For the year ended 31 march 2014
| 2014 | Restated 2013 |
|
|---|---|---|
| Rm | Rm | |
| Operating Expenses | ||
| 5.1 Cost of sales | 2 498 | 1 549 |
| The increase in the cost of sales is mainly due to increased customer premises equipment sales. | ||
| Change in comparatives | ||
| In order to achieve a more relevant presentation a decision was made to reclassify items from selling, general and administrative expenses to cost of sales. Refer to note 5.3. | ||
| 5.2 Employee expenses* | 7 137 | 9 997 |
| The decrease in employee expenses is mainly due to a net curtailment gain of R2,2 billion related to the post-retirement medical aid benefit that has been reduced. The average salary increase and the adoption of IAS 19R adversely impacted employee expenses. | ||
| Change in comparatives | ||
| Other benefits increased by R84 million due to the reclassification of employee vehicle insurance expense from security and other expenses (under service fees). These are short-term employee benefits derived from employment with Telkom and has therefore been reclassified accordingly to provide more relevant disclosure. | ||
| *Restated due to the adoption of IAS19R. (refer note 2.1) | ||
| 5.3 Selling, general and administrative expenses | 4 682 | 5 651 |
| The decrease in selling, general and administrative expenses is mainly due to a decrease in maintenance and material expenses, lower bad debts and the Competition Commission fine that was accounted for in 2013. | ||
| Included in selling, general and administrative expenses is a net loss of R29 million on the disposal of the iWayAfrica Group. This net loss includes foreign exchange losses of R122 million and disposal costs of R6 million. This relates to the cumulative amount of foreign exchange differences previously recognised in other comprehensive income, now realised in profit or loss due to the disposal of the iWayAfrica Group. | ||
| Change in comparatives | ||
| Selling, general and administrative expenses have decreased by R1,549 billion, due to the reclassification of expenses to cost of sales. In addition sundry income of R128 million was reclassified to other income. This was done in order to provide more relevant disclosure. | ||
| 5.4 Service fees | 3 110 | 2 996 |
| The increase in service fees is driven by costs relating to the transformation process, higher utilities and maintenance costs on Telkom properties. | ||
| Change in comparative | ||
| Service fees decreased by R84 million due to the reclassification of employee vehicle insurance expenses to employee expenses. These are short-term employee benefits derived from employment with Telkom and has therefore been reclassified accordingly to provide more relevant disclosure. Refer to note 5.2. | ||
| 5.5 Depreciation, amortisation, impairment and write-offs | 5 937 | 18 180 |
| Depreciation of property, plant and equipment | 4 616 | 5 097 |
| Amortisation of intangible assets | 689 | 906 |
| Impairment of property, plant and equipment and intangible assets | 392 | 12 000 |
| Write-offs of property, plant and equipment and intangible assets | 240 | 177 |
| Depreciation and amortisation decreased as a result of a lower asset base after a R12 billion impairment of assets in March 2013, partially offset by accelerated depreciation emanating from the review of the useful lives of drop wires installed at customer premises. The impairment at year end relates to property, plant and equipment that was reclassified from inventories following a change in the accounting policy. | ||