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Telekom Networks Malawi Limited
Directors’ report
Report Of Directors
The Directors have pleasure in presenting their report and the audited financialstatements of Telekom Networks Malawi Limited for the year ended 31
December 2009.
Nature Of BusinessThe company is engaged in providing telecommunication services in accordance
with its licence issued by Malawi Communications Regulatory Authority
(MACRA).
Registered Office
Telekom Networks Malawi Limited is a company incorporated in Malawi underthe Malawi Companies Act, 1984. It was listed on the Malawi Stock Exchange in
November 2008.
The address of its registered office is, Livingstone Towers, Fifth Floor, Glyn Jones
Road, P. O Box 3039, Blantyre, Malawi.
Financial PerformanceThe results and state of affairs of the company are set out in the accompanying
statement of financial position, statement of comprehensive income, statement
of changes in equity, statement of cash flows and notes to the financial state-
ments which includes a summary of significant accounting policies.
Directorate And SecretariatDirectors and Company Secretary who served during the year are listed below:
Prof. Dr. Matthews Chikaonda Chairman
Mr. Hitesh Anadkat Vice Chairman
Dr. Harry Gombachika Director
Dr. Stephanus Minaar Director
Mr. Ken Mthuzi Director
Mr. Pius P. Mulipa DirectorMr. John M. O’Neill Director
Mr. James Regout Director
Mr. Jonathan Larcombe Alternate to Mr. James Regout
Mrs. Hilda Singo Alternate to Mr. Ken Mthuzi
Mrs. Christina Mwansa Company Secretary
Corporate GovernanceThe company continues to embrace and abide by the main principles of modern
corporate governance as contained in the Cadbury and the King Reports. In this
regard, the company has at Board level, a Board Audit Committee and a BoardAppointments and Remuneration Committee. The Committees comprise Non-
Executive Directors.
DividendsDuring the year a total dividend of K602.4 million was declared. K200.8 million
was paid in July 2009 and K200.8 million was paid in October 2009. The balance
of K200.8 million which was declared in December 2009 was paid in January
2010.
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Telekom Networks Malawi Limited
Directors’ Report (Cont’d)
Auditors
Deloitte, Certified Public Accountants, P O Box 187, Blantyre, have signifiedtheir willingness to continue in office and a resolution is to be proposed at the
forthcoming Annual General Meeting in relation to their appointment as audi-
tors in respect of the year ending 31 December 2010.
BY ORDER OF THE BOARD
_________________________ _________________________
DIRECTOR DIRECTOR
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Telekom Networks Malawi Limited
Statement Of Directors’ Responsibilities
The Companies Act, 1984, requires the directors to prepare financial statements
f or each financial period which give a true and fair view of the state of affairs of the company as at the end of the financial period and of the operating results
for that period.
The Act also requires the directors to ensure the company keeps proper
accounting records which disclose with reasonable accuracy the financial
position of the company and enable them to ensure that the financial
statements comply with the Companies Act, 1984.
In preparing the financial statements the directors accept responsibility for the
following:
• Maintenance of proper accounting records;
• Selection of suitable accounting policies and consistent application thereof;
• Making judgements and estimates that are reasonable and consistently
applied;
• Compliance with applicable accounting standards when preparing financial
statements; and
• Preparation of financial statements on a going concern basis unless it is
inappropriate to presume that the company will continue in business in the
foreseeable future.
The directors also accept responsibility f or taking such steps as are reasonably
open to them to saf eguard the assets of the company and to maintain adequate
systems of internal control to prevent and detect fraud and other irregularities.
The directors are of the opinion that the financial statements give a true and
fair view of the state of the financial affairs of the company and of its operating
results, so far as concerns the members of the company.
DIRECTOR: ________________________________________
DIRECTOR: ________________________________________
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Telekom Networks Malawi Limited
Statement Of Comprehensive Income
Note 2009 2008 K’000 K’000 Revenue 7 8,205,000 6,701,931
Direct operational costs 8 (3,918,473) (2,788,062)
Gross profit 4,286,527 3,913,869
Other income 9 74,299 92,615
Selling and administrative expenses 10 (2,481,630) (1,822,951)
Results from operating activities 1,879,196 2,183,533
Finance income 11 59,082 42,201
Finance expenses 11 (180,802) (3,473)
Net finance (expense)/income (121,720) 38,728
Profit before income tax 1,757,476 2,222,261
Income tax expense 12 (542,689) (692,296)
Profit for the year 1,214,787 1,529,965
Other comprehensive income - -
Total comprehensive income for the year 1,214,787 1,529,965
Earnings per share
Basic earnings per share (MK) 13 0.12 0.17
31 December 2009
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Telekom Networks Malawi Limited
1. General Information
Telekom Networks Malawi Limited (TNM) is a company domiciled in
Malawi and incorporated under the Malawi Companies Act, 1984
Cap.46:03. The address of the company’s registered office is Livingstone
Towers, Fifth floor, Glyn Jones Road, P O Box 3039, Blantyre. The company
was listed on the Malawi Stock Exchange on 3 November 2008.
The company primarily is involved in the provision of telecommunication
services in accordance with its licence issued by Malawi Communications
Regulatory Authority (MACRA).
2. Adoption Of New And Revised International Financial ReportingStandards
In the current year, the company has adopted all of the new and revised
Standards and Interpretations issued by the International Accounting
Standards Board (the IASB) and the International Financial Reporting
Interpretations Committee (the IFRIC) of the IASB that are relevant to
its operations and effective for annual reporting periods beginning on or
after 1 January 2009.
The following new and revised standards and interpretations have been
adopted in the current period:
• IAS 1 Presentation of financial statements has been substantially
rewritten, with many changes in terminology, including changes to the
titles of individual financial statements and is ef fective for periods
beginning on or after 1 January 2009;
• The amendments to IFRS 7 expand the disclosures required in
respect of fair value measurements and liquidity risk.
