NO DREAM TOO BIG     SRI LANKA TELECOM PLC | ANNUAL REPORT 2021

CORPORATE INFORMATION

NAME OF THE COMPANY SENIOR TENDER BOARD

Sri Lanka Telecom PLC Mr. K. A. Vimalenthirarajah - Chairman

Mr Mohan Weerakoon, PC
LEGAL FORM
A public limited liability Company incorporated in Sri Ms Lai Choon Foong
Lanka in September 1996, under the Conversion of Public Mr. V. U. Kumar
Corporations of Government-Owned Business Undertakings
into Public Limited Companies Act No. 23 of 1987 and RELATED PARTY TRANSACTIONS REVIEW
quoted on the Colombo Stock Exchange in January 2003. COMMITTEE
Ms. Lai Choon Foong – Chairperson
COMPANY REGISTRATION NUMBER
PQ 7 Mr. Mohan Weerakoon, PC
Mr. K. A. Vimalenthirarajah
STOCK EXCHANGE LISTING
1,804,860,000 Ordinary Shares of the Company are listed in AUDITORS
the Colombo Stock Exchange. Ernst & Young (Chartered Accountants), 201,
De Saram Place, Colombo 10.
REGISTERED ADDRESS
Telecom Headquarters, Lotus Road, Colombo 1. COMPANY SECRETARY
Mr Mahesh Athukorale
BOARD OF DIRECTORS
Mr. Rohan Fernando - Chairman CREDIT RATING
Mr. Lalith Seneviratne - Director / GCEO Fitch Rating
National Long-Term Rating of AA-(Ika)
Mr Lawrence Paratz
Mr. Chan Chee Beng Long-term issuer
Credit rating of B
Ms Lai Choon Foong
Mr. Mohan Weerakoon, PC BANKERS
Bank of Ceylon
Mr. Ranjith Ganganath Rubasinghe
Bank of China
Mr. V. U. Kumar
Citi Bank N.A
Mr. K. A. Vimalenthirarajah
Commercial Bank of Ceylon PLC
AUDIT COMMITTEE
Deutsche Bank
Mr. Mohan Weerakoon, PC - Chairman
DFCC Bank PLC
Ms. Lai Choon Foong
Hatton National Bank PLC
Mr. V. U. Kumar
HSBC
Mr. K. A. Vimalenthirarajah
National Savings Bank
REMUNERATION AND NOMINATION COMMITTEE Nations Trust Bank PLC
Mr. Chan Chee Beng - Chairman
NDB Bank PLC
Mr. Lawrence Paratz
People’s Bank
Mr. Rohan Fernando
Sampath Bank PLC
TECHNOLOGY SUBCOMMITTEE Seylan Bank PLC
Mr. Lawrence Paratz - Chairman Standard Chartered Bank
Mr. Lalith Seneviratne
2  |  Sri Lanka Telecom PLC

CONTENTS

About the Report...............................3

About Us.............................................4
Our Socioeconomic Impact................6 FINANCIAL STATEMENTS
Digital Innovator.................................6 Independent Auditors’ Report.....................119
Our Coverage.....................................8 Statement of Profit or Loss and Other
Group Structure................................11 Comprehensive income................................123
Performance Highlights....................12 Statement of Financial Position....................124
2021 at a Glance..............................14 Consolidated Statement of
changes in Equity - Group............................126
Consolidated Statement of
changes in Equity - Company......................127
Statement of Cash Flows..............................128
EXECUTIVE REVIEWS Notes to the Financial
Group Chairman’s Message.............16 Statements...................................................129
Group Chief Executive Officer’s
Message...........................................20
Chief Executive
Officer’s Message.............................24 SUPPLEMENTARY
Chief Operating
INFORMATION
Officer’s Review................................26
Board of Directors............................28 Investor Information.......................199
Executive Management....................33 GRI Index........................................207
Subsidiary Chief Officers..................42 Notice of Annual
General Meeting............................214
Form of Proxy.................................215

CORPORATE GOVERNANCE CAPITAL REPORTS

Sri Lanka Telecom PLC | Annual Report 2021

Corporate Governance.....................46 Financial Capital...............................78

Audit Committee Report .................55 Social and Relationship Capital........84
Remuneration and Nomination Manufactured Capital.......................92
Committee Report............................58 Human Capital..................................96
Report of the Related Party Our Employee Profile.......................96
Transactions Review Committee......60 Natural Capital...............................104
Intellectual Capital..........................107
STRATEGY & ENTERPRISE RISK
MANAGEMENT
Our Business Model.........................62
Operating Environment....................64
Responsive to Stakeholders.............67
Strategy............................................70
Determining Material Issues.............71
Enterprise Risk Management............72
   Annual Report 2021  | 3

ABOUT THE REPORT

ABOUT OUR REPORT ASSURANCE principle 15 of The Rio Declaration on
Sri Lanka Telecom’s 9th Annual Assurance on Financial Statements Environment and Development.
Integrated Report presents a are provided by Ernst & Young
composite view of its performance while assurance on non-financial RESPONSIBILITY
for the financial year ending 31st information has been provided by The Management of the Sri Lanka
December 2021, clearly setting out GCEO/DIRECTOR, CEO and relevant Telecom PLC has prepared and
the financial, environmental, social Management personnel. reviewed the Integrated Annual
and governance aspects, evidenced Report for the financial year 2021.
with appropriate metrics. It follows FORWARD LOOKING
up on the progress reported in the STATEMENTS The Board and the management of
previous annual report for the financial We have provided forward looking Sri Lanka Telecom acknowledges its
year ending 31st December 2020 statements based on our assessment responsibility to provide a balanced
which is available for download at of the Group’s ability to create value. view of its performance in 2021,
www.sltmobitel.lk. These rely on trends observed and addressing all material issues as at the
external forecasts and existing policy date of the report.
REPORTING FRAMEWORK environment. As the operating
This report is prepared in compliance environment remains fluid with high The report is signed on behalf of the
with the below given regulatory and levels of uncertainty, these are subject Board by
voluntarily adopted frameworks. to change and investors are advised
to seek updated information at the Rohan Fernando
SCOPE & BOUNDARY time of reading the report. All forward Chairman
The report provides financial and looking statements are provided
without recourse or any liability Mohan Weerakoon. PC
non-financial information of Sri Lanka
whatsoever to the Board or other Audit Committee Chairman
Telecom PLC and its 9 subsidiaries.
Information relating to the Group preparers of the Annual Report due to
the reasons enumerated above. Janaka Abeysinghe
and the Company is duly identified
Chief Executive Officer
where relevant to provide clarity.
It focuses on material themes that PRECAUTIONARY PRINCIPLE
can significantly impact the Group’s SLT Group is committed to taking
ability to create value over the short, cost effective measures to prevent
medium and long term which are set environmental degradation where
WHAT WE CHANGED
out on page 71. The report adopts there are threats of serious or
THIS YEAR
a multi capital reporting approach in irreversible damage despite lack of full
line with the <IR> Framework. scientific certainty in compliance with 1. We redefined our capitals in
line with the 6 capitals set out
in the <IR> Framework
2. Improved presentation to
enhance readability of the
report.

REGULATORY VOLUNTARY We welcome feedback on this

Companies Act No.7 of 2007 Integrated Reporting
report which can be directed to:
Framework published by IIRC
CSE Continued Listing Rules Mr.Mahesh Athukorale
GRI Standards issued by the Group Company Secretary
Sri Lanka Financial Reporting
Global Reporting Initiative Sri Lanka Telecom PLC
Standards issued by the
Lotus Road,
Institute of Chartered Code of Best Practice on
Colombo 01
Accountants of Sri Lanka Corporate Governance issued
Sri Lanka
by the Institute of Chartered
Accountants of Sri Lanka
Tel: +94 11239 9478
Email: [email protected]
4  |  Sri Lanka Telecom PLC

ABOUT US
Sri Lanka Telecom is the National Information and Communication Technology solutions provider, connecting over 10.2 million
subscribers, and has always being in the forefront in catering to the nation's requirements. Being catalyst in the integration of the
country with global economy, Sri Lanka Telecom group provides diversified services encompassing fixed and mobile telephony,
broadband, data services, Internet Protocol Television, cloud computing and hosting services and networking solutions.

Vision
All Sri Lankans seamlessly connected with world-class
information, communicaiton and entertainment services

Mission
Your trusted and proven partners for innovative and
exciting communication experiences delivered with passion,
quality and commitment

Values
Customer 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
   Annual Report 2021  | 5

Over
65,000 Km 10.2 Mn
Fiber Network Subscribers

Rs.12 Bn Rs. 102 Bn

Group Profits Group Revenue

Rs.220 Bn
Total Assets

A Diverse Portfolio of Telecommunication Services

Fixed ICT Operations Mobile ICT Operations Other Segment Operations

Data
Voice
Mobile High Speed Software Solutions
Services Provided

Telephony Broadband
Healthcare Channelling
Data Center
Broadband Digital Marketing Solutions
and Cloud
Submarine Cable Maintenance
IDD Services Enterprise ICT Infrastructure & System
IPTV Solutions Integrator Solutions
Wholesale
Tertiary Educational Services
Directory Services
Mobile Money Property Development
Digital International

Next Generation Network (NGN) 4G-LTE/ 4.5G LTE Advanced

National Backbone Network /4.5G Pro LTE Advanced Pro
(NBN) Carrier Grade WI-FI
Optical Fibre VoLTE / VoWIFI
Technology

ADSL2+ NBIOT
VDSL2 Mission Critical Solutions
Carrier-grade WiFi 5G
Fixed 4G LTE
Multiple international submarine
cable networks

Rs.54.69Bn Rs.45.58Bn Rs.2.08Bn

Relevance to Group

Revenue Revenue Revenue

Rs.158.20Bn Rs.78.03Bn Rs.5.65Bn

Assets Assets Assets
6  |  Sri Lanka Telecom PLC

OUR SOCIOECONOMIC IMPACT

DIGITAL INNOVATOR
COVERAGE INCLUSION DELIVERED SLT RESEARCH &
SLT’s fibre technology deploys Enabling integration of all Sri DEVELOPMENT CENTRE
over 65,000 km of cables and Lankans to a knowledge economy Collaboration with several
500 nodes to provide islandwide with end-to-end fibre connectivity universities to fast track
coverage. Rural penetration to on dedicated lines through a innovative products to market
bridge the digital divide is a key digital highway with speeds from transforming lifestyles through
component of its strategy 100 Mbps up to 1,000 Mbps. relevant products and services.
Also established Research
& Development centres at
Universities of Moratuwa and
Peradeniya.

DIGITAL
INCLUSION

AFFORDABILITY
The unified brand, SLT-MOBITEL has
the ability to provide telecom networks
and ICT services to domestic customers,
public and private institution of all sizes
across all economic sectors, as well as to
other telecommunications operators and DIGITAL
internet service providers (ISPs).
INNOVATOR
HEALTH
SLT was a vital partner for the
healthcare sector in the country
which was critical for management HEALTH
of the pandemic. SLT provided
echannelling services and
specialised services to hospitals
while healthcare staff in specific
locations were able to get a
free connection and 3 months
voice and data free through the
Suvawiru Upahara programme. VALUE ADDED
SLT Group continues to
IT add value to the Sri Lankan
LITERACY economy.

FOR SCHOOLS SUPPORTING

SLT Group invests in multi-pronged efforts to EMPLOYMENT &
enhance digital literacy of Sri Lankans. These LIVELIHOODS
include: SLT Group provides direct
CSR Projects to build smart classrooms in employment to over 8,000
remote schools IT SKILLS DEVELOPMENT employees around the country.
Donations of computers to under- It also provides indirect
Facilitating digital enablement for
privileged schools employment to outsourced
all Sri Lankans, paving the way for
12 Months of rental free broadband employees through our
IT skills development across the
ICT awareness for teachers islandwide network of branches.
country
Introducing e-learning platforms such as
SLT Lynked, e-siphala
   Annual Report 2021  | 7

INVESTING IN
INFRASTRUCTURE
SLT Group has invested
FUTURE Rs. 28.5 Bn in expansion of
READY its network, upgrading its IT
systems and its Headquarters A UNIFIED BRAND
projects. TO DELIVER THE
FUTURE
The SLT Group plays a
critical role as a catalyst
in Sri Lanka’s integration
to the global economy
through future forward
investments in digital
infrastructure, imagining
our future. Partnering with
the government as a key
A PARTNER
FOR stakeholder in ensuring
PROGRESS that the country’s digital
infrastructure is fit for the
future, Group's innovative
ICT solutions underpin the
connectivity and smooth
functioning of our daily
A CHANGE AGENT lives.
Investments in 4G LTE, 5G and
fibre propel has made Sri Lanka
The unified SLT-MOBITEL
a leader in technology in South
SOCIO Asia keeping pace with emerging brand builds on a legacy of
ECONOMIC technologies such as AI, ML, IoT, over 164 years to provide an
PROGRESS virtual reality etc. unparalleled customer value
proposition that supports
the vision of a technology-
based economy that
benefits all.

SLT-MOBITEL enables the

fulfilment of customer
aspirations, be it in life or
POWERING THE IT ENVIRONMENTALLY in work, making for greater
SECTOR RESPONSIBLE efficiency, ease and limitless
A rapidly growing IT sector SLT Group integrates environmental opportunities.
is highly dependent on SLT consideration into its strategy
Group solutions to power their and investment decisions as it
businesses, a responsibility we is committed to minimising its
take seriously as we continue carbon footprint.The first Sri Lankan
to ensure the country’s telecommunications operator
integration to a virtual global to receive ISO 14064-1:2018
market place. certification for greenhouse gas
(GHG) emissions assessment.
8  |  Sri Lanka Telecom PLC

OUR SOCIOECONOMIC IMPACT

OUR COVERAGE
OUR REACH an ultra-high-speed capacity and
The rapid growth of its SLT Group has islandwide coverage cutting-edge routers facilitating new
for fixed and mobile ICT services high-speed broadband services to
broadband footprint enterprise and residential users across
reaching over 10.2 million subscribers,
in Sri Lanka addresses supporting digital inclusion for all the country.
the growing demand Sri Lankans. Our customers include
Over 10.2 million subscribers across
domestic users, small and medium
from customers for enterprises (SMEs) retail customers, Sri Lanka are connected with voice
and broadband wireless services via
ultra-broadband, paving multinationals and large enterprises,
GSM/EDGE (2G/2.5G), UMTS/HSPA/
public sector institutions, other
the way to providing a operators and wholesale customers. HSPA+/DC-HSPA+ (3G/3.5G/3.75G),
plethora of broadband- This is facilitated by an extensive fibre LTE/LTE-Advanced (4G/4.5G)
optic network of nearly 65,000 km technologies through Mobitel.
based services. It across the country with broadband
supports future proofing speeds of up to 1 Gbps. The rapid growth of its broadband
footprint in Sri Lanka addresses the
of its network growing demand from customers for
NETWORK CONNECTIVITY
ultra-broadband, paving the way to
SLT replaced its legacy access network
providing a plethora of broadband-
with fibre technology as part of its
based services. It supports future
accelerated fibre initiative, laying
proofing of its network, enabling its
65,000 km of core fibre throughout
evolution to virtualisation and software
the island, monetising the access
defined access networks (SDAN) by
network of copper cables valued
software upgrades.
over LKR 6 Bn. Traffic originating
from various points in the island is
NATIONAL BACKBONE
accumulated by more than 500 nodes
NETWORK (NBN)
connected throughout the country,
routing data to its destination within SLT’s advanced fibre optic based
milliseconds. The core transmission nationwide telecommunication main
network supports the speeds with backbone network is critical to the

SLT MOBITEL

Jaffna SLBN Network 4G Network

IP Network Jaffna 5G Enabled Cities

Kilinochchi

Mannar Chettikulam

Vavuniya

Horowpathana
Madawachchiya Trincomalee
Anuradhapura
Anuradhapura
Habarana

Polonnaruwa

Batticaloa
Chilaw
Kurunegala
Matale

Kegalle Kandy Kalmunai

Negombo
Gampaha Nawalapitiya Bandarawela Ampara
Kelaniya
Maradana
HavelockTown AvissawellaNuwara EliyaBadulla
Welikada
Colombo Kotte Hatton
MountLavinia Monaragala Colombo
Horana
Ratnapura

Kalutara
Embilipitiya

Galle Hambanthota
Tangalle Galle
Matara
   Annual Report 2021  | 9

SLT Global Network SEA-ME-WE 6 CABLE SYSTEM

SLT Global Network

MARSEILLE
FRANCE
ATHENS
MAZARA GREECE
ITALY

PORT SAID
RAS GHARIB EGYPT KARACHI
EGYPT PAKISTAN
COX’S BAZAR
YANBU MUMBAI
BANGLADESH
KSA INDIA
CHENNAI
INDIA
MORIB
MALAYSIA
DJIBOUTI MATARA
DJIBOUTI SRI LANKA
TRUNK
BRANCH HULHUMALE
OPTION MALDIVES
TUAS
SINGAPORE

high-capacity nodes and over 3,500 a capacity to connect to the East and

Access Nodes
service segregation nodes. These West cable segments at 39 Tbps each.
provide intelligent IP transport
services for various platforms which The proposed SEA-ME-WE 6
in Network are related to delivering SLT’s retail
products (broadband, PeoTV, 4G, and
submarine cable system that will run
from Singapore to France has a design
No of MSAN Wi-Fi) and connecting government, capacity of more than 100 Tbps with

5,628
enterprise, and network carriers. The completion date set for Q1 2025. This
NBN aims to pave the way for Sri is a key part of the content delivery
Lanka’s ICT development, meeting the network supporting SLT plans to
future needs of all ICT operators in the focus on supporting rich media and
country. video content in the future. The cable
No of OLT network is a vital component of the Sri

471
SOUTH ASIA’S FIRST Lanka’s 5G network as well, providing
SUBMARINE CABLE DEPOT customers access to rich content
The Galle Submarine Cable Depot hosted in other countries with high-
Ltd. is South Asia’s first submarine speed connectivity to those locations.
cable depot, located in Galle. A joint The investment in SEA-ME-WE 6
venture between SLT and the Indian cable has moved Sri Lanka’s global
digitalisation of the country and Ocean Cableship Private Limited connectivity capacity to the next level
connectivity to global opportunities, (IOCPL), it seeks to provide submarine - with Terabits of capacity; making Sri
vital to the country’s development cable spare storage facilities for Lanka and SLT ready to take on the
in a digital era. Built on 100G regional telecom operators under the anticipated data explosion.
technology, 500+ nodes, and 63 South East Asia Indian Ocean Cable
SLBN nodes function continuously Maintenance Agreement (SEAIOCMA)
with comprehensive protection zone. The Submarine Cable Depot
schemes such as Automatically commenced operations in January
Switched Optical Network (ASON) 2019.
and a comprehensive 1+2 redundancy
system. The high quality network is GLOBAL CONNECTIVITY
one that features a high speed of 8 SLT connects Sri Lanka to the world
Tbps combined with extremely low through five international submarine
latency. cable systems-SEA-ME-WE 3, SEA-
ME-WE 4, SEA-ME-WE 5, Bharat-
SLT’s IP network is the largest network Lanka and Dhiraagu-SLT system. We
in the island, comprising 100 Gbps are also a key member of the SEA-
backbone, metro rings, and multiple ME-WE 5 cable consortium with a full
access rings consisting of over 500 cable landing station in Matara with
10  |  Sri Lanka Telecom PLC

OUR SOCIOECONOMIC IMPACT

VALUE ADDED STATEMENT

2021 % 2020 %
Rs Mn. Rs Mn.
Value Added

Revenue 102,348 91,119

Other Income 2,478 2,186
104,826 93,305
Goods and Services purchased from other sources (37,083) (32,466)
Value creation 67,743 60,839

Distribution of Value Added

To Employees 20,701 30.56 19,268 31.67
  - Salaries ,wages and other benefits
To providers of capital
  - Dividend to shareholders 3,646 5.38 2,689 4.42
To Government
  - Taxes and Regulatory fees 4,051 5.98 5,768 9.48
To Lenders
  - Interest and Related charges 3,504 5.17 4,105 6.75
To Business Expansion and Growth
  - Depreciation 27,326 40.34 23,817 39.15
  - Retained Income 8,515 12.57 5,192 8.53
67,743 100 60,839 100

2021 2020
% %

30.56
31.67

To Employees
52.91 47.68 To providers of capital
To Government
To Lenders
To Business Expansion & Growth
5.38 4.42
5.98
9.48
5.17 6.75
   Annual Report 2021  | 11

GROUP STRUCTURE 100%

Mobile service provider

87.59%
E-Channelling PLC
Pioneer software development and ICT services
for the Healthcare industry

100%
Software solutions provider

100%
Digital marketing, directory services, web development,
event management and brand activation services

100%
Internet Protocol Television (IPTV) Services provider.

100%
Dormant company as operations ceased with
the deployment of staff by SLT

100%
Total HR solutions provider

100%
Managing SLT’s real estate resources

99.99%
Network and systems integration solutions provider

40%
Galle Submarine Cable Depot (Pvt) Ltd
Submarine cable depot service provider
12  |  Sri Lanka Telecom PLC

PERFORMANCE HIGHLIGHTS
SLT Group plays a vital role in enabling the Government’s vision of a “Digitally Inclusive
and Prosperous Sri Lanka”, which is citizen-centric, promoting IT entrepreneurship and
establishing Sri Lanka as a global innovation hub.

REVENUE PROFIT AFTER TAX EBITDA EARNINGS PER SHARE

Rs. Million Rs. Million Rs. Million Rs. Million
Financial Capital

102,348
91,119

12,161

35,450

41,170
7,881

4.37

6.73
2020 2021 2020 2021 2020 2021 2020 2021

LIABILITIES SHAREHOLDERS’ FUNDS ASSETS

Rs. Million Rs. Million Rs. Million

125,965 93,976 219,941

(2020 – Rs. 120,175 Million) (2020 – Rs. 84,281 Million) (2020 – Rs. 204,456 Million)

CAPEX PPE DEPRECIATION

Manufactured Capital

Rs. Million Rs. Million Rs. Million

22,176
(2020 – Rs. 19,115 Million)
137,208

141,937
16,467

28,548

2020 2021 2020 2021

BRAND NO. OF
VALUE AWARDS
Rs. Billion No
Intellectual Capital

22.3 11
Awards for SLT

VALUE OF
OPERATING LICENSES
7
Awards for Mobitel
Rs. Billion

5.1
   Annual Report 2021  | 13

NO OF NUMBER OF
EMPLOYEES NEW RECRUITS
No No

6,590 1,442 185 174

Human Capital
SLT Mobitel SLT Mobitel

FEMALE TOTAL TRAINING

REPRESENTATION HOURS
No

26% 29% 130,827 22,086

SLT Mobitel SLT Mobitel

YEAR END TAXES PAID TO THE HOLISTIC CSR

Social and Relationship Capital

CUSTOMER GOVERNMENT INITIATIVES
SATISFACTION Rs. Million Rs. Million

INDEX
85%
17,113

19,320

35,450

35,450

2020 2021 2020 2021

ZERO INSTANCES OF NON-COMPLIANCE

Natural Capital
14  |  Sri Lanka Telecom PLC

2021 AT A GLANCE
2021 2020 Change
Group
Revenue 102,348 91,119 12.3%

EBITDA 41,170 35,450 16.1%

Operating profit 13,844 11,632 19.0%
Profit before tax 12,818 9,713 32.0%
Profit after tax 12,161 7,881 54.3%

Earnings Per Share (LKR) 6.73 4.37 54.1%

Company
Revenue 59,811 51,552 16.0%

EBITDA 21,446 18,425 16.4%

Operating profit 3,336 3,502 -4.7%
Profit before tax 5,085 4,539 12.0%
Profit after tax 5,865 4,019 45.9%

Earnings Per Share (LKR) 3.25 2.23 45.9%

Revenue Profit Before Tax Current Assets

Rs. Bn Rs. Bn % FY 2021
9% FY 2020
120 14

100 12
9%
10 46%
80
8 33% 58%
60
6
40
4
20 2 45%

0 0 Current Receivables
2019 2020 2021 2019 2020 2021
Other Investments, Cash &
Fixed Mobile Others PAT Taxation Cash Equivalents
Other Current Assets

Use of EBITDA Dividend Per Share (DPS)

Rs. Bn % Rs.

50 42 2.5

40 40 2.0

30 38 1.5

20 36 1.0

10 34 0.5

0 32 0.0
2019 2020 2021 2017 2018 2019 2020 2021

PBT Net Interest

Depreciation EBITDA Margin

& Amortisation
16  |  Sri Lanka Telecom PLC

GROUP CHAIRMAN’S MESSAGE

Sri Lanka Telecom is the success story for privatization in the state sector. It has recorded
strong growth in earnings post privatization while expanding its pivotal role in the digital
evolution of the country.

Sri Lanka Telecom is

an asset rich company
with a vast majority
in Property Plant &
Equipment, In addition to
considerable investments
in technology.
   Annual Report 2021  | 17

Dear Shareholders, optimisation. The excellent financial reviewed for monetizing through
results posted this year is the success strategic partnerships. The Company
I am pleased to report that Sri Lanka of these deliberations during 2021. is confident of a good revenue from
Telecom Group recorded a stellar this exercise and hopes to create a
performance delivering earnings A BLUEPRINT FOR GROWTH new revenue line of approximately
growth of 54% to Rs.12.2 Bn in The outcome of the first board 500 million per annum soon.
2021. Its balance sheet strengthened meeting was a blueprint for unlocking
recording asset growth of 8% to value to realise the potential of this The brand unification launched in in
Rs.220 Bn and equity growth of 11% nationally significant institution. I am the beginning of 2021 supported the
to 93.9 Bn in 2021. More importantly, happy to see that the early initiatives “One stop shop” concept which is
its relevance to the country’s implemented in 2020 stabilised the now being implemented throughout
socioeconomic progress continues to company and enabled its move to the country. This enabled the Group
grow as we reach more subscribers the top of the ladder in 2021. The to save rental expenses through the
with our unified brand value consolidation of Group companies consolidation of operations under
proposition while fulfilling our role as under a Group CEO in 2020, was one roof. It also showcased the full
a catalyst for the digital transformation further enhanced with all main spectrum of services and devices and
of the country at individual and functions of HR, Finance, Legal and enhanced the customer experience.
enterprise levels. Brand Marketing being brought under For the next level of customer
the group umbrella for a unified and convenience, we are focusing on bill
On the negative side, the super gain focused strategic direction. convergence for which approval from
tax proposed by the government the Telecom Regulatory Commission
will dent our profitability and cash The unified brand SLT-MOBITEL is awaited. Additionally, the role out
flows. Nevertheless, as a responsible launched on the first working day of of 5G technology will be available for
corporate we shall bear this in the January 2021 was key to unlocking experience in selected outlets.
hope it will help tide over the critical value and realizing Group synergies.
economic issues faced by the nation. We were able to achieve this in a cost- UPHOLDING TRUST
effective manner as it was done within Sri Lanka Telecom upheld the
A SUCCESS STORY the process of the advertising pitch country’s trust during the past two
Sri Lanka Telecom is the success presented by all reputed advertising years as we all navigated perhaps
story for privatization in the state agencies in Sri Lanka. By channelling the most challenging period in living
sector. It has recorded strong growth the entire group advertising through memory. As the pandemic changed
in earnings post privatization while one agency after a successful pitch, we the way we work, learn and live,
expanding its pivotal role in the were able to manage costs effectively. telecommunication was the lifeline for
digital evolution of the country. Listed those who were sick, in quarantine or
in CSE with a govt holding of not The core principles, zero corruption, in need of comfort. Despite the health
more than 49.5%, we are currently minimum wastage, maximum and safety challenges to our teams
in discussions for further dilution of efficiency and inclusive management and the business disruptions, Sri Lanka
equity as specified under listing rules the new Board introduced in the Telecom upheld the trust of an entire
to meet main board requirements. SLT beginning of 2020, are now firmly nation providing an uninterrupted
market capitalisation of over Rs.70 Bn embedded in the governance code service and supporting the migration
representing approximately 1.5% of of operations. These helped in of thousands of businesses and
the market capitalisation of the CSE is building confidence between the people to digital platforms. It is hard
backed by a strong domestic franchise staff and the management and the to think of how we, as a nation, could
that has gained strength with the adoption of new strategies. These have managed to maintain even the
brand unification implemented critical changes made Sri Lanka subdued levels of economic activity
in 2021. Telecom the most powerful player since the pandemic without this iconic
in the telecommunications sector company upholding its promise.
In January 2020, we saw a company in the country with the broadest
with immense potential, but its presence across the value chain The leadership strategized to
progress was obstructed in several and unparalleled capacity to meet overcome the multiple challenges and
areas. Staff unrest was at the top of the needs of up-and-coming tech our field staff worked in the front lines
the list with regular strikes and work companies, large corporates, general at considerable risk to provide new
stoppages leading to poor messaging public and the state institutions. connections and address complaints,
to the customers especially, the all united by a sense of purpose.
corporate sector. There were also UNLOCKING VALUE Throughout this period, our staff
significant investments made but Sri Lanka Telecom is an asset rich remained motivated and national
without the desired ROI. These company with a fast majority in minded while effective engagement
were some of the key challenges Property Plant & Equipment, In with trade unions supported business
the new Board addressed and took addition to considerable investments continuity throughout this critical
result-oriented steps to take SLT to in technology. SLT real estate portfolio period. It is important to note that
a new era of growth and resource listed in the Annual Report is being we maintained our prices throughout
18  |  Sri Lanka Telecom PLC

GROUP CHAIRMAN’S MESSAGE

this period to ensure that our services footprint and reduce the MSAN
Sri Lanka Telecom plays remained affordable to our customers, impact. Solar, wind, hydro and other
making Sri Lanka one of the cheapest renewable energy options are being
a key role in inclusive countries for telecommunication evaluated to facilitate our transition to
progress for all Sri services. low carbon and renewable sources of
energy.
Lankans as connectivity We needed to rewrite the book
empowers them to on managing the pandemic as we SLT commenced its campaign to
continued to be dogged by variants plant Mee trees (Madhuca Longifolia)
access a host of services and waves in 2021 despite extensive islandwide under the ESG protocols
and improve their vaccinations. Cybersecurity was a key to improve environment, empower
lifestyle. Connecting concern as we also had a threat on underprivileged villages and govern
ransomware. Managing these twin the program through KPI’s including
rural villages through the threats made business continuity geo tagging the plants and their
“Gamata Sannivedanaya” planning a priority and significant ownership. Mee is an indigenous tree
time and resources were allocated with natural pest control properties
programme is an to strengthening our defenses and and contributes to fertilizing the
example of our vision of response mechanisms. A vigilance soil and purifying the air. It is a
committee was established which met historically significant tree as etched
empowering Sri Lankans weekly to assess the situation and in our ancient stone tablets. This is
to participate effectively address the issues. Sri Lanka Telecom an example of our commitment to
upheld its trust with its employees as finding sustainable solutions through
in the socioeconomic we implemented several measures knowledge, nature and science
progress of our country. for their safety and that of their aligned with our culture and heritage.
families. Our holiday bungalows were
converted to quarantine facilities The campaign will run over a few
for staff and their families. We also years and expand to other valuable
booked space at specialised care tree species with an aim of exceeding
centres managed by hospitals for million plants and earn carbon credit
employees who needed additional for the Company.
care. We also provided dry rations
for employees who tested positive Integration of ESG into our systems
and their families. A Group wide and processes and the work culture
campaign to vaccinate our staff rallies all to work beyond profit. Sri
enabled us to get 90% of our staff Lanka Telecom plays a key role in
vaccinated with two doses and now inclusive progress for all Sri Lankans
the booster is being administered as connectivity empowers them
to safeguard them. Employees also to access a host of services and
had access to medical advice through improve their lifestyle. Connecting
our e-channelling service. Sri Lanka rural villages through the “Gamata
Telecom was the first to contribute Sannivedanaya” programme is an
to the COVID fund as well. We are example of our vision of empowering
now able to move forward as a more Sri Lankans to participate effectively
resilient Group with an enhanced in the socioeconomic progress of our
employee value proposition and country. Other social aspects include
the readiness to meet unforeseen providing digital access to health and
challenges. other common services especially
the “connect schools” program
INTEGRATING ESG through our fibre optic backbone
Sri Lanka Telecom is committed to for uninterrupted connectivity for
integrating ESG best practices into its advanced education as an alternative
business model, making it an essential to tuition.
part of our operating structure. A
large energy bill provides strong NAVIGATING 2022 & BEYOND
motivation to formulate a holistic, The fragile global economic recovery
long-term response and we will observed in 2021 received a body
continue to seek solutions to reduce blow with the Russian invasion of
our energy consumption. Expansion Ukraine in March 2022. Locally,
of our fiber network coverage will the country continues to struggle
support a decrease in our carbon with the foreign exchange liquidity
   Annual Report 2021  | 19

crisis and sharp devaluation of the increased capacity will support the ESG at its core. I am grateful for the
rupee in March 2022 as looming growth of data centres, supporting commitment of the Board of Directors,
debt repayments continue to hinder new employment opportunities in the for their cooperation in this regard
economic progress. It has also country. and for their support in driving the
triggered a potential energy crisis changes required to transform Sri
which is a growing concern. Rising We are also enhancing our data Lanka Telecom into a resilient future
inflation which is a global issue centres and transforming them to data forward technology company that can
is amplified in the local context, farms, encouraging corporates to use lead Sri Lanka trough the 5th industrial
exacerbating the challenges ahead. our data servers as opposed to the revolution.
We are cautiously optimistic that current model of operating their own
the pandemic is nearing endemicity, server rooms which is an expensive All of this is possible due to a loyal
although we remain on high alert for solution. Our data farms will enable customer base that continues to
developments around the world. these corporates to reduce the cost of trust Sri Lanka Telecom for inclusion
operations while retaining control over in the socioeconomic progress of
Our relevance to customers increased their information assets. This will be a the country as we empower them to
as we transformed from a telephone key campaign for Sri Lanka Telecom connect locally to global opportunities
company to a tech company that in 2022. for learning, earning and innovating.
is a catalyst for Sri Lanka’s digital The Board, our teams and I are
transformation. We are excited about Sri Lanka Telecom will also leverage committed to paving the way to
delivering the future today as we its Group strength through a Group empower our customers through a
connect people with fiber network to Treasury function to manage Group growing portfolio of products and
their homes, creating safe wi-fi zones cashflows, reduce interest rates and services that will support their lifestyle
to supporting a future fit lifestyle. strengthen the Group’s financial and career aspirations, taking Sri
resilience with zero debt by 2023. We Lanka to a new era of growth.
In 2021, we established “The are pleased that we are very much on
Embryo”, our own research and course towards this goal with stringent
development arm which stems from financial management and optimized
the infusion of yin and yang to give use of assets.
life to ideas. Under this, we provide
facilities to start up tech companies We had a change in leadership at Rohan Fernando
and our own innovators who will Mobitel in 2021 as Mr. Chandika Chairman SLT Group
develop coding and applications. Vithanage took over the reins. There
was a change in leadership at Sri 15 March 2022
A number of projects have been Lanka Telecom in February 2022 as
undertaken by “The Embryo” and we well with Mr. Janaka Abeysinghe
will see new products coming out of taking over as the Chief Executive. A
this in 2022 which will enhance our new COO is also designated to take
product range to customers and new over in July 2022. These changes
applications and coding to improve will also support new ideas and
our own systems. These innovations development of new capabilities
will transform our houses to smart across the Group.
homes with hither to unknown
features. This will deliver services such ACKNOWLEDGEMENTS
as medical consultations, security, All of the above would not have
entertainment, education and also been possible without the willing
empower people to work and transact cooperation of key stakeholders. The
from the comfort of their homes management and the employees of
facilitating a new era of smart living, the Sri Lanka Telecom Group have set
an example to all utility companies
Although we delivered reliable Wi- in the country as they worked
Fi despite the upsurge in demand throughout the difficult times without
during the pandemic period, one of unfair demands demonstrating the
our issues has been the speed. This commitment to serve the nation and
is being addressed by increasing its people at a critical time. The Board
the bandwidth with an investment joins me in commending their efforts
of US$ 50 Mn from our own funds in and thanking them for their unstinted
a new under the sea cable together support.
with a consortium of 16 telecom
companies in the region to improve Effective leadership is a sine qua
broadband and data services. The non for sustained growth integrating
20  |  Sri Lanka Telecom PLC

GROUP CHIEF EXECUTIVE

OFFICER’S MESSAGE
The cornerstone of the Group’s strategy was the SLT-Mobitel brand unification which
supported realisation of significant group synergies and the positioning of the Group as the
National ICT solution services provider.

Sri Lanka Telecom

Group delivered a
strong performance
with topline growth of
12.3% year on year to
Rs.102.3 Bn boosted
by 16% growth in fixed
telephony operations
and 9% growth in mobile
operations.
   Annual Report 2021  | 21

Dear Stakeholders, overcome significant challenges in at the same award programme

2021 and increase the efficiency of organised by the Ceylon Chamber of
REFLECTIONS ON 2021 our operations. We anticipated the Commerce.
Digital transformation across the evolution of technology before it
world accelerated with the onset of transformed, and we were future DELIVERING PERFORMANCE
the COVID-19 pandemic in 2020 and ready in terms of infrastructure Sri Lanka Telecom Group delivered
continued to gather momentum in developments for the modern a strong performance with topline
2021. Sri Lanka Telecom has been at technology. SLT-MOBITEL now clearly growth of 12.3% year on year to
the forefront of the country’s digital poised as the National ICT solution Rs.102.3 Bn boosted by 16% growth
transformation, supporting people, services provider, reinforcing our in fixed telephony operations and
businesses and government entities strengths to provide an unmatched 9% growth in mobile operations.
migrate to digital platforms for a value proposition to individuals and Profit After Tax growth of 54.3% to
growing number of applications. As corporates of all sizes. Rs.12.2 Bn was largely attributable
the pandemic continued to disrupt to the enhanced profitability of
economic activity in 2021 as well, GROUP STRATEGY AND VISION mobile operations which increased
digital platforms continued to keep The cornerstone of the Group’s by 63.8% to Rs. 8 Bn accounting for
people connected and entertained strategy was the SLT-Mobitel brand 66% of Group Profits after tax while
while supporting learning and working unification which supported realisation profitability from fixed telephony
from home, significantly minimising of significant group synergies and operations increased by 46% to
its impact. Several key industries the positioning of the Group as the Rs. 5.9 Bn accounting for the balance.
including banks, hospitals, the retail National ICT solution services provider. EBITDA of the Group grew at 16.1%
and food industries accelerated digital These include the ability to offer to Rs. 41.17 Bn supporting a high
empowerment of their customers seamlessly integrated solutions to level of liquidity and strong cashflow
which supported the surge in customers, strengthening customer generation.
e-commerce and online transactions service and driving significant cost
in 2021 facilitating enhanced efficiencies in a number of areas. It Group profits were propelled forward
customer satisfaction. These initiatives also eliminated confusion of brands by by robust performances by multiple
led to significant progress of the customers who are now able to obtain business segments, improving
Government’s vision for a digital the full range of solutions under one financial resilience through improved
Sri Lanka. roof. diversification of revenues. 2021
saw a surge in broadband revenues
Sri Lanka Telecom continued to invest We also divested non-core businesses supported by increased connections
in upgrading its infrastructure, paving to concentrate on our core and usage. Revenue growth in PEO
the way for Sri Lanka’s integration businesses which has supported our TV was also encouraging as more
into the global marketplace and the performance during the year as we consumers sought broader menus for
5th industrial revolution that we are are now realizing the benefits through entertainment. We also strengthened
living through. We are expanding our improved focus and productivity. our value proposition to global
fibre and 5G technology networks to Further, the clear definition of metrics businesses with Xyntac, the Group’s
support higher speeds for all. With and goals supported oversight evolving digital communications
the brand unification, we focused and performance management, ecosystem that has the capability
on delivering integrated solutions synchronizing activities towards to provide transport speeds upto
combining the wide range of organisation goals. These initiatives multiple speeds of 100 Gbps through
services provided by both Sri Lanka supported the SLT Group to record ownership of major submarine cable
Telecom and Mobitel to provide total the highest turnover in its entire systems and partner cable systems.
solutions for individual and corporate history while maintaining prices
customers. Our integrated enterprise and ensuring that access to Wi-Fi Financial resilience was further
solutions are unparalleled supporting remained affordable with attractively improved with the decrease of
growth of the country’s vital IT sector priced Work From Home (WFH) and Rs.8.5 Bn in borrowings during the
which is key to its socioeconomic Work From POD (WFP) packages to year under review which was also
progress. Our investments in the support people through the pandemic supported by an increase of 11% in
SEA-ME-WE cables have been the years. equity to Rs.93.9 Bn. Accordingly,
gateway to the country’s integration the debt equity ratio improved from
with the world and we are now Sri Lanka Telecom was ranked 78.2% in 2020 to 66.1% in 2021.
investing in our 6th cable enhancing among the Top Ten in the country’s Liquidity of the Group also improved
capacity and speed which will be prestigious Best Corporate Citizen as operating cashflows recorded an
commissioned in 2022. Sustainability Awards in 2021 and was increase of 35% to Rs.43.6 Bn. We
also the winner of the Other category. invested Rs.30 Bn in new technologies
A commitment to drive growth Our efforts to support the nation and enhancing our capabilities
without corruption and waste in during the pandemic were recognised in 2021, a near doubling of the
an inclusive manner supported with an award for demonstrating investments made in 2020 enhancing
the Sri Lanka Telecom Group to resilient practices during this period our revenue generation capabilities.
22  |  Sri Lanka Telecom PLC

GROUP CHIEF EXECUTIVE OFFICER’S MESSAGE

Cash and cash equivalents at the close with employees receiving 8 hours of
Sri Lanka Telecom is of the year increased by 63% to Rs.16 training on average which we plan
Bn providing sufficient liquidity while to increased to 12 in the coming
transforming from a the overall financial position provides year. A retention rate of 95% affirms
Telecommunications sufficient headroom for pursuit of our the strength of our employee value
strategic goals to drive sustainable proposition with many employees
company to a Technology growth in earnings. encouraging the next generation to
company as we broaden join in as well.
I am pleased to report that the market
the customer value capitalisation of Sri Lanka Telecom FORMULATING OUR CLIMATE
propositions for different PLC increased by 15.8% to Rs. 70 Bn AGENDA
customer segments, during the reporting period, reflecting Sri Lanka Telecom commenced
the shareholder value created in 2021. its journey towards becoming a
delivering the future carbon neutral organisation in
today. We will expand VALUE DELIVERED TO 2018. Phase I to assess the carbon
EMPLOYEES footprint and obtain ISO certification
our 4G network beyond People strategy was critical to has been completed and we are
40% and also activate 5G alignment of employee and now in Phase II, which focuses on
in 2022. organisational objectives and to energy management and policy
the realisation of synergies through implementation. Several projects are
the brand unification. The more being rolled out across the Group to
inclusive and participative style of mitigate carbon emissions as a unified
management adopted from 2020 with brand. We are now in the process of
the absorption of outsourced staff into setting up a timeframe with external
the permanent cadre worked well and consultants to reach our goal in 5
the trade unions cooperated to ensure years. Apart from this, we continue
business continuity throughout the to increase awareness on the urgent
pandemic lockdown periods. In 2021, need to preserve the environment and
we enhanced the performance culture reduce environmental degradation.
by introducing a performance based Minimising waste was a key dimension
bonus linked to the performance with initiatives to convert waste to
management system, a supervisor cash supporting cost efficiencies.
peer evaluation system and a research As the only provider of fibre-to-the-
and development platform to home connectivity in Sri Lanka, we
capture employee ideas, enhancing have begun replacing traditional
recognition and rewards. We also copper cables with modern fibre optic
launched a Regional Awakening cables for high speed internet across
initiative to empower the regions the country. We then completely
under the General and Deputy repurpose those copper cables
General Managers to ensure that for traditional operations, reusing
progress benefited those who served resources that would otherwise have
around the country as well. been discarded as waste. Mee Tree
planting campaign is another project
The holistic care program which will support offsetting carbon
implemented for employees during emissions and has the potential to
the pandemic included the conversion create a revenue stream by generating
of the three holiday homes into carbon credits. A dedicated
quarantine centres, reserving space Power and energy department is
with intermediary care centres and implementing plans to diversify our
provision of dry rations for infected energy sources through investments
employees and their families. Capacity in renewable energy such as solar and
building has been a key area of focus biomass.
   Annual Report 2021  | 23

DELIVERING THE FUTURE Commission who continued their

The increasing reliance on digital collaborative and proactive approach
platforms to support lifestyles and to regulatory matters. In conclusion, I
how we do business underpins thank all our customers and business
our plans for growth. Despite the partners who all played a vital role in
uncertain economic landscape, there driving our growth in 2021 and look
has been no abatement of the pace of forward to sharing our journey with
technology evolution and we observe them.
an acceleration as there is increasing
acceptance and understanding of
the benefits. Regulation of the sector
continues to evolve and our position
as a National ICT Provider ensures that Lalith Seneviratne
we are engaged in the discussion and Group Chief Executive Officer
are cognizant of the multidimensional
socioeconomic impacts of this rapidly 15 March 2022
evolving industry.

Sri Lanka Telecom is transforming from

a Telecommunications company to a
Technology company as we broaden
the customer value propositions
for different customer segments,
delivering the future today. We will
expand our 4G network beyond 40%
and also activate 5G in 2022. Our fibre
network will be expanded as well,
using Fibre to the roof technology to
ensure it is safe and a viable option.
Investing in the SEA-ME-WE 6, the
newest undersea able running across
the globe will be key to improving
global connectivity. Ensuring our
customers are part of our journey is
key and we are planning to introduce
affordable 4G devices through our
joint venture which will do local
assembly.

ACKNOWLEDGEMENTS
Everyone played a part in delivering
the outstanding performance set out
in this report. I commence by thanking
my team and the CEOs who led the
teams to deliver on multifaceted
strategies despite the challenges.
I am also grateful for the direction
and guidance provided by the Board
which was available for counsel when
needed. We thank the Sri Lanka
Telecommunications Regulatory
24  |  Sri Lanka Telecom PLC

CHIEF EXECUTIVE
OFFICER’S MESSAGE
As an organisation, SLT adopted a holistic and strategic approach aligned to our aspiration
of driving connectivity through three pillars, namely being a catalyst in Sri Lanka’s digital
journey, strengthening global connectivity and investing for the future.

Our people strategy

focused on the key
pillars of empowering
our team, enhancing
productivity and offering
opportunities for training
and career development.
We also directed
significant investments in
supporting the well-being
of our people through
comprehensive health
and safety measures.

Dear Stakeholders,

The pandemic has forever

transformed what we believed to be
‘normal’, compelling communities,
organisations and individuals to
move out of their comfort zones
and adapt to unique opportunities
and challenges. In these conditions,
SLT successfully leveraged its voice
and data capabilities to support the
interconnectivity of people, playing
a vital role in ensuring continued
economic activity, education, and
entertainment in the country. This
purpose helped SLT navigate the
unprecedented challenges of the
past year, informing our strategy and
effectively directing our responses,
which in turn has enabled a strong
triple bottom line performance during
the year.

DELIVERING OUR ASPIRATIONS

As an organisation, SLT adopted
a holistic and strategic approach
aligned to our aspiration of driving
connectivity through three pillars,
namely being a catalyst in Sri Lanka’s
digital journey, strengthening global
connectivity and investing for the
future.
   Annual Report 2021  | 25

Catalyst in Sri Lanka’s digital journey infrastructure and technology. These WAY FORWARD
SLT is aptly positioned to spearhead investments are centered on providing I firmly believe that improved
aspirations towards a Smart Sri Lanka, best-in-class coverage, speed, secured and reliable connectivity is
through a multi-pronged approach security, reliability and performance a vital tool in driving socio-economic
centering on digital government, to our domestic and international empowerment and development.
digital economy, digital infrastructure customers. In 2021, we continued SLT has an important role to play in
and digital inclusivity. In 2021, to direct significant investments enabling this digital future and we are
our interventions were focused towards further expanding the FTTH deeply committed to leveraging our
towards addressing the broad- network, in line with our aspirations of capabilities, infrastructure and insights
based implications of the pandemic, delivering fibre broadband technology in propelling Sri Lanka towards the
particularly on facilitating remote to 2 million households by 2023. SLT next phase of its digital growth. Our
working, education, distribution and Mobitel also further developed its 4G short-to-medium term aspiration is to
supply chains and entertainment. network and trialed 5G technologies fortify our market position across all
Accordingly, SLT played a vital role in during the year while investing in domestic business verticals through
ensuring the continuity of economic new data centres and multi-cloud further driving rural penetration and
activity through providing the platforms. Key investments planned transforming the entire customer
necessary technology infrastructure for 2022 include the optical fibre experience to improve service levels
and offerings to facilitate work-from- network, 4G network expansions with and retention. Key investments
home, both in the Government and 5G capabilities along with Mobitel, planned for 2022 include the optical
private sector. Meanwhile, our wide- international cables, multi-cloud fibre network, 4G network expansions
ranging partnerships with Government platform expansions and carrier with 5G capabilities along with
institutions enabled the uninterrupted neutral data centres. Mobitel, international cables, multi-
provision of essential government cloud platform expansions and carrier
services across the country, which in PERFORMANCE OVERVIEW neutral data centres. The Company is
turn allowed the general public to The Company delivered a strong also pursuing opportunities to unlock
avail these services despite pandemic- performance during the year, the value of its extensive landbank,
led disruptions. A key achievement recording revenue growth of 16.0% through monetising these assets to
during the year, was SLT’s ability to to Rs.59.81 Bn and profit growth of fund expansion of our core business.
facilitate the unpredicted transition 45.9% to Rs. 5.87 Bn. Performance We are cognisant of the inevitable
to digital learning through unique was upheld by the Company’s ability short-to-medium term challenges
platforms, free access and attractive to swiftly cater to the unprecedented arising from the country’s macro-
data packages. Despite the financial surge in demand for connectivity economic vulnerabilities and shortage
and operational constraints posed and speed, as reflected by the in foreign currency which have made
by COVID-19, the Group adopted a strong growth in broadband and it difficult to import components,
long-term view to value creation and data services. Despite a marginal hardware and other infrastructure
continued to invest in the upgrade decline in operating profitability, essential for expansion. Despite these
and expansion of our network overall performance was upheld by risks, we are optimistic of the country’s
including FTTH. These investments strong dividend income from the revival over the medium-to-long
are expected to accrue significant Company’s subsidiaries. SLT also term and as Sri Lanka’s national ICT
benefits to Sri Lankan businesses, maintained financial resilience, with solutions provider, will play a central
households and the Government over equity increasing by 5% led by good role in propelling the country’s digital
the medium-to-long term, providing profitability and borrowings declining aspirations forward.
access to speedy, secure, reliable by 10%, resulting in the debt-to-
and affordable connectivity. We also equity ratio improving from 0.77 to ACKNOWLEDGEMENTS
supported continuity of agricultural 0.66 in 2021.
and other distribution chains through As I look forward to an exciting year, I
unique platforms such as Cochchi.lk would like to extend my gratitude to
and the Helaviru platform. OUR PEOPLE PROPOSITION the Chairman and Board of Directors for
SLT continued to offer a unique value their guidance and valuable counsel. I
Strengthening Global connectivity proposition to its +6,500 employees, also take this opportunity to thank each
Despite the challenges that prevailed who were a vital factor in facilitating and every member of our team and our
during the year, SLT continued connectivity and offering uninterrupted trade unions for their dedication and
to invest in expanding its global services to our customers. Our commitment in delivering the results
footprint, including our optical fibre people strategy focused on the key set out in this Report despite extreme
submarine cable systems. During the pillars of empowering our team, challenges. I also wish to thank all
year we directed investments towards enhancing productivity and offering customers, business partners and other
a new international cable system as a opportunities for training and career stakeholder who have partnered us in
consortium partner, with aim of further development. We also directed our journey and look forward to your
expanding our points of the presence significant investments in supporting continued support in the years to come.
across the globe. the well-being of our people through
comprehensive health and safety Thank you.
Investing for the future measures. The Company’s employee
Our established track record as Sri retention rate of around 95% during
Lanka’s national ICT solutions provider the year attests to the strength of its
has armed us with deep insights value proposition to employees, as
we progress towards our aspiration of Janaka R Abeysinghe
on the evolution of technology, Chief Executive Officer
which enables us to future-proof nurturing a dynamic and conducive
our business through investments in environment for our team.
15 March 2022
26  |  Sri Lanka Telecom PLC

CHIEF OPERATING
OFFICER’S REVIEW
Our people management strategy for the year centered on enhancing productivity and optimising
human capital. With new recruitments limited for the year, focus was placed on empowering the
team through providing access to technology tools, skill development and knowledge sharing.

The Group’s success

for the year was
underpinned by its ability
to swiftly embrace the
new realities of the post-
pandemic world. As
Sri Lanka experienced
2nd and 3rd COVID-19
waves, our foremost
priority was ensuring
the safety of our
employees while rolling
out our accelerated FTTH
program.
   Annual Report 2021  | 27

Dear Stakeholders, awe-inspiring, as they rallied behind emerging as key threats in the
our call to ensure uninterrupted risk landscape. We have placed
Even though the pandemic of services to customers across the strategic focus on strengthening
COVID 19 is a remaining tragedy country. our cybersecurity defenses, through
for two consecutive years in Sri enhancing end-point detection and
Lanka, as a Group, we managed to Despite the uncertainty and turbulence response systems and improving
provide boundless and continuous that prevailed throughout the year, monitoring across all platforms.
services. SLT, the national ICT the Group adopted a long-term Vulnerability assessments, penetration
and Telecommunications service view to value creation, continuing to testing and implementation of an
provider was called upon to lead direct investments towards enhancing internal security centre have also
the effort in transitioning to remote technology, connectivity and capacity. strengthened our defenses. As a result
working, online education, virtual Key investments made during the of these efforts, the Group was able
entertainment and keeping people year included expansion of the FTTH to effectively manage its cybersecurity
connected. It was a responsibility we network, aligned with our aspirations risks during the year, with no major
embraced with passion and integrity, of providing premium fibre broadband incidents reported.
and we are extremely proud of the technology to 2 million households
unparalleled role we played during by 2023. To date over 65,000km Following the strengthening of
the year in facilitating Sri Lanka’s of fiber has been laid out, with a the Group’s quality management
continued economic and social activity further 5000km expected in 2022. framework last year, we have
in these unprecedented times. We enhanced our 4G network and continued to make inroads in
started pre-commercial roll-out of our improving our processes, enhancing
The Group’s success for the year was 5G networks to offer fixed wireless workmanship, ensuring conformity to
underpinned by its ability to swiftly and mobile broadband solutions. standards and promoting risk-based
embrace the new realities of the The Group also invested in new data thinking. In 2021,we transitioned to
post-pandemic world. As Sri Lanka centres and multi- cloud platforms a 100% testing system through an
experienced 2nd and 3rd COVID-19 during the year. Increased migration to app-based platform, enabling quick
waves, our foremost priority was cloud-based platforms and multimedia reporting and immediate follow-up of
ensuring the safety of our employees consumption led to unprecedented any quality related issues.
while rolling out our accelerated FTTH demand for bandwidth, which in turn
program. The Group introduced an required continued investments in Consistently enhancing the service
array of precautionary measures to expanding the core, broadband and IP and experience offered to customers
minimise the risk of cross infection networks. Given the increased demand is a core pillar of our strategy. In recent
in line with the safety requirements on the international network, we also years, we have encouraged customers
recommended by local and global expanded our global footprint, which is to adopt digital channels to interact
health authorities. In addition to facilitated through our submarine and with us, enhancing the features and
regular PCR testing and facilitating undersea fibre optic cable systems. user experience of the MySLT App. We
vaccinations, infected employees and Through these investments, we also continued to invest in developing
their families were also given access to hope to offer holistic services across the product knowledge and customer-
dedicated quarantine centres across all industry verticals and customer service skills of our front-line staff while
the country. We also facilitated remote segments, including B2B, B2C the contact centre employees have
working in way of working from and B2G. access to a dedicated training unit
home, working from closest point to ensuring that they remain updated on
home and direct from home to field Disruptions to our supply chain the dynamic and evolving requirements
across the organisation, providing the remained a key challenge during the of customers.
relevant infrastructure and support for year, reflecting global shortages in
employees to deliver uninterrupted components and the country’s foreign Pandemic-led disruptions have
services. currency shortage. In addressing this changed the world as we know it,
challenge, the Group proactively dramatically altering the way we
Our people management strategy sought to re-engineer processes work, learn, entertain and connect
for the year centered on enhancing while recovering and reconditioning with others. As Sri Lanka’s national
productivity and optimising human selected input materials. We also ICT and telecommunications service
capital. With new recruitments ensured the effective management provider, we remain steadfast
limited for the year, focus was placed of inventories through lead-time in our commitment to facilitate
on empowering the team through controls and demand planning, this transition by empowering
providing access to technology tools, which in turn enabled the Group to individuals, businesses and the
skill development and knowledge minimise stock-out situations. We government through connectivity and
sharing. We continued to invest in have also driven efforts in expanding digitalisation.
developing our talent and our training our local procurement, thereby
proposition for the year aimed to providing local manufacturers the
build a multi-skilled, future-proof opportunity to expand capabilities
talent pool. This approach enabled and competencies.
the Group to match employee
competencies with the requirements The unprecedented shift to digital M. B. P. Fernandez
of the job, thereby optimising our platforms has led to a parallel increase Chief Operating Officer
human capital. The commitment in cybersecurity vulnerabilities, with
of our employees during these data confidentiality, data manipulation
challenging times have been truly and attacks by malicious actors 15 March 2022
28  |  Sri Lanka Telecom PLC

BOARD OF DIRECTORS
the organisation to include several
subsidiary companies, HVA Foods
PLC., HVA Beverages & HVA
Holdings. He functioned as the
Chairman and CEO of the HVA
Group as well as HVA Farms (Pvt)
Ltd., an organic agro-resort in the
NWP. Currently, he serves on the
Board of HVA Foods PLC as its
founder-adviser. He served on the
Colombo Tea Traders Association
as a member and also as a Director
on the Sri Lanka Tea Board and as
an Independent Director of the Sri
Lanka Industrial Technology Institute
from 2015 to 2016. He is also an
Independent, Non-Executive Director
MR. ROHAN FERNANDO of Ceylinco Insurance (General) Ltd. MR. LALITH SENEVIRATNE
Group Chairman/Director Director/Group Chief Executive
Mr. Fernando functioned as the Officer
Mr. Rohan Fernando was appointed
as Director/Chairman of the Company President of the National Chamber Mr. Lalith Seneviratne, was appointed
in January 2020. He also serves as of Exporters in 2008 and 2009. He to the Board as an Independent
Director/ Chairman of Mobitel (Pvt) served as the elected Chairman of Non–Executive Director on 23 January
Ltd., eChanneling PLC, SLT Digital Info the Tea Exporters Association of Sri 2020. Thereafter, he was appointed
Services (Pvt) Ltd., SLT Visioncom (Pvt) Lanka from 2014 to 2016. He is a as an Executive Director/Group Chief
Ltd., SLT Human Capital Solutions National award winner since 1997 Executive Officer on 1 May 2020. He
(Pvt) Ltd., Sky Network (Pvt) Ltd., SLT at the NCE Exports Awards and is also a member of the Technology
Property Management (Pvt) Ltd., Sri was selected “Exporter of the Year” Subcommittee. He serves on the
Lanka Telecom (Services) Limited, winning Gold awards in 4 categories, Boards of e-Channeling PLC, Mobitel
Mobit Technologies (Pvt) Ltd., and in 1999. He was also awarded “Sri (Pvt) Ltd., Sri Lanka Telecom (Services)
Director of Galle Submarine Cable Lankan Entrepreneur of the year Ltd., SLT Digital Info Services (Pvt)
Depot (Pvt) Ltd. He is also a member 2015”, winning the National Gold Ltd., SLT Visioncom (Pvt) Ltd., and
of the Remuneration and Nomination award and “Sri Lankan Entrepreneur Mobit Technologies (Pvt) Ltd.
Committee. of the year 2015”, with a Provincial
Gold award. He is an engineer by training. He has
Mr. Fernando has over 40 years of over thirty-five years’ experience in
experience in the tea industry and He is a multi-disciplined sportsman the corporate field, primarily with
has been successful in innovation, having represented the school Motorola Corporation.
promoting and marketing the at Rowing, Volleyball, Tennis and
traditional beverage of tea in Hockey. He represented and Mr Seneviratne obtained a
many variants. He is the creator captained Sri Lanka at Rowing. He Bachelor’s Degree in Electronics
of the global tea brand HELADIV functioned as the president of the Sri from the University of Kent, UK
registered in 40 countries. He began Lanka Amateur Rowing Association and a Masters Degree in Electrical
his career as a Tea Taster at Carson for several years and was also a Engineering from the University
Cumberbatch & Co., Ltd. In 1975. Mr senior member of the National of Calgary, Canada. He pursued
Fernando joined Brooke Bond Ceylon Olympic Committee. Currently, he a career in telecommunications
Limited and served as a Manager in serves as a member of the National starting in 1982 at the then Sri Lanka
the Tea Department from 1979 to Sports Council of Sri Lanka. Telecommunications Department
1989 with a secondment of one year (present day SLT). In 1988, he became
as a Tea Trader, at its headquarters in the head of engineering of Celltel,
the United Kingdom in 1982. setting up South Asia’s first mobile
telephone network.
In 1990, he established HVA Lanka
Exports as a joint venture with the In 1990, Mr. Seneviratne accepted a
Dutch agricultural conglomerate position with Motorola Corporation
HVA Holdings bv and expanded and moved to Singapore on a regional
role. During this period, he developed
   Annual Report 2021  | 29

