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The condensed consolidated interim financial statements of the Group for the
six months ended September 30, 2006 were authorised for issue in accordance
with a resolution of the directors on November 9, 2006.
2.Basis of preparation and accounting policies
Basis of preparation
The condensed consolidated interim financial statements have been prepared in
accordance with IAS34 Interim Financial Reporting and in compliance with the
South African Companies Act, 1973. The condensed consolidated interim
financial statements are prepared on the historical cost basis, with the
exception of certain financial instruments and share-based payments which are
measured at fair value. The results of the interim period are not necessarily
indicative of the results for the entire year, and these reviewed financial
statements should be read in conjunction with the audited financial
statements for the year ended March 31, 2006.
The preparation of condensed consolidated interim financial statements
requires the use of estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the condensed consolidated interim financial
statements and the reported amounts of revenue and expenses during the
reporting periods. Although these estimates are based on management"s best
knowledge of current events and actions that the Group may undertake in the
future, actual results may differ from those estimates.
Significant accounting policies
The accounting policies and methods of computation followed for presenting
the condensed consolidated interim financial statements are consistent with
those applied in the financial statements for the year ended March 31, 2006,
except that the Group has adopted the amendments to IAS21 (revised) and IAS39
(revised), and IFRIC4 and IFRIC7 with effect from April 1, 2006. The Group
has also adopted an accounting policy regarding the acquisition of minority
interests in subsidiary companies in terms of IAS8.
2. Basis of preparation and accounting policies (continued)
Adoption of amendments to standards and new interpretations
- Amendment to IAS21 The Effects of Changes in Foreign Exchange Rates
(revised)
The amendment, Net Investment in a Foreign Operation, requires that even if a
monetary item (which is part of a net investment) is denominated in a
currency which is neither that of the reporting entity or the foreign
operation, the resulting exchange difference should be recognised in equity.
This treatment is similar to the treatment where a monetary item is
denominated in the currency of the reporting entity or that of the foreign
operation. The impact of this amendment on previously reported results is
reflected in the table at the end of this note.
- Amendments to IAS39 Financial Instruments: Recognition and Measurement
(revised)
The revision of IAS39 relates to three amendments to the existing standard.
The first amendment requires that issuers of financial guarantee contracts
include the resulting liabilities in their balance sheet. The amendment
defines a financial guarantee contract as a contract that requires the issuer
to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payment when due in accordance with
the original or modified terms of a debt instrument. The amendment has not
had any impact on the Group"s financial statements.
The second amendment concerns cash flow hedge accounting of forecast
intragroup transactions. This amendment has not had any impact on the Group"s
financial statements since the Group"s derivative transactions do not qualify
for hedge accounting under the specific rules of IAS39.
The fair value option amendment to IAS39 introduces additional requirements
to be met before the fair value option may be used. The amendment has not had
any impact on the Group"s financial statements since the Group has not
designated any financial assets or liabilities into the category `at fair
value through profit or loss".
- IFRIC4 Determining whether an Arrangement contains a Lease
Under IFRIC4, where an entity enters into a service arrangement that depends
on the use of a specific asset and conveys the right to control this specific
asset to the customer, the arrangement should be assessed to determine
whether it contains a lease. Once it has been concluded that an arrangement
contains a lease, it should be assessed against criteria in IAS17 to
determine if the arrangement should be recognised as a finance lease or an
operating lease. The transitional provision of IFRIC4 does not require
retrospective application, however, it does require the Group to assess
existing arrangements at the
beginning of the earliest period for which comparative information under IFRS
is presented on the basis of facts and circumstances existing at the start of
that period. The effect of this interpretation was not considered material
for prior periods. The cumulative effect of this interpretation for the six
months ended September 30, 2006 was an increase in Profit before taxation of
R44 million and an increase in Taxation of R14 million which resulted in an
increase in Profit for the period of R30 million. It further resulted in a
Finance lease receivable of R117 million being recognised in the Balance
sheet at September 30, 2006.
- IFRIC7 Applying the Restatement Approach under IAS29 Financial Reporting in
Hyperinflationary Economies
The IFRIC provides guidance on determining the measuring unit current at the
balance sheet date. It also provides guidance on how to account for the
deferred tax opening balance in restated financial statements. The
interpretation does not have any impact since the Group does not operate in a
hyperinflationary economy and does not have significant investments in
hyperinflationary economies.
