Telkom AR front.qxp

More documents

Recommendations

Info

254 Telkom Annual Report 2009 Notes to the annual financial statements for the three years ended March 31, 2009 1. CORPORATE INFORMATION Telkom SA Limited (the Company) is a company incorporated and domiciled in the Republic of South Africa (’South Africa’) whose shares are publicly traded. The Company’s main objective and main business is to supply telecommunication, broadcasting, multimedia, technology, information and other related information technology services to the general public. The principal activities of the Company’s services and products include: • fixed-line subscription and connection services to post-paid, prepaid and private payphone customers using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Service Digital Network) lines, and the sale of subscription based value-added voice services and customer premises equipment rental and sales; • fixed-line traffic services to post-paid, prepaid and payphone customers, including local, long distance, fixed-to-mobile, international outgoing and international voice-over-internet protocol traffic services; • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations; • fixed-line data and internet services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services; and • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services. These separate annual financial statements are prepared in compliance with the South African Companies Act, 1973. In addition, the Group presents consolidated financial statements which include all subsidiaries, special purpose entities and joint ventures, which are included in these financial statements as investments. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The financial statements comply with the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the Companies Act of South Africa, 1973. The financial statements are prepared on the historical cost basis, with the exception of certain financial instruments which are measured at fair value and share-based payments which are measured at grant date fair value. Details of the Company’s significant accounting policies are set out below, and are consistent with those applied in the previous financial year except for the following: • The Company has adopted certain amendments to IAS39 and IFRS7, and adopted IFRIC12 and IFRIC14, which are applicable for annual periods beginning on or after January 1, 2008. The principal effects of these changes are discussed below. Adoption of amendments to standards and new interpretations IAS39 Financial Instruments: Recognition and Measurement and IFRS7 Financial Instruments: Disclosures – Reclassification of Financial Assets (amended) The amendments which are effective on or after July 1, 2008, permit an entity to reclassify non-derivative financial assets (other than those designated at fair value through profit or loss by the entity upon initial recognition) out of the fair value through profit or loss category in particular circumstances. The amendments also permit an entity to transfer from the available-for-sale category to the loans and receivables category a financial asset that would have met the definition of loans and receivables (if the financial asset had not been designated as available-forsale), if the entity has the intention and ability to hold that financial asset for the foreseeable future. The amendments do not have an impact on the annual financial statements. IFRIC12 Service Concession Arrangements The interpretation which is effective for annual periods beginning on or after January 1, 2008, sets out general principles on recognising and measuring the obligations and related rights in service concession arrangements from an operator’s perspective. This interpretation does not have an impact on the annual financial statements. IFRIC14 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction The interpretation which is effective for annual periods beginning on or after January 1, 2008, provides guidance on assessing the limit in IAS19 on the amount of the surplus that can be recognised as an asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum funding requirement. This interpretation does not have any impact on the annual financial statements, as the Company is not subject to minimum funding requirements.
