CONTENTS 1 FINANCIAL HIGHLIGHTS 2003 AND MTN GROUP STRUCTURE 2 MTN GROUP PROFILE 3 MTN FOOTPRINT 4 Directorate 6 CHAIRMAN’S REP
FINANCIAL HIGHLIGHTS 2003 ● REVENUE EBITDA ADJUSTED INCREASED BY 56% 71% TO R19,4 BILLION ● INCREASED BY TO R6,2 BILLION ● HEAD
MTN Group structure A S AT 3 1 M A R C H 2 0 0 3 36,1% 18,7% 45,2% JOHNNIC # NEWSHELF 664 OTHER SHAREHOLDERS MTN GROUP LIMITED
OUR VISION IS TO BE THE LEADING PROVIDER OF COMMUNICATION SERVICES IN AFRICA Like the topography of the continent, African soun
MTN Group profile MTN GROUP LIMITED (FORMERLY M-CELL LIMITED) IS AN AFRICA-FOCUSED HOLDING COMPANY THAT INVESTS IN THE COMMUNIC
MTN Footprint A S AT 3 1 M A R C H 2 0 0 3 Egypt Nigeria Ghana Cameroon Uganda Kenya GROUP SATELLITE FOOTPRINT GROUP GSM FOOTPR
Directorate As at 31 March 2003 NON-EXECUTIVE DIRECTORS 2. 3. 1. 4. 6. 7. 5. 8. 1. M C RAMAPHOSA Non-executive chairman BProc,
EXECUTIVE DIRECTORS 1. P F NHLEKO Group Chief Executive Officer BSc (Eng), MBA 4. R D NISBET Group Finance Director BCom, BAcc,
Chairman’s report CYRIL RAMAPHOSA Chairman D E A R S TA K E H O L D E R On behalf of the MTN Group Board, it is my pleasure to
Keeping pace with the technological transformation of the global information and communications industry is an important priori
Chairman’s report (continued) DISTRIBUTION TO SHAREHOLDERS After due consideration, it is the Board’s view that – in the best i
MTN group values Values To realise our vision, the Group subscribes to six shared values that form the foundation of our busine
REVIEW OF OPERATIONS 12 Group Chief Executive Officer’s Report 16 Group Finance Director’s Report 24 MTN South Africa 28 MTN In
REVIEW OF OPERATIONS Flashed, superheated air hotter than our sun’s surface Creates an acoustic shock wave that tells the Earth
Group chief executive officer’s report PHUTHUMA NHLEKO Group Chief Executive Officer OVERVIEW The MTN Group delivered a strong
for between 94,9% and 97,9% of the total subscriber base. MTN South Africa’s blended Average Revenue per User (ARPU) dropped ma
Group chief executive officer’s report (continued) MTN INTERNATIONAL The characteristics of the South African market contrast w
LOOKING AHEAD The positive results of our established operations together with the strong performance and resulting reduced fin
Group finance director’s report ROB NISBET Group Finance Director HIGHLIGHTS ● ● ● ● ALL WIRELESS OPERATIONS PROFITABLE AT PAT
operations in local currency was substantially higher than that in rand terms. The results of MTN Cameroon do not reflect the s
Group finance director’s report (continued) 3.2 EBITDA The Group’s overall EBITDA margin rose to 32,0% from 29,2% last year. In
a deferred tax asset raised which increased attributable profits for the year by R128 million) in addition to basic headline ea
Group finance director’s report (continued) losses of R84 million were also incurred in MTN South Africa on forward exchange co
Table 5 Capital expenditure (tangible assets only) For the year ended 31 March 2003 Rm Wireless operations South Africa Cameroo
Group finance director’s report (continued) Table 6 Cash flow statement For the year ended 31 March 2003 Cash inflows from oper
Table 7 Group facilities Total facility million 255 2 424 19 165 33 600 60 16 684 904 17 6 590 Utilised facility million 248 93
MTN South Africa SIFISO DABENGWA Managing Director MTN South Africa HIGHLIGHTS ● SUBSCRIBER GROWTH OF 22% TO 4,7 MILLION ● REVE
In the post-paid market, MTN South Africa has also introduced loyalty programmes, which, besides increasing our share of this m
MTN South Africa (continued) as voice Wireless Application Protocol (WAP). For the year, data revenue contributed 3,3% to total
gathering and analysing relevant customer information. An enterprise data warehouse is being set up as a key component of this
MTN International LAZARUS ZIM Managing Director MTN International HIGHLIGHTS ● SUBSCRIBER GROWTH OF 123% TO 2 MILLION ● REVENUE
(2002: R450 million). EBITDA was R297 million, resulting in an EBITDA margin of 34%. ARPU levels of US$21 were maintained, aide
MTN International (continued) In less than two years of operation MTN Nigeria has emerged as an integral and essential part of
MTN RWANDA MTN Rwanda recorded pleasing growth over the first half year with both customers and revenue increasing according to
MTN International (continued) MTN SWAZILAND MTN Swaziland performed in line with expectations, despite the fixed line operator
MTN UGANDA MTN Uganda continues to deliver strong results despite intensifying competition and aggressive price reductions by i
Strategic investments IRENE CHARNLEY Commercial Director OVERVIEW Strategic Investments is responsible for cultivating new grow
products across the Group. Airborn is charged with both the development of new technologies, and the commercial exploitation of
FIVE YEAR REVIEW FOR THE YEAR ENDED 31 MARCH 2003 2003 Income statement – extracts (Rm) Revenue Gross profit EBITDA Profit from
GROUP BALANCE SHEET A S AT 2 8 F E B R U A RY 2 0 0 2 2003 Solvency and liquidity ratios Gearing (%)(5) Interest cover (times)(
G R O U P C A S H VA L U E A D D E D S TAT E M E N T FOR THE YEAR ENDED 31 MARCH 2003 2003 Rm Cash value added Cash value gener
S H A R E H O L D E R I N F O R M AT I O N SPREAD OF ORDINARY SHAREHOLDERS as at 31 March 2003 Public Non-public – Directors of
CORPORATE GOVERNANCE AND RISK MANAGEMENT 42 Corporate Governance 50 Risk Management Report 53 Glossary of Terms
CORPORATE GOVERNANCE AND RISK MANAGEMENT In a military-like manoeuvre of precise, coordinated teamwork, Dolphin pods communicat
Corporate governance MANUELA MACKINTOSH Company Secretary GOVERNANCE PHILOSOPHY The directors and management of the MTN Group s