2. Basis of preparation and accounting policies (continued)
New accounting policy
Acquisition of minorities
The Group has developed an accounting policy regarding the acquisition of
minority interests in subsidiary companies in terms of IAS8 paragraph 10.
Minority shareholders are treated as equity participants and, therefore, all
acquisitions of minority interests by the Group in subsidiary companies are
accounted for using the parent entity extension method. Under this method,
the assets and liabilities of the subsidiary are not restated to reflect
their fair values at the date of the acquisition. The difference between the
purchase price and the minorities" share of the assets and liabilities
reflected within the consolidated balance sheet at the date of the
acquisition is recorded as goodwill. The adoption of this policy has not had
any impact on previously reported results.
Change in accounting policy
Revenue recognition
To ensure comparability with other telecommunications entities reporting
under IFRS and to better reflect Telkom"s customer retention focus, Telkom
retrospectively changed its accounting policy in terms of IAS8.14(b) at March
31, 2006 with regards to the recognition of fixed-line installation and
activation revenues. Previously such revenue was recognised when the
installation and activation of customers had occurred because it was viewed
as the culmination of a separate earnings process. The revised accounting
policy is to recognise such revenues (and the related costs) systematically
over the expected duration of the customer relationship because it is
considered to be part of the customers" ongoing rights to telecommunication
services and the operator"s continuing involvement. This treatment provides
more reliable and relevant information about this transaction with the
entity"s customers. Telkom changed its accounting policy in the second half
of the 2006 financial year. The impact of the change at September 30, 2005,
is reflected in the table at the end of this note.
Prior period restatements
Property, plant and equipment
In compliance with the revised IAS16, Telkom reassesses the useful lives of
its assets at the end of each financial year and adjusts the depreciation
charge prospectively. Due to the significant volume of assets, the process of
reassessing the useful lives for the financial year ending March 31, 2005 was
finalised after the release of the September 30, 2005 interim results. The
comparative amounts for September 2005 have therefore been restated to
reflect the relevant portion of the change in depreciation estimate that was
recognised in the second half of the 2006 financial year.
Other Balance sheet restatements
At March 31, 2006, the Group made certain retrospective changes to its
application of certain accounting standards. These changes had no effect on
the prior year net profit as they only represent reclassifications into
different line items as reported. The September 30, 2005 comparatives have
been adjusted accordingly. The changes were:
- IT software under construction have been reclassified from Property, plant
and equipment to Intangible assets. The Group has identified and recorded
certain software that was previously included as part of Property, plant and
equipment as a separate intangible asset because it was not considered an
integral part of the related hardware;
- Financial assets and liabilities previously classified as non-current, have
been reclassified to current assets and liabilities, as they represent
derivatives classified as held for trading;
2. Basis of preparation and accounting policies (continued)
Prior period restatements (continued)
Other Balance sheet restatements (continued)
- Investment properties have been restated to Property, plant and equipment.
The Vodacom Group previously classified its Vodaworld property as an
investment property. However, the primary purpose of the property is to
service and connect Vodacom customers. The property, therefore, does not meet
the criteria of IAS40 Investment Property, i.e. to earn rentals or for
capital appreciation; and
- The effect on the balance sheet of the straight-lining of leases was
disclosed separately as Operating lease assets and Operating lease
liabilities in the September 30, 2005 condensed consolidated interim
financial statements. These amounts have been reclassified as Deferred
expenses and Deferred revenue respectively to be consistent with the
presentation in the March 31, 2006 consolidated annual financial statements.
