Annual finanacial statements - Contents

Notes to the company financial statements

for the nine months ended 31 December 2005

		9 months ended December 2005 Rm	12 months ended March 2005 Rm
1.	PROFIT BEFORE TAX
	The following items have been included in arriving at profit before tax:
	Auditors’ remuneration:	1	1
	– Audit fees	1	1
	– Expenses	—	*
	Directors’ emoluments:	3	4
	– Directors’ fees	3	4
	Fees paid for services:	19	19
	– Administrative	4	4
	– Management	15	15
	– Technical	—	*

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2.	FINANCE INCOME
	Interest income	3	3
	Fair value adjustments	—	5
	Dividend income	1 080	679

		1 083	687

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3.	FINANCE COSTS
	Interest expense – borrowings	—	*

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4.	INCOME TAX EXPENSE
	Current tax
	Normal tax	2	9
	Current year	2	9
	South African normal taxation is calculated at 29% (March 2005: 30%) of the estimated taxable income for the year.
	Tax rate reconciliation
	The charge for the year can be reconciled to the effective rate of taxation in South Africa as follows:	%	%
	Tax at standard rate	29,0	30,0
	Exempt income	(29,0)	(30,36)
	Expenses not deductible for tax purposes	0,19	1,70

		0,19	1,34

	* Amounts less than R1 million

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5.	INTEREST IN SUBSIDIARIES
	525 757 682 (March 2005: 525 757 759) shares (100%) in Mobile Telephone Networks Holdings (Proprietary) Limited at cost	12 658	12 640
	Loan owing by subsidiary (note 5.1)	1 520	1 520

	Net interest in subsidiary	14 178	14 160

	100 shares (100%) in Orbicom (Proprietary) Limited at cost	—	1
	Loan owing by subsidiary	—	53
	Less: Impairment of loan account	—	(26)

	Net interest in subsidiary	—	28

	Total interest in subsidiary companies	14 178	14 188

5.1	This loan account has been subordinated in favour of certain of the Group’s lenders.

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6.	ORIGINATED LOANS
	Loans to employees share incentive schemes**	—	*

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7.	CASH AND CASH EQUIVALENTS
	Cash at bank and on hand	81	95

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8.	ORDINARY SHARES AND SHARE PREMIUM
	Ordinary share capital
	Authorised share capital
	2 500 000 000 ordinary shares of 0,01 cent each	*	*
	Issued and fully paid-up share capital
	1 665 317 425 (March 2005: 1 662 496 630) ordinary shares of 0,01 cent each	*	*
	Share premium
	Balance at the beginning of the year	14 238	14 184
	Arising on the issue of shares during the year (net of share issue expenses)	33	54

	Balance at the end of the year	14 271	14 238

	* Amounts less than R1 million ** These loans bear interest at a variable rate not less than the “official rate of interest” according to the South African Revenue Service, ranging between 9% and 14,5% (March 2005: 9% and 14,5%)
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9.	TRADE AND OTHER PAYABLES
	Sundry creditors	20	23
	Accrued expenses and other payables	18	117

		38	140

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10.	CASH GENERATED FROM OPERATIONS
	Profit before tax	1 081	671
	Adjustments for:
	Profit on disposal of Orbicom	(16)	—
	Finance cost (note 3)	—	*
	Finance income (note 2)	(1 083)	(687)

		(18)	(16)
	Changes in working capital	(76)	45
	Decrease in receivables and prepayments	26	41
	(Decrease)/increase in trade and other payables	(102)	4

	Cash (utilised by)/generated from operations	(94)	29

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11.	TAX PAID
	Balance at the beginning of the year	—	1
	Amounts charged to income statement	2	(9)
	Balance at the end of the year	(2)	—

	Total tax paid	—	(8)

	*Amounts less than R1 million

12.

RELATED PARTY TRANSACTIONS

Various transactions are entered into by the company during the year with related parties.

The following is a summary of transactions with related parties during the year and balances due at year-end:

Dividends received:	December 2005	March 2005
– Mobile Telephone Networks Holdings (Proprietary) Limited	1 080	679
Management fees paid:
– MTN Management Services Company (Proprietary) Limited	15	15
Management fees received:
– MTN International (Proprietary) Limited	5	8

Associates and joint ventures

Details of joint ventures and associates are disclosed in Annexure 1 and Annexure 2 of the financial statements.

Subsidiaries

Details of investments in subsidiaries are disclosed in Annexure 1 of the financial statements.

Directors

Details of directors’ remuneration are disclosed in note 2 of the Group financial statements as well as in the directors’ report under the heading “Details of emoluments and related payments”.

Shareholders

The principal shareholders of the company are disclosed in the directors’ report under the heading “Shareholders’ interest”.