Dialog Axiata : Annual Financial Report as of 31-12-2021

Dialog Axiata PLC | Annual Report 2021

Contents

Introduction to the Company	1	Statement of Comprehensive Income		79
Message from the Chairman	2	Consolidated Statement of Changes in Equity	80
Group Chief Executive's Review of Operations	6	Company Statement of Changes in Equity	81
Board of Directors	19	Statement of Cash Flows		82
Corporate Management Team	25	Notes to the Financial Statements		83
Business & Financial Review	30	US Dollar Financial Statements -
Corporate Governance Report	46	Statement of Financial Position		163
Report of the Board Audit Committee	54	US Dollar Financial Statements -
Report of the Related Party Transactions		Statement of Comprehensive Income	164
Review Committee	56	Group Value Added Statement		165
DIAL Share Information	57	Five Year Summary		166
		Group Real Estate Portfolio		167
Financial Statements		Notice of Annual General Meeting		168
Annual Report of the Board of Directors for		Administrative Details for the 25th
the year ended 31 December 2021	64	Annual General Meeting		169
The Statement of Directors' Responsibility	70	Form of Proxy		171
Independent Auditor's Report	72
Statement of Financial Position	78	Corporate Information	Inner Back Cover

Our Vision

To be the undisputed leader in the provision of multi-sensory connectivity resulting always, in the empowerment and enrichment of Sri Lankan lives and enterprises.

Our Mission

To lead in the provision of technology enabled connectivity touching multiple human senses and faculties, through committed adherence to customer-driven, ethical, responsive and flexible business processes, and through the delivery of quality service and leading edge technology unparalleled by any other, spurred by an empowered set of dedicated individuals who are driven by an irrepressible desire to work as one towards a common goal in the truest sense of team spirit.

Dialog Values

Service from the Heart

Create the Future

Champions of Change

Exceptional Performance

Uncompromising Integrity

Responsible Leadership

One Team

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Introduction to the Company

Dialog Axiata PLC, a subsidiary of Axiata Group Berhad (Axiata), operates Sri Lanka's Leading Quad-Play Connectivity Provider. The Company ranks among the largest listed companies on the Colombo Stock Exchange in terms of market capitalisation. Dialog is also Sri Lanka's largest Foreign Direct Investor (FDI) with cumulative investments totalling USD 3 billion.

The winner of six Global Mobile Awards, Dialog has the distinction of being voted by Sri Lankan Consumers as the 'Telecommunication Brand of the Year' for a record tenth year running, and 'Service Brand of the Year', and 'Youth Choice - Service Brand of the Year' for the second consecutive year at the SLIM People's Awards 2021. The Company was awarded 'Sri Lanka's Most Valuable Brand' for the third consecutive year and 'Most Valuable Telecommunications Brand' for the fourteenth consecutive year in the 2021 Brand Finance league table. Furthermore, it won the TM Forum 2021 Excellence Award in the AI, Data and Insights category.

Dialog is an ISO 9001 certified company, which is certified with the 27001:2013 standard for its Information Security Management System as well. The company's Environmental Management System also received the ISO 14001:2015 standard for its full scope of operations, becoming the first Quad-play in South Asia to do so. The Company has received numerous local and international awards, including the National Quality Award and the Sri Lanka Business Excellence Award. Dialog was recognised amongst the Top 10 Corporate Citizens at the Ceylon Chamber of Commerce - Best Corporate Citizen Sustainability Awards 2021 and endorses the worldwide Sustainable Development Goals (SDGs) which aim to build a sustainable future for all by 2030.

Dialog has been at the forefront of innovation and digitisation in the mobile industry in Sri Lanka since the late 90's, propelling the nation's mobile telephony infrastructure to a level of advancement on par with the developed world. The Company delivers advanced mobile telephony and high-speed mobile broadband

services to a subscriber base of over 17 million Sri Lankans, via 2.5G and 3G/3.5G and 4G/4.5G networks. Furthermore, Dialog is currently the fastest mobile network, having won both the Download Speed Experience and Upload Speed Experience awards from Opensignal.