The following table reflects the values of the different line items prior and
subsequent to the changes in accounting policy and prior period restatements
as discussed in this note:
Change in
accounting policies
Net
Balances investment
as in a Revenue
previously foreign recogni-
reported operation tion
Rm Rm Rm
September 30,
2005
Income
Statement
Operating 23,456 (9)
revenue
Depreciation,
amortisation,
impairment 2,921
and write-
offs
Finance 745 (1)
charges
Taxation 2,708 (3)
Profit
attributable
to equity
holders of 4,210 1 (6)
Telkom
Balance Sheet
Non-current
assets
Property,
plant
and equipment 37,156
Investment 24
properties
Intangible 2,656
assets
Other 107
financial
assets
Operating 15
lease asset
Deferred 127
expenses
Current
assets
Financial 287
assets
Equity
Non- 759 (2)
distributable
reserves
Retained 18,986 2 (689)
earnings
September 30,
2005
(continued)
Non-current
liabilities
Deferred 1,382 (281)
taxation
Operating 61
lease
liabilities
Deferred 263 639
revenue
Other 63
financial
liabilities
Current
liabilities
Current
portion of
deferred
revenue 1,452 331
Financial 287
liabilities
March 31,
2006
Income
Statement
Finance 1,233 (10)
charges
Taxation 4,520 3
Profit
attributable
to
equity 9,182 7
holders of
Telkom
Balance Sheet
Equity
Non- 1,136 (8)
distributable
reserves
Retained 22,896 8
earnings
Prior period restatements
Property, Financial
plant and assets/ Investment
equipment Software liabilities properties
Rm Rm Rm Rm
September 30,
2005
Income
Statement
Operating
revenue
Depreciation,
amortisation,
impairment (117)
and write-
offs
Finance
charges
Taxation 34
Profit
attributable
to equity
holders of 83
Telkom
Balance Sheet
Non-current
assets
Property,
plant
and equipment 117 (755) 24
Investment (24)
properties
Intangible 755
assets
Other (107)
financial
assets
Operating
lease asset
Deferred
expenses
Current
assets
Financial 107
assets
Equity
Non-
distributable
reserves
Retained 83
earnings
September 30,
2005
(continued)
Non-current
liabilities
Deferred 34
taxation
Operating
lease
liabilities
Deferred
revenue
Other (63)
financial
liabilities
Current
liabilities
Current
portion of
deferred
revenue
Financial 63
liabilities
March 31,
2006
Income
Statement
Finance
charges
Taxation
Profit
attributable
to
equity
holders of
Telkom
Balance Sheet
Equity
Non-
distributable
reserves
Retained
earnings
Prior period
restatements
Operating
lease Balances
assets/ as
liabilities restated
Rm Rm
September 30,
2005
Income
Statement
Operating 23,447
revenue
Depreciation,
amortisation,
impairment 2,804
and write-
offs
Finance 744
charges
Taxation 2,739
Profit
attributable
to equity
holders of 4,288
Telkom
Balance Sheet
Non-current
assets
Property,
plant
and equipment 36,542
Investment -
properties
Intangible 3,411
assets
Other -
financial
assets
Operating (15) -
lease asset
Deferred 17 144
expenses
Current
assets
Financial 394
assets
Equity
Non- 757
distributable
reserves
Retained (2) 18,380
earnings
September 30,
2005
(continued)
Non-current
liabilities
Deferred 1,135
taxation
Operating (61) -
lease
liabilities
Deferred 65 967
revenue
Other -
financial
liabilities
Current
liabilities
Current
portion of
deferred
revenue 1,783
Financial 350
liabilities
March 31,
2006
Income
Statement
Finance 1,223
charges
Taxation 4,523
Profit
attributable
to
equity 9,189
holders of
Telkom
Balance Sheet
Equity
Non- 1,128
distributable
reserves
Retained 22,904
earnings
3. Revenue
3.1 Total revenue 48,260 23,761 25,476
Operating revenue 47,625 23,447 25,147
Other income (excluding profit on 238 97 159
disposal of property, plant and
equipment and investments, refer
to note 4)
Investment income 397 217 170
3.2 Operating revenue 47,625 23,447 25,147
Fixed-line 32,039 16,074 16,139
Mobile 15,586 7,373 9,008
Fixed-line 32,039 16,074 16,139
Subscriptions, connections and 5,803 2,836 3,050
other usage
Traffic 17,534 8,912 8,447
??Domestic (local and long 8,886 4,608 4,166
distance)
??Fixed-to-mobile 7,647 3,821 3,788
??International (outgoing) 1,001 483 493
Interconnection 1,433 733 670
Data 6,223 3,012 3,363
Directories and other 1,046 581 609
Change in comparatives
Operating revenue has decreased by R9 million for September 30, 2005 due to
the change in fixed-line accounting policy at March 31, 2006 for recognising
connection revenues (Refer to note 2).
4. Other income 480 287 213
Other income
(Included in Total revenue, refer to 238 97 159
note 3)
Interest received from debtors 136 63 98
Sundry income 102 34 61
Profit on disposal of property, plant 79 68 11
and equipment and intangible assets
Profit on disposal of investment 163 122 43
5. Depreciation, 5,876 2,804 2,540
amortisation,impairment and write-
offs
Depreciation of property, plant and 5,154 2,479 2,191
equipment
Amortisation of intangible assets 560 261 263
Impairment of property, plant and - - 19
equipment
Reversal of impairment of property,
plant
and equipment (26) (34) -
Write-offs of property, plant and 188 98 67
equipment*
* These costs represent individual assets written-off, none of which are
individually material.
