4. Segment Information
(a) Primary reporting format - business segments
Management has determined the primary segments based on the nature of products and services and risks and rewards associated.
The Group provides telecommunication services, mainly in Sri Lanka. The Group is organised into five main business segments as follows:
Public Switched Telephone Network - PSTN
Code Divisional Multiple Access - CDMA
Other Gateway Operators - OGO
Mobile telephony operations
Other value added services
The connection charges, rental and call charges derived from fixed wired lines are included in
PSTN revenue.
Similar revenue streams generated from fixed wireless connections are shown under CDMA revenue.
Income derived from local and international operators for use of telecommunication network of the Company is shown as revenue from other gateway operators.
Mobile revenue consist of revenue generated from mobile telephony operations of the subsidiary, Mobitel (Pvt) Limited.
Other value added services comprise data services, IP & Broadband and other telephony services which do not constitute reporting segments in isolation.
The segment results for the year ended 31 December 2008 are as follows:
|
PSTN
|
CDMA
|
OGO
|
Mobile
|
Other
|
Unallocated |
Total |
Revenue
|
|
|
|
|
|
|
|
- Total segment revenue
|
16,721
|
5,133
|
8,184
|
9,060
|
9,445
|
–
|
48,543
|
- Inter-segment revenue
|
–
|
–
|
(400)
|
(165)
|
(934)
|
–
|
(1,499)
|
Revenue from external customers
|
16,721
|
5,133
|
7,784
|
8,895
|
8,511
|
–
|
47,044
|
Segment results/operating profits
|
1,724
|
785
|
1,082
|
1,368
|
3,240
|
–
|
8,199
|
Voluntary Retirement Scheme (VRS)
|
|
|
|
|
|
|
(390)
|
TDC Refund
|
|
|
|
|
|
|
2,183
|
Other income
|
|
|
|
|
|
|
419
|
Interest expenses and finance costs
|
|
|
|
|
|
|
(2,130)
|
Interest income
|
|
|
|
|
|
|
1,279
|
Profit before tax
|
|
|
|
|
|
|
9,560
|
Taxation
|
|
|
|
|
|
|
(2,193)
|
Profit after tax
|
|
|
|
|
|
|
7,367
|
|
|
|
|
|
|
|
|
Other segment information included in the income statement is as follows:
|
PSTN
|
CDMA
|
OGO
|
Mobile
|
Other
|
Unallocated |
Total |
Depreciation
|
6,209
|
282
|
1,119
|
1,665
|
1,156
|
–
|
10,431
|
Amortisation of intangible assets
|
66
|
19
|
27
|
196
|
24
|
–
|
332
|
| The segment assets and liabilities as at 31 December 2008 and capital expenditure for the year then ended are
as follows: |
| |
|
PSTN
|
CDMA
|
OGO
|
Mobile
|
Other
|
Unallocated
|
Total
|
Assets
|
37,275
|
7,311
|
16,307
|
21,926
|
10,249
|
130
|
93,198
|
Liabilities
|
(7,714)
|
(341)
|
(6,912)
|
(4,278)
|
(1,819)
|
(24,579)
|
(45,643)
|
Capital expenditure
|
2,834
|
446
|
505
|
8,629
|
1,999
|
–
|
14,413
|
Segment assets and liabilities are reconciled to entities’ assets and liabilities as follows:
|
Assets |
Liabilities |
Segment assets and liabilities :
|
93,068
|
(21,064)
|
Unallocated:
|
|
|
| - Interest receivable |
130
|
–
|
- Non-current borrowings
|
–
|
(5,228)
|
- Current borrowings
|
–
|
(16,488)
|
- Deferred income tax liabilities
|
–
|
(1,097)
|
- Income tax liabilities
|
–
|
(1,633)
|
- Interest payable
|
–
|
(133)
|
Group assets/liabilities
|
93,198
|
(45,643)
|
|
|
|
The segment results for the year ended 31 December 2007 are as follows:
| |
PSTN
|
CDMA
|
OGO
|
Mobile
|
Other
|
Unallocated
|
Total
|
Revenue
|
|
|
|
|
|
|
|
- Total segment revenue
|
18,241
|
6,188
|
8,253
|
5,397
|
6,100
|
–
|
44,179
|
- Inter-segment revenue
|
–
|
–
|
(401)
|
(44)
|
(500)
|
–
|
(945)
|
Revenue from external customers
|
18,241
|
6,188
|
7,852
|
5,353
|
5,600
|
–
|
43,234
|
| Segment results/operating profits |
3,113 |
1,342 |
1,752 |
868 |
2,144 |
– |
9,219 |
| Voluntary Retirement Scheme (VRS) |
|
|
|
|
|
|
(43) |
| Other income |
|
|
|
|
|
|
169 |
| Interest expenses and finance costs |
|
|
|
|
|
|
(2,232) |
| Interest income |
|
|
|
|
|
|
1,286 |
| Profit before tax |
|
|
|
|
|
|
8,399 |
| Taxation |
|
|
|
|
|
|
(2,759) |
| Profit after tax |
|
|
|
|
|
|
5,640 |
| |
|
|
|
|
|
|
|
Other segment information included in the income statement is as follows:
| |
PSTN |
CDMA |
OGO |
Mobile |
Other |
Unallocated |
Total |
| Depreciation |
7,000 |
283 |
1,103 |
1,030 |
804 |
– |
10,220 |
| Amortisation of intangible assets |
61 |
12 |
14 |
101 |
8 |
- |
196 |
| |
|
|
|
|
|
|
|
The segment assets and liabilities as at 31 December 2007 and capital expenditure for the year then ended are
as follows:
| |
PSTN |
CDMA |
OGO |
Mobile |
Other |
Unallocated |
Total |
| Assets |
39,005 |
7,979 |
17,357 |
15,095 |
5,863 |
73 |
85,372 |
| Liabilities |
(8,250) |
(314) |
(7,412) |
(2,509) |
(892) |
(24,095) |
(43,472) |
| Capital expenditure |
2,672 |
756 |
1,007 |
4,310 |
1,343 |
– |
10,088 |
| |
|
|
|
|
|
|
|
Segment assets and liabilities are reconciled to entities’ assets and liabilities as follows:
| |
Assets Liabilities |
| Segment assets and liabilities: |
85,299 |
(19,376) |
| Unallocated: |
|
|
| - Interest receivable |
73 |
– |
| - Non-current borrowings |
- |
(16,660) |
| - Current borrowings |
- |
(2,625) |
- Deferred income tax liabilities
|
- |
(2,777) |
| - Income tax liabilities |
- |
(1,896) |
| - Interest payable |
- |
(138) |
| Group assets/liabilities |
85,372 |
(43,472) |
| |
|
|
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.
Segment assets consist primarily of property, plant & equipment, intangible assets, inventories, trade and other receivables and cash and cash equivalents.
Segment liabilities comprise operating liabilities. Unallocated liabilities mainly comprise taxation
and borrowings.
Capital expenditure comprises additions to property, plant & equipment and intangible assets.
(b) Secondary reporting format - geographical segments
The Group's revenue, assets and liabilities can be identified geographically based on the location as follows:
| |
2008 |
2007 |
| |
Domestic
|
International
|
Total
|
Domestic
|
International
|
Total
|
| Revenue |
40,985 |
7,558 |
48,543 |
36,748 |
7,431 |
44,179 |
| Assets |
91,709 |
1,489 |
93,198 |
83,986 |
1,386 |
85,372 |
Liabilities
|
(45,440)
|
(203)
|
(45,643)
|
(43,315)
|
(157)
|
(43,472)
|
|
