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Annual Report : Notes to afs   Next : Interest in major subsidiaries & jvs
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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          
   
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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”.


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