.SLThas enterprise customers and domestic services totheGovernment provider, providesICT the nationalICTsolutions SLT, initscapacityas PARTNER CAPITAL BUSINESS
with anon-screenuserinterface that have accesstoahigh-quality display entertainment experience.Guests will to offertheirguestsasophisticated system aimedathotelierswho wish entertainment andcommunication brings acustomisedinteractivehotel The SLTAkazaInteractiveTVsolution to thehospitalityindustryinSriLanka. Ltd toofferinnovativeIPTVsolutions SLT partneredwithInfotainmentPvt Akaza Interactive TV track theirprogress. can viewtheirassignedcoursesand to accessalearnerportalwhereinthey customer portal.Eachuserwillbeable branded e-learningadministrative institutions cansubscribetotheirown offering thatcorporatesandeducational as aSoftware-as-a-Service(SaaS) solution ontheAkazaCloudportal will seei-Contexthostthee-learning educational institutions.Thepartnership and reportingforcorporates training administrationwithdelivery, facilitates anonlinecoursemarketplace, a cloude-learningtrainingplatformthat branded asAKAZALMS.AkazaLMSis up withSLTcloudinfrastructure developed eLearningsolutionsbundled (Pvt) Ltdin2015tooffertheirlocally i-Context ContentConvergence SLT enteredintoapartnershipwith Akaza LMS England CricketteamstourofSriLanka. and SriLanka,theSouthAfrica tournament betweenBangladesh,India, its servicestotheNidahasTrophy and others.SLTcontinuedtoprovide the BBC,SkySportsUK,TalkSport, international mediabodiesincluding appreciation ofSriLankaCricketand cricket matchesthathasreceivedthe Wi-Fi servicesforinternational reliable andtrustedInternet For over15years,SLThasprovided International cricket matches ventures collaborations, andjoint New strategicalliances, SLT’s networkinfrastructure. Cloud andcanbeaccessedthrough solution whichishostedlocallyonSLT pay amonthlysubscriptionfeeforthe relationship management.Customers manufacturing, projects,andcustomer management, fixedassets,procurement, sales andinvoicing,finance,inventory their requirementswithmodulesfor manage theirbusinessthatcatersto to buildacustomisedERPsolution and services,Entutionallowscustomers distribution, manufacturing,projects enterprises involvedinsalesand Planning (ERP)solution.Aimedat a cloud-basedEnterpriseResource solution provider,toofferEntution, established cloud-basedERP SLT partneredwithBileeta,alocally Entution ERP and infrastructureupfrontisall but need toinvestinexpensivehardware legacy datawarehousingsolutions. The platforms athalfthecostand timeof integrated insightsthroughdifferent data, andgeneratedeliver are heldasstructuredorunstructured from differentsystems,whetherthey quickly combineandcorrelatedata number ortypesofdatasourcesand their entiredatasetsregardlessofthe (BI) solutions.Enterprisescanvirtualise data analyticsandBusinessIntelligence Lankan enterpriseswithrealtimebig as aServicesolutionwillempowerSri the DataVirtualisationandAnalytics through SLT’sAkazaCloudplatform, their businessinrealtime.Offered organisations toreceiveinsightsinto offer asolutionthatenablesbusiness solutions providerDataWerksGmbHto SLT joinedhandswithdatavirtualisation DataWerks GmbH management system. fully integratedwithahotelproperty offers standaloneoperationorcanbe quickly setupinhotelsofanysizeand with hotelservices.Thesystemcanbe local touristinformation,andinteract television shows,internetservices, services includingon-demandmovies, allows themtochoosearangeof for thedevelopment. the communicationsbackbone infrastructure thatwillserveas will providestate-of-the-artfibre development inMountLavinia.SLT for “TheMount”,a35-apartment the totaldigitalservicesprovider Evercore Properties(Pvt)Ltd.tobe SLT enteredintoapartnershipwith The Mount between apartments. internal voicecommunications PEO TV)andaPABXsystemfor services (voice,broadband,and new apartmentswithFTTHtripleplay and 4willseeSLTprovidingover600 apartments infourtowers.Phases3 services andIPTVin445 covered voiceandhigh-speedinternet provider forPhases1and2,which exclusive telecommunicationsservice in SriLanka.SLTalsoservedasthe development projectundertaken the largestintegrated/mixed-use for Phases3and4ofHavelockCity, telecommunications serviceprovider (Pvt) Ltdtoserveastheexclusive SLT partneredwithMirekaHomes phases 3and4 Havelock City their lifestylesandlivingstandards. speeds inthenationtotransform that offersthefastestbroadband fibre-to-the-home (FTTH)infrastructure benefit fromSLT’sultra-fast Residents oftheapartmentswill within Colombocityanditssuburbs. projects comprising785units provider for24condominium that seesSLTbethedigitalservices Companies, establishedapartnership SLT andtheBlueOceanGroupof of Companies Blue Ocean Group its kindavailableintheregion. the firstdatavirtualisationsolutionof eliminated. Thepioneeringsolutionis and ElectronicEngineering. University’s DepartmentofElectrical and developmentcentreatthe projects andestablishanewresearch out collaborativeICTresearch will seeSLTandtheUniversitycarry cutting-edge research.Theagreement universities inSriLankarenownedforits of Peradeniya,onethetopranked SLT signedanMoUwiththeUniversity University ofPeradeniya with 63units. covers twoupcomingprojects in Wellawatte.Theagreementalso JPKL Construction’snew32-unitproject for voice,data,andPEOTVservices SLT willbethedigitalserviceprovider JPKL Construction Lake MenarainRajagiriya. Coral XinColombo03,and Colombo 15,CoralCityinGampaha, Plus inColombo04,CoralSaffron properties locatedinColombo:Coral infrastructure toeightupcoming apartments. SLTwillprovidefibre connectivity toCoral’slatestluxury agreement withSLTtoprovidefibre Coral Propertiesenteredintoan Coral Properties Business Partnercapital Dealer support and businessethics. with partnerswhosharesimilarvalues fair andresponsiblemannerworks committed toconductingactivitiesina business operations.SLTremains as labourpracticesandsustainable in comprehensivedetailissuessuch A CodeofEthicsforsupplierscovers procurement ofgoodsandservices. in placeonallmattersrelatedtothe SLT hasdetailedpoliciesandguidelines partners standards forbusiness Procurement policiesand their profitability. productivity andefficiencyincrease solutions, thusimprovingtheirinternal products canoffersupplementaryICT those whosellvoiceanddata diversify theirofferings.Resultantly, with onnewsolutionstohelpthem SLT updatesthedealersitworks Management discussionandanalysis 59
Sri Lanka Telecom PLC | Annual Report 2018 60 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis transparent manner. experience inanopenand to improveouremployee employees andwecontinue environment forour a rewardingworking regional player.Weprovide in SriLankaandakey service provider(DSP) into theleadingdigital transform ourselves an importantroleaswe SLT’s employeesplay CAPITAL EMPLOYEE 72.7% Total workforcebygender–OverallICTbusiness * Excludesoutsourcedstaff Total workforcebygender* Outsourced by type Employee composition Total workforce by employment type Workforce Profile employment Type of Total Contract Outsourced Permanent 23.3% Type ofemployment Overall ICTbusiness Mobile ICToperations Fixed ICToperations Male operations Fixed ICT 2018 7,241 1,869 5,364 8 operations Mobile ICT 2018 1,434 1,165 Permanent 27.3% 75.3% 113 156 Contract 1.4% Female Female Overall ICT 1,818 1,432 business 386 2,025 8,675 6,529 121 by businesssegment Total workforce 74.3% operations Mobile ICT 16.5% 100 (%) 21 79 Male operations Fixed ICT
2,148 7,561 5,390 4,832 3,940 23 Male 892 operations Mobile ICT 2017 2017 100 1,532 1,147 (%) 18 82 189 196 Total 2018 Overall ICT business operations 1,278 6,650 5,372 Fixed ICT 2,344 9,093 6,537 25.7% 83.5% 212 Female (Nos.) Service analysis–OverallICTbusiness Age analysisofstaff–OverallICTbusiness Scheme (SRPS). SLT’s StaffRecruitmentandPromotion business. Allrecruitmentsarebasedon ensuring thecontinuedgrowthof the Companyandindustryvitalfor that requireskillsarespecificto and findingcandidatesforpositions long-term humanresourcesplanning around talentacquisitionfocuseson leaders, andfutureexecutives.Efforts talent byseekingoutspecialists, SLT constantlyseekstorecruitnew Recruitment 21 andabove * Excludesoutsourcedstaff 56 andabove (Nos.) 25 andbelow Male Male 11 –15 16 –20 26 –30 31 –35 36 –40 41 –45 46 –50 51 –55 6 –10 0 –5 Female Female 2,500 1,000 2,000 800 1,500 600
Employee recruitment by ageandbusiness segment Total 56 yearsandabove 51-55 years 41-50 years 31-40 years 21-30 years Age Category 18-20 years 1,000 400 Employee Capital 500 200 Fixed ICT 0 0 501 161 295 44 Management discussionandanalysis 0 1 0 Mobile ICT 500 200 122 103 15 0 0 2 2 Total ICT 623 163 310 147 1,000 400 0 1 2 61 Sri Lanka Telecom PLC | Annual Report 2018 62 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis per gender. Note: Indicatespercentageofturnover business segment by genderand Employee turnover y y y following scenarios: Turnover atSLTmayoccurthroughthe Turnover y y y of themanagement. supervisors, andthediscretion recommendations ofexecutive performance, disciplineandconduct, of ageuponrequestsubjectto with extensionsupto60years Retirement atthe55yearsofage, labour regulations. to theprovisionsofrespective employee’s employmentsubject SLT maychoosetoterminatean appointment. prior noticeaspertheirlettersof employment atSLTsubjecttogiving Employees mayconcludetheir Male Female Fixed ICT 11.35 8.67 (%) Mobile ICT 5.86 5.81 (%) Employee Capital cover allstaff. Agrahara healthinsuranceprogramme medical assistanceprogrammeand across theisland.Additionally,SLT programme annuallyforallemployees conducts theSuwathahealthscreening health practicesperiodicallyand awareness programmesforbetter workplace. Moreover,SLTconducts to maintainsafetystandardsinthe working environmentandworks SLT hasestablishedasafeandhealthy and safety Occupational health Note: Indicatespercentageofturnoverpergrade. Employee turnover by grade andbusiness segment Total Non-executive staff Executives Middle management Senior management Grade operations Fixed ICT 10.60 10.70 10.90 5.30 8.20 (%) 2018 survey throughouttheyear;Contact quarterly basisthroughanemployee satisfaction wasmeasuredon a customer satisfaction.Employee (ESat) iscriticallyimportantto achieve SLT believesthatEmployeeSatisfaction developments intheICTindustry. the Company,Companyactivities,and date onimportantdecisionsmadein “Amathuma”, tokeepemployeesup mail, andaninternalnewsletter, media-watch, intranetupdates,socio related matters.SLTutilisesinfo-mail, and commentsuggestonHR through whichtheycanofferinsight blog offersemployeesanoutlet and internalnewsletters.AnHR involvement incommunityprojects, departmental meetings,briefings, out toouremployees,including SLT employsvariousmeanstoreach Planning (ERP)system. SLT throughtheEnterpriseResource performance managementprocessat working hours,andautomatingthe office” pilotproject,apolicyforflexible by introducinga“workfromnearest the rapidlychangingdigitaleconomy as changingoldpoliciestokeepupwith improve theemployeeexperience,such working forSLT.SLThasworkedto in theirworkandenthusiasticabout are essentialtothembeinginvolved clear linesofcommunicationwiththem Engaging withemployeesandhaving engagement Employee relationsand operations Mobile ICT 5.82 0.00 5.86 4.44 5.94 (%) operations Fixed ICT 5.40 5.00 2.50 9.90 7.60 (%) 2017 operations Mobile ICT 5.61 0.00 3.55 1.44 6.77 (%) y y y y y y y y y y y y y y including: of benefitsandwelfareinitiatives, Employees ofSLTenjoyabroadrange Benefits andpromotions training anddevelopmentopportunities. obtained fromimmediatesuperiors,and supervisory leadership,support working environment,workpatterns, and systemavailabilitytoemployees, in ESatsurveyincludedITinfrastructure 2018. Parametersthatweremeasured satisfaction of75%inallquarters centre agentsrecordedanemployee y y y y y y y y y y y y y y Vehicle scheme Death donationstofamilymembers Gratuity andpension Monthly andannualsalesprogrammes training, etc. subsistence, transport,meals,foreign Allowances forrisk,overnight, disabilities/accidents duringwork Workmens’ compensationfor Training programmes other postgraduatestudies education, includingMSc,MBA,and Financial supportforhigher etc. volleyball, tabletennis,badminton, cricket, football,netball,athletics, Sports activitiesandassociationsfor yoga, karate,swimming,cycling,etc. Fitness programmesincludingZumba, insurance schemes Medical centre,andmedical Leave bonusforunutilisedleave Attractive bonusespaideachyear Attractive EPF/ETFcontributions non-executive employees. promotions and863for 2018, therewere46executivelevel examinations and/orinterviews.In selected forpromotionsthroughwritten Promotion Scheme.Candidatesare in theSLTStaffRecruitmentand if theyqualifyforthecriteriadefined Employees areeligibleforpromotions performance, andexperience. their professionalqualifications, available toemployeesbasedon Opportunities forpromotionare regional staff. improving relationshipsamongst awareness programmesaimedat Provincial meets,andRegional initiatives suchastheTelecomGames, balance ofouremployeesthrough also workstoimprovethework-life in themindsofourstakeholders.SLT in turnreflectspositivelyontheGroup to anengagingworkenvironmentthat well-being ofouremployeescontributes SLT believesthatthesatisfactionand y y y y y y y y y y y y programmes, Christmasactivities,etc. Religious activitiessuchasBuddhist phone purchasereimbursement Telephone subscriptionsandmobile and leaveforGovernmentelections Leave entitlements,overseasleave, housing loaninterest Loan facilitiesandreimbursementof Cafeteria facilities Holiday bungalows Employee Capital during January–December2018. a totalof77,394hourstraining more focus.SLTemployeescompleted and SLTidentifywhatareasrequire an appraisalsystemthathelpsthem feedback fromtheirmanagersthrough on-the-job experience,andregular combination offormaltraining, Employees areprovidedwitha individual anddepartmentallevel. development isconductedatan and loyalty.Employeetraining beneficial toemployeeretention growth ofSLT,inadditiontobeing our employeestobeessentialthe SLT considersthedevelopmentof Training anddevelopment subject toorwitnessed. misconduct thattheyhavebeen anonymously reportanyactsof allow anyemployeetosafelyand whistle-blowing policyisinplaceto grievances andissues.Adetailed mechanism tohandleanystaff with asystematicandcomprehensive Committee hasbeenestablishedalong Furthermore, aGrievanceHandling trade union. all employeesbelongtoatleastone recognised bytheCompanyandalmost three months.18activetradeunionsare conducted withalltradeunionsevery At leastoneformaldiscussionis approached togetherforallissues. any timeandpositivesolutionsare Human ResourcesOfficer(CHRO)at any tradeunioncanmeetwiththeChief An open-doorpolicywithtradeunions; with tradeunionssinceitsprivatisation. SLT hasmaintainedsocialdialogue handling Unions andgrievance Management discussionandanalysis 63
Sri Lanka Telecom PLC | Annual Report 2018 64 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis this goal. country thataimtoachieve social projectsaroundthe initiate andchampion to thegeneralpublic.We convenience ofdigitisation and promotingtheease reducing the“digitalgap” one willbeleftbehindby is workingtoensurethatno towards digitalisation,SLT country movessteadily it isapartof.Whilethe communities andcountry believes inupholdingthe corporate citizen,SLT inhabitants. Asaresponsible economy andthelivesofits that issointrinsictothe the digitalinfrastructure the countrybybuilding to thedevelopmentof Sri Lanka,SLTcontributes solutions providerof As thenationalICT ENVIRONMENTAL CAPITAL SOCIAL AND
habits instudents. libraries tocultivategoodreading provided Englishbookstoschool of theOrdinaryLevelssyllabusand conducted anICTlecturecomprised a smarteducationsystem.SLTalso supports thecountry’svisiontobuild ADSL) aspartoftheinitiativewhich a freebroadbandconnection(LTEor education. Schoolswereprovidedwith technology andaccesstoglobal engage intheirstudieswithmodern the nextgenerationofstudentsto telecommunications facilities,providing for informationtechnologyand 160 schoolswithinfrastructure The programmehasempowered commemorate SLT’s160thanniversary. Programme” commencedin2016to The “160SchoolDevelopment Batticaloa Teaching Hospital. an EmergencyandTraumaUnit atthe USD 300,000intheprojectto build Project (BEAP);theCompany invested the BatticaloaEmergencyand Accident SLT wastheSuperPlatinumSponsor for Accident Project Batticaloa Emergency and 160 SchoolDevelopment Programme Social initiatives Nanyang Technological Universityin Health, theUniversityofColombo, and Ministry ofEducationand of Child” appincollaborationwith the Mobitel developedthe“Dengue Free “DengueFreeChild” app Mobitel launches their wellbeingandindependence. to improvetheirICTskillsandenhance senior citizensthroughoutthecountry population, SLTarrangedworkshopsfor of elderlypeopleinthecountry’s gap” thatexistsinthegrowingsegment digitalisation. Toaddressthe“digital important inthecountry’sjourneyto The engagementofseniorcitizensis e-Seniors workshops Polonnaruwa, andAmpara. region includingTrincomalee, Batticaloa, aswellthesurrounding serve over2millionpeoplewholivein The upgradewillhelpthehospitalbetter approximately 700patientseveryday. treatment atthehospital,whichtreats the largenumberofpatientswhoseek The fullyequippedunitisbuilttohandle or province.Theinitiativeispart of of anyindividual,classroom,school, enough tomeettherequirements to setupandmanageisflexible accessible learningplatformissimple outcomes. Mobitel’saffordableand an environmentforbetterlearning prospects asaresultofMobitelenabling to enhancetheirICTliteracyforbetter from schoolsintheareawillbeable North WesternProvince.Students provide Internettoschoolsinthe in KurunegalaSeptember2018to “Wayamba SchoolInternetProject” Provincial Councilfacilitatedthe Mobitel andtheNorthWestern Internet project Wayamba School sending anSMSto6352. cash donationtoextendthisfacilityby encouraged todonateviavoiceor the donationsmade.Customersare donations fromthepublicandmatching the projectbyseekinginvolvementand Mobitel collectedthesumrequiredfor the comfortandsafetyoftheirhomes. experience thesplendourofVesakfrom display inColombo,enablingthemto of fiveprominentVesakPandolson users tolistencaptivatingstories Response (IVR)platformandallows technology onanInteractiveVoice combines storytellingwithmodern Visually Handicapped.Theproject to theSriLankaFederationof completion, thelibrarywasentrusted of thevisuallyhandicapped.Uponits at enhancingandenrichingthelives of itsNethrabhimanainitiativeaimed Mobitel launchedavoicelibraryaspart Nethrabhimana initiative Google PlayStore. available forAndroidusersonthe take precautions.Theappiscurrently the reportedareasandalertparentsto incidents sothatactioncanbetakenin to reportcasesofdengueorsuspected launched inMarch2018,enablesusers dengue amongschoolchildren.Theapp, Singapore tocombatthespreadof operates within. cultural festivalsinthecommunitiesit Around theyear,SLTcelebratedseveral Cultural celebrations more sessionsinvariousdistricts. event, Mobitelwillseektoorganise positive feedbackreceivedfromthe As aresultoftheoverwhelmingly discussions, andicebreakersessions. hands-on experiencewithapps, The workshopincludedgroupactivities, and helpthemgrowtheirbusiness. technology, getinspired,connected, balance, helpwomenmakethemostof and entrepreneurialskills,work-life aimed toimpartdigital,leadership, held attheMobitelInnovationCentre, everywhere. Afull-dayworkshop, create economicopportunityforwomen retailer network.Theinitiativeaimsto programme tothefemalesegmentofits Colombo tointroducethe“WomenWill” with theGoogleBusinessGroup(GBG) Connected Womeninitiative,partnered Mobitel, amemberoftheGSMA WomenWill programme in thecountry. society andbridgingthedigitaldivide helping tobuildaknowledge-based digital empowermentofsociety, Mobitel’s long-termvisionforthe Social andEnvironmentalCapital y y y y Temple premises. temple andceremonialplantinginthe offering ofAtaVisiBodhisetstothe the libraryofPirivena,and to themonks,bookdonations cooked withtraditionalriceoffered Minuwangoda sawmealsandporridge at GalkandaPirivena,Horampalla, the school.APirivenaprogramme Sisu Connectservicesprovidedto school library,andbroadband for students,bookdonationstothe porridge cookedwithtraditionalrice in Minuwangoda,withmealsand held attheSeelawimalaSchool A SchoolSeelaprogrammewas social, education,andenvironment. programme focusingonthreeareas: SLT celebratedVesakwitha entertainment activities. festive occasion,alongwithgiftsand and sweetstocommemoratethe children receivedaspeciallunch community. 100underprivileged in theyearforSriLankanHindu is oneofthemostsignificantevents 2018. TheharvestfestivalofPongal a varietyofactivitieson12January children inUppuveli,Trincomaleewith destitute, orphaned,andhandicapped Thapovanam ashram,ahomeforthe hosting eventsattheSivananda SLT celebratedThaiPongalby Management discussionandanalysis 65
Sri Lanka Telecom PLC | Annual Report 2018 66 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis y y y y out bySLTCustomerClubsinclude: section. Someoftheactivitiescarried Telecom officeandCorporateRelations and cooperationoftheRegional SLT customersunderthesupervision operated andhandledindependentlyby aforementioned areas.TheClubsare and variousactivitiesaroundthesix society-empowering CSRprogrammes to buildloyaltythroughsustainable an innovativewayfortheCompany & culture.SLTCustomerClubsare professional bodies,nature,andart categories: social,sports,education, CSR strategycentredaroundsixmain activities linkedtoitsSustainable corporate citizenandcarriesout SLT isfocusedonbeingagood Customer Clubs y y y y y y y y CCL Avissawella. An ITworkshopforteachersby family byCCLAnuradhapura. A newhouseforanunderprivileged Ratnapura. Reforestation projectbyCCL The “PlantingforWater”Sinharaja Kurunegala HospitalbyCCLKandy. system totheThalassemiawardof The donationofawaterfilter spirit ofChristmas. festive season,inkeepingwiththe gifts toneedyeldersduringthe with aneventtoprovidemealsand SLT celebratedChristmasin2018 library ofMuslimBalikaVidyalaya. well asprovidedschoolbookstothe school bagsandstationeryitemsas 2018 andgaveawaygiftsincluding underprivileged Muslimchildrenin hosted anIftarmealforover100 giving backtothoseinneed.SLT in raisingpublicawarenessand the importanceofplayingitsrole month ofgivingandSLTrecognises Muslim communityinSriLanka;itisa of themostimportanteventsfor The HolymonthofRamadanisone Social andEnvironmentalCapital preservation oftheenvironment: SLT Groupundertooktowardsthe These aresomeoftheinitiatives from paperbillstoelectronicbills. encouraging ourcustomerstoswitch more ofourinternalprocessesand and wastagebyrelyingondigitalising For instance,wereducepaperusage economically sustainablemanner. in anenvironmentallyresponsible, on theenvironmentandoperate mitigate oroffsetanyadverseeffects us. Weconstantlyseekwaysto they impacttheenvironmentaround of ouroperations,includinghow SLT iscommittedtothesustainability Environmental Initiatives MV-Exchange Gampaha Kurunegala Ja-Ela Anuradhapura Kuliyapitiya Maradana Chilaw Kelaniya Wattala Mattakkuliya Ratmalana Hambantota Kaduwela Welisara Kotugoda Moratuwa Site conditioning atitssites. LED lightingandinverter-typeair efficient structuresandimplementing energy consumptionbybuilding Additionally, SLTseekstoreduce Electricity Board. sites andsellenergytotheCeylon solar panelsontherooftopsofSLT with supplierswhowishtoinstallPV pursue powerpurchaseagreements 821 tonnesperyear.SLTwillseekto reduction inSLT’scarbonfootprintby saving ofLKR25.2Mn.peryearanda Hours peryear,resultinginanestimated generates anestimated1,156-Megawatt a totalcapacityof876kilowattsand commissioned in2017,thesystemhas 2018. Togetherwiththeeightsites nine photovoltaic(PV)solarsitesin SLT initiatedtheimplementationof PV Solarimplementation Capacity (kW) 876 131 PV 45 30 55 35 90 15 90 40 25 50 15 90 30 25 60 50 Generation 1,156,320 118,800 118,800 118,800 172,920 Annual 59,400 39,600 72,600 46,200 19,800 52,800 33,000 66,000 19,800 39,600 33,000 79,200 66,000 Power (kWh) Footprint per year) (tonnes Carbon 821.0 122.8 42.2 28.1 51.5 32.8 14.1 84.3 37.5 84.3 23.4 46.9 14.1 28.1 84.3 23.4 56.2 46.9
well asbeinghealthierforemployees. and areductioninplasticpollution,as period ofapproximatelysevenmonths, saving oftimeandspace,alowpayback Benefits fromtheinitiativeinclude in asavingofLKR2.5Mn.peryear. LKR 120,000thatisestimatedtoresult Headquarters ataprojectcostof (RO) watersolutionattheSLT SLT implementedareverseosmosis at SLT Headquarters RO Water implementation ecological balance. pollution andhelppreservethe 2017, SLTaimstopreventenvironmental recycling programmecommencedin (CFL) andfluorescenttubelights(FTL) the compactfluorescentlightbulb to reducingmercurypollution.Through Mercury Convention”andiscommitted SLT isasignatoryofthe‘Minamata recycling programme CFL andFTL reduction (mg) Total Mercury Other Total FTLcollected Total CFLcollected 15,092 1,832 1,848 93 across theglobe. link upwithlike-mindednaturelovers age. Theappwillalsohelpusersto output basedontheplanttypeand leaderboard bycalculatingtheoxygen award pointsandranktheuserona images totheappwhichwillthen (AI). Userscanplanttreesandupload blockchain, andArtificialIntelligence technologies suchasNarrowbandIoT, use ofintelligentandforward-looking end of2020.Theplatformwillmake drive toplan2milliontreesbythe to planttreesaspartofareforestation gamified platform that encourages users tech realityTVshow.THURUisa innovation andentrepreneurship-based Vatina Adahasak,SriLanka’sfirst-ever the 10finalistsofSeason2Kotiyak Mobitel partneredwithTHURU,oneof Reforestation drive Social andEnvironmentalCapital Management discussionandanalysis 67
Sri Lanka Telecom PLC | Annual Report 2018 68 Sri Lanka Telecom PLC | Annual Report 2018 Management discussionandanalysis and devices. different operators compatibility between standards toensure and maintaintechnical between telecomoperators, facilitate relationships consumers andtheindustry, regulations servetoprotect charge eachother.These fees thatoperators security, andthewholesale data protection,cyber consumer rights,copyright, allocation, roamingcharges, for areassuchasspectrum is regulatedbyauthorities telecommunication industry The SriLankan CAPITAL REGULATORY advancement ofthecountryforward. processes andpoliciestosafeguard the amendments andsolutionstothe solution toestablishappropriate to concludeinamutualsustainable with therelevantauthoritiesmoreoften been voicetheirissuesandconcerns Telecommunications operatorshas on theregulatoryinstruments. journey withmutualunderstanding institutes hasbeenensuedaprolonged world. Theindustryandtheregulatory are enabledtoahyper-connected households andpersonsaspossibly service” whichensuresasmany compatibility, andachieving“universal behaviour, maintenanceoftechnical services, restrictinganti-competitive industry byensuringfairpricingof protect bothconsumersandthe derived policiesandmeasuresto These regulatoryInstitutionhave Lanka’s TelecommunicationIndustry. have vitalregulatoryrelevancetotheSri key InfluentialGovernmentalbodiesthat Central BankofSriLankaaretheother Enterprises, CustomsofSriLanka, Authority, DepartmentofPublic Authority, CentralEnvironment Commission, ConsumerAffairs of MassMedia,RighttoInformation Information Technology,Ministry Ministry ofDigitalInfrastructureand institutes namelyBoardofInvestments, in SriLanka.InadditionGovernment of theTelecommunicationsindustry which allareparamountaspirations Charging systemsandTariffRegulations protection, privacyandcybersecurity, Assurance, Security Assurance with data Asset Management,Consumerrights Licensing framework,Spectrum scope oftheentireindustryincluding of 1996.TRCSLregulatestheextensive of 1991asamendedbytheActNo.27 Lanka TelecommunicationsActNo.25 under theauthorityvesteduponSri Commission ofSriLanka(TRCSL) Telecommunications Regulatory in SriLankaisregulatedbythe The telecommunicationsindustry money operations. the CentralBankofSriLankaformobile licenses, MobitelcarriesaLicensefrom license. Apartfromseveralofthese Gateway OperatorlicenseandaVendor technology. FurtherithasanExternal to spectrumwhichincludes3Gand4G Outdoor WiFi,severallicensesrelated Fixed Serviceslicensetoprovide authorisation toprovideindoorWiFi, Mobile Licensewhichincludesan Accordingly, MobitelcarriesLand cellular mobileoperatorinSriLanka. on keylicensesrequiredfora Mobitel (Private)Limitedoperates South AsianRegionforthefirsttime. established theIPTVoperationin is thepioneerIPTVlicenseholderwho offer necessaryservices.FurtherSLT permissions, andvendorlicensesto wireless services,Internationalservices provide bothFixedwiredand areas. SLTholdssystemslicensesto covering allDivisionalSecretariat Sri Lankabyestablishingfibrefootprint SLT hasachievedthiscompliancein year spanasarolloutcomplianceand divisional secretariatareaswithinfive Island widefibrepresencecoveringall The NBNLicensegrantstoestablish to buildthisnetworkforSriLanka. legitimately grantedthesoleauthority Network InfrastructureandSLTis for NBNwhichisanIslandwideFibre as pertheCabinetApprovedPolicy Backbone Network(NBN)License company, SLTisgrantedtheNational specified territoriesandperiods.The are permittedtobeprovidedwithinthe system atwhatparticularconditions operator whichnatureofLicense Regulatory licensingauthorisesan Regulatory licensing y y y y y y y enhancements are; Key rolesinregulatorycapital capital enhancement Key rolesinregulatory y y y y y y y with regulator. monitoring andreportingprocess networks, serviceswithclose Ensuring qualityofserviceon consumer protection. process ofsafeguardingthe and facilitateregulatorinthe Managing customerrelations regulatory institutions. with relationshipmanagementofthe directives withintheOrganisation Administration ofregulatory and management. compliance oninterconnections Compliance ontariffregulations, Government entities. compliance withallrelevant Establishment ofregulatory wide networkdeployment. wireless operationforisland allocations formobileand Obtain thenecessaryspectrum as pertheenactedlaw. Vendor, etc.)fromtheregulator business operations(Systems, authorisation forallintended Assuring thepreciselicense y y y y y our possession: empowered andcurrentlyin The followingassetsareregulatory Regulatory assetsofSLT y y y y y majority governmentshares. public enterpriseinSriLankaowning Brand namesandgoodwillasa and MobileOperations. Infrastructure ofbothFixed Telecommunications tower LTE, 5G,Wi-Fi,MaritimeRadioetc. Spectrums forfrequencieson3G,4G fixed andmobilespacewithradio Extensive 4GLTEnetworkinboth Backbone Network(NBN)inSriLanka. the licenseauthorisationonNational extending nearly35,000kmasper An Island-widefibreopticnetwork Permission forWiredNetwork DSL capabilitywithSLT’sLicense Island-wide coppernetworkwith Regulatory Capital as wellcustomercharges. on operationalandcapitalexpenditure agencies thatcanhaveadverseimpacts by localauthoritiesandgovernment from unregulatedchargingandtaxing framework thatprotectsoperators There isalsoaneedforlegal inevitable infrastructureduplication. the entireindustrycostgrowthwith operators cannegativelyimpacton since unregulatedventuresbyother spread oftechnologiessuchasfibre regulation tomonitorandregulatethe competition. Thereisaneedfor have anadverseimpactonmarket to advancedtechnology,whichcan market, notalloperatorshaveaccess and newtechnologieslike5Genterthe telecommunication serviceproviders solutions like4GLTEareadoptedby As wirelesshigh-speedbroadband by SLT Regulatory risksfaced Management discussionandanalysis 69
Sri Lanka Telecom PLC | Annual Report 2018 70 Sri Lanka Telecom PLC | Annual Report 2018 DIRECTORS BOARD OF STEWARDSHIP
the privateandgovernmentsectors. and humanresourcemanagementin management, financial of workexperienceincludinggeneral (Private) Limited.Hecountsover32years Limited (REDECO)andLRDCServices Reclamation andDevelopmentCompany currently servesasaDirectoroftheLand of StateTimberCorporation.He Corporation andCEO/GeneralManager of StateDevelopmentandConstruction Mr SirisenawastheManagingDirector Remuneration andNominationCommittee. Limited. Healsoservesasamemberofthe of GalleSubmarineCableDepot(Private) Campus (Private)Limited,andDirector Sri LankaTelecom(Services)Limited,SLT Property Management(Private)Limited, Sky Network(Private)Limited,SLT Human CapitalSolutions(Private)Limited, SLT Visioncom(Private)Limited, SLT DigitalInfoServices(Private)Limited, Mobitel (Private)Limited,eChannellingPLC, He alsoservesasDirector/Chairmanof to theabovepositionon23January2015. Mr KumarasingheSirisenawasappointed Chairman Mr PGKumarasingheSirisena of SriLanka. of theAssociationFIRProfessionals of SriLanka,andanAssociatemember Institute ofPersonnelManagement Institute ofDirectors,memberthe of Marketing,membertheSriLanka certified memberoftheSriLankaInstitute public sectorwingofCASriLanka.Heisa Finance AccountantsofSriLanka–the of SriLanka,andtheAssociationPublic Association ofAccountingTechnicians Government AccountsandFinance, Professional Managers,Instituteof of Marketing,InstituteCertified Fellow memberoftheCharteredInstitute other institutions.Inaddition,heisalsoa University ofSriJayewardenepuraand and ProjectManagementfromthe Accountancy, FinancialManagement, Management, aPostgraduateDiplomain Resource Management,DiplomainBusiness Administration (MBA),MasterofHuman Degree inManagement,MasterofBusiness Mr SirisenaholdsaBScHonors(Special) England andWales. Institute ofCharteredAccountants United KingdomandisaFellowofthe University ofNewcastle-upon-Tyne, Economics andAccountingfromthe Mr ChanholdsanHonoursDegreein and YuCaiFoundation. Maxis CommunicationsBerhadofMalaysia, Armada Berhad,BinariangGSMSdnBhd, of severalcompaniesincludingBumi corporate finance.HeservesontheBoards Sdn Bhd(UTSB)Groupin1992asheadof Co. Ltd.priortojoiningtheUsahaTegas at Ernst&YoungandMorganGrenfell management, andaccounting.Heworked investment banking,generalandfinancial He countsover40yearsofexperiencein Committee. of theRemunerationandNomination (Pvt) Ltd.HealsoservesasChairman Management (Pvt)LtdandSLTCampus Board ofMobitel(Pvt)Ltd,SLTProperty on 5June2008andsubsequentlytothe the BoardasaNon-ExecutiveDirector Mr ChanCheeBengwasappointedto Mr ChanCheeBeng Director
providing ultra-high-speed Broadbandto a DirectorofVernet PtyLtd,aCompany Technology Committee oftheBoard,as Communication Berhad,Chairman ofthe He hasservedasaDirectorofMaxis communication forAustralia. proposal fordeliveryofnational broadband for thedevelopmentofanintegrated Acacia AustraliaPtyLtd,hewas responsible issues. AsaDirectorandChiefExecutiveof sales, customerserviceandregulatory and infrastructuredevelopment,operations, domestic networks.Thisincludescapital broadband, satelliteandinternational telecommunication includingmobile,fixed, experience inallfacetsof Mr Paratzhasmorethan40years’ Engineering (ATSE). Academy ofTechnologicalSciencesand was electedasaFellowoftheAustralian and Engineering(Honours).In2011,he holds Bachelor’sDegreesinScience Development Programme.Healso Stanford UniversityExecutive (FIEAust) andanalumnusofthe He isaFellowofEngineersAustralia MEngSc fromtheUniversityofQueensland. the PhilipsPrizefromEssexUniversity,andan Systems) withDistinction,andwasawarded Mr ParatzholdsanMSc(Telecommunication effect from26May2010. Independent Non-ExecutiveDirectorwith Board ofSriLankaTelecomPLCasan Mr LawrenceParatzwasappointedtothe Mr LawrenceParatz Director
in anumberofinitiatives ine-health. Cancer Programme,andhasbeen involved at PeterMacAdolescentandYoung Adult He wasformerlyChairmanofthe ONTrac Sciences andEngineering. Australian AcademyofTechnological Health InformaticsConference, and the been aninvitedspeakerattheAustralian Internet AssistanceProgramme.Hehas Board oftheAustralianGovernment’s previously servedasamemberofthe regional, andruralcommunications.He experience ininternational,metropolitan, multiple technologies,withextensive transformations anddeploymentsacross and integrationsincludingnetwork for multi-billion-dollarprogrammes Mr Paratzhashadexecutiveresponsibility Remuneration &NominationCommittee. member oftheSeniorTenderBoardand Technology Sub-Committeeandisa Mr Paratzservesasthechairmanof company incorporatedinVictoria,Australia. company andRazorbackPtyLtd,a Pty Ltd,anAustralianhightechnology also aDirectorofRealThingEntertainment SLT DigitalInfoServices(Pvt)Ltd.Heis (Services) Ltd.,Visioncom(Pvt)Ltd,and SLT Campus(Pvt)Ltd.,SriLankaTelecom Ltd., SLTPropertyManagement(Pvt) of Mobitel(Pvt)Ltd,SkyNetworks of TelstraCorporation.HeisaDirector in Australia,andaformerSeniorExecutive Universities andResearchEstablishments Board ofDirectors Stewardship 71 Sri Lanka Telecom PLC | Annual Report 2018 72 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship of CPAAustralia. and aCertifiedPracticingAccountant of theMalaysianInstituteAccountants Australia andisaCharteredAccountant Degree fromMelbourneUniversity, Ms LaiholdsaBachelorofCommerce Communication Berhad. Director forafewsubsidiariesofMaxis Berhad. SheisalsoaNon-Executive Finance HeadofMaxisCommunications with MaxisBerhadandiscurrentlythe government sectors.Shewaspreviously the telecommunications,banking,and finance, procurement,andauditingin She hasover35yearsofexperiencein Transactions ReviewCommittee. Audit CommitteeandRelatedParty Tender Boardandamemberofthe She istheChairpersonofSenior 9 May2014asaNon-ExecutiveDirector. and Mobitel(Private)Limitedon to theBoardofSriLankaTelecom Ms LaiChoonFoongwasappointed Ms LaiChoonFoong Director Board ofDirectors
Director post ofAssistantSecretary. the BarAssociation,including She hasheldseveralpositionsat of PaulRatnayakeAssociates. she servesasthePartner 31 yearsofpracticeattheBar.Atpresent, over 31yearsofexperienceincluding Supreme CourtofSriLankaandcounts Ms PierisisanAttorney-at-Lawofthe Management (Pvt)Ltd. (Private) LimitedandSLTProperty Director ofSLTHumanCapitalSolutions Senior TenderBoard.Shealsoservesasa also sitsontheAuditCommitteeand Party TransactionsReviewCommitteeand She istheChairpersonofRelated Independent Non-ExecutiveDirector. the Boardon3February2015asan Ms NilanthiPieriswasappointedto Ms NilanthiPieris
Director Commerce. Heservedasamember ofthe council memberoftheCeylonChamber of of SriLanka(FCCISL),formerexecutive of ChamberIndustryandCommerce executive councilmemberofFederation (COYLE), SeniorVicePresidentand Chamber ofYoungLankanEntrepreneurs bases. HewasthepastChairmanof Non–Government Institutionsonvoluntary eminent positionsinGovernmentand operations. MrWegapitiyaheldmany business conglomeratewithoverseas founder of“Laugfs”,ahighlydiversified recognition. MrWegapitiyaisthe who hasgainedlocalandinternational He isanawardwinningentrepreneur, Campus (Pvt)Ltd. He alsoservesontheBoardofSLT Subcommittee andSeniorTenderBoard. He isamemberoftheTechnology Independent Non-ExecutiveDirector. to theBoardon2December2015asan Mr WKHWegapitiyawasappointed Mr WKHWegapitiya
Year atthe2017ACESAwards. He alsorecentlywonEntrepreneurofthe development andentrepreneurialefforts. his valuablecontributiontotheNation’s honourable titleof“Deshabandu”for Mr Wegapitiyawasawardedthelifetime entrepreneurship atthePIM. At presentheisreadingforhisPhDin (PIM) affiliatedtothesameuniversity. the PostgraduateInstituteofManagement Sri JayewardenepuraandanMBAfrom Administration fromtheUniversityof Mr WegapitiyaholdsaBScinBusiness Sri Jayewardenepura. council memberoftheUniversity for severalyears,andalsoasa National PayCommission Director and severalotherprivatecompanies. Bank FundManagementCompany, Engineering PLC,NationalSavings Currently, heisaDirectorofSerendib global conglomerate. cement manufacturerinSriLankaanda 2009 toMay2013.Holcimwasthelargest Development ManagerfromNovember Limited inColombo,SriLankaasBusiness He startedhiscareeratHolcimLanka Warwick, UK. Degree inLawfromtheUniversityof in Finance.HealsoholdsaFoundation University ofTampa,USAwithaDegree Mr Senanayakeisagraduateofthe Management (Pvt)Ltd. Mobitel (Pvt)Ltd.,andSLTProperty serves ontheBoardofeChannellingPLC, the ChairmanofAuditCommitteeand Independent Non-ExecutiveDirector.Heis to theBoardon17September2018asan Mr KanishkaSenanayakewasappointed Mr KanishkaSenanayake
Company Secretary of SLTGroup. for BoardSubcommitteesandsubsidiaries He alsofunctionsasCompanySecretary and financialsector. Group andeightyearsinthemercantile has 15yearsofexperienceintheSLT In hiscareerspanningover23yearshe Secretaries andAdministratorsofUK. member oftheInstituteChartered University ofSriLanka.HeisanAssociate Bachelor’s DegreeofLawfromtheOpen from theUniversityofColombo,anda Attorney-at-Law. HeholdsanMBA Mr MaheshAthukoraleisan Mr MaheshAthukorale Board ofDirectors
Stewardship
73
Sri Lanka Telecom PLC | Annual Report 2018 74 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship TEAM LEADERSHIP 13 1 7
14 2 8 15 3 9 16 4 10 5 11 17 Leadership team 18 6 12 Stewardship 75
Sri Lanka Telecom PLC | Annual Report 2018 76 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship Leadership team 22 20 19 21 Organisation in countlessnationaland 1994, MrPerera hasrepresentedthe In thecourseofhistenureat SLT since at thetime. was alsoSriLanka’sleadingIT project the country’stechnologyfield and 2005. Thiswasakeyturning point in Ethernet TechnologytoSriLanka in also responsibleforintroducingMetro Radio Accesstechnologies,butwas on GSHDSL,MetroEthernetandDigital developing dataaccessnetworksbased only involvedinplanning,designing,and management team,MrPererawasnot As avitalmemberofSLT’sinitial South Asia. technology) –whichwasthefirstin system (withRAamplifiersandDWDM of therepeaterlesssubmarinecable deeply involvedinthehigh-leveldesign Cable SystemProjectin2005,aswas Manager oftheBharatLankaSubmarine Mr PererawasalsoappointedProject and theColomboLotusTower. Data CentreatPitipana,AKAZACloud, Sri Lanka’sfirstpurpose-builtTierIII national projectssuchasCHOGM2013, whilst supportingnumerouskey business overthelastsevenyears, grow asanenterpriseandgovernment instrumental ininvigoratingSLTto The diversityofhisexpertisehasbeen of experienceatSriLankaTelecom. understanding tohistwenty-fouryears for thefieldandadeepertechnical Mr Pererahasbroughthispassion Telecommunications Engineering, of MoratuwainElectronicsand Graduate fromtheUniversity Technology (UK),andMasters Institution ofEngineeringand Engineering Council(UK)and A CharteredEngineerofthe since June2018. Services since2016,andasCEOofSLT serving ontheBoardofDirectorsSLT roles acrossdepartments,aswell of significantstrategicandleadership galvanising theOrganisationathelm Sri LankaTelecomhaveseenhim Perera’s decadesofexperiencewithin Dynamic, driven,purposefulMrKiththi 1 Commercial Officer Chief ExecutiveOfficerand Mr KAKiththiPerera National DataCentre, andSubmarine Broadband Programme(i-Sri Lanka), The Home(FTTH),LTE(4G), National Backbone Network(SLBN),Fiber To Generation Network(NGN),Sri Lanka SLT networktransformation. New very largescaleprogrammes for leading roleinplanninganddeploying customer experience.Hehasplayeda SLT’s CallCentreinlinewithimproving implementation, andoperationof addition, hehasoverseenthedesign, networks andprojectsinSriLanka.In operation, andmaintenanceofSLT role heoverseestheentireplanning, and ChiefTechnologyOfficer.Inthis position astheChiefOperatingOfficer within SLT,culminatinginhiscurrent He hasheldastringofseniorpositions exposure duringhistenure. has recordedover650daysofsuch operators, andequipmentvendors.He international traininginstitutions,telco representations inforumsorganisedby overseas trainings,seminars,andvarious telecommunication industry,included His 31-yearcareerasaprofessionalin Engineers SriLanka. and FellowofTheInstitution Sri Lanka.HeisaCharteredEngineer University ofSriJayewardenepura, Sri Lanka;andanMBAfromthe from theUniversityofMoratuwa, in ElectronicsandTelecommunications organisations. HeholdsaBSc(Eng.) multinational telecommunications in 1991;followinghisrolesvarious Mr PriyanthaFernandezjoinedSLT and synergyintheyearstocome. doubt beinstrumentalinSLT’sgrowth experience inmanagementwillno Mr Perera’spassionanddecadesof infrastructural andeconomichistory, extremely excitingtimeinthecountry’s giant’s CEOduringthecuspofan Commencing hisroleasthetelecom Category in2014. Award intheSeniorManagement winner oftheSLTTransformerGold international forums,andwasalsothe 2 Chief TechnologyOfficer Chief OperatingOfficerand Mr MBPFernandez of Florida.Hehas beeninvolvedinthe Media Authority (ACMA),andUniversity (CTO), AustralianCommunication and Telecommunications Organisation Regulation fromtheCommonwealth certifications inTelecommunication KDD ofJapan.Hehasalsogained France Telecom,AT&TofUSA, and providers, includingTeliaABofSweden, offered byreputedinternationalservice Mr Herathhasgainedextensivetraining Manager inchargeofColomboMetro. Regulatory Affairs,andDeputyGeneral Business, GeneralManagerinchargeof Manager inchargeofInternational Officer, ChiefDigitalGeneral Planning Officer,ChiefCorporate including thepositionsofGroupChief positions atGroupandCompanylevel, He hasheldanumberofsenior Management, Regulation,andBusiness. exposure inthefieldsofEngineering, at SLT,hehasgainedmultidisciplinary a careerspanningoverthreedecades University ofSriJayewardenepura.In in IndustrialMathematicsfromthe of MoratuwaandaMaster’sDegree in EngineeringfromtheUniversity Engineer withanHonoursDegree Mr MahindaHerathisaChartered Limited since2007. Non-Executive DirectorofSLTServices of SLTsince2011.Healsofunctionsasa member oftheTechnicalSubcommittee Mr Fernandezisapermanent member ofSeniorTenderBoardSLT. (SEAIOCMA). Heisapermanent Ocean CableMaintenanceAgreement under theSouth-EastAsiaandIndian as amanagementcommitteemember Cable System.Headditionallyserves and theBharathLankaSubmarine SEA-ME-WE 3,4and5,DhiraaguCable, submarine cableconsortiumof Management Committeeforthe He wasamemberoftheInternational contribution. projects inwhichhemadeasignificant Cable Systemsaresomeoftheflagship 3 Transformation and SeniorChiefOfficer/Digital Group ChiefPlanningOfficer Mr MahindaBHerath General Manager, andGeneral General Manager,SeniorDeputy Chief FinancialOfficer,Assistant number ofkeypositionsincluding; overseas, companies,serving at a has heldseniorpositionsatlocal and several companies.Inaddition, he He hasworkedasHeadofAuditat branches acrosstheisland. Government-owned bankwith265 Development Bank(RDB),a100% Chief FinancialOfficeratRegional prior tojoiningSLT,heworkedas Chief InternalAuditor.Immediately SLT inSeptember2016astheGroup Mr ChandrasiriKalupahanajoined of SLTVisionCom(Private)Limited. He isalsotheChiefExecutiveOfficer 15 yearsofexperienceinMarketing. Engineers ofSriLanka.Hecountsover and amemberofTheInstitution Mr SeneviratneisaCharteredEngineer University ofSriJayewardenepura. In addition,heholdsanMBAfromthe Open UniversityofSriLanka(OUSL). Diploma inIndustrialEngineeringfrom of MoratuwaandaPostgraduate Telecommunications fromtheUniversity 1993. HeholdsaBScinElectronicsand Mr AjanthaSeneviratnejoinedSLTin the entireSLTGroup. and overarchingitsactivitiesacross developing itasacentreofexcellence Planning GroupwithintheCompany, He gaveleadershiptocreatinga Transformation andrelatedtopics. in theinternationalcircuitonDigital is asought-afterspeakerandpanellist Transformation oftheSLTGroupand Mr HerathisleadingtheDigital chapter tohiscredit. with severalresearchpapersandabook Development ResearchCentre(IDRC), Science (SLAAS),andInternational Association fortheAdvancementof activities ofITUstudygroups,SriLanka 4 5 Group ChiefInternalAuditor Kalupahana Mr Chandrasiri Group ChiefMarketingOfficer Mr AjanthaSeneviratne strategic unitthat shapedMobitel’s and transformed ittobecomeakey Mobitel’s InformationSystems group In additiontohisGCIOrole,he leads multiple internationalsuppliers. telecommunication industrywith complex large-scaleprojects in the given leadershipinimplementing for SriLankaRailways.Hehasalso and EmigrationmTicketing for theDepartmentofImmigration including theElectronicTravelAuthority business andnational-levelsolutions software developmentprojectsfor he hasgivenleadershiptolargescale technical background.Duringhiscareer, technology managerwithastrong as athought-leaderandinnovative years experienceintheITindustry Mr SamanPererapossessover25 Business School,ofCASriLanka. member andtheChairmanof Mr KalupahanaisaGoverningCouncil Tanzania duringhistenurethere. Public AccountantsandAuditorsof membership attheBoardofCertified Managers ofSriLanka,andhad of SriLanka,theInstituteProfessional Association ofAccountingTechnicians Accountants ofSriLanka,the of; the Institute of Certified Management KPMG-Sri LankaandaFellowmember Sri Lanka(CALanka)–trainedat of CharteredAccountants He isaFellowmemberofTheInstitute different fields. extensive localandoverseastrainingin company inSriLanka.Hehasreceived company inAngola/UK,andinsurance American companyinTanzania,British three regulatedcompanies;an He hasworkedastheCEO/GMfor Angola/UK, andSaudiArabia. Companies forseveralyearsinTanzania, working inBritish,Irish,andAmerican holds valuableinternationalexposure in theprivateandpublicsectors.He has morethan35yearsexperience Entertainment, Automobilesetc.He Civil Engineering,Aviation,Trading, Finance, Insurance,Manufacturing, Manager/CEO inthefieldsofBanking, 6 Group ChiefInformationOfficer Mr SamanPerera Leadership team Stewardship 77