Details of attendance by directors at quarterly Board meetings during the year under review are set out below: Names of directo
Corporate governance (continued) Details of attendance by directors at Special Board meetings during the year under review are
DEALINGS IN SECURITIES All directors of the Group and its subsidiaries are required to notify the Company Secretary of any inte
Corporate governance (continued) ● Risk Management and Corporate Governance Committee; and ● Nominations, Remuneration and Huma
of internal, financial and operational controls, and the appropriateness of accounting policies. The Group Audit Committee also
Corporate governance (continued) The members of the Nominations, Remuneration and Human Resources Committee are: Mr M C Ramapho
● No share options have been repriced; and ● There is no pricing discount on share options granted to directors of the Group an
Risk management report The Group has adopted an enterprise-wide risk management methodology to ensure an integrated and effecti
investment in five countries outside South Africa. Some of the substantial risks to which the Group is exposed are linked to th
Risk management report (continued) connection to the Internet. It was also the first operator to offer a high-speed circuit-swi
Glossary of terms and acronyms Group companies M-Cell: M-Cell Limited MTN, MTN Group or the Group: MTN Group Limited – formerly
ANNUAL FINANCIAL STATEMENTS 56 STATEMENT OF DIRECTORS’ RESPONSIBILITY 57 DIRECTORS’ APPROVAL 57 CERTIFICATE BY COMPANY SECRETAR
These regular visitors, who shape continents, Roll and churn along our coasts. At the will of the moon they beckon you closer A
S TAT E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I T I E S FOR THE YEAR ENDED 31 MARCH 2003 The Directors are requ
DIRECTORS’ APPROVAL OF THE ANNUAL F I N A N C I A L S TAT E M E N T S FOR THE YEAR ENDED 31 MARCH 2003 The annual financial sta
REPORT OF THE INDEPENDENT AUDITORS FOR THE YEAR ENDED 31 MARCH 2003 TO THE MEMBERS OF MTN GROUP LIMITED We have audited the ann
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 The directors take pleasure in presenting their report and audited financial
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued) SHARE CAPITAL AND PREMIUM Authorised share capital There has bee
THE MTN GROUP SHARE OPTION AND INCENTIVE SCHEMES The Company operates a share option scheme and a share incentive scheme (the s
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued) MTN STAFF INCENTIVE SCHEME (“the MTN Debenture Scheme”) In terms
EQUITY COMPENSATION BENEFITS FOR EXECUTIVE DIRECTORS (continued) MTN Group (M-Cell) Share Option Scheme for the year ended 31 M
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued) MTN STAFF INCENTIVE SCHEME (MTN Debenture Scheme) MTN Group shar
DIRECTORS’ SHAREHOLDINGS The interests of the Directors and alternate Directors in the ordinary shares of the Company were as f
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued) DIRECTORS’ EMOLUMENTS AND RELATED PAYMENTS Payments for the year
DIRECTORS’ EMOLUMENTS AND RELATED PAYMENTS (continued) Payments for the year to 31 March 2002 Date appointed Executive Director
DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued) MANAGEMENT BUY-IN OF AN 18,7% INTEREST IN MTN GROUP THROUGH NEWS
In addition, the Public Investment Commissioner gave an option to the MTN Executive Directors to participate in the economic be
PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003 A glossary of terms and acronyms utilised in this report is prov
The Group’s investment in associates includes goodwill (net of accumulated amortisation) on acquisition. When the Group’s share
PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003 (continued) ● Interest Interest is recognised on the time propor
issue during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as requ
PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003 (continued) income statement on a straight-line basis over an ap
● income and expenditure and cash flow items are translated at the weighted average exchange rates for the year. Goodwill and f
GROUP I N C O M E S TAT E M E N T FOR THE YEAR ENDED 31 MARCH 2003 Notes Revenue Cost of sales Gross profit Operating expenses
GROUP BALANCE SHEET A S AT 3 1 M A R C H 2 0 0 3 Notes ASSETS Non-current assets Property, plant and equipment Goodwill Intangi
GROUP C A S H F L O W S TAT E M E N T FOR THE YEAR ENDED 31 MARCH 2003 Notes OPERATING ACTIVITIES Cash receipts from customers
GROUP S TAT E M E N T O F C H A N G E S I N S H A R E H O L D E R S ’ E Q U I T Y A S AT 3 1 M A R C H 2 0 0 3 Notes Balance at
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 1. BUSINESS AND GEOGRAPHICAL SEGMENTS For manag
1. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued) For management purposes, the Group is currently organised into two operating
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 2. REVENUE AND COST OF SALE
2003 Rm 3. OPERATING EXPENSES – NET OF SUNDRY INCOME (continued) Gain on dilution on consolidation of interest in MTN Nigeria I
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 6. TAXATION Current taxatio
2003 Rm 7. EARNINGS PER ORDINARY SHARE The calculation of basic and adjusted headline earnings per ordinary share are based on
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 8. CHANGE IN ACCOUNTING POL
Information systems, furniture and office Buildings equipment Rm Rm 9. PROPERTY, PLANT AND EQUIPMENT (continued) ACCUMULATED DE
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 9. PROPERTY, PLANT AND EQUIPMENT (c
Connection incentives Rm 11. INTANGIBLE ASSETS (continued) ACCUMULATED AMORTISATION Balance at 31 March 2001 Change in accounti
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 14. LOANS Loans to employee
