DIALOG AXIATA PLC AND ITS SUBSIDIARIES

CONSOLIDATED INTERIM FINANCIAL

INFORMATION FOR THE NINE MONTHS ENDED
30 SEPTEMBER 2011

Page 2

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Balance sheet
(all amounts in Sri Lanka Rupees Thousands)
30 September 2011
Group
Company
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiaries
Investment in associate
Other investment
Amount due from subsidiaries

31 December 2010
Group
Company

51,584,001
3,993,255
Nil
34,057
30,596
Nil
55,641,909

43,131,481
1,719,631
10,326,010
27,742
30,596
9,254,822
64,490,282

53,014,351
3,757,193
Nil
Nil
30,596
Nil
56,802,140

44,348,523
1,397,140
10,326,010
Nil
30,596
8,771,992
64,874,261

389,904
10,060,682
10,010,208
20,460,794

385,202
8,721,685
9,494,357
18,601,244

271,184
9,628,718
5,433,770
15,333,672

266,159
8,071,307
5,079,135
13,416,601

76,102,703

83,091,526

72,135,812

78,290,862

29,306,113
(1,990,921)
291,782
129,225
4,834,680
32,570,879
32,570,879

29,306,113
(1,990,921)
291,782
94,503
13,636,567
41,338,044
41,338,044

30,556,113
(1,990,921)
260,067
131,713
2,656,318
31,613,290
31,613,290

30,556,113
(1,990,921)
260,067
96,820
10,744,469
39,666,548
39,666,548

17,932,680
1,923,985
450,229
642,520
1,103,522
22,052,936

17,932,680
1,923,985
411,134
629,710
1,103,522
22,001,031

20,122,753
1,612,510
390,635
619,876
285,766
23,031,540

20,122,753
1,612,510
358,854
607,794
285,766
22,987,677

Total liabilities
Total equity and liabilities

13,364,527
54,440
8,059,921
21,478,888
43,531,824
76,102,703

11,879,111
50,820
7,822,520
19,752,451
41,753,482
83,091,526

12,094,208
14,151
5,382,623
17,490,982
40,522,522
72,135,812

10,443,631
10,898
5,182,108
15,636,637
38,624,314
78,290,862

Net assets per share (Rs.)

3.85

4.92

3.57

4.56

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents

Total assets
EQUITY
Capital and reserves attributable to equity
holders of the Company
Stated capital
ESOS Trust shares
Dividend reserve - ESOS
Revaluation reserve
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Deferred income tax liabilities
Retirement benefit obligations
Provision for other liabilities
Deferred revenue
Current liabilities
Trade and other payables
Current income tax liabilities
Borrowings

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

Group Chief Financial Officer

Date : 28 October 2011
The Board of Directors is responsible for the preparation and presentation of these financial statements.
Approved and signed for and on behalf of the Board of Directors:
Signed

Director
Date : 28 October 2011
The notes on page 8 to 12 form an integral part of these financial statements.

Signed

Director
Date : 28 October 2011

Page 3

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Income statement
(all amounts in Sri Lanka Rupees Thousands)
Nine months ended
30 September 2011
Group
Company

Revenue

Direct costs

Gross margin

Other operating income

33,663,914

30,853,735

(18,592,777) (16,693,108)

Nine months ended

30 September 2010
Group
Company

30,668,744

28,068,421

(17,350,683)

(15,221,131)

15,071,137

14,160,627

13,318,061

12,847,290

55,975

53,414

79,603

63,333

Administrative costs

(6,087,298)

(4,811,804)

(4,993,823)

(3,875,265)

Distribution costs

(4,857,845)

(4,503,915)

(4,273,387)

(3,811,404)

4,181,969

4,898,322

4,130,454

5,223,954

155,623

154,346

6,638

Nil

Nil

Nil

4,344,230

5,052,668

4,095,407

5,315,548

Operating profit

Finance income/ (costs )- net

Share of profit of associate

Profit before tax

(408,803)

Tax

Profit for the period

(403,334)

(35,047)

(323,262)

91,594

(325,101)

3,935,427

4,649,334

3,772,145

4,990,447

3,935,427

4,649,334

3,772,145

4,990,447

- Basic

0.72

0.85

0.44

0.59

- Diluted

0.72

0.85

0.44

0.59

Attributable to:
Equity holders of the Company

Earnings per share on profit attributable to the equity holders of

the Company during the period (expressed in Rs per share)

The notes on page 8 to 12 form an integral part of these financial statements.

