Annual Report 2012 - Dialog

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72 l Dialog Axiata PLC l Annual Report 2012 Notes to the Financial Statements 2 Summary of significant accounting policies contd. 2.23 Revenue recognition contd. (a) Domestic and international service revenue and rental income Revenue from telecommunications comprises amounts charged to customers in respect of monthly access charges, call time usage, messaging, the provision of other telecommunications services, including data services and information provision, fees for connecting users of other fixed lines and mobile networks to the the Company’s and Group’s network. Revenue from Pay TV comprises amounts charged to customers in respect of monthly subscription revenue and connection fees. Access charges and airtime used by contract customers are invoiced and recorded as part of a periodic billing cycle and recognised as revenue over the related access period, with unbilled revenue resulting from services already provided from the billing cycle date to the end of each period accrued. The customers are charged Government taxes at the applicable rates and the revenue is recognised net of such taxes. Revenue from the sale of prepaid card on Mobile, CDMA, Broadband and Pay TV are deferred until such time the customer uses the call time, downloadable quota, telecast time or when credit expires. (b) Revenue from other network operators and international settlements The revenue from other network operators, local and international, for the use of the Company’s and the Group’s telecommunication network for completing call connections is recognised, net of taxes, based on traffic minutes/per second rates stipulated in the relevant agreements and regulations. (c) Connection fees Connection fees are recognised as revenue over the subscriber churn period. (d) Lease of passive infrastructure Income from lease of passive infrastructure is recognised on an accrual basis based on prices agreed with customers upon completion of service. (e) Equipment revenue Revenue from equipment sales is recognised when the equipment is delivered to the end customer and the sale is considered complete. For equipment sales made to intermediaries, revenue is recognised if the significant risks associated with the device are transferred to the intermediary and the intermediary has no legal right to return. (f) Award credits Award credits are separately identifiable component of the sales transaction in which they are granted. The fair value of the consideration received or receivable in respect of the initial sale are allocated between the award credits and the other components of the sale. (g) Interest income Interest income is recognised using the effective interest method. When a loan granted or a receivable is impaired, the Company and the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loan and receivables are recognised using the original effective interest rate.
(h) Dividend income Dividend income is recognised when the right to receive payment is established. Annual Report 2012 l Dialog Axiata PLC l 73 2.24 Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. The adjustments made to comparative figures are given in Note 33 to the financial statements. 3 Financial risk management Financial risk factors The Company’s and the Group’s activities exposed to variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company’s and the Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company and the Group. Financial risk management is carried out through risk reviews, internal control systems, insurance programmes and adherence to the Company’s and the Group’s financial risk management policies. The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risks. Hedging transactions are determined in the light of commercial commitments. Derivative financial instruments are used only to hedge underlying commercial exposures and are not held for speculative purposes. Market risk consists of: (i) foreign currency exchange risk – risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. (ii) fair value interest rate risk – risk that the value of a financial instrument will fluctuate due to changes in market interest rates. (iii) cash flow interest rate risk – risk that future cash flows associated with a financial instrument will fluctuate. In the case of a floating rate debt instrument, such fluctuations result in a change in the effective interest rate of the financial instrument, usually without a corresponding change in its fair value. (iv) price risk – risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instrument traded in the market. Credit risk – risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Liquidity risk (funding risk) – risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.
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Introduction to the Company Dialog
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Annual Report 2012 l Dialog Axiata
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Mr. Moksevi Prelis Independent, Non
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Mr. James Maclaurin Non-Independent
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Group NPAT Rs. Mn +23% 7,000 6,000
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Gross Debt to Equity 2.0 1.5 1.0 0.
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Annual Report 2012 - Dialog

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