In recognition of the changed usage patterns of certain items of property,
plant and equipment and intangible assets, the Group reviewed their remaining
useful lives as at March 31, 2006. The assets affected were certain items
included in Network equipment, Support equipment, Office equipment and IT
software and hardware. The revised estimated useful lives of these assets as
set out below, resulted in a decrease of the current period depreciation and
amortisation charges of R445 million (March 31, 2006: R405 million).
Previous Revised
life life
Years Years
Property, plant and equipment
Network equipment 2 - 15 3 - 30
Support equipment 8 11
Furniture and office equipment 6 - 10 11 - 15
Data processing equipment and software 7 10
Other 5 - 10 10 - 15
Intangible assets 7 10
Software
Impairment of property, plant and equipment and intangible assets
Due to the competitive and economic environment in which VM, S.A.R.L.
operates in Mozambique, the Group assessed the assets for impairment in
accordance with the requirements of IAS36 Impairment of Assets (`IAS36"). The
recoverable amount of these assets has been determined based on the fair
value of the assets less costs to sell at September 30, 2006. The fair value
of the assets was obtained from a knowledgeable, willing party on an arm"s
length basis, based on the assumption that the assets would be disposed of on
an item by item basis. The amount with which the carrying amount exceeded the
recoverable amount is recognised as an impairment loss. The reversal of the
impairment loss in the prior year/period related to an increase in the fair
value of infrastructure assets.
Change in comparatives
The comparatives were restated by R117 million for September 30, 2005 due to
the revision of the estimated useful lives of Property, plant and equipment.
The adjustment is a consequence of the change in estimate performed at March
31, 2005 (Refer to note 2).
March 31, September September
30, 30,
2006 2005 2006
Rm Rm Rm
6. Taxation 4,523 2,739 2,844
South African normal 3,763 1,920 1,797
company taxation
Deferred taxation 173 431 537
Secondary Taxation on 585 383 464
Companies
Foreign taxation 2 5 46
The deferred taxation expense mainly relates to temporary differences on
normal company taxation and Secondary Taxation on Companies.
During the six months ended September 30, 2006 the Group paid R3,234 million
to the South African Revenue Service for normal company taxation (R2,770
million) and Secondary Taxation on Companies (R464 million):
Taxation paid (4,550) (2,470) (3,234)
Tax liability at beginning of year (1,711) (1,711) (1,549)
Taxation (3,795) (1,944) (1,804)
Secondary Taxation on Companies (585) (383) (464)
Business combination (8) (8) -
Tax liability at end of year/period 1,549 1,576 583
Change in comparatives
Deferred taxation has decreased by R3 million for the period ended September
30, 2005 due to the change in fixed-line"s accounting policy for recognising
connection revenues (Refer to note 2).
Deferred taxation has also increased by R34 million for the period ended
September 30, 2005 due to the restatement of fixed-line"s depreciation as a
result of the revision of the estimated useful lives of Property, plant and
equipment (Refer to note 2).
7. Dividends paid 4,884 4,848 4,726
Dividends payable at beginning of year 7 7 4
Declared during the year/period:
Dividends on ordinary shares: 4,881 4,847 4,731
??Final dividend for 2005: 400 cents 2,134 2,134 -
??Special dividend for 2005: 500 cents 2,667 2,667 -
??Final dividend for 2006: 500 cents - - 2,599
??Special dividend for 2006: 400 cents - - 2,079
??Dividends paid to minority 80 46 53
shareholders
Dividends payable at end of year/period (4) (6) (9)
March 31, September September
30, 30,
2006 2005 2006
8. Earnings per share
Basic earnings per 1,746.1 807.4 868.1
share (cents)
The calculation of earnings per share is based on profit attributable to
equity holders of Telkom for the year/period of R4,500 million (September 30,
2005: R4,288 million; March 31, 2006: R9,189 million) and 518,369,738
(September 30, 2005: 531,102,429; March 31, 2006: 526,271,093) weighted
average number of ordinary shares outstanding.
Reconciliation of weighted average number of ordinary shares:
Ordinary shares in 544,944,899 544,944,899 533,891,034
issue
Weighted average (18,673,806) (13,842,470) (15,521,296)
number of treasury
shares and shares
bought back
Weighted average 526,271,093 531,102,429 518,369,738
number of shares
outstanding
Diluted earnings per 1,736.6 804.6 866.4
share (cents)
The calculation of diluted earnings per share is based on earnings for the
year/period of R4,500 million (September 30, 2005: R4,288 million; March 31,
2006: R9,189 million) and 519,407,752 diluted weighted average number of
ordinary shares (September 30, 2005: 532,939,130; March 31, 2006:
529,152,318). The adjustment in the weighted average number of shares is as a
result of the expected future vesting of shares already allocated to
employees under the
Telkom Conditional Share Plan.