Page 4

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Income statement
(all amounts in Sri Lanka Rupees Thousands)
Three months ended
30 September 2011
Group
Company

Three months ended

30 September 2010
Group
Company

Revenue

11,648,028

10,676,925

10,557,453

9,671,291

Direct costs

(6,074,750)

(5,511,966)

(5,913,567)

(5,222,958)

5,573,278

5,164,959

4,643,886

4,448,333

2,657

2,295

19,248

17,440

Gross margin

Other operating income

Administrative costs

(2,113,384)

(1,580,940)

(1,595,280)

(1,291,952)

Distribution costs

(1,729,151)

(1,580,488)

(1,408,559)

(1,312,473)

1,733,400

2,005,826

1,659,295

1,861,348

120,537

125,854

Operating profit

Finance (costs)/income - net

Share of profit of associate

Profit before tax

(85,573)

4,329

Nil

Nil

Nil

1,652,156

1,919,292

1,779,832

1,987,202

(259,701)

Tax

Profit for the period

(86,534)

(256,678)

(86,894)

(86,552)

1,392,455

1,662,614

1,692,938

1,900,650

1,392,455

1,662,614

1,692,938

1,900,650

- Basic

0.26

0.31

0.20

0.23

- Diluted

0.26

0.31

0.20

0.23

Attributable to:
Equity holders of the Company

Earnings per share on profit attributable to the equity holders of

the Company during the period (expressed in Rs per share)

The notes on page 8 to 12 form an integral part of these financial statements.

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Page 5

Statement of changes in equity

(all amounts in Sri Lanka Rupees Thousands)
Group
Stated
capital

Shares in
ESOS trust

Dividend
reserve
- ESOS

Revaluation
reserve

Retained
earnings

Total

Balance at 1 January 2010

31,806,113

(1,990,921)

260,067

136,471

(2,102,401)

28,109,329

Net profit
Dividend to rated cumulative redeemable preference shares
Redemption of rated cumulative redeemable preference shares
Deferred tax attributable to revaluation surplus
Depreciation transfer
Balance as at 30 September 2010

Nil
Nil
(1,250,000)
Nil
Nil
30,556,113

Nil
Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
Nil
Nil
260,067

Nil
Nil
Nil
(1,050)
(3,015)
132,406

3,772,145
(257,025)
Nil
Nil
3,015
1,415,734

3,772,145
(257,025)
(1,250,000)
(1,050)
Nil
30,373,399

Balance at 1 October 2010

30,556,113

(1,990,921)

260,067

132,406

1,415,734

30,373,399

Net profit
Dividend to rated cumulative redeemable preference shares
Depreciation transfer
Deferred tax attributable to revaluation surplus
Balance at 31 December 2010

Nil
Nil
Nil
Nil
30,556,113

Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
Nil
260,067

Nil
Nil
(1,037)
344
131,713

1,275,296
(35,749)
1,037
Nil
2,656,318

1,275,296
(35,749)
Nil
344
31,613,290

Balance at 1 January 2011

30,556,113

(1,990,921)

260,067

131,713

2,656,318

31,613,290

Net profit
Dividend to rated cumulative redeemable preference shares
Depreciation transfer
Dividend received ESOS
Deferred tax attributable to revaluation surplus
Dividend to ordinary shares
Redemption of rated cumulative redeemable preference shares
Balance as at 30 September 2011

Nil
Nil
Nil
Nil
Nil
Nil
(1,250,000)
29,306,113

Nil
Nil
Nil
Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
31,715
Nil
Nil
Nil
291,782

Nil
Nil
(3,035)
Nil
547
Nil
Nil
129,225

3,935,427
(131,344)
3,035
Nil
Nil
(1,628,756)
Nil
4,834,680

3,935,427
(131,344)
Nil
31,715
547
(1,628,756)
(1,250,000)
32,570,879

The notes on page 8 to 12 form an integral part of these financial statements.

