Dhivehi Raajjeyge Gulhun Plc ANNUAL REPORT 2018 Take on tomorrow Contents
01 02 03 Our Business Highlights Strategy & of the year Performance 2018 04 05 06 Corporate Social Corporate Audited Responsibility Governance Financial Statements Dhiraagu
Annual Report 2018 2018 Report Annual
Our Our Vision Our Values Business | Our Enrich lives Business through digital services Collaborate Innovate We work together to We constantly innovate offer our customers a to provide our customers seamless experience with the latest and best in digital services Our Mission To lead the market through excellence Serve Inspire in customer We keep our customer We empower people, at the heart of all we do, and never lose sight experience because we win of the bigger picture when they do of nation-building and growth
5 Dhiraagu
Annual Report 2018 2018 Report Annual
Haa 59 Partners Alifu Haa Dhaalu 12% Population Served Shaviyani | Our Business | Our
Noonu 90 Raa Who Presence Partners 12% Lhaviyani Our Products Achievements Population Baa Served We Are • We overcome geographic barriers and stay close to our customers through the & Services & Awards 2018 We are the leading telecommunications nation’s largest retail and distribution Kaafu company in the Maldives, offering a full range network of 73 partners, 31 wholesalers, 53 Partners Alifu of digital and communication services. 279 agents, 8 overseas agents and over Alifu With telecommunications being an enabler in our • Recognised as one of the most effective 100 Our business is to inspire and empower 3,800 retailers. 7% increasingly connected society, our portfolio includes brand transformation of 2017 by Rebrand 100® Population 92 our customers to ‘take on tomorrow’ served Alifu Partners an array of mobile, internet, data, IPTV, mobile money Global Awards Vaavu and thrive in the digital future. Dhaalu • We provide the widest coverage in 47% and fixed services specially tailored to cater for the Maldives, which includes all of the Population needs of both consumer and business segments. • Presented with the ‘Social Responsibility Our customers include individual consumers, country’s 199 inhabited islands, all Faafu Served & Environment Awareness Award’ at Meemu small to medium businesses, corporate resort islands and all major industrial Partners We ensure reliable international connectivity the Maldives Business and Customer and government institutions. We provide islands. Dhaalu and maintain our network resilience to deliver Experience Awards 2018 total solutions and cater to specific needs full coverage within the Maldives. We provide Population ranging from simple telephone services • We have linked the Maldives from North Served enterprise and government customers with • Won ‘Public Enterprise of the Year’ Thaa Laamu to complex integrated private networking to South through a 1,253 km long fibre fully integrated end-to end solutions. award at Maldives Business Awards solutions for global corporate customers. optic submarine cable network which supports the nation’s largest 3G and • Recognised for its contributions towards With over 500,000 customers and employing 4G LTE and fixed broadband network. 20 12 Partners developing Maldivian Football community Gaafu 99% trained qualified Maldivians present in Partners by the Football Association of Maldives Alifu 10 strategically located operating centres 3% 3% Population Gaafu Population across the country, we remain the largest Served • Received ‘Next Generation Employment Served Dhaalu telecommunications provider in the Maldives. Initiative Award’ from HR Maldives for its Apprenticeship Program With 30 years of working together to know and serve our customers better 4 17 Partners than anyone else, we continue to lead by Partners Seenu Gnaviyani consistently delivering the latest and best 2% experience digital technology has to offer. 7% Population Population Served Served
6 7 Dhiraagu
Annual Report 2018 2018 Report Annual 30 Years Milestone 2015 Launched Fibre broadband 2006 service on 31 March 2015 2018 with speeds up to 100Mbps 100% Coverage of
2001 Business | Our An optical fibre cable link Completed 4G Network in Maldives established between Maldives installation of Prepaid and Sri Lanka to improve system followed by Marked 30th Anniversary 1988 bandwidth and quality of services launch of mobile 1 Oct 1988 1994 SMS service Demonstrated 5G technology Dhivehi Raajjeyge “National Telephone 2009 for the first time in Maldives Gulh un Pvt Ltd Network Rollout 100% mobile coverage began operations Program” introduced to all inhabited islands 1999 across the country Launching of GMS Mobile Service and completed National Telephone Network Rollout Program linking all inhabited islands by th telephone access
1991 1995 2002 2017 Paging Service introduced Installation of 2011 Broadband ADSL service Launched the first a Satellite Earth Station A 1253km long introduced to the market digital mobile and a telephone exchange fibre optics submarine to cater to growing needs plan MAMEN in Seenu Atoll cable laid across of fast internet Launched 2 new digital the country to improve 2000 services, Dhiraagu TV, reach and service A full time an IPTV service and Dhiraagu Pay, 24 hour call centre a mobile money service with hotline 123 introduced
8 9 Dhiraagu
Commercial Highlights 2018 Report Annual
4G
We completed expanding 4G Year the of | Highlights coverage to 100% of the 55 74% Quarter 1 Q1 population. islands of national 44 households 100% With the expansion we offered islands 5GB of population LTE Broadband services to all inhabited islands and resorts. Dhiraagu Fibre 50 72% FTTH expansion Mobile Services total of national Broadband islands households Our Postpaid plans were 41 Dhiraagu TV Services At the end of Q4, high-speed enhanced with social media islands Fibre Broadband services was 38 LTE data allowances of up to 5GB. Final 10 Mobile Services extended to 11 more islands, islands Broadband We launched our DhiraaguTV app At the end of Q3, Our fixed broadband covering a total of 55 inhabited Dhiraagu Fibre matches the perfect way for our customers high-speed Fibre Broadband offers were revamped islands which represents 74% to access content on the go. services were deployed with more data We launched a new Prepaid plan Dhiraagu TV of national households. Dhiraagu Fibre As we continued Broadband to a total of 44 islands which allowances and bigger which offers customisation of to enhance our 4G Broadband Services We acquired rebroadcasting rights represents 70% of national boosters. A new 5M Fibre voice and data add-ons and free We offered customers a Fibre network across the DhiraaguTV DhiraaguTV service was to show all live matches of the FIFA households. Broadband package was data for social media apps. Broadband promotion during Services country, we introduced 4K UHD also introduced. extended to 7 additional Substantial progress World Cup 2018 on DhiraaguTV. November and December which initiatives to upgrade DhiraaguTV service was islands and by the end was made on our rollout The final 10 matches were Special roaming rates and included free connection and customers to 4G sims. launched in 7 additional of Q4, the service was We deployed high-speed of high-speed Fibre rebroadcasted in 4K UHD quality discounted IDD rates to Saudi 3 months of discounted islands, covering a total of available in 50 inhabited Fibre Broadband services in Broadband services. across the country. Arabia were offered during monthly rental. 28 islands which represents islands across the country 7 new islands during the Hajj season and Eid Al Adha. We pride ourselves in striving 62% of national households. to introduce innovation and representing 72% Q1, covering a total of By the end of Q2 high-speed With additional 8 new islands new technology and with great of household. 38 islands which represents Fibre Broadband services launched, DhiraaguTV became DhiraaguPay On Eid Al Adha, two special data pleasure, we demonstrated 5G 66% of national households. were available in 41 islands available in a total of 36 islands add-ons were made available technology for the first time in th covering 68% of the which represents 66% of national We became the first to for our Postpaid, and new Maldives. We offered free connection households. households. introduce personalised Prepaid customers. and discounts on our fixed NFC cards in the Maldives. broadband packages and Anniversary DhiraaguTV 28 62% The card was launched for total of national Prepaid Mini Ghiyaasudhin International Mobile Services Campaign islands households MAMEN School students and is Data Bundles being used by students We continued our Postpaid We launched a ‘double to pay for meals at the To mark 30th Anniversary, ‘30 promo through school’s canteen. 43 69% Social Media promotion under value’ Attractive mini data bundles were people 30 destinations’ lucky total of national which all customers on the which customers launched for our Prepaid customers. draw held every week for a islands households latest Postpaid plans were MORE recieved twice more The bundles provide better value for duration of 15 weeks where offered up to a 5GB social media Data/SMS/Voice with our customers and more data when Enterprise 30 lucky draw winners were data allowance. merchants every recharge. it is needed for a short period. offered all-inclusive trips to 1 of 30 international Connectivity to all destinations. DhiraaguPay government schools was delivered to the Also, 1GB Data valid for 3 days We secured over 130 Ramadan Ministry of Education was offered to mobile merchants, including under the ‘Digital Dhiraagu TV customers and 30% extra popular supermarkets Campaign Schools’ project. allowance was offered to fixed and cafes across the broadband customers during World Cup DhiraaguTV service was country. For Ramadan, special data October. Dhiraagu packs were offered and with Campaign launched in 7 additional Huawei Mate every purchase of our data islands covering a total of 43 Digital Elite bundle, 10% of what was spent islands which represents 69% 20 series by our customers was donated Special promotions and of national households. Club activities were run during the to the NGO, Tiny Hearts In partnership with Huawei, World Cup including a guess of Maldives. Huawei Mate20 and Mate20 the score challenge. Baiskoafu App Our loyalty ‘Elite Club’ Pro were launched with membership was We launched a Ramadan app Samsung attractive packages. Samsung S9 launch digitised and offered that featured alerts for prayer We set up LED mega screens ‘Baiskoafu’ app; the first ever through the Dhiraagu times, updates of grocery prices at ‘Raalhugandu’ and Galaxy Note 9 Maldivian OTT video streaming at the local market and the rebroadcasted all the service, was launched during Samsung S9 and S9+ phones mobile self-care app. IPhone XS series menus of popular restaurants. matches live for public Samsung Galaxy Note 9 was the quarter in partnership with were launched with attractive The app was also integrated viewing. Customers were launched with attractive Baiskoafu. The app allows users packages, offering free data with DhiraaguPay to enable also offered an add-on to packages offering free data to watch and listen to Dhivehi Apple’s iPhone XS was allowances and attractive customers to pay zakat using watch the World Cup allowances and convenient music, film, videos, TV channels launched with attractive payment plans. their eWallets. through the DhiraaguTV app. payment plans. and premium original content packages offering free data allowances and convenient payment plans.
10 11 Dhiraagu
Key CSR Highlights Key Financial Highlights 2018 Report Annual | Highlights of the Year the of | Highlights
Dhiraagu Revenue EBITDA Profit After Tax Earnings Per Share Apprenticeship Angelhack Programme 2018 2018 2018 2018
The first international 28 new MVR 2,762m MVR 1,418m MVR 905m MVR 11.91 hackathon held in Maldives apprentices enrolled, to foster innovation and 14 apprentices and support startups. graduated. 2017 2017 2017 2017 MVR 2,620m MVR 1,371m MVR 898m MVR 11.81m
5.4% 3.5% 0.8% 0.8% Dhiraagu Maldives Road Race Startup Grind X 4000 registered runners Free Cash Flow Dividend Per Share Capital Investments Return on Capital and MVR 600,000 donated The first Startup Grind to local NGOs in the area Employed (ROCE) event in Maldives to of child protection 2018 2018 2018 inspire, educate and Care for the Oceans and support connect startup 2018 communities Launch of Rethink. Reduce. Reuse MVR 617m MVR 11.91 MVR 406m campaign. 42.5% Over 1.5 tonnes of plastic 2017 2017 2017 Film for Change collected through our coastal MVR 644m MVR 11.81m MVR 389m 2017 clean-up programme. Dhiraagu Special Young people trained to Sports Festival 42.8% explore social issues and produce short films on Participation by 11 schools, -4.2% 0.8% 4.5% SDGs through smartphones 4 NGOs and over 350 children -0.3 p.p and tablets with disabilities
12 13 Dhiraagu
Key Sponsor Highlights 2018 Report Annual | Highlights of the Year the of | Highlights
Maldivian Idol
Title sponsor of the popular reality music franchise Maldivian Idol for its third consecutive season. As pioneers in Dhivehi connecting the homes, Premier League businesses, communities Title sponsor of the national football league. and individuals across GM Forum the country, we are Maldives Aero-press Title sponsor of Hotelier Maldives’ GM Forum, a committed to making Championship dedicated platform bringing together over sure the Maldives Title sponsor of Maldives 100 general managers Aero-press Championship from the hotel industry. the largest festival celebrating become part of the coffee, music and art. connected world. Top Achievers Award
Pole and Line Day Title sponsor of the Top Maldives Business Awards Achievers Award recognising Title sponsor of Pole and Line Day with the achievements of the Platinum sponsor the first local awards to acclaim Gemanafushi Masverin to celebrate nation’s top performing higher businesses who have shown exceptional performance Fishermen’s Day. secondary students. in their respective industry.
14 15 Dhiraagu
Digital Raajje Note of Appreciation
Annual Report 2018 2018 Report Annual Our FTTH network; Last October we celebrated Dhiraagu’s 30th accessible to 74% anniversary. Today, we remain the industry leader The success of our initiatives requires more of national households and we continue to enrich lives and empower than financial investment in infrastructure. The people through building strong, inclusive continuous hard work of our colleagues who making it the largest digital communities. Our brand transformation tirelessly work together to know and serve our
fibre network in drives the expansion of FFTH, IPTV and the customers better than anyone else, is the reason | Chairperson’s Opening Remarks the country. Chairperson’s introduction of new and exciting offers to why we continue to lead and consistently deliver more islands across the country. We aspire to the best experience digital technology has to offer. During the year, create Digital Raajje for everyone to enjoy the benefits of the mobile and digital revolution, I convey appreciation to the Board members, we invested 270.7m Opening whilst ensuring that our services are more both past and present, for overseeing our into network innovation convenient and accessible to our customers company’s transformation. I also thank the and expansion Remarks in their homes, offices and on the move. management for their sheer determination to achieve this change while maintaining financial During the year, we invested MVR 270.7m into “We aspire and operational momentum and ensuring Dear Shareholders, network innovation and expansion. Our FTTH to create our business performance is to plan. network; accessible to 74% of national households Our company was founded as a joint venture On behalf of the Board of Directors, making it the largest fibre network in the country. ‘Digital Raajje’ between the Government and a foreign investor. it is my pleasure to present the These investments benefit businesses as much 30 years on, despite changes in administration Annual Report for 2018. as individuals and by introducing our high-speed for everyone to and ownership the collaboration and support One of the key roles of the Board has been connectivity to new communities we aim to deliver of our majority shareholders remains strong to find the right balance between strategic on our brand promise and empower our customers enjoy the benefits and evident. I take this opportunity to sincerely long-term investments to secure the to ‘take on tomorrow’. With different connected thank both the Government of the Maldives sustainability of the business, a healthy technologies now permeating all aspects of of the digital and the Batelco Group for being an integral balance sheet and a strong financial position our lives and with our future customers having part of our success. I am also grateful to all our to navigate through challenging market revolution” conditions whilst maintaining regular and grown up in a digital world where the internet is shareholders for the interest they show in our sustainable returns for shareholders. ever-present, our ability to translate this strong company and the trust they have placed in us. demand for data into revenue will be a key driver November 2018 we bid farewell to the three Sustainable Value for Shareholders of our financial performance in the years ahead. Government appointed Directors, including the I look forward to working with the Board to former Chairperson Mr. Mohamed Ashmalee help ensure that Dhiraagu is well placed to Our 2018 financial results reflect a strong Our business has a clear strategy which and Non-Executive Directors Mr. Abdulla Ahmed capitalise on the opportunities of the digital performance with a gross revenue of MVR 2.8bn. focuses on providing a superior experience to and Mr. Ahmed Hafiz. We also bid farewell to the age. Our business continues to lead the Earnings per share grew by 10 laari to MVR 11.91 our customers, continuing our investments to longstanding Batelco appointed Non-Executive market for the benefit of our customers, in 2018. The Board continues to view dividends enhance our network and tap into new avenues Director Mr. AbdulRahman Fakhro in January 2019, employees and shareholders by enabling and as the measure for shareholder returns for sustainable and long-term growth. and welcomed the appointment of Mr. Khalid Taqi empowering a connected ‘Digital Raajje’. and recommends continuing with a full year as his replacement to the Board in March 2019. Board Changes dividend pay-out ratio of 100% of Profit After I wish to acknowledge their valuable contributions Tax, which amounts to MVR 905m as total During the period under review, there were a to the Board and thank them for their services. dividend (MVR 11.91 per share) of which number of changes to the Board. Mr. Ahmed Hafiz Further details regarding Board appointments MVR 453m (MVR 5.96 per share) has been was appointed to the Board by the Government can be found in our Governance Report Ismail Waheed paid out as interim dividend during 2018. as a Non-Executive Director in January 2018. In Chairperson 16 17 Dhiraagu
That is our vision, and we continue to demonstrate DhiraaguPay, our mobile money solution, leverages include the annual Dhiraagu Maldives Road Race 2018 Report Annual our resolve by rolling our services across the on the high penetration of mobile phones in the which has become a platform for local NGOs Maldives, including the very remote corners of the market and the difficulties in accessing conventional and the Dhiraagu Special Sports Festival; the country. It is this resolve and our mission to deliver banking. With an e-Wallet our customers can only sports festival for children with disabilities. excellence in customer experience, that strengthens send and receive money, purchase goods and The Dhiraagu Apprenticeship Programme our brand as we endeavour to continue serving as pay for bills. We became the first to introduce another key CSR initiative celebrated its 10th
a trusted partner offering high quality coverage personalised NFC debit cards in the Maldives. anniversary and enrolled 28 new apprentices. Message | CEO’s CEO’s Message and connectivity for voice, data, business and Developing young entrepreneurs and fostering entertainment services across multiple technologies. innovation is a key focus area, with our partners In 2018, we continued our robust performance With purpose-built we organised Angelhack, the first international delivering increased revenue, EBITDA and net With the power of our newly refreshed brand and hackathon in Maldives. Under our flagship CSR profit over the previous year, as seen in our 2018 outlook, together with the depth and breadth solutions for small and campaign for the “For the Oceans” we launched full year results. These achievements, despite of our coverage we have focussed on fostering medium enterprises such as a focused campaign “Rethink. Reduce. Reuse” the inherent challenges and in a dynamically a ‘Digital Raajje’ by building digitally inclusive advocating against the use of single-use plastic. changing operational environment with intense the guest house industry competition, is the result of our team’s focus on communities. Our 4G LTE & LTE-A network now “delivering an excellent customer experience” covers 100% of the country and high-speed FTTH and customised fully Our success continues to be reliant upon the which is placed at the heart of everything we service is now accessible to 74% of national contributions of our dedicated colleagues. I thank do, and the continued trust and confidence households spanning 55 islands. Digitisation and integrated enterprise our team for their continued efforts to deliver of our customers across the Maldives. transformation are at the heart of this expansion. solutions for our corporates, superior experiences to our customers and their hard work to implement our strategy. I We saw strong customer growth and have made we help our business great progress in delivering our strategy, further Our fibre optic submarine cable network forms am very grateful to the Board of Directors for enriching the lives of people in communities the backbone for the nation’s largest 3G and 4G customers achieve their time, direction, and insight to create and across the country. The investments made LTE and fixed broadband network. We bring the ease of operation and oversee strategic goals, and their support to the in the prior year in expanding our broadband benefits and ease of the digital revolution to our management in executing those strategies. service across the country have translated customers, through a range of digital services. Our into strong performances in our broadband, improved performance. enterprise and digital services as reflected fixed broadband offers were enhanced with more I extend a heartfelt thanks to all our customers for in our gross revenue and EBITDA. data allowances and bigger boosters to support the Our ICT infrastructure and managed solutions their loyalty and support, for choosing our services demand for increased speed and meet the capacity are designed to enable our customers to access, and assure them of our commitment to be bolder and requirements of our customers. We also redesigned communicate and store information securely deliver bigger value and the best user experience. “ Dhiraagu’s connectivity our prepaid plans, in order to meet the increasing to better serve the community. We champion enables digital services need for quality mobile internet at affordable innovation and endeavour to continue serving My team and I, will relentlessly continue our prices, and introduce digital lifestyle services. businesses of all sizes as a partner offering new age work to create a Digital Raajje and empower to reach people across digital solutions for them to thrive and prosper. Maldivians to ‘take on tomorrow’, whilst maintaining the Maldives which powers Our digital IPTV service “DhiraaguTV”, is now increasing value for our shareholders. available on 50 islands and through our DhiraaguTV We have a structured Corporate Social socio-economic development. mobile app we offer customers seamless access to Responsibility Programme which is This connectivity helps our suite of digital content throughout the country. underpinned by good governance, responsible enrich the lives of people We bring great content with high-quality experience business practices and giving back to the to homes and personal devices. We showed all the community, and supports the United Nations and communities across matches of the FIFA World Cup 2018 on DhiraaguTV sustainable development goals (SDG’s). Ismail Rasheed the Maldives.” and to the delight of fans across the country, the final Through our CSR Programme we continued to Chief Executive Officer 10 matches were shown in Ultra HD (4K) quality. support various programmes. Key highlights and Managing Director 18 19 Dhiraagu
Annual Report 2018 2018 Report Annual
Board of Directors of | Board Directors
Mr. Ismail Waheed Mr. Ihab Hinnawi Mrs. Khulood Mr. Ismail Rasheed Mr. Oliver McFall Mr. Imran Ali Mr. Khalid Taqi Rashid AlQattan
20 21 Dhiraagu
Annual Report 2018 2018 Report Annual | Board of Directors of | Board
Mr. Ismail Waheed Mr. Ihab Hinnawi Mrs. Khulood Rashid AlQattan Chairperson Director Director Non-Executive & Independent Non-Executive & Independent Non-Executive & Independent
Maldivian Jordanian Bahraini
Appointed as Chairperson of the Board by the Mr. Waheed also went on to serve as an Appointed to the Board by the Other directorships and appointments: Appointed to the Dhiraagu Board by Mrs. AlQatan holds a BA in Accounting Government of Maldives in November 2018. Executive Director of the Indian Ocean Region Batelco Group in July 2016. the Batelco Group in May 2017. from Ayn Shams University, Cairo. of Cable & Wireless Plc from 2006 to 2008. • Vice Chairman - SAMENA Chairperson of the Remuneration Nomination He holds a BEng (Hons) in Telecommunications Mr. Hinnawi has been the Batelco Group CEO Telecommunications Council. Chairperson of the Audit Committee. Other directorships and appointments: and Governance Committee. Management and System Design from Anglia since December 2015 and held key positions in • Board Member SURE Telecommunications • Board member and Chairperson Polytech University, Chelmsford (UK) and completed various business units within the Batelco Group; Company (Channel Islands) Mrs. AlQatan is the General Manager of Audit Committee in Umniah With over 40 years’ experience in the an Executive Leadership Programme at Darden including Chief Executive Officer of Umniah, • Board member -SURE South Atlantic of Prime Advisory WLL. Telecommunications Company (Jordan); telecommunications industry, Mr. Waheed was Business School, University of Virginia, USA. Jordan from 2009 to 2015, General Manager Limited (South Atlantic & Diego Garcia). • Board member of Batelco Group (Bahrain); at the helm of Dhiraagu, as the Chief Executive Enterprise Division of Batelco Bahrain in 2008, • Board Member – Etihad Atheeb Mrs. AlQatan has over 25 years’ of extensive • Board member in Sico Fund Officer & Managing Director, from 2004 till Other directorships and appointments: General Manager Special Projects in Batelco Telecom Company Saudi Arabia. experience in banking, with a focus on investments. Services company (SFS); his retirement in September 2015. During his None Bahrain in 2008 and Chief Executive Officer of • Board Member – Umniah Mobile She started her career as a trader in US & • Member of the Committee for the Young career he held key positions including Head of Batelco, Jordan from 2007 to June 2008. Telecommunication Company-Jordan. European equities and has experience in capital Women Entrepreneur award (Bahrain). Networks, Head of Marketing and Customer • Board Member-Sabafon and money market instruments in international Services. Mr. Waheed steered the company With over 25 years of extensive managerial Telecommunication Company-Yemen. markets as well as portfolio management. through key milestones including the IPO and operational experience to lead industry and transformation of Dhiraagu from a joint pioneering operations, Mr. Hinnawi helped Her career began at the Bank of Bahrain & venture to a publicly listed company in 2011. establish Umniah in 2004, as a key member of its Kuwait where she worked her way to the Head initial management team and continued to work of Investment Department before widening her He started his career in telecommunications there as its Operations Director until 2007. experience with ADDax Investment Bank, Abu with Cable & Wireless Maldives in 1977 and held Mr. Hinnawi holds a BA in Business Administration. Dhabi Investment House and Evolvence Capital. various positions and later continued to serve in Dhiraagu with its formation in October 1988. 22 23 Dhiraagu
Annual Report 2018 2018 Report Annual | Board of Directors of | Board
Mr. Ismail Rasheed Mr. Oliver McFall Mr. Imran Ali Chief Executive Officer & Managing Director Director Director Executive & Non Independent Non-Executive & Independent Non-Executive & Independent
Maldivian Danish Maldivian
Appointed to the Board as Chief Executive Officer Appointed to the Board by the He holds an MBA from IMD Business School, Re-elected to the Dhiraagu Board by the public & Managing Director by the Batelco Batelco Group in May 2017. Switzerland and a M.Sc in Chemical Engineering shareholders at the 29th AGM in May 2018. Group in September 2015. from the Technical University of Denmark. Mr. McFall is the Vice President of Roland Berger Mr. Ali has served on the Dhiraagu Board Mr. Rasheed previously served as Chief Executive Strategy Consultants Middle East office. Other directorships and appointments: since May 2014. Member of the Remuneration of Dhiraagu from 2007 till September 2015 • Board Member of Batelco Group (Bahrain); Nomination and Governance Committee, and held other key positions including Director With over 30 years’ experience in international • Board member and Chairman of and Member of the Audit Committee. of Networks from 2000 to 2007, Manager Networks management consulting, his career achievements the Audit committee of Sure Group Planning and Projects from 1999 to 2000. include 10 years as Vice President in Hamburg Telecommunication Company (UK); Mr. Ali is the Chief Executive Officer of Dhonkeyo and the Middle East with Roland Berger Strategy • Board member in Ballard Europe; Group of companies with over 16 years’ With over 30 years’ of extensive telecoms experience, Consultants, 10 years as Senior Partner and member Executive Director in Blue Ocean/HSV of experience in tourism and real estate development. Mr. Rasheed has played a pivotal role in transforming of the Executive Team with AT Kearney and 5 years (Switzerland); real estate management Dhiraagu into a leading digital solutions provider. as Senior Project Manager with McKinsey & Company. and development in Europe; He holds an MBA from Manchester Metropolitan • Board member in Ringford University, UK and a BSc in Economics from He holds an MBA from University of Reading (UK), Mr McFall has worked in North America, Europe Holding (Switzerland). the University College London, UK. BEng (Hons) in Telecommunications Systems and the Middle East with major industrial Management & Design - Anglia Polytechnic corporations within telecom, energy and metals. Other directorships and appointments: University (UK). Mr. Rasheed is a member Mr. McFall is currently working as a special advisor • Chairman of Dhonkeyo Group of Companies. of the Institute of Engineering & Technology (UK). for CEO’s in a selected number of SME’s in Europe. • Managing Director of Reethi Rah Resort Pvt Ltd.
