(formely M-Cell Limited) - Business Report 2003 - MTN Group

GROUP
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued)
FOR THE YEAR ENDED 31 MARCH 2003
31 March 31 March
2003 2002
Rm
Rm
37. JOINT VENTURES
The Group had the following effective percentage interests in joint ventures: % %
– MTN Swaziland 30 30
– MTN Uganda 52 52
– MTN Rwanda 31 31
– MTN Network Solutions 60 60
The following amounts are included in the Group’s financial statements
as a result of the proportionate consolidation of the above joint ventures.
Current assets 141 160
Non-current assets 466 674
Current liabilities (100) (186)
Non-current liabilities (162) (240)
Revenue 747 595
Expenses (132) (428)
Cash generated by operations 180 227
Cash invested (166) (228)
Cash from financing activities * 16
Joint control is exercised over the funding and operating activities of
MTN Uganda in terms of the joint venture agreement concluded with
Telia Overseas AB. MTN Uganda and MTN Network Solutions are
proportionately consolidated as joint ventures even though a majority
of the ordinary share capital is held by the Group in both operations.
38. RELATED PARTY TRANSACTIONS
DIRECTORS’ EMOLUMENTS
The remuneration of directors is decided by the nomination, remuneration
and human resources committee having regard to comparative market
information. For details refer to the Directors’ report (pages 66 and 67).
LOAN TO DIRECTOR
P L Zim 6 6
The loan bears no interest and is secured by a cession of an endowment
policy in the name of the Director. The loan is repayable on 13 July 2006.
Other related party transactions
Amounts paid to Johnnic group companies
Johnnic Communications Management Services (Proprietary) Limited * 16
6 22
*Amount less than R1 million.
39. TRANSFER PRICING
In terms of the transfer pricing provisions contained in section 31 of the South African Income Tax Act,
58 of 1962 (the Act) where a taxpayer supplies financial services to a connected person who is a
non-South African resident, interest should be charged on an arm’s length basis. The Group has
consistently taken the view, based on professional advice, that the provisions of section 31 should not
apply in respect of the loan element of Shareholder Equity Funding to its African subsidiaries and joint
ventures. The Group and its professional advisors continue to believe in the soundness of the approach
adopted and accordingly consider that there is no justification to raise a provision for any potential liability
in this matter.
PAGE 102
MTN BUSINESS REPORT 2003