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

a deferred tax asset raised which
increased attributable profits for the year
by R128 million) in addition to basic
headline earnings as it does not consider
that the latter adequately reflect the
Group’s results for the year.
The deferred tax asset was raised in
accordance with South African Statements
of Generally Accepted Accounting Practice
AC102 (IAS 12 equivalent), as a result of
deductible temporary differences arising
within MTN Nigeria, which became
profitable during the year.This enhanced
MTN Group’s basic headline earnings by
R128 million for the current financial year.
The Board considers that full recognition
of the deferred tax asset somewhat
undermines fair presentation of the
financial results because the actual
economic benefit to be derived from the
asset is uncertain, as it will only be realised
once MTN Nigeria emerges from the fiveyear
tax holiday granted to it under
“pioneer status” legislation. In addition,
current accounting standards do not
permit discounting of such assets so as to
take cognisance of timing and currency
uncertainties.
Further details on the calculation of
adjusted headline EPS are presented in
note 7 to the Group financial statements.
3.4 Financing costs
Net finance costs for the Group increased
by 164% to R833 million compared with
last year’s R316 million.This was primarily
as a result of increased borrowings in MTN
Nigeria, which had raised various financing
facilities during the previous period and
utilised these funds for network expansion
during the current financial year. Financing
costs for the current year also include
foreign exchange losses of R325 million.
This includes an unrealised foreign
exchange translation loss of R105 million
on a R500 million sinking fund policy
taken out by MTN International as an
indirect hedge against the Group’s
offshore US dollar loans. Foreign exchange
Table 3
Adjusted headline earnings per share 2003 2002
For the year ended 31 March Cents Cents % change
Wireless operations 144,6 73,2 98
South Africa 90,2 89,0* 1
Cameroon 4,9 (2,4) n/a
Nigeria 55,3 (13,3) n/a
Rwanda 1,2 0,6 100
Swaziland 0,7 0,7 —
Uganda 7,0 5,6 25
Mauritius/International (14,7) (7,0) n/a
Satellite operation
Orbicom (1,8) (0,7) n/a
Total 142,8 72,5* 97
* Restated for change in accounting policy.
MTN BUSINESS REPORT 2003
PAGE 19