Motorola’s relationship with SLT that and infrastructure development,

enabled SLT to provide telephone operations, sales, customer service
service to remote areas including and regulatory issues. As a Director
restoring telephone service to Jaffna and Chief Executive of Acacia
in 1996. Australia Pty Ltd., he was responsible
for development of an integrated
Since leaving Motorola, proposal for delivery of national
Mr. Seneviratne has carried out several broadband communication for
professional consulting assignments Australia.
in telecommunications and renewable
energy, while engaging in rural He has served as a Director of Maxis
electrification activities during his Communication Berhad, Chairman
spare time. He was part of a team of the Technology Committee of the
that set up four grid connected mini- Board, as a Director of Vernet Pty
hydropower systems. He implemented Ltd, a Company providing ultra high
Sri Lanka’s first off-grid village solar speed Broadband to Universities and
electrification system in 2001 and Sri Research Establishments in Australia,
Lanka’s first off-grid village biomass
MR. LAWRENCE PARATZ and a former Senior Executive of
electrification system in 2004. Director Telstra Corporation. He also serves on
Mr. Lawrence Paratz was appointed to the Board of Real Thing AI Pty Ltd., an
In the period 2006 to 2009, the Board of Sri Lanka Telecom PLC Australian high technology company
Mr. Seneviratne was a member of as an Independent Non-Executive with subsidiaries in the USA and UK,
the Board of Directors of Lanka Director with effect from 26 May 2010. and Razorback Pty Ltd., a company
Transformers Ltd., and its Chairman He is the Chairman of the Technology incorporated in Victoria, Australia.
during the latter part. He was a Subcommittee and a member of He is an Advisor to major companies
member of the inaugural governing the Remuneration & Nomination in the Australian Telecommunication
board of the Sri Lanka Sustainable Committee. He serves on the Boards market.
Energy Authority. of e-Channelling PLC, Mobitel (Pvt)
Ltd., SLT Property Management (Pvt) Mr Paratz has had executive
Currently, Mr Seneviratne is a member Ltd., Sri Lanka Telecom (Services) Ltd., responsibility for multi-billion dollar
of the Board of Directors of four mini- SLT Visioncom (Pvt) Ltd., SLT Digital programmes and integrations
hydropower companies – M/s Escas Info Services (Pvt) Ltd., and Mobit including network transformations
Owala Pvt Ltd., Escas Ankanda Pvt Technologies (Pvt) Ltd. and deployments across multiple
Ltd., Escas Diggala Pvt Ltd., and Escas technologies, with extensive
Kiula Pvt Ltd. Mr Lawrence Paratz holds an M. Sc. experience in international,
(Telecommunication Systems) with metropolitan and regional and rural
Mr. Seneviratne is the recipient of Distinction, and was awarded the communications. He previously
the Year 1999 Motorola CEO Award Philips prize from Essex University, and served as a member of the Board
for Volunteerism. For his voluntary an M. Eng. Sc. from the University of of the Australian Government's
services to the Department of Wildlife Queensland. Internet Assistance Programme.
Conservation he was made an He has been an invited speaker at
Honorary Director in the Department. He is a Fellow of Engineers, the Australian Health Informatics
For his innovation, he was elected Australia (FIEAust) and an alumnus Conference, and the Australian
a Lemelson Fellow and for his of the Stanford University Executive Academy of Technological Sciences
sustainable development activities Development Programme. He also and Engineering.
he was elected an Ashoka Fellow. On holds Bachelor's Degrees in Science
the 20th Anniversary of the Internet and Engineering (Honours). In 2011, He was formerly Chairman of the
Society of Sri Lanka, he was recognised he was elected as a Fellow of the On-Trac@Peter Mac Adolescent and
as one of twenty-five people having Australian Academy of Technological Young Adult Cancer Programme, and
contributed to the early development Sciences and Engineering (ATSE). has been involved in a number of
of the Internet in Sri Lanka. initiatives in e-health.
Mr. Paratz has more than 40 years
Mr Seneviratne is a Chartered experience in all facets of the
Engineer and a Member of the telecommunication including mobile,
Institution of Engineering & fixed, broadband, satellite and
Technology, UK. international networks both domestic,
and international. This includes capital
30  |  Sri Lanka Telecom PLC

BOARD OF DIRECTORS

MR. CHAN CHEE BENG MS. LAI CHOON FOONG MR. MOHAN WEERAKOON, PC
Director Director Director
Mr. Chan Chee Beng was appointed Ms. Lai was appointed to the Board of Mr. Mohan Weerakoon, was
to the Board as a Non-Executive SLT as an Independent Non-Executive appointed to the Board as an
Director on 5 June 2008 and Director on 9 May 2014. She also Independent Non–Executive Director
subsequently to the Board of Mobitel serves on the Boards of Mobitel (Pvt) on 23 January 2020. He is the
(Pvt) Ltd., SLT Property Management Ltd., SLT Human Capital Solutions Chairman of the Audit Committee
(Pvt) Ltd., SLT Digital Info Services (Pvt) Ltd., and Galle Submarine and a member of the Senior Tender
(Pvt) Ltd., and SLT Visioncom (Pvt) Cable Depot (Pvt) Ltd. She is Board and Related Party Transactions
Ltd. He also serves as the Chairman the Chairperson of Related Party Review Committee. He also serves
of Remuneration & Nomination Transactions Review Committee and a in the Board of SLT Human Capital
Committee. member of the Audit Committee and Solutions (Pvt) Ltd and SLT Property
Senior Tender Board. Management (Pvt) Ltd.
He counts over 40 years of experience
in investment banking, general She has over 35 years of experience Mr. Weerakoon is a senior legal
and financial management and in finance, procurement and audit practitioner who counts more than
accounting. He worked at Ernst & areas in telecommunications, banking 38 years of experience as a civil and
Young and Morgan Grenfell & Co. and government sectors. She was criminal counsel. He was appointed a
Ltd., prior to joining the Usaha Tegas previously with Maxis Berhad and is President's Counsel in 2017.
Sdn Bhd (UTSB) Group in 1992 as currently the Finance Head of Maxis
Head of Corporate Finance. He Communications Berhad. She is also He has served as a Director of
serves on the Boards of several a Non-Executive Director of a few Sinhaputhra Finance PLC and Deputy
companies including Bumi Armada subsidiaries of Maxis Communication Mayor and Councilor of the Municipal
Berhad, Binariang GSM Sdn Bhd, Berhad. Council of Matale, and Central
Maxis Communications Berhad of Provincial Councilor.
Malaysia and Yu Cai Foundation. Ms. Lai holds a Bachelor of Commerce
Degree from Melbourne University,
Mr. Chan holds an Honours Degree in Australia and is a Chartered
Economics and Accounting from the Accountant of the Malaysian Institute
University of Newcastle-upon-Tyne, of Accountants and a Certified
United Kingdom and is a Fellow of the Practicing Accountant of CPA Australia.
Institute of Chartered Accountants of
England and Wales.
   Annual Report 2021  | 31

MR. RANJITH GANGANATH With an MBA from the University of MR. V. U. KUMAR
RUBASINGHE Colombo, a Postgraduate Diploma in Director
Director Electronics and Telecommunications
Engineering and a BSc Engineering Mr. Uthaya Kumar K Vivekananda
With over two decades of experience in Electrical and Electronics, was appointed to the Board as an
in Telecommunications and IT, Mr. Rubasinghe is a Chartered Independent Non–Executive Director
Organisational Development, Human Engineer and a Fellow of the on 2 July 2021. He also serves as a
Resources and Marketing, Mr Ranjith Institution of Engineers Sri Lanka member of the Senior Tender Board
G Rubasinghe was appointed to the (IESL), Fellow of Chartered and Audit Committee.
Board of Sri Lanka Telecom PLC as a Professional Managers of Sri Lanka
Non-Executive Director on 23 January (CPM), Certified Member of the Sri He has been with Pricewaterhouse-
2020. Lanka Institute of Marketing (SLIM) Coopers for nearly 36 years. He
and an Associate Member of the has led and worked on some of
Mr. Rubasinghe currently serves as Chartered Institute of Personnel the most challenging and complex
the Chairperson of TRACE and as a Management (CIPM). assignments, both in Malaysia and
member of the Board of Directors of globally, working with multinational
Lanka Sathosa Ltd., the largest retail Mr. Rubasinghe has been with Sri and blue-chip national clients in
chain operator in Sri Lanka. Lanka Telecom PLC for over 20 years audit, business advisory, mergers and
and he held the positions of CEO/ acquisitions, valuations, privatisations,
During his diverse professional career, Mobitel (Pvt) Ltd, CEO/SLT Human Initial Public Offerings (IPOs) and
he has served as Vice-President of the Capital Solutions (Pvt) Ltd., and Head cross-border transactions.
Institute of Engineers Sri Lanka (IESL), of SLT RAINBOW PAGES as well.
Council Member of the University
of Colombo and the Council of the Among his personal achievements,
Board of Management at University of he was awarded the Chartered
Colombo – School of Computing. He Engineer of the Year 2011 at IESL’s
also serves as a member of the Council Engineering Excellence Awards,
of the Open University of Sri Lanka. the “HR Leadership Award” at the
Global HR Excellence Awards 2010
He is the Founder President and CEO and 2013, and “The Education
of the SLT Campus (Pvt) Ltd., (SLTC), Leadership Award” at the Sri Lanka
which is the only corporate powered, Education Leadership Awards 2019
research based, fully residential & 2020.
university in the country. Under his
leadership, SLTC became the “Most
Emerging Education Institute of the
Year at the South Asian Business
Excellence Awards 2019” and has
also been recognized at the “National
Business Excellence Awards 2019” in
Sri Lanka.
32  |  Sri Lanka Telecom PLC

BOARD OF DIRECTORS

MR. K. A. VIMALENTHIRARAJAH Trade and Investment Policy of the MR. MAHESH ATHUKORALE
Director General Treasury, he held various Group Company Secretary
positions in the public service
Mr. K. A. Vimalenthirarajah was including the positions of Director Mr. Mahesh Athukorale is an Attorney-
appointed to the Board as a Non- General, Department of Fiscal Policy, at-Law. He holds an MBA from
Executive Director on 15 March 2022. Senior Assistant Secretary in charge the University of Colombo, and a
He is the Chairman of the Senior of Administrative Reforms, the Chief Bachelor’s Degree of Law from the
Tender Board and serves as a member Information Officer of the Ministry Open University of Sri Lanka. He is an
of the Audit Committee and Related of Public Administration and Home Associate Member of The Chartered
Party Transactions Review Committee. Affairs, Minister Counsellor of the Sri Governance Institute of UK.
Lankan Embassy in Beijing, China.
Mr. Vimalenthirarajah is an officer In his career spanning over 27
of Sri Lanka Administrative Service, Mr. Vimalenthirarajah is Sri Lanka’s years, he has more than 19 years of
counting over 28 years of experience Director to the SAARC Development experience in the SLT Group and
in the public service. He is presently Fund, Member of the Supervisory over eight years in the mercantile and
working as the Director General, Board for the Commonwealth financial sectors.
Department of Trade and Investment Small States Trade Finance Facility
Policy. (CTFF), and Director of the Board He also functions as Company
Directors of the Sri Lanka Export Secretary for Board Sub committees
He is an Attorney-at-Law. Development Board. He has also and subsidiaries of SLT Group.
represented the General Treasury as
Mr. Vimalenthirarajah holds a Director of the Board of the Bank of
Special Degree in Economics from Ceylon, the People’s Bank, the Sri
the University of Jaffna, Master of Lanka Tourism Promotion Bureau,
Philosophy in Economics from the the Board of Investment of Sri Lanka,
University of Peradeniya, Master of the Ceylon Petroleum Corporation,
Business Administration from the and the Institute of Human Resource
University of Moratuwa and Bachelor Advancement of the University of
of Laws from the Open University Colombo and Chairman / Director, Sri
of Sri Lanka. He has a Postgraduate Lanka Insurance Corporation.
Diploma in Development Studies and
Public Policy, Postgraduate Diploma
in International Relations, Diploma in
Human Resource Management and
Diploma in Information Technology.

Prior to his appointment as the

Director General, Department of
   Annual Report 2021  | 33

EXECUTIVE MANAGEMENT

MR. JANAKA R ABEYSINGHE extensive experience in the areas

Chief Executive Officer of Enterprise Digital Services,
Enterprise Communications
Driven by an interest in advancing Solutions, Data Communications,
technologies and accommodating Business Development, Domestic &
the growing needs of consumers International Switching Operations
and enterprises Mr. Janaka and Global Wholesale Voice & Data
Abeysinghe, the Chief Executive Business.
Officer of Sri Lanka Telecom,
started his career at SLT in 1991 A Fulbright Scholar, Mr. Janaka
straight out of the University of Abeysinghe earned a Masters’
Moratuwa, where he graduated with Degree in Electrical & Computer
First Class Honors in Electronic & Engineering from the University
Telecommunications Engineering. of Kansas, USA and is a Chartered
Engineer, a member of the
A keen tech enthusiast, Institution of Engineers Sri Lanka,
Mr. Abeysinghe believes that to and a member of the Computer
be successful in the race for digital Society of Sri Lanka. Mr. Abeysinghe
innovation; strengthening digital also served on the Board of the Sri
skills, rolling out digital tools, Lanka Institute of Nanotechnology
and accelerating new product (SLINTEC) as a Non-Executive
development in a collaborative Director.
environment is essential. He
realises the importance of new
opportunities for bundled service
offerings, IoT solutions and
enhanced flexibility in purchasing
and consuming services to enable
business agility; and brings his
extensive insight and learning to his
vision for his role as Chief Executive.

Prior to taking up the mantle of

CEO, Mr. Abeysinghe, as Chief
Enterprise and Wholesales Officer,
led the Enterprise & Wholesale
business of SLT that provides
integrated voice and data solutions
to Enterprises, and Government
Institutions. He earlier served
as General Manager Enterprise
& International Sales and has
34  |  Sri Lanka Telecom PLC

EXECUTIVE MANAGEMENT

network transformation. Some of

the flagship projects in which he
made a significant contribution are
New Generation Network (NGN),
Sri Lanka Backbone Network
(SLBN), Fiber-To-The- Home (FTTH),
LTE (4G), National Broadband
Programme (i-Sri Lanka), National
Data Centre, Submarine Cable
Systems, and establishment of Cable
Depot in Galle. He was a member
of the International Management
Committee for the submarine cable
consortium of SEA-ME-WE 3, 4 and
MR. M B P FERNANDEZ 5, Dhiraagu Cable, and the Bharath MR. SAMAN PERERA
Chief Operating Officer Lanka Submarine Cable System. He Group Chief Officer - Information
additionally serves as a management Mr. Saman Perera possess over
Mr. Priyantha Fernandez joined
committee member under the 30 years’ experience in the IT
SLT in 1991 following multiple
South-East Asia and Indian Ocean industry as a thought-leader and
roles in various multinational
Cable Maintenance Agreement innovative technology manager.
telecommunications organisations.
(SEAIOCMA). He has given leadership to large
He holds a BSc (Eng.) in Electronics scale software development
In addition to the above projects including Business
and Telecommunications from the
responsibilities, his authority Operation & Billing solutions for
University of Moratuwa, Sri Lanka
extends to planning, formulating Telco and national-level projects
and an MBA from the University of
and overseeing implementation including the Electronic Travel
Sri Jayewardenepura, Sri Lanka. He is
of policies that promoting Authority (eVisa) and mTicketing
a Chartered Engineer and Fellow of
profitability, company culture, for Sri Lanka Railways. He has also
the Institution of Engineers Sri Lanka.
and quality of operations. His given leadership in implementing
His 34-year career as a professional in
role involves strategic decision- complex large-scale projects
telecommunication industry, includes
making for achieving agreed involving multiple international
attending to technological updates
short-term, medium-term and suppliers covering all aspects
in the form of overseas training and
long-term corporate objectives of business operations and
seminars, organised by international
towards making SLT business Infrastructure and successfully
training institutions, telco operators,
viable and profitable. In the areas led the technical teams in many
and equipment vendors. He has
of responsibilities as the Chief digital transformation projects and
recorded over 700 such days of
Operating Officer, he is empowered implementing technologies and
exposure during his tenure. He has
to execute agreements for the solutions to support Digital enabled
held a string of senior positions
procurement of goods and services, customer and Work-from-Home
within SLT, culminating in his current
financial instruments, notarial enabled staff in pandemic situation.
position as the Chief Operating
documents, special category
Officer. In this role he oversees
agreements and international He holds an MBA in Management
the Planning, Designing networks,
agreements. His recent involvement of Technology from University
Regional Operation, IT, Procurement,
in preparing the National Digital of Moratuwa, MSc in Computer
Projects, Quality and Information
Road map to achieve SMART Science, and BSc from University of
Security groups within Sri Lanka
SRI LANKA has paved the Next Colombo. He serves as a resource
Telecom.
Generation transformation of SLT person for the MBA in IT at
falling in line with global operators. University of Moratuwa, and served
His role involved business continuity
activities and establishment of as a visiting lecturer for MBA in
Mr. Fernandez is a permanent Information Systems, University of
cyber security function.
member of the Technical Colombo. He is currently serving as
Subcommittee and Senior Tender a Board member of the University
In addition, he has had overseen
Board of SLT. He also has been of Colombo School of Computing
operation of SLT’s Call Centre
functioned as a Non-Executive (UCSC) representing the IT industry.
in line with improving customer
Director of SLT Services Limited for
experience. He has played a leading
over twelve years from 2007 to 2019. He is an active member of the
role in planning and deploying very
large scale programmes for SLT Computer Society of Sri Lanka and
has served as a council member.
He is a recipient of the prestigious
“CIO of the Year” award.
   Annual Report 2021  | 35

MR. SANJEEWA sector in the same conglomerate.

SAMARANAYAKE Further, during his career, he
Group Chief Officer - Finance worked as the Group Financial
Controller and also as a member of
Mr Sanjeewa Samaranayake is the the Senior Management Committee
Group Chief Financial Officer of in a reputed company engaged in
Sri Lanka Telecom PLC and counts exports in Sri Lanka.
over 25 years of management
experience, holding senior positions He held many senior positions of
in reputed manufacturing, trading the Chamber of Pharmaceuticals
and service organizations in Industry of Sri Lanka, the last being
Sri Lanka and overseas. He is a the Senior Vice President position
Fellow of the Chartered Institute for two consecutive years. He was a
of Management Accountants (UK) committee member of the Ceylon
and of the Institute of Certified Chamber of Commerce, Import
Management Accountants of Sri Section for several years holding
Lanka. He holds an MBA from senior positions.
the Postgraduate Institute of
Management (PIM), University of Sri He was awarded the prestigious
Jayewardenepura and a Bachelor “Platinum Honours Award” by
of Commerce Degree from the the Postgraduate Institute of
University of Colombo. He followed Management Alumni in 2010 and
an Advanced Management the “Diamond Service Award” for
Programme (AMP) conducted by the “Most Outstanding Business
the Kellogg Business School in Leader of the Year” awarded
USA and a Mergers & Acquisitions jointly by the Ceylon Chamber of
Course conducted by the Chicago Commerce and the Postgraduate
Booth, University of Chicago, USA. Institute of Management Alumni in
2016.
He joined Sri Lanka Telecom
PLC as the Group Chief Financial
Officer in September 2018. Prior
to joining SLT, he served as the
Group Chief Financial Officer of
a leading conglomerate in Sri
Lanka diversified into consumer,
healthcare and transportation
sectors. Prior to his appointment as
the Group Chief Financial Officer,
he served as the Managing Director
and as the Director - Finance and
Supply Chain of the healthcare
36  |  Sri Lanka Telecom PLC

EXECUTIVE MANAGEMENT

MR. SAMAN ABEYSEKARA Management, Regional Operation MR. PRABHATH AMBEGODA

Chief Officer - Administration and Maintenance, Customer Chief Officer - Corporate and
Service and Consumer and
Digital
Mr Saman Abeysekara joined SLT SME Sales Operations in the
in 1998 as an Engineer. Before Telecommunication industry Mr. Prabhath Ambegoda currently
joining SLT, he held similar positions and also in the areas of Property holds the position of Chief
in a few reputed organizations in Development and Security Corporate and Digital Officer of the
Sri Lanka. He holds a degree in Management. Company. Current portfolio spans
BSc (Eng.) in the field of Electrical Corporate Strategy, Regulations,
and Electronics Engineering from Tariff, Programme Management
University of Peradeniya, Sri Lanka. and Digital Projects, R & D
He is a Chartered Engineer and Quality Assurance & Information
Fellow of the Institute of Engineers Security and Business Continuity
Sri Lanka. Management of the Company.

He has 26 years of vast He joined Sri Lanka Telecom

experience as a professional in 1991 as an Engineer and
in telecommunication industry. counts over 30 years of multi-
During his career, he has served disciplinary experience in the
as a Project Engineer in Greater telecommunication industry, in the
Colombo Telecommunication field of Engineering, Management.
Improvement Project executed by He counts 20 years of experience
a transnational Company, as the in Corporate Management of
Assistant Director- Interoperability telecommunication industry.
of the Telecommunication
Regulatory Commission of Sri Lanka During his career, he has gained
and as the project Engineer of a extensive industry-related knowledge
Supplier’s Credit Project under Sri and trainings from National and
Lanka Telecom Services ltd. International Academies in number of
countries. Further, he has undergone
After joining Sri Lanka Telecom, several certificates courses in
he has served in the capacity other disciplines in Management,
of Project Manager in the Rural Accounting, Marketing, Secretariat
Telecommunication Development services and General Management.
Projects and later as a Regional He is a trainer of Commonwealth
Telecommunication Manager, a Telecommunication Organisation
Provincial Deputy General Manager (CTO) programmes.
and a Regional General Manager
over a considerable period. Mr Prabhath is a Chartered
He also held the Deputy Chief Engineer by profession, holds a
Regional Operating Officer and BSc(Eng.) Honours Degree from
Chief Asset Property and Security University of Peradeniya specialising
Management Officer positions in the field of Electrical and
before being appointed as the Electronics Engineering. He is a
Chief Administrative Officer of SLT. Fellow of Institution of Engineers in
Sri Lanka (IESL) and holds a Master
He has a wide range of of Business Administration Degree
experience in areas of Project from Anglia Ruskin University of UK.
   Annual Report 2021  | 37

MR. PRABHATH DAHANAYAKE MR. IMANTHA WIJEKOON

Chief Officer - Marketing Chief Officer - Regional Sales
With a career spanning over Mr. Imantha Wijekoon is a Chartered
29 years at Sri Lanka Telecom, Engineer with a Degree in
Mr Prabhath Dahanayake’s Electronics and Telecommunications
multidisciplinary exposure in the Engineering from the University of
fields of Engineering, Project Moratuwa. In addition, he holds
Management, Business and an MBA from the Postgraduate
Marketing, position him as an Institute of Management, University
invaluable resource in this dynamic of Sri Jayewardenepura. Before
time in the Organisation’s journey. joining SLT in 1994, Mr. Wijekoon
has worked in the private sector.
During his quarter-century tenure at for a short stint. In his career at
SLT, he has held an illustrious variety SLT spanning over 27 years, he
of Senior Management positions has gained extensive exposure in
at the telecom giant, including but the fields of Regional Operations,
not limited to over a decade’s worth Project Management and Consumer
of marketing experience, as well and SME sales operations. He has
as Head of Province and General undergone telecommunication
Manager – Product Development operation and business-related
and Management. trainings in several foreign countries.
Swedish International Development
A Chartered Engineer with a Cooperation Agency (Sida) of
BSc Degree in Engineering in Sweden, LG Cables and Machinery
Electronics and Telecommunications Ltd. of South Korea, Korea Telecom
from the University of Moratuwa, of South Korea, and AOTS of
he completed a Master’s Degree in Japan are few such institutes to
Business Administration with core mention. He has also participated
studies at the University of Ruhuna. in many international and local
conferences and workshops.
Mr. Prabhath Dahanayake has Next Generation Networks, Fixed
been instrumental in driving the Mobile Convergence, CRM Change
Company’s broadband-led new Management, Telecommunication
services development, as well as Business Simulation, Value Driven
the crucial repositioning of SLT’s Marketing, Total Telecom Congress
flagship products and services. and World Mobile Congress are
His role as Chief Marketing several such events.
Officer stations him on an ideal
platform to revolutionise Sri Lanka Mr. Wijekoon counts over 12 years
Telecom’s strategy and marketing of experience in the consumer sales
vision. During his carrier, he has segment. In his professional carrier at
gained extensive industry-related SLT, he has held the senior positions
knowledge and trainings from NTT of Head of Province, Deputy Head of
training centre – Japan, Training Regions, General Manager Customer
institute in Netherland, Nokia of Service, Regional General Manager
Finland, Spain, and UK. and Chief Sales Officer. Since
November 2019, he serves as a Non-
Executive Director of SLT Services.
38  |  Sri Lanka Telecom PLC

EXECUTIVE MANAGEMENT

MR. R M P S SAMARAJEEWA Broadband Network (i-Sri Lanka MR. TILAK GAMALATH

Chief Officer - Network Programme), Lanka Government Chief Officer - Information
Network (LGN) and the SEA-ME-
Mr. Mangala Samarajeewa WE-5,6 Submarine Cable System. Mr. Tilak Gamalath joined SLT
joined SLT in 1997 and holds He has overseen the operations in 1992. He holds a BSc (Eng)
a BSc (Eng.) in Electronics and of the Field Services Projects Unit Honors Degree in Electronics
Telecommunications from the in SLT for fast deployment of & Electrical Engineering from
University of Moratuwa, Sri Lanka. the network in the Northern and University of Peradeniya, Sri Lanka.
He is a Chartered Engineer and Eastern Provinces of Sri Lanka and He is a Chartered Engineer of the
corporate member of the Institution also held a range of positions in Institution of Engineers of Sri Lanka
of Engineers, Sri Lanka. With 25 operations and maintenance of the and is a member of IET (UK) and
years of work experience in various SLT network at regional level. He is obtained Chartered IT professional
capacities, he has strong managerial also working as the sponsor for the from BCS(UK). He has an experience
and technical skills to provide National fiberization Program. of over 29 years in IT and
leadership to SLT’s Network Group. Telecommunication. His experience
He is a member of the International counts to 8 years in International
As a professional in the Management Committees for Switching and 21 years in IT. He has
telecommunication industry, the submarine cable consortiums held the positions of DGM/System
he has participated in many of SEA-ME-WE 3, 4, 5 and 6, Administration, GM/Systems, GM/
overseas trainings, seminars, Dhiraagu – SLT, and Bharath Lanka System Development & Network
and various forums organized by Submarine Cable Systems. and GM/IT Infrastructure during his
international training institutions, career in IT. He has pioneered in
top ranking telecommunication Mr. Samarajeewa is the present Vice introducing IT Disaster Recovery,
service providers, and reputed President of the Japan-Sri Lanka IT data center constructions,
telecommunication equipment Technical and Cultural Association Infrastructure Consolidation &
vendors. In this role he oversees (JASTECA) and was the Past Virtualization, Data Analytics,
the entire network operation and Secretary General of the South Robotic Process Automation and
planning of SLT including Transport Asia Federation of AOTS Alumni has contributed into introducing
and Access, Network Services, Societies (SAFAAS). multiple IT applications in SLT. He
Data Centre and Cloud Services, has pioneered to deliver multiple
Power and AC, Service Operations, IT applications with in-house
National Fiberization Program and developments to optimize the IT
Projects. costs. He has vast experience in IT
project management and delivery
In the path to his current position of successful project completions.
as Chief Network Officer, he has
proven excellence in management
of technology and programme
management as a senior manager.
His major achievements are leading
the implementation of National
   Annual Report 2021  | 39

MR. ARUNA JAYASEKERA Previously, he was the Regional

Chief Officer - People HR Manager (Manufacturing) in
a reputed global manufacturing
Mr. Aruna Jayasekera is an company. Prior to joining SLT, he
experienced HR professional with served as the Group Chief Human
a progressive career spanning Resource Officer in a reputed bank
over 25 years in the financial and in Sri Lanka
export manufacturing sectors. He
commenced his professional career
as a State Counsel at the Attorney
General’s Department before
changing to Human Resources
Management. He holds a Bachelor
of Laws (LLB) from the Faculty of
Law, University of Colombo and is
an Attorney-at-law. He is a Fellow of
the Chartered Institute of Personnel
Management, Sri Lanka and for
his contribution to the Human
Resource field, he was recognized
with the life time award “The
Most Outstanding HR Professional
of the year 2007”, the HR Gold
Medal awarded by the Institute of
Personnel Management. He was
the youngest recipient to receive
this prestigious award.

He is a multi-disciplined sportsman.
He is an International Rugby
Referee appointed by the Asian
Rugby Football Union and has
officiated in many international
tournaments including Hong
Kong Sevens and Dubai Sevens.
Currently, he is the Judicial Officer
appointed by the World Rugby.

During his tenure in SLT, he has

facilitated initiatives to enhance the
performance culture and introduce
flexible working strategies to
enhance productivity to face the
pandemic situation.
40  |  Sri Lanka Telecom PLC

EXECUTIVE MANAGEMENT

MR. A KIRUPAKARAN Manager for Operational Support MR. LAKMAL JAYASINGHE

Chief Officer - Regional Operations in HQ, eight (08) Deputy General Chief Officer - Enterprise and
Managers for Provinces and three Wholesale
Mr. A Kirupakaran joined SLT as (03) Deputy General Manager
Engineer in September 1991. in HQ, Forty seven(47) Regional Mr. Lakmal Jayasinghe joined
Telecom Officers and Forty two SLT in 2001 after holding various
He was appointed as Deputy (42) Regional Operations and roles in recognized organizations.
General Manager-Eastern Province Maintenance centres in the Island. In his present role, he leads the
in 1999. Enterprise & Wholesale Business of
SLT that provides integrated voice
He was appointed as Regional and data solutions to Enterprises,
Head - North & East Provinces Government Institutions, Domestic
in 2005 and promoted as Telco Operators and Global
Deputy Chief Sales & Regional Wholesale Carriers.
Officer (DCSRO-II) in June 2019.
Thereafter, he was promoted to In his career at SLT spanning for
Chief Regional Operations Officer 21 years, he has held a number
in June 2021. He is a Graduate of senior positions, including
Engineer pass-out from Madurai General Manager Government
Kamaraj University, South India Business, General Manager Sales
and a Chartered Engineer of the Metro & Region 2, Deputy General
Institution of Engineers, Sri Lanka Manager Enterprise Sales Large
(MIESL). Reading for Masters Business, Deputy General Manager
Degree in Business Administration Training & Development. He has
(MBA) in Postgraduate Institute extensive experience in the areas
of Management, University of Sri of Enterprise & Government
Jayewardenepura. He has wide Sales, Enterprise Communications
experience in analogue and digital Solutions, Business Development,
Switching and Transmission Projects Training & Development, Consumer
implementation, development, & SME Sales Operation and
Operations and Maintenance. Regional Sales Management.
Also, he has experience in Outside
Plant Network development and He holds a Master’s Degree in
Customer Service Assurance and Business Administration (MBA) from
Service fulfillment in order to the University of Colombo and a
improve customer satisfaction. BSc Honors degree in Electronics
& Telecommunications Engineering
Currently, he is in charge of from the University of Moratuwa, Sri
Regional Operational activities of Lanka. He is a Chartered Engineer,
the 25 districts of the country in a member of the Institution of
Sri Lanka and administrative areas Engineers Sri Lanka.
of three (03) Regional General
Managers for Regions, One General
   Annual Report 2021  | 41

MS. SONALI WIJEKOON MR. LALITH WARAGODA MR. NIRMAL DHARMARATNE

Group Chief Officer - Legal Group Chief Officer - Internal Audit (MAJOR GENERAL - RETD) WWV, RWP, RSP
Group Chief Officer - Security
By profession Ms. Sonali Wijekoon Mr Lalith Waragoda joined SLT
is an Attorney-at-Law and a Notary in November 2019 as the Group Mr. Nirmal Dharmaratne (Major
Public, who holds a Master’s Degree Chief Internal Auditor. Prior to General - Retd) serves in the
from the University of Colombo this appointment, he held the appointment of the Group Chief
responsibility of Asia Regional Security Officer of Sri Lanka Telecom
She is holding the position of Group Auditor of a Multi-National PLC since 1 July 2021. During this
Chief Legal Officer of the Company Corporation (MNC), a global short period, with his assertive
with effect from 2021. Under her logistics solutions provider. Also, approach to work, he was able to
supervision, SLT Legal Department he has worked as a Director/Chief bring in a new dimension to the
handles diverse Litigation matters Financial Officer at few leading security sector of the Group.
for the Company, international private business enterprises in Sri
and local commercial contracts, Lanka. He counts over 35 years of Mr. Dharmaratne, who retired in
Intellectual property right matters, professional experience in Audit/ 2020 from the Sri Lanka Army,
conveyancing and other corporate Assurance, Shipping/Logistics, having had a distinguished 35 years
legal matters etc. Collaboration of Trading and Manufacturing of career, has brought into the
SLT Group work is a novel concept industries. Company his decades of military
introduced by the present Board experiences in the fields of Safety,
of Directors, to optimize the SLT He is a Fellow of The Institute of Security, Training, Human Resources
Group synergies, wherein Chief Chartered Accountants of Sri Lanka Management and Leadership.
Legal Officer of SLT contributes to (CA Sri Lanka), and holds an MBA
SLT Legal Group services with able from the Postgraduate Institute of While serving in the Army, he has
direction of two Board Directors Management (PIM), affiliated to the held many key appointments, and
from SLT and Mobitel. University of Sri Jayewardenepura. the appointments of Commanding
Also, he is a holder of Diploma in Officer of Kotelawala Defence
Her experience in the field of Law Taxation (CA Sri Lanka). Prior to Academy, Commandant of
counts over 33 years of with 29 becoming a Chartered Accountant, the Volunteer Force, Director
years’ of experience in Sri Lanka Mr Waragoda has obtained four Operations, Defence Advisor in
Telecom Legal Division. Her years of extensive training in the United Kingdom and Director
previous experience in the banking external and internal auditing under Personnel Administration speak
sector and a short spell at the KPMGSri Lanka. well of his well-rounded potential.
Private Bar has been a contributory He played a key role as the
factor for handling of diversed Legal Commander of the Special Forces
work for SLT. Brigade during the final phase of
the Eelam War.

Academically, he holds two Master’s

degrees and three Diplomas in
addition to have been trained at
a dozen other training institutions
both locally and internationally.
42  |  Sri Lanka Telecom PLC

SUBSIDIARY CHIEF OFFICERS

MR. CHANDIKA P. VITHARENA MR. AJANTHA SENEVIRATNE MR. UPUL MANCHANAYAKE

Chief Executive Officer - Chief Executive Officer - Chief Executive Officer -
Mobitel (Pvt) Ltd SLT VisionCom (Pvt) Ltd SLT Digital Services (Pvt) Ltd
Mr. Chandika Vitharena’s illustrious Mr. Ajantha Seneviratne joined Mr. Upul Manchanayake is a
career spans over three decades SLT in 1993. He holds a BSc in Chartered Engineer & Corporate
with profound knowledge and Electronics and Telecommunications Member of the Institution of
experience in Product Strategy, from the University of Moratuwa Engineers (Sri Lanka). He counts
Sales and Channel Development, and a Postgraduate Diploma in over 26 years’ experience in
Finance, Human Resources, and Industrial Engineering from the the telecommunication industry
many more. Open University of Sri Lanka as a technical and engineering
(OCSL). In addition, he holds an professional with extensive
At present, Mr. Chandika functions MBA from the University of Sri experience in project management
as the Chief Executive Officer of Jayewardenepura. Mr. Seneviratne well acquainted with technology
Mobitel and holds a Directorship is a Chartered Engineer and a best practices and a qualified
at the Airport and Aviation Services member of The Institution of professional in engineering
Ltd. Chandika’s strategic vision has Engineers of Sri Lanka. He counts management.
not only helped Mobitel to become over 20 years of experience in
one of the most profitable and Marketing and currently serves as He holds an Executive MSc in
successful Mobile Service Operators the Chief Executive Officer of SLT Project Management at Asia
in the country but also brought VisionCom (Pvt) Ltd. University of Malaysia and Master
numerous recognitions, including of Business Administration from the
several local and international Preston University of USA. He has
awards. also graduated from the Institute
of Engineers Sri Lanka in Electrical
Having started his career at Lanka Power Engineering (Heavy Current)
Cellular Services (Pvt) Ltd which and holding a Diploma in Electrical
was the second mobile operator Power Engineering Technology
that entered Sri Lanka in the early from the University of Moratuwa,
1990s under the brand name “Call Sri Lanka.
Link”, Mr. Chandika has progressed
through the roles of Sales Manager, He is an active member of
Senior General Manager. In the Government’s Provincial
December 2020, Mr. Chandika was Administration Procedures and
appointed as CEO to head one of Citizen Participation Development
the largest Mobile networks in Sri Committee and Justice of Pease
Lanka, serving the people and the for All island. Mr. Manchanayake
country with supreme connectivity gained experience in the Japanese
solutions. corporate management program
on Japanese philosophy and
Mr. Chandika holds a B A (Honours) an active member of Japan Sri
Degree in Political Science from the Lanka Technical Association Sri
University of Delhi, India.
   Annual Report 2021  | 43

Lankan Alumni of the Overseas MR. ASELA C R GALAPPATTIGE He is a well-respected Internet

Human Resources and Industry Chief Executive Officer - technology evangelist, contributing
Development Association. He Sri Lanka Telecom Services Limited to the Internet technical community
has contributed to develop a with voluntary contribution under
project proposal of a solar power Mr. Asela Galappattige is a well local and global voluntary societies
sustainable energy project of experienced professional engineer and groups as an executive
Sterling Gensis in India, which and a business leader committed committee member, a trainer
includes 10GWH (Gigawatt Hour) to deliver excellence to the and a resource person. He also
and it was well accepted by the organizations he serves. contributes as a visiting lecturer at
Indian authorities. national universities for engineering
Mr. Asela is a Chartered Engineer graduate studies.
Mr. Manchanayake was appointed and a Fellow of Institute of
to the Board of Airport & Aviation Engineers of Sri Lanka (FIESL).
Services (Sri Lanka) (Private) Limited He has earned his BSc degree in
as a Non-Executive Director with Engineering (Honors) in Electronics
effect from 12 December 2019. & Telecommunication Engineering
from University of Moratuwa, a MSc
Mr. Upul Manchanayake was degree in Digital Communication
appointed as the Director Talantfort from University of Bath, UK, and an
(pvt) Limited by the Group MBA from Postgraduate Institute
Chairman SLT since 30th October of Management of University of Sri
2020. Jayewardenepura.

Currently, he serves as the CEO He joined Sri Lanka Telecom in

for Sri Lanka Telecom - Digital 1998 as a planning engineer,
Services (Pvt) Limited. Also, he has held many key responsibilities in
more than 3 years of experience technical & managerial positions in
as a General Manager and more SLT and has been appointed as the
than 8 years of experience as Chief Executive Officer of Sri Lanka
a Deputy General Manager of Telecom Services Limited in year
Sri Lanka Telecom PLC holding 2020.
responsibilities in the fields of
Telecommunications network He has had an illustrious carrier
expansion and penetrate voice, with extensive experience in
broadband, and data services engineering and management in
island-wide. the areas of internet networks &
services management, data center
development, information security,
engineering project management,
supply chain management and
corporate management as a Chief
Executive officer.
44  |  Sri Lanka Telecom PLC

SUBSIDIARY CHIEF OFFICERS

MR. PRABATH GUNATHUNGE MR. ROSHAN DAYARATHNE fixed, wireless, broadband,

Chief Executive Officer - Chief Executive Officer - data, and overall network. This
SLT Property Management (Pvt) Ltd. Talentfort (Pvt) Ltd. includes capital and infrastructure
development, operations, sales,
Mr. Prabath Gunathunge is a Mr. Roshan Dayarathne is a marketing, customer service,
Civil Engineer graduated from Chartered Engineer & Corporate provisioning new connections,
University of Moratuwa in 1993. Member of the Institution of and outside plant developments
He has obtained an MBA from Engineers (Sri Lanka). Also, he is a and maintenance to fulfill business
the Postgraduate Institute of member of Project Management objectives.
Management in 2000. Institute (USA). He counts over
18 years’ experience in the Mr. Dayarathne was appointed to
Throughout his inspiring telecommunication industry as the Board of Urban Development
management career, he has an engineering professional Authority (Sri Lanka) and State
served for both public and with extensive experience in Development Construction
private sector companies over 25 project management, operational Corporation (SD & CC) as a Non-
years. As the key attainments in management and a qualified Executive Director with effect from
his professional expedition, he professional in engineering 02nd January 2020.
initiated his management career as management.
a Business Development Manager
at a reputed company in the He holds a BSc Engineering (Hons)
country and subsequently, he held in Electronics & Telecommunication
senior positions such as a General from University of Moratuwa,
Manager and Director Sales & Sri Lanka & Master of Business
Marketing, in reputed companies Administration from Commonwealth
in Sri Lanka. With his unwavering University, Canada.
efforts to expand the exposure and
persuade individuals, he became Currently, he serves as the CEO for
the CEO of Business Learning Talentfort (Pvt) Limited and General
Centre and then the Country Manager of Sri Lanka Telecom PLC.
Director/Technical Representative of Also, he has more than seven years
USAEP – Sri Lanka Office, funded of experience as a Deputy General
by USAID Colombo. Manager of Sri Lanka Telecom PLC
holding responsibilities in the fields
Since he assumed duties as CEO of Telecommunications operation
-SLT PML in 2013, he had a stint management and penetrate voice,
of working as the Chief Executive broadband, and data services
Officer of Sri Lanka Telecom metropolitan area. Also, he has
(Services) Ltd for nearly three years experience as regional manager of
until end of 2021. SLT for eight years. He served as
access network engineer for SLT
Currently, he is serving as the Mobitel for one year.
Chief Executive Officer in the
SLT Property Management Ltd Mr. Dayarathne has more than
and is aiming at monetizing 18 years’ experience in all facets
the Company’s highly valuable of telecommunications including
properties scattered islandwide.
  Annual Report 2021  | 45
46  |  Sri Lanka Telecom PLC

CORPORATE GOVERNANCE
MANAGEMENT
BOARD SUB COMMITTEES
The Board of Sri COMMITTEES
Lanka Telecom is
Remuneration Strategic
responsible for & Nomination Shareholders Investment
setting in place sound Committee Management
corporate governance Committee
structures, frameworks,
and processes to Related Party
Product
provide guidance to Transactions
Investment
management in the day- Review Board of
Committee Management
to-day operations of the Directors Committee
businesses.
Senior Tender Enterprise
A FRAMEWORK FOR Board Investment
GOVERNANCE Group Chief Management
LEGAL ENACTMENTS Executive Officer Committee
Companies Act No.7 of 2007 (GCEO)

Articles of Association Technology Sub Project Portfolio

Committee Investment
Sri Lanka Telecommunications
Management
Act No.25 of 1991 as amended
Committee
by Act No.27 of 1996 Chief Executive
Officer
Continuing Listing Rules of the (CEO)
Colombo Stock Exchange Audit
Committee
Voluntary Codes
Code of Best Practice on
Corporate Governance
issued by the Institute of
Chartered Accountants of
Sri Lanka
Internal Governance Internal
Documents Audit
Company Rules

Industry Code of Practice

SELECTION OF BOARD recommended by the two major

shareholders to the Board, filling
GRI: 102-24 / A7.3
casual vacancies as provided
by
In terms of the Articles of Association the AoA after deliberation of their
(AoA) of SLT, the Board
of Directors experience, understanding of
has the authority to fill vacancies in business and financial issues, ability
BOARD OF DIRECTORS the Board and appoint additional to exercise sound judgement,
Directors subject to their re-election diversity, leadership, achievements
GRI: 102-18, 19, 20 / A1.1 - 1.6
at the immediate proceeding Annual and experience in matters affecting
SLT is led by a well balanced Board General Meeting (AGM). The two business and industry.
of Directors with years of expertise major shareholders, namely the
and wealth of knowledge that has Government
of Sri Lanka acting On appointment, Directors are
helped the Group to continue to be through the
Secretary to the Treasury, provided with a Board Induction Pack
the market leader in the industry. The and Global Telecommunication aiming to build an understanding
Board meets regularly to execute its Holdings N.V. recommend five of the nature of the organisation, its
responsibilities that are detailed in and four Directors to the Board, activities and the industry in which
page 47. respectively. Accordingly, the it operates and build a link with the
Board appoints the candidates organisation’s people.
   Annual Report 2021  | 47

GRI: 102-26

Role of the Board Board Balance

Provide leadership and direction to the Group business.

Chairperson
Ensure proper governance, ethics and regulatory compliance
and wherever necessary seek professional guidance.
Independent Non-Executive
Ensure that SLT is appropriately managed and achieves the Directors
strategic objectives it sets.
Non-independent Non-
Select, monitor, evaluate and compensate Senior Management Executive Directors
Pave the way for Management succession.
Executive Director
Review and approve significant corporate actions.

Review and monitor implementation of Management’s The appointed Board is well balanced which includes
strategic plans. sufficiency of financial acumen as given in their Board
Review and approve the Company’s annual business plan, profiles on pages 28-32. During the year, 03 Board members
budgets and operating plan are professionals in finance or accounting bodies.

Monitor corporate performance and evaluate results compared Processes in place to assist Directors to fulfil their
to the strategic plans and other long-range goals. responsibilities.
Review Company’s financial controls and reporting systems. All Directors receive accurate, relevant, timely, clear and
balanced information.
Review and approve the Company’s Financial Statements and
financial reporting. Directors exercise independent judgement on all matters set
before the Board without bias
Review the Company’s legal compliance programmes and
procedures The Company Secretary act as the point of contact for the flow
of information between committees, the Board and Directors,
Oversee the Company’s management of enterprise risk. and other key managers

The CEO along with the respective Chief Officers and the Heads
of Divisions presents their submissions to the Board and provides
the necessary clarifications requested by the Board.

All Board Papers are made available in electronic format, in line

with the Group’s sustainability initiatives also enabling Board
members to participate in meeting even remotely.

Board Papers are made available atleast one week prior to the
board meetings for review and clarifications.

During the year, the Board consised requirements and for better sub-committee meet the Corporate
of 08 Non-Executive Directors and 01 controls over business operations. Executive Team members as and
Executive Director ensuring sufficient A formal Terms of Reference is in when required to discuss and develop
caliber and number for their views to place for each of these committees proposals collectively in relation to the
carry sufficient weight. The Company and the appointees are experts Group’s strategy and key operational
maintains the composition of Directors in each of the areas concentrated issues.
in accordance with Section 7.10 of the on. Regular meetings are held to
Listing Rules and the requirements of deliberate matters falling within Following are the main
the Company’s AoA. their purview and observations and subcommittees, their role, members
recommendations are reported to the and meetings held during the year
BOARD SUB-COMMITTEES Board on a regular basis. under review:
GRI: 102:22 / A7.1/ B1.3 / D3.3
The subcommittee takes on the
SLT governance structure is responsibility for communications
further strengthened with Board with Senior Managements where
subcommittees to fulfil regulatory the Chairmen and Members of the
48  |  Sri Lanka Telecom PLC

CORPORATE GOVERNANCE

Sub-committee/Role/Meetings Members 2021

AUDIT COMMITTEE (AC)

The AC assists the Board in its oversight and monitoring The AC comprise Non–Executive Directors, majority of whom
of financial reporting, Group’s Risks Management, revenue are independent.
assurance functions, and internal controls. The AC report on
pages 55 to 57 of the Annual Report sets out in detail the Following were the members during the year 2021
Committee’s policies, practices, and areas of focus. Mr. Mohan Weerakoon, PC – Chairman

The Committee meets atleast four times a year and at such Ms. Lai Choon Foong
other times as the Chairman of
the Committee require. Refer Mr Saman Fernando
page 49 for meetings held during the year and attendance
Mr. V U Kumar – Appointed on 14th July 2021

The GCEO, CEO, Group Chief Financial Officer (GCFO) and

the Group Chief Internal Auditor (GCIA) attend the meetings
by invitation. The GCIA reports directly to the AC.
REMUNERATION AND NOMINATION
COMMITTEE (R&N C)
The activities of the R&NC include nomination, selection The R&NC comprises Non–Executive Directors, majority of
and recommendation for appointment of Non-Executive whom are independent.
Directors, GCEO, CEO and key senior officers, succession
planning for the CEO and Senior Management, and review The members of the Committee for 2021 are:
Board composition, particularly in relation to the diversity of
Mr. Chan Chee Beng – Chairman
background, skills, and experience.
Mr. Lawrence Paratz
It also provides support and guidance with regard to the
Mr Rohan Fernando
Group’s policy for determining the fees for Non-Executive
Directors and remuneration of GCEO, CEO, CEOs of
The GCEO and CEO attend meetings by invitation, as and
subsidiary companies, and Senior Management.
when required by the Committee.
Minimum of four meetings are held during a year and at
such other times
as the Chairman of the Committee shall
require. Refer page 49 for meetings held during the year and
attendance
RELATED PARTY TRANSACTIONS REVIEW COMMITTEE
(RPTRC)
RPTRC is in place to ensure that the interest of shareholders The Committee comprises Non–Executive Directors of
is taken into account when entering into related party whom two Directors were independent. The Chairman of the
transactions and to enhance corporate transparency and Committee is an Independent Director.
promote fair transactions between SLT, its subsidiaries, and
The members of the Committee for 2021 were:


other related parties.
Ms. Lai Choon Foong – Chairperson
The related party relationship with its subsidiaries is disclosed
Mr. Mohan Weerakoon, PC
in the Notes to the Financial Statements. However, the Board
believes that those transactions are exempted in accordance Mr. Saman Fernando
with the exceptions specified in the Listing Rules.

A minimum of four meetings are held annually. Refer page 49

for meetings held during the year and attendance.
   Annual Report 2021  | 49

Sub-committee/Role/Meetings Members 2021

TECHNOLOGY SUBCOMMITTEE (TSC)

A team of expertise set up to assist the Group in constantly TSC comprises an Independent Non–Executive Director and
evaluating business opportunities through technological Executive Director.
advancement and to ensure that the current platforms
The members of the Committee for 2021 were :
support the Groups business objectives and strategies.
Mr. Lawrence Paratz – Chairman
Accordingly, TSC primarily focuses on;
Mr Lalith Seneviratne
Strategise to increase business efficiencies;
Keep conversant with technological advancement through CEO and member of senior management of SLT and Mobitel
development of technical staff and by introducing more attend meetings of the TSC as continual members in order
effective delivery system. to maintain Group synergies. If required, CEOs of subsidiary
companies are also invited to attend meetings.
Review existing processes in place and its appropriateness
against the Company’s objectives and vision and introduce
new development for better efficiencies.
Evaluate performance and methods of assessment, the
Company’s technology, people and skill plans and their
implementation.

The Committee meets as and when required. Refer page 49

for meetings held during the year and attendance.
SENIOR TENDER BOARD (STB)
A pre-approved structured function set-up by the Board to STB comprises Non–Executive Directors.
ensure proper controls and governance on procurement
The members of the Committee for 2021 were:
are being maintained throughout the Group. Accordingly,
the STB reviews and approves all procurement with a value Mr. Saman Fernando - Chairman
of LKR 75Mn to LKR 150Mn while the Board of Directors
Ms. Lai Choon Foong
approve amounts exceeding LKR 150Mn. and the Junior
Tender Board for amounts less than LKR 75 Mn. Mr. Lawrence Paratz - Resigned w.e.f 08/09/2021
Mr. Mohan Weerakoon
STB meets prior to every Board meeting. Refer page 49 for
meetings held during the year and attendance. Mr. V. U. Kumar - Appointed w.e.f 08/09/2021

The CEO and the GCFO are appointed to the Committee by

the Board to review the Group’s procurement needs.

ATTENDANCE AT BOARD AND SUB-COMMITTEE MEETINGS DURING THE YEAR 2021

Board Member Status Board AC R&N C TSC STB RPTRC
Mr. Rohan Fernando-Chairman INED 8/8 8/8
Mr. Chan Chee Beng NED 8/8 8/8
Mr. Lawrence Paratz INED 8/8 8/8 6/6 4/4
Ms. Lai Choon Foong INED 8/8 9/9 6/6 4/4
Mr. Lalith Seneviratne ED 8/8 6/6 4/6
Mr. Mohan Weerakoon,PC INED 8/8 9/9 5/6 4/4
Mr. Ranjith Rubasinghe NED 8/8
Mr. Saman Fernando NED 7/8 7/8 5/5 4/4
Mr. V U Kumar - Appointed w.e.f.
14/07/2021 INED 5/5 3/3 2/2
50  |  Sri Lanka Telecom PLC

CORPORATE GOVERNANCE
INDEMNITIES TO DIRECTORS discuss any issues pertaining to the REMUNERATION OF SENIOR
AND LIABILITY INSURANCE Company’s performance, operational MANAGEMENT
COVER matters, and human resources.
GRI: 102-35, 36
The AoA of the Company grants an
indemnity to the Directors from the CEO PERFORMANCE The remuneration framework and
Company to the extent permitted by EVALUATION policies are designed to appraise the
law in respect to liabilities incurred as The CEO’s Performance is evaluated work performance of the employees
a result of the performance of their by the Board annually against the towards achieving the Group objectives
duties in their capacity as Directors of performance objectives that were and strategies. Accordingly, appropriate
the Company. The indemnity would agreed upon at the beginning of corporate and individual performance
not provide any coverage to the the year through the R&N C and metrics are agreed upon based on the
extent the Director
is proven to have the Board. The CEO’s evaluation medium and long-term targets and
acted fraudulently or dishonestly. The and performance compensation are year end evaluations are performed.
Company has maintained Directors’ agreed between the two parties on Competitive packages are offered to
and Officers’ Liability Insurance cover this basis. attract and retain highly experienced
throughout the year. and talented individuals
STRATEGIC GOVERNANCE
REMUNERATION OF NON- BOARDS (SGB) SLT’s CEO is the head of management
EXECUTIVE DIRECTORS and is, therefore, remunerated as part
Strategic Governance Board is
of Senior Management. The R&N C
GRI: 102-35, 36 / B3 B3.1 established with four cross functional
recommends the salary package of
governance committees comprising
Directors’ fees is based on their the CEO to commensurate with his
of the CEO and the Chief Officers of
experience and skills and the qualifications and experience for the
each functional area. The committees
complexity of the Group’s business approval of the Board.
are responsible for studying the
and operations. R&N C reviews requirements of cross functional areas
and proposes the Non–Executive and introduce solutions for business CORPORATE ETHICS
Directors remuneration which is efficiencies and improvement of D5.1
approved by the Board. The fees for processes in a transparent manner.
Non-Executive Directors comprise SLT has adopted a Code of Ethics
a fee for attendance at Board and THE COMPANY SECRETARY for Directors and a more detailed
Board’s subcommittee meetings. The Code
of Conduct for the employees,
The Company Secretary is which is also extended to third parties
aggregate Directors’ fees paid to the
responsible to the Board and is who deal
with the Company. The
Directors for the financial year ended
available to individual Directors in Code sets out principles to guide
31 December 2021 is given in Note 7
respect of Board procedures. The employees in carrying out their duties
of the Financial Statements.
Company Secretary supports the and responsibilities to the highest
Chairman in delivery of the agenda, standards of personal
and corporate
ROLE OF THE CHAIRMAN AND in particular the planning of the
CHIEF EXECUTIVE OFFICER integrity when dealing with SLT, its
annual cycle of Board and Board competitors, customers, suppliers,
A2.1 / A5.7 Committee meetings, and ensures and the community. Processes and
that information is made available to standards in the Code are intended
Clearly defined distinction between Board members in a timely fashion.
strategic and operational matters is to enhance investor confidence
He also advises the Directors on and rapport, and to ensure that
established in terms of division of Board procedures and corporate
responsibility of the Chairman and the decision- making is properly carried
governance matters. He also functions out in the
best interests of the
Chief Executive Officer (CEO). The as the Secretary to all the Board
Chairman of the Board of SLT is a non- Group. The Code covers areas such
subcommittees. as equal opportunity employment
executive appointment and focuses
on strategic issues. He ensures that practices, workplace health and
The Company Secretary is an safety, conduct in the workplace,
Board procedures are followed and all Attorney-at-Law and an Associate
Board members effectively participate business conduct, protection of SLT’s
Member of the Chartered Governance assets, proprietary information and
during meetings. Institute, United Kingdom and is the intellectual property, data protection,
designated person for shareholder security, resilience, conflict of interest,
The CEO is responsible for day-to- communication who acts upon the
day management of the business and and non-solicitation of customers and
guidance of the GCEO and CEO. employees. The Code is posted on
leadership of the executive team, and
execution of the Group’s strategic SLT’s internal website. Policies and
The appointment or removal of the standards are clearly stipulated to
and operating plans in consultation Company Secretary is a matter for the
with the GCEO. The Chairman meets guide employees in carrying out their
Board as a whole. daily tasks.
the GCEO and CEO regularly to
   Annual Report 2021  | 51

FINANCIAL ACUMEN, its decision- making process to avoid corporate transactions detailing all
INTERNAL CONTROL AND RISK any conflict of interest that may facts associated with such transactions
MANAGEMENT occur. Accordingly, a RPTRC under that are of material value to SLT. There
the Board of Directors to enhance were no major transactions entered
GRI: 102:27
corporate transparency and promote into by SLT during the year 2021.
Internal control framework currently
in fair transactions between SLT and its
place is set by the risk management subsidiaries. COMMUNICATIONS WITH
framework, financial control, internal SHAREHOLDERS AND
audit and supporting policies. The Company has a related party CONSTRUCTIVE USE OF THE
The aim
of SLT’s internal control relationship with its subsidiaries as ANNUAL GENERAL MEETING

framework is
to assure that operations disclosed in Note 34 of the Notes The AGM is used for constructive
are effective and well aligned with to
the Financial Statements. However, engagement with investors, and
the strategic goals and to ensure the Board believes those transactions all shareholders are encouraged
correct, reliable, complete
and timely are exempted in accordance with to participate. Chairpersons of
financial reporting and management exceptions specified in the Code subcommittees will be available at the
information is available for its of Best Practices on Related Party AGM to answer any questions from
stakeholders. The framework endorses Transactions issued by the SEC and shareholders.
ethical values, good corporate Listing Rules. All these are recurrent
governance and risk management transactions and are in the ordinary
practices. course of business of the Company.

SLT uses systematic risk management There are no material contracts

to develop the efficiency and control entered into by SLT or any of its
of business operations as well as their subsidiaries that involve the interests
profitability and continuity. of the CEO, any Director, or the
controlling shareholders, Secretary
RELATED PARTY to the Treasury and the Global
TRANSACTIONS AND MATERIAL Telecommunications Holdings, N.V.
CONTRACTS
MAJOR TRANSACTIONS
C3 / C3.1
The Board of Directors, as required
by
The Board of Directors has Section 185 of the Companies Act,
adopted
rules issued by the CSE on disclose to shareholders all proposed
related party transactions throughout

STATEMENT OF COMPLIANCE UNDER THE RULES OF CSE ON CORPORATE GOVERNANCE

CSE Rule CSE Rule Compliance SLT Action

No. Status
7.10. a,b,c Compliance
Compliance with Corporate Governance Rules þ SLT is in compliance with the Corporate
Governance Rules
7.10.1 Non – Executive Directors (NED)
(a), (b) (c) Two members or 1/3 of the Board, whichever is þ As at 31st December 2021, eight out of nine
higher, should be NEDs. Directors are Non-Executive Directors
7.10.2 Independent Directors (ID)
(a) Two or 1/3 of NEDs, whichever is higher, should þ As at 31st December 2021 five out of the
be Independent eight NEDs are Independent
(b) Each NED should submit a declaration annually þ All NEDs have submitted signed declaration
of his/her Independence or Non-Independence confirming their independence/ non –
independence
7.10.3 Disclosures relating to Directors
The Board shall annually determine the þ The Board annually determines as to the
independence or otherwise of the NEDs independence or non – independence of each
NED based on the declaration submitted by
(a) Names of the IDs should be disclosed in the them and the names of the ID's are set out in
Annual Report the Annual Report.
52  |  Sri Lanka Telecom PLC

CORPORATE GOVERNANCE

CSE Rule CSE Rule Compliance SLT Action

No. Status
(b) In the event a Director does not qualify as þ Mr. Lawrance Paratz has served on the Board
‘independent’ against any of the specified continually from 2010. The Board believes
critera, the Board taking account all the that the independence of Mr. Paratz is not
circumstances, may determine the Director compromised by him serving on the Board
independent and such basis of determination for a period exceeding nine years from his
should be set out in the Annual Report appointment.
(c ) A brief resume of each Director should be þ A brief description of each Director is given in
included in the Annual Report including the the Board of Directors section of the Annual
Director’s experience Report
(d) Upon the appointment of a new Director, a þ A resume of Mr. V. U. Kumar, who was
brief resume of newly appointed Director be appointed during the year, has been submitted
provided to CSE to the CSE along with the announcement.
7.10.4 Determination of Independence
(a-h) Requirements for meeting the criteria to be an þ The Independence of the Board of Directors
Independent Director has been determined in accordance with
the requirements of the CSE Listing Rules.
Accordingly, 5 NEDs are considered
Independent as at 31st December 2021.
7.10.5 Remuneration Committee (“RC”)
(a) Composition
Committee shall comprise a minimum of two þ RC comprises three NEDs out of whom two
IDs or of NEDs, a majority of whom shall be are Independent.
independent

One NEDs shall be appointed as Chairman of Chairman of the Committee is a NED.

the Committee by the Board of Directors
(b) Functions
RC shall recommend the remuneration of the þ The Board considering the recommendation
EDs and CEO of the R & NC determines the remuneration
payable to the ED and the CEO. Fees for
Non-Executive Directors comprised a fee
for attendance at Board and Board’s sub-
committee meetings.
(c) Disclosure in the Annual Report
Names of Directors comprising the RC þ Refer Board Sub Committees under Corporate
Governance.
Statement of Remuneration Policy þ Refer Board Sub Committees under Corporate
Governance.
Aggregate remuneration paid to EDs and NEDs þ Refer Board Sub Committees under Corporate
Governance and Note 7 to the Financial
Statements
   Annual Report 2021  | 53

CSE Rule CSE Rule Compliance SLT Action

No. Status
7.10.6 Audit Committee (AC)
(a) Composition
Committee shall comprise a minimum of two þ AC comprised four NEDs out of whom three
IDs or of NEDs, a majority of whom shall be NEDs are considered independent
independent

One NED shall be appointed as the Chairman þ The Chairman of the Committee is an
of the Committee Independent Director.

