Evolution is not a force but a process. Not a cause but a law. John Morley MAJOR LANDMARKS • First telephone installed in Mauritius and fi rst manual exchange inaugurated • Mauritius connected to Zanzibar and Seychelles by telegraph submarine cable 1883 - 1900 • Durban connected to Mauritius, Rodrigues and Seychelles by second submarine cable • First automatic telephone exchange opened • Telex service introduced • Digital E10B telephone exchange installed 1901 - 1999 • Internet Services launched commercially by Telecom Plus • Mobile GSM services introduced commercially by Cellplus Mobile Communications • Strategic equity partnership with France Telecom signed in November 2000 • SAFE fi bre-optic cable system inaugurated 2000 - 2004 • First Teleshop launched in Curepipe • Wi-Fi offered by Telecom Plus commercially • Cellplus’ 3G Network launched • My.T, Mauritius Telecom’s Multiplay-IPTV services, launched 2005 - 2012 • ADSL launched in Rodrigues • The LION submarine cable came into service in November 2009 OUR CORE VALUES OUR VISION Innovation & Creativity, To be a Premier World Class Quality, Professionalism, Infocom Services Provider Customer Service, Competitiveness 4 MAURITIUS TELECOM - ANNUAL REPORT 2011 CONTENTS Financial Highlights 6 Certifi cate by Company Secretary 8 Corporate Profi le 11 Board of Directors 13 Chairman’s Statement 18 Chief Executive Offi cer’s Review 20 Strategic Executive Committee 25 Corporate Governance 27 Directors’ Annual Report 35 Highlights 2011 41 Business Review 47 Independent Auditor’s Report 64 Statements of Financial Position 66 Statements of Comprehensive Income 67 Statement of Changes in Equity 68 Statements of Cash Flows 70 Notes to Financial Statements 71 Milestones 114 Glossary of Terms 117 MAURITIUS TELECOM - ANNUAL REPORT 2011 5 FINANCIAL HIGHLIGHTS for the year ended 31 December 2011 +5.7% +4.0% Growth 2010-2011 Growth 2010-2011 Group Operating Revenue Profi t before Tax +4.5% Growth 2010-2011 Profi t from Operations Key Results for 2011 compared with year 2010 · Operating revenue for the Group progressed by 5.7% during the year, nearing the Rs7.9 billion mark. · Group Profi t from Operations which was at Rs2.3 billion, grew by 4.5%. · Profi t before Tax increased by 4.0% to reach Rs2.5 billion. · Profi t for the year which stood at Rs1.8 billion, grew by 8.8%. · Group Capital Expenditure has been maintained at Rs1.5 billion, that is 19.5% of operating revenue. · Earnings per share which was at Rs9.77, increased by 8.8%. · Return on net assets was at 21.1% compared to 22.2% in 2010. · Return on equity is in line with last year, at 20%. 6 MAURITIUS TELECOM - ANNUAL REPORT 2011 FINANCIAL HIGHLIGHTS [CONT’D] for the year ended 31 December 2011 Evolution Consolidated Revenues Evolution in Group Profi t from Evolution in Consolidated (Rs M) Operations (Rs M) Shareholder’s Equity (Rs M) 9,267 2,317 8,589 * 8,301 2,219 1,950 7,718 7,927 1,777 1,739 6,943 7,501 7,164 6,828 6,421 *special dividend distribution of Rs3 billion in 2007 Financial Key Figures For The Group 2011 2010 Income Statement (MILLION RS) (MILLION RS) Operating Revenue 7,895 7,468 Profi t Before Tax 2,550 2,452 Profi t After Tax 1,856 1,706 Earnings Per Share (Rs) 9.77 8.98 Balance Sheet Total Assets 16,028 15,020 Total Liabilities 6,761 6,431 Debt Interest Bearing 36 77 Shareholders’ funds 9,267 8,589 Net asset Value per share (Rs) 48.78 45.21 MAURITIUS TELECOM - ANNUAL REPORT 2011 7 FINANCIAL HIGHLIGHTS [CONT’D] for the year ended 31 December 2011 Value added statement The group The company Employees 29% Government 29% (taxes and licences) Company (reinvested) 25% Company (reinvested) 28% Shareholders 23% Government 21% Employees 25% (taxes and licences) Shareholders 17% Other providers of capital 3% Value Added Statement for year ended 31 December 2011 THE GROUP THE COMPANY Rs ‘m % Rs ‘m % Revenue 7,895 4,725 Value Added Tax 1,079 641 Total revenue 8,974 5,366 Payment to suppliers of goods and services -2,491 -1,966 Value added by operations 6,483 3,400 Investment and other income 245 1,775 Total Value created during the year 6,728 100% 5,175 100% Employees Salaries, wages and benefi ts 1,657 25% 1,515 29% Government Taxes, levy, USF, CSR, licences, leases, social security charges 1,982 29% 1,074 21% Company (re-invested to maintain / develop operations) Depreciation/ amortisation and retained earnings to be re-invested 1,916 28% 1,274 25% Providers of capital Dividends 1,170 17% 1,170 23% Other providers of capital Interest expenses 3 0.0% 142 2.7% Total value distributed during the year 6,728 100% 5,175 100% Certifi cate by Company Secretary Certifi cate by Secretary required under the Companies Act 2001 I certify to the best of my knowledge and belief that the Company has fi led with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001 as at 31 December 2011. P.C. Colimalay Company Secretary 29 March 2012 8 