2003 Rm 16. TRADE AND OTHER RECEIVABLES Balance at 31 March 2002 Reclassification of sundry debtors to securitised cash deposit
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 19. MINORITY INTERESTS Bala
2003 Rm 20. BORROWINGS (continued) UNSECURED (continued) International MTN Mauritius Syndicated revolving loan facility arrange
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 20. BORROWINGS (continued)
2003 Rm 20. BORROWINGS (continued) SECURED (continued) International (continued) MTN Uganda (continued) European Investment Ban
GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2003 (continued) 2003 Rm 20. BORROWINGS (continued)
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MTN Group Limited (formerly M-Ce
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CONTENTS 1 FINANCIAL HIGHLIGHTS 2003 AND MTN GROUP STRUCTURE 2
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FINANCIAL HIGHLIGHTS 2003 ● REVENUE EBITDA ADJUSTED INCREASED B
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MTN Group structure A S AT 3 1 M A R C H 2 0 0 3 36,1% 18,7% 45
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OUR VISION IS TO BE THE LEADING PROVIDER OF COMMUNICATION SERVI
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MTN Group profile MTN GROUP LIMITED (FORMERLY M-CELL LIMITED) I
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MTN Footprint A S AT 3 1 M A R C H 2 0 0 3 Egypt Nigeria Ghana
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Directorate As at 31 March 2003 NON-EXECUTIVE DIRECTORS 2. 3. 1
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EXECUTIVE DIRECTORS 1. P F NHLEKO Group Chief Executive Officer
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Chairman’s report CYRIL RAMAPHOSA Chairman D E A R S TA K E H O
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Keeping pace with the technological transformation of the globa
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Chairman’s report (continued) DISTRIBUTION TO SHAREHOLDERS Afte
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MTN group values Values To realise our vision, the Group subscr
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REVIEW OF OPERATIONS 12 Group Chief Executive Officer’s Report
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REVIEW OF OPERATIONS Flashed, superheated air hotter than our s
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Group chief executive officer’s report PHUTHUMA NHLEKO Group Ch
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for between 94,9% and 97,9% of the total subscriber base. MTN S
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Group chief executive officer’s report (continued) MTN INTERNAT
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LOOKING AHEAD The positive results of our established operation
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Group finance director’s report ROB NISBET Group Finance Direct
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operations in local currency was substantially higher than that
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Group finance director’s report (continued) 3.2 EBITDA The Grou
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a deferred tax asset raised which increased attributable profit
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Group finance director’s report (continued) losses of R84 milli
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Table 5 Capital expenditure (tangible assets only) For the year
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Group finance director’s report (continued) Table 6 Cash flow s
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Table 7 Group facilities Total facility million 255 2 424 19 16
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MTN South Africa SIFISO DABENGWA Managing Director MTN South Af
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In the post-paid market, MTN South Africa has also introduced l
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MTN South Africa (continued) as voice Wireless Application Prot
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gathering and analysing relevant customer information. An enter
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MTN International LAZARUS ZIM Managing Director MTN Internation
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(2002: R450 million). EBITDA was R297 million, resulting in an
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MTN International (continued) In less than two years of operati
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MTN RWANDA MTN Rwanda recorded pleasing growth over the first h
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MTN International (continued) MTN SWAZILAND MTN Swaziland perfo
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MTN UGANDA MTN Uganda continues to deliver strong results despi
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Strategic investments IRENE CHARNLEY Commercial Director OVERVI
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products across the Group. Airborn is charged with both the dev
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FIVE YEAR REVIEW FOR THE YEAR ENDED 31 MARCH 2003 2003 Income s
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GROUP BALANCE SHEET A S AT 2 8 F E B R U A RY 2 0 0 2 2003 Solv
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G R O U P C A S H VA L U E A D D E D S TAT E M E N T FOR THE YE
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S H A R E H O L D E R I N F O R M AT I O N SPREAD OF ORDINARY S
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CORPORATE GOVERNANCE AND RISK MANAGEMENT 42 Corporate G