Sri Lanka Telecom PLC | Annual Report 2018 78 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship 2010 and2016. Alumni atinaugural eventsheldin Postgraduate InstituteofManagement Business LeaderoftheYearby the Award” fortheMostOutstanding Award” andthe“DiamondService the prestigious“PlatinumHonours companies inSriLanka.Hewas awarded senior positionsinmanyreputed in September2018,heheldvarious Prior tojoiningSLTastheGroupCFO Management AccountantsofSriLanka. a FellowoftheInstituteCertified of SriJayewardenepura.Heisalso Institute ofManagement,University with anMBAfromthePostgraduate Chartered ManagementAccountant the UniversityofColomboandisa a BachelorofCommerceDegreefrom sector companiesinSriLanka.Hehas in manufacturing,trading,andservice experience, holdingseniorpositions 25 yearsofmanagementandfinance Sri LankaTelecomPLCandcountsover Group ChiefFinancialOfficerof Mr SanjeewaSamaranayakeisthe Computer SocietyofSriLanka. once inlifetimeaccolade–fromthe “CIO oftheYear”awardin2015–a council member.Hewontheprestigious Society ofSriLanka,andhasservedasa He isanactive member of the Computer the industry. Computing (UCSC)representing University ofColomboSchool serving asaBoardmemberofthe University ofColombo.Heiscurrently Diploma/MBA inInformationSystems, a visitinglecturerforthePostgraduate University ofMoratuwa,andservedas the MBAinInformationTechnologyat He servesasaresourcepersonfor and aBScfromUniversityofColombo. Moratuwa, anMScinComputerScience, of TechnologyfromUniversity He holdsanMBAinManagement Mobitel’s businessoperation. the TCOofmanycriticalaspects in digitalserviceswhilebringingdown leadership, hasfuelledmanyinnovations powerful professionalITteam,withhis business andentirevaluechain.The 7 Group ChiefFinancialOfficer Samaranayake Mr Sanjeewa Leadership team Programme (i-SriLanka)projects. (FTTH), 4GLTE,andNational Broadband Network (SLBN),FibreToThe Home Network (NGN),SriLankaBackbone contributions toSLT’sNewGeneration since 2016.Hehasmadeimmense Director ofSLTServicesLimited He alsofunctionsasaNon-Executive Management. Quality Management,andProject Sales, Marketing,CustomerService, areas suchasOperations,Maintenance, telecommunications industry,including He haswideexperienceinthe from LaTrobeUniversityofAustralia. an MBA(TechnicalManagement) Associations inAustraliaandholds Engineers ScientistsandManagers of theAssociationProfessional Engineers (London,UK).HeisaMember Engineer oftheInstitutionElectrical (London, UK)andbecameaChartered of RadioandElectronicEngineers He obtainedGraduatemembership Chief RegionalOfficerofSLTin2010. in 2001priortohisappointmentas in 1984andservedasRegionalHead Mr ChinthakaWijesuriyajoinedSLT in theSLTITlandscape. Architecture implementationframework implementation, andService-Oriented Data ManagementSystem(MDM),CRM sponsor forimplementingtheMaster At present,MrWijeweeraistheproject CRM system. BSS whichwaslaterintegratedwiththe implemented theIntegratedOSSand the ProgrammeManager,MrWijeweera the strategicITroadmapforSLT.As involved inkeyITprojectsproviding (IESL), IET(UK)andCSSL.Hehasbeen The InstitutionofEngineersSriLanka CIO ofSLTin2005.Heisamember Billing Divisionin2001andthereafter 1982. HewasappointedasHeadofthe Mr RohanaWijeweerajoinedSLTin 9 8 Regional Operations Senior ChiefOfficer/ Wijesuriya Mr ChinthakaC Information Technology Senior ChiefOfficer/ Mr DWRWijeweera
Anglia RuskinUniversity,UK. of BusinessAdministrationdegree from in SriLanka(IESL)andholds a Master member oftheInstitutionEngineers Electronics Engineering.Heis aFellow specialising inthefieldofElectrical and degree fromUniversityofPeradeniya, profession, holdsaBSc(Eng)Honours Mr AmbegodaisaChartedengineerby Organisation (CTO)programmes. of CommonwealthTelecommunications General Management.Heisalsoatrainer Marketing, Secretariatservices,and such asManagementAccounting, certificate coursesinotherdisciplines Further, hehasundergoneseveral in Sweden,UK,IndiaandMalaysia. Japan, andTelecomTraininginstitutes South Korea,NTTTrainingCentre, Ireland, KoreaTelecomTrainingCentre, Singapore, UniversityCollegeDublin, and trainingfromNationalUniversityof extensive industryrelatedknowledge During hiscareer,hehasgained within thetelecommunicationindustry. experience inCorporateManagement Strategy. Hecounts18yearsof and GeneralManagerinCorporate Manger inTariffandInterconnections, Manager inRegulatoryAffairs,General New BusinessDevelopment,General Corporate Strategy,GeneralMangerin Resources, DeputyGeneralManagerin Deputy GeneralManagerinHuman Engineer, Operationsengineer, Telecommunication Engineer,Project at SriLankaTelecomasRegional served inseveralmanagerialpositions and Regulations.Hehaspreviously Customer Services,HumanResources, the fieldofEngineering,Management, in thetelecommunicationindustry, years ofmultidisciplinaryexperience as anEngineer,andcountsover27 He joinedSriLankaTelecomin1991 Relations oftheCompany. Digitalisation, andCorporate Programme Management, Strategy, Regulations,Tariff, His currentportfoliospansCorporate and DigitalOfficeroftheCompany. holds thepositionofChiefCorporate Mr PrabhathAmbegodacurrently 10 Chief CorporateandDigitalOfficer Mr PrabhathRAmbegoda
Nokia ofFinland,SpainandUK. Japan, TraininginstituteinNetherland, and trainingsfromNTTtrainingcentre- extensive industryrelatedknowledge During hiscarrier,hehasgained marketing vision. Sri LankaTelecom’sstrategyand him onanidealplatformtorevolutionise role asChiefMarketingOfficerstations flagship productsandservices.Hisnew as thecrucialre-positioningofSLT’s new servicesdevelopment,aswell in drivingtheCompany’sbroadband-led Mr Dahanayakehasbeeninstrumental core studiesattheUniversityofRuhuna. Degree inBusinessAdministrationwith of Moratuwa,hecompletedaMaster’s Telecommunications fromtheUniversity Degree inEngineering in Electronicsand A CharteredEngineerwithaBSc Management. Manager –ProductDevelopmentand well asHeadofProvinceandGeneral worth ofmarketingexperience,as but notlimitedtooveradecade’s positions atthetelecomgiant,including illustrious varietyofseniormanagement at SLT,MrDahanayakehasheldan During hisquarter-centurytenure organisation’s journey. resource inthisdynamictimethe Marketing positionhimasaninvaluable Project Management,Businessand exposure inthefieldsofEngineering, Dahanayake’s multi-disciplinary at SriLankaTelecom,MrPrabhath With acareerspanningover25years Diplomatic Training Institute.Healso from theBandaranaike International obtained aDiploma inDiplomacy International Studies(BCIS).He has from theBandaranaikeCentre for Diploma inInternationalRelations Kingdom. Healsopossessesa higher of ManagementAccountants, United Kingdom andtheCharteredInstitute Certified AccountantsUnited of theAssociationChartered Mr UdeniSamararatneisaMember 12 11 Chief MarketingOfficer Mr PrabhathDahanayake Chief FinancialOfficer Mr UdeniKSamararatne (IESL) Provincial Centre.SheisaFellow The Institution of EngineersSriLanka Professionals and aPastPresidentof Association ofHumanResource She isanexecutivememberof the Leadership Awardin2018. Ms HissallewasawardedtheAsian HR Leadership Awards2018.Furthermore, citation attheSriLankaWomen the WomenLeadershipExcellence Awards in2017.Shewasalsoawarded 7th ProfessionalandCareerWomen’s Human ResourcesManagementatthe She wastheGoldAwardwinnerfor administration andhumanresources. as contactcentrebusiness–including project management,training,aswell experience inregionaloperations, of service,shehasgainedextensive as anEngineerandduringher25years Ms IndraniHissallejoinedSLTin1993 Holdings Limitedgroupofcompanies. General ManagerFinanceatCeatKelani Prior tojoiningSLT,hewastheGroup Sri Lanka’spremiertyremanufacturer. attached toCeatKelaniHoldings, and PackagingPLC,etc.Hewasalso Ashok LeylandPLC,AcmePrinting PLC, alargediversifiedcompany;Lanka listed companiessuchasRichardPieris worked inreputedSriLankanpublic the ceramicindustryetc.Hehasalso vehicles; NoritakeofJapan,agiantin in themanufactureofcommercial Group ofIndia,acompanyinvolved chocolate manufacturer;AshokLeyland International, theLuxembourgbased multinational companiessuchasFerrero During hiscareerheworkedat and packaging. telecommunications, andprinting production, confectionerymanufacture, and plasticproducts,ceramics,tyre manufacturing ofautomobiles,rubber worked indiverseindustriessuchas and strategicplanning.Hehasalso financial management,accounting, 30 yearsofexperienceinfinance, University ofColombo.Hehasover of FinancialEconomicsfromthe He iscurrentlyreadingforaMaster Business SchoolZurich,Switzerland. holds anMBAfromtheSBSSwiss 13 Chief HumanResourcesOfficer Ms IndraniHissalle Charted Engineer ofTheInstitute Officer inNovember 2018.Heisa promoted toChiefSalesand Regional New Connectionsin1998and thereafter He wasappointedasHeadof Division– Mr LionelImbulanajoinedSLT in1984. sales segment. 10 yearsofexperienceintheconsumer Metro Region.MrWijekooncountsover Service Centres,andGeneralManager of Regions,GeneralManagerCustomer include HeadofProvince,Deputy a numberofseniorpositionswhich sales operations.Hehaspreviouslyheld Management, andConsumerSME fields ofRegionalOperations,Project he hasgainedextensiveexposureinthe career atSLTspanningover22years, University ofSriJayewardenepura.Inhis Postgraduate InstituteofManagement, addition, heholdsanMBAfromthe from theUniversityofMoratuwa.In and TelecommunicationsEngineering Engineer withaDegreeinElectronics Mr ImanthaWijekoonisaChartered Labour Organization. collaboration oftheInternational Employers’ FederationofCeylonwith Employment Relationshipswiththe completed postgraduateeducationon the UniversityofPeradeniya.Shehas She iscurrentlyreadingforaPhDat from theUniversityofPeradeniya. in TelecommunicationsEngineering Electrical EngineeringandanMSc. She holdsaBSc.inElectronicand of Hertfordshire,UK. awarding programmefromUniversity Administrator oftheFranchiseDegree Higher NationalDiplomainSLTand the AcademicBoardofEdexcelBTEC Peradeniya. Further,sheisHeadof Faculty ofEngineering,University of theIndustryAdvisoryBoard Peradeniya since2006.Sheisamember a visitinglecturerattheUniversityof Engineering, IEEE(USA).MsHissalleis the InstituteofElectricalandElectronic Member oftheIESLanda 14 15 Chief SalesandRegionalOfficer II Mr BLionelImbulana Chief SalesandRegionalOfficerI Mr ImanthaWijekoon Leadership team Stewardship 79
Sri Lanka Telecom PLC | Annual Report 2018 80 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship International VoiceandDataBusiness. Communications Solutions,and Business Development,Enterprise Switching, DataCommunications, areas ofDomesticandInternational and hasextensiveexperienceinthe Enterprise andInternationalSales, positions, includingGeneralManager 27 years,heheldanumberofsenior Carriers. InhiscareeratSLTspanning Telco operators,andglobalwholesale government institutions,domestic and datasolutionstoenterprises, of SLTthatprovidesintegratedvoice Enterprise andWholesalebusiness In hispresentrole,heleadsthe the ComputerSocietyofSriLanka. Engineers SriLanka,andamemberof Engineer, amemberoftheInstitution of Kansas,USA.HeisaChartered Engineering fromtheUniversity Degree inElectricalandComputer of Moratuwa,SriLankaandaMaster’s First ClassHonoursfromtheUniversity Telecommunications Engineeringwith holds aBScDegreeinElectronicsand 1991. HeisaFulbrightScholar,and Mr JanakaAbeysinghejoinedSLTin use byfieldoperationalstaff. customer satisfaction.Thesystemisin management systemswithimproved which automatescustomerfaults Workforce Management(WFM)system, to designanddevelopmentof He hasmadeanimmensecontribution Service Assurance. Plant NetworkandCustomer and MaintenanceoftheOutside development andmanagesOperations Switching Projectsimplementation He haswideexperienceinElectronic from theUniversityofKelaniya. Business Administration(MBA) of UK.HeholdsaMaster’sDegreein of EngineeringTechnology(IET) in UKandamemberofTheInstitute Electronic andRadioEngineers(IERE) 16 Wholesale Officer Chief Enterpriseand Mr JanakaRAbeysinghe Leadership team (Private) Limited. Officer ofSLTHumanCapitalSolutions 2015. HeisalsotheChiefExecutive at SLTfromNovember2010toMarch He istheFormerChiefMarketingOfficer fixed andmobilecategoriesinSriLanka. 12 yearsintelecommunications,across FMCG andConsumerDurables,over has cross-industryexperiencecovering Sri Lankanblue-chipcompanies.He Management, inmultinationaland Management, andStrategicBusiness the entirespectrumofMarketing,Sales with over25yearsofpracticeacross of MarketingandBusinessManagement Mr Kaluarachchiisaveteraninthefield at theUniversityofColombo. Management andBusinessStudies Currently, heisreadingforaPhDin at theSLIMBrandExcellenceAwards. Sri LankaRegionandhasbeenajudge of theCharteredInstituteMarketing Pacific Region.HeisaBoardDirector Advisory BoardofCMOCouncil,Asia of Colombo.Heisamemberthe in BusinessStudiesfromtheUniversity Sri Lanka(FCPM).HeholdsaMaster’s of theCertifiedProfessionalManagers, of Marketing(FSLIM).HeisaFellow and aFellowofTheSriLankaInstitute Chartered InstituteofMarketing(FCIM), in Marketing–CIM,aFellowofthe holding aPostgraduateDiploma Officer. HeisaCharteredMarketer, SLT in2010asChiefMarketing Mr RoshanKaluarachchijoined serves thereasaVisitingLecturer. of Moratuwa,SriLanka,andcurrently an AssistantLecturerattheUniversity 2011-2016. BeforejoiningSLThewas Formulating aNationalICTPlan a MemberoftheTaskforceon Non-Executive Director.Hewas Nanotechnology (SLINTEC)asa Board oftheSriLankaInstitute Mr Abeysingheservesonthe 17 Chief CustomerOfficer Mr PRoshanKaluarachchi Engineers SriLanka(IESL). Corporate MemberoftheInstitute University ofColombo.Sheisalsoa in BusinessAdministrationfromthe from Netherlands,andaMaster’sDegree Electrical &ElectronicsEngineering of Moratuwa,aMaster’sDegreein Telecommunications fromtheUniversity Engineering DegreeinElectronicsand in April2018.MsJinadasaholdsaBSc promoted toChiefLogisticsOfficer Chief NetworkOfficer,beforebeing Management Office,andDeputy Assurance, TransformationandProject Programmes wheresheheadedQuality Officer, DeputyChiefOfficer/Corporate Officer, DeputyChiefQualityAssurance of DeputyChiefHumanResource years. Shehasservedinthecapacity served asDeputyChiefOfficerfor17 of experienceatSLT,whichshe Ms ManeeshaJinadasahas34years Operations, andProjects. Services, PowerandAC,Service Centre andCloudServices,Application and Access,NetworkServices, Data operation ofSLTincludingTransport he overseestheentirenetwork equipment vendors.Inthisrole and reputedtelecommunication telecommunication serviceproviders, training institutions,topranking forums organisedbyinternational trainings, seminars,andvarious has participatedinmanyoverseas telecommunication industry,he As aprofessionalinthe Network Group. skills toprovideleadershipSLT’s he hasstrongmanagerialandtechnical work experienceinvariouscapacities, Engineers, SriLanka.With24yearsof corporate memberoftheInstitution Lanka. HeisaCharteredEngineerand from theUniversityofMoratuwa,Sri Electronics andTelecommunications in 1994andholdsaBSc(Eng.) Mr MangalaSamarajeewajoinedSLT 19 18 Chief LogisticOfficer Ms ManeeshaJinadasa Chief NetworkOfficer Mr RMPSSamarajeewa delivering successful projects. experience inIT projectmanagement applications in SLT. Hehasvast introduction ofmultipleIT and hascontributedtothe Virtualisation andDataAnalytics, Infrastructure Consolidationand IT datacentreconstruction, introduction ofITDisasterRecovery, his careerinIT.Hehaspioneered and GM/ITInfrastructureduring GM/System DevelopmentandNetwork, Administration, GM/Systems, held thepositionsofDGM/System switching, and18yearsinIT.Hehas counts 8yearsinInternational Telecommunication. Hisexperience over 26yearsexperienceinITand and isamemberofIET(UK).Hehas the InstitutionofEngineersSriLanka Lanka. HeisaCharteredEngineerof from UniversityofPeradeniya,Sri in Electronics&ElectricalEngineering He holdsaBSc(Eng)HonoursDegree Mr TilakGamalathjoinedSLTin1992. AOTS AlumniSocieties(SAFAAS). General oftheSouthAsiaFederation (JASTECA) andwasthePastSecretary Technical andCulturalAssociation President oftheJapan-SriLanka Mr SamarajeewaisthepresentVice Cable Systems. SLT, andBharathLankaSubmarine SEA-ME-WE 3,4and5,Dhiraagu– submarine cableconsortiumsof Management Committeesforthe He isamemberoftheInternational of theSLTnetworkatregionallevel. positions inoperationsandmaintenance of SriLankaandalsoheldarange in theNorthernandEasternProvinces SLT forfastdeploymentofthenetwork of theFieldServicesProjectsUnitin System. Hehasoverseentheoperations the SEA-ME-WE-5SubmarineCable Lanka GovernmentNetwork(LGN)and Network (i-SriLankaProgramme), implementation ofNationalBroadband major achievementsareleadingthe management asaseniormanager.His of technologyandprogramme proven excellenceinmanagement as ChiefNetworkOfficer,hehas In thepathtohiscurrentposition 20 Chief InformationOfficer Mr TilakGamalath Professional Engineer(IntPE). registration asInternational Sri Lankaandrecentlyreceived his Member oftheInstitutionEngineers, and Technology(IET/UK),Fellow Member ofInstituteEngineering Electronics Engineers(IEEE/USA), Member ofInstituteElectricaland Ruhuna. HeisalsoaCharteredEngineer, Administration fromtheUniversityof a PostgraduateDiplomainBusiness University ofMoratuwain1984and Electrical Engineeringfromthe He holdsaBSc(Eng)degreein Training Centre,Welisara. Programme conductedbytheSLT (University ofHertfordshire)Degree module-leader cumlecturerfortheUH faculty, UniversityofRuhuna.Heisa a visitinglectureroftheEngineering for Engineeringpractitioners.Heis for conductingprofessionalreviews and alsoservesasapanelmember Institution ofEngineersSriLanka(IESL) He isanelectedCouncilMemberinthe undertaken byhimfortheCompany. activities aresomesignificantinitiatives Company, andbusinessinnovation Systems asanintegralpartofthe culture tobringQualityManagement Management Office,inculcatingthe cable depot,reinforcingtheProject Centre (NOC),settingupsubmarine Establishment ofNetworkOperation and legacytelecommunicationnetworks. and Operation&Maintenanceofmodern experience inPlanning,Development, of SLT,amongothers.Hehasextensive Deputy ChiefOfficer,andOfficer General Manager, Telecommunication Engineer,Deputy since heldthepositionsofRegional and Maintenancein1985has an Engineer,PowerOperations He startedhiscareerwithSLTas and CultureOfficer. the designationofChiefInnovation experience atSLT.Hepresentlyholds 1985 andcountsover33yearsof Mr PWSarathjoinedSLTinMay 21 Culture Officer Chief Innovationand Mr PWSarath Maintenance, andProjectManagement. Process Management,Operationand Fixed andWirelessCommunication, of Telecommunicationsincluding of extensiveexperienceinthefield Mr Fernandohasgained34years General Manager. and IPTVNetworkinthecapacityof Networks, ISPNetwork,DataCentres, responsibility foroperationofIP concept inSriLanka.Heundertook introduced FibretoCurb(FTC) optical fibreringnetworksand SLT’s networkwerelinkedthrough (JBIC), underwhichallmainnodesin Bank forInternationalCorporation Project (TNEP)fundedbytheJapanese Telecommunication NetworkExpansion He wastheProjectManagerof and SubmarineCableSystemsatSLT. Centre, InternationalSwitchingCentres, International TransmissionMaintenance and operatingSatelliteEarthStations, planning, designing,commissioning, digitalisation. Hewasinstrumentalin Subsystem (IMS)enablingthepathfor to SoftSwitchesandIPMultimedia transform legacyswitchingsystems Team andledarangeofinitiativesto Generation NetworkImplementation He servedasChairmanoftheNext Engineers (UK). Membership ofInstituteElectrical Electronic Engineers(UK)andCorporate Graduate MembershipofRadioand A ChartedEngineer,healsoobtained in IndustrialEngineeringandanMBA. Engineering, aPostgraduateDiploma (Honours) DegreeinComputer 1984. HeholdsaBachelorofTechnology Mr TerranceFernandojoinedSLTin 22 Chief PlanningOfficer Mr KTPFernando Leadership team Stewardship 81 Sri Lanka Telecom PLC | Annual Report 2018 82 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship CHIEF OFFICERS SUBSIDIARY 3 1
5 4 6 2 sports personality inthecountry. Colombo. Heis alsoawellrecognised Business StudiesfromUniversity of Marketer (UK).HeearnedaMaster of in Marketing(UK)andisaChartered Mr PereraholdsaPostgraduate Diploma and accoladesovertheyears. a hostoflocalandinternational awards vibrant leadershiphasearnedMobitel changing customerbehaviours.His on thepulseofkeystakeholdersand telephony industry,whilehavinginsights wealth ofexperienceinthemobile resource management,leveraginga channel development,andhuman into brandmanagement,productand Mr Pererapossessesstronginsights Operating OfficeratMobitelpreviously. as ChiefMarketingOfficerand Service Operators.Hewasappointed most profitableandsuccessfulMobile one milestonetothenextasof of Mobitel,poweringtheCompanyfrom functions astheChiefExecutiveOfficer An inspirationalleader,MrPerera and enterprisebusinesssolutions. innovative value-addedservices revolutionised theindustrywith ideas-man, hehassubsequently brand ofleadership.Anirrepressible directly attributedtoMrPerera’sunique its businessmodelinSriLankacanbe of theMobilePre-Paidconceptand within ashortperiodoftime.Thelaunch General Manager-SalesandMarketing rapidly withintheMillicomGroupto telephony toSriLankain1989,rising Celltel’s introductionofmobile a crucialroleinpioneeroperator A versatileleader,MrPereraplayed rise toprominence. synonymous withtheindustry’s Telecommunication industryis growth andsuccessintheMobile and localtelecoms,hisprofessional decades withleadinginternational In astellarcareerspanningthree as anindustryveteranandfrontliner. evolution, cementinghiscredentials influenced theindustry’slandscapeand Mr NalinPererahaspowerfully Mobile Telecommunicationsspace, A dynamiccatalystinSriLanka’s 1 Mobitel (Private)Limited Chief ExecutiveOfficer, Mr NalinPerera brand name. technology under theSLTPEOTV on deliveringservices throughIPTV (2011 –2016),acompanyfocused of SLTVisionCom(Private)Limited position, hewasappointedas CEO In 2011,inadditiontohispresent Media Association. Trustees oftheAsianLocalSearchand appointed asaMemberoftheBoard networking inSouthAsia,hehasbeen local searchandmediaspace,his his expertiseandexperienceinthe Government ofSriLanka.Owingto directory publisherrecognisedbythe highest echelonsandbecometheonly helped RainbowPagestoreachthe entrepreneurial skillswhichhave managerial, marketing,and He isadynamicpersonalitywith Micro businesses. range ofdigitalservicestoSMEsand digital transformationtoprovidea to focusonbusinesstransitionand a seriesoftransformationalsteps CEO, theCompanyhasundergone (Private) Limited.Duringhistimeas of CEOatSLTDigitalInfoServices At present,heholdstheposition Publications (Private)Limited. to hisappointmentasCEOofSLT Province, andtoGeneralManagerprior Telecom Engineer,Headofthe from TechnicalOfficertoRegional swiftly climbedthecorporateladder strata ofSLT’sadministration.Hehas 35 yearsofworkexperienceatvarious of EngineersSriLanka.Hecountsover Engineer andaFellowoftheInstitution Mr MalrajBalapitiyaisaChartered Please referpage80fortheprofile. Please referpage77fortheprofile. 4 3 2 Info Services(Private)Limited Chief ExecutiveOfficer,SLTDigital Mr MalrajBalapitiya Capital Solutions(Private)Limited Chief Executive Officer, SLT Human Mr PRoshanKaluarachchi SLT VisionCom(Private)Limited Chief ExecutiveOfficer, Mr AjanthaSeneviratne value toGroupsynergy. generate profitsforSLT,whilstadding steered thecompanytoderiveand Telecom (Services)Limitedandhas the ChiefExecutiveOfficerofSriLanka Presently, MrGunathungefunctionsas CEO ofBusinessLearningCentre. USAID WashingtonDCandthenthe of TechnologyCorporation,fundedby Representative ofUSAEP–SriLanka became theCountryDirector/Technical exposure andpersuadeindividuals,he his unwaveringeffortstoexpandthe in ColomboCommunication.With also performedastheDirectorSales in theSalesandMarketingfield,he Moreover, whileusinghisproficiency in SriLankaStateTradingCorporation. and subsequently,asaGeneralManager Development ManageratEDSLanka management careerasaBusiness professional journey,heinitiatedhis 26 years.Askeyattainmentsinhis and privatesectorcompaniesover career, heservedinbothpublic Throughout hisinspiringmanagement of Managementin2000. an MBAfromthePostgraduateInstitute Pilling PLC.Furthertothat,heobtained was theGeneralManagerofWalkers assignment withSriLankaTelecom,he of Moratuwain1993.Priortohispresent Engineer graduatedfromtheUniversity Mr PrabathGunathungeisaCivil 5 Telecom (Services)Limited (Private) Limited,SriLanka SLT PropertyManagement Chief ExecutiveOfficer, Mr PrabathGunathunge HR ExcellenceAwards2010and2013. “HR LeadershipAward”attheGlobal Excellence Awardsandthe of theYear2011atIESL’sEngineering he wasawardedtheCharteredEngineer Among hispersonalachievements, Rainbow Pages(2006-2008). 2013, andheservedasheadofsection Capital Solutions(Private)Limitedin which hetransformedintoSLTHuman Solutions (Private)Limited(2008-2015), Founder CEOofSLTManpower (Private) Limited(2014-2017)and Chief ExecutiveOfficerofMobitel Mr Rubasingheheldthepositionsof Management (IPM). Member oftheInstitutePersonnel Marketing (SLIM),andanAssociate Member oftheSriLankaInstitute Engineers SriLanka(IESL),acertified and aFellowoftheInstitution Mr RubasingheisaCharteredEngineer in ElectricalandElectronics, Engineering, andaBScEngineering Electronics andTelecommunications Colombo, aPostgraduateDiplomain With anMBAfromtheUniversityof Colombo SchoolofComputing. Board ofManagementatUniversity of ColomboandontheCouncil as aCouncilMemberoftheUniversity (IESL). MrRubasinghehasalsoserved Institution ofEngineersSriLanka served astheVicePresidentofThe Resources, andMarketing.Hehas Telecommunication andIT,Human fields ofOrganisationalDevelopment, and holdsawealthofexperienceinthe Sri LankaTelecomforover16years Mr RanjithRubasinghehasbeenwith Subsidiary ChiefOfficers 6 SLT Campus(Pvt)Ltd. Chief ExecutiveOfficer, Rubasinghe Mr RanjithGanganath Stewardship 83
Sri Lanka Telecom PLC | Annual Report 2018 84 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship achieve commongoals. working togetherto with bestpracticesand employees beingfamiliar value. Itisbasedonour customer andshareholder fosters trustandcreates corporate culturethat a soundandeffective SLT isdesignedtocreate Corporate governanceat CORPORATE GOVERNANCE y y y y y y y y it alsoencompasses: stakeholders. Inabroadersense, other Groupcompaniesand management, otheremployees, board ofdirectors,executive the relationshipbetweenshareholders, SLT definescorporategovernanceas authorities andotherstakeholders. of customers,owners,employees, and aprerequisitetomaintainthetrust key elementsofasuccessfulbusiness management andinternalcontrolare Good corporategovernance,risk y y y y y y y y sustainable way How wemanageoperationsina How transparencyispromoted;and created and buildsshareholdervalueis promotes theinterestsofcustomers How acorporateculturethat and developed How futureleadersareencouraged How risksaremanaged How goalsaresetandfollowed-up How wellthevaluesarecompliedwith are designedandcommunicated How thevision,purposeandstrategy y y y y y practices. legislation, codesandvoluntary with thefollowingframeworksof practiced atSLTisinfullcompliance Corporate governancephilosophy y y y y y of SriLanka(SEC). Securities andExchangeCommission Accountants ofSriLankaandthe jointly bytheInstituteofChartered Corporate Governanceissued Code ofBestPracticeon Exchange Listing RulesoftheColomboStock 27 of1996 No. 25of1991asamendedbyAct the SriLankaTelecommunicationsAct Companies ActNo.07of2007and Legislation, particularlythe Company Articles ofAssociation(“AoA”)the and industrycodesofpractice Internal Companyrulesandprocesses SLT’s CorporateGovernanceFramework Sri LankaandtheSEC. Accountants of Institute ofChartered jointly byThe Governance issued on Corporate Code ofBestPractice compliance Voluntary practice and industrycodesof Rules andprocesses Internal Company Stock Exchange Rules oftheColombo Continuing Listing of 1996 amended byActNo.27 Act No.25of1991as Telecommunications Sri Lanka of 2007 Companies ActNo.07 Association Company’s Articlesof compliance Mandatory Compliance SGB PPGB PGB ESGB – – – – Strategic GovernanceBoard Project PortfolioGovernanceBoard Product GovernanceBoard Enterprise SolutionsGovernance Board Senior Tender Board SGB affairs intheinterestofCompanyandshareholders Responsible formanagingSLT’sday-to-dayoperations in accordancewithexternalregulationsandwithinthe The BoardisresponsibleformanagingSLT’s Remunerations & Nomination Committee Internal governancestructure the BoardofDirectorsateachAGM Investment GovernanceBoards framework setbytheDirectors PPGB The shareholderselect Board ofDirectors CEO’s Committees Shareholders Transactions Committee Related Review CEO Party
PGB Subcommittee Technology ESGB Committee Corporate Governance Audit risk management The shareholders Auditor, whois recommended Informs/Reports Elects/Appoints Internal Audit effectiveness, Assurance in theGroup. Reviews and by theAudit governance, and control Committee Stewardship Auditors elect the External evaluate External
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Sri Lanka Telecom PLC | Annual Report 2018 86 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship re-election attheAGM. service retirebyrotationandmayseek of theDirectors,whoarelongestin of theAoACompany,onethird their appointment.Inaddition,interms by shareholdersatthefirstAGMafter by theCompany'sAoAtobeelected appointed bytheBoardarerequired by theR&NC.However,allDirectors expertise inrelevantfunctionalareas of theirqualifications,experience,and filling casualvacanciesafterdeliberation Company appointsthemtotheBoard, as empoweredbytheAoAof to theBoardrespectively.The recommends fiveandfourdirectors Telecommunication HoldingsN.V. Secretary totheTreasury,andGlobal of SriLankaactingthroughthe shareholders, namelytheGovernment of theCompany,twomajor As pertheshareholdingstructure Ownership andDirectors which isvitaltotheGroup. resources, andstandardsofconduct issues ofstrategy,performance, provide independentjudgmenton of experienceandsufficientcalibreto the annualreportdemonstrateawealth Their biographiesonpages70–73of Listing Rules. with requirementssetoutbytheCSE has beendeterminedinaccordance The independenceoftheDirectors with 05ofthembeingIndependent. comprised 07Non-ExecutiveDirectors During theyearunderreviewBoard Composition oftheBoard The BoardofDirectors Corporate Governance y y SLT asawhole.Thisincludes: and monitorstheperformanceof licensing decisions,andevaluates major financing,investmentand conduct. Italsoappraisesandapproves SLT’s governancestructureandcodeof risk managementpoliciesandapproves The Boardreviewsinternalcontrolsand and businessstrategy. approval ofoverallbudgetaryplanning meetings ayear,whichincludesthe programme ofatleasteightscheduled out itsresponsibilitiesthrougha objectives itsets.TheBoardcarries managed andachievesthestrategic for ensuringthatSLTisappropriately Board isaccountabletoshareholders leadership withinthebusiness.The The Boardstrivestoprovidestrategic changes arerequired. the futurewhilebeingflexiblewhen ahead andvisioning.Theyplanfor strategic directionsreadingtheroad order toremaincompetitive,provides contemporary issuesandchallengesin current issuesinstrategicplanningand The Board,whileaddressingcertain longer-term trendsanddevelopment. external issues,short-termpressure,and The Boardisawareofinternaland decision-making bodyaftertheAGM. The Boardisthehighest Providing Strategic Leadership The role oftheBoard y y and annualplans financial andbusinessobjectives Evaluating progresstowardsour Group's prospects external issuesrelevanttothe and operatingperformance Senior ExecutivesonSLT’sfinancial challenging theCEOandother Engaging with,supporting,and y y y Key aspectsoftheseprocessesare: effectiveness. to maximiseitsperformanceand established Boardprocessesdesigned Board functionseffectivelyandhas Company Secretary,ensuresthatthe Operating Officer(COO)andthe Executive Officer(CEO),Chief The Chairman,alongwiththeChief y y y y y y y sustainability initiatives. format, inlinewiththeGroup’s are madeavailableinelectronic In addition,allBoardPapers by theBoard. necessary clarificationsrequested to theBoardandprovides Divisions presentstheirsubmissions Chief OfficersandtheHeadsof The CEOalongwiththerespective Company. CSE ListingRulesandAoAofthe requirements oftheCompaniesAct, governance andcompliancewiththe well asimplementationofcorporate involved priortothemeeting,as and Directors,otherkeyplayers between Committees,theBoard include theflowofinformation provided bytheCompanySecretary duties andresponsibilities.Support information thatreflectstheir relevant, timely,clear,andbalanced All Directorsreceiveaccurate, the keysignificantrisksfacingSLT directly orfromvariouscommittees– Monitoring –throughreportsreceived objectives andplans management inmeetingthese Scrutinising theperformanceof office duringnormalbusinesshours. inspection attheCompany’sregistered of Referencewhichisavailablefor duties aresetoutinformalTerms to theassignedcommittees,and can bringtheirexpertiseandexperience Committees compriseDirectorswho better governanceofitsactivities.These to fulfilregulatoryrequirementsandfor and voluntaryBoardSub-Committees SLT hasinplaceanumberofmandatory Subcommittees Delegation to Board INED NED The attendanceofindividualDirectorsatBoardmeetingsandCommitteeduringtheyearissetoutintablebelow. (Appointedw.e.f.17.09.2018) Mr.Kanishka Senanayake (Resignedw.e.f.19.06.2018) Mr ARDesapriya Mr WKHWegapitiya Ms NilanthiPieris Ms LaiChoonFoong Mr LawrenceMichaelParatz Mr ChanCheeBeng Mr SirisenaKumarasinghe–Chairman Board Member Committee Audit Committee : : Independent Non-ExecutiveDirector Non-Executive Director Mr ARDesapriya(Resigned w.e.f.19June2018) Ms NilanthiPieris Ms LaiChoonFoong, Mr KanishkaSenanayake,Chairman(Appointedw.e.f.17 September2018) The membersoftheCommitteeare; recognised accountingbodies. of whomareindependent.AmembertheCommittee isamemberof The AuditCommittee(AC)compriseNon-ExecutiveDirectors, majority Composition andRole operate withinclearlydefinedtermsof delegated toBoardcommitteeswhich Other specificresponsibilitiesare reported totheBoard. recommendations areregularly of Reference.Theirobservationsand accountability specifiedintheTerms falling withintheirauthorityand to consideranddiscussmatters The Committeesmeetregularly Status INED INED INED INED INED INED NED NED Board 4/4 4/8 8/8 2/2 8/8 8/8 8/8 8/8 Committee Audit 5/5 7/8 2/2 8/8 – – – – Remuneration & Nomination Committee 5/5 5/5 5/5 – – – given onpage87–89. operations oftheSubcommitteesare issues. Detailsoftheresponsibilitiesand Group's strategyandkeyoperational proposals collectivelyinrelationtothe when requiredtodiscussanddevelop Executive Teammembersasand and MembersmeettheCorporate reference. TheSubcommitteeChairmen Subcommittee Corporate Governance Technology
0/9 9/9 – – – – Tender Senior Board 9/9 0/9 6/9 9/9 Frequency Meeting require. Committee shall Chairman ofthe times asthe at suchother per annumand four meetings A minimumof – – Related Party Transactions Committee Stewardship Review 2/2 4/4 4/4 – – – – – 87
Sri Lanka Telecom PLC | Annual Report 2018 88 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship Committee Review Transactions Related Party Committee & Nomination Remuneration Committee Corporate Governance Practices onRelatedPartyTransactionsissuedbytheCSE. exempted inaccordancewiththeexceptionsspecified in theCodeofBest Financial Statements.However,theBoardbelievesthat thosetransactionsare The relatedpartyrelationshipwithitssubsidiariesisdisclosed inthenotesto its subsidiariesandotherrelatedparties. enhance corporatetransparencyandpromotefairtransactions betweenSLT, are takenintoaccountwhenenteringrelatedparty transactionsandto The objectiveofthesub-committeeistoensurethat interestofshareholders Mr KanishkaSenanayake(Appointedw.e.f17September 2018) Mr ARDesapriya(Resignedw.e.f.19June2018) Ms LaiChoonFoong Ms NilanthiPieris–Chairperson The membersoftheCommitteeare; The ChairmanoftheCommitteeisanIndependentDirector. Non-Executive Directorsofwhomtwodirectorsareindependent. The RelatedPartyTransactionsReviewCommittee(RPTRC)comprises The CEOattendsmeetingsbyinvitation,asandwhenrequiredtheCommittee. CEOs ofsubsidiarycompanies,andseniormanagement. determining thefeesfornon-executivedirectorsandremunerationofCEO, It alsoprovidessupportandguidancewithregardtotheGroup’spolicyfor relation tothediversityofbackground,skills,andexperience. GCEO andSeniorManagement,reviewofBoardcomposition,particularlyin Non-Executive Directors,GCEOandkeyseniorofficers,successionplanningforthe The activitiesoftheR&NCincludenomination,selectionandappointment Mr LawrenceParatz Mr KumarasingheSirisena Mr ChanCheeBeng–Chairman The membersoftheCommitteeare; Directors majorityofwhomareindependent. The Remuneration&NominationCommittee(R&NC)comprisesNon-Executive focus. annual reportsetsoutinmoredetailtheCommittee’spolicies,practicesandareasof risks managementandinternalcontrols.TheACreportonpages9596ofthe The AC assists the Board in its oversight and monitoring of financial reporting, Group’s attend themeetingsbyinvitation. The CEO,theGroupChiefFinancialOfficer,andInternalAuditor was appointedasamember/ChairmanoftheCommitteeeffective17September2018. become MemberoftheCommitteeeffective19June2018.MrKanishkaSenanayake Pursuant totheresignationfromdirectorateofSLT,MrARDesapriyaceased Composition andRole
Frequency Meeting per year. four meetings A minimumof require Committee shall Chairman ofthe times asthe at suchother Once ayearand
Board Senior Tender Subcommittee Technology Committee Junior TenderBoard Senior TenderBoard Board ofDirectors follows: and reducerisk,theBoardhasdelegatedapprovallimits forprocurementas Group levelforSLTanditssubsidiaries.Thereforeinorder toincreaseefficiencies by theBoardwhere,allcommonprocurementprocessesareconsolidatedat The procurementfunctioninvolvesastandardprocessapproved the Group’sprocurementneeds. The CEOandtheGCFOareappointedtoCommitteebyBoardreview Ms NilanthiPieris Mr WKHWegapitiya Mr LawrenceParatz Ms LaiChoonFoong–Chairperson The membersoftheCommitteeare: The SeniorTenderBoard(STB)comprisesNon-ExecutiveDirectors. people andskillplanstheirimplementation. Network performanceandmethodsofassessmenttheCompany’stechnology, the existenceandappropriatenessofplansprocesses,plannedachieved advances andinformation.ItisalsotheresponsibilityofCommitteetoreview develop aflexibledeliverysystemtoeffectivelyrespondnewtechnological efficiencies; supporttheadvancementofprofessionalstaffcapabilities,and Therefore, TSCprimarilyfocusesonbeststrategiestoincreaseorganisational If required,CEOsofsubsidiarycompaniesarealsoinvitedtoattendmeetings. made. permanent membersinordertomaintainGroupsynergieswhenmajordecisionsare and SeniormanagementmembersofSLTMobitelattendmeetingstheTSCas technical discussionsandlookingatroadmapswithalong-termperspective.CEO of studyingavailabletechnologyandprovidingaplatformforengaginginintense The TSCcomprisesDirectorswithtechnicalexpertisewhoareassignedthetask Mr WKHWegapitiya Mr LawrenceParatz–Chairman The membersoftheCommitteeare; Directors. The Technologysubcommittee(TSC)comprisesIndependentNon-Executive Composition andRole – – – Value lessthanLKR25Mn. Value betweenLKR25Mn.and50 Value exceedingLKR50Mn. Corporate Governance
Frequency Meeting Board meeting Prior toevery required As andwhen Stewardship 89
Sri Lanka Telecom PLC | Annual Report 2018 90 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship cycle ofBoardandCommittee particular theplanningof annual Chairman indeliveryoftheagenda, in The CompanySecretarysupports the Board procedures. individual Directorsinrespectof to theBoardandisavailable The CompanySecretaryisresponsible The Company Secretary matters, andhumanresourcesaspects. Company’s performance,operational to discussanyissuespertainingthe meets theCEOandCOOregularly and operatingplans.TheChairman and executionoftheGroup’sstrategic and leadershipoftheexecutiveteam, day-to-day managementofthebusiness Officer (COO)isresponsiblefor together withtheChiefOperating The ChiefExecutiveOfficer(CEO) effectively participateduringmeetings. are followedandallBoardmembers team. HeensuresBoardprocedures monitoring thebusinessandexecutive and focussesonstrategicissues SLT isanon-executiveappointment the ChiefExecutive.TheChairmanof responsibility oftheChairmanand established intermsofdivision and operationalmattersisclearly Distinction betweenstrategic Chief Executive Officer Role oftheChairmanand the year. Liability insurancecoverthroughout maintained Directors’andOfficers’ or dishonestly.TheCompanyhas is proventohaveactedfraudulently coverage totheextentDirector The indemnitywouldnotprovideany capacity asDirectorstotheCompany. performance oftheirdutiesin liabilities incurredasaresultofthe extent permittedbylawinrespectto indemnity fromtheCompanyto Company, Directorsaregrantedan In accordancewiththeAoAof Indemnities to Directors Corporate Governance better utilisationofGroupresources. enhance supplychainmanagement and improve incapitalinvestment decision, reduced tofourinanattempt boards previouslyintroducedhave The sixcrossfunctionalgovernance transparent manner. areas andintroducingsolutionsina the requirementsofcrossfunctional given theresponsibilityofstudying Officers ofeachfunctionalareaare comprising theCEOandChief Strategic GovernanceBoard (SGB) Strategic Governance Boards risks fromabottom-upflow. processes assessingnewandpotential established andbuiltintowork process. Continualmonitoringis Company throughtheRiskManagement associated withthebusinessandof directly involvedinassessingtherisks risk management.TheBoardwas is tooverseeinternalcontroland Audit Committeewhoseresponsibility established andmaintainedthroughthe and riskmanagementareproperly The Boardensuresthatinternalcontrols management Internal control andrisk the Boardasawhole. Company Secretaryisamatterfor The appointmentorremovalofthe United Kingdom. Secretaries andAdministrators, member oftheInstituteChartered Attorney-at-Law andanAssociate well. TheCompanySecretaryisan to alltheBoardcommitteesas in November2014.HeisSecretary The CompanySecretarywasappointed corporate governancematters. Directors onBoardproceduresand in atimelyfashion.Healsoadvisesthe is madeavailabletoBoardmembers meetings, andensuresthatinformation in carryingouttheirdailytasks. are clearlystipulatedtoguideemployees internal website.Policiesandstandards employees. ThecodeispostedonSLT’s and non-solicitationofcustomers confidentiality, conflictofinterest, intellectual property,dataprotection, assets, proprietaryinformationand business conduct,protectionofSLT’s and safety,conductintheworkplace, employment practices,workplacehealth covers areassuchasequalopportunity best interestsoftheGroup.TheCode making isproperlycarriedoutinthe rapport, andtoensurethatdecision- to enhanceinvestorconfidenceand standards intheCodeareintended the community.Theprocessesand competitors, customers,suppliersand integrity whendealingwithSLT,its standards ofpersonalandcorporate and responsibilitiestothehighest employees incarryingouttheirduties The Codesetsoutprinciplestoguide parties whodealwiththeCompany. applies toallemployeesandthird SLT hasacodeofconductthat Practice Codes ofConduct and with him. performance indicatorsagreed upon performance isassessedbased onkey approval oftheBoard.TheCEO’s qualifications andexperienceforthe the CEOtocommensuratewithhis recommends thesalarypackageof of SeniorManagement.TheR&NC and is,therefore,remuneratedaspart SLT’s CEOistheheadofmanagement Remuneration Holdings, N.V. and theGlobalTelecommunications shareholders, SecretarytotheTreasury CEO, anyDirector,orthecontrolling that involvetheinterestsof into bySLToranyofitssubsidiaries There arenomaterialcontractsentered Material Contracts shareholder value. of theGroup’sstrategyandenhance is designedtosupportimplementation The remunerationframeworkandpolicy Management Remuneration ofSenior fee toacharitableorganisation. fee andofferedhismonthlydirector 2015 hasdeclinedtoacceptadirector appointed totheBoardinDecember Mr WKHWegapitiya,whowas LKR 16Mn. year ended31December2018was non-executive Directorsforthefinancial The aggregateDirectors’feespaidto meetings isreimbursed. to attendBoardandsub-committee required totraveloutoftheircountry by theoverseasDirectorswhowere travelling andaccommodationincurred subcommittee meetings.Thecostof fee forattendanceatBoardandBoard’s other thantheChairmancompriseda The feesfornon-executiveDirectors issues oftheCompany. engagement andtimespentoncomplex in July2018commensuratewiththeir Non-Executive Directorswererevised Fees fortheChairmanand approval oftheBoard. business andoperations,forthe and thecomplexityofGroup’s on experienceandskillsoftheDirectors Non-Executive Directors’feesbased The R&NCreviewsandproposesthe Non-Executive Directors Remuneration of conflicts ofinterestthatmayoccur. decision-making processtoavoidany party transactionsthroughoutits the rulesissuedbyCSEonrelated The BoardofDirectorshasapplied Related partytransactions SLT fortheyear2018. no majortransactionsenteredintoby are ofmaterialvaluetoSLT.Therewere associated withsuchtransactionsthat transactions detailingallfacts shareholders allproposedcorporate by theCompaniesAct,disclosesto The BoardofDirectors,asrequired Major transactions from shareholders. the AGMtoansweranyquestions of subcommitteeswillbeavailableat encouraged toparticipate.Chairpersons investors, andallshareholdersare General Meetingtocommunicatewith The BoardseekstousetheAnnual Annual General Meeting Constructive useofthe y y y remuneration toSeniorManagement: The followingaretheprinciplesfor y y y on anannualandlong-termbasis remuneration toperformance,both Link asignificantproportionof talented individuals and retainhighlyexperienced Offer competitivepackagestoattract of shareholdervalue strategies andongoingenhancement incentive planstosupportbusiness metrics forannualandlong-term Select appropriateperformance
