For the year ended 31 march 2013
| 2013 | 2012 | |
|---|---|---|
| Rm | Rm | |
| Operating expenses | ||
| 5.1 Employee expenses | 9,861 | 8,636 |
| The increase in employee expenses is mainly due to an average salary increase of 6.5% and the provision for the voluntary severance and voluntary early retirement packages (VSP/VERP). | ||
| 5.2 Selling, general and administrative expenses | 7,216 | 7,193 |
| Mobile direct costs and fixed-line dealer incentives decreased due to lower sales acquisition costs. This decrease has been offset by an increase of the provision for the Competition Commission fine resulting in a net increase in selling, general and administrative expenses. Refer to note 15 for the Competiton Commission fine. | ||
| 5.3 Depreciation, amortisation, impairment and write-offs | 18,156 | 6,138 |
| Depreciation of property, plant and equipment | 5,072 | 4,608 |
| Amortisation of intangible assets | 906 | 707 |
| Impairment of property, plant and equipment and intangible assets | 12,000 | 569 |
| Write-offs of property, plant and equipment and intangible assets | 178 | 254 |
| As a result of rolling out of the Next Generation Network transformation programme, the Group reassessed the useful lives of certain legacy equipment. The reassessment of useful lives had the effect of increasing the depreciation expense for the year ended 31 March 2013 by R667 million (2012: R605 million). Depreciation for each year of the remaining useful lives of the individually reassessed equipment could be significantly lower as a result of the impairment loss recognised on the legacy asset. | ||
| The impairment loss of R12 billion relates to property, plant and equipment of R11,025 million and Intangible assets of R975 million of the Telkom Cash Generating Unit. This is based on Value in Use. |