CEO and Chief Financial Officer (CFO) should þ The GCEO, CEO, GCFO, GCIA and the
attend AC meetings External Auditors attended the Meetings by
invitation

Chairman of the AC or one member should be þ Ms. Lai Choon Foong, and Mr. V. U. Kumar are
a member of a professional accounting body members of professional accounting bodies
(b) Functions
Overseeing the preparation, presentation þ AC assists the Board in fulfilling its oversight
and adequacy of disclosures in the Financial responsibilities for the integrity of the Financial
Statements in accordance with Sri Lanka Statements of the Company and the Group
Accounting Standards
Overseeing the compliance with financial þ AC has the overall responsibility for overseeing
reporting requirements, information the preparation of Financial Statements in
requirements of the Companies Act and other accordance with the laws and regulations of
relevant financial reporting related regulations the country and also recommending to the
and requirements Board, on the adoption of best accounting
policies
Overseeing the processes to ensure that the þ AC assesses the effectiveness of internal
internal controls and risk management are control and risk management
adequate to meet the requirements of the Sri
Lanka Auditing Standards
Assessment of the independence and þ AC assesses the External Auditor’s
performance of the External Auditors performance, qualifications and independence
Make recommendations to the Board þ AC is responsible for appointment,
pertaining to appointment, re-appointment and reappointment and removal of External
removal of External Auditors, and approve the Auditors and also the approval of the
remuneration and terms of engagement of the remuneration and terms of engagement
External Auditor
(c) Disclosure in the Annual Report
Names of Directors comprising the AC þ Refer Board Sub Committees under Corporate
Governance
AC shall make a determination of the þ Refer the Report of the AC in the Annual
independence of the Auditors and disclose the Report
basis for such determination
Aggregate remuneration paid to EDs and NEDs þ Refer the Report of the AC in the Annual
Report
9.2 Related Party Transactions Review Committee (RPT – RC)
9.2.1. RPT – RC shall review all related party þ All related party transactions have been
transactions except for transactions set out in reviewed by the RPT RC except for
Rule 9.5 of the Listing Rules transactions set out in rule 9.5.
54  |  Sri Lanka Telecom PLC

CORPORATE GOVERNANCE

CSE Rule CSE Rule Compliance SLT Action

No. Status
9.2.2. Committee shall comprise a combination of þ RPT – RC comprise of three NEDs of which two
NEDs and INEDs. ED may also be appointed at are INEDs.
the option of the Company.

INED shall be appointed as the Chairman of þ Chairman of the Committee is a INED

the Committee
9.2.3. In the event where the parent and the þ The Company has appointed a RPT - RC
subsidiary are listed entities the RPT –RC of
the parent can function as the RPT – RC of the
subsidiary.

If the parent company is not listed, the

subsidiary shall have a separate RPT – RC
9.2.4. RPT – RC shall meet atleast once a calendar þ Committee met four times during the financial
quarter . Minutes of all the meetings should be year.
documented and communicated to the Board.
The Minutes of the RPT – RC meeting are
submitted to the Board.
9.2.5 to Members should ensure that they have access þ Members have access to enough knowledge
9.2.7 to enough knowledge and expertise to assess or expertise to assess all aspects of proposed
proposed related party transactions. related party transactions.

Committee may request the Board to approve RPT-RC did not refer any related party
related party transactions under review by the transactions under their review to the Board for
Committee approval during the year.

A Director who has material personal interest in Directors did not have material personal
a related party transaction shall not participate interest in any related party transactions
and vote on the matter. carried out during the year.
9.3 Disclosures
9.3.1. Immediate Disclosures þ There were no related party transactions that
required immediate disclosure to the CSE
9.3.2. Disclosures in the Annual Report þ There were no Non – recurrent or Recurrent
related party transaction that required
disclosure in the Annual Report.

Please refer Annual Report of the Board

of Directors for an affirmative statement of
compliance with the Rules on Related Party
Transactions
   Annual Report 2021  | 55

AUDIT COMMITTEE REPORT D3.3

I am pleased to present the Audit in England & Wales and Corporate Oversight of risk management
Committee (“Committee”) report for Finance Institute of Chartered and internal control systems and
the year ended 31 December 2021. Accountants of England & Wales, processes
a Chartered Accountant of the
Oversight of its compliance with
The primary objective of the Malaysian Institute of Accountants,
legal and regulatory requirements
Committee is to provide oversight of and a former senior partner of
the financial reporting process, the PricewaterhouseCoopers SEAPEN. Oversight of the external
audit process, the system of internal The Board is satisfied that the current auditors’ independence and
controls in the Group, and compliance members of the Audit Committee are recommendation of their fees for
with laws and regulations. The competent in financial matters and the approval of the Board
Committee provides assurance to have a good mix of skills, expertise
Review of the effectiveness of the
the Board of Directors (“Board”) on and experience in commercial
internal audit function
the integrity of the Group’s financial matters, telecommunications, finance
reporting and effectiveness of its and audit.
internal control environment. Other attendees at Committee
FINANCIAL REPORTING
meetings (or part thereof) were The Committee’s oversight of financial
The Committee is particularly focused the Group Chief Executive Officer, reporting is to ensure the accuracy,
on the effectiveness of the internal Chief Executive Officer, Group completeness and timeliness in the
and external audit functions, revenue Chief Financial Officer, Group Chief management’s reporting of interim
assurance capabilities, fraud and risk Internal Auditor, external auditor and annual financial results of the
management, cyber security and representatives and Group Company Group and its subsidiaries.
the impact of COVID-19 pandemic Secretary. Members of senior
on the business in terms of financial management were also invited to The financial and management
performance, new and emerging risks, attend as appropriate to present reporting of SLT comprises of monthly,
crisis management as well as business reports and provide responses quarterly and annual financial and
continuity and resilience. on audit issues presented to the management reports including the
Committee. reporting of actual results against the
MEMBERSHIP OF COMMITTEE budget, targets, key performance
The agenda of the Committee indicators and forecasts.
The Committee comprises of four
Non-Executive Directors, of whom meetings comprised of the following 4
recurrent items: The Committee reviews these financial
three were independent.
and management reports on a regular
External Audit (for the quarter, basis and directs the management
The members of the Committee are: half-year and full year financial on the strategies, plans and action
Mr. Mohan Weerakoon, PC - statements) required to improve the effectiveness
Chairman Internal Audit (as per the audit of controls and performance of the
plan) Group and its subsidiaries.
Ms. Lai Choon Foong
Mr. V U Kumar Risk Management External Auditors
(Appointed w.e.f 14.07.2021) Revenue Assurance and Fraud At the AGM held in April 2021,
Management the shareholders approved the
Mr. K A Vimalenthirarajah
appointment of Ernst & Young
(Appointed w.e.f 15.03.2022)
ROLE OF COMMITTEE as the external auditors. On the
Mr. Saman Fernando ceased to be recommendation of the Audit
The role and responsibilities of
a member of the Committee upon Committee, the Directors will be
the Committee are set out in in its
his resignation from the Board on proposing the re-appointment of Ernst
Terms of Reference (“ToR”) and the
02.03.2022. & Young as the external auditors at
Committee conducts its affairs in
the AGM to be held in May 2022.
compliance with the ToR.
On behalf of the Committee, I
would like to place on record the Auditor’s Independence
The responsibilities’ of the Committee
Committee’s appreciation for the The Committee is responsible for
include, but are not limited to, the
services rendered by Mr. Saman monitoring of the policies and
following matters:
Fernando during his tenure as a procedures on the use of the external
member of the Committee. Oversight of the integrity of the auditor for non-audit services in
financial statements of the Group accordance with professional and
Ms. Lai Choon Foong is a Chartered and Company regulatory requirements.
Accountant of the Malaysian Institute
Review of its quarterly, half-year
of Accountants and a CPA of CPA
and annual financial statements
Australia. Mr. Kumar is a member of
followed by recommendation for
the Institute of Chartered Accountants
the approval of the Board
56  |  Sri Lanka Telecom PLC

AUDIT COMMITTEE REPORT

The external auditor has confirmed adequacy of internal audit Reviewed internal and
that in relation to the audit of SLT resources. external audit findings and
financial statements for the year recommendations, and
ended 31 December 2021, they are RISK MANAGEMENT management’s action on the
independent within the meaning of SLT has implemented an enterprise recommendations
Section 163, sub-section 3(a) of the risk management framework which Reviewed the policies and
Companies Act No. 07 of 2007. covers the strategic, operational, procedures of key accounting
compliance and financial risks of the processes and recommended
These policies are kept under review Group and subsidiaries. areas for improvement
to ensure that the Group benefits,
in a cost-effective manner, from the The risk management function is Reviewed key items recommended
cumulative knowledge and experience focused on assessing various risks for write-off by management
of its external auditor whilst also arising from the impact of the Reviewed the engagement of the
ensuring the necessary degree of their pandemic and cyber security, of external auditor
independence and objectivity. which the management has taken
appropriate action to mitigate these Reviewed the effectiveness of the
The Committee also ensures that fees risks. services provided by the external
incurred, or to be incurred, for non- auditor
audit services both individually and The Committee reviews the adequacy Reviewed compliance of the
in aggregate, do not exceed the fees of the risk management function in external auditor with the
recommended for the external audit, identifying and assessing key risks, independence criteria
and considers the relevant ethical and in working with the management
guidance for external auditors. to mitigate these risks through Reviewed the external audit fee
appropriate and timely action. for 2021 and recommended for
AUDITOR’S FEES approval of the Board
The fees paid to the external auditor REVENUE ASSURANCE AND Held meetings with the external
for the audit of SLT and its subsidiaries FRAUD MANAGEMENT auditor without the presence of
during the financial year 2021 are The key objective of the Revenue management
disclosed in Note no. 07 to the Assurance function and Fraud
financial statements. Reviewed and approved the
Management function is to minimize
internal audit plan, and monitors
revenue leakages and frauds
INTERNAL AUDIT AND the achievement of the plan
penetrated by internal or external
COMPLIANCE parties. Reviewed the adequacy of the
The Group Internal Audit function internal audit function and its
of SLT conducts audits based on The Committee reviews the findings resources
an annual audit plan approved by and recommendations of these
the Committee. It also conducts functions and ensures that appropriate Internal Audit
investigations at the request of senior and timely action is taken by the Reviewed reports from Group
management, Committee or the management to minimize revenue Internal Audit function to
Board of Directors. leakages and frauds. ensure adequacy of the systems
of internal control and risk
The Committee monitors the ACTIVITIES PERFORMED management
effectiveness, performance and DURING 2021
objectivity of the internal audit Reviewed and approved the
The Committee held 8 meetings Internal Audit Plan for 2021
function, and reviews: during the year 2021 and its key
its reporting line and access to the activities were as follows: Reviewed the internal audit reports
Committee and members of the on compliance to the policies of
Board; Financial Statements and Accounting the Group and subsidiaries
Policies
internal audit plans and Assessed the effectiveness of
achievement of its plans; Reviewed the quarterly and the Internal Audit function and
full year financial statements provide recommendations for
key internal audit findings, for financial year 2021 and strengthening the function
adequacy of management’s recommended for the approval of
response and timeliness of their the Board
corrective action; and
   Annual Report 2021  | 57

Risk Management
Reviewed the update on
enterprise risk management and
proposed changes to the risk map

Revenue Assurance and Fraud

Management
Reviewed the implementation
of the project on the system to
detect revenue leakages and
frauds

The attendance of the Directors at the

Committee meetings is given in page
49 of the Annual Report.

On behalf of the Group Audit

Committee

Mohan Weerakoon, PC
Chairman of the Audit Committee

15 March 2022
58  |  Sri Lanka Telecom PLC

REMUNERATION AND NOMINATION

COMMITTEE REPORT
The Remuneration and Nomination Review and recommend annual Payment of an annual bonus depends
Committee of the Board, whose bonus payments and annual salary on achievement of operating profit
membership is set out below, consists increments for all employees of targets and personal goals. The salary
solely of Non-Executive Directors SLT group. of the GCEO, CEO and the senior
of whom majority are independent management are reviewed annually in
Directors; The GCEO and the CEO's of January having regard to the year-
respective companies are fully on-year inflation of the Country, the
Mr. Chan Chee Beng – Non Executive consulted on remuneration proposals. organizational performance and the
Director (Chairman) individual performance.
The Committee operates within
Mr. Lawrence Paratz – Independent agreed terms of reference and Details of the overall Directors’
Non-Executive Director is committed to ensuring that remuneration charged to the Group
remuneration arrangements align Income Statement is shown in Note 7
Mr. Rohan Fernando – Independent -reward with performance. on of the Financial Statements.
Non – Executive Director
REMUNERATION POLICY The Directors have no beneficial
The Company Secretary functions as The remuneration policy is designed interests in any of the Group’s
the Secretary of the Committee. to reward, motivate and retain the subsidiary undertakings.
Company’s executive team, with
The Committee function as the market competitive remuneration and ACTIVITIES CARRIED OUT
Group Remuneration and Nomination benefits, to support the continued DURING 2021
Committee. The Group Chief success of the business and creation The Committee met on eight
Executive Officer (GCEO), Chief of shareholder value. occasions during the year 2021
Executive Officer (CEO), Group and the activities carried out are
Chief Financial Officer, Chief Human The remuneration packages which are summarized below.
People’s Officer and external advisers linked to individual performances are
are invited to attend for all or any part Recommended performance-
aligned with the Company’s short-
of the meeting as required. based grade promotions of the
term and long-term strategy. The
senior management of SLT and its
Committee makes every endeavour
ROLE & RESPONSIBILITIES subsidiaries
to maintain remuneration levels that
The principal tasks of the Committee are sufficient to attract and retain Recommended extension of
include; members of the senior management services of senior officers of
team. permanent and fixed term of
Recommend to the Board on
contracts, of employment
formulation of proposals in respect
All Non-Executive Directors receive
of the remuneration policy of Non- Performance Review of senior
a fee for serving on the Board and
Executive Directors, Executive management
serving on Board committees based
Director/GCEO, CEO of SLT and
on their attendance at meeting. They Recommended payment of annual
its subsidiaries and executive
do not receive any performance bonus, increments for employees
management of SLT.
related incentive payments. of SLT and its subsidiaries and
Nominate for Board’s approval incentive schemes for respective
suitable candidates to fill casual GCEO, CEO AND THE sales staff
vacancies as the need arises. SENIOR MANAGEMENT’S
Performance Evaluation of the
REMUNERATION
Review the career and GCEO
development plans for the The main elements of the
remuneration package for the GCEO, Reviewed and recommended the
Company’s most senior members
CEO and senior management implementation of organizational
of management with a view to
are basic salary, benefits, and structural changes across the
ensuring that there is an adequate
performance related annual bonus. Regional Group
talent pool.
   Annual Report 2021  | 59

Reviewed and recommended

the revision of Directors fee for
attendance at Meetings of SLT and
Mobitel.
Reviewed and recommended
for approval of the Board the
policy on staff secondment to
subsidiaries
Reviewed and recommended
the appointment of CEO in place
of Mr. Kiththi Perera who is on
overseas leave and the selection
of a successor for the position of
COO as the current COO is due
to retire from the service by July
2022.

On behalf of the
Remuneration & Nomination
Committee

Chan Chee Beng

Chairman

15 March 2022
60  |  Sri Lanka Telecom PLC

REPORT OF THE RELATED PARTY

TRANSACTIONS REVIEW COMMITTEE
OBJECTIVE The activities and views of the DECLARATION BY THE BOARD
The objective of the Committee is to Committee have been communicated A declaration is given by the Board
exercise oversight on behalf of the to the Board of Directors, through in the Annual Report of the Board of
Board to ensure compliance with the verbal briefings, and by tabling the Directors on pages 112 to 117 as a
Code on Related Party Transactions, minutes of the Committee’s meetings negative statement to the effect that
as issued by the Securities and no related party transaction failing
Exchange Commission of Sri Lanka POLICIES AND PROCEDURES within the ambit of rule 9.3.2. of
(The Code) and with the Listing Rules The members of the Board of Listing Rules of the CSE was entered
of the Colombo Stock Exchange Directors of the Company have into by the Company during the year.
("CSE"). been identified as Key Management
Personnel. In accordance with the On behalf of the
COMPOSITION Related Party Transaction Policy, Related Party Transactions Review
The Committee during the financial the declarations are obtained from Committee
year 2021 comprised of three NEDs of each Key Management Personnel
whom two are Independent Directors. of the Company for the purpose of
The members of the Committee were identifying parties related to them.
as follows; Based on the information furnished
in these declarations, the Company Lai Choon Foong (Ms.)
Ms. Lai Choon Foong, Chairperson retrieves data on related party Chairperson
Mr. Mohan Weerakoon transactions from the data base of the
Company. 15 March 2022
Mr. Saman Fernando
ACTIVITIES DURING 2021
Mr. Saman Fernando, ceased to be a During the year, there were no
member of the Committee with effect non-recurrent or recurrent related
from 2 March 2022 subsequent to his party transactions that exceeded the
resignation from the Board of SLT. respective thresholds mentioned in
the Listing Rules requiring disclosure
Mr. K A Vimalenthirarajah was in the Annual Report.
appointed as a member of the
Committee on 15 March 2022. The Committee reviewed the
transaction in connection with the
In compliance with the requirements Share Sale & Purchase Agreement
of the Listing Rules of the CSE, the with Tempest Two (Pvt) Ltd, an
Chairman of the Committee is an investor consortium to divest the
independent Director. shares held in SLT Campus (Pvt) Ltd.
The Committee recommended for the
The Company Secretary functions as approval of the Board the transaction
the Secretary of the Committee. and noted that the transaction does
not require the approval of the
MEETINGS OF COMMITTEE shareholders or immediate market
The Committee had four meetings disclosure as per the listing rules.
during the financial year 2021 and
the attendance at these meetings is Details of other related party
showed in the Corporate Governance transactions entered into by the
Report on page 49. The Group Company during the financial year is
Chief Financial Officer attended the disclosed in Note 34 of the Financial
meetings by invitation. Statements.
  Annual Report 2021  | 61
62  |  Sri Lanka Telecom PLC

OUR BUSINESS MODEL

INPUTS VALUE CREATION

FINANCIAL CAPITAL
The funds obtained through shareholders and
other lenders which allow us to drive our value
creation
Total Equity: Rs 93.98 Bn

All Sri Lankans seamlessly connected with world-class information,

Borrowings: Rs 46.6 Bn

INSTITUTIONAL CAPITAL

communication and entertainment services

Rs 22.3 Mn Brand value CONNECTING
LIVES, BUSINESSES
The robust systems and processes in place
AND COMMUNITIES
The tacit knowledge of our team. THROUGH A RANGE
OF ICT SOLUTIONS

OUR VISION
AND SERVICES.
HUMAN CAPITAL
Competencies, attitudes and experience of our
workforce.

SOCIAL & RELATIONSHIP CAPITAL

The strong relationships we have nurtured
over the years with our customers, suppliers,
business partners and the society

NATURAL CAPITAL
Natural resources consumed in carrying out our
business activities.
Governance
Corporate
Strategy
Focused

MANUFACTURED CAPITAL
Expansion of the network and investments in
digital infrastructure.

Property, plant and equipment: Rs 141.94 Bn

85
   Annual Report 2021  | 63

OUTPUTS OUTCOMES

Voice and data services

via Fibre, ADSL, 3G,4G FINANCIAL CAPITAL
and 5G technologies (PAGE 78)

National Backbone Rs 12.16 Bn Profit After

Network Services Tax
PEO TV IPTV services Rs 2.69 Bn Dividend
Fixed ICT payments
Content production
Operations
Fintec services Rs 102.35 Bn Revenue
Data centre services
INTELLECTUAL
Akaza and Multi Cloud CAPITAL (PG 107)
platforms
Increased brand value
Digital Solutions/Products through the SLT-
Storage Solutions Mobitel unified brand
Mobile ICT name
Operations Smart home facility
Global IP network, PoP Increased digital
Service customer enablement
Smart Security HUMAN CAPITAL
e-Channelling (PG 96)

Healthcare platform Investment in training

eSports platform and development
Other
Segments Gaming platforms Opportunities for career
progression
BPO services
HR services SOCIAL &
Training Centre Services RELATIONSHIP
CAPITAL (PG 84)
Value added services
Mutual opportunities
National Business
for business growth
Directory
Holistic CSR initiatives
Management

Expectations
Stakeholder

Sophisticated
Risk

communications
infrastructure for the
Nation

NATURAL CAPITAL
(PG 104)
Operating landscape

Emissions
Changing consumer

Technological
Shift towards
digitalization

Government

Waste generation
preferences

Disruptions
(Page 64)

policies

MANUFACTURED
CAPITAL (PG 92)
Fibre network
Copper (xDSL) network
Wireless network
64  |  Sri Lanka Telecom PLC

OPERATING ENVIRONMENT
A GLOBAL PERSPECTIVE For Telcos, the investments continue
Telecommunications is The global telecommunications to be an area of key concern as
industry is the bedrock on which the rapid evolution in technology
pivotal to the country’s necessitates replacement of old
modern socioeconomic activity
digital future as it is built and it is hard to imagine a technologies prior to economic
utilisation of their useful life. However,
provides the necessary sphere of activity untouched by
it has also meant that markets
telecommunications. The pandemic
infrastructure to drive made its relevance universal as it were getting saturated and intense
competition was eroding margins.
growth. Growth of underpinned the way we interacted
The services offered by Telcos were
with the rest of the world. Working
telecommunications from home, online learning and becoming more commoditized and
future forward Telcos needed to
sector has been entertainment were seamlessly
integrated while applications to transform into technology companies,
supported by accelerated engage and empower customers expanding their portfolio of value
digitalisation of business proliferated accelerating digitalisation added services to compete effectively
of nearly every aspect of life. with established technology
applications to facilitate Technology companies experienced companies. Telcos are well poised
customer engagement unprecedented demand for their for the transformation as the
services and this amplified the analytics available provide a distinct
and enable employees to competitive advantage. Unlocking
demand for broadband services. The
work remotely during the trend continued in 2021 as waves this value will be key to increasing
the share of wallet of the customer
past two years. and variants of COVID-19 continued
and extending their life cycle by
to disrupt economic activity. Working
from home, online learning and adding relevant products to manage
entertainment were seamlessly customer value.
integrated as the world embraced
the possibilities of the 5th industrial COUNTRY PROFILE
revolution. Business experienced Sri Lanka’s economy is estimated to
cost efficiencies as digital platforms have grown by 4%1after weathering
provided the scalability and cost a lockdown in the 3rd quarter due to
rationalisation that were a key area the Delta variant. The country made
of focus. Consumer dependency on significant progress in vaccinating its
e-commerce surged as did financial population with 96% of its population
transactions. vaccinated with at least one dose,
82% with the 2nd dose and 54%
with the booster by 26th March
Real GDP Growth Rate 2022.2 Interest rates which were low
% in the first half of the year moved
upwards in the latter half as monetary
8 policy was tightened in response to
6 economic developments. Inflation
increased during the year to 12.1%
4
which was driven by a number of
2 factors including increased supply
0 chain costs and commodity prices.
Additionally, the sharp decrease in
-2
inflows of foreign exchange for a
-4 prolonged period and government
-6 debt repayments resulted in a
2017 2018 2019 2020 2021 2022 2023 foreign exchange liquidity crisis
World and a devaluation of the Sri Lankan
Emerging & Developing Asia rupee leading to wide ranging import
Sri Lanka restrictions and an energy crisis by
Source: World Economic Outlook October 2021 early 2022.

Monetary Policy Review No.1 of 2022, CBSL

1

Presidential Secretariat Sri Lanka, Status of Cases and Vaccination

2
   Annual Report 2021  | 65

Telecommunications Sector Growth Category of Service 2021 SLT Group

Rs. Bn
Fixed Access Telephone Service 3 ü
35 Cellular Mobile Service 4 ü
Data Communications (Facility based) 2
Data Communications (Non-facility based and 3
30
Internet Service Providers)
Trunk Mobile Radio 1
25 International Telecommunication Operators 6 ü
Direct to Home Satellite Broadcasting Service 4 ü
20 Cable TV Distribution Network 3
Q1 Q2 Q3 Q4
Other Operators 2
19 20 21 Total 28
Source: GDP By Industrial Origin at Current Market Prices

TELECOMMUNICATIONS has been supported by accelerated key government agency shaping

SECTOR IN SRI LANKA digitalisation of business applications the development of the national
The Telecommunications sector in the to facilitate customer engagement telecommunications and technology
country is one of the most dynamic and enable employees to work landscape with a mandate to making
sectors and its growth was accelerated remotely during the past two years. Sri Lanka a digitally inclusive country
with the onset of the COVID-19 This trend is expected to continue as with a mission of transforming Sri
pandemic in 2020. Social distancing we move into the industrial revolution Lanka as a creative knowledge-based
became a necessity since then to that is being shaped by the rapid society.
minimise risk, and wide ranging adoption of artificial intelligence
business disruptions made working supported by access to big data There are 28 licenses issued by
from home and learning from home and improved hardware processing the TRC as above and the Sri
a necessity, increasing the demand capabilities. Lanka Telecom Group holds 4 of
for reliable telecommunication these licenses as set out in the
services to stay connected to family, Telecommunications is pivotal table alongside. Growth of the
workplaces, learning institutions, to the country’s digital future country’s telecommunication sector
other economic activity and social as it provides the necessary is graphically depicted overleaf.
interactions. An essential service infrastructure to drive growth. Sri The charts set out reflect the
that supports Sri Lanka’s connectivity Lanka’s telecommunications sector is coverage and increasing demand for
to global opportunities, the regulated by the Telecommunications telecommunication services in the
telecommunications sector grew Regulatory Commission (TRC). country.
by 10.9% in 2020 and accounted Additionally, the Information and
for 0.66% of GDP in the same year. Communications Technology
Growth of telecommunications sector Agency of Sri Lanka (ICTA) is a

Mobile Fixed Per Capita Banking Transactions Value

Mn. Connections Mn. Connections Rs. ‘000

Southern Southern
250
Uva Uva
Sabaragamuwa Sabaragamuwa
200
Western Western
Central Central 150
Eastern Eastern
North Western North Western 100
North Central North Central
Northern Northern
50
0 2 4 6 8 10 0 500,000 1,000,000 1,500,000
0
2016 2017 2018 2019 2020
Source: TRCSL https://www.trc.gov.lk
Per Capita Internet Banking Transactions Value
Per Capita Mobile Banking Transactions Value
66  |  Sri Lanka Telecom PLC

OPERATING ENVIRONMENT

FIXED ACCESS TELEPHONE CELLULAR MOBILE TELEPHONE 2021 HIGHLIGHTS

SUBSCRIPTIONS SUBSCRIPTIONS Growth
Fixed á9%
Mn. Mn.
Mobile á4%
Subscriber Growth

3.0 35

2.5 30
No. of Subscribers
2.0
25 Fixed: 2.85 Mn
20
1.5 Mobile: 29.96 Mn
15
1.0
10
0.5 5

0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

BROADBAND: FIXED BROADBAND: MOBILE Subscribers

Fixed á 43%
Mn. Mn. Mobile á 24%
3.0 20

2.5 No. of Subscribers

Broadband

15 Fixed: 2.81 Mn
2.0
Mobile: 19.42 Mn
1.5 10

1.0
5
0.5

0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

INTERNATIONAL CALL LOCAL CALL TERMINATIONS CALL TERMINATIONS

TERMINATIONS International:
Incoming â24%
Mn. Bn.
Outgoing â35%
800 700
Local
Call Terminations

700 600 Incoming á10.7%

600
500
Outgoing á 9.6%
500
400
400
300
300
200
200
100 100

0 0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
International Incoming Local Incoming
International Outgoing Local Outgoing

Source: TRCSL https://www.trc.gov.lk

   Annual Report 2021  | 67

RESPONSIVE TO STAKEHOLDERS
Operating in an increasingly need and significant resources were dissemination of information to
competitive industry, the Sri Lanka allocated to assess stakeholder needs all stakeholders. The table below
Telecom Group is conscious of the in order to address them effectively discusses the specialised mechanisms
need to maintain an equilibrium and efficiently. in place for engaging the stakeholders
between the value delivered to together with the concerns identified
stakeholders and the value derived The Sri Lanka Telecom website, and a summary of their responses.
from them. The pandemic era newspapers, brochures, magazines
heightened our awareness of this and social media facilitate

Stakeholder Engagement Frequency of Stakeholder Concerns Our Response

Mechanism Engagement
Customer Annually Reliable service 99.5% Uptime
satisfaction survey or more
frequently as
required
CUSTOMERS Branches As per the Availability of the Branches availability in every
Our customers vary customer engagement team/ district
from individuals need tool
to global Contact Centre Easy access to Portals Expanding Fibre network
enterprises. We Self-care Portals and Apps
have established Expanding 5G network
dedicated teams
SLT and Mobitel Privacy Investments in data protection
to manage the
Self Care Apps Cybersecurity and cybersecurity
varying needs
of the different Proposals (for Regularly Troubleshooting Response teams
customer segments, businesses)
facilitating targeted
Customer visits Convenience Empowering customers through
responses.
Meetings Overall experience selfcare portals

Newsletters Other value-added The Embryo, A/L Kuppiya,

features Callertune, Sisuconnect, eBill,
MTicketing
Employee Quarterly Health & Safety at Stringent protocols for safety and
satisfaction survey work provision of PPE
Healthcare during Holistic care package for infected
pandemic employees
Group meetings Regularly
EMPLOYEES
One on one Fair remuneration Salaries, increments and bonuses
Our employees
meetings paid
drive our growth
with their skills, Intranet Recognition and Performance management system
knowledge, rewards and awards programmes
expertise, ideas and Grievance As needed Skill development Total number of employees in the
work mechanisms year 2021 at SLT was 6,590 and at
One on one Career progression Mobitel was 1,442.
correspondence
Average training hours per
employee of SLT and Mobitel is
19.85 and 15.3, respectively.
Performance Annually Freedom of collective 24 active trade unions and
appraisals bargaining harmonious industrial relations
Employee Events Frequently A great place to work Holistic approach to ensuring that
SLT is a preferred employer
68  |  Sri Lanka Telecom PLC

RESPONSIVE TO STAKEHOLDERS

Stakeholder Engagement Frequency of Stakeholder Concerns Our Response

Mechanism Engagement
Quarterly results Quarterly Sustained growth in Earnings growth
earnings
Annual Report Annual Dividends Regular payment of dividends
INVESTORS AGM Share price Increase in share price
Investors provide CSE Disclosures As needed Timely disclosure Quarterly results and other
the necessary of price sensitive information disclosed via the CSE,
capital and expect information website and media
a fair return on their
investments Media releases Regularly Sound governance Governance structures and risk
and risk management management processes set in
place
Rating Reviews Annual Organisation stability Strong balance sheet and liquidity
and resilience positions
Dealer Satisfaction Quarterly Timely payment of Timely payment of dues to
surveys dues vendors, dealers and other
suppliers
BUSINESS Vendor satisfaction Annually Fair business Tender committee at Board level
PARTNERS surveys practices and strong processes and policies
Business partners in place to ensure fair business
share our growth dealings
journey and
Communication of As needed Opportunities for Regular feedback via Dealer and
facilitate delivery of
requirements growth Vendor awareness and review
value to customers
Meetings sessions and post evaluation
reviews
E-Tenders and
e-auctions
Dealer reviews Bi-monthly Reward programmes for Vendors
Dealer awareness Monthly and Dealers
sessions
Vendor review and Annually
awareness sessions
Meetings with Regularly A partner for Investments in national
TRCSL, Treasury, progress telecommunications infrastructure
Ministry, ICTA, BOI,
GOVERNMENT Key Partner in E-government
Inland Revenue and
initiatives
& REGULATORS other government
Operating in a authorities Partner for developing country’s
regulated industry, Annual Report Annually technology sector
the government is Creating direct and indirect
Presentations As required
a key stakeholder employment
for Sri Lanka
Telecom Group. Connecting Sri Lanka to global
The Government opportunities
is also the main Compliance Processes in place to ensure
shareholder of with regulatory compliance with regulatory
the Group and requirements and requirements
expects Sri Lanka timely reporting
Telecom Gorup
Revenue collection Timely remittance of taxes and
to spearhead the
Timely payment of levies collected
country’s progress
to a digital taxes
knowledge-based
economy
   Annual Report 2021  | 69

Stakeholder Engagement Frequency of Stakeholder Concerns Our Response

Mechanism Engagement
Network of Regular Responsible business Focus on digital inclusion of all Sri
branches practices Lankans
Affordability of services and
COMMUNITY recognition of special need
Ensuring that we groups
have a positive
Islandwide presence and
impact on the
coverage
community and
minimise potential Focused integration of ESG into
negative impacts business processes
Events and Need based Mitigation of Assessment of carbon footprint
activations potentially harmful and emission reduction activities
impacts
Social media Regularly Engaging with and Achievements of SLT Group
Mass media Regularlt uplifting communities
Information about SLT Group
products and services
70  |  Sri Lanka Telecom PLC

STRATEGY
Clear communication of strategy is takes into consideration our value environment, material matters to the
necessary for alignment of a large and creation processes, feedback from Group and the resources available.
diverse organisation and a dedicated stakeholder engagement activities, The Sri Lanka Telecom Group’s
department coordinates the Group’s the opportunities and risks stemming strategy, achievements and plans are
strategic planning process. It from the prevailing operating summarised below.

VISION MISSION
All Sri Lankans seamlessly connected with world-class Your trusted and proven partners for innovative and
information, communicaiton and entertainment services exciting communication experiences delivered with
passion, quality and commitment

ment Infrastructure expansion

age
an
M
k

Consolidate brand
Ris

unification
Market
vernance 

Enabling the leadership

The Catalyst & Financial
country’s ICT
in Sri Lanka’s Resilience
Digital Journey
Go

An Empowered Team
 

n
iv e
Value Dr
Sustainable Growth

Strategy Infrastructure Consolidate Enabling ICT Sector An Empowered Sustainable Growth Market Leadership
Expansion Brand Unification Team & Financial
Resilience

Progress in SEA-ME-WE 6 Teleshops Multi-cloud The Embryo – Maintained Ranked among

2021 converted to services Intrapreneurship Consumer Top 10 Brands
Roll out of
Fibre network unified brand The Embryo Studio affordability in Sri Lanka
Roll out of 5G Media Entrepreneurship Smart Technician Revenue growth of Strengthened
campaigns Studio training per 12.3% financial
Replacing 3G on unified employee resilience with
with 4G Venture Capital Total Asset growth
brand Holistic care of 8% reduced debt
Studio
Cross sell to for employees Growth of Strong
customers Data farms during cashflows
subscriber base
One Face to pandemic supporting
Launched liquidity
Customer Empowering initiatives to
Cost employees reduce emissions
optimization through remote and minimise
working options waste
Plans for Rollout Fiber Consolidated Carrier neutral Increase average Mixed Segmented
2022 Network systems data centres training hours developments Market Growth
Rollout 4G/ 5G Unified Smart Platforms per employee with collaborative Strengthen
network Campaigns Smart technician partnerships Financial
Research &
Increase rural One face Development and Smart sales Renewable Energy Resilience
penetration Omni Initiatives training Reduce carbon
through channel Leadership footprint
Gamata experience Training
Sannivedanaya Employee
Data Centre productivity
Expansions enhancement
   Annual Report 2021  | 71

DETERMINING MATERIAL ISSUES

MATERIAL MATTERS No. Topic Importance to Importance to
In determining the material matters, SLT Stakeholder
Sri Lanka Telecom Group considers 1 Financial and economic performance Very High Very High
various aspects of its operations that 2 Employment Very High Very High
are critical to achieving its strategic 3 Training and education Very High Very High
goals and those that are identified as
4 Customer privacy Very High Very High
key concerns for stakeholders. The list
of material matters for the 2021 are 5 Work and lifestyle changes Very High Very High
given below: 6 Purchasing power of consumers Very High Very High
7 Macroeconomic conditions Very High Very High
8 Financial resilience Very High High
9 Industry evolution in country Very High High
10 Energy Very High High
11 Indirect Economic Impacts Very High Medium
12 Procurement Practices High High
13 Anti-corruption High High
14 Anti-competitive behaviour High High
15 Emissions High High
16 Effluents and waste High High
17 Environmental compliance High High
18 Occupational health and safety High High
19 Freedom of assiciation and collective
bargaining High High
20 Socioeconomic compliance High High
21 Community Health and Safety High High
22 Technology evolution High High
23 Research and development High Medium
24 Diversity and equal opporutnity Medium High
25 Biodiversity Medium High
26 Local community engagement Medium Medium
27 Marketing and labelling Medium Medium

High
1,
2,
3, 4,
5, 6, 7,
Importance to Stakeholder

12,
13, 14, 15,
24, 25 16, 17, 18, 19, 8, 9, 10
20, 21, 22

26, 27 23 11

Low Importance to Sri Lanka Telecom Group High

72  |  Sri Lanka Telecom PLC

ENTERPRISE RISK MANAGEMENT

RISK GOVERNANCE
Risk management is The Board bears ultimate Migration to digital
fundamental to the Group’s responsibility for managing risk and platforms by individuals
allocating resources to mitigation
ability to create sustainable of the same. The SLT Group has in and entities continued
value for stakeholders place a well-established system of during the year and
in the short, medium risk management which enables the
and long term and the Group to identify, measure, monitor businesses accelerated
Group has set in place a and manage risks effectively. The their digitalisation plans,
year under review saw significant
robust risk management enhancing capacity
threats emerge which have been
structure and processes for managed with increased alert levels utilisation of digital
management of enterprise throughout the Group, facilitating
risks. These processes also early identification and mitigation of
infrastructure around the
facilitate identification of potential risks. world.
opportunities for growth
which is an integral part
of the risk management
process.

Risk ERM at Audit

Governance Committee
Oversight
Su
s

sta
gie

Tone at the top

in
ate

an
str

dC
loy

on
p
de

tin
uo

ERM Infrastructure
nd

usl
pa

Integrated Group
y

Risk Infrastructure
elo

im

Risk Management
and Management
pro
v
De

People Process Technology

ve

Functional
Risk Process Group Level Risk
Management
Risk

Identify Access and Integrate Respond to Design, Monitor Risk

risks evaluate risk risk implement issues and Owners
risk and test escalate
controls
   Annual Report 2021  | 73

AN UNCERTAIN RISK increased in the first half of 2021 and downgrades to its sovereign rating.
LANDSCAPE supply demand stresses continued. Continuing woes in the Tourism
The prolonged duration of the Quantitative easing measures sector and lower inward remittance
pandemic posed significant threats adopted by many governments with coupled with large government debt
exposing and amplifying the the onset of the pandemic gave repayments resulted in a foreign
economic vulnerability of people, way to tightening monetary policy exchange liquidity crisis which has
businesses and countries. Business resulting in upward movement of also led to an energy crisis and a
disruption continued in 2021 with interest rates in the latter half of sharp devaluation of the Sri Lankan
new variants and waves, heightening 2021. Migration to digital platforms rupee by end March 2022. The
concerns for health and safety and by individuals and entities continued seeming convergence of risk factors
business continuity. Vaccinations during the year and businesses has exacerbated the uncertainties
were rolled out albeit unevenly accelerated their digitalisation plans, for the year ahead with significant
across countries and by early 2022, enhancing capacity utilisation of uncertainties in the socioeconomic
a number of countries were well into digital infrastructure around the landscape.
the booster dose. Predictions that the world. Cybersecurity threats increased
pandemic was nearing endemicity exponentially with hackers becoming RISK OVERVIEW
saw a return to physical work as more sophisticated giving rise to The diagram below sets out the key
employers were eager for employees increased investments cybersecurity. categories of risks that are likely
to return to work as supply chain By the 4th quarter of 2021 there to present significant threats and
and logistics issues continued to was a convergence of risk factors in opportunities to the Sri Lanka Telecom
hinder economic activity and growth. Sri Lanka, increasing its economic Group.
Inflation rose as commodity prices vulnerability and resulting in further

PEOPLE
FINANCIAL
Health & Safety of Workforce
Credit Risk
Talent Retention
Market Risks
Interest Rate Risk Skill evolution
Exchange Rate Risk Health and safety of community
Commodity Price Risk
Liquidity & Funding Risk

RISK
OVERVIEW

TECHNOLOGY
Reliability OPERATIONAL
Technology Business continuity
evolution
Fraud and error
Transformation
Cyber threats

STRATEGIC Compliance and

Consumer behaviour ENVIRONMENTAL regulatory risks
Energy management
Evolution of business
model Circular economy

Resource allocation Climate change

and management impacts

Reputation risk Resource depletion/

scarcity
74  |  Sri Lanka Telecom PLC

ENTERPRISE RISK MANAGEMENT

RISK SUMMARY
Risks Mitigation & Opportunities Assessment

FINANCIAL RISKS
Financial resilience is key to growth and sustainability of the business and sustained earnings
Increasing interest rates Risk rating affirmed at AA- (lka) with a stable High
Potential deterioration in affordability of outlook by Fitch Ratings Lanka Ltd., supports Despite increasing
services and credit quality due to inflationary Group’s ability to source capital threat levels, the
pressures and reduced disposable income Prudent debt equity ratio of 66.1% provides Group is financially
sufficient headroom for increasing debt in resilient as evinced by
Elevated levels of exchange rate risk with
case of need its strong credit rating
sharp devaluation of the Sri Lankan rupee in
affirmed in January
March 2022 making investments expensive Prudent debt management and strong
2022. However, the
Foreign exchange liquidity crisis with wide cashflow generation mitigates potential
impact on profitability
ranging import restrictions impact of rising interest rates
can be high due to
Exchange rate risk makes investments in Strong credit control supports liquidity the escalation in
infrastructure more expansive Enhancing digital payment channels for retail operational costs.
Commodity price risk and inflation is customers Therefore, the risk is
expected to increase operational costs Introducing several Financing options to assessed as High.
reduce forex exposure
Potential opportunities for growth in payment
channel offerings to customers
Headroom to increase tariffs as it is amongst
the lowest in the world although this needs to
be balanced with inflationary pressures
SLT Group dollar deposits provide a hedge
against exchange rate fluctuations

PEOPLE RISKS
Risks related to workforce, consumers, and community
Spread of pandemic within workforce and Implemented stringent health and safety Mitigating actions
community protocols to mitigate pandemic risks implemented for
including remote working, minimising People risks have
Health and safety of employees and
physical gatherings, provision of PPE, holistic been effective,
consumers
care package for employees supporting growth
Retaining skilled talent pools during in employee and
Increasing investment in training and
economic crisis customer satisfaction.
development aligning with digital
Despite this, the risk
Upskilling employees to adapt to changes in transformation
is assessed as High
technology and digital transformation
Intrapreneurship opportunities for employees due to the strategic
Supporting employees migrate to new norms through The Embryo initiative importance of the risk
of working category.
   Annual Report 2021  | 75

Risks Mitigation & Opportunities Assessment

TECHNOLOGY RISK
The rapid evolution of technology in the telecommunications and allied fields, the surge in demand with the onset of the
pandemic and opportunities for institutional transformation makes this category of risk critical to sustained earning growth.
Consumer demand for increasingly high Dedicated network planning function to As adoption of
bandwidth and speeds for evolving lifestyles assess short-, medium-, and long-term needs cutting-edge
of the SLT Group technology is critical
Surge in subscriber base and digital
to the Group’s
transaction volumes which may or may not be Accelerated investments to meet the surge in
strategic goals, the
sustained in a post pandemic era demand
risks are assessed as
Affordability of new technologies in emerging Expansion and roll out of fibre and 5G High.
and developing markets networks
Speed of technology evolution in increasing, Investment in the 6th SEA-ME-WE cable,
making current technologies obsolete upgrading of the 4th and retirement of the
3rd cables.
Collaboration with ICTA, TRCSL and other
influential technology associations to assess
future requirements and planning investments

OPERATIONAL RISKS
As telecommunications is an essential service, maintaining continuous service in a safe and secure manner presents
significant challenges which are classified as operational risks.
Business continuity amidst the pandemic Detailed business continuity plans prepared Assessed as Medium
and related lockdowns presented several to manage the risks during pandemic due to efficacy of
challenges mitigation activities
Strict health and safety protocols
Servicing customer requests and visiting implemented to minimise threat of contagion
homes presented challenges for field staff
Ramped up investments in cyber security
Cyberthreats escalated during the year to identify and monitor potential threats to
institution and customers
Ensuring sufficient energy for network
operations during energy crisis Increased rigour of oversight and review by
internal audit
Compliance with evolving regulatory
requirements Processes are in place to facilitate regulatory
compliance which is also a matter of internal
audit review
76  |  Sri Lanka Telecom PLC

ENTERPRISE RISK MANAGEMENT

Risks Mitigation & Opportunities Assessment

STRATEGIC RISKS
These risks have a significant impact in determining the effectiveness of strategy and achievement of goals.
Consumer behaviour patterns underwent a Data analytics undertaken to monitor Threat is assessed
significant change during the pandemic and consumer behaviour as Medium due
remain in a state of flux to effectiveness of
Focus on Research and Development through
mitigating activities
The business model of the Group is the Embryo project
evolving and a planned transformation
Regular stakeholder surveys
from a telecommunications company to a
technology company is taking shape and Prudent management of resources
form
Well established procurement and tender
As resources are finite, it is critical to prioritise procedures with oversight by the Board
strategies and allocate sufficient resources to
Brand surveys
achieve successful outcomes
Ratings
As the National Telecommunications
service provider, our reputation is critical to Clear communication of transformational
maintaining reliable and credible relationships goals and management of the process
with our stakeholders

ENVIRONMENTAL RISKS
Environmental risks are increasingly becoming apparent with depletion of non-renewable sources and resultant demand
supply gaps
Energy management is key to managing Opportunities to enhance solar power Assessed as Medium
emissions and impact on climate change generation reducing dependency on non-
renewable sources of energy and reducing
Rising costs of energy
operational costs
Rising costs of non-renewable resources due
Investments in solar power generation
to supply limitations
Implementing several waste-to-cash initiatives
Increased awareness of potential for saving
through reduce, reuse and recycling Responsible disposal of e-waste and recovery
of materials that can be reused/recycled
Techology can be a catalyst for resource
efficiency which can support operational cost Mee Tree planting campaign to fertilise soil
management and absorb CO2 emissions
Safeguarding networking from extreme
weather events
  Annual Report 2021  | 77
78  |  Sri Lanka Telecom PLC

FINANCIAL CAPITAL
Sri Lanka Telecom
recorded Profit After
Tax growth of 54.3% to
Rs.12.2 Bn for the year
ending 31st December
2021 driven by broad
based revenue growth
of 12.3% and Groupwide
cost minimisation
initiatives. The financial
position of the Group
also strengthened during
the year as Total Assets
grew by 7.6% to Rs. 219.9
MARKET
Bn and equity increased
by 11.5% to Rs.94 Bn. AA- (lka) CAPITALISATION
Rs. Bn
The debt equity ratio FitcFitch
Ratings affirmed Sri
improved from 78.1% to Lanka Telecom PLC’s National 80
70
66.1% as equity increased Long Term rating at AA- (lka) 60
50
and borrowings were with a stable outlook in 40
30
repaid. Liquidity was January 2022. 20
10
also strengthened with 0
increased operating 2019 2020 2021

cashflows and improved

Segmental Analysis: Profit Before Tax Sri Lanka Telecom is the leader
cash and cash equivalent Rs. Bn
positions after funding in Fixed Telephony in the country
capital expenditure of 120
and has the second largest
Rs.26 Bn. All this positions market share in Mobile Telephony.
100 Fixed
Rs.5.1 Profitability of Mobile Operations
Sri Lanka Telecom Group
Liabilities

Bn
80 increased by 53.5% to Rs.9.4 Bn
for strong growth in the
60 supported by increased broadband
future as the National ICT
revenues. Fixed Telephony
Solutions Provider. This 40 Mobile
Rs.9.4 profitability growth was also strong
segment sets out how 20 Bn
at 12% driven by revenue growth.
we nurtured our financial 0
capital in 2021. 50 100 200
Assets

CAPITAL
SUBSCRIBERS
EXPENDITURE
Rs. Bn Mn
30 12
25 10
20 8
15 6
10 4
5 2
0 0
2019 2020 2021 2019 2020 2021
   Annual Report 2021  | 79

INCOME STATEMENT cost increase to 9.3%. Additionally, Use of EBITDA

Revenue programmes such as waste to cash Rs. Bn %
Group revenue increased by 12.3% also drove savings as we recycled
to Rs.102.3 Bn in 2021 as online and repurposed used materials, 50 42
activity surged with continuing integrating sustainable practices into
lockdowns and acceleration of our processes. These resulted in an 40 40

digital infrastructure development improved EBITDA margin of 40.2%

by businesses. Consumer migration in 2021 compared to 38.9% in 2020 30 38

to digital platforms for transactions, which was commendable as it was

20 36
learning and entertainment continued achieved without upward revisions in
to gather momentum in 2021 as tariff structures.
10 34
well. Intermittent lockdowns also
necessitated working and learning Revenue 0 32
2019 2020 2021
online which supported increased Rs. Bn
PBT Net Interest
usage of broadband. PEO TV
also recorded healthy growth 120 Depreciation EBITDA Margin
& Amortisation
underpinned by surge in usage and
new connections. Usage increased 100

across all customer segments ranging Increased revenue á

80
from individuals to corporate and Operational efficiencies á
government entities. Demand for 60 Depreciation á
fixed voice services was stable in 2021 Net Interest costs á
40
supported by increased connections
in contrast to the declining trend 20

observed in 2020. 0
2019 2020 2021 EBITDA Fixed Operations
Increased coverage through the Fixed Mobile Others Rs. Bn
Group’s accelerated fibre expansion
programme and the expansion of 100
the 4G LTE network were major New Connections á
contributory factors for new 80
Broadband Usage á
connections. It is noteworthy that Fixed Voice á
60
the revenue increase was achieved No change in tariff rates
despite offering attractive pricing on 40
learning and working tariff packages
taking into consideration the need to 20
EBITDA
ensure affordability and also that there
Rs. Bn
were no tariff increases during the 0
2019 2020 2021
reporting year.
150 Revenue EBITDA

Revenue from Carrier Domestic 120

business grew significantly during
the year while the revenue from data 90 EBITDA Mobile Operations
products provided to Corporate and Rs. Bn
Government business segments too 60
grew notably year-on-year. 80
30
70
Revenue from Fixed Telephony 60
0
increased by 16% to Rs.59.8 Bn in 2019 2020 2021 50
2021 accounting for 53.4% of Group Revenue EBITDA
40
Revenue. Mobile revenue increased
30
by 8.7% to Rs.47.1 Bn accounting
for 44.5% of Group Revenue. Fixed operations of the Group
20
10
recorded an EBITDA of Rs. 21.4 Bn,
EBITDA up by 16.4%. The EBITDA margin 0
2019 2020 2021
Group EBITDA increased by 16.1% grew from 35.7% in the year before to Revenue EBITDA
to Rs. 41.2 Bn reinforced by revenue 35.9%. EBITDA of Mobile operations
growth and improved operational grew to Rs. 19.5 Bn, reflecting a
efficiencies. The brand unification 17.7% growth, pushing the EBITDA
played a key role in driving synergies margin up to 41.3% from 38.2% in the
which enabled us to curtail marketing year 2020.
80  |  Sri Lanka Telecom PLC

FINANCIAL CAPITAL
MANAGING COSTS Profit after tax of Mobile operations FINANCIAL POSITION
Cost rationalisation was a key area recorded its highest profits in its
in 2021 as the Group needed to 28 year history at Rs. 8.0 Bn. Fixed
increase spending in Sales and operations of the Group too recorded Sri Lanka Telecom
Marketing to grow market share while a remarkable growth in profit after tax
strengthened its financial
depreciation was exerting pressure to Rs. 5.9 Bn, up by 45.9%.
position through strategic
on costs as we continued to upgrade
and expand our network. During the
investments to enhance
year, Administrative costs increased Cost Analysis revenue generation
by 10.7% primarily stemming from the Rs. Bn capability and prudent
increased Depreciation & Amortisation capital management to
100
costs by 14.7% and increased strengthen its financial
90
International Settlement cost by Rs.
80 resilience. The infographic
1.4 Bn resulting from the increase of
Transit revenue during the year. The
70 below reflects the changes
60
overall cost increase of 11.3%, which 50
from 2020 to 2021.
was sufficiently below the revenue 40
growth rate of 12.3%, together lifted 30
the Operating Profit up by 19% and 20
improved the Operating Profit margin 10 Analysis of Total Assets
& Funding
to 13.5%. 0
2019 2020 2021
Rs. Bn
Sales & Marketing Administrative
PROFIT BEFORE & AFTER TAX 250
Direct Costs
Profit before tax (PBT) increased by 200
32% to Rs.12.8 Bn supported by 150
Direct Costs á 12%
increased revenue, improved cost 100
Administrative Costs á 11%
management, increase in other income
Sales & Marketing Costs á 9% 50
and reduced foreign exchange losses.
0
Taxation also decreased during the
year by 64.1% due to reduced tax rates -50

which also provided a strong boost to -100

profitability. Accordingly, profit after tax Group PAT Walk from 2020 to 2021 -150
increased by 54.3% to Rs.12.2 Bn. Rs. Bn -200
22 -250
20 2019 2020 2021
Profit Before Tax 18
16 Property, Plant & Equipment
Rs. Bn
14 Other Non-Current Assets
12 Current Receivables
14 10
Other Investments, Cash & Cash Equivalents
8
12 Other Current Assets
6
10 4 Equity
2 Non-Current Borrowings
8
0 Other Non-Current Liabilities
Revenue

Operating
Costs
Depreciation
& Amortisation
Income
Tax
Forex Loss
Reduction

PAT 2021
Other
PAT 2020

6
Current Borrowings
4 Other Current Liabilities

0 Increase
2019 2020 2021 Decrease

PAT Taxation

PBT á32%
Taxation â64%
PAT á54%
   Annual Report 2021  | 81

CURRENT ASSETS Other current assets amounted to

PPE á 3% to Rs.141.9 Bn with Trade & Other Receivables accounted 8.9% of the total which includes Rs.2.7
capex of Rs. 28.5 Bn for the largest component of Current Bn as inventories and Rs.1.5 Bn as
Liquid Assets (Other Assets classified as held for sale.
Assets which was consciously
Investments and Cash and
managed and reduced from 57.9%
Cash Equivalents) á69% to CAPITAL & FUNDING
Rs.26.3 Bn in 2020 to 46.1% in 2021. The Group
Total Assets á 8% to managed to maintain the Trade Equity is the main source of funding
Rs.219.9 Bn Receivables at the same level while and accounted for 42.7% of all
Equity á 12% to Rs.94 Bn also delivering revenue growth of funding sources amounting to
Total Borrowings â15% to 12.3% which would normally result in Rs.94 Bn as at the close of the year.
Rs.46.6 Bn increased Trade Receivables. Effective Borrowings were curtailed to 21.2%
• Vendor Financing á 484% to collection techniques and exercise of of total funding to strengthen the
Rs.6.3 Bn credit control mechanisms were key financial resilience of the Group.
contributors to management of Trade Vendor financing is a growing source
Receivables. of funding for the Group, increasing
by a multiple of 4.8 to Rs.6.3 Bn.
PPE as a percent of Total Assets
Current Assets Supplier financing also increased
% by 19.8% to Rs.42.2 Bn, becoming
% FY 2021
9% FY 2020 an increasingly significant source
of funding. Other current and non-
current liabilities amounted to 14.1%
35% 9% of total funding and included Lease
46%
Liabilities of Rs.9.2 Bn, Deferred Tax
65% 33% 58% Liabilities of Rs.5.6 Bn and Employee
benefits of Rs.5 Bn amongst others.

45% Capital Structure

PPE Total Other Assets Current Receivables %

Other Investments, Cash &
Cash Equivalents
Group Asset Base Other Current Assets

%
40%
Current Assets to Current Liabilities 60%
%
2.3%

65.4%
32.3%

51% Debt Equity

49%

Fixed Mobile Others

Current Assets Current Liabilities

NON-CURRENT ASSETS
Property, Plant & Equipment (PPE)
is the largest component of the The Group’s liquidity position was
Statement of Financial Position and strengthened significantly with short
accounted for 64.5% of Total Assets term investments and cash and cash
with a net book value of Rs.141.9 Bn. equivalents amounting to Rs.26.3 Bn,
Capital expenditure for PPE during the an increase of 69.2% over 2020.
year amounted to Rs. 28.5 Bn which
was partly offset by the depreciation As depicted in the graph, the
charge for 2021 of Rs.22.2 Bn. PPE proportion of liquid assets increased
and Right of Use Assets accounted for from 33.2% to 45% in 2021 due to
92.7% of Non-Current Assets as at focused management of working
the reporting date. capital and liquidity.
82  |  Sri Lanka Telecom PLC

FINANCIAL CAPITAL
Sources of Funding net cash used in financing activities our growth with careful balancing of
%
recorded an outflow of Rs. 7.4 Bn stakeholder interests. The infographic
FY 2021
5% FY 2020 for the year. The Group concluded below provides a summary of the
9% the financial year with a favourable value delivered to our investors.
Cash and Cash Equivalents balance
19% 3% 43%
of Rs. 16.2 Bn compared to Rs. 10
11%
Bn in the year before. The Group has Valuations
17% 41% Rs. Bn
sufficient liquid assets to meet its
1% obligations and is poised for growth
27% with enhanced value propositions for 100
3% its stakeholders.
80

21% Value to Investors

60
Equity Investors have received sustained
Borrowings earnings growth from the Sri Lanka 40
Vendor Financing Telecom Group supported by the
Trade & Other Payables strength of its unified brand, market 20
Other Non-Current Liabilities position, continued investments in
Other Current Liabilities cutting edge technology and capacity 0
2017 2018 2019 2020 2021
enhancements. Strong governance
and a socially and environmentally Net Asset Value
responsible mindset have supported Market Capitalisation
CASHFLOWS
Net Cashflows generated from
operations increased by 35.1% to
Rs.43.6 Bn and utilisation of the same Returns 2020 2021
reflects the Group’s commitment to
Sri Lanka’s digital journey and prudent Market Capitalisation Rs. 60.4 Bn Rs. 70.0 Bn
management of financial resources Earnings Per Share (EPS) Rs. 4.37 Rs. 6.73
and exposures. The cash outflow on Return on Equity (ROE) 9.4% 12.9%
capital expenditure rose to Rs. 26 Bn
in 2021 compared to Rs. 14.6 Bn in Return on Assets (ROA) 3.9% 5.5%
2020 as there was a need to invest Dividend Per Share (DPS) Rs. 1.49 Rs. 2.02
in new technologies, improve speed
and enhance capacity to support the
country’s increased dependency on Return on Equity (ROE) Earnings Per Share (EPS)
telecommunications in every aspect %
of life. Primarily due to the higher Rs. Bn Rs.
settlement of borrowings compared 14
to proceeds from fresh borrowings, 12 12 8
7
10 10
Use of Net Cash Generated From 6
8 8
Operating Activities 5
6
Rs. Bn 6 4
4
3
4
45 2 2
40 2
0 1
35 2017 2018 2019 2020 2021
0 0
30 2017 2018 2019 2020 2021
25
20 PAT EPS
15
10
5
0
2020 2021

Cashflows from Investing Activities

Cashflows from Financing Activities
Increase in Cash & Cash Equivalents
   Annual Report 2021  | 83

Dividend Per Share (DPS)

Overview Rs. Investors have received

sustained earnings
2.5
ROE á growth from the Sri

37 % 2.0

1.5
Lanka Telecom Group
supported by the
1.0 strength of its unified
ROA á brand, market position,

41 %
0.5
continued investments
0.0
2017 2018 2019 2020 2021 in cutting edge
technology and capacity
EPS á Return on Assets (ROA) enhancements.
%

54 % 6

4
Market Capitalisation á

16 %
3

2
11

0
Net Asset Value á 2017 2018 2019 2020 2021

12 %
84  |  Sri Lanka Telecom PLC

SOCIAL AND RELATIONSHIP CAPITAL

telecom service providers, global
carrier and SME and Micro business.
At SLT, we are committed Having understood the needs of our
to nurturing long lasting customers, we provide a range of
relationships with our telecommunication services targeted
external stakeholders at these groups.
experiences. We actively
engage with them to A STRONG CUSTOMER VALUE
PROPOSITION
understand and address
During the year, we have continued
their needs with the
our efforts to improve the value
state-of-art networks provided to customers through a
built by SLT over the holistic proposition.
OUR CUSTOMERS
years. The changes in
As the national telecommunications SLT is reputed for providing ultra-
lifestyles brought about carrier, we have a wide customer
by the necessity for social fast broadband services through the
base ranging from individuals to fibre network and is a catalyst for
distancing increased the corporates, government entities other digital enablement in the country.
dependency on telephony
and broadband, making
us an indivisible part of
many people’s lives. We
also needed to step up to
support many stakeholders
during this stressful period
Product and Customer Experience and Digital Inclusivity
and this is a summary of Service Offering Service Management and Affordability
how we addressed our
external stakeholders’
concerns. Product and Service Offering
For Households For Enterprises For the SME’s
Fixed and Mobile Fixed and Mobile Voice and
voice Services voice Collaboration
Internet services Networking Networking and
including data Internet
bundles for social Internet Solutions
media, entertainment Data Hosting
Data Centre
and gaming. Managed Services
Cloud Services
Value added Digital Solutions
learning packages, Cyber Security
study platforms e-commerce platform
Managed services called “Cochchi”
and educational
programmes such Digital Solutions For Micro Businesses
as e-Siphala and A/L Global Connectivity Voice and
Kuppiya. Collaboration
For Other Service
Meeting packages Providers Broadband, TV and
which facilitate National backbone CCTV
Teams, Zoom, Link offerings
and Webex. Managed applications
Global Connectivity Structured cabling
PeoTV
Internet Solutions and Power solutions
Eazy storage
Data Center Financial offers
Smart Home solutions
Transit services
Other value-added
services including Global Carrier
e-channeling, caller International voice
tunes and MTicketing. and Data Solutions
Transit Services
   Annual Report 2021  | 85

Accordingly, we offered special data, encouraging people to stay safe market. There were no incidents of
broadband packages, transitioning at home. Easy payment methods and non-compliance concerning products
Sri Lankans into a digital era as we late payments were accommodated and service information or marketing
facilitated work from home, online through multiple SLT platforms during communications during the year.
education, connectivity to people via the pandemic period.
social media and entertainment. For our longstanding customers
Although we were restricted from we have the ‘Customer for Life
We ensured that our customers had carrying out large scale marketing Programme’ which allows us to
uninterrupted access to all of our campaigns during the year, we manage the customer journey
services without degradation in quality switched to alternate digital through timely communications with
despite the increase in demand during methods such as e-mail, e flyers them. We educate the customer and
the year. SLT also provided enhanced and social media to communicate communicate with them regularly on
data usage limits by providing free our products and services to the our services and offerings.