The Company forayed into new digital frontiers, spearheading technology firsts in South Asia and Sri Lanka with the commissioning of South Asia's first fully functional and standards-compliant 5G pilot transmission and Sri Lanka's first 5G trial network, showcasing next-generation technology that will propel Sri Lanka into the future.

Dialog Axiata supplements its market leading position in the Mobile Telecommunications sector with a robust footprint and market presence in Sri Lanka's Fixed Telecommunications, Digital Pay Television, Digital Services, Financial Services, and IT services markets through its subsidiaries, Dialog Broadband Networks (Private) Limited (DBN), Dialog Television (Private) Limited (DTV), Digital Holdings Lanka (Private) Limited, Dialog Finance PLC, and H One (Private) Limited.

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Message from the

Chairman

DAVID NAI PEK LAU

Chairman

"We remain steadfast in our commitment to doing our utmostin supporting the nation through this economic crisis while continuing to deliver on our ethos of empowering and enriching Sri Lankan lives and enterprises."

2	Dialog Axiata PLC

My dear shareholders,

As I write this message for Dialog's 2021 Annual Report, Sri Lanka is in the midst of an economic crisis, which has severely affected the livelihoods of the people of Sri Lanka. Dialog has not been exempt, where the debilitating effects of the pandemic and the ensuing economic crisis had taken their toll. During these challenging times, we remain steadfast in our commitment to doing our utmost in supporting the nation through this economic crisis while continuing to deliver on our ethos of empowering and enriching

Sri Lankan lives and enterprises.

I am immensely proud of the continued support and dedication extended by our Dialog team and business partners, which has enabled us to play such a leading role in supporting our customers, businesses, communities and the nation at large throughout the crisis. We are seeing the benefits of our purpose-driven strategy built around supporting our customers, our people and our communities through inclusive and accessible services and sustainable initiatives. This has resulted in Dialog once again delivering an outstanding performance in 2021, despite operating in the second year of the pandemic which has challenged our business like no other.

To mention a few highlights, during 2021, your Company recorded growth across its core business segments to achieve a consolidated revenue of Rs.

141.9 billion, representing a YoY growth of 18% and the Group EBITDA was recorded at Rs. 58.8 billion for FY 2021, representing a growth of 16% YoY. Revenue of the mobile segment grew by 10%, Fixed Broadband grew by 39%, and Dialog Television grew by 22% YoY. Group PAT grew by 42%, while normalised PAT (excluding mark to market losses in FX) grew by 53%, ROIC solidified at almost 18%, an improvement of over 5pp from 2020.

Adapting to Emerge Stronger

None of the achievements mentioned above were possible without the relentless efforts and hard work of our Dialog team and our business partners across

the country. They demonstrate this resilience every day at work, along with their focus on the needs of our customers and the communities we operate in, and most important of all, their creativity to cope with these unprecedented times. I want to personally thank each and every one of you for your contribution in 2021. In addition, I would like to place on record our special thanks to our front-line teams who continued to serve our customers during the restricted period. The health and safety of our customers, people, and colleagues continue to be our top priority during this period, while the company adapts to a new normal of flexible work arrangements which has turned out to be an immense success.

Investing in the Future

In 2021, Dialog continued to chart a path that has set the company and our nation's digital infrastructure on course towards a sustainable and brighter future. Dialog invested approximately Rs. 31.7 billion in 2021, to develop connectivity infrastructure in the country and ensure that our customers continue to get quality and consistent services, in line with our ambition

to accelerate Sri Lanka into a Digital Nation. As a result of these efforts, your Company, along with our valued investors, continued to hold the distinguished position as the largest FDI in the country, with a total investment of USD 3.0 billion since inception.

Innovation and Digital

Transformation

In 2021, the Dialog team continued to provide creative and innovative solutions for Sri Lankans. As Digital adoption continues to accelerate, with COVID-19 driving a continued shift in customer behaviours, we continued to deploy new technologies and solutions to deliver significant improvements to customer experience and deliver a step-change in efficiency. During the year, we accelerated our digital transformation agenda to empower our teams to serve our customers faster and better while improving operational efficiency. In addition, we enhanced our digital care platforms, which resulted in over 50%

of our business being done on digital platforms as

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