timely manner. employees ofSLT,havebeenmadeina bodies andthosepaymentsrelatedto to theGovernment,otherregulatory satisfied thatallstatutorypaymentsdue the bestoftheirknowledgeandbeliefis In addition,theBoardofDirectorsto of compliancetothesaidrules. Governance principles”andthedegree 93 and94fortheruleson“Corporate thereto. Seethetablesonpages and subsequentamendments/guidelines Colombo StockExchangeissuedin2010 Continuing ListingRequirementsofthe 7.10 on“CorporateGovernance”ofthe requirements stipulatedinSection SLT isfullycompliantwiththe Statement ofCompliance Company. in theordinarycourseofbusiness these arerecurrenttransactionsand Transactions issuedbytheSEC.All of BestPracticesonRelatedParty exceptions specifiedintheCode are exemptedinaccordancewith the Boardbelievesthosetransactions the FinancialStatements.However, disclosed inNote34oftheNotesto relationship withitssubsidiariesas The Companyhasarelatedparty account whenenteringintoRPTs. interests ofshareholdersaretakeninto with theobjectiveofensuringthat Non-Executive IndependentDirectors was formedcomprisingthree subsidiaries. Accordingly,aRPTRC fair transactionsbetweenSLTandits corporate transparencyandpromote the BoardofDirectorstoenhance Transactions Committeeunder importance ofaRelatedParty The Boardhasrecognisedthe Corporate Governance Stewardship 91 Sri Lanka Telecom PLC | Annual Report 2018 92 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship (a-h) 7.10.4 (d) (c ) (a) (b) 7.10.3 (b) (a) 7.10.2 (a), (b)(c) 7.10.1 7.10. a,b,c No. CSE Rule Statement ofComplianceundertheRulesCSEonCorporateGovernance an IndependentDirector Requirements formeetingthecriteriatobe Determination ofIndependence Directors toCSE Provide abriefresumeofnewlyappointed Director’s experience included intheAnnualReportincluding A briefresumeofeachDirectorshouldbe Annual Report Names oftheIDsshouldbedisclosedin independence orotherwiseoftheNEDs The Boardshallannuallydeterminethe Disclosures relatingtoDirectors non-independence annually ofhis/herindependenceor Each NEDshouldsubmitadeclaration should beindependent Two or1/3ofNEDs,whicheverishigher, Independent Directors(“ID’) is higher,shouldbeNEDs. Two membersor1/3oftheBoard,whichever Non-Executive Directors(“NED”) CSE Rule Rules Compliance withCorporateGovernance Compliance Corporate Governance Status Compliance non-independent NEDs related companyofGTHareconsidered Choon Foongawhoisanemployeeof which holds44.98%stakeandMsLai Telecommunications HoldingsN.V(“GTH”) Mr ChanCheeBeng,DirectorofGlobal 5 NEDsareconsideredIndependent. the CSEListingRules.Accordingly, accordance withtherequirementsof Directors hasbeendeterminedin The IndependenceoftheBoard during theyeararesubmittedtoCSE. Detailed resumesofanyDirectorappointed Annual Report Refer BoardofDirectorssectionthe directors aresetoutintheAnnualReport. by themandthenamesofindependent NED basedonthedeclarationsubmitted independence ornon-independenceofeach The Boardannuallydeterminesastothe independence/non-independence declaration confirmingtheir All NEDshavesubmittedsigned NEDs areIndependent As at31stDecember2018,5outofthe7 All DirectorsareNon-Executive Governance Rules SLT isincompliancewiththeCorporate SLT Action
(a) 7.10.6 (c) (b) (a) 7.10.5 No. CSE Rule Statement ofComplianceundertheRulesCSEonCorporateGovernance a memberofprofessionalaccountingbody Chairman oftheACoronemembershouldbe attend ACmeetings CEO andChiefFinancialOfficer(CFO)should of theCommittee One NEDshallbeappointedastheChairman be independent two IDsorofNEDs,amajoritywhomshall The Committeeshallcompriseaminimumof Composition Audit Committee(AC) NEDs Aggregated remunerationpaidtoEDsand Statement ofRemunerationPolicy Names ofDirectorscomprisingtheRC Disclosure intheAnnualReport the ChiefExecutiveOfficer(CEO)andEDs The RCshallrecommendtheremunerationof Functions CSE Rule the CommitteebyBoardofDirectors One NEDsshallbeappointedasChairmanof shall beindependent of twoIDsorNEDs,amajoritywhom The Committeeshallcompriseofaminimum Composition Remuneration Committee(RC) Status Compliance a memberofprofessionalaccountingbodies Ms. LaiChoonFoong,amemberoftheACis Auditors attendedtheMeetingsbyinvitation The CEO,GCFO,GCIAandtheExternal Independent Director. The ChairmanoftheCommitteeisa independent NEDs outofwhomtwoareconsidered As at31December2018,theACcomprised3 Financial Statements Annual ReportandNote7tothe Refer BoardSubcommitteesofthe Report Refer BoardSubcommitteesoftheAnnual Report Refer BoardSubcommitteesoftheAnnual monthly fee. meetings. TheChairmanispaida meetings andBoardSub-Committee comprised afeeforattendanceatBoard The feeforNEDsotherthanChairman remuneration oftheCEO. made bytheRCindetermining The Boarddeterminestherecommendation Chairman oftheCommitteeisaNED. are Independent. RC comprisesthreeNEDsoutofwhomtwo SLT Action Corporate Governance
Stewardship 93
Sri Lanka Telecom PLC | Annual Report 2018 94 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship (c) (b) No. CSE Rule Statement ofComplianceundertheRulesCSEonCorporateGovernance Annual Reportrelates. compliance duringtheperiodtowhich A reportbytheACsettingoutmannerof the basisforsuchdetermination independence oftheAuditorsanddisclose The ACshallmakeadeterminationofthe Names ofDirectorscomprisingtheAC Disclosure intheAnnualReport engagement oftheexternalauditor approve theremunerationandtermsof and removalofexternalauditors, pertaining toappointment,re-appointment Make recommendationstotheBoard performance oftheexternalauditors Assessment oftheindependenceand CSE Rule Sri LankaAuditingStandards are adequatetomeettherequirementsof the internalcontrolsandriskmanagement Overseeing oftheprocessestoensurethat regulations andrequirements other relevantfinancialreportingrelated requirements oftheCompaniesActand reporting requirements,information Overseeing ofthecompliancewithfinancial Accounting Standards Statements inaccordancewithSriLanka and adequacyofdisclosuresintheFinancial Overseeing ofthepreparation,presentation Functions Corporate Governance Status Compliance Report oftheACisgiveninpage95 Annual Report Refer theReportofACin Annual Report Refer BoardSubCommitteesofthe the remunerationandtermsofengagement External Auditorsandalsotheapprovalof appointment, reappointmentandremovalof The Committeeisresponsiblefor independence performance, qualificationsand The ACassessestheexternalauditor’s internal controlandriskmanagement The ACassessestheeffectivenessof SLT Action adoption ofbestaccountingpolicies recommending totheBoard,on and regulationsofthecountryalso statements inaccordancewiththelaws overseeing thepreparationoffinancial The AChastheoverallresponsibilityfor and theGroup of theFinancialStatementsCompany oversight responsibilitiesfortheintegrity The ACassiststheBoardinfulfillingits
Role andresponsibilities Audit Committee. Mobitel (Pvt)Ltd.,whichhasitsown of subsidiarycompaniesexcept internal controlsandriskmanagement The Committeealsoreviewsthe assessment. assurance capabilitiesandrisk Auditors, andevaluatesSLT’srevenue objectivity oftheInternalandExternal the effectiveness,performanceand systems ofinternalcontrol,monitors and effectivenessoftheGroup’s Committee reviewstheadequacy Financial Statements.Inaddition,the monitor theintegrityofGroup’s discharging itsresponsibilitiesto Committee istoassisttheBoardin The principalpurposeoftheAudit y y y y y COMMITTEE REPORT AUDIT y y y y y SLT Group independent reportinglinewithinthe the InternalAuditDepartmentandits Internal AuditHead,resourcingof Board ontheappointmentof Considers andrecommendstothe External Auditor policy onnon-auditservicesbythe audit feestotheBoardand reappointment ofAuditorsandtheir Recommends theappointment/ Management whereappropriate wish todiscussintheabsenceof matters whichtheAuditorsmay arising fromtheauditandany discuss theaudit,includingissues post-audit atthereportingstageto Meets withtheExternalAuditors amended accountingpolicy concerning anyproposed,newor Makes recommendationstotheBoard approval prior tosubmissiontheBoardfor Company’s financialperformance formal announcementrelatingtothe Financial Statementsandreviewany Monitor theintegrityofSLT’s other organisations. current orpreviousseniorpositionsin financial andauditmattersduetothe in commercial,telecommunications, mix ofskills,expertiseandexperience Committee membershaveagood professional accountingbodies.The Ms LaiChoonFoongisamemberof the Chairmaneffectivethatdate. Kanishka Senanayakewasappointedas with effectfrom18October2018andMr the ChairpersonofAuditCommittee Ms LaiChoonFoongsteppeddownas Directors witheffectfrom19June2018. to hisresignationfromtheBoardof member oftheCommitteeconsequent Mr ARDesapriyaceasedtobea Ms NilanthiPieris Ms LaiChoonFoong 18October2018) (Appointedwitheffectfrom Mr KanishkaSenanayake(Chairman) out onpages70to73. Directors, biographicaldetailsareset Directors ofwhomtwoareindependent The Committeecomprisesthree Membership of Reference. affairs incompliancewiththeTerms The Committeehasconductedits y y y y y y of thebusinessesinGroup covering variousareasandactivities Reviews theInternalAuditReports and riskmanagement for internalcontrol,financialreporting Monitors andreviewsSLT’ssystems audit programmeanditseffectiveness Monitors andreviewstheinternal Accountants ofSriLankaandSEC. issued byTheInstituteofChartered Corporate GovernanceCodeJointly to theCSEListingRulesand reporting andtheGroup’scompliance environment, controloverfinancial effectiveness ofthecontrol relating totheadequacyand Directors tofulfilitsresponsibilities The CommitteeassiststheBoardof financial reporting Internal financial control and Committee Activities oftheAudit the Committeemeetings. briefings andbytablingtheminutesof the BoardofDirectorsthroughverbal Committee havebeencommunicatedto The activitiesandviewsofthe given inpage87oftheAnnualReport. Directors attheCommitteemeetingsis the year2018.Theattendanceof The Committeemet8timesduring Meetings ofCommittee Secretary oftheCommittee. The CompanySecretaryfunctionsasthe Committee. to auditissuespresentedthe to presentreportsandprovideresponse may beinvitedtoattendasappropriate, Other membersofSeniorManagement y y y y y invitation: meetings oftheCommitteeby The followingpersonsattendall y y y y y External AuditRepresentatives Group ChiefInternalAuditor Group ChiefFinancialOfficer Chief ExecutiveOfficer Group Chairman Stewardship 95
Sri Lanka Telecom PLC | Annual Report 2018 96 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship corrective actiontoresolveissues. minimising fraud,andinitiating timely of revenueleakages,detectingand systems inplace,evaluatingtherisk (RA) functioninmonitoringtheexisting effectiveness oftheRevenueAssurance The Committeereviewsthe Revenue assurance y y y also considered; To fulfilitsduties,theCommittee Company’s needs. ensure theyareappropriatetomeetthe plan, itspurposeandresponsibilitiesto It reviewstheannualinternalaudit and adequacyofitsplansresources. capability oftheinternalauditfunction fulfil itsresponsibilitiesbyensuringthe The CommitteeassiststheBoardto Internal audit y y y y y y reviewed: To fulfiltheseduties,theCommittee y y y y y y y y y timeliness ofresolution. Management’s responseandthe significant findings,adequacyof Key resultsofauditsandother achievement ofitsplans; Internal audit’splansand members oftheBoard; access totheCommitteeandall Internal audit’sreportinglineand implementation. Reports onsignificantsystems security andwhistleblowing; The Group’sapproachtoIT,cyber the Group; Reports onfraudcommittedagainst management; internal financialcontrolandrisk Reports onthesystemsof the financialcontrolenvironment; areas andsignificantdeficienciesin Internal auditreportsonkey Reports andpresentations; letters andtheirAuditCommittee The ExternalAuditors’management Audit CommitteeReport not exceedthefeesincurred for the incurred fornon-auditservices do The Committeealsoensuresthat fees review andapprovaloftheCommittee. the ExternalAuditorrequiresprior Any non-auditworktobeperformedby independence oftheExternalAuditor. regulatory requirementstoensurethe in accordancewithprofessionaland External Auditorfornon-auditservices, and compliedwith,ontheuseof policies andproceduresaredeveloped The AuditCommitteeensuresthat External Auditor’s independence implemented. are constructiveandeffectively for improvementsorchanges timely, andthatanysuggestions Auditors areclear,relevantand communications withtheExternal The Committeeensuresthat Statements forthefinancialyear. and statutoryauditoftheFinancial review oftheGroup’sfinancialresults and proposedfeesforthequarterly of work,auditapproach,resources auditor’s planincludingthescope The CommitteereviewstheExternal remains effectiveonacontinuingbasis. ensure thattheexternalauditprocess The AuditCommitteeiscommittedto External audit reporting anditsrelateddisclosures. integrity oftheCompany’sfinancial requirements, andbysafeguardingthe compliance withregulatoryandlegal into thedailyoperations,byensuring by integratingmanagementcontrol assurance thatobjectivesaremet policy isdesignedtoprovidereasonable cycle. TheCompany’sriskandcontrol of thebusinessplanningandreview Risk managementformsanintegralpart financial areas. strategic, operational,complianceand SLT focusesonriskmanagementinthe Risk managementframework Committee On behalfoftheGroupAudit y y y y y y y y held during2018: Key mattersconsideredatmeetings Statements. disclosed inNote7totheFinancial during thefinancialyear2018are The feespaidtotheExternalAuditor External Auditors fees 21 February2019 Chairman Kanishka Senanayake guidance forAuditors. considers therelevantethical external auditinafinancialyear,and y y y y y y y y the InternalAuditCharter Reviewed andapprovedchangesto high riskissuestotheBoard by Management,andreportedthe recommendations andactiontaken reports includingthekeyfindings, Reviewed theinternalaudit audit plan,resourcesandbudget Reviewed andapprovedtheinternal the ExternalAuditors Management followedthereviewby life offixedassetsproposedby policies andrevisionintheuseful Reviewed thechangesinaccounting within therequiredtimelines accounting standardsbyManagement Reviewed theimplementationofnew of theBoard recommended thesameforapproval Statements fortheyear2017and Reviewed theauditedFinancial approval oftheBoard recommended thesamefor the quarterlyfinancialresultsand findings andrecommendationson Reviewed theExternalAuditor’s for approvaloftheBoard plan andfees,recommended Reviewed theExternalAuditor’s remuneration proposals. Officer arefullyconsultedon The ChairmanandChiefExecutive y y y y include: The principaltasksoftheCommittee Role andresponsibilities any partofthemeetingasrequired. and externaladviserstoattendforallor Officer, ChiefHumanResourceOfficer Executive Officer,GroupChiefFinancial The CommitteeinvitestheChief Secretary oftheCommittee. The CompanySecretaryfunctionsasthe Non-ExecutiveIndependentDirector Mr LawrenceParatz– Non-ExecutiveIndependentDirector Mr PGKumarasingheSirisena– Non-ExecutiveDirector(Chairman) Mr ChanCheeBeng– Independent Directors. directors ofwhommajorityare consists solelyofNon-Executive membership issetoutbelow, Committee oftheBoard,whose The RemunerationandNomination NOMINATION COMMITTEE REPORT REMUNERATION AND y y y y of SLTGroup. increments forallemployees bonus paymentsandannualsalary Review andrecommendannual adequate talentpool. view toensuringthereisan members ofmanagementwitha plans fortheCompany’smostsenior Review thecareeranddevelopment vacancies astheneedarises. suitable candidatestofillcasual Nominate forBoard’sapproval, management ofSLT. its subsidiaries,andexecutive Executive OfficerofSLTand Non-Executive directors,Chief of theremunerationpolicy formulation ofproposalsinrespect Recommend totheBoardon subsidiary undertakings. interests inanyoftheGroup’s The Directorshavenobeneficial on page141. Income StatementisshowninNote7 remuneration chargedtotheGroup Details oftheoverallDirectors’ comparators. levels, timecommitment,andmarket the increaseoftheirresponsibility May 2018,takingintoconsideration Directors hasbeenreviewedin as awhole.ThefeeforNon-Executive determined bytheBoardofDirectors attendance feeatmeetings,whichis Directors solelycomprisesofan The remunerationofNon-Executive the Board’sstrategicdecisions. strategy implementationandexecuting chairman. Heiscloselyinvolvedin is inexcessofthenormallevelfora on theroleandtimecommitmentthat The Chairman’sfeeisdeterminedbased remuneration Non–Executive Directors’ Chairman and and individualperformance. Country, organisationalperformance, considering year-on-yearinflationofthe are reviewedannuallyinJanuary, of theCEOandseniormanagement targets andpersonalgoals.Salary on achievementofoperatingprofit Payment ofanannualbonusdepends and performancerelatedannualbonus. management arebasicsalary,benefits, package fortheCEOandsenior The mainelementsoftheremuneration Management’s remuneration CEO andtheSenior
Committee Remuneration andNomination On behalfofthe y y y y y y y y y y carried outaresummarisedbelow: during theyear2018andactivities The Committeemetonfiveoccasions during 2018 Activities carriedout 21 February2019 Chairman Chan CheeBeng y y y y y y y y y y Promotion Schemeforrevision. Review oftheStaffRecruitmentand Operations Officer. Chief ExecutiveOfficerand Performance Evaluationof subsidiary companies. Subcommittees andBoardsof reconstitution ofBoard Making arecommendationfor employees ofSLTanditssubsidiaries. annual bonusandincrementsfor Recommendations onpaymentof management. Performance Reviewofsenior of employment. permanent andfixed-termcontracts extension ofseniorofficerswith Recommendations forservice remuneration. the Non-ExecutiveDirectors’ Review ofCEO,COO,and the positionofseniormanagement. Recommendation ofpromotionsto Financial Officer. appointment oftheGroupChief Review andrecommendationofthe qualified staff. of CEOandtheCOOfrominternally Recommendation forappointment Stewardship 97
Sri Lanka Telecom PLC | Annual Report 2018 98 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship the meetingsbyinvitation. Group ChiefFinancialOfficerattended page 87TheChiefExecutiveOfficerand in theCorporateGovernanceReporton attendance atthesemeetingsisgiven during thefinancialyear2018and The Committeemetfourmeetings Meetings ofcommittee Secretary oftheCommittee. The CompanySecretaryfunctionsasthe independent Director. Chairperson oftheCommitteeisan of theListingRulesCSE, In compliancewiththerequirements from 19June2018. member oftheCommitteewitheffect Board, MrARDesapriyaceasedtobe Subsequent totheresignationfrom Mr KanishkaSenanayake(Appointed Ms LaiChoonFoong Ms NilanthiPieris–Chairperson Committee areasfollows: directors. Themembersofthe NEDs ofwhomtwoareindependent The Committeecompriseofthree Composition Colombo StockExchange(CSE). and withtheListingRulesof Commission ofSriLanka(TheCode) issued bytheSecuritiesandExchange Code onRelatedPartyTransactions,as Board toensurecompliancewiththe exercise oversightonbehalfofthe The objectiveoftheCommitteeisto Objective TRANSACTIONS REVIEW COMMITTEE REPORT OF THE RELATED PARTY w.e.f. 18.10.2018) 21 February2019 Chairperson Nilanthi Pieris(Ms) Transactions ReviewCommittee On behalfoftheRelatedParty Financial Statements. is disclosedinNote33tothe Company duringtheaboveperiod transactions enteredintobythe Details ofotherrelatedparty observations totheBoard. communicated theircommentsand during thefinancialyear2018andhave reviewed theRelatedPartyTransactions During theyearCommittee Activities during2018 of theCompany. party transactionsfromthedatabase Company retrievesdataonrelated furnished inthesedeclarations,the to them.Basedontheinformation purpose ofidentifyingpartiesrelated Personnel oftheCompanyfor obtained fromeachKeyManagement Transaction Policy,thedeclarationsare accordance withtheRelatedParty as KeyManagementPersonnel.In of theCompanyhavebeenidentified The membersoftheBoardDirectors Policies andprocedures minutes oftheCommittee’smeetings. verbal briefings,andbytablingthe to theBoardofDirectors,through Committee havebeencommunicated The activitiesandviewsofthe
Risk management Risk infrastructureand Risk governance framework Risk management to ERMbest-practicessuchasISO framework. Referenceshavebeenmade Management (ERM)processandERM SLT developedtheEnterpriseRisk Complying withtheBoard’sdirection, processes acrosstheOrganisation. to implementeffectiveriskmanagement of Directors(BOD)hasgivendirections considered theimportance,Board manage themeffectively.Having to foreseebusiness-criticalrisksand Hence, itisvitalforanorganisation pressure onbusinessoperations. and economicuncertaintiesisexerting Players, fast-changingtechnology, telecommunication operators,OTT environment, marketsaturationof competitive andvolatilebusiness The presentcontextofahighly (ERM) Enterprise RiskManagement MANAGEMENT RISK
risks Identify
Develop and deploy strategies
risks evaluate Assess and identify keybusiness-criticalrisks. risks fromfunctionalgroupsandto This wastoaidanalysisofanyescalated the chairmanshipofGroupCEO. Committee (RMSC)wasformedunder process, aRiskManagementSteering ERM process.Inordertosupportthis the aimofenhancinganddriving to theBoardwasintroducedwith A formalprocessforreportingrisks inculcated withintheOrganisation. Therefore, ariskmanagementcultureis implementation oftheERMprocess. in day-to-daybusinessactivitieswith identify andmanageitsfunctionalrisks in thisregard.SLThasstartedto has beenobtainedfromMessrsDeloitte 31000 andCOSO,dueguidance People
risks Integrate infrastructure Tone atthetop Oversight Process process ERM Risk
risks Respond to
Technology controls and test implement Design improve continuously and Sustain responsibilities withrelevantgroups. the organisationofERMandits risks). Thefigurebelowillustrates transfer anynegativerisks(unrewarded risks) andaccept,mitigate,avoid,or calculated positiverisks(rewarded empowered themtotakeappropriately process intofunctionalunits.Thishas to embedtheriskmanagement It encouragesSeniorExecutives become animportant(BAU)process. and projectmanagementithas maturity atbothfunctionalunits Risk managementhasnowreached risks attheAuditCommitteemeeting. Mobitel, andtheBoardreviewsGroup extended tooursubsidiariesincluding Further, theERMprocesshasbeen escalate Issues and Monitor risk management ERM atAudit Management Group level Committee Committee Stewardship Functional Steering owner Risk Risk
99
Sri Lanka Telecom PLC | Annual Report 2018 100 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship terms offoreigncurrencies. liabilities tocontrolcashoutflowsin critical capitalexpenditureandother the possibilityoflimitingnon-business fluctuations. Furthermore,weexplore our exposuretoforeignexchange establishing anaturalhedgetominimise operators. Throughthisweare our servicesprovidedtointernational improving foreigncurrencyinflowsfrom well. Weareconsistentlyworkingon business andindustryactivitiesas a hugeimpactontheCompany’s Sri Lankanrupeeduringtheyearhad The significantdepreciationofthe translation losses. currencies, leadingtoforeignexchange expenditure isincurredinforeign capital expenditureandoperational Thus, asignificantportionofour of telecommunicationsystems. and softwareapplicationsinclusive in additiontoprocuringhardware implementation andmaintenance, for telecommunicationsystem vendors inobtainingservices Sri Lankacollaboratewithinternational Telecommunication operatorsin exchange fluctuations Exposure to foreign premiums formarketparticipants. risk forfundingactivitiesandcredit volatile andthismayheightenexecution costs. Financialmarketscontinuetobe management, andincreasedoperating foreign exchangefluctuations,fund financial assetsandliabilitiesare The mainrisksarisingfromour Financial risks taken tomitigatethem. their potentialimpact,andactions with abriefdescriptionofeachrisk, industry-specific andcompany-specific top business-criticalrisks;both Given belowisasummaryof Risk Management Value AddedTax(VAT)of15%, Nation affordability oftheservice.However, from 25%to15%inorderimprovethe reducing thetelecommunicationlevy on telecommunicationservicesby revised thefinancialleviesimposed of theCompany.Governmenthas adversely impactsthebusiness policy ontelecommunicationservices The Government’sheavytaxation Taxation part oftheyear. environment diminishedbythelatter uncertainties inthemacroeconomic in thepreviousyearleadingto Economic headwindsthatprevailed operations andfinancialperformance. related services,andhence,onour and informationtechnology(IT) for telecommunications,digitalservices, material adverseeffectonthedemand global economicconditionsmayhavea Changes indomestic,regional,and Economic risks utilisation ofhumanresources. process re-engineering,andefficient (Kaizen) ofbusinessprocess, through continuousimprovements while keepingouroperationalcostlow provide thebestafter-salesservice customers issignificant.Westriveto cost onservicesprovidedtodomestic Lanka, ouroperationandmaintenance telecommunication operatorinSri As thelargestwire-line profits. and promotions,furthercuttingdown features whilealsoofferingdiscounts operators toinvestinuniqueproduct low switchingcosthaspressurised Increase ofconsumers’powerand increasing operationalexpenditure. to maintainlowprofit-marginsdespite competitors hascompelledoperators Intense pricecompetitionamongthe Escalating operating costs Regulatory andlegalrisks business objectives. capacity tooperateinlinewith our may affectourbusinessand/or our the marketincludingcallbypass,and operators createunfaircompetitionin authorised scopeoflicensesbysome conditions orexploitationbeyondthe in business.Violationoflicense provide acompetitiveadvantage access technologysecuredbyus, spectrum, orrighttouseaparticular either righttoaccessabandof litigation. Furthermore,suchlicenses, to finesorothersanctionsincluding meet regulatoryrequirementsareliable Telecommunication Act.Failuresto Regulatory Commissionunderthe Sri LankaTelecommunication require licensesissuedbythe Telecommunication businesses license conditions Regulatory riskson workplace safetyandhealth. anti-bribery andcorruption, customer dataprivacyandprotection, regulations, suchasthoserelatingto conditions, andvariousotherlaws governance, aresubjecttoregulatory with theGovernment’svisionforgood other parties.Ouroperations,aligned or litigationactionbyregulatorand We areexposedtotheriskofregulatory such potentialrevenuelosses. and takeproactivemeasurestoprevent price sensitivenatureofourcustomers mobile arm,Mobitelarecognisantofthe We, SriLankaTelecomincludingour adversely affectedinacriticalmanner. telecommunication servicescouldbe to theconsumer,demandandusageof of suchleviesandtaxesarepassedon international services.Sincetheburden Levy andIDDlevyareappliedon International Telecommunication telecommunication services.Inaddition, levy of2%continuetobeimposedon Building Tax(NBT)of2%andCESS security systemsisemphasised. levels ofsophisticationininformation intensity, andtheneedforenhanced common, increasinginfrequencyand incidents arebecomingmoreand Unfortunately, suchcyber-security incidents werereportedglobally. ransom-ware attacksandhacking reputation. Duringtheyear,several Company systemsand and othercyber-attacksmaydamage confidence. DDOSattacks,malware, advantage andlossofcustomer breach mayleadtolossofcompetitive of sensitiveinformationoranydata crucial forbusinesscontinuity.Loss Organisations’ systemsanddataare In thisinformationsociety, Information securityrisks Statements onpage168. Refer Note32totheFinancial “Contingent Liabilities”. to theFinancialStatementsunder of suchlitigationaredisclosedinNotes regulators andotherparties.Examples regulatory orlitigationactionby We areexposedtotheriskof Legal risks telecommunications andmediaindustry. reforms anddevelopmentsinthe and providefeedbackonregulatory the industrytoproposechanges respective regulatoryauthoritiesand in discussionsandconsultationswith framework andregularlyparticipate new developmentsintheregulatory requirements. Wecloselymonitor the businesstocomplywithregulatory We closelyworkwithourpartnersin to meetchangingneeds. and byinvestinginnewtechnologies reviewing ourpoliciesandprocesses, training anddevelopmentplan, our humanresourcerecruitment, our organisationstructure,reviewing We respondbycontinuallyupdating on people,processes,andsystems. New businessesplacenewdemands alters thebusinessmodel. data analytics,anddigitalservices,it services, cybersecurity,IOT services, cloudinfrastructure such asOTTapplications,managed streams throughproductsandsolutions in ICTtocreateadditionalrevenue As wemoveintonewgrowthareas Business risks are takenforidentifiedvulnerabilities. ISO 27001standard.Remedialactions regular basistoensurecompliancewith architecture reviewareconductedona compromise assessment,andsecurity critical services,penetrationtesting, such asvulnerabilityassessmentof ensures internalauditsandactivities (ISMS) withintheOrganisation.This Security ManagementSystem we haveestablishedanInformation heavily oninformationtechnology, As ourbusinessesandoperationsrely information security Cyber securityand Telecom agreatplacetowork. focused onmakingSriLanka motivation. Weareconsistently are offeredtoenhanceemployee and soft-skillenhancementprogrammes training opportunities,foreigntrainings, latest technologies.Furtherout-bound skills andupdatethemselveswiththe employees toenhancetheirtechnical project relatedtrainingsareofferedto five-year strategicplan.Necessary plan aligningwiththeorganisational a five-yeartraininganddevelopment us. Weareintheprocessofpreparing the forthcomingyearsisachallengeto number ofexperiencedstaffduring amidst theretirementofasignificant including newskillsandcapabilities, wages. Attractingandsustainingtalent increase incostofstaffsalariesand of theOrganisationandcontrol introduced toimproveproductivity A goldenhandshakeschemewas avenues ofgrowth. which requirecreativityasweseeknew to adoptinnovativebusinessmodels telecommunication operatorinSriLanka in transformingtheincumbent change willbeaprimaryfactor Organisational culturalandmindset transformation management and Human resource Risk Management
Stewardship
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Sri Lanka Telecom PLC | Annual Report 2018 102 Sri Lanka Telecom PLC | Annual Report 2018 Stewardship to theinternationalmarket. domestic markethasbroadened competition. Competitioninthe the marketandcreatingintense have enteredthemarket,flooding such asOver-The-Top(OTT)players operators, non-traditionalcompetitors those traditionaltelecommunication addition tocompetitionamong telecommunication operators.In the existenceofseveral Sri Lankaisnearlysaturateddueto The telecommunicationindustryin Threat from competitors opportunity. of OTTapplicationstorealisethis usage. Wearedevelopingaseries broadband adoptionandincreased also becomescomplementarytohigh reduce traditionalvoicerevenue,it Although OTTapplicationstendto traditional communicationchannels. over internetplatformsratherthan social networkingandcommunication millennials aremorecomfortablewith as consumersfromgenerationYand especially internationalon-nettraffic, of telecommunicationoperators traditional voiceanddatarevenues increasingly becomingathreatto Over-The-Top (OTT)applicationsare (OTT) Threat from Over theTop Risk Management requirements. digital productscateringtomarket has beenrestructuredtodevelop the need,Organisationstructure more innovativeproducts.Identifying is well-equippedindevelopingeven exhibit ourcapabilities,andteam location-based productcampaigns based newtechnologycampaigns,and events, robotics/machine-to-machine (IOT) andconnecteddevices.eSports products basedonInternetofThings bundling offers,andthroughournovel product-line extensions,andproduct product featureenhancements, win theirloyaltythroughcontinuous proposition forourcustomersand We strivetocreateauniquevalue FINANCIAL REPORTS
Annual Report of the Board of Directors on the Affairs of the Company – 104 Statement of Directors in relation to their responsibility for the preparation of Financial Statements – 109 Independent Auditors’ Report – 110 Statement of Profit or Loss and Other Comprehensive Income – 114 Statement of Financial Position – 115 Statement of Changes in Equity – Group – 116 Statement of Changes in Equity – Company – 117 Statement of Cash Flow – 118 Notes to the Financial Statements – 119 104 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports were vestedwithSLT. immediately beforethetransferdateof1September1991 of Telecommunications(“DoT”)wasentitledorsubjectto Sri LankaTelecommunicationsAct)towhichtheDepartment Minister andSLTaspersubsection2ofSection23the those excludedbytheagreemententeredintobetween August 1991allproperties,rights,andliabilities(otherthan Act No.25of1991andpublishedintheGazette6759 1991 underSection23oftheSriLankaTelecommunications Posts andTelecommunications(“theMinister”)on24July Subsequently, intermsofanOrdermadebytheMinister Extraordinary GazetteNo.596/11of6February1990. Corporations ActNo.49of1957andpublishedinthe Order madeunderSection2oftheStateIndustrial Sri LankaTelecom(“SLT”)wasformedbyanIncorporation Formation Telecom PLCandtheGroupforfinancialyear2018. Audited FinancialStatementsoftheCompany,SriLanka The Directorsarepleasedtopresenttheirreportandthe ON THE AFFAIRS OF THE COMPANY ANNUAL REPORT OF THE BOARD OF DIRECTORS Galle SubmarineCableDepot(Private)Limited SLT Campus(Private)Limited SLT PropertyManagement(Private)Limited Sky Network(Private)Limited SLT VisionCom(Private)Limited SLT HumanCapitalSolutions(Private)Limited [formerlyknownasSLTPublications(Private)Limited] SLT DigitalInfoServices(Private)Limited Sri LankaTelecom(Services)Limited eChannelling PLC Mobitel (Private)Limited Name ofthesubsidiary/associate
2007 asSriLankaTelecomPLCon4June2007. SLT wasre-registeredundertheCompaniesActNo.07of Extraordinary GazetteNo.942/7dated25September1996. into PublicLimitedCompaniesActNo.23of1987,vide Corporations orGovernmentOwnedBusinessUndertakings 25 September1996,undertheConversionofPublic SLT wasconvertedtoapubliclimitedcompanyon business activitiesareasfollows: The Company’sinterestinsubsidiaries/jointventuresandtheir uplink, andmaritimetransmission. domestic andinternationalleasedcircuits,framerelay,satellite alia, internetservices,IPTV,wirelessbroadband,data the rangeofservicesprovidedbyGroupinclude,inter international fixedandmobiletelephoneservices.Inaddition, services acrossSriLanka,themainactivitybeingdomesticand The Groupprovidesabroadportfoliooftelecommunication the business Principal groupactivitiesandreviewof Discussion andAnalysis. future developmentsaregivenunderManagement development ofitsbusinesses,andanindicationlikely A detailedreviewoftheCompany’sactivities, Business activity telecommunication cablesystemstothirdparties. Repair andmaintenanceofsubmarine Higher Education Management ofSLT’srealestateresources Wireless broadbandoperations IPTV supportservices Human resourcesolutions activation, anddigitalservices Directory information,eventmanagementand Total networksolutions Information infrastructureforthehealthcareindustry Mobile telephoneservices
INED being eligibleofferhimselfforre-election. 91 and92oftheArticlesAssociationCompany their lastelection,retirebyrotationintermsofArticles Mr WKHWegapitiya,whohasbeenlongestinofficesince the CompanyMrSenanayakeoffereshimselfforreappointment. In accordancewithArticle97oftheArticlesAssociation vacancy thatarosefromtheresignationofMrRohanDeSilva. Non–Executive Directoron17September2018tofillthecasual Mr KanishkaSenanayakewasappointedasaIndependent themselves forreappointmentbytheshareholders. to onethird)retiresbyrotationateachAGMandoffer In addition,onethirdoftheDirectors(ornumbernearest the shareholders. Meeting (“AGM”)andwillofferthemselvesforre-electionby the yearwillholdofficeonlyuntilnextAnnualGeneral Association oftheCompany.TheDirectorsappointedduring the maximumnumberofDirectorsspecifiedinArticles provided thatthetotalnumberofDirectorsdonotexceed either tofillacasualvacancyorasanadditionalDirector Directors areauthorisedtoappointanypersonbeaDirector In termsoftheArticlesAssociationCompany, re-election ofDirectors Appointment and NED Company asat31December2018aregivenbelow: In termsofSection168(1)(h)theCompaniesActNo.072007,namespersonswhoheldofficeasDirectors Board ofDirectors Directors sectionoftheAnnualReport. Brief profilesoftheDirectorsarecontainedinBoard Mr KanishkaSenanayake Mr ARDesapriya(Resignedw.e.f19.06.2018) Mr WKHWegapitiya Ms NilanthiPieris Ms LaiChoonFoong Mr LawrenceParatz Mr ChanCheeBeng Mr PGKumarasingheSirisena Name ofDirector – – Independent Non–ExecutiveDirector Non-Executive Director Annual ReportoftheBoardDirectorsonAffairsCompany
Chairman/INED
of theCompaniesActNo.07 of 2007. authorised representativesas requiredbySection119(1)(d) Register isavailableforinspectionbyshareholdersortheir Section 192(2)oftheaforesaidCompaniesAct.TheInterest Directors havemadenecessarydeclarationsasprovidedin the requirementofCompaniesActNo.072007.The An InterestRegisterismaintainedbytheCompanyasper contracts withtheCompany Interest RegisterandDirectors’interestin the CompaniesAct. liabilities thatmayariseagainstthemundertheprovisions of insurance whichgivesappropriatecoveragainstthelegal The CompanymaintainsDirectors’andofficers’liability Directors’ indemnitiesandinsurance “Corporate Governance”onpage87. Information relatingtosubcommitteesisgivenunder y y y y y by theBoardtofocusindetailonaparticularissue. mandatory andvoluntarysubcommitteeshavebeenappointed Association oftheCompanyandListing Rules thefollowing In termsofSection186theCompaniesAct,Articles Board subcommittees Position y y y y y Related PartyTransactionsReviewCommittee Technology subcommittee Senior TenderBoard Remuneration andNominationCommittee Audit Committee INED INED INED INED NED NED NED Date ofappointment 05.06.2008 09.05.2014 26.05.2010 03.02.2015 30.10.2017 17.09.2018 23.01.2015 02.12.2015 Date ofre-election Financial Reports 09.05.2018 09.05.2018 24.05.2017 12.05.2016 12.05.2016 12.05.2016 13.05.2015 –
105
Sri Lanka Telecom PLC | Annual Report 2018 106 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports required bySection168(1)(f)oftheCompaniesAct. are giveninNote7totheFinancialStatementsonpage141 as The remunerationandotherbenefitsreceivedbytheDirectors Directors Remuneration andotherbenefitsof subsidiaries duringthefinancialyearunderreview. The DirectorsdidnotholdsharesintheCompanyorits shareholding Directors andChiefExecutiveOfficer’s Financial Statements. the consolidatedrevenueofGroupasperAudited carried outduringtheyear2018doesnotexceed10%of RPT–RC confirmsthattherecurrentrelatedpartytransactions except thosesetoutinRule9.5oftheListingRules. reviews transactionscarriedoutbetweenrelatedentitles The RelatedPartyTransactionsReviewCommittee(RPTRC) Exchange CommissionAct. Directive issuedunderSection13(c)oftheSecuritiesand Transactions undertheSecuritiesandExchangeCommission Listing Rule9.3.2andCodeofBestPracticeonRelatedParty The CompanyhascompliedwiththeColomboStockExchange are giveninNote33totheFinancialStatements. Transactions intermsofLKAS24“RelatedPartyDisclosures” Transactions ifanythatcouldbeclassifiedasRelatedParty Related partytransactions matters inwhichtheyhaveamaterialinterest. involving theCompanyandhaverefrainedfromvotingon The Directorshavedeclaredallmaterialinterestincontacts 31 December2018. or proposedcontactwiththeCompanyforyearended The Directorshavenodirectorindirectinterestinanycontract holds substantialinterestinsuchentitles. of theCompanyisChairmanorDirectorsuchentitles business atcommercialrateswithentitiesinwhichaDirector The Companycarriesouttransactionsintheordinarycourseof Chief ExecutiveOfficer Annual ReportoftheBoardDirectorsonAffairsCompany 1 January2018 1,563 No. ofShares 31 December2018
1,563 shares asat31December2018. The followingshareholdersheldmorethan5%oftheissued Substantial shareholding to theFinancialStatements. Details oftheCompany’sstatedcapitalaresetoutinNote29 Company duringtheyearunderreview. shares. Therewerenochangestotheissuedcapitalof LKR 18,048,600,000dividedinto1,804,860,000ordinary The statedcapitaloftheCompanyasat31December2018was Stated capital capital expenditure. funds wereutilisedtopartlyfinance therequiredfuture maturing andhighinterestpayingdebt.Thebalance The primarypurposeoftheissuewastoretireshortterm Exchange. LKR 100.ThedebentureswerelistedintheColomboStock senior, unsecured,redeemabledebenturesataissueprice of The Companyon26April2018issued50,250,000ten-year Debentures portfolio ofSLT. private placementwillbeutilisedtorestructurethedebt Exchange. Thefundsexpectedtoberaisedthroughthe rules onminimumpublicfloatissuedbytheColomboStock capital postprivateplacementinordertocomplywiththe ordinary votingsharesrepresenting4.74%oftheissuedshare SLT isproposingtheissueofamaximum89,766,198new Private placement share heldbyhimonapoll. have onevoteonashowofhandsandforevery corporation presentbyadulyauthorisedrepresentative)shall Every shareholderpresentinpersonorbyproxy(orbeinga A proxyneednotbeashareholderoftheCompany. may appointaproxytoattendandvoteinsteadofhim. A shareholderentitledtoattendandvoteataGeneralMeeting attend andspeakatanyGeneralMeetingoftheCompany. Ordinary shareholdersareentitledtoreceivenoticeand Voting rights HoldingsN.V.ofNetherlands Global Telecommunications (GovernmentofSriLanka) Secretary totheTreasury
44.98% 49.50%
(2017 – final dividendofRupeesoneandsixCentspershare The Directorsrecommendthepaymentofafirstand Dividends Changes inEquityonpage116oftheAnnualReport. The movementofthereservesaregiveninStatement Income Statementonpage114. Results oftheCompanyandGrouparegivenin Financial resultsandappropriations. Report. Independent Auditors’Reportissetoutfrompage110ofthis Statement ofDirectors’Responsibilitiesonpage109whilethe preparing theFinancialStatementsisincludedin A statementbytheDirectorsoftheirresponsibilitiesfor this Report. Officer andsignedbytwoDirectorsaregivenonpage115of 31 December2018certifiedbytheGroupChiefFinancial The aforementionedFinancialStatementsfortheyearended preparation oftheconsolidatedFinancialStatementsfor2018. Directors whohaveconfirmedthemtobeappropriateforthe applicable estimationtechniques,havebeenreviewedbythe on Note3totheFinancialStatements.Thesepolicies,and Company inpreparingtheFinancialStatementsaresetout The significantaccountingpoliciesadoptedbytheGroupand requirements oftheCompaniesActNo.072007. Chartered AccountantsofSriLankaandcomplywiththe Standards (SLFRS/LKASs),laiddownbytheInstituteof have beenpreparedinaccordancewithSriLankaAccounting The FinancialStatementsoftheGroupandCompany Financial Statements Auditors intermsofSection57 oftheCompaniesAct. distribution ismadeandhave obtainedacertificatefromthe satisfies theSolvencyTestimmediately afterthedividend their opinionbasedontheinformation availabletheCompany of 2007,theDirectorshavesigned acertificatestatingthatin As requiredbySection56(2) oftheCompaniesActNo.07 the shareholders. registered asat27March2019,subjecttotheapprovalof 31 December2018payableon8April2019totheshareholders Reserves Profit Revenue LKR 0.89pershare)forthefinancialyearended Company LKR Mn. 58,140 47,389 1,906 2018 LKR Mn. 73,624 81,445 Group 4,948 Company LKR Mn. 59,220 44,537 1,428 Annual ReportoftheBoardDirectorsonAffairsCompany 2017 LKR Mn.