Other directorships and appointments: None 24 25 Mr. Khalid Taqi, Director Non-Executive & Independent
Bahraini Our Team’s focus on
Appointed to the Dhiraagu Board by the Other directorships and appointments: “delivering an excellent Batelco Group in March 2019. • Member of the board of Gulf Hotels customer experience” Mr. Taqi has served as a representative of the Group and is a member of the Social Insurance Organization (SIO) on the Investment and Audit committees. is placed at the heart Batelco Board of Directors since January 2019. Mr.Taqi graduated from Concordia University, of everything we do. Montreal, Canada with a B.Comm in Finance. He also completed his Master’s degree in Finance from DePaul University’s Kellstadt Graduate School of Business. In addition, Mr. Taqi completed a number of executive training programs at the London Business School, NYU Stern and INSEAD.
Mr. Taqi started his career with the Transaction Advisory Services Team at Ernst & Young, Bahrain. During his tenure at Ernst & Young, he was exposed to a variety of different industries including real estate, banking, construction and telecom. Mr.Taqi joined Osool Asset Management in 2013, his current mandate is to manage Osool’s strategic investments in both listed and non-listed companies. 26 Dhiraagu
Management 2018 Report Annual
Team Team | Management
Left to right: 1. Ajwad Ali 3. Ali Riyaz 5. Mohamed Musad 6. Musthag Ahmed Didi 8. Mohamed Hazmath Abdulla 10. Abdulla Firag
2. Athifa Ali 4. Ismail Rasheed 7. Robin Wall 9. Mohamed Abdul Gadir
28 29 Dhiraagu
• He holds a Masters in Human Resource • He has extensive knowledge and experience
Ismail Rasheed Robin Wall Athifa Ali Abdulla Firag 2018 Report Annual Planning and Development from GGS managing multiple departments across the Chief Executive Officer Chief Financial Officer Director, Corporate Services Director, Networks Indraprastha University (India, New Delhi) company including, Transmission, Switching, & Managing Director • Appointed Chief Financial Officer (CFO) • Appointed Director Networks in 2016. and Bachelor of Commerce in Human Internet & IP Solutions with over 30 years of • Appointed Director, Corporate Services in 2016 experience in the industry. Gadir holds a MBA in February 2015. Resource Management and Industrial • Appointed CEO & MD in September 2015. after being the Director of International, Legal • Firag joined the company in 2012 and has Relations from Curtin University of in Information Management, TASMAC, India. Ismail and his team are committed to building and Regulatory since 2003. • Robin joined Dhiraagu in 2011 and held key held key positions in Dhiraagu including Technology (Australia, Perth). Ajwad is a
a culture of customer centric innovation Manager Access Engineering and Manager Team | Management positions in the company including Acting Professional Member of the Society for at Dhiraagu to enable the business’ digital • Athifa joined Dhiraagu in 1988 and has held Network Quality Assurance. Human Resource Management (USA). CFO, Financial Controller as well as Assistant transformation. key positions in the company including Financial Controller. Financial Controller. • Prior to joining Dhiraagu he has worked as a Mohamed Hazmath Abdulla • Prior to that Ismail was the Chief Executive Postdoctoral Research Fellow at University Mohamed Musad • Prior to joining Dhiraagu, Robin served of the Company for 7 years. In this role, he led • She served as the Chairperson of the Board of Canterbury in New Zealand, Project Coordinator Director, Property, Procurement Director, Digital Transformation as Financial Controller of of the Monaco performance and strategy and was directly of Maldives Pension Administration Office at Ministry of Communications, Science and & Administration • Appointed Director, Digital Transformation & Islands region in the CWC Group. responsible for the company’s technical and for 6 years. Technology in Maldives, and as an Engineer • Appointed as Director, Property, in November 2017. commercial operations. at the Maldives Airports Company Limited. Procurement and Administration in 2004. • He is a Chartered Management Accountant with • Athifa is a Chartered Management • Musad Joined Dhiraagu in 1995 and has held over 14 years of financial & operational expertise • Firag is a qualified engineer and researcher key positions in Dhiraagu including Director • Ismail has been with Dhiraagu since 1988 and Accountant with over 28 years of telecoms • Hazmath joined Dhiraagu in 2004. in the telecoms industry. Robin holds a BSc with over 16 years of experience in the Networks, Manager Mobile Networks and in that time, he has held senior roles including and finance experience. She holds an Prior to joining Dhiraagu, he held key positions Management Studies, University of Brunel (UK) telecommunications as well as the electrical Manager Core Networks and Senior Engineer. Director of Networks and Manager Networks MBA, University of Bradford (UK) and is an in the Ministry of Finance and Treasury from and is an Associate Member of the Chartered and energy sectors. He holds a Ph.D. Planning and Projects. Within the Networks Associate Member of the Chartered Institute 1995-2004 including Assistant Director Institute of Management Accountants (UK). and Masters in Electrical and Electronics • He is a chartered engineer with over 20 years department, he has led and managed major of Management Accountants (UK). of the Department of Inland Revenue. Engineering from the University of Canterbury of technical expertise in the telecom sector. transformation projects such as the Dhiraagu- (New Zealand) and Bachelor of Engineering Ali Riyaz • Hazmath has over 20 years of operational SLT Submarine Cable deployment, installation in Electrical and Electronics Engineering from • Musad holds a Master of Commerce, Information Systems from the Victoria of the Domestic Submarine Cable Network Director, Customer Services & Sales the University of Adelaide (Australia). Firag and managerial experience in both the public across the country and mobile broadband Musthag Ahmed Didi and private sector. University of Wellington (New Zealand); • Appointed as Director, Customer Services has been an IEEE member since 2006. national roll-out plan to connect all the Director, Customer Solutions MBA, Australian Institute of Business and Sales in 2004. (Australia) and Bachelor of Engineering in inhabited islands Ajwad Ali • He holds Masters in Economics (Public Mobile Telecommunications Technology, • Appointed Director, Customer Solutions Policy & Taxation) from Yokohama National • Ali joined Dhiraagu in 1999 and has held key Director, Human Resources The University of Hull (UK). • As an experienced Chartered Engineer in 2009. University (Japan) and a Bachelor in Business positions in the company including Head • Appointed Director Human Resources in 2016. with over 30 years of telecoms industry Administration, Hawaii Pacific University (USA). of Administration and Human Resources. • Musthag joined Dhiraagu in 1994 and has experience and over 15 years of strategic • Ajwad joined Dhiraagu in 2016. Prior to joining management experience, he holds a MBA, served the company as the Manager Data • He also served as Group Sales & Marketing Dhiraagu, he served in the Public Sector and Farewelled Ms. Isabelle Hajri who served as the Chief University of Reading (UK); BEng (Hons) & IP solutions and Manager Information Mohamed Abdul Gadir Manager at Universal Enterprises Pvt Ltd held key positions including Director Corporate Marketing Officer from February 2016 to February 2018. Telecommunications Systems Management Systems. Director, Information Systems and Manager Human Resources at Maldives Affairs at Maldives Pension Administration & Design, Anglia Polytechnic University Office, Permanent Secretary of Ministry of • Appointed Director, Information Systems Farewelled Mr. Ahmed Maumoon who served as Inflight Catering Pvt Ltd. • As an IT specialist with over 23 years (UK) and is a Member of the Institute Human Resources, Youth and Sports, Director in June 2017. the Acting Chief Marketing Officer from February 2018 till his resignation from Dhiraagu in January 2019. He of Engineering & Technology (UK). of experience in the telecommunications General at Ministry of Higher Education, • Ali has extensive knowledge and over 22 years was also the Director of Business Development and had industry Musthag holds a BSc Employment and Social Security. • Gadir joined Dhiraagu in 1988 and has served of industry experience in cross-functional areas served as the Director of Marketing and other senior Microelectronics & Computing, the company as Manager IT Projects, Manager roles during his 28 year career with the company. of business and management. University College of Wales (UK). • Ajwad is a Human Resource Planning and Information Systems and managed significant Development Specialist with over 19 years of projects impacting a broad spectrum of • He holds an Advanced Diploma in Hospitality services. experience in Human Resource Management. Management from SHATEC College (Singapore). 30 31 Dhiraagu
Annual Report 2018 2018 Report Annual Strategy & Digital technology & Performance | Strategy Performance 2018 has the power to enrich lives and empower communities Digital technology is changing our world. We have seen a profound change in the way people connect and communicate in this data-driven era. We believe that network is going to matter even more to the next generation, than it does to this one.
Our strategic initiatives to meet the expectations of an increasingly digital future, focuses on fostering strong, inclusive digital communities through transformation and growth to create long term value for our shareholders.
32 33 Dhiraagu
Dhiraagu app and My Account Baiskoafu Fibre to the Home (FTTH) 2018 Report Annual Network Expansion Thousands of customers all over the country In support of local talent, we partnered use the Dhiraagu app and My Account portal with Baiskoafu, the first ever Maldivian In line with our strategy of digital inclusivity, to self-manage their accounts and keep OTT video streaming service. we seek to foster strong digital communities. track of their usage. At their convenience, We expanded our FTTH network to bring
customers can simply log in and make a The app has transformed mobile high-speed internet to 55 islands representing & Performance | Strategy change to their service or complete simple entertainment, paving the way for users to 74% of national households, making it by far transactions such as placing a service enjoy Dhivehi music, films, videos, TV channels the largest and fastest fibre network in the country. order, topping up by purchasing bundles and on demand premium original content. or making payment for their account. 5G Technology ‘Take on Digital Almost 35,000 customers are now active High-Speed We were the first company in the Maldives to users of our Dhiraagu app, which was DhiraaguPay demonstrate 5G technology. During a live demo we tomorrow’ Transformation redesigned last year to include 24/7 chat Connectivity showcased that 5G delivers lightning fast speeds option. The Dhiraagu app offers an intuitive DhiraaguPay is our convenient, reliable and twenty times faster than LTE-A and very low latency. We bridge communities across our island We have made good progress on building means for customers to self-manage their secure digital money platform. We aspire to for Everyone nation and digitally empower locals and digital platforms to drive greater simplicity account and services from their smartphone create a cashless society, offering financial Introducing the latest technology embodies our residents of Maldives to enrich their lives. of our business and make our products or tablet. With the growth in digital, many inclusion that overcomes geographical Digitisation of information, entertainment and core value ‘innovation’. Once 5G is commercially Our brand has a strong bond with our communities and services more accessible. of our customers prefer to be served barriers. The growth in DhiraaguPay during communication, has meant that our customers launched it will facilitate digital growth and open as it plays an integral part of everyday life of through digital channels. Digital channels 2018 is attributed to our partnerships with expect to have seamless connectivity wherever new avenues for the community in education, individuals and businesses, supporting them We expanded our digital footprint now account for more than a quarter of a wide range of merchants including retail, they go. We aim to enrich lives by maintaining healthcare, transportation, community with reliable and robust digital connectivity. and offered an array of digital services our customer service transactions. transport, insurance and healthcare providers. an improved and more connected network. services, disaster management and more. from mobile payments and entertainment Following the brand revitalisation programme on-the-go, to personalised data plans. We became the first to introduce personalised During the year we invested MVR 270.7m, New Prepaid Plan that we undertook in 2017, we continue to deliver NFC debit cards in the Maldives. With NFC, to enhance and expand our network. Our on our promise and enable our customers to Mamen our customers have the ease to simply network innovations continue to provide We improved our value proposition to prepaid and ‘take on tomorrow’ through our innovative digital touch-and-go to make a transaction. our customers with a superior network restructured our price plans to meet the increasing solutions. During the year, we established the Mamen was launched in 2017 as a revolutionary experience across the country. need for quality mobile internet at affordable revitalised brand and through independent digital youth offering; the first of its kind in Dhiraagu Digital Elite Club prices. The new prepaid plan offers customisation surveys it is evident that the public has recognised the Maldives. It instantly became popular of voice and data add-ons, while offering free our brand as the most well-known and the as it gave our customers full flexibility in We digitised our Elite Club reward card. We 4G Nationwide Coverage use of social media apps. We also introduced most remembered brand in the Maldives. managing their data, voice or text messaging partnered up with various businesses to mini data bundles to complement the plan. needs, offering unprecedented levels of offer our Elite Club members benefits and As a result of our investment, we completed Our brand transformation continues usage freedom at affordable prices. lifestyle offers which can now be accessed establishing a nationwide 4G network. Postpaid Value Enhancement to focus on the digital transformation through a virtual card on their Dhiraagu app. that had paved the way to expand the FTTH Its appeal also lies in our ability to engage and High-speed 4G services are now available Our postpaid plans are the most popular and IPTV service coverage to more islands empower young people through partnerships to 100% of the population across amongst our customers showing a growth of and the introduction of other innovative services. with trendy lifestyle outlets, popular hangouts, all inhabited islands and resorts. 24% in 2018. We gave an additional 40% free and opportunities to pursue entrepreneurial data allowance to all our customers, offering avenues. Mamen continues to evolve and the best social media value pack available. stay on point with what matters to youth. 34 35 Dhiraagu
Fixed Broadband Education We provide specialised solutions for the 2018 Report Annual guesthouse industry to drive and champion We continued to leverage our fixed By delivering a full ecosystem connecting 212 local tourism. We actively participated in the Financial broadband offerings by creating greater schools across the country through a high-speed Guesthouse Forum organised by the Ministry value for our customers through increased dedicated internet access, we supported the of Tourism and reiterated our support to the data allowances and bigger boosters. Ministry of Education’s ‘Digital Schools’ effort to industry by strengthening our portfolio of Performance
augment internet-based learning into Maldivian CloudVoice and Guesthouse Internet services. & Performance | Strategy We introduced further notifications classrooms. The end-to-end solution allows to allow customers to effectively for over 70,000 devices to seamlessly work on Our 2018 financial results reflect our strong With the expansion of our core network, we were manage their monthly usage. this network, allowing teachers and students Enterprise performance in broadband, enterprise and able to bring innovative new products and services across the country to benefit from being digital services and the expansion of our high to more communities; we launched hospitality TV connected to a digitised educational system. We work in partnership with enterprises to speed 4G mobile and FTTH broadband networks and provided 4K UHD channels to viewers across the Fostering create custom solutions to cater for their throughout the country. Our gross revenue country for the first time, and improve our existing Device Launches individual business requirements. Our full grew by 5.4% and totalled MVR 2.8bn. product portfolio. Although operational costs We successfully launched the latest Partnerships for Healthcare suite of enterprise ICT solutions; includes increased during the year by MVR 95m, mainly on smartphones; including Huawei Mate20, connectivity, hosting and cloud services, M2M We are pleased to have again delivered on account of increase in the revenue and the change Mate20 Pro, iPhone XS, Samsung Galaxy Economic Growth We have enabled healthcare providers with services, integrated data centres and disaster our financial commitments despite operating in the mix of revenue, both the EBITDA and Profit Note 9, Samsung S9 and S9+, bundled fully customised managed services and played recovery, are designed to offer our customers in a highly competitive and dynamic market. after tax for 2018 grew 3.5% and 0.8% respectively. with free data allowances and convenient We are focused on ensuring that everyone a critical role in improving healthcare in our greater simplicity and peace of mind. By maintaining our focus on delivering the best payment plans for our customers. benefits from being connected communities. With modern and efficient ways experience to our customers and with significant The Board has announced to recommend to digital technologies. of accessing, communicating and storing Through our strategy to drive digitisation we investment, our high-speed 4G LTE & LTE-A network a full year dividend of MVR 11.91 (2017: MVR 11.81). information, our ICT infrastructure and managed aspire to make businesses more efficient now covers 100% of the country and high-speed fibre This represents 100% payout of Net Profit for the As pioneers in the industry, we have always solutions for healthcare providers enable them and accessible. Our aim is to enable our broadband covers 74% of the population, reaching year which is in line with our continued commitment DhiraaguTV had an eye to the future and champion to better serve patients and the community. enterprise partners to thrive in the new over 55 islands by the end of 2018. to provide the best return to our shareholders. innovation in our community through digital communities that we are building. nanc al Performance DhiraaguTV was extended to more islands partnerships with the education sector, and it is now available to 72% of national Government and businesses of all sizes. Tourism households across the country. Our MVR (millions) 2018 2017 2016 DhiraaguTV mobile app was launched to We endeavour to continue serving small We continue to work with and support the offer customers seamless access to a and medium enterprises as a trusted partner tourism industry by providing dedicated Re enue 2 2 2 20 2 01 diverse range of content wherever they go. offering new age digital solutions for them high-speed internet access to over 90% of to grow and thrive efficiently and successfully. resorts operating in the Maldives. As the A 1 18 1 1 1 8 We extended our suite of digital content leading telecoms and digital partner, we by offering 60% of the channels in HD Likewise, we serve our enterprise and build technology solutions that are easy to Prof t After a 0 8 8 8 0 quality, and rebroadcasted Ultra HD Government clients with fully integrated use and provide managed solutions; SIP a c arn ng Per S are R 11 1 11 81 11 0 (4K) channels throughout the country, end-to-end solutions and products. services, ICT infrastructure and network for the first time in Maldives. security management to meet the needs of ree a lo 1 8 our customers. With DhiraaguTV we also et A et 2 0 2 1 2 12 offer a resort only edition that aggregates great content with quality experience.
36 37
ey ra ng g l g t
Trading Highlights 2018 2017 2016
a t ra e Pr ce R 80 80 00 81 00 g e t ra e Pr ce R 8 8 00 8 00 o e t ra e Pr ce R 8 80 00 80 00 e g te a erage tra e pr ce R 82 1 8 8 82 o of are tra e 8 1 00 8 o of tra e 1 ar et ap tal at on R n 08 08 1 en Pay out Rat o 100 100 1 0
Share Performance 2018 2017 2016
PS R 11 1 11 81 11 0 P Rat o t me 2 en per S are R 11 1 11 81 1 et A et per S are R 0 0 0 en Pay out Rat o 100 100 1 0 Dhiraagu
Revenue Profit After Tax (PAT) Dividend Free Cash Flow 2018 Report Annual MVR 2,762M [+5.4%] MVR 905M [+0.8%] MVR 905M [100% of PAT] MVR 617M [-4.2%] For the financial year 2018, a total dividend Free cash flow (cash flow from operating Revenue grew by MVR 142m in 2018 mainly contributed Profit after tax increased by MVR of MVR 905m is proposed to the shareholders (MVR activities less capital expenditure) was MVR by an increase in revenue from major revenue lines – 8m (0.8%) compared to 2017. 453m already paid as interim dividend and MVR 617m for 2018. This is a 4.2% decrease from 2017
mobile, fixed broadband, enterprise and adjacent services. 452m proposed as final dividend for 2018). primarily due to higher capital expenditure. & Performance | Strategy Customer growth in Mobile data, Fixedbroadband and TV with focus on providing new, value added services have helped to achieve this performance.
3,000 1,000 Assets & ROCE Dividends The Board recommends a full year dividend 2,500 MVR 3,147M [-7.2%] of MVR 905,160,000 (nine hundred and five At the end of 2018 Dhiraagu’s total asset base million, one hundred and sixty thousand) 2,000 500 stood at MVR 3.1bn and net assets were MVR amounting to MVR 11.91 per share for the year
1,500 2.3bn. Return on capital employed (ROCE) 2018, to be declared as full year dividend for for 2018 is at 42.5% from 42.8% in 2017. 2018. The full year dividend comprises of:
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 • MVR 5.96 per share (total MVR 452,960,000) paid as interim dividend during 2018, and; Capital Investment • MVR 5.95 per share (total MVR 452,200,000) as the final dividend for 2018 which will EBITDA Earnings Per Share MVR 406M [+4.5%] be proposed for shareholder approval MVR 1,418M [3.5%] MVR 11.91 [+0.8%] at the 30th AGM. Total capital investment in 2018 increased by EBITDA increased by MVR 48m, a Basic EPS grew by 0.8% to MVR 11.91, 4.5% to MVR 406m with significant investment in The final dividend for 2018 will be payable 3.5% increase over 2017, mainly due resulting from the increase enhancing customer experience through investment to all shareholders listed in the Company’s to increased revenue from Fixed in profit after tax. in high speed broadband, expanding our network register on the book closure day announced Broadband, Mobile data and enterprise. and upgrading customer support systems. for the 30th Annual General Meeting.
1,500 12
10
1,000 8 6
500 4
2
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 38 39 Dhiraagu
Annual Report 2018 2018 Report Annual
nanc al Performance
Sustainable Returns SustainableMVR (millions) 2018 2017 2016 Re enue 2 2 2 20 2 01 Returns to Shareholders Returns | Sustainable A 1 18 1 1 1 8 ro it A ter a 0 8 8 8 0 to Shareholders to asi arnin s Shareholders er Share R 11 1 11 81 11 0 ree ash lo 1 8 Creating sustainable shareholder value Our Dividend Policy is sound and ensures is et important Assets to us and this continues 2 0 a minimum2 1 dividend of2 12 50% of profit after to be demonstrated by the healthy tax, are proposed by the Board of Directors dividends we pay to our shareholders. based on cash availability after meeting Since being listed on the Maldives Stock Exchange capital expenditure and other business in January 2012, we distributed a cumulative requirements for future growth. dividend of MVR 5.7 bn, which represents a return We have consistently distributed over 90% of ey 94% ra ng on the g l g t initial purchase price of MVR 80. of our Profit After Tax (PAT) as dividends and maintain a positive financial position.