Notes to the annual financial statements (continued) for the three years ended March 31, 2009 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Significant accounting judgements, estimates and assumptions The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Although these estimates and assumptions are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may ultimately differ from those estimates and assumptions. The presentation of the results of operations, financial position and cash flows in the financial statements of the Company is dependent upon and sensitive to the accounting policies, assumptions and estimates that are used as a basis for the preparation of these financial statements. Management has made certain judgements in the process of applying the Company’s accounting policies. These, together with the key estimates and assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, are as follows: Revenue recognition To reflect the substance of each transaction, revenue recognition criteria are applied to each separately identifiable component of a transaction. In order to account for multiple-element revenue arrangements in developing its accounting policies, the Company considered the guidance contained in the United States Financial Accounting Standards Board (FASB) Emerging Issues Task Force No 00-21 Revenue Arrangements with Multiple Deliverables. Judgement is required to separate those revenue arrangements that contain the delivery of bundled products or services into individual units of accounting, each with its own earnings process, when the delivered item has stand-alone value and the undelivered item has fair value. Further judgement is required to determine the relative fair values of each separate unit of accounting to be allocated to the total arrangement consideration. Changes in the relative fair values could affect the allocation of arrangement consideration between the various revenue streams. Judgement is also required to determine the expected customer relationship period. Any changes in these assessments may have a significant impact on revenue and deferred revenue. Property, plant and equipment and intangible assets The useful lives of assets are based on management’s estimation. Management considers the impact of changes in technology, customer service requirements, availability of Telkom Annual Report 2009 255 capital funding and required return on assets and equity to determine the optimum useful life expectation for each of the individual categories of property, plant, equipment and intangible assets. Due to the rapid technological advancement in the telecommunications industry as well as the Company’s plan to migrate to a next generation network over the next few years, the estimation of useful lives could differ significantly on an annual basis due to unexpected changes in the roll-out strategy. The impact of the change in the expected useful life of property, plant and equipment is described more fully in note 5.6. The estimation of residual values of assets is also based on management’s judgement whether the assets will be sold or used to the end of their useful lives and what their condition will be like at that time. For intangible assets that incorporate both a tangible and intangible portion, management uses judgement to assess which element is more significant to determine whether it should be treated as property, plant and equipment or intangible assets. Asset retirement obligations Management judgement is exercised when determining whether an asset retirement obligation exists, and in determining the present value of expected future cash flows and discount rate when the obligation to dismantle or restore the site arises, as well as the estimated useful life of the related asset. Impairments of property, plant and equipment and intangible assets Management is required to make judgements concerning the cause, timing and amount of impairment as indicated on notes 9 and 10. In the identification of impairment indicators, management considers the impact of changes in current competitive conditions, cost of capital, availability of funding, technological obsolescence, discontinuance of services and other circumstances that could indicate that an impairment exists. The Company applies the impairment assessment to its separate cash-generating units. This requires management to make significant judgements concerning the existence of impairment indicators, identification of separate cash-generating units, remaining useful lives of assets and estimates of projected cash flows and fair value less costs to sell. Management judgement is also required when assessing whether a previously recognised impairment loss should be reversed.
Page 1 and 2:
We are... one of Africa’s largest
Page 3 and 4:
Telkom shareholding as at March 31,
Page 5 and 6:
Grow profitable revenue through wir
Page 7 and 8:
600 500 400 300 200 100 0 07 08 09
Page 9 and 10:
The telecommunications industry Con
Page 11 and 12:
egulation that stipulated standard
Page 13 and 14:
a - Euros a - Euros a - Euros 0.25
Page 15 and 16:
ated management team with experienc