71,309 75,741 Group 3,940
services renderedareasfollows: review. TheAuditfeespayableandfornon-audit the ExternalAuditorsofCompanyduringyearunder Ernst &Young,(“EY”)CharteredAccountantsservedas Auditors status ofvaluepropertiesisdisclosedonpage147. year aresetoutinNote14totheFinancialStatements.Current The movementsinproperty,plantandequipmentduringthe Property, plantandequipment of theColombostockExchange. applicable lawsandregulationsincludingtheListingRules The Companyhasalsoensuredthatitcompliedwiththe in theFinancialStatements. reporting datehavebeenpaidorwhererelevantprovided for due andpayablebytheCompanyitssubsidiariesasat the its subsidiariesandallotherknownstatutoryduesaswere behalf ofandinrespecttheemployeesCompany and subsidiaries, allcontributions,leviesandtaxespayableon all taxes,dutiesandleviespayablebytheCompany The Directorsconfirmthattothebestoftheirknowledge laws andregulations Statutory paymentsandCompliancewith forthcoming AnnualGeneralMeeting. to determinetheirremunerationwillbeproposedatthe A resolutiontoreappointthemandauthorisetheDirectors E &Yhaveexpressedtheirwillingnesstocontinueinoffice. that ofExternalAuditors. or relationshipwiththeCompanyitssubsidiariesotherthan Directors aresatisfiedthattheAuditorshavehadnointerest Based onthewrittenrepresentationmadebyAuditors the Companyforensuingyear. shareholders thereappointmentofE&YasAuditors performance andtheirindependencerecommendtothe SLT GroupAuditCommitteehavingconsideredE&Y’s Fees fornon-auditservices Audit fees LKR Mn. 2018 8 7 Financial Reports LKR Mn. 2017
3 7
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Sri Lanka Telecom PLC | Annual Report 2018 108 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports disclosed morefullyonpages64to67ofthisReport. in recognitionofitsresponsibilityasacorporatecitizenare natural resources.TheactivitiesundertakenbytheGroup environment andtoensuresustainablecontinuityofour endeavours tominimisetheadverseeffectson environment duetoitsbusinessactivities.TheGroup SLT isconsciousofthedirectandindirectimpacton Sustainability reporting Note 7onpage142. The numberofpersonsemployedbySLTandGroupisgivenin abilities andtheneedsofGroup. the opportunitytodevelopfullyaccordingtheirindividual aim istoencourageacultureinwhichallemployeeshave religion orotherbeliefsandethnicnational,origin.The gender, sexualorientation,age,maritalstatus,disability,race, employees promoteequalityofopportunityregardless training, careerdevelopmentandtheCodeofEthicsfor their marketsector.Policiesandproceduresforrecruitment, resource policies,practices,andregulationsappropriateto The Groupcompaniesoperatewithinaframeworkofhuman rehabilitation andtraining. retained inemploymentwhereverpossibleandwillbegiven who becomedisabledduringtheirserviceatSLTwillbe prospective employeebasedonphysicaldisability.Employees disabled seriouslyanddoesnotdiscriminateanyemployeeor The Companytakesitsresponsibilitytowardsthephysically diversity, employeewell-being,andequalopportunities. The employmentpoliciesofSLTcoverissuessuchas Employment policies LKR 2Mn. The Directorshaveapproveddonationsamountingto Donations communities withinwhichtheGroupoperates. that haveabeneficialeffectonthecustomersand on theenvironmentandprovidesproductsservices operate inamannerthatminimisesthedetrimentaleffects Directors aresatisfiedthattheCompanyanditssubsidiaries After makingadequateenquiriesfromManagement,the Environmental protection (2017 –Nil). forcharitablepurposestheyear2018. Annual ReportoftheBoardDirectorsonAffairsCompany Sri LankaTelecomPLC By orderoftheBoard Annual Report. set outinaseparateNoticeofMeetingwhichaccompaniesthis Details oftheMeetingandresolutionstobeproposedare Conference Hall(BMICH),BauddhalokaMawatha,Colombo07. at theLotusRoomofBandaranaikeMemorialInternational The AGMwillbeheldat10.00amonThursday,28March2019 Annual GeneralMeeting(AGM) Statements. adopting thegoingconcernbasisinpreparingFinancial to continueitsoperationsintheforeseeablefuturejustify and issatisfiedthattheCompanyhasadequateresources The DirectorshavereviewedtheCompany’sbusinessplans Going concern the FinancialStatements. Auditors’ Reportwhichrequireadjustmentstoordisclosurein Statements, therearenomaterialeventsasatthedateof Except formattersdisclosedinNote36totheFinancial Post balancesheetevents Colombo 21 February2019 Company Secretary Mahesh Athukorale Director Nilanthi Pieris(Ms) Chairman P GKumarasingheSirisena of internalcontrolsandaccounting. recognised inweighingtheassurancesprovidebyanysystem However, thereareinherentlimitationsthatshouldbe and proceduresoftheCompanywereconsistentlyfollowed. provide reasonableassurancethattheestablishedpolicies The InternalAuditorshaveconductedperiodicauditsto preventing anddetectingfraudotherirregularities. of appropriateinternalcontrolsystemswithaviewto in thisregardtogiveproperconsideration to theestablishment to safeguardtheassetsofCompanyandGroup The Directorsarealsoresponsiblefortakingreasonablesteps requirements oftheAct. Financial Statementspresentedcomplywiththe the CompanyandofGroup,toensurethat disclose, withreasonableaccuracythefinancialpositionof the Companymaintainssufficientaccountingrecordsto Further, theDirectorshavearesponsibilitytoensurethat preparing theseFinancialStatements. operation tojustifyapplyingthegoingconcernbasisin and theGrouphaveadequateresourcestocontinuein The DirectorsarealsorequiredtoensurethattheCompany y y y Financial Statements: The Directorsarerequiredtoensurethat,inpreparingthese y y The FinancialStatementscomprise: Report onpage110. of 2007(theAct),issetoutintheIndependentAuditors’ accordance withtheprovisionsofCompaniesActNo.07 Auditors, inrelationtotheFinancialStatements,prepared following statement.TheresponsibilityoftheIndependent Statements oftheCompanyandGroupissetoutin The responsibilityoftheDirectorsinrelationtoFinancial FINANCIAL STATEMENTS THEIR RESPONSIBILITY FOR THE PREPARATION OF STATEMENT OF DIRECTORS IN RELATION TO y y y y y reasonable andprudent. Judgements andestimateshavebeenmadewhichare been followed; of CharteredAccountantsSriLanka,asrelevant,have All applicableAccountingStandardsissuedbyTheInstitute any, havebeendisclosedandexplained; applied inaconsistentmannerandmaterialdepartures,if Appropriate accountingpolicieshavebeenselectedand requirements oftheActandSLFRS. at theendoffinancialyear,andwhichcomplywith view ofthestateaffairsCompanyandGroupas Statement ofFinancialPosition,whichpresentatrueandfair and loss oftheCompanyandGroupforfinancialyear; Income, whichpresentatrueandfairviewoftheprofit Statement ofProfitorLossandOtherComprehensive
responsibilities assetoutinthisstatement. The Directorsareoftheviewthattheyhavedischargedtheir them togivetheIndependentAuditors’opinion. inspections thattheymayconsidertobeappropriateenable opportunity totakewhateverstepsandundertake and toprovidetheIndependentAuditorswithevery The DirectorsarerequiredtopreparetheFinancialStatements Committee todiscussanymatterofsubstance. have fullandfreeaccesstothemembersofAudit the IndependentAuditorsandInternal financial reportingissues.Toensurecompleteindependence, responsibilities, andtodiscussauditing,internalcontrol review themannerinwhichtheseauditorsareperformingtheir with theInternalAuditorsandIndependentto The AuditCommitteeoftheCompanymeetsperiodically Colombo 21 February2019 Company Secretary Mahesh Athukorale Sri LankaTelecomPLC By OrderoftheBoard covering contingentliabilities. for, exceptasspecifiedinNote32totheFinancialStatements the reportingdatehavebeenpaid,orwhererelevantprovided due andpayablebytheCompanyitssubsidiariesasat its subsidiaries,andallotherknownstatutoryduesaswere behalf ofandinrespecttheemployeesCompany subsidiaries, allcontributions,leviesandtaxespayableon all taxes,dutiesandleviespayablebytheCompanyits The Directorsconfirmthattothebestoftheirknowledge, Compliance report Financial Reports 109
Sri Lanka Telecom PLC | Annual Report 2018 110 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports We areindependentoftheGroupinaccordancewithCode for theauditofFinancialStatementssectionourreport. standards arefurtherdescribedintheAuditor’sresponsibilities Auditing Standards(SLAuSs).Ourresponsibilitiesunderthose We conductedourauditinaccordancewithSriLanka Basis foropinion Sri LankaAccountingStandards. cash flowsfortheyearthenendedinaccordancewith 31 December2018,andoftheirfinancialperformance the financialpositionofCompanyandGroupasat the CompanyandGroupgiveatruefairviewof In ouropinion,theaccompanyingFinancialStatementsof accounting policies. Financial Statements,includingasummaryofsignificant of CashFlowsfortheyearthenended,andnotesto Income, StatementofChangesinEquityand 31 December2018,andtheStatementofComprehensive which comprisetheStatementofFinancialPositionasat Statements oftheCompanyanditssubsidiaries(theGroup), Telecom PLC(theCompany)andtheconsolidatedFinancial We haveauditedthefinancialstatementsofSriLanka Opinion Report ontheauditofFinancialStatements To theShareholdersofSriLankaTelecomPLC AUDITORS’ REPORT INDEPENDENT Sri Lank Co P. 201 DeSar Chart Ernst &Y O. lombo 10 Bo er x 101 ed Accoun
a oung am Plac ta e nt s eys Fa ey T el .c x Gen l om @lk. Ta
x ey .c our opinion. obtained issufficientandappropriatetoprovideabasisfor Code ofEthics.Webelievethattheauditevidencewehave fulfilled ourotherethicalresponsibilitiesinaccordancewiththe of EthicsissuedbyCASriLanka(CodeEthics)andwehave opinion ontheaccompanyingFinancialStatements. address themattersbelow,providebasisforouraudit audit procedures,includingtheproceduresperformedto misstatement oftheFinancialStatements.Theresultsour designed torespondourassessmentoftherisksmaterial Accordingly, ourauditincludedtheperformanceofprocedures section ofourreport,includinginrelationtothesematters. responsibilities fortheauditofFinancialStatements We havefulfilledtheresponsibilitiesdescribedinAuditor’s addressed thematterisprovidedinthatcontext. For eachmatterbelow,ourdescriptionofhowaudit and wedonotprovideaseparateopiniononthesematters. Statements asawhole,andinformingouropinionthereon, were addressedinthecontextofourauditFinancial Financial Statementsofthecurrentperiod.Thesematters judgement, wereofmostsignificanceinourauditthe Key auditmattersarethosethat,inourprofessional Key auditmatters : +9411557818 : +94112697369 : +94112463500 om 0
Financial Statements. are includedinNotes3(d)and14totheconsolidated The Group’sdisclosuresonpropertyandequipment network assets. in concludingtheusefuleconomiclifeof evaluation andexperiencewiththesimilarassets assessment oftheindustrypractice,internaltechnical focus forouraudit.ItinvolvestheGroup’scollective requires judgmentbythecompanyandisakey Estimating theusefullivesofnetworkequipment straight-line basis. of theassetoveritsusefuleconomiclifeona 2018. Thecompanypolicyistodepreciatethecost to LKR14,010Mn.fortheyearended31December total assets.Depreciationontheseassetsamount equipment accountedfor42%oftheconsolidated As atDecember31,2018,theGroup’snetwork Estimating usefullivesofnetworkequipment Standard –SLFRS15Revenuefromcontracts. recognised inaccordancewithSriLankaAccounting of differenthardwareorservicessoldwhichis volume oftransactionswhicharisefromacombination changes inratestructuresandcomprisesofalarge revenue recognitionarecomplex,involvesfrequent recognised bytheGroupbecausesystemsrelatedto Significant effortwasspentauditingtherevenue and fixed-line)yearended31December2018. the provisionoftelecommunicationsservices(mobile The GrouprecognisedrevenueofLKR81,445Mn.from Revenue recognition Key auditmatter
y y y y How ourauditaddressedthekeymatter y y y y y y How ourauditaddressedthekeymatter How ourauditaddressedthekeymatter y y y y y y y y y y made intheFinancialStatements. We alsoassessedtheadequacyofrelateddisclosures external data. data andpractice,marketoutlook,otherrelevant useful livesofthenetworkequipmentagainstindustry We testedmanagementassessmentontheestimated of currenttechnologyanditsutilisationforfutureperiods. technological roadmapanditsevaluationoftherelevance and informationtechnologyengineersonitsfuture We inquiredwiththeGroup’snetworkoperations estimating theusefullivesofnetworkequipment. We obtainedanunderstandingoftheGroup’sprocessin Statements reflected inNote3(x)and6oftheFinancial We alsoassessedtheadequacyofrelateddisclosures applied onunderlyinginvoices. contracts byindependentlyreviewingusageandrates We performedsubstantivetestsonasampleofcustomer revenue transactionstorelevantaccounts. relevant ratesandthecapturingrecordingof amounts billedtocustomersincludingapplicationof We testedthekeycontrolsovercalculationof key controlsrelatedtotherevenueassuranceprocess. systems andtothegeneralledgerincludingtesting records extractedfromsourcesystemstothebilling We testedtheend-to-endreconciliationsfromdata terms andconditions. within eachstreambasedontheirrespectivecontractual streams, assessedrevenuerecognitionofkeycontracts and services,weindependentlyselectedmajorrevenue allocation ofthetransactionpriceinbundledproducts In relationtothetimingofrevenuerecognitionand connected withrevenuerecognition. controls andapplicationofITsystems specialists toassistuswithtestingtheITgeneral We involvedourinternalInformationTechnology Independent Auditors’Report Financial Reports
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Sri Lanka Telecom PLC | Annual Report 2018 112 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports on thebasisoftheseFinancialStatements. expected toinfluencetheeconomicdecisionsofuserstaken individually orintheaggregate,theycouldreasonablybe can arisefromfraudorerrorandareconsideredmaterialif, detect amaterialmisstatementwhenitexists.Misstatements that anauditconductedinaccordancewithSLAuSswillalways assurance isahighlevelofassurance,butnotguarantee issue anauditor’sreportthatincludesouropinion.Reasonable material misstatement,whetherduetofraudorerror,and whether theFinancialStatementsasawholearefreefrom Our objectivesaretoobtainreasonableassuranceabout Financial Statements Auditor’s responsibilitiesfortheauditof the Company’sandGroup’sfinancialreportingprocess. Those chargedwithgovernanceareresponsibleforoverseeing alternative buttodoso. the Grouportoceaseoperations,hasnorealistic accounting unlessmanagementeitherintendstoliquidate to goingconcernandusingthebasisof a goingconcern,disclosing,asapplicable,mattersrelated responsible forassessingtheGroup’sabilitytocontinueas In preparingtheFinancialStatements,managementis material misstatement,whetherduetofraudorerror. the preparationoffinancialstatementsthatarefreefrom as managementdeterminesisnecessarytoenable Sri LankaAccountingStandards,andforsuchinternalcontrol Statements thatgiveatrueandfairviewinaccordancewith Management isresponsibleforthepreparationofFinancial charged withgovernance Responsibilities ofthemanagementandthose nothing toreportinthisregard information, wearerequiredtoreportthatfact.Wehave conclude thatthereisamaterialmisstatementofthisother misstated. If,basedontheworkwehaveperformed, obtained intheauditorotherwiseappearstobematerially inconsistent withtheFinancialStatementsorourknowledge so, considerwhethertheotherinformationismaterially responsibility istoreadtheotherinformationand,indoing In connectionwithourauditoftheFinancialStatements, assurance conclusionthereon. the otherinformationandwedonotexpressanyformof Our opinionontheFinancialStatementsdoesnotcover other information. auditor’s reportthereon.Managementisresponsibleforthe Annual Report,otherthantheFinancialStatementsandour Other informationconsistsoftheincludedin Other Informationincludedinthe2018AnnualReport Independent Auditors’Report
during ouraudit. any significantdeficienciesininternalcontrolthatweidentify timing oftheauditandsignificantfindings,including regarding, amongothermatters,theplannedscopeand We communicatewiththosechargedgovernance y y y y y y throughout theaudit.Wealso: professional judgmentandmaintainskepticism As partofanauditinaccordancewithSLAuSs,weexercise y y y y y y solely responsibleforourauditopinion. supervision andperformanceofthegroupaudit.Weremain Financial Statements.Weareresponsibleforthedirection, within theGrouptoexpressanopiniononconsolidated financial informationoftheentitiesorbusinessactivities Obtain sufficientappropriateauditevidenceregardingthe achieves fairpresentation. underlying transactionsandeventsinamannerthat and whethertheFinancialStatementsrepresent of theFinancialStatements,includingdisclosures, Evaluate theoverallpresentation,structureandcontent going concern. or conditionsmaycausetheGrouptoceasecontinueasa up to the date of our auditor’s report. However, future events Our conclusionsarebasedontheauditevidenceobtained or, ifsuchdisclosuresareinadequate,tomodifyouropinion. report totherelateddisclosuresinFinancialStatements exists, wearerequiredtodrawattentioninourauditor’s going concern.Ifweconcludethatamaterialuncertainty significant doubtontheGroup’sabilitytocontinueasa exists relatedtoeventsorconditionsthatmaycast audit evidenceobtained,whetheramaterialuncertainty the goingconcernbasisofaccountingand,basedon Conclude ontheappropriatenessofmanagement’suse disclosures madebymanagement. and thereasonablenessofaccountingestimatesrelated Evaluate theappropriatenessofaccountingpoliciesused controls oftheCompanyandGroup. of expressinganopinionontheeffectivenessinternal appropriate inthecircumstances,butnotforpurpose the auditinordertodesignproceduresthatare Obtain anunderstandingofinternalcontrolrelevantto override ofinternalcontrol. forgery, intentionalomissions,misrepresentations,orthe for oneresultingfromerror,asfraudmayinvolvecollusion, material misstatementresultingfromfraudishigherthan provide abasisforouropinion.Theriskofnotdetecting obtain auditevidencethatissufficientandappropriateto and performauditproceduresresponsivetothoserisks, Financial Statements,whetherduetofraudorerror,design Identify andassesstherisksofmaterialmisstatement
Colombo 28 February2019 report is1420. partner responsibleforsigningthisindependentauditor’s CA SriLankamembershipnumberoftheengagement by theCompany. our examination,properaccountingrecordshavebeenkept that wererequiredfortheauditand,asfarappearsfrom of 2007,wehaveobtainedalltheinformationandexplanations As requiredbysection163(2)oftheCompaniesActNo.07 Report onotherlegalandregulatoryrequirements communication. expected tooutweighthepublicinterestbenefitsofsuch the adverseconsequencesofdoingsowouldreasonablybe matter shouldnotbecommunicatedinourreportbecause when, inextremelyrarecircumstances,wedeterminethata regulation precludespublicdisclosureaboutthematteror describe thesemattersinourauditor’sreportunlesslawor current periodandarethereforethekeyauditmatters.We significance intheauditofFinancialStatements governance, wedeterminethosemattersthatwereofmost From thematterscommunicatedwiththosecharged independence, andwhereapplicable,relatedsafeguards. matters thatmayreasonablybethoughttobearonour and tocommunicatewiththemallrelationshipsother accordance withtheCodeofEthicsregardingindependence, statement thatwehavecompliedwithethicalrequirementsin We alsoprovidethosechargedwithgovernancea
Independent Auditors’Report Financial Reports 113
Sri Lanka Telecom PLC | Annual Report 2018 114 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports The Notesonpages119to173 formanintegralpartoftheseFinancialStatements. (all amountsinSriLankarupeesmillion) OTHER COMPREHENSIVE INCOME STATEMENT OF PROFIT OR LOSS AND Revenue For theyearended31December Direct costs Gross profit Sales andmarketingcost Administrative cost Operating profit Other income Interest expenseandfinancecosts Dividend income Foreign exchange(loss)/gain Interest income Profit beforetax Share oflossfromassociatescompany Income taxexpenses Defined benefitplanactuarial(losses)/gains reclassifiedtoprofitorlossinsubsequentperiod Other comprehensiveincomethatwillnotbe Profit fortheYear Tax onothercomprehensiveincome Net movementoncashflowhedges toprofitorlossinsubsequentperiod Other comprehensiveincomethatmaybereclassified Other comprehensiveincome Other comprehensiveincomefortheyearnetoftax Total ComprehensiveIncomefortheyear Owners oftheCompany Profit Attributableto: Owners oftheCompany Total comprehensiveIncomeattributableto: – Basic(LKR) Earnings pershare
Notes 9.a 10 11 26 11 12 13 6 7 7 7 9 (44,803) (19,663) 81,445 36,642 (9,366) (1,809) (2,221) 7,613 7,169 4,948 4,388 4,948 4,388 2018 (239) (672) (560) 2.74 947 685 125 (28) (13) Group – (43,218) (18,778) 75,741 32,523 (9,827) (1,588) 3,918 1,207 1,040 5,528 3,940 4,328 3,940 4,328
2017 (159) (478) (155) 2.18 543 388 – – (28,263) (13,176) 47,389 19,126 (4,109) (1,200) (1,236) 1,841 1,551 3,142 1,906 1,296 1,906 1,296 2018 (672) (610) 1.06 628 443 Company (93) (28) (23) 85 (26,492) (13,389) 44,537 18,045 (4,398) 1,059 2,129 1,428 1,826 1,428 1,826 2017 (471) (701) (155) 0.79 258 733 562 553 398 (12) – – Group ChiefFinancial Officer Sanjeewa Samaranayake of 2007. in compliancewiththerequirements oftheCompaniesActNo.07 I certifythattheseFinancialStatements havebeenprepared Financial Statements. The Notesonpages119to173formanintegralpartofthese (all amountsinSriLankaRupeesmillion) STATEMENT OF FINANCIAL POSITION Retained earnings Total equity Equity attributabletoequityholdersoftheCompany Hedging reserve Total currentassets Total currentliabilities Trade andotherpayables Current taxliabilities Contract liabilities Total non-currentliabilities Trade andotherpayables Employee benefits Deferred incometaxliabilities Contract liabilities Deferred income Borrowings Grants Non-current liabilities Liabilities Non-controlling interest Insurance reserve Stated capital Capital andreserves Equity Total assets Cash andcashequivalents Other investments Contract assets Current taxreceivable Trade andotherreceivables Inventories Current assets Total non-currentassets Other receivables Contract assets Total liabilities Deferred income Borrowings Current liabilities Deferred incometaxassets Property, plantandequipment Non-current assets Assets Total equityandliabilities Investments inassociates Investments insubsidiaries Intangible assetsandgoodwill As at31December Notes 24 (b) 24 (b) 24 (a) 24(b) 12 25 25 26 23 24 22 28 27 29 21 17 20 19 18 24 22 23 14 16 16 15 21 February 2019 Chairman Director P GKumarasinghe Sirisena Signed forandbehalfoftheBoard, the BoardofDirectorson21February 2019 Statements. TheseFinancialStatements wereapprovedby The BoardofDirectorsisresponsiblefortheseFinancial 180,435 135,058 106,715 123,850 180,435 55,456 73,720 73,624 45,377 31,983 38,886 18,049 11,089 27,340 52,378 54,337 16,949 1,941 4,239 6,537 2,186 3,665 2,173 2,970 2,469 7,652 2018 (672) 791 412 497 613 565 548 438 148 96 Group
– – – 159,206 128,158 117,035 159,206 52,569 71,404 71,309 31,048 28,450 14,920 18,049 20,731 57,885 29,917 26,891 87,802 4,277 2,444 4,355 5,956 2,239 1,844 1,035 3,161 3,150 2,143 7,861 2017 691 401 95 84 28 – – – – – – 3 Nilanthi Pieris(Ms) 138,525 114,588 138,525 39,972 58,140 58,140 23,937 20,230 30,928 18,049 17,541 36,190 44,195 15,104 80,385 96,047 14,366 3,598 6,525 2,155 3,569 1,440 2,938 1,124 2018 (672) Company 791 671 456 103 613 471 533 113 385 – – – – – Financial Reports 133,574 109,881 133,574 40,480 59,220 59,220 23,693 22,501 14,492 18,049 17,854 47,455 26,899 24,486 74,354 91,453 14,206 1,035 3,719 5,945 2,208 1,780 2,228 3,127 1,067 2017 691 796 532 468 28 – – – – – – – – 3 115
Sri Lanka Telecom PLC | Annual Report 2018 116 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports (all amountsinSriLankaRupeesmillion) The Notesonpages 119to173formanintegral partoftheseFinancialStatements. STATEMENT OF CHANGES IN EQUITY – GROUP SLFRS 15Adjustment Non-controlling interest Net profitfortheyear2018 Total comprehensiveincomefortheyear Balance asat1January2018 Balance asat1January2017 Net movementoncashflowhedges Other comprehensiveincome Non-controlling interest Total Othercomprehensiveincome actuarial(loss)/gain,netoftax Defined benefitplan Total comprehensiveincomefortheyear Total othercomprehensiveincome actuarial(loss)/gain,netoftax Defined benefitplan Other comprehensiveincome Net profitfortheyear2017 Total comprehensiveincomefortheyear Total comprehensiveincomefortheyear Transfer toinsurancereserve Insurance reserve Dividends toequityshareholders contribution byanddistributiontoowners directly inequity Transactions withowners,recorded Balance asat31December 2018 Dividends toequityshareholders contribution byanddistributiontoowners recordeddirectlyinequity Transactions withowners, Balance asat31December2017 Transfer toinsurancereserve Insurance reserve
Notes Notes 27 27 Stated 18,049 18,049 capital 18,049 18,049 Stated capital – – – – – – – – – – – – – – – – – Insurance reserve Insurance AttributabletoownersoftheCompany reserve AttributabletoownersoftheCompany 691 791 100 – – – – – – – – 680 691 11 11 – – – – – – – – Hedging reserve Retained (672) (672) earnings 49,858 52,569 – – – – – – – – – (1,606) 4,328 3,940 388 388 (11) Retained earnings – 52,569 55,456 (1,606) 4,948 5,060 (467) (100) 112 112 – – 68,587 71,309 (1,606) equity 4,328 3,940 Total 388 388 71,309 73,624 equity (1,606) 4,948 4,388 – – – Total (467) (672) (560) 112 – – controlling controlling interest Non- interest 95 95 Non- 91 – – – – – 4 4 95 96 – – – – – – – – 1 68,678 71,404 71,404 73,720 (1,606) equity (1,606) equity 3,940 4,332 4,948 4,388 Total Total (467) (672) (560) 388 388 112 – – – 4 1 TheNotesonpages119to173 formanintegralpartoftheseFinancialStatements. (all amountsinSriLankaRupeesmillion) STATEMENT OF CHANGES IN EQUITY – COMPANY Transfer toinsurancereserve Insurance reserve Dividends toequityshareholders contribution byanddistributiontoowners Transactions withowners,recordeddirectlyinequity Balance asat31December2018 Total comprehensiveincomefortheyear Total othercomprehensiveincome Defined benefitplanactuarial(loss)/gain,netoftax Net movementoncashflowhedges Other comprehensiveincome Net profitfortheyear2018 Total comprehensiveincomefortheyear Balance asat31December2017 SLFRS Adjustment–Contractliability Transfer toinsurancereserve Insurance reserve Dividends toequityshareholders contribution byanddistributiontoowners Transactions withowners,recordeddirectlyinequity Total comprehensiveincomefortheyear Total othercomprehensiveincome Defined benefitplanactuarial(loss)/gain,netoftax Other comprehensiveincome Net profitfortheyear2017 Total comprehensiveincomefortheyear Balance asat1January2018 Balance asat1January2017 Notes 18,049 18,049 Stated capital Notes – – – – – – – 27 Insurance reserve 18,049 18,049 Stated capital 100 791 691 – – – – – – – – – – – – Hedging Insurance reserve reserve (672) (672) (672) 691 680 11 11 – – – – – – – – – – Retained earnings Retained earnings 39,972 40,480 (1,606) 40,480 40,271 1,296 1,906 (1,606) 1,826 1,428 (100) (672) (770) 398 398 62 62 62 62 (11) Financial Reports 58,140 59,220 equity (1,606) 59,220 59,000 1,296 1,906 Total (1,606) equity 1,826 1,428 (610) (672) Total (770) 398 398 62 62 – – 117
Sri Lanka Telecom PLC | Annual Report 2018 118 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports TheNotesonpages119to173 formanintegralpartoftheseFinancialStatements. (all amountsinSriLankaRupeesmillion) CASH FLOW STATEMENT Cash generatedfromoperations Cash flowsfromoperatingactivities Fortheyearended31December Interest received Interest paid Tax paid Gratuity paid Net cashgeneratedfromoperatingactivities Acquisition ofproperty,plantandequipment Cash flowsfrominvestingactivities Acquisition ofintangibleassets property,plantandequipment Proceeds fromdisposalof Proceeds/(Purchase) ofshort-terminvestments Net cash(used)ininvestingactivities Investments inassociatescompany Investments insubsidiarycompany Proceeds fromborrowings Cash flowsfromfinancingactivities Finance leaseprincipalre-payments Re-payment ofborrowings Dividends paidtotheequityshareholders generatedfromfinancingactivities Net cash(used) (Decrease)/increase incashandequivalents beginningoftheyear Cash andcashequivalentsatthe Movement incashandequivalents cashequivalents Effect ofexchangefluctuationoncashand (Decrease)/increase incashandequivalents At theendofyear
Notes 21.a 30 26 15 (20,527) (22,890) (13,550) 24,052 19,656 32,142 16,909 13,675 13,675 (3,145) (1,284) (1,806) (1,606) (9,046) (9,046) 4,629 (654) (889) 2018 687 332 (77) Group – – – (22,049) (27,415) (13,866) 21,734 18,224 16,242 (2,989) (1,238) (4,974) (1,065) (1,606) (8,435) (8,435) (9,046) 1,039 (322) (616) (611) 2017 701 756 (28) (14) – 5 (12,817) (14,757) (11,316) (11,610) (11,610) 14,903 11,340 23,050 10,060 (3,190) (1,774) (1,606) (4,967) 6,643 6,643 (257) (561) (312) (160) 2018 445 306 Company (68) – – (18,057) (18,851) (11,610) 13,693 10,977 13,798 (2,665) (1,062) (9,644) (1,606) (5,381) (6,234) (6,229) (5,381) 2,493 (307) (305) (383) 2017 561 679 (28) (55) 5 – except forthefollowingitem: made forinflationaryfactorsaffectingthefinancialstatements cost basisappliedconsistentlywithnoadjustmentsbeing The FinancialStatementshavebeenpreparedonthehistorical (c) Basisofmeasurement Directors on21February2019. Board ofDirectorsinaccordancewiththeresolution The FinancialStatementswereauthorisedforissuebythe by Directors (b) Approval ofFinancialStatement Companies ActNo.07and2007. Accountants ofSriLanka(ICASL)andtherequirements (SLFRS &LKAS)aslaiddownbyTheInstituteofChartered prepared inaccordancewithSriLankaAccountingStandards of changesinequityandstatementcashflowshavebeen of profitorlossandothercomprehensiveincome,statement which comprisesthestatementoffinancialposition, The FinancialStatementsoftheGroupandCompany (a) Statement ofcompliance 2. Basisofpreparation Company whichislistedontheColomboStockExchange. provision ofmanpower.TheCompanyisaquotedpublic maritime transmission,IPTVservice,directorypublishingand international leasedcircuits,broadband,satelliteuplink, inter-alia, voiceandbroadbandservices,domestic the rangeofservicesprovidedbyGroupinclude, telecommunication servicesacrossSriLanka,Inaddition, The Groupprimarilyisinvolvedinprovidingbroadportfolioof financial yearwhichendson31December2018. all CompanieswithintheGrouparepreparedforacommon individually as“Groupentities”).TheFinancialStatementsof and itssubsidiaries(togetherreferredtoasthe“Group” for theyearendedDecember2018compriseCompany Consolidated FinancialStatementoftheCompanyasatand Financial StatementsrelatestoSriLankaTelecomPLC.The registered officeisLotusRoad,Colombo1.TheSeparate domiciled inSriLanka.TheaddressoftheCompany’s Sri LankaTelecomPLC(the“Company”)isacompany 1. Reportingentity (all amountsinSriLankaRupeesmillion) FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED have beenpreparedonagoingconcernbasis. the definedbenefitobligation.TheFinancialStatements actuarially valuedandrecognisedatthepresentvalueof The liabilityfordefinedbenefitobligationrecognisedare
y y y y y y the FinancialStatementsisincludedinfollowingnotes: have themostsignificanteffectonamountsrecognisedin and criticaljudgmentsinapplyingaccountingpoliciesthat Information aboutsignificantareasofestimationuncertainty in anyfutureperiodsaffected. recognised intheperiodwhichestimatesarerevisedand an ongoingbasis.Revisionstoaccountingestimatesare Estimates andunderlyingassumptionsarereviewedon differ fromtheseestimates. of assets,liabilities,incomeandexpenses.Actualresultsmay application ofaccountingpoliciesandthereportedamounts make judgments,estimatesandassumptionsthataffectthe Sri LankaAccountingStandardrequiresmanagementto The preparationofFinancialStatementsinconformitywith (e) Useofestimates andjudgements unless otherwiseindicated. presented inrupeeshasbeenroundedtothenearestmillion, the Group’spresentationcurrency.Allfinancialinformation Rupees, whichistheCompany’sfunctionalcurrencyand These FinancialStatementsarepresentedinSriLankan (d) Functionalandpresentation currency y y y y y y Note 26–EmployeeBenefits Note 24–DeferredIncome Note 23–DeferredTax Note 20–TradeandotherReceivables Note 15–IntangibleAssets Note 14–Property,plantandequipment
Financial Reports 119
Sri Lanka Telecom PLC | Annual Report 2018 120 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports amounts aregenerallyrecognisedinprofitorloss. related tothesettlementofpre-existingrelationships.Such The considerationtransferreddoesnotincludeamounts securities. as incurred,exceptifrelatedtotheissueofdebtorequity profit orlossimmediately.Transactioncostsareexpensed impairment. Anygainorbargainpurchaseisrecognisedin acquired. Anygoodwillthatarisesistestedannuallyfor measured atfairvalue,asaretheidentifiablenetassets The considerationtransferredinacquisitionisgenerally acquisition methodwhencontrolistransferredtotheGroup. The Groupaccountsforbusinesscombinationsusingthe (i) BusinessCombinations (a) Basisofconsolidation 2018 asdescribedinNote3(x). except newaccountingstandardseffectivefrom1January and havebeenappliedconsistentlybytheGroupentities, consistently toallperiodspresentedinfinancialstatements, The accountingpoliciessetoutbelowhavebeenapplied 3. Significantaccountingpolicies eChannelling PLC SLT Campus(Private)Limited SLT PropertyManagement(Private)Limited Sky Network(Private)Limited SLT HumanCapitalSolutions(Private)Limited SLT DigitalInfoServices(Private)Limited SLT VisionCom(Private)Limited Sri LankaTelecom(Services)Limited Mobitel (Private)Limited Name ofentity Notes totheconsolidatedfinancialstatements Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka Colombo/Sri Lanka incorporation country of Place ofbusiness/ in profitorloss. in thefairvalueofcontingentconsiderationarerecognised is accountedforwithinequity.Otherwise,subsequentchanges is classifiedasequity,thenitnotremeasuredandsettlement consideration that meets the definition of a financial instrument the dateofacquisition.Ifanobligationtopaycontingent Any contingentconsiderationismeasuredatfairvalue accounting policies (ii-a) CriticalJudgementsinapplyingtheentity’s commences untilthedateonwhichcontrolceases. entity. Thefinancialstatementsfromthedateonwhichcontrol the abilitytoaffectthosereturnsthroughitspowerover variable returnsfromitsinvolvementwiththeentityandhas Group controlsanentitywhenitisexposedto,orhasrights Subsidiaries areentitiesthatcontrolledbytheGroup.The (ii) Subsidiaries 31 December2018 Set outbelowarethegroup’sprincipalsubsidiariesasat (ii-b) Interestinsubsidiaries subsidiaries asdepictedinNote(ii-b),below: subsidiaries asithasmajoritycontrolandvotingrightsoverits The directorshaveconcludedthattheGroupcontrolsall
Percentage of ownership 99.94% 99.99% 87.59% 100% 100% 100% 100% 100% 100% industry infrastructure forthehealthcare Providing information and BusinessManagement. Higher educationalservicesofICT resources Managing SLT’srealestate Wireless broadbandoperations Providing workfocesolutions. publication services Directory informationand Providing IPTVsupportservices. businesses. corporate customersandsmall Providing networksolutionsfor Mobile serviceprovider. Principal activities
in whichsubstantiallyallrisks andrewardsofownershipthe the rightstoreceivecontractual cashflowsinatransaction rights tothecashflowsfrom theassetexpire,orittransfers The Groupderecognisesafinancial assetwhenthecontractual recognised onthetradedate. All otherfinancialassetsandliabilitiesareinitially debt securitiesissuedonthedatewhentheyareoriginated. The Groupinitiallyrecognisesloansandreceivables liabilities –Recognitionandderecognition (i) Non-derivativefinancialassetsand other financialliabilitiescategory. The Groupclassifiesnon-derivativefinancialliabilitiesinto the receivables andavailable-for-salefinancialassets. profit orloss,held-to-maturityfinancialassets,loansand following categories:financialassetsatfairvaluethrough The Groupclassifiesnon-derivativefinancialassetsintothe (C) Financialinstruments translated. measured basedonhistoricalcostinaforeigncurrencyarenot other comprehensiveincome.Non-monetaryitemsthatare are generallyrecognisedinstatementofprofitorlossand fair valuewasdetermined.Foreigncurrencydifferences into thefunctionalcurrencyatexchangeratewhen are measuredatfairvalueinaforeigncurrencytranslated at thereportingdate.Non-monetaryassetsandliabilitiesthat translated intothefunctionalcurrencyatexchangerate assets andliabilitiesdenominatedinforeigncurrenciesare exchange ratesatthedateoftransaction.Monetary respective functionalcurrenciesofGroupcompaniesatthe Transactions inforeigncurrenciesaretranslatedintothe (i) Foreigncurrencytransactions (b) Foreign currency eliminated. income andexpensesarisingfromintra-grouptransactions,are Intra-group balancesandtransactionsanyunrealised (v) Transactioneliminatedonconsolidation control islost. interest intheformersubsidiaryismeasuredatfairvaluewhen Any resultinggainorlossisrecognisedinprofitloss. related NCI(ifapplicable)andothercomponentsofequity. derecognises theassetandliabilitiesofsubsidiaryany When thegrouplosescontroloverasubsidiary,it (iv) Lossofcontrol control areaccountedforasequitytransactions. the groupinterestinasubsidiarythatdonotresultlossof identifiable netassetsatthedateofacquisition.Changesin NCI aremeasuredattheirproportionateshareofacquiree’s (iii) Non-controllinginterest(NCI)