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Page 6

Statement of changes in equity

(all amounts in Sri Lanka Rupees Thousands)
Company
Stated
capital

Shares in
ESOS trust

Dividend
reserve
- ESOS

Balance at 1 January 2010

31,806,113

(1,990,921)

260,067

Net profit
Deferred tax attributable to revaluation surplus
Redemption of rated cumulative redeemable preference shares
Depreciation transfer
Dividend to rated cumulative redeemable preference shares
Balance as at 30 September 2010

Nil
Nil
(1,250,000)
Nil
Nil
30,556,113

Nil
Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
Nil
Nil
260,067

Balance at 1 October 2010

30,556,113

(1,990,921)

Net profit
Deferred tax attributable to revaluation surplus
Depreciation transfer
Dividend to rated cumulative redeemable preference shares
Balance at 31 December 2010

Nil
Nil
Nil
Nil
30,556,113

Balance at 1 January 2011

Net profit
Redemption of rated cumulative redeemable preference shares
Dividend to ordinary shares
Dividend to rated cumulative redeemable preference shares
Dividend received ESOS
Depreciation transfer
Deferred tax attributable to revaluation surplus
Balance as at 30 September 2011

Revaluation
reserve

Total

4,481,458

34,658,075

Nil
(1,050)
Nil
(2,850)
Nil
97,458

4,990,447
Nil
Nil
2,850
(257,025)
9,217,730

4,990,447
(1,050)
(1,250,000)
Nil
(257,025)
38,140,447

260,067

97,458

9,217,730

38,140,447

Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
Nil
260,067

Nil
344
(982)
Nil
96,820

1,561,506
Nil
982
(35,749)
10,744,469

1,561,506
344
Nil
(35,749)
39,666,548

30,556,113

(1,990,921)

260,067

96,820

10,744,469

39,666,548

Nil
(1,250,000)
Nil
Nil
Nil
Nil
Nil
29,306,113

Nil
Nil
Nil
Nil
Nil
Nil
Nil
(1,990,921)

Nil
Nil
Nil
Nil
31,715
Nil
Nil
291,782

Nil
Nil
Nil
Nil
Nil
(2,864)
547
94,503

4,649,334
Nil
(1,628,756)
(131,344)
Nil
2,864
Nil
13,636,567

4,649,334
(1,250,000)
(1,628,756)
(131,344)
31,715
Nil
547
41,338,044

The notes on page 8 to 12 form an integral part of these financial statements.

101,358

Retained
earnings

Page 7

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Cash Flow Statement
(all amounts in Sri Lanka Rupees Thousands)
Nine months ended
30 September 2011
Group
Company

Nine months ended

30 September 2010
Group
Company

Cash flows from operating activities

Cash generated from operations
Interest received
TDC refund received
Interest paid
Tax / SRL/ ESC paid
Retirement benefit obligations paid
Net cash generated from operating activities

11,988,747
152,454
1,646,941
(166,199)
(86,693)
(10,180)
13,525,070

11,338,084
146,198
1,646,941
(166,135)
(82,112)
(9,998)
12,872,978

10,470,862
45,207
210,260
(575,788)
(69,268)
(36,076)
10,045,197

9,891,928
43,758
210,260
(434,048)
(69,255)
(31,078)
9,611,565

Cash flows from investing activities

Purchases of property, plant and equipment (PPE)
Purchases of intangible assets
Amount given to subsidiaries
Investment in associate
Proceeds from sale of investment
Expenditure incurred on capital work-in-progress
Proceeds from sale of PPE
Net cash used in investing activities

(4,957)
(384,614)
Nil
(11,440)
69,190
(6,278,733)
2,781
(6,607,773)

(4,969)
(384,614)
(847,456)
(11,440)
69,190
(4,901,320)
2,363
(6,078,246)

(65,549)
(28,134)
Nil
Nil
Nil
(3,880,934)
46,785
(3,927,832)

(62,938)
(12,642)
(2,712,424)
Nil
Nil
(2,548,872)
36,409
(5,300,467)

Cash flows from financing activities

Repayment of finance leases
Repayment of borrowings
Proceeds from borrowings
Redemption of rated cumulative redeemable preference shares
Dividend - Ordinary shares
Dividend - rated cumulative redeemable preference shares
Dividend received -ESOS

(5,755)
(3,401,222)
4,276,441
(1,250,000)
(1,628,756)
(124,023)
31,714

Nil
(3,401,222)
4,276,441
(1,250,000)
(1,628,756)
(124,023)
31,714

(19,638)
(6,609,526)
2,112,243
(1,250,000)
Nil
(222,185)
Nil

(5,247)
(5,125,892)
2,081,563
(1,250,000)
Nil
(222,185)
Nil

Net cash used in financing activities

(2,101,601)