• Revised IAS 23 Borrowing Costs removes the option to expense
borrowing costs on qualifying assets during the period of
construction and is effective f or financial statements for periods
beginning on or after 1 January 2009.
• IFRS 2 Share-based Payments has been amended to clarify the
definition of vesting conditions and the accounting treatment of
cancellation by the counterparty to a share-based arrangement and is
effective for periods beginning on or after 1 January 2009.
• IFRS 8 is a disclosure standard that has resulted in a redesignation of
the company’s reportable segments.
• Disclosures in these financial statements have been reviewed to
reflect the IASB’s clarification (as part of improvements to IFRSs
(2009)) that the disclosure requirements in standards other than
IFRS 5 do not generally apply to non-current assets classified as held
for sale and discontinued operations.
Notes To The Financial Statements
For The Year Ended 31 December 2009
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Telekom Networks Malawi Limited
2. Adoption of new and revised International Financial ReportingStandards (Cont’d)
• The amendments (part of improvements to IFRSs’ (2009)) specify
that only expenditure that result in a recognised asset in the
statement of financial position can be classified as investing
activities in the statement of cash flows. Consequently, cash flows
in respect of development costs that do not meet the criteria in IAS
38 intangible asset for capitalisation as part of internally generated
intangible asset (and, therefore, are recognised in profit or loss as
incurred) are reclassified f rom investing to operating activities in thestatement of cash flows.
• As part of Improvements to IFRS’ (2008) , IAS 38 has been amended
to state that an entity is permitted to recognise a prepayment asset
for advertising or promotional expenditure only up to the point at
which the entity has the right to access the goods purchased or up
to the point of receipt of services. Mail order catalogues have been
specifically identified as a form of advertising and promotional
activities.
• IFRIC 13 Consumer Loyalty Programmesaddresses the accounting
by entities that operate, or otherwise participate in, customer loyalty
programmes for their customers and is effective for periods
beginning on or after 1 January 2009; and
• There have also been terminology changes and clarifications as part
of the IASB annual improvements project, to: IAS 7, IAS 8, IAS 10,
IAS 16, IAS 18, IAS 19, IAS 20, IAS 23, IAS 27, IAS 28, IAS 31, IAS 32,
IAS 36, IAS 38, IAS 39, IAS 40, IFRS 3, IFRS 5 and IFRS 7, and are
effective f or periods beginning on or after 1 January 2009.
Apart from the changes to IAS 1 Presentation of financial statements and
IFRS 7 Financial Instruments Disclosures, all the above amendments did not
have any impact on the company’s financial statements.
At the date of authorisation of these financial statements, the following
relevant Standards and Interpretations were in issue but not yet effective:
• IFRS 9 Financial Instruments: Classification and Measurement. This
Standard introduces new requirements f or the classification and
measurement of financial assets and is ef fective f or periods beginning on or after 1 January 2013. Key features are as follows: Financial
assets are required to be classified into two measurement
categories; those to be measured subsequently at fair value, and
those to be measured subsequently at amortised cost. The decision
is to be made at initial recognition. This standard is effective for
periods on or after 1 January 2013. This amendment is expected to
have a significant impact on the financial statements;
• IFRIC 17 Distributions of Non-cash Assets to Owners provides
guidance on the appropriate accounting treatment when an entity
distributes assets other than cash as dividends to its shareholders
and is effective f or periods beginning on or after 1 January 2010.
This amendment will not have any impact on the company’s financial
statements; and
Notes To The Financial Statements
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
• IFRIC 18 Transfers of Assets from Customersaddresses the
accounting by recipients for transfers of property, plant and
equipment from ‘customers’. The recipient should recognise the asset
at its fair value on the date of the transfer, with the credit recognised
as revenue in accordance with IAS 18 Revenueand is eective
to transfers of assets from customers received on or after 1 July
2009. This amendment will not impact on the company’s financial
statements.
3. Significant accounting policies
Statement of complianceThe financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB), and the provisions of the Malawi Companies Act, 1984.
Basis of preparationThe financial statements are prepared in terms of the historical cost convention.
No other procedures have been adopted to reflect the impact on the financial
statements of specific price changes or changes in the general level of prices.
The principal accounting policies are set out below.
3.1 Functional and presentation currencyThese financial statements are presented in Malawi Kwacha, which is the
company’s functional currency.All financial information presented in Malawi
Kwacha has been rounded to the nearest thousand.
3.2 Use of estimates and judgementsThe preparation of financial statements in conformity with IFRSs requires
management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Judgements made by management in the application of IFRS’s that have
significant ef fect on the amounts recognised in the financial statements are
discussed in note 4.2 to these financial statements.
3.3 Foreign currency
Transactions in foreign currencies are converted to Malawi Kwacha at theforeign exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies at the reporting date are converted
to Malawi Kwacha at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in profit or loss,
except for those capitalized into property, plant and equipment under policy
note 3.4 (vi). Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are converted using the exchange rate at
the date of the transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are converted to Malawi Kwacha
at foreign exchange rates ruling at the dates the fair value was determined.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
3.4 Property, plant and equipment
(i) Recognition and measurements Items of property, plant and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses.The cost
of self-constructed assets includes the cost of material and direct labour,
any other costs directly attributable to bringing the asset to a working
condition f or its intended use. Purchased software that is integral to the
functionality of the related equipment is capitalized as part of that
equipment.
When parts of an item of property, plant and equipment have different
useful lives, they are accounted f or as separate items (major components)
of property, plant and equipment.
(ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment
is recognised in the carrying amount of the item if it is probable that
the future economic benefit embodied within the part will flow to
the company and its cost can be measured reliably. The costs of the
day-to-day servicing of property, plant and equipment are recognised in
profit or loss as incurred.
(iii) Depreciation No depreciation is provided for land. Depreciation is recognised in the
profit or loss on a straight line basis over the estimated useful lives of
each part of an item of property, plant and equipment.