Notes totheconsolidatedfinancialstatements realise theassetandsettleliabilitysimultaneously. amounts andintendseithertosettlethemonanetbasisor when, andonlytheGrouphasalegalrighttooffset net amountpresentedintheStatementofFinancialPosition Financial assetsandfinancialliabilitiesareoffsetthe contractual obligationsaredischargedorcancelled,expire. The Groupderecognisesafinancialliabilitywhenits Group isrecognisedasaseparateassetorliability. derecognised financialassetsthatiscreatedorretainedbythe retain controloverthetransferredasset.Anyinterestinsuch substantially allrisksandrewardsofownershipdoesnot financial assetaretransferred,oritneithertransfersnorretains at amortisedcostusingtheeffectiveinterestmethod. Subsequent toinitialrecognition,theseliabilitiesaremeasured fair valuelessanydirectlyattributabletransactioncosts. Non-derivative financialliabilitiesareinitiallyrecognisedat (i-ii) Non-derivativefinancialliabilities–Measurement market dataorthetransaction isclosedout. than whenthevaluationissupported whollybyobservable appropriate basisoverthelifeofinstrumentbutnotlater model issubsequentlyrecognisedinprofitorlossonan this priceandthevalueinitiallyobtainedfromavaluation measured atthetransactionpriceandanydifferencebetween value atinitialrecognition,thefinancialinstrumentisinitially When transactionpriceprovidesthebestevidenceoffair 5. 4. 3. 2. 1. the following: A Fairvaluemeasurementrequiresanentitytodetermineall date. transactions betweenmarketparticipantsatthemeasurement to sellandassetorpaidtransferaliabilityinanorderly SLFRS 13definesfairvalueasthepricethatwouldbereceived (i-iii) FairValueMeasurement observable markettransactionsormarket. specific measurement.Forsomeassetsandliabilities, Fair valueisamarket-basedmeasurement,notanentity- which theinputsarecategorised. or liabilityandtheleveloffairvaluehierarchywithin that marketparticipantswouldusewhenpricingtheasset which todevelopinputsthatrepresenttheassumptions measurement, consideringtheavailabilityofdatawith The valuationtechnique(s)appropriateforthe or liability. The principal(ormostadvantageous)marketfortheasset highest andbestuse). appropriate forthemeasurement(consistentlywithits For anon-financialasset,thevaluationpremisethatis measurement. The particularassetorliabilitythatisthesubjectof Financial Reports
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Sri Lanka Telecom PLC | Annual Report 2018 122 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports to holdtheassetsforforeseeablefutureoruntilmaturity. date ofreclassificationandtheGrouphasintentability would havemetthedefinitionofaloanandreceivableat the category totheloanandreceivableswherethey Financial assetsaretransferredoutoftheavailablefor-sale future oruntilmaturity. the intentandabilitytoholdassetsforforeseeable receivable atthedateofreclassificationandGrouphas and theywouldhavemetthedefinitionofaloan for thepurposeofsellingorrepurchasinginnearterm loan andreceivablescategory,wheretheyarenolongerheld purpose ofsellingorrepurchasinginthenearterm;to where, inrarecircumstances,theyarenolongerheldforthe the followingcircumstances:toavailable-for-salecategory, out oftheheldatfairvaluethroughprofitorlosscategoryin Held fortradingnon-derivativefinancialassetsaretransferred categories arenotpermittedfollowinginitialrecognition: below, oroffinancialliabilitiesbetweenmeasurements Reclassifications offinancialassets,otherthanassetout (i-iv) Reclassification maturity amount,minusanyreductionforimpairment. any differencebetweentheinitialamountrecognisedand cumulative amortisationusingtheeffectiveinterestmethodof recognition, minusprincipalrepayments,plusorthe at whichthefinancialassetorliabilityismeasuredinitial The amortisedcostofafinancialassetorliabilityistheamount Amortised Cost – – – specific instrument. factors, pricingassumptionandotherrisksaffectingthe depending onliquidity,concentration,uncertaintyofmarket is lessobjectiveandrequiresvaryingdegreesofjudgment trade infrequentlyandhavelittlepricetransparency,fairvalue the useofvaluationtechniques.Forfinancialinstrumentsthat liabilities forwhichthereisnoobservablemarketpricerequires The determinationoffairvalueforfinancialassetsand Determination ofFairvalues data (i.e.,unobservableinputs). asset orliabilitythatarenotbasedonobservablemarket Level 3–Fairvaluemeasurementsusinginputsforthe indirectly (i.e.,derivedfromprices);and for theassetorliability,eitherdirectly(i.e.,asprices) quoted pricesincludedwithinLevel1thatareobservable Level 2–Fairvaluemeasurementsusinginputsotherthan liabilities; (unadjusted) inactivemarketsforidenticalassetsor Level 1–Fairvaluemeasurementsusingquotedprices Notes totheconsolidatedfinancialstatements
interest method. over theremaininglifeoffinancialasset,usingeffective to thedateofreclassificationisamortisedprofitorloss or lossonthoseassetsrecognisedinshareholder’sequityprior available-for-sale categoryintoloansandreceivables,anygain of reclassification.Forfinancialassetsreclassifiedoutthe Financial assetsarereclassifiedattheirfairvalueonthedate prior totheirmaturity. other thananinsignificantamountofheld-to-maturityassets category iftheportfoliobecomestaintedfollowingsaleof Held-to-maturity assetsarereclassifiedtotheavailable-forsale profit orloss. at fairvalueandchangesthereinaregenerallyrecognisedin Subsequent toinitialrecognition,derivativesaremeasured of ProfitorLossandOtherComprehensiveIncomeasincurred. attributable transactioncostsarerecognisedinthestatement Derivatives areinitiallyrecognisedatfairvalue;anydirectly interest rateriskexposure. The Groupholdsderivativefinancialinstrumentstohedgeits (i-v) Derivative financialinstruments evidence ofimpairment. or prolongeddeclineinitsfairvaluebelowcostisobjective In addition,foraninvestmentinequitysecurity,asignificant – – – – – – Objective evidencethatfinancialassetsareimpairedincludes; there isobjectiveevidenceofimpairment. loss, areassessedateachreportingdatetodeterminewhether Financial assetsnotclassifiedatfairvaluethroughprofitor Non-derivative financialassets. (i-vi) Impairment financial assets. decrease intheexpectedcashflowsfromagroupof Observable dataindicatingthatthereisameasurable the disappearanceofanactivemarketforasecurity;or issuers; adverse changesinthepaymentstatusofborrowersor indications thatadebtororissuerwillenterbankruptcy; the Groupwouldnotconsiderotherwise; restructuring ofanamountduetotheGroupontermsthat default ordelinquencybyadebtor; or amortisation, ifnoimpairmentlosshadbeen recognised. amount thatwould havebeendetermined,net ofdepreciation that theasset’scarryingamount doesnotexceedthecarrying other assets,animpairmentloss isreversedonlytotheextent An impairmentlossinrespect ofgoodwillisnotreversed.For of theotherassetsinCGU onaproratabasis. allocated totheCGUandthen toreducethecarryingamounts allocated firsttoreducethe carrying amountofanygoodwill Impairment lossesarerecognisedinprofitorloss.They asset orCGUexceedsitsrecoverableamount. An impairmentlossisrecognisedifthecarryingamountof an specific totheassetorCGU. market assessmentsofthetimevaluemoneyandrisks present valueusingapre-taxdiscountratethatreflectscurrent based ontheestimatedfuturecashflows,discountedtotheir value inuseanditsfairlesscoststosell.Value is The recoverableamountofanassetorCGUisthegreater its expected tobenefitfromthesynergiesofcombination. combination isallocatedtoCGUsorgroupsofthatare of otherassetsorCGUs.Goodwillarisingfromabusiness continuing usethatarelargelyindependentofthecashinflows smallest groupofassetsthatgeneratescashinflowsfrom For impairmenttesting,assetsaregroupedtogetherintothe estimated. Goodwillistestedannuallyforimpairment. indication exists,thentheasset’srecoverableamountis whether thereisanyindicationofimpairment.Ifsuch property, inventoriesanddeferredtaxassets)todetermine amounts ofitsnon-financialassets(otherthaninvestment At eachreportingdate,theGroupreviewscarrying Non-financial assets financial assets Available-for-sale amortised cost measured at Financial assets
is reversedthroughstatementofprofitorloss;otherwise,itOCI. objectively toaneventoccurringaftertheimpairmentlosswasrecognised,then impaired available-for-saledebtsecuritysubsequentlyincreasesandtheincreasecanberelated recognised inStatementofProfitorLossandOtherComprehensiveIncomeIfthefairvaluean repayment andamortisation)thecurrentfairvalue,lessanyimpairmentlosspreviously Income. Theamountreclassifiedisthedifferencebetweenacquisitioncost(netofanyprincipal accumulated inthefairvaluereservetoStatementofProfitorLossandOtherComprehensive Impairment lossesonavailable-for-salefinancialassetsarerecognisedbyreclassifyingthe Other ComprehensiveIncome. the previouslyrecognisedimpairmentlossisreversedthroughStatementofProfitorLossand decrease canberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,then relevant amountsarewrittenoff.Iftheamountofimpairmentlosssubsequentlydecreasesand account. WhentheGroupconsidersthattherearenorealisticprospectsofrecoveryasset, original effectiveinterestrate.Lossesarerecognisedinprofitorlossandreflectedanallowance carrying amountandthepresentvalueofestimatedfuturecashflowsdiscountedatasset’s suggested byhistoricaltrends.Animpairmentlossiscalculatedasthedifferencebetweenanasset’s economic andcreditconditionsaresuchthattheactuallosseslikelytobegreaterorlesserthan on thetimingofrecoveriesandamountlossincurred,makesanadjustmentifcurrent similar riskcharacteristics.Inassessingcollectiveimpairment,theGroupuseshistoricalinformation assessed forimpairment.Collectiveassessmentiscarriedoutbygroupingtogetherassetswith but notyetindividuallyidentified.Assetsthatareindividuallysignificantcollectively found nottobeimpairedarethencollectivelyassessedforanyimpairmentthathasbeenincurred collective level.Allindividuallysignificantassetsareindividuallyassessedforimpairment.Those The Groupconsidersevidenceofimpairmentfortheseassetsatbothanindividualassetanda Notes totheconsolidatedfinancialstatements of eachpart anitemofproperty,plantand equipment. loss onastraight-linebasisover theestimatedusefullives less itsresidualvalue.Depreciation isrecognisedinprofitor is thecostofanasset,orother amountsubstitutedforcost, Depreciation iscalculatedover thedepreciableamount,which (iii) Depreciation plant andequipmentarerecognised inprofitorloss. reliably. Thecostsoftheday-to-dayservicingproperty, the partwillflowtoGroupanditscostcanbemeasured is probablethatthefutureeconomicbenefitsembodiedwithin equipment isrecognisedinthecarryingamountofitem ifit The costofreplacingpartanitemproperty,plantand (ii) Subsequentcosts (major components)ofproperty,plantandequipment. different usefullives,theyareaccountedforasseparateitems When partsofanitemproperty,plantandequipmenthave capitalised aspartofthatasset. is integraltothefunctionalityofrelatedequipment condition fortheirintendeduse.Purchasedsoftwarethat costs directlyattributabletobringingtheassetsaworking includes thecostofmaterialsanddirectlabouranyother acquisition oftheasset.Thecostself-constructedassets Cost includesexpenditurethatisdirectlyattributabletothe losses. less accumulateddepreciationandimpairment Items ofproperty,plantandequipmentaremeasuredatcost (i) Recognitionandmeasurement (d) Property, plantandequipment Financial Reports 123
Sri Lanka Telecom PLC | Annual Report 2018 124 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports substantial period oftimetogetreadyforits intendeduseor construction or productionofanassetthatnecessarily takesa Borrowing costdirectlyattributable totheacquisition, (vi) Borrowingcost amount ofthepreviouscost inspectionsisderecognised. capitalised. Ateachsuchcapitalisation, theremainingcarrying replaced partisderecognised. Majorinspectioncostsare Plant andEquipment,theremainingcarryingamountof are recognisedinthecarryingamountofanitemproperty, and OtherComprehensiveIncome.Whenreplacementcosts net within“otherincome”inthestatementofProfitorLoss amount ofproperty,plantandequipmentarerecognised by comparingtheproceedsfromdisposalwithcarrying an itemofproperty,plantandequipmentaredetermined is derecognisedondisposal.Gainsandlossesdisposalof The carryingamountofanitemproperty,plant&equipment (v) Derecognition and equipment. used inconnectionwithspecificitemsofProperty,plant to usethemduringmorethanoneyearperiodandare as Property,plantandequipmentwhentheentityexpects Major sparepartsandprojectrelatedinventoryqualify awaiting capitalisation. buildings, majorplantandmachinerysystemdevelopment, of acapitalnaturedirectlyincurredintheconstruction Capital work-in-progressisstatedatcost.Theseareexpenses (iv) CapitalWork-in-Progress The estimatedusefullivesfortheassetsareasfollows: reviewed ateachreportingdateandadjustedifappropriate Depreciation method,usefullivesandresidualvaluesare the endofleaseterm.Landisnotdepreciated. it isreasonablycertainthattheGroupwillobtainownershipby over theshorterofleasetermandtheirusefullivesunless particular assetwasdisposed.Leasedassetsaredepreciated and nodepreciationwillbechargedtothemonthinwhich proportionate basisfromthemonthassetisputintouse In theyearofacquisitiondepreciationiscomputedon Network equipment Other FixedAssets IT systems PABX System CDMA Handsets Motor Vehicles Submarine cables Freehold buildings Towers andtransmissionequipment Telephone exchanges Ducts, cablesandotheroutsideplant Notes totheconsolidatedfinancialstatements
12.5-40 years 8-12.5 years 19-25 years 5-20 years 4-10 years 5-10 years 5-40 years 1-6 years 3 years 5 years
an entityincursinconnectionwiththeborrowingoffunds. occur. Borrowingcostsconsistofinterestandotherthat All otherborrowingcostsareexpensedintheperiodthey sale arecapitalisedaspartofthecostrespectiveassets. (ii) Otherintangibleassets losses. Goodwill ismeasuredatcostlessaccumulatedimpairment Subsequent measurement initial recognition,seenote3(a)(i). included inintangibleassets.Formeasurementofgoodwillat Goodwill thatarisesupontheacquisitionofsubsidiariesis Goodwill arisesontheacquisitionofsubsidiaries. (i) Goodwill (e) Intangibleassets the Group’sstatement ofFinancialPosition. For operatingleases,theleased assetsarenotrecognisedon accounting policyapplicable to thatasset. recognition, theassetisaccounted forinaccordancewiththe value oftheminimumleasepayments. Subsequenttoinitial an amountequaltothelower ofitsfairvalueandthepresent leases. Uponinitialrecognition theleasedassetismeasuredat the risksandrewardsofownershipareclassifiedasfinance Leases intermsofwhichtheGroupassumessubstantiallyall (f) Leasedassets periods areasfollows: The estimatedusefullivesforthecurrentandcomparative than goodwill,fromthedatethattheyareavailableforuse. basis overtheestimatedusefullivesofintangibleassets,other Amortisation isrecognisedinprofitorlossonastraight-line (v) Amortisation as incurred. on internallygeneratedgoodwillisrecognisedinprofitorloss which itrelates.Allotherexpenditure,includingexpenditure the futureeconomicbenefitsembodiedinspecificassetto Subsequent expenditureiscapitalisedonlywhenitincreases (iv) Subsequentexpenditure line basis. and isbeingamortisedovertheLicenceperiodonastraight relate to more than one financial year is classified as licence fee Expenditures onlicencefeesthatisdeemedtobenefitor Separately acquiredlicencesareshownathistoricalcost. (iii) Licences amortisation andaccumulatedimpairmentlosses. have finiteusefullives,aremeasuredatcostlessaccumulated Other intangibleassetsthatareacquiredbytheGroup,which Licence andspectrumfees Software
2-10 years 2-10 years salary ofeachemployeetothe Employees’TrustFund. The Companyandothersubsidiaries contribute3%ofthe Employees’ TrustFund salary andallowances. where thecompanycontribute15%ofsuchemployees’basic Limited aremembersofEmployees’ProvidentFund(EPF), and allowances.EmployeesofSri subsidiaries contribute12%ofsuchemployees’basicsalary Employees’ ProvidentFund(EPF),towhichtherespective All employeesofsubsidiariestheGrouparemembers 15% ofsuchemployees’basicsalaryandallowances. Telecom ProvidentFundtowhichtheCompanycontributes All employeesoftheCompanyaremembersSriLanka Employees’ ProvidentFund future paymentsisavailable. as anassettotheextentthatacashrefundorreductionin rendered byemployees.Prepaidcontributionsarerecognised expense inprofitorlosstheperiodsduringservicesis contribution planarerecognisedasanemployeebenefit pay furtheramounts.Obligationsforcontributionstodefined and theentitywillhavenolegalorconstructiveobligationto plan underwhichcontributionsaremadeintoaseparatefund A definedcontributionplanisapost-employmentbenefit (i) Definedcontributionplans Employee(j) benefits basis overtheusefullifeofasset. an assetarerecognisedintheprofitorlossonasystematic recognised. GrantsthatcompensatetheGroupforcostof systematic basisinthesameperiodswhichexpensesare and OtherComprehensiveIncomeasotherincomeona incurred arerecognisedinthestatementofProfitorLoss the grant.GrantsthatcompensateGroupforexpenses the Groupwillcomplywithconditionsassociated there isreasonableassurancethattheywillbereceivedand Government grantsarerecognisedinitiallyatfairvaluewhen (i) GovernmentGrants tax effects. options arerecognisedasadeductionfromequity,netofany directly attributabletotheissueofordinarysharesandshare Ordinary sharesareclassifiedasequity.Incrementalcosts Ordinary ShareCapital (h) Sharecapital condition. costs incurredinbringingthemtotheirexistinglocationand expenditure incurredinacquiring,conversioncostsandother weighted averagecostprinciple.Valueofinventoriesincludes realisable value.Thecostofinventoriesisbasedonthe Inventories aremeasuredatthelowerofcostandnet (g) Inventories L anka Telecom(Services) Notes totheconsolidatedfinancialstatements completion offiveyearscontinuedservice. Act No.12of1983,theliabilitytoanemployeearisesonlyon “Employee Benefits”.However,underthePaymentofGratuity year ofserviceforallemployees,inconformitywithLKAS19 Provision hasbeenmadeforretirementgratuitiesfromthefirst amount ofdefinedbenefitobligations. Any changesintheseassumptionswillimpactthecarrying the definedretirementbenefitobligationsaregiveninNote26. number ofassumptions.Keyassumptionsusedindetermining of factorsthataredeterminedonanactuarialbasisusinga value ofthedefinedbenefitobligationdependsonanumber respect ofaplaninothercomprehensiveincome.Thepresent and lossesthatariseincalculatingtheGroup’sobligation Company’s obligations.TheGrouprecognisesactuarialgains and havematuritydatesapproximatingtothetermsof using theyieldonGovernmentBondsatreportingdate determined bydiscountingtheestimatedfuturecashoutflows Benefits”. Thepresentvalueofthedefinedbenefitobligationis Unit CreditmethodasrecommendedbyLKAS19“Employee is calculatedbyanindependentactuaryusingProjected other thanadefinedcontributionplan.Thebenefit A definedbenefitplanisapost-employment (ii) Definedbenefitplans volume rebates. received orreceivable,netof returns, tradediscountsand activities ismeasuredatthefair valueoftheconsideration Revenue fromthesaleofgoods inthecourseofordinary (i) Goods (k) Revenue estimated reliably. provided bytheemployeeandobligationcanbe obligation topaythisamountasaresultofpastservice plans iftheGrouphasapresentlegalorconstructive to bepaidundershort-termcashbonusorleaveencashment is provided.Aliabilityrecognisedfortheamountexpected undiscounted basisandareexpensedastherelatedservice Short-term employeebenefitobligationsaremeasuredon an (iv) Short-term benefits estimated reliably. offer willbeaccepted,andthenumberofacceptancescan made anofferofvoluntaryredundancy,itisprobablethatthe redundancies arerecognisedasanexpenseiftheGrouphas voluntary redundancy.Terminationbenefitsfor termination benefitsasaresultofanoffermadetoencourage employment beforethenormalretirementdate,ortoprovide of withdrawal,toaformaldetailedplaneitherterminate Group isdemonstrablycommitted,withoutrealisticpossibility Termination benefitsarerecognisedasanexpensewhenthe (iii) Termination benefits Financial Reports
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Sri Lanka Telecom PLC | Annual Report 2018 126 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports the periodinwhichcustomer usestheservice. customers throughthesaleofprepaidcards,isrecordedin customers aspartoftheinvoicedamountorfromprepaid part ofaperiodicbillingcycle.Airtime,eitherfromcontract Mobile monthlyaccesschargesareinvoicedandrecorded as and theprovisionofothermobiletelecommunicationsservices. respect ofmonthlyaccesscharges,airtimeusage,messaging, Mobile revenuecomprisesamountschargedtocustomers in Mobile Revenue to theperiodofservicesrendered. rental isrecognisedasincomeonamonthlybasisinrelation revenue asservicesareperformedonaccrualbasis.Fixed Revenue forcalltimeusagebycustomersisrecognisedas Fixed Line and rentalincome Domestic andinternationalcallrevenue until provisionoftheservice. respect ofservicesinvoicedinadvance,amountsaredeferred in proportiontotheservicesdeliveredatreportingdate.In of greaterthan12monthsisrecognisedintheprofitandloss provided. Revenuefromservicecontractsthatcoverperiods Revenue fromservicesisrecognisedastheare (ii) Services a percentageofcompletionmethod. telephone directoryandacopydeliveredtothesubscriberon revenue isrecognisedonpublishingtheadvertisement Revenue frompublicationsalesrelatingtoadvertising Sale ofDirectories depending ontheindividualtermsofcontractsale. The timingofthetransfersrisksandrewardsvaries value ofthecomponents. components thatareseparablebasedontheestimatedfair equipment andongoingservice)isallocatedtothose generating activities(generallythesaleoftelecommunications total considerationonarrangementswithmultiplerevenue as areductionofrevenuethesalesarerecognised.The can bemeasuredreliably,thenthediscountisrecognised If itisprobablethatdiscountswillbegrantedandtheamount goods, andtheamountofrevenuecanbemeasuredreliably there isnocontinuingmanagementinvolvementwiththe costs andpossiblereturnofgoodscanbeestimatedreliably, recovery oftheconsiderationisprobable,associated and rewardsofownershiphavebeentransferredtothebuyer, form ofanexecutedsalesagreement,thatthesignificantrisks recognised whenpersuasiveevidenceexists,usuallyinthe Revenue fromsalesoftelecommunicationsequipmentis Equipment Sale Notes totheconsolidatedfinancialstatements
net oftaxes,rebatesanddiscounts. usage andthefixedrentalonamonthlybasiswhenitisearned Revenue fromDataservicesandIPTVisrecognisedon Revenue frombroadband in profitorloss. interconnection expensesrecognisedunderoperatingcosts is recognisedunderincomeintheIncomeStatementand and presentedongrossbasis.Therelevantrevenueaccrued recognised atthetimeoftransitacrossGroup’snetwork traffic betweenothertelecommunicationsoperatorsis Revenue arisingfromtheinterconnectionofvoiceanddata lease agreementsforfixedrentals. agreements andregulationsbasedonthetermsof the trafficminutes/persecondratesstipulatedinrelevant network arerecognised,netoftaxes,basedonusagetaking international, fortheuseofGroup’stelecommunication The revenuereceivedfromothernetworkoperators,localand international settlements Revenue fromothernetworkoperatorsand the connection isactivated. (CDMA) connectionsarerecognised asrevenueatthepoint The connectionfeesrelatingto CodeDivisionalMultipleAccess CDMA revenue period expires. until suchtimeasthesubscribers usetheservicesorcredit subscribers areinitiallyrecognisedasdeferredrevenue Sale ofmobilerechargecardsandreloadsforprepaid quota orthecreditexpires. such timeasthecustomerusescalltime,downloadable Revenue fromthesaleofprepaidCDMAcardsisdeferred until recorded asdeferredrevenue. of contracts.Amountsreceivedinadvanceforanyservices are capacity isrecognisedonastraightlinebasisovertheperiod Backhauling revenuewhichisleasingofSEA-ME-WE3cable recognised intheperiodcontractisterminated. future services,theremainingunamortiseddeferredrevenue is and releasestheCompanyfromobligationtoprovide customer terminatesanIRUpriortotheexpiryofcontract services arerecordedasdeferredrevenue.Intheeventthata period ofthecontracts.Amountsreceivedinadvanceforany capacity arerecognisedonastraightlinebasisoverthe IRU revenuerelatingtoleasingofSEA-ME-WE4cable date ofconnection. Revenue isrecognisedonanannualbasisirrespectiveofthe Network (PSTN)aredeferredoveraperiodof15years. The connectionfeesrelatingtoPublicSwitchTelephone Deferred income between theGroupandsubscribers. on anaccrualbasisbasedfixedrentalcontractsentered The revenuefromothertelephoneservicesarerecognised Revenue fromotherICTservices
comprehensive income. in equity,whichcaseitisrecognised inequityorother to theextentthatitrelates itemsrecogniseddirectly Income taxexpenseisrecognised inprofitorlossexcept Income taxexpensecomprises currentanddeferredtax. (o) Income tax payment isestablished. loss onthedatewhichGroup’srighttoreceive interest method.Dividendincomeisrecognisedinprofitor Interest incomeorexpenseisrecognisedusingtheeffective y y y y y y The Group’sfinanceincomeandcostinclude: (n) Finance income andexpenses asset. to theGrouprightcontroluseofunderlying conveys therighttouseassetifarrangement dependent ontheuseofthatspecificasset.Anarrangement is thesubjectofaleaseiffulfilmentarrangement such anarrangementisorcontainsalease.Aspecificasset At inceptionofanarrangement,theGroupdetermineswhether an arrangementcontainsalease. when theleaseadjustmentisconfirmed.Determiningwhether minimum leasepaymentsovertheremainingtermof Contingent leasepaymentsareaccountedforbyrevisingthe of theliability. constant periodicrateofinterestontheremainingbalance to eachperiodduringtheleasetermsoasproducea of theoutstandingliability.Thefinanceexpenseisallocated apportioned betweenthefinanceexpenseandreduction Minimum leasepaymentsmadeunderfinanceleasesare total leaseexpense,overthetermoflease. incentives receivedarerecognisedasanintegralpartofthe or lossonastraight-linebasisoverthetermoflease.Lease Payments made under operating leases are recognised in profit (m) Lease payments charged againstincomeinarrivingattheprofitforyear property, plantandequipmentinastateofefficiencyis incurred intheordinarycourseofbusinessandmaintaining The expensesarerecognisedonanaccrualbasis.All (l) Expenditure y y y y y y Foreign exchangegainsorlosses Interest expensearisingfromLeases Interest expensefromborrowings Staff loaninterestincome Interest incomefromfixeddeposits Interestincomefromrepurchaseagreements
Notes totheconsolidatedfinancialstatements on revenue. due tofactthattheincometaxesarecomputedandpaidat 2% No deferredtaxationisprovidedforMobitel(Private)Limited benefit willberealised. to theextentthatitisnolongerprobablerelatedtax assets arereviewedateachreportingdateandreduced its subsidiariesanddistributionofthoseprofits.Deferredtax as theParentCompanyhascontroloverdividendpolicy of is notrecognisedfortheundistributedprofitsofsubsidiaries which thetemporarydifferencecanbeutilised.Deferredtax probable thatfuturetaxableprofitswillbeavailableagainst A deferredtaxassetisrecognisedtotheextentthatit tax assetsliabilitieswillberealisedsimultaneously. settle currenttaxliabilitiesandassetsonanetbasisortheir taxable entityorondifferenttaxentities,buttheyintendto to incometaxesleviedbythesametaxauthorityon right tooffsetcurrenttaxliabilitiesandassets,theyrelate assets andliabilitiesareoffsetifthereisalegallyenforceable or substantivelyenactedbythereportingdate.Deferredtax when theyreverse,basedonthelawsthathavebeenenacted rates thatareexpectedtobeappliedtemporarydifferences recognition ofgoodwill.Deferredtaxismeasuredatthe for taxabletemporarydifferencesarisingontheinitial foreseeable future.Inaddition,deferredtaxisnotrecognised the extentthatitisprobabletheywillnotreversein loss anddifferencesrelatingtoinvestmentsinsubsidiaries and differencesrelatingtoinvestmentsinnortaxableprofitor and thataffectsneitheraccountingnortaxableprofitorloss liabilities inatransactionthatisnotbusinesscombination temporary differences:theinitialrecognitionofassetsor purposes. Deferredtaxisnotrecognisedforthefollowing financial reportingpurposesandtheamountsusedfortaxation between thecarryingamountsofassetsandliabilitiesfor Deferred taxisrecognisedinrespectoftemporarydifferences (ii) Deferredtaxation from 1April2018newIRDActNo.24of2017. provisions oftheInlandRevenueAct(IRD)No.102006and adjusted fortaxationpurposesinaccordancewiththe Provisions fortaxationisbasedontheprofityear comprehensive income. equity, inwhichcaseitisrecognisedequityorother the extentthatitrelatestoitemsrecogniseddirectlyin Income taxexpenseisrecognisedorprofitlossexceptto Income taxexpensecomprisescurrentanddeferredtax. (i) CurrentTaxation per therelevantprovisionin Act. carried forwardandsetoffagainst theincometaxpayableas from theincometaxliability.Any unclaimedpaymentcanbe 2006 andsubsequentamendments thereto,ESCisdeductible the provisionofEconomicServiceChargeActNo.13 ESC ispayableontheliableturnoveratspecifiedrates.As per (iii) Economicservicecharge(ESC) Financial Reports
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Sri Lanka Telecom PLC | Annual Report 2018 128 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports reclassified unlessitisimpracticable. Financial Statementsareamended,comparativeamounts period. Wherethepresentationorclassificationofitemsin the comparative informationisdisclosedinrespectoftheprevious Except whenastandardpermitsorrequiresotherwise, (s) Comparatives Directors, isapprovedbytheshareholders. dividend recommendedanddeclaredbytheBoardof Provision forfinaldividendsisrecognisedatthetime Company’s shareholders. in theperiodwhichdividendsareapprovedby recognised asaliabilityintheGroup’sFinancialStatements Dividend distributiontotheCompany’sshareholdersis (r) Dividenddistribution party insurer. except formotorvehicles,thatarenotinsuredwithathird losses arisingfromdamagetoproperty,plantandequipment, equipment. Theinsurancereserveismaintainedtorecoverany for potentiallossesfromuninsuredproperty,plantand invested inasinkingfundtomeetanyfundingrequirements and equipmenttoaninsurancereserve.Anequalamountis an amountequalto0.25%ofadditionsproperty,plant The Companytransfersannuallyfromtheretainedearnings (q) Insurance reserve of alldilutivepotentialordinaryshares. average numberofordinarysharesoutstandingfortheeffects attributable toordinaryshareholdersandtheweighted- Diluted EPSisdeterminatedbyadjustingtheprofitorloss outstanding duringtheperiod. company bytheweightedaveragenumberofordinaryshares profit orlossattributabletoordinaryshareholdersofthe its ordinaryshares.BasicEPSiscalculatedbydividingthe The GrouppresentsbasicEarningsPerShare(EPS)datafor (p) Earningspershare expense itemasapplicable. as partofthecostacquisitionassetor taxation authority,inwhichcasethesalestaxisrecognised purchase ofassetsorservicesisnotrecoverablefromthe amount ofsaletax,except:wheresalestaxincurredona Revenue, expensesandassetsarerecognisednetofthe (iv) Salestax Notes totheconsolidatedfinancialstatements statements. have beenmadeinrespectivenotestothefinancial considered andwhereappropriate,adjustmentsordisclosures All materialeventsafterthereportingdatehavebeen (u) Events after thereporting period call andshortnotice. hand, balanceswithbanks,placementsmoneyat change invalue.Thecashandequivalentinclude amounts ofcashandaresubjecttoaninsignificantrisk highly liquidinvestmentsthatarereadilyconvertibletoknown Cash Flows”.andequivalentscompriseshort-term, the SriLankaAccountingStandard(LKAS07)–“Statementof “indirect method”ofpreparingcashflowsinaccordancewith The cashFlowStatementhasbeenpreparedusingthe (t) Cashflow statement is determined. Company’s FinancialStatements whenthechangeinestimate change inanasset’slifeorresidual valueisreflectedinthe useful life,therebyincreasingdepreciationexpense.Any in excessoftheresidualvalueoverrevisedremaining residual valuereduced,itdepreciatesthenetcarryingamount property, plantandequipmentshouldbeshortenedor Where theCompanydeterminesthatusefullifeof residual valuesdifferingfrominitialestimates. the assetsconcernedcouldresultinactualusefullives or prospective economicutilisationandphysicalconditionof Changes incircumstancessuchastechnologicaladvances, of actualassetlivesandtheintendeduseforthoseassets. property, plantandequipmentbasedonperiodicstudies The Companyassignsusefullivesandresidualvaluesto (i) Depreciationofproperty,plantandequipment about theeffectofmattersthatareuncertain. judgements, oftenasaresultoftheneedtomakeestimates These particularpoliciesrequiresubjectiveandcomplex to thepresentationofitsfinancialperformanceandposition. accounting policies,whicharethosethatmostimportant following discussionaddressestheCompany’smostcritical assumptions andconditions.TheDirectorsconsiderthatthe may differsignificantlyfromthoseestimatesunderdifferent performance andthefinancialpositionofGroup.Results estimates andassumptionshavebeenmaderelatingtothe In thepreparationoftheseFinancialStatements,anumber assumptions andjudgements (w) Criticalaccounting estimates, Financial Statements. The BoardofDirectorsthecompanyisresponsibleforthese (v) Directors’ responsibility statement SLFRS 9,exceptforfollowing changesinaccountingpolicies. presentation forallperiodspresented, duetotheadoptionof No materialeffecttothefinancial statementrecognitionand accounting. classification andmeasurement; impairment;andhedge three aspectsoftheaccountingforfinancialinstruments: beginning onorafter1January2018,bringingtogetherall Instruments: RecognitionandMeasurementforannualperiods SLFRS 9FinancialInstrumentsreplacesLKAS39 SLFRS 9FinancialInstruments January 2018. applicable forthefinancialperiodsbeginningonorafter1 the followingnewSriLankaAccountingStandardswhichare The InstituteofCharteredAccountantsSriLankahasissued (x) New accounting standards condition mayresultinloweractualwrite-offs. improves ordeteriorates.Animprovementinfinancial may berequiredifthefinancialconditionofitscustomers historical write-offexperienceetc.Changestotheprovision accounts, customercredit-worthinessandtheCompany’s payments. Theprovisionisbasedontheageingofcustomer from thefailureorinabilityofcustomerstomakerequired receivables reflectstheCompany’sestimatesoflossesarising The provisionforimpairmentlossestradeandother (iv) Valuationofreceivables provided bythirdparties. respect ofincomereceivedfromtransmissioncontent includes presentationofrevenueasprincipaloragentin principles ofrevenuerecognitioninrespectrevenues.This Judgement isrequiredinassessingtheapplicationof (iii) Revenuerecognition require significantjudgement. recoverable amountforassetsorcashgeneratingunits of futurecashflowsandthedetermination The identificationofimpairmentindicators,theestimation (d) (c) (b) (a) an impairmentreviewincludethefollowing: Factors thatareconsideredimportantandwhichcouldtrigger recoverable orotherwiseasrequiredbyaccountingstandards. in circumstancesindicatethatthecarryingvaluemaynotbe equipment andintangibleassetswhenevereventsorchanges The Companyassessestheimpairmentofproperty,plantand intangible assets (ii) Impairmentofproperty,plantandequipment for itsoverallbusiness; significant changesintheuseofitsassetsorstrategy historical orprojectedfutureoperatingresults; significant underperformancerelativetoexpected environments; significant changesintechnologyandregulatory obsolescence orphysicaldamage;
Notes totheconsolidatedfinancialstatements Group’s financialliabilitiesduetotheadoptionofSLFRS9. There arenochangesinclassificationandmeasurementforthe receivables andotherinvestments. in theStatementsoffinancialpositionastradeandother financial assetsatamortisedcost.Theareincluded hold tocollectcontractualcashflows,theyareclassifiedas Since financialassetsoftheGroupmeetSPPIcriteriaand and financialassetsatamortisedcost. value throughOCIwithrecyclingofcumulativegainsorlosses accordingly classifiedasfinancialassetsdesignatedfair and interest’(SPPI)ontheprincipalamountoutstanding contractual cashflowsrepresent‘solelypaymentsofprincipal model formanagingtheassets;andwhetherinstruments’ instruments arebasedontwocriteria:TheGroup’sbusiness instruments. AsperSLFRS9theclassificationofdebt Group’s financialinstrumentssolelyconstitutewithdebt (i) Classificationandmeasurement Income Statement. other comprehensiveincomeisimmediatelytransferredto the expected tooccurthecumulativegains/losswasreported in income statement.Whenaforecasttransactionisnolonger hedge forecasttransactionultimatelyrecognisedinthe in othercomprehensiveincomeandisrecognisedwhenthe existing inothercomprehensiveincomeatthattimeremains criteria forhedgeaccounting,anycumulativegains/losses terminated, exercisedorwhenahedgenolongermeetthe Statement. Whenahedginginstrumentexpires,orissold, the correspondingincomeorexpenselineofIncome the gainorlossonhedginginstrumentisrecordedin When thehedgecashflowaffectIncomeStatement, instrument isrecognisedimmediatelyintheProfitandLoss. The ineffectiveportionofthegainsorlossesonhedge recognised directlyinequitythe“Cashflowhedgereserve”. portion ofthegainorlossonhedginginstrumentisinitially For designatedandqualifyingcashflowhedges,theeffective (iii) Hedge considered aslowriskofdefault. Investments infixeddeposits,TreasuryBillsandBondsare and theeconomicenvironment. adjusted forforward-lookingfactorsspecifictothedebtors matrix thatisbasedonitshistoricalcreditlossexperience, each reportingdate.TheGrouphasestablishedaprovision instead recognisesalossallowancebasedonlifetimeECLsat Therefore, theGroupdoesnottrackchangesincreditrisk,but simplified approachincalculatingECLs. For tradereceivablesandcontractassets,theGroupappliesa (ii) Impairmentassessmentonfinancialassets Financial Reports 129
Sri Lanka Telecom PLC | Annual Report 2018 130 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports customer atan amountthatreflectstheconsideration towhich control ofthegoodsorservices aretransferredtothe Revenue fromcontractswith customers isrecognisedwhen transmission, IPTVserviceand directorypublishingservice. leased circuits,broadband,satellite uplink,maritime alia, voiceandbroadbandservices, domesticandinternational the rangeofservicesprovided bytheGroupinclude,inter of telecommunicationservicesacrossSriLanka.Inaddition, The Groupisprimarilyinvolvedinprovidingabroadportfolio period hasbeendisclosedinNote24. method ofadoption.Theeffectthetransitiononcurrent The GroupadoptedSLFRS15usingthemodifiedretrospective requires relevantdisclosures. directly relatedtofulfillingacontract.Inaddition,theStandard the incrementalcostsofobtainingacontractand customers. TheStandardalsospecifiestheaccountingfor when applyingeachstepofthemodeltocontractswiththeir consideration alloftherelevantfactsandcircumstances SLFRS 15requiresentitiestoexercisejudgement,takinginto exchange fortransferringgoodsorservicestoacustomer. the considerationtowhichanentityexpectsbeentitledin requires thatrevenueberecognisedatanamountreflects account forrevenuearisingfromcontractswithcustomersand its customers.SLFRS15establishesafive-stepmodelto limited exceptions,toallrevenuearisingfromcontractswith 18 Revenueandrelatedinterpretationsitapplies,with SLFRS 15supersedesLKAS11ConstructionContracts, SLFRS 15–Revenuefromcontracts is, asfollows: A reconciliationbetweenthecarryingamountsunderLKAS39tobalancesreportedSLFRS9asof31December2018 Cash andbankbalance Fixed deposits Staff loans Trade andotherreceivables Loans andreceivables Company Cash andbankbalance Repurchase agreements Fixed deposits Staff loans Trade andotherreceivables Group Financial assets Notes totheconsolidatedfinancialstatements L&R L&R L&R L&R L&R L&R L&R L&R L&R Category LKAS 39measurement principal initsrevenuearrangements. or services.TheGrouphasgenerallyconcludedthatitisthe the Groupexpectstobeentitledinexchangeforthosegoods any creditterms. equipment attheirownexpense. Thissaledoesnotinvolve the servicebyinstallingadvanced customerpremises provided bytheGroupsince the customercouldenhance This equipmentissoldseparately tothebundledservices the equipment. customer andtheGroupdoesnothaveanycontrolover this stage,equipmentisconsideredasanassetofthe the customer,generallyondeliveryofequipment.After at thepointintimewhencontrolofassetistransferred to Under SLFRS15,revenuefromsaleofequipmentisrecognised individual termsofthecontractsale. of thetransfersrisksandrewardsvariesdependingon the amountofrevenuecanbemeasuredreliably.Thetiming no continuingmanagementinvolvementwiththegoodsand possible returnofgoodscanbeestimatedreliably,thereis of theconsiderationisprobable,associatedcostsand ownership havebeentransferredtothebuyer,recovery sales agreement,thatthesignificantrisksandrewardsof persuasive evidenceexists,usuallyintheformofanexecuted telecommunications equipmentisrecognisedwhen Before adoptingSLFRS15,revenuefromsaleof Sale ofequipment LKR Mn. Amount