24x7 customer Uninterrupted Concessionary Doorstep

Free Data
service operations connectivity rates Services

Customer Engagement Channels & Touchpoints

CUSTOMER EXPERIENCE AND SERVICE We continued to actively engage with and provide
MANAGEMENT assistance to our customers across multiple channels.
Excellence in customer service and
Revamped the customer care centres in Panadura
experience remains a key value proposition
and Matara with state-of-the-art facilties and hope to
to our customers as we constantly strive do the same in Kandy in 2022.
to enhance the customer convenience and
provide the best service possible.
Established teleshops and regional telecommunication
offices in strategic locations across the island.
Customer Service
Our regional employees are empowered to address the
reported faults while random quality checks are carried
out to ensure the highest standards are maintained. Maintaining an extensive dealer and reseller network,
We deployed a repair and reuse strategy which was enabling customers to easily purchase recharge cards
very successful in overcoming the spare parts shortage and register for broadband and LTE services.
during the year. Our staff operate even during natural
disasters such as floods, landslides and thunderstorms
24x7 Contact Centre providing voice, e-mail, social
with the necessary safety equipment in order to ensure an
media and automated services including Interactive
uninterrupted service to customers.
Voice Response and SMS services.
90% fault clearance rate per day
Two member teams were replaced by one-member
‘smart technicians’ who are equipped with the right tools Launched the integrated My SLT mobile app and
and safety equipment to carry out the work efficiently. online web portal which allows the customer to
easily monitor their usage of daily quota and request
changes to the data limits and packages if necessary.
86  |  Sri Lanka Telecom PLC

SOCIAL AND RELATIONSHIP CAPITAL

Customer Satisfaction Online onboarding
There is a structured mechanism in place to measure Following the pandemic-imposed restrictions, there was
the customer satisfaction levels based on our response a need to introduce online onboarding of customers.
time, stability of service, affordability and the speed. This We facilitated the process of allowing the customers to
feedback helps us to improve customer experience and conveniently obtain our services including the payment
drive the organization forward. and viewing of bills through our Mobile apps and online
portal, eliminating the need to physically visit us. To
facilitate convenient customer payments, we introduced
85% 56% automated payment kiosks at shops which had 24x7 access
Year-end Customer Net Promoter for customers to pay their bills
Satisfaction Index Score
Brand Unification
The SLT-MOBITEL brand unification took place in 2021, was
Monitored the digital instrumental in achieving a powerful position in the industry
Survey on random landscape while accelerating the digital transformation
experience element sample conducted for
through Nelly, an internally, ensuring an elevated service to our customers.
app which allowed
4000 calls per Analysing the market, numerous improvements were
our employees to month to assess made in areas such as fixed and mobile voice services,
understand the pressure customer satisfaction broadband services, smart home solutions, automated
points bill payment facilities, home entertainment services, and
CPEs through unified touchpoints, allowing SLT-MOBITEL
customers to experience several industry firsts.
24x7 SLT Contact Centre
The contact centre, the main customer touch point of SLT
provides customer service through various channels with Established a centre of excellence to drive RPA. The
the use of automation and agent assistance as inbound and workflows have been automated through the ERP/
outbound services. Mainly contact centre is equipped with CRM systems and operation support system.
voice, email, SMS and social media channels facilitating easy
access to the customers
Billing support transformation where information
required for billing is aggregated and finished
The level of automation in the contact centre reached 45%
seamlessly.
in 2021 that enable customers to access the contact centre
via automated voice service as Interact Voice Response
(IVR), 1212 SMS service and the chatbot service.
Commenced an online charging system which will
enable the introduction of prepaid systems in the
The agent assisted service is supported by around 300 future.
agents equipped with updated knowledge and training
which supports the accuracy and consistency of the
responses. Completed the digitization of document-based
information and incorporated these into workflows for
The main services provided by the contact centre are the HR and supply chain management divisions. This
product and service inquiries, purchase requests, product was done as part of the digital transformation within
updates, billing inquiries and clarifications, directory SLT, and we are looking to expand this into the other
information, e-channeling services and railway ticketing division as well.
related inquiries.

The demand for the contact centre service heavily

increased during the pandemic due to increased usage of
broadband successfully managed by the hybrid nature of
operation through automated channels and moreful the
agent support at customers’ preference.

80% of the calls were resolved by the contact centre directly

as level 1 support to the matters raised by the customers.
   Annual Report 2021  | 87

DIGITAL INCLUSIVITY AND AFFORDABILITY

1212 E-mails responded

to within 15
By expanding our connectivity and reach to the rural
areas and making it affordable to all, we have contributed
SMS Service to creating a digitally inclusive Sri Lanka. The reliable
minutes
introduced in 2021 service we provide through our telecommunication
solutions, has contributed immensely towards the digital
literacy drive within the country and towards creating an
Written complaints inclusive society with enhanced quality of life. We have
responded to with Green badge on enabled digital engagement for citizens through digital
input from the relevant Facebook channels and applications.
departments

The SLT contact centre contributes directly and indirectly

towards revenue generation for the SLT Group through
tele-sales for value added products, credit reminders to
customers based on requests from the finance division
and proactive customer engagement to promote package
upgrades based on customer analytics.

25 Mn GB Free Loyalty data and 5 Mn GB Free

promotional data during 2021 Fibre network of
65,000 Km
running across the country in order to provide an
Wireless Coverage enhanced broadband experience to the customers

OUR BUSINESS PARTNERS telecommunications services, ultra- Shangri La Hotels Lanka (Private)
INCLUDING SUPPLIERS AND fast broadband connectivity provided Ltd for One Galle Face Mall & One
COLLABORATORS through Fibre technology and the Galle Face Tower.
We work closely with our business next generation high-definition
partners to find innovative solutions entertainment experience. SME Solutions Partners
while creating greater synergies SLT signed partnership agreements
throughout the value chain. We have Few main projects include: with several SME solutions partners
built a network of partnerships with local WelcomeHotels Lanka (Private) Ltd during the year to provide tailor made
and international suppliers, business for Sapphire Residencies and ITC solutions to suit the needs of the SME’s.
entities and service providers who are Colombo One Hotel
vital for our operating eco-system. Our active SME Solutions Partners are
E. A. Macro Holdings for 606 The
mentioned below:
Address
Multi-tenant project partnerships Hayleys Fentons Ltd.
SLT is the digital services provider Y D Construction (Private) Ltd for
for a number of residencies and “Opal” , “Garnet", “Onyx” and Metropolitan Technologies (Pvt) Ltd
apartments providing advanced “"Emerald" Residencies
P. W. J Lanka Technology (Pvt) Ltd.
88  |  Sri Lanka Telecom PLC

SOCIAL AND RELATIONSHIP CAPITAL

Advanced Network Technologies
(Pvt) Ltd
STRATEGIC ALLIANCES, COLLABORATIONS AND
Finco Technologies (Pvt) Ltd JOINT VENTURES
SLT has built a sustainable eco-system of partnerships with local and
SLT Digital Services (Pvt) Ltd
international business entities and service providers. The relationships built
Sri Lanka Telecom (Services) Ltd with Government, Enterprise customers, and domestic operators have also
been mutually beneficial and continue to contribute towards SLT’s mission
Softlogic Retail (Pvt) Ltd
of innovating for the future.
Sala Enterprises
Bartleet Innovative Technologies
(Pvt) Ltd
Vista Solutions (Pvt) Ltd
Smartcom Engineering (Pvt) Ltd
Secvision (Pvt) Limited
Ceylon Innovation Services (Pvt) Ltd

Dealers Customer Strategic Alliance

We communicate with our dealers on a
National Water Supply Relocated Call Centre of National Water Supply &
regular basis, to diversify our offerings
and Drainage Board Drainage Board was re-engineered alongside new
and provide the necessary support. communication technology and other innovative
ideas.
Vendors
We maintain relationships with a Ceylon Electricity SLT delivered the first large scale SDWAN network
number of vendors including Network Board in Sri Lanka to connect 140 locations covering 4
regions of Ceylon Electricity Board.
Infrastructure Vendors, Customer
Premises Equipment Vendors and Department of Motor IVR and Web based appointment booking system
Content Development Partners in Traffic for Department of Motor Traffic as a fully internally
conducting our business operations. developed solution.
Cisco Partnership with Cisco to develop SLT SD
Partnerships WAN with the aim of addressing the network
Partnerships with National institutes transformation that is necessary for the facilitation
to facilitate growth of Micro and SME of the digital enablement within the country.
business segments and undertake Oracle Oracle OPN partner to provide oracle licenses to
initiatives relating to stakeholder enterprise customers along with Oracle PCA
engagement, professional and
industry networks, market traction, Fortinet Partnership with Fortinet to provide MSSP services
solution modeling and joint offers. to Enterprise and Government sector to address
growing security demand
The Institute of Chartered Hayley’s Group Retain existing SLT services for next 5 years and
Accountants of Sri Lanka leverage latest solutions to Hayleys PLC and all the
National Chamber of Exporters of subsidiaries.
Sri Lanka Hirdaramani Group Agreement with the Hirdaramani Group to provide
its first Software Defined Wide Area Network
Small Enterprises Development
(SDWAN) service, enabling the Hirdaramani to
Division
revolutionize its network infrastructure.
CAN Market LB Finance LB finance Primary Data Center migration to
Hatton National Bank Pitipana Tier 3 iDC
Hameedia Hameedia has moved entire cloud hosting services
SDB Bank
to Akaza Mutli cloud services on top of Enterprise
NDB Bank premium cloud running on top of Vmware platform
and Oracle PCA . All Hameedia outlets stores and
HO are connected via SLT VPN.
DSI DSI ERP services were on boarded on top of
Enterprise premium cloud running on top of
Vmware platform and Oracle PCA . This enabled
them to increase resource allocation to match
computing resource demands.
   Annual Report 2021  | 89

35%
SUPPLIERS

Local Procurement NETWORK EQUIPMENT AND CUSTOMER PREMISES

APPLICATIONS SUPPLIER EQUIPMENT SUPPLIERS
A pool of Local and International For Sales Outlets (RTO &
suppliers ranging from World leading Teleshop) on a consignment basis
Our Code equipment and software suppliers to
small scale local manufacturers
(CONBES)

of Ethics for
Suppliers We understand the importance of
maintaining a diverse and reliable
contracts to avoid negative impacts
caused by the fluctuations in the
covers the guiding supplier base to ensure product exchange rates. We also tried to
principles related to labour quality and timely delivery. Even increase the value addition to local
practices and sustainable amidst the global supply chain suppliers by purchasing certain
business operations that disruptions caused by the pandemic, network equipment and aplications
we managed to procure the materials locally where possible.
we expect our suppliers to
on time and ensure continued services
comply with. This covers to our customers by proactively At SLT, we have a Board approved
environmental criteria altering our sourcing strategy. We procurement policy which sets out
such as availability of EPL, made the decision to switch from the process to be adopted when
environmental assessment long-term contracts to short term screening and selecting new suppliers.
etc., enabling SLT to
increase awareness and Several stages of The selected Supplier to submit
encourage sustainable supplier evaluation suppliers will be their profile details
practices within the supply including technical, registered on our and audited
chain. commercial, system. accounts as part
sole source and of the registration
enterprise solution process
evaluation
Supplier
Training We involve the relevant departments, employees, the steering committee as
well as the Board and ensure transparency in the decision-making process
Programmes
conducted on an ongoing EXTERNAL ASSOCIATIONS
basis through our training SLT is a member of the following associations, and our staff actively
centres, to support the participate in their activities:
technical staff of our National Associations International Associations
suppliers. This aids in
National Broadband Committee SEA-ME-WE connectivity consortium
ensuring the maintenance
National Chamber of Commerce IPv6 Execution Committee
of the quality of the
Ceylon Chamber of Commerce Global Internet Exchange Network
service provided by them
Sri Lanka Association for quality International PoP Community
and productivity Commonwealth Telecommunications
Next Generation Network Organisation (CTO)
Committee International Telecommunication Union
Government initiative of free Wi- (ITU)
Fi programme Fibre-to-the-Home Community
Online secondary school Carrier Ethernet Forum
education (SchoolNet)
Carrier Grade Wi-Fi Forum
programme
International Internet Society
Online university education
programme (LEARN)
eGovernment programme
Sri Lanka Internet Society
90  |  Sri Lanka Telecom PLC

SOCIAL AND RELATIONSHIP CAPITAL

COUNTRY AND COMMUNITY and the tools necessary to carry the segments. Our CSR agenda is driven
As the national telecommunications country forward into the digital future. from the top by the Board and
solutions provider, SLT understands Management and directly relevant
the catalytic role it plays in CORPORATE SOCIAL to the UNSDG’s. CSR is integrated
contributing towards the development RESPONSIBILITY into the corporate plan and inbuilt
of the economy and work closely with As a socially responsible entity, we aim into every layer of the organization.
the Government and the regulator to minimize the unfavourable impacts During the year, our CSR activities also
to drive economic and community from our operations on the society, revolved around the brand unification
development. SLT plays an enabling the environment and the country while strategy of the Group. Our employees
role by developing the infrastructure uplifting the society’s most vulnerable volunteer for some of these activities.

Education

Hackathons Hithak Athnam Bus library for School Smart Classrooms Scholarships
Pothak Denna’

We want to uplift the Distribution of Converted In line with the Partnered with
nation and create a textbooks to students decommissioned group’s vision National Library and
tech driven economy in rural areas having SLTB buses into fully to bridge the Commonwealth
by enriching young understood that equipped libraries with digital divide, the Learning Canada
talent through platforms every book has the Wi-Fi connectivity for Company continues to develop the
such as Hackathons. potential to change schools, in partnership to empower rural unskilled workforce
Students from schools a child’s life. This with the National areas with supreme of the country in
and universities are initiative helps Library of Sri Lanka, Sri 4G LTE connectivity order to improve
encouraged to participate children explore, Lanka Transport Board solutions whilst socioeconomic
and are allowed to learn and broaden (SLTB) and Manusath enabling rural progress.
showcase their levels their knowledge and Derana. schools to access
of passion and skill in ultimately receive a latest technology
the fields of science, better education and through the
technology, engineering, a brighter future. concept of SMART
and mathematics. classroom.

Healthcare

Suwaviru Upahara 'Sabandiyawe Sathkaraya'

A series of programmes supporting frontline healthcare Contributing to national efforts to curtail the spread of
workers with free mobile connectivity , Voice and data Covid-19, the Company donated five Polymerase Chain
offer etc. Reaction (PCR) machines to different hospitals across the
country. The total value of the donation made under the
theme of 'Sabandiyawe Sathkaraya' was over Rs 26.7M.
   Annual Report 2021  | 91

Nature

‘Earth is calling, are

you listening?’
Conducted online awareness programmes on environmental degradation and the preservation of threatened
species with the aim of reaching out to the public to protect and conserve nature, encourage accountability towards
environmental protection in daily actions and take decisions with the hope of building responsible behavior and
increased enthusiasm to protect the environment.

Other Ongoing Initiatives

‘Helaviru’- Uplifting the livelihood of
the agricultural sector

SLT together with Epic Technology Group supports the operation of ‘Helaviru’, which is a cloud-based e-commerce
platform initiated by the Government to facilitate trading of agricultural produce, farm produce and similar
commodities among diverse stakeholders on a seamlessly connected supply chain. SLT facilitates to host the platform
in its state-of-the-art SLT iDC ensuring reliability and security backed by professional support. This is a revolutionary
platform which connects farmers and growers with transport and delivery service providers, fertilizer suppliers, plants
and seed suppliers, agro-insurance providers, banks, and government institutes. In order to support this platform, SLT
signed an MoU with People’s Bank to provide Agri based digital loan schemes to the farmers who have been on-
boarded onto the Helaviru platform. LAUGFS Holdings Limited and Softlogic Holdings PLC have come on board as
strategic partners of the “Helaviru” initiative, to promote the platform among agriculture stakeholders and encourage
diverse stakeholders to actively use the platform for mutual benefit.

1. We are jointly working with Mahaweli Authority through the TAMAP Program in the “Gama Smart” program which
is initiated with the aim of digitally enabling the farming communities in the Mahaweli Zones.

2. “Helaviru” platform was short listed as one of the Ag-tech initiatives in Sri Lanka to work with Bill and Melinda
Gates Foundation’s Digital Agriculture Program. This Projects is initiated by ICTA with the aim of modernizing the
Agriculture Sector of Sri Lanka
92  |  Sri Lanka Telecom PLC

MANUFACTURED CAPITAL
Manufactured capital
is fundamental to our Overview
ability to create value as Capital Expenditure
a telecommunications

Rs.28.5 Bn
and technology
company and fulfil our
role as the National
Telecommunications Transfers from Capital Work in
Solutions Provider. Its Progress

Rs.29.3 Bn
monetary value is reflected
in the property, plant
and equipment which
comprises our network
(ducts, cables and other Depreciation Charge

Rs.22.2 Bn
outside plant assets),
transmission equipment,
our branch network and
other assets.
Investments in PPE
Rs. Bn
Sustained Investment in Growth 5
Property Plant and Equipment
Rs. Mn %
4
10 2%
3 22%
8
2 3% 37%
6 4%
1
4 3%
29%
0
Land and
Buildings

Ducts, cables
& other
outside plants

Transmission
Equipment

Capital
WIP

Other

Free hold building IT system

0
2019 2020 2021 Ducts, cables and other Other fixed assets
Telephone exchange CWIP
Series 1 Series 2 Series 3 2021 2020 2019
Transmission equipment

COVERAGE Key projects in hand at the close of forward to new era. It is a long term
Nurturing Manufactured Capital the year include the following: project expected to be completed by
We continued to invest in growth December 2026 comprising:
Implementation of the masterplan
of our physical infrastructure with for SLT Operational HQ Complex an Operational Headquarters
investments of Rs.28.5 Bn in 2021 of at Welikada Building
which Rs.25.0 Bn remained in capital
work in progress at the close of the SEA-ME-WE Cable No.6 Stage I to be completed by
year. This is typical of the investments October 2022
Roll out of 5G network
undertaken by the Group as they tend Stage II to be completed by
to be long term in nature. We also MASTERPLAN FOR SLT August 2023
operationalised assets amounting to OPERATIONAL HEADQUARTERS
Rs.29.3 Bn which were transferred COMPLEX Cafeteria & Clubhouse –
out of capital work in progress Scheduled for completion by July
Our plans for the future requires a
outstanding at the beginning of the 2023
state of the art facility that will be
year which amounted to Rs.35.0 Bn.
an ecosystem for transformative Proposed Recreational Area – For
Capital work in progress at the year
telecommunications and technological completion by December 2026
end amounted to Rs.30.7 Bn.
innovations that will take our country
Proposed Quarters Building – For
completion by December 2028
   Annual Report 2021  | 93

We anticipate significant challenges

and visible enhancement of
manufactured capital in 2022 due the
rupee devaluation, foreign currency
liquidity, disruptions to energy supply.
Challenges in the supply chain and
inflation continue to exert pressure
on project costs and availability of
resources. However, our dedicated
teams are taking proactive measures
to anticipate challenges and secure
necessary resources at competitive
rates on a timely basis.

ESTIMATED
PROJECT COST Rs. 1.6 Bn

PROJECT
M/s. ATS Consultants Pvt Ltd
ARCHITECT

SPECIAL Qbus intelligent motion detectors –

FEATURES: automated lighting control system
Interactive touch panels
Dedicated visitor lounge
High tech display units

The development plans are aligned OUTLOOK

with the Urban Development Authority The Group plans on continued
plans to develop the Prison premises expansions of its manufactured
as IT park in Colombo. The Master capital to keep up with the evolving
Plan comprises a Commercial Building technology and the varying demand
Complex. A mix development growths in line with the Groups
project with Apartments & sports Vision and strategic business plans.
complex, Recreation area, Restaurant The following expansions have been
& supermarkets etc. Planned as a planned for the coming financial year
greener and smarter epicentre for the and the Group is confident of meeting
evolution of technology in the country, these planned outcomes.
all buildings will be smart buildings
with state of Art Technology and high- Work is in progress as per schedule
end features. It will include features on the proposed new headquarters
for minimising energy consumption, complex and we expect Mobitel to
e-waste Management , Fire & security move into its new premises in 2023.
systems, reducing carbon emission
and other ecofriendly features.
94  |  Sri Lanka Telecom PLC

MANUFACTURED CAPITAL
FIXED

Northern
SLT
BRANCHES
North Central

31 14 47
Regional
Teleshops Franchise
Eastern shops Offices

North Western

42
Maintenance Centers
Central

Western
Teleshops Outside Plant Maintenance Office
Regional Telecom Office
Uva

Sabaragamuwa

Southern
   Annual Report 2021  | 95

MOBILE Northern

Eastern

MOBITEL North Central

BRANCHES

North Western
75 13
Branch
05
Mini
Dealer Touch
points Network Branches
Central

49 17
Singer Mega Sabaragamuwa
SLT Touch
points Touch points

Western

Uva
Dealer Branch / Mini Branch
SLT Touch Points
Singer Mega Touch Points

Southern
96  |  Sri Lanka Telecom PLC

HUMAN CAPITAL
OUR EMPLOYEE
At SLT, we employ a group
of over 8,000 people who
are equipped with the
right skills and mindset.
Our team is a key source PROFILE
of competitive strength in
driving the organization Employees by Gender Employees by Category
towards success. Having
understood the pivotal role
played by our employees, 7,000 7,000

we offer an attractive 6,000 6,000

value proposition to 5,000 5,000

them which enables an 4,000 4,000

engaged and committed 3,000 3,000
workforce. During the 2,000 2,000
year, the commitment 1,000 1,000
of our employees
0 0
ensured our ability to SLT Mobitel SLT Mobitel

provide an uninterrupted Male Female Permanent employees

service and helped us to Contract employees
expand the connectivity
across the country.
We remain steadfast
in our commitment to
building a resilient and
motivated team in order
to successfully deliver our
strategy.

EMPLOYEES BY GENDER AND GRADE

SLT MOBITEL
Male Female Total Male Female Total

Senior Management 63 10 73 19 1 20
Middle Management 99 19 118 359 102 461
Executive 480 312 792 623 310 933
Non-Executive 4,258 1,349 5,607 27 1 28
Total 4,900 1,690 6,590 1,028 414 1,442
*The employee level classification is different at SLT and MOBITEL

DIVERSE
UNIQUE EMPLOYEE WORKFORCE OF
BENEFIT SCHEMES PEOPLE
   Annual Report 2021  | 97

Employees by Age Group for SLT Work Location Analysis for SLT Tenure Analysis for SLT

883 HQ & Other Colombo Less than 5 years

1,833
N&E

NC&NWP 5-10 years

CEN&Uva
10-20 years
SAB&Southern

WPS 20-30 years

WPN
3,874 Above 30 years
WPC
0 500 1,000 1,500 2,000 2,500 3,000 0 500 1,000 1,500 2,000 2,500 3,000

Under 30 30 to 50
50 and above

Key Strategic Relevant Policies

Focus Areas
Digitalization of Policy on Telecommuting &
operations and Connected Workplace
remote working
arrangements

Health and safety of

Health & Safety Policy
our employees

Upgrading the
Performance Performance
Management Management policy
Systems

Talent Development Talent development policy

INVESTMENT IN STRONG SAFE AND

EMPLOYEE TRAINING AND GOVERNANCE CONDUCIVE WORK
DEVELOPMENT STRUCTURE ENVIRONMENT
98  |  Sri Lanka Telecom PLC

HUMAN CAPITAL
OUR MANAGEMENT Governance Structure
APPROACH
Our Human Resource (HR) policies
and procedures are compliant with the Group Chief Chief People
relevant Sri Lankan labour laws and Board of Directors Officer
Executive Officer
regulatory standards and aligned to
industry best practices. Robust policy
frameworks are in place to ensure that
an equitable and thriving environment Remuneration
is created for all our employees. We and Nomination Chief Executive
continuously review the HR reporting Committee Officer
and governance structure that is in
place and make necessary changes to
ensure it is relevant and up to date.
The changes made during the year are Our recruitment procedure is robust,
mentioned below. involving an interview and several
assessment processes to ensure
Rearrangement of the regional the right individuals are directly
Digital transformation group structure to empower absorbed into the organization on a
regional management to initiate
is affecting the human internal staff deployments within
permanent basis. As a leading digital
services provider in Sri Lanka, in
resource management regions. This will enhance the the next few years we are planning
function at a rapid speed, employee work-life balance, to incorporate virtual reality into
facilitate ease of working and the recruitment process to test
allowing HR to become enable the delivery of a strong certain skills of the candidates,
more data driven by customer service. which will give them an outstanding
experience while also creating brand
presenting evidence- Cadre Review and new recognition for the organization.
organizational design in line Despite the many challenges created
based insights to make with span of control and line of by the pandemic, there was no
accurate decisions. authority benchmarked across SLT downsizing of staff during the year.
PLC. In 2021, we recruited a total of 185
employees at SLT, including the
MOVEMENTS IN OUR TEAM children of our employees as well as
We have in place a structured the immediate family members of
talent sourcing and management demised employees. Our retention
strategy which set out the process rate is over 98.75%, which is a strong
for attracting, developing and testament to the strength of our
retaining our employees. It is a holistic value proposition to employees. 285
employees retired during the year
approach, which creates the right
while only 67 employees resigned. At
values and environment for staff to
Mobitel, we recruited a total of 174
feel empowered and is a key factor for
employees during the year and we
our success. have a retention rate of 94.15%.

Evaluating the
learning outcomes
Timely delivery of and ensuring
learning solutions continuous
through physical improvement
Bridging the and technological
competency gaps resources and
Identifying short by developing and methodologies
and long-term sourcing effective
competency learning solutions
requirements in line
with the strategic
plans and objectives
   Annual Report 2021  | 99

Recruitment by Age Group Turnover by Age Group Recruitment by Gender

200 400 200

350
150 300 150
250
100 200 100
150
50 100 50
50
0 0 0
SLT Mobitel SLT Mobitel SLT Mobitel

18-30 31-55 Above 56 18-30 31-55 Above 50 Male Female

Turnover by Gender Recruitment by Region for SLT

9 33 7
7 8
400 1
3
350
300 Reduction in paper usage

70-80%
250
200
150
100 144
50
0 Central Eastern Northern
SLT Mobitel
Southern Western North Western
Male Female North Central Uva Sabaragamuwa

OUR REFINED HR STRATEGY

Enhancing Enhancing Engaging the Sustainable

Productivity Capabilities Workforce Development

HR STRATEGY AND KEY A FLEXIBLE WORK the fact that many global corporations
DEVELOPMENTS IN 2021 ENVIRONMENT have announced plans to embrace
The Group’s HR strategy is aligned Our staff have extensively engaged in some form of remote working beyond
to the overall corporate strategy many modes of remote working such the pandemic, we are also looking
and during the year, the HR division as the Work from Home, Work from to make these modes of work a
refined its strategy to focus on four Pod and Home to Field modes since permanent fixture in the company’s
key areas in the upcoming years. the start of the pandemic and this was range of work options. While the work
During the year, the HR division continued during the year. This has from home guidelines have already
carried out several key initiatives allowed us to create a flexible work been published, we are in the process
to nurture and create value for our environment and continue operations of finalizing the Work from Home
employees who worked hard to unhindered while also ensuring policy.
overcome the challenges posed by employee safety and improving
the post COVID-19 environment. employee satisfaction. Considering
100  |  Sri Lanka Telecom PLC

HUMAN CAPITAL
DIGITALIZATION OF HR
Ensured continuous supply of PPE including disposable
OPERATIONS
masks, face shields, reusable gloves, thermometers,
In order to implement a digital disinfectants and hand sanitizers among all sales and
workplace strategy, various HR operational staff.
Processes including recruitment, talent
development and promotion were
automated during the year, leading Management of organizational Business Continuity
to reduction in the time spent on Program and initiatives across the organization to
repetitive tasks as well as creating successfully face COVID 19 pandemic
a green atmosphere within the HR
Group. The planned implementation Allocated a contingency fund to safeguard employees
of Document Management System and their immediate family members, registered under the
(DMS) via the ERP system will lead Company medical scheme
to a reduction of paper usage by
70%-80% within the HR Group.
Digital transformation is affecting Set up a vigilant committee comprising of the
the human resource management management and the unions who meet every week to
function at a rapid speed, allowing assess the situation and implement corrective action
HR to become more data driven by
presenting evidence-based insights to
Set up three intermediate quarantine centers in Poththude, Anuradhapura and
make accurate decisions. The biggest
Kataragama with a total capacity of approximately 60 beds
challenge for the HR Group in this
data driven culture will be finding the
right balance between technology Facilitated hotel-based quarantine center for employees and their immediate
and the human role. family members

The latest advancements in machine

learning and artificial intelligence Facilitated a home based quarantine scheme for SLT staff
are rapidly developing in the global
scenario. We hope to integrate these Arrangements were done to facilitate PCR testing and conduct the vaccination
developments into our HR processes drive
in the next few years for the benefit of
the organization as a whole.
Introduced comprehensive measures to reduce the risk of cross infection
within the premises
EMPLOYEE HEALTH AND
SAFETY
GRI: A1.1 / A1.2 / A1.3 / A1.4 / A1.5 / A1.6
Staff were provided with Company funded transportation in order to
avoid public transportation
As a responsible employer, ensuring
the health and wellbeing of our
people became a priority during the SLT MOBITEL
year. We fully adhere to the health Facility No of Total Cost No of Total Cost
and other statutory requirements and patients (Rs. Mn) patients (Rs. Mn)
have implemented organization wide
The number of employees/
HR policies through the establishment
family members who have
of a COVID-19 management steering
already received hotel
committee.
accommodations 488 42.65 73 15.03
The number of employees/
Having continued operations during
family members who
the pandemic, we understood the
have already received the
impact of the pandemic on work, the
e-channeling facility 680 2.74 12 0.12
workforce and workplace. HR became
the centerpiece of guiding and The number of employees/
managing the other functions in the family members who have
adoption of organization wide safety already received the dry
measures to ensure the physical and ration pack 591 5.91 109 1.49
psychological well-being of the entire
workforce.
   Annual Report 2021  | 101

REMUNERATION, examinations and/or interviews. collaboration with the University

RECOGNITION AND REWARDS During the year initiatives were taken of Hertfordshire – UK, TDC offers
As part of our people experience, we to redesign the SRPS based on current a Bachelor of Engineering (BEng)
provide an attractive and competitive industry standards. This will strengthen Degree program as well. Even with
remuneration for all our employees. In employee skills and create a skill- the numerous challenges created by
addition to the remuneration, we offer based path for career advancement. the COVID-19 pandemic, SLTDC has
a range of other benefits and rewards been able to generate Rs. 88 Mn as
including loans at concessionary TRAINING AND DEVELOPMENT revenue for SLT in 2021.
rates, medical allowances and death Enhancing the knowledge and
donations. These are designed to capabilities of our workforce is a Average Hours of Training by Gender
retain employees and motivate them key value proposition offered by the
to perform better in order to help Group. We assess the knowledge gap
the organization achieve its overall of employees and fulfill the training 50
strategic goals. During the year, requirements accordingly. Training
and development opportunities are 40
longstanding salary anomalies were
addressed through an equitable offered through formal and on the
30
solution. The table above shows the job training with regular feedback
benefits provided to employees and provided via the appraisal system. 20
their families who were affected by During the year, with the digitalization
COVID 19. of operations and increased remote 10
working arrangements, there was a
Performance Management need to provide training to improve 0
SLT Mobitel
We have a performance-based IT capabilities, network connectivity
culture where 100% of our employees and cyber security knowledge of the Male Female
undergo performance appraisals employees as well.
evaluated on predetermined key Average Hours of Training by
performance indicators during the SLT Talent Development Division
Employee Category
year. Employees are recognized and The SLT Talent Development Division
rewarded through performance-based which constitutes our training delivery SLT
bonuses linked to the Performance arm has three fully fledged Talent
Senior Management 12
Management System. During the year, Development Centers (TDC) which
individual performance management are ISO 9001:2015 certified. Although Middle Management /
with peer evaluation system was also these centres were initiated for the Executive 35
introduced to the final evaluation development of the human capital Non-Executive 18
process. We have also aligned the of the company, we have expanded
MOBITEL
rewarding mechanism with the our capacity through affiliations with
organizational innovation framework. reputed bodies, to generate revenue Senior Management 25.1
for SLT. TDC has proven its strength Middle Management 25.1
Career Progression in the higher education sector of Executive 10.7
We nurture a strong learning the country by opening doors to the Non-Executive 1.6
environment through succession public to pursue technician certificates *The employee level classification is different at
planning and leadership development and Higher National Diplomas. In SLT and MOBITEL
initiatives which helps our employees
reach their full potential. Having
understood the role of leaders in
driving the growth of the people,
last year, we completed a plan to
ensure a strong leadership pipeline
is maintained for the top level. Based
on this plan, succession planning was
implemented this year as well.

Opportunities for promotions are

available to employees if they meet
the defined criteria in the SLT Staff
Recruitment and Promotion Scheme
(SRPS) based on their professional
qualifications, performance, and
experience. Candidates are selected
for promotions through written
102  |  Sri Lanka Telecom PLC

HUMAN CAPITAL

SMART TECHNICIAN NVQ 4 TELECOMMUNICATION NVQ LEVEL 4 CALL CENTRE

PROGRAMME TECHNICIAN PROGRAMME PROFESSIONAL PROGRAMME
This is a systematic program where SLT Moratuwa Training Center SLT TDC is the only educational
the skill level of all the technicians is the only training center in Sri institute in Sri Lanka which can
will be assessed and necessary Lanka which can conduct NVQ4 deliver the NVQ Level 4 Call Centre
trainings will be provided to bridge Telecommunication Technician Professional program
the identified gaps. In 2021, 629 assessments. In 2021, 160
technicians were assessed and 149 technicians of SLT obtained this
technicians qualified to the level of qualification
SMART technician.

SUPERVISORY SKILL PROFESSIONAL MASTERS IN NVQ 6 PROGRAMME

DEVELOPMENT PROGRAM BUSINESS ANALYTICS AND In 2021, the SLT training centre in
This is a 5-day programme for BUSINESS TRANSFORMATION Welisara became the first Sri Lankan
line managers in partnership COURSE education institute to obtain the
with the Chartered Institute of 11 senior staff members have been equivalent to a National Vocational
Personnel Management (CIPM). given the opportunity to follow Qualification-Level 6 (Electronic
During the year, 120 line managers this course conducted by the Asian technology) status for its Pearson
participated in this programme Institute of Technology (AIT) Thailand, BTEC level 5 Higher National Diploma
with the objective of developing with the objective of developing their (Electrical and electronic engineering)
their supervisory skills capabilities in Digital Transformation from the Tertiary and Vocational
and Leadership Development. Education Commission (TVEC)

EMPLOYEE ENGAGEMENT Employee concerns and grievances

are identified and addressed by
GRI: A1.1 / A1.2 / A1.3 / A1.4 / A1.5 / A1.6 Vigilant committees
the grievance handling committee,
We are committed to creating a through an effective and systematic
strong bond with our employees by mechanism that has been put into
Meetings with
engaging with them through multiple management place by the organization. All kinds
channels. We strive to create an of employee grievances are correctly
environment where the employee addressed to create a conductive
feels valued and respected. Regular Interactive seminar work environment. The formal
sessions whistleblowing policy in place ensures
staff and team meetings ensure that
constant dialogue is maintained with that employees can safely report any
the employees. During the year, we acts of malpractices or misconduct and
Online training raise their concerns in a safe manner.
held some of the welfare activities
while ensuring the health and safety of
our employees.
   Annual Report 2021  | 103

Relationships with trade unions

87.3% of the organization’s employees are represented through 24 trade Considering the fact that
unions and covered by collective bargaining process. We maintained cordial
relationships with the trade unions and there were no instances of disruption to many global corporations
work on industrial disputes during the period under review. Having understood have announced plans to
the importance of this stakeholder group, we have adopted an open-door policy
and an inclusive approach with them and have built a strong mutually beneficial
embrace some form of
relationship over the years, which has helped us to improve working conditions, remote working beyond
enable better decision making through collective bargaining as well as promoting
the pandemic, we are
equality and harmony within the Group. There is a dedicated section in the HR
Group to attend to the trade union concerns as quickly as possible. also looking to make
these modes of work a
We support the right to exercise freedom of association and collective bargaining by:
permanent fixture in the
Providing office room and infrastructure for trade union Company’s range of work
offices so that the trade union officials and members can
enjoy the freedom of association at work place options.

Implementing effective mechanisms to settle pending

court cases, inquiries against SLT PLC while coordinating
with relevant stakeholders amicably

Granting special leave and work releases for employees

who attend trade union meetings with management

Granting one day duty leave for employees attending

Annual General Meetings

Sponsorships for CSR activities organized by trade unions

Arranging training programs for trade unions to enhance their knowledge on

the importance of continuous dialogue and the role of the trade union during
the pandemic

Facilitating Check-off facility

SLT MOBITEL
Parental Leave 2021 2020 2021 2020

Employees that took maternity leave 67 63 25 20

Diverse workplace and Gender Parity Gender diversity is a key area of focus
We pride ourselves in being an equal through all levels of the Company,
opportunity employer nurturing a and we are committed to creating
diverse and inclusive culture within an enabling environment for women
the organization. We have employees working within the company. We
with varying skills, perspectives and have 26% females within our team
social and religious backgrounds despite being in the tech industry
who blend together to provide an where traditionally women are under
excellent level of service. Our policies represented. During the year, all
and procedures promote equality pregnant women were allowed to
of opportunity regardless of gender, work from home to ensure their safety.
age, race or religion and we do not We provide maternity leave as per the
discriminate employees based on any stipulated regulations.
grounds. There were no incidents of
discrimination reported during the year.
104  |  Sri Lanka Telecom PLC

NATURAL CAPITAL
SLT relies on natural
resources such as energy,
Energy Waste
water and an extensive consumption generated
land bank in its value
creation process, while
SLT
and recycled
impacting the environment
through the generation
77,650,726 kWh
of solid waste and carbon
MOBITEL
emissions. As a responsible
corporate citizen, the
Group is driving concerted
79,644,000 kWh
efforts to optimise the use
of its natural resources
while mitigating the
adverse outputs of its
operations.
Carbon
footprint
Inputs

Outputs

Land Bank
Portfolio of over

500
ands with an extent of over

120 hectares
   Annual Report 2021  | 105

GRI: A1.1 / A1.2 / A1.3 / A1.4 / A1.5 / A1.6

Key Strategic Focus Areas

Reducing energy consumption
and enhancing efficiency

Responsible waste
management through re-use
and recycling

Preservation of ecosystems
through awareness ,
collaborations and integrated
all nature related activities
consciousness across the organisation. SLT has also obtained the ISO
14064-1: 2018 Certification for Greenhouse Gas (GHG) emmission
assessment and is the first telecommunications operator in the country
to do so.

Energy
management

Relevant Policies/Standards Waste

14064-1: 2018 Certification for management
Greenhouse Gas (GHG) emmission Ecosystem
assessment preservation

Energy management policy

Power Policy

MANAGEMENT APPROACH
SLT is committed to reducing the environmental
footprint of its operations and contributing
towards a greener planet through strategic ENERGY MANAGEMENT
environmental initiatives. Our approach Nearly 98.5% of SLT's energy requirements are fulfilled through the
centres on the three main pillars of energy national grid, with the balance generated through solar power. In line
management, waste management and with its carbon neutral aspirations, SLT has continued to drive concerted
ecosystem preservation. An Energy efforts towards reducing energy consumption through the use of energy
Management Committee has been appointed efficient equipment, lighting and cooling solutions. Meanwhile, the
to provide oversight on all energy related new headquarters features a range of energy efficient design elements
activities supported by cross functional Energy including natural lighting and green concepts. Key energy saving
Ambassadors to nurture a culture of energy initiatives launched during the year include the following:
106  |  Sri Lanka Telecom PLC

NATURAL CAPITAL

JOURNEY TO CARBON NEUTRALITY

We are cognisant of the escalating implications of climate change and are determined to do our part in reducing our
carbon footprint. SLT commenced its carbon reduction journey in 2018, with clear plans to achieve carbon neutrality
by 2030. As an initial step, the SLT obtained the ISO 14064-1: 2018 certification for Greenhouse gases emissions
assessment in 2018 and being assessing carbon emission in year 2019 &2020.

Assessment of carbon footprint Energy management policy Generation of renewable energy and
and obtain ISO certification on formulation and implementation reduce dependence on fossil fuel
Greenhouse gases assessment -based energy sources
Roll-out small-scale projects to
reduce carbon emissions

PHASE 1 PHASE2 PHASE 3

Introduction of e-payment
solutions, replacing manual
Promote the 3R principle- Reduce, Reuse
payments of over 6,674 electricity PAPER and Recycle paper across all operational
bills across the island sites
Replacement of 130 conventional
low efficiency air conditioners, with
high-efficiency inverter type air Recover old copper cables and send them
USED COPPER to Government-approved third party
conditioners with a total capacity CABLES recyclers
of 325 TR
Replacement of 2500 low
efficiency/faulty bulbs with higher CUSTOMER PREMISES Establishing state-of-art repair centers
efficient LED lighting solutions EQUIPMENT island wide , to repair and reuse CPEs.
across the country
Improvements in Tier 1 Network
Room
In 2021, total energy consumption waste disposal while striving to exploring avenues for renewable
amounted to 77,650,726 kWh except minimise waste generation. energy and through implementing
Self Generation owned by SLT stringent procedures for evaluating
Generators. Diesel consumption for Land bank the energy efficiency of new
generators is 157,385 litres. The Group has an extensive island- equipment. We will also continue
wide land bank of over 120 hectares to drive our reforestation efforts
Reducing customers’ carbon across 500 lands, which includes through the tree planting initiative
footprint: Our ability to facilitate several prime properties in Colombo. while leveraging our brand presence
remote working, education, The land bank represents a valuable to raise stakeholder awareness of this
entertainment and engagement, natural resource, which the Group initiative.
enables customers to reduce their intends to monetise over the short-
carbon footprint, through minimising to-medium term through strategic
of travelling. partnerships with international
investors and local corporate entities.
WASTE MANAGEMENT
The most significant waste generated Way forward
from the Group’s operations comprise Over the short-to-medium term,
electronic waste, which includes used the Group will place strategic focus
equipment, cables, wires etc. We have on achieving its carbon reduction
continued to practice responsible aspirations. This will be driven through
   Annual Report 2021  | 107

INTELLECTUAL CAPITAL
LICENSES HELD BY SLT GROUP
Our Intellectual capital AND SUBSIDIARIES
comprises licenses,
software, the brand, tacit
Fixed Operator License VALUE OF
knowledge, systems, Mobile Operator License OPERATING LICENSES
processes and protocols. International Telecommunication
As we transform from
a telecommunications
Operator License
Direct to Home Satellite
Rs.5.1 Bn
company to a technology Broadcasting Operators License
company, managing
these capitals becomes THE POWER OF A UNIFIED
BRAND
even more important as
these resources will play a Ranked as one of the Top 10 brands
in the country in 2021, the unified
critical role if defining our brand is valued at Rs.22.3 Bn by Brand
competitive advantage. Finance Sri Lanka

AN EVOLVING PRODUCT A UNIQUE CORPORATE

PORTFOLIO CULTURE
OPERATING LICENSES A future forward product portfolio A culture that ensured availability of
that is relevant across all customer critical communication services during
Sri Lanka Telecom Group operates segments covering fixed, mobile, the pandemic ensuring that people
in an increasingly regulated sector internet, broadband, storage, were connected to their families,
and requires licenses issued by the applications and cloud services. friends, workplaces and learning
Telecommunications Regulatory
institutions during lockdowns is a
Commission of Sri Lanka to operate its
critical part of our intellectual capital
core services. The licenses obtained
are listed above. While its monetary INNOVATION CAPABILITIES RESEARCH & DEVELOPMENT
value is reflected in the financial As the leading national Sri Lanka Telecom Group enters into
statements at Rs.5.1 Bn, it is the Telecommunications solutions provider, a strategic partnership for research
bedrock of our operations and its we continue to innovate pushing the and development in technology
intrinsic value is worth much more boundaries of possibilities for our enhancement.
than that to the Sri Lanka Telecom consumers and businesses.
Group.

A UNIFIED BRAND
The power of the unified brand
was reflected in the 2021 rankings
of the Sri Lankan brands by Brands
Finance Sri Lankan as the new SLT-
MOBITEL brand vaulted into the
Top 10 Sri Lankan brand's with an
estimated brand value of Rs.22.3 Bn.
Importantly, Brand Finance has also
assigned a AAA brand strength rating
reflecting the ability of the brand to
consolidated even during a time of
crisis.
108  |  Sri Lanka Telecom PLC

INTELLECTUAL CAPITAL
INNOVATION CAPABILITY UNIQUE CORPORATE CULTURE their role in delivering uninterrupted
Our capacity to innovate and launch The Sri Lanka Telecom Group has a services during the two years of
future forward products propels unique corporate culture that is future the pandemic. Civic minded and
our success. The new products and forward in delivery of technology committed, employees worked
solutions launched during 2021 yet grounded by human values. This throughout lockdowns, taking the
strengthen our intellectual capital and culture passed through successive necessary risks to visit homes and
are summarized below. generations of employees ensured resolve issues. Principles of diversity,
that everyone employee played inclusivity and equality are embedded

CONSUMER SME ENTERPRISE

eSport platform and Gaming VoBox SDWAN
bundles Lynked Ez Messenger
YouTube and Messenger data Check In Assure Stack Service
bundles
Cloud POS ConneXt
Unlimited broadband packages
Biztunes IP interconnection link
MySLT app
eSiphala Fleet MGT
Kasperskey End Point Security Robotic Process -Automation
IP Transit Service (Local)
IP Transit Service (Global)
SSL Certificate Service
IP IX product

into our DNA and is part of our rich digital solutions for Sri Lanka. The touch Networking) and Developer
heritage. Loyalty is another key initiative leverages the knowledge Platforms.
feature and employees take pride in and skills within the SLT Group and
being part of a nationally recognised relationships with Academia, Industry, The initiative creates a platform for
brand. This was affirmed when a Integrators and Entrepreneurs to the next generation of innovators
fourth-generation employee joined take Sri Lanka into the 5th Industrial to tap into the wealth of knowledge
the team and 17 new recruits were revolution. ‘The Embryo’ initiative and skills of the Group, establishing
children of employees. The Group will be driven through three main a strong partnership that fosters the
has also been able to attract the top pillars; the Intrapreneurship Studio, growth of innovative digital products
talent in the country for its technical the Entrepreneurship Studio and and services.
roles which has had a pervasive effect the Venture Capital Studio. It is
in creating a tech savvy vibe in the envisaged that it will be a launching
Group. Continuous investments in pad for breakthrough collaborative
cutting edge technology has ensured innovations in a range of verticals
that our team is future focused to fulfil spanning health, education,
our role as a catalyst supporting Sri environment, agriculture, tourism, Sri Lanka Telecom PLC
Lanka’s digital journey. finance, etc., utilising of state of art was awarded as one of the
technologies such as 4G, 5G, GPON, Most Admired Companies
FOCUS ON RESEARCH & Cloud Computing, Open RAN, Intent in Sri Lanka during the
DEVELOPMENT Driven Network, IoT, Open Source
year 2020/21 which has in
Sri Lanka Telecom Group established a Applications, Blockchain, Analytics
including AI / ML / DL, Hyper turn enhanced employer
pioneering Group R&D initiative ‘The
Automation (RPA / DPA), Open Digital branding.
Embryo’ driving multiple innovation
pipelines in building cutting edge Architecture (API, Micro services, Zero
   Annual Report 2021  | 109

THE EMBRYO

ENTREPRENEURSHIP
INTRAPRENEURSHIP STUDIO STUDIO VENTURE CAPITAL STUDIO
Aims to drive innovation by Designed to provide early-stage Drive innovation through
supporting the Group’s employees tech entrepreneurs with access partnerships for co-financing,
to be the entrepreneurs with their to funding, mentoring and to providing the capital injection
inherent skills to define technology build connections in the tech that is critical for start-ups to drive
of the future ecosystem, enabling them to value creation
scale up

Both the Intrapreneurship and participating in workshops and boot Elephant Decoder Hackathon’, ‘The
Entrepreneurship Studios have camp sessions. Embryo’ aims to address the growing
commenced and demo day of the human-elephant conflict by seeking
Entrepreneurship Studio 2021/2022 ‘The Embryo’ has also undertaken disruptive and practical solutions to
cohort was completed selected to use technological innovations to help curb this recurring issue.
start-ups are being onboarded by address pressing social challenges
high-calibre experienced resources, affecting the nation. Through the ‘The

CERTIFICATIONS
SLT has obtained and continues to comply with a range of certifications, which have strengthened its internal
processes and provide assurance to stakeholders on its systems and standards. Key certifications include the
following:

ISO 9001:2015, ISO 27001:2013, ISO 22301:2012, ISO 18295:2017

Quality Management Information Security Business Continuity Mobitel Customer
System (QMS) Management System Management System Contact Centres were
(ISMS) : for all (BCMS) : for critical awarded with ISO
operational platforms functions covering all 18295:2017 Certificate
operational platforms
110  |  Sri Lanka Telecom PLC

INTELLECTUAL CAPITAL
AWARDS
SLT

1 2

6
3 4

1. UiPath Automation Excellence 3. ARC international awards 2021 5. CA Sri Lanka Annual Report
Awards 2021 Gold award - ‘Interactive Awards 2021
Jury Recognition -in the category Annual Report’ / Gold award - Telecommunication
“Automation Excellence – Sri Telecommunications Sector
Lanka” Silver award - ‘Financial Data’ /
Telecommunications 6. Most Admired Companies of Sri
2. Best Corporate Citizen Honours - Integrated AR & Lanka 2021
Sustainability Award 2021’ CSR - Non-Traditional Format/ Top 5 Honourable Mentions
Winner - Top 10 Corporate Specialized Annual Reports
Citizens 7. National Business Excellence
Winner - sector award for 4. Best presented Annual Report awards 2021
“other” category Awards, Integrated Reporting Runner-up - Infrastructure and
2nd runner-up - ‘Demonstrated award and SAARC Anniversary Utilities category
Resilient Practices for award for Corporate Governance
COVID-19 Context’ Disclosures 2020
Winner - Communication &
Information Technology

MOBITEL
1

2 4

1. ACEF Awards Bronze award- for the 4. Digis Awards 2021

Gold award -for the campaign campaign name 'Match Bronze award - Light up Sri Lanka
name 'Mobitel Rewards'- Event Your Number' under Digital Wesak Campaign
and Promotion category Marketing category
Gold award -for the campaign
2. Ookla Speedtest Award 2021
name 'SLT-Mobitel Corporate' -
Sri Lanka’s Fastest Mobile
Television category
Network, for the year 2021
Bronze award- for the
campaign name 'Unlimited 3. SLIM Brand Excellence – 2021
Roaming'- Event and Bronze Award -Service Brand of
Promotion category the year 2020
  Annual Report 2021  | 111
112  |  Sri Lanka Telecom PLC

ANNUAL REPORT OF THE BOARD OF DIRECTORS

ON THE AFFAIRS OF THE COMPANY

The Directors are pleased to present their report and the The Company’s interest in subsidiaries/joint ventures and
Audited Financial Statements of the Company, Sri Lanka their business activities are as follows:
Telecom PLC and the Group for the financial year 2021.
Name of the subsidiary/ Business activity
FORMATION Associate Company
Sri Lanka Telecom (“SLT”) was formed by an Incorporation
Order made under Section 2 of the State Industrial Mobitel (Pvt) Ltd. Mobile telephone services
Corporations Act No. 49 of 1957 and published in the e-Channeling PLC Information infrastructure for
Extraordinary Gazette No. 596/11 of 6 February 1990. the healthcare industry
Subsequently, in terms of an order made by the Minister of Mobit Technologies (Pvt) Ltd. Software solutions provider
Posts and Telecommunications (“the Minister”) on 24 July Sri Lanka Telecom Total network solutions
1991 under Section 23 of the Sri Lanka Telecommunications (Services) Ltd.
Act No. 25 of 1991 and published in the Gazette No. 675 of SLT VisionCom (Pvt) Ltd. IPTV support services
9 August 1991 all properties, rights and liabilities (other than SLT Digital Info Services Directory information, event
those excluded by the agreement entered into between the (Pvt) Ltd. management & activation
Minister and SLT as per sub-section 2 of Section 23 of the and digital services
Sri Lanka Telecommunication Act) to which the Department
SLT Property Management Management of SLT’s real
of Telecommunications (“DoT”) was entitled or subject to
(Pvt) Ltd estate resources
immediately before the transfer date of 1 September 1991
were vested with SLT. SLT Human Capital Operations have ceased
Solutions (Pvt) Ltd.
SLT was converted to a public limited Company on Talentfort (Pvt) Ltd. Human resource solutions
25 September 1996, under the Conversion of Public Sky Network (Pvt) Ltd. Operations cased and the
Corporations of Government Owned Business Undertakings Company has commenced
into Public Limited Companies Act No. 23 of 1987, vide the process of liquidation
Extraordinary Gazette No. 942/7 dated 25 September 1996 Galle Submarine Cable Repair and maintenance
and the shares were listed in the Colombo Stock Exchange Depot (Pvt) Ltd of submarine
(“CSE”) in January 2003. telecommunication cable
systems to third parties.
SLT was re-registered under the Companies Act No. 07 of
2007 as Sri Lanka Telecom PLC on 4 June 2007. A detailed review of the Company’s activities, the
development of its businesses, and an indication of
PRINCIPAL GROUP ACTIVITIES AND REVIEW OF likely future developments are given under Management
THE BUSINESS Discussion and Analysis.
The Group provides a broad portfolio of telecommunication
services across Sri Lanka, the main activity being domestic SLT on 25 January 2022 divested 100% of the shares of its
and international fixed and mobile telephone services. fully owned subsidiary SLT Campus (Pvt) Ltd to Tempest Two
In addition, the range of services provided by the Group (Pvt) Ltd, an investor consortium for a total consideration of
include, inter-alia, internet services, IPTV, Wireless Rupees Four Hundred and Ten Million (LKR 410,000,000).
broadband, data services, domestic and international
leased circuits, frame relay, satellite uplink and maritime
transmission.
   Annual Report 2021  | 113

BOARD OF DIRECTORS
In terms of section 168 (1) (h) of the Companies Act No. 07 of 2007, and the Listing Rules of the CSE, the names of persons
who held the office as Directors of the Company during the financial year ended 31st December 2021 are given below;

Name of Director Position Date of Appointment Date of Re-election

Mr. Rohan Fernando Chairman/INED 23 January 2020 15 July 2020

Mr. Lalith Seneviratne GCEO/ED 23 January 2020 15 July 2020
Mr. Chan Chee Beng NED 5 June 2008 23 April 2021
Mr. Lawrence Paratz INED 26 May 2010 15 July 2020
Ms. Lai Choon Foong INED 9 May 2014 24 May 2017
Mr. Mohan Weerakoon, PC INED 23 January 2020 15 July 2020
Mr. Ranjith Rubasinghe NED 23 January 2020 15 July 2020
Mr. Saman Fernando NED 10 December 2020 23 April 2021
Mr. V U Kumar INED 14 July 2021 To be elected at the
AGM

ED – Executive Director
NED – Non Executive Director
INED – Independent Non – Executive Director
Changes to the directorate subsequent to the financial year.

Mr. Saman Fernando - Resigned w.e.f. 2 March 2022 BOARD SUB- COMMITTEES
Mr. K A Vimalenthirarajah - Appointed w.e.f. 15 March 2022 In terms of Section 186 of the Companies Act, the AoA of
the Company and the Listing Rules the following mandatory
Brief profiles of the Directors are contained in the Board of and voluntary sub-committees have been appointed by the
Directors section in the Annual Report Board to focus in detail on a particular issue.

APPOINTMENT & RE-ELECTION OF DIRECTORS > Audit Committee

In terms of the Articles of Association (AoA) of the Company, > Remuneration & Nomination Committee
the Directors are authorized to appoint any person to be
> Senior Tender Board
a Director either to fill a casual vacancy or as an additional
Director provided that the total number of Directors do not > Technology Sub-Committee
exceed the maximum no. of Directors specified in the AoA
> Related Party Transactions Review Committee
of the Company. The Directors appointed during the year
will hold office only until the next Annual General Meeting
(“AGM”) and will offer themselves for re-election by the Information relating to Sub-committees is given under
shareholders. “Corporate Governance” on page 46 to 59.

In addition, one third of the Directors (or the number nearest DIRECTORS’ INDEMNITIES AND INSURANCE
to one third) retires by rotation at each AGM and offer The Company maintains Directors’ and Officers’ liability
themselves for re-appointment by the shareholders. insurance which gives appropriate cover for any legal action
brought against its Directors and Officers.
Messrs V. U. Kumar and K A Vimalenthirarajah who were
appointed to the Board since the previous AGM offer INTEREST REGISTER AND DIRECTORS’ INTEREST
themselves for re-appointment in accordance with Article 97 IN CONTRACTS WITH THE COMPANY
of the AoA of the Company. An Interest Register is maintained by the Company as per
the requirement of the Companies Act No. 7 of 2007. The
Ms. Lai Choon Foong and Mr. Mohan Weerakoon who have Directors have made necessary declarations as provided in
been longest in office since their last re-election, retire by section 192 (2) of the aforesaid Companies Act. The interest
rotation in terms of Article 91 and 92 of the AoA of the Register is available for inspection by shareholders, or their
Company and being eligible offer themselves for re-election. authorized representatives as required by section 119 (1) (d)
of the Companies Act No. 7 of 2007.

114  |  Sri Lanka Telecom PLC

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON

THE AFFAIRS OF THE COMPANY

The Company carries out transactions in the ordinary course SHARES AND DEBENTURES
of business at commercial rates with entities in which a Stated Capital
Director of the Company is the Chairman or Director of such The Stated Capital of the Company as at 31 December 2021
entities or holds substantial interest in such entities. was LKR 18,048,600,000 divided into 1,804,860,000 ordinary
shares. There were no changes to the issued capital of the
The Directors have no direct or indirect interest in any Company during the year under review.
contract or proposed contact with the Company for the year
ended 31 December 2021 other than those disclosed in Substantial shareholding
Note 34 to the Financial Statements. The following shareholders held more than 5% of the issued
shares as at 31 December 2021.
The Directors have declared all material interest in contacts
involving the Company and have refrained from voting on Secretary to the Treasury
matters in which they have a material interest. (Government of Sri Lanka) 49.50%

RELATED PARTY TRANSACTIONS Global Telecommunications

Transactions if any that could be classified as Related Party Holdings N.V. of Netherlands 44.98%
Transactions in terms of LKAS 24 “Related Party Disclosures”
are given in Note 34 to the Financial Statements. Voting rights
Ordinary shareholders are entitled to receive notice and to
The related party transactions of the Company during the attend and speak at any General Meeting of the Company. A
financial year have been reviewed by the Related Party shareholder entitled to attend and vote at a General Meeting
Transactions Review Committee (“RPT – RC”) and are in may appoint a proxy to attend and vote instead of him. A
compliance with the Section 09 of the CSE Listing Rules proxy need not be a shareholder of the Company.

The RPT – RC confirms that recurrent related party Every shareholder present in person or by proxy (or being a
transactions carried out during the year does not exceed corporation present by a duly authorised representative) shall
10% of the equity or 5% of the total assets of the listed have one vote on a show of hands and one vote for every
entity. In addition, the aggregate value of the recurrent share held by him on a poll.
related party transactions does not exceed 10% of the gross
revenue. Details of the Company’s Stated capital are set out in Note
30 to the Financial Statements.
DIRECTORS & CHIEF EXECUTIVE OFFICER’S
SHAREHOLDING Debentures
The Directors did not hold shares in the Company or its The Company in April 2018 issued 70,000,000 Senior
subsidiaries during the financial year under review. Unsecured Redeemable Rated 10-year (2018/2028)
Debentures as indicated below:
The shareholding of the CEO is given below;
Type of Interest rate No. of debentures
No. of shares Debentures (per annum) issued
01.01.2021 31.12.2021
Chief Executive Officer 1,824 1,824 Type A 12.75% payable annually 20,760,000
Type B 12.75% payable semi- 49,240,000
annually
REMUNERATION AND OTHER BENEFITS OF
DIRECTORS Minimum Public Holding Requirement
The remuneration and other benefits received by the Given that the two controlling shareholders and other
Directors are given in Note 7 to the Financial Statements as Government connected institutions are considered “non-
required by Section 168 (1) (f) of the Companies Act. public”, the public free float has reduced to 4.78% of the
shareholding. The shares of SLT was transferred to the
Second Board with effect from 29 October 2021.
   Annual Report 2021  | 115

In view of the current situation, SLT is evaluating various and applicable estimation techniques, have been reviewed
options available to increase the public float such as private by the Directors who have confirmed them to be appropriate
placement and/or secondary public share offering in order to for the preparation of the consolidated Financial Statements
comply with minimum public holding requirements of section for 2021.
7.14.1 of the Listing Rules.
The aforementioned Financial Statements for the year ended
FINANCIAL STATEMENTS 31 December 2021 certified by the Group Chief Financial
The Financial Statements of the Group and the Company Officer and signed by two Directors are given on page 125 of
have been prepared in accordance with Sri Lanka Accounting this Report.
Standards (SLFRs/LKASs), laid down by the Institute of
Chartered Accountants of Sri Lanka and comply with the A statement by the Directors of their responsibilities for
requirements of the Companies Act No. 7 of 2007. preparing the Financial Statements is included in the
Statement of Directors’ responsibilities on page 118 while
The significant accounting policies adopted by the Group the independent Auditors Report is set out in pages 119 to
and Company in preparing the Financial Statements are set 122 of this report.
out on Note 3 to the Financial Statements. These policies,

FINANCIAL RESULTS & APPROPRIATIONS

2021 2020
Company Group Company Group
Rs. Mn Rs. Mn Rs. Mn Rs. Mn
Revenue 59,811 102,348 51,552 91,119
Profit 5,865 12,161 4,019 7,881
Reserves 65,672 93,868 62,443 84,179

Results of the Company and of the Group are given in As required by Section 56(2) of the Companies Act No. 7
the Statement of Profit or Loss and Other Comprehensive of 2007, the Directors have signed a Certificate stating that
Income on page 123. in their opinion the Company based on the information
available satisfies the Solvency Test immediately after the
The movement of the reserves are given in the Statement of dividend distribution is made and have obtained a Certificate
Changes in Equity on pages 126 to 127 of the Annual Report. from the Auditors in terms of section 57 of the Companies
Act.
IMPACT OF COVID 19
SLT being the national communication service provider PROPERTY, PLANT AND EQUIPMENT
in Sri Lanka focused on providing uninterrupted service The movements in property, plant and equipment during
to the consumers, ensured smooth functioning of voice/ the year are set out in Note 14 to the Financial Statements.
data services and network quality during the pandemic as Current status of value of properties is disclosed on Pages
telecommunication services was identified as an essential 201 to 206.
service.
AUDITORS
SLT activated the Company’s Business Continuity Plan (BCP) Ernst & Young, (“E & Y”) Chartered Accountants served as
and effected changes in operations, supply chain, workforce the external Auditors of the Company during the year under
movements, investments and strategies to cope with the review. The Audit fees payable and fees payable for non
unprecedented challenges posed by the pandemic. -audit services rendered are as follows:

DIVIDENDS 2021 2020

The Directors recommend the payment of a first and final Rs. Mn Rs. Mn
dividend of Rs. 2.02 per share (2020 - Rs. 1.49 per share) for
the financial year ended 31 December 2021 payable on 2 Audit Fees 12 12
June 2022 to the shareholders registered as at 12 May 2022, Non – Audit Fees 3 2
subject to the approval of the shareholders.
116  |  Sri Lanka Telecom PLC

ANNUAL REPORT OF THE BOARD OF DIRECTORS ON

THE AFFAIRS OF THE COMPANY

SLT Group Audit Committee having considered E & Y’s EMPLOYMENT POLICIES
performance and their independence recommend to the The employment policies of SLT cover issues such as
shareholders the re-appointment of E & Y as the Auditors of diversity, employee well-being and equal opportunities.
the Company for the ensuing year. The Company takes its responsibility towards the physically
disabled seriously and does not discriminate any employee
Based on the written representation made by the Auditors or prospective employee based on physical disability.
the Directors are satisfied that the Auditors have had no Employees who become disabled during their service at SLT
interest or relationship with the Company or its subsidiaries will be retained in employment wherever possible and will be
other than that of external Auditors. given rehabilitation and training.