Headline earnings per 1,728.6 790.6 874.7
share (cents)*
The calculation of headline earnings per share is based on headline earnings
of R4,534 million (September 30, 2005: R4,199 million; March 31, 2006: R9,097
million) and 518,369,738 (September 30, 2005: 531,102,429; March 31, 2006:
526,271,093) weighted average number of ordinary shares outstanding.
Diluted headline 1,719.2 787.9 872.9
earnings per share
(cents)*
The calculation of diluted headline earnings per share is based on headline
earnings of R4,534 million (September 30, 2005: R4,199 million; March 31,
2006: R9,097 million) and 519,407,752 (September 30, 2005: 532,939,130; March
31, 2006: 529,152,318) diluted weighted average number of ordinary shares in
issue. The adjustment in the weighted average number of shares is as a result
of the expected future vesting of shares already allocated to employees under
the Telkom Conditional Share Plan.
Reconciliation between earnings and headline earnings:
Earnings as reported 9,189 4,288 4,500
Adjustments:
Profit on disposal of investment (163) (122) (43)
Net (profit)/loss on disposal of property, (79) (68) 5
plant and equipment and intangible assets
(Reversal of impairment)/impairment of (26) (34) 19
property, plant and equipment and intangible
assets
Write-offs of property, plant and equipment 188 98 67
Acquisition of subsidiary (35) - -
Tax and minority interest effects 23 37 (14)
Headline earnings 9,097 4,199 4,534
March 31, September September
30, 30,
2006 2005 2006
Reconciliation of
diluted weighted
average number of
ordinary shares
Ordinary shares in 544,944,899 544,944,899 533,891,034
issue
Expected future vesting 2,881,225 1,836,701 1,038,014
of shares
Weighted average number (18,673,806) (13,842,470) (15,521,296)
of treasury shares and
shares bought back
Weighted average number 529,152,318 532,939,130 519,407,752
of shares outstanding
Dividend per share 900.0 900.0 900.0
(cents)
The calculation of dividend per share is based on dividends of R4,678 million
(September 30, 2005: R4,801 million; March 31, 2006: R4,801 million) declared
on June 2, 2006 and 519,711,092 (September 30, 2005: 533,465,571; March 31,
2006: 533,465,571) number of ordinary shares outstanding (net of treasury
shares at the date of payment).
* The disclosure of headline earnings and diluted headline earnings per share
is a requirement of the JSE Securities Exchange of South Africa and is not a
recognised measure under IFRS and US GAAP. It has been calculated in
accordance with the South African Institute of Chartered Accountants"
circular issued in this regard.
Change in comparatives
The amounts for basic, diluted, headline and diluted headline earnings per
share for March 31, 2006 and September 30, 2005 have changed as a result of
the change in accounting policies and restatements as discussed in note 2.
The effect of the change on previously reported numbers is immaterial.
March 31, September 30, September 30,
2006 2005 2006
9. Net asset value per 5,593.5 4,643.2 5,417.9
share (cents)
The calculation of net asset value per share is based on net assets of
R27,675 million (September 30, 2005: R24,210 million; March 31, 2006: R29,165
million) and 510,804,915 (September 30, 2005: 521,408,320; March 31, 2006:
521,408,320) number of ordinary shares outstanding.
March 31, September 30, September 30,
2006 2005 2006
Rm Rm Rm
10. Property,
plant and
equipment
Additions 6,310 2,565 3,913
A major portion of this capital expenditure relates to the expansion of
existing networks and services.
Disposals (56) (10) (16)
Change in comparatives
The carrying amount of Property, plant and equipment has been restated by
R755 million at September 30, 2005, due to the reclassification of software
under construction from Property, plant and equipment to Intangible assets
(Refer to note 2).
The carrying amount of Property, plant and equipment has also been restated
by R117 million at September 30, 2005 due to the revision of the estimated
useful lives of Property, plant and equipment (Refer to note 2).
The carrying amount of Property, plant and equipment has further been
restated with R24 million for September 30, 2005 due to the reclassification
of investment properties (Refer to note 2).
