For the year ended 31 march 2014
The condensed consolidated provisional annual financial statements have been prepared in accordance with IAS34 Interim Financial Reporting and in compliance with the Listing Requirements of the JSE Limited and the Companies Act of South Africa, 1973.
These condensed consolidated provisional annual financial statements are presented in Rand, which is the Group's functional currency. All financial information presented in Rand has been rounded to the nearest million.
The condensed consolidated provisional annual financial statements are prepared on the historical cost basis with the exception of certain financial instruments that are measured at fair value and share-based payments which are measured at grant date fair value.
Except as described below the accounting policies applied by the Group in the condensed consolidated provisional annual financial statements are consistent with those applied in the previous year.
The Group has early adopted the revised IAS 24 in full. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for Government-related entities to disclose details of all transactions with Government and other Government-related entities, refer to note 22. The change in the definition of a related party has no material impact on the Group.
The disclosures relating to the relief for Government-related entities to disclose details of all transactions with Government and Government-related entities have been applied retrospectively. Telkom discloses only those transactions that are individually or collectively significant when transacting with Government and major public entities.
The Group has early adopted the amendment to IFRIC 13. The interpretation addresses the accounting by an entity that grants award credits to its customers. The amendment clarifies that the fair value of the award credits takes into account the amount of discounts or incentives that would otherwise be offered to customers who have not earned award credits from the initial sale.
These principles were already incorporated in determining the fair values of award credits subject to customer loyalty programmes on the Group accounting policies, therefore, there was no material retrospective impact on the Group financial statements.
As of 1 April 2010, the Group adopted IFRIC 18 which clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services.
This interpretation does not have a material impact on contracts that Telkom has with external customers.
As of 1 April 2010, the Group changed its accounting policy for interests in joint ventures from proportionate consolidation to equity accounting.
The Group believes that equity accounting aligns it with the expected changes that will be introduced with IFRS 11 Joint Arrangements.
The Number Portability Company which was acquired in April 2010 and the Group's share in UUNET, through iWayAfrica Group, will be accounted for in terms of the new policy.
This change in accounting policy had no retrospective impact on the Group financial statements. The impact of UUNET is not material.
IFRS 8 (amendment) Operating Segments – Disclosure of information about segment assets
IAS 1 (amendment) Presentation of Financial Statements – Current / Non-current classification of convertible instruments
IAS 7 (amendment) Statement of Cash Flows – Classification of expenditures on unrecognised assets
IAS 17 (amendment) Leases – Classification of leases of land and buildings
IAS 32 (amendment) Financial Instruments – Classification of rights issus
IAS 36 (amendment) Impairment of Assets – Unit of accounting for goodwill impairment test
IAS 38 (amendment) Intangible Assets – Additional consequential amendments arising from revised IFRS 3
IAS 38 (amendment) Intangible Assets – Measuring the fair value of an item of an intangible asset acquired in a business combination
IAS 39 (amendment) Financial Instruments – Scope exemption for business combination contracts
IAS 39 (amendment) Financial Instruments – Cash flow hedge accounting
IAS 39 (amendment) Financial Instruments – Assessment of loan prepayments penalties as embedded derivatives
IFRIC 9 (amendment) Reassessment of Embedded Derivatives – Scope of IFRIC 9 and revised IFRS 3
IFRIC 16 (amendment) Hedges of a Net Investment in a Foreign Operation – Amendment to the restriction on the entity that can hold hedging instruments
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
IFRS 3 Business Combinations – Amendments resulting from May 2010 Annual improvements to IFRSs (effective 1 July 2010)
IFRS 7 Financial Instruments Disclosures – Amendments resulting from May 2010 Annual improvements to IFRSs (effective 1 January 2011)
IFRS 7 Financial Instruments Disclosures – Amendments enhancing disclosures about transfers of financial assets (effective 1 July 2011)
IFRS 9 Financial Instruments – Classification and Measurement (effective 1 January 2013)
IFRS 10 Consolidated Financial Statements (effective 1 January 2013)
IFRS 11 Joint Arrangements (effective 1 January 2013)
IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013)
IFRS 13 Fair Value Measurements (effective 1 January 2013)
IAS 1 Presentation of Financial Statements – Amendments resulting from May 2010 Annual improvements to IFRSs (effective 1 January 2011)
IAS 12 Income Taxes – Limited scope amendment (recovery of underlying assets) (effective 1 January 2012)
IAS 27 Consolidated and separate Financial Statements – Amendments resulting from May 2010 Annual Improvements to IFRSs (effective 1 July 2010)
IAS 34 Interim Financial Reporting – Amendments resulting from May 2010 Annual Improvements to IFRS's (effective 1 January 2011)
IFRIC14 Prepayments of a minimum funding requirement ( effective 1 January 2011)
The condensed consolidated provisional annual financial statements were authorised for issue by the Board of Directors on 10 June 2011.