E & Y have expressed their willingness to continue in office. A The Group companies operate within a framework of Human
resolution to re-appoint them and to authorize the Directors Resource policies, practices and regulations appropriate to
to determine their remuneration will be proposed at the their market sector. Policies and procedures for recruitment,
forthcoming AGM. training , career development and the Code of Ethics for
Employees promote equal opportunity regardless of gender,
STATUTORY PAYMENTS & COMPLIANCE WITH sexual orientation, age, marital status, disability, race, religion
LAWS & REGULATIONS or other beliefs and ethnic or national origin. The aim is
The Directors confirm that to the best of their knowledge to encourage a culture in which all employees have the
all taxes, duties and levies payable by the Company and opportunity to develop fully according to their individual
subsidiaries, all contributions, levies and taxes payable on abilities and the needs of the Group.
behalf of and in respect of the employees of the Company
and its subsidiaries and all other known statutory dues as The number of persons employed by SLT and Group is given
were due and payable by the Company and its subsidiaries in Note 7.1 on page 157.
as at the reporting date have been paid or where relevant
provided for in the Financial Statements. SUSTAINABILITY REPORTING
SLT is conscious of the direct and indirect impact on the
The Company has also ensured that it complied with the environment due to its business activities. The Group
applicable laws and regulations including the Listing Rules of endeavours to minimise the adverse effects on the
the CSE. environment and to ensure sustainable continuity of our
natural resources. The activities undertaken by the Group
ENVIRONMENTAL PROTECTION in recognition of its responsibility as a corporate citizen are
After making adequate enquiries from the management, the disclosed more fully on pages 84 to 91 of this Report.
Directors are satisfied that the Company and its subsidiaries
operate in a manner that minimizes the detrimental effects POST BALANCE SHEET EVENTS
on the environment and provides products and services Except for matters disclosed in Note 39 to the Financial
that have a beneficial effect on the customers and the Statements, there are no material events as at the date of the
communities within which the Group operates. Auditors Report which require adjustments to or disclosure in
the Financial Statements.
DONATIONS
The Directors have approved donations amounting to GOING CONCERN
Rs. 2.0 Mn for charitable purposes for the year 2021. (2020 – The Directors have reviewed the Company’s business plans
Rs. 2.0 Mn). and is satisfied that the Company has adequate resources
to continue its operations in the foreseeable future to justify
adopting the going concern basis in preparing the Financial
Statements.
   Annual Report 2021  | 117

ANNUAL GENERAL MEETING (AGM)

The AGM will be held at 10.00 am. on 11 May 2022 at
the Lotus Hall of the Bandaranaike Memorial International
Conference Hall (BMICH), Bauddhaloka Mawatha, Colombo
07. The Notice of the Annual General Meeting appears on
page 214 of the Annual Report.

By order of the Board

Of Sri Lanka Telecom PLC

Rohan Fernando
Chairman

Lalith Seneviratne
Director

Mahesh Athukorale
Group Company Secretary

15 March 2022
Colombo
118  |  Sri Lanka Telecom PLC

STATEMENT OF DIRECTORS IN RELATION TO

THEIR RESPONSIBILITY FOR THE PREPARATION
OF FINANCIAL STATEMENTS
The responsibility of the Directors in relation to the Financial The Internal Auditors have conducted periodic audits to
Statements of the Company and the Group is set out in the provide reasonable assurance that the established policies
following statement. The responsibility of the Independent and procedures of the Company were consistently followed.
Auditors, in relation to the Financial Statements, prepared in However, there are inherent limitations that should be
accordance with the provisions of the Companies Act No. 07 recognised in weighing the assurances provide by any system
of 2007 (“ the Act”), is set out in the Independent Auditors’ of internal controls and accounting.
Report from pages 119 to 122.
The Audit Committee meets periodically with the Internal
The Financial Statements comprise: Auditors and the Independent Auditors to review the manner
> Statement of Profit or Loss and Other Comprehensive in which these auditors perform their responsibilities, and
Income, which present a true and fair view of the profit to discuss auditing, internal control and financial reporting
and loss of the Company and the Group for the financial issues. To ensure complete independence, the Independent
year; and Auditors and the Internal Auditors have full and free access
to the members of the Audit Committee to discuss any
> Statement of Financial Position, which present a true
matter of substance.
and fair view of the state of affairs of the Company and
the Group as at the end of the financial year, and which
The Directors are required to prepare the Financial
comply with the requirements of the Act and SLRFS.
Statements and to provide the Independent Auditors
with every opportunity to take whatever steps and
The Directors are required to ensure that, in preparing these
undertake whatever inspections that they may consider to
Financial Statements:
be appropriate to enable them to give the Independent
> appropriate accounting policies have been selected and Auditors ‘opinion.
applied in a consistent manner and material departures, if
any, have been disclosed and explained; The Directors are of the view that they have discharged their
responsibilities as set out in this Statement
> all applicable Accounting Standards issued by the
Institute of Chartered Accountants of Sri Lanka, as
COMPLIANCE REPORT
relevant, have been followed;
The Directors confirm that to the best of their knowledge,
> judgments and estimates have been made which are all taxes, duties and levies payable by the Company and its
reasonable and prudent. subsidiaries, all contributions, levies and taxes payable on
behalf of and in respect of the employees of the Company
The Directors are also required to ensure that the Company and its subsidiaries, and all other known statutory dues as
and the Group have adequate resources to continue its were due and payable by the Company and its subsidiaries
operation to justify applying the going concern basis in as at the Reporting date have been paid, or where relevant
preparing these Financial Statements. provided for, except as specified in Note 33 to the Financial
Statements covering contingent liabilities.
Further, the Directors have a responsibility to ensure that the
Company maintains sufficient accounting records to disclose, By Order of the Board
with reasonable accuracy of the financial position of the Sri Lanka Telecom PLC
Company and of the Group, and to ensure that the Financial
Statements presented comply with the requirements of the
Act.

The Directors are also responsible for taking reasonable Mahesh Athukorale
steps to safeguard the assets of the Company and of the Group Company Secretary
Group and in this regard to give proper consideration to
the establishment of appropriate internal control systems 15 March 2022
with a view to preventing and detecting fraud and other Colombo
irregularities.
   Annual Report 2021  | 119

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS OF responsibilities in accordance with the Code of Ethics.

SRI LANKA TELECOM PLC We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Report on the audit of the Financial Statements
Key audit matters
Opinion Key audit matters are those matters that, in our professional
We have audited the financial statements of Sri Lanka judgement, were of most significance in our audit of the
Telecom PLC (the Company) and the consolidated Financial Financial Statements of the current period. These matters
Statements of the Company and its subsidiaries (the Group), were addressed in the context of our audit of the Financial
which comprise the Statement of Financial Position as at Statements as a whole, and in forming our opinion thereon,
31 December 2021, and the Statement of Comprehensive and we do not provide a separate opinion on these matters.
Income, Statement of Changes in Equity and Statement For each matter below, our description of how our audit
of Cash Flows for the year then ended, and notes to the addressed the matter is provided in that context.
Financial Statements, including a summary of significant
accounting policies. We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the Financial
In our opinion, the accompanying Financial Statements of Statements section of our report, including in relation
the Company and the Group give a true and fair view of the to these matters. Accordingly, our audit included the
financial position of the Company and the Group as at performance of procedures designed to respond to our
31 December 2021, and of their financial performance and assessment of the risks of material misstatement of the
cash flows for the year then ended in accordance with Sri Financial Statements. The results of our audit procedures,
Lanka Accounting Standards. including the procedures performed to address the matters
below, provide the basis for our audit opinion on the
Basis for opinion accompanying Financial Statements.
We conducted our audit in accordance with Sri Lanka
Auditing Standards (SLAuSs). Our responsibilities under
those standards are further described in the Auditor’s
responsibilities for the audit of the Financial Statements
section of our report. We are independent of the Group in
accordance with the Code of Ethics issued by CA Sri Lanka
(Code of Ethics) and we have fulfilled our other ethical
120  |  Sri Lanka Telecom PLC

INDEPENDENT AUDITORS’ REPORT

Key Audit Matter How our audit addressed the key audit matter
Revenue recognition of fixed telephony and mobile
communication services
The Group recognized revenue of LKR 100,269 Mn from the Our audit procedures included the following amongst others;
provision of fixed telephony & mobile communication services > We involved our internal specialized resources to assist us with;
for the year ended 31 December 2021 in accordance with its
accounting policy set out in Note 3 (k) to the financial statements > Evaluating the design and operating effectiveness of IT
General Controls and IT Application Controls of IT systems
Recognition of revenue from the provision of fixed telephony & having significant impact over revenue recognition.
mobile communication services was a key focus of our audit due
to: > Evaluating the adequacy of controls implemented for security
monitoring aspects over selected IT systems related to revenue
—
Provision of telecommunication services to customers involve recognition.
frequent changes in rate structures and arrangements with
multiple features. It comprises a large volume of transactions > We evaluated the design, implementation and operating
which arise from sales of different combinations of hardware effectiveness of IT dependent manual controls and manual controls
and services that are captured, processed and recorded by including performing re-computations and testing end-to-end
the Group using multiple IT systems. reconciliations, as relevant.
> We assessed the reasonableness of significant judgements
— Significant judgement exercised by management when made by management when determining the timing of revenue
determining: recognition, duration of customer contracts and when allocating
a. Whether to recognize revenue at a point in time or over transaction price to bundled products and services of major
a period for revenue arrangements revenue streams, based on the respective terms and conditions of
customer contracts.
b. Duration of customer contracts
> We also assessed the adequacy of related disclosures reflected in
c. Transaction price and allocating it to bundled products Note 3 (k) and Note 6 (a) of the Financial Statements.
and services
Estimated Useful Lives and Capital Work-in-Progress of Network
Assets
As at 31 December 2021, the Group’s network assets accounted Our audit procedures included the following amongst others;
for 43% of the consolidated total assets and Group’s capital work- > We obtained an understanding of the Group’s process in estimating
in-progress related to such network assets accounted for 9% of the useful lives of network assets.
the consolidated total assets.
> We inquired with the Group’s network engineers on their evaluation
Depreciation on network assets amounted to LKR 16,685 Mn of the relevance of current technology and its utilization for future
for the year ended 31 December 2021. The Group’s policy is to periods.
calculate the depreciation of an asset over its estimated useful life
> We tested management assessment of the estimated useful lives
on a straight-line basis.
of network assets against industry data and practice and other
Estimating the useful lives of network assets requires judgment by relevant external data.
the management and is a key focus for our audit. It involves the
> We evaluated whether management has identified possible
Group’s collective assessment of the industry practice, internal
indicators of impairment for any project related to network
technical evaluation and experience with the similar assets in
assets which have not been commissioned for a prolonged
concluding the useful lives of network assets.
period including evaluating the reasonableness of management
Capital work in progress of network assets was a key focus for our judgements applied and assumptions used based on our
audit due to the: knowledge of the business and industry.
— Degree of judgement involved, and assumptions used when > By discussion with the respective project managers and inspection
assessing impairment of amounts of capital work – in – of relevant documentation, we
progress relevant to projects of an extended duration
> checked the current status of completion of those projects in
and relation to budgeted project duration
— Importance of timeliness in transferring amounts from capital and
work – in – progress of network assets to the relevant class of
> whether amounts related to network assets commissioned for
property, plant and equipment, when such items have been
use have been appropriately transferred out of capital work–in-
commissioned for use.
progress and recognized under the relevant class of property,
The Group’s disclosures on property and equipment are included plant & equipment, on a timely basis
in Notes 3 (d) and 14 to the consolidated Financial Statements
> We also assessed the adequacy of related disclosures made in the
and the disclosures on capital work-in-progress are included in
Financial Statements.
Notes 3 (d) (iv) and 14 to the consolidated Financial Statements.
   Annual Report 2021  | 121

Other Information included in the 2021 Annual Report As part of an audit in accordance with SLAuSs, we exercise
Other information consists of the information included in the professional judgment and maintain professional skepticism
Annual Report, other than the Financial Statements and our throughout the audit. We also:
auditor’s report thereon. Management is responsible for the
other information. > Identify and assess the risks of material misstatement of
the Financial Statements, whether due to fraud or error,
Our opinion on the Financial Statements does not cover design and perform audit procedures responsive to those
the other information and we do not express any form of risks, and obtain audit evidence that is sufficient and
assurance conclusion thereon. appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
In connection with our audit of the Financial Statements, our fraud is higher than for one resulting from error, as fraud
responsibility is to read the other information and, in doing may involve collusion, forgery, intentional omissions,
so, consider whether the other information is materially misrepresentations, or the override of internal control.
inconsistent with the Financial Statements or our knowledge
obtained in the audit or otherwise appears to be materially > Obtain an understanding of internal control relevant to
misstated. If, based on the work we have performed, we the audit in order to design audit procedures that are
conclude that there is a material misstatement of this other appropriate in the circumstances, but not for the purpose
information, we are required to report that fact. We have of expressing an opinion on the effectiveness of the
nothing to report in this regard. internal controls of the Company and the Group.

Responsibilities of the management and those charged with > Evaluate the appropriateness of accounting policies used
governance and the reasonableness of accounting estimates and
Management is responsible for the preparation of Financial related disclosures made by management.
Statements that give a true and fair view in accordance with
Sri Lanka Accounting Standards, and for such internal control > Conclude on the appropriateness of management’s use of
as management determines is necessary to enable the the going concern basis of accounting and, based on the
preparation of financial statements that are free from material audit evidence obtained, whether a material uncertainty
misstatement, whether due to fraud or error. exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a
In preparing the Financial Statements, management is going concern. If we conclude that a material uncertainty
responsible for assessing the Group’s ability to continue as exists, we are required to draw attention in our auditor’s
a going concern, disclosing, as applicable, matters related report to the related disclosures in the Financial
to going concern and using the going concern basis of Statements or, if such disclosures are inadequate, to
accounting unless management either intends to liquidate modify our opinion. Our conclusions are based on the
the Group or to cease operations, or has no realistic audit evidence obtained up to the date of our auditor’s
alternative but to do so. report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
Those charged with governance are responsible for
overseeing the Company’s and the Group’s financial > Evaluate the overall presentation, structure and content
reporting process. of the Financial Statements, including the disclosures,
and whether the Financial Statements represent the
Auditor’s responsibilities for the audit of the Financial underlying transactions and events in a manner that
Statements achieves fair presentation.
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from > Obtain sufficient appropriate audit evidence regarding
material misstatement, whether due to fraud or error, the financial information of the entities or business
and to issue an auditor’s report that includes our opinion. activities within the Group to express an opinion on the
Reasonable assurance is a high level of assurance but is not consolidated Financial Statements. We are responsible for
a guarantee that an audit conducted in accordance with the direction, supervision and performance of the group
SLAuSs will always detect a material misstatement when it audit. We remain solely responsible for our audit opinion.
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these Financial
Statements.
122  |  Sri Lanka Telecom PLC

INDEPENDENT AUDITORS’ REPORT

We communicate with those charged with governance

regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

We also provide those charged with governance with a

statement that we have complied with ethical requirements in
accordance with the Code of Ethics regarding independence,
and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of most
significance in the audit of the Financial Statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such
communication.

Report on other legal and regulatory requirements

As required by section 163 (2) of the Companies Act No.
07 of 2007, we have obtained all the information and
explanations that were required for the audit and as far as
appears from our examination, proper accounting records
have been kept by the Company.

CA Sri Lanka membership number of the engagement

partner responsible for signing this independent auditor’s
report is 1420.

04 April 2022
Colombo
   Annual Report 2021  | 123

STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME
(all amounts in Sri Lanka Rupees million)

Group Company
For the year ended 31 December Notes 2021 2020 2021 2020

Revenue 6 102,348 91,119 59,811 51,552

Direct costs 7 (56,482) (50,436) (34,919) (29,162)
Gross profit 45,866 40,683 24,892 22,390
Sales and marketing costs 7 (11,157) (10,209) (5,599) (4,720)
Administrative costs 7 (20,865) (18,842) (15,957) (14,168)
Operating profit 13,844 11,632 3,336 3,502
Other income 1,084 880 1,293 1,261
Dividend income - - 1,489 1,001
Interest expense and finance costs 9 (3,022) (2,902) (1,825) (1,391)
Foreign exchange (loss) / gain 9.a (482) (1,203) 76 (727)
Interest income 10 1,308 1,232 630 819
Share of profit from associate company 16.2 86 74 86 74
Profit before tax 12,818 9,713 5,085 4,539
Income tax (expenses) / reversal 11 (657) (1,832) 780 (520)
Profit for the year 12,161 7,881 5,865 4,019

Other comprehensive income

Other comprehensive income that may be reclassified to
profit or loss in subsequent period

Net movement on cash flow hedges 12 - 501 - 471

Other comprehensive income that will not be reclassified to

profit or loss in subsequent period

Defined benefit plan actuarial gains / (losses) 28 397 (473) 169 (426)
Tax on other comprehensive income 11 (150) 114 (116) 119
Other comprehensive income for the year net of tax 247 142 53 164
Total comprehensive income for the year 12,408 8,023 5,918 4,183

Profit attributable to:

Owners of the company 12,155 7,877 5,865 4,019
Non-controlling interest 6 4 - -
12,161 7,881 5,865 4,019

Total comprehensive income attributable to:

Owners of the company 12,402 8,019 5,918 4,183
Non-controlling interest 6 4 - -
12,408 8,023 5,918 4,183

Earnings per share (Rs.)

- Basic 13 6.73 4.37 3.25 2.23

The Notes on pages 129 to 196 form an integral part of these Financial Statements.
124  |  Sri Lanka Telecom PLC

STATEMENT OF FINANCIAL POSITION

(all amounts in Sri Lanka Rupees million)

Group Company
As at 31 December Notes 2021 2020 2021 2020

Assets
Non-current assets
Property, plant and equipment 14 141,937 137,208 105,854 100,269
Right of use assets 14 (a) 7,815 8,750 805 78
Intangible assets 15 7,827 8,115 2,832 2,656
Investments in subsidiaries 16.1 - - 14,431 14,821
Investments in associates 16.2 214 128 214 128
Deferred tax assets 24 181 185 - -
Contract assets 25(a) 878 560 233 155
Other receivables 18 2,672 2,748 2,657 2,732
Total non-current assets 161,524 157,694 127,026 120,839

Current assets
Inventories 19 2,689 3,367 2,039 2,634
Trade and other receivables 20 26,909 27,070 18,682 17,932
Current tax receivable 14 15 - -
Contract assets 25 (a) 978 778 164 97
Other investments 17 8,310 3,666 8,288 3,646
Cash and cash equivalents 21 17,972 11,866 1,615 1,041
56,872 46,762 30,788 25,350
Assets classified as held for sale 22 1,545 - 390 -
Total current assets 58,417 46,762 31,178 25,350
Total assets 219,941 204,456 158,204 146,189

Equity
Capital and reserves
Stated capital 30 18,049 18,049 18,049 18,049
Insurance reserve 29 1,105 1,044 1,105 1,044
Hedging reserve 12 - 30 - -
Retained earnings 74,714 65,056 46,518 43,350
Equity attributable to equity holders of the company 93,868 84,179 65,672 62,443
Non controlling interest 108 102 - -
Total equity 93,976 84,281 65,672 62,443

Liabilities
Non-current liabilities
Borrowings 23 37,837 45,539 35,807 40,875
Vendor financing 27 5,987 922 5,961 762
Lease liability 14 (a) 6,823 7,377 613 27
Contract liabilities 25 (b) 1,071 660 1,071 660
Deferred income 25 1,666 1,832 1,666 1,832
Deferred tax liabilities 24 5,627 7,346 4,870 6,936
Employee benefits 28 4,957 5,204 4,272 4,358
Trade and other payables 26 6,565 4,609 5,283 3,193
Total non-current liabilities 70,533 73,489 59,543 58,643
   Annual Report 2021  | 125

Group Company
As at 31 December Notes 2021 2020 2021 2020

Current liabilities
Borrowings 23 8,752 9,518 7,256 7,117
Vendor financing 27 311 157 171 -
Lease liability 14 (a) 2,373 2,281 216 58
Contract liabilities 25 (b) 971 742 684 484
Deferred income 25 3,924 2,812 383 240
Current tax liabilities 2,075 560 1,474 73
Deferred tax liabilities 24 11 11 - -
Trade and other payables 26 35,605 30,605 22,805 17,131
54,022 46,686 32,989 25,103
Liabilities directly associated with assets held for sale 22 1,410 - - -
Total current liabilities 55,432 46,686 32,989 25,103
Total liabilities 125,965 120,175 92,532 83,746
Total equity and liabilities 219,941 204,456 158,204 146,189

The notes on pages 129 to 196 form an integral part of these financial statements.

I certify that these financial statements have been prepared in compliance with the requirements of the Companies Act No.
07 of 2007.

Sanjeewa Samaranayake
Group Chief Financial Officer


The Board of Directors is responsible for these financial statements. These financial statements were approved by the
Board of Directors on 15 March 2022.


Signed for and behalf of the board.

Rohan Fernando Lalith Seneviratne

Chairman Director
126  |  Sri Lanka Telecom PLC

CONSOLIDATED STATEMENT OF CHANGES IN

EQUITY - GROUP
(all amounts in Sri Lanka Rupees million)

Group Attributable to owners of the Company

Notes Stated Insurance Hedging Retained Total Non Total
capital reserve reserve earnings equity controlling equity
interest
Balance as at 1 January 2020 18,049 917 (471) 59,574 78,069 98 78,167
Non controlling interest - - - - - 4 4
Total comprehensive income for the year
Net profit for the year 2020 - - - 7,881 7,881 - 7,881
Other comprehensive income
Net movement on cash flow hedges - - 501 - 501 - 501
Defined benefit plan actuarial loss, net of tax - - - (359) (359) - (359)
Total other comprehensive income - - 501 (359) 142 - 142
Total comprehensive income for the year - - 501 7,522 8,023 - 8,023

Transactions with owners,recorded directly

in equity contribution by and distribution
to owners
Dividends to equity shareholders - - - (1,913) (1,913) - (1,913)

Insurance reserve
- Transfer to insurance reserve 29 - 127 - (127) - - -
Balance as at 31 December 2020 18,049 1,044 30 65,056 84,179 102 84,281

Group Attributable to owners of the Company

Notes Stated Insurance Hedging Retained Total Non Total
capital reserve reserve earnings equity controlling equity
interest
Balance as at 1 January 2021 18,049 1,044 30 65,056 84,179 102 84,281
Non controlling interest - - - - - 6 6
Total comprehensive income for the year
Net profit for the year 2021 - - - 12,161 12,161 - 12,161
Other comprehensive income
Net movement on cash flow hedges - - (30) - (30) - (30)
Defined benefit plan actuarial gain, net of tax - - - 247 247 - 247
Total other comprehensive income - - (30) 247 217 - 217
Total comprehensive income for the year - - (30) 12,408 12,378 - 12,378

Transactions with owners,recorded directly

in equity contribution by and distribution
to owners
Dividends to equity shareholders - - - (2,689) (2,689) - (2,689)

Insurance reserve -
- Transfer to insurance reserve 29 - 61 - (61) - - -
Balance as at 31 December 2021 18,049 1,105 - 74,714 93,868 108 93,976

The notes on pages 129 to 196 form an integral part of these financial statements
   Annual Report 2021  | 127

CONSOLIDATED STATEMENT OF CHANGES IN

EQUITY - COMPANY
(all amounts in Sri Lanka Rupees million)

Attributable to owners of the Company

Company Notes Stated Insurance Hedging Retained Total
capital reserve reserve earnings equity

Balance as at 1 January 2020 18,049 917 (471) 41,678 60,173

Total comprehensive income for the year
Net profit for the year 2020 - - - 4,019 4,019
Other comprehensive income
Net movement on cash flow hedges - - 471 - 471
Defined benefit plan actuarial loss, net of tax - - - (307) (307)
Total other comprehensive income - - 471 (307) 164
Total comprehensive income for the year - - 471 3,712 4,183

Transactions with owners, recorded directly in equity

Contribution by and distribution to owners
Dividends to equity shareholders - - - (1,913) (1,913)

Insurance reserve
- Transfer to insurance reserve 29 - 127 - (127) -
Balance as at 31 December 2020 18,049 1,044 - 43,350 62,443

Attributable to owners of the Company

Company Notes Stated Insurance Hedging Retained Total
capital reserve reserve earnings equity

Balance as at 1 January 2021 18,049 1,044 - 43,350 62,443

Total comprehensive income for the year
Net profit for the year 2021 - - - 5,865 5,865
Other comprehensive income
Defined benefit plan actuarial gain, net of tax - - - 53 53
Total other comprehensive income - - - 53 53
Total comprehensive income for the year - - - 5,918 5,918

Transactions with owners,recorded directly in equity

Contribution by and distribution to owners
Dividends to equity shareholders - - - (2,689) (2,689)

Insurance reserve
- Transfer to insurance reserve 29 - 61 - (61) -
Balance as at 31 December 2021 18,049 1,105 - 46,518 65,672

The notes on pages 129 to 196 form an integral part of these financial statements

128  |  Sri Lanka Telecom PLC

STATEMENT OF CASH FLOWS

(all amounts in Sri Lanka Rupees million)

Group Company
For the year ended 31 December Notes 2021 2020 2021 2020

Cash flows from operating activities

Cash generated from operations 31 50,611 40,562 31,413 22,048
Interest received 1,334 1,243 656 830
Interest paid (6,781) (8,109) (4,304) (5,378)
Tax paid (995) (706) - -
Gratuity paid 28 (538) (690) (465) (468)
Net cash generated from operating activities 43,631 32,300 27,300 17,032

Cash flows from investing activities

Acquisition of property, plant and equipment (23,855) (12,141) (18,828) (6,355)
Acquisition of intangible assets 15 (2,104) (2,477) (1,384) (2,293)
Proceeds from disposal of property, plant and equipment 376 93 306 85
Purchase of short term investments (4,418) (509) (4,416) (464)
Net cash used in investing activities (30,001) (15,034) (24,322) (9,027)

Cash flows from financing activities

Proceeds from borrowings 5,779 17,911 5,750 17,500
Cash payment for the principle portion of lease liability (1,761) (1,769) (622) (588)
Finance lease principal re-payments (7) (56) (7) (2)
Re-payment of borrowings (13,922) (23,176) (10,014) (20,794)
Increase in vendor financing 5,219 - 5,370 -
Dividends paid to the equity shareholders (2,689) (1,913) (2,689) (1,913)
Net cash used for financing activities (7,381) (9,003) (2,212) (5,797)

Increase in cash and cash equivalents 6,249 8,263 766 2,208

Movement in cash and cash equivalents

Cash and cash equivalents at beginning of year 9,981 1,718 (412) (2,620)
Increase in cash and cash equivalents 6,249 8,263 766 2,208
At the end of the year 21.(a) 16,230 9,981 354 (412)

The notes on pages 129 to 196 form an integral part of these financial statements
   Annual Report 2021  | 129

NOTES TO THE FINANCIAL STATEMENTS

1 REPORTING ENTITY application of accounting policies and the reported amounts

Sri Lanka Telecom PLC (the “Company”) is a company of assets, liabilities, income and expenses. Actual results may
domiciled in Sri Lanka. The address of the Company’s differ from these estimates.
registered office is Lotus Road, Colombo 1. The Separate
Financial Statements relates to Sri Lanka Telecom PLC. The Estimates and underlying assumptions are reviewed on
Consolidated Financial Statements of the Company as at and an ongoing basis. Revisions to accounting estimates are
for the year ended December 2021 comprise the Company recognised in the period in which the estimates are revised
and its subsidiaries (together referred to as the “Group” and and in any future periods affected.
individually as “Group entities”). The Financial Statements of
all Companies within the Group are prepared for a common Information about significant areas of estimation uncertainty
financial year which ends on 31 December 2021. and critical judgments in applying accounting policies that
have the most significant effect on the amounts recognised
The Group primarily is involved in providing a broad in the Financial Statements is included in the following notes:
portfolio of telecommunication services across Sri Lanka, > Note 14 - Property, plant and equipment
In addition, the range of services provided by the Group
include, inter-alia, internet services, data services, domestic > Note 15 - Intangible Assets
and international leased circuits, broadband, satellite uplink,
maritime transmission, IPTV service, directory publishing and > Note 14 (a) - Right-of-use assets & lease liabilities
provision of manpower. The Company is a quoted public
> Note 20 - Trade and other Receivable
Company which is listed on the Colombo Stock Exchange.
> Note 24 - Deferred Tax assets and liabilities
2 BASIS OF PREPARATION
(a) Statement of compliance > Note 25 - Deferred Income,contract assects and contract
The Financial Statements of the Group and the Company liabilities
which comprises the statement of financial position, > Note 28 - Employee Benefits
statement of profit or loss and other comprehensive income,
statement of changes in equity and statement of cash flows (f) Current versus non-current classification
have been prepared in accordance with Sri Lanka Accounting The Group presents assets and liabilities in the Statement of
Standards (SLFRS & LKAS) as laid down by The Institute Financial Position based on current/non-current classification.
of Chartered Accountants of Sri Lanka (ICASL) and the
requirements of the Companies Act No. 07 of 2007. An asset is current when it is:

(b) > Expected to be released or intended to be sold or

The Financial Statements were authorised for issue by the consumed in the normal operating cycle
Board of Directors in accordance with the resolution of the
Directors on 15 March 2022. > Held primarily for the purpose of trading

> Expected to be realised within 12 months after the

(c) Basis of measurement reporting period
The Financial Statements have been prepared on the
historical cost basis applied consistently with no adjustments Or
being made for inflationary factors affecting the financial
statements except for the following item: > Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after the reporting period
The liability for defined benefit obligation recognised is
actuarially valued and recognised at the present value of the > All other assets are classified as non-current.
defined benefit obligation.
A liability is current when:
(d) Functional and presentation currency
These Financial Statements are presented in Sri Lankan > It is expected to be settled in the normal cycle
Rupees, which is the Company’s functional currency and
the Group’s presentation currency. All financial information > It is held primarily for the purpose of trading
presented in rupees has been rounded to the nearest million, > It is due to be settled within twelve months after the
unless otherwise indicated. reporting period

(e) Use of estimates and judgements > There is no unconditional right to defer the settlement
The preparation of Financial Statements in conformity with of the liability for at least 12 months after the reporting
Sri Lanka Accounting Standards requires management to period
make judgments, estimates and assumptions that affect the
130  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

> The terms of the liability that could, at the option of the the assets acquired and all of the liabilities assumed and
counterparty, result in its settlement by the issue of equity reviews the procedures used to measure the amounts to be
instruments do not affect its classification recognized at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired
> The Group classifies all other liabilities as non-current. over the aggregate consideration transferred, then the
recognized in Statement of Profit or Loss.
Deferred tax assets and liabilities are classified as non-current
assets and liabilities. After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
(g) Going concern of impairment testing, goodwill acquired in a business
The Financial Statements have been prepared on a going combination is, from the acquisition date, allocated to each
concern bases. The Directors have considered the potential of the Group’s cash-generating units that are expected to
downsides that the COVID-19 pandemic could bring to benefit from the combination, irrespective of whether other
business operations of the Group in making this assessment. assets or liabilities of the acquire are assigned to those units.
Impact of the COVID-19 pandemic is described in Note 38.
Where goodwill has been allocated to a cash-generating unit
3 SIGNIFICANT ACCOUNTING POLICIES (CGU) and part of the operation within that unit is disposed
The accounting policies set out below have been applied of, the goodwill associated with the disposed operation
consistently to all periods presented in financial statements, is included in the carrying amount of the operation when
and have been applied consistently by the Group determining the gain or loss on disposal. Goodwill disposed
entities,except amendments to existing accounting standards in these circumstances is measured based on the relative
which are efffective from 1 January 2021 as described in values of the disposed operation and the portion of the cash-
Note 3 (w) generating unit retained.

(a) Basis of consolidation (ii) Subsidiaries

(i) Business combinations Subsidiaries are entities that are controlled by the Group.
The Group accounts for business combinations using the The Group controls an entity when it is exposed to, or has
acquisition method when control is transferred to the Group. rights to, variable returns from its involvement with the entity
The consideration transferred in acquisition is generally and has the ability to affect those returns through its power
measured at fair value, as are the identifiable net assets over the Consolidation of a subsidiary begins when the
acquired. Any goodwill that arises is tested annually for Group obtains control over the subsidiary and ceases when
impairment. Any gain or bargain purchase is recognised in the Group loses control over the subsidiary.
profit or loss immediately. Transaction costs are expensed
as incurred, except if related to the issue of debt or equity As per the reporting date the group has changed the
securities. accounting treatment of its investments in SLT Campus
(Private) Limited from a subsidiary to non current assets held
The consideration transferred does not include amounts for sale as per the ‘SLFRS 5 - Non current assets held for sale
related to the settlement of pre-existing relationships. Such and discontionued operations’ as disclosed in note 16.1 and
amounts are generally recognised in Statement of Profit or 22.
Loss.
(ii- a) Critical judgements in applying the entity’s
Any contingent consideration is measured at fair value at accounting policies
the date of acquisition. If an obligation to pay contingent The directors have concluded that the Group controls all
consideration that meets the definition of a financial subsidiaries as it has majority control and voting rights over
instrument is classified as equity, then it is not remeasured its subsidiaries as depicted in Note (ii-b).
and settlement is accounted for within equity. Otherwise,
subsequent changes in the fair value of the contingent
consideration are recognised in Statement of Profit or Loss.

Goodwill is initially measured at cost (being the excess of the

aggregate of the consideration transferred and the amount
recognized for non-controlling interests and any previous
interest held over the net identifiable assets acquired and
liabilities assumed). If the fair value of the net assets acquired
is in excess of the aggregate consideration transferred, the
Group re-assesses whether it has correctly identified all of
   Annual Report 2021  | 131

(ii- b) Interest in subsidiaries

Set out below are the group’s principal subsidiaries as at 31` December 2021

Name of entity Place of business/country % of Ownership Principal Activities

of incorporation interest held by
the group

Mobitel (Private) Limited Colombo/SriLanka 100% Mobile service provider.

Sri Lanka Telecom (Services) Limited Colombo/SriLanka 99.99% Providing network solutions for
corparate customers and small
businesses.
SLT VisionCom (Private) Limited Colombo/SriLanka 100% Providing IPTV support services.
SLT Digital Info Services (Private) Limited Colombo/SriLanka 100% Directory information and
publication services
SLT Human Capital Solutions (Private) Colombo/SriLanka 100% Providing workforce solutions.
Limited
Sky Network (Private) Limited Colombo/SriLanka 99.94% Wireless broadband operations
SLT Property Management (Private) Limited Colombo/SriLanka 100% Managing SLT’s real estate
resources
SLT Campus (Private) Limited Colombo/SriLanka 100% Higher educational services of ICT
and Business Management.
eChannelling PLC Colombo/SriLanka 87.59% Providing information
infrastructure for the healthcare
industry
Talentfort (Pvt) Ltd Colombo/SriLanka 100.00% Providing workforce solutions.
Mobit Technologies (Pvt) Ltd Colombo/SriLanka 100.00% Providing software solutions.

(iii) Equity - accounted investees (Investment in associates is presented as part of the Group’s Other Comprehensive
and joint ventures) Income. In addition, when there has been a change
An associate is an entity over which the Group has significant recognised directly in the equity of the associate or joint
influence. Significant influence is the power to participate in venture, the Group recognises its share of any changes, when
the financial and operating policy decisions of the investee applicable, in the Statement of Changes in Equity. Unrealised
but is not control or joint control over those policies. gains and losses resulting from transactions between the
Group and the associate or joint venture are eliminated to
A joint venture is a type of joint arrangement whereby the the extent of the interest in the associate or joint venture.
parties that have joint control of the arrangement have rights
to the net assets of the joint venture. Joint control is the The aggregate of the Group’s share of profit or loss of
contractually agreed sharing of control of an arrangement, an associate and a joint venture is shown on the face of
which exists only when decisions about the relevant activities the Statement of Profit or Loss outside operating profit
require unanimous consent of the parties sharing control. and represents profit or loss after tax and non-controlling
interests in the subsidiaries of the associate or joint venture.
The considerations made in determining significant influence
or joint control is similar to those necessary to determine The Financial Statements of the associate or joint venture are
control over subsidiaries. The Group’s investments in its prepared for the same reporting period as the Group. When
associates and joint venture are accounted for using the necessary, adjustments are made to bring the accounting
equity method. policies in line with those of the Group.

Under the equity method, the investment in an associate After application of the equity method, the Group
or a joint venture is initially recognised at cost. The carrying determines whether it is necessary to recognise an
amount of the investment is adjusted to recognise changes in impairment loss on its investment in its associate or joint
the Group’s share of net assets of the associate or joint venture venture. At each reporting date, the Group determines
since the acquisition date. Goodwill relating to the associate whether there is objective evidence that the investment in
or joint venture is included in the carrying amount of the the associate or joint venture is impaired. If there is such
investment and is not tested for impairment separately. evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the
The Statement of Profit or Loss reflects the Group’s share of associate or joint venture and its carrying value, and then
the results of operations of the associate or joint venture. Any recognises the loss as ‘Share of profit or loss of equity
change in Other Comprehensive Income of those investees accounted investees’ in the Statement of Profit or Loss.
132  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

Upon loss of significant influence over the associate or joint Group has applied the practical expedient, the Group initially
control over the joint venture, the Group measures and measures a financial asset at its fair value plus, in the case
recognises any retained investment at its fair value. Any of a financial asset not at fair value through profit or loss,
difference between the carrying amount of the associate or transaction costs. Trade receivables that do not contain a
joint venture upon loss of significant influence or joint control significant financing component or for which the Group
and the fair value of the retained investment and proceeds has applied the practical expedient are measured at the
from disposal is recognised in the Statement of Profit or Loss. transaction price as disclosed in Note 3(k) - Revenue from
contracts with customers.
(iv) Non conrtolling interest ( NCI)
NCI are measured at their proportionate share of acquiree’s In order for a financial asset to be classified and measured
identifiable net assets at the date of acquisition.Changes in at amortised cost or fair value through OCI, it needs to give
the group interest in a subsidiary that do not result in a loss rise to cash flows that are ‘solely payments of principal and
of control are accounted for as equity transactions. interest (SPPI)’ on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed
(v) Loss of control at an instrument level. Financial assets with cash flows that
When the group loses control over a subsidiary, it are not SPPI are classified and measured at fair value through
derecognises the asset and liabilities of the subsidiary and profit or loss, irrespective of the business model.
any related NCI (if applicable) and other components of
equity. Any resulting gain or loss is recognised in profit or The Group’s business model for managing financial assets
loss. Any interest in the former subsidiary is measured at fair refers to how it manages its financial assets in order to
value when control is lost. generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash
(vi) Transaction eliminated on consolidation flows, selling the financial assets, or both. Financial assets
Intra-group balances and transactions and any unrealised are not reclassified subsequent to their initial recognition
income and expenses arising from intra-group transactions, unless the Group changes its business model for managing
are eliminated. financial assets, in which case all affected financial assets
are reclassified on the first day of the first reporting period
(b) Foreign currency following the change in the business model.Purchases or
(i) Foreign currency transactions sales of financial assets that require delivery of assets within
Transactions in foreign currencies are translated into the a time frame established by regulation or convention in the
respective functional currencies of Group companies at the market place (regular way trades) are recognised on the trade
exchange rates at the date of the transaction. Monetary date, i.e., the date that the Group commits to purchase or
assets and liabilities denominated in foreign currencies are sell the asset.
translated into the functional currency at the exchange rate at
the reporting date. Non-monetary assets and liabilities that (i-ii) Subsequent measurement
are measured at fair value in a foreign currency are translated For purposes of subsequent measurement, financial assets
into the functional currency at the exchange rate when the are classified in four categories;
fair value was determined. Foreign currency differences
are generally recognised in statement of profit or loss and > Financial assets at amortised cost (debt instruments)
other comprehensive income. Non-monetary items that are > Financial assets at fair value through OCI with recycling of
measured based on historical cost in a foreign currency are cumulative gains and losses (debt instruments)
not translated.
> Financial assets designated at fair value through OCI
(c) Financial instruments with no recycling of cumulative gains and losses upon
A financial instrument is any contract that gives rise to a derecognition (equity instruments)
financial asset of one entity and financial liability or equity
instrument of another entity. > Financial assets at fair value through profit or loss

(i) Financial assets Financial assets at amortised cost (debt instruments)

(i-i) Initial recognition and mearsurement The Group measures financial assets at amortised cost if both
Financial assets are classified, at initial recognition, as following conditions are met:
subsequently measured at amortised cost, fair value through
> The financial asset is held within a business model with
other comprehensive income (FVOCI) and fair value through
the objective to hold financial assets in order to collect
profit or loss.
contractual cash flows, and
The classification of financial assets at initial recognition > The contractual terms of the financial asset give rise on
depends on the financial asset’s contractual cash flow specified dates to cash flows that are solely payments
characteristics and the Group’s business model for managing of principal and interest on the principal amount
them. With the exception of trade receivables that do not outstanding
contain a significant financing component or for which the
   Annual Report 2021  | 133

Financial assets at amortised cost are subsequently measured in the near term. Derivatives, including separated embedded
using the effective interest rate (EIR) method and are subject derivatives, are also classified as held for trading unless they
to impairment. Gains and losses are recognised in profit or are designated as effective hedging instruments. Financial
loss when the asset is derecognised, modified or impaired. assets with cash flows that are not solely payments of
principal and interest are classified and measured at fair value
The Group’s financial assets at amortised cost include trade through profit or loss, irrespective of the business model.
and other receivables, amounts due from related parties and Notwithstanding the criteria for debt instruments to be
cash and cash equivalents. classified at amortised cost or at fair value through OCI, as
described above, debt instruments may be designated at fair
Financial assets at fair value through OCI (debt instruments) value through profit or loss on initial recognition if doing so
The Group measures debt instruments at fair value through eliminates, or significantly reduces, an accounting mismatch.
OCI if both of following conditions are met:
Financial assets at fair value through profit or loss are carried
> The financial asset is held within a business model with in the statement of financial position at fair value with net
the objective of both holding to collect contractual cash changes in fair value recognised in the statement of profit or
flows and selling, and loss.
> The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments This category includes derivative instruments and listed
of principal and interest on the principal amount equity investments which the Group had not irrevocably
outstanding. elected to classify at fair value through OCI. Dividends on
listed equity investments are also recognised as other income
in the statement of profit or loss when the right of payment
For debt instruments at fair value through OCI, interest
has been established.
income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit
or loss and computed in the same manner as for financial A derivative embedded in a hybrid contract, with a financial
assets measured at amortised cost. The remaining fair value liability or non-financial host, is separated from the host
changes are recognised in OCI. Upon derecognition, the and accounted for as a separate derivative if: the economic
cumulative fair value change recognised in OCI is recycled to characteristics and risks are not closely related to the host; a
profit or loss. separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative; and
the hybrid contract is not measured at fair value through
Financial assets designated at fair value through OCI (equity
profit or loss. Embedded derivatives are measured at fair
instruments)
value with changes in fair value recognised in profit or loss.
Upon initial recognition, the Group can elect to classify
Reassessment only occurs if there is either a change in the
irrevocably its equity investments as equity instruments
terms of the contract that significantly modifies the cash
designated at fair value through OCI when they meet the
flows that would otherwise be required or a reclassification
definition of equity under LKAS 32 Financial Instruments:
of a financial asset out of the fair value through profit or loss
Presentation and are not held for trading. The classification is
category.
determined on an instrument-by-instrument basis.
(i-iii) Fair value measurement
Gains and losses on these financial assets are never recycled
SLFRS 13 defines fair value as the price that would be
to profit or loss. Dividends are recognised as other income in
received to sell and asset or paid to transfer a liability in
the statement of profit or loss when the right of payment has
an orderly transactions between market participants at the
been established, except when the Group benefits from such
measurement date.
proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not A Fair value measurement requires an entity to determine all
subject to impairment assessment. the following;
1. The particular asset or liability that is the subject of the
This category includes listed and non listed equity measurement.
instruments that the Group elected to classify irrevocably.
2. For a non-financial asset, the valuation premise that is
appropriate for the measurement (consistently with its
Financial assets at fair value through profit or loss
highest and best use).
Financial assets at fair value through profit or loss include
financial assets held for trading, financial assets designated 3. The principal (or most advantageous) market for the asset
upon initial recognition at fair value through profit or loss, or liability.
or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing
134  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

4. The valuation technique(s) appropriate for the Objective evidence that financial assets are impaired
measurement, considering the availability of data with includes;
which to develop inputs that represent the assumptions
that market participants would use when pricing the asset > default or delinquency by a debtor;
or liability and the level of the fair value hierarchy within > restructuring of an amount due to the Group on terms
which the inputs are categorised. that the Group would not consider otherwise;
5. Fair value is a market-based measurement, not an entity-
> indications that a debtor or issuer will enter bankruptcy;
specific measurement. For some assets and liabilities,
observable market transactions or market. > adverse changes in the payment status of borrowers or
issuers;
When transaction price provides the best evidence of
fair value at initial recognition, the financial instrument is > the disappearance of an active market for a security; or
initially measured at the transaction price and any difference
between this price and the value initially obtained from a > Observable data indicating that there is a measurable
valuation model is subsequently recognised in profit or loss decrease in the expected cash flows from a group of
on an appropriate basis over the life of the instrument but financial assets.
not later than when the valuation is supported wholly by
observable market data or the transaction is closed out. In addition, for an investment in an equity security, a
significant or prolonged decline in its fair value below its cost
Determination of Fair values is objective evidence of impairment.
The determination of fair value for financial assets and
liabilities for which there is no observable market price For trade receivables and contract assets, the Group applies
requires the use of valuation techniques. For financial a simplified approach in calculating Expected Credit Losses
instruments that trade infrequently and have little price (ECLs). Therefore, the Group does not track changes in
transparency, fair value is less objective and requires varying credit risk, but instead recognises a loss allowance based
degrees of judgment depending on liquidity, concentration, on lifetime ECLs at each reporting date.The Group has
uncertainty of market factors, pricing assumption and other established a provision metrix that is based on its historical
risks affecting the specific instrument. credit loss experiance,adjusted for forward looking factors
specific to the debtors and the economic environment.
Level 1 - Fair value measurements using quoted prices
(unadjusted) in active markets for identical assets The Group considers a financial asset in default when
or liabilities; contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial
Level 2 - Fair value measurements using inputs other than asset to be in default when internal or external information
quoted prices included within Level 1 that are indicates that the Group is unlikely to receive the oustanding
observable for the asset or liability, either directly contractual amounts in full before taking into account any
(i.e.,as prices) or indirectly (i.e., derived from credit enhancements held by the Group. A financial asset
prices);and is written off when there is no reasonable expectation of
recovering the contractual cash flows.
Level 3 - Fair value measurements using inputs for the
asset or liability that are not based on observable Investments in fixed deposits,Treasuray Bills and Bonds are
market data (i.e., unobservable inputs). considered as low risk of default.

(i-iv) Amortised cost Non-financial assets

The amortised cost of a financial asset or liability is the At each reporting date, the Group reviews the carrying
amount at which the financial asset or liability is measured amounts of its non-financial assets (other than investment
at initial recognition, minus principal repayments, plus property, inventories and deferred tax assets) to determine
or minus the cumulative amortisation using the effective whether there is any indication of impairment. If any such
interest method of any difference between the initial amount indication exists, then the asset’s recoverable amount is
recognised and the maturity amount, minus any reduction for estimated. Goodwill is tested annually for impairment.
impairment.
For impairment testing, assets are grouped together into
(i-v) Impairment the smallest group of assets that generates cash inflows
Non-derivative financial assets from continuing use that are largely independent of the cash
Financial assets not classified at fair value through profit inflows of other assets or CGUs.
or loss, are assessed at each reporting date to determine
whether there is objective evidence of impairment. Goodwill arising from a business combination is allocated to
CGUs or groups of CGUs that are expected to benefit from
the synergies of the combination.
   Annual Report 2021  | 135

The recoverable amount of an asset or CGU is the greater of This is the category most relevant to the Group. After
its value in use and its fair value less costs to sell. Value in use initial recognition, interest-bearing loans and borrowings
is based on the estimated future cash flows, discounted to are subsequently measured at amortised cost using the
their present value using a pre-tax discount rate that reflects EIR method, after considering any discount or premium on
current market assessments of the time value of money and acquisition and fees or costs that are an integral part of the
the risks specific to the asset or CGU. EIR. Gains and losses are recognised in profit or loss when
the liabilities are derecognised. EIR amortisation is included
An impairment loss is recognised if the carrying amount of an as finance costs in the statement of profit or loss.
asset or CGU exceeds its recoverable amount.
(ii)-(iii) Derecognition
Impairment losses are recognised in profit or loss . They are A financial liability is derecognised when the obligation
allocated first to reduce the carrying amount of any goodwill under the liability is discharged or cancelled or expires.
allocated to the CGU and then to reduce the carrying When an existing financial liability is replaced by another
amounts of the other assets in the CGU on a pro rata basis. from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such
An impairment loss in respect of goodwill is not reversed. an exchange or modification is treated as the derecognition
For other assets, an impairment loss is reversed only to the of the original liability and the recognition of a new liability.
extent that the asset’s carrying amount does not exceed the The difference in the respective carrying amounts is
carrying amount that would have been determined, net of recognised in the statement of profit or loss.
depreciation or amortisation, if no impairment loss had been
recognised. (iii) Offseting of financial instruments
Financial assets and financial liabilities are offset and the net
(i-vi) Hedge amount is reported in the consolidated statement of financial
For designated and qualifying cash flow hedges, the effective position if there is a currently enforceable legal right to offset
portion of the gain or loss on the hedging instrument is the recognised amounts and there is an intention to settle
initially recognised directly in equity in the “cash flow hedge on a net basis, to realise the assets and settle the liabilities
reserve”. The ineffective portion of the gains or losses on the simultaneously.
hedge instrument is recognised immediately in the profit and
loss. (d) Property, plant and equipment
(i) Recognition and measurement
When the hedge cash flow affect the Income Statement, Items of property, plant and equipment are measured at cost
the gain or loss on the hedging instrument is recorded in less accumulated depreciation and accumulated impairment
the corresponding income or expense line of the Income losses.
Statement. When a hedging instrument expires, or is sold,
terminated, exercised or when a hedge no longer meet the Cost includes expenditure that is directly attributable to the
criteria for hedge accounting, any cumulative gains/losses acquisition of the asset. The cost of self-constructed assets
existing in other comprehensive income at that time remains includes the cost of materials and direct labour and any other
in other comprehensive income and is recognised in the costs directly attributable to bringing the assets to a working
income statement. When a forecast transaction is no longer condition for their intended use. Purchased software that
expected to occur the cumulative gains/loss was reported in is integral to the functionality of the related equipment is
other comprehensive income is immediately transferred to capitalised as part of that asset.
the Income Statement.
When parts of an item of property, plant and equipment
(ii) Financial liabilities have different useful lives, they are accounted for as separate
(ii-i) Initial recognition and measurement items (major components) of property, plant and equipment.
Financila Liabilities are classified,at initial recognition,as
financial liabilities at fair value through profit or loss, (ii) Subsequent costs
loanes and borrowings,payables, or as appropriate.All The cost of replacing part of an item of property, plant and
financialliabilities are recognised initially at fair value and , equipment is recognised in the carrying amount of the item
in the case of loans, borrowings and payables,net of directly if it is probable that the future economic benefits embodied
attributable transaction costs. within the part will flow to the Group and its cost can be
measured reliably. The costs of the day-to-day servicing of
The Group’s financial liabilities include trade and property, plant and equipment are recognised in profit or
other payables loans and borrowing including bank loss.
overdrafts,lease liabilities,contract liablities and deferred
income. (iii) Depreciation
Depreciation is calculated over the depreciable amount,
(ii-ii) Subsequent measurement which is the cost of an asset, or other amount substituted
Financial liabilities at amortised cost (Loans and borrowings) for cost, less its residual value. Depreciation is recognised
136  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

in profit or loss on a straight-line basis over the estimated (vi) Borrowing cost
useful lives of each part of an item of property, plant Borrowing cost directly attributable to the acquisition,
and equipment. In the year of acquisition depreciation is construction or production of an asset that necessarily takes
computed on proportionate basis from the month the asset a substantial period of time to get ready for its intended use
is put into use and no depreciation will be charged to the or sale are capitalised as part of the cost of the respective
month in which the particular asset was disposed. Leased assets. All other borrowing costs are expensed in the period
assets are depreciated over the shorter of the lease term and they occur. Borrowing costs consist of interest and other
their useful lives unless it is reasonably certain that the Group costs that an entity incurs in connection with the borrowing
will obtain ownership by the end of the lease term. Land is of funds.
not depreciated.
(e) Intangible assets
Depreciation method, useful lives and residual values are (i) Goodwill
reviewed at each reporting date and adjusted if appropriate Goodwill arises on the acquisition of subsidiaries.

The estimated useful lives for the assets are as follows: Goodwill that arises upon the acquisition of subsidiaries is
included in intangible assets. For measurement of goodwill
Freehold buildings 5 - 40 years at initial recognition, see note 3 (a) (i)
Submarine cables 10 - 25 years
Subsequent measurement
Motor vehicles 5 years
Goodwill is measured at cost less accumulated impairment
CDMA handsets 3 years losses.
PABX system 1-6 years
IT systems 5 - 10 years (ii) Other intangible assets
Other fixed assets 2 - 12.5 years Other intangible assets that are acquired by the Group,
Network equipment which have finite useful lives, are measured at cost less
Ducts ,cables and other outside plant 5 - 20 years accumulated amortisation and accumulated impairment
losses.
Telephone exchanges and transmission 5 -12.5 years
equipment
(iii) Licenses
Towers 40 years
Separately acquired licences are shown at historical cost.
Expenditures on license fees that is deemed to benefit or
(iv) Capital work-in-progress
relate to more than one financial year is classified as license
Capital work-in-progress is stated at cost net of accumulated
fee and is being amortised over the License period on a
impairment losses, if any. These are expenses of a capital
straight line basis.
nature directly incurred in the construction of buildings,
network equipment, system development and other fixed
(iv) Subsequent expenditure
assets, awaiting capitalisation.
Subsequent expenditure is capitalised only when it increases
the future economic benefits embodied in the specific
Major spare parts and project related inventory qualify as
asset to which it relates. All other expenditure, including
Property, plant and equipment when the entity expects to
expenditure on internally generated goodwill is recognised
use them during more than one year period and are used
in profit or loss as incurred.
in connection with specific items of Property, plant and
equipment.
(f) Right of use assets and lease liabilities
Leases
(v) Derecognition
The Group assesses at contract inception whether a contract
The carrying amount of an item of property, plant &
is, or contains, a lease. That is, if the contract conveys the
equipment is derecognised on disposal.Gains and losses
right to control the use of an identified asset for a period of
on disposal of an item of property, plant and equipment are
time in exchange for consideration.
determined by comparing the proceeds from disposal with
the carrying amount of property, plant and equipment and
Group as a lessee
are recognised net within “other income” in the statement of
The Group applies a single recognition and measurement
Profit or Loss and Other Comprehensive Income.
approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognises lease
When replacement costs are recognised in the carrying
liabilities to make lease payments and right-of-use assets
amount of an item of property, Plant and Equipment,
representing the right to use the underlying assets.
the remaining carrying amount of the replaced part is
derecognised. Major inspection costs are capitalised. At each
such capitalisation, the remaining carrying amount of the
previous cost of inspections is derecognised.
   Annual Report 2021  | 137

Right-of-use assets Leases of low-value assets

The Group recognises right-of-use assets at the The Group applies the lease of low-value assets recognition
commencement date of the lease (i.e., the date the exemption to leases of some tower rentals that are
underlying asset is available for use). Right-of-use assets are considered to be low value.Lease payments on leases of
measured at cost, less any accumulated depreciation and low-value assets are recognised as expenses on straight -line
impairment losses, and adjusted for any remeasurement basis over the lease term.
of lease liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial direct Group as a lessor
costs incurred, and lease payments made at or before the Leases in which the Group does not transfer substantially
commencement date less any lease incentives received. all the risks and rewards incidental to ownership of an asset
Right-of-use assets are depreciated on a straight-line basis are classified as operating leases. Rental income arising is
over the shorter of the lease term and the estimated useful accounted for on a straight-line basis over the lease terms
lives of the assets, as follows: and is included in revenue in the statement of profit or loss
due to its operating nature. Initial direct costs incurred in
Leased assets Estimated useful lives negotiating and arranging an operating lease are added
to the carrying amount of the leased asset and recognised
Buildings 2-3 years over the lease term on the same basis as rental income.
Towers 2-3 years Contingent rents are recognised as revenue in the period in
which they are earned.
If ownership of the leased asset transfers to the Group at
the end of the lease term or the cost reflects the exercise (g) Inventories
of a purchase option, depreciation is calculated using the Inventories are measured at the lower of cost and net
estimated useful life of the asset. The right-of-use assets are realisable value. The cost of inventories is based on the
also subject to impairment as more fully described in Note 3 weighted average cost principle.Value of inventories includes
(v)-(iii) - Impairment of Assets. expenditure incurred in acquiring, conversion costs and other
costs incurred in bringing them to their existing location and
Lease liabilities condition.
At the commencement date of the lease, the Group
recognises lease liabilities measured at the present value of (h) Share capital
lease payments to be made over the lease term. The lease Ordinary Share Capital
payments include fixed payments (including in-substance Ordinary shares are classified as equity. Incremental costs
fixed payments) less any lease incentives receivable, directly attributable to the issue of ordinary shares and share
variable lease payments that depend on an index or a rate, options are recognised as a deduction from equity, net of any
and amounts expected to be paid under residual value tax effects.
guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised (i) Government grants
by the Group and payments of penalties for terminating Government grants are recognised initially at fair value when
the lease, if the lease term reflects the Group exercising the there is reasonable assurance that they will be received and
option to terminate. Variable lease payments that do not the Group will comply with the conditions associated with
depend on an index or a rate are recognised as expenses the grant. Grants that compensate the Group for expenses
(unless they are incurred to produce inventories) in the incurred are recognised in the statement of Profit or Loss
period in which the event or condition that triggers the and Other Comprehensive Income as other income on a
payment occurs. systematic basis in the same periods in which the expenses
are recognised. Grants that compensate the Group for the
In calculating the present value of lease payments, the cost of an asset are recognised in the of profit or loss on a
Group uses its incremental borrowing rate at the lease systematic basis over the useful life of the asset.
commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement (j) Employee benefits
date, the amount of lease liabilities is increased to reflect (i) Defined contribution plans
the accretion of interest and reduced for the lease payments A defined contribution plan is a post-employment benefit
made. In addition, the carrying amount of lease liabilities is plan under which contributions are made into a separate
remeasured if there is a modification, a change in the lease fund and the entity will have no legal or constructive
term, a change in the lease payments (e.g., changes to obligation to pay further amounts. Obligations for
future payments resulting from a change in an index or rate contributions to defined contribution plan are recognised as
used to determine such lease payments) or a change in the an employee benefit expense in profit or loss in the periods
assessment of an option to purchase the underlying asset. during which services are rendered by employees. Prepaid
contributions are recognised as an asset to the extent that a
The Group’s lease liabilities are included in rights-of-use cash refund or a reduction in future payments is available.
assets and lease liabilities in Note 14.(a) to the Financial
Statements.
138  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

Employees’ Provident Fund A liability is recognised for the amount expected to be paid
All employees of the Company are members of the Sri Lanka under short-term cash bonus or leave encashment plans if
Telecom Provident Fund to which the Company contributes the Group has a present legal or constructive obligation to
15% of such employees’ basic salary and allowances. pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
All employees of subsidiaries of the Group are members of
Employees’ Provident Fund (EPF), to which the respective (k) Revenue from contracts with customers
subsidiaries contribute 12% of such employees’ basic salary The Group is primarily involved in providing a broad
and allowances. Employees of Sri lanka Telecom (Services) portfolio of telecommunication services across Sri Lanka.
Limited are members of Employees’ Provident Fund (EPF), In addition, the range of services provided by the Group
where the company contribute 15% of such employees’ basic include, inter allia, voice and broadband services, domestic
salary and allowances. and international leased circuits, broadband, satellite up-link,
maritime transmission, IPTV service, directory publishing
Employees’ Trust Fund service and educational services.
The Company and other subsidiaries contribute 3% of the
salary of each employee to the Employees’ Trust Fund. Revenue from contracts with customers is recognised when
control of the goods or services are transferred to the
(ii) Defined benefit plans customer at an amount that reflects the consideration to
A defined benefit plan is a post-employment benefit plan which the Group expects to be entitled in exchange for those
other than a defined contribution plan. The defined benefit goods or services. The Group has generally concluded that it
is calculated by an independent actuary using Projected Unit is the principal in its revenue arrangements.
Credit method as recommended by LKAS 19 “Employee
Benefits” The present value of the defined benefit obligation (i) Performance obligations relevant to contacts
is determined by discounting the estimated future cash As a telecommunication service provider, the Group’s
outflows using the yield on Government Bonds at the performance obligation related to service contracts include
reporting date and have maturity dates approximating to the the installation services and maintenance services provided
terms of the Company’s obligations. and the uninterrupted telecommunication service which will
be provided throughout the connection period.
The Group recognises actuarial gains and losses that arise
in calculating the Group’s obligation in respect of a plan The Group expects that above performance obligations
in other comprehensive income. The present value of the would be satisfied throughout the connection period.
defined benefit obligation depends on a number of factors
that are determined on an actuarial basis using a number Domestic and international call revenue and rental income
of assumptions. Key assumptions used in determining the Fixed lines
defined retirement benefit obligations are given in Note 28. Revenue for call time usage by customers is recognised as
Any changes in these assumptions will impact the carrying revenue as services are performed on accrual basis. Fixed
amount of defined benefit obligations. rental is recognised as income on a monthly basis in relation
to the period of services rendered.
Provision has been made for retirement gratuities from the
first year of service for all employees, in conformity with Mobile revenue
LKAS 19 “Employee Benefits”. However, under the Payment Mobile revenue comprises amounts charged to customers in
of Gratuity Act No.12 of 1983, the liability to an employee respect of monthly access charges, airtime usage, messaging,
arises only on completion of five years of continued service. and the provision of other mobile telecommunications
services. Mobile monthly access charges are invoiced and
(iii) Termination benefits recorded as part of a periodic billing cycle. Air time, either
Termination benefits are recognised as an expense when from contract customers as part of the invoiced amount or
the Group is demonstrably committed, without realistic from prepaid customers through the sale of prepaid cards,
possibility of withdrawal, to a formal detailed plan to either is recorded in the period in which the customer uses the
terminate employment before the normal retirement date, or service.
to provide termination benefits as a result of an offer made
to encourage voluntary redundancy. Termination benefits Revenue from other network operators and international
for voluntary redundancies are recognised as an expense if settlements
the Group has made an offer of voluntary redundancy, it is The revenue received from other network operators,
probable that the offer will be accepted, and the number of local and international, for the use of the Group’s
acceptances can be estimated reliably. telecommunication network are recognised, net of taxes,
based on usage taking the traffic minutes/per second rates
(iv) Short-term benefits stipulated in the relevant agreements and regulations and
Short-term employee benefit obligations are measured on an based on the terms of the lease agreements for fixed rentals.
undiscounted basis and are expensed as the related service
is provided.
   Annual Report 2021  | 139

Revenue arising from the interconnection of voice and the performance obligations relevant to such installation
data traffic between other telecommunications operators is services are performed, CPEs provided to customers are
recognised at the time of transit across the Group’s network considered as assets of the Group as long as the contracts
and presented on gross basis. The relevant revenue accrued with customers are valid. Accordingly, the Group allocates a
is recognised under income in the Income Statement and bundled price for the equipment and installation services for
interconnection expenses recognised under operating costs such facilities.
in profit or loss.
(iii) Recognision of contract liabilities
Revenue from broadband The Group concluded that revenue from new connections
Revenue from Data services and IPTV services is recognised in fixed and mobile telecommunication services is to be
on usage and the fixed rental on a monthly basis when it is recognised over time because the customer simultaneously
earned net of taxes, rebates and discounts. receives and consumes the benefits provided by the Group.
The fact that another entity would not need to reperform
Revenue from other ICT services the installation of the service that the Group has provided to
The revenue from other telephone services are recognised date demonstrates that the customer simultaneously receives
on an accrual basis based on fixed rental contracts entered and consumes the benefits of the Group’s performance as it
between the Group and subscribers. performs.

