Dialog Axiata PLC | Annual Report 2010 D ia lo g A x ia ta P L C | A ...

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Message from the ChairmanThe Turnaround StoryDialog’s 2010 chapter was everything we promised it would be. In my message to you lastyear, I affirmed Dialog’s quest to return to a state of singular profitability in what was ayear of structural re-engineering of the organisation and its business. It gives me immensepleasure to present you the audited financials of the Dialog turnaround on the back of yourcommitted support and a courageous and committed effort led by the management andstaff of your Company.In the year under review, the Group recorded a profit after tax of Rs. 5.05 Bn., an increaseof 141% over the previous year, with EBITDA (Operating Profit before Depreciation,Amortisation and Impairment) growth ending at Rs. 15.08 Bn.On behalf of the Board of Directors, I wish to extend to you our shareholders, our sincereappreciation for your patient understanding, support and encouragement which wasinvaluable in our quest for a rapid financial turnaround of the Company. The turnaroundwas the outcome of several strategic initiatives, principal amongst which were strategiccost rescaling and balance sheet restructuring initiatives. Looking back at the two years ofnegative financial performance, we can derive a great sense of satisfaction that with yoursupport, the Company has returned to profitability in a short span of time. As alluded topreviously, this transformation is the result of great commitment and sacrifices made by the2Dialog Axiata PLCAnnual Report 2010 |
management and staff of your Company, and it is imperative we acknowledge this mostunique of efforts. These unique people stood behind your Company and themselves, andmade this turnaround story the immense success it is today.Relentless Commitment to ExcellenceDialog not only achieved a turnaround in its profitability, even during its difficult period yourCompany remained committed to deliver the empowerment and value addition it deliversto the hearts and lives of millions of Sri Lankans. We never compromised on our standardsor service; we grew our customer base and introduced a host of advanced new subscriberfeatures. Dialog has maintained a best-in-class status in every sphere and held its position asthe market leader in the mobile sphere with over 55% revenue share. Our subsidiaries DialogTelevision and Dialog Broadband recorded significant gains YoY, being EBITDA (positive) andNPAT (negative) by 243% and 80% for DTV and 169% and 50% for DBN, respectively.Dialog has grown its network and extended its reach further into the country’s North andEast, complementing the rapid progress made in the region in terms of infrastructure. Ouraccelerated coverage expansion is derived from our vision to connect every Sri Lankan andinspiration from the Government’s commitment to return normalcy to citizens of the region.Your Company also extended its presence in these areas with the establishment of servicecentres in Trincomalee, Batticaloa and Ampara.In addition, we continued to contribute aggressively towards the socio-economicdevelopment of Sri Lanka centred on the empowerment of the country’s citizens throughinclusive technology applications. We rolled out the third phase of the Nenasa digitaldistance learning bridge connecting up to 500 schools in rural Sri Lanka, bringing parityeducation and access to our children. Further demonstrating our commitment to inclusiveand sustainable business, your Company launched ‘Tradenet’ - a trade informationexchange designed to reach multiple socio-economic segments, which was recognisedwith a World Summit Award for Dialog and Sri Lanka. Our constant commitment to globalbest practice and governance manifested in Dialog topping the country’s corporateaccountability rating for the second year running.Our FutureWe are closing the year under review with a record performance, but we will not restat these levels. We will continue to lead the country’s ICT industry through our leadingpresence in the multiple