| |
|
|
|
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
25. Trade and other Payables
|
Group |
Company |
|
2008 |
2007 |
2008 |
2007 |
| Amounts due within one year |
|
|
|
|
| Domestic trade payables |
1,647 |
1,321 |
312 |
85 |
| Foreign trade payables |
203 |
157 |
203 |
157 |
| Amount due to subsidiaries [Note 35 (g)] |
- |
- |
829 |
357 |
| Capital expenditure payables [See Note (a) below] |
4,220 |
2,327 |
1,273 |
1,083 |
| Social security and other taxes [See Note (b) below] |
268 |
361 |
268 |
361 |
| Interest payable |
133 |
138 |
133 |
138 |
| Other payables [See Note (c) below] |
6,692 |
6,870 |
5,754 |
6,356 |
|
13,163 |
11,174 |
8,772 |
8,537 |
|
|
|
|
|
| Amounts due after one year |
|
|
|
|
| International Direct Dialling deposits |
235 |
235 |
235 |
235 |
| Prepayments on VOIP services |
11 |
44 |
11 |
44 |
| PSTN guarantee deposits |
43 |
- |
43 |
- |
|
289 |
279 |
289 |
279 |
|
|
|
|
|
|
|
|
|
|
(a) Capital expenditure payable of the Company mainly consists of contractors’ payable of Rs. 534 million (2007 - Rs. 297 million) and advances on network restoration after road works of Rs. 519 million (2007 - Rs. 577 million). Capital expenditure payables of the Group mainly consist of contractors’ payable of Rs. 3,480 million (2007 - Rs. 2,487 million) and advances on network restoration after road works of Rs. 519 million (2007 - Rs. 577 million).
(b) Social security and other taxes of the Group and the Company mainly consist of Value Added Tax
Rs. 24 million (2007 - Rs. 223 million), EPF payable of Rs. 80 million ( 2007- Rs. 53 million) PAYE payable of Rs. 90 million (2007 - Rs. 42 million) and Cellular Mobile Subscriber Levy payable of
Rs. 34 million (2007 - Rs. Nil).
(c) Other payables of the Company mainly consist of dividend payable to the Government of Sri Lanka of Rs. 244 million (2007 - Rs. 244 million), provision for Goods Received Notes (GRNs) of Rs. 480 million (2007 - Rs. 105 million), International Telecommunication Operators’ Levy payable of
Rs. 3,583 million (2007 - Rs. 5,009 million), CESS payable to Director-General of Telecommunication of Rs. 217 million (2007 - Rs. 152 million) and accrued expenses and other payable of Rs. 868 million (2007 - Rs. 692 million). Other payables of the Group mainly consist of dividend payable to the Government of Sri Lanka of Rs. 244 million (2007 - Rs. 244 million), provision for Goods Received Notes (GRNs) of Rs. 480 million (2007 - Rs. 105 million), International Telecommunication Operators’ Levy payable of Rs. 3,583 million (2007 - Rs. 5,009 million), CESS payable to Director-General of Telecommunication of Rs. 217 million (2007 - Rs. 152 million) and accrued expenses and other payable of Rs. 1,565 million (2007 - Rs. 1,175 million).
(d) Other payables of the Company and the Group also include a provision for the legal claims potentially payable of Rs. 163 million under ICC Arbitration application No. 13839/M against the Company by Informatics (Pvt) Limited claiming USD 1,143,630 being the licence upgrade cost and an annual maintenance fee of 15% of the licence fee for the TBR system to the SLT PLC by Informatics, and a provision for overtime payment of Rs. 175 million under Court of Appeal CA No. 883/2003 increasing the overtime rate from 1.5% to 1.75% and granting of lieu leave with regard to an application made by the Telecommunications Employees Union with effect from 1 January 2002. These provisions are recognised in income statement within ‘operating costs’. The balance at 31 December 2008 is expected to be utilised in the first half of 2009.
