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294 Telkom Annual Report 2009 Notes to the annual financial statements (continued) for the three years ended March 31, 2009 2007 2008 2009 Rm Rm Rm 21. TREASURY SHARE RESERVE (1,778) (1,642) (1,521) This reserve represents amounts paid by Telkom to Rossal No 65 (Proprietary) Limited and Acajou Investments (Proprietary) Limited, subsidiaries, for the acquisition of the Company’s shares to be utilised in terms of the Telkom Conditional Share Plan (TCSP). Treasury shares 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 TCSP. The decrease in the number of treasury shares is due to 1,552,029 (2008: 1,743,375; 2007: 450,505) shares that vested in terms of the TCSP during the current financial year. The fair value of these shares at the date of vesting was R228 million (2008: R301 million; 2007: R59 million). 22. SHARE-BASED COMPENSATION RESERVE This reserve represents the cumulative grant fair value of the equitysettled share-based payment transactions recognised in employee expenses over the vesting period of the equity instruments granted to employees in terms of the Telkom Conditional Share Plan (refer to note 25). 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 the 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.
Notes to the annual financial statements (continued) for the three years ended March 31, 2009 23. INTEREST-BEARING DEBT Telkom Annual Report 2009 295 2007 2008 2009 Rm Rm Rm Non-current interest-bearing debt 3,308 7,336 10,193 Total interest-bearing debt (refer to note 12) 9,083 13,362 17,704 Gross interest-bearing debt 10,416 14,403 18,296 Discount on debt instruments issued (2,185) (1,898) (1,576) Finance leases 852 857 984 Less: Current portion of interest-bearing debt (5,775) (6,026) (7,511) Local debt (5,771) (6,000) (7,476) Locally registered Telkom debt instruments (4,432) – – Call borrowings – (2,600) – Term loans – – (2,000) Commercial paper bills (1,339) (3,400) (5,476) Foreign debt – – – Finance leases (4) (26) (35) Total interest-bearing debt is made up as follows: 9,083 13,362 17,704 (a) Local debt 8,125 12,365 16,582 Locally registered Telkom debt instruments 6,786 8,164 11,106 Name, maturity, rate p.a., nominal value TK01, 2008, 10%, RNil (2008: RNil; 2007: R4,680 million) 4,432 – – TL12, 2012, 12.45%, R1,060 million (2008: RNil; 2007: RNil) – – 1,059 TL15, 2015, 11.9%, R1,160 million (2008: RNil; 2007: RNil) – – 1,159 TL20, 2020, 6%, R2,500 million (2008: R2,500 million; 2007: R2,500 million) 1,246 1,283 1,325 PP02, 2010, 0%, R430 million (2008: R430 million; 2007: R430 million) 264 304 349 PP03, 2010, 0%, R1,350 million (2008: R1,350 million; 2007: R1,350 million) 844 977 1,131 Call borrowings, 2009, 11.58%, RNil (2008: R2,600 million; 2007: RNil) – 2,600 – Term loans, 2010, 9.67%, R2,000 million (2008: R3,000 million; 2007: RNil) – 3,000 2,000 Syndicated loans, 2014, 11.46%, R4,100 million (2008: RNil; 2007: RNil) – – 4,083 Total interest-bearing debt is made up of R17,704 million debt at amortised cost (2008: R13,362 million debt at amortised cost; 2007: R8,985 million debt at amortised cost and R98 million debt at fair value through profit or loss).
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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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Fixed-line operating revenue increa
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The following table sets forth info
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Interconnection revenue Year ended
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Telkom Annual Report 2009 117 Fixed
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Fixed-line payments to other networ
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Service fees increased in the year
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Vodacom’s operating revenue from
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our fixed-line business, which were
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Vodacom’s selling, general and ad
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The increase in other operating rev
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commercial paper bills, as well as
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The following table sets forth our
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challeng Consolidated financial sta
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138 Telkom Annual Report 2009
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140 Telkom Annual Report 2009 Direc
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142 Telkom Annual Report 2009 Conso
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146 Telkom Annual Report 2009 Notes
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346 VOTING AND PROXIES Ordinary sha
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Notes Telkom Annual Report 2009 1.
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