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  • Sri Lanka Telecom PLCAnnual Report 2015

    Scan to view the online version of this Annual Report

    Sri L

    ank

    a Telecom P

    LC

    An

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    al R

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    015

  • Welcome to Sri Lanka Telecom PLCs Annual Report 2015 -------- 03Highlights -------- 04

    Message from the Group Chairman -------- 06Group Chief Executive Officers Review -------- 08

    Stewardship 12

    Board of Directors -------- 12Leadership Team -------- 20Corporate Governance -------- 25Remuneration & Nomination Committee Report -------- 31Risk Management -------- 32

    Business Model 36

    About Us -------- 36Operating Environment -------- 38Strategic Direction -------- 43Stakeholders -------- 47Materiality -------- 51 Value Creation and Capital Formation -------- 52

    Management Discussion and Analysis 56

    Financial Capital -------- 56Institutional Capital -------- 62Investor Capital -------- 64Customer Capital -------- 67Business Partner Capital -------- 78 Employee Capital -------- 79Social and Environmental Capital -------- 84

    Leadership and Recognition 90

    Driving Two Decades of Internet History in Sri Lanka -------- 90Awards and Accolades -------- 92Our Technological Milestones -------- 94

    Financial Reports 97Annual Report of the Board of Directors on the Affairs of the Company -------- 98

    Statement of Directors in Relation to their Responsibility for the Preparation of Financial Statements -------- 103Audit Committee Report -------- 104Independent Auditors Report -------- 106Statement of Profit or Loss and Other Comprehensive Income -------- 107Statement of Financial Position -------- 108Statement of Changes in Equity Group -------- 109Statement of Changes in Equity Company -------- 110Statement of Cash Flow -------- 111Notes to the Financial Statements -------- 112

    Supplementary Information 165

    Our Subsidiary Businesses -------- 165Ten Year Progress - Group -------- 167Portfolio of Lands -------- 168GRI Content Index -------- 172Abbreviations -------- 175Notice of Annual General Meeting -------- 176Form of Proxy -------- EnclosedCorporate Information -------- Inner Back Cover

    Our VisionAll Sri Lankans seamlessly connected with world-class information,

    communication and entertainment services.

    Our MissionYour trusted and proven partner for innovative and exciting

    communication experiences delivered with passion, quality

    and commitment.

    Our ValuesCustomer Caring

    We put our customers at the centre of everything we do

    Trustworthy

    We are true to our promises

    Innovative

    We continuously invent new opportunities through creative thinking

    Responsive

    We are ready to listen and act promptly

    Teamwork

    We are one team with a common purpose to achieve common goals

    Excellence

    We are committed to exceptional performance

    Results Driven

    We are committed to enhancing shareholder value

  • [ 01 ]

    Sri Lanka Telecom PLC Annual Report 2015 Stewardship

    Business Model

    Management Discussion and Analysis

    Leadership and Recognition

    Financial Reports

    Supplementary Information

    We pioneered telecommunications in Sri Lanka more than 150 years ago. We re-invented ourselves many times over to lead the telecom and digital revolutions in the country. We forge ahead in the spirit of pioneering and innovation.

  • Sri Lanka Telecom PLC Annual Report 2015

    [ 03 ]

    Welcome to Sri Lanka Telecom PLCs Annual Report 2015This Annual Report 2015 of Sri Lanka Telecom PLC is an integrated report. It communicates coherently and concisely the relationships and interdependence of the many aspects of our business - such as strategy, governance, performance and prospects - in the context of creating value over time.

    The underlying concepts that provide the structure of our integrated reporting, are discussed in the section on Business Model commencing on page 36, where we also explain the broader meaning of value creation and capital formation a recurrent theme that runs throughout the Report.

    In preparing this Report we have drawn on concepts, principles and guidance given in the following where applicable:

    Global Reporting Initiative (GRI) Sustainability Reporting Guidelines G4;

    The International Integrated Reporting Framework; and

    The Smart Integrated Reporting MethodologyTM.

    Report BoundaryThe overall boundary of this Annual Report comprises Sri Lanka Telecom PLC and its subsidiaries, duly identified as SLT or the Company individually, and Group collectively. Consistent with the framework adopted in the previous year, key financial aspects are discussed in the context of the Company and the Group. SLT Groups business is dominated by two principal segments, namely, fixed ICT operations and mobile ICT operations. Our Management Discussion and Analysis thus treats these two segments either separately or as one ICT business as appropriate and duly identified as such.