26. Retirement Benefit Obligations
Movement in the liability recognised in the balance sheet is as follows:
| |
Group |
Company |
| |
2008 |
2007 |
2008 |
2007 |
| At the beginning of the year |
1,329 |
942 |
1,272 |
903 |
| Current service cost |
90 |
247 |
81 |
226 |
| Interest cost |
133 |
90 |
127 |
90 |
Provision made for gratuity payable to
VRS employees |
- |
30 |
- |
30 |
| Actuarial (gains)/losses |
(222) |
(89) |
(224) |
89 |
| Benefits paid |
(113) |
(69) |
(112) |
(66) |
| At the end of the year |
1,217 |
1,329 |
1,144 |
1,272 |
| |
|
|
|
|
The amounts recognised in the income statement are as follows:
| |
Group |
Company |
| |
2008 |
2007 |
2008 |
2007 |
| Current service cost |
90 |
247 |
81 |
226 |
| Interest cost |
133 |
90 |
127 |
90 |
| Actuarial (gains)/losses |
(222) |
89 |
(224) |
89 |
| |
1 |
426 |
(16) |
405 |
| |
|
|
|
|
(a) As stated in Accounting Policy 2.19 (b) as at 31 December 2008, an actuarial valuation was carried out by an independent actuary.
The principal actuarial assumptions used were as follows:
| |
Group |
Company |
| |
2008 |
2007 |
2008 |
2007 |
| Discount rate (long-term) |
12% |
10% |
12% |
10% |
| Future salary increases |
9%-15% |
9% |
9% |
9% |
| Inflation rate (long-term) |
10% |
10% |
10% |
10% |
| |
|
|
|
|
In addition to above, demographic assumptions such as mortality, withdrawal, retirement age were considered for the actuarial valuation. In 2008, 1967/70 Mortality Table issued by the Institute of Actuaries London (2007 - 1967/70 Mortality Table) was taken as the base for the valuation.
The provision for defined obligations is actuarially valued by Messrs Actuarial and Management Consultants (Pvt) Limited. The provision for defined benefit obligations is not externally funded.
27. Insurance reserve
| |
Group/Company |
| |
2008 |
2007 |
| At the beginning of the year |
204 |
183 |
| Income statement charge and interest income on sinking fund deposit |
32 |
21 |
| At the end of the year |
236 |
204 |
As stated in Accounting Policy 2.14, the Company transfers annually from the income statement an amount equal to 0.1% 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 & equipment.
28. Group Reporting dates
The annual financial statements of the subsidiaries, Sri Lanka Telecom (Services) Limited, SLT Hong Kong Limited, SLT Publications (Pvt) Limited and Mobitel (Pvt) Limited, SLT Manpower Solutions (Pvt) Limited, SLT VisionCom (Pvt) Limited and Sky Network (Pvt) Limited are prepared at 31 December each year.
29. Stated Capital
| |
Company |
| |
2008 |
2007 |
| Issued and fully paid |
|
|
| 1,804,860,000 ordinary shares issued at Rs. 10 per share |
18,049 |
18,049 |
| |
|
|
The issued and fully paid share capital is made up as follows:
| |
2008 |
2007 |
| |
Holding % |
No. of Shares |
Holding % |
No. of Shares |
| Government of Sri Lanka (GOSL) |
49.50 |
893,405,709 |
49.50 |
893,405,709 |
| Global Telecommunications Holdings N.V. |
44.98 |
811,757,869 |
- |
- |
| NTT Communications Corporation (NTT Com) |
- |
- |
35.20 |
635,076,318 |
| Public Shareholders |
5.52 |
99,696,422 |
15.30 |
276,377,973 |
| |
100.00 |
1,804,860,000 |
100.00 |
1,804,860,000 |
| |
|
|
|
|
30. Hedging Reserve
| |
Group/Company |
| |
2008 |
2007 |
| At the beginning of the year |
(58) |
(236) |
| - Foreign currency translation difference |
(4) |
(17) |
| - Income statement charge (Note 10) |
30 |
195 |
| At the end of the year |
(32) |
(58) |
| |
|
|
In terms of the risk management objectives, the Company hedged certain foreign currency borrowings against its foreign currency revenue streams. The future transactions are forecasted for a period of five years. The gains/(losses) from revaluation of these foreign currency loans are deferred to be matched against the gains/(losses) from the future revenue streams.
|
| |
|
|