The estimated useful lives of assets f or current and comparative periods
are as follows:-
• Buildings 20 years • Equipment and machinery 8-15 years
• Furniture & fittings 5 years
• Other equipment 5 years
• Motor vehicles 5 years
(iv) Determination of residual values and useful livesThe assets’ residual values useful lives and depreciation method are
reviewed and adjusted, if appropriate, at each reporting date. Where the
carrying amount of an asset is greater than its estimated recoverable
amount, it is written down immediately to its recoverable amount.
(v) Gains and losses on disposal Gains and losses on disposals of an item of property, plant and
equipment are determined by comparing the proceeds with the carrying
amount of the item and are recognised net within “other income” in the
statement of comprehensive income.
(vi) Interest and exchange losses on loansInterest and exchange losses on loans which are utilised for the
construction of qualifying property, plant and equipment are capitalised
until the commissioning of the related asset after which they are dealt with in profit or loss. Qualifying assets are those that necessarily take a
substantial period of time to get ready f or their intended use or sale.
Notes ToThe Financial Statements
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
3.4 Property, plant and equipment
(vii) Capital work in progressCapital work in progress is an integral part of property, plant and
equipment and measured at cost. Cost includes all expenditures directly
attributable to the asset under construction. Capital work in progress
is not depreciated until it is available f or use upon which it is capitalized
to its relevant class of property, plant and equipment.
3.5 Intangible assets
Computer software acquired by the company is recognised initially at cost.Cost includes all directly attributable costs in order to bring the asset into
a state f or its intended use. Computer software is measured at cost less
accumulated amortization and accumulated impairment losses.
Subsequent expenditure is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it related.
Amortisation is recognised in the profit or loss on a straight-line basis over
the estimated useful lives of intangible assets from the date they are
available f or use.
The estimated useful life f or current and comparative periods f or acquired computer software is 5 years.
3.6 Impairment of non-financial assets At each financial position date, the company reviews the carrying amounts
of its tangible and intangible assets to determine whether there is any
indication that those assets have suf fered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any).Where it is not
possible to estimate the recoverable amount of an individual asset, the
company estimates the recoverable amount of the cash-generating unit to
which the asset belongs.Where a reasonable and consistent basis of
allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or they are allocated to the smallest group of
cash-generating units f or which a reasonable and consistent allocation basis
can be identified.
Recoverable amount is the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current mark et assessments of the time value of money and the risks
specific to the asset f or which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount.An impairment
loss is recognised immediately in the statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of
the asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no
impairment loss been recognised f or the asset (or cash-generating unit) in
prior years. A reversal of an impairment loss is recognised immediately in
the statement of comprehensive income.
Notes ToThe Financial Statements (Cont’d)
f or the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
3.7 InventoriesInventories are measured at the lower of cost and net realisable value. The
cost of inventories is based on the average cost principle and includes
expenditure incurred in acquiring the inventories, conversion costs and
other costs incurred in bringing them to their existing location and
condition.
Net realizable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
3.8 Trade receivablesReceivables are measured at amortized cost using the eective interest
method less any allowance made for impairment of these receivables.
Allowance for impairment of trade receivables is established when there is
objective evidence that the company will not be able to collect all amounts
due according to the original terms of contracts.
3.9 Cash and cash equivalentsCash and cash equivalents includes cash on hand, call deposits with banks,
other short-term highly liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are disclosed ascurrent liabilities on the statement of nancial position.
3.10 Income taxCurrent and deferred tax are recognised as an expense or income in prot
or loss, except when they relate to items that are recognised outside prot
or loss (whether in other comprehensive income or directly in equity), in
which case the tax is also recognised outside prot or loss, or where they
arise from the initial accounting for a business combination.
Current taxCurrent tax is the expected tax payable on the taxable income for the
period, using tax rates enacted or substantively enacted at the reporting
date, and any adjustment to tax payable in respect of previous years.
Taxable income diers from prot as reported in the statement of
comprehensive income because of items of income or expense that are
taxable or deductible in other years and items that are never taxable or
deductible.
Def erred taxDeferred tax is provided using the liability method, providing for temporary
dierences between the carrying amounts of assets and liabilities fornancial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary dierences the
initial recognition of assets or liabilities that is not a business combination
aect neither accounting nor taxable prot. The amount of deferred tax
provided is based on the expected manner of realization or settlement of
the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable prots will be available against which the asset can beutilized. Deferred tax assets are reviewed at each reporting date and
reduced to the extent that it is no longer probable that the related tax
benet will be realised.
NotesTo The Financial Statements (Cont’d)
f or the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority
and the company intends to settle its current tax assets and liabilities on a
net basis.
3.11 Provisions A provision is recognised in the statement of financial position when the
company has a present legal or constructive obligation as a result of a past
event, and it is probable that an outflow of economic benefits will berequired to settle the obligation. If the eff ect is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate
that reflects current mark et assessments of the time value of money and,
where appropriate, the risks specic to the liability.
When some or all of the economic benefits required to settle a provision
are expected to be recovered from a third party, a receivable is recognised
as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
Restructuring A provision for restructuring is recognised when the company has
approved a detailed and formal restructuring plan, and the restructuring has
either commenced or has been announced publicly. Costs relating to the
ongoing activities of the company are not provided for.
Onerous contracts A provision for onerous contracts is recognised when the expected
benefits to be derived by the company from a contract are lower than the
unavoidable cost of meeting its obligations under the contract. The
provision is measured at the present value of the lower of the expected
cost of terminating the contract and the expected net cost of continuing
with the contract. Before a provision is established, the company recognises
any impairment loss on the assets associated with the contract.
Warranties A provision for warranties is recognised when the underlying products
or services are sold.The provision is based on historical warranty data and
a weighting of all possible outcomes against their associated probabilities.
3.12 Earnings per share
The calculation of basic earnings per share is based on the profit for the period attributable to ordinary shareholders and the weighted average
number of shares in issue during the period. Where new equity shares have
been issued by way of capitalization or subdivision, the profit is apportioned
over the shares in issue after the capitalization or subdivision and the
corresponding figures f or all earlier periods are adjusted accordingly.
