SLFRS S1 and S2 Disclosures
1.0 Basis of Preparation and Presentation
The sustainability and climate-related financial disclosures are prepared in compliance with CSE Listing Rule 7.5.a(i) to disclose information on sustainability -related risks and opportunities (SRROs) and climate-related risks and opportunities (CRROs) based on the sustainability and climate-related provisions in SLFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and SLFRS S2 Climate-related Disclosures (other than the transitional relief applicable in the first annual reporting period in which entity applies these Standards). The disclosures in this section are provided on a consolidated basis, unless otherwise stated.
Navigation symbols are used throughout this section to indicate linkages between disclosures within this chapter as well as to other relevant sections of the Integrated Annual Report. A guide to these symbols is provided in Section 1.7.
1.1 Reporting Boundary and Period
Sustainability-related financial disclosures include Sri Lanka Telecom PLC and its subsidiaries (together referred to as “SLT”) for the year ended 31 December 2025 and aligns with the reporting boundary of the consolidated financial statements of SLT. SLT’s sustainability and climate-related financial disclosures cover the same reporting period as the related financial statements.
1.2 Value Chain
SLT operates across an integrated telecommunication value chain shaped by mutual dependencies and impacts, as outlined in the section “Our Business Model” SLT draws on a combination of financial, manufactured, intellectual, human, social and relationship, and natural capital throughout its value chain to provide reliable connectivity, digital solutions, and sustainable long term value. Concurrently, SLT’s operational activities and engagement with stakeholders influence these capitals through value creation, preservation or erosion.
In evaluating SRROs and CRROs, SLT assessed both upstream and downstream components of the value chain based on reasonable and supportable information available without undue cost or effort, to obtain a holistic understanding of value chain wide effects.
1.2.1 Upstream Value Chain
As described in the “Our Business Model” , upstream activities primarily comprise SLT’s interactions with suppliers, technology and infrastructure partners, regulators, financial institutions and strategic alliances to obtain essential financial and non financial resources for telecommunication operations. These resources include network infrastructure and equipment, spectrum, energy inputs, technology platforms, skilled workforce, and capital funding.
SLT utilises six categories of capital—Financial, Manufactured, Intellectual, Human, Social and Relationship, and Natural—which form the foundational inputs enabling network rollout, service provision, and technological innovation.
SRROs and CRROs influence upstream activities by affecting the cost, availability, and dependability of network assets, energy supply, funding sources, and skilled labour, as well as SLT’s capacity to sustain effective relationships with suppliers and other key external stakeholders.
1.2.2 Internal Operations
Internal operations comprise SLT’s core activities that convert six-capital inputs into connectivity solutions, digital offerings, and strategic outcomes. As illustrated in “Our Business Model” , value creation activities include network planning, expansion, and upkeep; operation of fixed, mobile, data centres, and submarine cable infrastructure; development of products and solutions; customer service management; IT and cybersecurity functions; human capital development; and governance, risk, compliance, and ESG integration, including sustainability and climate risk oversight.
These processes are fundamental to delivering secure and reliable services, fostering innovation, preserving service quality, and strengthening operational resilience. SRROs and CRROs can affect these operations through SLT’s ability to convert capital into value.
1.2.3 Downstream Value Chain
Downstream activities relate to SLT’s customer facing services and engagements that deliver value to individual consumers, enterprise clients and the wider economy as described in the "Our Business Model" . These activities include the delivery of fixed and mobile connectivity, digital and cloud based services, managed network solutions, customer support and ongoing monitoring of network performance and service quality.
Through its downstream value chain, SLT supports the development of digital inclusion, reinforcing social and relationship capital through responsible and ethical service delivery, facilitating economic activity, and contributing to national digital and environmentally sustainable infrastructure initiatives.
Downstream activities are a critical component which expose SLT to SRROs and CRROs arising from its customer base, industry exposure, and market dynamics, with direct impact on financial performance and long-term value creation. Sustainability and climate related risks may influence customer demand, network usage behaviour,
and infrastructure resilience, while simultaneously creating opportunities to advance energy efficient improvements, enable digitalisation, support low carbon emission sources, and creating positive value for stakeholders and environment.
1.3 Materiality
In the context of sustainability-related financial disclosures, information is material if omitting, mistaking or obscuring that information could reasonably be expected to influence decisions that primary users of general-purpose financial reports make on the basis of those reports.
