Telkom AR front.qxp

306
Telkom Annual Report 2009
Notes to the annual financial statements (continued)
for the three years ended March 31, 2009
25. EMPLOYEE BENEFITS (continued)
Telephone rebates
The Company provides telephone rebates to its pensioners. The most recent actuarial valuation was performed at March 31, 2009.
Eligible employees must be employed by the Company until retirement age to qualify for the telephone rebates. The scheme is a defined
benefit plan.
The status of the telephone rebate liability is disclosed below:
2007 2008 2009
Rm Rm Rm
Benefit obligation opening balance 251 307 443
Service cost 4 3 6
Interest cost 19 22 39
Actuarial (gain)/loss (39) 133 19
Amendments 93 – –
Benefits paid (21) (22) (23)
Present value of unfunded obligation 307 443 484
Unrecognised net actuarial loss and past service cost (25) (156) (159)
Liability as disclosed in the balance sheet (refer to note 24) 282 287 325
Principal actuarial assumptions were as follows:
Discount rate (%) 7.5 9.0 8.7
Rebate inflation rate (%) – 4.0 4.0
Contractual retirement age 65 65 65
Average retirement age 60 60 60
The assumed rates of mortality are determined by reference to the
standard published mortality table PA (90) Ultimate standard tables,
as published by the Institute and Faculty of Actuaries in London
and Scotland, rated down one year to value the pensioners.
Number of members 19,515 18,766 17,034
Number of pensioners 10,918 10,680 10,499
Telkom Conditional Share Plan
Telkom’s shareholders approved the Telkom Conditional Share Plan at the January 2004 Annual General Meeting. The scheme covers both
operational and management employees and is aimed at giving shares to Telkom employees, at a RNil exercise price, at the end of the
vesting period. The vesting period for the operational employees awarded in 2004 and 2005 is 0% in year one and 33% in each of the
three years thereafter, while the shares allocated in 2006 and 2007 together with management shares vest fully after three years.
Although the number of shares awarded to employees will be communicated at the grant date, the ultimate number of shares that vest may
differ based on certain performance conditions being met.
The Telkom Board approved the fourth enhanced allocation of shares to employees as at September 4, 2007, with a grant date of
September 27, 2007, the day that the employees and the Company shared a common understanding of the terms and conditions of the
grant. A total number of 6,089,810 shares were granted.
The Board has also approved an enhanced allocation for the November 2006 grant on September 4, 2007 with a grant date of
September 27, 2007. The number of additional shares granted with regard to the 2006 allocation is 4,966,860 shares.