for the six months ended 30 September 2013
| 30 September 2013 | Restated September 2012 |
|
|---|---|---|
| Rm | Rm | |
| 5.1 Payments to other operators Payments to other network operators (interconnection fees) has decreased due to the reduction in the termination rates. |
2 026 | 2 458 |
| 5.2 Cost of sales The increase in the cost of sales is due to increased customer premises equipment sales. |
1 001 | 661 |
| 5.3 Employee expenses* 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. This was set-off with a R100 million curtailment loss from the Telkom Retirement Fund due to the closing of the voluntary severance and voluntary early retirement process as well as a lower headcount. The average salary increase and the adoption of IAS 19R adversely impacted employee expenses. Refer to note 16 with regard to the curtailment gain. |
2 814 | 4 812 |
| 5.4 Selling, general and administrative expenses Selling and administrative expenses decreased mainly due to the provision for the Competition Commission fine in 2012. Included in selling, general and administrative expenses is writedown of inventories to the value of R11 million (2012: R17 million). |
2 357 | 2 906 |
| 5.5 Service fees Increases in service fees are due to the cost incurred on the transformation programme of the Company. |
1 557 | 1 472 |
| 5.6 Operating leases Operating leases increased as a result of an increase in the number of mobile sites acquired and an increase in building leases. |
504 | 442 |
| 5.7 Depreciation, amortisation, impairment, write-offs and losses | 3 091 | 2 966 |
| Depreciation of property, plant and equipment | 2 309 | 2 474 |
| Amortisation of intangible assets | 333 | 436 |
| Impairment of property, plant and equipment and intangible assets | 392 | - |
| Write-offs of property, plant and equipment and intangible assets | 57 | 56 |
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. Impairment and write-offs increased significantly due to the decision to write off property, plant and equipment that was reclassified from inventories following a change in accounting policy.* Restated due to the adoption of IAS 19R.