Group |
Company |
|||||||||||
38. Commitments |
2015 Rm |
2014 Rm |
2015 Rm |
2014 Rm |
||||||||
| Capital commitments authorised | 5 500 | 5 055 | 5 500 | 5 055 | ||||||||
| Commitments against authorised capital expenditure | 1 057 | 1 132 | 1 057 | 1 132 | ||||||||
| Authorised capital expenditure not yet contracted | 4 443 | 3 923 | 4 443 | 3 868 | ||||||||
Capital commitments are largely attributable to purchases of property, plant and equipment and software. Management expects these commitments to be financed from internally generated cash and borrowings.
| Total
Rm |
<1 year Rm |
1 - 5 years Rm |
>5 years Rm |
|||||||
| Group | ||||||||||
| Operating lease commitments and receivables | ||||||||||
| 2015 | ||||||||||
| Land and buildings | 1 844 | 506 | 1 237 | 101 | ||||||
| Rental receivable on buildings | (1 179) | (373) | (772) | (34) | ||||||
| Customer premises equipment receivables | (46) | (30) | (16) | – | ||||||
| Vehicles | 1 951 | 423 | 563 | 965 | ||||||
| Total | 2 570 | 526 | 1 012 | 1 032 | ||||||
| 2014 | ||||||||||
| Land and buildings | 1 910 | 380 | 1 430 | 100 | ||||||
| Rental receivable on buildings | (727) | (269) | (451) | (7) | ||||||
| Customer premises equipment receivables | (46) | (28) | (18) | – | ||||||
| Vehicles | 496 | 496 | – | – | ||||||
| Swap bodies | 12 | 12 | – | – | ||||||
| Total | 1 645 | 591 | 961 | 93 | ||||||
| Company | ||||||||||
| Operating lease commitments and receivables | ||||||||||
| 2015 | ||||||||||
| Land and buildings | 1 822 | 502 | 1 219 | 101 | ||||||
| Rental receivable on buildings | (1 179) | (373) | (772) | (34) | ||||||
| Customer premises equipment receivables | (46) | (30) | (16) | – | ||||||
| Vehicles | 1 951 | 423 | 563 | 965 | ||||||
| Total | 2 548 | 522 | 994 | 1 032 | ||||||
| 2014 | ||||||||||
| Land and buildings | 1 785 | 355 | 1 330 | 100 | ||||||
| Rental receivable on buildings | (727) | (269) | (451) | (7) | ||||||
| Customer premises equipment receivables | (46) | (28) | (18) | – | ||||||
| Vehicles | 496 | 496 | – | – | ||||||
| Swap bodies | 12 | 12 | – | – | ||||||
| Total | 1 520 | 566 | 861 | 93 |
Operating leases
The group leases certain buildings, vehicles and equipment. The majority of the lease terms negotiated for equipment-related premises range from three to ten years. The majority of the leases contain an option clause entitling Telkom to renew the lease agreements for a period usually equal to the main lease term.
The minimum lease payments under these agreements are subject to annual escalations, which range from 6% to 15%.
Penalties in terms of the lease agreements are only payable should Telkom vacate a premises and negotiate to terminate the lease agreement prior to the expiry date, in which case the settlement payment will be negotiated in accordance with the market conditions of the premises. Future minimum lease payments under operating leases are included in the above note. Onerous leases for buildings, for which the company has no further use, no possibility of sub-lease and no option to cancel are provided for in full and included in other provisions.
Telkom is in negotiations with various suppliers to renew the commitments.
| Total
Rm |
<1 year Rm |
1 - 5 years Rm |
>5 years Rm |
|||||||
| Group finance lease commitments | ||||||||||
| 2015 | ||||||||||
| Building | ||||||||||
| Minimum lease payments | 824 | 187 | 637 | – | ||||||
| Finance charges | (192) | (79) | (113) | – | ||||||
| Finance lease obligation | 632 | 108 | 524 | – | ||||||
| Software | ||||||||||
| Minimum lease payments | 24 | 6 | 18 | – | ||||||
| Finance charges | (5) | (2) | (3) | – | ||||||
| Finance lease obligation | 19 | 4 | 15 | – | ||||||
| 2014 | ||||||||||
| Building | ||||||||||
| Minimum lease payments | 997 | 172 | 825 | – | ||||||
| Finance charges | (284) | (91) | (193) | – | ||||||
| Finance lease obligation | 713 | 81 | 632 | – | ||||||
| Software | ||||||||||
| Minimum lease payments | 33 | 8 | 25 | – | ||||||
| Finance charges | (8) | (3) | (5) | – | ||||||
| Finance lease obligation | 25 | 5 | 20 | – | ||||||
| Company finance lease commitments | ||||||||||
| 2015 | ||||||||||
| Building | ||||||||||
| Minimum lease payments | 824 | 187 | 637 | – | ||||||
| Finance charges | (192) | (79) | (113) | – | ||||||
| Finance lease obligation | 632 | 108 | 524 | – | ||||||
| Software | ||||||||||
| Minimum lease payments | 24 | 6 | 18 | – | ||||||
| Finance charges | (5) | (2) | (3) | – | ||||||
| Finance lease obligation | 19 | 4 | 15 | – | ||||||
| 2014 | ||||||||||
| Building | ||||||||||
| Minimum lease payments | 995 | 170 | 825 | – | ||||||
| Finance charges | (284) | (91) | (193) | – | ||||||
| Finance lease obligation | 711 | 79 | 632 | – | ||||||
| Company finance lease commitments | ||||||||||
| 2015 | ||||||||||
| Software | ||||||||||
| Minimum lease payments | 33 | 8 | 25 | – | ||||||
| Finance charges | (8) | (3) | (5) | – | ||||||
| Finance lease obligation | 25 | 5 | 20 | – |
Finance leases
Finance leases on software relates to the lease of Content Delivery Platform software. The lease term for the software is for a period of four years and nine months ending on December 2019.
A major portion of the finance leases relates to the sale and lease-back of the group's office buildings. The lease term negotiated for the buildings is for a period of 25 years ending 2019. The minimum lease payments are subject to an annual escalation of 10%. Telkom has the right to sublet part of the buildings. In case of breach of contract, the lessor is entitled to cancel the lease agreement and claim damages.
The exit strategy pertaining to the corporate offices within the Pretoria CBD, which is subject to a lease that expires in 2019, is being assessed.
Telkom has the option to renew the lease and the first option to purchase the buildings.
Telkom has a commitment to migrate customers to new cable systems when the existing cables are decommissioned before the lease period expires. Refer to note 18 for lease payments.
There are no major restrictions imposed by lease arrangements.