Trading Highlights 2018 2017 2016
a t ra e Pr ce R 80 80 00 81 00 g e t ra e Pr ce R 8 8 00 8 00 o e t ra e Pr ce R 8 80 00 80 00 e g te a erage tra e pr ce R 82 1 8 8 82 o of are tra e 8 1 00 8 o of tra e 1 ar et ap tal at on R n 08 08 1 en Pay out Rat o 100 100 1 0
Share Performance 2018 2017 2016
PS R 11 1 11 81 11 0 P Rat o t me 2 en per S are R 11 1 11 81 1 et A et per S are R 0 0 0 en Pay out Rat o 100 100 1 0 40 41 Dhiraagu
Investor Number of Public Annual General 2018 Report Annual Relations Shareholders Meeting (AGM) AGMs are the principal platform where we interact Number with our shareholders. For this reason, shareholder to Shareholders Returns | Sustainable Shares of Public participation at AGMs is encouraged. Draft minutes Our Shareholders Held Shareholders of the preceding meetings are opened for public comments prior to the AGM to ensure shareholder Our company is owned by 14,327 shareholders concerns raised at general meetings are captured (as at 31 December 2018). With only 9.5% of 1 to 100 12,529 accurately. The Board and management attend the our shareholders being corporate entities, the AGM to address any queries and concerns from majority of our shareholders are individuals 101 to 1,000 1,595 shareholders. The External Auditor is present to who have invested in Dhiraagu. help address any queries relating to the External 1001 to 10,000 188 Auditors Report. Resolutions passed at the AGM BTC Islands Limited (Batelco) holding 52% and are published and made available on our website. 10,001 and over 13 the Government of Maldives holding 41.8%, are our two principal shareholders. The remaining shares are held by members of the public. Dhiraagu Website There are no other individual or institutional shareholders holding more than 5% of our shares. Our investor relations webpage provides regular and timely updates on all key developments of the company. Key financial reports, public Shareholder announcements and communications related to the AGMs are updated and maintained on our website Communications allowing investors and other stakeholders to be Bahrain Telecommunications kept abreast of our business and performance. Company (BATELCO) is headquartered Our shareholders form an integral part of in the Kingdom of Bahrain and is the company. We ensure to provide clear, listed on the Bahrain Bourse. accurate and timely information to our shareholders via various mediums. Investor Batelco has evolved from being a regional Middle Eastern operation to becoming a In this regard, our shareholders are Relations Team major international communications entity communicated through financial reports, which operating as the ‘Batelco Group’ with direct are published quarterly within 30 days of end We have a committed team responding daily to and indirect investments across 14 markets, of each quarter and Annual Reports which are enquiries from shareholders and stakeholders. namely Bahrain, Jordan, Kuwait, Saudi published within 4 months of the year end. Information on shareholding details and Arabia, Yemen, Egypt, Guernsey, Jersey, Isle dividend payment history are promptly provided. of Man, Maldives, Diego Garcia, St. Helena, All quarterly and annual reports published Dhiraagu’s customer service hotlines and Ascension Island and the Falkland Islands. since the company became publicly offices support the IR team by forwarding listed are available on our website. queries and requests from shareholders. 42 43 Dhiraagu
Employee 2018 Report Annual Corporate Development We equip our people with the tools and trainings
required to foster a digital mindset and deliver Responsibility Social | Corporate We undertake sustainable business practices increasingly responsive and customised services. to make a positive difference for our people, We also give importance to ensure that our our community and our environment. people have the right skills and competencies to Social further their own professional development. As a distinctly Maldivian company we have an important role in strengthening the social Our HR department actively creates learning fabric of our society, which is why we remain and development opportunities for our people. committed to programmes that protect and Last year, 585 employees received training in preserve the sanctity of children and provide technical and non-technical programmes to Responsibility avenues of advancement for young people. Our People enable them further their knowledge and skills.
As one of the most climate vulnerable countries We also have a formal induction programme in the world, we are committed to ensuring Our people are a critical enabler to achieving which helps ensure our people are aware of environmental protection and building a more our strategy transformation and growth targets our policies and their responsibilities. climate-resilient country. We place emphasis on and realising the benefits of our initiatives. Our our oceans and make efforts to reduce our carbon committed and talented people have always footprint by continuing to be one of the largest been the driving force behind our success. We Health, Safety users of renewable energy in the Maldives. closed the year with 597 permanent full-time employees, 99% of whom are Maldivian. and Wellbeing We support the United Nations Sustainable Development Goals. As a signatory to the Our initiatives for our People support the United At Dhiraagu, we consider our people to United Nations Global Compact (UNGC), Nations Sustainable Development Goals on be a family and maintain our focus on the world’s largest corporate sustainability Good Health and Wellbeing (SDG 3), Decent their health, safety and wellbeing. initiative, we are committed to the universal Work and Economic Growth (SDG 8) and principles of human rights, safe labour practices, Industry, Innovation and Infrastructure (SDG 9) We contribute 10% to the employee pension fund, environmental protection and anti-corruption. which is beyond the 7% required by the Maldives Pensions Act (Law No. 8/2009). We have had a Retirement and Redundancy Policy and a Voluntary Retirement Benefit Scheme in place, even before the establishment of the national pension scheme.
In addition to complying with local legislations, we work towards achieving international best practices in areas relating to our industry and specific work environments. 44 45 Dhiraagu
staff and to their dependent children under age 2018 Report Annual We have the following targets: of 18. Other activities carried out last year to promote Volunteering Care for Children Empowering wellbeing off our people include: • ensure that work activities are not Our people are encouraged to be involved in the Young People harmful to the health of employees • physical fitness education sessions community. Last year they contributed their time or to the general public and are as held in collaboration with Absolute Fitness and efforts to a range of community-based activities • Over 350 children participated in Dhiraagu • Our Dhiraagu Apprenticeship Programme
safe as is reasonably practicable; across the country including: Special Sports Festival 2018, an annual sports another key CSR initiative which provides Responsibility Social | Corporate • a company-wide H1N1 influenza vaccine event organised and driven by Dhiraagu for structured training and experience in a drive for our people and their families • provide and maintain adequate • as part of our Eid Al Fitr celebrations, children with disabilities in collaboration professional work environment celebrated th measures to control health and • an awareness session conducted our people volunteered to distribute Eid with 11 schools and 4 local NGOs. its 10 anniversary and 28 new apprentices safety risks arising from work on World Cancer Day in partnership gifts to children across the Maldives were enrolled. 14 apprentices graduated activities in order to prevent with the Cancer Society • in collaboration with our partners; Parley • We contributed MVR 600,000 to local from the programme in 2018. accidents and cases or work- Maldives and Maldives Airports Company NGOs working for children’s rights and related ill health • a Health Screening Programme Limited, we collected over 1.5 tonnes of ocean protection through Dhiraagu Maldives Road • We place emphasis to support the startup conducted in association with Health plastic on International Coastal Clean-up Day Race 2018, the largest run in the Maldives culture and foster innovation. Together with • provide employees with relevant Protection Agency (HPA) • our people also volunteered in SaafuRaajje, with over 4000 participants. our local partner, Sparkhub, we organised information, instruction, training the Nationwide Clean-up programme Angelhack, the first and the largest and supervision to ensure health organised by the Ministry of Environment • We donated 10% of the proceeds from our international hackathon in Maldives. and safety at work Employee • “Buddy Walk” to support the local NGO Roadha Special Data bundles (amounting Beautiful Eyes Down Syndrome Association. to MVR 411,068) to the local NGO, Tiny Hearts • To inspire, educate and connect startup • ensure that a conducive Engagement Our people also contributed to a fundraising of Maldives who work to support children communities, the first Startup Grind X work environment is campaign “#meanddownsyndrome” with congenital heart disease. event for young entrepreneurs in Maldives was We seek to foster a healthy work life balance for established for our staff also held in partnership with Sparkhub. our staff and their families. During the year, our HR Our regional teams also work closely • On Children’s Day, we contributed resources Startup Grind is the largest independent Department together with the e-Club organised the with their communities to strengthening to help establish a Children’s Thalassemia startup community, that nurtures startups following events: the social fabric of our society. Ward in Laamu Gan Regional Hospital. through events featuring successful local Our proactive approach to health and safety founders, innovators, educators and investors • a Roadha Festival including Quran and Our Community management, has helped to prevent incident • On World Autism Awareness Day, we pledged who share lessons learned on the road Madhaha competition for our people from occurring. During the past year we We continued to support various NGOs working for to help establish a children’s playground at the to building great companies. • a futsal tournament to celebrate provided basic fire awareness training to 322 children’s rights as well as programmes designed Maldives Autism Association. The play area our 30th Anniversary employees across our business. Our formal to empower young people. Our initiatives under was completed and inaugurated during the year. • We launched ‘Film for Change 2018’ • the Dhiraagu Employees Soccer induction programme covers safety procedures the Community pillar support the United Nations in collaboration with UNDP Maldives, Cup (DESCUP 2018) and includes fire and first aid training. Sustainable Development Goals on Reduced • We supported Cancer Society of Maldives to empower young people to explore social • the Annual Award night to recognise Inequalities (SDG 10), Good Health and Wellbeing to launch a campaign on childhood cancer issues through smartphones and tablets. and reward key innovators and the Our in-house medical benefits scheme offers more (SDG 3), Decent Work and Economic Growth (SDG 8) and the common warning signs and symptoms The project consists of a training component outstanding performers of 2017 comprehensive benefits than a basic health insurance and Industry, Innovation and Infrastructure (SDG 9) in order to create awareness amongst parents, and a post-production component where • a gala evening to mark our 30th anniversary scheme. The medical benefits scheme applies to all teachers and the wider community. trainees produced short films that were where long service contributions were inspired by the United Nations Sustainable appreciated and awarded. • We continued to be a member of Development Goals on Quality Education, the GSMA Mobile Alliance Against Child Gender Equality, Climate Change Our teams also participated in the Club Sexual Abuse Content which blocks child and Life Below Water. Maldives Cup, Inter-office Basket Tournament, sexual abuse content from our network. and the Inter Office TT Tournament. 46 47 Disaster Relief Care for our Oceans Energy Efficiency and Community Our • Under the flagship CSR campaign • Our Head Office was designed with Awareness Environment “For the Oceans” Dhiraagu launched a focused sustainable green features and provides campaign “Rethink. Reduce. Reuse” advocating for to significant energy efficiencies. • We became a platinum corporate member We place great importance in raising awareness against the use of single-use plastic. All the lights used in the building, including of the Maldivian Red Crescent to support against single use plastic. Advocating for • We distributed our new ocean themed emergency lights are 99% LED lights. humanitarian efforts across Maldives. the protection and preservation our natural reusable bags to our people and the community environment and ensuring environmental through our outlets and popular supermarkets • We have motion sensors to switch off the • We contributed MVR 200,000 to the sustainability in our corporate practices is an on World Oceans Day. lights in common areas to ensure lights National Disaster Management Centre important aspect of Dhiraagu’s CSR strategy. are switched off when not in use. High to assist with the ongoing relief efforts Our initiatives under our environment pillar support • Together with local NGO Parley Maldives heat reflective glass is used in building following the Male’ flooding. the United Nations Sustainable Development Goals and Maldives Airports Company Limited, facade to minimise heat entering into on Affordable and Clean Energy (SDG 7), Responsible we collected over 1.5 tonnes of ocean plastic the building. The office adopts central Consumption and Production (SDG 12), Climate on International Coastal Clean-up Day AC control, where air-conditioning is Connecting Action (SDG 13) and Life Below Water (SDG 14). centrally turned off at pre-set times and Communities Renewable Energy is limited to official working hours. • We remain committed to low emission • We continued to support the Blind and carbon-resilient business practices Visually Impaired Society of Maldives, and seek to reduce our carbon footprint by providing a customised phone meeting through increasingly relying on renewable service; a digital space to empower and energy to power our various systems. connect over 200 members across the We take great pride in our role as one country. the largest producers and users of renewable energy in the country. • We supported the Centre for Holy Quran by providing network solutions free of charge to facilitate digital Quran classes. 48 Dhiraagu
Role of the Board, Chairperson delegated to the Chief Executive Officer & Board Composition 2018 Report Annual and Chief Executive Officer Managing Director (this is further complemented & Membership by formal delegations from the Chief Executive & Managing Director Officer & Managing Director to our employees) The Board of Directors consists of 9 members, Board and those specifically retained by the Board. to ensure that our Board has representation from all our shareholders; 5 Directors are appointed
The Board is responsible for establishing our Responsibilities by our major shareholder Batelco, 3 Directors | Corporate Governance policies and strategy, overseeing matters of the Board of Directors are appointed by the Government of Maldives ranging from implementation of our strategy, and one Director is appointed by the public performance against our corporate plan, the • As part of its overall responsibilities to serve shareholders at the Annual General Meeting. status of our material business risks and matters the long-term interests of the shareholder, the Board: “Our commitment to excellence in requiring Board approval, to matters relating to At the date of the approval of this report, there are corporate governance and responsible our people, culture and governance framework. • reviews and approves, our strategic plans, 7 sitting Directors and details of their qualifications management structure and responsibilities, and experience, together with details of the year of business practices that are ethical, The Board’s role and responsibilities and systems and controls framework, initial appointment and re-election (where applicable), are detailed in the Board Charter which can be found in the Board of Directors section of this sustainable and accountable is at the was recently amended in 2017. • adopts the strategic guidelines for Annual Report. Appointments from Batelco Group heart of the long-term performance as proposed by management or, where and Government of Maldives are received in writing Chairperson appropriate, on its own initiative; from the respective shareholder, and holds office until a written notice of their removal is provided. and sustainability of our Company.” The Chairperson’s overarching responsibility • reviews and discuss reports of is to provide leadership and effective guidance our performance, our plans, and products; and The Public Director is elected by the public to the Board and Dhiraagu to ensure our Company shareholders at the AGM and holds office for fulfils its obligations. The Chairperson’s role We believe that our commitment to excellence in Remuneration, Nomination and Governance • assess major risks facing the business a term of two years from the meeting he/she is to take an active lead in promoting mutual trusts, corporate governance and responsible business Committee is responsible for periodical by reviewing and approving strategies is elected to the second AGM following the open discussion, constructive dissent and support practices that are ethical, sustainable and review of the Dhiraagu CG Code to ensure our for addressing such risks. election unless he/she resigns or is removed Corporate for decisions after they have been made by the Board. accountable is at the heart of the long-term practices conform to regulatory standards. from office during the intervening period. performance and sustainability of our Company. Throughout the financial year ended 31 December The Board also ensures that processes are in place The position of Chairperson and the Chief • Governance 2018, and up to the date of publication of this for maintaining our integrity and reputation including: All Directors, except the Chief Executive Officer Executive Officer & Managing Director cannot To protect and enhance the interests of our Annual Report, every effort was expended & Managing Director, are non-executive and be exercised by the same individual. shareholders and other stakeholders, the to ensure that we have complied with the • the integrity of the financial statements; independent directors as defined by CMDA’s Board regularly reviews our governance compulsory provisions of the Capital Market CEO & MD Corporate Governance Code. Whether independent Directors arrangements as well as developments in Development Authority’s (CMDA) CG Code. • compliance with applicable legislation or not, all Directors are required to act in the market practice, expectations and regulation. The Chief Executive Officer & Managing Director, accounting and auditing principles, best interests of Dhiraagu and to exercise Governance As a listed company we adhere to the principles In the event of any variations, together with the senior management team, is and internal policies governing our business unfettered and independent judgment. and guidelines set by the Maldives Code of explanations are provided. responsible to the Board for the development Report Corporate Governance, issued by Capital and implementation of our strategy and overall • the integrity of our relationship Market Development Authority (CMDA). The Dhiraagu CG Code can be downloaded from day-to-day management of Dhiraagu. with our shareholders; and www.dhiraagu.com.mv/investor_relations. Additionally, we have our own Corporate There is a formal delegations of authority • overseeing the process of disclosure and Governance Code which acts as our foundation structure in place in our ‘Authority Matrix’ which ensuring that the communications are fair, for sound corporate governance. The Board’s is approved by the Board and sets out the powers transparent, comprehensive, and timely. 50 51 Dhiraagu
Board Meetings Board Committees Conflicts of Interest 2018 Report Annual
The Board acts as the guardian to the company, The agendas for the meetings were set Key Decisions in 2018 The Board has two standing committees; the Audit Directors are required to take all necessary steps determines the broad strategic and policy outlook for in advance, after consulting with the Chairperson Committee and the Remuneration Nomination to avoid actual, potential or perceived conflicts of the company, and oversees the effectiveness of the and Batelco Group. Board papers were shared in prior and Governance (RNG) Committee, which interest and to be sensitive to situations in which executive management to implement such policies to the meeting, providing an opportunity for Directors • Approval of Audited Financial Statements operate in accordance with approved Terms these may arise. In accordance with the Company’s for the year ended 31st December 2017. and strategies. to better prepare for the meetings. of References. The Board appoints members Act (Law no 10/96) and our Articles of Association, | Corporate Governance to and chairperson of each committee. Directors must declare any conflict of interest they The Board meets at least once every quarter. All Board meeting agendas have a permanent • Proposed full year divided of MVR 11.81 may have, and follow the procedures set out in our On specific matters that require the Board’s provision for any other business where per share (total MVR 897.6m) to be Following each committee meeting, the Board Charter including, in certain circumstances, declared as Full Year Dividend for 2017, urgent attention special meetings are held Directors can voice matters of pressing Board receives a report of the deliberations, to abstain from participating in any discussion or comprising of MVR 5.96 per ordinary in between regular sessions. A total of 4 concern to the shareholders they represent. conclusions and recommendations. An overview voting on matters in which they have a material share for Interim Dividend and MVR 5.85 Board meetings were held in 2018. of the roles and responsibilities, composition, personal interest. As a practice, all Board and per share for final dividend for 2017. and membership as at 31 December 2018, are Committee meeting agendas have a permanent provided in the respective committee reports. provision for declaring a conflict of interest of any Mr. Ismail Waheed Mr. Ihab Hinnawi Mr. Mohamed Ashmalee • Proposed re-appointment of KPMG agenda item to be discussed at that meeting. Position : Chairperson Position : Non-Executive Director Position : Chairperson as the External Auditor for 2018. Representation : Government of Maldives Representation : Batelco Group Representation : Government of Maldives All material related to transactions of the majority Attendance: Attendance: Attendance: • Review and revision of Going Concern the Dhiraagu Authority Matrix. shareholders and Directors is reviewed during the 1/1 4/4 1/3 Considering our strong financial standing quarterly Board meetings. There were no substantial • Approval of 2017 and position in the market, Dhriaagu is or material third party transactions made by the Performance Bonus Payout. well placed to manage its business risks Directors or the Management during the year. Mr. Abdul Rahman Fakhro Mrs. Khulood Rashid AlQattan Mr. Abdulla Ahmed in the current economic conditions. Position : Deputy Chairperson Position : Non-Executive Director Position : Non-Executive Director • Approval of the Annual Report Representation : Batelco Group Representation : Batelco Group Representation : Government of Maldives for the year ended 31st December 2017. Having reviewed our strategy and business plan Shares held by Directors Attendance: Attendance: Attendance: for 2019, and the audited financial statements for Director No. of Shares Held • Approval of the Bonus KPI’s 4/4 4/4 1/3 2018, the Board affirms that the Dhiraagu’s ability and Performance Bonus Payout Plan for to continue as a going concern, and that we have Mr. Imran Ali 15,000 2018. adequate resources to continue in operation for the Mr. Ismail Rasheed Mr. Oliver McFall Mr. Ahmed Hafiz foreseeable future. We will continue to disclose, Mr. Ismail Rasheed 13,994 • Recommending the Nomination Position : Chief Executive Officer & Managing Director Position : Non-Executive Director as applicable, matters related to going concern Position : Non-Executive Director of Public Director. Mr. Ismail Waheed 1,510 Representation : Batelco Group Representation : Batelco Group Representation : Government of Maldives and use the going concern basis of accounting. Attendance: Attendance: Attendance: • Review and revision of the Credit 4/4 4/4 2/3 Control Policy of the Company.