Page 17 and 18:
The regulatory environment The regu
Page 19 and 20:
On target for 2010 Telkom Annual Re
Page 21 and 22:
Online impairments, the fixed-line
Page 23 and 24:
• Remodelling - reaching for new
Page 25 and 26:
in this annual report has been upda
Page 27 and 28:
Capital expenditure for the Group i
Page 29 and 30:
More than100 years of combined tele
Page 31 and 32:
Management team Telkom Annual Repor
Page 33 and 34:
Telkom Annual Report 2009 33 Age at
Page 35 and 36:
uild a partnership with communities
Page 37 and 38:
Customers: Through our Customer Cen
Page 39 and 40:
• Interfacing with the media Whil
Page 41 and 42:
Partnering with Human Resources Gro
Page 43 and 44:
The members’ resignations and app
Page 45 and 46:
Share dealings In line with JSE Lis
Page 47 and 48:
NYSE rules Telkom practice Telkom A
Page 49 and 50:
the codes of conduct and ethics tha
Page 51 and 52:
Telkom Annual Report 2009 51 Enterp
Page 53 and 54:
provider, we practice a risk manage
Page 55 and 56:
egulate the business of dealers in
Page 57 and 58:
addressing a number of significant
Page 59 and 60:
There was a major Over the past dec
Page 61 and 62:
payment policy that facilitates the
Page 63 and 64:
Headcount movement Compensation and
Page 65 and 66:
• Accelerated development of wome
Page 67 and 68:
14,500 union members participated i
Page 69 and 70:
were admitted to the university in
Page 71 and 72:
ole in exposing students to the rea
Page 73 and 74:
Sick leave indices • We saved R2
Page 75 and 76:
These will be augmented by another
Page 77 and 78:
Some of the key deliverables are:
Page 79 and 80:
Fittingly, the initiative was launc
Page 81 and 82:
Sponsorships Sponsorships continue
Page 83 and 84:
Item Comment and reference Governan
Page 85 and 86:
espond to competitive challenges Pe
Page 87 and 88:
Operational review History and deve
Page 89 and 90:
service. All costs including instal
Page 91 and 92:
Traffic was adversely affected in b
Page 93 and 94:
Telkom’s focus on bringing new in
Page 95 and 96:
esponse of the CDMA operators to ou
Page 97 and 98:
MWEB Africa On April 21, 2009, we a
Page 99 and 100:
VPN model that allows other service
Page 101 and 102:
services and also to support Telkom
Page 103 and 104:
Telkom’s fixed-line voice busines
Page 105 and 106:
Results of operations The Telkom Gr
Page 107 and 108:
EBITDA can be reconciled to operati
Page 109 and 110:
Telkom Annual Report 2009 109 Finan
Page 111 and 112:
Fixed-line operating revenue increa
Page 113 and 114:
The following table sets forth info
Page 115 and 116:
Interconnection revenue Year ended
Page 117 and 118:
Telkom Annual Report 2009 117 Fixed
Page 119 and 120:
Fixed-line payments to other networ
Page 121 and 122:
Service fees increased in the year
Page 123 and 124:
Vodacom’s operating revenue from
Page 125 and 126:
our fixed-line business, which were
Page 127 and 128:
Vodacom’s selling, general and ad
Page 129 and 130:
The increase in other operating rev
Page 131 and 132:
commercial paper bills, as well as
Page 133 and 134:
The following table sets forth our
Page 135:
challeng Consolidated financial sta
Page 138 and 139:
138 Telkom Annual Report 2009
Page 140 and 141:
140 Telkom Annual Report 2009 Direc
Page 142 and 143:
142 Telkom Annual Report 2009 Conso
Page 144 and 145:
144 Telkom Annual Report 2009 Conso
Page 146 and 147:
146 Telkom Annual Report 2009 Notes
Page 148 and 149:
Page 150 and 151:
Page 152 and 153:
Page 154 and 155:
Page 156 and 157:
Page 158 and 159:
Page 160 and 161:
Page 162 and 163:
Page 164 and 165:
Page 166 and 167:
Page 168 and 169:
Page 170 and 171:
Page 172 and 173:
Page 174 and 175:
Page 176 and 177:
Page 178 and 179:
Page 180 and 181:
Page 182 and 183:
Page 184 and 185:
Page 186 and 187:
Page 188 and 189:
Page 190 and 191:
Page 192 and 193:
Page 194 and 195:
Page 196 and 197:
Page 198 and 199:
Page 200 and 201:
Page 202 and 203:
Page 204 and 205: 204 Telkom Annual Report 2009 Notes
Page 250 and 251: 250 Telkom Annual Report 2009 Compa
Page 252 and 253: 252 Telkom Annual Report 2009 Compa
Page 304 and 305:
Page 306 and 307:
Page 308 and 309:
Page 310 and 311:
Page 312 and 313:
Page 314 and 315:
Page 316 and 317:
Page 318 and 319:
Page 320 and 321:
Page 322 and 323:
Page 324 and 325:
Page 326 and 327:
Page 328 and 329:
Page 330 and 331:
Page 332 and 333:
Page 334 and 335:
Page 336 and 337:
Page 338 and 339:
338 Telkom Annual Report 2009 Share
Page 340 and 341:
340 Telkom Annual Report 2009 Defin
Page 342 and 343:
342 Telkom Annual Report 2009 Defin
Page 344 and 345:
344 Telkom Annual Report 2009 Notic
Page 346 and 347:
346 VOTING AND PROXIES Ordinary sha
Page 348:
Notes Telkom Annual Report 2009 1.
show all

Telkom AR front.qxp

Create successful ePaper yourself

Delete template?

Save as template?