Although the SLFRS Sustainability Disclosure Standards are based on financial materiality, SLT has also considered impact materiality in its assessment to enhance the transparency and completeness of sustainability information provided to stakeholders, as described in the “Materiality”
The financial materiality assessment incorporates both quantitative and qualitative considerations to evaluate the significance of potential financial impacts arising from SRROs and CRROs. This assessment applies to a structured scoring methodology to assess each SRRO and CRRO based on its likelihood of occurrence and the magnitude or severity of its potential impact. The following thresholds were used to determine the impact/severity of SRROs and CRROs during the reporting period.
| Quantitative Criteria | Qualitative Criteria |
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SLT uses the financial impact to determine financial materiality, with classifications as follows:
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Strategic Alignment: Relevance to the SLT’s business model, long-term strategy and value creation objectives. |
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Reputational Impact: Potential impact on stakeholder confidence, brand value and market positioning. |
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Regulatory and Policy Compliance: Exposure to regulatory, supervisory or legal consequences. |
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Stakeholder Sensitivity: Degree of stakeholder expectation, scrutiny or pressure. |
This approach ensures a comprehensive materiality assessment by considering both quantifiable financial effects and non quantifiable strategic and regulatory factors that could influence the decisions of primary users of general purpose financial statements.
1.4 Functional Currency
The presentation currency of the sustainability and climate-related financial disclosures is the Sri Lankan Rupees, which aligns with the SLT’s functional and presentation currency, and amounts disclosed are rounded to the nearest million unless otherwise stated.
1.5 Sources of Guidance
Where relevant, the SLT has referred to guidance from the following frameworks and standards in the identification and disclosure of SRROs and CRROs.
- SLFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information)
- SLFRS S2 (Climate-related Disclosures)
- SASB Standards
– Telecommunication Services Sustainability Accounting Standard (Version 2023-12)
- Sri Lanka’s Nationally Determined Contributions (NDC 3.0)
In identifying its SRROs and CRROs, SLT applied the referenced guidance and considered a combination of external evidence and SLT specific data.
1.6 Time Horizons
SRROs and CRROs may give rise to significant and extensive financial implications, affecting the SLT’s financial performance over the short, medium, and long-term. Due to uncertainty over the timing and scale of sustainability and climate related impacts, the SLT has established the following time horizons for its risk assessment.
| Time Horizon | Period | Definition |
|---|---|---|
| Short-term (S) | 1 year | Financial year 2026 |
| Medium-term (M) | 2 to 5 years | Financial years 2027 to 2030 |
| Long-term (L) | Beyond 5 years | Beyond financial year 2030 |
The short term horizon is aligned with the SLT’s annual budgeting and detailed financial planning processes, the medium term horizon corresponds to the SLT’s five year financial, capital and funding strategies, and the long term horizon extends beyond five years to facilitate the evaluation of emerging SRROs and CRROs across a range of future scenarios.
1.7 Connected Information
This section incorporates cross references and navigation symbols, as illustrated below, to indicate linkages between the SRROs and CRROs with other related disclosures.
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Connections between different SRROs and CRROs |
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Connections within its sustainability and climate-related financial disclosures |
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Connections across sustainability and climate-related financial disclosures, Annual Financial Statements, and sections in the Integrated Report. |
Where relevant information is disclosed elsewhere in the Integrated Annual Report, the corresponding sections and page numbers are clearly referenced.
1.8 Transitional Relief
In preparing the SLFRS sustainability related financial disclosures for the year 2025, SLT has applied the transition reliefs available under SLFRS S1 and SLFRS S2, as outlined below.
- Comparative Information: In the first annual reporting period in which the entity applies to this Standard, it is not required to disclose comparative information.
- Scope 3 GHG Emissions: Entities must initially report only Scope 1 and Scope 2 emissions. Full compliance with Scope 3 emissions, becomes mandatory two years after the initial application date.
- Climate Resilience and Scenario Analysis: Relief period of two years is granted to apply the requirements from the date of mandatory application to fully comply with climate resilience disclosure requirements.
1.9 Significant Judgements and Uncertainties
The forward looking nature of SRROs and CRROs necessitates the exercise of professional judgement in the preparation of sustainability related financial disclosures.
Key Judgement AreasIdentification of material SRROs and CRROs Determination of appropriate qualitative disclosure Assessment of linkages to strategy and financial performance Selection of materiality thresholds |
Sources of UncertaintyForward-looking economic and climate projections Data availability and methodological limitations Regulatory and market developments |
1.10 Principle of Proportionality
In preparing these disclosures, management has used reasonable and supportable information available at the reporting date without incurring undue cost or effort. SLT has applied the principle of proportionality to ensure that disclosures are commensurate with the nature, scale, complexity, and risk profile of the institution, while remaining relevant and decision useful for primary users.
1.11 Statement of Compliance
This sustainability related financial disclosures represent a complete set of sustainability related financial disclosures for Sri Lanka Telecom PLC and its subsidiaries (together referred to as “SLT”) for the year ended 31 December 2025. The disclosures have been prepared in accordance with the SLFRS Sustainability related Financial Disclosure Standards issued by the Institute of Chartered Accountants of Sri Lanka, including the transition reliefs applied as permitted for first-time adoption, as set out in Section 1.8 – Transitional Reliefs