• Approval of the Insider Trading Policy. Mr. Imran Ali • Declared MVR 5.96 per ordinary Position : Non-Executive Director share (total MVR 452.9m) as Representation : Public Shareholders interim dividend for 2018. Attendance: 4/4 52 53 Dhiraagu
Internal Control, Governance 2018 Report Annual Risk Oversight, Policy Framework and Risk Management
Our risk management approach centres We place great emphasis to conduct our business Our ‘Authority Matrix’ was last reviewed and to comply with applicable laws and regulations (2012/R-20) as a result of failing to seek In accordance with the Audit Committee’s
on continuous assessment, monitoring in a fair and responsible manner by adopting the amended in April 2018, it sets approval limits concerning bribery, corruption, fraud and authorisation from the Maldives Broadcasting recommendation, the board is proposing to | Corporate Governance and reporting of risks which may impact the highest standards of professionalism, honesty, for all business transactions and expenditures any other prohibited business practices. Commission, prior to making additions to and/or recommend the re-appointment of KPMG to progress of delivering our strategic priorities. integrity and ethical behaviour. In order to meet all within our company. Due to the nature of our In addition to this, a Fraud Reporting and removals from its DhiraaguTV channel packages. carry out to carry out the statutory audit for the Risks together with their controls and treatment the legal and regulatory obligations and compliance business and the environment within which Whistle Blowing Policy and Procedures were Dhiraagu has subsequently strengthened the financial year 2019. The proposed remuneration are regularly reported to the Audit Committee and to ensure that strong good governance is we operate, we may be exposed to risks. Thus was established in 2014 to strengthen the internal process to ensure that, due process is a maximum fee of US$ 45,000 excluding which assists the Board in its oversight function. implemented, we have adopted various internal risks that we may face are monitored, reported human resource governance structures, raising is followed. Dhiraagu has paid the penalty. out of pocket expenses and 6% GST. polices, procedures and guidelines to promote and addressed regularly throughout the year. A the confidence of our colleagues and other ethical and responsible conduct and provide ‘Risks Register’ is also maintained and reviewed stakeholders in our systems and processes. We have conducted our business in compliance Board Nominations guidance to our Directors, and our people. by the Audit Committee every quarter. with the legal and regulatory obligations under • A risk and compliance function We adopted a Policy on Insider Trading in 2018, the Maldives Company’s Act (Law No. 10/96), Our Articles of Association provide that the was established in 2016 and a full Our Ethics Policy was revised in September 2011, From 2013 onwards, our suppliers and vendors to comply with CMDA’s Policy on Prohibition of the Maldives Telecommunications Law (Law nomination process of the Director elected time Risk and Compliance Officer it contains our code of conduct and recognises sign on to our Supplier Code of Conduct when Insider Trading. The policy imposes and provides No. 43/2015), the Maldives Securities Act (Law by the public shareholders be managed by oversees all matters related to that our success depends on the ability to contracting with us and are expected to meet the guidelines, instructions and the codes of conduct No. 2/2006), obligations under our operational the Board, through the RNG Committee. compliance and risk. establish and maintain positive relationships, both standards detailed in it. Our Supplier Code of Conduct in trading our shares. It applies to our Directors, our licenses, the Maldives Stock Exchange Listing internally within employees and externally with all was modelled to set out our minimum standards people and certain third-party agents and advisers. Rules and the CMDA’s CG Code. With appropriate The Nomination process for the Public Director • An ‘Authority Matrix’ approved by stakeholders. The Ethics Policy is communicated to in the areas of labour and human rights, health The policy is a cohesive guide to ensure that we controls and governance procedures in place, proposed for election at the 29th AGM was carried the Board is in place and delegates our people through formal induction programmes and safety, environment and ethical dealings. are in compliance with the Maldives Securities Act the company continues to comply with relevant out by the RNG Committee and candidates were approval limits for all business transactions and expenditures. and is shared on our internal portal. (Law No: 2/2006) and its related regulations. laws, regulations and industry codes. shortlisted following a public announcement Our Donations and Sponsorships Framework has made for the directorship position. Application • A ‘Risks Register’ is maintained Our Disciplinary Policy and Procedure adopted in been in place since 2012 and establishes clear and Legal & Regulatory Compliance Auditors details and evaluation criteria can be viewed from and reviewed by the Audit Committee October 2014 establishes a transparent, fair and transparent guidelines for all our donations and our website. Names and profiles of candidates every quarter. The Internal Audit consistent mechanism to deal with the consequence sponsorships. It complements the Anti-Bribery Dhiraagu has a separate Legal Department to A tendering process was conducted in 2016 to recommended for election were released along function carries out annual audits, of failing to meet the required standards of behaviour Policy by implementing good governance and fulfil our legal and regulatory obligations, with a recommend an External Auditor. The tender covers with the Notice of the 29th Annual General Meeting. based on an Internal Audit Plan and job performance. We also have a separate establishing a formal application, assessment, dedicated team of internal and external lawyers three years, and is subject to shareholder approval that is approved and reviewed Committee to Prevent Sexual Harassment at the approval, notification and reporting process. appointed to ensure that we continue to comply at the Annual General Meetings. The Board ensures Mr. Imran was re-elected at the 29th AGM closely by the Audit Committee. Workplace set up in 2014 in accordance with the with relevant laws and regulations. Other than that regulatory requirements on audit partner held on 14 May 2018 for a term of two years Anti-Sexual Harassment Act (Law No. 16/2014). We have zero tolerance for corruption and bribery. in relation to the following matter, Dhiraagu has rotation are strictly adhered to and the Audit (from the 29th AGM to the 31st AGM). Our Anti-Bribery Policy adopted in September 2011 not been given notice of, or prosecuted for, or Partner was rotated in 2018 in order to comply Our Grievance Policy and Procedure has been aims ensures that gifts, prizes and hospitality convicted of, any significant breaches of any relevant with the CMDA Corporate Governance Code. 30th Annual General We remain committed to continuous established since January 2015, with the objective are not accepted in inappropriate circumstances, laws or regulations during the financial year. improvement in our approach to managing of documenting and formalising a mechanism including where acceptance may or may be Our KPMG Partner attends our AGM, and is available Meeting (AGM) risks and ensure that we maintain a strong, for employees to raise grievances regarding perceived to compromise independence or be As disclosed previously in the Fourth Quarter to answer any shareholder questions about the integrated risk and compliance culture. any work-related matters, so that such matters construed as a bribe. We refrain from making any Report for 2018, Dhiraagu received a notice of conduct of our audit and the content of the auditor’s The 30th AGM is scheduled to be held on can be resolved timely and amicably. The policy political contributions either directly or indirectly penalty of MVR 28,000 (IMCAC-17/2018) and report for the year ending 31 December 2018. Thursday, 25 April 2019. Details of the venue, further enhances transparency and consistency to political parties, causes or individuals. Our MVR10,000 (IMCAC-18/2018) respectively for timings and proposed resolutions will be in dealing with grievances across our company. Code of Conduct also addresses the commitment contravention of the Rebroadcasting Regulation communicated in the Notice of AGM. 54 55 Dhiraagu
Audit 2018 Report Annual Committee Report | Audit Committee Report
Dividends Declaration of Interest Composition & Membership Terms of Reference As at 31 December 2018, the following members The Audit Committee is scheduled to meet Key Decisions The Board recommends a full year dividend of MVR In compliance with the requirements of • There was no contract(s) of significant served the Audit Committee. All members were non- once every quarter provides a forum for 905,160,000 (nine hundred and five million, one the Securities (Continuing Disclosure Obligations substance during or at the end of the executive and independent directors and possessed communication between the Board, management hundred and sixty thousand) amounting to MVR 11.91 of Issuers) Regulation 2010, the Board of Directors accounting period in which a Board Director sufficient accounting and financial knowledge and both the internal and external auditors. • Review and recommendation per share for the year 2018, to be declared as full year of Dhivehi Raajjeyge Gulhun Plc affirms that: of the company has a direct or indirect interest. to allow them to discharge their duties, ensuring The Committee is responsible for monitoring of Audited Financial Statements for 2018. dividend for 2018. The full year dividend comprises of: compliance with CMDA Corporate Governance and advising the Board on matters relating to • This Annual Report 2018 has been prepared in Details of material contracts for the provision of Code and Dhiraagu Corporate Governance Code. financial reporting, risk management, compliance, • Review and recommendation • MVR 5.96 per share compliance with all the reporting requirements, services entered into between Dhiraagu and Batelco external audit, internal control, internal audit of quarterly financial reports for (total MVR 452,960,000) which was and in accordance with the relevant laws and Group and Government of Maldives are provided in and matters that may significantly impact the the financial year 2018. Ms. Khulood Rashid AlQattan paid as interim dividend in 2018, and regulations; Note 26 “Related Parties Transactions” of the Audited financial condition or affairs of our business. Financial Statements as at 31st December 2018. Position : Chairperson of the Audit Committee • Recommendations on the appointment • MVR 5.95 per share (total MVR 452,200,000) • The Board of Directors of Dhiraagu and/or any Tenure: Jul 17 to date of KPMG as the company’s external auditor for the financial year 2019. as the final dividend for 2018 of their associates did not have any significant Attendance: Meetings which is proposed for shareholder interest in the equity or debt securities of the 4/4 • Review and monitoring of all Internal approval at the 30th AGM company, or had any right to subscribe for Audit activities on a quarterly basis. equity or debt security of the company; and The Audit Committee met 4 times during the financial The final dividend for 2018 will be payable year ending 31 December 2018. Other members of Mr. Abdulla Ahmed to all shareholders listed in the Company’s the Board may attend Audit Committee meetings register on the book closure day announced Position : Member and the Committee may invite management, the for the 30th Annual General Meeting. Tenure : Jan 14 to Nov 18 external auditor and others to attend meetings All action points from the Attendance: as it considers necessary or appropriate. Committee’s meetings were 3/4 completed on a timely basis. All meetings during the financial year ending 31 December 2018, were attended by the Chief Mr. Imran Ali Executive Officer & Managing Director, the Chief Ismail Waheed Ismail Rasheed Financial Officer and the Internal Auditor. The Position : Member Chairperson Chief Executive Officer meetings were also attended by Batelco Group’s & Managing Director Tenure : Jul 14 to date Chief Internal Auditor. The Secretary of the Board Attendance: acted as the Secretary of all the meetings. 4/4 56 57 Dhiraagu
External Audit IT and compliance controls and procedures for Roles & Responsibilities 2018 Report Annual identifying and managing risks. The outcomes and KPMG was appointed by the shareholders as follow up actions of these audits were regularly The RNG Committee was reconstituted in our External Auditor for 2018 and our Partner reviewed at the audit committee meetings, and August 2013 to facilitate effective and efficient was rotated in 2018 to ensure that we comply the Committee is satisfied with the progress of discharge of responsibilities, by combining the with the CMDA Corporate Governance Code. all the implementation of the action items. three functions of remuneration, nomination
and governance. Its role is to assist the Board in Report Committee Governance and Nomination Remuneration, | The Audit Committee reviewed the non-audit The Audit Committee is satisfied with the Remuneration, formulating remuneration policies, the framework services provided by KPMG and the explanation progress of the Internal Audit function for nominating the Public Director, and monitoring of how the provision of those non-audit services during the year 2018 and the adequacy of the performance of our corporate governance was compatible with auditor independence. the internal control measures in place. Nomination framework and compliance with relevant legislation. The Committee is satisfied that appropriate measures are put in place by both KPMG and Risk Management and Governance Dhiraagu to ensure the independence and Meetings objectivity of the External Auditor. The External Our ‘Risk Register’ is prepared by a full time The RNG Committee met twice during the financial Auditor confirmed of their compliance with Risk and Compliance Officer who maintains Committee Report year ending 31 December 2018. Other members of the practice note of CMDA’s CG Code. processes identifying new and emerging risks to the Board may attend the RNG Committee meetings our business. Identified risks together with their and the Committee may invite management, and The External Auditor attended all the Audit controls and treatment were closely monitored by Composition & Membership Mr. Abdul Rahman Fakhro others to attend meetings as it considers necessary Committee meetings during the year to provide the Audit Committee every quarter and exposure or appropriate. meetings were held in 2018. The Position : Member independent assurance and present their opinion or effectiveness of controls were reported to The following non-executive and independent Chief Executive Officer & Managing Director, and Tenure : May 14 to 1 Jan 19 on the financial reports. The Audit Committee the Board during the course of the year. Directors served the Remuneration, Nomination the Group CEO attended all the meetings and Attendance: also met the External Auditor in a private session and Governance (RNG) Committee during other members from the management team were without the management to get an independent The requirements for disclosures and year ending 31 December 2018. 2/2 invited as and when required. The Secretary of the view of their audit experience and opinion. provisions on any material claims and litigations Board acted as the Secretary of all the meetings. against the company was monitored closely Mr. Ismail Waheed Mr. Mohamed Ashmalee with support from both external lawyers Internal Audit Position : Chairperson Position : Chairperson and external auditor when required. Tenure : Dec 18 to date Tenure : Jun 15 to 22 Nov 18 Internal audit activities are undertaken by our Attendance: Attendance: Internal Audit Department. The Internal Auditor The Audit Committee is satisfied with the Internal Key Decisions - reports directly reports to the Audit Committee Audit function during the year ending 31 December 1/2 with a parallel administrative reporting line to the 2018 and that a sound system for risk management • Review and recommendation Chief Executive Officer & Managing Director for and internal control is operating effectively. *Mr. Ismail Waheed was appointed Mr. Imran Ali of the 2018 Performance Bonus Plan day to day matters. Its role is to provide the Board to the RNG Committee on 3 December and 2017 Performance Bonus Pay-out. Position : Member and management with independent and objective 2018. There were no RNG Committee assurance on the effectiveness of our governance, Meetings following his appointment. Tenure : Jul 14 to date • Review and recommendation risk management and internal control processes. Attendance: of HR Transformation initiative. 2/2 A total of 10 Internal Audits were carried out and presented during the year and the Audit Committee Khulood Rashid AlQattan reviewed the effectiveness of the company’s internal Chairperson, controls including financial, operational, technical, Audit Committee 58 59 Remuneration Package Board Appointments During 2018, there were several Board Diversity of Directors & Executives changes to the Dhiraagu Board:
Board Directors are rewarded as per the Our Articles of Association provide that the • In January 2018 we welcomed the appointment Our Board represents a highly qualified and diverse by the Government of the Maldives of Mr. Board Director’s Remuneration Policy, nomination process of the Director elected set of experts with members from different Ahmed Hafiz to the Board. Mr. Hafiz had which ensures Director remuneration is by the public shareholders be managed by professional and academic backgrounds. previously served as a non-executive director competitive and compensates for the the Board, through the RNG Committee. on the Dhiraagu Board of Directors. responsibilities assigned to each Director. Dhiraagu is committed to promoting gender The Nomination process for the Public Director diversity at the Boardroom and encourages female • In May 2018, Mr Imran Ali was re-elected as the The RNG Committee reviews and makes th AGM was carried representation on the Board in accordance with proposed for election at the 29 Public Director by the public shareholders at recommendations to the Board on Dhiraagu’s out by the RNG Committee. As a part of the the 29th AGM for a further term of two years. the Corporate Governance Code issued by CMDA. overall remuneration strategy, policies and process, the RNG Committee establishes a criterion At the time of issuing this report, there is one practices, and monitors the effectiveness of with respect to the qualifications, experience, skills • In November 2018, the Government of Maldives female representative on the Board of Dhiraagu. Dhiraagu’s overall remuneration framework. The and expertise that candidates should possess. made changes to their appointees to the Board. remuneration for key executives is determined in The Committee then, undertakes appropriate As a result we: consultation with Batelco Group, and is based on checks of potential candidates before it makes Board Effectiveness the individuals scope of work, performance against a recommendation for a candidate to be nominated • Farewelled Mr. Mohamed Ashmalee who agreed measures, market rates for comparable by the Board of Directors to put forward to the had served as Chairperson of the Dhiraagu roles and other relevant factors. The Company’s public shareholders for election at the AGM. Board of Directors since February 2015. During Our Board Directors Performance Evaluation Policy, remuneration packages include fixed components Application details and evaluation criteria can his term he also served as the Chairperson of requires Directors to carry out a self-evaluation and performance linked incentives which are be viewed from our website. Names and profiles the RNG Committee. of the Board and the Committee’s performance. designed to be competitive with the market, of candidates recommended for election were A Board evaluation was carried out in January encourage sustainable performance and provide a released along • Farewelled Mr. Abdulla Ahmed 2019. The results of the evaluation were reviewed who had served as a Non-Executive Director on retention element to retain key and critical talent. with the Notice of the 29th Annual General meeting. by the RNG Committee in February 2019. Dhiraagu Board of Directors from Jan 14 and No stock options are included in the remuneration during his term he also served as Member of package of Board Directors or key executives. Mr. Imran was re-elected at the 29th AGM held The RNG Committee confirms that Dhiraagu the Audit Committee. on 14 May 2018 for a term of two years (from Board and its committees discharged their Disclosure of remuneration of Directors and key the 29th AGM to the 31st AGM). Board Directors responsibilities satisfactorily during 2018. • Farewelled Mr.Ahmed Hafiz who representing the major shareholders are executives as required by CMDA, which includes had served as a Non-Executive Director on details on the level and mix of the remuneration appointed through a letter of appointment. Dhiraagu Board of Directors from January 2018 package, and individual remunerations paid to to November 2018. Board Directors and key executive, are withheld The Curriculum Vitae of Directors appointed due to the competitive environment that Dhiraagu by the majority shareholders are reviewed by • Welcomed Mr. Ismail Waheed operates in. Total remuneration (including short the committee, and the committee confirms as Chairperson of the Dhiraagu Board of term benefits) paid to the Directors and key that all Directors possess the required expertise Directors. Mr. Ismail Waheed had previously executives are MVR 1.30m and MVR 19.38m to discharge their responsibilities effectively. served as the Chief Executive Officer & respectively. Payments for service contracts, Managing Director of Dhiraagu from 2004 notice period, severance fees and stock options An induction including a meeting with the until his retirement in September 2015. Ismail Waheed did not form any part of the remuneration senior management as well as a tour of our company is organised for all new directors. paid to Directors or key executives in 2018. Chairperson, Remuneration, Nomination and Governance Committee 60 Dhiraagu
Annual Report 2018 2018 Report Annual Audited Financial Statements Statements Financial | Audited
62 63 Dhiraagu
Annual Report 2018 2018 Report Annual | Audited Financial Statements Financial | Audited Our Response Basis for Opinion Revenue Recognition – Accuracy of revenue recorded and the adoption of IFRS 15 We conducted our audit in accordance Our audit procedures included, - Testing of key controls, assisted by our own IT specialists DHIVEHI RAAJJEYGE GULHUN PLC. with International Standards on Auditing (Refer to the accounting policies and critical including, among others, those over the input of terms and FINANCIAL STATEMENTS (“ISAs”). Our responsibilities under those accounting estimates, assumptions and judgments Independent pricing of different services; accuracy of the data captured standards are further described in the in notes 4.11 and 5(c) of the financial statements and by different systems and linkage between the systems. FOR THE YEAR ENDED 31ST DECEMBER 2018 Auditor’s Report Auditors’ Responsibilities for the Audit of the refer to the accounting policy 3.1 (A) for the transition Financial Statements section of our report. disclosures provided for the adoption of IFRS 15) - Performing detailed analysis of revenue testing the We are independent of the Company in accordance timing of its recognition through focused substantive To the Shareholders with the International Ethics Standards Board testing performed based on our industry knowledge which of Dhivehi Raajjeyge Gulhun PLC for Accountants’ Code of Ethics for Professional include, among others, testing on a sample basis of the; Accountants (“IESBA Code”) and we have • Adjustments which are outside of the normal billing process. fulfilled our ethical responsibilities in accordance Risk Description Opinion • Revenue recognition on with the IESBA Code. We believe that the audit the bundled services offered. Revenue recognition is one of the most judgmental CONTENTS We have audited the accompanying financial evidence we have obtained is sufficient and • Deferred revenue and cost on installation which and complex area of accounting especially with statements of Dhivehi Raajjeyge Gulhun PLC (the appropriate to provide a basis for our opinion. considered as a part of the overall performance the added complexity of the vast array of rapidly “Company”), which comprise the statement of financial obligation of the respective service and; Independent Auditor’s Report 64-67 changing offers and due to high volume of low value position as at 31st December 2018, the statements • Revenue recognition related to the customer transactions captured by the billing systems. Financial Statements of profit or loss and other comprehensive income, loyalty program of the Company. statement of changes in equity and statement of The majority of the Company’s revenue is generated - With regard to the adoption of IFRS 15, we have Statement of Profit or Loss cash flows for the year then ended, and notes to from the output of billing systems. Determining when 68 performed the procedures, assisted by our IFRS 15 and Other Comprehensive Income the financial statements, comprising a summary Key Audit Matters and how much revenue is recognized from customer specialist including, among others, evaluating the gaps of significant accounting policies and other contracts has a significant impact especially on identified by the management, assessing the impacts not multiple elements arrangements and customer offers. Statement of Financial Position 69-70 explanatory information set out in pages 68 to 114. Key audit matters are those matters that, in our considered on the materiality and the methodology used professional judgment, were of most significance in by the management over the computations and evaluating The Company has adopted IFRS 15 from the effective Statement of Changes in Equity 71 In our opinion, the accompanying financial statements our audit of the financial statements of the current the completeness, relevance and accuracy of the data date of 1st January 2018 and revenue recognition give a true and fair view of the financial position of period. These matters were addressed in the context and evaluation of the reasonableness of management’s from complex products / services and revenue Statement of Cash Flows key assumptions and estimates that have been used in 72-73 the Company as at 31st December 2018, and of its of our audit of the financial statements as a whole, generated and cost incurred on new service lines determining the impact of IFRS 15. We have assessed the financial performance and its cash flows for the and in forming our opinion thereon, and we do not and customer acquisitions include judgmental appropriateness of revenue recognition under IFRS 15 across Notes to the Financial Statements 74-114 year then ended in accordance with International provide a separate opinion on these matters. criteria and may not be in compliance with IFRS 15 significant revenue streams for a sample of contracts. Financial Reporting Standards (“IFRSs”). requirements, increasing the risk of misstatement of revenue and deferred income. Further, adoption - Reviewing the adequacy, relevance and accuracy of IFRS 15 required the new accounting policies and of the new accounting policies and disclosures disclosures in the financial statements whereas the in the financial statements including the new policies and disclosures provided in the financial transition disclosures required by IFRS 15. statements would not be adequate and accurate. 64 65 Dhiraagu
technological update. Therefore, technology changes • Assessing the performances of the new service
Responsibilities of the Board of • Identify and assess the risks of material misstatement We communicate with the Board regarding, 2018 Report Annual Carrying value of property would create obsolescence of Property & Equipment, lines introduced by the Company to assess whether of the financial statements, whether due to fraud and equipment which might require an impairment provision. adequate cash flows are generated by those Directors for the Financial Statements among other matters, the planned scope and or error, design and perform audit procedures service lines. timing of the audit and significant audit findings, The Board is responsible for the preparation and responsive to those risks, and obtain audit evidence (Refer to the accounting policies Determination of recoverable amount of Property & including any significant deficiencies in internal the fair presentation of financial statements in that is sufficient and appropriate to provide a basis and critical accounting estimates, Equipment involves significant judgments and estimates. • Assessing whether there were impairment triggers control that we identify during our audit. accordance with IFRSs, and for such internal control for our opinion. The risk of not detecting a material assumptions and judgments in notes 4.3 Therefore, an error in such estimates could result in giving rise to a need to perform a comprehensive misstatement resulting from fraud is higher than for material misstatements in the financial statements. impairment review of Property & Equipment based as the Board determines is necessary to enable the and 5 (g) of the financial statements . one resulting from error, as fraud may involve collusion, We also provide the Board with a statement Statements Financial | Audited We identified the carrying value of property and on the internal and external information assessed, preparation of financial statements that are free from forgery, intentional omissions, misrepresentations, that we have complied with relevant ethical equipment as a key audit matter because of the material misstatement, whether due to fraud or error. or the override of internal control. requirements regarding independence, and high level of management judgments involved and • Challenging the management’s positions of the Risk Description to communicate with them all relationships its significance to the financial statements. impairment assessment as to whether or not In preparing the financial statements, the Board • Obtain an understanding of internal control relevant and other matters that may reasonably be a reasonable possible change to key operating is responsible for assessing the Company’s to the audit in order to design audit procedures that thought to bear on our independence, and assumptions could result in impairment. ability to continue as a going concern, disclosing, The Company continues to incur a significant level of are appropriate in the circumstances, but not for the where applicable, related safeguards. as applicable, matters related to going purpose of expressing an opinion on the effectiveness capital expenditure in connection with the expansion Our Response • Assessing the adequacy of the financial statements concern and using the going concern basis of of the Company’s internal control. of its network coverage and improvements to network disclosures relevant for property and equipment From the matters communicated with the quality. The carrying value of Property and Equipment accounting unless the Board either intends to Board, we determine those matters that were as at 31st December 2018 was MVR 1,870 million. liquidate the Company or to cease operations, • Evaluate the appropriateness of accounting policies Our audit procedures included: of most significance in the audit of the financial Other Information or has no realistic alternative but to do so. used and the reasonableness of accounting estimates statements of the current period and are There are number of areas where management The Board of Directors (the “Board”) is responsible and related disclosures made by the Board. • Assessing the design, implementation and operating judgment impacts the carrying value of therefore the key audit matters. We describe effectiveness of key internal controls over the for the other information. The other information Property and Equipment, and the related • Conclude on the appropriateness of Board of Directors’ these matters in our auditors’ report unless capitalization of property and equipment, including comprises the information included in the annual depreciation profiles, which include: use of the going concern basis of accounting and, law or regulation precludes public disclosure the key internal controls over the estimation of useful report, but does not include in the financial Auditors’ Responsibilities for the based on the audit evidence obtained, whether about the matter or when, in extremely rare economic lives of assets; statements and our auditors’ report thereon. The Audit of the Financial Statements a material uncertainty exists related to events or • determining which costs meet the circumstances, we determine that a matter criteria for capitalization; annual report is expected to be made available conditions that may cast significant doubt on the • Assessing, on a sample basis, costs capitalized during Our objectives are to obtain reasonable assurance should not be communicated in our report • determining the date on which construction- to us after the date of this auditors’ report. Company’s ability to continue as a going concern. If the year by comparing the costs capitalized with the about whether the financial statements as a whole because the adverse consequences of doing so in progress is transferred to property and we conclude that a material uncertainty exists, we relevant underlying documentation, which included are free from material misstatement, whether due would reasonably be expected to outweigh the equipment and depreciation commences Our opinion on the financial statements does not are required to draw attention in our auditors’ report purchase agreements and invoices, and assessing to fraud or error, and to issue an auditors’ report public interest benefits of such communication. and determining the values transferred cover the other information and we will not express to the related disclosures in the financial statements whether the costs capitalized met the relevant criteria from construction work in progress; that includes our opinion. Reasonable assurance or, if such disclosures are inadequate, to modify for capitalization; any form of assurance conclusion thereon. • the estimation of economic useful lives is a high level of assurance, but is not a guarantee our opinion. Our conclusions are based on the audit The engagement partner on the audit assigned to property and equipment. that an audit conducted in accordance with ISAs evidence obtained up to the date of our auditors’ report. resulting in this independent auditors’ • Challenging the date of transferring construction-in- In connection with our audit of the financial will always detect a material misstatement when it However, future events or conditions may cause the report is W.K.D.C. Chamara Abeyrathne. progress to Property and Equipment by examining the statements, our responsibility is to read the other Company to cease to continue as a going concern. The complex nature of the assets may result exists. Misstatements can arise from fraud or error inspection reports and/or project progress reports, on in inappropriate capitalization of the costs information identified above when it becomes a sample basis; and are considered material if, individually or in the and inappropriate determination of the date available and, in doing so, consider whether the • Evaluate the overall presentation, structure and aggregate, they could reasonably be expected to and the values transferred from construction other information is materially inconsistent with content of the financial statements, including the • Evaluating management’s estimation of useful influence the economic decisions of users taken in progress to property and equipment. the financial statements or our knowledge obtained disclosures, and whether the financial statements economic lives by considering our knowledge of the on the basis of these financial statements. in the audit, or otherwise appears to be materially represent the underlying transactions and events business. in a manner that achieves fair presentation. Chartered Accountants Telecommunication industry is evolving continually misstated. due to changes in the technology. Further, the As part of an audit in accordance with Male’ • Inquiring the networks and the other relevant Company has significant number of physical ISAs, we exercise professional judgment 6th February 2019 teams in order to assess on technological When we read the annual report, if we conclude that assets related to telecommunication subject to the and maintain professional skepticism updates and actual replacements of assets, if any there is a material misstatement therein, we are throughout the audit. We also: with latest technology to identify any potential required to communicate the matter to the Board. impairment indicators for the existing assets 66 67 Dhiraagu
Statement of Profit Or Loss and Other Comprehensive Income Statement of Financial Position 2018 Report Annual
F R AR 1S R 2018 2017 AS A 1S R 2018 2017 Note MVR 000 MVR 000 Note MVR 000 MVR 000 Assets
Revenue Non current assets | Audited Financial Statements Financial | Audited peratin costs 8 1 2 1 1 2 2 ropert and e uipment 1 1 8 0 108 1 82 epreciation and amorti ation 1 1 1 21 10 2 ntan i le assets 1 28 0 8 2 8 0 mpairment loss on trade recei a les and contract assets 1 1 1 1 0 2 e erred ta assets 11 2 1 8 t er income 2 2 1 Total non current assets 1 1 5 Results from operating activities 1 1 1 Finance income 10 0 20 urrent assets Finance costs 10 821 1 2 n entories 1 1 1 0 et finance costs 1 1 rade and ot er recei a les 1 8 0 10 rofit efore ta 1 1 1 5 5 as and an alances 1 2 0 12 a e pense 11 1 1 8 1 0 0 Total current assets 5 5 1 1 5 Profit/ Total Comprehensive Income for the year 905,093 897,560 Total assets 3,147,421 3,198,021
Earnings per share asic and diluted earnin s per s are R 12 11 1 11 81 Equity and Liabilities Equity S are capital 18 1 0 000 1 0 000 Fi res i bra ets i di ate ded tio s. Retained earnin s 2 1 8 2 12 8 Total equity 1 hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es .