3.13 Revenue recognition Revenue, which excludes value added tax, represents the fair value of the
consideration received or receivable for services provided and accessories
sold. The main categories of revenue and bases of recognition are:
Air time usage
Revenue f rom prepaid, postpaid and international roaming telephone
service is recognised when airtime is used by the customer.
Notes ToThe Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
3.13 Revenue rocognition(Cont’d)
Starter packs, sim cards and otherRevenue on starter packs, sim cards and other sales is recognised on the date all risks and rewards associated with the sale are transferred to the purchaser. Revenue on other services is recognised upon the perf ormance of the contractual obligation.
Deferred income Deferred income consists of the value of unused airtime on prepaid service recharge vouchers sold to customers.
3.14 Employee benefits
Pension obligations - Defined Contribution Plan The company contributes to an independently managed defined
contribution pension plan. Obligations f or contributions to defined
contribution plans are recognised as an expense in the statement of
comprehensive income as incurred. Once the contributions have been
made, the company has no further payment obligations.
Short-term benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
3.15 Financial instruments
3.15.1Financial assets Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose
terms require delivery of the investment within the timeframeestablished by the mark et concerned, and are initially measured at fair value, plus transaction costs, except f or those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL),
‘held-to-maturity investments’, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’.The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The eff ective interest method is a method of calculating the
amortised cost of a financial asset and of allocating interest income over the relevant period. The eff ective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected lif e of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an ef f ective interest basis f or debt
instruments other than those financial assets designated as at FVTPL.
Notes ToThe Financial Statements (Cont’d)for the year ended 31st December 2009
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Telekom Networks Malawi Limited
3.
Significant accounting policies (Cont’d)3.16 Financial liabilities and equity instruments
3.16.2Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Equity instruments are recorded at the proceeds received, net of direct issue costs.
3.16.3Financial liabilities
Financial liabilities are classified as either financial liabilities at ‘FVTPL’ or ‘other financial liabilities’.
3.16.4Financial liabilities at FairValue Through Profit or Loss Financial liabilities are classified as at FVTPL where the financial
liability is either held f or trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of repurchasing
in the near future; or
• it is a part of an identified portfolio of financial instruments that
the company manages together and has a recent:
(i) Actual pattern of short-term profit-taking; or
(ii) It is a derivative that is not designated and effective as a
hedging instrument.
A financial liability other than a financial liability held f or trading may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a
measurement or recognition inconsistency that wouldotherwise arise; or • the financial liability forms part of a company of financial assets
or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance
with the company’s documented risk management or
investment strategy, and information about the company is
provided internally on that basis; or • it forms part of a contract containing one or more embedded
derivatives, and IAS 39 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any
resultant gain or loss recognised in profit or loss.The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.
3.16.5Other financial liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Notes ToThe Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
3. Significant accounting policies (Cont’d)
Other financial liabilities are subsequently measured at amortised
cost using the effective interest method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period.The effective interest rate is the
rate that exactly discounts estimated future cash payments through
the expected life of the financial liability, or, where appropriate, a
shorter period.
3.17 Segment reporting A segment is a distinguishable component of the company that is engaged either in providing products or service (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are
diff erent f rom those of other segments.The company does not, at present,
have distinguishable business segments.
3.18 Leased assets - lessee Rentals payable under operating leases are charged to statement of
comprehensive income on a straight-line basis over the term of the
relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
4. Critical accounting judgments and key sources of estimation un certainty
4.1 Critical judgements in applying the company’s accounting policiesIn the application of the company’s accounting policies, which are
described in note 3, management are required to mak e judgements,
estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent f rom other sources. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ f rom these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects
both current and future periods.
Notes ToThe Financial Statements (Cont’d)
f or the year ended 31st December 2009
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Telekom Networks Malawi Limited
4. Critical accounting judgments and key sources of estimationuncertainty (Cont’d)
4.2 Key sources of estimation uncertainty
4.2.1 Provision for doubtful debts The company provides post paid services mainly on credit terms and management is aware that certain debts due to the company may not be recoverable either in part or in full.
Estimates, based on historical experience, are used in
determining the level of debts that management believes will not
be collected. When deriving these estimates, factors such as the current state of the Malawi economy, financial difficulties of the debtors, or financial reorganisation and delinquency in
paying, amongst others, are taken into account.
4.2.2 Property, plant and equipment The residual values and useful lives of property, plant and
equipment are reviewed and adjusted, if appropriate, at each financial position date to reflect current thinking on their
remaining lives in the light of technological change, prospective economic utilisation and physical conditions of the assets
concerned.
4.2.3 Interconnection income and payments to other operators The company relies in most cases on other operators to
measure the traffic flows interconnecting with its network.
Estimates are used in these cases to determine the amount
payable to these other operators.
4.2.4 Severance allowance provision The company has estimated severance allowance provision as at 31 December 2009. The actual liability to be incurred willdepend on a number of factors including rates of death,
retirement resignation and dismissal. The amount provided is subject to review annually.
5. Comparatives
Where necessary, comparative figures are adjusted to conform with
changes in presentation in the current period.
6. Financial risk management
OverviewThe Company has exposure to the following risks from its use of financial
instruments:
• credit risk
• liquidity risk
• market risk.
This note presents information about the company’s exposure to each of
the above risks, the company’s objectives, policies and processes formeasuring and managing risk, and the company’s management of capital.
Further quantitative disclosures are included throughout these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
6. Financial risk management (Cont’d)
6.3 Market risk Market risk is the risk that changes in market prices, such as foreign
exchange rates, interest rates and equity and commodity prices will affect
the company’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, while optimising the return.
Currency risk The company transacts the majority of its sales, non-capital expenditure
purchases and borrowings in its functional currency Malawi Kwacha (MK).The company is exposed to currency risk where these transactions are
denominated in currencies other than functional currency. Purchases in
currencies other than the functional currency are carried out by opening
letters of credit.
