Telkom AR front.qxp

Telkom Annual Report 2009 197
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
2007 2008 2009
Rm Rm Rm
23. TREASURY SHARE RESERVE (1,774) (1,638) (1,517)
This reserve represents amounts paid by Telkom to Rossal No 65
(Proprietary) Limited and Acajou Investments (Proprietary) Limited,
subsidiaries, for the acquisition of Telkom’s shares to be utilised in terms
of the Telkom Conditional Share Plan (’TCSP’).
At March 31, 2009, 11,646,680 (2008: 10,493,141;
2007: 12,237,016) and 8,143,556 (2008: 10,849,058;
2007: 10,849,058) ordinary shares in Telkom, with a fair value of
R1,229 million (2008: R1,377 million; 2007: R2,031 million) and
R859 million (2008: R1,423 million; 2007: R1,801 million) are held
as treasury shares by its subsidiaries Rossal No 65 (Proprietary) Limited
and Acajou Investments (Proprietary) Limited, respectively.
The shares held by Rossal No 65 (Proprietary) Limited and Acajou
Investments (Proprietary) Limited are reserved for issue in terms of the
Telkom Conditional Share Plan (’TCSP’).
The reduction in the number of treasury shares is due to 1,552,029
(2008: 1,743,785; 2007: 450,505) shares that vested in terms
of the TCSP during the year.
The fair value of these shares at the date of vesting was R228 million
(2008: R301 million; 2007: R63 million).
24. SHARE-BASED COMPENSATION RESERVE
This reserve represents the cumulative grant date fair value of the equitysettled
share-based payment transactions recognised in employee
expenses during the vesting period of the equity instruments granted to
employees in terms of the Telkom Conditional Share Plan (refer to note 30).
No consideration is payable on the shares issued to employees, but
performance criteria will have to be met in order for the granted shares
to vest. The ultimate number of shares that will vest may differ based on
certain individual and Telkom performance conditions being met. The
related compensation expense is recognised over the vesting period of
shares granted, commencing on the grant date.
The following table illustrates the movement within the share-based
compensation reserve:
Balance at beginning of year 151 257 643
Net increase in equity 106 386 433
Employee cost 141 522 554
Vesting and transfer of shares (35) (136) (121)
Balance at end of year 257 643 1,076
At March 31, 2009 the estimated total compensation expense to be recognised over the vesting period was R1,824 million (2008:
R2,151 million; 2007: R580 million), of which R554 million (2008: R522 million; 2007: R141 million) was recognised in employee
expenses for the year.