March 31, September 30, September 30,
2006 2005 2006
Rm Rm Rm
11. Intangible assets
Additions 1,196 531 438
Disposals (19) (18) -
Included in Additions is R161 million goodwill resulting from the acquisition
by the Vodacom Group of the minorities of Smartphone SP (Proprietary)?Limited
and Smartcom (Proprietary) Limited (Refer to note 23).
Change in comparatives
The carrying amount of Intangible assets has been restated by R755 million at
September 30, 2005, due to the reclassification of software under
construction from Property, plant and equipment to Intangible assets (Refer
to note 2).
12. Post-retirement medical aid plan asset
Included in Provisions as at March 31, 2006 was R2,607 million (September 30,
2005: R2,474 million) for the Group"s post-retirement medical liability. The
liability is funded with an investment in a cell captive, which was included
in Investments for the year ended March 31, 2006 to the value of R2,819
million (September 30, 2005: R2,492 million).
During the six months ended September 30, 2006, an addendum to the cell
captive annuity policy contract was signed, which resulted in the annuity
policy qualifying as a plan asset. This has effectively changed the
presentation of the liability and the asset as the annuity policy meets the
definition of a plan asset in terms of IAS19 which requires the liability to
be reduced by the fair value of the plan asset. The effect of this on the
condensed consolidated interim financial statements is a reduction in
investments and liabilities to the value of R1,759 million.
March 31, September 30, September 30,
2006 2005 2006
Rm Rm Rm
The status of the
medical aid plan is as
follows:
Present value of 3,904 3,122 4,003
funded obligation
Fair value of plan - (1,759)
assets -
Fund status 3,904 3,122 2,244
Unrecognised net (1,297) (648) (1,221)
actuarial loss
Benefit obligation 2,607 2,474
13. Deferred taxation (587) (866) (1,159)
Deferred tax assets 481 269 332
Deferred tax liabilities (1,068) (1,135) (1,491)
The major part of the deferred tax asset relates to taxation losses,
provisions and deferred income recognised in the Vodacom Group.
The remaining balance has been recognised in Telkom in respect of STC credits
on past dividends received that are available to be utilised against
dividends declared. It is considered probable that these credits will be
utilised in the future. The asset will be released as a tax expense when
dividends are declared.
The deferred tax liability has increased mainly due to the increase in the
difference between the carrying value and tax value of assets, resulting from
the change in the estimate of useful lives of assets.
Change in comparatives
Deferred taxation has decreased by R281 million for September 30, 2005 due to
the change in fixed-line policy for recognising connection revenues (Refer to
note 2).
The comparatives have also been restated due to a restatement of depreciation
and amortisation as a result of the revision of the estimated useful lives of
assets with R34 million for September 30, 2005 (Refer to note 2).
March September September
31, 30, 30,
2006 2005 2006
Rm Rm Rm
14. Inventories 814 822 1,266
Gross inventories 916 905 1,402
Write-down of inventories (102) (83) (136)
to net realisable value
Inventories consist of the 814 822 1,266
following categories:
Installation material, 487 459 755
maintenance material and
network equipment
Merchandise 327 363 511
Inventory levels as at September 30, 2006 have increased due to the roll-out
of the next generation network and increased inventory required to improve
customer service.
15. Net cash and cash equivalents 4,255 951 153
Cash shown as current assets 4,948 2,696 718
??Cash and bank balances 1,853 2,476 718
??Short-term deposits 3,095 220 -
Credit facilities utilised (693) (1,745) (565)
Undrawn borrowing facilities 9,519 7,977 9,796
The undrawn borrowing facilities are unsecured, bear interest at a rate
linked to the prime interest rate, have no specific maturity date and are
subject to annual review. The facilities are in place to ensure liquidity.
Borrowing powers
To borrow money, Telkom"s directors may mortgage or encumber Telkom"s
property or any part thereof and issue debentures, whether secured or
unsecured, whether outright or as security for debt, liability or obligation
of Telkom or any third party. For this purpose the borrowing powers of Telkom
are unlimited, but are subject to the restrictive financial covenants of the
TL20 loan.
March 31, September September
30, 30,
2006 2005 2006
Rm Rm Rm
16. Number of shares in
issue
Issued and fully paid 6,791 6,791 5,339
533,891,032 (September 5,449 5,449 5,339
30, 2005: 544,944,897;
March 31, 2006:
544,944,897) ordinary
shares of R10 each
1 (September 30, 2005: - - -
1; March 31, 2006: 1)
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