DIALOG FINANCE PLCFINANCIAL STATEMENTS FOR THE YEAR ENDED

31 DECEMBER 2021

DIALOG FINANCE PLC

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021

CONTENTS

PAGE

Annual Report of the Board of Directors

1 -6

The Statement of Directors' Responsibility

7

Independent Auditor's Report

8 - 13

Statements of Profit or Loss and Other Comprehensive Income

14 - 15

Statements of Financial Position

16

Statement of Changes in Equity

17

Statements of Cash Flows

18

Notes to the Financial Statements

19 - 84

Confidential

DIALOG FINANCE PLC

Annual Report of the Board of Directors for the year ended 31 December 2021

The Board of Directors of Dialog Finance PLC ('the Company') is pleased to present its Annual Report on the State of Affairs of the Company for the year ended 31 December 2021, together with the audited financial statements of the Company.

This report contains the information required in terms of the Companies Act, No. 07 of 2007, Finance Business Act, No. 42 of 2011 and Directions issued there under and the Listing Rules of the Colombo Stock Exchange.

The Company

The Company bearing the registration No. PB 765 PQ, is a public limited liability company incorporated and domiciled in Sri Lanka. The registered office of the Company is located at No. 475, Union Place, Colombo 02 and the principal place of business is located at No. 57 Srimath Anagarika Dharmapala Mawatha, Colombo 03.

The Company was incorporated on 25 November 1981, under the Companies Ordinance (Chapter 145), bearing the name Silvereen Finance Company Limited. The Company changed its name to People's Merchant Finance Company Limited on 30 September 2009 and Capital Alliance Finance Limited on 16 September 2011. The Company was re-registered under the provisions of the Companies Act, No. 07 of 2007 on 22 November 2011 and was accordingly renamed as Capital Alliance Finance PLC. On 22 December 2015, the Company changed its name to Colombo Trust Finance PLC and following the acquisition by Dialog Axiata PLC, the Company changed its name to Dialog Finance PLC on 15 September 2018.

The Company is a Licensed Finance Company under the Finance Business Act, No. 42 of 2011 and the ordinary shares of the Company was listed on the Colombo Stock Exchange ("CSE") on 4 October 2011.

Principal business activities

The Company provides a comprehensive range of financial services encompassing accepting deposits, margin trading facilities, debt factoring, revolving loans, leasing and business / personal loans.

Financial statements

The financial statements of the Company as set out on pages 16 to 86, comprise of the statement of financial position, statement of profit or loss and comprehensive income, statement of changes in equity, statement of cash flows and notes to the financial statements of the Company. They have been prepared in accordance with the Sri Lanka Accounting Standards (SLFRSs & LKASs) laid down by the Institute of Chartered Accountants of Sri Lanka, in compliance with the requirements of the Companies Act, No. 07 of 2007 ("the Companies Act") and the Finance Business Act, No. 42 of 2011.

The aforementioned financial statements for the year ended 31 December 2021 are duly signed by the Chief Executive Officer, Head of Finance and two other Directors of the Company.

Independent auditors' report

The Independent Auditors of the Company are Messrs. PricewaterhouseCoopers ("PwC"), Chartered Accountants. PwC carried out the audit on the financial statements of the Company for the year ended 31 December 2021 and their report on the financial statements, is set out on pages 8 to 13.

Significant accounting policies

The significant accounting policies adopted in the preparation of the financial statements are given on pages 19 to 40.

DIALOG FINANCE PLC

Annual Report of the Board of Directors for the year ended 31 December 2021 (Continued)

Directors' responsibility for financial reporting

The Directors are responsible for the preparation of the financial statements of the Company to reflect a true and fair view of its state of affairs. The Directors are of the view that these financial statements appearing on pages 16 to 86 have been prepared in conformity with the requirements of the Sri Lanka Accounting Standards, Companies Act, the Finance Business Act, No.42 of 2011 and amendments thereto and the Listing Rules of the Colombo Stock Exchange.

The detailed Statement of Directors' Responsibility for Financial Reporting is set out on page 7 of this Annual report.

Property, plant and equipment

The details of property, plant & equipment are given on Note 27 to the financial statements.