The company’s capital expenditure requirements are in currencies other
than the functional currency and whilst these liabilities are settled by way of
short-term letters of credit, the company is exposed to currency risk.
The company mitigates currency risk by utilizing borrowing facilities fromlocal banks and minimizing foreign supplier credit. Purchases in currencies
other than the functional currency are carried out by opening letters of
credit.
6.4 Capital managementThe company’s policy is to maintain a strong capital base so as to maintain
investor, creditor and mark et confidence and to sustain future development
of the business. The company’s objectives when managing capital are to
safeguard the company’s ability to continue as a going concern in order to
provide returns for shareholders and to maintain an optimal capital
structure.
2009 2008
K’000 K’000
7. Revenue
Revenue is derived from the following revenue streams
Post-paid 779,211 796,609
Prepaid 6,449,370 5,157,251
International roaming 178,960 109,068Interconnect revenue 797,459 639,003
8,205,000 6,701,931
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
8. Direct operational costs
Depreciation 860,453 465,275
Dealers commission 610,178 475,458
Marketing development expenses 577,407 382,724
Interconnect charges 390,713 344,938
MACRA annual levy 318,190 259,393
Network repairs and maintenance 298,477 215,871
Cost of recharge vouchers 189,914 118,210
IDD call charges 163,607 150,072Power and electricity 136,900 44,164
International roaming charges 112,596 108,657
Lease circuit charges 108,788 104,217
Site and space rental 57,309 55,404
Frequency channels licences 33,600 33,600
Cost of starter packs 24,464 19,497
RBT text and content 22,843 -
Data network leased lines 13,034 9,640
Cost of sim cards sold - 942
3,918,473 2,788,062
9. Other income
Profit on disposal of property, plant
and equipment 398 4,855
Sundry income 73,901 87,760
74,299 92,615
10. Selling and administrative expenses
Licences, marketing and other expenses 1,006,627 832,957
Staff costs and allowances 776,034 549,356
Depreciation and amortization 180,339 135,068
Office rentals and security expenses 151,927 98,336
Motor vehicle running expenses 125,322 71,295
Management fees 118,257 72,960
Insurance 67,129 34,453
Impairment losses on receivables 39,857 17,146
Audit fees 8,250 4,500Directors’ fees and expenses 7,888 6,880
2,481,630 1,822,951
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
11. Finance income and expenses
Interest on bank deposits 44,272 39,292
Interest on staff loan and other receivables 14,810 2,909
Total finance income 59,082 42,201
Interest expenses (115,678) (884)
Net foreign exchange loss (65,124) (2,589)
Total finance expense (180,802) (3,473)
Net finance (expense)/ income (121,720) 38,728
12. Income tax expenses
Current tax expense Current tax year 393,125 588,548
Adjustment for prior periods-
12,271
393,125 600,819
Deferred tax expense Origination and reversal of temporaly difference 149,564 103,748
Adjustment for prior periods - (12,271)
149,564 91,477
Total income tax expense 542,689 692,296
Reconciliation of effective tax rate Profit for the year 1,214,787 1,529,965
Total income tax expenses 542,689 692,296
Profit excluding income tax 1,757,476 2,222,261
2009 2009 2008 2008
Income tax using domestic rate 30% 527,243 30% 666,678
Non-deductible expenses 1% 17,531 0.72% 15,892
Taxation incentives (0.12%) (2,085) (0.11%) (2,545)
Under provided in prior periods - - 0.55% 12,271
30.88% 542,689 31.6% 692,296
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
13. Earnings per share
The calculation of basic earnings per
share at 31 December 2009 was based
on the profit attributable to ordinary
shareholders of K1, 214 million
(2008: K1, 530 million) and the weighted
average number of ordinary share in issue
for the year ended 31 December 2009.
Profit attributable to ordinary shareholder
for the year (K’000) 1,214,787 1,529,965
Weighted average number of shares (‘000) 10,040,450 8,958,023
Basic earnings per share (MK) 0.12 0.17
Weighted average number of shares (‘000)
Issued ordinary shares as at beginning of year
10,040,450
8,750,000
Effect of shares issued on 3 November 2008 - 208,023 Weighted average number of ordinary shares
at end of year 10,040,450 8,958,023
There are no dilutive potential ordinary shares.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
14.
Property, plant and equipmentEquipment Capital
Land and Motor Office work in
buildings machinery vehicles equipment progress Total
K’000 K’000 K’000 K’000 K’000 K’000CostAt 1 January 2008 502,931 3,573,045 195,326 251,880 218,665 4,741,847Additions 7,249 - 192,572 249,197 2,851,015 3,300,033Transfers 114,129 1,611,602 - - (1,725,731) -Disposals - - (12,526) - - (12,526)
At 31 December 2008 624,309 5,184,647 375,372 501,077 1,343,949 8,029,354
At 1 January 2009 624,309 5,184,647 375,372 501,077 1,343,949 8,029,354Additions 17,752 193,885 145,312 214,536 3,888,466 4,459,951Transfers 699,366 2,890,132 - - (3,589,498) -Disposals - - (2,613) (663) - (3,276)
At 31 December 2009 1,341,427 8,268,664 518,071 714,950 1,642,917 12,486,029
Depreciation andimpairment lossesAt 1 January 2008 54,473 1,426,497 63,370 104,558 - 1,648,898
Charge f or the year 26,364 441,313 49,224 73,219 - 590,120Disposals - - (7,818) - - (7,818)
At 31 December 2008 80,837 1,867,810 104,776 177,777 - 2,231,200
At 1 January 2009 80,837 1,867,810 104,776 177,777 - 2,231,200Charge f or the year 32,577 842,883 67,250 83,226 - 1,025,936Disposals - - (2,613) (79) - (2,692)
At 31 December 2009 113,414 2,710,693 169,413 260,924 - 3,254,444
Carrying amountAt 31 December 2009 1,228,013 5,557,971 348,658 454,026 1,642,917 9,231,585
At 31 December 2008 543,472 3,316,837 270,596 323,300 1,343,949 5,798,154
Notes ToThe Financial Statements (Cont’d)
f or the year ended 31st December 2009
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Telekom Networks Malawi Limited
14.
