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

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your company concluded the Financial Year 2010 having recorded a consolidated ProfitAfter Tax (PAT) of Rs. 5.05 Bn. Furthermore, in addition to perfecting and consolidatingthe multifaceted transformation undertaken by the Company in the previous years, Dialogcontinued to lead Sri Lanka’s mobile communications sector driving robust outcomes withrespect to subscriber acquisition, network development and service excellence.Our focus on transformation and excellence extended beyond our core business. In concert,our portfolio of ICT businesses have forged a formula of sustainable profitability, in tandemwith setting the pace and standard for the proliferation of the very best in converged ICTservices. In 2010, our market leading Pay TV operation enjoyed four quarters of positiveEBITDA (Operating Profit before Depreciation, Amortisation and Impairment) while ourFixed Telecommunication business crossed the milestone of EBITDA positive operations, inthe second quarter of the year.The reversal of a negative trend in profitability is often referred to as a ‘Turnaround’. Seededin the year 2008, we branded our determined focus on transformation, as the ‘DialogRebound’. It was our belief that ‘Rebound’ better embodied the power and strength behindthe transformation objectives, and the momentum and buoyancy with which we aimed toreturn to profitability through the leverage of our position as a market leader, power brandand national ICT champion. In 2008 and in prospective terms, the Dialog Rebound wasa transformation agenda. Today, in retrospect it joins the annals of the Dialog Story as achapter of a different kind – bearing indelible testimony to the courage, determination andcapability of the Dialog team to fight and succeed in the face of challenging times.The Dialog ReboundAs alluded to in my review last year, Dialog’s transformation agenda applied parallelfocus to the right-sizing and corresponding rescaling of technology platforms, operatingcost structures and organisational capacity. In 2010, we continued with similar focus andmomentum to rescale multiple dimensions of our business against aggressive time scales.Accordingly, we continued to be challenged to implement simultaneously and on a timelybasis a multiplicity of impactful structural corrections encompassing process, technology,automation and the optimum deployment of human and other resources, across ourmulti-faceted business. While performance outcomes endorsed our transformationstrategies, we remained committed to uphold uncompromised, the standards of serviceexcellence, technology leadership and contribution to the nation and economy, as requiredof an industry leader.6Dialog Axiata PLCAnnual Report 2010 |Group Chief Executive’s Review of Operations
The outcome of Dialog’s Rebound Programme vindicated the Company’s strategy ofcompressing the major and impactful part of its Structural and Operational transformationprogramme. The strategy to ‘accelerate’ change was based on the rationale that theenhanced operating model envisioned, if approached expeditiously, would in turn deliveron the strategic objective of achieving ‘operational profitability through performanceimprovements’ in the near term.The buoyancy embodied in the Dialog Rebound is best articulated through a cursory reviewof operational performance relative to preceding years. In 2010, Company EBITDA grew69% relative to 2009. Growth in absolute EBITDA was shadowed by sustainable marginexpansion. In 2010, the Company’s EBITDA margin grew by 12 percentage points relativeto 2009. As alluded to previously, our transformation focus encompassed in no lesserterms our subsidiary business, leading to both DBN and DTV achieving positive EBITDA inthe year 2010. On consolidated basis, Group EBITDA grew by 82% relative to 2009 with acorresponding expansion in EBITDA margin by 13 percentage points, YoY.We are singularly confident that the financial outcome of the Dialog Rebound indeedsignifies the re-establishment of a platform for sustainable profitability and growth.The Economy and IndustryLast year, on the backdrop of Sri Lanka entering an era of peace and limitless opportunity,my report alluded to our confidence that an accelerated rebound was within immediatereach of multiple tiers of the country’s economy and socioeconomic stratum. We lookedforward to the invigoration of consumer spending power and resultant demand for productsand services which in turn, we were confident of supplying with sustainable profitability,based on our aggressive growth aspirations and transformed business formulation.Our country’s economy has indeed rebounded and today multiple sectors and segmentsof the nation’s economy and people have been energised with the momentum ofupward mobility. On the backdrop of judiciously designed fiscal and monetary policy,the Government of Sri Lanka has through the application of strategic as well as tacticalinterventions on a sectoral as well as overarching basis, succeeded in triggering a wave ofeconomic resurgence. We believe that this resurgence is fundamentally sustainable, whilehaving the momentum to drive catalytic growth well into the future. Sri Lanka’s economygrew by 8.0% in 2010. The Industrial sector recorded growth of 8.4%, while the servicesector grew by 8.0%.Group Chief Executive’s Review of OperationsDialog Axiata PLC| Annual Report 20107
Page 4 and 5: Message from the ChairmanThe Turnar
Page 6 and 7: The Sri Lankan economy has begun to
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
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Independent Auditor’s ReportTo th
Page 69 and 70:
Consolidated Income StatementFor th
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Attributable to equity holders of t
Page 73 and 74:
Notes to the Consolidated Financial
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(c) Computer SoftwareAcquired compu
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2.8 InvestmentsInvestments are stat
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(c) Short-term Employee BenefitsWag
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(e) Prepaid Card RevenueRevenue fro
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(f) ProvisionsThe Group recognises
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The segment assets and liabilities
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6. Property, Plant and Equipment(a)
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(c) Provision for Capital Inventory
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(b) CompanyLicencesRs. ’000Comput
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The following assumptions were appl
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10. Trade and Other Receivables2010
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The preference shares are redeemabl
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15. Trade and Other Payables2010Rs.
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Axiata Investments (Labuan) Ltd. (f
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The gratuity liability of the Compa
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22. Employee Benefit Expense2010Rs.
Page 107 and 108:
Tax losses available for carry forw
Page 109 and 110:
27. Cash Generated from OperationsR
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29. Contingencies(a) Pending litiga
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31. Related Party Transactions(a) T
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(b) The Company is controlled by Ax
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2010Rs. ’0002009Rs. ’000iii) Te
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(f) Outstanding receivable balances
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33. Events after the Balance Sheet
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Income StatementFor Information Pur
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Five Year SummaryGROUP31st December
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NotesDialog Axiata PLC| Annual Repo
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Form of ProxyI/We (name) ..........
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Corporate InformationNAME OF COMPAN
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