(2,095,846)

(5,989,106)

(4,521,761)

Net increase/(decrease) in cash and cash

equivalents

4,815,696

4,698,886

128,259

(210,663)

Movement in cash and cash equivalents

At start of year
Increase/(decrease)
Exchange losses on cash and bank overdrafts
At end of period

4,475,861
4,815,696
(4,585)
9,286,972

4,314,219
4,698,886
(4,585)
9,008,520

3,019,449
128,259
(32,571)
3,115,137

3,175,076
(210,663)
(32,571)
2,931,842

The notes on page 8 to 12 form an integral part of these financial statements.

Page 8

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Notes to the financial statements
(in the notes all amounts in Sri Lanka Rupees thousands unless otherwise stated)

General information
Dialog Axiata PLC (the Company) and its subsidiaries (together the Group) provide Communication (Mobile, Internet,
International, Data and Backbone, Fixed wireless and Transmission infrastructure) and Media related services.
Dialog Axiata PLC (the Company) is a public limited liability company incorporated and domiciled in Sri Lanka and listed
on the Colombo Stock Exchange. The registered office of the Company is located at 475, Union Place, Colombo 2.
Issued ordinary shares of the Company have been listed on the Colombo Stock Exchange since 28 July 2005.

Basis of preparation
The condensed interim consolidated financial information of Dialog Axiata PLC (the Company) for the period ended 30
September 2011 has been prepared in accordance with Sri Lanka Accounting Standard 35 Interim Financial Reporting.
The interim consolidated financial information should be read in conjunction with the annual financial statements for the
year ended 31 December 2010.

Accounting policies
Accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December
2010.

Segment information
The segmental reporting presentation is revised to represent more appropriate business segments of the group.

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Page 9

Notes to the financial statements (Contd)

Segment information (Contd)

Primary reporting format - business segments
o

The segment results for the period ended 30 September 2011 are as follows:
Mobile
operations
Total segmental revenue
Inter-segment revenue
Revenue from external customers
Operating profit/(loss) / segment results

Fixed
broadband
operations

Television
operations

Other

30,853,735
(333,915)
30,519,820

1,771,983
(338,372)
1,433,611

1,722,348
(12,263)
1,710,085

39,784
(39,386)
398

4,898,322

(657,175)

(19,563)

(1,242)

Elimination
/adjustment
Nil
Nil
Nil
(38,373)

Finance income - net

Share of profit of associate
Profit before income tax
Income tax expense
Profit for the period
o

34,387,850
(723,936)
33,663,914
4,181,969
155,623
6,638
4,344,230
(408,803)
3,935,427

Other segment items included in the income statement are as follows:

Mobile
operations
Depreciation, amortisation and impairment

Group

6,037,107

Fixed
broadband
operation
1,115,199

Television
operations
396,549

Elimination
/adjustment

Other
1,758

37,715

Group
7,588,328

The segment assets and liabilities at 30 September 2011 and capital expenditure for the period then ended are as follows:
Mobile
operations

Fixed
broadband
operations

Television
operations

Elimination
/adjustment

Assets
Inter -segment assets
Total assets

83,091,526
(9,246,646)

8,314,114
(14,848)

3,269,939
(1,060)

Liabilities
Inter- segment liabilities
Total liability

41,753,482
(114,157)

8,913,856
(8,093,421)

2,542,161
(1,470,097)

Nil
Nil

53,209,499
(9,677,675)
43,531,824

5,290,903

1,094,126

283,275

Nil

6,668,304

Capital expenditure

(9,310,322)
Nil

Group
85,365,257
(9,262,554)
76,102,703

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Page 10

Notes to the financial statements (Contd)

Segment information (Contd)

o

The segment results for the period ended 30 September 2010 are as follows:
Mobile
operations
Total segmental revenue
Inter-segment revenue
Revenue from external customers
Operating profit / (loss) / segment results

Fixed
broadband
operations

Television
operations

28,068,421
(414,613)
27,653,808

1,770,947
(267,424)
1,503,523

1,520,109
(8,696)
1,511,413

5,223,954

(838,853)

(216,230)

Elimination
/adjustment
Nil
Nil
Nil
(38,417)