Statement of Financial Position (Continued)
AS A 1S R 2018 2017 Note MVR 000 MVR 000
Non current liabilities ro isions 1 1 0 2 1 8 2 68 Total non current lia ilities 1 5 15 69
urrent liabilities rade and ot er pa a les 20 8 1 2 Amounts due to related part 21 1 8 1 ncome ta pa a le 8 88 8 Total current lia ilities 1
Total lia ilities 1 5 1
Total equity and liabilities 3,147,421 3,198,021
hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es .
hese fi a ial state e ts were a roved b the board of dire tors a d si ed o its behalf b
Mr. smail Waheed Mr. smail Rasheed Mr. Robin Wall
airperson ie ecuti e icer ie Financial icer and ana in irector
6th February 2019 Statement of Financial Position
AS A 1S R 2018 2017 Note MVR 000 MVR 000 Assets Non current assets ropert and e uipment 1 1 8 0 108 1 82 ntan i le assets 1 28 0 8 2 8 0 e erred ta assets 11 2 1 8 Total non current assets 1 1 5
urrent assets n entories 1 1 1 0 rade and ot er recei a les 1 8 0 10 as and an alances 1 2 0 12 Total current assets 5 5 1 1 5
Total assets 3,147,421 3,198,021
Equity and Liabilities Equity S are capital 18 1 0 000 1 0 000 Retained earnin s 2 1 8 2 12 8 Total equity 1 Dhiraagu
Statement of Financial Position (Continued) 2018 Report Annual Statement of Changes in Equity Retained AS A 1S R 2018 2017 F R AR 1S R hare capital earnings Total Note MVR 000 MVR 000 Note MVR 000 MVR 000 MVR 000
Non current liabilities As at 1st January 2017 1 51 | Audited Financial Statements Financial | Audited ro isions 1 1 0 2 1 8 2 ro it and otal ompre ensi e ncome or t e ear 8 0 8 0 Total non current lia ilities 1 5 15
Transactions with owners of the Company, directly recognized in Equity urrent liabilities i idends 18 2 1 0 1 0 1 0 1 0 rade and ot er pa a les 20 8 1 2 As at 31st December 2017 1 1 1 Amounts due to related part 21 1 8 1 Ad ustment on initial application o FRS 0 ncome ta pa a le 8 88 8 Ad ustment on initial application o FRS 1 0 2 0 2 Total current lia ilities 1 Ad usted Balance as at 1st anuary 2018 1 1 1 1 ro it and otal ompre ensi e ncome or t e ear 0 0 0 0 Total lia ilities 1 5 1
Transactions with owners of the Company, directly recognized in Equity Total equity and liabilities 3,198,021 3,147,421 i idends 18 2 8 0 8 0
As at 31st December 2018 190,000 2,139,843 2,329,843
hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art Fi res i bra ets i di ate ded tio s. of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es . hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art hese fi a ial state e ts were a roved b the board of dire tors a d si ed o its behalf b of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es .
Mr. smail Waheed Mr. smail Rasheed Mr. Robin Wall
airperson ie ecuti e icer ie Financial icer and ana in irector
6th February 2019
70 71 Statement of Cash Flows
F R AR 1S R 2018 2018 2017 Note MVR 000 MVR 000
Cash flows from operating activities ro it e ore a 1 0 2 2 1 1 0
Adjustments for: epreciation 1 28 2 281 12 Amorti ation o intan i le assets 1 2 1 2 02 ro ision or slo mo in o solete in entories 1 1 2 281 2 ro ision or impairment loss on trade and ot er recei a les 1 1 1 1 0 2 nterest income 10 0 20 n indin o discount on net or and asset retirement o li ation 10 11 8 0 12 et ain on disposal o propert and e uipment 202 1 2 Operating profit before working capital changes 1,401,419 1,362,696
Changes in: n entories 1 18 rade and ot er recei a les 1 181 10 12 rade and ot er pa a les 282 1 1 0 Amounts due to a related part 2 1 0 Cash generated from operations 1,307,132 1,148,494 ncome ta paid 1 1 1 1 8 Net cash generated from operating activities 1,141,213 999,336 Dhiraagu
Statement of Cash Flows Statement of Cash Flows (Continued) 2018 Report Annual 2018 2017 F R AR 1S R 2018 2018 2017 Note MVR 000 MVR 000 F R AR 1S R Note MVR 000 MVR 000
Cash flows from operating activities | Audited Financial Statements Financial | Audited ro it e ore a 1 0 2 2 1 1 0 Cash flows from investing activities urc ase and construction o propert and e uipment 81 2 1 Adjustments for: urc ase o intan i le assets 81 110 0 epreciation 1 28 2 281 12 roceeds rom disposal o propert and e uipment 202 Amorti ation o intan i le assets 1 2 1 2 02 penses incurred on assets retirement and disposals ro ision or slo mo in o solete in entories 1 1 2 281 2 nterest recei ed 8 2 2 10 2 ro ision or impairment loss on trade and ot er recei a les 1 1 1 1 0 2 eposit made in custodian account 00 nterest income 10 0 20 et proceeds rom matured i ed deposits 1 2 2 21 1 n indin o discount on net or and asset retirement o li ation 10 11 8 0 12 Net cash used in investing activities 5 1 1 1 et ain on disposal o propert and e uipment 202 1 2 Operating profit before working capital changes 1,401,419 1,362,696 Cash flows from financing activities i idend paid durin t e ear 8 1 0 0
Changes in: Net cash used in financing activities (896,997) (1,095,079) n entories 1 18 rade and ot er recei a les 1 181 10 12 et ecrease in cas and cas e ui alents 108 1 22 2 rade and ot er pa a les 282 1 1 0 as and cas e ui alents at e innin o t e ear 2 88 0 1 Amounts due to a related part 2 1 0 Cash and cash equivalents at end of the year 1 315,976 424,889 Cash generated from operations 1,307,132 1,148,494
ncome ta paid 1 1 1 1 8 Fi res i bra ets i di ate ded tio s. Net cash generated from operating activities 1,141,213 999,336 hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es .
Statement of Cash Flows (Continued)
F R AR 1S R 2018 2017 Note MVR 000 MVR 000
72 73 Cash flows from investing activities urc ase and construction o propert and e uipment 81 2 urc ase o intan i le assets 1 81 110 0 roceeds rom disposal o propert and e uipment 202 penses incurred on assets retirement and disposals nterest recei ed 8 2 2 10 2 eposit made in custodian account 00 et proceeds rom matured i ed deposits 1 2 2 21 1 Net cash used in investing activities 5 1 1 1
Cash flows from financing activities i idend paid durin t e ear 8 1 0 0 Net cash used in financing activities (896,997) (1,095,079)
et ecrease in cas and cas e ui alents 108 1 22 2 as and cas e ui alents at e innin o t e ear 2 88 0 1 Cash and cash equivalents at end of the year 1 315,976 424,889
Fi res i bra ets i di ate ded tio s.
hese fi a ial state e ts are to be read i o j tio with the related otes whi h for a i te ral art of these fi a ial state e ts of the Co a set o t o a es . he e ort of the I de e de t ditors is ive o a es . Dhiraagu
Notes to 2018 Report Annual the Financial Statements 3. Changes in Significant (A) IFRS 15 - Revenue from Contracts with Customers
(b) Basis of Measurement accounting policies IFRS 15 establishes a comprehensive framework Statements Financial | Audited for the year ended for determining whether, how much and when 31st December 2018 The financial statements have been prepared 3.1 New and Amended Standards revenue is recognized. It replaced IAS 18 Revenue, based on the historical costs basis. and Interpretation applicable IAS 11 Construction and related interpretations. 1. Reporting entity from 1st January 2018 Under IFRS 15, revenue is recognised when a (c) Functional and customer obtains control of the goods or services. Dhivehi Raajjeyge Gulhun PLC (the “Company”) Presentation Currency The Company has initially applied IFRS 15 and Determining the timing of the transfer of control - at was originally incorporated under the Limited IFRS 09 from 1st January 2018. A number of a point in time or over time - requires judgement. Liability Companies Decree No. 1988/123 and These financial statements are presented other new standards are also effective from 1st presently governed under the Companies’ Act in Maldivian Rufiyaa, which is also the January 2018 but they do not have a material No. 10 of 1996 as a limited liability Company in Company’s functional currency. All financial effect on the Company’s financial statements. the Republic of Maldives. The Company provides information presented in Maldivian Rufiyaa i. Impact on the adoption of IFRS 15 as at 1st January 2018 telecommunication services in the Maldives. has been rounded to the nearest thousand Due to the transition methods chosen by The registered office of the Company is situated except where otherwise indicated. the Company in applying these standards, mpact of adopting at Dhiraagu Head Office, Ameenee Magu, P.O. comparative information throughout these The Company has adopted IFRS 15 using the Retained FR 15 as at Box 2082, Male’ 20403, Republic of Maldives. (d) Use of Estimates and Judgements financial statements has not been restated to cumulative effect method, with effect of initially 1st anuary 2018 Earnings MVR 000 reflect the requirements of the new standards. applying this standard recognized at the initial date mpact on o er t e The Company is a listed Company in the Maldives The preparation of financial statements in of application (1st January 2018). Accordingly, the Stock Exchange, in the Republic of Maldives conformity with IFRSs requires management to The effect of initially applying these standards information presented for 2017 has not been restated time reco nition o nstallation ncome with effect from 29th September 2011. make judgements, estimates and assumptions is mainly attributed to the following; – i.e. it is presented, as previously reported, under IAS mpact on o er t e that affect the application of accounting 18, IAS 11 and related interpretations. Additionally, time reco nition o nstallation ost policies and the reported amounts of assets, • Change of the revenue recognition of the the disclosure requirements in IFRS 15 have not mpact on t e reco nition liabilities, income and expenses. Actual sales projects due to the consideration generally been applied to comparative information. 8 2. Basis of preparation di erence o sales pro ect income results may differ from these estimates. of the performance obligations. The following table summarises the • Change of the recognition of the impact, of transition to IFRS 15 on retained Total Impact on Retained Earnings (7,062) (a) Statement of Compliance Estimates and underlying assumptions are reviewed installation income and installation costs earnings as at 1st January 2018. as at 1st January 2018 The financial statements have been prepared on an ongoing basis. Revisions to accounting as the installation income and costs are in accordance with International Financial estimates are recognised in the period in which recognized over the period compared to Reporting Standards (“IFRSs”). the estimates are revised and in any future early recognition as incurred and earned. The primary differences arose from recognition periods affected. Information about significant • A decrease of impairment losses of contract cost assets, recognition of This is the first set of the Company’s annual areas of estimation, uncertainty and critical recognized on financial assets. installation revenue over the time and the financial statements in which IFRS 15- judgements in applying accounting policies that recognition of sales projects revenue based Revenue from Contracts with Customers have the most significant effect on the amounts on multiple performance obligations. and IFRS 9- Financial Instruments have been recognised in the financial statements are applied. Changes to significant accounting discussed in Note 5 to the financial statements. policies are described in Note 3. 74 75 Dhiraagu
ii. Impact on the adoption of IFRS 15 Amounts without iii. Key changes to the accounting
mpact on tatement of Financial Position 2018 Report Annual on the statement of financial position, As presently adoption of policies on the adoption of IFRS 15 statement of profit or loss and other reported Ad ustments FR 15 AS A 1S R 2018 MVR 000 MVR 000 MVR 000 comprehensive income as at and for Under IFRS 15, revenue is recognized when a the year ended 31st December 2018 Type of New revenue hange from customer obtains control of the goods or services. product service previous accounting policy Assets cost recognition criteria Determination of the timing of the transfer of control on current assets 1 1 5 - 1 1 5
The following tables summarise the impacts of at a point or over time requires judgements. Statements Financial | Audited Sale o e uipment Re enue rom andset and ot er e uipment sales is nder AS 18 consideration or re enue adopting IFRS 15 on the Company’s statement n entories 1 - 1 reco nised en t e product is deli ered to t e customer arran ements rom undled contracts of financial position as at 31st December 2018 The details of the new significant accounting rade and ot er recei a les 8 2 0 1 includin more t an one deli era le as and its profit or loss and other comprehensive policies and the nature of the changes to previous as and an alances 2 2 n re enue arran ements rom undled contracts include allocated to eac deli era le ased on income for the year then ended for each line accounting policies in relation to the Company’s more t an one er ormance li ation t e t eir relati e air alues items affected. There was no material impact Current assets 5 5 5 1 5 various goods and services are set out below. arran ement consideration is allocated to eac FRS 1 did not a e a si ni icant impact on the Company’s statement of cash flows Total assets 3,147,421 (34,527) 3,112,894 per ormance o li ation ased on t eir relati e standalone on t e ompan s accountin polic in for the year ended 31st December 2018. sellin price SS respect o sale o e uipment
Equity ro ision o ser ices Re enue or access c ar es airtime usa e FRS 1 did not a e a si ni icant impact S are capital 1 0 000 1 0 000 and messa in contract customers is reco nised as on t e ompan s accountin policies in ser ices are per ormed it un illed re enue resultin Retained earnin s 2 1 8 2 2 112 188 respect o pro ision o ser ices rom ser ices alread pro ided accrued at t e end o eac Total equity 2,329,843 (27,655) 2,302,188 period and unearned re enue rom ser ices to e pro ided in uture periods de erred
Liabilities Re enue rom t e sale o prepaid credit is de erred until on current lia ilities 1 5 - 1 5 suc time as t e customer uses t e airtime or t e credit rade and ot er pa a les 8 1 2 8 e pires e erred re enue related to unused airtime is reco nised en utilised t e customer pon Amounts due to related part 1 8 1 8 termination o t e customer contract all de erred re enue ncome ta pa a le 8 81 8 or unused airtime is reco nised in t e pro it or loss Current lia ilities (6,872) 1 Re enue rom interconnect ees is reco nised at t e time Total lia ilities 1 5 (6,872) 1 t e ser ices are per ormed Re enue rom data ser ices is Total equity and liabilities 3,147,421 (34,527) 3,112,894 reco nised en t e ompan as per ormed t e related ser ice and dependin on t e nature o t e ser ice is reco nised eit er at t e ross amount illed to t e mpact on tatement of Profit Loss and ther omprehensive ncome customer or t e amount recei a le t e ompan AR 1S R 2018 as commission or acilitatin t e ser ice
Re enue 2 2 8 1 22 2 10 et peratin costs 1 1 2 0 1 8 22 Type of New revenue hange from Results from operating activities 1 1 1 product service cost recognition criteria previous accounting policy ncome a pense 1 1 8 1 0
Profit and total comprehensive 905,093 (20,593) 884,500 income for the period ontract costs ontract costs t at are incremental in o tainin re iousl all contract costs ere 76 a contract it a customer are capitali ed and amortised e pensed as incurred 77 o er t e period o related re enues Appl in t e practical
e pedient per FRS 1 t e ompan reco nises Adoption o FRS 1 resulted incremental cost o o tainin a contract as an e pense in reco nition o contract assets en incurred i t e amortisation period o t e assets t at and su se uent amortisation in respect t e ompan ot er ise ould a e reco nised o t ese costs it in t e ompan s is one ear or less statement o inancial position
nstallation re enue nstallation ser ices are speci ic ser ices re iousl all contract installation and does not a e a standalone alue it out t e data re enue ere reco ni ed as t e internet ser ices it as not een considered as separate installation ser ice is pro ided per ormance o li ation
Adoption o FRS 1 resulted in e installation re enue is considered as part reco nition o contract lia ilit and o t e o erall transaction price and is amorti ed o er t e su se uent reco nition o re enue in e pected tenure o t e contracts it respect o t ese installation re enues t e customers o er t e period
Sales pro ects nstallation de ice sale and ser ice pro ision are re iousl t e ompan reco ni ed considered to e separate er ormance li ation as t e re enue ased on t e percenta e t ose are distinct oods ser ices e customer can o completion o t e pro ect considerin o tain eac o t e said ood ser ice on a standalone t e pro ect as a ole asis rom di erent endors and eac as a standalone alue to t e customer
Standalone sellin prices SS is determined or installation ser ice sale o de ice and pro ision o ser ice Accordin l t e transaction price collected rom t e customers are allocated to eac er ormance li ation ased on relati e SS allocation and reco ni e re enue accordin l Type of New revenue hange from product service cost recognition criteria previous accounting policy
Sale o e uipment Re enue rom andset and ot er e uipment sales is nder AS 18 consideration or re enue reco nised en t e product is deli ered to t e customer arran ements rom undled contracts includin more t an one deli era le as n re enue arran ements rom undled contracts include allocated to eac deli era le ased on more t an one er ormance li ation t e t eir relati e air alues arran ement consideration is allocated to eac FRS 1 did not a e a si ni icant impact per ormance o li ation ased on t eir relati e standalone on t e ompan s accountin polic in sellin price SS respect o sale o e uipment
ro ision o ser ices Re enue or access c ar es airtime usa e FRS 1 did not a e a si ni icant impact and messa in contract customers is reco nised as on t e ompan s accountin policies in ser ices are per ormed it un illed re enue resultin respect o pro ision o ser ices rom ser ices alread pro ided accrued at t e end o eac period and unearned re enue rom ser ices to e pro ided in uture periods de erred
Re enue rom t e sale o prepaid credit is de erred until suc time as t e customer uses t e airtime or t e credit e pires e erred re enue related to unused airtime is reco nised en utilised t e customer pon termination o t e customer contract all de erred re enue or unused airtime is reco nised in t e pro it or loss
Re enue rom interconnect ees is reco nised at t e time t e ser ices are per ormed Re enue rom data ser ices is reco nised en t e ompan as per ormed t e related ser ice and dependin on t e nature o t e ser ice is reco nised eit er at t e ross amount illed to t e customer or t e amount recei a le t e ompan as commission or acilitatin t e ser ice Dhiraagu
Type of hange from (B) IFRS 9 – Financial Instruments i. Impact on the adoption of IFRS 9 New revenue
The following table and the accompanying 2018 Report Annual as at 1st January 2018 product service cost recognition criteria previous accounting policy notes below explain the original measurement IFRS 9 sets out requirements for recognising and The following table summarises the categories under IAS 39 and the new measuring financial assets, financial liabilities impact of transition to IFRS 9 on retained measurement categories under IFRS 9 for each
ontract costs ontract costs t at are incremental in o tainin re iousl all contract costs ere and some contracts to buy or sell non-financial earnings as at 1st January 2018. class of the Company’s financial assets and mpact of adopting FR 9 a contract it a customer are capitali ed and amortised e pensed as incurred items. This standard replaces IAS 39 Financial financial liabilities as at 1st January 2018. as at 1st anuary 2018
o er t e period o related re enues Appl in t e practical Instruments: Recognition and Measurement. Statements Financial | Audited (MVR 000 ) e pedient per FRS 1 t e ompan reco nises Adoption o FRS 1 resulted The effect of adopting IFRS 9 on the carrying incremental cost o o tainin a contract as an e pense in reco nition o contract assets As a result of the adoption of IFRS 9, the Company amounts of financial assets at 1st January 2018 en incurred i t e amortisation period o t e assets t at and su se uent amortisation in respect has adopted consequential amendments to relates solely to the new impairment requirements. t e ompan ot er ise ould a e reco nised o t ese costs it in t e ompan s IAS 1 Presentation of Financial Statements, Retained Earnings as at 1st January 2018 2,124,879 is one ear or less Reversal of Impairment statement o inancial position which require impairment of financial assets riginal classification New classification to be presented in a separate line item in the allowance on e pected credit under A 39 under FR 9 statement of profit or loss and OCI. Previously, losses recogni ed under IFRS Financial assets the Company’s approach was to include the rade and ot er recei a les nstallation re enue nstallation ser ices are speci ic ser ices rade and ot er recei a les oans and recei a les Amorti ed cost re iousl all contract installation impairment of trade receivables in Operating costs. As at 1st January 2018 retained and does not a e a standalone alue it out t e data re enue ere reco ni ed as t e as and an alances oans and recei a les Amorti ed cost earnings after IFRS 09 adjustment 2,125,248 internet ser ices it as not een considered as separate installation ser ice is pro ided Consequently, the Company reclassified impairment S ort erm eposits oans and recei a les Amorti ed cost per ormance o li ation losses amounting to MVR 1,052 thousand, Total financial assets Adoption o FRS 1 resulted in ii. Classification and measurement of recognised under IAS 39, from ‘operating costs’ e installation re enue is considered as part reco nition o contract lia ilit and financial assets and financial liabilities to ‘impairment loss on trade receivables and Financial liabilities o t e o erall transaction price and is amorti ed o er t e su se uent reco nition o re enue in contract assets’ in the statement of profit or loss IFRS 9 contains three principal classification rade and ot er pa a les t er inancial lia ilities t er inancial lia ilities e pected tenure o t e contracts it respect o t ese installation re enues and OCI for the year ended 31st December 2017. categories for financial assets: measured at Amounts due to related arties t e customers o er t e period t er inancial lia ilities t er inancial lia ilities amortised cost, FVOCI and FVTPL. The classification Total financial liabilities Additionally, the Company has adopted of financial assets under IFRS 9 is generally
Sales pro ects nstallation de ice sale and ser ice pro ision are re iousl t e ompan reco ni ed consequential amendments to IFRS 7 Financial based on the business model in which a financial (a) Trade and (b) Short Term considered to e separate er ormance li ation as t e re enue ased on t e percenta e Instruments: Disclosures that are applied to asset is managed and its contractual cash flow other receivables Deposits t ose are distinct oods ser ices e customer can o completion o t e pro ect considerin disclosures about 2018 but have not been characteristics. IFRS 9 eliminates the previous o tain eac o t e said ood ser ice on a standalone t e pro ect as a ole generally applied to comparative information. IAS 39 categories of held to maturity, loans and asis rom di erent endors and eac as a standalone receivables and available for sale. Under IFRS 9, Trade and other receivables that were classified Short term deposits that were previously alue to t e customer derivatives embedded in contracts where the host as loans and receivables under IAS 39 are classified as loans and receivables are now is a financial asset in the scope of the standard now classified at amortised cost. Decrease classified at amortised cost. The Company Standalone sellin prices SS is determined or are never separated. Instead, the hybrid financial of MVR 369 thousand in the allowance for intends to hold the assets to maturity to collect installation ser ice sale o de ice and pro ision o ser ice instrument as a whole is assessed for classification. impairment over these receivables was contractual cash flows and these cash flows Accordin l t e transaction price collected rom t e recognised in opening retained earnings as consist solely of payments of principal and customers are allocated to eac er ormance li ation IFRS 9 largely retains the existing at 1st January 2018 on transition to IFRS 9. interest on the principal amount outstanding. ased on relati e SS allocation and reco ni e re enue requirements in IAS 39 for the classification accordin l and measurement of financial liabilities. Additional trade receivables of MVR 2,241 Based on the materiality ground, thousand were recognised as at 1st January the Company has not recognized The adoption of IFRS 9 has not had a 2018 on the adoption of IFRS 15. These impairment for those balances. For additional information about the Company’s accounting policies relating to the revenue recognition, see Note 4.11. significant effect on the Company’s accounting were not included in the table above policies related to financial liabilities. 78 79 Dhiraagu
(B) IFRS 9 – Financial Instruments iii. Impairment of financial assets iv. Transition (a) IFRS 16 – Leases ii. Leases in which the Company is a lessor
Annual Report 2018 2018 Report Annual (Continued) IFRS 9 replaces the ‘incurred loss’ model in IAS Changes in accounting policies resulting from The Company is required to adopt IFRS The Company will reassess the classification of The following table reconciles the carrying amounts of 39 with an ‘expected credit loss’ (ECL) model. The the adoption of IFRS 9 have been applied 16 - “Lease” from 1st January 2019. sub-leases in which the Company is a lessor. financial assets under IAS 39 to the carrying amounts under new impairment model applies to financial assets retrospectively, except as described below. The Company is in the process of assessing No significant impact is expected for other IFRS 9 on transition to IFRS 9 on 1st January 2018. measured at amortised cost, contract assets and the impact that initial application of IFRS leases in which the Company is a lessor. debt investments at FVOCI, but not to investments • The Company has used an exemption not 16 will have on its financial statements.