17,675 25,274 3,569 3,617 3,163 2,135 9,456 3,650 671 Amount 17,675 25,274 3,569 3,617 3,163 2,135 9,456 3,650 671 Reclassification as perSLFRS9 Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Amortised Cost Category
services tothecustomer. consistent withtheentity’stransferofrelatedgoodsor that wouldbeamortisedonasystematicbasisis paid toemployeesforeachnewcontractasasset Under SLFRS15,theGroupidentifiessalescommission new connectionwerechargedasexpensetheyincurred. Before adoptingSLFRS15,thesalescommissionrelevantfor new connectioncontractthattheyobtain. The Grouppayssalescommissiontoitsemployeesforeach Cost toobtainacontract a givenmonth. and whentherelevantperformanceobligationisfulfilledfor The Groupexpectsthattheserevenuesarerecognisedas customer intherespectivemonth. on monthlybasisdependingtheusageofserviceby The Groupchargeavariableusagefromthecustomer telecommunication service. premises equipmentinordertoprovidethe on monthlybasisfortheuseofGroupsubsidisedcustomer The Groupchargeafixedrentalfromthecustomer Rental andusagecharge services. allocates abundledpricefortheequipmentandinstallation the contractwithcustomerisvalid.Accordingly,Group equipment isconsideredasanassetoftheGrouplong premises equipmentisprovidedtothecustomer,this to installationserviceisperformedandwhenacustomer Under SLFRS15,whentheperformanceobligationrelevant installation serviceswereidentifiedastheyincurred. Before adoptingSLFRS15,therevenuegeneratedfrom together withthesaleofequipmenttoacustomer. The Groupprovidesinstallationservicesthatarebundled Installation services would besatisfiedthroughouttheconnectionperiod. The Groupexpectsthattheaboveperformanceobligations provided throughouttheconnectionperiod. and theuninterruptedtelecommunicationservicewhichwillbe the installationservicesandmaintenanceprovided performance obligationrelatedtoservicecontractsinclude As atelecommunicationserviceprovider,theGroup’s Performance obligationsrelevanttocontracts
Notes totheconsolidatedfinancialstatements the customerovercontractperiod. satisfaction fortheinstallationserviceswillbeconsumedby goods orservicestothecustomerwithnotionthat basis thatisconsistentwiththeentity’stransferofrelated contract liabilityandrecognisetherevenueonasystematic The Groupidentifiestherevenueforinstallationservicesas benefits oftheGroup’sperformanceasitperforms. that thecustomersimultaneouslyreceivesandconsumes installation thattheGrouphasprovidedtodatedemonstrates The factthatanotherentitywouldnotneedtore-performthe receives andconsumesthebenefitsprovidedbyGroup. be recognisedovertimebecausethecustomersimultaneously The Groupconcludedthatrevenueforinstallationservicesisto installation services Determining thetimingofsatisfaction of from contractswithcustomers. affect thedeterminationofamountandtimingrevenue The Groupappliedthefollowingjudgementthatsignificantly Judgements provided below. before 1January2018.Thecontractassetmovementsare contracts whichischargedtostatementofProfitorLoss the contractassetrepresentingexistingcustomer The openingbalanceasat1stJanuary2018indicates as anexpenditurewhenincurred. Company identifytheadditionalcostofacquiringacontract amortization periodisoneyearorless,theGroupand charged totheStatementofProfitorLoss.However,if performance obligations.Previously,thesecostsweredirectly on asystematicbasisinlinewiththeachievementof contracts arerecognizedascontractassetsandamortized As perSLFRS15,thecostsdirectlyattributabletocustomer (1) ContractAssets 1 January2018 Opening adjustment– Addition Amortisation Balance asat31December2018
LKR Mn. Group (350) 515 770 935 Financial Reports Company LKR Mn. (100) 212 104 216
131
Sri Lanka Telecom PLC | Annual Report 2018 132 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports of SLFRS15. Company andGroup’sRetainedEarningsfromtheapplication The followingisasummaryoftransitionadjustmentstothe (3) RetainedEarnings performance obligationsasat1January2018. The figureshowsthecontractliabilitiesduetounsatisfied previously shownasdeferredincometocontractliabilities. The groupandCompanyreclassifycustomercontracts the relativestand-alonesellingprice. allocated betweenseparateperformanceobligationsbasedon The totalconsiderationreceivedorreceivablehasbeen performance obligationsspecifiedinacontractaresatisfied. As perSLFRS15revenueisrecognisedwhentheindividual (2) ContractLiabilities Recognition ofcontractassets 1 January2018 Opening adjustment– Recognition ofcontractliabilities Addition as at1January2018 Impact totheretainedearnings Amortisation Balance asat31December2018 Notes totheconsolidatedfinancialstatements
LKR Mn. LKR Mn. Group Group 1,113 (982) (467) (537) 515 982 668 Company Company LKR Mn. LKR Mn. 1,004 (982) (770) (490) 212 982 512 from theapplicationofSLFRS15. Company andGroup’sRevenueSellingMarketingcost The followingisasummaryofthetransitionadjustmentsto Other ComprehensiveIncome (4) ImpacttotheStatementofProfitandLoss Statements resultingfromtheapplicationofSLFRS16. The GroupisassessingthepotentialimpactonitsFinancial Possible impactonthefinancialstatements after 1January2019. The standardiseffectiveforannualperiodbeginningonor Form ofalease. Evaluating theSubstanceofTransactionsInvolvingLegal a Leases,SIC-15OperatingLeaseIncentiveandSIC-27 Leases, IFRIC4DeterminingwhetheranArrangementcontains SLFRS 16replacesexistingleasesguidanceincludingLKAS17 finance oroperatingleases. current standard-i.e.lessorscontinuetoclassifyleaseas of lowvalueitems.Lessoraccountingremainssimilartothe There areoptionalexemptionsforshort-termleasesand liability representingitsobligationtomakeleasepayments. representing itsrighttousetheunderlyingassetandalease model forlessees.Alesseerecognisesaright-of-useasset SLFRS 16introduceasingle,on-balanceleasesheetaccounting SLFRS 16–Leases of itsFinancialStatementsresultingfromtheirapplication. 1 January2019.TheGrouphasnotassessedthepotentialimpact applicable forthefinancialperiodsbeginningonorafter the followingnewAccountingStandardswhichwillbecome The InstituteofCharteredAccountantsSriLankahasissued reporting date New standardsissuedbutnoteffectiveasat SLFRS 15 As per Adjustment LKAS 18 As per Revenue LKR Mn. 82,160 81,445 (715) Group Selling and marketing LKR Mn. (10,089) (9,366) cost 723 Revenue LKR Mn. 47,408 47,389 (19) Company Selling and marketing LKR Mn. (4,113) (4,109) cost 4 sales areusedasameansofmitigatingcreditrisk. for theInternationalInterconnectcustomer.Further,Prepaid established toevaluateandrecommendthecreditworthiness to minimisethecreditrisk.Aseparatecommitteehasbeen International InterconnectcustomersandDomestic The Grouphavingaverywell-establishedcreditpolicyfor both 4.1.1 Tradereceivables credit exposure Carrying amountoffinancialassetsrepresentsthemaximum receivables fromcustomers. contractual obligation,andariseprincipallyfromtheGroup’s or counterpartytoafinancialinstrumentfailsmeetits Credit riskistheoffinanciallosstoGroupifacustomer 4.1 Credit Risk included throughouttheseFinancialStatements. Management ofcapital.Furtherquantitativedisclosuresare processes formeasuringandmanagingrisktheGroup’s each oftheaboverisks,Group’sobjectives,policiesand This notepresentsinformationabouttheGroup’sexposureto y y y financial instruments: The Grouphasexposuretothefollowingrisksfromitsuseof which arereportedtotheAuditCommittee. of riskmanagementcontrolsandprocedures.Theresults Committee isassistedinitsoversightrolebyinternalreviews risk managementframeworkinrelationtotherisks.TheAudit guidelines andprocedures,reviewstheadequacyof compliance withtheGroup’sriskmanagementprocesses/ The AuditCommitteeoverseeshowManagementmonitors Group activities. regularly toreflectchangesinmarketconditionsandthe adherence tolimits.Riskmanagementsystemsarereviewed appropriate risklimitsandcontrols,tomonitorrisks to identifyandanalysetherisksfacedbyGroup,set The Group’sriskmanagementprocessesareestablished framework. establishment andoversightoftheGroup’sriskmanagement The BoardofDirectorshasoverallresponsibilityforthe 4. FinancialRiskManagement y y y Market risk Liquidity risk Credit risk Notes totheconsolidatedfinancialstatements for tradebygeographicregionwasasfollows: As at31December2018,theMaximumexposuretocreditrisk monitored individually. generated customersincludingcorporateare defaulted customerstominimisethecreditrisk.Highrevenue recovery actionsaretakenfortheoverduecustomersand they reachedthethresholdlimit.Creditcontrolactionsand voice customersaresubjectedtoautodisconnectionwhen periodically revisedasperthepastmonthlybillvalue.Highrisk are monitoredasperthecreditlimit.Creditlimitwillbe average monthlybillvalue.Customerusageandpayments to thesegmentsandcreditlimithasbeenfixedaspertheir minimise thecreditrisk.Customersarecategorisedaccording has awell-establishedcreditcontrolpolicyandprocessto scrutinising throughainternalblacklisteddatabase.Thegroup Domestic serviceisofferedtoanewcustomeronlyafter (2017 –LKR421Mn.) which accountedforLKR1,104 Mn.oftradereceivables Lanka GovernmentInformationInfrastructure(Private)Limited As at31DecembertheGroup’smostsignificantcustomer was for tradereceivablesbytypeofcounterpartywasasfollows: As at31December2018,themaximumexposuretocreditrisk LKR Mn. customers Wholesale LKR Mn. Sri Lanka customers Retail Middle East Others Asia Europe Australia Other receivables Total trade 21,851 18,257 25,274 25,274 3,905 3,112 1,354 1,480 2018 2018 188 249 152 Group Group 20,225 17,107 23,270 23,270 3,582 2,581 1,268 1,164 2017 2017 285 262 66 66 15,378 13,393 17,670 17,670 3,816 1,176 2018 2018 117 461 726 222 Company Company 51 51 Financial Reports 14,500 12,597 16,763 16,763 3,468 1,007 2017 2017 223 698 799 180 54 54 133
Sri Lanka Telecom PLC | Annual Report 2018 134 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports trade receivablesduringtheyearisasfollows: The Movementintheallowanceforimpairmentrespectof customer creditrisk. on historicalpaymentbehaviourandextensiveanalysisof past duemorethan2yearsarestillcollectibleinfull,based Management believesthattheunimpairedamountsare were notimpairedwasasfollows: As at31December2018,theagingoftradereceivablesthat Impairment 31December2018 Balance asat – Adjustments – Amountswrittenoff – Impairmentlossrecognised Balance asatDecember2017 – Amountswrittenoff – Impairmentlossrecognised Balance asat1January2017 LKR Mn. Past due1year LKR Mn. and above 2 years Past due
Notes totheconsolidatedfinancialstatements 2018 574 127 701 Group 2017 171 267 impairment 96 96 Group 8,890 1,166 9,321 1,653 7,669 (900) (697) (1) 2018 353 121 474 Company impairment Company 5,492 6,483 1,086 5,397 2017 (900) (697) 169 606 73 73 96 96 – and managedbythetreasurydivision. Short andmedium-termrequirementsareregularlyreviewed the sameisreviewedonanannualbasis. to assessfundingadequacyforatleasta12-monthperiodand supplemented byafinancialheadroomanalysiswhichisused both shortandlong-termcashforecasts.Theseforecastsare Group determinesitsliquidityrequirementsbytheuseof support operationalandotherfundingrequirements.The in short,mediumandlong-termfinancialinstrumentsto The Groupensuresitsliquidityismaintainedbyinvesting damage totheGroup’sreputation. conditions, withoutincurringunacceptablelossesorrisking meet itsliabilitieswhendue,underbothnormalandstressed far aspossible,thatitwillalwayshavesufficientliquidityto The Group’sapproachtomanagingliquidityisensure,as that aresettledbydeliveringcashoranotherfinancialasset. in meetingtheobligationsassociatedwithitsfinancialliabilities Liquidity riskisthethatGroupwillencounterdifficulty 4.2 LiquidityRisk from theemployeesEPFbalance. salary, oriftheemployeeleavessuchamountsarerecovered loan balancearerecoveredfromtheemployeesmonthly The Grouplimitsitsexposuretocreditriskbyensuringthe 4.1.4 EmployeeLoans at 31December2018(2017LKR4,277Mn.). The GroupheldcashandequivalentsofLKR10,935Mn.as 4.1.3 Cashandequivalents with selectedbankersBoardapproval. Government DebtSecurities,Reposandinshort-termdeposits The Grouplimitsitsexposuretocreditriskbyinvestingonlyin 4.1.2 Otherinvestments and undiscounted: The followingaretheremainingcontractualmaturitiesoffinancialliabilitiesatreportingdate.amountsgross Lease liabilities Bank borrowingsandothers Bank overdrafts As at31December2018 Company LKR Mn. Lease liabilities Vendor financing Bank borrowingsandothers Bank overdrafts As at31December2018 Group LKR Mn. Lease liabilities Bank borrowingsandothers Bank overdrafts As at31December2017 Lease liabilities Vendor financing Bank borrowingsandothers Bank overdrafts As at31December2017 Notes totheconsolidatedfinancialstatements Carrying Carrying 40,392 46,032 26,502 12,406 38,978 47,764 55,835 26,525 13,323 41,811 5,638 1,528 6,460 1,803 value value 160 70 70 83 83 2 15,104 12,013 12,406 24,486 16,949 12,036 13,323 26,891 Up to1 Up to1 9,464 5,638 9,479 6,460 1,432 year year 982 100 67 67 28 28 2 Up to2 Up to2 5,018 5,018 6,285 6,288 8,710 8,998 6,285 6,587 years years 245 268 34 34 43 – – – – – – – 3 – Up to5 16,285 16,285 Up to5 19,950 20,263 6,564 6,564 6,564 6,693 years years 301 103 26 26 12 – – – – – – Financial Reports – – Over 5 Over 5
9,625 9,625 1,640 1,640 9,625 9,625 1,640 1,640 years years – – – – – – – – – – – – 135
Sri Lanka Telecom PLC | Annual Report 2018 136 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports to foreigncurrencywasasfollows: The summaryofquantitativedataabouttheGroup’sexposure currency inflowsforservicessettledinforeigncurrencies. for repaymentsofforeigncurrencyloansandserviceswith mechanism toacertainextentbymatchingcurrencyoutflows The Groupmanagesitscurrencyriskbyanaturalhedging currency otherthantheSriLankanRupees(LKR). services receivedandborrowingsthataredenominatedina The Groupisexposedtocurrencyriskonservicesprovided, 4.3.1 Currencyrisk acceptable parameters,whileoptimisingthereturn. is tomanageandcontrolmarketriskexposureswithin financial instruments. The objective of market risk management will affecttheGroup’sincomeorvalueofitsholdings foreign exchangerates,interestratesandequitypriceswhich Market riskisthethatchangesinmarketprices,suchas 4.3 Market risk financialpositionexposure Net statementof Trade payables Unsecured loans Secured bankloans Foreign tradereceivables As at31December2017 financialpositionexposure Net statementof Trade payables Unsecured loans Secured bankloans Foreign tradereceivables As at31December2018
Notes totheconsolidatedfinancialstatements Group USD Mn. (108) (103) (96) (10) (56) (48) (13) (12) 20 20 18 18 during theyear: The followingsignificantexchangerateshavebeenapplied USD LKR exposure Net statementoffinancialposition Trade payables Unsecured loans Secured bankloans Foreign tradereceivables As at31December2017 exposure Net statementoffinancialposition Trade payables Unsecured loans Secured bankloans Foreign tradereceivables As at31December2018 EUR 191.71 162.54 Average rate 2018 171.73 152.40 2017
209.07 182.71 2018 spot rate Year end Company USD Mn. 191.18 153.23 (103) 2017 (49) (56) (96) 15 15 14 14
(7) (8) – – – – the loanagreement.TheGroupinterestratesensitivitywas the floorinterestrate(Minimum)of2.5%asstipulatedin Interest ratesensitivityoftheCompanywascomputedwithin decisions requireapprovalfromtheBoardofDirectors. treasury operationswhilelong-terminterestratemanagement Short-term interestratemanagementisdelegatedtothe rate CAP. SWAP andarrangementsarebeingmadetoobtainaninterests in themarket,Companyhasobtainedaninterestrate borrowings duetoanupwardmovementofUSDinterestrates To minimisetheadverseimpactofvariableinterestrate possible adverseimpactduetovolatilityoftheinterestrates. gap analysisiscarriedouttotaketimelyactionandmitigate and variableinterestrateinstrumentsperiodicalmaturity borrowings andinvestmentsaremaintainedinamixoffixed impacted bychangesintheinterestrates.TheGroup’s interest sensitiveassetsandliabilities,whicharedirectly, Interest rateriskmainlyarisesasaresultofGrouphaving 4.3.2 Interestraterisk that allothervariablesinparticularinterestratesremainconstant. A reasonablepossiblestrengthening(weakening)USDwouldhaveanimpactontheGroup’sborrowings.Thisanalysisassumes Sensitivity analysis 2018 DecemberUSD(10%) Group 2017 DecemberUSD(10%) 2018 DecemberUSD(10%) Company 2017 DecemberUSD(10%) Notes totheconsolidatedfinancialstatements sensitivity ofinterestratemovementisshownbelow: foreign currencyexchangerates,remainconstant.The This analysisassumesthatallothervariables,inparticular, computed basedona100basispointincreaseordecrease. Variablerateinstruments 2017 December Variablerateinstruments 2018 December Company Variablerateinstruments 2017 December Variablerateinstruments 2018 December Group LKR Mn. Strengthening (1,418) (2,064) 1,027 1,581 Profit orloss
Weakening (1,027) (1,581) 1,418 2,064 interestrate Strengthening Increase in (1,418) (2,064) Balance sheet 1,027 1,581 Profit orloss (182) (274) (181) (18) interestrate Financial Reports Decrease in Weakening (1,027) (2,064) (1,581) 1,418 181 182 274 18 18 137
Sri Lanka Telecom PLC | Annual Report 2018 138 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports as follows: The gearingratiosat31December2018and2017were to reducedebt. return capitaltoshareholders,issuenewsharesorsellassets may adjusttheamountofdividendspaidtoshareholders, In ordertomaintainoradjustthecapitalstructure,Group structure toreducethecostofcapital. other stakeholdersandtomaintainanoptimalcapital order toprovidereturnsforshareholdersandbenefits safeguard theGroup’sabilitytocontinueasagoingconcernin The Group’sobjectiveswhenmanagingcapitalareto ordinary shareholders. the returnoncapitalaswelllevelofdividendsto stated capitalandreservesTheBoardofDirectorsmonitors sustain futuredevelopmentofthebusiness.Capitalconsists to maintaininvestor,creditorandmarketconfidence The Board’spolicyistomaintainastrongcapitalbasesoas 4.4 Capitalmanagement Gearing ratio(%) Total capital Total equity Total borrowings Notes totheconsolidatedfinancialstatements
129,459 73,624 55,835 2018 43.1 Group 113,120 71,309 41,811 2017 37.0
104,172 58,140 46,032 Company 2018 44.2
98,198 59,220 38,978 2017 39.7
to otherentitiesthatoperatewithintheseindustries. relevant inevaluatingtheresultsofcertainsegmentsrelative management believesthatsuchinformationisthemost (BOD). Segmentprofitisusedtomeasureperformanceas reports thatarereviewedbytheBoardofDirectors profit beforetax.Asincludedintheinternalmanagement is includedbelow.Performancemeasuredbasedonsegment Information regardingtheresultsofeachreportablesegment y y y operations ineachoftheGroup’sreportablesegments. least quarterlybasis.Thefollowingsummarydescribesthe Maker-CODM) reviewsinternalmanagementreportsonat divisions, theBoardofDirectors,(theChiefOperatingDecision technology andmarketingstrategies.Foreachofthestrategic and aremanagedseparatelybecausetheyrequiredifferent strategic divisionsofferdifferentproductsandservices, below, whicharetheGroup’sstrategicdivisions.The The Grouphasthreereportablesegments,asdescribed 5. Operating segments y y y Segments in2018or2017. quantitative thresholdsfordeterminingreportable and supportservices.Noneofthesesegmentsmeetthe Other SegmentoperationsincludesDirectorypublication telecommunication services. Mobile ICToperationsincludessupplyofmobile telecommunication services. Fixed ICToperationsincludessupplyoffixed Information aboutreportable segments Consolidated profitbeforetax Elimination ofinter-segmentprofits Reportable segmentProfitbeforetax Profit orlossforothersegments Total Profitorlossforreportablesegments Profit orloss Consolidated revenue Elimination ofinter-segmentrevenue Reportable segmentrevenue Revenue forothersegments Total revenueforreportablesegments Revenues External revenues Inter-segment revenue revenue Reportable segment profitbeforetax Reportable segment Interest revenue Interest expenses amortisation Depreciation and assets Reportable segment Capital expenditure liabilities Reportable segment
138,525 (11,616) Fixed telephony 43,307 47,389 13,129 80,385 4,082 3,142 2018 operations 443 (93) 133,574 (11,121) 40,616 44,537 18,440 74,354 3,921 2,129 2017 562 (12) Mobile operations 36,739 38,881 56,395 27,524 (6,294) 2,142 4,404 8,158 (106) 2018 200 Notes totheconsolidatedfinancialstatements 34,037 36,499 43,601 17,948 (6,077) 2,462 4,113 8,531 (121) 2017 439 Other segments 1,399 3,257 4,656 2,982 2,235 2018 operations 340 129 (40) (38) 42 42 1,088 2,352 3,440 2,173 1,846 2017 135 (26) (89) 39 39 52 52 81,445 90,926 86,270 (9,481) 7,169 7,886 7,546 4,656 197,902 110,144 2018 (717) (17,948) 340 81,445 90,926 21,416 9,481 7,886 (239) 2018 685 Total Financial Reports 179,348 (17,287) 75,741 84,476 81,036 75,741 84,476 27,023 94,148 (8,735) 5,528 6,377 6,242 3,440 8,735 6,377 1,040 (849) (159) 2017 2017 135 139
Sri Lanka Telecom PLC | Annual Report 2018 140 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Information aboutreportable segments Consolidated totalliabilities Elimination ofinter-segmentliabilities Liabilities forothersegment Total liabilitiesforreportablesegments Liabilities Consolidated totalassets Elimination ofinter-segmentassets Assets forothersegments Depreciation andamortisation Capital expenditure Interest expense Interest revenue Other materialitems(2017) Depreciation andamortisation Capital expenditure Interest expense Interest revenue Other materialitems(2018) Total assetsforreportablesegments Assets Notes totheconsolidatedfinancialstatements Reportable segment (17,948) (17,287) 21,416 27,023 1,040 totals (239) (159) 685 Adjustments 106,715 110,144 107,909 180,435 197,902 194,920 (17,467) (3,429) 2,235 2,982 2018 – – – – – – – – – – – – – Consolidated 159,206 179,348 177,175 (17,948) (17,287) (20,142) 21,416 27,023 87,802 94,148 92,302 (6,346) 1,040 1,846 2,173 totals (239) (159) 685 2017 The followingitemshavebeenincludedinarrivingatoperatingprofit: 7. Operatingcosts The significantcategoriesunderwhichrevenueisrecognisedareasfollows: 6. Revenue Staff costs(Note7.1) Directors’ emoluments Payments tointernationalnetworkoperators – International Payments toothernetworkoperators – Domestic International TelecommunicationOperatorsLevy(Note 8) – Ernst&Young Audit Auditors’ remuneration – OtherAuditors Release ofdeferredconnectioncharges Rental income Domestic callrevenue Receipts fromothernetworkoperators–Domestic International callrevenue Receipts fromothernetworkoperators–International International settlements(in-payments) CDMA revenue Broadband revenue Data andotherservices Notes totheconsolidatedfinancialstatements 22,826 19,572 19,918 81,445 17,750 7,261 1,894 8,183 1,260 1,164 2,589 2,054 2018 2018 392 774 531 94 94 41 12 Group Group – 23,706 16,497 15,725 75,741 17,117 7,194 1,896 8,305 1,119 1,323 2,675 2,157 2017 434 960 112 912 2017 31 11 2 10,206 20,790 47,389 11,759 4,696 4,048 5,842 1,260 1,166 1,055 2018 2018 392 578 306 531 Company 735 Company – 16 – 7 Financial Reports 17,678 44,537 11,864 4,852 4,485 5,879 9,297 1,119 1,247 1,129 2017 434 597 403 912 2017 936 – 12 7 2 141
Sri Lanka Telecom PLC | Annual Report 2018 142 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports applicable forthe aboveperiodwasreceived onyear2014. reimbursement process,thefinalclaimrequested fromTRC received witheffectfromJuly 2010whileeliminatingthe under therespectiveregulation. Asthesaidregulationwas from April2009toJuly2010 which wasthelastclaimobtained The TDCRefundreceivedin2014 correspondstotheperiod development charges. the 2/3rdofTDCagainst the costsofnetwork defined insuchawaythatOperatorswereallowedtoclaim effective from3March2003whereinitiallythelevywas call minutesterminatedinthecountry.Thislevywasmade (TDC) totheGovernmentofSriLanka,basedoninternational levy definedastheTelecommunicationDevelopmentCharge Telecommunication GatewayOperatorsarerequiredtopay a In accordancewiththeFinanceActNo.11of2004,all Development Charge(TDC) 8. RefundsonTelecommunication 7.1 Staff costs – Ernst&Young Non-audit – OtherAuditors Repairs andmaintenanceexpenditure Provision fordoubtfuldebts Impairments/(reversals) ofinventory Impairment ofproperty,plantandequipment(Note13) Other operatingexpenditure Depreciation Amortisation and administrativecost Total directcosts,salesandmarketing Salaries, wages,allowancesandotherbenefits Staff prepaidcost – Definedcontributionplans Post-employment benefits – Definedbenefitobligations(Note26) Average numberofpersonsemployed Notes totheconsolidatedfinancialstatements
basis over10years, asdisclosedinNote34. Development Charge(TDC)in profitorlossonastraight-line Mobitel PrivateLimitedRecognises Telecommunications 2016 inaccordancewiththeBudget Proposalfor2016. again toUSDcents6.00perminute witheffectfromJanuary Budget Proposalfor2012and ITOLratewasfurtherrevised minute witheffectfromJanuary 2012,inaccordancewiththe until suchtimetheratewasrevisedtoUSDcents3.00per regulation. AsstatedabovetherevisedITOLrateprevailed the disbursementprocessofTDCwasremovedfrom cents 3.80toUSD1.50.Throughthesamerevision, Operators Levy(ITOL)TDCratechangefromUSD from 15July,2010withanInternationalTelecommunication First revisiontothisregulationwasintroducedwitheffect 23,590 16,850 73,832 15,600 17,750 10,242 6,530 1,127 1,097 1,381 2018 2018 (281) 108 661 40 Group Group 8 1 21,995 16,461 71,823 14,878 17,117 6,134 1,767 1,371 9,931 2017 2017 100 826 186 682 97 3 5 12,448 11,361 45,548 10,170 11,759 5,124 5,403 2018 2018 (281) 605 255 108 956 525 Company Company 29 8 1 10,954 10,926 44,279 10,097 11,864 4,446 1,266 5,576 2017 2017 100 195 186 988 593 68 3 5 iii. ii. i. mainly includes– (a) ForeignCurrency(loss)orgainofthegroup 9.a Foreign exchange (loss)/gain (b) Otherchargesmainlyincludeinterestcostoffinance (a) InterestcostoftheCompanyrelatestoUSDloansand 9. Interestexpenseandfinancecosts Net foreignexchange(loss)/gain Rupee loans[seeNote(a)below] Other charges[seeNote(b)below] Foreign currencyloans[seeNote(a)below] Total interestandfinancecost Debenture Interest capitalised Net totalinterestandfinancecost leases andoverdraftfacilities. other termloans. arising fromrevaluationofUSDsyndicateloanand Exchange lossofLKR1,198Mn.(2017–471Mn.) suppliers (2017–LKR70Mn.). Exchange lossofLKR944Mn.onpaymenttoforeign and bankbalancesmaintainedinUSD. arising fromrevaluationofthereceivables,fixeddeposits Exchange gainofLKR333Mn.(2017–63Mn.) loans, USDloansandvendorfinancing. Rupee loans.Interestcostofthegrouprelatestorupee
Notes totheconsolidatedfinancialstatements iii. ii. i. mainly includes– (b) ForeignCurrency(loss)orgainofthecompany arising fromrevaluationofUSDsyndicateloan. Exchange lossofLKR1,198Mn.(2017–455Mn.) suppliers (2017–lossLKR33Mn.). Exchange lossofLKR265Mn.onpaymenttoforeign balances maintainedinUSD. from revaluationofreceivables,fixeddepositsandbank Exchange gainofLKR263Mn.(2017–17Mn.)arising
(1,809) (4,035) 2,346 4,274 2018 2018 638 662 628 239 Group Group (2,650) 1,058 2,809 2017 2017 (478) 847 904 159 –
(1,200) (4,035) 2,271 4,128 2018 2018 627 628 602 93 Company Company Financial Reports (2,650) 1,038 2,662 2017 2017 (471) 834 790 12
143
Sri Lanka Telecom PLC | Annual Report 2018 144 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Tax recognisedinStatementofProfitorLoss 11. Incometaxexpenses (c) (b) TheweightedaverageinterestratesoninvestmentsinGovernmentSecuritieswas7.92%(2017–Nil). (a) The interestincomeonBankdepositsreflecttheprevailingratesdateofrespectiveinvestments. 10. Interestincome Current taxexpense Current year Treasury bonds Interest incomefrom: Tax ondividends Repurchase agreement–Repos Treasury bills Fixed deposits Staff loaninterest Origination andreversaloftemporarydifferences(Note 23) Deferred taxexpense Interest income–Debentureissue Tax losses Tax The weightedaverageinterestratesonstaffloansarebetween12%and15%(2017–14%). LKR was11.5%. Nil (2017–12.33%and8.65%)USDwas3.34%2.86%).TheweightedaverageinterestrateonBankdeposits in The weightedaverageinterestratesonrestrictedfundsinBankdepositsandGovernmentSecuritiesLKRwere12.08% expense Notes totheconsolidatedfinancialstatements 2,221 1,062 1,456 1,159 2018 2018 (297) 960 102 143 225 685 307 Group Group – 4 6 1,588 1,040 1,258 2017 2017 (636) 966 404 183 966 452 622 – – 1 – 1,236 1,509 1,212 2018 2018 (297) 111 443 306 Company Company 24 20 24 – – 6 – 1,283 2017 2017 (655) 701 108 562 451 628 73 73 – – –
3 – Reconciliation betweenincometaxexpensesandaccountingprofit Tax recognised inothercomprehensive income –Company Tax recognised inothercomprehensive income –Group Defined benefitplanactuarial(loss)/gain Accounting profitbeforetax Defined benefitplanactuarial(loss)/gain Non-taxable receipts/gains Aggregate disallowableexpenses Exempt profit Aggregate allowableexpenses Utilisation oftaxlosses Current yeartaxlossesnotutilised Concessionary rateof14% Standard rateof28% Other adjustments Taxable income Concessionary rateof10% Other rates Tax ondividendincome Tax oncurrentyearprofits Before Before 125 125 tax tax 85 85 Notes totheconsolidatedfinancialstatements (expense) 2018 (expense) benefit 2018 benefit Tax Tax (13) (13) Tax Tax (23) (23) (17,322) 14,858 7,169 4,828 1,062 2018 (628) (143) 649 116 844 102 Group – – Net of Net of 112 112 tax tax 62 62 (17,848) 14,492 5,528 2,236 4,307 2017 (730) (275) 845 966 Before 44 73 – Before 4 543 543 tax 553 553 tax (expense) (17,210) 14,469 (expense) 2017 benefit 3,142 2017 2018 (628) benefit 620 Company (47) (155) (155) 24 87 24 Tax – – – – (155) (155) Tax Financial Reports (17,811) 14,399 Net of 2,129 2,236 Net of 2017 (730) (223) 388 388 tax 73 73 398 398 – – – – – tax 145
Sri Lanka Telecom PLC | Annual Report 2018 146 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Current incometaxchargeoftheGroup/Companyismadeupasfollows: (b) (a) Net profitattributabletoequityholders(LKRMn.) Weighted averagenumberofordinarysharesinissue(Mn.) Basic earningspershare(LKR) Sri LankaTelecomPLC Mobitel (Private)Limited Sri LankaTelecom(Services)Limited SLT HumanCapitalSolutions(Private)Limited SLT DigitalInfoServices(Private)Limited SLT VisionCom(Private)Limited Sky Network(Private)Limited SLT PropertyManagement(Private)Limited SLT Campus(Private)Limited tax onbusinessprofit. In viewoftheaboveCompanyisnotliabletoincome may bespecifiedinacertificateissuedbytheBoard. commences commercialoperation,whicheverisearlieras two yearsreckonedfromthedateonwhichCompany to makeprofitsoranyyearofassessmentnotlaterthan reckoned fromtheyearinwhichCompanycommences For theabovepurposeyearofassessmentshallbe Limited isexemptfromincometaxforaperiodof6years. 17 ofBOIActNo.041978theSkyNetwork(Private) Sri Lanka(BOI)dated19November2009underSection As pertheagreementwithBoardofInvestement July 2009. turnover forafurtherperiodof15yearscommencingfrom1 turnover basedtaxoptioninwhich2%waschargedonthe per theagreement,Mobitel(Private)Limitedoptedfor Mobitel (Private)Limitedexpiredon30June2009andas No. 04of1978,15yearstaxexemptionperiodgrantedto Sri LankaunderSection17oftheBoardInvestmentAct February 2001enteredintowiththeBoardofInvestment Pursuant toagreementsdated15January1993and26 Notes totheconsolidatedfinancialstatements
below: The compositionofthecashflowhedgereserveisgiven 12. NetmovementonCashFlowhedges share holdings. does nothaveanyinstrument thatwillpotentiallydilutethe Diluted EPSisthesameascomputed aboveastheCompany number ofordinarysharesinissueduringtheyear. profit attributabletoequityholdersbytheweightedaverage The basicearningspershareiscalculatedbydividingthenet 13. Earningspershare Balance asat31December2018 Comprehensive Income impact underOther Recognition ofrevenue Comprehensive Income impact underOther Recognition ofloan 4,948 1,805 2.74 2018 2018 844 962 24 61 30 Group Group – – – – 3
3,940 1,805 2.18 2017 2017 844 966
73 17 23 – – – 5 4 LKR Mn. 1,906 1,805 1.06 2018 2018 Group Company Company (216) 24 24 672 888 – – – – – – – – Company LKR Mn. 1,428 1,805 0.79 2017 2017 (216) 672 888 73 73 – – – – – – – –
14.1 Property, plantandequipment–Group 14. Property,plantandequipment 31December2018 value asatCarrying 31December2017 value asatCarrying As at31December2018 As at31December2017 Depreciation charge Depreciation charge Impairment loss Impairment loss Disposals Disposals As at1January2018 depreciation Accumulated As at1January2017 depreciation Accumulated As at31December2018 As at31December2017 Disposals Disposals work-in-progress Transfers fromcapital work-in-progress Transfers fromcapital Additions atcost Additions atcost As at1January2018 Cost As at1January2017 Cost
Freehold Freehold land land 357 357 357 357 357 357 – – – – – – – – – – – – – – – – buildings buildings Freehold Freehold (2,232) (2,123) (2,123) (2,026) 1,607 1,600 3,839 3,723 3,723 3,496 (101) 112 229 (99) – – – (8) (2) 2 4 Ducts, cables Ducts, cables outside plant outside plant and other and other (102,646) 134,750 131,135 131,135 125,120 (97,413) (97,413) (92,749) 32,104 33,722 (5,482) (5,455) 3,116 5,309 1,559 (249) (853) 249 853 748 (62) exchanges exchanges Telephone Telephone (21,468) (19,917) (19,917) (18,444) 29,367 29,201 29,201 27,256 (1,569) (1,559) 7,899 9,284 1,925 (114) Notes totheconsolidatedfinancialstatements 114 184 134 (28) (18) – 18 Transmission Transmission equipment equipment (61,720) (55,358) (55,358) (48,475) 35,104 38,242 96,824 93,600 93,600 87,360 (6,959) (6,901) 2,518 3,500 1,303 2,773 (597) 597 (10) (33) 28 systems systems (10,924) 16,100 14,329 14,329 12,323 (9,566) (1,410) (1,292) (9,566) (8,299) 5,176 4,763 1,574 1,727 305 249 (52) (26) 52 25 IT IT IT vehicles vehicles (2,594) (2,353) (2,353) (2,095) Motor Motor 2,894 2,892 2,892 2,738 (241) (302) 300 539 199 (21) (21) (45) – – 21 44 23 12,731 12,117 12,117 (8,959) (7,921) (1,088) (7,921) (7,144) assets assets Other Other 3,772 4,196 1,282 1,709 9,204 fixed fixed (853) 670 (11) (80) (78) – 61 76 24 progress progress work-in- work-in- (10,759) Capital Capital 37,531 24,332 37,531 24,332 20,728 15,064 24,332 20,027 (7,529) Financial Reports – – – – – – – – – – – (210,543) (194,651) (194,651) (179,232) 123,850 117,035 334,393 311,686 311,686 287,881 (16,850) (16,461) 23,725 24,956 (1,017) (1,151) 1,142 Total Total (100) 998 (40) – – 147
Sri Lanka Telecom PLC | Annual Report 2018 148 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports 14.2 Property, plantandequipment–Company 31December2017 value asatCarrying As at31December2017 Depreciation charge Impairment loss Disposals As at1January2017 depreciation Accumulated As at31December2017 Disposals work-in-progress Transfers fromcapital Additions atcost 31December2018 value asatCarrying As at31December2018 Depreciation charge Impairment loss Disposals As at1January2018 depreciation Accumulated As at31December2018 Disposals work-in-progress Transfers fromcapital Additions atcost As at1January2018 Cost As at1January2017 Cost
Notes totheconsolidatedfinancialstatements
Freehold Freehold land land 357 357 357 357 357 357 – – – – – – – – – – – – – buildings buildings Freehold Freehold (2,224) (2,123) (2,123) (2,026) 1,588 3,812 3,696 1,573 3,696 3,469 (101) 112 229 (99) – – (2) 4 2 Ducts, cables Ducts, cables outside plant outside plant (102,654) 134,750 131,135 131,135 125,120 (97,413) (97,413) (92,749) and other and other 32,096 33,722 (5,482) (5,455) 3,116 5,309 1,559 (249) (853) 748 249 853 (62) (8) exchanges exchanges Telephone Telephone (21,468) (19,917) (19,917) (18,444) 29,367 29,201 29,201 27,256 (1,569) (1,559) 7,899 9,284 1,925 (114) 184 114 134 (18) (28) 18 – Transmission Transmission equipment equipment (22,340) (20,261) (20,261) (18,278) 16,183 38,523 35,881 15,620 35,881 32,569 (2,092) (1,974) 1,693 1,962 1,351 962 (13) (10) 13 (1) 1 (10,911) systems systems 16,082 14,316 14,316 12,310 (1,410) (9,553) (9,553) (1,291) (8,287) 5,171 1,574 4,763 1,727 244 305 (52) (26) 52 25 IT IT IT vehicles vehicles (2,300) (2,125) (2,125) (1,907) Motor 2,529 2,527 Motor 2,527 2,486 (195) (262) 402 229 (45) (20) 44 86 20 22 (5,592) (5,058) (5,058) (4,772) assets assets 2,530 8,122 7,902 Other Other 2,844 7,902 1,282 5,691 fixed fixed (513) (286) 196 929 (21) 24 – – – – – progress progress work-in- work-in- 29,994 29,994 22,888 13,809 Capital Capital 22,888 22,888 13,380 18,729 (6,703) (9,221) – – – – – – – – – – – (167,489) (156,450) (156,450) (146,463) 263,536 247,903 247,903 227,987 (11,361) (10,926) 96,047 15,985 91,453 20,957 (1,041) 1,039 Total Total (352) (100) 352 (29) – – Comparative FiguresaspresentedincurrentFinancialStatements As presentedinauditedFinancialStatement2017 y y y y y has beenreclassifiedforbetterpresentationpurposesintothefollowingassetcategories. The Other fixed asset total Net Book Value of LKR 18,215 Mn. as at 31 December 2017 presented with in other fixed assets category 14.3 Reclassification ofProperty, PlantandEquipment–Group y y y y y Carrying valueas at31December2017 As at31December2017 Depreciation charge Impairment loss Disposals As at1January2017 Accumulated depreciation As at31December2017 Disposals Transfers fromcapitalwork-in-progress Additions atcost As at1January2017 Cost Transmission equipment Telephone exchanges Ducts, cables,andotheroutsideplants Motor vehicles IT systems Carrying valueasat31December2017 As at31December2017 Depreciation charge Impairment loss Disposals As at1January2017 Accumulated depreciation As at31December2017 Disposals Transfers fromcapitalwork-in-progress Additions atcost As at1January2017 Cost Systems 14,329 12,323 (9,566) (1,292) (8,299) 4,763 1,727 305 (26) 25 IT IT – Vehicles Motor (2,353) (2,095) 2,892 2,738 (302) 539 199 (45) 44 – – and other outside (16,663) (15,017) cables Ducts, 22,440 20,518 (1,729) plant 5,777 1,013 Notes totheconsolidatedfinancialstatements 992 (83) 83 – Exchanges Telephone (103) 514 617 617 (60) (43) – – – – – Equipment Transmission (1,652) 6,622 8,274 1,871 5,484 (693) (960) 919 – – 1 Reclassified (30,337) (26,414) 18,215 48,552 41,680 Value (4,076) Total 3,168 3,858 (154) 153 – Remaining Assets 12,117 Other Fixed (7,921) (7,144) 4,196 1,282 1,709 9,204 Fixed Assets Financial Reports (853) (78) 76 – (38,258) (38,258) (33,558) (33,558) 22,411 60,669 50,884 22,411 60,669 50,884 Other (4,929) (4,929) Total 4,450 5,567 4,450 5,567 (232) (232) 229 229 – – 149