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CORPORATE GOVERNANCE AND RISK MANAGEMENT In a military-like man
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Corporate governance MANUELA MACKINTOSH Company Secretary GOVER
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Details of attendance by directors at quarterly Board meetings
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Corporate governance (continued) Details of attendance by direc
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DEALINGS IN SECURITIES All directors of the Group and its subsi
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Corporate governance (continued) ● Risk Management and Corporat
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of internal, financial and operational controls, and the approp
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Corporate governance (continued) The members of the Nominations
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● No share options have been repriced; and ● There is no pricin
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Risk management report The Group has adopted an enterprise-wide
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investment in five countries outside South Africa. Some of the
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Risk management report (continued) connection to the Internet.
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Glossary of terms and acronyms Group companies M-Cell: M-Cell L
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ANNUAL FINANCIAL STATEMENTS 56 STATEMENT OF DIRECTORS’ RESPONSI
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These regular visitors, who shape continents, Roll and churn al
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S TAT E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I
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DIRECTORS’ APPROVAL OF THE ANNUAL F I N A N C I A L S TAT E M E
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REPORT OF THE INDEPENDENT AUDITORS FOR THE YEAR ENDED 31 MARCH
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 The director
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued)
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THE MTN GROUP SHARE OPTION AND INCENTIVE SCHEMES The Company op
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued)
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EQUITY COMPENSATION BENEFITS FOR EXECUTIVE DIRECTORS (continued
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued)
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DIRECTORS’ SHAREHOLDINGS The interests of the Directors and alt
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued)
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DIRECTORS’ EMOLUMENTS AND RELATED PAYMENTS (continued) Payments
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DIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2003 (continued)
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In addition, the Public Investment Commissioner gave an option
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PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003
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The Group’s investment in associates includes goodwill (net of
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PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003
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issue during the period and is based on the earnings attributab
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PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2003
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● income and expenditure and cash flow items are translated at
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GROUP I N C O M E S TAT E M E N T FOR THE YEAR ENDED 31 MARCH 2
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GROUP BALANCE SHEET A S AT 3 1 M A R C H 2 0 0 3 Notes ASSETS N
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GROUP C A S H F L O W S TAT E M E N T FOR THE YEAR ENDED 31 MAR
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GROUP S TAT E M E N T O F C H A N G E S I N S H A R E H O L D E
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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1. BUSINESS AND GEOGRAPHICAL SEGMENTS (continued) For managemen
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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2003 Rm 3. OPERATING EXPENSES – NET OF SUNDRY INCOME (continued
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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2003 Rm 7. EARNINGS PER ORDINARY SHARE The calculation of basic
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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Information systems, furniture and office Buildings equipment R
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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Connection incentives Rm 11. INTANGIBLE ASSETS (continued) ACCU
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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2003 Rm 16. TRADE AND OTHER RECEIVABLES Balance at 31 March 200
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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2003 Rm 20. BORROWINGS (continued) UNSECURED (continued) Intern
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
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2003 Rm 20. BORROWINGS (continued) SECURED (continued) Internat
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GROUP NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR END
African Annual Reports
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