Recognision of deferred income The Group identifies the revenue for installation services as a
The connection fees relating to Public Switch Telephone contract liability and recognises the revenue on a systematic
Network (PSTN) are deferred over a period of 15 years. basis that is consistent with the entity’s transfer of the related
Revenue is recognised on an annual basis irrespective of the goods or services to the customer since satisfaction for the
date of connection. installation services will be consumed by the customer over
the contract period.
IRU revenue relating to leasing of SEA-ME-WE 4 cable
capacity are recognised on a straight line basis over the (iv) Costs incurred in securing customer contracts
period of the contracts. Amounts received in advance for any The Group identifies the sales commission paid to sales team
services are recorded as deferred revenue. In the event that a for each new connection contract and other such related
customer terminates an IRU prior to the expiry of the contract costs in contract acquisition as costs incurred in securing
and releases the Company from the obligation to provide customer contracts.
future services, the remaining unamortised deferred revenue
is recognised in the period the contract is terminated. (v) Recognision of contract assets
Contract acquisition costs are recognised as a contract asset
Backhauling revenue which is leasing of SEA-ME-WE 3 cable and subsequently recognised as an expense over the life of a
capacity is recognised on a straight line basis over the period contract on a systematic basis consistent with the pattern of
of contracts. Amounts received in advance for any services the transfer of services to which the asset relates, that is; as
are recorded as deferred revenue. and when the relevant performance obligation is fulfilled for
a given month.
Revenue from the sale of prepaid CDMA cards is deferred
until such time as the customer uses the call time, (l) Expenditure
downloadable quota or the credit expires. The expenses are recognised on an accrual basis. All
expenses incurred in the ordinary course of business and
Sale of mobile recharge cards and reloads for prepaid in maintaining property, plant and equipment in a state of
subscribers are initially recognised as deferred revenue until efficiency is charged against income in arriving at the profit
such time as the subscribers use the services or credit period for the year
expires.
(m) Lease payments
CDMA revenue Minimum lease payments made under finance leases are
The connection fees relating to Code Divisional Multiple apportioned between the finance expense and the reduction
Access (CDMA) connections are recognised as revenue at the of the outstanding liability. The finance expense is allocated
point the connection is activated. to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of
(ii) New connection fees the liability.
The Group provides installation services relevant to the new
connections of fixed and mobile telecommunication services Contingent lease payments are accounted for by revising
including both voice and non-voice categories. These the minimum lease payments over the remaining term of the
installation services are bundled together with providing lease when the lease adjustment is confirmed. Determining
of Customer Premises Equipment (CPE) to customers whether an arrangement contains a lease.
in fixed line voice and some non-voice services. When
140  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

At inception of an arrangement, the Group determines the reporting date. Deferred tax assets and liabilities are
whether such an arrangement is or contains a lease. A offset if there is a legally enforceable right to offset current
specific asset is the subject of a lease if fulfillment of the tax liabilities and assets, and they relate to income taxes
arrangement is dependent on the use of that specific asset. levied by the same tax authority on the same taxable entity
An arrangement conveys the right to use the asset if the or on different tax entities, but they intend to settle current
arrangement conveys to the Group the right to control the tax liabilities and assets on a net basis or their tax assets
use of the underlying asset. liabilities will be realised simultaneously.

(n) Finance income and expenses A deferred tax asset is recognised to the extent that it is
The Group’s finance income and finance cost include: probable that future taxable profits will be available against
which the temporary difference can be utilized. Deferred tax
> Interest income from repurchase agreements is not recognised for the undistributed profits of subsidiaries
> Interest income from fixed deposits as the Parent Company has control over the dividend policy
of its subsidiaries and distribution of those profits. Deferred
> Staff loan interest income tax assets are reviewed at each reporting date and are
reduced to the extent that it is no longer probable that the
> Interest expense from borrowings related tax benefit will be realised.
> Interest expense arising from Leases
Deferred tax relating to items recognised outside profit or
> Foreign exchange gains or losses loss, is recognised either in other comprehensive income or
directly in Statement of Changes in Equity in line with the
Interest income or expense is recognised using the effective underlying transaction.
interest method. Dividend income is recognised in profit
or loss on the date on which the Group’s right to receive (iii) Economic Service Charge (ESC)
payment is established. ESC is payable on the liable turnover at specified rates.
As per the provision of the Economic Service Charge Act
(o) Income tax No. 13 of 2006 and subsequent amendments thereto, ESC
Current income tax assets are measured at amount to be is deductible from the income tax liability. Any unclaimed
recovered from or paid to the taxation authorities payment can be carried forward and set off against the
income tax payable as per the relevant provision in the Act.
(i) Current taxation With effective from 1 January 2020 the Act mentioned above
Income tax expense comprises current and deferred tax. was abolished.
Income tax expense is recognised or profit or loss except
to the extent that it relates to items recognised directly (iv) Sales tax
in equity, in which case it is recognised in equity or other Revenue, expenses and assets are recognised net of the
comprehensive income. amount of sale tax, except: where sales tax incurred on a
purchase of assets or services is not recoverable from the
Provisions for taxation is based on the profit for the year taxation authority, in which case the sales tax is recognised
adjusted for taxation purposes in accordance with the as part of the cost of acquisition of the asset or as part of
provisions of the Inland Revenue Act No. 24 of 2017 and the expense item as applicable.
amendments thereto.
(v) Uncertainty over income tax treatment
(ii) Deferred taxation The Group determines whether to consider each uncertain
Deferred tax is recognised in respect of temporary tax treatment separately or together with one or more other
differences between the carrying amounts of assets and uncertain tax treatments and uses the approach that better
liabilities for financial reporting purposes and the amounts predicts the resolution of the uncertainty.
used for taxation purposes. Deferred tax is not recognised
for the following temporary differences: the initial recognition The Group applies significant judgment in identifying
of assets or liabilities in a transaction that is not a business uncertainties over income tax treatments and it assessed
combination and that affects neither accounting nor taxable whether the interpretation had an impact on its consolidated
profit or loss and differences relating to investments in nor Financial Statements.
taxable profit or loss and differences relating to investments
in subsidiaries to the extent that it is probable that they will If the Group concludes that it is probable that the taxation
not reverse in the foreseeable future. In addition, deferred authority will accept the tax treatment used or planned to be
tax is not recognised for taxable temporary differences used in its tax fillings, the entity determines its tax position
arising on the initial recognition of goodwill. Deferred tax is on that basis. This is consistent with the requirement that
measured at the tax rates that are expected to be applied current tax is measured at the amount expected to be paid
to temporary differences when they reverse, based on the or recovered from the taxation authorities, and that deferred
laws that have been enacted or substantively enacted by
   Annual Report 2021  | 141

tax is measured using the rates and tax laws expected to (t) Statement of cash flows
apply when the related asset is realised or liability is settled. The statement of cash flows has been prepared using the
‘indirect method’ of preparing cash flows in accordance with
If the Group concludes that acceptance of the uncertain tax the Sri Lanka Accounting Standard (LKAS 07) – ‘Statement
treatment by the taxation authorities is not probable, it would of Cash Flows’. Cash and Cash equivalents comprise short-
apply one of the following two methods for reflecting the term, highly liquid investments that are readily convertible
effect of uncertainty in its estimate of the amount it expects to known amounts of cash and are subject to an insignificant
to pay or recover from the tax authorities risk of change in value. The cash and cash equivalent include
cash in hand, balances with banks, placements with banks,
a. the most likely amount - the single most likely amount in money at call and short notice.
a range of possible outcomes; or
(u) Non-current assets held for sale
b. the expected value - thesum of the probability-weighted The Group classifies non-current assets and disposal groups
amounts in a range of possible outcomes. as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through
The Group uses the method that is expects to better predict continuing use. Non-current assets and disposal groups
the resolution of the uncertainty. classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Costs to sell
(p) Earnings per share are the incremental costs directly attributable to the disposal
The Group presents basic Earnings Per Share (EPS) data for of an asset (disposal group), excluding finance costs and
its ordinary shares. Basic EPS is calculated by dividing the income tax expense.
profit or loss attributable to ordinary shareholders of the
company by the weighted average number of ordinary shares The criteria for held for sale classification is regarded as
outstanding during the period. met only when the sale is highly probable, and the asset or
disposal group is available for immediate sale in its present
Diluted EPS is determinated by adjusting the profit or loss condition. Actions required to complete the sale should
attributable to ordinary shareholders and the weighted- indicate that it is unlikely that significant changes to the sale
average number of ordinary shares outstanding for the will be made or that the decision to sell will be withdrawn.
effects of all dilutive potential ordinary shares. Management must be committed to the plan to sell the asset
and the sale expected to be completed within one year from
(q) Insurance reserve the date of the classification.
The Company transfers annually from the retained earnings
an amount equal to 0.1% of additions to property, plant Property, plant and equipment and intangible assets are not
and equipment to an insurance reserve. An equal amount is depreciated or amortised once classified as held for sale.
invested in a sinking fund to meet any funding requirements Assets and liabilities classified as held for sale are presented
for potential losses from uninsured property, plant and separately as current items in the statement of financial
equipment. The insurance reserve is maintained to recover position.
any losses arising from damage to property, plant and
equipment, except for motor vehicles, that are not insured Additional disclosures are provided in Note 22.
with a third party insurer.
(v) Critical accounting estimates, assumptions and
(r) Dividend distribution judgements
Dividend distribution to the Company’s shareholders is In the preparation of these Financial Statements, a number of
recognised as a liability in the Group’s Financial Statements estimates and assumptions have been made relating to the
in the period in which the dividends are approved by the performance and the financial position of the Group. Results
Company’s shareholders. may differ significantly from those estimates under different
assumptions and conditions. The Directors consider that the
Provision for final dividends is recognised at the time the following discussion addresses the Company’s most critical
dividend recommended and declared by the Board of accounting policies, which are those that are most important
Directors, is approved by the shareholders. to the presentation of its financial performance and position.
These particular policies require subjective and complex
(s) Comparatives judgements, often as a result of the need to make estimates
Except when a standard permits or requires otherwise, about the effect of matters that are uncertain.
comparative information is disclosed in respect of the
previous period. Where the presentation or classification of (i) Depreciation of property, plant and equipment
items in the Financial Statements are amended, comparative The Company assigns useful lives and residual values to
amounts are reclassified unless it is impracticable. property, plant and equipment based on periodic studies
of actual asset lives and the intended use for those assets.
Changes in circumstances such as technological advances,
142  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

prospective economic utilisation and physical condition of (v) Inventories

the assets concerned could result in the actual useful lives or The Company assesses the inventory provision whenever
residual values differing from initial estimates. events or changes in circumstances indicate that the carrying
value may not be recoverable or otherwise as required by
Where the Company determines that the useful life of accounting standards. Factors that are considered important
property, plant and equipment should be shortened or and which could trigger an impairment review include the
residual value reduced, it depreciates the net carrying following;
amount in excess of the residual value over the revised
a. obsolescence or physical damage;
remaining useful life, thereby increasing depreciation
expense. Any change in an asset’s life or residual value is b. significant changes in technology and regulatory
reflected in the Company’s Financial Statements when the environments;
change in estimate is determined.
c. significant changes in the use of its assets or the strategy
for its overall business;
(ii) Impairment of property, plant and equipment and
intangible assets
(vi) Current tax and deferred tax
The Company assesses the impairment of property, plant
Judgement was required to determine the total provision for
and equipment and intangible assets whenever events or
current, deferred and other taxes due to uncertainties that
changes in circumstances indicate that the carrying value may
exist with respect to the interpretation of the applicability
not be recoverable or otherwise as required by accounting
of tax law at the time of the preparation of these financial
standards. Factors that are considered important and which
statements.
could trigger an impairment review include the following;
Certain uncertainties exist with respect to the interpretation
a. obsolescence or physical damage;
of tax regulations and the amount and timing of future
taxable income. Differences arising between the actual
b. significant changes in technology and regulatory
results and the assumptions made, or future changes to
environments;
such assumptions, could necessitate future adjustments to
tax income and expense already recorded. Where the final
c. significant underperformance relative to expected
tax outcome of such matters is different from the amounts
historical or projected future operating results;
that were initially recorded, such differences will impact the
income and deferred tax amounts in the period in which the
d. significant changes in the use of its assets or the strategy
determination is made.
for its overall business;
Deferred tax is measured at the tax rates that are expected
The identification of impairment indicators, the estimation of
to be applied to temporary differences when they reverse,
future cash flows and the determination of the recoverable
based on the laws that have been enacted or substantively
amount for assets or cash generating units require significant
enacted by the reporting date.
judgement.
(vii) Leases-estimating the incremental borrowing rate
(iii) Revenue recognition
The Group cannot readily determine the interest rate implicit
Judgement is required in assessing the application of the
in the lease, therefore, it uses its incremental borrowing
principles of revenue recognition in respect of revenues. This
rate (IBR) to measure lease liabilities. The IBR is the rate of
includes presentation of revenue as principal or as agent
interest that the Group would have to pay to borrow over a
in respect of income received from transmission of content
similar term, and with a similar security, the funds necessary
provided by third parties.
to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The IBR therefore
(iv) Valuation of receivables reflects what the Group “would have to pay”, which requires
The provision for impairment losses for trade and other estimation when no observable rates are available or when
receivables reflects the Company’s estimates of losses arising they need to be adjusted to reflect the terms and conditions
from the failure or inability of customers to make required of the lease. The Group estimates the IBR using observable
payments. The provision is based on the ageing of customer inputs such as market interest rates when available and is
accounts, customer credit-worthiness and the Company’s required to make certain entity-specific estimates as well.
historical write-off experience etc. Changes to the provision
may be required if the financial condition of its customers
(viii) Revenue recognision from contracts with customers
improves or deteriorates. An improvement in financial
Judgement is required in assessing the application
condition may result in lower actual write-offs.
of the principles of revenue recognition in respect of
revenues.Certain contracts with customers are bundled
packages that may include sale of products and
telecommunications services that comprise voice, data, and
   Annual Report 2021  | 143

other telecommunications services. The Group accounts (ii) Amendments to SLFRS 9, LKAS 39, SLFRS 7, SLFRS 4 and
for individual products and services separately as separate SLFRS 16 - Interest Rate Benchmark Reform Phase 1 and 2
performance obligations if they are distinct promised
goods and services. The Group exercises judgements in IBOR reform Phase 1
determining whether a product is distinct, that is, if such In 15 January 2021, the Institute of Chartered Accountants
product or service is separately identifiable from other items of Sri Lanka (CA Sri Lanka) issued amendments to SLFRS
in the bundled package and if a customer can benefit from 9, LKAS 39 and SLFRS 7 due to Interest Rate Benchmark
it separately. This determination will affect the allocation Reform (Phase 1). A summary of Phase 1 amendments are as
of consideration specified in the contract and the revenue follows:
recognised for each performance obligation.
> Highly Probable Requirement: According to SLFRS 9 and
(ix) Assets held for sale LKAS 39, when a forecast transaction is designated as a
On 14 December 2021, the Group publicly announced the hedged item, that transaction must be highly probable
decision of its Board of Directors to sell SLT Campus (Pvt) Ltd, to occur. By the Phase 1 amendments, when determining
a wholly owned subsidiary. Operations of SLT Campus (Pvt) whether a forecast transaction is highly probable, an
Ltd are classified as a disposal group held for sale. The Board entity shall assume that the interest rate benchmark on
considered the subsidiary to meet the criteria to be classified which the hedged cashflows are based is not altered as a
as held for sale at that date for the following reasons: result of the reform

> SLT Campus (Pvt) Ltd is available for immediate sale and > Prospective assessments: A hedging relationship qualifies
can be sold to the buyer in its current condition for hedge accounting only if there is an economic
relationship between the hedged item and the hedging
> The actions to complete the sale were initiated and instrument (described in SLFRS 9) or the hedge is
expected to be completed within one year from the date expected to be highly effective in achieving off-setting
of initial classification (described in LKAS 39). An entity must demonstrate
such prospective assessments on a regular basis. By the
> A potential buyer has been identified and negotiations as Phase 1 amendments, when performing prospective
at the reporting date are at the conclusion stage. assessments, an entity shall assume that the interest rate
> The shareholders approved the plan to sell on 14 benchmark on which the hedged item, hedged risk and/
December 2021. For more details refer to Note 22. or hedging instrument are based is not altered as a result
of the interest rate benchmark reform
(w) Amendments to existing accounting standards
The Group applied for the first-time certain amendments, to LKAS 39 retrospective assesment: To apply hedge
existing accounting standards, which are effective for annual accounting under LKAS 39, an entity must demonstrate that
periods beginning on or after 1 January 2020. The Group the actual results of the hedge are within a range of 80% -
has not early adopted any other standard, interpretation or 125%. This requirement is commonly known as the ‘LKAS 39
amendment that has been issued but is not yet effective. retrospective assesment’. By the Phase 1 amendments, an
entity is not required to undertake the LKAS 39 retrospective
assesment for hedging relationships directly affected by
(i) Amendments to SLFRS 16 Leases: Covid-19-Related
the reform. However, the entity must comply with all other
Rent Concessions beyond 30 June 2021
LKAS 39 hedge accounting requirements, including the
In 4 December 2020, the Institute of Chartered Accountants
prospective assesment
of Sri Lanka (CA Sri Lanka) issued Covid-19-Related Rent
Concessions - amendment to SLFRS 16 Leases. The
amendments provide relief to lessees from applying SLFRS > Separately identifiable risk components: While there
16 guidance on lease modification accounting for rent are some differences between SLFRS 9 and LKAS
concessions arising as a direct consequence of the Covid-19 39 regarding designation of risk components, both
pandemic. As a practical expedient, a lessee may elect not Standards require a risk component (or a portion) to
to assess whether a Covid-19 related rent concession from be separately identifiable to be eligible for hedge
a lessor is a lease modification. A lessee that makes this accounting. An entity may designate an item in its
election accounts for any change in lease payments resulting entirety or a component of an item as a hedged item in
from the Covid-19 related rent concession the same way a hedging relationship. SLFRS 9 and LKAS 39 require the
it would account for the change under SLFRS 16, if the component to be separately identifiable to qualify as a
change were not a lease modification. The amendment was hedged item. By the Phase 1 amendments, for hedges
intended to apply until 30 June 2021, but as the impact of of non-contractually specified benchmark component
the Covid-19 pandemic is continuing, in 28 June 2021, CA of interest rate risk, an entity shall apply the separately
Sri Lanka extended the period of application of the practical identifiable requirement only at the inception of such
expedient to 30 June 2022.The amendment applies to hedging relationships
annual reporting periods beginning on or after 1 April 2021.
144  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

IBOR reform Phase 2 (x) Standards issued but not yet effective
In addition to Phase 1 amendments, CA Sri Lanka also issued The new and amended standards and interpretations that are
amendments to SLFRS 9, LKAS 39, SLFRS 7, SLFRS 4 and issued, but not yet effective, up to the date of issuance of the
SLFRS 16 due to Interest Rate Benchmark Reform. The Phase Group’s Financial Statements are disclosed below. The Group
2 amendments provide temporary reliefs which address the intends to adopt these new and amended standards and
financial reporting effects when an interbank offered rate interpretations, if applicable, when they become effective.
(IBOR) is replaced with an alternative nearly risk-free interest
rate (RFR). The amendments include the following practical (i) SLFRS 17 - Insurance Contracts - In 8 January 2020,
expedients the Institute of Chartered Accountants of Sri Lanka (CA
Sri Lanka) issued SLFRS 17 Insurance Contracts (SLFRS
> A practical expedient to require contractual changes, or 17). SLFRS 17 was amended by Amendments to SLFRS
changes to cash flows that are directly required by the 17 - Insurance Contracts, in 28 June 2021. SLFRS 17 is a
reform, to be treated as changes to A floating interest comprehensive new accounting standard for insurance
rate, equivalent to A movement in A market rate of contracts covering recognition and measurement,
interest presentation and disclosure. Once effective, SLFRS 17
> Permit changes required by IBOR reform to be made to will replace SLFRS 4 Insurance Contracts (SLFRS 4) that
hedge designations and hedge documentation without was issued in 2005. SLFRS 17 applies to all types of
the hedging relationship being discontinued. insurance contracts (i.e., life, non-life, direct insurance
and re-insurance), regardless of the type of entities that
> Provide temporary relief to entities from having to meet issue them, as well as to certain guarantees and financial
the separately identifiable requirement when an RFR instruments with discretionary participation features. A
instrument is designated as a hedge of a risk component few scope exceptions will apply. The overall objective of
SLFRS 17 is to provide an accounting model for insurance
The effective date of both IBOR reform Phase 1 and Phase 2 contracts that is more useful and consistent for insurers. In
amendments is for annual reporting periods beginning on or contrast to the requirements in SLFRS 4, which are largely
after 1 January 2021 in the Sri Lankan context based on grandfathering previous local accounting
policies, SLFRS 17 provides a comprehensive model for
The requirements under phase 1 amendments have to be insurance contracts, covering all relevant accounting
applied retrospectively. However, the reliefs only apply aspects. The core of SLFRS 17 is the general model,
to hedging relationships that existed at the beginning of supplemented by:
the reporting period in which an entity first applies those
requirements or were designated thereafter, and to the > A specific adaptation for contracts with direct
amount accumulated in the cash flow hedge reserve that participation features (the variable fee approach)
existed at the beginning of the reporting period in which
an entity first applies those requirements. It follows that it > A simplified approach (the premium allocation approach)
is not possible to apply the reliefs retrospectively to hedge mainly for short-duration contracts
relationships that were not previously designated as such
SLFRS 17 is effective for annual reporting periods beginning
The requirements under phase 2 amendments have to on or after 1 January 2023, with comparative figures
be applied retrospectively. Hedge relationships are not required. Early application is permitted, provided the entity
designated retrospectively. However, discontinued hedging also applies SLFRS 9 and SLFRS 15 on or before the date it
relationships must be reinstated if, and only if, first applies SLFRS 17.

> The hedging relationship was discontinued solely due SLFRS 17 - Insurance contracts is not expected to have a
to changes required by the Reform, and, therefore, the significant impact on the Group’s Consolidated Financial
entity would not have been required to discontinue that Statements.”
hedging relationship if the Phase 2 Amendments had
been applied at that time and (ii) Amendments to LKAS 37 Provisions, Contingent Liabilities
and Contingent Assets : Onerous Contracts – Costs of
> At the date of initial application of the Phase 2 Fulfilling a Contract
Amendments, that discontinued hedge relationship
continues to meet all the qualifying criteria for hedge In 25 March 2021, the Institute of Chartered Accountants
accounting, after taking account of the Phase 2 of Sri Lanka (CA Sri Lanka) issued amendments to LKAS 37
Amendment. Provisions, Contingent Liabilities and Contingent Assets
(LKAS 37) to specify which costs an entity needs to include
These amendmends had no material impact on the financial when assessing whether a contract is onerous or loss-making.
statements. We intend to apply these amendments in future The amendments apply a “directly related cost approach”.
periods if they become applicable. The costs that relate directly to a contract to provide goods
   Annual Report 2021  | 145

or services include both incremental costs and an allocation The amendments are effective for annual reporting
of costs directly related to contract activities. General and periods beginning on or after 1 January 2022 and apply
administrative costs do not relate directly to a contract prospectively. This amendment is not expected to have
and are excluded unless they are explicitly chargeable to a significant impact on Group’s Consolidated Financial
the counterparty under the contract. The amendments are Statements.”
effective for annual reporting periods beginning on or after 1
January 2022. Earlier application is permitted. (v) SLFRS 1 First-time Adoption of Sri Lanka Financial
Reporting Standards – Subsidiary as a first-time adopter
This amendment is not expected to have a significant impact
on Group’s Consolidated Financial Statements. As part of its 2018-2020 annual improvements to SLFRS
standards process, the Institute of Chartered Accountants
(iii) Amendments to LKAS 16 Property, Plant & Equipment : of Sri Lanka (CA Sri Lanka) issued an amendment to SLFRS
Proceeds before Intended Use 1 First-time Adoption of International Financial Reporting
Standards (SLFRS 1). The amendment permits a subsidiary
In 25 March 2021, the Institute of Chartered Accountants of that elects to apply paragraph D16(a) of SLFRS 1 to measure
Sri Lanka (CA Sri Lanka) issued LKAS 16 Property, Plant and cumulative translation differences using the amounts
Equipment — Proceeds before Intended Use, which prohibits reported by the parent, based on the parent’s date of
entities deducting from the cost of an item of property, plant transition to SLFRS. This amendment is also applied to an
and equipment, any proceeds from selling items produced associate or joint venture that elects to apply paragraph
while bringing that asset to the location and condition D16(a) of SLFRS 1. The amendment is effective for annual
necessary for it to be capable of operating in the manner reporting periods beginning on or after 1 January 2022 with
intended by management. Instead, an entity recognizes the earlier adoption permitted. This amendment is not expected
proceeds from selling such items, and the costs of producing to have a significant impact on Group’s Consolidated
those items, in profit or loss Financial Statements.

The amendment is effective for annual reporting periods (vi) SLFRS 9 Financial Instruments – Fees in the ’10 per cent’
beginning on or after 1 January 2022 and must be applied test for derecognition of financial liabilities
retrospectively to items of property, plant and equipment
made available for use on or after the beginning of the As part of its 2018-2020 annual improvements to SLFRS
earliest period presented when the entity first applies the standards process, the Institute of Chartered Accountants
amendment of Sri Lanka (CA Sri Lanka) issued an amendment to SLFRS
9 Financial Instruments (SLFRS 9). The amendment clarifies
This amendment is not expected to have a significant impact the fees that an entity includes when assessing whether the
on Group’s Consolidated Financial Statements. terms of a new or modified financial liability are substantially
different from the terms of the original financial liability.
(iv) Amendments to SLFRS 3 Business Combinations : These fees include only those paid or received between the
Updating a reference to conceptual framework borrower and the lender, including fees paid or received
by either the borrower or lender on the other’s behalf. An
In 23 March 2021, the Institute of Chartered Accountants entity applies the amendment to financial liabilities that
of Sri Lanka (CA Sri Lanka) issued amendments to SLFRS are modified or exchanged on or after the beginning of
3 Business Combinations - Updating a Reference to the the annual reporting period in which the entity first applies
Conceptual Framework. The amendments are intended to the amendment. The amendment is effective for annual
replace a reference to the Framework for the Preparation reporting periods beginning on or after 1 January 2022 with
and Presentation of Financial Statements, issued in 1989, earlier adoption permitted.
with a reference to the Conceptual Framework for Financial
Reporting issued in March 2018 without significantly This amendment is not expected to have a significant impact
changing its requirements. on Group’s Consolidated Financial Statements.

An exception was also added to the recognition principle of (vii) LKAS 41 Agriculture – Taxation in fair value
SLFRS 3 to avoid the issue of potential ‘day 2’ gains or losses measurements
arising for liabilities and contingent liabilities that would be
within the scope of LKAS 37 or IFRIC 21 Levies, if incurred As part of its 2018-2020 annual improvements to SLFRS
separately standards process, the Institute of Chartered Accountants
of Sri Lanka (CA Sri Lanka) issued an amendment to LKAS
At the same time, it was decided to clarify existing guidance 41 Agriculture (LKAS 41). The amendment removes the
in SLFRS 3 for contingent assets that would not be affected requirement in paragraph 22 of LKAS 41 that entities exclude
by replacing the reference to the Framework for the cash flows for taxation when measuring the fair value of
Preparation and Presentation of Financial Statements assets within the scope of LKAS 41. An entity applies the
amendment prospectively to fair value measurements on
146  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

or after the beginning of the first annual reporting period 4.1. Credit risk
beginning on or after 1 January 2022 with earlier adoption Credit risk is the risk of financial loss to the Group if a
permitted. customer or counterparty to a financial instrument fails to
meet its contractual obligation, and arise principally from the
This amendment is not expected to have a significant impact Group’s receivables from customers.
on Group’s Consolidated Financial Statements.
Carrying amount of financial assets represents the maximum
4. FINANCIAL RISK MANAGEMENT credit exposure
The Board of Directors has overall responsibility for the
establishment and oversight of the Group’s risk management 4.1.1 Trade receivables
framework. The group having a very well established credit policy for
both International Interconnect customers and Domestic
The Group’s risk management processes are established customers to minimize the credit risk. A separate committee
to identify and analyse the risks faced by the Group, to set has been established to evaluate and recommend the credit
appropriate risk limits and controls, and to monitor risks and worthiness for the International Interconnect customer.
adherence to limits. Risk management systems are reviewed Further, Prepaid sales are used as a means of mitigating
regularly to reflect changes in market conditions and the credit risk
group activities.
Domestic service is offered to a new customer only after
The Audit Committee oversees how management monitors scrutinizing through a internal blacklisted data base. The
compliance with the Group’s risk management processes/ group has a well-established credit control policy & process
guidelines and procedures, and reviews the adequacy of the to minimize the credit risk. Customers are categorised
risk management framework in relation to the risks. The Audit according to the segments and credit limit has been fixed
Committee is assisted in its oversight role by internal reviews as per their average monthly bill value. Customer usage and
of risk management controls and procedures. The results of bill payments are monitored as per the credit limit. Credit
which are reported to the Audit Committee. limit will be periodically revised as per the past monthly
bill value. High risk voice customers are subjected to auto
The Group has exposure to the following risks from its use of disconnection when they reached the threshold limit. Credit
financial instruments: control actions and recovery actions are taken for the
overdue customers and defaulted customers to minimise
the credit risk. High revenue generated customers including
> Credit risk, Liquidity risk and Market risk
corporate customers are monitored individually.
This note presents information about the Group’s exposure to
As at 31 December, the maximum exposure to credit risk for
each of the above risks, the Group’s objectives , policies and
trade by geographic region was as follows:
processes for measuring and managing risk and the Group’s
management of capital. Further quantitative disclosures are
included throughout these financial statements.

Group Company
For the year ended 31 December 2021 2020 2021 2020

Sri Lanka 23,225 22,375 17,255 15,466

Middle east 134 137 115 137
Asia 1,352 1,147 946 902
Europe 981 1,147 887 966
Australia 239 171 234 164
Other 21 389 7 13
Total trade receivables 25,952 25,366 19,444 17,648
   Annual Report 2021  | 147

As at 31 December, the maximum exposure to credit risk for trade receivables by type of counterparty was as follows:

Group Company
2021 2020 2021 2020

Wholesale customers 3,666 3,467 3,610 3,386

Retail customers 19,179 18,042 14,697 13,476
Other 3,107 3,857 1,137 786
25,952 25,366 19,444 17,648

As at 31 December the Group’s most significant customer was Information Communication Technology Agency (ICTA) which
accounted for Rs. 589 Mn of trade receivables (2020 - Rs.267 Mn)

As at 31 December 2021, the aging of trade receivables was as follows;

Group Company
2021 2020 2021 2020

Past due 1 Year 141 235 92 78

Past due 2 Years and above 193 64 99 64
334 299 191 142

Management believes that the past due more than 1 year are still collectible in full, based on historical payment behavior and
extensive analysis of customer credit risk.

The movement in the allowance for impairment in respect of trade receivables during the year is as follows:

Group Company
Impairment Impairment

Balance as at 1 January 2020 9,232 5,402

  - Impairment loss recognised 2,212 1,846
  - Impairment gain recognised (811) (811)
  - Adjustments (47) -
  - Amounts written off (2,063) (1,074)
Balance as at December 2020 8,523 5,363
  - Impairment loss recognised 1,759 1,201
  - Impairment gain recognised (27) -
  - Adjustments 5 -
  - Discontinue of opeartions in SLT Campus (Pvt) Limited (66) -
  - Amounts written off (431) (257)
Balance as at 31 December 2021 9,763 6,307

4.1.2 Other investments

The Group limits its exposure to credit risk by investing only in Government Debt Securities, Repos and in short term deposits
with selected bankers with Board approval.

4.1.3 Cash and cash equivalents

The Group held cash and cash equivalents of Rs 17,972 Mn as at 31 December 2021 (2020 Rs. 11,866 Mn)

4.1.4 Employee loans

The Group limits its exposure to credit risk by ensuring the loan balance are recovered from the employees monthly salary, or if
the employee leaves such amounts are recovered from the employees EPF balance.
148  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

4. FINANCIAL RISK MANAGEMENT CONTD.

4.2 Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Group’s reputation.

The group ensures its liquidity is maintained by investing in short, medium and long-term financial instruments to support
operational and other funding requirements. The group determines its liquidity requirements by the use of both short and
long-term cash forecasts. These forecasts are supplemented by a financial headroom analysis which is used to assess funding
adequacy for at least a 12-month period and the same is reviewed on an annual basis.

Short and medium-term requirements are regularly reviewed and managed by the Treasury Division.

Contractual undiscounted payments the Sri Lanka Telecom PLC would be called upon to make under the issued Corporate
Guarantee Contracts on behalf of its subsidiaries are as follows,

For the year ended 31 December Carrying up to 1

Value Year

SLT Campus (Pvt) Ltd. – Seylan loan (a) 887 847

SLT Campus (Pvt) Ltd. – Bank overdraft 110 110

(a) This term loan was granted by Seylan Bank to SLT Campus (Private) Limited in August 2019. The loan tenure is 120
months including a grace period of 24 months from the granted date.

Above loan and bank overdraft were settled in full by SLT Campus (Pvt) Limited and the relevant corporate guarantees were
cancelled in January 2022.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and
undiscounted.

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years
As at 31 December 2021
Bank overdrafts 1,742 1,742 - - -
Bank borrowings and others 44,826 7,006 8,220 17,200 12,400
Lease liabilities 21 17 4 -
Trade and other payables due with in one year (4.2.1) 35,605 35,605 - - -
Trade and other payables due after one year (4.2.2) 6,565 6,565 - - -
88,759 50,935 8,224 17,200 12,400

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years
As at 31 December 2020
Bank overdrafts 1,885 1,885 - - -
Bank borrowings and others 53,147 7,628 8,827 23,507 13,185
Vender financing 317 157 136 24 -
Lease liabilities 25 4 9 12 -
Trade and other payables due with in one year (4.2.3) 30,605 30,605 - - -
Trade and other payables due after one year (4.2.4) 5,371 3,839 382 7 1,143
91,350 44,118 9,354 23,550 14,328
   Annual Report 2021  | 149

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2021
Bank overdrafts 1,261 1,261 - - -
Bank borrowings and others 41,781 5,991 6,190 17,200 12,400
Lease liabilities 21 17 4 - -
Trade and other payables due with in one year (4.2.5) 22,805 22,805 - - -
Trade and other payables due after one year (4.2.6) 5,283 1,864 1,190 1,049 1,180
71,151 31,938 7,384 18,249 13,580

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2020
Bank overdrafts 1,453 1,453 - - -
Bank borrowings and others 46,514 5,659 6,815 21,315 12,725
Lease liabilities 25 4 9 12 -
Trade and other payables due with in one year (4.2.7) 17,131 17,131 - - -
Trade and other payables due after one year (4.2.8) 3,955 2,826 391 364 374
69,078 27,073 7,215 21,691 13,099

4.2.1 Trade and other payables due with in one year

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2021
Domestic trade payables 6,062 6,062 - - -
Foreign trade payables 3,438 3,438 - - -
Capital expenditure payables 10,017 10,017 - - -
Social security and other taxes 574 574 - - -
Interest payable 20 20 - - -
Other payables 15,494 15,494 - - -
35,605 35,605 - - -

4.2.2 Trade and other payables due after one year

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2021
Subscriber deposits 253 2 4 7 240
Domestic trade payables 1,668 323 675 410 260
Capital expenditure payables 4,644 1,930 1,402 632 680
6,565 2,255 2,081 1,049 1,180
150  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

4. FINANCIAL RISK MANAGEMENT CONTD.

4.2.3 Trade and other payables due with in one year

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2020
Domestic trade payables 5,967 5,967 - - -
Foreign trade payables 1,979 1,979 - - -
Capital expenditure payables 7,999 7,999 - - -
Social security and other taxes 1,039 1,039 - - -
Interest payable 71 71 - - -
Other payables 13,550 13,550 - - -
30,605 30,605 - - -

4.2.4 Trade and other payables more than one year

Group Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2020
Subscriber deposits 273 2 4 7 260
Domestic trade payables 1,906 580 313 - 1,013
Capital expenditure payables 2,430 3,192 - - (762)
4,609 3,774 317 7 511

4.2.5 Trade and other payables due with in one year

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2021
Domestic trade payables 164 164 - - -
Foreign trade payables 1,424 1,424 - - -
Amount due to subsidiaries 4,087 4,087 - - -
Capital expenditure payables 5,072 5,072 - - -
Social security and other taxes 548 548 - - -
Other payables 11,510 11,510 - - -
22,805 22,805 - - -
   Annual Report 2021  | 151

4.2.6 Trade and other payables due after one year

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2021
Subscriber deposits 253 2 4 7 240
Advance on RDA 674 73 175 410 16
Unclaimed dividend 244 - - - 244
Capital expenditure payables 4,112 1,789 1,011 632 680
5,283 1,864 1,190 1,049 1,180

4.2.7 Trade and other payables due after one year

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2020
Domestic trade payables 180 180 - - -
Foreign trade payables 1,278 1,278 - - -
Amount due to subsidiaries 2,798 2,798 - - -
Capital expenditure payables 3,242 3,242 - - -
Social security and other taxes 601 601 - - -
Other payables 9,032 9,032 - - -
17,131 17,131 - - -

4.2.8 Trade and other payables due after one year (4.2.8)

Company Carrying up to 1 up to 2 up to 5 Over 5

Value Years Years Years Years

As at 31 December 2020
Subscriber deposits 273 67 69 7 130
Advance on RDA 769 90 322 357 -
Unclaimed dividend 244 - - - 244
Capital expenditure payables 1,907 2,669 - - -
3,193 2,761 326 364 374
152  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

4. FINANCIAL RISK MANAGEMENT CONTD.

4.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return.

4.3.1 Currecny risk

The Group is exposed to currency risk on services provided, services received and borrowings that are denominated in a
currency other than the Sri Lankan rupees (Rs.)

The Group manages its currency risk by a natural hedging mechanism to a certain extent by matching currency outflows for
repayments of foreign currency loans and services with currency inflows for services settled in foreign currencies.

The summary of quantitative data about the Group’s exposure to foreign currency was as follows:

Group Company
2021 2020 2021 2020
USD Mn. USD Mn. USD Mn. USD Mn.

As at 31 December
Foreign trade receivables 15 19 13 14
Secured bank loans (1) (2) - -
Unsecured loans (15) (30) - -
Trade payables (17) (10) (7) (7)
Net statement of financial position exposure (18) (23) 6 7

The following significant exchange rates have been applied during the year:

Average rate Year end spot rate

2021 2020 2021 2020

USD 198.88 185.55 200.75 186.65

Sensitivity analysis
A reasonable possible strengthening (weakening) USD would have an impact on the Group’s borrowings. This analysis assumes
that all other variables, in particular interest rates remain constant.

Profit or loss Balance sheet

Strengthening Weakening Strengthening Weakening

Group
2021 December USD (10%) (415) 415 (415) 415
2020 December USD (10%) (803) 803 (803) 803

   Annual Report 2021  | 153

4.3.2 Interest rate risk

Interest rate risk mainly arises as a result of Group having interest sensitive assets and liabilities, which are directly, impacted
by changes in the interest rates. The Group’s borrowings and investments are maintained in a mix of fixed and variable interest
rate instruments and periodical maturity gap analysis is carried out to take timely action and to mitigate possible adverse
impact due to volatility of the interest rates.

To minimise the adverse impact of variable interest rate borrowings due to an upward movement of USD interest rates in the
market, the Company has obtained an interest rate SWAP and arrangements are being made to obtain an interets rate CAP.

Short-term interest rate management is delegated to the treasury operations while long-term interest rate management
decisions require approval from the Board of Directors.

Interest rate sensitivity of the company was computed within the floor interest rate (Minimum) of 2.5% as stipulated in the loan
agreement. The Group interest rate sensitivity was computed based on a 100 basis point increase or decrease. This analysis
assumes that all other variables, in particular, foreign currency exchange rates, remain constant. The sensitivity of interest rate
movement is shown below;

Profit or loss
Increase Decrease
in interest rate in interest rate

Group
2021 December variable rate instruments (548) 548
2020 December variable rate instruments (383) 383

Company
2021 December variable rate instruments (485) 485
2020 December variable rate instruments (323) 323

4.4 Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Capital consists of stated capital and reserves The Board of Directors monitors the return
on capital as well as the level of dividends to ordinary shareholders.

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the
cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.

The Debt/equity ratios at 31 December were as follows:

Group Company
2021 2020 2021 2020

Total borrowings 62,083 65,794 50,024 48,839

Total equity 93,967 84,281 65,672 62,443
Total capital 156,059 150,075 115,696 111,282

Debt/equity Ratio 66.1 78.1 76.2 78.2

154  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

5. OPERATING SEGMENTS
The Group has three reportable segments, as described below, which are the Group’s strategic divisions. The strategic
divisions offer different products and services, and are managed separately because they require different technology and
marketing strategies for each of the strategic divisions, the Board of Directors, (the Chief Operating Decision Maker-CODM)
reviews internal management reports on at least quarterly basis. The following summary describes the operations in each of
the Group’s reportable segments.

> Fixed ICT operations includes supply of fixed telecommunication services.

> Mobile ICT operations includes supply of mobile telecommunication services.

> Other segment operations includes directory publication and support services. None of these segments meet the
quantitative thresholds for determining reportable segments in 2021 or 2020.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment
profit before tax. As included in the internal management reports that are reviewed by the Board of Directors (BOD). Segment
profit is used to measure performance as Management believes that such information is the most relevant in evaluating the
results of certain segments relative to other entities that operate within these industries.

Information relevant to the operating segments are presented in a method consistent with the management reporting
provided to those charged with governance.

Fixed telephony Mobile Other segments Total

operations operations operations
2021 2020 2021 2020 2021 2020 2021 2020

External revenues 54,693 47,065 45,576 41,939 2,079 2,115 102,348 91,119
Inter-segment revenue 5,118 4,487 1,565 1,428 4,678 3,219 11,361 9,134
Reportable segment revenue 59,811 51,552 47,141 43,367 6,757 5,334 113,709 100,253
Reportable segment profit before tax 5,085 4,539 9,418 6,134 (26) 94 14,477 10,767
Interest revenue 630 819 670 405 8 8 1,308 1,232
Interest expenses (1,825) (1,391) (1,284) (1,574) (92) (82) (3,201) (3,047)
Depreciation and amortisation (18,110) (14,923) (9,032) (8,750) (184) (145) (27,326) (23,818)
Reportable segment assets 158,204 146,189 78,034 73,974 5,646 4,870 241,884 225,033
Reportable segment liabilities 92,532 83,746 35,965 38,611 4,703 3,709 133,200 126,066

2021 2020

Revenue
Total revenue for reportable segments 106,952 94,919
Revenue for other segments 6,757 5,334
Reportable segment revenue 113,709 100,253
Elimination of inter-segment revenue (11,361) (9,134)
Consolidated revenue 102,348 91,119

Profit or loss
Total profit or loss for reportable segments 14,503 10,673
Profit or loss for other segments (26) 94
Reportable segment profit before tax 14,477 10,767
Elimination of inter-segment profit (1,659) (1,054)
Consolidated profit before tax 12,818 9,713
   Annual Report 2021  | 155

Information about reportable segments

2021 2020

Assets
Total assets for reportable segments 236,238 220,163
Assets for other segments 5,646 4,870
241,884 225,033
Elimination of inter-segment assets (21,943) (20,577)
Consolidated total assets 219,941 204,456

Liabilities
Total liabilities for reportable segments 128,497 122,357
Liabilities for other segments 4,703 3,709
133,200 126,066
Elimination of inter-segment liabilities (7,235) (5,891)
Consolidated total liabilities 125,965 120,175

Reportable Adjustments Consolidated

segment totals
totals

Other material items (2021)

Interest revenue 1,308 - 1,308
Interest expense (3,201) 179 (3,022)
Capital expenditure 25,959 - 25,959
Depreciation and amortisation (27,326) - (27,326)

Other material items (2020)

Interest revenue 1,232 - 1,232
Interest expense (3,047) 145 (2,902)
Capital expenditure 14,618 - 14,618
Depreciation and amortisation (23,818) - (23,818)
156  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

6 REVENUE
The significant categories under which revenue is recognized are as follows:

Group Company
2021 2020 2021 2020

Release of deferred connection charges 291 292 291 292

Rental income 6,456 6,880 3,675 4,217
Domestic call revenue 21,132 21,295 2,932 3,012
Receipts from other network operators – Domestic 2,326 2,004 680 600
International call revenue 384 438 137 156
Receipts from other network operators – International 46 14 - -
International settlements (in-payments) 9,908 8,692 7,264 6,226
CDMA revenue 26 152 26 152
Broadband revenue 36,226 27,095 18,745 12,496
Data and other services 25,553 24,257 26,061 24,401
102,348 91,119 59,811 51,552

7 OPERATING COSTS
The following items have been included in arriving at operating profit:

Group Company
2021 2020 2021 2020

Staff costs (Note 7.1) 20,648 19,250 14,984 13,419

Directors' emoluments 89 48 77 40
Payments to international network operators 3,006 1,390 3,006 1,390
Payments to other network operators
- international 1,112 1,326 853 910
- domestic 2,345 2,167 596 585
Int'l Telecommunication Operators Levy (Note 8) 1,228 1,563 490 700
Auditors’ remuneration
Audit - Ernst & Young 21 19 12 12
- Other auditors - - - -
Non-audit - Ernst & Young 3 6 3 2
- Other auditors 1 18 1 4
Repairs and maintenance expenditure 7,043 7,113 5,490 5,052
Provision for doubtful debts 1,757 1,297 1,201 944
Impairments / (reversals) of inventory (43) 30 (55) (10)
Impairment of property, plant and equipment (Note 14) 16 43 16 1
Other operating expenditure 23,952 21,399 11,691 10,078
Depreciation on property, plant and equipment 22,176 19,115 16,263 13,570
Depreciation on right of use assets 2,758 2,925 639 565
Amortization 2,392 1,778 1,208 788
88,504 79,487 56,475 48,050
   Annual Report 2021  | 157

7.1 Staff costs

Group Company
2021 2020 2021 2020

Salaries, wages, allowances and other benefits 18,392 17,047 13,265 11,765

Post employment benefits

  - Defined contribution plans 1,567 1,479 1,171 1,060
  - Defined benefit obligations (Note 28) 689 724 548 594
20,648 19,250 14,984 13,419

Average number of persons employed: 8,769 8,929 6,683 6,005

8 REFUNDS ON TELECOMMUNICATION DEVELOPMENT CHARGE (TDC)

In accordance with the Finance Act No. 11 of 2004, all Telecommunication Gateway Operators are required to pay a levy
defined as the Telecommunication Development Charge (TDC) to the Government of Sri Lanka, based on international call
minutes terminated in the country. This levy was made effective from 03 March, 2003 where initially the levy was defined in
such a way that Operators were allowed to claim the 2/3rd of the TDC against the costs of network development charges.

The TDC Refund received in 2014 corresponds to the period from April 2009 to July 2010 which was the last claim obtained
under the respective regulation. As the said regulation was received with effect from July 2010 while eliminating the
reimbursement process, the final claim requested from TRC applicable for the above period was received in year 2014.

First revision to this regulation was introduced with effect from 15 July, 2010 with an International Telecommunication
Operators Levy (ITOL) TDC rate change from USD cents 3.80 to USD cents 1.50. Through the same revision, the disbursement
process of TDC was removed from the regulation. As stated above the revised ITOL rate prevailed until such time the rate was
revised to USD cents 3.00 per minute with effect from January 2012, in accordance with the Budget Proposal for 2012 and
ITOL rate was further revised again to USD cents 6.00 per minute with effect from January 2016 in accordance with the Budget
Proposal for 2016.

Mobitel (Private) Limited Recognises Telecommunications Development Charge (TDC) in profit or loss on a straight-line basis
over 10 years, as disclosed in Note 35.

9 INTEREST EXPENSE AND FINANCE COSTS

Group Company
2021 2020 2021 2020

Rupee loans [see Note (a) below] 2,744 3,969 2,509 3,887
Foreign currency loans [see Note (a) below] - 376 - 91
Debenture 893 892 893 892
Other charges [See Note (b) below] 1,151 1,376 189 232
Total interest and finance cost 4,788 6,613 3,591 5,102
Interest capitalized [See Note (c) below] (1,766) (3,711) (1,766) (3,711)
Net total interest and finance cost 3,022 2,902 1,825 1,391

(a) Interest cost of the company relates to the Rupee loans. Interest cost of the group relates to rupee loans, USD loans and
vendor financing.

(b) Other charges mainly include interest cost of finance leases and overdraft facilities.

(c) Capitalization rate used for 2021 is 9.90% (2020 - 11.60%)

158  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

9 INTEREST EXPENSE AND FINANCE COSTS CONTD.

9.a Foreign exchange (loss) / gain

Group Company
2021 2020 2021 2020

Net foreign exchange (loss) / gain (482) (1,203) 76 (727)

(a) Foreign exchange loss of the group mainly includes,

i.    Exchange gain of Rs. 86 Mn (2020 - of Rs. 69 Mn) arising from revaluation of the receivables, fixed deposits and bank
balances maintained in USD

ii.  Exchange loss of Rs.302 Mn on payment to foreign suppliers (2020 - Rs. 422 Mn).

iii. Exchange loss of Rs. 266 Mn (2020 - Rs. 850 Mn) arising from revaluation of USD syndicate loan and other term loans.

(b) Foreign exchange gain / (loss) of the company mainly includes,

i.   Exchange gain of Rs.252 Mn (2020 - Rs.34 Mn) arising from revaluation of receivables, fixed deposits and bank balances
maintained in USD.

ii. Exchange loss of Rs. 176 Mn on payment to foreign suppliers (2020 - Rs. 170 Mn).

iii. Exchange loss of Rs. Nil (2020 - Rs. 591 Mn) arising from revaluation of USD syndicate loan.

10
INTEREST INCOME
Group Company
2021 2020 2021 2020

Interest income from:

Repurchase agreement-Repos 301 101 9 -
Fixed deposits 731 513 346 202
Staff loan interest 276 618 275 617
1,308 1,232 630 819

The interest income on bank deposits reflect the prevailing rates on the date of respective investments.

(a) The weighted average interest rates on restricted funds in bank deposits 5.82% (2020 - 6.81%) and USD was 5.28 % (2020
- 5.21%) .The weighted average interest rate on bank deposits in Rupees was 6.03% (2020 - 7.31%).The weighted average
interest on repurchase agreement -Repo was 5.92 (2020-Nil)

(b) The weighted average interest on staff loans are between 10% and 15% (2020 - 10% and 15%) computed as per the
provisions in the Sri Lanka Accounting Standards. The actual interest rates charged on the staff loans are between 6.24%
and 7.20% (2020 – 6.24% and 7.20%)
   Annual Report 2021  | 159

11
INCOME TAX EXPENSES / REVERSALS
Tax recognized in statement of profit or loss

Group Company
2021 2020 2021 2020

Current tax expense

Current year 2,744 1,654 1,588 734
Adjustments (5) 46 - 76
Tax on dividends 208 140 208 140
2,947 1,840 1,796 950

Deferred tax expense

Origination and reversal of temporary differences (Note 24) (753) (399) (1,161) (824)
Recognition of tax credit (262) (615) (262) (615)
Tax losses (2) 1,005 - 1,009
Rate change adjustments (1,273) - (1,153) -
(2,290) (9) (2,576) (430)
Tax expense / (reversal) 657 1,832 (780) 520

Tax recognized in other comprehensive income - Group

2021 2020
Tax Tax
Before (expense) Net of Before (expense) Net of
tax benefit tax tax benefit tax

Defined benefit plan actuarial gain / (loss) 397 (150) 247 (473) 114 (359)
397 (150) 247 (473) 114 (359)

Tax recognized in other comprehensive income - Company

2021 2020
Tax Tax
Before (expense) Net of Before (expense) Net of
tax benefit tax tax benefit tax

Defined benefit plan actuarial gain / (loss) 169 (116) 53 (426) 119 (307)
169 (116) 53 (426) 119 (307)
160  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

11
INCOME TAX EXPENSES CONTD.
Reconciliation between income tax expenses and accounting profit

Group Company
2021 2020 2021 2020

Accounting profit before tax 12,818 9,713 5,085 4,539

Non - taxable receipts / gains (1,489) (1,074) (1,489) (1,074)
Exempt profit (779) - (779) -
Aggregate disallowable expneses 20,555 17,580 20,200 17,273
Aggregate allowable expneses (16,350) (14,007) (16,402) (13,663)
Utilization of tax losses (109) (3,714) - (3,599)
Current year tax losses not utilized 194 207 - -
Taxable income 14,840 8,705 6,615 3,476

Income tax charged at ;

Standard rate 1,640 770 1,588 734
Concessionary rate of 14% 29 - - -
Tax on dividend income 14% 208 140 208 140
Other rates 1,070 885 - -
Tax on current year profits 2,947 1,795 1,796 874

The Company applied the revised rate of 24% and other amendments in line with the Inland Revenue Amendment Act No.10
of 2021 to calculate the income tax and deferred tax assets/liabilities as at 31st December 2021. Although these amendments
were effective from 1st January 2020, both income tax and deferred tax assets/liabilities for the comparative period have been
calculated at the rate of 28% and other amendments were not considered on the basis that they were not legally enacted in 2020.

Current income tax charge of the Group / Company is made up as follows:

Group Company
2021 2020 2021 2020

Sri Lanka Telecom PLC 1,796 874 1,796 874

Mobitel (Private) Limited 1,070 885 - -
Sri Lanka Telecom (Services) Limited - - - -
SLT Human Capital Solutions (Private) Limited 8 - - -
SLT Digital Services (Private) Limited - - - -
SLT VisionCom (Private) Limited 37 36 - -
Sky Network (Private) Limited - - - -
SLT Property Management (Private) Limited - - - -
SLT Campus (Private) Limited 29 - - -
Talentfort (Private) Limited 7 - - -
2,947 1,795 1,796 874

(a) Pursuant to agreements dated 15 January 1993 and 26 February 2001 entered into with the Board of Investment of Sri
Lanka under Section 17 of the Board of Investment Act No. 4 of 1978, 15 years tax exemption period granted to Mobitel
(Private) Limited expired on 30 June 2009 and as per the agreement, Mobitel (Private) Limited opted for the turnover based
tax option in which 2% was charged on the turnover for a further period of 15 years commencing from 1 July 2009.
   Annual Report 2021  | 161

12
NET MOVEMENT ON CASH FLOW HEDGES

Movement of cash flow hedge reserve is given below:

Group Company

As at 1 January 2021 (30) -

Net movement in cash flow hedges 30 -
As at 31 December 2021 - -

The composition of the cash flow hedge reserve is given below:

Group Company

Recognition of loan impact under other comprehensive income (30) -

Recognition of revenue impact under other comprehensive income 30 -
As at 31 December 2021 - -

Hedging activities
The Group is exposed to certain risks relating to its ongoing business operations. The Group uses foreign currency-
denominated borrowings to manage some of its transaction exposures. The primary risks managed using hedging activities is
the foreign currency risk.

The Group’s risk management strategy and how it is applied to manage foreign currency risk are explained in Note 4.3.1.

There is an economic relationship between the hedged items and the hedging instruments as there is an opposite relationship
between currency inflows for services settled in foreign currencies which are generated from day-to-day business operations
and currency outflows for repayments of foreign currency loans which are on fixed terms.

The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the foreign exchange are
identical to the hedged risk components. To test the hedge effectiveness, the Group uses the hypothetical derivative method
and compares the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items
attributable to the hedged risks.

The hedge ineffectiveness can arise from:

> Differences in the timing of the cash flows of the hedged items and the hedging instruments

> Changes to the forecasted amount of cash flows of hedged items and hedging instruments

13
EARNINGS PER SHARE
The basic earnings per share is calculated by dividing the net profit attributable to equity holders by the weighted average
number of ordinary shares in issue during the year.

Group Company
2021 2020 2021 2020

Net profit attributable to equity holders (Rs. Mn) 12,155 7,877 5,865 4,019
Weighted average number of ordinary shares in issue (million) 1,805 1,805 1,805 1,805
Earnings per share (Rs.)
  - Basic 6.73 4.37 3.25 2.23

Diluted EPS is the same as computed above as the company does not have any instrument that will potentially dilute the share
holdings.
162  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

14 PROPERTY, PLANT AND EQUIPMENT

14.1 Group

Freehold Freehold Ducts, cables Telephone Transmission IT Motor Other Capital Total
land buildings and other exchanges equipment Systems vehicles fixed work-in-
outside plant assets progress

Cost
As at 1 January 2020 367 4,869 143,783 29,393 103,750 17,785 2,858 14,591 49,176 366,572
Reclassification - - - - - 2,813 (192) (2,621) - -
Additions at cost 34 186 1 1,758 800 34 302 13,352 16,467
Transfers from capital work-in-progress 1,284 13,944 1,501 9,653 867 - 246 (27,495) -
Transferred to right-of -use-assets - - - - - - - (219) - (219)
Disposals - - (115) - (2) (66) (90) (90) - (363)
Transfers - - - - (643) - - - - (643)
As at 31 December 2020 367 6,187 157,798 30,895 114,516 22,199 2,610 12,209 35,033 381,814

Accumulated depreciation
As at 1 January 2020 - (2,490) (107,807) (23,189) (67,461) (12,504) (2,707) (9,782) - (225,940)
Reclassification - 9 (9) - - (2,002) 148 1,854 - -
Accumulated depreciation on disposals - - 100 - 1 64 79 82 4 330
Transferred to right-of -use-assets - - - - - - - 162 - 162
Impairment loss - - - - - (1) - - (42) (43)
Depreciation charge - (291) (7,292) (1,805) (7,075) (2,058) (63) (531) - (19,115)
As at 31 December 2020 - (2,772) (115,008) (24,994) (74,535) (16,501) (2,543) (8,215) (38) (244,606)
Carrying value as at 31 December 2020 367 3,415 42,790 5,901 39,981 5,698 67 3,994 34,995 137,208

14.1 Group

Freehold Freehold Ducts, cables Telephone Transmission IT Motor Other Capital Total
land buildings and other exchanges equipment Systems vehicles fixed work-in-
outside plant assets progress

Cost
As at 1 January 2021 367 6,187 157,798 30,895 114,516 22,199 2,610 12,209 35,033 381,814
Additions at cost - - 90 - 1,407 1,323 93 672 24,963 28,548
Transfers from capital work-in-progress - 334 18,736 77 8,545 1,421 - 189 (29,302) -
Disposals at cost - - (154) - (1,543) (540) (155) (55) - (2,447)
Adjustmens at cost - (24) (342) - - (148) - - - (514)
Assets classified as held for sale (Note 22) (1,087) - - - - - (260) - (1,347)
As at 31 December 2021 367 5,410 176,128 30,972 122,925 24,255 2,548 12,755 30,694 406,054

Accumulated depreciation
As at 1 January 2021 - (2,772) (115,008) (24,994) (74,535) (16,501) (2,543) (8,215) (38) (244,606)
Accumulated depreciation on disposals - - 154 - 1,602 538 145 51 - 2,490
Impairment loss - - (3) (12) (1) - - - 41 25
Depreciation charge - 298 8.933 (1,124) 8,268 2,536 (57) 960 - (22,176)
Accumuladed depreciation for assets
classified as held for sale (Note 22) - 38 - - - - - 112 - 150
As at 31 December 2021 - (3,032) (123,790) (26,130) (81,202) (18,499) (2,455) (9,012) 3 (264,117)
Carrying value as at 31 December 2021 367 2,378 52,338 4,842 41,723 5,756 93 3,743 30,697 141,937
   Annual Report 2021  | 163

14.1 Company

Freehold Freehold Ducts, cables Telephone Transmission IT Motor Other Capital Total
land buildings and other exchanges equipment Systems vehicles fixed work-in-
outside plant assets progress

Cost
As at 1 January 2020 367 4,575 143,783 29,393 40,369 17,753 2,493 9,516 34,667 282,916
Additions at cost - - 186 1 52 531 34 48 9,860 10,712
Transfers from capital work-in-progress - 516 13,944 1,501 401 867 - 238 (17,467) -
Disposals at cost - - (115) - - (33) (74) (1) - (223)
Cost of assets impaired - - - - (643) - - - - (643)
As at 31 December 2020 367 5,091 157,798 30,895 40,179 19,118 2,453 9,801 27,060 292,762

Accumulated depreciation
As at 1 January 2020 - (2,482) (107,816) (23,189) (24,706) (12,486) (2,413) (6,024) - (179,116)
Accumulated depreciation on disposals - - 100 - - 31 63 - - 194
Impairment loss - - - - - (1) - - - (1)
Depreciation charge - (253) (7,292) (1,805) (2,178) (1,680) (55) (307) - (13,570)
As at 31 December 2020 - (2,735) (115,008) (24,994) (26,884) (14,136) (2,405) (6,331) - (192,493)
Carrying value as at 31 December 2020 367 2,356 42,790 5,901 13,295 4,982 48 3,470 27,060 100,269

14.1 Company

Freehold Freehold Ducts, cables Telephone Transmission IT Motor Other Capital Total
land buildings and other exchanges equipment Systems vehicles fixed work-in-
outside plant assets progress

Cost
As at 1 January 2021 367 5,091 157,798 30,895 40,179 19,118 2,453 9,801 27,060 292,762
Additions at cost - - 90 - 131 399 21 584 21,153 22,378
Transfers from capital work-in-progress - 334 18,736 77 1,237 1,421 - 185 (21,990) -
Disposals at cost - - (154) - - (139) (105) (7) - (405)
Adjustments at cost - (24) (342) - - (148) - - - (514)
Cost of assets impaired - - - - - - - - - -
As at 31 December 2021 367 5,401 176,128 30,972 41,547 20,651 2,369 10,563 26,223 314,221

Accumulated depreciation
As at 1 January 2021 - (2,735) (115,008) (24,994) (26,884) (14,136) (2,405) (6,331) - (192,493)
Accumulated depreciation on disposals - - 154 - - 139 105 7 - 405
Impairment loss - - (3) (12) (1) - - - - (16)
Depreciation charge - (289) (8,933) (1,124) (3,005) (2,082) (39) (782) - (16,263)
As at 31 December 2021 - (3,033) (123,790) (26,130) (29,890) (16,079) (2,339) (7,106) - (208,367)
Carrying value as at 31 December 2021 367 2,368 52,338 4,842 11,657 4,572 30 3,457 26,223 105,854
164  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

14 PROPERTY, PLANT AND EQUIPMENT CONTD.

(a) On 1 September 1991, the Department of Telecommunications (DoT) transferred its entire telecommunications business
and related assets and liabilities to SLT. A valuation of the assets and liabilities transferred to SLT was performed by
the Government of Sri Lanka. The net amount of those assets and liabilities represents SLT’s Contributed Capital on
incorporation and the value of property, plant and equipment as determined by the Government of Sri Lanka.Valuers were
used to determine the opening cost of fixed assets on 1 September 1991 in the first statutory accounts of SLT. Further, SLT
was converted into a public limited company, Sri Lanka Telecom Limited (SLTL), on 25 September 1996 and on that date, all
business and the related assets and liabilities of SLT were transferred to SLTL as part of the privatisation process.