Sri Lanka Telecom PLC | Annual Report 2018 150 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Comparative Figuresaspresentedincurrentfinancialstatements As presentedinauditedFinancialStatement2017 y y y y y category hasbeenreclassifiedforbetterpresentationpurposesintothefollowingassetcategories. The OtherfixedassettotalNetBookValueofLKR18,140Mn.asat31December2017presentedwithinotherassets 14.4 Reclassification ofProperty, PlantandEquipment- Company y y y y y Carrying valueas at31December2017 As at31December2017 Depreciation charge Impairment loss Disposals As at1January2017 Accumulated depreciation As at31December2017 Disposals Transfers fromcapitalwork-in-progress Additions atcost As at1January2017 Cost Transmission equipment Telephone exchanges Ducts, cables,andotheroutsideplants Motor vehicles IT systems Carrying valueasat31December2017 As at31December2017 Depreciation charge Impairment loss Disposals As at1January2017 Accumulated depreciation As at31December2017 Disposals Transfers fromcapitalwork-in-progress Additions atcost As at1January2017 Cost Notes totheconsolidatedfinancialstatements Systems 14,316 12,310 (9,553) (1,291) (8,287) 4,763 1,727 305 (26) 25 IT IT Vehicles Motor (2,125) (1,907) 2,527 2,486 (262) 402 (45) 44 86 – – and other outside (17,431) (15,722) cables Ducts, 23,212 21,290 (1,792) plant 5,781 1,013 992 (83) 83 – Exchanges Telephone 518 595 595 (77) (60) (17) – – – – – Equipment Transmission (1,671) 6,676 8,347 1,871 5,553 (693) (979) 923 – – 1 Reclassified (30,857) (26,912) 18,140 48,997 42,234 Value (4,098) Total 3,168 3,749 (154) 153 – Remaining Assets Other Fixed (5,058) (4,772) 2,844 7,902 1,282 5,691 Fixed Assets (286) 929 – – – (35,915) (35,915) (31,684) (31,684) 20,984 56,899 47,925 20,984 56,899 47,925 Other (4,384) (4,384) Total 4,450 4,678 4,450 4,678 (154) (154) 153 153 – – (j) (d) (c) (b) (a) (i) Carrying amount Depreciation chargeforthe year Accumulated depreciationat1January Cost Cost Accumulated depreciation Carrying value category inasfollows; Property, plantandequipmentincludesubmarinecables.The totalcostandaccumulateddepreciationofallcablesunder this over theassetsandliabilitiesofcorporationat transferred atincorporationoftheCompany(totake that theCompanyhasfreeholdtitletolandandbuildings which werevestedfromthecorporationtoCompany, The Directorsbelieve,partainingtolandsandbuildings borrowings oftheGroup. No assetshavebeenmortgagedorpledgedassecurityfor LKR 88,189Mn.(2017–78,715Mn.). assets stillinusetheGroupasat31December2018was (2017 –LKR69,661Mn.).Thecostoffully-depreciated Company asat31December2018wasLKR74,396Mn. The costoffully-depreciatedassetsstillinusethe process. of SLTweretransferredtoSLTLasparttheprivatisation that date,allbusinessandtherelatedassetsliabilities Telecom Limited(SLTL),on25September1996and was convertedintoapubliclimitedcompany,SriLanka 1991 inthefirststatutoryaccountsofSLT.Further,SLT determine theopeningcostoffixedassetson1September by theGovernmentofSriLanka.Valuerswereusedto the valueofproperty,plantandequipmentasdetermined represents SLT’sContributedCapitalonincorporationand Sri Lanka.Thenetamountofthoseassetsandliabilities transferred toSLTwasperformedbytheGovernmentof liabilities toSLT.Avaluationoftheassetsand telecommunications businessandrelatedassets Telecommunications (DoT)transferreditsentire On 1September1991,theDepartmentof as follows: The property,plantandequipmentincludesassetsacquiredunderfinanceleases,thenetbookvalueofwhichismadeup Notes totheconsolidatedfinancialstatements (h) (g) (f) (e) amounted toLKR4,035Mn.(2017–2,650Mn.) Borrowing costcapitalisedfromaGroupperspective LKR 4,035Mn.duringtheyear(2017–2,650Mn). The Companycapitalisedborrowingcostsamountingto CPE LKR62Mn.(2017–NIL). for payphonesLKR5Mn.(2017–NIL.)andIPTV were impairedduetotheflood.Impairmentprovision Cable NetWorkUptoDPLKR7Mn.(2017–Nil) Transmission EquipmentNil(2017–LKR10Mn.) LKR 15Mn.(2017–44Mn.)andNational (2017 –LKR18Mn.),CableNetWorkBeyondDP LKR Nil(2017–28Mn.),PSTNCPE carrying valueofNextGenerationNetwork(NGN) Impairment ofassetsmainlyconsiststhe – LKR691Mn.)(Note27). date ,theinsurancereserveamountedtoLKR791Mn.(2017 uninsured property,plantandequipment.Atthereporting investment tomeetanypotentiallosseswithregard reserve hasbeencreatedtogetherwithasinkingfund All themotorvehicleshavebeeninsured.Aninsurance is 1,180(2017–1,175) The numberofbuildingsasat31December2018, list oflandssovestedwiththeCompany. from theGovernmentauthorities,inordertoconfirm Company hasinitiatedaprocesstoobtaintitledocument title documentsareavailableforeachofsuchlands.The September 1996),byoperationoflaw,althoughnospecific Conversion ofSLTintoapubliclimitedcompanyon25 2018 (535) 777 242 Group 2017 (493) 667 174 Group/Company 11,975 (5,560) 6,083 (332) 2018 2018 (438) 440 Company 2 Financial Reports 11,873 (5,197) 6,313 (363) 2017 2017 (396) 440
44
151
Sri Lanka Telecom PLC | Annual Report 2018 152 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports the CGUoperates. the long-termaveragegrowth rateforthebusinessinwhich growth ratesstatedbelow.The growthratedoesnotexceed the five-yearperiodareextrapolated usingtheestimated Management coveringafive-year period.Cashflowsbeyond flow projections,basedonfinancialbudgetsapprovedby value-in-use calculations.Thesecalculationsusepre-taxcash The recoverableamountofaCGUisdeterminedbasedon presented below: Units (CGUs).Asummaryofthegoodwillallocationis Goodwill isallocatedtotheGroup’sCash-Generating acquisition ofMobitel(Private)LimitedeChannellingPLC. The goodwillintheGroupconsistsofarisingon 15.1 Intangibleassets –Group 15. Intangibleassets Total eChannelling PLC Mobitel (Private)Limited Balance asat1January2017 Cost Balance asat31December2017 – Acquisitions Balance asat1January2018 – Acquisitions Balance asat31December2018 Balance asat1January2017 Accumulated amortisation Balance asat31December2017 – Amortisation Balance asat1January2018 Balance asat31December2018 – Amortisation December 2018 Carrying Amounts December 2017 Notes totheconsolidatedfinancialstatements 2018 551 410 141 2017 551 410 141 Goodwill 804 804 804 804 253 253 253 253 551 551 as follows: The keyassumptionsusedforvalue-in-usecalculationsare CGU (2017–Nil). recognised fortheyearended31December2018above relevant operatingsegments.Noimpairmentchargehasbeen used arepre-taxandreflectspecificrisksrelatingtothe the forecastsincludedinindustryreports.Thediscountrates The weightedaveragegrowthratesusedareconsistentwith past performanceanditsexpectationsofmarketdevelopment. Management determinedbudgetedgrossmarginbasedon Discount rate Growth rate – – – – Licences 9,521 4,083 4,822 8,905 8,905 2,040 2,767 2,767 3,618 5,903 6,138 616 727 851 Software 3,995 3,588 3,740 3,740 2,621 2,720 2,720 2,966 1,029 1,020 152 255 246 99 Others 2018 485 485 485 502 333 333 333 333 169 152 2-7 12 17 % – – – 14,822 13,934 13,934 Total 4,974 8,960 5,247 6,073 1,097 6,073 7,170 7,652 7,861 2017 889 826 2-7 12 %
16.1 Investments insubsidiaries associates 16. Investmentsinsubsidiariesand 15.2 Intangibleassets –Company Opening netbookamount Balance asat1January2017 Cost Balance asat31December2017 – Acquisitions Closing netbookamount Additions Impairment ofInvestment Balance asat1January2018 Balance asat31December2018 – Acquisitions Balance asat1January2017 Accumulated amortisation Balance asat31December2017 – Amortisation Balance asat1January2018 Balance asat31December2018 – Amortisation December 2017 December 2018 Carrying Amounts 14,206 14,366 2018 160 – 14,220 14,206 2017 (14) – Notes totheconsolidatedfinancialstatements financial year. statements. TheCompanydidnothaveoperationsduringthe for usingtheequitymethodinCompany’sfinancial Galle SubmarineCableDepot(Private)Limitedisaccounted in maintenanceofmarinecables.TheCompany’sinterest Depot (Private)LimitedsituatedatGallewhichisinvolved The companyhas40%interestinGalleSubmarineCable 16.2 Investment inassociates As at31December company Share oflossfromassociate As at1January Licences 1,817 1,430 1,813 1,813 1,015 383 603 798 195 798 941 143 876 876 4 Software 2,035 1,727 1,727 1,727 1,675 1,675 1,675 1,787 308 112 248 248 52 – – Others 330 330 330 330 330 330 330 330 – – – – – – 2018 Company (28) Financial Reports 28 – Total 4,182 3,487 3,870 3,870 2,608 2,803 2,803 1,067 1,124 1,124 3,058 2017 383 312 195 255 28 28 – 153
Sri Lanka Telecom PLC | Annual Report 2018 154 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Details ofthesubsidiarycompaniesinwhichCompanyhadcontrolasat31Decemberaresetoutbelow: (h) (g) (f) (e) (d) (c) (b) (a) book values. companies listedabovedonotdiffersignificantlyfromtheir The Directorsbelievethatthefairvalueofeach eChannelling PLC[seeNote(i)below] Sub-subsidiaries SLT Campus(Private)Limited[SeeNote(h)below] SLT PropertyManagement(Private)Limited(SeeNote(g)below) Sky Network(Private)Limited(SeeNote(f)below) SLT HumanCapitalSolutions(Private)Limited[SeeNote(d)below] Sri LankaTelecom(Services)Limited[SeeNote(a)below] SLT DigitalInfoServices(Private)Limited[SeeNote(c)below] SLT VisionCom(Private)Limited[SeeNote(e)below] Mobitel (Private)Limited[SeeNote(b)below] Name oftheCompany Limited duringtheyear2018. 160 Mn.onordinarysharecapital inSLTCampus(Private) SLT Campus(Private)Limited. TheCompanyinvestedLKR 5,000,001 sharesrepresenting theentirestatedcapitalof This investmentinsubsidiary company consistsof The investmentisfullyimpaired. SLT Propertymanagement(Private)Limited. 1,500,001 sharesrepresentingtheentirestatedcapitalof This investmentinsubsidiarycompanyconsistsof Limited. Theinvestmentisfullyimpaired. redeemable preferencesharesofSkyNetwork(Private) issued statedcapitaland6,000,00012%cumulative 42,071,251 sharesrepresentinga99.94%holdingofthe This investmentinsubsidiarycompanyconsistsof SLT VisionCom(Private)Limited. 10,000,000 sharesrepresentingtheentirestatedcapitalof This investmentinsubsidiarycompanyconsistsof Capital Solutions(Private)Limited shares representingtheentirestatedcapitalofSLTHuman This investmentinsubsidiarycompanyconsistsof50,000 SLT DigitalInfoServices(Private)Limited. 5,000,000 sharesrepresentingtheentirestatedcapitalof This investmentinsubsidiarycompanyconsistsof (Private) Limited. 100% oftheentireOrdinarySharecapitalMobitel The Companyowns1,320,013,240sharesrepresenting Sri LankaTelecom(Services)Limited. 2,500,000 sharesrepresenting99.99%ofstatedcapital This investmentinsubsidiarycompanyconsistsof Notes totheconsolidatedfinancialstatements
Current investments 17. Otherinvestments (i) by eChannellingPLCinother companies. Investment inequitysharescomprises ofinvestmentmade carrying valueofLKR3Mn(2017–Nil). (2017 –LKR669Mn.)arerestrictedatbank.FixedDeposit Fixed depositsandRepowithacarryingvalueofLKR786 Mn. with carringvalueofLKR2,780Mn.(2017–1,111Mn.)and measured at amortised cost. Fixed deposits of foreign currency Fixed depositsandRepoareclassifiedasfinancialassets and Repo Fixed deposits/ equity share Investment in issued ShareCapitalofeChannellingPLC. 106,974,618 sharesrepresentingthe87.59%holdingof This investmentinsubsidiaryCompanyconsistsof Investment LKR Mn. 14,366 13,980 642 210 100 25 50 – – 1 2018 3,665 3,665 Company 2018 holding Group – 87.59 99.99 99.94 100 100 100 100 100 100 % 1,844 1,842 2017 Investment 2 LKR Mn. 14,206 13,980 100 642 3,569 3,569 50 50 25 2018 – – 1 2017 Company – Company holding 87.59 99.99 1,780 1,780 2017 100 100 100 100 100 100 – %
LKR 108Mn.(2017–186Mn.). The differencebetweenthecostandfairvalueofemployee loansisrecognisedasprepaidstaffcost.Benefitamountin2018 related ratesforthesimilarloans. level 2inputs.Thefairvalueoftheemployeeloansaredetermined bydiscountingexpectedfuturecashflowsusingmarket The Groupprovidesloanstoemployeesatconcessionaryrates. Theseemployeeloansarefairvaluedatinitialrecognitionusing 18. Otherreceivables The group’sexposuretocreditandmarketriskfairvalueinformationrelatedotherinvestmentaredisclosedin Note4. Non-current Fixed deposits–Restrictedatbank Current Fixed Deposits–USD Repurchase agreement–Restrictedatbank Repurchase agreement–Repo Fixed Deposits–LKR Employee Loans Prepaid staffcost Prepaid staffcost1January Additions Amortisation Prepaid staffcostat31December Notes totheconsolidatedfinancialstatements 2,970 12.08 3,650 11.50 3,229 3,650 2018 2018 (159) 3.34 7.92 680 421 472 108 421 Group Group % – 12.33 3,150 3,827 3,355 3,827 2017 2017 (201) 8.65 2.86 677 472 487 186 472 – – % 2,938 12.08 11.50 3,617 3,196 3,617 2018 2018 (159) 3.34 7.92 679 421 472 108 421 Company Company % – Financial Reports 12.33 3,127 3,803 3,331 3,803 2017 2017 (201) 8.65 2.86 676 472 487 186 472 – – % 155
Sri Lanka Telecom PLC | Annual Report 2018 156 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports (a) AdvancesandprepaymentsoftheCompanymainlyconsist 20. Tradeandotherreceivables (a) Inventoriesincludetelecommunicationhardware, 19. Inventories Domestic tradereceivables Customer PremisesEquipment Foreign tradereceivables Cable &networks Other consumables Less: Provisionforbadanddoubtfulreceivables Less: Interest/revenueinsuspense Provision forchangeincarryingvalueofinventories Trade receivables–net Amount duefromsubsidiaries[Note33.1(k)] Amount duefromrelatedcompanies Advances andprepayments[SeeNote(a)below] Employee loans(Note18) Other receivables[SeeNote(b)below] Amounts duewithinoneyear (2017– LKR249Mn.) (2017 –LKR246Mn.)andfree phoneofferLKR283Mn. (2017 –LKR107Mn.)Prepaid TRC FrequencyLKR804Mn. advances onBuildingandtower rentofLKR138Mn. software maintenanceofLKR 70Mn.(2017–LKR341Mn.) LKR 5,911Mn.(2017–3,393 Mn.),paymentsfor of advancesonforeign&local suppliersadvances Advances andprepaymentsoftheGroupmainlyconsist software maintenanceofLKR70Mn.(2017–341Mn.) LKR 1,720Mn.(2017–2,843Mn.),paymentsfor of advancesonforeignandlocalsuppliers’ of provisionsforslow-movingandobsoleteitems. consumables andofficestationery.Inventoryisstatednet Notes totheconsolidatedfinancialstatements (b) OtherreceivablesoftheCompanyconsistrefundable (2017 –Rs302Mn.) site rentalsreceivablesfromother operatorsLKR864Mn. from salesagentsLKR122Mn.(2017–128Mn.)and deposits ofLKR132Mn.(2017–125Mn.),receivables receivables oftheGroupmainlyconsistrefundable deposits ofLKR132Mn.(2017–125Mn.).Other 21,846 25,274 16,384 27,340 (8,890) 1,188 3,428 1,069 3,099 2,173 8,561 1,567 2018 2018 (926) 842 148 680 Group Group – – 20,731 20,196 23,270 13,930 (9,321) (1,167) 2,345 3,074 1,590 4,328 3,161 5,101 2017 2017 393 677 985 (19) 38 – 15,373 17,670 12,178 17,541 (5,492) 1,188 2,297 2,210 1,440 2,042 2,360 2018 2018 (770) 701 321 147 679 135 Company Company – 17,854 14,471 16,763 10,280 (6,483) (1,053) 2,345 2,292 3,281 2,228 3,460 3,266 2017 2017 393 543 676 134 38 – 22. Borrowings Cash andcashequivalents 21.a For cashflow purpose: 21. Cashandcashequivalents Bank overdrafts Current (duewithinoneyear) Cash andcashequivalents Cash atbankandinhand Bank borrowingsandothers[SeeNote22(e)below] Bank overdrafts Call deposits Fixed deposits Vendor financing Lease liabilities Repurchase agreements–Repo Bank borrowingsandothers[SeeNote22(e)below] Non-current (dueafteroneyear) Vendor financing Lease liabilities Total borrowings Notes totheconsolidatedfinancialstatements 16,949 38,285 38,886 55,835 11,089 11,089 (6,460) 6,460 9,479 3,163 5,791 4,629 2,135 2018 2018 2018 982 546 28 55 Group Group Group – (13,323) 13,323 12,036 26,890 14,489 14,921 41,811 (9,046) 1,432 4,277 1,973 2,046 4,277 2017 2017 2017 371 258 99 61 – 15,104 30,928 30,928 46,032 (5,638) (4,967) 5,638 9,464 2018 2018 2018 Company 671 671 671 Company Company – – – – – – 2 Financial Reports (12,406) (11,610) 12,406 12,013 24,486 14,489 14,492 38,978 2017 2017 2017 796 796 796 67 – – – – – 3 157
Sri Lanka Telecom PLC | Annual Report 2018 158 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports (c) MaturityanalysisoftheCompanyandGroupisasfollows: (b) EffectiveinterestratesoftheCompanyandGroupareasfollows: The currencyexposureoftheborrowingsGroupandCompanyasatreportingdatewerefollows: (a) TheinterestrateexposureoftheborrowingsGroupandCompanywereasfollows: Foreign currency Local currency – Between1and2years (excludingfinanceleaseliabilities): Maturity ofnon-currentborrowings – Atfixedrates – bankoverdrafts Average effectiveinterestrates: – Between3and5years – Atfloatingrates – bankborrowings(USDloan) – Over5years – leaseliabilities – bankborrowings – Vendorfinancing – Debenture Notes totheconsolidatedfinancialstatements
10.00 –14.40 12.18 –12.75 LIBOR+3.8% 8.00 –16.00 20,250 38,831 19,125 36,710 55,835 17,633 38,202 55,835 8,956 9,625 12.75 2018 2018 2018 2018 4.74 Group Group Group Group % 10.00 –14.00 LIBOR+3.8% 8.00 –16.00 14,860 17,613 24,198 41,811 23,097 18,714 41,811 6,553 8,307 12.22 2017 2017 2017 2017 4.30 – – % 8.00-10.00 16,285 30,928 10,268 35,764 46,032 17,355 28,677 46,032 5,018 9,625 11.71 12.18 12.75 2018 2018 2018 2018 4.74 Company Company Company Company % – 8.00-10.00 14,489 15,811 23,167 38,978 23,008 15,970 38,978 6,285 8,204 11.88 12.22 2017 2017 2017 2017 4.30 – – – % (j) (i) (h) (g) (f) Movement oftheborrowingsisgivenbelow–Company (e) Movementoftheborrowingsisgivenbelow–Group (d) AnalysisofthefinanceleaseliabilitiesGroupandCompanyareasfollows: Net repaymentduringtheyear Net repaymentduringtheyear Additions duringtheyear Additions duringtheyear Balance asat1Jan2018 Balance asat1Jan2018 – Notlaterthan1year Finance leaseliabilities–minimumpayments – Laterthan1yearandnotlater5years Less: futurefinancechargesonleases Present valueoffinanceleaseliabilities – Current Representing leaseliabilities: – Non-current interalia, bycorporate guarantees givenbytheCompany. Limited, asubsidiary oftheCompany,aresecured, Bank borrowings andsuppliercreditsofMobitel (Private) title oftheasset. effectively securedbythelessor againsttherightsto Lease liabilitiesoftheCompany andtheGroupare commitments. will havesufficientfundsavailable tomeetitspresentloan The Directorsbelievethatthe CompanyandtheGroup with SriLankaAccountingStandards. to maintainadequateaccountingrecordsinaccordance the financialyearend,maintainanceofcovenantratiosand statements tothelenderswithinaspecifiedperiodfrom The loancovenantsincludesubmissionofauditedfinancial from thetermloanandshortloansinRupees. During theyearcompany,drewdownLKR23.05Bn. Borrowings Borrowings Notes totheconsolidatedfinancialstatements (11,178) (m) (l) (k) 40,392 23,050 26,502 49,292 32,142 28,328 (9,160) working Capitalrequirements. Telecom (Services)Limitedto obtainfacilitiesfor (2017 –LKR26Mn.)wereprovided toSriLanka Guarantee facilitiesamountingtoLKR26Mn. Limited fortheGSMrollout6and7. (2017 –LKR102Mn.)wereprovidedtoMobitel(Private) Guarantee facilitiesamountingtoLKR77Mn., Expansion Projects. during theyearforpurposeofCapital Mobitel (Private)LimitedhasborrowedLKR9,092Mn. Bank overdraft Bank overdraft 2018 (13) 42 54 96 83 28 55 Group (16,831) (14,646) 12,406 13,323 5,638 7,878 6,460 9,968 2017 115 188 160 Lease liabilities Lease liabilities (28) 73 99 61 160 (77) (68) 70 83 – 2 - 2018 Company – – – 2 2 2 2 Financial Reports Total Total (28,086) (23,874) 46,032 30,928 38,978 55,835 42,110 41,811
2017 72 75 70 63 (5) 3 3 159
Sri Lanka Telecom PLC | Annual Report 2018 160 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports Deferred taxassetsandliabilitiesoftheGroupareattributabletofollowing: for definedbenefitobligationsandotherprovisions. The taxableanddeductibletemporarydifferencesmainlyarisefromproperty,plantequipment,deferredincome, provision The amountsshowninthestatementofFinancialPositionrepresentsfollowing: The movementinthedeferredincometaxaccountisasfollows: method usingaprincipaltaxrateof28%(fortheyear2017–28%). differences betweenaccountingbasesandtaxofassetsliabilities.Deferredincomeisprovidedundertheliability Deferred incometax(assets)andliabilitiesarecalculatedonalltaxabledeductibletemporarydifferencesarisingfrom Recognised deferred income tax(assets) andliabilities 23. Deferredincometaxliabilitiesandassets. Net tax(assets)/liabilities Set-off oftax Tax (assets)/liabilitiesbeforeset-off Tax losses Deferred income Provisions Defined benefitobligations Deferred taxliabilities At thebeginningofyear Property, plantandequipment Group Deferred taxassets Release toStatementofComprehensiveIncome(Note11) At theendofyear Release toStatementofOtherComprehensiveIncome(Note11) (Over)/under provisionofDTrelevanttopreviousyears Notes totheconsolidatedfinancialstatements (6,370) (2,658) (2,434) 6,370 2018 (712) (566) Assets – – (4,594) (2,552) 4,594 2017 (636) (736) (670) – – 6,537 6,389 5,872 1,159 6,389 (148) 2018 2018 (655) 12,759 12,759 (6,370) 6,389 13 Group Group 2018 Liabilities – – – – 5,956 5,872 4,459 1,258 5,872 10,466 10,466 2017 (4,594) 2017 5,872 (84) 155 2017 – – – – – 12,759 6,525 6,525 (2,658) (2,434) 6,389 6,389 5,945 1,212 6,525 2018 2018 2018 (712) (566) (655) Company Company 23 – - Net 10,466 (2,552) 5,872 5,872 5,945 5,945 2017 (636) (736) (670) 4,507 1,283 5,945 2017 2017 155 – – - Deferred taxassetsandliabilitiesoftheCompanyareattributabletofollowing: Movement indeferredtaxbalancesduringtheyear–Group Net tax(assets)liabilities Set-off oftax Tax (assets)liabilitiesbeforeset-off Tax losses Deferred income Provisions Defined benefitobligations Property, plantandequipment Company and equipment Property, plant obligations Defined benefit Provisions Deferred income Tax losses Tax Losses Adjustment to 1 January Balance 10,012 (2,094) (1,706) 4,459 (982) (771) 2017 comprehensive Recognised in income 1,524 1,258 (458) 157 35 – comprehensive Recognised (6,232) (2,658) (2,351) 6,232 in other 2018 income (713) (510) Assets – – 155 155 – – – – Recognised Notes totheconsolidatedfinancialstatements directly in (5,585) (1,706) (2,479) 5,585 2017 (737) (663) equity – – – – – – – December Balance 11,536 12,758 12,758 (2,552) (1,706) (6,232) 5,872 6,525 (670) (736) 2018 2017 Liabilities 31 31 – – – – Recognised in profit 11,530 11,530 or loss (5,585) 1,223 1,159 5,945 (297) 2017 118 91 24 – – – – comprehensive Recognised in other 12,758 income (2,658) (2,351) 6,525 6,525 2018 (713) (510) 13 13 – – – – – Net Financial Reports December Balance 11,530 12,759 (2,479) (2,434) (2,003) 5,945 5,945 6,389 2017 (737) (663) (566) (712) (655) 2018 31 – –
161
Sri Lanka Telecom PLC | Annual Report 2018 162 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports The ContractAssetmovementsareprovidedbelow: 24(a) Contract Assets – – – – 24. DeferredIncome Movement indeferredtaxbalancesduringtheyear–Company Balance asat31December2018 Amortisations Additions Opening adjustment1January 2018 and equipment Property, plant Provisions obligations Defined benefit Deferred income Tax losses Tax Losses Adjustment to is terminated. deferred revenueisrecognisedintheperiodcontract to providefutureservices,theremainingunamortsed the contractandreleasesCompanyfromobligation that acustomerterminatesanIRUpriortotheexpiryof any servicesarerecordedasdeferredrevenue.Intheevent period ofthecontracts.Amountsreceivedinadvancefor capacity isrecognisedonastraightlinebasisoverthe IRU revenuerelatingtoleasingofSEA-ME-WE4cable for anyservicesarerecordedasdeferredrevenue. the periodofcontracts.Amountsreceivedinadvance cable capacityisrecognisedonastraightlinebasisover Backhauling revenuewhichisleasingofSEA-ME-WE3 downloadable quotaorthecreditexpires. deferred untilsuchtimeasthecustomerusescalltime, Revenue fromthesaleofprepaidcredit,Internetis the dateofconnection. Revenue isrecognisedonanannualbasisirrespectiveof Network (PSTN)aredeferredoveraperiodof15years. The connectionfeesrelatingtoPublicSwitchTelephone Notes totheconsolidatedfinancialstatements 1 January Balance 10,006 (2,046) (1,706) 4,507 (975) (772) 2017 comprehensive Recognised in LKR Mn. income 1,524 1,283 Group (433) 157 (350) 935 770 515 35 – comprehensive Company LKR Mn. Recognised (100) in other income 216 104 212 155 155
– – – – Recognised directly in – Current deferred income Representing the year At theendof – Non-current contract assets Representing – Current contract assets Representing the year At theendof – Non-current deferred income Representing equity – – – – – – December Balance 11,530 (2,479) (1,706) 5,945 (663) (737) 2017 31 31 Recognised 2,469 2,186 4,655 2018 2018 in profit 935 438 497 or loss Group Group 1,228 1,212 (297) 128 130 24 2,143 2,239 4,382 comprehensive 2017 2017 – – – Recognised in other income 2,155 2,540 2018 2018 23 23 Company Company – – – – 260 113 103 385 December Balance 12,758 (2,351) (2,003) 6,525 2,208 2,676 (510) (713) (655) 2018 2017 2017 468 31 – – – The figureshowsthecontractliabilitiesduetounsatisfiedperformanceobligationsasat1January2018. The groupandCompanyreclassifycustomercontractspreviouslyshownasdeferredincometocontractliabilities. 25. Tradeandotherpayables stand-alon total considerationreceivedorreceivablehasbeenallocatedbetweenseparateperformanceobligationsbasedontherelative As perSLFRS15revenueisrecognizedwhentheindividualperformanceobligationsspecifiedinacontractaresatisfied.The 24 (b) Contract Liabilities – RepresentingcontractliabilitiesNon-Current Domestic tradepayables Amounts duewithinoneyear – RepresentingcontractliabilitiesCurrent At theendofyear Balance asat31December2018 Amortization Addition Opening adjustment–1January2018 Foreign tradepayables Amount duetosubsidiaries[Note33.1(k)] Amount duetorelatedcompanies Capital expenditurepayables[SeeNote(a)below] Social securityandothertaxes[SeeNote(b)below] Interest payable Other payables[SeeNote(c)below] International directdialling deposits Amounts dueafteroneyear Advance onLGNproject PSTN guaranteedeposits Domestic TradePayables Capital expenditurepayables e sellingprice. Notes totheconsolidatedfinancialstatements 10,767 12,646 31,983 1,113 5,044 2,093 1,079 1,941 2018 2018 548 565 132 222 157 280 695 790 19 Group Group – 12,698 28,450 2,841 1,990 9,345 1,511 1,064 2,444 2017 2017 232 280 848 32 33 20 – – – – LKR Mn. Group 1,113 20,230 (537) 1,004 1,237 1,065 6,989 9,513 668 982 2018 2018 533 471 391 132 903 157 280 456 Company Company 19 – – – Financial Reports Company LKR Mn. 10,395 22,501 1,004 1,175 2,540 7,249 (490) 2017 2017 512 982 508 602 232 280 532 32 20 – – – – – –
163
Sri Lanka Telecom PLC | Annual Report 2018 164 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports The principalactuarialassumptionsusedwereasfollows: 26. Employeebenefits (b) SocialsecurityandothertaxesoftheCompanymainly (a) CapitalexpenditurepayablesoftheCompanymainly Future salaryincreases Discount rate(long-term) Total employeebenefitliabilityasat1January Current servicecost Movement inpresentvalueofemployeebenefitliabilities Interest cost Actuarial (gain)/loss Benefit paidduringtheyear Balance asat31December Current servicecost Expenses recognisedintheIncomeStatement Interest cost Actuarial (gain)/loss Recognised inOtherComprehensiveIncome LKR 378Mn.(2017–150Mn.). Levy (TL)ofLKR449Mn.(2017–792Mn.),Cess taxes oftheGroupmainlyconsistTelecommunication LKR 106Mn.(2017–112Mn.).Socialsecurityandother IDD LevyofLKR4Mn.(2017–7Mn.),EPFpayable (2017 –LKR417Mn.),Cess92Mn.64 consist ofTelecommunicationLevy(TL)LKR190Mn. (2017 –LKR1,017Mn.). network restorationafterroadworksofLKR906Mn. of LKR9,670Mn.(2017–8,178Mn.)andadvanceson Group mainlyconsistofcontractors’payableandretention (2017 –LKR1,019Mn.).Capitalexpenditurepayablesofthe network restorationafterroadworksofLKR906Mn. LKR 6,083Mn.(2017–6,218Mn.)andadvanceson consist ofcontractors’payablesandretention Notes totheconsolidatedfinancialstatements (c) OtherpayablesoftheCompanymainlyconsist LKR 3,275Mn.(2017–1,739Mn.). and accruedexpensesotherpayablesof payable ofLKR190Mn.(2017–148Mn.), International TelecommunicationOperators’Levy supplies ofLKR7,623Mn.(2017–7,570Mn.), LKR 244Mn.(2017–Mn.),payableforunpaid dividend payabletotheGovernmentofSriLanka 214 Mn.).OtherpayablesoftheGroupmainlyconsist expenses andotherpayablesofLKR255Mn.(2017– payable ofLKR190Mn.(2017–148Mn.)andaccrued Telecommunication Operators’Levy of LKR7,623Mn.(2017–7,570Mn.),International 244 Mn.(2017–LKRMn.),payableforunpaidsupplies dividend payabletotheGovernmentofSriLankaLKR payable LKR113Mn.(2017–119Mn.). payable ofLKR106Mn.(2017–112Mn.)andNBT IDD LevypayableofLKR9Mn.(2017–Mn.),EPF 11.0 -12.2 4,355 4,239 7.5 -10.0 2018 (125) (652) (125) (125) 445 216 445 216 661 Group 2018 Group % 10.0 -10.4 8.5 -10.0 4,538 4,355 2017 (543) (322) (543) (543) 461 221 461 221 682 2017 % 3,719 3,598 2018 (561) 375 150 375 150 525 Company 2018 (85) (85) (85) 12.2 Company 7.5 %
3,984 3,719 2017 2017 (553) (305) (553) (553) 10.4 438 155 438 155 593 8.5 % Mobitel Private Limited Sri Lanka Telecom PLC Associates respectively. (Private) LimitedandMessrsPiyalSGoonetilleke valued byMessrsActuarialandManagementConsultants (Private) LimitedandMobitelareactuarially Limited, SLTCampus(Private)Visioncom Info Services(Private)Limited,SriLankaTelecom(Services) PLC, SLTHumanCapitalSolution(Private)Limited,Digital The provisionsfordefinedobligationsofSriLankaTelecom for thevaluation. (2017 –1967/70MortalityTable)wastakenasthebase Table issuedbytheInstituteofActuariesLondon for theactuarialvaluation.In2018,1967/70Mortality mortality, withdrawal,retirementagewereconsidered In additiontoabove,demographicassumptionssuchas Salary incrementrate(Change by1%) Salary incrementrate(Changeby1%) Salary incrementrate(Changeby1%) Discount rate(Changeby1%) 2018 Discount rate(Changeby1%) 2017 Discount rate(Changeby1%) 2018 Profit orLossandOtherComprehensive Profit orLossandOtherComprehensive Effect onchargetotheStatementof Effect onchargetotheStatementof Effect onchargetotheStatement of ProfitorLossandOther Comprehensive Income Increase Increase Increase
(140) (132) 167 177 (26) 36 Income Income Notes totheconsolidatedfinancialstatements salary incrementrateasdepictedinthefollowingtable: is theeffectofassumedchangesindiscountrateand comprehensive incomeandthestatementoffinancialposition The sensitivityofthestatementprofitorlossandother by theamountshownbelow: consultant, wouldhaveaffectedthedefinedbenefitobligation the relevantactuarialassumptions,holdingotherassumptions Reasonably possiblechangesatthereportingdatetooneof Sensitivity Analysis externally funded. The provisionfordefinedbenefitobligationsisnot Decrease Decrease Decrease
(162) (156) 144 156 (32) 29
Effect onnetdefinedbenefitliability Effect onnetdefinedbenefitliability Effect onnetdefined Increase Increase Increase benefit liability (140) (132) 167 177 (26) 36 Financial Reports Decrease Decrease Decrease
(162) (156) 144 156 (32) 29 165
Sri Lanka Telecom PLC | Annual Report 2018 166 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports received fromAlcatelCITFrancein2005. Grant inCompanyandGroupconsistsofExchangeequipment 28. Grants insurance reserveandtheadequacyofprovisionmade. Management regularlymonitorsthechargesmadeagainst property, plantandequipment. any fundingrequirementsforpotentiallossesfromuninsured reserve. Anequalamountisinvestedinasinkingfundtomeet of additionstoproperty,plantandequipmentaninsurance annually fromtheretainedearningsanamountequalto0.25% As statedinAccountingPolicy3(s)theCompanytransfers 27. Insurancereserves Salary incrementrate(Changeby1%) As at31December Transferred toretainedearnings As at1January Discount rate(Changeby1%) 2017 Balance at1January Balance at31December toProfitorloss Grant credited
Notes totheconsolidatedfinancialstatements 2018 Group (3) – 3 2017 (6) 3 9 Profit orLossandOtherComprehensive Effect onchargetotheStatementof 2018 Company (3) – 3 Increase 2017 (6) (31) 3 9 37 Income 29. Statedcapital ordinaryshares 1,804,860,000 Issued andfullypaid Decrease (33) 35
Effect onnetdefinedbenefitliability Increase (31) 37 Group/Company Group/Company 18,049 2018 2018 791 100 691 Decrease 18,049 2017 2017 691 680 (33) 35 11 Reconciliation ofprofitbeforetaxtocashgeneratedfromoperations: 30. Cashgeneratedfromoperations Profit beforetax Depreciation Adjustments for: Grant receivedlessamortisation Amortisation ofintangibleassets Provision/write-off ofbadanddoubtfuldebts Provision forfallingvalueofinventories Interest expenseandfinancecosts Foreign exchange(loss)/Gain Interest income Connection feeslessamortisation Profit onsaleofproperty,plantandequipment Impairment ofassets Impairment ofinvestment Changes inworkingcapital: Contract assetsSLFRS15adjustment Provision forretirementbenefitobligations Impairment ofinvestmentinassociatecompany Net movementoncashflowhedges Cash generatedfromoperations – Receivablesandprepayments – Inventories – Payables Note 9.a 28 15 10 14 16 26 Notes totheconsolidatedfinancialstatements 7 9 16,850 27,030 24,052 (7,556) 7,169 1,097 1,127 1,809 2,137 2,441 (281) (685) (332) (290) (672) 2018 239 273 661 40 40 28 28 (3) Group – – 16,461 24,992 21,734 (1,040) (4,318) (1,923) 5,528 1,767 2,983 (681) 2017 826 159 478 607 100 682 97 97 14 14 (6) – – – – 11,361 15,413 14,903 (2,344) 3,142 1,200 1,937 (281) (443) (136) (306) (103) (672) 255 605 525 Company 2018 93 93 29 29 16 16 28 28 (3) – – Financial Reports 10,926 14,332 13,693 (3,064) (1,400) 2,129 1,266 3,825 (562) (197) (677) 195 471 100 593 2017 68 68 12 12 14 14 (6) – – – – – – 167
Sri Lanka Telecom PLC | Annual Report 2018 168 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports (d) (c) (b) (a) 32. Contingencies disclosure. no othermaterialfinancialcommitmentsthatrequiresseparate with thirdpartiesinthenormalcourseofbusiness,thereare Except foranyregularmaintenancecontractsenteredinto Other financial commitments The GroupandtheCompanyhavepurchasedcommitmentsinordinarycourseofbusinessasat31December2018follows: 31. Capitalcommitments payments areasfollows: The futureminimumleasepaymentsandothercommitment Operating leasecommitments Property, plantandequipment – Approvedbutnotcontracted – Notlaterthan1year – Approvedandcontracted – Laterthan1yearandnotlater5years the CustomsDepartment. pending theInquiry. Presentlyawaitingthedecision of Subsequently, the equipmentwasclearedin July2009, project, wasdetainedbytheCustoms inMay2009. consignment ofequipmentfor NGNPhaseIIexpansion USD 996,785.65,whichwasimported underthelast Customs CaseNo.ADP/031/2009 –Goodsvaluedat is 15May2019. Order dated17October2014. Nextdateofthecase on 9March2016,precludingRespondents fromenforcing against thisOrderandinterimorderwasissuedbyCourt has filedCaseinCourtofAppealunderCA/writ/387/2014 mitigated forfeitureofLKR1,820,502,062.00onSLT.SLT The OrderwasdeliveredinOctober2014imposinga on acashdepositandbankguaranteesubmittedbySLT. the equipmentwereclearedpendingInquiry,based October 2008bytheCustomsAuthority.Subsequently consignment ofCDMAequipmentwasdetainedin 12/2008 CBCU,aninquirybySriLankaCustoms–A order. ArgumentSE/CHC/Appeal31/2010. the DirectorybySLT.DLPLappealedagainstabove competition withregardtoartworkonthecoverpageof 6(3) claimeddamagesofLKR250Mn.,forallegedunfair (DLPL) againstSLTthedismissalofCHC2/200 Appeal CasefiledbyDirectoriesLanka(Private)Limited proceedings 6March2019. disconnection ofinterconnectionservices.Corrections from SriLankaTelecomPLC(“SLT”)forallegedunlawful Court CaseNo.20/2006claimingdamagesofUSD12Mn. Global ElectroteksLimitedinitiatedlegalactionunderHigh Notes totheconsolidatedfinancialstatements
(f) (e) and theCasefixedforarguments on28October2019. the HighCourtintact.Bothparties filedwrittensubmissions certain pointsoflawleavingthe originalordergivenunder points. Thismeansthecasewill proceedfurthertoargue leave wasgrantedinalimited mannerwithregardto legal Court toobtainleaveproceed withtheirapplicationand against theaforesaidOrder.Dialogsupportedmatterin number (SC/HC/LA82/2018)S.C.Appeal139/2018 appealed totheSupremeCourtunderCasebearing Subsequently DialogBroadBandNetwork(Pvt)Ltd the orderwasdeliveredinfavourofSLTon8August2018. supported its application for the Preliminary Objections and SLT filedrevocationpaperon10August2017and LKR 7,800,000,000.00isprayedunderthepetition. Further permanentinjunctionanddamagesof provisions ofIntellectualPropertyAct. revealed theRFPandtofurnishoriginalunder 2017 requiringSLTtodisclosethesource/partywho and anex-parteinteriminjunctionwasissuedon19July Intellectual PropertyRightsintheCommercialHighCourt HC/Civil/23/2017 againstSLTregardingviolationof On 18July2017DBNfiledaCasebearingNumber Tribunal. in HighCourtregardtotheproceedingsbeforeLabour the proceedingbeforeLabourCommission.Appealsfiled Tribunal. Anappealispending(WR232/2015)filedagainst or compensationundertheProceedingsbeforeLabour the LabourCommissionerandincludesre-instatement compensation withregardtoproceedingsinitiatedbefore respectively. ThereliefclaimedincludesEPF,ETFand proceeding initiatedundereachforumare47and21 Commissioner) andLabourTribunalnumberof filed legalproceedingsinLabourDepartment(Labour Debt RecoveryOfficerswhowereattachedtoSLThad 13,085 15,667 2,582 2018 116 164 48 Group 25,984 27,758 1,774 2017 160 253 93 2,582 4,742 7,324 2018 116 164 Company 48 25,984 27,384 1,400 2017 160 253 93 than 3500E1Links. entitled toreceivediscountsif theCompanyusesmore As pertheTRCapprovaldated 19May2014,Mobitelis (a) Mobitel(Private)Limited 33.1 Transactions withrelated entities whether apriceischarged. resources orobligationsbetweenrelatedparties,regardlessof A relatedpartytransactiontakesplacewithatransferof the otherpartyinmakingfinancialandoperatingdecisions. to controltheotherpartyorexercisesignificantinfluenceover Parties areconsideredtoberelatedifonepartyhastheability 33. Relatedpartytransactions in theFinancialStatementsupto31December2018. the appealsandhearings,noprovisionshavebeenrecognised With regardtocasesdetailedabove,pendingtheoutcomeof (ii) (i) subsidiaries forfollowingcreditandtradefinancefacilities. The Companyhasprovidedguaranteesonbehalfofits result inamaterialliabilitytotheCompanyanditssubsidiaries. the opinionofDirectorsnonetheseactionsarelikelyto by employeesandthirdpartiesfordamagesotherrelief.In In additiontotheabovereferredcasesthereareotherclaims Purchase ofgoodsandservices: Sale ofgoodsandservices: Commission onbillcollection Buliding rent Antenna towerspace Interconnection charges mobilephone Call chargesonofficial ERP Rental TDM, VOIPPlatformandTransit Interconnection charges Provision ofE1links facilities forworkingCapitalrequirement. for SriLankaTelecom(Services)Limitedtoobtain Facilities amountingtoLKR26Mn.(2017–Mn.) Limited fortheGSMrolloutStage6and7 USD 77Mn.(2017–102Mn.)forMobitel(Private)