MAURITIUS TELECOM - ANNUAL REPORT 2011 The joyful get-together of people from all walks of life ~ we make sure it takes place ~ connect feelings communicate All the time, people are feeling the need to get closer: to share their emotions; to learn, to have fun; for business or for leisure. Today, not a second goes without thousands of spoken, written and audiovisual messages bridging people across our land and abroad. With over 714,000 GSM mobile and 117,000 love broadband subscribers in 2011, not to mention landline subscribers, Mauritius Telecom endows Mauritians with the freedom to be together virtually, as and when they want. CORPORATE PROFILE Mauritius Telecom (MT) is the leading telecommunications directory services. The Group is committed to providing its operator and service provider in Mauritius. Incorporated customers with quality ICT services at competitive prices. in 1988 as Mauritius Telecommunications Services (MTS), it acquired the assets of Overseas Telecommunications Since the rebranding of all mobile and internet services in Services (OTS) in 1992 and became Mauritius Telecom. April 2008 to Orange, a strong international brand, there The company has since enjoyed a phenomenal rate of has been a quantum leap in providing customers with development and it is now one of the top enterprises in the innovative services and experiences. Telecommunication country, with revenue of Rs7.9 billion in 2011. services are becoming increasingly convergent and Mauritius Telecom makes every effort to respond to new device and The company, which is ISO 9001:2008 certifi ed, operates consumption trends in an increasingly competitive market. in accordance with the requirements of good corporate governance practices, providing fair working conditions Today, the company’s real-time technology services and and offering secure products and services. solutions, coupled with its experience and know-how, are providing businesses with a one-stop solution for IP-based Vision services, virtual private networks, and high-speed internet Mauritius Telecom’s strategy for growth is centred on access and application services for improved decision- innovation, in line with its vision “To be a Premier making anytime, anywhere. FTTC, GPON, ADSL, SHDSL World-Class Infocom Services Provider,” whilst the new are the technologies we are investing in, while offering commercial strategy is led by the vision “Today changes TelePresence and Cloud Computing solutions. with Orange.” Over the ye ars, the company has invested considerably in restructuring the organisation so that it Customers functions as an integrated operator. MT also endeavours By the end of December 2011, the company had acquired to provide the best conditions for its 1,600 employees to about 1.2 million subscribers for its fi xed-line, mobile, enhance their skills to better serve its customers. internet dial-up, broadband and My.T convergent services. This signifi cant customer base has enabled Mauritius Shareholding Telecom to strengthen its position as market leader and The Government of Mauritius, the State Bank of Mauritius preferred end-to-end solutions provider. (through its wholly owned subsidiary SBM Investments Managers Ltd) and the National Pensions Fund hold 59% of MT continues to improve broadband access through lower the shares in the company. 1% of Mauritius Telecom shares tariffs for both business and residential customers, as part were sold to eligible employees and pensioners in 2007 at of MT’s commitment to aligning its strategy with that of a discounted rate under an Employee Share Participation the Government’s vision of Broadband Mauritius. Indeed, Scheme. The remaining 40% are held by France Telecom, to make ICT available and affordable to as many people as through its investment vehicle RIMCOM. possible in Mauritius, the Company launched the NetPC in June 2008. Investment in other entities Mauritius Telecom has a regional presence through its MT is the country’s only telecommunications company investments in Orange Madagascar. MT has acquired a 50% that provides universal services and universal access. To share in Vanuatu Telecom Ltd through its investment vehicle, meet these responsibilities, the company is committed to Mauritius Telecom International Ventures, set up in 2011. developing its networks throughout the country and to providing effective services to all citizens and residents Products & services within the Republic of Mauritius. Mauritius Telecom provides a full spectrum of voice and data services using fi xed, mobile and internet platforms. Network MT additionally offers convergent services through My.T, Mauritius Telecom is setting the pace in the region in the its Multiplay-IPTV service. Internet and TV services are transition from narrowband to broadband and IP (Internet provided for mobile users. MT also provides call centre and Protocol) services.