in equity instruments. Under IFRS 9, credit losses to restate comparative information for iii. Transition Statements Financial | Audited A 39 carrying are recognised earlier than under IAS 39. prior periods with respect to classification IFRS 16 introduces a single, on balance sheet lease amount as at FR 9 carrying and measurement (including impairment) accounting model for lessees. A lessee recognizes The Company plans to apply IFRS 16 initially 31st ecember Re amount as at For assets in the scope of the IFRS 9 impairment requirements. Differences in the carrying a right-of-use asset representing its right to use the on 1st January 2019, using the modified model, impairment losses are generally expected amounts of financial assets and financial underlying asset and a lease liability representing retrospective approach. Therefore, the cumulative 2017 measurement 1st anuary to increase and become more volatile. liabilities resulting from the adoption of its obligation to make lease payments. There are effect of adopting IFRS 16 will be recognised MVR 000 MVR 000 2018 The Company has determined that the application IFRS 9 are recognised in retained earnings recognition exemptions for short term leases as an adjustment to the opening balance of to IFRS 9’s impairment requirements as at as at 1st January 2018. Accordingly, the and leases of low value items. Lessor accounting retained earnings as at 1st January 2019, with 1st January 2018 results in an additional/ a information presented for 2017 does not remains similar to the current standard. no restatement of comparative information. Financial assets decrease in provision for impairment as follows. generally reflect the requirements of IFRS 9, Amortized cost but rather those of IAS 39. IFRS 16 replaces existing leasing guidance, The Company plans to apply the practical expedient including IAS 17 “Leases”, IFRIC 4 “Determining to grandfather the definition of a lease on transition. Trade and other receiva les (MVR 000 ) • The following assessments have been made whether an arrangement contains a Lease”, This means that it will apply IFRS 16 to all contracts rou t or ard oans and recei a les 8 8 2 on the basis of the facts and circumstances SIC 15 “Operating Leases – Incentives” and SIC entered into before 1st January 2019 and identified Allowance for impairment as at Re measurement mpairment that existed at the date of initial application. 27 “Evaluating the substance of Transactions as leases in accordance with IAS 17 and IFRIC 4 31st December 2017 under IAS 39 42,053 involving the legal form of a Lease”. arried or ard Amorti ed cost 2 1 Reversal of the impairment recognised • The determination of the business model The following amended standards are not within which a financial asset is held. expected to have a significant impact on as at 1st anuary 1 on i. Leases in which the Company is a lessee Cash and an alances the Company’s financial statements. rade and ot er recei a les The Company will recognise new assets and rou t or ard oans and recei a les 2 0 10 Loss allowance for impairment as at liabilities for its operating leases of lands, 3.2 New and Amended Standards Title Description Effective Date Re measurement mpairment 1st January 2018 under IFRS 9 41,684 administrative buildings and indefeasible right of and Interpretations issued 2 0 10 use (IRU), network tower sharing arrangements. IFRIC 23 Uncertainty Annual period arried or ard Amorti ed cost but not yet effective. The nature of expenses related to those leases over Income Tax beginning on will now change because the Company will Treatments. or after 1st Short Term eposits A number of new standards and amendments recognise a depreciation charge for right-of-use January 2019. rou t or ard oans and recei a les 802 are effective for annual periods beginning assets and interest expense on lease liabilities. after 1st January 2018 and early application is Annual Miscellaneous Annual period Re measurement mpairment permitted. However, the Company has not early Previously, the Company recognised operating lease Improvements improvements to the beginning on arried or ard Amorti ed cost 802 adopted the following new or amended standards expense on a straight-line basis over the term of the to IFRS standards IFRSs Amendments or after 1st in preparing these financial statements. lease, and recognised assets and liabilities only to 2015-2017 to IFRSs 3 & 11, January 2019. the extent that there was a timing difference between IASs 12 & 23) Total Amortized cost 986,384 369 986,753 Of those Standards that are not yet effective, actual lease payments and the expense recognised. IFRS 16 is expected to have a material impact on the Company’s financial statements in the period of initial application. 80 81 Dhiraagu
(ii) Financial liabilities (Non-derivative)
4. Significant A financial asset (unless it is a trade receivable at amortised cost or at FVOCI as at FVTPL if other basic lending risks and costs (e.g. liquidity risk Financial assets at amortized cost comprise 2018 Report Annual accounting policies without a significant financing component) doing so eliminates or significantly reduces an and administrative costs), as well as a profit margin. trade and other receivables, Bank deposits The Company initially recognizes debt securities or financial liability is initially measured at accounting mismatch that would otherwise arise. and Investment in fixed deposit. issued and subordinated liabilities on the date Except disclosed above on the changes of the fair value plus, for an item not at FVTPL, In assessing whether the contractual cash flows that they are originated. All other financial accounting policies due to the adoption of IFRS 15 transaction costs that are directly attributable Financial assets – Business are solely payments of principal and interest, The Company has classified its financial liabilities are recognized initially on the trade and IFRS 9 on 1st January 2018, the accounting to its acquisition or issue. A trade receivable model assessment: the Company considers the contractual terms of assets into the following category; date at which the Company becomes a party to
policies set out below have been applied consistently without a significant financing component is Policy applicable from 1st January 2018 the instrument. This includes assessing whether the contractual provisions of the instrument. Statements Financial | Audited to all periods presented in these financial statements, initially measured at the transaction price. the financial asset contains a contractual term that • loans and receivables and have been applied consistently by the Company. The Company makes an assessment of the could change the timing or amount of contractual Financial liabilities are classified as measured at Classification and Subsequent objective of the business model in which a financial cash flows such that it would not meet this condition. The Company has got the following amortised cost or FVTPL. A financial liability is Measurement asset is held at a portfolio level because this In making this assessment, the Company considers: financial assets (non-derivative): classified as at FVTPL if it is classified as held- 4.1 Transactions in foreign currencies Financial assets – Policy applicable best reflects the way the business is managed for-trading, it is a derivative or it is designated from 1st January 2018 and information is provided to management. • contingent events that would change • Receivables as such on initial recognition. Other financial Transactions in foreign currencies are translated On initial recognition, a financial asset is classified The information considered includes the amount or timing of cash flows. • Cash and Cash Equivalents liabilities are subsequently measured at amortised to Maldivian Rufiyaa (functional currency) at as measured at: amortised cost; FVOCI – debt • terms that may adjust the contractual coupon cost using the effective interest method. Interest the exchange rates prevailing at the date of the investment; FVOCI – equity investment; or FVTPL. • the stated policies and objectives for the rate, including variable-rate features; expense and foreign exchange gains and losses Financial assets – Subsequent transaction. Foreign exchange gains and losses portfolio and the operation of those policies • prepayment and extension features; and are recognised in profit or loss. Any gain or loss on measurement and gains and losses: resulting from the settlement of such transactions Financial assets are not reclassified subsequent in practice. These include whether • terms that limit the Company’s claim de-recognition is also recognised in profit or loss. Policy applicable from 1st January 2018 and from the translation of monetary assets and to their initial recognition unless the Company management’s strategy focuses on earning to cash flows from specified assets liabilities denominated in foreign currencies as at changes its business model for managing financial contractual interest income, maintaining a (e.g. non-recourse features). The Company has the non-derivative financial Receivables the reporting date are recognized in profit or loss. assets, in which case all affected financial assets particular interest rate profile, matching the liabilities such as trade and other payables are reclassified on the first day of the first reporting duration of the financial assets to the duration A prepayment feature is consistent with the solely Receivables are financial assets with fixed or and Amounts due to related party. Non-monetary assets and liabilities, which are stated period following the change in the business model. of any related liabilities or expected cash payments of principal and interest criterion if the determinable payments that are not quoted in an at historical cost, denominated in foreign currencies outflows or realising cash flows through prepayment amount substantially represents active market. Such assets are recognized initially at Such financial liabilities are recognized initially at fair are translated to Maldivian Rufiyaa at the exchange A financial asset is measured at amortised the sale of the assets; unpaid amounts of principal and interest on fair value plus any directly attributable transaction value plus any directly attributable transaction costs. rates ruling at the date of transaction. Non-monetary cost if it meets both of the following conditions the principal amount outstanding, which may costs. Subsequent to initial recognition receivables assets and liabilities, which are stated at fair value, and is not designated as at FVTPL: • the risks that affect the performance of include reasonable additional compensation are measured at amortized cost using the effective Subsequent to initial recognition, these denominated in foreign currencies are translated to the business model (and the financial for early termination of the contract. interest method, less any impairment losses. financial liabilities are measured at amortized Maldivian Rufiyaa at the foreign exchange rates ruling • it is held within a business model assets held within that business model) cost using the effective interest method. at the dates that the fair value was determined. whose objective is to hold assets to and how those risks are managed; Financial assets – Subsequent Receivables comprise trade and other receivables De-recognition collect contractual cash flows; and measurement and gains and losses: and Investments in Fixed Deposits. • its contractual terms give rise on specified 4.2 Financial Instruments Financial assets – Assessment whether Policy applicable from 1st January 2018 Financial Assets dates to cash flows that are solely contractual cash flows are solely Cash and Cash Equivalents (i) Financial Assets (Non-derivative) Financial assets at amortised cost payments of principal and interest on payments of principal and interest: The Company derecognizes a financial asset when Recognition and initial the principal amount outstanding. Policy applicable from 1st January 2018 These assets are subsequently measured at Cash and cash equivalents comprise short the contractual rights to the cash flows from the measurement amortised cost using the effective interest term deposits which form an integral part of asset expire, or it transfers the rights to receive the All financial assets not classified as measured at For the purposes of this assessment, ‘principal’ method. The amortised cost is reduced by the Company’s cash management which are contractual cash flows on the financial asset in a The Company initially recognizes receivables and amortised cost or FVOCI as described above are is defined as the fair value of the financial asset impairment losses. Interest income, foreign held for the purpose of meeting short term cash transaction in which substantially all the risks and deposits on the date that they are originated. All measured at FVTPL. This includes all derivative on initial recognition. ‘Interest’ is defined as exchange gains and losses and impairment are commitments, cash at bank and cash in hand. rewards of ownership of the financial asset are other financial assets are recognized initially on the financial assets. On initial recognition, the Company consideration for the time value of money and for recognised in profit or loss. Any gain or loss on transferred. Any interest in transferred financial trade date at which the Company becomes a party may irrevocably designate a financial asset that the credit risk associated with the principal amount de-recognition is recognised in profit or loss. assets that is created or retained by the Company to the contractual provisions of the instrument. otherwise meets the requirements to be measured outstanding during a particular period of time and for is recognized as a separate asset or liability. 82 83 Dhiraagu
Financial Liabilities (ii) Subsequent expenditure
4.6 Contract assets related are also included in the cost of property, plant and The estimated useful lives are as follows: • the borrower is unlikely to pay its credit 2018 Report Annual The Company derecognizes a financial equipment. The corresponding obligation is Subsequent expenditure is only capitalized if to the Enterprise Sales Projects obligations to the Company in full, without liability when its contractual obligations recognised as a provision. Purchased software Buildings 5 to 40 years costs can be measured reliably, the product recourse by the Company to actions such are discharged or cancelled or expire. that is integral to the functionality of the related Plant and equipment is technically and commercially feasible, Contract assets related to the sales project as realising security (if any is held); or Offsetting equipment is capitalized as part of that equipment. - Civil works, cables and ducting 5 to 40 years future economic benefits are probable and represents the gross unbilled amount expected • the financial asset is more than 90 days - Network and electronic equipment 3 to 10 years the Company has sufficient resources to to be collected from customers for performance past due for the residential segment.
Financial assets and liabilities are offset and the When parts of an item of property, plant and obligations satisfied to date. It is measured at • the financial asset is more than 150 days Statements Financial | Audited Vehicles and launches 4 to 7 years complete development and to use the asset. net amount presented in the statement of financial equipment have different useful lives, they the consideration allocated to the performance past due for the Government segment. Furniture and Fittings 4 to 10 years position when, and only when, the Company has are accounted for as separate items (major (iii) Amortization obligations completed as at the reporting date • the financial asset is more than 120 days a legal right to offset the amounts and intends components) of property, plant and equipment. recognised to date less progress billings and past due for the corporate segment. either to settle on a net basis or to realize the Depreciation methods, useful lives and residual Amortisation is recognised in profit or loss on recognised losses. Cost includes all expenditure asset and settle the liability simultaneously. Gains and losses on disposal of an item of property, values are reviewed at each financial year end a straight-line basis over the estimated useful related directly to specific projects and an allocation The Company has rebutted the presumption of 90 plant and equipment are determined by comparing and adjusted prospectively, if appropriate. lives of intangible assets, other than goodwill, of fixed and variable overheads incurred. days past due for the Government and corporate (iii) Share Capital the proceeds from disposal with the carrying from the date that they are available for use. segment as the Company has assessed the previous Ordinary Shares amount of property, plant and equipment, and are The estimated useful lives for the current If progress billings exceed costs incurred plus years’ collections and the historic collections at Capital Work in Progress Ordinary shares are classified as equity. Incremental recognized net within other income in profit or loss. and comparative periods are as follows: recognised profits, then the difference is presented as a considerable levels after 3 months period. costs directly attributable to the issue of ordinary Assets under construction as at the year-end deferred income in the statement of financial position. shares are recognized as a deduction from equity. represents the costs incurred or accrued for Software 3 to 10 Years Lifetime ECLs are the ECLs that result (ii) Subsequent Costs the projects which are not commissioned for Licences 10 Years or licence term 4.7 Impairment from all possible default events over the Dividends The cost of replacing a part of an item of property, commercial operation as at the year end. whichever is lower expected life of a financial instrument. Interim dividends to ordinary shareholders plant and equipment is recognized in the carrying Indefeasible right 15 Years or cable life i. Non-derivative financial assets are recognised as a liability in the period in amount of the item if it is probable that the future Policy applicable from 1st January 2018 12-month ECLs are the portion of ECLs that 4.4 Intangible assets to use cable capacity whichever is lower which they are declared and final dividends economic benefits embodied within the part will Financial instruments and contract assets result from default events that are possible are recognised as a liability in the period which flow to the Company, and its cost can be measured (i) Recognition and Measurement within the 12 months after the reporting date they are approved by the shareholders. reliably. The carrying amount of the replaced The Company recognises loss (or a shorter period if the expected life of Capital Work in Progress part is derecognized. The costs of the day-to- Intangible assets that are acquired by the allowances for ECLs on: the instrument is less than 12 months). day servicing of property, plant and equipment Company, which have finite useful lives, are Capital work in progress as at the year-end 4.3 Property, Plant and Equipment are recognized in profit or loss as incurred. measured at cost less accumulated amortization represents the costs incurred or accrued • financial assets measured The maximum period considered when estimating (i) Recognition and Measurement and accumulated impairment losses for the projects which have not commenced at amortised cost; and ECLs is the maximum contractual period over commercial operations as at the year end. • contract assets. which the Company is exposed to credit risk. Items of property, plant and equipment are (iii) Depreciation Costs that are directly associated with the purchase measured at cost less accumulated depreciation and implementation of identifiable and unique 4.5 Inventories The Company measures loss allowances Measurement of ECLs and accumulated impairment losses. Cost includes Depreciation is calculated over the depreciable software products by the Company are recognized Inventories are measured at the lower of cost and at an amount equal to lifetime ECLs expenditure that is directly attributable to the amount, which is the cost of an asset, or other as intangible assets. Expenditures that enhance net realizable value. The cost of inventories is based for trade and other receivables. ECLs are a probability-weighted estimate of acquisition of the asset. The cost of self-constructed amount substituted for cost, less its residual value. and extend the benefits of computer software on the weighted average principle, and includes credit losses. Credit losses are measured as assets includes the cost of materials and direct Depreciation is recognized in profit or loss on a programmes beyond their original specifications expenditure incurred in acquiring the inventories, Loss allowances for trade receivables and the present value of all cash shortfalls (i.e. the labour, any other costs directly attributable to straight-line basis over the estimated useful lives and lives are recognized as a capital improvement conversion costs and other costs incurred in bringing contract assets are always measured at difference between the cash flows due to the entity bringing the assets to a working condition for their of each part of an item of property, plant and and added to the original cost of the software. them to their existing location and condition. an amount equal to lifetime ECLs. in accordance with the contract and the cash intended use and capitalized borrowing costs. equipment, since this most closely reflects the flows that the Company expects to receive). expected pattern of consumption of the future Net realizable value is the estimated selling price in The Company considers a financial The estimated costs of dismantling and removing economic benefits embodied in the asset. the ordinary course of business, less the estimated asset to be in default when: ECLs are discounted at the effective an asset and restoring the site on which it is located costs of completion and selling expenses. interest rate of the financial asset. 84 85 Dhiraagu
Credit-impaired financial assets
amount of write-off based on whether there is a 4.8 Employee Benefits in impairment loss is reversed through profit or loss. of the present value of the unavoidable future Revenue from the sale of prepaid credit is 2018 Report Annual At each reporting date, the Company assesses reasonable expectation of recovery. The Company cost of dismantling and removing the items of deferred until such time as the customer uses the whether financial assets carried at amortised cost (a) Defined contribution plans expects no significant recovery from the amount property, plant and equipment and restoring airtime, or the credit expires. Deferred revenue are credit-impaired. A financial asset is ‘credit written off. However, financial assets that are (ii) Non-financial Assets A defined contribution plan is a post- the sites on which they are located. related to unused airtime is recognised when impaired’ when one or more events that have a written off could still be subject to enforcement The carrying amounts of the Company’s non- employment benefit plan under which the utilised by the customer. Upon termination of detrimental impact on the estimated future cash activities in order to comply with the Company’s financial assets other than inventories are company pays fixed contributions into a separate 4.10 Events occurring the customer contract, all deferred revenue for flows of the financial asset have occurred. procedures for recovery of amounts due.
