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162 Telkom Annual Report 2009 Notes to the consolidated annual financial statements (continued) for the three years ended March 31, 2009 5. OPERATING EXPENSES (continued) 2007 2008 2009 Rm Rm Rm 5.3 Selling, general and administrative expenses 4,184 4,045 5,772 Selling and administrative expenses 1,533 1,220 2,374 Maintenance 1,870 1,966 2,319 Marketing 640 614 711 Bad debts 141 245 368 The increase in the current year’s selling and administrative expenses is attributable to the focus on expanding the customer base in Nigeria. 5.4 Service fees 2,209 2,437 2,756 Facilities and property management 1,142 1,228 1,275 Consultancy services 192 169 295 Security and other 821 982 1,121 Auditors’ remuneration 54 58 65 Audit services 53 57 58 Company auditors 48 46 47 Current year 47 43 47 Prior year underprovision 1 3 – Other auditors – current year 5 11 11 Audit related services – 1 – Other auditors – 1 – Other services 1 – 7 Included in the current year’s consultancy services is an amount of R177 million relating to services rendered in respect of the transaction to dispose of Telkom’s shareholding in Vodacom Group (Proprietary) Limited. The increase in the current year’s security and other costs is mainly attributable to the new contract negotiated to secure the copper network in Telkom’s drive to cut down on cable thefts. 5.5 Operating leases 775 671 823 Land and buildings 135 160 244 Transmission and data lines 8 35 118 Equipment 80 48 72 Vehicles 552 428 389 5.6 Depreciation, amortisation, impairment and write-offs 3,601 4,134 5,280 Depreciation of property, plant and equipment 3,011 3,151 3,733 Amortisation of intangible assets 306 469 724 Impairment of property, plant and equipment and intangible assets – 229 501 Write-offs of property, plant and equipment and intangible assets 284 285 322 Included in the current year’s amortisation of intangible assets is an amount of R134 million relating to the FIFA brand intangible asset. The impairment charge for the 2009 financial year consists of R462 million and R39 million relating to Multi-Links and Africa Online respectively.
Telkom Annual Report 2009 163 Notes to the consolidated annual financial statements (continued) for the three years ended March 31, 2009 2007 2008 2009 Rm Rm Rm 6. INVESTMENT INCOME 199 168 181 Interest income 196 168 181 Dividend income from investments 3 – – Included in investment income is an amount of R160 million (2008: R142 million; 2007: R196 million) which relates to interest earned from financial assets not measured at fair value through profit or loss. 7. FINANCE CHARGES AND FAIR VALUE MOVEMENTS 857 1,556 2,843 Finance charges on interest-bearing debt 1,142 1,543 1,732 Local debt 1,303 1,700 1,895 Foreign debt – 18 – Finance charges capitalised (161) (175) (163) Foreign exchange gains and losses and fair value movement (285) 13 1,111 Foreign exchange losses 59 93 843 Fair value adjustments on derivative instruments (344) (80) 268 Capitalisation rate 14.77% 12.60% 12.40% Included in finance charges is an amount of R1,655 million (2008: R1,499 million; 2007: R1,142 million) which relates to interest paid on financial liabilities not measured at fair value through profit or loss. Included in foreign exchange losses and fair value adjustments are forex losses of R961 million in respect of the loan that Multi-Links received from Telkom and R409 million loss in respect of the Multi-Links put option, offset by the R318 million gain in Telkom.
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We are... one of Africa’s largest
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Telkom shareholding as at March 31,
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Grow profitable revenue through wir
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600 500 400 300 200 100 0 07 08 09
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The telecommunications industry Con
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egulation that stipulated standard
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a - Euros a - Euros a - Euros 0.25
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ated management team with experienc
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The regulatory environment The regu
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On target for 2010 Telkom Annual Re
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Online impairments, the fixed-line
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• Remodelling - reaching for new
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in this annual report has been upda
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Capital expenditure for the Group i
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More than100 years of combined tele
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Management team Telkom Annual Repor
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Telkom Annual Report 2009 33 Age at
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uild a partnership with communities
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Customers: Through our Customer Cen
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• Interfacing with the media Whil
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Partnering with Human Resources Gro
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The members’ resignations and app
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Share dealings In line with JSE Lis
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NYSE rules Telkom practice Telkom A
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the codes of conduct and ethics tha
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Telkom Annual Report 2009 51 Enterp
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provider, we practice a risk manage
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egulate the business of dealers in
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addressing a number of significant
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There was a major Over the past dec
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payment policy that facilitates the
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Headcount movement Compensation and
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• Accelerated development of wome
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14,500 union members participated i
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were admitted to the university in
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ole in exposing students to the rea
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Sick leave indices • We saved R2
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These will be augmented by another
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Some of the key deliverables are:
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Fittingly, the initiative was launc
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Sponsorships Sponsorships continue
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Item Comment and reference Governan
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espond to competitive challenges Pe
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Operational review History and deve
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service. All costs including instal
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Traffic was adversely affected in b
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Telkom’s focus on bringing new in
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esponse of the CDMA operators to ou
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MWEB Africa On April 21, 2009, we a
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VPN model that allows other service
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services and also to support Telkom
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Telkom’s fixed-line voice busines
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Results of operations The Telkom Gr
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EBITDA can be reconciled to operati
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Telkom Annual Report 2009 109 Finan
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Page 117 and 118: Telkom Annual Report 2009 117 Fixed
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Notes Telkom Annual Report 2009 1.
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