Financingfunction of Dialog Axiata PLC is managed and controlled by its financialcontroller. Company’s financing activities can be analyzed under equity andliabilities.

When we look at the overall picture of the company it is apparentthat equity as well as its current and noncurrent liabilities plays an equalrole in financing the company activities.Annexure01 depicts common size financial statements in which,common size statement of financial position provides an insight of how thecompany’s financing is made. We can see that the company finances its assetsalmost equally through equity and liabilities in 2014 which is approximately 49% and 51% respectively.  And in2013 there is a slightly higher weight for liabilities which is 52% than for equity which is 48% approximately. However, if we lookat exact figures of 2012, equity financing is slightly higher than liabilityfinancing, although the difference is not significant.Company’sequity comprises of Stated Capital and Reserves for which, there is a 50 – 50formation. However if we look at past figures, stated capital of the companyhad played a major role in equity.

Figure2 shows the equity structure of the company for the last financial year andfor past two years.Figure02 – Equity composition of Dialog Axiata PLC Further,we can see that equity structure had not changed over the year. Company has exercisedESOS (Employee Share Option Schemes) during 2013 which has increased the numberof shares from 7,985,205,943 to 8,143,778,405 hence at the end of year 2014company has had a share capital of LKR 28,103,913,000. As a conclusion, DialogAxiata PLC has a healthier financing function which comprises almost equally ofequity and liabilities. Thedividend payment of LKR2.3Bn duringyear 2014 and LKR2.7Bn in year 2013shows the credibility of the company towards their shareholders.

Outof Non-current and current liabilities, largest proportions are held byborrowings – 44% and Trade and other payables – 41% respectively out of totalliabilities. Company has Increased Interest bearing borrowings through lastthree years gradually, which has resulted in increased non-current liabilities.In 2014, Current and non-current liabilities has almost leveled up; Figure 2.1 shows the increase.

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Figure 2.1 – Composition ofLiabilities of Dialog Axiata PLC Thefollowing graph shows the how each component of financing has changed over thepast three years.Figure2.2 – Trend in financing – Dialog Axiata PLCAdditionallywe can see an increase in gearing ratio clearly resulted by the increase inborrowing throughout last three years.    Year 2014 2013 2012 Gearing  (Debt : Equity) 46% 35% 26% Table 01 – Gearing – Dialog AxiataPLC over last three yearsHowever,still company is in a very healthy position where it can easily finance anyexpansion to come from this available source of finance (i.e.

Debt). Figure 3represents the Debt – Equity composition of Dialog Axiata PLC for the lastthree years.  Figure3 – Debt : Equity composition of Dialog Axiata PLC over last three yearsFurther,if we look at Interest coverage of the company (Table 02), it has increased significantly over last three yearsshowing the ability to finance even further in an event of expansion. Year 2014 2013 2012 Interest Coverage ratio 10.82 5.61 1.41 Table 02 – Interestcoverage times over last three years– Dialog Axiata PLC    1          ANALYSIS OF INVESTMENTACTIVITIES Investmentactivities explain how a company has utilized the funds acquired via thefinancing activities.

Dialog’s balance sheet comprise of PPE, Intangibleassets, investments (namely investments in subsidiaries and associates) andcurrent assets. Inour analysis we pay special attention towards the structural composition ofnon-current assets firstly, since 80% approximately comprises of Non-currentassets from the asset structure in each year, simultaneously from 2014 to 2012.Thebreakdown of assets is as found below. Outof the Non-current asset composition, more than 50% of the assets comprise ofProperty, plant and equipment.

PPE of Dialog Axiata basically comprises of Landand Buildings, Computer systems and Telecom equipment, Furniture fittings andother equipment, motor vehicles and Assets in the course of construction (WIP),out of which the highest proportion of assets are deemed by Computer systemsand Telecom equipment, since Dialog is a company operating in thetelecommunications industry.However,it is important to note that the asset composition has changed from 2012 to2014. PPE has dropped down from 60% roughly to a 55% approximately; whileamounts due from other companies have increased by over a 6%. Also, the companyhas additionally invested in Associates over the period from 2012 to 2014,whereas at now, an ownership stake of 26% and 42.48% simultaneously from Firstsource-DialogSolutions(Private) Limited and Digital Commerce Lanka (Private) Limited is observed. Thecompany’s fixed asset turnover ratio has reduced from 0.

67 to 0.62 from 2012 to2013, and has remained the same in 2014, even though revenue has increased byroughly a 16%. The company also undertakes a yearly impairment test for itscash generating units, based on DCF model using cash projections in to thefuture approved by the management for a period of 10 years.