Finance costs - net

Share of profit of associate
Profit before income tax
Income tax expense
Profit for the period

31,359,477
(690,733)
30,668,744
4,130,454
(35,047)
Nil
4,095,407
(323,262)
3,772,145

Mobile
operations
Depreciation, amortisation and impairment

Group

5,730,576

Fixed
broadband
operations
1,016,982

Television
operations
354,269

Elimination
/adjustment
37,715

Group
7,139,542

The segment assets and liabilities at 31 December 2010 and capital expenditure for the year then ended are as follows:
Mobile
operations

Fixed
broadband
operations

Television
operations

Assets
Inter -segment assets
Total assets

78,290,862
(8,769,992)

8,487,674
(8,278)

3,408,441
(291)

Liabilities
Inter- segment liabilities
Total liability

38,624,314
(23,146)

8,429,555
(7,583,078)

2,657,593
(1,582,716)

5,029,817

2,201,115

Capital expenditure

701,490

Elimination
/adjustment
(9,272,604)
Nil

Group
80,914,373
(8,778,561)
72,135,812

Nil
Nil

49,711,462
(9,188,940)
40,522,522

Nil

7,932,422

Page 11

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Notes to the financial statements (Contd)
5

Stated capital
Stated Capital of the Company consist of 8,143,778,405 ordinary shares and 1,250,000,000 rated cumulative
redeemable preference shares.

Comparatives
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current period.

Market price per share

For the three months ended 30 September
-

11.00
7.80
8.40

2010
12.70
9.25
12.60

20 largest shareholders of the Company

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Highest
Lowest
Last traded

2011

Name of Shareholder

No. of Shares

% Holding

Axiata Investments (Labuan) Limited

HSBC - BBH - Genesis Smaller Companies
Dialog Telekom Employees ESOS Trust
Employees Provident Fund
Sri Lanka Insurance Corporation Ltd-Life Fund
HSBC-SSBT- South Asia Portfolio
HSBC-International Finance Corporation
HSBC-BBH-Genesis Emerging Markets Opportunities Fund
HSBC-JPMLU-Morgan Stanley Asset Management
Browns Investments (Pvt) Ltd
BNY-CF Ruffer Investment Funds
Northen Trust Co s/a Northern Trust Fiduciary Services (Ireland)
as Trustee to Baring Asean Frontiers Fund
HSBC-JPMCB-Scottish Orl Sml TR GTI 6018
Pemberton Asian Opportunities Fund
Sri Lanka Insurance Corporation Ltd-General Fund
Associated Electrical Corporation Ltd
HSBC-SSBT-Morgan Stanley Frontier Emerging Markets Fund Inc
Seylan Bank PLC. - A/C No. 3
CB London s/a RBS as DEP of FS India Sub/Cont FD Aa s/f of First State
Invest ICVC
Mercantile Investments Limited

6,785,252,765
191,221,640
158,572,462
124,461,289
74,585,920
68,161,980
64,086,800
55,345,900
54,985,167
44,990,600
44,314,300
38,938,000

83.32%
2.35%
1.95%
1.53%
0.92%
0.84%
0.79%
0.68%
0.68%
0.55%
0.54%
0.48%

32,207,500
23,000,000
22,320,360
18,450,600
18,347,188
17,459,100

0.40%
0.28%
0.27%
0.23%
0.23%
0.21%

17,240,000
11,000,000

0.21%
0.14%

Public shareholding
The percentage of public shareholding as at 30 September 2011 was 14.73% (14.73% as at 31 December 2010),
calculated as per the listing rules of the Colombo Stock Exchange.

Page 12

DIALOG AXIATA PLC AND ITS SUBSIDIARIES

Notes to the financial statements (Contd)
10

Directors shareholdings
The details of shares held by the Directors and their spouses as at 30 September 2011 are as follows:
Dr. Shridhir Sariputta Hansa Wijayasuriya
Mr. Moksevi Rasingh Prelis
Mr. Mohamed Vazir Muhsin

42,570
18,480
18,040

None of the Directors other than those disclosed above hold any shares in the Company.

11

Contingencies
There has not been a significant change in the nature of the contingent liabilities, which were disclosed in the Annual
Report for the year ended 31 December 2010.

12

Events after the balance sheet date

No circumstances have arisen since the balance sheet date, which would require adjustments to or disclosure in the
financial statements.