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  Risk Management
  In the field of entrepreneurship risk and reward are closely linked. Rewards can be generated only if a business entity is willing to take risks. It is the capacity to take informed and intelligent Risk Management measures thatgenerate sustainable rewards that are the hallmark of a business enterprise.

While all companies take risks, most companies also have in places systems and controls to mitigate, minimise and manage risk. The essence of a good Risk Management system is to be able to identify risks as precisely as possible, to quantify the impact that risks will have on a company’s performance, and to generate a capacity within the Company to manage and control these risks as far as possible.

Business risks are events which have the potential to adversely impact on the realisation of business objectives. An effective system of Risk Management would need to identify these events in advance, predict when they are most likely to occur and prevent or mitigate the impact of these risks on the organisation’s activities. An effective system of Risk Management should not only minimise or reduce risks but also be able to translate these risks into opportunities for greater rewards.

SLT has put in place systems, policies and procedures in all of its major areas of operation to identify, measure and monitor risks in a systematic way. These systems and procedures seek to generate a uniform interpretation of risk and a synchronised approach to quantifying the impact of the risk and its management. These systems and procedures ensure that SLT takes well calculated risks, but at the same time tries to eliminate certain types of risks altogether and minimise the impact of others. Our senior management constantly reports to the Board on the systems being implemented in their areas of operation. The adequacy and efficacy of SLT’s Risk Management procedures are constantly monitored in the light of a constantly changing business environment.

Risks emerge from a variety of sources:

Natural Disasters
Risks from natural disasters such as fire, water and lightening have the potential to impact on most businesses in varying degrees. Mitigation measures include comprehensive fire protection systems and other emergency response mechanisms. In 2003 SLT had to respond to the floods which devastated much of the Western, Sabargamuwa and Southern Provinces.

Reputation Risks
SLT’s activities have touched the lives of many stakeholders including the broader public. We know that we are in a business area that has an important impact on the lives of ordinary people. We are conscious of this larger social responsibility and have taken steps to forge a close relationship not just with our customers but with larger society as well. We have invested in the wellbeing of the community including the under-privileged. We have also invested in the preservation of the environment for future generations.

However, we are mindful of the fact that because of the nature of our operations our reputation can change over time and sometimes very quickly. In this respect we have a major public relations drive that constantly communicates with the public and explains the changes that we are constantly bringing about. Whether it is the introduction of new technology, the expansion of our network, prices revisions, the introduction of a new billing structure or a VRS package, we are constantly making attempts to communicate not just with those affected but with larger public too.

Risks arising out of Competition

Previously SLT was the only player in the telecommunications market. This has changed and now SLT has to compete not just with domestic players but also with international players and a combination of both international and domestic.

As we have noted elsewhere in this report SLT has taken many steps to cope and respond to this increasing revenue. This includes diversifying our lines of business and sources of revenue, continuously upgrading our technology and network, and developing our levels of customer service.

Regulatory Risks
The TRC is the statutory body that regulates the telecommunications industry. Because of SLT’s dominant position in the market we are sometimes required to conform to standards not imposed on other players.

We have put in place systems and procedures to ensure that SLT complies strictly with the standards laid down by the TRC. We are also developing our capacity to engage with the TRC so that we can optimise the regulatory framework.
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