However, as therecoverable amounts exceeded the carrying value of the assets, no impairment assuch was identified for the year 2014. (As per LKAS 39) Financingfunction of Dialog Axiata PLC is managed and controlled by its financialcontroller. Company’s financing activities can be analyzed under equity andliabilities. When we look at the overall picture of the company it is apparentthat equity as well as its current and noncurrent liabilities plays an equalrole in financing the company activities.Annexure01 depicts common size financial statements in which,common size statement of financial position provides an insight of how thecompany’s financing is made. We can see that the company finances its assetsalmost equally through equity and liabilities in 2014 which is approximately 49% and 51% respectively.  And in2013 there is a slightly higher weight for liabilities which is 52% than for equity which is 48% approximately. However, if we lookat exact figures of 2012, equity financing is slightly higher than liabilityfinancing, although the difference is not significant.

Company’sequity comprises of Stated Capital and Reserves for which, there is a 50 – 50formation. However if we look at past figures, stated capital of the companyhad played a major role in equity. Figure2 shows the equity structure of the company for the last financial year andfor past two years.Figure02 – Equity composition of Dialog Axiata PLC Further,we can see that equity structure had not changed over the year.

Company has exercisedESOS (Employee Share Option Schemes) during 2013 which has increased the numberof shares from 7,985,205,943 to 8,143,778,405 hence at the end of year 2014company has had a share capital of LKR 28,103,913,000. As a conclusion, DialogAxiata PLC has a healthier financing function which comprises almost equally ofequity and liabilities. Thedividend payment of LKR2.3Bn duringyear 2014 and LKR2.7Bn in year 2013shows the credibility of the company towards their shareholders.Outof Non-current and current liabilities, largest proportions are held byborrowings – 44% and Trade and other payables – 41% respectively out of totalliabilities.

Company has Increased Interest bearing borrowings through lastthree years gradually, which has resulted in increased non-current liabilities.In 2014, Current and non-current liabilities has almost leveled up; Figure 2.1 shows the increase.Figure 2.1 – Composition ofLiabilities of Dialog Axiata PLC Thefollowing graph shows the how each component of financing has changed over thepast three years.Figure2.2 – Trend in financing – Dialog Axiata PLCAdditionallywe can see an increase in gearing ratio clearly resulted by the increase inborrowing throughout last three years.

   Year 2014 2013 2012 Gearing  (Debt : Equity) 46% 35% 26% Table 01 – Gearing – Dialog AxiataPLC over last three yearsHowever,still company is in a very healthy position where it can easily finance anyexpansion to come from this available source of finance (i.e. Debt). Figure 3represents the Debt – Equity composition of Dialog Axiata PLC for the lastthree years.  Figure3 – Debt : Equity composition of Dialog Axiata PLC over last three yearsFurther,if we look at Interest coverage of the company (Table 02), it has increased significantly over last three yearsshowing the ability to finance even further in an event of expansion. Year 2014 2013 2012 Interest Coverage ratio 10.82 5.61 1.

41 Table 02 – Interestcoverage times over last three years– Dialog Axiata PLC    1          ANALYSIS OF INVESTMENTACTIVITIES Investmentactivities explain how a company has utilized the funds acquired via thefinancing activities. Dialog’s balance sheet comprise of PPE, Intangibleassets, investments (namely investments in subsidiaries and associates) andcurrent assets. Inour analysis we pay special attention towards the structural composition ofnon-current assets firstly, since 80% approximately comprises of Non-currentassets from the asset structure in each year, simultaneously from 2014 to 2012.Thebreakdown of assets is as found below. Outof the Non-current asset composition, more than 50% of the assets comprise ofProperty, plant and equipment.

PPE of Dialog Axiata basically comprises of Landand Buildings, Computer systems and Telecom equipment, Furniture fittings andother equipment, motor vehicles and Assets in the course of construction (WIP),out of which the highest proportion of assets are deemed by Computer systemsand Telecom equipment, since Dialog is a company operating in thetelecommunications industry.However,it is important to note that the asset composition has changed from 2012 to2014. PPE has dropped down from 60% roughly to a 55% approximately; whileamounts due from other companies have increased by over a 6%. Also, the companyhas additionally invested in Associates over the period from 2012 to 2014,whereas at now, an ownership stake of 26% and 42.

48% simultaneously from Firstsource-DialogSolutions(Private) Limited and Digital Commerce Lanka (Private) Limited is observed. Thecompany’s fixed asset turnover ratio has reduced from 0.67 to 0.62 from 2012 to2013, and has remained the same in 2014, even though revenue has increased byroughly a 16%. The company also undertakes a yearly impairment test for itscash generating units, based on DCF model using cash projections in to thefuture approved by the management for a period of 10 years.

However, as therecoverable amounts exceeded the carrying value of the assets, no impairment assuch was identified for the year 2014. (As per LKAS 39)