sectors of mobile, fixed and global telecommunications, broadbandand media. We will also continue to maintain a close scrutiny of our cost structure andoperating modalities and take strategic measures to improve our business efficiency. Thedifficult times are behind us, and at the same time it provides a roadmap for our future.As envisaged in my message last year, we will remain committed to deliver the futurein connectivity to our customers and all Sri Lankans through the relentless pursuit ofdeploying, enabling ICTs towards the socio-economic development of the nation.Message from the ChairmanDialog Axiata PLC| Annual Report 20103
Page 6 and 7: The Sri Lankan economy has begun to
Page 8 and 9: your company concluded the Financia
Page 10 and 11: The positive dynamics of the Sri La
Page 12 and 13: Our Fixed Telephony and Data Transm
Page 14 and 15: Dialog’s direct contribution to t
Page 16 and 17: Board of DirectorsDatuk Azzat Kamal
Page 18 and 19: Board of Directors (Contd.)Mr. Jaya
Page 20 and 21: Group Senior ManagementPradeep De A
Page 22 and 23: Business & Financial Review2010 - A
Page 24 and 25: The Group direct costs grew by 6% w
Page 26 and 27: Parent Axiata Group. Dialog has a U
Page 28 and 29: The international telecommunication
Page 31 and 32: Finance CostsIn early 2010, Dialog
Page 33 and 34: TaxationDialog has been granted fla
Page 35 and 36: However, DBN remained PAT negative
Page 37 and 38: On the backdrop of revenue and cost
Page 39 and 40: Board Composition and IndependenceT
Page 41 and 42: All committees have written Terms o
Page 43 and 44: Re-electionThe Company’s Articles
Page 45 and 46: The BAC conducts a review of the ef
Page 47: Information which is disseminated t
Page 50 and 51: The BAC was also entrusted with the
Page 52 and 53:
Shareholder InformationMarket Infor
Page 54 and 55:
DividendsDialog’s dividend policy
Page 56 and 57:
The total number of shareholders of
Page 59 and 60:
Financial ReportsDialog Axiata PLC
Page 61 and 62:
Accounting PoliciesThere were no ch
Page 63 and 64:
Mr. Moksevi Rasingh Prelis, who has
Page 65 and 66:
Future DevelopmentsIn line with its
Page 67 and 68:
Independent Auditor’s ReportTo th
Page 69 and 70:
Consolidated Income StatementFor th
Page 71 and 72:
Attributable to equity holders of t
Page 73 and 74:
Notes to the Consolidated Financial
Page 75 and 76:
(c) Computer SoftwareAcquired compu
Page 77 and 78:
2.8 InvestmentsInvestments are stat
Page 79 and 80:
(c) Short-term Employee BenefitsWag
Page 81 and 82:
(e) Prepaid Card RevenueRevenue fro
Page 83 and 84:
(f) ProvisionsThe Group recognises
Page 85 and 86:
The segment assets and liabilities
Page 87 and 88:
6. Property, Plant and Equipment(a)
Page 89 and 90:
(c) Provision for Capital Inventory
Page 91 and 92:
(b) CompanyLicencesRs. ’000Comput
Page 93 and 94:
The following assumptions were appl
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10. Trade and Other Receivables2010
Page 97 and 98:
The preference shares are redeemabl
Page 99 and 100:
15. Trade and Other Payables2010Rs.
Page 101 and 102:
Axiata Investments (Labuan) Ltd. (f
Page 103 and 104:
The gratuity liability of the Compa
Page 105 and 106:
22. Employee Benefit Expense2010Rs.
Page 107 and 108:
Tax losses available for carry forw
Page 109 and 110:
27. Cash Generated from OperationsR
Page 111 and 112:
29. Contingencies(a) Pending litiga
Page 113 and 114:
31. Related Party Transactions(a) T
Page 115 and 116:
(b) The Company is controlled by Ax
Page 117 and 118:
2010Rs. ’0002009Rs. ’000iii) Te
Page 119 and 120:
(f) Outstanding receivable balances
Page 121 and 122:
33. Events after the Balance Sheet
Page 123 and 124:
Income StatementFor Information Pur
Page 125 and 126:
Five Year SummaryGROUP31st December
Page 127 and 128:
NotesDialog Axiata PLC| Annual Repo
Page 129 and 130:
Form of ProxyI/We (name) ..........
Page 131 and 132:
Corporate InformationNAME OF COMPAN
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Dialog Axiata PLC | Annual Report 2010 D ia lo g A x ia ta P L C | A ...

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