1,985 1,029 3,613 4,662 2018 816 131 631 390 Company 28 4 5 2,196 1,243 3,572 3,881
2017
846 282 97 27 – 6 4 Notes totheconsolidatedfinancialstatements for theGSMrolloutStages6and7. USD 77Mn.(2017–102Mn.)forMobitel(Private)Limited for thefollowingloansandobligations: The CompanyhasprovidedguaranteesonbehalfofMobitel provided bySriLankaTelecomPLC Further, Mobitelreceivesdiscountsoninfrastructureservices (b) SLTDigitalInfoServices(Private)Limited working Capitalrequirements. Sri LankaTelecom(Services)Limitedtoobtainfacilitiesfor Facilities amountingtoLKR26Mn.(2017–Mn.)for and obligations: Telecom (Service)Limitedforthefollowingloans The CompanyhasprovidedguaranteesonbehalfofSriLanka (c) SriLankaTelecom(Services)Limited retainer fortheservicesprovided. SLT DigitalInfoServices(Private)Limitedentitletoreceivea management servicestoSLTPLC.Aspertheagreement, SLT DigitalInfoServices(Private)Limitedprovidesevent Sale ofgoodsandservices: Sale ofgoodsandservices: Purchase ofgoodsandservices: Supply ofservices otherservices Directory distributionand Supply ofservices
2018 2018 Company Company Financial Reports 8 6 3 2017 2017 5 6 8 169
Sri Lanka Telecom PLC | Annual Report 2018 170 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports (f) SLTCampus(Private)Limited 5% marginin2018. in 2018(2017–LKR254Mn.)Totalcostincurredplusa cumulative billablesubscriberwhichamountedtoLKR297 Mn. unit ratebasedfeecomputedattheofLKR65.00per Sri LankaTelecomPLCpaysVisionCom(Private)Limiteda Service fee: following percentages: (2017 –LKR10Mn.)SLT’sshareofrevenueisbasedonthe VisionCom (Private)LimitedamountingtoLKR13Mn. Sri LankaTelecomreceivedanad-insertionrevenuefromSLT Ad-insertion revenue: (e) SLTVisionCom(Private)Limited (d) SLTHumanCapitalSolutions(Private)Limited Purchase ofgoodsandservices: Sale ofgoodsandservices: Channel advertisement Advertisement onPEOTV–EPG Purchase ofgoodsandservices: Sale ofgoodsandservices: Purchase ofgoodsandservices: Sale ofgoodsandservices: Service provisioning Supply ofservices Service provisioning Supply ofservices Provision ofmanpowerservice Supply ofservices Notes totheconsolidatedfinancialstatements 1,778 2018 2018 2018 Company 804 Company Company 15 17 – 7
1,650 2017 2017 2017 34% 17% 330 15 10 0 4 of services (k) Outstandingbalancesarisingfromsale/purchase provided to/bySLTPLC (g) Feesforsecondmentofpersonnelandservices Receivable fromsubsidiaries: Payable tosubsidiaries: (Private) Limited SLT DigitalInfoServices Mobitel (Private)Limited (Private) Limited SLT DigitalInfoServices (Private) Limited SLT HumanCapitalSolutions (Services) Limited Sri LankaTelecom SLT VisionCom(Private)Limited (Private) Limited SLT PropertyManagement Sky Network(Private)Limited SLT Campus(Private)Limited Mobitel (Private)Limited (Private) Limited SLT DigitalInfoServices (Private) Limited SLT HumanCapitalSolutions SLT VisionCom(Private)Limited (Services) Limited Sri LankaTelecom Sky Network(Private)Limited SLT Campus(Private)Limited
1,277 2,042 1,065 2018 2018 140 155 181 258 197 283 238 273 Company Company 51 51 31 53 20 – – 1 2,684 3,460 1,681 2,540 2017 2017 136 157 150 284 212 306 130 190 46 46 11 38 20 – 1 business. other Government-relatedentitiesintheordinarycourseof carried outtransactionswiththeGovernmentofSriLanka and During theyearended31December2018,Companyhas a relatedpartyaccordingtoLKAS24PartyDisclosure. the CompanyhasconsideredGovernmentofSriLankaas financial andoperatingpoliciesoftheCompany.Accordingly, to theTreasuryandthosehavesignificantinfluenceover of theCompanyasat31December2018throughsecretary The GovernmentofSriLankaholds49.5%thevotingrights (C) Government-relatedkeyinstitutions (b) Outstanding balances arisingfrom sale/purchase ofservices (a) MaxisCommunications Berhadanditssubsidiaries 33.2 Transactionswithotherrelatedparties Purchase ofgoodsandservices: Sale ofgoodsandservices: Receivable fromrelatedcompanies: Payable torelatedcompany: International outgoingtraffic Maxis CommunicationsBerhadanditssubsidiaries Maxis CommunicationsBerhadanditssubsidiaries Sale ofSEA-ME-WE3Cablecapacity International incomingtraffic International incomingtraffic Notes totheconsolidatedfinancialstatements (iii) (ii) (i) with keyGovernmentrelatedentitiesasgivenbelow: The Companyidentifiedindividuallysignificanttransactions LKR 244Mn.(2017–Mn.) Dividend payabletotheGovernmentamounting (2017 –LKR11,532Mn.)asat31December2018. LKR 3,569Mn.(20171,790Mn.)and20,752 of theGroupat/fromGovernmentbanksamountedto Deposits, repurchaseagreements(Repo)andBorrowings LKR 2,948Mn.(2017–1,606Mn.) receivables asat31December2018amountedto to LKR4,789Mn.(2017–3,769Mn.)andcredit during theyearended31December2018amounted Revenue fromprovisionoftelecommunicationservices 2018 2018 148 148 132 Group Group 1 6 3 9 2017 2017 141 141 119 33 16 42 58 2018 2018 Company 147 147 132 Company 1 6 3 9 Financial Reports 2017 2017 141 141 119 33 16 38 54 171
Sri Lanka Telecom PLC | Annual Report 2018 172 Sri Lanka Telecom PLC | Annual Report 2018 Financial Reports conjunction withNote16totheFinancialStatements. Related partytransactionsdisclosedaboveshouldbereadin y y y y y y y y y eliminated inpreparingtheConsolidatedFinancialStatements: reporting datebetweenthefollowingcompanieshavebeen All transactionsduringtheyearandbalancesasat officers oftheCompanyandGroup. Key managementpersonnelcomprisetheDirectors&chief personnel 33.3 Transactionswithkeymanagement y y y y y y y y y eChannelling SLT Campus(Private)Limited SLT PropertyManagement(Private)Limited PLC Sky Network(Private)Limited SLT VisionCom(Private)Limited SLT HumanCapitalSolutions(Private)Limited SLT DigitalInfoServices(Private)Limited Sri LankaTelecom(Services)Limited Mobitel (Private) Limited Short termbenefits Post employmentbenefits Salaries andotherbenefits Notes totheconsolidatedfinancialstatements Financial Statementsassetoutbelow: the subsidiarycompanyhasbeenadjustedinConsolidated The impactofnon-uniformaccountingpoliciesadoptedby 34. Non-uniformaccountingpolicies consolidated accounts. Limited waseliminatedandisrecognisedoncashbasisinthe Therefore, therecognitionofrefundbyMobitel(Private) Other ComprehensiveIncomeonastraightlinebasis. Limited recognisesitintheStatementofProfitorLossand basis whenthepaymentisreceivedwhereasMobitel(Private) Telecommunication DevelopmentCharge(TDC)oncash Sri LankaTelecomPLCaccountsforrefundson policies oftheparent andtheGroup entity Adjustment dueto different accounting Income byMobitel(Private)Limited or LossandOthercomprehensive recognised inStatementofProfit Reversal ofdeferredrevenue 2018 286 270 16 16 Group
2017
268 294 26 26
2018 204 189 Company 15 15 2018
Company (87) 2017 2017
227 249 (98) 22 22
AWFDR rate. been arrivedbydiscountinggrossvaluestheyearend Fair ValueofTradeandOtherPayablesBorrowingshave term maturitiesoftheseinvestments. approximate theircarryingamountslastlyduetotheshort receivables, Tradepayables(current)andbankoverdraft Cash andbankbalances,Shorttermdeposits,Trade assumption wasusedtoestimatethefairvalues: in aforcedorliquidationsale.Thefollowingmethodand in acurrenttransactionbetweenwillingparties,otherthan at theamountwhichinstrumentcouldbeexchanged The fairvaluesofthefinancialassetsandliabilitiesareincluded the FinancialStatements. and fairvaluesoftheFinancialinstrumentsthatarecarriedin Set outbelowisacomparisonbyclassofthecarryingamounts 35. Fairvaluedisclosure Total Bank overdrafts Trade andotherpayables Borrowings Obligations underFinanceleases Financial Liabilities Total Cash atbankandinhand Short termdeposits Trade andotherreceivables Financial Assets 87,152 32,845 47,764 33,533 11,591 18,779 6,460 3,163 2018 83 Group Carrying Amount 69,391 13,323 29,383 26,525 21,749 15,630 1,973 4,146 2017 160
65,815 19,783 40,392 19,421 15,181 Notes totheconsolidatedfinancialstatements 5,638 3,569 changes to,ordisclosureinthe FinancialStatements. since theStatementofFinancial Positiondatewhichrequire Except asdisclosedabove,noothereventshavearisen Ernst &Young. Directors on21February2019hasbeenauditedbyMessrs A statementofsolvencycompletedanddulysignedbythe the Section57,priortorecommendingfinaldividend. the Companysatisfiedsolvencytestinaccordancewith the CompaniesActNo.07of2007,BoardDirectors Companies ActNo.07of2007.AsrequiredbySection56 LKR 1,913,151,600,incompliancewithSection56and57of declared. Finaldividendproposedfortheyearamountsto 24 of2017,aWHT14%hasbeenimposedondividend at 31December2018.UndertheInlandRevenueActNo. final dividendhasnotbeenrecognisedasaliability General Meetingtobeheldon28March2019.Thisproposed Further, thisdividendistobeapprovedattheAnnual financial yearended31December2018. Company tobepaidbywayofcashdividendforthe share (2017–LKR0.89pershare)onvotingsharesofthe recommended afirstandfinaldividendofLKR1.06per The BoardofDirectorstheCompanyhas 36. Eventsafterthereportingdate 2018 671 Company 2 61,409 12,406 22,431 26,502 17,164 14,588 1,780 2017 796 70 69,751 32,005 31,203 33,533 11,591 18,779 6,460 3,163 2018 83 Group 61,880 13,323 28,326 20,071 21,749 15,630 1,973 4,146 2017 160 Fair Value 52,239 19,586 27,013 19,421 15,181 5,638 3,569 2018 671 Company Financial Reports 2
54,911 12,406 22,201 20,234 17,164 14,588 1,780
2017 796 70 173
Sri Lanka Telecom PLC | Annual Report 2018 SUPPLEMENTARY INFORMATION TEN YEAR PROGRESS – GROUP (All amounts in Sri Lanka rupees million)
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Financial position – Group
Property, plant and equipment 123,850 117,035 108,649 99,283 90,935 80,506 73,602 67,705 61,258 65,896 Total assets 180,435 159,206 142,910 126,545 122,604 108,047 104,510 96,603 87,030 90,220 Current assets 45,377 31,048 27,464 21,426 25,343 20,598 25,712 24,341 21,238 19,764 Current liabilities 52,378 57,885 45,226 33,082 29,031 26,526 28,091 23,948 22,691 27,403 Borrowings 55,835 41,811 32,940 24,395 27,122 20,690 17,852 14,709 11,316 13,351 Equity 73,720 71,404 68,678 65,240 63,900 59,789 55,987 53,660 49,849 46,311 Performance
Revenue 81,445 75,741 73,801 68,022 65,040 60,144 56,771 51,644 50,250 48,077 Operating profit 7,613 3,918 5,726 6,789 5,711 6,491 6,055 5,169 5,144 2,547 Finance cost 2,048 637 1,229 2,398 211 1,177 2,233 841 1,012 2,024 Earnings before tax 7,169 5,528 6,497 5,515 8,251 7,365 5,851 6,162 5,961 1,395 Taxation 2,221 1,588 1,707 1,791 2,250 1,946 1,930 1,657 2,018 617 Earnings after tax 4,948 3,940 4,790 3,724 6,001 5,419 3,921 4,505 3,943 778 Cash flow
Net operating cash flows 19,656 18,224 19,466 21,265 20,047 15,386 16,094 20,250 15,260 18,213 Net cash used in investing activities 22,890 27,415 24,347 14,375 23,524 16,507 15,362 22,968 7,975 7,238 Net cash used in/(from) financing activities 16,909 756 360 6,065 (5,039) 57 174 1,494 3,965 11,408 Key financial indicators
Earnings per Share (Rs.) 2.74 2.18 2.65 2.06 3.32 3.00 2.17 2.50 2.18 0.44 Return on Assets (%) 4.22 2.46 4.01 5.36 4.66 6.01 5.79 5.36 5.91 2.82 Return on Equity (%) 6.71 5.52 6.97 5.71 9.39 9.06 7.00 8.40 7.91 1.68 Operating margin (%) 9.35 5.17 7.76 9.98 8.78 10.79 10.67 10.01 10.24 5.30 Asset turnover (No. of times) 0.45 0.48 0.52 0.54 0.53 0.56 0.54 0.54 0.58 0.53 Current ratio (No. of times C.L.) 0.87 0.54 0.61 0.65 0.87 0.78 0.92 1.02 0.94 0.72 Quick asset ratio (No. of times C.L.) 0.82 0.48 0.57 0.62 0.86 0.69 0.84 0.93 0.88 0.65 Gearing ratio (Debt to Rs. 1/- of total equity) 0.43 0.37 0.32 0.27 0.30 0.26 0.24 0.21 0.19 0.22 Interest cover (No. of times interest) 1.77 2.02 4.53 5.62 8.94 9.44 6.73 11.43 6.89 1.69 Net Assets per Share 40.82 39.56 38.05 36.14 35.40 33.13 31.02 29.73 27.62 25.66 Dividend per share 1.06 0.89 0.89 0.89 0.85 0.85 0.85 0.85 0.60 0.25
1. Earnings per share – Earnings per ordinary share (EPS) – Profit attributable to ordinary shareholders divided by the number of ordinary shares in use. 2. Return on Assets – Return on assets (ROA) – Profit after tax expressed as a percentage of the average assets; indicates overall effectiveness in generating profits with available assets. 3. Return on Equity – Return on equity (ROE) – Net profit attributable to owners, expressed as percentage of average ordinary shareholders’ equity. 4. Operating Margin – Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. 5. Asset Turn Over – Asset turnover ratio measures the value of a company's sales or revenues generated relative to the value of its assets. 6. Current Ratio – The current ratio measures the ability of a company to cover its short-term liabilities with its current assets. 7. Quick Asset Ratio – The Quick Ratio, also known as the Acid-test or liquidity ratio, measures the ability of a business to pay its short-term liabilities by having assets that are readily convertible into cash. 8. Gearing Ratio – The gearing ratio measures the proportion of a company's borrowed funds to its equity. Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka 9. Interest Cover – Interest cover – Number of times interest expense is covered by earnings before interest and tax.
174 Supplementary Information PORTFOLIO OF LANDS
The following values are based on valuation reports submitted by a firm of incorporated Valuers in 2011, on lands transferred on incorporation (conversion of SLT into a public limited company in 1996) and lands acquired after the incorporation. The said lands valued over LKR 500,000/- with their respective values given below:
Location Extent Value of Location Extent Value of (Hectare) land (Hectare) land (LKR Mn.) (LKR Mn.)
No. 108 & 109, Walawwaththa Road, High Level Road, Nugegoda 0.1170 116 Anuradhapura 0.2434 24 Polhengoda Road, Narahenpita 0.3030 240 Maithripala Senanayake Mawatha, Anuradhapura 0.1125 56 Pottode, Katunayaka 0.3039 12 Maithripala Senanayake Mawatha, Anuradhapura 0.3355 166 Thimbirigaskatuwa, Pottode, Negombo 0.6037 24 Galkandehena, Kekirawa 0.1310 12 Thimbirigaskatuwa, Pottode, Negombo 1.7160 68 No. 14, Nivanthaka Chethiya Road, Anuradhapura 0.0466 4 St. Joseph’s Street, Negombo 0.6787 191 Mannar Road, Medawachchiya 0.3315 5 Queen Elizabeth Drive, Nuwara Eliya 0.2354 93 Medawachchiya Road, Medawachchiya 0.1468 2 Main Street, Panadura 0.2542 126 Nochchiyagama Idama, Nochchiyagama 0.1800 9 Bandaragama 0.2803 55 Behind the Mosque, Maithripala Senanayake Mawatha, Anuradhapura 0.1769 24 Anguruwatta Road, Horana 0.2177 52 Nivanthaka Chethiya Road, Anuradhapura 0.0971 12 Sri Gunarathana Mawatha, Panadura 0.2952 47 Galkantha Mawatha, Ampara 0.7657 91 Hotel Road, Mount Lavinia 0.1913 95 Ratnapura Road, Eheliyagoda 0.0802 14 Airport Junction, Ratmalana 0.2076 62 Station Road, Batticaloa 0.4383 61 Main Street, Ratnapura 0.3645 86 Lower King’s Street, Badulla 0.4020 48 Old Negombo Road, Ja-Ela 0.0870 43 Batticaloa Road, Bibile 0.0890 9 Minuwangoda Road, Kotugoda 8.0937 440 Lower King’s Street, Badulla 0.0340 4 Ragama Road, Ragama 0.2048 40 Ridikotaliyagama, Mahiyanganaya 0.0790 5 Negombo Road, Welisara 2.2280 484 Circuit Bangalow, Namunukula 0.2100 10 Old Negombo Road, Wattala 0.1012 80 Senanayake Mawatha, Bandarawela 0.0705 11 Aliyamalagala, Anuradhapura 0.2027 2 Anduwakelepathana, Haputale 0.4080 32 Post Office Road, Eppawela 0.0914 3 No. 6, Senanayake Mawatha, Bandarawela 0.2380 56 Kuda Galnewa Road, Galnewa 0.1453 1 No. 8, Wakwella Road, Galle 0.1697 50 Police Station Road, Horowpothana 0.4180 2 Court Road, Gampaha 0.1523 54 Kahatagasdigiliya, Anuradhapura 0.0993 1 Lotus Road, Colombo 1.3154 2,600 Padaviya Road, Kebithigollewa 0.2628 8 Dickmans Road, Colombo 5 0.3360 291 Anuradhapura-Kurunegala Road, Thambuttegama 0.0860 7 No. 5, Anderson Road, Colombo 5 0.1889 299 Hospital Road, Inginiyagala 0.0470 1 No. 7, Anderson Road, Colombo 5 0.1363 216 Badulla Road, Padiyatalawa 0.1020 2 No. 9, Anderson Road, Colombo 5 0.1949 308 Panama Road, Pottuvil 0.2570 15 No. 17, Sugathodaya Mawatha, Colombo 2 0.2190 346 No. 63, Cemetery Road, Veedukkadu, Batticaloa 0.1019 5 Main Street, Kalutara 0.3035 108 Ketawala Road, Hali Ela 0.0940 22 Primrose Hill, Kandy 0.0534 4 Ella Road, Namunukula 0.1485 9 Prince Street, Kandy 0.2251 89 Dammeria Estate Road, Passara 0.2460 17 Punchi Borella, Maradana 0.2625 212 Poonagala Road, Balagala 0.1264 5 Baseline Road, Welikada 3.0880 1,099 Railway Station Road, Ella 0.0330 4 Tangalle Road, Matara 0.2880 148 Haputalegama Road, Diyathalawa 0.0226 6 Satellite Earth Station, Padukka 13.8960 165 Wellawaya Road, Koslanda 0.0440 3 Nalandarama Road, Nugegoda 0.1970 156 Ettampitiya Road, Pattiyagedara 0.1568 6 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
175 Supplementary Information Portfolio of lands
Location Extent Value of Location Extent Value of (Hectare) land (Hectare) land (LKR Mn.) (LKR Mn.)
Wellawaya Road, Monaragala 0.3160 41 Kegalle Road, Ampe North, Kotiyakumbura 0.1012 6 Vishaka Hill, Bandarawela 0.0958 11 Aranayaka Road, Mawanella 0.0910 6 Divitotawela, Welimada 0.1112 11 Nawa Rohala Road, Warakapola 0.0867 6 Ella Road, Wellawaya 0.1300 10 Alawwa-Giriulla Road, Alawwa 0.0760 3 Kurunegala Road, Mukalanhena Village 0.3190 9 No. 67, Gettuwana, Kurunegala 0.2730 27 Old Town-Madampe Road, Ihalagama Village 0.1048 12 No. 116/53, Tank Circular Road, Kurunegala 0.2060 24 Marawila-Nattandiya Road, Ihalagama Village 0.0507 5 Galgamuwa-Ehetuwewa Road, Arsonwewa 0.1580 2 Puttalam 0.3054 42 Pannala-Kurunegala Road, Pahala Narangamuwa 0.1010 1
Galle Main Street, Baddegama 0.1340 8 Hettipola Road, Dolahamuna 0.0980 5 Galle Road, Elpitiya 0.1460 6 No. 7, Gattuwana Circular Road, Gattuwana, Kurunegala 0.1210 12 Galle Road, Gintota 0.0513 5 Madampe-Narammala Road, Kuliyapitiya 0.2298 45 Galle Road, Habaraduwa 0.0796 8 No. 139, Kandy Road, Kurunegala 0.9200 164 Akuressa Road, Imaduwa 0.2150 4 Wariyapola Road, Narammala 0.0970 5 Galle Road, Kosgoda 0.0920 6 Anuradapura Road, Nikadalupotha 0.1180 1 Galle Road, Nagoda 0.1230 1 Puttalum Road, Nikaweratiya 0.0850 4 Church Street, Galle 0.2520 50 Negombo Road, Pannala 0.0940 3 Donald Janz Road, Galle 0.0510 5 Polgahawela-Kegalle Road, Galaboda, Makumbura Road, Udugama 0.1391 3 Polgahawela 0.1998 8 Dunaly Estate, Galaha 0.1253 2 Wariyapola-Ganewatta Road, Wariyapola 0.1077 4 Gonahena, Nawalapitiya 0.2782 22 Kalmunai Road, Akkaraipattu 0.2050 49 No. 6, Galaha Road, Peradeniya 0.1089 28 Yard Road, Kalmunai 1.2250 170 Pussellewa Exchange, Nuwara Eliya Road 0.2155 9 Telecom Road, Paiyagala North 0.0253 3 Udawalagedara Watta, Gampola 0.0285 6 Mangala Road, Beruwala 0.2100 21 Nittambuwa Road, Kirindiwela 0.2129 17 Telecom Road, Palligoda, Matugama 0.0597 8 Naligama Road, Mirigama 0.1874 15 Telecom Road, Pahala Welgama, Bulathsinhala 0.1934 1 Kandy Road, Pasyala 0.0534 4 Telecom Road, Meegahatenna 0.2618 2 Negombo Road, Veyangoda 0.0889 7 Digana 0.1986 8 New Kandy Road, Waliveriya 0.0438 7 Galagedara Exchange, Rambukkana Road 0.1386 5 Rideeyagama Road, Ambalanthota 0.1720 3 Kadugannawa Exchange, Kandy Road 0.0356 3 No. 66, Barrak Street, Hambantota 0.1920 7 Primrose Hill, Kandy 0.1233 2 No. 6, Tower, Hill Road, Hambantota 0.2150 11 Rikillagaskada 0.1300 4 Kotuwegoda Road, Tangalle 0.1960 31 Station Road, Mannar 0.3238 10 Tissamaharama Road, Tissamaharama 0.0820 5 Akuressa 0.0711 14 Beliatta Road, Walasmulla 0.0803 8 Matugoba, Kotapola 0.1770 2 Kotabo Road, Weeraketiya 0.1700 10 Dickwella 0.1554 2 Danbar Road, Hatton 0.8306 41 Beruwewela, Hakmana 0.1260 6 Pundaluoya 0.2620 2 Kamburupitiya 0.0890 7 Talawakelle 0.1813 9 Godauda, Dickwella 0.1036 4 Debathgama Road, Gevilipitiya 0.1200 1 Ihala Ganegama, Malimbada 0.0690 7 Kandy Road, Ballapana 0.1031 4 Urubokka 0.1290 4 Bulathkohupitiya Road, Kegalle 1.4515 244 Pelena, Weligama 0.1069 15 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
176 Portfolio of lands Supplementary Information
Location Extent Value of Location Extent Value of (Hectare) land (Hectare) land (LKR Mn.) (LKR Mn.)
Matale Road, Dambulla 0.4150 25 Digana, Ahaspokuna 0.3560 4 Naula 0.3050 6 Balungala Watta 0.2317 1 No. 1/3, King Street, Matale 0.3342 66 Telicom Road, Pahala, Nebeda 0.1032 1 Akuramboda Watta, Pallepola 0.0970 3 Telicom Road, Agalawatta 0.0080 1 Exchange Building, Badalgama 0.0303 1 Ibbagamuwa-Keppettipola Road, Rideegama 0.2530 3 Negombo-Mirigama Road, Kelepitimulla Village 0.1710 6 Bulathkohupitiya Road, Moradana Pahala 0.0969 1 St. Christopher Lane, Kochchikade 0.0410 5 Watawala 0.1210 4 Wennappuwa-Lunuwila Road, Wennappuwa 0.0900 5 Watagoda 0.1850 2
Police Station Road, Ragala 0.0791 10 Upcot 0.1495 1 Gonakele, Maturata 0.1670 5 Maskeliya 0.1046 2 Gampola Road, Thawalantenna 0.0982 12 Ginigathhena Land, Kurundugolla 0.1310 2 Welimada Road, Udupussellawa 0.0906 4 Killarney Estate Road, Bogawantalawa 0.1247 3 Ragala Road, Wathumulla 0.0770 3 Mavihena Road, Kandalama 0.1555 2 Telecom Road, Urugala-Ingiriya 0.2800 28 Pathirajakanda Estate Road, Pathirajakanda 0.1010 1 Batticaloa Road, Pollonnaruwa 0.3129 9 Galle Road, Ambalangoda 0.7900 15 New Town, Ratnapura 0.0632 5 Chilaw-Puttalam Road, Rajakadaluwa 0.1490 6 Embilipitiya-Pelmadulla Road, Kahawatta 0.0250 1 Chilaw-Puttalam Road, Kuruwikulam 0.2023 3 Kalawana-Weddagala Road, Obokka 0.2060 2 Poonagala Estate, Ampitikanda 0.1920 5 Ratnapura Road, Kiriella 0.0875 2 Haldummulla 0.0990 2 Ratnapura Road, Kolonna 0.3320 3 Beddegama, Namunukula 0.1373 3 Kuruwita-Udakada Road, Delgamuwa, Kuruwita 0.0653 2 Madulsima 0.3870 15 New Town, Ratnapura 0.0531 4 Batticaloa Road, Lunugala 0.1346 13 Nivitigala-Kahawatta Road, Nivitigala 0.2830 3 Mahakele Road, Kandaketiya 0.0253 2 Pelmadulla-Kuttapitiya Road, Pelmadulla 0.0950 5 Exchange Building, Makandura 0.4040 6 Rakwana-Godakawela Road, Rakwana 0.2035 2 Exchange Building, Balangoda 0.0807 11 Batticaloa Road, China Bay 0.0678 4 Minnana Town, Awissawella 0.3655 22 Lane Off Inner Harbour Road, Trincomalee 0.3294 65 Havelock Road, Colombo 5 0.0253 30 Post Office Road, Kantalai 0.1244 9 Vaverset Place, Colombo 5 0.0179 18 Mannar Road, Vavuniya 0.3060 33 IDH Road, Kalapaluwawa, Angoda 0.0364 6 Station Road, Vavuniya 0.1500 18 Godaporagahalanda, Malabe 0.0248 3 Saviapragasa Vidyasalai Veethy Road, Vavuniya 0.4047 40 Madiwela, Kotte 0.0278 4 Eramadu Road, Pulmoddai 0.3103 5 Kongahawatta, Talawathugoda, Kotte 0.0278 4 Nilaveli Road, Nilaveli 0.0581 2 Battaramulla, Kotte 0.0185 6 Temple Road, Mutur 0.2838 8 No. 478, Kaduwela Road, Thalangama North 0.0354 8 Pulmoddai Road, Kuchchaveli 0.0690 1 Udumullahena Watta, Kotuwegoda, Kotte 0.0311 5 Periyathumunai Road, Kinniya 0.1080 7 Bogahawtta, Nawala 0.0304 12 Off Main Street, Hingurakgoda 0.0583 4 Millennium City, Athurugiriya 0.0197 2 Main Street, Valachchenai 0.2036 6 Asdiyapokunawatta, Mulleriyawa, Angoda 0.0379 4 Trinco Road, Eravur 0.0925 13 Primrose Hill, Kandy 0.0751 6 Kandapola 0.0894 7 Heiyantuduwa, Biyagama 0.0506 7 Badalgama-Mahaoya Road, Badalgama 0.0984 4 Hettiyaovita, Biyagama 0.0374 5 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
177 Supplementary Information Portfolio of lands
Location Extent Value of Location Extent Value of (Hectare) land (Hectare) land (LKR Mn.) (LKR Mn.)
Walawwewatta, Delgoda 0.0320 3 Magammana, Homagama 0.0151 1 Ketakelagahawatta, Ranmuthugala, Kadawatha 0.0329 5 Telecom Road, Mahaaruggoda 0.0759 4 Ihala Karagahamuna, Kadawatha 0.0430 3 Kudugalla Road, Wattegama 0.1511 7 Puwakgahalanda, Siyambalape 0.0202 2 No. 27, Station Road, Batticaloa 0.0585 9 Mawaramandiya Road, Makola North 0.0192 2 Karainagar 0.0507 1 Pitipana North, Homagama 0.0253 2 Ariyalai, Jaffna 0.0658 4 Panagoda, Homagama 0.0253 3 Point Pedro, Jaffna 0.0809 3 Mattegoda, Nugegoda 0.1265 36 Pandathirippu, Jaffna 0.0514 1
No. 320/2, Old Kottawa Road, Embuldeniya, Pesalei 0.0908 1 Nugegoda 0.0234 7 Dalupothawatta, Pillewatta, Udugampola 0.0025 1 Gangodawila, Nugegoda 0.0186 7 Total 11,995 Sudharshi Mawatha, Kalubowila 0.0241 10 No. 67, Mahinda Place, Kirulapone 0.0244 24 Delgahalanda, Ihala Bope, Padukka 0.0266 1 Rukmalgama, Maharagama 0.0817 8 Srimathi Road, Keselwatta, Panadura 0.0632 15 St. Anthony’s Road, Moratumulla, Moratuwa 0.0276 4 3A, Rawatawatte Road, Moratuwa 0.0202 4 Millagahakanatta, Molpe, Ratmalana 0.0257 3 Kahatagahalanda Estate, Makandana, Ratmalana 0.0177 2 Gorakagahawatta, Wethara 0.0253 2 Batakeththara, Piliyandala 0.0253 4 Bokundara, Piliyandala 0.0316 4 Godaparagahalanda, Honnanthara, Piliyandala 0.0519 5 Kandawala Estate, Borupana, Ratmalana 0.0190 4 Madangahawatta, Laxapathiya, Moratuwa 0.0253 4 Keerakotuwa, Nawanuge Road, Peliyagoda 1.6432 325 Awissawella, Ratnapura Road, Welikanna 0.1623 3 Kotawera Pallegama, Welimada 0.0526 2 Puttalam Road, Chilaw 0.2708 54 Kiribathkumbura, Pilimathalawa 0.5805 11 No. 47/1A, Church Road, Mattakkuliya 0.0303 15 Nawalapitiya Road, Ginigathena 0.1420 3 Alpitiya Road, Alpitiya 0.1789 2 Dambulla Road, Ibbagamuwa 0.1011 2 Telecom Road, Dodangoda 0.1510 9 Namadagala Village, Medamahanuwara 0.1247 1 Pallekele-Kundasale 0.0899 9 Pugoda Road, Giridara, Dompe 0.0050 1 Mandawala Road, Owitigama, Pugoda 0.0253 2 Ukuwela, Matale 0.0506 1 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
178 Supplementary Information GRI INDEX
GRI Standard Disclosure Page number(s) and/or Omission URL(s) or explanation
General Disclosures GRI 102: General Disclosures 102-1 Name of the organisation Inner back cover 102-2 Activities, brands, products, and services 5 102-3 Location of headquarters Inner back cover 102-4 Location of operations 102-5 Ownership and legal form Inner back cover 102-6 Markets served 5 102-7 Scale of the organisation 6 102-8 Information on employees and other workers 60-63 102-9 Supply chain 59 102-10 Significant changes to the organisation and its supply chain None 102-11 Precautionary Principle or approach 3 102-12 External initiatives 33 102-13 Membership of associations 33 102-14 Statement from senior decision-maker 12 102-16 Values, principles, standards, and norms of behaviour 42 102-18 Governance structure 85 102-40 List of stakeholder groups 30 102-41 Collective bargaining agreements 63 102-42 Identifying and selecting stakeholders 30 102-43 Approach to stakeholder engagement 31 102-44 Key topics and concerns raised 33 102-45 Entities included in the consolidated financial statements 4 102-46 Defining report content and topic Boundaries 3 102-47 List of material topics 33 102-48 Restatements of information None 102-49 Changes in reporting None 102-50 Reporting period 3 102-51 Date of most recent report 3 102-52 Reporting cycle 3 102-53 Contact point for questions regarding the report 3 102-54 Claims of reporting in accordance with the GRI Standards 3 102-55 GRI content index 179 102-56 External assurance None Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
179 Supplementary Information GRI Index
GRI Standard Disclosure Page number(s) and/or Omission URL(s) or explanation
Material topics GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 201: Economic Performance 201-1 Direct economic value generated and distributed 34-41 201-3 Defined benefit plan obligations and other retirement plans 63
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 203: Indirect Economic Impacts 203-1 Infrastructure investments and services supported 64-67 203-2 Significant indirect economic impacts 64-67
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 204: Procurement Practices 204-1 Proportion of spending on local suppliers 59
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 205: Anti-corruption 205-1 Operations assessed for risks related to corruption 100
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 206: Anti-competitive Behavior 206-1 Legal actions for anti-competitive behavior, anti-trust, and None monopoly practices
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
180 GRI Index Supplementary Information
GRI Standard Disclosure Page number(s) and/or Omission URL(s) or explanation
GRI 302: Energy 302-5 Reductions in energy requirements of products and services 66
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 307: Environmental Compliance 307-1 Non-compliance with environmental laws and regulations None
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 401: Employment 401-1 New employee hires and employee turnover 61-62 401-2 Benefits provided to full-time employees that are not provided to 63 temporary or part-time employees
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 403: Occupational Health and Safety 403-3 Workers with high incidence or high risk of diseases related to their None occupation
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 404: Training and Education 404-1 Average hours of training per year per employee 63 404-2 Programmes for upgrading employee skills and transition assistance 63 programmes 404-3 Percentage of employees receiving regular performance and career 63 development reviews
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 405: Diversity and Equal Opportunity 405-1 Diversity of governance bodies and employees 60
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25 Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
181 Supplementary Information GRI Index
GRI Standard Disclosure Page number(s) and/or Omission URL(s) or explanation
GRI 406: Non-discrimination 406-1 Incidents of discrimination and corrective actions taken 63
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 407: Freedom of Association and Collective Bargaining 407-1 Operations and suppliers in which the right to freedom of 63 association and collective bargaining may be at risk
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 413: Local Communities 413-1 Operations with local community engagement, impact assessments, 65-66 and development programmes 413-2 Operations with significant actual and potential negative impacts on None local communities
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 417: Marketing and Labeling 417-3 Incidents of non-compliance concerning marketing communications None
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 418: Customer Privacy 418-1 Substantiated complaints concerning breaches of customer privacy None and losses of customer data
GRI 103: Management Approach 103-1 Explanation of the material topic and its Boundaries 3 103-2 The management approach and its components 25
GRI 419: Socioeconomic Compliance 419-1 Non-compliance with laws and regulations in the social None and economic area Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
182 Supplementary Information ABBREVIATIONS
4G – Fourth Generation ITU – International Telecommunication Union 5G – Fifth Generation KPI – Key Performance Indicator ADSL – Asymmetric Digital Subscriber Line KPO – Knowledge Process Outsourcing BPO – Business Process Outsourcing LED – Light Emitting Diode BSS – Billing Support System LGN – Lanka Government Network CAPEX – Capital Expenditure LTE – Long-Term Evolution CCC – Colombo City Centre MBB – Mobile Broadband CDMA – Code Division Multiple Access Mbps – Megabits per second CRM – Customer Relationship Management MIMO – Multiple-Input and Multiple-Output CSP – Communication Service Provider MoU – Memorandum of Understanding DC HSPA+ – Dual-Carrier High Speed Packet Access MPLS – Multi Protocol Label Switching DSP – Digital Service Provider NB-IoT – Narrowband Internet of Things EBITDA – Earnings Before Interest, Taxes, NBN – National Backbone Network Depreciation and Amortisation NED – Non-Executive Director EPF – Employees’ Provident Fund NFV – Network Functions Virtualisation ERP – Enterprise Resource Planning NGN – Next Generation Network of Sri Lanka ETF – Employees’ Trust Fund OPEX – Operating Expenses FBB – Fixed Broadband OSS – Operational Support System FTTH – Fibre-To-The-Home OTT – Over the Top FTTN – Fibre-To-The-Node PEO TV – Personalised Entertainment Option Gbps – Gigabits per second Television GRI – Global Reporting Initiative PIOCMA – Pacific and Indian Ocean Cable Maintenance Agreement GTH – Global Telecommunications Holdings PoP – Point of Presence HDTV – High Definition Television PSTN – Public Switched Telephone Network HSPA – High Speed Packet Access RCS – Rich Communications Suite ICT – Information and Communication Technologies SAFA – South Asian Federation of Accountants ICTA – Information and Communication SDN – Software-Defined Networking Technology Agency SEA ME WE – South East Asia-Middle East-West Europe IDD – International Direct Dialling SEAIOCMA – South East Asia and Indian Ocean Cable IMS – IP Multimedia Subsystem Maintenance Agreement INED – Independent Non-Executive Director SLBN – Sri Lanka Telecom Broadband Network IoE Internet of Everything SLFRS – Sri Lanka Accounting Standards IoT – Internet of Things SLIM – Sri Lanka Institute of Marketing IPTV – Internet Protocol Television SME – Small and Medium Enterprise ISP – Internet Service Provider SOA – Service Oriented Architecture Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
183 Supplementary Information NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twenty Second (22nd) Annual General Meeting of Sri Lanka Telecom PLC will be held on 28 March 2019 at 10.00am at the Lotus Room of the Bandaranaike Memorial International Conference Hall (BMICH), Bauddhaloka Mawatha, Colombo 07 for the purpose of conducting the following Ordinary Business:
Agenda
1. To receive and consider the Annual Report of the Board of Directors on the affairs of the Company and the Statement of Accounts for the year ended 31 December 2018 with the Report of the Auditors thereon. 2. To declare a first and final dividend of Rupees One and Six Cents (LKR 1.06) per share as recommended by the Directors. 3. To elect as a Director, Mr Kanishka Senanayake, who retires in terms of Article 97 of the Articles of Association. 4. To re-elect as a Director, Mr W K H Wegapitiya, who retires by rotation in terms of Articles 91 and 92 of the Articles of Association. 5. To reappoint Messrs. Ernst & Young, Chartered Accountants as Auditors for the ensuing year and to authorise the Directors to determine their remuneration. 6. To authorise the Directors to determine and make donations to charities. 7. To transact any other business of which due notice has been given.
BY ORDER OF THE BOARD, SRI LANKA TELECOM PLC
Mahesh Athukorale Company Secretary
1 March 2019 Colombo
Notes 1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him/her. 2. A proxy need not be a member of the Company. 3. A Form of Proxy accompanies this Notice. Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
184 Supplementary Information NOTES Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
185 Supplementary Information Notes Sri Lanka Telecom PLC | Annual Report 2018 PLC Telecom Sri Lanka
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Sri Lanka Telecom PLC | Annual Report 2018 Sri Lanka Telecom PLC | Annual Report 2018 . ThecompetedFormofProxyshouldbedepositedattheRegisteredOfficeCompany,SriLankaTelecomPLC, 4. 3. 2. KindlyperfecttheFormofProxybyfillinginlegiblyyourfullname,addressandNationalIdentityCardnumber andsigning 1. Instructions astocompletionofFormProxy Lotus Road,Colombo01notlaterthan48hoursbeforethetimefixedforholdingofmeeting. not alreadybeenregisteredwiththeCompany. Proxy issignedbyanAttorney,therelativePowerofAttorneyshouldalsoaccompanycompletedFormProxy,ifithas In thecaseofacorporatememberproxymustbeexecutedinaccordancewithArticlesAssociation.IfForm proxy inhis/herdiscretionwillvoteashe/shethinksfit. Please indicatewithan“X”inthespaceprovided,howyourproxyistovoteoneachresolution.Ifnoindicationgiven in thespaceprovidedandfillingdateofsignature.
CORPORATE INFORMATION
Name of the Company Audit Committee Company Secretary Sri Lanka Telecom PLC Mr Kanishka Senanayake – Chairman Mr Mahesh Athukorale Ms Lai Choon Foong Legal Form Ms Nilanthi Pieris Credit Rating A public limited liability company Remuneration and Fitch Rating incorporated in Sri Lanka in September National long-term rating of AA+ (lka) 1996, under the Conversion of Public Nomination Committee Standard & Poor’s rating Corporations of Government-Owned Mr Chan Chee Beng – Chairman Long-term issuer Business Undertakings into Public Mr P G Kumarasinghe Sirisena credit rating of B Limited Companies Act No. 23 of 1987 Mr Lawrence Paratz and quoted on the Colombo Stock Bankers Exchange in January 2003. Technology Subcommittee Bank of Ceylon Company Registration Mr Lawrence Paratz – Chairman Citibank N.A. Number Mr W K H Wegapitiya Commercial Bank of Ceylon PLC Deutsche Bank PQ 7 Senior Tender Board Hatton National Bank PLC HSBC Bank Ms Lai Choon Foong – Chairperson Nations Trust Bank PLC Stock Exchange Listing Mr Lawrence Paratz NDB Bank PLC 1,804,860,000 Ordinary Shares of the Mr W K H Wegapitiya People’s Bank Company are listed in the Colombo Ms Nilanthi Pieris Sampath Bank PLC Stock Exchange. Seylan Bank PLC Related Party Transactions Standard Chartered Bank Registered Address Review Committee Telecom Headquarters, Lotus Road, Ms Nilanthi Pieris – Chairperson Colombo 01. Ms Lai Choon Foong Mr Kanishka Senanayake Board of Directors Mr P G Kumarasinghe Sirisena – Chairman Auditors Mr Chan Chee Beng Ernst & Young (Chartered Accountants), Mr Lawrence Paratz 201, De Saram Place, Ms Lai Choon Foong Colombo 10. Ms Nilanthi Pieris Mr W K H Wegapitiya Mr Kanishka Senanayake
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