(b) The cost of fully depreciated assets still in use in the company as at 31 December 2021 was Rs 143,682 Mn (2020 - Rs
133,464 Mn). The cost of fully depreciated assets still in use in the Group as at 31 December 2021 was Rs 163,487 Mn
(2020 - Rs 157,927 Mn).

(c) No assets have been mortgaged or pledged as security for borrowings of the Group.

(d) The number of buildings as at 31 December 2021, is 1,200 (2020 -1,186)

(e) All the motor vehicles have been insured. An insurance reserve has been created together with a sinking fund investment
to meet any potential losses with regard to uninsured property, plant and equipment. At the reporting date , the insurance
reserve amounted to Rs 1,105 Mn (2020 - Rs 1,044 Mn) (Note 29).

(f) Impairment of assets mainly consists of the carrying value of CDMA assets Rs. 16 Mn (2020 - Rs. 1 Mn on IT system)

(g) The capital work-in -progress related to network equipment of the Group is Rs 19,258 Mn (2020 -Rs 21,077 Mn) and the
Company is Rs 14,162 Mn (2020 -Rs 13,112 Mn)

(h) The company capitalized borrowing costs amounting to Rs. 1,766 Mn during the year (2020 - Rs 3,711 Mn). Borrowing cost
capitalized from a Group perspective amounted to Rs. 1,766 Mn (2020 - Rs. 3,711 Mn)

   Annual Report 2021  | 165

(i) Property, plant and equipment include submarine cables.The total cost and accumulated depreciation of all cables under
this category as follows;

Group/Company
2021 2020

Cost 12,380 11,988

Accumulated depreciation at 1 January (6,376) (6,063)
Depreciation charge for the year (354) (313)
Carrying amount 5,650 5,612

14 (a) RIGHT OF USE ASSETS AND LEASE LIABILITIES

The Group has lease contracts for various items of land and buildings, E1 links and towers used in it’s operations. Leases
of land and Buildings generally have lease terms between 1 to 2 years while Leases of towers generally have lease terms
between 2 to 3 years . The Group’s obligations under it’s leases are secured by the lessor’s title to the leases assets. Generally
the Group is restricted from assigning and sub leasing the leased assets.

The Group also has certain leases of towers or tower spaces with low value.

i) Set out below are the carrying amounts of right-of-use-assets recognised and the movements during the year.

Group Land and Towers Others Total

Buildings

As at 01 January 2021 5,841 2,873 36 8,750

Classification change (197) 197 - -
Additions 408 868 3 1,279
Disposals/Adjustments (78) (40) - (118)
Depreciation expense (1,029) (1,067) - (2,096)
As at 31 December 2021 4,945 2,831 39 7,815

Company Land and Towers Total

Buildings

As at 01 January 2021 55 23 78
Additions - 1366 1,366
Depreciation expense (31) (608) (639)
As at 31 December 2021 24 781 805
166  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

14 (a) RIGHT OF USE ASSETS AND LEASE LIABILITIES CONTD.

ii) Set out below are the carrying amounts of Lease Liabilities recognised and the movements during the year.

Group
2021 2020

As at 01 January 9,658 10,749

Additions 1,380 1,152
Disposals/Adjustments (80) (475)
Accretion of interest 1,029 1,184
Payments (2,791) (2,952)
As at 31 December 9,196 9,658

Non-current 6,823 7,377

Current 2,373 2,281
9,196 9,658

Company
2021 2020

As at 01 January 85 544
Additions 1,366 129
Accretion of interest 67 40
Payments (689) (628)
As at 31 December 829 85

Non-current 613 27
Current 216 58
829 85

iii) Following are the amounts recognised in Profit or Loss;

Group
2021 2020

Depreciation expense of right of use asset 2,096 2,217

Interest expense on lease liabilities 1,030 1,184
Leases of low value 35 55
Total amount recognised in profit or loss 3,161 3,456

Company
2021 2020

Depreciation expense of right of use asset 639 565

Interest expense on lease liabilities 67 40
Leases of low value 35 55
Total amount recognised in profit or loss 741 660
   Annual Report 2021  | 167

Sensitivity analysis ROU Asset Lease

liability

Sensitivity to discount rate/Incremental borrowing rate - Group

Increase by 1% (26) (23)
Decrease by 1% 26 23

Sensitivity to discount rate/Incremental borrowing rate - Company

Increase by 1% (17) (14)
Decrease by 1% 17 14

15 INTANGIBLE ASSETS
Group

Goodwill Licences Software Others Total

Cost
As at 01 January 2020 804 10,136 4,219 558 15,717
- Acquisitions - 776 1,655 46 2,477
As at 31 December 2020 804 10,912 5,874 604 18,194

As at 01 January 2021 804 10,912 5,874 604 18,194

- Acquisitions - 1,047 1,066 24 2,137
- Assets classified as held for sale (Note 22) - - (33) - (33)
As at 31 December 2021 804 11,959 6,907 628 20,298

Accumulated amortisation
As at 01 January 2020 253 4,555 3,146 347 8,301
- Amortisation - 966 782 30 1,778
As at 31 December 2020 253 5,521 3,928 377 10,079

As at 01 January 2021 253 5,521 3,928 377 10,079

- Amortisation 1,270 1,102 35 2,407
- Accumulated amortization of assets classified as held
for sale (Note 22) - - (15) - (15)
As at 31 December 2021 253 6,791 5,015 412 12,471

Carrying amounts
December 2021 551 5,168 1,892 216 7,827
December 2020 551 5,391 1,946 227 8,115

The goodwill in the Group consists of goodwill arising on acquisition of Mobitel (Private) Limited and eChannelling PLC.
168  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

15 INTANGIBLE ASSETS CONTD.

Goodwill is allocated to the Group’s Cash-Generating Units (CGUs). A summary of the goodwill allocation is presented below:

2021 2020

Mobitel (Private) Limited 141 141

eChannelling PLC 410 410
Total 551 551

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre - tax cash flow
projections, based on financial budgets approved by management covering a five-year period.Cash flows beyond the five-
year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term
average growth rate for the business in which the CGU operates.

The key assumptions used for value-in-use calculations are as follows:

2021 2020
% %

Growth rate 8.7 7.4

Discount rate 16 13

Management determined budgeted gross margin based on past performance and its expectations of market development.
The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used
are pre-tax and reflect specific risks relating to the relevant operating segments. No impairment charge has been recognized
for the year ended 31 December 2021 for the above CGU (2020 - Rs Nil).

Company

Licences Software Others Total

Cost
As at 01 January 2020 1,817 2,402 330 4,549
- Acquisitions 643 1,650 - 2,293
As at 31 December 2020 2,460 4,052 330 6,842

As at 01 January 2021 2,460 4,052 330 6,842

- Acquisitions 655 729 - 1,384
As at 31 December 2021 3,115 4,781 330 8,226

Accumulated amortisation
As at 01 January 2020 1,084 1,984 330 3,398
- Amortisation 172 616 - 788
As at 31 December 2020 1,256 2,600 330 4,186

As at 01 January 2021 1,256 2,600 330 4,186

- Amortisation 351 857 - 1,208
As at 31 December 2021 1,607 3,457 330 5,394

Carrying amounts
December 2021 1,508 1,324 - 2,832
December 2020 1,204 1,452 - 2,656
   Annual Report 2021  | 169

16 INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

16.1 Investments in subsidiaries

2021 2020

As at 01 January 14,821 14,821

Assets classified as held for sale (390) -
As at 31 December 14,431 14,821

Details of the subsidiary companies in which the Company had control as at 31 December are set out below:

Name of company 2021 2020

Investment Company Investment Company
Rs. Mn holding % Rs. Mn holding %

Mobitel (Private) Limited [See Note (a) below] 13,980 100 13,980 100
SLT VisionCom (Private) Limited [See Note (b) below] 100 100 100 100
SLT Digital Info Services (Private) Limited [See Note (c) below] 50 100 50 100
Sri Lanka Telecom (Services) Limited [See Note (d) below] 300 99.99 300 99.99
SLT Human Capital Solutions (Private) Limited [See Note (e) below] 1 100 1 100
Sky Network (Private) Limited [See Note (f) below] - 99.94 - 99.94
SLT Property Management (Private) Limited [See Note (g) below] - 100 - 100
SLT Campus (Private) Limited [See Note (h) below] 390 100 390 100
14,821 14,821
Investment classified as held for sale -SLT Campus (Private) Limited (390) -
(Note 22)
14,431 14,821

Subsubsidiaries
eChannelling PLC [ See Note (i) below] 642 642 87.59
Talentfort (Private) Limited [See Note (j) below] - - 100.00

The Directors believe that the fair value of each of the companies listed above do not differ significantly from their book values.
(a) The Company owns 1,320,013,240 shares representing 100% of the entire ordinary share capital of Mobitel (Private)
Limited.
(b) This investment in subsidiary company consists of 10,000,000 shares representing the entire stated capital of SLT
VisionCom (Private) Limited.
(c) This investment in subsidiary company consists of 5,000,000 shares representing the entire stated capital of SLT Digital Info
Services (Private) Limited.
(d) This investment in subsidiary company consists of 30,000,000 shares representing 99.99 % of stated capital of Sri Lanka
Telecom (Services) Limited.
170  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

16 INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES CONTD.

16.1 Investments in subsidiaries Contd.
(e) This investment in subsidiary company consists of 50,000 shares representing the entire stated capital of SLT Human Capital
Solutions (Private) Limited
(f) This investment in subsidiary company consists of 42,071,251 shares representing a 99.94% holding of the issued stated
capital and 6,000,000 12% cumulative and redeemable preference shares of Sky Network (Private) Limited. The investment
is fully impaired.
(g) This investment in subsidiary company consists of 1,500,001 shares representing the entire stated capital of SLT Property
Management (Private) Limited.This investment is fully impaired.
(h) This investment in sub subsidiary company consists of 39,000,001 shares representing the entire stated capital of SLT
Campus (Private) Limited.This investment classified as Non current assets held for sale as per the ‘SLFRS 5 - Non current
assets held for sale and discontionued operations’ as disclosed in note 22.
(i) This invesment in sub subsidiary company consists of 106,974,618 shares representing the 87.59% holding of the issued
Share Capital of eChannelling PLC.
(j) This investment in sub subsidiary company consists of 1 share representing the 100% holding of the issued share capital of
Talentfort (Private) Limited.

16.2 Investments in associates

Galle Submarine Cable Depot (Private) Limited (GSCDPL) engages in the business of providing services related to storage
of spare submersible plant for the repair and maintenance of submarine telecommunication cable systems under South East
Asia Indian Ocean Cable Maintenance Agreement. The Company’s 40% interest in GSCDPL is accounted for using the equity
method in the Company’s financial statements.

Group/Company
2021 2020

As at 1 January 128 54
Share of profit from associate company 86 74
As at 31 December 214 128

17 OTHER INVESTMENTS
Current Investments

Group Company
2021 2020 2021 2020

Fixed deposits/Repo 8,310 3,666 8,288 3,646

8,310 3,666 8,288 3,646

Fixed deposits in foreign currency with a carrying value of Rs. 7,056 Mn (2020 - Rs. 2,625 Mn) & Fixed deposits with a carrying
value of Rs.1,131 Mn (2020 - Rs. 1,018 Mn) are restricted at bank. Fixed Deposit with carrying value of Rs. 3 Mn (2020 - Rs.
3 Mn) is in local currency. Repo with a carrying value of Rs. 98 Mn (2020 - Nil) is in local currency.

Group Company
2021 2020 2021 2020

Fixed deposits - Restricted at bank 5.82 6.81 5.82 6.81

Fixed Deposits - LKR 5.80 - 6.25 12.00 5.80 - 6.25 5.80 - 9.83
Fixed Deposits - USD 5.28 4.51 5.28 5.21
Repurchase agreement-Repo 5.93 - 5.92 -

The Group’s exposure to credit and market risk and fair value information related to other investment are disclosed in Note 4.
   Annual Report 2021  | 171

18 OTHER RECEIVABLES
Group Company
2021 2020 2021 2020

Employee loans non-current 2,672 2,748 2,657 2,732

Employee loans current 703 706 701 704
3,375 3,454 3,358 3,436

Employee loans 3,194 3,276 3,177 3,258

Prepaid staff cost 181 178 181 178
3,375 3,454 3,358 3,436

Preapid staff cost 1 January 178 156 178 156

Additions 61 434 61 434
Amortization (58) (412) (58) (412)
Preapid staff cost at 31 December 181 178 181 178

The Group provides loans to employees at concessionary rates. These employee loans are fair valued at initial recognition
using level 2 inputs.The fair value of the employee loans are determined by discounting expected future cash flows using
market related rates for similar loans.

The difference between the cost and fair value of employee loans is recognised as prepaid staff cost and the amount is
recognised in the statement of profit or loss for 2021 was Rs. 58 Mn (2020 - Rs. 412 Mn). This amount is recognised in the
statement of profit or loss under salaries, wages, allowances and other benefits.

19 INVENTORIES
Group Company
2021 2020 2021 2020

Customer premises equipment 1,649 2,754 1,649 2,215

Cable and networks 519 596 400 867
Other consumables 1,286 893 710 372
3,454 4,243 2,759 3,454
Provision for change in carrying value of inventories (765) (876) (720) (820)
As at 31 December 2,689 3,367 2,039 2,634

(a) Inventories include telecommunication hardware, consumables and office stationery. Inventory is stated net of provisions for
slow-moving and obsolete items.
172  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

20 TRADE AND OTHER RECEIVABLES

Group Company
2021 2020 2021 2020

Domestic trade receivables 23,223 22,375 17,253 15,466

Foreign trade receivables 2,580 2,991 2,042 2,182
25,803 25,366 19,295 17,648
Less: Provision for bad and doubtful receivables (9,763) (8,523) (6,307) (5,363)
Trade receivables - net 16,040 16,843 12,988 12,285
Amount due from subsidiaries [Note 34.1 (h)] - - 2,062 1,587
Amount due from related companies 149 158 149 158
Advances and prepayments [See Note (a) below] 8,255 6,975 2,588 2,696
Employee loans (Note 18) 703 706 701 704
Other receivables [See Note (b) below] 1,762 2,388 194 502
Amounts due within one year 26,909 27,070 18,682 17,932

(a) Advances and prepayments of the Company mainly consist of advances on foreign and local suppliers advances Rs.
1,530 Mn (2020 - Rs. 1,871 Mn), payments for software maintenance of Rs. 284 Mn (2020 - Rs. 282 Mn. Advances and
prepayments of the Group mainly consist of advances on foreign & local suppliers advances Rs. 5,196 Mn. (2020 - Rs
10,029 Mn.) , payments for software maintenance of Rs. 861 Mn (2020 - Rs. 342 Mn) Prepaid TRC Frequency Rs, 610 Mn
(2020 - Rs. 740 Mn) and free phone offer Rs. 295 Mn (2020 - Rs. 321 Mn.)

(b) Other receivables of the Company consist of refundable deposits of Rs. 138 Mn (2020 - Rs. 138 Mn). Other receivables of
the Group mainly consist of refundable deposits of Rs. 434 Mn (2020 - Rs. 144 Mn) and site rentals receivables from other
operators Rs. 957 Mn (2020 - Rs. 725 Mn)

21 CASH AND CASH EQUIVALENTS

Group Company
2021 2020 2021 2020

Cash at bank and in hand 1,811 1,937 1,615 1,041

Fixed deposits 10,325 6,930 - -
Repurchase agreements - Repo 5,836 2,999 - -
17,972 11,866 1,615 1,041

21.a For cash flow purpose:

Cash and cash equivalents

Group Company
2021 2020 2021 2020

Cash and cash equivalents 17,972 11,866 1,615 1,041

Bank overdrafts (1,742) (1,885) (1,261) (1,453)
16,230 9,981 354 (412)
   Annual Report 2021  | 173

22 DIVESTMENT OF SLT CAMPUS (PVT) LTD

On 14 December 2021, the Group publicly announced the decision of its Board of Directors to sell SLT Campus (Pvt) Ltd, a
100% owned subsidiary. On 14 December 2021, the shareholders of the Company approved the plan to sell. On 25 January
2022, Sri Lanka Telecom PLC transferred Twenty-One Million and One (21,000,001) Ordinary Shares and Eighteen Million
(18,000,000) Redeemable Cumulative Preference Shares representing one hundred per centum (100%) of the total issued
shares of the SLT Campus (Private) Limited worth Rs. 390,000,010 to Tempest Two (Private) Limited for a total purchase
consideration of Rs. 410,000,000.

As at 31 December 2021, SLT Campus (Pvt) Ltd was classified as a disposal group held for sale. The business of SLT Campus
(Pvt) Ltd represented a part of the Group’s other operating segment. The major classes of assets and liabilities of SLT Campus
(Pvt) Ltd classified as held for sale as at 31 December 2021 are presented below:

Assets classified as held for sale

Group Company
2021 2020 2021 2020

Property, plant and equipment 1,197 - - -

Intangible assets 18 - - -
Investments in subsidiaries - - 390 -
Right of use asset 10 - - -
Deferred tax assets 25 - - -
Inventories 1 - - -
Trade and other receivables 272 - - -
Cash and cash equivalents 22 - - -
1,545 - 390 -

Liabilities directly associated with assets held for sale

Group Company
2021 2020 2021 2020

Borrowings 1,035 - - -
Lease liability 14 - - -
Deferred tax liabilities 24 - - -
Employee benefits 18 - - -
Trade and other payables 290 - - -
Current tax liabilities 29 - - -
1,410 - - -

The group has not recognised the divestment of SLT Campus (Pvt) Ltd. as a discontinued operation since it is not a major line
of business or geographical area of operations as per SLFRS 5 - Non current assets held for sale and discontinued operations.
174  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

23 BORROWINGS
Group Company
2021 2020 2021 2020

Current (due within one year)

Bank overdrafts 1,742 1,885 1,261 1,453
Bank borrowings and others [See Note 23 (e) below] 7,006 7,628 5,991 5,659
Finance lease liabilities 4 5 4 5
8,752 9,518 7,256 7,117

Non-current (due after one year)

Bank borrowings and others [See Note 23 (e) below] 37,820 45,519 35,790 40,855
Finance lease liabilities 17 20 17 20
37,837 45,539 35,807 40,875
Total borrowings 46,589 55,057 43,063 47,992

(a) The interest rate exposure of the borrowings of the Group and the Company were as follows:

Group Company
2021 2020 2021 2020

At fixed rates 9,208 10,368 9,208 10,045

At floating rates 37,381 45,006 33,855 37,947
46,589 55,057 43,063 47,992

The currency exposure of the borrowings of the Group and the Company as at the reportingt date were as follows:

Group Company
2021 2020 2021 2020

Foreign currency 3,211 5,993 - -

Local currency 43,378 49,064 43,063 47,992
46,589 55,057 43,063 47,992

(b) Effective interest rates of the Group and the Company are as follows:

Group Company
2021 2020 2021 2020
% % % %

Average effective interest rates:

  - bank overdrafts 5.53 - 12.00 7.54 - 12.00 5.53 7.54
  - bank borrowings (USD loans) LIBOR+1.95% LIBOR+1.9% - 4.00
  - bank borrowings (LKR loans) 6.98 10.16 6.98 10.16
  - debenture 12.75 12.75 12.75 12.75
  - lease liabilities 11.00-13.00 10.00-12.50 12.50 12.50
   Annual Report 2021  | 175

(c) Maturity analysis of the Group and the Company is as follows:

Group Company
2021 2020 2021 2020

Maturity of non-current borrowings :

(excluding finance lease liabilities)
  - between 1 and 2 years 8,246 10,670 6,190 6,820
  - between 3 and 5 years 17,174 22,124 17,200 21,310
  - over 5 years 12,400 12,725 12,400 12,725
37,820 45,519 35,790 40,855

(d) Movement of the borrowings is given below - Group

Borrowings Bank Lease Total

overdraft liabilities

As at 1 Jan 2021 53,464 1,885 25 55,374

  - Additions during the year 5,779 29,735 - 35,514
  - Net repayment during the year (13,530) (29,730) (4) (43,264)
  - Liabilities directly associated with assets held for sale (887) (148) - (1,035)
44,826 1,742 21 46,589

Movement of the borrowings is given below - Company

Borrowings Bank Lease Total

overdraft liabilities

As at 1 Jan 2021 46,514 1,453 25 47,992

  - Additions during the year 5,750 29,412 - 35,162
  - Net repayment during the year (10,483) (29,604) (4) (40,091)
41,781 1,261 21 43,063

(e) During the year company, drew down Rs. 5,750 Mn from the term loan and short term loans in Rupees.
(f) The loan covenants include submission of audited financial statements to the lenders within a specified period from the
financial year end,maintainance of covenant ratios and to maintain adequate accounting records in accordance with
Sri Lanka Accounting Standards.
(g) The Directors believe that the Company and the Group will have sufficient funds available to meet its present loan
commitments.
(h) Lease liabilities of the Company and the Group are effectively secured by the lessor against the rights to the title of the
asset.
(i) Bank borrowings and supplier credits of Mobitel (Private) Limited. a subsidiary of the Company, are secured, interalia, by
corporate guarantees given by the Company.
(j) Facilities amounting to Rs. 960 Mn (2020 - Rs. 960 Mn) for SLT Campus (Pvt) Ltd., to working capital requirement, hostel
and academic building project.
Above facilities were settled in full by SLT Campus and relevant corporate guatantees were cancelled in January 2022.
176  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

24 DEFERRED TAX LIABILITIES AND ASSETS

Recognized deferred tax (assets) and liabilities
Deferred tax (assets) and liabilities are calculated on all taxable and deductible temporary differences arising from differences
between accounting bases and tax bases of assets and liabilities. Deferred tax is provided under the liability method using a
principal tax rate of 24% (for the year 2020 - 28%).

The movement in the deferred tax account is as follows:

Group Company
2021 2020 2021 2020

As at 1 January 7,172 7,276 6,936 7,485

Other adjustments (5) 19 - -
Release to statementof comprehensive income (Note 11) (2,289) (9) (2,576) (430)
Release to statement of other comprehensive income (Note 11) 150 (114) 116 (119)
Deffered tax related to divestments 24 - - -
Claim of deffered tax asset 394 - 394 -
As at 31 December 5,446 7,172 4,870 6,936

The amounts shown in the statement of financial position represents the following:

Group Company
2021 2020 2021 2020

Deferred tax liabilities - Non current 5,627 7,346 4,870 6,936

Deferred tax liabilities - Current 11 11 - -
Deferred tax assets (181) (185) - -
5,457 7,172 4,870 6,936

The taxable and deductible temporary differences mainly arise from property, plant and equipment, deferred income, provision
for defined benefit obligations and other provisions.

Deferred tax assets and liabilities of the Group are attributable to the following:

Group Assets Liabilities Net

2021 2020 2021 2020 2021 2020

Property, plant and equipment - - 11,454 11,950 11,454 11,950

Defined benefit obligations (613) (746) - - (613) (746)
Provisions (2,488) (2,316) - - (2,488) (2,316)
Deferred income (584) (595) - - (584) (595)
Tax losses (613) (556) - - (613) (556)
Tax credit (482) (615) - - (482) (615)
Rate change adjustment (1,273) - - - (1,273) -
Other adjustments - - 56 50 56 50
Tax (assets) liabilities before set off (6,053) (4,828) 11,510 12,000 5,457 7,172

Set off of tax 6,053 4,828 (6,053) (4,828) - -

Net tax (assets) liabilities - - 5,457 7,172 5,457 7,172
   Annual Report 2021  | 177

Movement in deferred tax balances during the year-Group

Balance Recognised Recognised Balance Recognized Recognized Deffered tax Balance 31

1 January comprehensive in other 31 in profit or in other related to December
2020 income comprehensive December loss comprehensive divestments 2021
Income 2020 income

Property, plant and equipment 12,483 (533) - 11,950 (495) - - 11,454

Defined benefit obligations (687) 55 (114) (746) (17) 150 - (613)
Provisions (2,322) 6 - (2,316) (172) - - (2,488)
Deferred income (668) 73 - (595) 11 - - (584)
Tax losses (906) 1,005 - 99 (3) - - 96
Adjustment to tax losses (655) - - (655) (55) - - (710)
Tax credit - (615) (615) (262) - - (877)
Tax credit claimed - - - - - - - 394
Deffered tax related to - - - - (24) - 24 -
divestments
Rate change adjsutment - - - - (1,273) - - (1,273)
Other adjustments 31 - - 50 - - - 56
7,276 (9) (114) 7,172 (2,290) 150 24 5,457

Deferred tax assets and liabilities of the Company are attributable to the following:

Company Assets Liabilities Net

2021 2020 2021 2020 2021 2020

Property, plant and equipment - - 10,612 11,562 10,612 11,562

Defined benefit obligations (609) (705) - - (609) (705)
Provisions (2,419) (2,217) - - (2,419) (2,217)
Deferred income (584) (595) - - (584) (595)
Tax loss (494) (494) - - (494) 161
Tax credit (483) (615) - - (483) (615)
Rate change adjustment (1,153) - - - (1,153) (655)
Tax (assets) liabilities before set off (5,742) (4,626) 10,612 11,562 4,870 6,936

Set off of tax 5,742 4,626 (5,742) (4,626) - -

Net tax (assets) liabilities - - 4,870 6,936 4,870 6,936
178  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

24 DEFERRED TAX LIABILITIES AND ASSETS CONTD.

Movement in deferred tax balances during the year - Company

Balance Recognized in Recognized Recognised Balance 31 Recognized Recognized Balance 31

1 January comprehensive in other directly in December in profit or in other December
2020 income comprehensive equity 2020 loss comprehensive 2021
Income income

Property, plant and equipment 12,483 (921) - - 11,562 (950) - 10,612

Defined benefit obligations (596) 10 (119) - (705) (20) 116 (609)
Provisions (2,232) 15 - - (2,217) (202) - (2,419)
Deferred income (668) 73 - - (595) 11 - (584)
Tax losses (847) 1,008 - - 161 - - 161
Adjustment to tax loss (655) - - - (655) - - (655)
Tax credit - (615) - - (615) (262) - (877)
Claimed from tax credit - - - - - - - 394
Rate change adjustment - - - - - (1,153) - (1,153)
7,485 186 (119) 6,936 (2,576) 116 4,870

Tax credits
The Company has recognised tax credits for the year ended 31 December 2021 Rs. 262 Mn (2020 - Rs. 615 Mn).

25 DEFERRED INCOME
> The connection fees relating to Public Switch Telephone Network (PSTN) are deferred over a period of 15 years. Revenue is
recognized on an annual basis irrespective of the date of connection.

> Revenue from the sale of prepaid credit and Internet is deferred until such time as the customer uses the call time,
downloadable quota or the credit expires.

> Backhauling revenue which is leasing of SEA-ME-WE 3 cable capacity is recognized on a straight line basis over the period
of the contracts. Amounts received in advance for any services are recorded as deferred revenue.

> IRU revenue relating to leasing of SEA-ME-WE 4 cable capacity is recognized on a straight line basis over the period of the
contracts. Amounts received in advance for any services are recorded as deferred revenue. In the event that a customer
terminates an IRU prior to the expiry of the contract and releases the Company from the obligation to provide future
services, the remaining unamortized deferred revenue is recognized in the period the contract is terminated.

Group Company
2021 2020 2021 2020

At the end of the year

Representing deferred income - Non-current 1,666 1,832 1,666 1,832
Representing deferred income - Current 3,924 2,812 383 240
5,590 4,644 2,049 2,072
   Annual Report 2021  | 179

25 (a) Contract assets

The contract asset movements are provided below:

Group Company

Balance as at 1 January 2021 1,338 252

Additions 1,782 205
Amortisations (1,264) (60)
Balance as at 31 December 2021 1,856 397

Group Company
2021 2020 2021 2020

At the end of the year

Representing contract assets - Non-current 878 560 233 155
Representing contract assets - Current 978 778 164 97
1,856 1,338 397 252

25 (b) Contract liabilities

As per SLFRS 15 revenue is recognized when the individual performance obligations specified in a contract are satisfied. The
total consideration received or receivable has been allocated between separate performance obligations based on the relative
stand-alone selling price.

The figure shows the contract liabilities due to unsatisfied performance obligations as at 31 December 2021.

Group Company

Opening adjustment 1 January 2021 1,402 1,144

Additions 1,245 943
Amortisations (605) (332)
Balance as at 31 December 2021 2,042 1,755

Group Company
2021 2020 2021 2020

At the end of the year

Representing contract liabilities - Non-current 1,071 660 1,071 660
Representing contract liabilities - Current 971 742 684 484
2,042 1,402 1,755 1144
180  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

26 TRADE AND OTHER PAYABLES

Group Company
2021 2020 2021 2020

Amounts due within one year

Domestic trade payables 5,941 5,846 164 180
Foreign trade payables 3,438 1,979 1,303 1,157
Amount due to subsidiaries [Note 34.1 (h)] - - 4,087 2,798
Amount due to related companies [Note 34.2 (b)] 121 121 121 121
Capital expenditure payables [See Note (a) below] 11,985 7,999 7,040 3,242
Social security and other taxes [See Note (b) below] 574 1,039 548 601
Interest payable 20 71 - -
Other payables [See Note (c) below] 13,526 13,550 9,542 9,032
35,605 30,605 22,805 17,131

Amounts due after one year

International direct dialling and VoIP deposits 253 273 253 273
Advance on RDA 674 769 674 769
Unclaimed dividend 244 244 244 244
Domestic trade payables 750 893 - -
Capital expenditure payables 4,644 2,430 4,112 1,907
6,565 4,609 5,283 3,193

(a) Capital expenditure payables of the Company mainly consist of contractors’ payables and retention of Rs. 6,633 Mn
(2020 - Rs. 3,094 Mn) and advances on network restoration after road works of Rs. 407 Mn (2020 - Rs. 148 Mn) Capital
expenditure payables of the Group mainly consist of contractors’ payable and retention of Rs. 11,578 Mn (2020 - Rs. 7,883
Mn) and advances on network restoration after road works of Rs. 407 Mn (2020 - Rs. 148 Mn).

(b) Social security and other taxes of the Company mainly consist of Telecommunication Levy (TL) of Rs. 178 Mn (2020 - Rs.
178 Mn), Cess Rs. 83 Mn (2020 - Rs. 78 Mn ), VAT Payable of Rs. 30 Mn (2020 - Rs. 114 Mn ), EPF payable of Rs. 152 Mn
(2020 - Rs. 131 Mn). Social security and other taxes of the Group mainly consist of Telecommunication Levy (TL) of Rs.
312 Mn (2020- Rs. 315 Mn), Cess of Rs. 203 Mn (2020 - Rs. 195 Mn). VAT payable of Rs. 30 Mn (2020- Rs. 114 Mn), EPF
payable of Rs. 139 Mn (2020 - Rs. 139 Mn)

(c) Other payables of the Company mainly consist of dividend payable to the Government of Sri Lanka of Rs. 244 Mn (2020
- Rs. 244 Mn), payable for unpaid supplies of Rs. 4,930 Mn (2020 - Rs. 5,459 Mn), International Telecommunication
Operators’ Levy payable of Rs. 79 Mn (2020 - Rs. 90 Mn) and accrued expenses and other payables of Rs. 414 Mn
(2020 - Rs. 414 Mn). Other payables of the Group mainly consist of dividend payable to the Government of Sri Lanka
of Rs. 244 Mn (2020 - Rs. 244 Mn), payable for unpaid supplies of Rs. 4,930 Mn (2020 - Rs. 5,459 Mn), International
Telecommunication Operators’ Levy payable of Rs.198 Mn (2020 - Rs. 220 Mn), and accrued expenses and other payables
of Rs. 2,335Mn (2020 - Rs. 1,524 Mn).
   Annual Report 2021  | 181

27 VENDOR FINANCING
Group Company
2021 2020 2021 2020

Non-current (due after one year) 5,987 922 5,961 762

Current (due within one year) 311 157 171 -
6,298 1,079 6,132 762

(a) The interest rate exposure of the vendor financing of the Group and the Company were as follows:

Group Company
2021 2020 2021 2020

At floating rates 6,298 1,079 6,132 762

6,298 1,079 6,132 762

The currency exposure of the borrowings of the Group and the Company as at the reportingt date were as follows:

Group Company
2021 2020 2021 2020

Local currency 6,298 1,079 6,132 762

6,298 1,079 6,132 762

(b) Effective interest rates of the Group and the Company are as follows:

Group Company
2021 2020 2021 2020

Average effective interest rates:

SLT AWPLR + 0.75 p.a. AWPLR + 0.75 p.a. AWPLR + 0.75 p.a. AWPLR + 0.75 p.a.
Mobitel LIBOR+ 4% p.a. & LIBOR+ 4% p.a. & - -
EURIBOR+ 2% p.a. EURIBOR+ 2% p.a.

(c) Maturity analysis of the Group and the Company is as follows:

Group Company
2021 2020 2021 2020

Maturity of non-current Vendor financing

between 1 and 2 years 1,506 134 1,480 -
between 3 and 5 years 1,975 788 1,975 762
over 5 years 2,506 - 2,506 -
5,987 922 5,961 762
182  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

28 EMPLOYEE BENEFITS
Group Company
2021 2020 2021 2020
Total employee benefit liability as at 1 January 5,204 4,697 4,358 3,806

Movement in present value of employee benefit liabilities

Current service cost 273 271 199 204
Interest cost 416 453 349 390
Actuarial (gain) / loss (397) 473 (169) 426
Benefit paid during the year (538) (690) (465) (468)
Gratuity adjustment 5 - - -
Liabilities directly associated with assets held for sale (6) - - -
As at 31 December 4,957 5,204 4,272 4,358

Expenses recognised in the income statement

Current service cost 273 271 199 204

Interest cost 416 453 349 390
689 724 548 594

Recognised in other comprehensive income

Actuarial (gain) / loss (397) 473 (169) 426
(397) 473 (169) 426

The principal actuarial assumptions used were as follows:

Group Company
2021 2020 2021 2020
Discount rate (long-term) - % 10.6 - 11.6 8.0-10.0 10.6 8.0
Future salary increases - % 7.0 -8.0 7.0-10.0 8.0 7.0
Expected average working life of employees - Years 11.7 -13.4 9.9-12.3 13.4 12.3
Retirement age of the employees - Years 55-60 55-60 55-60 55-60

In addition to above, demographic assumptions such as mortality, withdrawal, retirement age were considered for the actuarial
valuation. In 2021,1967/70 Mortality Table issued by the Institute of Actuaries London (2020 - 1967/70 Mortality Table) was
taken as the base for the valuation.

The provisions for defined obligations of Sri Lanka Telecom PLC,SLT Digital Info Services (Private) Limited, Sri Lanka Telecom
(Services) Limited,SLT Campus (Private) Limited,SLT Visioncom (Private) Limited, Talentfort (Private) Limited and Mobitel
(Private) Limited , are actuarially valued by Messrs Actuarial and Management Consultants (Private) Limited and Messrs Piyal S
Goonetilleke and Associates respectively.

The provision for defined benefit obligations is not externally funded.

Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amount shown below.

The sensitivity of the statement of profit or loss and other comprehensive income and the statement of financial position is the
effect of the assumed changes in discount rate and salary increment rate as depicted in the following table.
   Annual Report 2021  | 183

Sri Lanka Telecom PLC

2021 Effect on charge to the statement Effect on net defined benefit

of profit or loss and other liability
comprehensive income
Increase Decrease Increase Decrease

Discount rate (Change by 1%) (199) 219 (199) 219

Salary increment rate (Change by 1%) 243 (224) 243 (224)

2020 Effect on charge to the statement Effect on net defined benefit

of profit or loss and other liability
comprehensive income
Increase Decrease Increase Decrease

Discount rate (Change by 1%) (244) 216 (244) 216

Salary increment rate (Change by 1%) (263) 238 (263) 238

Mobitel (Private) Limited

2021 Effect on charge to the statement Effect on net defined benefit

of profit or loss and other liability
comprehensive income
Increase Decrease Increase Decrease

Discount rate (Change by 1%) (46) 53 (46) 53

Salary increment rate (Change by 1%) 62 (54) 62 (54)

2020 Effect on charge to the statement Effect on net defined benefit

of profit or loss and other liability
comprehensive income
Increase Decrease Increase Decrease

Discount rate (Change by 1%) (46) 53 (46) 53

Salary increment rate (Change by 1%) 56 (50) 56 (50)

29 INSURANCE RESERVES
Group / Company
2021 2020

As at 1 January 1,044 917

Trasfered to retained earnings 61 127
As at 31 Decemeber 1,105 1,044

As stated in Accounting Policy 3 (q) the Company transfers annually from the retained earnings an amount equal to 0.25% of
additions to property, plant and equipment to an insurance reserve. An equal amount is invested in a sinking fund to meet any
funding requirements for potential losses from uninsured property, plant and equipment.

Management regularly monitors the charges made against the insurance reserve and the adequacy of the provision made.
184  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

30 STATED CAPITAL
Company
2021 2020

Issued and fully paid 1,804,860,000 ordinary shares 18,049 18,049

31 CASH GENERATED FROM OPERATIONS

Reconciliation of profit before tax to cash generated from operations:

Group Company
2021 2020 2021 2020

Profit before tax 12,818 9,713 5,085 4,539

Adjustments for:
Depreciation on property, plant and equipment (Note 7) 22,176 19,115 16,263 13,570
Depreciation on right of use assets (Note 7) 2,758 2,925 639 565
Amortisation of intangible assets (Note 7) 2,392 1,778 1,208 788
Provision of bad and doubtful debts (Note 7) 1,757 1,297 1,201 944
Impairment / (reversals) of inventory (43) 30 (55) (10)
Interest expense and finance costs (Note 9) 3,022 2,902 1,825 1,391
Foreign exchange loss / (gain) (Note 9.a) 482 1,203 (76) 727
Interest income (Note 10) (1,308) (1,232) (630) (819)
Connection fees less amortisation 946 (291) (23) (275)
Profit on sale of property, plant and equipment (376) (93) (306) (85)
Impairment of property plant and equipment (Note 7) 16 43 16 1
Share of profit from associate company (Note 16.2) (86) (74) (86) (74)
Provision for retirement benefit obligations (Note 28) 689 724 548 594
Net movement on cash flow hedges - 501 - 471
SLFRS 15 adjustment 121 351 466 150
45,364 38,892 26,075 22,477

Changes in working capital:

  - Receivables and prepayments (1,520) 4,803 (1,876) 2,125
  - Inventories (549) 222 (620) 198
  - Payables 7,451 (3,355) 7,834 (2,752)
  - Assets classified as held for sale (1,545) - - -
  - Liabilities directly associated with assets held for sale 1,410 - - -
Cash generated from operations 50,611 40,562 31,413 22,048
   Annual Report 2021  | 185

32 CAPITAL COMMITMENTS
The Group and the Company have purchase commitments in the ordinary course of business as at 31 December as follows:

Group Company
2021 2020 2021 2020
Property, plant and equipment
  - approved but not contracted 48,714 64,924 45,976 64,924
  - approved and contracted 38,376 13,474 29,108 10,194
87,090 78,398 75,084 75,118

Operating lease commitments

The maturity analysis of the future minimum lease payments and other commitment payments are as follows:

Group Company
2021 2020 2021 2020
Property, plant and equipment
  - Not later than 1 year 2,949 2,820 257 63
  - Later than 1 year and not later than 5 years 11,216 13,007 668 30
14,165 15,827 925 93

Above cash flows are the contractual gross and undiscounted cash flows and such undiscounted cash flows differ from the
discounted amounts included in the Statement of Financial Position.

Other financial commitments

Except for any regular maintenance contracts entered into with third parties in the normal course of business, there are no
other material financial commitments that requires separate disclosure.

33 CONTINGENCIES
(a) Global Electroteks Limited initiated legal action under High Court Case No. 20/2006 claiming damages of USD 12 Mn. from
Sri Lanka Telecom PLC (“SLT”) for alleged unlawful disconnection of interconnection services. The order was given in favour
of SLT in Commercial High Court on 12th June 2020 dismissing the application of Global Electroteks Limited. Subsequently,
Global Electroteks Limited has appealed to the Supreme Court against the order.
(b) 12/2008 CBCU, an inquiry by Sri Lanka Customs – A consignment of CDMA equipment was detained in October 2008
by the Customs Authority. Subsequently the equipment were cleared pending the Inquiry, based on a cash deposit and
bank guarantee submitted by SLT. The Order was delivered in October 2014 imposing a mitigated forfeiture of LKR
1,820,502,062.00 on SLT. SLT has filed Case in Court of Appeal under CA/writ/387/2014 against this Order and interim
order was issued by court on 9th March 2016, precluding Respondents from enforcing order dated 17th October 2014.In
September 2020, the court of Appeal gave the judgement in favor of SLT and the order given by the Customs Authority
was dismissed. However, the Custom Authority has appealed to the Supreme Court against the order. Next date 19 July
2022 support for leave.
(c) Customs Case No. ADP/031/2009 – Goods valued at USD 996,785.65, which was imported under the last consignment of
equipment for NGN Phase II expansion project, was detained by the Customs in May 2009. Subsequently, the equipment
was cleared in July 2009. Pending the Inquiry. Presently awaiting the decision of the Customs Department.

186  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

33 CONTINGENCIES CONTD.
(d) Debt Recovery Officers who were attached to SLT had filed legal proceedings in Labour Department (Labour
Commissioner) and Labour Tribunal and number of proceeding initiated under each forum are 49 and 21 respectively. The
relief claimed includes EPF, ETF and compensation with regard to proceedings initiated before the Labour Commissioner
and includes re-instatement or compensation under the Proceedings before Labour Tribunal. An appeal bearing No. WR
232/2015 filed by SLT in the Court of Appeal was dismissing and SLT filed an appeal to Supreme Court bearing case no.
SC(SPL)LA 02/2020 against the order in WR 232/2015. Special Leave to Appeal was obtained by SLT on 17th March 2021 in
case no SC (SPL) LA 02/2020. The new Case No is SC/Appeal/41/2021. Case was re-fixed for argument on 11th July 2022.
In addition to the above referred cases, there are other claims by employees and third parties for damages and other
relief. In the opinion of the Directors’ none of these actions are likely to result in a material liability to the Company and its
subsidiaries.
With regard to cases detailed above, pending the outcome of the appeals and hearings, no provisions have been
recognized in the financial statements up to 31 December 2021.

The Company has provided guarantees on behalf of its Subsidiaries for following credit and trade finance facilities.

(i) Facilities amounting to Rs. 960 Mn (2020 - Rs 960 Mn) for SLT Campus (Pvt) Ltd., to working capital requirement, hostel and
academic building project.

Above corporate guarantee on SLT Campus (Pvt) Ltd., was cancelled in January 2022.

With regard to cases detailed above, pending the outcome of the appeals and hearings, no provisions have been recognized
in the financial statements up to 31 December 2021.

34 RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over
the other party in making financial and operating decisions. A related party transaction takes place with a transfer of resources
or obligations between related parties, regardless of whether a price is charged.

34.1
(a) Mobitel (Private) Limited

Company
2021 2020

Sale of goods and services:

Provision of E1 links 4,692 3,990
Interconnection charges 328 385
TDM, VOIP platform and transit - 4
ERP rental 219 377
5,239 4,756

Purchase of goods and services:

Call charges on official mobile phone 88 95
Interconnection charges 818 938
Antenna tower space 387 391
Buliding rent 5 4
Data anchoring 364 -
1,662 1,428

As per the TRC approval dated 19 May 2014, Mobitel is entitled to receive discounts if the Company uses more than 3500 E1
Links.

Further, Mobitel receives discounts on infrastructure services provided by Sri Lanka Telecom PLC.The Company has provided
guarantees on behalf of Mobitel for the following loans and obligations.
   Annual Report 2021  | 187

(b) SLT Digital Info Services ( Private) Limited

Company
2021 2020

Sale of goods and services:

Supply of services 45 58

Purchase of goods and services:

Event management and other services 123 32

SLT Digital Info Services ( Private) Limited provides event management services to SLT PLC. As per the agreement, SLT Digital
Info Services ( Private) Limited is entitled to receive a retainer for the services provided.

(c) Sri Lanka Telecom (Services) Limited

Company
2021 2020

Sale of goods and services:

Supply of services 19 4

(d) SLT Human Capital Solutions (Private) Limited

Company
2021 2020

Sale of goods and services:

Supply of services 3 3

Purchase of goods and services:

Provision of manpower service 139 755

(e) SLT VisionCom (Private) Limited

Company
2021 2020

Sale of goods and services:

Supply of services 30 31

Purchase of goods and services:

Service provisioning 2,958 1,526
188  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

34 RELATED PARTY TRANSACTIONS CONTD.

(e) SLT VisionCom (Private) Limited Contd.
Ad- insertion revenue:
Sri Lanka Telecom received an ad-insertion revenue from SLT VisionCom (Private) Limited amounting to Rs.Nil (2020 - Rs 11
Mn) SLT’s share of revenue is based on the following percentages:
Advertisement on PEO TV - EPG 34%
Channel advertisement 17%

Service fees /Revenue share:

Sri Lanka Telecom PLC recognised 50% of IPTV revenue as revenue share payable to SLT Vision com (Private) Limited from
1 January 2021 amounted to Rs. 2,958 Mn (a unit rate based fee computed at the rate of Rs.65/- per cumulative billable
subscriber was paid up to 30 June 2020 which amounted to Rs.188 Mn. Due to the model change, from 1 July 2020, 45% of
IPTV revenue was recognised as revenue share payable to SLT Vision com (Private) Limited amounted to Rs. 1,174 Mn.

(f) SLT Campus (Private) Limited

Company
2021 2020

Sale of goods and services:

Supply of services 1 12

Facilities amounting to Rs. 960 Mn (2019 - Rs 960 Mn) for SLT Campus (Pvt) Ltd., to working capital requirement, hostel and
academic building project.

Above corporate guarantee on SLT Campus (Pvt) Ltd., was cancelled in January 2022.

Supply of services provided for the above mentioned subsidiaries include Voice, Broadband, Data and providing building
spaces.

(g) Fees for secondment of personnel and services provided to / by SLT PLC

Company
2021 2020

SLT Digital Info Services (Private) Limited 41 49

SLT VisionCom (Private) Limited 29 20
Sri Lanka Telecom Services (Private) Limited 21 -
SLT Campus (Private) Limited 1 -
92 69
   Annual Report 2021  | 189

(h) Outstanding balances arising from sale / purchase of services

Company
2021 2020

Receivable from subsidiaries:

Mobitel (Private) Limited 1,713 1,324
SLT Digital info Services (Private) Limited 44 19
SLT Human Capital Solutions (Private) Limited 8 2
SLT VisionCom (Private) Limited 66 42
Sri Lanka Telecom (Services) Limited 45 60
SLT Property Management (Private) Limited 39 29
SLT Campus (Private) Limited 111 111
Talentfort (Private) Limited 36 -
2,062 1,587

Payables to subsidiaries:
Mobitel (Private) Limited 1,511 1,060
SLT Digital info Services (Private) Limited 62 59
SLT Human Capital Solutions (Private) Limited - 4
SLT VisionCom (Private) Limited 2,142 1,295
Sri Lanka Telecom (Services) Limited 354 380
Talentfort (Private) Limited 18 -
4,087 2,798

34.2 Transactions with other related parties

a) Maxis Communications Berhad and its subsidiaries

Group Company
2021 2020 2021 2020

Sale of goods and services:

International incoming traffic 39 96 39 71
39 96 39 71

Purchase of goods and services:

International outgoing traffic - 8 - -

190  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

34 RELATED PARTY TRANSACTIONS CONTD.

34.2 Transactions with other related parties Contd.
b) Outstanding balance arising from sale / purchase of services

Group Company
2021 2020 2021 2020

Receivable from related company:

Maxis Communications Berhad and its subsidiaries 149 158 149 158

Payable to related company:

Maxis Communications Berhad and its subsidiaries 121 121 121 121

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions.
Outstanding balances at the year end are unsecured and interest free and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables. For the year ended 31 December 2021, the
Group recognised provision for expected credit losses of Rs.Nil relating to amounts owed by related parties.(2020 - Nil)

(c) Government-related key institutions

The Government of Sri Lanka holds 49.5% of the voting rights of the Company as at 31 December 2020 through the secretary
to the Treasury and those have significant influence over the financial and operating policies of the Company. Accordingly, the
Company has considered the Government of Sri Lanka as a related party according to LKAS 24 ‘Related Party Disclosure’.

During the year ended 31 December 2021, the Company has carried out transactions with the Government of Sri Lanka and
other Government related entities in the ordinary course of business.

The Company identified individually significant transactions with key Government related entities as given below:

(i) Revenue from provision of telecommunication services during the year ended 31 December 2021 amounted to Rs. 5,200
Mn (2020- Rs. 6,881 Mn) and credit receivables as at 31 December 2021 amounted to Rs. 2,136 Mn (2020- Rs. 1,297 Mn)

(ii) Deposits, repurchase agreements (Repo) and Borrowings of the Group at / from Government banks amounted to Rs. 8,288
Mn (2020 Rs. 3,646 Mn) and Rs. 29,716 Mn (2020 Rs. 31,848 Mn) as at 31 December 2021.

(iii) Dividend payable to the Government amounting to Rs. 244 Mn (2020 - Rs 244 Mn)

The sales to and purchases from government related key institutions are made on terms equivalent to those that prevail in
arm’s length transactions.

34.3 Transactions with key management personnel

Key management personnel comprise the directors and chief officers of the company and the group

Group Company
2021 2020 2021 2020

Short term benefits 470 422 361 341

Post employment benefits 38 35 32 31
Salaries and other benefits 508 457 393 372
   Annual Report 2021  | 191

All transactions during the year and balances as at the reporting date between the following companies have been eliminated
in preparing the consolidated financial statements:
> Mobitel (Private) Limited

> Sri Lanka Telecom (Services) Limited

> SLT Digital info Services (Private) Limited

> SLT Human Capital Solutions (Private) Limited

> SLT VisionCom (Private) Limited

> Sky Network (Private) Limited

> SLT Property Mangement (Private) Limited

> SLT Campus (Private) Limited

> eChannelling PLC

> Mobitel Technologies (Private) Limited

> Talentfort (Private) Limited

Related party transactions disclosed above should be read in conjunction with Notes 16 to the financial statements.

35 NON-UNIFORM ACCOUNTING POLICIES

The impact of non-uniform accounting policies adopted by the subsidiary company has been adjusted in the consolidated
financial statements as set out below:

Adjustment due to different accounting policies of the parent and the Group entity
(a) Sri Lanka Telecom PLC accounts for refunds on Telecommunication Development Charge (TDC) on cash basis when
the payment is received whereas Mobitel (Private) Limited recognises it in the statement of profit or loss and other
comprehensive income on a straight line basis.

Therefore, the recognition of the refund by Mobitel (Private) Limited was eliminated and is recognised on cash basis in the
consolidated accounts.

Group impact
2021 2020

Reversal of deferred revenue recognized in statement of profit or loss and other comprehensive
income by Mobitel (Private) Limited (46) (14)

(b) Sri Lanka Telecom PLC recognises and measures property, plant and equipment based on cost model where as SLT Campus
(Pvt) Limited has adopted revaluation model in the financial year 2019.

Therefore, the revaluation gain recognised by SLT Campus (Private) Limited and its underlying deferred tax impact
was eliminated and the property, plant and equipment of SLT Campus (Private) Limited was recognised at cost in the
consolidated accounts.

Reversal of revaluation gain and the underlying deferred tax impact recognised in statement of other comprehensive
income by SLT Campus (Private) Limited in 2021 is Rs. 111 Mn (2020 - Rs. 111Mn).
192  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

36 COMPARATIVES
The presentation and classification of following items in these financial statements are amended to ensure comparability with
the current year for the puprpose of fairer presentation.
Statement of profit or loss and other comprehensive income - Group

Direct Cost Administrative

Costs

As reported previously for the year 2020 50,285 18,993

Revenue share on solution revenue 151 (151)
Current presentaion for the year 2020 50,436 18,842

Statement of profit or loss and other comprehensive income - Company

Direct costs Adminstrative

costs

As reported previously for the year 2020 29,011 14,319

Revenue share on solution revenue 151 (151)
Current presentaion for the year 2020 29,162 14,168

Statement of financial position

Non current liabilities - Group

Trade and Vendor Borrowings

other financing
payables

As reported previously as at 31 Dec 2020 5,371 - 45,684

Finance lease liabilities - - 15
Vendor financing in borrowings - 160 (160)
Vendor financing in trade and other payables (762) 762 -
Current presentaion as at 31 Dec 2020 4,609 922 45,539

Current liabilities - Group

Vendor Borrowings
financing

As reported previously as at 31 Dec 2020 - 9,690

Finance lease liabilities - (15)
Vendor financing in borrowings 157 (157)
Current presentaion as at 31 Dec 2020 157 9,518

Statement of financial position

Non-current liabilities - Company

Trade and Vendor Borrowings

other financing
payables

As reported previously as at 31 Dec 2020 3,955 - 40,860

Finance lease liabilities - - 15
Vendor financing in trade and other payables (762) 762 -
Current presentaion as at 31 Dec 2020 3,193 762 40,875
   Annual Report 2021  | 193

Current liabilities - Company

Borrowings

As reported previously as at 31 Dec 2020 7,132

Finance lease liabilities (15)
Current presentaion as at 31 Dec 2020 7,117

37 FAIR VALUE DISCLOSURE

Set out below is a comparison by class of the carrying amounts and fair values of the financial instruments that are carried in
the Financial Statements.

Carrying Amount Fair Value

Group Company Group Company
2021 2020 2021 2020 2021 2020 2021 2020

Financial assets
Trade and other receivables 18,654 19,999 16,094 15,236 18,654 19,999 16,094 15,236
Short term deposits 8,310 3,666 8,288 3,646 8,310 3,666 8,288 3,646
Cash at bank and in hand 17,972 11,866 1,615 1,041 17,972 11,866 1,615 1,041
Total 44,936 35,531 25,997 19,923 44,936 35,531 25,997 19,923

Financial liabilities
Obligations under finance leases 21 25 21 25 21 25 21 25
Borrowings 45,013 53,489 41,802 46,539 35,527 40,357 32,831 34,812
Trade and other payables 47,728 35,331 33,672 20,485 44,053 33,789 30,318 19,350
Bank overdrafts 1,742 1,885 1,261 1,453 1,742 1,885 1,261 1,453
Total 94,504 90,730 76,756 68,502 81,343 76,056 64,431 55,640

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.The following method and assumption was
used to estimate the fair values:

Cash and bank balances, short term deposits, trade receivables, trade payables (current) and bank overdraft approximate their
carrying amounts lastly due to the short term maturities of these investments.

Fair value of trade and other payables and borrowings have been arrived by discounting gross values by the year end AWFDR rate.
The following table shows an analysis of assets recorded/disclosed at fair value by level of the fair value hierarchy.

Group Company
As at 31 December 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Financial assets
Trade and other receivables - 18,654 - - 16,094 -
Short term deposits - 8,310 - - 8,288 -
Cash at bank and in hand - 17,972 - - 1,615 -
Disposal group feld for sale - - 410 - - 410
Total assets - 44,936 410 - 25,997 410

Financial liabilities
Obligations under finance leases - 21 - - 21 -
Borrowings - 35,527 - - 32,831 -
Trade and other payables - 44,053 - - 30,318 -
Bank overdrafts - 1,742 - - 1,261 -
Total liabilities - 81,343 - - 64,431 -
194  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

37 FAIR VALUE DISCLOSURE CONTD.

Group Company
As at 31 December 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Financial assets
Trade and other receivables - 19,999 - - 15,236 -
Short term deposits - 3,666 - - 3,646 -
Cash at bank and in hand - 11,866 - - 1,041 -
Total assets - 35,531 - - 19,923 -

Financial liabilities
Obligations under finance leases - 25 - - 25 -
Borrowings - 40,357 - - 34,812 -
Trade and other payables - 33,789 - - 19,350 -
Bank overdrafts - 33,789 - - 1,453 -
Total liabilities - 107,960 - - 55,640 -

Fair value of financial assets and liabilities not carried at fair value
the following describes the methodologies and assumptions used to determine fair values of those financial instruments which
are not already recorded at fair value in the Financial Statements.

Assets for which fair value approximates carrying value

financial Assets and Liabilities that have a short term maturity, it is assumed that the carrying amounts approximate their fair
values.

Fixed rate financial instruments

The fair Value of fixed rate financial assets and liabilities carried at amortised cost are estimated by comparing market interest
rates when they were first recognized with current market rates for similar financial instruments

Variable rate financial instruments

Variable rate is a fair measure which reflects market movements. Hence the carrying value represents the fair value of the
variable rate instruments.
   Annual Report 2021  | 195

38 IMPACT OF COVID 19 - PANDEMIC

Significant unusual items affecting assets, liabilities, equity, net income or cash flows
The telecommunication service has been categorised as an essential service by the Government of Sri Lanka. With the
responsibility to provide an uninterrupted service to the nation, SLT as the national telecommunications provider activated its
Business Continuity Plan (“BCP”) and effected changes in operations, supply chain, workforce movements, investments and
strategies to cope with the unprecedented challenges posed by the COVID-19 pandemic.

The below summarises our strategy and the response plan for the pandemic situation:

(a) Uninterrupted service to the nation while keeping people safe

As the national telecommunications and mobile services provider, SLT Group provided an uninterrupted service to the nation
during this challenging period. SLT Group ensured customer service through digital platforms to minimize human contact and
maintained social distancing and safety regulations in customer points. SLT Group shifted most of the employees to Work from
Home and the employees who perform their duties in office premises/ field were allowed to work under strict health and safety
guidelines while maintaining social distancing regulations. During the years 2020 and 2021, SLT created a fund to mitigate the
cost of hospitalization, set up three intermediatory quarantine centers and provided home care medical facilities for detected
SLT employees and their immediate family members. However, considering the new guidelines issued by the Government of
Sri Lanka on Covid-19 management practices, SLT revised its Covid-19 incident handling protocol in the new normal situation
and presently continues only with the provision of home care medical facilities.

(b) Direction of operations for the need of the hour

As a response to the need of the hour, SLT together with its mobile arm Mobitel provided innovative yet affordable data
packages to meet the growing customer demand and introduced easy payment terms for corporate customers. With the
shift towards work from home arrangements and study from home arrangements, the Group experienced a positive impact in
revenue in areas such as Broadband, PEOTV and Career Business services due to surge in utilization in both residential and
business sectors. Further, future opportunities are emerging with novel digital products and services.

(c) Liquidity management

The effective collection strategies of the Group coupled with the need for continuous supply of telecommunication services
improved collections over the period. The Group prioritised capital expenditure for critical projects, which included projects
which provide connectivity to rural areas to narrow the digital divide in the Country. However, the recent depreciation of the Sri
Lankan rupee against the US dollar adversely impacted the cash flows of the Group. Further, the foreign currency liquidity issue
prevailing in the domestic foreign exchange market poses challenges to project payments in foreign currency.

(d) Impact on property, plant and equipment

The Group has assessed the impact on property, plant and equipment and spectrum assigned to the Group and does not
foresee impairment due to the pandemic.