reviewed at each reporting date to determine entity and will have no legal or constructive after the reporting date unused airtime is recognised in the profit or loss. Statements Financial | Audited Policy applicable from 1st January 2018 whether there is any indication of impairment. obligation to pay further amounts. Evidence that a financial asset is credit-impaired Financial Assets (Including receivables) If any such indication exists, then the asset’s The materiality of the events occurring after the Revenue from interconnect fees is recognised at includes the following observable data: A financial asset not carried at fair value through recoverable amount is estimated. For intangible The Company contributes 10% of members’ salary reporting date has been considered and appropriate the time the services are performed. Revenue from profit or loss is assessed at each reporting date assets that have indefinite useful lives or that are into the scheme with an additional, minimum, 4% adjustments and provisions have been made in data services is recognised when the Company • significant financial difficulty to determine whether there is objective evidence not yet available for use, the recoverable amount of salary being contributed by the members. the financial statements wherever necessary. has performed the related service and, depending of the borrower or issuer; that it is impaired. A financial asset is impaired is estimated each year at the same time. on the nature of the service, is recognised either • a breach of contract such as a default (b) Short-term benefits if objective evidence indicates that a loss event 4.11 Revenue from at the gross amount billed to the customer or being more than 180 days past due has occurred after the initial recognition of the The recoverable amount of an asset or cash- Short-term employee benefit obligations of the contracts with customers or the amount receivable by the Company as of the significant government customers asset, and that the loss event had a negative generating unit is the greater of its value in use and Company are measured on an undiscounted basis commission for facilitating the service. who exceed MVR 100,000/-; effect on the estimated future cash flows of its fair value less costs to sell. In assessing value in and are expensed as the related service is provided. The Company has initially applied IFRS 15 • a breach of contract such as a default that asset that can be estimated reliably. use, the estimated future cash flows are discounted from 1st January 2018. Information about (c) Installation revenue or being more than 180 days past due to their present value using a discount rate that A liability is recognised for the amount expected the Company’s accounting policies relating to Installation services are specific services and of the significant corporate customers The Company considers evidence of impairment reflects current market assessments of the time to be paid under short-term cash bonus if the contracts with customers is provided below. does not have a standalone value without the who exceed MVR 100,000/-; for receivables at both a specific asset and value of money and the risks specific to the asset. Company has a present legal or constructive data/ internet services, it has not been considered • a breach of contract such as a default collective level. All individually significant obligation to pay this amount as a result of (a) Sale of equipment as separate performance obligation. or being more than 365 days past due of receivables are assessed for specific impairment. For the purpose of impairment testing, assets past service provided by the employee and the wholesale customers; All individually significant receivables found not that cannot be tested individually are grouped the obligation can be estimate reliably. Revenue from handset and other equipment The installation revenue is considered as part of the • it is probable that the contractual party to be specifically impaired are then collectively together into the smallest group of assets sales is recognised when the product overall transaction price and is amortized over the will enter bankruptcy or other assessed for any impairment that has been that generates cash inflows from continuing is delivered to the customer. expected tenure of the contracts with the customers. financial reorganisation; 4.9 Provisions incurred but not yet identified. Receivables that use that are largely independent of the cash Presentation of allowance for ECL are not individually significant are collectively inflows of other assets or groups of assets A provision is recognized if, as a result of a In revenue arrangements from bundled contracts (d) Sales projects in the statement of financial position assessed for impairment by grouping together (the “cash-generating unit, or “CGU”). past event, the Company has a present legal or include more than one Performance Obligation Loss allowances for financial assets measured receivables with similar risk characteristics. constructive obligation that can be estimated reliably, (PO), the arrangement consideration is allocated Installation, device sale and service provision are at amortised cost are deducted from the An impairment loss is recognized if the carrying and it is probable that an outflow of economic to each performance obligation based on their considered to be separate Performance Obligation gross carrying amount of the assets. An impairment loss in respect of a financial asset amount of an asset or its “CGU” exceeds its benefits will be required to settle the obligation. relative standalone selling price (SSP). as those are distinct goods/ services. The customer Write-off measured at amortized cost is calculated as estimated recoverable amount. Impairment can obtain each of the said good/ service on The gross carrying amount of a financial asset is the difference between its carrying amount and losses are recognized in profit or loss. If the time value of money is material, provisions a standalone basis from different vendors and written off when the Company has no reasonable the present value of the estimated future cash are determined by discounting the expected future (b) Provision of services each has a standalone value to the customer. expectations of recovering a financial asset in flows discounted at the asset’s original effective An impairment loss is reversed if there has been cash flows at a pre-tax rate that reflects current its entirety or a portion thereof. For individual interest rate. Losses are recognized in profit or a change in the estimates used to determine the market assessments of the time value of money Revenue for access charges, airtime usage and Standalone selling prices (“SSP”) is determined for customers, the Company has a policy of writing loss and reflected in an allowance account against recoverable amount. An impairment loss is reversed and the risks specific to the liability. The unwinding messaging by contract customers is recognised installation service, sale of device and provision of off based on historical experience of recoveries of discount is recognised as finance cost. as services are performed, with unbilled revenue service. Accordingly, transaction price collected of similar assets and based on the assessment receivables. Interest on the impaired asset continues only to the extent that the asset’s carrying amount carried out by the Company. For wholesale segment to be recognized through the unwinding of the does not exceed the carrying amount that would have resulting from services already provided accrued at from the customers are allocated to each customers, the Company individually makes discount. When a subsequent event causes the been determined, net of depreciation or amortization, Network and asset retirement obligation the end of each period and unearned revenue from Performance Obligation based on relative SSP an assessment with respect to the timing and amount of impairment loss to decrease, the decrease if no impairment loss had been recognized. provision has been made for the best estimate services to be provided in future periods deferred. allocation and recognize revenue accordingly. 86 87 Dhiraagu
(e) Contract costs
If it is probable that discounts will be granted and Airtime, either from contract customers as part of over the period of the lease. Payments made under In calculating interest income and expense, the assets and liabilities for financial reporting purposes 2018 Report Annual the amount can be measured reliably, then the the invoiced amount or from prepaid customers operating leases are recognised in profit or loss on effective interest rate is applied to the gross and the amounts used for taxation purposes. Contract costs that are incremental in obtaining discount is recognised as a reduction of revenue as through the sale of prepaid cards, is recorded in the a straight-line basis over the term of the lease. carrying amount of the asset (when the asset a contract with a customer are capitalized and the sales are recognised. The total consideration period in which the customer uses the service. is not credit-impaired) or to the amortised cost Deferred tax is measured at the tax rates amortised over the period of related revenues. on arrangements with multiple revenue generating of the liability. However, for financial assets that that are expected to be applied to temporary Applying the practical expedient per IFRS15, the activities (generally the sale of telecommunications The Company recognises revenue from the (b) Determining whether an have become credit-impaired subsequent to differences when they reverse, based on the
Group recognises incremental cost of obtaining equipment and ongoing service) is allocated to transmission of content and traffic on its network arrangement contains a lease initial recognition, interest income is calculated tax rate enacted at the reporting date. Statements Financial | Audited a contract as an expense when incurred if the those components that are separable based on originated by third-party providers. The Company by applying the effective interest rate to the amortisation period of the assets that the Group the estimated fair value of the components. assesses whether revenue should be recorded At inception of an arrangement, the Company amortised cost of the financial asset. If the asset Deferred tax assets and liabilities are offset if there otherwise would have recognised is one year or less. gross as principal or net as agent, based on the determines whether such an arrangement is is no longer credit-impaired, then the calculation is a legally enforceable right to offset current tax The timing of the transfers of risks and particular features of such arrangements. Revenue or contains a lease. An arrangement conveys of interest income reverts to the gross basis. liabilities and assets, and they relate to income (f) Loyalty Programme rewards varies depending on the individual arising from the provision of other services, the right to use the asset if the arrangement taxes levied by the same tax authority on the terms of the contract of sale. including maintenance contracts, is recognised conveys to the Company the right to control the (d) Operating Expenses same taxable entity, or on different tax entities, Revenue is allocated between the loyalty over the periods in which the service is provided. use of the underlying asset. At inception or upon but they intend to settle current tax liabilities (b) Services programme and other components of the Income. reassessment of the arrangement, the Company All expenses incurred in the running of the and assets on a net basis or their tax assets The amount allocated to the loyalty programme Revenue from services is recognised as the services separates payments and other consideration business and in maintaining the capital and liabilities will be realized simultaneously. is deferred and is recognized as revenue when are provided. Revenue from service contracts (c) Loyalty Programme required by such an arrangement into those assets in a state of efficiency has been the Company has fulfilled its obligations to supply that cover periods of greater than 12 months is for the lease and those for other elements charged to the profit or loss for the year. Deferred tax assets are recognized for unused the services under terms of the programme or recognised in the profit and loss in proportion to Revenue is allocated between the loyalty on the basis of their relative fair values. tax losses, tax credits and deductible temporary when it is no longer probable that the points the services delivered at the reporting date. In programme and other components of the Income. Expenses incurred for the purpose of difference to the extent that it is probable that under the programme will be redeemed. respect of services invoiced in advance, amounts The amount allocated to the loyalty programme (c) Finance income and expense acquiring, expanding or improving assets of future taxable profits will be available against are deferred until provision of the service. is deferred and is recognized as revenue when a permanent nature by means of which to which they can be utilized. Deferred tax assets Revenue recognition prior to 1st January 2018 the Company has fulfilled its obligations to supply Finance income comprise interest income on carry on the business or for the purpose of are reviewed at each reporting date and are Amounts payable by and to other the services under terms of the programme or funds invested. Interest income is accrued on a increasing the earning capacity of the business reduced to the extent that it no longer probable Revenue is recognised net of discounts and telecommunications operators are recognised as when it is no longer probable that the points time basis by reference to the principal outstanding has been treated as capital expenses. that the related tax benefits will be provided. represents the amounts receivables in respect of the services are provided. Charges are negotiated under the programme will be redeemed. and the effective interest rate applicable. goods and services provided to the customers. separately and are subject to continual review. 4.13 Tax Expenses 4.14 Determination of Fair Values Revenue generated through the provision of 4.12 Expenditure Finance costs comprise, unwinding of discounts (a) Sale of Goods these services is accounted for gross of any on provisions and foreign exchange losses that Tax expense comprises current and A number of the Company’s accounting policies Revenue from the sale of goods in the course of amounts payable to other telecommunication (a) Operating lease payments are recognised in profit or loss. Foreign exchange deferred tax. Current tax and deferred and disclosures require the determination of fair ordinary activities is measured at the fair value of the operators for interconnect fees. gains and losses are reported on net basis. tax is recognized in profit or loss. value, for both financial and non-financial assets consideration received or receivable, net of returns, Leases comprising a lease of land and a lease of and liabilities. Fair values have been determined trade discounts and volume rebates. Revenue Customer revenues from the billing cycle date buildings within a single contract are split into the The ‘effective interest rate’ is the rate that (a) Current tax for measurement and / or disclosure purposes from sales of telecommunications equipment is to the end of each period is accrued. Unearned two component parts. The component part for exactly discounts estimated future cash Current tax is the expected tax payable or based on the following methods. When applicable, recognised when persuasive evidence exists, usually monthly access charges relating to periods buildings is then tested to determine whether the payments or receipts through the expected receivable on the taxable income or loss further information about the assumptions in the form of an executed sales agreement, that the after each accounting period are deferred. lease is a finance or operating lease and treated life of the financial instrument to: for the year, using tax rates enacted or made in determining fair values is disclosed in significant risks and rewards of ownership have been Mobile revenue comprises amounts charged to accordingly. Leases of land and all other leases substantially enacted at the reporting date. the notes specific to that asset or liability. transferred to the buyer, recovery of the consideration customers in respect of monthly access charges, are classified as operating leases and are not • the gross carrying amount of is probable, the associated costs and possible airtime usage, messaging, and the provision of recognised in the statement of financial position. the financial asset; or (b) Deferred tax • Level 1 : Quoted prices ( Unadjusted) in active return of goods can be estimated reliably, there is no other mobile telecommunications services. Payments made under operating leases, net of • the amortised cost of the financial liability. market for identical assets and liabilities continuing management involvement with the goods, Mobile monthly access charges are invoiced lease incentives or premiums received, are charged Deferred tax is recognized in respect of temporary • Level 2 : Inputs other than quoted prices and the amount of revenue can be measured reliably. and recorded as part of a periodic billing cycle. to the income statement on a straight-line basis differences between the carrying amounts of included in Level 1 that are observable for the 88 89 Dhiraagu
(a) Depreciation of property,
assets or liability, either directly (i.e as prices) The identification of impairment indicators, the it uses estimates to determine the amount of 6 Segment Information 2018 Report Annual or indirectly (i.e. derived from process) plant and equipment estimation of future cash flows and the determination revenue receivable from or expense payable to • Level 3 : Inputs for the assets or The Company assigns useful lives and residual of the recoverable amount for assets or cash these other operators. The prices at which these Reportable Segments liability that are not used on observable values to property, plant and equipment based on generating units require significant judgement. services are charged are sometimes regulated market data (unobservable inputs) periodic studies of actual asset lives and the intended and may be subject to retrospective adjustment. The Company’s operation is segregated into use for those assets. Changes in circumstances such (c) Revenue recognition Estimates are used in assessing the likely impact two reportable segments, which the Company
(a) Trade and other receivables as technological advances, prospective economic of these adjustments. Adjustments to interconnect operates and manages as strategic business Statements Financial | Audited utilisation and physical condition of the assets Judgement is required in assessing the application estimates are taken to operating profit in the units and organize by products and services. The The fair value of trade and other receivables, concerned could result in the actual useful lives or of the principles of revenue recognition in respect period in which the adjustments are made. Company measures and evaluates the reportable excluding construction contracts, is estimated residual values differing from initial estimates. of revenues. This includes presentation of revenue segments based on segment operating income, as the present value of future cash flows, as principal or as agent in respect of income (f) Provisions consistent with the Chief Operating Decision Maker’s discounted at the market rate of interest at the Where the Company determines that the useful received from transmission of content provided (“CODM”) assessment of segment performance. reporting date. However, the Company has got life of property, plant and equipment should be by third parties. As per the requirements of IFRS A provision is recognised when there is a present The Company makes capital allocation decisions short term receivables as at the reporting date. shortened or residual value reduced, it depreciates 15 Identification of the performance obligations, (legal or constructive) obligation in respect of based on the strategic needs of the business, the net carrying amount in excess of the residual allocation of the consideration over the performance a past event as explained in the accounting needs of the network (mobile or fixed and (b) Financial liabilities (Non-derivative) value over the revised remaining useful life, obligations, determination of the key assumption policy in Note 4.9 to the financial statements. broadband) providing services and to provide thereby increasing depreciation expense. Any such as customer expected retention period. Judgement is required to quantify such amounts. emerging services to the customers. The Company Fair value, which is determined for disclosure change in an asset’s life or residual value is excludes from segment results the effects of purposes, is calculated based on the present reflected in the Company’s financial statements (d) Valuation of receivables (g) Capitalization of Property, certain items that management does not consider value of future principal and interest cash flows, when the change in estimate is determined. Plant and equipment and in assessing segment performance, primarily discounted at the risk adjusted discount rate. Note 4.7 – measurement of ECL allowance for trade projects under construction because of their non-operational nature (b) Impairment of property, plant receivables and contract assets: key assumptions 5 Critical accounting and equipment and intangible assets in determining the weighted average loss rate. Assets are transferred to Property, Plant and equipment from assets under construction when The Following summery describes estimates, assumptions The Company assesses the impairment of property, The provision for impairment losses for trade and they are ready for its intended use. The complex the operations of each reportable segment. and judgements plant and equipment and intangible assets whenever other receivables reflects the Company’s estimates nature of the assets is such that judgment is events or changes in circumstances indicate that the of losses arising from the failure or inability of required as to when that point is reached. Also, (1) Mobile : Mobile operation primarily In the preparation of these financial statements, carrying value may not be recoverable or otherwise customers to make required payments. The judgment is required to determine whether the costs includes prepaid mobile, postpaid mobile, a number of estimates and assumptions have as required by accounting standards. Factors that provision is based on the individual assessment incurred on those assets can be capitalized or can roaming, mobile equipment, and mobile been made relating to the performance and are considered important and which could trigger of the customers, lifetime expected credit loss of be recognized as an expense in profit or loss. broadband which are provided to consumer, the financial position of the Company. an impairment review include the following; the trade and other receivables, customer credit- business and government customers. worthiness and the Company’s historical write-off Results may differ significantly from those estimates • obsolescence or physical damage; experience etc. Changes to the provision may be under different assumptions and conditions. The • significant changes in technology required if the financial condition of its customers (2) Fixed, Broadband and Enterprise: Fixed, Directors consider that the following discussion and regulatory environments; improves or deteriorates. An improvement in financial Broadband and Enterprise primarily include addresses the Company’s most critical accounting • significant underperformance relative condition may result in lower actual write-offs. fixed telephony, fixed and fiber broadband, policies, which are those that are most important to expected historical or projected lease circuits, datacoms, IP TV services, to the presentation of its financial performance future operating results; (e) Interconnection with mobile money and enterprise infrastructure and position. These particular policies require • significant changes in the use of its assets other operators project. The Company provides these subjective and complex judgements, often as or the strategy for its overall business; As part of the normal course of business, products and services to the individuals, a result of the need to make estimates about • significant negative industry the Company interconnects with other businesses and government customers. the effect of matters that are uncertain. or economic trends; telecommunications operators. In certain instances 90 91 Dhiraagu
Infor ation about 6 Segment Infor ation about 2018 Report Annual eportable Seg ents Mobile Fixed, Broadband Enterprise ther Total Information (Continued) eportable Seg ents 2018 2017 Se ment in ormation disclosed 2018 2017 2018 2017 2018 2017 2018 2017 Non current urrent Non current urrent or t e ear ended 1st ecem er MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 Reconciliation of total assets MVR 000 MVR 000 MVR 000 MVR 000 2018 and 201 are as ollo s information on reportable segments
to the total assets reported in the Statements Financial | Audited
Statement of Financial Position. Total assets for reporta le segments 1 80 0 2 0 2 1 1 8 0 8 ternal Re enue 1 1 82 22 82 800 1 1 2 2 8 2 20 00 Total assets for other segments 1 02 11 1 8 1 1 82 Total evenue ther unallocated amounts 1 2 8 0 12
Total assets as per the state ent of financial position peratin osts 802 2 02 8 2 1 8 28 1 28 0 1 2 1 1 2 2 epreciation and amorti ation 18 8 21 101 21 8 28 0 0 1 21 10 2 mpairment losses on trade and ot er Recei a les 8 8 0 1 1 22 2 1 1 0 2 et inance costs 2 1 1 1 2 0 1 21 0 7 Revenue on operatin income 1 1 2 2 1 11 2 2 1 eportable seg ent profit before ta The effect of initially applying IFRS 15 on 2018 2017 the Company’s revenue from contracts MVR 000 MVR 000 Seg ent assets and liabilities with customers is described in Note 3. Due to the transition method selected on current assets 82 8 8 8 82 8 00 1 02 1 1 2 1 20 2 0 20 Revenue from contracts with customers in applying IFRS 15, comparative urrent assets 20 1 22 8 8 1 11 1 8 82 0 180 1 0 information has not been restated to Total assets reflect the new requirements.
on current lia ilities 1 0 2 1 8 2 1 0 2 1 8 2 A) Revenue Streams 21 1 10 0 11 112 00 2 10 urrent lia ilities 0 0 8 1 0 The Company generates revenue Total liabilities primarily from mobile and fixed, broadband and enterprise revenue. Other sources of revenue include customer equipment maintenance ther o eratio s i l de the sto er e i e t ai te a e servi es b l M servi es do ai a d web hosti a d other adja e t servi es. services and other adjacent services. o e of these se e ts et the a titative threshold for re ortable se e ts i or .
eve e is show o ross basis a d before o t a e ts to other tele o i atio o a ies a d li e se a e ts.
92 93 Dhiraagu
B) Disaggregation of revenue 8.1 Personal Costs In the following table, revenue is disaggregated 8 Operating Costs 2018 Report Annual from contracts with customers by timing of recognition. The table also includes a Disaggregation of revenue by major reconciliation of the disaggregated revenue with products and service lines has been the Company’s reportable segments. Revenue by 2018 2017 2018 2017 disclosed in the segment information major products and service lines are disclosed MVR 000 MVR 000 MVR 000 MVR 000 under mobile, fixed, broadband and under segment information (See Note 6)
enterprise and other revenue. Statements Financial | Audited a es salaries and per ormance Reportable egments irect cost o ser ices 1 082 re ard sc eme 20 2 1 00 Mobile Fixed, Broadband Enterprise ther Total ersonnel costs (Note 8.1) 22 1 218 0 2 e ined contri ution e pense 12 0 11 88 2018 2017 2018 2017 2018 2017 2018 2017 icense ees 11 20 11 1 t er personnel costs 2 2 2 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 peratin lease rentals 0 1 2
evenue by ti ing of recognition Support ser ices 8 0 0 212 Sta costs capitali ed 1 0 1 roducts trans erred at a point in time 118 0 2 10 2 8 2 2 22 1 ternal pu licit 80 02 roducts and ser ices et or costs 118 2 112 01 trans erred o er time 1 8 181 1 8 81 21 2 0 1 8 8 2 110 2 2 ropert and utilit costs 110 1 108 1 8 Re enue it contracts it customers 1 1 82 22 82 800 1 1 2 2 8 2 20 00 ro essional ees 1 1 12 E ternal evenue as reported in ote 9 Other Income t er administrati e 2018 2017 e penses 81 1 2 MVR 000 MVR 000
C) Contract balances The contract assets primarily relate to from customers for contracts, for the Company’s right to consideration which revenue is recognized over et ain on disposal o ropert The following table provides for services performed and work time as the related performance lant and uipment 202 1 2 information about receivables, contract Total completed, but not billed at the obligations are fulfilled and to the assets and contract liabilities from reporting date on customer contracts unredeemed customer loyalty points. An impairment loss on trade receivables of iscellaneous income 2 0 2 31 12 2018 01 01 2018 contracts with customers. MVR 000 MVR 000 and costs that were deferred on MVR 1,052 thousand in the year ended 31st installations and infrastructure projects. The amount of MVR 2,510,651/- December 2017 was reclassified from operating recognized in contract liabilities costs to a separate line item in the statement The contract assets are transferred at the beginning of the period has of the profit or loss and comprehensive income Recei a les included in trade and ot er recei a les 2 2 0 18 88 to receivables when the rights been recognized as revenue for the pursuant to the adoption of IFRS 09. ontract assets included in trade and ot er recei a les 2 220 become unconditional. This usually year ended 31st December 2018. ontract lia ilities included in trade and ot er pa a les 1 8 0 occurs when the Company issues an invoice to the customer and over the No information is provided about period of customer tenure expected remaining performance obligations in respect of the deferred cost. as at 31st December 2018 that have an original expected duration of one The contract liabilities primarily relate year or less, as allowed by IFRS 15. to the advance consideration received 94 95
Dhiraagu
11.3 Deferred Tax Asset is attributable for following: 10 Net 11.1 Reconciliation 2018 Report Annual Finance Costs between accounting profit
and taxable income 2018 2017 2018 2017 The effect of initially applying 2018 2017 MVR 000 MVR 000 Deferred tax Assets and (Liabilities) IFRS 9 is described in Note 3 MVR 000 MVR 000 Temporary Tax Effect Temporary Tax Effect are calculated on all taxable and
ifference ifference deductible temporary differences Statements Financial | Audited MVR 000 MVR 000 MVR 000 MVR 000 arising from the differences between accounting bases and tax Accountin pro it e ore ta 1 0 2 2 1 1 0 bases of assets and liabilities. inance Inco e isallo a le e penses 1 2 Deferred tax is provided at the ropert and e uipment 02 1 0 10 1 8 nterest income under R Allo a le e penses 8 1 rate of 15% (2017: 15%). ntan i le assets 1 8 2 001 1 02 on an eposits 0 20 a ree allo ance 00 00 Total ta a le income 1 1 ro isions 211 8 1 8 1 2 inance osts Inco e ta at n indin o discount on pro isions 11 8 0 12 Forei n e c an e loss 81 18 88 In accordance with the provisions of the Business Profit Tax Act No.5 11.4 Movement in Deferred Tax Balances 12. Earnings Per Share 821 1 2 of 2011, regulations and subsequent amendments thereto, the Company is liable for income tax on its taxable income at the rate of 15%. Basic and diluted earnings per share eferred et inance osts Tax asset Basic and diluted earnings per Balance as Recogni ed (Liability) as at ordinary share is based on the profit for the year attributable to ordinary 11.2 Deferred Tax Asset 2018 2017 at 1st anuary in profit 31st ecember shareholders and the weighted MVR 000 MVR 000 2018 or loss 2018 average number of ordinary shares For the year ended outstanding during the year. 11 Tax Expense 2018 2017 MVR 000 MVR 000 ropert 2018 2017 penin alance 8 2 and e uipment 1 8 1 28 1 0 e erred ta asset reco ni ed ntan i le assets 1 02 2 001 ro it or t e ear attri uta le to on temporar di erences 00 0 ro isions 2 81 1 8 ncome ta e pense (Note 11.1) 1 0 1 0 2 t e ordinar s are olders R 000 0 0 8 0 losing balance er pro ision or t e pre ious ear 2 122 ei ted a era e num er o e erred ta asset reco ni ed durin 00 0 ordinar s ares outstandin 000 000 000 t e ear (Note 11.2) asic and diluted earnings The balance as at 1st January 2018 does not include the effect of initial application of IFRS 9. per share 96 97 Dhiraagu
13 Property and Equipment 2018 Report Annual
Buildings Plant and Vehicles Furniture apital Wor Total Buildings Plant and Vehicles Furniture apital Wor Total Equipment and launches and fittings n Progress Equipment and launches and fittings n Progress | Audited Financial Statements Financial | Audited 1S R 2018 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 1S R 201 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000
ost ost As at 1st anuar 2018 1 08 1 0 21 1 0 0 08 228 As at 1st anuar 201 18 2 1 82 1 22 111 2 0 1 Additions durin t e ear 1 1 Additions durin t e ear 8 00 2 8 2 28 02 rans er rom durin t e ear 10 0 1 8 82 8 1 rans er rom durin t e ear 2 2 2 1 1 2 0 2 12 8 0 isposals durin t e ear 8 2 1 2 2 isposals durin t e ear 2 8 111 0 2 10 As at 1st ecem er 1 1 5 1 1 5 1 5 As at 1st ecem er 1 1 5 5 1 5 1 1 5 5
ccu ulated Depreciation ccu ulated Depreciation As at 1st anuar 2018 1 80 2 02 1 20 1 2 8 8 2 As at 1st anuar 201 1 1 2 2 8 2 8 1 2 1 82 2 1 0 ar e or t e ear 18 2 0 2 1 2 22 28 2 ar e or t e ear 1 0 2 0 1 2 1 0 281 12 isposals durin t e ear 8 2 1 2 2 isposals durin t e ear 2 0 111 8 2 2 As at 1st ecem er 1 1 11 5 5 1 1 5 11 As at 1st ecem er 1 15 5 5 1 1
arrying a ount as at st Dece ber arrying a ount as at st Dece ber
13.1 13.2 Capital work in progress represents the costs incurred mainly Capital work in progress represents the costs incurred mainly on the projects of the service extension and expansion of the on the projects of the service extension and expansion of the network which were in progress as at 31st December 2018. network which were in progress as at 31st December 2017.