Property, plant and equipment (Cont’d)
A register of land and buildings giving details required under the Malawi
Companies Act 1984, Schedule 3, Section 16 is maintained at the registered
office of the company and is open for inspection by members or their duly
authorised agents. Property, plant and equipment were free of any charge and
were not pledged as security for any borrowings or facilities during the year.
No interest expense was capitalised during the year (in 2008, interest totaling
K79,104,307 was capitalised)
Capital work in progress represents land and buildings and equipment and ma-chinery still under construction and installation.
15. Intangible assets Computer software 2009 2008
K’000 K’000
CostAt beginning of year 52,254 46,858
Additions during the year 77,990 5,396
Balance at end of year 130,244 52,254
AmortisationAt beginning of year 16,498 6,275
Amortisation for the year 14,856 10,223
At end of year 31,354 16,498
Carrying amounts
At end of year 98,890 35,756
16. Inventories
Goods held for resale 181,956 179,218
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008K’000 K’000
17. Trade receivables
Trade receivables 873,126 430,037
Allowance for impairment losses (75,453) (35,596)
797,673 394,441
Other receivables
Staff advances 258,119 225,931
Deposits and prepayments 501,385 448,857 Other receivables 7,885 4,769
767,389 679,557
Total trade and other receivables 1,565,062 1,073,998
Movement in the allowance for impairment in respect
of trade receivables during the year was as follows:-
Balance at beginning of year 35,596 88,977Provision previously recognised in statement of
comprehensive income written off - (70,527)
Impairment loss recognised 39,857 17,146
Balance at end of year 75,453 35,596
The impairment loss recognised of K39, 857,000 (2008:K17, 146,000) relates to
post paid air time receivables and amounts due from dealers and distributors.
The ageing of trade receivables at the reporting date was:
Gross Impairment Gross Impairment
2009 2009 2008 2008
Not past due 126,043 - 102,592 -
Past due 0-30 days 124,349 - 102,208 -
Past due 30-120 days 425,327 - 96,036 1,594
Past due 121-360 days 107,731 9,857 94,825 7,504
More than one year 89,676 65,596 34,376 26,498
873,126 75,453 430,037 35,596
Substantial amounts in the receivables between 0 – 360 days are due from Zain
Malawi (K241 million), Emperion (K94 million) and Gateway (K80 million). Un-
der payables there are also amounts owed to Zain (K258 million) and Emprion
(K70 million) for similar transactions which may be offset against receivables.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008K’000 K’000
18a. Amount due from related party
Due from
Malawi Telecommunications Limited 8,216 7,112
b. Related party disclosures
The company transacts part of its business with shareholders and
parties related to or under the control of its shareholders. Details of such
related party transactions of the company are set out below:
Malawi Telecommunications LimitedInterconnection income (325,991) (392,122)
Interconnection charges 53,638 149,673
Leased circuit rentals (58,533) (79,521)
Leased circuit, co-sitting and data line charges 121,822 105,390
Net income (209,064) (216,580) Livingstone Exports Limited Premises rental 26,496 23,615
Old Mutual Life Assurance Company Limited Pension contributions and group life insurance 45,344 40,106 In addition, related parties, including shareholders, directors and parties
related thereto are subscribers to the company’s phone network for
which they are charged on an arms-length basis.
National Bank of Malawi Banking facilities with this fellow subsidiary of Press Corporation Limited
are disclosed in note 19.
Compensation of directors and key management personnel Directors fees 7,888 6,880 Senior management salaries and other
short-term benefits 31,895 29,471 Greenhurst (Anguilla, British West Indies) 118,257 72,960 With effect from January 2008, the Company contracted Greenhurst
(Anguilla, British West Indies) to provide management services for a
period of three years.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
19. Cash and cash equivalents
Bank and cash balances 425,073 247,119
Short-term investments 216,969 1,287,247
642,042 1,534,366
Bank overdraft (1,703,085) -
Cash and cash equivalents in the statement of
cash flows (1,061,043) 1,534,366
Bank facilities
The company has the following facilities:
First Merchant Bank Limited
Banking facilities including overdraft K997 million K500 million
From the K997 million banking facilities, US3 million was availed as a loan.
The balance will be utilised for overdraft and letters of credit.
These facilities are unsecured.
National Bank of Malawi
Overdraft facility K850 million K850 million
The bank overdraft facility is unsecured.
Note that the National Bank of Malawi overdraft facility expired on 31
October 2009 and the facility has been renewed to K1,500 million after
year end.
Standard Bank Limited
General short - term banking facility K1,500 million K800 million
The banking facility is unsecured.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
20. Authorised and issued ordinary share capital
Number (thousand) 10,040,450 10,040,450
Nominal value per share (Malawi Kwacha) 0.04 0.04
Nominal value (thousand Malawi Kwacha) 401,618 401,618
The holders of ordinary shares are entitled to receive dividends as
declared from time to time and are entitled to one vote per share on a poll atmeetings of the company.
21. Deferred tax (assets)/liabilities
Deferred tax assets and liabilities are attributable to the following items:
Asset Liabilities Net
2009 2008 2009 2008 2009 2008
Severance pay provision 32,068 21,035 - 32,068 21,035
Exchange difference 7,444 - - 7,444 -
Excess capital allowance - - 473,968 305,927 (473,968) (305,927)
39,512 21,035 473,968 305,927 (434,456) (284,892)
2009 2008
K’000 K’000
22. Interest bearing loans
Long term portion of loans 427,523 -
Short term portion of loans 14,742 -
442,265 -
During the year 2009 the company obtained a loan of US$3,000,000
From First Merchant Bank Limited as part of the banking facilities of up to
K997 million.