The Group will continue to take proactive measures to mitigate any potential impact and will continue its contingency plans
and risk management measures as the situation evolves.

There were no other events or transactions that require disclosures or adjustments to the financial statements for the period
ended 31 December 2021.
196  |  Sri Lanka Telecom PLC

NOTES TO THE FINANCIAL STATEMENTS

39 EVENTS AFTER THE REPORTING DATE

a) Surcharge tax
The Government of Sri Lanka in its Budget for 2022 has proposed a one-time tax, referred to as a surcharge tax of 25% to
be imposed on companies that have earned a taxable income in excess of LK Rs. 2,000 million for the year of assessment
2020/2021. The proposed tax should be deemed an expenditure in the financial statements relating to the year of assessment
2020/2021

The Bill introducing the proposed tax was published after the reporting period and it has not been placed on the Order Paper
of the Parliament for its first reading before the date these financial statements were authorized for issue. The proposed tax has
not been substantively enacted by the end of the reporting period. Therefore, the financial statements have not been adjusted
to reflect the consequences of this proposal.

b) Divestment of SLT Campus (Private) Limited

In line with the Board’s strategic direction, Sri Lanka Telecom PLC had decided to dispose its 100% stake held in SLT Campus
(Private) Limited.

On 25 January 2022, Sri Lanka Telecom PLC had transferred Twenty-One Million and One (21,000,001) Ordinary Shares and
Eighteen Million (18,000,000) Redeemable Cumulative Preference Shares representing one hundred per centum (100%) of
the total issued shares of the SLT Campus (Private) Limited worth Rs. 390,000,010 to Tempest Two (Private) Limited for a total
purchase consideration of Rs. 410,000,000.

c) Proposed dividend declaration

The Board of Directors of the company has recommended a first and final dividend of Rs. 2.02 per share (2020- Rs.1.49 per
share) on voting shares of the company to be paid by way of cash dividend for the financial year ended 31 December 2021.

Further, this dividend is to be approved at the Annual General Meeting to be held on 11 May 2022. This proposed final
dividend has not been recognised as a liability as at 31 December 2021.Final dividend proposed for the year amounts to
Rs. 3,645,817,200 in Compliance with section 56 and 57 of Companies Act No.07 of 2007. As required by section 56 of the
Companies Act No.07 of 2007, the Board of Directors of the Company satisfied the solvency test in accordance with the
section 57, prior to recommending the final dividend. A statement of solvency completed and duly signed by the Directors on
15 March 2022 has been audited by Messrs Ernst & Young.

Except as disclosed above, no other events have arisen since the statement of Financial Position date which require Changes
to, or disclosure in the Financial Statements.
  Annual Report 2021  | 197
198  |  Sri Lanka Telecom PLC

TEN YEAR PROGRESS - GROUP

2021 2020 2019 2018 2017 2016 2015 2014 2013 2012

Financial position – Group

Property, plant and equipment 141,937 137,208 140,632 123,850 117,035 108,649 99,283 90,935 80,506 73,602
Total assets 219,941 204,456 209,019 180,435 159,206 142,910 126,545 122,604 108,047 104,510
Current assets 58,417 46,762 46,718 45,377 31,048 27,464 21,426 25,343 20,598 25,712
Current liabilities 55,432 46,686 56,949 52,378 57,885 45,226 33,082 29,031 26,526 28,091
Borrowings 46,589 55,057 61,676 55,835 41,811 32,940 24,395 27,122 20,690 17,852
Equity 93,976 84,281 78,167 73,720 71,404 68,678 65,240 63,900 59,789 55,987

Performance
Revenue 102,348 91,119 85,948 81,445 75,741 73,801 68,022 65,040 60,144 56,771
Operating profit 13,844 11,632 8,539 7,613 3,918 5,726 6,789 5,711 6,491 6,055
Finance cost 3,504 4,105 2,510 2,048 637 1,229 2,398 211 1,177 2,233
Profit before tax 12,818 9,713 8,216 7,169 5,528 6,497 5,515 8,251 7,365 5,851
Taxation 657 1,832 1,894 2,221 1,588 1,707 1,791 2,250 1,946 1,930
Profit after tax 12,161 7,881 6,322 4,948 3,940 4,790 3,724 6,001 5,419 3,921

Cash flow
Net operating cash flows 43,631 32,300 20,410 19,656 18,224 19,466 21,265 20,047 15,386 16,094
Net cash used in investing activities 30,001 15,034 28,278 22,890 27,415 24,347 14,375 23,524 16,507 15,362
Net cash used in/(from) financing
activities (7,381) (9,003) 4,957 16,909 756 360 6,065 (5,039) 57 174

Key financial indicators

Earnings per share (Rs.) 6.73 4.37 3.50 2.74 2.18 2.65 2.06 3.32 3.00 2.17
Return on assets (%) 5.53% 3.85% 3.02% 2.74% 2.47% 3.35% 2.94% 4.89% 5.02% 3.75%
Return on equity (%) 12.94% 9.35% 8.09% 6.71% 5.52% 6.97% 5.71% 9.39% 9.06% 7.00%
Operating margin (%) 13.53% 12.77% 9.94% 9.35% 5.17% 7.76% 9.98% 8.78% 10.79% 10.67%
Asset turnover (Number of times) 0.47 0.45 0.41 0.45 0.48 0.52 0.54 0.53 0.56 0.54
Current ratio (Number of times CL) 1.05 1.00 0.82 0.87 0.54 0.61 0.65 0.87 0.78 0.92
Quick asset ratio (Number of times CL) 1.01 0.94 0.76 0.82 0.48 0.57 0.62 0.86 0.69 0.84
Debt/equity ratio – Number of times 0.66 0.78 0.93 0.76 0.59 0.48 0.37 0.42 0.35 0.32
Interest cover (Number of times
interest) 3.31 1.91 1.47 1.77 2.02 4.53 5.62 8.94 9.44 6.73
Net assets per share (Rs.) 52.01 46.64 43.25 40.79 39.81 38.00 36.14 35.40 33.13 31.02
Dividend per share (Rs.) 2.02 1.49 1.06 1.06 0.89 0.89 0.89 0.85 0.85 0.85

1. Earnings per share - Earnings per ordinary share (EPS) - Profit attributable to ordinary shareholders divided by the number of ordinary
shares in use.
2. Return on Assets - Return on assets (ROA) - Profit after tax expressed as a percentage of the average assets; indicates overall effectiveness
in generating profits with available assets.
3. Return on Equity - Return on equity (ROE) - Net profit attributable to owners, expressed as percentage of average ordinary shareholders’
equity.
4. Operating Margin - Operating margin is a measurement of what proportion of revenue is left over after paying for variable costs of
production such as wages, raw materials, etc.
5. Asset Turnover - Asset turnover ratio measures the value of sales or revenues generated relative to the value of its assets.
6. Current Ratio - The current ratio measures the ability to cover its short-term liabilities with its current assets.
7. Quick Asset Ratio - The Quick Ratio, also known as the Acid-test or liquidity ratio, measures the ability of a business to pay its short-term
liabilities by having assets that are readily convertible into cash.
8. Debt/Equity Ratio - The Debt/Equity ratio measures the proportion of borrowed funds to its equity.
9. Interest Cover - Number of times interest expense is covered by earnings before interest and tax.
10. Net assets per share - Net assets per share measures net assets divided by number of ordinary shares in use.
   Annual Report 2021  | 199

INVESTOR INFORMATION

DISTRIBUTION OF SHARES
Shareholding Resident Non-Resident Total
Number of Number of % Number of Number of % Number of Number of %
shareholders shares shareholders shares shareholders shares

1 – 1,000 shares 9,985 2,873,084 0.16 11 4,304 0.00 9.996 2,887,388 0.16
1,001 – 10,000 shares 2,212 8,614,060 0.48 23 105,554 0.01 2.235 8,719,614 0.49
10,001 – 100,000 shares 211 4,390,561 0.24 6 210,334 0.01 217 4,600,895 0.25
100,001 – 1,000,000 shares 11 1,635,984 0.09 0 0 0.00 11 1,635,984 0.09
Over 1,000,000 shares 9 975,268,250 54.03 1 811,757,869 44.98 10 1,787,026,119 99.01
12,428 992,781,939 55.00 41 812,078,061 45.00 12,469 1,804,860,000 100.00

CATEGORIES OF SHAREHOLDERS
Category Number of Number of
shareholders shares

Individual 12,337 15,887,070

Institutional 132 1,788,972,930
Total 12,469 1,804,860,000

20 MAJOR SHAREHOLDERS AS AT 31ST DECEMBER 2021

NAME SHAREHOLDING PERCENTAGE(%)

1 SECRETARY TO THE TREASURY 893,405,709 49.50

2 GLOBAL TELECOMMUNICATIONS HOLDINGS NV 811,757,869 44.98
3 EMPLOYEES PROVIDENT FUND 25,324,104 1.40
4 SRI LANKA INSURANCE CORPORATION LTD- LIFE FUND 17,713,735 0.98
5 BANK OF CEYLON A/C CEYBANK UNIT TRUST 17,309,741 0.96
6 NATIONAL SAVINGS BANK 13,158,700 0.73
7 EMPLOYEES TRUST FUND BOARD 3,302,188 0.18
8 SRI LANKA INSURANCE CORPORATION LTD – GENERAL FUND 2,041,538 0.11
9 BANK OF CEYLON A/C CEYBANK CENTURY GROWTH FUND 1,620,369 0.09
10 CONFAB STEEL (PRIVATE) LIMITED 1,392,166 0.08
11 THE INCORPORATED TRUSTEES OF THE CHURCH OF CEYLON 223,590 0.01
12 BANK OF CEYLON NO. 1 ACCOUNT 214,000 0.01
13 PINNACLE TRUST (PVT) LIMITED 183,984 0.01
14 CEYLON BISCUITS LIMITED 161,825 0.01
15 MR. T.K.D.A.P. SAMARASINGHE 150,000 0.01
16 MR. A.M. WEERASINGHE 140,100 0.01
17 MR. A.H. MUNASINGHE 130,787 0.01
18 MR. E.L. KARANNAGODA 112,576 0.01
19 MR. D.S. KARALLIEDDE 109,523 0.01
20 SINHARAJA HILLS PLANTATION (PVT) LIMITED 107,491 0.01
TOTAL 1,788,559,995 99.11

Float adjusted Market Capitalisation as at 31 December 2021 LKR 3,347,365,550

Percentage of public holding as at 31 December 2021 4.78%
Number of shareholders representing the public holding as at 31 December 2021 12,465
200  |  Sri Lanka Telecom PLC

INVESTOR INFORMATION

RATIO AND MARKET PRICE INFORMATION SHARE PRICE TREND

2021 2020 2019 2018 2017 2016 2015 2014 2013 2012

Highest value (LKR) 42.90 34.80 34.50 30.00 36.70 46.40 54.90 57.30 50.00 50.00
Lowest value (LKR) 31.50 18.00 19.60 18.90 27.00 31.20 43.00 33.33 36.10 34.00
Last traded price (LKR) 38.80 33.50 31.90 23.40 28.50 36.00 47.00 49.90 37.00 44.50
Market capitalisation (LKR Bn.) 70.02 60.40 57.57 42.23 51.43 64.97 84.83 90.00 66.78 80.32

TRADING ACTIVITY
2021 2020 2019

Number of transactions 9,726 6,853 5,576

Number of shares traded 6,697,029 5,982,917 2,718,416
Value of shares traded (LKR) 243,389,461 186,345,491 76,016,539

THE DEBT/EQUITY RATIOS

At 31 December Group Company
2021 2020 2021 2020

Total borrowings 62,083 65,794 50,024 48,839

Total equity 93,967 84,281 65,672 62,443
Total capital 156,059 150,075 115,696 111,282

Debt/equity Ratio 66.1 78.1 76.2 78.2

EQUITY - GROUP
Group 2021 2020

Earnings per Share (Rs.) 6.73 4.37

Net Assets per share 52.01 46.64
Debt/equity ratio-No of times 0.66 0.78
Quick Asset Ratio (No. of times C.L.) 1.01 0.94
Interest Cover (No. of times Interest) 3.31 1.91
Dividend pay out Ratio 30.0% 34.1%
Dividend per share 2.02 1.49

DEBT INFORMATION - COMPANY

Group 2021 2020

Interest rate onf comparable govt security Market price & yield during the year (ex-interest) 11.53% 6.98%
Highest debenture price
Debenture were not traded
Lowest debenture price
during the year 2021
Last traded debenture price
Debt/equity ratio-No of times 0.76 0.78
Interest Cover (No. of times Interest) 1.92 1.16
Quick Asset Ratio (No. of times C.L.) 0.88 0.90
   Annual Report 2021  | 201

PORTFOLIO OF LANDS

The following values are based on valuation reports The level of the fair value hierarchy within which the fair value
submitted by a firm of incorporated Valuers in 2018, on measurements are categorised is Level 3. Land values have
lands transferred on incorporation (conversion of SLT into a been adopted after comparing with land sales in particular
public limited company in 1996) and lands acquired after the location by the valuer. Unobservable inputs for the assets
incorporation. The said lands valued over LKR 500,000/- with have been used as inputs in the fair value measurement.
their respective values are given below:

Location Extent Value of Location Extent Value of

(Hectare) land (Rs. (Hectare) land (Rs.
Mn) Mn)
Agalawatta Kiosk Land – Lot 1, 2 0.008 0.9 Bulathkohupitiya Exchange Land 0.2349 6.9
Agarapathana Ex. & LPT Quarters Land 0.15 2.9 Buttala Exchange Land 0.202 35.9
Agarapathana RSU Land, 150 K Project, 0.0215 0.7 Chavakachcheri RAX & RSU Land 0.1214 12.0
Agbopura Land 0.192 3.8 Cheddikulam Exchange Land 0.2026 3.2
Akkaraipattu Exchange Land 0.205 40.5 Chilaw DIT/IPT Quarters Land 0.0468 27.7
Akkaraipattu Old Exchange Land Chilaw Exchange Land, Puttalam Road,
(PP A 1355, Lot 1) 0.0999 15.8 Chilaw 0.2708 80.3
Akkaraipattu Road, Hingurana 0.3877 7.6 Chinabay Exchange Land – Lot 163 &
Akurana Land 0.0759 12.0 Lot 165 0.0768 6.7
Akurassa Exchange Land 0.0711 28.1 Chunnakam RAX Land 0.1912 15.1
Akurassa Repeater Station Land Lot Circuit Bungalow Land – Bandarawela 0.1718 19.0
385,386,387,388,389,390 & 391. 0.0787 2.3 Delgoda RSU1 Land, Delgoda 0.032 3.8
Alawwa Exchange Land, Narammala Road. 0.076 9.8 Deniyaya Exchange & IPT Qtrs Land Lot 764 0.177 7.0
Aliyamalagala Repeater Station 0.2021 4.0 Deraniyagala Exchange Land
Alubomulla RSU Land 0.0759 5.3 (Lot 1, 2) 0.139 8.2
Ambalangoda Exchange & DIT Office Land 0.079 89.0 DGM Quarter Land, Rifle Green, Trincomalee 0.1577 31.2
Ambalantota Exchange Land 0.1721 20.4 Dickwella Auto Exchange & Quarters Land 0.1554 35.2
Anandankulam Land 0.202 8.0 Digana Old Exchange & Repeater Station
Land Ahaspokuna 0.356 24.6
Angoda Exchange Land, Angoda 0.09 32.0
District Switching Centre & IPT Qtrs Land,
Angoda RSU1 Land, IDH 0.0364 10.8
Inner Harbour Road, Trincomalee. 0.3294 65.1
Angunakolapalassa Exchange Land
District Switching Centre Land, Mannar. 0.3238 76.8
Lot 525, 755 0.196 7.8
DIT Quarters Land, 99/1, Ratnapura Road,
Aranayaka Exchange Land 0.12 3.6
Awissawella. 0.1593 28.3
Ariyalai Land 0.0658 5.2
DIT Quarters Land – No. 67,Gattuwana. 0.273 77.2
Auto Exchange & IPT Quarters Land, Main
DIT/IPT Quarters Land – Bandarawela 0.0705 69.6
Street, Panadura. (RTOM Office)
Divurmpitiya Repeater Station Land 0.1093 2.1
Lot 1, 2 0.2542 299.1
Dodangoda RSU Land
Auto Exchange & Quarters Land,
Bandaragama. 0.2803 60.9 Dolosbage New Exchnage Land 17.9
Badalgama Exchange Land 0.0984 5.8 Lot 1 & Lot 2 0.093 1.1
Badalgama IPT Qrts Land 0.0303 1.8 Dunagaha Exchange Land 0.171 33.8
Baddegama Exchange Land 0.134 21.1 Earth Satellite Station Land, Padukka. 13.896 257.5
Badulla District Switching Centre & Ehiliyagoda Exchange Land 0.0802 23.7
Engineer's Quarters Land 0.402 135.1 Elpitiya Exchange & Kiosk Land 0.146 20.2
Bagawantalawa Exchange Land 0.1185 2.8 Embilipitiya Exchange & IPT Quarters Land,
Bakamuna RSU Building Land 0.375 14.8 Embilipitiya 0.462 50.0
Balangoda Telecom Exchange Land Lot 1 & Engineer's Quarters Land, No. 116/53,
Lot 2 0.2324 41.5 Lake Round, Kurunegala. 0.206 48.9
Balungala Repeater Station Land 0.2317 2.3 Ensalwatta Repeater Station Land – Deniyaya 0.304 9.0
Bambarabotuwa Exchange Land 0.1204 4.7 Eravur Auto Exchange Land 0.0925 36.6
Beliatta Exchange Land, Beliatta 0.442 30.5 Ethagala Repeater Station Land 0.253 9.0
Beragama Kiosk Land 0.06 0.9 Exchange Land, Thimbolketiya (Lot 1,2,3) 0.6771 17.2
Bibile Exchange Land (Lot 770, 773,774) 0.274 32.5 Exchange Land, Aluth Mw., Mattakkuliya 0.046 54.5
Bingiriya Exchange & Kiosk Land 0.168 13.3 Exchange Land, Homagama 0.1035 122.7
Biyagama RSU1 Land, Heiyanduwa 0.0506 10.0 Exchange Land, Padukka 0.0607 18.0
Biyagama RSU2 Land, Biyagama Exchange Land, Yatiyana Lot 1, 2, 3 & 4 0.1288 11.0
(Bandarawatta Land) 0.0374 14.8 Exhange & IPT Quarters Land,
Boralesgamuwa Exchange Land 0.0335 33.7 Mahawa Lot 176, 177, 179 0.462 32.0
Browns Hill Repeater Station Land, Browns Galagedara Exchange Land, Rambukkana
Hill Lot 1, 2, 3, 4, 5 0.1415 28.0 Road. 0.1386 8.2
202  |  Sri Lanka Telecom PLC

PORTFOLIO OF LANDS

Location Extent Value of Location Extent Value of

(Hectare) land (Rs. (Hectare) land (Rs.
Mn) Mn)
Galaha Exchange, & IPT Quarters Land, HP's Quarters Land, Bandarawela 0.2329 27.6
Galaha.– Lot 2 & Lot 3 0.1278 2.5 HQ Building,OTS Building and CTO Building
Galapitamada Land 0.099 8.2 Land, Lotus Road – Colombo 1. 1.3154 9,101.0
Galapitamada New Ex. Land 0.1789 3.5 Hungama Exchange Land, Hungama 0.125 14.8
Galenbiduniwewa Land 0.1921 9.5 Ibbagamuwa DRMASS Land 0.0154 3.4
Galewala Old Kiosk Land 0.0152 1.1 Ibbagamuwa RSU Land 0.0379 3.0
Galewela RSU Land Lot 1185, Imaduwa Exchange & Kiosk Land Lot 473,
Lot 1188 & Lot 1190 0.1822 10.8 474 0.215 17.0
Galgamuwa Auto Exchange Land 0.158 12.5 Inginiyagala Exchange Land 0.047 1.3
Galhinna Land 0.0759 2.5 Ingiriya Exchange Land Lot 1, 2, 3 0.28 9.9
Galigamuwa Auto Echange Land 0.1031 10.2 Ingiriya Kiosk Land 0.0126 0.7
Galkantha Mawatha, Ampara 0.7657 75.7 IPT Qrts (Present OPMC) Land No. 8 & 10,
Sri Gunarathena Mw.Panadura. 0.2952 84.6
Galle Exchange & IPT Quarters Land, No. 8,
Wakwella Road, Galle 0.1697 184.4 IPT Quarters (No. 1,2 & 3) Land,
Galnawa Exchange & Linemen Quarters Land 0.1453 20.1 District Switching Centre, No. 26, Badulla. 0.034 12.1
Galoya Junction(LPT Qts. Land,Station Rd.) 0.2023 2.0 IPT Quarters 1 No & Stores Land Mannar Rd,
Vavuniya 0.306 30.2
Gampola Singha pitiya Road Land, Gampola 0.2529 30.0
IPT Quarters Land - 13 A/1, Galwala Road,
Ganemulla Exchange & IPT Quarters Land 0.1564 47.8
Hambantota. 0.102 12.0
Ginigathhena Exchange & Quarters Land 0.142 4.2
IPT Quarters Land., Station Rd, Vavuniya 0.15 29.7
Gintota(Dodanduwa Exchange) Land 0.0513 10.1
IPT Quarters Land – Diyathalawa 0.0226 8.9
Giriulla Auto Exchange Land 0.101 10.0
IPT Quarters Land – No. 07, Gattuwana. 0.121 21.5
Godakawela RSU Land 0.049 4.7
Ja-Ela Exchange Land, DIT Office & IPT
Gonapola Land 0.0759 13.5
Quarters. 0.087 103.1
Gurugoda Exchange Land, Gurugoda 0.079 3.8
Jaltara Housing Scheme Land 0.0253 1.8
Habaraduwa Exchange Land 0.0796 11.0
Kadawatha Exchange Land Lot 1, 2 0.1062 38.7
Habarana Land 0.1182 9.3
Kadawatha RSU1 Land, Ranmuthugala 0.0329 9.7
Haddon Hill Land – Nuwara-Eliya Lot 1,2
Kadawatha RSU2 Land, Ihala karagahamuna 0.043 8.5
(Road Reservation) 0.072 15.5
Kadawatha RSU3 Land, Siyambalape 0.0202 4.8
Hakmana Exchange Land 0.126 11.2
Kadawatha RSU4 Land, Makola North 0.0192 6.8
Haldummulla Kiosk Land 0.099 2.0
Kaduwela ELU 1 Land, Ranala 0.00025 0.5
Halgaran-oya Exchange Land 0.791 6.3
Kaduwela ELU4 Land, Welivita Junction 0.00032 0.9
Hali-Ela Exchange Land 0.094 18.6
Kaduwela Exchange Land Lot 1, 2 0.0983 97.2
Hambantota Exchange Land, No. 66, Barrak
Street 0.192 34.1 Kaduwela RSU1 Land, Malambe 0.0248 7.3
Handessa RSU Land 0.1012 4.0 Kahatagasdigiliya Exchange Land 0.0993 8.8
Hanguranketha Ex.(New) Land 0.0851 7.6 Kahawatta Kiosk Land 0.014 5.5
Haputale Exchange Land 0.408 64.5 Kalawana Exchange Land 0.206 4.0
Hasalaka Exchange Land, Hasalaka 0.0794 10.2 Kalawanchikudy Exchnage Land 0.1693 40.2
Hatton Exchange and RTOM Office Land, Kal-Eliya Exchange Land 0.1005 5.0
Danbar Road, Hatton Lot 1 0.965 148.6 Kalpitiya Exchange Land, Kalpitiya 0.1093 10.8
Havelock Town RSU II Land, Havelock road, Kamburupitiya Exchange Land 0.089 26.4
Colombo 5 0.0253 90.0 Kandaketiya Exchange Land 0.0981 5.8
Havelock Town RSU III Land, Vauerset place, Kandalama-Radio Repeater Station Land 0.1555 3.1
Colombo 6 0.018 60.3
Kandapola Land 0.0894 10.6
Hemmathagama Land 0.1017 10.0
Kantalai Exchange Land 0.1244 14.8
Hettipola Exchnage Land 0.098 11.6
Karainagar Land 0.0507 0.5
Hingurakgoda Auto Exchange Land 0.0583 8.1
Karaveddy RSU Land 0.311 18.4
Hiniduma (Topparangala) Land 0.05 0.8
Katana Land 0.1012 4.0
Hokandara Exchange Land 0.0857 27.8
Katugastota Exchange & IPT Quarters Land 0.0395 23.4
Homagama LEU1 Land, Pitipana North 0.0253 1.0
Katunayaka Exchange Land Lot 1, 2 0.3039 60.1
Homagama RSU 1 Land, Panagoda 0.0253 2.0
Katuwana land 0.1 4.0
Homagama RSU 2 Land, Magammana 0.0152 1.2
Kebithigollewa Exchange Land
Horana Exchange & DIT Quarters Land, (Lot 314, 315) 0.2628 15.6
Anguruwatta Road, Horana. 0.2177 55.9
Kegalle Exchange and RTOM office Land,
Horawpathana Exchange Land 0.418 12.4 Kegalle. 1.4515 392.9
HP Quarters Land, Primrose Hill. 0.0534 31.7
   Annual Report 2021  | 203

Location Extent Value of Location Extent Value of

(Hectare) land (Rs. (Hectare) land (Rs.
Mn) Mn)
Kekanadura Exchange & Qtrs Land, Maharagama Exchange Land 0.114 264.2
Kekanadura 0.102 20.2 Mahiyangana Exchange Land 0.079 10.9
Kekirawa Auto Exchange Land 0.131 23. Main Street, Kalutara Lot 1, 2, 3 0.3035 342.0
Kelaniya Exchange Land, Kelaniya 0.1475 46.1 Maithreepala Senanayake Mw, Anuradapura 0.1125 177.9
Keselwatta RSU Building Land,34, Srimathi Maithrieepala Senanayake Mawatha
Rd, Keselwatta 0.0632 18.7 Anuradhapura 0.3355 298.4
Killinochchi Exchange & Repeater Station Makandura Exchange Land 0.404 19.9
Land 0.5799 22.9
Malwatta Exchange Land 0.1568 2.5
Killinochchi RAX Land,Paranthan 0.1748 5.1
Mamadala Kiosk Land 0.0879 3.5
Killiveddy Exchange Land 0.0331 0.8
Manipai RAX Land 0.0516 3.0
Kinniya Exchange Land 0.108 17.1
Mannar Transmission Tower Land 0.2645 41.8
Kiri Ella Telecom Exchange Land 0.0875 6.9
Marawila Auto Exchange Land (LOT 2) 0.0507 13.6
Kiribathkumbura Land (Proposed for Training
Maskeliya Exchange Land 0.1078 4.2
Centre) 0.5805 40.2
Mattegoda exchange Land 0.1265 37.5
Kirindiwela Exchange &
IPT Quarters Land – Lot 1, 2 0.2129 23.6 Maturata Exchange Land 0.167 2.3
Kitulgala Exchange Land, Ginigathhena Mawanella Auto Exchnage Land 0.091 21.6
Road, Kitulgala 0.088 2.6 Mawarala Exchange Land 0.207 8.2
Kochchikade Exchange Land 0.041 6.5 Mawatagama New Exchnage Land,
Kollonna Exchange Land 0.332 7.9 Mawatagama 0.1015 20.1
Kopay RAX Land 0.0206 1.4 Medamahanuwara New Exchange land 0.1247 4.5
Kosgama RSU Land, Kosgama (Lot 1, 2) 0.0759 7.5 Medawachchiya Exchange & Linemen
Quarters Land 0.1468 5.8
Kosgoda Exchange Land 0.092 10.9
Medirigiriya Land 0.214 8.5
Koslanda Exchnage Land 0.044 1.3
Middeniya Exchange Land, Middeniya 0.287 6.8
Kotadeniyawa Exchange Land 0.1686 10.0
Millaniya Exchange Land, Millaniya 0.1012 3.0
Kotapola Exchange Land, Kotapola 0.122 4.8
Millenium City Land, Athurugiriya 0.0197 3.5
Kotiyakumbura Exchange Land 0.1012 17.3
Minuwangoda Exchange & IPT Quarters
Kotte RSU1 Land, Madiwela 0.0278 16.5
Land 0.0759 45.0
Kotte RSU2 Land, Talawathugoda 0.0278 21.8
Mirigama Telecom Building, DIT Office & IPT
Kotte RSU3 Land, Battaramulla 0.0185 10.5 Quarters Land, Lot 1,2,3 0.1874 24.0
Kotte RSU4 Land, Thalangama North 0.0354 10.5 Monaragala Exchange & IPT/ Linemen
Kotte RSU5 Land, Kotuwegoda 0.0311 12.3 Quarters Land 0.316 124.9
Kotte RSU6 Land, Nawala 0.0304 30.0 Moratuwa Exchange Land, Moratuwa 0.1119 39.8
Kottegoda Exchange Land 0.1036 16.4 Moratuwa RSU 2 Land, Moratumulla 0.0276 8.2
Kotugoda Stores Complex Land 7.6475 330.6 Moratuwa RSU 3 Land, Rawatha watte 0.0202 12.0
Kuchchaveli Exchange Land Lot 1689 & Lot Moratuwa RSU I Land, Molpe 0.257 6.6
1690 0.1375 4.2 Morawaka Exchange Land, Morawaka 0.0458 3.3
Kuliyapitiya Exchange Land Lot 37, 39 0.23 90.9 Mount Lavinia Exchange Land, Minor Staff
Kurunegala Exchange and RTOM office Land Room & Stores 0.1913 226.8
Kandy Road, Kurunegala. 0.92 345.5 Mulativu Auto Exchange 0.6506 7.7
Kuruwita Telecom Exchange Land 0.0653 7.7 Mulatiyana Exchange Land, Mulatiyana 0.113 6.7
Laggala Repeater Station (Reverston) Land Mulleriyawa Land (Angoda RSU 2) 0.0379 7.5
(Lot 62, 69, 70, 76, Lot A, B) 1.0498 20.8
Murukkan Land 0.1062 2.1
LPT Quarters Land, Station Rd., Vavuniya 0.0777 12.3
Muruthalawa Exchange Land 0.0969 3.8
Lunugala Kiosk Land 0.1346 4.0
Mutur Exchange Land 0.2838 25.2
Lunuwila Exchange (New) Land 0.09 6.2
Nagoda Exchange Land 0.123 7.2
Madampe New Exchange Land, kurunegala
Namunukula Circuit Bangalow Land 0.21 6.6
Road (LOT 1, 2) 0.1048 7.1
Namunukula Exchange Land 0.1485 4.1
Madawachchiya Land, Mannar Rd.
Medawachchiya. 0.3315 5.2 Narammala old & New Exchange Land 0.097 46.0
Madolkelle Exchange Land 0.0961 1.9 Naula Exchange Land 0.138 16.3
Madolsima Exchange Land 0.3844 6.1 Nawalapitiya Exchange & IPT Quarters Land
– Lot 1 & Lot 2 0.2782 82.5
Madolsima Repeater Station Land,
Madolsima 0.252 3.8 Neboda Auto Exchange Land 0.1032 4.1
Madukanda Repeater St. Land Lot 1523 & Negampaha Exchange, Negampaha 0.084 3.3
Lot 1525 0.6037 5.7 Nikadalupotha Exchange Land, Hiripitiya 0.118 10.5
Mahaoya Exchange Land,Main Street, Nikaweratiya Exchange Land. Lot 586, 680 0.14 16.8
Mahaoya. 0.111 4.4
204  |  Sri Lanka Telecom PLC

PORTFOLIO OF LANDS

Location Extent Value of Location Extent Value of

(Hectare) land (Rs. (Hectare) land (Rs.
Mn) Mn)
Nilaveli Exchange Land 0.0629 5.0 Piliyandala RSU 4 Land, Batakeththara 0.0253 4.0
Ninthavur Exchange Land 0.0863 10.2 Piliyandala RSU 5 Land, Bokundara 0.0316 10.6
Nivanthaka Chethiya Road. Anuradhapura 0.0971 34.5 Piliyandala RSU I Land, Honnanthara 0.0518 9.0
Niwitigala Exchange & Linemen Quarters Pitabaddara Exchange Land, Pitabaddara 0.216 8.5
Land 0.283 8.4 Point Pedro Land 0.0809 5.2
No. 17, Sugathodaya Mawatha, Colombo 02. 0.219 1,038.9 Polgahawela Exchange & Quarters
No. 5, Anderson Road, Colombo 05. 0.1889 672.1 Land LOT 1, 3, 5 0.2 4.0
No. 7, Anderson Road, Colombo 05. 0.1363 484.9 Post office Road, Eppawela 0.0914 7.2
No. 9, Anderson Road, Colombo 05. 0.1949 693.4 Potthuwil Exchange Land 0.257 15.2
No. 108 & 109, Walawwaththa Rd., Potuhera Auto Exchange Land, ELU –
Anuradhapura 0.243 48.1 KG206,209 0.009 0.9
No: 562/D, Jayanthi Rd, Anuradhapura 0.7889 93.6 Primrose Hill, Circuit Bungalow Land, Kandy 0.0751 54.9
No: 106, St. Joseph's Street, Negombo 0.6787 335.4 Pugoda ELU-1 Land, Giridara 0.0051 1.2
Nochchiyagama Exchange Land (Lot 1666, Pugoda ELU-2 Land, Owitigama, 0.0253 4.3
1668) 0.18 8.9 Pulasthigama Land 0.212 5
Norton Bridge Exchange Land 0.1519 2.4 Pulmoddai Exchange Land 0.3103 18.4
Nugegoda RSU 2 Land, Embuldeniya 0.0234 9.2 Punagala (Ampitikanda) Repeater Station
Nugegoda RSU 3 Land, Gangodawila 0.0186 11.4 Land 0.192 3.7
Nugegoda RSU 4 Land, Kalubowila 0.0241 33.4 Punchi Borella Exchange Land, Maradana. 0.2625 934
Nugegoda RSU I Land, Kirulapane 0.0244 33.8 Pundaluoya Exchange Land 0.262 8.3
Nugegoda Transport Garage Land, Punguduthive RAX Land 0.3571 2.8
Nalandarama Road 0.197 311.5 Pussellewa Exchange Land, Nuwara Eliya
Oluvil Exchange Land 0.1006 7.9 Road. 0.2155 72.4
OPMC Land, Awissavella 0.3655 50.5 Puttalam Auto Exchage Land, Equipment
OPMC land, station Road, Batticaloa 0.516 30.6 Building & IPT Quarters 0.3054 75.5
P-1 ,P-2, P-3, P-4 Thimbirigaskatuwa Pottode Raddolugama Land 0.02908 5.2
– quarterrs Land ,Negombo. 0.6037 41.8 Radella LPT Quarters Land 0.0438 1.7
-5 & P-6 Poththode quarterrs Land, Ragama Exchange Land 0.2048 121
Thimbirigaskatuwa, Pottode – Negombo Rajakadaluwa Exchange Land 0.149 23.5
Lot 1, 2 1.716 84.8
Rakwana Kiosk Land. 0.027 6.4
Padavi Siripura Exchnge Land 0.263 4.2
Rakwana Telecom Exchange Land. 0.2035 12.1
Padaviya Exchange, Padaviya 0.1087 4.3
Ramboda Exchange Land Lot 1, 2, 3 & 4. 0.112 5.8
Padiyathalawa Exchange Land 0.102 2.4
Rangala Exchange Land 0.154 1.8
Padiyathalawa Trans Repeater Station Land 1.261 5.0
Ranpokunugama Exchange &
Padukka LEU Land (Ihala Bope) 0.0266 0.8 IPT Quarters Land, Ranpokunugama 0.1532 21.2
Palavi Exchange Land (Double Kiosk) Palavi. 0.2024 20.0 Rathmalana RSU 2 Land, Borupana 0.019 3.7
Pallekale Land 0.0899 26.7 Rathmalana RSU I Land, Laxapathiya 0.0253 7
Pandaththeruppu Land 0.0513 1.2 Ratmalana Exchnage Land, Ratmalana 0.2076 255.7
Pankulam Exchange Land 0.0608 2.4 Rattota Kiosk Land 0.0209 4.1
Pannala Exchnage Land 0.094 11.1 Regional Telecom Engineer's Office Land,
Pasalai new land 0.097 1.1 Church Street, Galle. 0.252 647.6
Passara Exchange and Linemen Regional Telecom Engineers' Office
Quarters Land 0.3744 19.5 Pollonnaruwa Exchange & IPT Quarters Land 0.3129 160.8
Pasyala Exchange & IPT Quarters Land, Regional Telecom Engineer's Office & Kandy
Nittambuwa Rd, Pasyala. Lot 1, 2 0.0534 7.9 Exchange Land Lot 1 & Lot 2 0.2251 489.4
Pathiraja Kanda Repeater Station Land, Regional Telecom Engineer's Office -
Ambalangoda. 0.101 1.9 Rathnapura Billing Land 0.3645 172.9
Pawakkulam Land 0.2091 1.2 Regional Telecom Engineer's office &
Peliyagoda Stores Complex Land 1.6432 640.4 exchange Land, Court Road, Gampaha. 0.1366 162
Pelmadulla Telecom Exchange Land 0.095 37.5 Regional Telecom Engineer’s Office Land –
06, Senanayake Mw. Bandarawela 0.238 282.2
Peradeniya Exchange, Telecom Training
Centre & Quarters Land, Galaha Road, Regional Telecom Engineer's Office Land –
Peradeniy Lot 1 & Lot 2 0.1169 69.3 Kalmunai 0.4326 67.8
Pettigala Repeater Station Land, Balangoda. 0.073 1.7 Regional Telecom Engineer's office Land,
Dickmens Road, Colombo 05 0.336 1,328.40
Piliyandala Exchange Land 0.0632 37.5
Regional Telecom Engineer's Office Matale
Piliyandala RSU 2 Land, Makandana 0.0177 2.1
Exchange Land 0.3342 165.2
Piliyandala RSU 3 Land, Wethara 0.0253 4.0
   Annual Report 2021  | 205

Location Extent Value of Location Extent Value of

(Hectare) land (Rs. (Hectare) land (Rs.
Mn) Mn)
Regional Telecom Engineers' Office, Thirukkovil RSU Land 0.1012 6
Exchange & IPT Quarters Land, Nuwara-Eliya 0.2354 698 Thoppur Auto Exchange Land 0.1745 5.2
Regional Telecom Engineer's Office – Matara Tissamaharama New Exchange Land 0.082 11.3
Exchange and DIT Office Land 0.288 341.6
Torwood Repeater station Land, Matugama 0.1607 2.5
Regional Telecom, Engineer's Office &
Tower Hill Raod, Hambantota. Lot 1 & Lot 2 0.215 85
Exchange Land, Kotte 0.2051 283.8
Training Centre Land, Horethuduwa
Repeater Station Land -Glen Course 0.2244 3.1
(Sirimathi Rd.) 1.4346 141.8
Repeater Station Land, Primrose Hill. 0.1233 32.9
Transport Division Land,
Rideegama Exchange Land 0.253 8
Polhengoda Road, Narahenpita. 0.303 539
Ridiyagama Rural Exchange Land 0.0655 1.9
Tx. Tower land (Opposite to the RTOM office
Rikillagaskada Exchange, & IPT seperated by Highway),Gampaha 0.0157 17.1
Quarters Land 0.13 23.1
Udathuttiripitiya Exchange Land 0.1258 7.5
RSU 1 Land, No.47/1A, Church Road,
Udugama Exchange Land Udugampola
Mattakkuliya 0.0304 18
MSAN Land 0.1391 11
RSU Building & Exchange Land, Beruwela. 0.21 27
Udupussallawa Exchange Land 0.0906 1.8
RSU Building & IPT Quarters Land,
Ukuwela land 9.0
Matugama 0.0597 9.4
Ullukkulam(SR-500) Land
RSU Building Bulathsinghala Land Lot 1, 2 0.2017 8
(Periya-Ullukkulam) 0.0536 1.6
RSU Building Meegahatenna
Undugoda Exchange Land 0.0969 2.9
Land Lot 2828, 2829 0.265 5.6
Upcot Rural Exchange & Linemen Quarters
RSU Land-Pallepola Lot 403 0.097 8.6 Land, Lot 1, 2 0.1495 2.9
RSU Land-Rattota Lot 6 & Lot 7 0.122 9.6 Urubokka Exchange Land 0.129 11.5
RTOM & Auto ExchangeLand, Batticaloa 0.4383 156 Uyanwatta Land- MNA201, Dewalagama 0.0025 0.5
RTOM building Land,Nugegoda 0.117 279.4 Vakarai VHF Station Land 0.1645 3.3
RTOM Office & DIT/IPT Quarters Land, Valachchanai Auto Exchange Land 0.2036 22.1
Awissawella 0.4376 167.6
Valvettithurai RAX Land 0.0725 1.4
RTOM office Land,Vavuniya. Lot 1772, 1773 0.4047 48
Veyangoda Excahnge Land, Negombo Road. 0.0889 21.1
RTOM Qtrs Land,Donald janz rd, Galle 0.0511 20.2
VHF Station Land -Batticaloa (Kaliyankadu) 0.1019 14.1
RTOM Quartres, behind the Mosque –
Visaka Hill Repeater Station Land,
Anuradhapura 0.1769 52.5
Bandarawela 0.0958 9.4
Rukmalgama Exchange Land 0.0267 5.8
Waga Land 0.1623 2.8
Ruwanwella RSU Land, Ruwanwella 0.0673 5.3
Walasmulla Exchange Land 0.0803 6.3
Samanturai Exchange Land 0.199 13.8 Warakapola Exchange Land 0.0867 9.4
Seruwila Exchnage Land 0.232 3.7 Wariyapola Exchange Land 0.112 6.6
Sevanagala Exchange & LPT Qts Land Lot Watawela Land 0.121 3.8
4900, 4901 0.642 19
Wattala Exchange Land 0.1012 120.0
Single Tree Hill-Repeater Station Land
Lot 1, 2, 3 0.1691 6.7 Wattegama Exchange Land Kudugalla Road 0.0827 8.2
Sithankerni RSU Land 0.1745 11.8 Wattegama Exchange Land Kudugalla Road
(Part 2 out of Parts 2). 0.1512 16.4
Suriyakanda Repeater station Land 0.15 3.6
Weeraketiya Exchange & Qtrs Land 0.17 10.1
Suriyawewa Exchange Land 0.082 2.4
Weligama Exchange & IPT Quarters Land 0.1069 30.2
Switching Centre & Jaffna Exchnage Land 1.181 233.5
Welikada Wireless Station & Maritime Servcie
Talaimannar Repeater St. Land Lot 1 & Lot 2 0.0824 6.7 Station Land 3.088 4,883.2
Talawakelle Exchange Land Lot 1, 2, 3 0.1622 7.2 Welikanda Exchange Land 0.2988 11.8
Tanamalwila Exchange Land 0.32 7.6 Welimada Exchange & Kiosk Land 0.111 17.5
Tangalle Exchange, IPT Quarters & Welimada RLL Base Station Land 0.0527 1.5
Repearter Stn. Land 0.196 27.1
Weliweriya Exchange Land, Gampaha Road.
Tangalle Linemen's Quarters Land, Lot 1, 2, 3, 4 0.0438 25.5
Tissa Road, Marakolliya, Tangalle. 0.0824 4.1 Wellampitiya Exchange Land 0.102 40.3
Telecom Training Centre Land, No. 176, Wellawaya Exchange Land 0.13 20.5
Matara Rd, Unawatuna, Galle 0.791 125.1
Wilgamuwa RSU Land 0.1878 22.3
Telecom Training Centre Land, Welisara. 2.228 484.5
Yakkalamulla Radio Base Station Land
Thambuttegama Exchange Land 0.086 34 (Nabadawa RBS Land) 0.0506 0.8
Thampalagam Exchange Land, Yatiyantota Auto Exchange Land 0.0511 2.0
Thampalagam 0.102 6.1
Thelijjawila Auto Exchange & Quarters Land 0.069 13.6
Thellipalai RSU Land 0.10985 2.2
206  |  Sri Lanka Telecom PLC

PORTFOLIO OF LANDS

Lands revalued in the year 2020

Location Extent Value of
(Hectare) land (Rs.
Mn.)
DIT & IPT Quarters, Anuradhapura 0.7889 60.2
Quarters, Nivanthika Chetiya Road,
Anuradhapura 0.0466 9.2
Namulukula Repeater Station 0.1373 1.6
Bogahakumbura Exchange 0.1264 5.0
Ampitikanda Exchange 0.1264 8.2
Ella Kiosk 0.033 13.0
Batapola Exchange 0.116 27.5
Malwana Exchange 0.1057 31.3
Hanthana Repeater Station 0.2123 5.3
Kadugannawa Exchange 0.0356 28.1
Gampola Exchange 0.0285 12.7
Galaha Exchange 0.0556 0.6
Piyagala SLT Site – 11.9
Dambulla Exchange 0.4032 136.0
Kotmale Kiosk 0.1012 1.2
Del Repeater Station 0.3731 4.4
Watagoda Exchange 0.185 7.3
Benachi Radio Transmission 0.0777 1.6
Total value of lands above LKR 500,000/- 37,121.66
   Annual Report 2021  | 207

GRI INDEX

GRI Standard Disclosure Page number Omission

GRI 101: Foundation 2016 (does not include any disclosures)

GENERAL DISCLOSURES
GRI 102: General 102-1 Name of the organization 3, Inner Back
Disclosures 2016 Cover
102-2 Activities, brands, products and services 4
102-3 Location of headquarters Inner Back
Cover
102-4 Location of operations 4
102-5 Ownership and legal form Inner Back
Cover
102-6 Markets served 4
102-7 Scale of the organization 11, 12
102-8 Information on employees and other workers 13, 96
102-9 Supply chain 89
102-10 Significant changes to the organization and its supply chain None
102-11 Precautionary principle or approach 3
102-12 External initiatives 89
102-13 Membership of associations 89
102-14 Statement from senior decision maker 16
102-16 Values, principles, norms and standards of behaviour 4, 107
102-18 Governance Structure 46
102-40 List of stakeholder groups 67
102-41 Collective bargaining agreements 103
102-42 Identifying and selecting stakeholders 67
102-43 Approach to stakeholder engagement 67
102-44 Key topics and concerns raised 67
102-45 Entities included in the consolidated financial statements 11
102-46 Defining report content and topic boundary 3
102-47 Material topics 71
102-48 Restatement of information None
102-49 Changes in reporting 3
102-50 Reporting period 3
102-51 Date of most recent report 3
102-52 Reporting cycle 3
102-53 Contact point for questions regarding the report 3
102-54 Claims of reporting in accordance with the GRI Standards 3
102-55 GRI context index 207
102-56 External assurance 3
208  |  Sri Lanka Telecom PLC

GRI INDEX

GRI Standard Disclosure Page number Omission

MATERIAL TOPICS
Economic Performance
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 8
Approach 2016 103-2 The management approach and its components 8
103-3 Evaluation of the management approach 8
GRI 201: Economic 201-1- Direct economic value generated and distributed 10
Performance 2016 201-3 Defined benefit plan obligations and other retirement plans 98
Indirect Economic Impacts
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 8
Approach 2016 103-2 The management approach and its components 8
103-3 Evaluation of the management approach 8
GRI 203: Indirect 203-1 Infrastructure investments and services supported 6, 87, 92
Economic Impacts 2016 203-2 Significant indirect economic impacts 6, 87
Procurement practices
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 89
Approach 2016 103-2 The management approach and its components 89
103-3 Evaluation of the management approach 89
GRI 204: Procurement 204-1 Proportion of sending on local suppliers 89
Practices 2016
Anti-corruption
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 72
Approach 2016 103-2 The management approach and its components 72
103-3 Evaluation of the management approach 72
GRI 205 Anti-corruption 205-1 Operations assessed for risks related to corruption 72
2016
Anti-competitive Behaviour
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 46
Approach 2016 103-2 The management approach and its components 46
103-3 Evaluation of the management approach 46
GRI 206 Anti-competitive GRI 206-1 Legal actions for anti-competitive behavior, anti-trust, and No legal
Behaviour 2016 monopoly practices action was
taken during
the year
Energy
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 105
Approach 2016 103-2 The management approach and its components 105
103-3 Evaluation of the management approach 105
GRI 302: Energy 2016 302-5 Reductions in energy requirements of products and services 105
Environmental Compliance
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 104
Approach 2016 103-2 The management approach and its components 104
103-3 Evaluation of the management approach 104
   Annual Report 2021  | 209

GRI Standard Disclosure Page number Omission

GRI 307: Environmental 307-1 Non-compliance with environmental laws and regulations None
Compliance 2016
Employment
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98

GRI 401: Employment 401-1 New employee hires and employee turnover 98
2016 401-2 Benefits provided to full-time employees that are not 101
provided to temporary or part-time employees
Occupational Health and Safety
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98
GRI 403: Occupational 403-3 Occupational health services 100
Health and Safety 2018
Training and Education
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98
GRI 404: Training and 404-1 Average hours of training per year per employee 101
Education 2016 404-2 Programs for upgrading employee skills and transition 101
assistance programmes
404-3 Percentage of employees receiving regular performance and 101
career development reviews
Diversity and Equal Opportunity
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98
GRI 405: Diversity and 405-1 Diversity of governance bodies and employees 96, 103
Equal Opportunity 2016
Non-discrimination
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98
GRI 406: Non- 406-1 Incidents of discrimination and corrective actions taken 103
discrimination 2016
Freedom of Association and Collective Bargaining
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 98
Approach 2016 103-2 The management approach and its components 98
103-3 Evaluation of the management approach 98
210  |  Sri Lanka Telecom PLC

GRI INDEX

GRI Standard Disclosure Page number Omission

GRI 407: Freedom 407-1 Operations and suppliers in which the right to freedom of 103
of Association and association and collective bargaining may be at risk
Collective Bargaining
2016
Local Communities
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 90
Approach 2016 103-2 The management approach and its components 90
103-3 Evaluation of the management approach 90
GRI 413: Local 413-1 Operations with local community engagement, impact 90
Communities 2016 assessments and development programmes
413-2 Operations with significant actual and potential negative None
impacts on local communities
Marketing and Labelling
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 107
Approach 2016 103-2 The management approach and its components 107
103-3 Evaluation of the management approach 107
GRI 417: Marketing and 417-3 Incidents of non-compliance concerning marketing None
Labelling 2016 communications
Customer privacy
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 84
Approach 2016 103-2 The management approach and its components 84
103-3 Evaluation of the management approach 84
GRI 418: Customer 418-1 Substantiated complaints concerning breaches of customer None
Privacy 2016 privacy and losses of customer data
Socioeconomic Compliance
GRI 103: Management 103-1 Explanation of the material topic and its Boundary 6
Approach 2016 103-2 The management approach and its components 6
103-3 Evaluation of the management approach 6
GRI 419: Socioeconomic 419-1 Non-compliance with laws and regulations in the social and None
Compliance 2016 economic area
   Annual Report 2021  | 211

ABBREVIATIONS

4G - Fourth Generation OTT - Over The Top

5G - Fifth Generation PAT - Profit After Tax
ADSL - Asymmetric Digital Subscriber Line PBT - Profit Before Tax
BPO - Business Process Outsourcing PEO TV - Personalised Entertainment Option Television
BSS - Billing Support System PIOCMA - Pacific and Indian Ocean Cable Maintenance
CAPEX - Capital Expenditure Agreement
CCC - Colombo City Centre PoP - Point of Presence
CDMA - Code Division Multiple Access PSTN - Public Switched Telephone Network
CRM - Customer Relationship Management RCS - Rich Communications Suite
CSP - Communication Service Provider SAFA - South Asian Federation of Accountants
DC HSPA+ - Dual-Carrier High Speed Packet Access SDN - Software-Defined Networking
DSP - Digital Service Provider SEA ME WE - South East Asia – Middle East – West Europe
EBITDA - Earnings Before Interest, Taxes, Depreciation and SEAIOCMA - South East Asia and Indian Ocean Cable
Amortisation Maintenance Agreement
EPF - Employees’ Provident Fund SLBN - Sri Lanka Telecom Broadband Network
ERP - Enterprise Resource Planning SLFRS - Sri Lanka Financial Reporting Standards
ETF - Employees’ Trust Fund SLIM - Sri Lanka Institute of Marketing
FBB - Fixed Broadband SME - Small and Medium Enterprise
FTTP - Fibre-To-The-Premises SOA - Service Oriented Architecture
FTTN - Fibre-To-The-Node
Gbps - Gigabits per second
GRI - Global Reporting Initiative
GTH - Global Telecommunications Holdings
HDTV - High Definition Television
HSPA - High Speed Packet Access
ICT - Information and Communication Technologies
ICTA - Information and Communication Technology Agency
IDD - International Direct Dialling
IMS - IP Multimedia Subsystem
INED - Independent Non-Executive Director
IoE - Internet of Everything
IoT - Internet of Things
IPTV - Internet Protocol Television
ISP - Internet Service Provider
ITU - International Telecommunication Union
KPI - Key Performance Indicator
KPO - Knowledge Process Outsourcing
LED - Light Emitting Diode
LGN - Lanka Government Network
LTE - Long-Term Evolution
MBB - Mobile Broadband
Mbps - Megabits per second
MIMO - Multiple-Input and Multiple-Output
MoU - Memorandum of Understanding
MPLS - Multi Protocol Label Switching
NB-IoT - Narrowband Internet of Things
NBN - National Backbone Network
NED - Non-Executive Director
NFV - Network Functions Virtualisation
NGN - Next Generation Network of Sri Lanka
OPEX - Operating Expenses
OSS - Operational Support System
212  |  Sri Lanka Telecom PLC

NOTES
  Annual Report 2021  | 213
214  |  Sri Lanka Telecom PLC

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twenty Fifth (25th) of moneys borrowed by the Company exclusive of any
Annual General Meeting of Sri Lanka Telecom PLC will be temporary borrowing secured or unsecured from bankers
held at 10.00 am on Wednesday, 11th May 2022 at the Lotus or others in the ordinary course of business to meet
Hall of the Bandaranaike Memorial International Conference temporary requirements, shall not without the previous
Hall (BMICH), Bauddhaloka Mawatha, Colombo 07 for the sanction of an Ordinary Resolution of the Company
purpose of conducting the following Business: exceed three times the total of:

AGENDA (i) the nominal amount of the issued and paid-up share
1. Routine Business capital of the Company for the time being; and
1.1 To receive and consider the Annual Report of the
Board of Directors on the affairs of the Company (ii) The amount for the time being standing to the credit
and the Statement of Accounts for the year ended of its Retained Earnings Account in the books of the
31 December 2021 with the Report of the Auditors Company;
thereon.
but nevertheless, no person dealing with the Company shall
1.2 To declare a first and final dividend of Rupees Two be concerned to see or inquire whether these limits are
and Cents Two (LKR 2.02) per share as recommended observed, and no debt incurred or security given in excess of
by the Directors. such limit shall be invalid or ineffectual unless the lender or
1.3 To elect as a Director, Mr. V. U. Kumar, who retires in recipient of the security had at the time when the debt was
terms of Articles 97 of the Articles of Association. incurred or security given express notice that the limit hereby
imposed had been or would thereby be exceeded.”
1.4 To elect as a Director, Mr. K A Vimalenthirarajah,
who retires in terms of Articles 97 of the Articles of BY ORDER OF THE BOARD
Association. SRI LANKA TELECOM PLC
1.5 To re-elect as a Director, Ms. Lai Choon Foong, who
retires by rotation in terms of Articles 91 and 92 of the
Articles of Association.
1.6 To re-elect as a Director, Mr. Mohan Weerakoon, who Mahesh Athukorale
retires by rotation in terms of Articles 91 and 92 of the Group Company Secretary
Articles of Association.
1.7 To re-appoint Messrs. Ernst & Young, Chartered
Accountants as Auditors for the ensuing year 11 April 2022
and to authorize the Directors to determine their Colombo
remuneration.
1.8 To authorize the Directors to determine and make Notes:
donations to charities. 1. A member entitled to attend and vote at the meeting is
1.9 To transact any other business of which due notice has entitled to appoint a proxy to attend and vote instead of
been given. him/her.

2 Special Business 2. A proxy need not be a member of the Company.

To consider and if thought fit to pass the Resolution set out 3. A Form of Proxy accompanies this Notice.
below as a Special Resolution.

> Delete the existing Article 114 of the Articles of

Association of the Company in its entirety and replace with
the following clause numbered as Article 114:

“The Directors may exercise all the powers of the

Company to borrow money and may mortgage or charge
its undertaking property and uncalled capital, or any
part thereof and issue debentures, debenture - stock,
convertible loan stock, and other securities whether
outright or as collateral security for any debt, liability or
obligation of the Company or of any third party, provided
that the aggregate amount at any one time outstanding
   Annual Report 2021  | 215

FORM OF PROXY

I/We ................................................................................................................................ (holder of NIC No ...................................)

of ...................................................................................................................being a member/members of Sri Lanka Telecom PLC

hereby appoint ..................................................................................................................................................................................

(holder of NIC No ....................................................................) of...............................................................................whom failing*

Mr. Rohan Fernando whom failing*

Mr. Lalith Seneviratne whom failing*
Mr. Chan Chee Beng whom failing*
Mr. Lawrence Paratz whom failing*
Ms. Lai Choon Foong whom failing*
Mr. Mohan Weerakoon, PC whom failing*
Mr. Ranjith Rubasinghe whom failing*
Mr. V U Kumar whom failing*
Mr. K A Vimalenthirarajah

as my/our* proxy to represent me/us* to speak and vote for me/us* and on my/our* behalf as indicated below at the 25th
Annual General Meeting of the Company, to be held on 11th May 2022 and at any adjournment thereof and at every poll
which may be taken in consequence thereof.

For Against
1. Routine Business
To receive and consider the Annual Report of the Board of Directors on the affairs of the Company
1.1 and the Statement of Accounts for the year ended 31 December 2021 with the Report of the
Auditors thereon.
To declare a first and final dividend of Rupees Two and Cents Two (LKR 2.02) per share as
1.2
recommended by the Directors.
To elect as a Director, Mr. V.U.Kumar, who retires in terms of Articles 97 of the Articles of
1.3
Association.
To elect as a Director, Mr. K A Vimalenthirarajah, who retires in terms of Articles 97 of the Articles of
1.4
Association.
To re-elect as a Director, Ms. Lai Choon Foong, who retires by rotation in terms of Articles 91 & 92 of
1.5
the Articles of Association.
To re-elect as a Director, Mr. Mohan Weerakoon, who retires by rotation in terms of Articles 91 & 92
1.6
of the Articles of Association.
To re- appoint Messrs Ernst & Young, Chartered Accountants as Auditors for the ensuing year and to
1.7
authorize the Directors to determine their remuneration:
1.8 To authorise the Directors to determine and make donations to charities.
Special Business
2. To pass the Special Resolution indicated in the Notice of the Meeting to amend Article 114 of the
Articles of Association of the Company

In witness my/our hand/seal given on this…………day of ……………Two Thousand and Twenty Two.

......................................................
Signature

*Please delete what is inapplicable.

Note : Instruction as to completion appear overleaf.

216  |  Sri Lanka Telecom PLC

FORM OF PROXY

INSTRUCTIONS AS TO COMPLETION OF FORM

OF PROXY
1. Kindly perfect the Form of Proxy by filling in legibly
your full name address and the National Identity Card
number and signing in the space provided and filling in
the date of signature.

2. Please indicate with an “X” in the space provided,

how your proxy is to vote on each resolution. If no
indication is given the proxy in his/her discretion will
vote as he/she thinks fit.

3. In the case of a corporate member the proxy must

be executed in accordance with the Articles of
Association. If the Form of Proxy is signed by an
Attorney, the relative Power of Attorney should also
accompany the completed Form of Proxy, if it has not
already been registered with the Company.

4. The competed Form of Proxy should be deposited

at the Registered Office of the Company, Sri Lanka
Telecom PLC, Lotus Road, Colombo 01 or sent to the
e-mail address - [email protected] not later than
48 hours before the time fixed for the holding of the
meeting.
CORPORATE INFORMATION

NAME OF THE COMPANY SENIOR TENDER BOARD

Sri Lanka Telecom PLC Mr. K. A. Vimalenthirarajah - Chairman

Mr Mohan Weerakoon, PC
LEGAL FORM
A public limited liability Company incorporated in Sri Ms Lai Choon Foong
Lanka in September 1996, under the Conversion of Public Mr. V. U. Kumar
Corporations of Government-Owned Business Undertakings
into Public Limited Companies Act No. 23 of 1987 and RELATED PARTY TRANSACTIONS REVIEW
quoted on the Colombo Stock Exchange in January 2003. COMMITTEE
Ms. Lai Choon Foong – Chairperson
COMPANY REGISTRATION NUMBER
PQ 7 Mr. Mohan Weerakoon, PC
Mr. K. A. Vimalenthirarajah
STOCK EXCHANGE LISTING
1,804,860,000 Ordinary Shares of the Company are listed in AUDITORS
the Colombo Stock Exchange. Ernst & Young (Chartered Accountants), 201,
De Saram Place, Colombo 10.
REGISTERED ADDRESS
Telecom Headquarters, Lotus Road, Colombo 1. COMPANY SECRETARY
Mr Mahesh Athukorale
BOARD OF DIRECTORS
Mr. Rohan Fernando - Chairman CREDIT RATING
Mr. Lalith Seneviratne - Director / GCEO Fitch Rating
National Long-Term Rating of AA-(Ika)
Mr Lawrence Paratz
Mr. Chan Chee Beng Long-term issuer
Credit rating of B
Ms Lai Choon Foong
Mr. Mohan Weerakoon, PC BANKERS
Bank of Ceylon
Mr. Ranjith Ganganath Rubasinghe
Bank of China
Mr. V. U. Kumar
Citi Bank N.A
Mr. K. A. Vimalenthirarajah
Commercial Bank of Ceylon PLC
AUDIT COMMITTEE
Deutsche Bank
Mr. Mohan Weerakoon, PC - Chairman
DFCC Bank PLC
Ms. Lai Choon Foong
Hatton National Bank PLC
Mr. V. U. Kumar
HSBC
Mr. K. A. Vimalenthirarajah
National Savings Bank
REMUNERATION AND NOMINATION COMMITTEE Nations Trust Bank PLC
Mr. Chan Chee Beng - Chairman
NDB Bank PLC
Mr. Lawrence Paratz
People’s Bank
Mr. Rohan Fernando
Sampath Bank PLC
TECHNOLOGY SUBCOMMITTEE Seylan Bank PLC
Mr. Lawrence Paratz - Chairman Standard Chartered Bank
Mr. Lalith Seneviratne
NO DREAM TOO BIG     SRI LANKA TELECOM PLC | ANNUAL REPORT 2021