98 99 Dhiraagu
14 Intangible Assets 14.1 2018 Report Annual
Capital work in progress represents mainly the costs incurred on the development of new softwares which were in progress of ndefeasible Licenses oftwares Wor in Total ndefeasible Licenses oftwares Wor in Total development as at 31st December 2018. Rights of se progress Rights of se progress | Audited Financial Statements Financial | Audited 1S R 2018 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 1S R 2018 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000
ost ost As at 1st anuar 2018 2 8 1 80 1 2 2 0 2 As at 1st anuar 201 08 1 0 0 1 0 0 1 1 2 2 Additions durin t e ear 81 81 Additions durin t e ear 110 0 110 0 rans er rom durin t e ear 2 0 1 1 0 rans er rom durin t e ear 2 0 0 1 0 2 22 isposals durin t e ear 10 1 2 isposals durin t e ear 2 2 As at 1st ecem er 1 1 5 15 15 As at 1st ecem er 1 1 15 5
ccu ulated orti ation ccu ulated orti ation As at 1st anuar 2018 1 1 8 1 1 1 0 0 As at 1st anuar 201 12 12 11 0 1 0 Amorti ation or t e ear 2 1 2 1 Amorti ation or t e ear 2 22 2 2 02 isposals durin t e ear 10 1 2 isposals durin t e ear 1 1 As at 1st ecem er 1 11 1 151 1 1 As at 1st ecem er 1 1 1 1 5 1 1 5
arrying a ount as at st Dece ber arrying a ount as at st Dece ber
14.2 15 Inventories 2018 2017 Capital work in progress represents mainly MVR 000 MVR 000 the costs incurred on the development of new softwares which were in progress of development as at 31st December 2017. ost o in entories 0 2 14.3 Less: ro ision or slo During the year ended 31st December mo in o solete items (Note 15.1) 22 11 1 8 2016, the Company has made a provision for impairment loss for softwares under development amounting to MVR 4,236,341/-. 100 101 2018 2017 MVR 000 MVR 000
penin alance 1 8 1 ro ision made durin t e ear 2 281 2 losing alance 2018 2017 MVR 000 MVR 000
ost o in entories 0 2 Less: ro ision or slo mo in o solete items (Note 15.1) 22 11 1 8 Dhiraagu
2018 2017 2018 2017
15.1 Provision 16.1 Allowance for Impairment Loss 17 Cash 18.2 Dividends 2018 Report Annual MVR 000 for Slow-Moving / MVR 000 MVR 000 on Trade and Other Receivables and Bank Balances MVR 000 2018 2017 Obsolete Inventories The holders of ordinary shares are entitled to Movements in the allowance for impairment in MVR 000 MVR 000 dividend, as declared from time to time and are penin alance 1 8 1 respect of trade receivables and contract assets as in and 8 1 entitled to one vote per share at the shareholders’ ro ision made durin t e ear 2 281 2 alances it an s 200 2 2 2
The movement in the allowance for impairment in meetings of the Company. The board of directors Statements Financial | Audited as in and 8 1 losing alance respect of trade receivables and contract assets S ort term deposits 12 0 2 802 has declared dividends for the year as follows. during the year and movement of the impairment alances it an s 200 2 2 2 of other receivables are as follows. Comparative ash and ban balance S ort term deposits 12 0 2 802 amounts for 2017 represent the allowance in the statement of financial position account for impairment losses under IAS 39. ash and ban balance 2018 2017 16 Trade and Other Receivables S ort term deposits it maturities in the statement of financial position e ceedin t ree mont s ote 1 1 1 182 2 Per share ividend Per share ividend The effect of Initially applying IFRS 15 2018 2017 S ort term deposits it maturities Trade Receivables ther ash and cash equivalents MVR. MVR 000 MVR. MVR 000 and IFRS 9 is described in Note 3. MVR 000 MVR 000 and contract assets Receivables e ceedin t ree mont s ote 1 1 1 182 2 in the statement of cash flows 2018 2017 2018 2017 ash and cash equivalents rade recei a les 2 2 0 18 88 MVR 000 MVR 000 MVR 000 MVR 000 17.1in the Short-term statement of cash deposits flows i idend pa ment urrent nvestments ontract Assets 2 20 with maturities exceeding three months 1st tranc e 8 00 8 2 200 hort term deposits amorti ed cost 1 i idend pa ment alance as at 1st urrent nvestments Less: ro ision or impairment loss anuar under AS 1 8 2nd tranc e 2 0 2 0 hort term deposits amorti ed cost on trade recei a les (Note 16.1) 88 1 8 Ad ustment on initial Short term deposits are classified as amortized cost (2017: Loans and 5 5 application o FRS Receivables) have interest rates of1.5% to 2.5% and mature within alance as at 1st 6 months to 7 months. After the reporting date, the board of directors has repa ments 8 2 2 1 8 anuar under FRS 1 12 18 Share Capital 2018 2017 proposed dividends which is disclosed in Note 26. t er recei a les 2 2 8 easurement o loss MVR 000 18.1 Share Capial MVR 000 15 1 allo ance or t e ear 1 1 0 2 Authori ed share capital Less: Allo ance or impairment loss ad de t ritten o ordinary shares on ot er recei a les (Note 16.1) durin t e ear 2 1 of each 1 2 2 8 losing alance Issued and fully paid share capital ordinary shares The Receivables are considered to be held within held to collect business Increase of the trade receivables and contract assets as a result of the growth model consistent with the Company’s continuing recognition of receivables. of the business has resulted in increase of the allowance for impairment loss. of each 102 103 ost
As at 1st anuar 2018 2018 2017 Additions durin t e ear rans er rom durin t e ear pected rate o increase isposals durin t e ear o t e dismantlin cost 00 00 s at st Dece ber Dhiraagu iscount rate 0 0
2018 2017 Sensitivity Analysis Lease 19 Provisions ccu ulated orti ation 22 Commitments 2018 Report Annual MVR 000 MVR 000 Commitments - As at 1st anuar 2018 leases as lessee An increase/decrease of 1% of the Capital Commitments Amorti ation or t e ear below variables would have increased ffect on networ s et or and asset or decreased the provision and and assets retirement o ligation The Company had capital Less than 1 to 2 2 to 5 ver Total isposals durin t e ear one year ears ears 5 ears retirement o li ation (Note 19.1) 1 0 2 1 8 2 profit or loss by following amounts. commitments at the end of the MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 s at st Dece ber This analysis assumes that the ncrease ecrease financial period relating to the 1S R 2018 Statements Financial | Audited other variables remain constant. purchase of property, plant and Future peratin ease Rentals ove ent during the year equipment and acquisition and on and and uildin s 8 1 00 1 8 18 82 2 8 arrying a ount as at st Dece ber development of intangible assets penin alance 1 8 2 1 10 pected rate o increase of MVR 80,191,099/- (31st December ro ision made durin t e ear 8 00 o t e dismantle cost an e 1 1 280 8 8 2017: MVR 108,970,739/-). Less than 1 to 2 2 to 5 ver Total n indin o discounts on pro isions 11 8 0 12 iscount rate an e 1 0 12 one year ears ears 5 ears
isposals made durin t e ear 1 22 1S R 201 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 Lease losing alance 20 Trade and 2018 2017 Future peratin ease Rentals Commitments - MVR 000 MVR 000 Other Payables leases as lessee on and and uildin s 2 22 2 2 0 8 20 18 0
19.1 Network The provisions of network and asset retirement The Company has a number of obligations represent the provisions made for operating commitments arising and assets the best estimate of the present value of the rade pa a les 18 1 8 in the ordinary course of the retirement unavoidable future cost of dismantling and ontract ia ilities 1 8 0 Company’s business. The Company obligation removing the items of property and equipment and has obtained mainly land and restoring the sites on which they are located. Accruals and pa a les 0 2 buildings under various lease Leases as lessor i idend pa a le 1 agreements (Operating Leases). The following assumptions have been Re unda le deposits rom customers 22 0 1 8 Less than 1 to 2 2 to 5 ver Total used to calculate the network and asset The leases have varying terms one year ears ears 5 ears retirement obligation as at reporting date. ustomer lo alt points 1 0 2 8 and escalation clauses. 1S R 2018 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 t er a a les 2 2 2 ost The future operating lease Future peratin ease Rental commitments of the Company As at 1st anuar 2018 Recei a les on and and uildin s 2 28 11 008 0 2 08 2018 2017 as at the reporting date Additions durin t e ear are as follows. rans er rom durin t e ear pected rate o increase 21 Amounts Due 2018 2017 Less than 1 to 2 2 to 5 ver Total isposals durin t e ear one year ears ears 5 ears o t e dismantlin cost 00 00 to Related Party MVR 000 MVR 000 s at st Dece ber 1S R 201 MVR 000 MVR 000 MVR 000 MVR 000 MVR 000 iscount rate 0 0 Future peratin ease Rental a rain elecommunications Recei a les on and and uildin s 00 12 0 2 1 1 0 2 1 ccu ulated orti ation ompan S atelco 1 8 1 As at 1st anuar 2018 104 105 Amorti ation or t e ear ffect on networ s and assets retirement o ligation isposals durin t e ear
s at st Dece ber ncrease ecrease
arrying a ount as at st Dece ber pected rate o increase o t e dismantle cost an e 1 1 280 8 8 iscount rate an e 1 0 12 Dhiraagu
Comparative information under IAS 39
23 Financial Instruments procedures, and reviews the adequacy of the risk management seeks to reduce the credit risk by estimate of expected credit losses in respect of 2018 Report Annual and Risk Management management framework in relation to the risks faced ensuring the counterparties to all but a small trade and other receivables. The allowance for by the Company. The Company’s Audit Committee is proportion of the Company’s financial instruments impairment represents the specific loss component Analysis of the Trade receivables of not The effect of initially applying IFRS 9 on the assisted in its oversight role by Internal Audit. Internal are the core relationship banks. The counterparties that relates to individually significant exposures. past due and past due together with the Company’s financial statements is described Audit undertakes both regular and ad hoc reviews are selected in compliance with Company related impairment amounts of each as in Note 3. Due to the transition method of risk management controls and procedures, the Treasury Policy. The types of instrument used for at 31st December 2017 is as follows;
selected, comparative information has not been results of which are reported to the Audit Committee. investment of funds are prescribed by the Board. arrying Amount Statements Financial | Audited restated to reflect the new requirements. These policies contain limits on exposure for the Treasury Policy 2017 Company as a whole to any one counterparty. 2018 2017 Impairment Losses Financial Risk Management The Company’s activities expose it to a variety MVR 000 MVR 000 Gross mpairment Overview of financial risks: market risk (including currency Impairment Losses on financial assets and contract MVR 000 MVR 000 The Company has exposure to the following risk and interest rate risk), credit risk and liquidity assets recognized in profit or loss were as follows; risks from its use of financial instruments: risk. The Company’s overall risk management programme seeks to minimize potential adverse onsumer Se ment 1 2 80 2 2 2018 2017 The aging of trade receivables (i) Credit risk effects on the Company’s financial performance. orporate Se ment 12 1 81 20 MVR 000 MVR 000 (ii) Liquidity risk Day to day management of treasury activities is as at the reporting date was (iii) Market risk o ernment Se ment 0 22 delegated to the Company’s treasury function ot past due 0 20 mpairment loss on olesale Se ment 1 8 8 1 This note presents information about the Company’s (“Treasury”), within specified financial limits for trade recei a les and 1 0 da s 1 1 exposure to each of the above risks, the Company’s each type of transaction and counterparty. contract assets arisin objectives, policies and processes for measuring ast due 1 180 da s 2 2 0 and managing risk, and the Company’s management To the extent that the Company undertakes rom contracts it customers 1 1 0 2 The maximum exposure to credit risk ore t an 180 da s 88 1 1 of capital. Further, quantitative disclosures are treasury transactions, these are governed by of trade receivable at the reporting Total included throughout these financial statements. Company policies and delegated authorities. date for each segment was: Trade and other receivables arrying Amount Risk Management Framework The key responsibilities of Treasury include funding, and contract assets Expected Credit loss assessment The Board of Directors has overall responsibility for investment of surplus cash and the management of The Company’s exposure to credit risk is influenced 2018 2017 for the customers as at 1st January the establishment and oversight of the Company’s interest rate and foreign currency risk. The majority mainly by the individual characteristics of each MVR 000 MVR 000 2018 and 31st December 2018 risk management framework. The Board is of the Company’s cash resources (including facilities) customer. However, management also considers also responsible for developing and monitoring and borrowings are managed centrally by Treasury. the demographics of the Company’s customer rade recei a les Exposures within each credit risk grades are the Company’s risk management policies. base, including the default risk of the industry segmented by the type of the customers. and contract assets 88 2 2 1 (i) Credit Risk and country in which customers operate, as Risk management systems are reviewed regularly these factors may have an influence on credit t er recei a les 2 08 2 8 The Company uses an allowance Matrix to measure to reflect changes in market conditions and the Credit risk is the risk of financial loss to risk, particularly in the currently deteriorating as e ui alents 0 08 0 122 the ECLs of trade receivables from individual Company’s activities. The Company, through the Company if a customer or counter economic circumstances. However, geographically S ort term deposits 1 182 2 customers, which comprise a very large number of its training and management standards and party to a financial instrument fails to meet there is no concentration of credit risk. small customers except for its wholesale segment. procedures, aims to develop a disciplined and its contractual obligations, and arises constructive control environment in which all principally from the Company’s receivables The management has established a credit policy Loss rates are calculated using a ‘roll rate’ employees understand their roles and obligations. from customers and investments. under which each new customer is analyzed method based on the probability of a receivable individually for creditworthiness before the progressing through successive stages of The Company’s Audit Committee oversees The carrying amount of financial assets of Company’s standard payment and delivery terms and delinquency to write-off. Roll rates are calculated how management monitors compliance with the Company represents the maximum credit conditions are offered. The Company establishes separately for exposures in different segments the Company’s risk management policies and exposure. In relation to deposits held, the a provision for impairment that represents its based on the type of the customer. 106 107 Dhiraagu
Consumer Corporate Government Wholesale
The following table provides information about The following table provides information about The following table provides information about The following table provides information about 2018 Report Annual Segment the exposure to credit risk and ECLs for trade Segment the exposure to credit risk and ECLs for trade Segment the exposure to credit risk and ECLs for trade Segment the exposure to credit risk and ECLs for trade receivables and contract assets for consumer receivables and contract assets for corporate receivables and contract assets for government receivables and contract assets for government customers segment as at 31st December 2018. customers segment as at 31st December 2018. customers segment as at 31st December 2018. customers segment as at 31st December 2018.
Weighted Gross carrying Loss Weighted Gross carrying Loss Weighted Gross carrying Loss Gross mpairment 1S average amount allowance 1S average amount allowance External Weighted loss rate loss rate 1S average amount allowance credit rating average carrying loss Statements Financial | Audited MVR 000 MVR 000 MVR 000 MVR 000 1S amount R 2018 R 2018 loss rate loss rate allowance MVR 000 MVR 000 MVR 000 MVR 000 R 2018 R 2018
0 0 da s past due 1 8 1 0 1 0 da s past due 1 1 88 121 1 011 1 0 da s past due 1 0 rades 1 1 0 da s past due 1 1 20 1 0 da s past due 8 1 11 2 1 0 da s past due 0 18 8 o ris to AAA 0 02 1 2 8 2 1 0 da s past due 201 2 0 1 0 da s past due 1 2 1 0 da s past due 1 2 rades ore t an 0 da s past due 0 00 0 28 2 2 1 120 da s past due 2 812 1 22 1 120 da s past due 22 2 1 0 2 2 Fair ris to 0 0 2 ore t an 120 da s past due 0 00 12 12 2 121 1 0 da s past due 2 2 81 nrated ore t an 1 0 da s past due 00 11 2 80 customers 81
Loss rates are based on actual credit loss experience Loss rates are based on actual credit loss experience Loss rates are based on actual credit loss experience Expected credit loss assessment for individual specific over past three years. These rates are multiplied over past three years. These rates are multiplied over past three years. These rates are multiplied wholesale customers as at 31st December 2018 by scalar factors to reflect differences between by scalar factors to reflect differences between by scalar factors to reflect differences between economic conditions during the period over which economic conditions during the period over which economic conditions during the period over which Specific provision would be made provision required on case-by the historical data has been collected, current the historical data has been collected, current the historical data has been collected, current for any of the following indicators; case basis. conditions and the Company’s view of economic conditions and the Company’s view of economic conditions and the Company’s view of economic conditions over the expected lives of the receivables. conditions over the expected lives of the receivables. conditions over the expected lives of the receivables. If the customer (roaming or carrier If the debt from any roaming partners) declare bankruptcy, the partner is aged more than 12 Expected credit loss assessment for individual specific Expected credit loss assessment for individual specific full amount receivable should be months, the amount which is corporate customers as at 31st December 2018 government customers as at 31st December 2018 provided, unless there is a high aged more than 12 months, probability of recovering the debt. after netting off any payables from respective operator will All customers’ receivable more The Company has recognized a If the customer is having known be assessed for impairment. All customers’ receivables more The Company has recognized a than MVR 100,000/- which are specific incremental impairment financial problems, it would be than MVR 100,000/- which are specific incremental impairment aged for a period of more than of MVR 1,283,209/- as at 31st considered for specific provision. The Company has recognized an aged for a period of more than of MVR 1,194,780/- as at 31st 6 months are assessed for December 2018 (1st January specific incremental impairment 6 months are assessed for December 2018 (1st January specific impairment based on the 2018: incremental impairment If there are on-going disputes for the of MVR 5,213,037/- as at 31st specific impairment based on the 2018: incremental impairment assessment, specific impairment of MVR 2,565,711/-). receivable amounts from a customer, December 2018 (1st January assessment, specific impairment of MVR 1,442,056/-). is made for those customers. the amount receivable shall be 2018: incremental impairment is made for those customers. assessed for the possible risk and of MVR 4,319,406/-). management would decide on the
108 109 Dhiraagu
(iii) Market risk Exposure to currency risk
Annual Report 2018 2018 Report Annual Market risk is the risk that changes in market prices, The Company is exposed to the risk of available Currency risk is managed by the Company’s treasury Investments in Short term Deposits arrying Within such as foreign exchange rates, equity prices and foreign currency for capital and operational purposes function that monitors foreign currency cash inflows The Company limits its exposure to credit risk Amount ne ear interest rates will affect the Company’s income or and also to the risk of movements in exchange rates and outflows and its closing position on a daily by investing in short term deposits with selected 1S R 2018 MVR 000 MVR 000 the value of its holdings of financial instruments. in relation to foreign currency transactions (US basis. The Company also monitors its exposure to Banks. In respect of the short term bank deposits, The objective of market risk management is to Dollars, Euro, Sterling Pounds and Singapore Dollars). movements in exchange rates on a net basis. The
the Company has not recognized any allowance inancial Liabilities manage and control market risk exposures within Company currently does not use forward foreign Statements Financial | Audited for impairment based on the materiality ground. acceptable parameters, while optimizing the return. The Company receives certain collections exchange contracts and other derivative and financial rade and ot er pa a les 2 2 2 2 such as roaming and interconnect in terms of instruments to reduce the exposures created where foreign currency and on the other hand, the Cash and Cash Equivalents Amounts due to related part 1 8 1 8 (a) Interest rate risk currencies do not naturally offset in the short term. Treasury may seek to reduce volatility by fixing Company makes certain payments such as The Company held cash and cash equivalents of Total a proportion of this interest rate exposure capex payments, dividends, out payments, The Company’s exposure to foreign currency risk MVR. 315,975,549/- as at 31st December 2018 whilst taking account of prevailing market roaming settlements, payments relating to group was as follows (based on notional amounts) : (as at 31st December 2017: MVR. 424,889,450/-). conditions as appropriate. There were no management in terms of foreign currencies. The Company limits its exposure to credit risk by interest bearing loans as at 31st December maintaining its cash balances in selected banks. 2018 (as at 31st December 2017: Nil ) 31 12 2018 Exposure to interest rate risk The Company has not recognized any Euro G GBP arrying Within allowance for impairment for the bank At the reporting date, the interest rate 000 000 000 000 Amount ne ear balance based on the materiality ground. profile of the Company’s interest- 1st ecem er 201 MVR 000 MVR 000 bearing financial instruments was: as and an alances 8 80 212 2 8 inancial Liabilities arrying Amount rade and ot er recei a les 1 01 2
rade and ot er pa a les 2018 2017 Amount due to related part 10 Amounts due to related part 1 1 MVR 000 MVR 000 rade and ot er pa a les 1 200 22 82
Total et state ent of financial i ed ate Instru ents (ii) Liquidity Risk position e posure Short ter deposits Liquidity risk is the risk that the Company will 31 12 2017 encounter difficulty in meeting the obligations Fair value sensitivity analysis for associated with its financial liabilities that are The Company manages its own The Management produces liquidity fixed-rate instruments Euro G GBP settled by delivering cash or another financial liquidity to meet its financial obligations forecasts on a regular basis to ensure The Company does not account for any fixed- 000 000 000 000 assets. The Company’s approach to managing of servicing and repaying external the utilization of current facilities is rate financial assets at FVTPL. Therefore, liquidity is to ensure, as far as possible, that it will debt, dividends, Company costs and optimized that medium-term liquidity a change in interest rates at the reporting as and an alances 1 0 01 2 2 always have sufficient liquidity to meet its liabilities strategic initiatives. The principal is maintained and for the purpose of date would not affect profit or loss. rade and ot er recei a les 1 2 1 when due, without incurring unacceptable losses source of liquidity for the Company identifying long-term strategic funding or risking damage to the Company’s reputation. is its operating cash inflows from requirements. The Directors also A change of 100 basis point in interest rates would Amount due to related part 88 the business, supported by bank regularly assess the balance of capital have increased or decreased profit for the year rade and ot er pa a les 1 2 1 1 The Company’s exposure to liquidity risk as at the finance. and debt funding of the Company. ended 31st December 2018 by MVR 2,616,565/- reporting date is against the following liabilities. (2017 : MVR 1,891,625/-). This analysis assumes et state ent of financial that all the other variables remain constant. position e posure 110 111 arrying Amount
Financial Assets ther financial Total at Amorti ed cost liabilities MVR 000 MVR 000 MVR 000 1S R 2018
inancial assets not easured at fair value alance it an s 200 2 2 200 2 2 S ort term deposits 12 0 2 12 0 2 rade and ot er recei a les and contract assets 8 8
inancial liabilities not easured at fair value rade and ot er pa a les 2 2 2 2 Amounts due to related part 1 8 1 8 Dhiraagu
(iv) Capital Management (v) Accounting classifications
The following significant exchange rates 24.2 Transactions with 2018 Report Annual and fair values (Continued) were applied during the year: The Board’s policy is to maintain The Company’s objectives when BTC Islands Limited a strong capital base so as to managing capital are to safeguard Loans and ther financial Total receivables liabilities Average Rate pot Rate maintain investor, creditor and the Company’s ability to continue BTC Islands Limited had a 52% shareholding market confidence and to sustain as a going concern in order to MVR 000 MVR 000 MVR 000 in the Company as at 31st December 2018 2018 2017 2018 2017 1S R 201 future development of the business. provide returns for shareholders (31st December 2017: 52%). Transactions with BTC
Capital consists of stated capital and benefits for other stakeholders Islands Limited included support fees for technical Statements Financial | Audited inancial assets not easured at fair value S 1 R 1 2 1 2 1 2 1 2 and reserves. The Board of Directors and to maintain an optimal capital services, and payments for outsourcing services alance it an s 2 2 uro 1 R 18 1 1 18 0 18 8 monitors the return on capital structure to reduce the cost of capital. for certain supplier invoices. Transactions with BTC as well as the level of dividends There were no borrowings of the S ort term deposits 802 802 Islands Limited during the years, and outstanding S 1 R 11 11 11 11 8 to ordinary shareholders. Company as at 31st December 2018 rade and ot er recei a les balances as at the year ends, are as follows: 1 R 21 21 20 20 10 21 2 (as at 31st December 2017: Nil). and contract assets 8 8 2 8 8 2 ear ended ear ended 2018 2017 (v) Accounting classifications MVR 000 MVR 000 and fair values inancial liabilities not easured at fair value Sensitivity Analysis Transactions The following table shows the financial assets and financial liabilities rade and ot er pa a les i idends 1 8 A strengthening/ (weakening) the end of each period would have carrying amounts of financial assets not measured at fair value since the Amounts due to related part 1 1 of the MVR, as indicated below, increased / (decreased) profit or and financial liabilities. It does not carrying amount is a reasonable ana ement ee 2 2 1 against the foreign currencies as at loss by the amounts shown below. include fair value information for approximation of fair value.
24.3 Transactions with key ear ended 2018 ear ended 2017 arrying Amount management personnel trengthening Wea ening trengthening Wea ening Financial Assets ther financial Total Key management includes Directors affecting the future development MVR 000 MVR 000 MVR 000 MVR 000 24 Related Party Transactions at Amorti ed cost liabilities and Executive committee members and business prospects of the MVR 000 MVR 000 MVR 000 that have regular access to inside Company. Employee costs 1S R 2018 24.1 Parent and Ultimate S 10 o ement 1 1 20 20 information and have the power include key management uro 10 o ement 18 18 8 8 Holding Company to make managerial decisions remuneration as follows: inancial assets not easured at fair value Parent of the Company is BTC Islands Limited, S 10 o ement 1 1 alance it an s 200 2 2 200 2 2 a Company incorporated in the United ear ended ear ended 10 o ement 0 0 28 28 2018 2017 S ort term deposits 12 0 2 12 0 2 Kingdom and the ultimate parent is Bahrain Telecommunications Company BSC (Batelco), MVR 000 MVR 000 rade and ot er recei a les a Company incorporated in Bahrain. and contract assets 8 8 irectors Fees 1 0 1 1 Salaries to ecuti es 1 0 1 00 S ort term ene its to ecuti es 0 inancial liabilities not easured at fair value rade and ot er pa a les 2 2 2 2
Amounts due to related part 1 8 1 8 alances outstanding Amount pa a le
112 113
Loans and ther financial Total receivables liabilities MVR 000 MVR 000 MVR 000 1S R 201
inancial assets not easured at fair value alance it an s 2 2 S ort term deposits 802 802 rade and ot er recei a les and contract assets 8 8 2 8 8 2
inancial liabilities not easured at fair value rade and ot er pa a les Amounts due to related part 1 1
24.4 Transactions with 25 Board of Director’s the Government of Maldives Responsibility
The Government of Maldives has a 41.8% operators) and the rentals of The Board of Directors of the Company shareholding in the Company as at 31st assets owned by the Government is responsible for the preparation and December 2018 (31st December 2017: 41.8%). of Maldives. Transactions with the presentation of these financial statements. Transactions with the Government of Maldives Government of Maldives during the included license fees (on gross revenue less out- year, and outstanding balance as payment charges to other telecommunications at the year end are as follows: 26 Events Occuring after the Reporting Date ear ended ear ended 2018 2017 The Board of Directors of the Company has MVR 000 Individually Significant MVR 000 proposed a final dividend of MVR 5.95 per Transactions share (total: MVR 452,200,000/-) which is to be approved at the meeting of the shareholders.
Transactions Except for the above, no circumstances icense ees 11 20 11 1 have arisen since the reporting date which require adjustments to/ or disclosure Rentals on land space 10 in the financial statements. i idends 20 808
alances outstanding Amounts pa a le in respect o rentals on land space 12 Amounts pa a le in respect o license pa ments 10 28 10
Collectively, but not individually, significant transactions
Dhivehi Raajjeyge Gulhun PLC has with other government related entities transactions with entities directly or including but not limited to sales, indirectly controlled by the Government of purchases, rendering of services, lease Maldives through its authorities, agencies, of assets and use of public utilities. affiliations and other organizations, collectively referred to as government entities. The Company has transactions 114 Corporate Information
Company Chief Executive Officer Registration Number & Managing Director C-0024 / 1988 Ismail Rasheed
Place of Incorporation Chief Financial Officer Male’, Republic of Maldives Robin Wall
General Counsel & Head Office Company Secretary Dhivehi Raajjeygge Gulhun Plc Hazrath Rasheed Hussain Dhiraagu Head Office, Ameenee Magu P.O Box 2082, Asiath Rilweena served as the Company Male’ 20403, Republic of Maldives Secretary till her resignation in August 2018.
Hazrath Rasheed Hussain served as the Acting Tel: +960 3322802 Company Secretary from August 2018 till the Fax: +960 3322800 Board of Directors combined the roles of General Counsel and Company Secretary in February 2019. Website: www.dhiraagu.com.mv Email: 123@dhiraagu [email protected] External Auditors KPMG
External Counsel Mohamed Shahdy Anwar, Partner, Suood & Anwar LLP
Laila Manik, Attorney at Law
116 Dhivehi Raajjeyge Gulhun Plc ANNUAL REPORT 2018