The aggregate directors’ valuation of the above investments is R3,606 million (2012: R3,682 million) based on net asset value.
Investments and loans key assumptions*
Loans and investments are tested for impairment losses whenever there are impairment indicators, by comparing the recoverable amounts of the cash-generating units (CGU) with the carrying amounts of the investments and loans.
For continuing operations the recoverable amount of a CGU is determined based on value in use calculations. Value in use is based on the discounted cash flow method.
The key assumptions used for value-in-use calculations are as follows:
| Gross margin % |
27 to 30 |
|
| Growth rate % |
2,0 |
|
| Discount rate % |
13.87 |
|
Gross margin
The budgeted gross margin is based on past experience and management’s future expectations of business performance.
Growth rates
The growth rates are determined based on the forward-looking Consumer Price Index, and reflect management’s assessment of the long-term growth prospects of the sector in which the CGU operates.
Discount rates
The discount rates used are post-tax and reflect specific risks relating to the relevant cash-generating units.
Sensitivity to changes in assumptions
Management believes that no reasonably possible changes in the assumptions would cause the carrying amount of the continuing cash-generating unit to exceed their recoverable amount in the short term.
Disposal of Multi-Links
| |
2013
Rm |
|
2012
Rm |
|
| Multi-Links Telecommunications Limited |
– |
|
– |
|
| 25% shareholding at cost |
– |
|
1,339 |
|
| 100% 550,000 10% non-cumulative preference shares at par NGN1.00 and a premium of NGN 99,999.00 |
– |
|
2,674 |
|
| Equity capital contribution |
– |
|
999 |
|
| Multi-Links guarantee |
– |
|
10 |
|
| Loan/equity contribution |
– |
|
3,135 |
|
| Impairment of investment, loan and guarantee |
– |
|
(8,157) |
|
Multi-Links had issued 550,000 10% non-cumulative preference shares at NGN1.00 each at a Premium of NGN99,999.00. Telkom SA had acquired all the shares for NGN55 billion (USD365,448,505).
The 75% shareholding in Multi-Links Telecommunications Limited was an indirect investment through Telkom International Proprietary Limited, while 25% was held directly by Telkom.
In September 2009, Telkom amended the terms and conditions of the USD loans advanced to Multi-Links, so that a portion of the loan balance becomes interest free with no repayment terms. Multi-Links repaid a portion of the loans outstanding (USD361,793,945). The remaining outstanding amount was then split between debt and equity components – in terms of IAS 39.
On 31 March 2011, Telkom and Visafone Communications Limited (Visafone) entered into a legally binding agreement regarding the sale of Multi-Links’ CDMA business to Visafone for an enterprise value of USD52 million through a number of transaction steps.
On 3 October 2011 Multi-Links was sold to Helios Towers Nigeria Limited. |