The loan is repayable over 60 months in equal principal installmentsof US$50,000 per month. Repayment will commence after one year
from the date of the draw down.
The rate of interest on the loan is 9.5% per annum. The loan is unsecured.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008
K’000 K’000
23. Employee benefits liabilities
Severance pay provisions
Balance at beginning of year 70,118 40,903
Charge for the year 36,774 29,215
Balance at end of year 106,892 70,118
24. Dividend liability
At beginning of year 200,809 -
Dividend declared 602,427 880,809
Dividend paid (602,427) (680,000)
At end of year 200,809 200,809
25. Deferred income
Deferred income consists of the value of unused prepaid airtime sold to
customers as at 31 December 2009.
26. Trade and other payables
Other payables 527,333 572,661
Accrued expenses 1,026,044 578,839
VAT and excise duty 92,949 155,641
Customer deposits 35,831 30,221
Total trade and other payables 1,682,157 1,337,362
27. Capital commitments
Authorised and contracted for 2,698,000 568,000
Authorised but not contracted for 2,556,000 497,000
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
28. Financial instruments-exposure to currency risk
TNM’s exposure to foreign currency risk was as follows based on notional
amounts:
2009 2008 K’000 K’000
US Dollar Bank balances 153,356 104,916
Trade receivables-International roaming 97,125 51,272
Trade receivables-International incoming traffic 173,287 -
Trade payables-International roaming (77,979) (68,234)
Interest bearing loans (442,265) - Other foreign liabilities (436,774) (154,981)
Statement of nancial position exposure (533,250) (67,027)
Euro
Bank balances 1,873 472
Trade payables-International roaming - (6,625)
Other foreign liabilities (87,282) (430,076)
Statement of financial position exposure (85,409) (436,229)
Gross currency risk statement of financial
position exposure (618,659) (503,256)
29. Sensitivity analysis
Foreign currency sensitivity analysis
Transaction losses arising on a 10 percent strengthening of the United
States Dollar and Euro against the Malawi Kwacha as at 31 December
would result in a decrease in equity and profit for the year as shown
below:
Equity and profit for the year
31 December 2009 US Dollar (37,328)
Euro (5,979)
31 December 2008
US Dollar (4,692) Euro (30,536)
A 10 percent weakening of the United States Dollar and the Euro against
the functional currency as at 31 December would have had an equal but
opposite effect.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
29. Sensitivity analysis (Cont’d)
Interest rate sensitivity analysis The sensitivity analysis below has been determined based on the
exposure to interest rates for the bank overdraft as at 31 December 2009.
The analysis is prepared assuming the amount of the bank overdraft
outstanding at 31 December 2009 was outstanding for the whole year. A
5% increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s
assessment of the reasonably possible change in interest rates.
If interest rates had been increased by 5% for all bank borrowings and allother variables were held constant, the company’s:
• Profit for the year ended 31 December 2009 would decrease by
MK 85,154,250 (2008: nil). This is mainly attributable to the
company’s exposure to interest rates on its bank overdraft;
The interest rate on the First Merchant Bank Limited loan is fixed.
2009 2008
K’000 K’00030. Financial instruments-exposure to
credit risk
The carrying amount of financial assets
represents the maximum credit exposure.
The maximum credit exposure to credit risk
at the reporting date was as follows:-
Trade and other receivables (note 17) 1,565,062 1,073,998
Amount due from related parties (note 18) 8,216 7,112 1,573,278 1,081,110
31. Financial instruments-exposure toliquidity risk
The following are the contractual obligations
due within 1 year which may affect the
liquidity of the company.
Financial assetsTrade and other receivables (note 17) 1,565,062 1,073,998
Amount due from related parties (note 18) 8,216 7,112
Bank and cash balances (note 19) 642,042 1,534,366
Total financial assets 2,115,320 2,615,476
Financial liabilities Bank overdraft 1,703,085 - Trade and other payables (note 26) 1,682,157 1,337,362
Net liquidity (exposure) /cover (1,269,922) 1,278,114
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
32.
Operating segments
32.1 Adoption of IFRS 8 Operating SegmentsThe company has adopted IFRS 8 Operating Segments with effect
from 1 January 2009. IFRS 8 requires operating segments to be
identified on the basis of internal reports about components of the
company that are regularly reviewed by the chief operating
decision maker in order to allocate resources to the segments and
to assess their performance. In contrast, the predecessor Standard
(IAS 14 Segment Reporting) required an entity to identify two
sets of segments (business and geographical), using a risks and
returns approach, with the entity’s ‘system of internal financialreporting to key management personnel’ serving only as the
starting point f or the identification of such segments.
32.2 Products and services from which reportable segmentsderive their revenuesThe company’s principal line of business is the provision of
telecommunication services. Information reported to and used
by the Chief Executive Officer for decision making for the
purposes of resource allocation and assessment of segment
performance is more specifically focused on the companys’sproducts or services. The principal categories of products and
services are air time post and prepaid, interconnection,
international roaming, and short messaging. The company’s
reportable segments under IFRS 8 are therefore as follows:
• Air time post paid;
• Air time prepaid;
• Interconnection; and
• Roaming.
The split of revenue into these streams is disclosed in note 7.
32.3 Geographical information The company’s operations are conducted throughout the country with offices in the major cities and towns in the country. The
international roaming revenue disclosed in note 7 is the amount earned from subscribers when they use the company’s services whilst out of Malawi and also includes the amount earned from subscribers of networks from other countries who use the
company’s services whilst in Malawi. The company operates an
international gateway for both incoming and outgoing traffic andthe revenue earned from such services is included in
interconnection revenue. Direct operating costs cannot be split
geographically and are aggregated and disclosed in note 8.
32.4 Information about major customersThe company’s customers are many and there is no single
customer that individually contributes more than five percent of
the company’s total revenues.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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Telekom Networks Malawi Limited
2009 2008K’000 K’000
33. Contingent liabilities
Legal claims (a) 10,050 12,450
Malawi Telecommunications Limited
claim for US$ 1.028 million (b) 151,603 -
Total contingent liabilities 161,653 12,450
(a) These represent legal claims made against the company in theordinary course of business, the outcome of which is uncertain.