    ComplianceThis Annual Report 2015, covers the 12-month period 1 January to 31 December 2015 and is consistent with our usual annual reporting cycle for financial and sustainability reporting.

    There are no significant changes from previous reporting periods in the scope and aspect boundaries. The most recent previous Annual Report, dated 27 February 2015, covered the 12-month period ending 31 December 2014. It is available on our website www.slt.lk.

    The information contained in this Report, as in the past, is in compliance with all applicable laws, regulations and standards as well as guidelines for voluntary disclosures. Details are given in the section on corporate governance (page 25) and the independent auditors report (page 106).

    Precautionary PrincipleThe Company applies the precautionary principle in relation to social and environmental sustainability. We are highly mindful of the impacts caused to society and environment by our actions and take necessary actions to mitigate such risks.

    QueriesWe welcome your comments or questions on this Report. You may contact:

    Mr Mahesh Athukorale, Company SecretarySri Lanka Telecom, Lotus Road, Colombo 01, Sri Lanka.Telephone: +94 11 239 9478Email: mathukorale@slt.com.lkWeb: www.slt.lk

  • [ 04 ]

    Annual Report 2015 Sri Lanka Telecom PLCStewardshipBusiness Model

    Management Discussion and Analysis

    Leadership and Recognition

    Financial Reports

    Supplementary Information

    Highlights

    2015 2014 Change (%)

    Group

    Revenue (Rs. billion) 68.02 65.04 4.58

    Operating profit (Rs. million) 6,789 5,711 18.88

    Profit before tax (Rs. million) 5,515 8,251 -33.16

    Profit after tax (Rs. million) 3,724 6,001 -37.94

    Earnings per share (Rs.) 2.06 3.32 -37.94

    Return on equity (%) 5.71 9.39

    Company

    Revenue (Rs. billion) 40.56 38.95 4.13

    Operating profit (Rs. million) 2,371 2,227 6.47

    Profit before tax (Rs. million) 2,795 4,859 -42.48

    Profit after tax (Rs. million) 1,728 3,324 -48.01

    Earnings per share (Rs.) 0.96 1.84 -48.01

    Return on equity (%) 2.94 5.67

    Mobitel

    Revenue (Rs. billion) 32.56 30.60 6.41

    Profit before tax (Rs. million) 3,351 3,461 -3.16

    Profit after tax (Rs. million) 2,713 2,817 -3.69

    02012 2013 2014 2015

    Revenue (Rs. million)

    15,000

    30,000

    45,000

    60,000

    75,000

    2011

    SLT Mobitel Group

    02012 2013 2014 2015

    Profit before tax (Rs. million)

    1,750

    3,500

    5,250

    7,000

    8,750

    2011

    SLT Mobitel Group

    02012 2013 2014 2015

    Profit after tax (Rs. million)

    1,500

    3,000

    4,500

    6,000

    7,500

    2011

    SLT Mobitel Group

    02012 2013 2014 2015

    Earnings per share (Rs.)

    0.75

    1.50

    2.25

    3.00

    3.75

    2011

    SLT Group

  • [ 05 ]

    Sri Lanka Telecom PLC Annual Report 2015 Stewardship

    Business Model

    Management Discussion and Analysis

    Leadership and Recognition

    Financial Reports

    Supplementary Information

    Highlights

    Centres of Excellence

    Realignment of the organisation structure to the needs of the business successfully carried out through centres of excellence focused on planning, sales, service delivery and network operation

    Customers

    Fixed ICT Mobile ICT

    Broadband PEO TV Mobile Subscribers

    8.5% 39.6% 9.3% 490,048 531,437 124,851 174,278 5,400,000 5,900,000(2014) (2015) (2014) (2015) (2014) (2015)

    New Products

    Fibre optic broadband launched Cloud platform established

    Projects

    Increased the coverage of SLT carrier grade Wi-Fi network to more than 200 sites island wide

    SLT set up a PoP in Singapore for improved Internet reliability

    Completely migrated to the NGN network from the legacy network

    3,128 km of fibre optic cable added to the network under i-Sri Lanka project

    Speed Up Campaign

    Speed Up campaign launched to aggressively promote countrywide adoption of fibre and LTE services

  • Annual Report 2015 Sri Lanka Telecom PLC

    [ 06 ]

    Message from the Group Chairman

    The digital revolution is turning the world into an all-pervasive information system. Superfast broadband is driving this revolution in transforming the global economy and lifestyles, be it in creating new business models, improving process efficiencies, reducing costs

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