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Management Discussion and Analysis

Institutional capital

Institutional capital is largely intangible in nature and covers a broad spectrum of non-financial aspects which are a direct result of exemplary governance. It includes components such as organisational knowledge, brand and reputation, internal systems, internal ethical standards, and the corporate culture that SLT Group uses to create value.

Our values

There are seven core values (inner front cover) that lie at the heart of SLT. We aim to be customer-oriented, trustworthy, innovative, and responsive. We ensure that we work together as a team to deliver exceptional results. Our values are inculcated in our new employees through our induction schemes. We offer refresher programmes to complement these as well. We possess written policies on all legal and ethical protocols. These cover the entire breadth of material from whistle-blowing to individual employee grievances.

Corporate culture

The corporate culture that you find at SLT is a culture of professionalism which encourages communication and engagement with employees. SLT hosts a variety of team building activities that enrich our unique corporate culture. We further encourage employee contribution through suggestion schemes, registers, and brainstorming sessions. Our subsidiary, Mobitel also shares an open working environment. It possesses a flat organisational framework, and even encourages lifelong employment amongst its peers.

Systems and processes

Improvements in internal efficiency

Following SLT Vision 2022, SLT Group is engaged in a process of organisational restructuring to improve internal efficiencies. The aim of Vision 2022, as detailed in our Business model section is to achieve Group-wide synergy which will help in reducing costs through the sharing of resources and the elimination of duplicate investments.

We integrated and automated processes through the introduction of an Enterprise Resource Planning (ERP) system. This was expedited in the third quarter of 2016. To complement this, a Customer Relationship Management (CRM) system was envisaged which was implemented in the fourth quarter of 2016.

Existing CAPEX projects were classified as “projects”, “business as usual activities (BAUs)” and “procurement-only investments”. Projects combining both BAUs and procurement-only investments are named “strategic projects” for investment governance processes. Reducing the governance boards as such, led to several benefits. Decisions in capital investments were improved.

The supply chain management saw similar enhancements, and there was better utilisation of resources.

Project management and benefit realisation management

Reports on the progress of projects are compiled on a monthly basis for the top 25 projects. These are then duly communicated to the Board of Directors. The financial benefits of all investments are captured at the level of the programme. These are then reported on a quarterly basis to the senior management. The outcomes are measured and reported at the level of the project.

Operational excellence

ERP

The ERP system helps both SLT and Mobitel in digitising and streamlining all key business processes. These include activities in finance, enterprise asset management, human resources, projects, and the supply chain. The automation and standardisation of processes, with an integrated approach, eliminates delays for greater efficiency and productivity in line with global best practices.

Big data analytics

Mobitel initiated a project to harness the value of large amounts of transactional and other data elements by establishing a focused unit on “Big Data, machine learning and advanced analytics”. With this, Mobitel has implemented capabilities to better understand customers, their behaviour patterns and predictive capabilities in managing and providing customers a better service. This capability is extended across the group companies as part of the group synergy activities.

Service Oriented Architecture (SOA) & Application Program Interface (API) Gateway

In order to become a Digital Services provider Mobitel & SLT has fully adopted the industry standard SOA for all business system integrations. As part of the initiative API gateway is implemented in order to facilitate products and services as APIs for partner organizations and external developers. This is a bold step towards becoming a Digital Service provider.

Mobile Application Development & Hosting platform

Mobile applications is the most demanding application area in the global context as well as locally. In order to meet the demands of the Mobile App market, Mobitel has deployed a leading MADP platform as a group initiative which will reduce the development time for cross platform mobile Applications and also provide the proactive management of customer experience.

Contingencies

Through international consultancy, Disaster Recovery (DR) systems in ICT and networking and cyber security mechanisms, SLT possesses a stringent business continuity plan that can successfully navigate unforeseen events and serve customers without any interruptions in service. Finally, the increased adoption of our data centre and cloud services can bolster local enterprises to compete amongst global players in their industries.

Brand image

As the national ICT service provider and ICT service provider for Sri Lanka, SLT enjoys respect and approval amongst Sri Lankans. Our investments in creating the National Backbone Network (NBN) and our numerous partnerships with the Sri Lankan Government and Government institutions have also boosted our reputation. Our island-wide connectivity, and strong regional presence further contribute to this distinction. To supplement all this, we maintain an active media and social media presence.

Our brand is further strengthened by the numerous accolades that were bestowed upon SLT. In 2017, we received National long-term rating at “AAA(lka)”. We were judged to be 12th among the Best Sri Lankan brands in 2017 by Interbrand. Lanka Monthly Digest ranked SLT 10th of LMD top 100 entities. We were also ranked 10th in Business Today’s Top 30 entities in Sri Lanka. Furthermore, SLT’s company website (www.slt.lk) received the Gold Medal in recognition of being the “Best Corporate Website” as well as the Award for the “Most Popular Corporate Website” at the 7th annual BestWeb.lk competition for the year 2017.

Our subsidiary Mobitel is equally renowned as being the leading national mobile service provider. With carefully-executed marketing and promotional programmes, we wield an influential position on all sections of society. We wish to extend this in the years to come by positioning ourselves as a bespoke digital lifestyle services provider. Our customers will be able to integrate all aspects of their lives; from their workplace to their home and beyond, with the services we provide, to benefit from the entirety of what we offer.

Quality assurance and certification

SLT continued its operations under the ISO 9001-2008 framework. We have views on upgrading to the more recent version of ISO 9001-2015. We similarly visualise using the system to digitise tasks and solve routine issues. This will increase the efficiency of our operations and therefore our productivity.

In 2017, BSI India, an external auditor, confirmed that SLT ISMS has complied with international standards and the ISO 27011:2013 certifications will continue. Furthermore, the SLT Quality Circle team won the National Quality Award and was selected to the International Competition. SLT QC won a Gold Medal at the International Quality Circle Competition held in the Philippines in 2017. SLT completed implementation of a fully-fledged Business Continuity Plan compliant with the ISO 22301:2012 international standard covering critical operational areas of SLT.

Information security

SLT’s information security policy is compliant with the ISO/IEC 27001:2013 International Standard. To further improve our security, we undertook measures to evaluate the existing infrastructure and take appropriate measures as required. This similarly helped us in shaping the existing collateral to be more ergonomic and efficient.

Compliance

SLT possesses separate regulatory and legal divisions that monitor all regulatory and statutory ratifications. Employees are kept aware of relevant developments through the SLT Intranet portal. All our human resource practices are compliant with labour regulations and related statutory collateral. We also ensure the compliance of our outsourced operations, such as making contributions to Employees’ Provident Funds (EPFs) and Employees’ Trust Funds (ETFs). SLT takes every effort to fully comply with all Government regulations. As a listed company, SLT closely follows the rules and regulations imposed on it by the Colombo Stock Exchange. All company policies, procedures, and guidelines have been developed in compliance with regulatory and statutory requirements. Our compliance is audited by Auditors both internally and externally. For the period under review, SLT did not default in relation to issues of non-compliance with laws and regulations pertaining to the provision and use of our products and services. Similarly, we did not receive any complaints on discordances in customer privacy. Finally, we ensure that all our activities are compliant with established guidelines on environmental protection.

Risks and contingencies

The Board of Directors bears total responsibility for the setting up and monitoring of the Group’s Risk Management Framework (page 110). The Audit Committee inspects management’s monitoring of compliance with the Group’s risk management processes. Aspects of financial risk management are covered under Note 4 to the Financial Statements commencing on page 143. Any other extraneous aspects are discussed under Note 32 to the Financial Statements on page 176.