for the six months ended 30 September 2010
Basis of preparationThe condensed consolidated interim financial statements have been prepared in accordance with IAS34 Interim Financial Reporting and in compliance with the Listings Requirements of the JSE Limited and the South African Companies Act,1973.
The condensed consolidated interim financial statements are prepared on the historical cost basis, with the exception of certain financial instruments and share-based payments which are measured at grant date fair value. The results of the interim period are not necessarily indicative of the results for the entire year, and these reviewed financial statements should be read in conjunction with the audited financial statements for the year ended 31 March 2010.
The preparation of condensed consolidated interim financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Although these estimates are based on management's best knowledge of current events and actions that the Group may undertake in the future, actual results may differ from those estimates.
Significant accounting policies
Except as described below, the accounting policies and methods of computation applied by the Group in the condensed consolidated interim financial statements are consistent with those applied in the annual financial statements dated 31 March 2010.
IAS24 (revised) Related Party Disclosures
The Group has early adopted the revised IAS24 partial exemption from the disclosure requirements for government related entities for the financial reporting period starting 1 April 2010.
In terms of the above partial exemption of the revised standard, government related entities are required to disclose only those transactions that are either individually significant or collectively significant in transactions with government and major public entites.
The disclosures have been applied retrospectively.
IFRIC18 Transfers of Assets from Customers
As of 1 April 2010, the Group adopted IFRIC18 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.
Change in Accounting Policy
IAS31 Interests in Joint Ventures
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 to the standard dealing with joint ventures likely to be issued as a new IFRS.
The Number Portability Company which was acquired in April 2010 will be accounted for in terms of the new policy.
This change in accounting policy has no retrospective impact on the Group financial statements.
The following new standards, amendments to standards and interpretations which are mandatory for financial periods beginning after 1 January 2010 do not have a material impact on the Group:
IFRS2 (amendment) Share-based Payments - Amendments relating to group cash-settled share based payment transactions
IFRS2 (amendment) Share-based Payments - Scope of IFRS2 and revised IFRS3
IFRS5 (amendment) Non-Current Assets Held for Sale and Discontinued Operations - Plan to sell the controlling interest in a subsidiary
IFRS5 (amendment) Non-Current Assets Held for Sale and Discontinued Operations - Disclosure on non-current assets (disposal groups) classified as held for sale or discontinued operations
IFRS8 (amendment) Operating Segments - Disclosure of information about segment assets
IAS1 (amendment) Presentation of Financial Statements - Current / non-current classification of convertible instruments
IAS7 (amendment) Statement of Cash Flows - Classification of expenditures on unrecognised assets
IAS17 (amendment) Leases - Classification of leases of land and buildings
IAS32 (amendment) Financial Instruments - Classification of rights issue
IAS36 (amendment) Impairment of Assets - Unit of accounting for goodwill impairment test
IAS38 (amendment) Intangible Assets - Additional consequential amendments arising from revised IFRS3
IAS38 (amendment) Intangible Assets - Measuring the fair value of an item of an intangible asset acquired in a business combination
IAS39 (amendment) Financial Instruments - Eligable hedged items
IAS39 (amendment) Financial Instruments - Scope exemption for business combination contracts
IAS39 (amendment) Financial Instruments - Cash flow hedge accounting
IAS39 (amendment) Financial Instruments - Assessment of loan prepayments penalties as embedded derivatives
IFRIC9 (amendment) Reassessment of Embedded Derivatives - Scope of IFRIC9 and revised IFRS3
IFRIC16 (amendment) Hedges of a Net Investment in a Foreign Operation - Amendment to the restriction on the entity that can hold hedging instruments