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304 <strong>Telkom</strong> Annual Report 2009 Notes to the annual financial statements (continued) for the three years ended March 31, 2009 25. EMPLOYEE BENEFITS (continued) Medical benefits (continued) Plan assets at fair value: 2007 2008 2009 Rm Rm Rm At beginning of year – 1,961 1,929 Plan asset – initial recognition 1,720 – – Expected return on plan assets 188 257 223 Benefits paid from plan assets (94) (125) (141) Actuarial gain/(loss) 147 (164) (393) Plan assets at end of year 1,961 1,929 1,618 Present value of funded obligation 4,366 4,831 5,389 Fair value of plan assets (1,961) (1,929) (1,618) Fund deficit 2,405 2,902 3,771 Unrecognised net actuarial loss (1,285) (1,566) (2,048) Liability as disclosed in the balance sheet (refer to note 24) 1,120 1,336 1,723 Expected return on plan assets 188 257 223 Actuarial return on plan assets 147 (164) (393) Actual gain/(loss) on plan assets 335 93 (170) Principal actuarial assumptions were as follows: Discount rate (%) 7.5 9.0 8.7 Expected return on plan assets (%) 13.5 12.0 11.0 Salary inflation rate (%) 6.0 7.5 7.2 Medical inflation rate (%) 6.5 8.0 7.7 The assumed rates of mortality are determined by reference to the SA85-90 (Light) Ultimate table, as published by the Actuarial Society of South Africa, for pre-retirement purposes and the PA(90) Ultimate table, minus one year age rating as published by the Institute and Faculty of Actuaries in London and Scotland, for retirement purposes. Contractual retirement age 65 65 65 Average retirement age 60 60 60 Number of members 17,119 15,526 13,883 Number of pensioners 8,494 8,430 8,397
Notes to the annual financial statements (continued) for the three years ended March 31, 2009 25. EMPLOYEE BENEFITS (continued) Medical benefits (continued) <strong>Telkom</strong> Annual Report 2009 305 The valuation results are sensitive to changes in the underlying assumptions. The following table provides an indication of the impact of changing some of the valuation assumptions: Current assumption Decrease Increase Rm Rm Rm Medical cost inflation rate 7.7% -1.0% +1.0% Benefit obligation 5,389 (736) 921 Percentage change (13.7)% 17.1% Service cost and interest cost 2009/2010 555 (84) 108 Percentage change (15.1)% 19.5% Discount rate 8.7% -1.0% +1.0% Benefit obligation 5,389 933 (734) Percentage change 17.3% (13.6)% Service cost and interest cost 2009/2010 555 46 (37) Percentage change 8.3% (6.7)% Post-retirement mortality rate PA(90) ultimate- 1 -10.0% +10.0% Benefit obligation 5,389 221 (197) Percentage change 4.1% (3.7)% Service cost and interest cost 2009/2010 555 23 (20) Percentage change 4.1% (3.6)% 2007 2008 2009 The fund portfolio consists of the following: Equities (%) 59 56 30 Bonds (%) 3 2 2 Cash and money market investments (%) 21 33 10 Foreign investments (%) 9 9 9 Insurance policies (%) 8 – 49
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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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146 Telkom Annual Report 2009 Notes
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