  • (a) Capital expenditure

    The total capital expenditure made on acquiring property, plant and equipment and intangible assets of the Company amounted to Rs. 25.13Mn (For the year ended 31 December 2020 - Rs. 64.74Mn) and the details are given in Notes 27 and 28 to the financial statements.

  • (b) Capital commitments

    The capital expenditure approved and contracted for, as at the reporting date is given in Note 37 to the financial statements.

Reserves

The aggregate value of reserves and their composition are set out in the Statement of Changes in Equity of the Company on page 19 to the financial statements.

(a) Statutory reserve fund

The statutory reserve fund is a capital reserve which consists of profits transferred as required by section 3 (b) (ii) of Central Bank Direction No. 1 of 2003.

Stated capital

The Stated Capital of the Company as at 31 December 2021 amounted to Rs. 2,934,582,100 consisting of 117,399,866 ordinary shares (31 December 2020 - Rs. 2,374,509,340 consisting of 108,783,362 ordinary shares).

The details of the shares issued are given on Note 33 to the financial statements.

(a) Issue of shares

During the year under review, the Company issued 8,616,504 ordinary shares by way of a Rights Issue in the proportion of eight (8) Ordinary Shares for Hundred and One (101) Ordinary shares held in the capital of the Company and shares were listed on CSE on 13 October 2021. The Company raised Rs. 560,072,760 from the Rights Issue and increased the Stated Capital of the Company.

DIALOG FINANCE PLC

Annual Report of the Board of Directors for the year ended 31 December 2021 (Continued)

Stated capital (Continued)

(b) Shareholdings of the Company

The parent company, Dialog Axiata PLC, held 99.05% of the Ordinary shares in issue of the Company as at 31 December 2021. The main shareholders of the Company and corresponding holding percentages are set out below.

31 December 2021

Name of Shareholder

No. of shares

% Holding

1

Dialog Axiata PLC

116,290,376 99.05%

2 Hatton National Bank Plc/Rohan Chanaka Joseph Goonewardene 252,407 0.21%

3 Mr. S.R.S. De Saram & Mrs. S.T.T. Jayasundera (Joint) 76,234 0.06%

4 Dawi Investment Trust (Pvt) Ltd 64,450 0.05%

5 Myland Developments Limited 30,400 0.03%

6 Bansei Securities Capital (Pvt) Ltd/Dawi Investment Trust (Pvt) Ltd 30,002 0.03%

7 Mr. P.S.M. Fernando 24,282 0.02%

8 Mr. R.C.J. Goonewardene 24,254 0.02%

9 Mrs. A.A. Raaymakers 19,711 0.02%

10

  • People's Leasing & Finance Plc/C.D.Kohombanwickramage 18,152 0.02%

    11

  • People's Leasing & Finance Plc/Mr. R. Dahanayake 18,000 0.02%

    12

  • Mr. M.K. Gunawardena 16,190 0.01%

    13

  • Mr. G.D.M. Ranasinghe & Mrs. O.R.K. Ranasinghe (Joint) 14,029 0.01%

    14

  • Mr. B.Y. Edirisuriya & Mrs. R.D. Edirisuriya (Joint) 11,995 0.01%

  • Citizens Development Business Finance Plc/K.D.C. Somalatha and K.

    15

  • 11,580 0.01%

  • Nandasiri

    16

  • Mr. B.C.N. Mendis 11,576 0.01%

    • 17 Mr. B.C.V. Mendis

  • 11,576 0.01%

    • 18 Mr. P. Poongunaseelan

  • 11,205 0.01%

    • 19 Mrs. S. Suwandaratne

  • 10,792 0.01%

    • 20 Mr. C. Chanmugam

  • 10,632 0.01%

  • Others 442,023 0.38%

Total

117,399,866

100.0%

  • (c) Minimum public holding requirement

    The percentage of shares held by the public as at 31 December 2021 was 0.95%, in the hands of 735 public shareholders (31 December 2020 - 0.95% in the hands of 679 public shareholders)

    The Company is not compliant with the Minimum Public Holding requirement under section 2 of Rule 7.13.1(b) of the Listing Rules of the Colombo Stock Exchange ("CSE"). Accordingly, the Company was transferred to the Second Board on 10 February 2020.

  • (d) Equitable treatment to shareholders

    The Company has at all times ensured that all shareholders treated equitably.

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Dialog Finance plc published this content on 29 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2022 04:13:06 UTC.