The amount disclosed represents an estimate of the cost to the
company in the event that legal proceedings find the company to
be in the wrong. In the opinion of the directors the claims are not
expected to give rise to a cost to the company.
(b) This represent a claim made by Malawi Telecommunications Limited
(MTL) for loss of revenue when lightning struck their
transmission station equipment on 27 February 2009. MTL is
alleging that lightning strike damaged their equipment due to the
fact that a contractor employed by TNM excavated and damaged
the stations earthing installation which protects the station’s
equipment from lightning. The company is contesting the matter
and the claim.
34. Exchange rates and inflation
The average of selling and buying exchange rates at year end of major
foreign currencies affecting the performance of the company are stated
below, together with the increase in the National Consumer Price Index
which represents an official measure of inflation.
2009 2008
Kwacha/GBP 237.03 217.13
Kwacha/Euro 211.80 211.40
Kwacha/Rand 20.06 16.11 Kwacha/US Dollar 146 140.60
Inflation rate 7.6% 9.9% As at 8 March 2010 the above rates had moved as follows: Kwacha/GBP 231.87
Kwacha/Euro 207.35
Kwacha/Rand 21.45
Kwacha/US Dollar 150.8
Inflation rate (February 2010) 8.2%
35. Events after reporting date
Subsequent to the reporting date no events have occurred which require
adjustment to or disclosure in the financial statements.
Notes To The Financial Statements (Cont’d)
for the year ended 31st December 2009
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TNM is a licensed mobile telecommunications operator in Malawi enjoying 62% and 33%
market share in post-paid and pre-paid sector respectively. TNM’s brand “always with you”
is clearly identified as Malawian and portrays best customer value and service availability.
TNM’s principal colour green, is fresh and synonymous with Malawi’s prosperity derived
from agriculture and the environment.
TNM offers services and products designed to meet the needs and desires of its subscriber
base in Malawi which is primarily divided into price-conscious pre-paid and premium-
paying post-paid subscribers
Key achievements
> 77 new base stations commissioned
> New products and services were introduced > More focused corporate social responsibility
Financial highlights
> 60% growth in subscribers to 828,000
> 22% growth in revenues
> 6% growth in EBITDA
> 21% decline in net profit
Revenues MK 8.2bn
EBITDA MK 2.8bn
Profit after tax MK 1.2bn
ARPU MK 1,014 ARPU US$ 6.9
Shareholders’ funds MK 6.8bn
Long-term debt MK 428m
Market capitalisation MK 33.1bn
Shares in issue at year end 10,040,450,000
Earnings per share MK 0.12
Market price per share (as at year end) MK 3.30
Return on equity % 18
EBITDA margin % 35
Contents
1 Our statement of vision
2 Letter of the Chairman of the board
4 Your directors
6 Management Letter
17 Corporate Social Responsibility & the
Environment
22 Executive management
25 Director Annual Report
28 Annual Financial Statement
?? Notice Annual General Meeting
?? Form of Proxy
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Our statement of vision
1
Vision Always with you
Mission Our mission is to be "Malawi’s premier mobile company of choice, offering best in
class mobile telecommunication services to people everywhere." Premier means
best in terms of:
> Customer value
> Customer service
> Employee talent
> Consistent and predictable growth
As Malawi’s Premier mobile company we will enable people and businesses to realise
their full potential. In doing so, our mobile services will contribute to the growth
and development of the Malawi economy.
Values CustomersWe value all our customers and treat them with respect, providing
friendly, courteous, knowledgeable and prompt service at all touch points. We
never forget that they come to us by choice. We seek and are driven by our
customers' feedback. We are committed to direct relationships and outperforming
the competition with value and a superior customer experience.
IntegrityWe operate with unyielding integrity, obeying all laws and adhering to a
stringent code of business conduct. We will not tolerate unethical business conduct
by our team members. We will act with integrity and respect towards all.
ExcellenceWe continually raise our performance to exceed customer and shareholder
expectations. We strive to be the best in quality and in everything we do.
PeopleWe are an equal opportunity employer and we value, respect and empower
our people. Providing an environment where diverse individuals can develop and
are expected to perform to their full potential. Teamwork is key; respecting new
viewpoints, diversity, building trust, enhancing communications, and sharing best
practices to deliver world-class products and services.
Malawian Identity We are committed to our roots and our corporate social
responsibility, Green or otherwise. We share an infectious sense of mission to
make an impact on society and community at large. We reach out to and empower
our customers in ways never before possible. Ourgoal is todevelop mobile
telecommunication services and offerings that are accessible and within reach of
every Malawian. In so doing giving every Malawian the means and ability to reach
their full potential and allow them to play a full role in the development of Malawi.
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Letter of the Chairman of the Board
Overview
The past year saw an aggressive rollout of new and innovative products
and services. TNM also continues to prioritize the expansion of coverage
and capacity with an emphasis on quality, reliability, and efficiency.
Despite the worldwide economic downturn and a range of
outside factors, including limitations on availability of foreign exchange and
fuel shor tages, TNM was able to achieve key milestones. In 2009, we were
the leader in implementing cutting-edge data services, including GPRS,
Edge, and 3.5G. This was a first for TNM and a first for Malawi.TNM built 77 BTS sites, increasing connectivity and mobile phone
penetration. We guaranteed a completely redundant core network which
improved TNM's accessibility, dependability, and quality. The newly completed
Lilongwe technical centre assures absolute geographic redundancy and
will serve both the central and northern regions. These redundancy efforts
are a par t of TNM's comprehensive business continuity plan.
TNM undertook a complete and thorough audit to identify areas
of needed improvement. We were able to prioritize actions that emphasized
quality and reliability. This resulted in TNM proactively identifying and solving
problems before they could impact or inconvenience customers.
2009 was an important year in terms of major upgrades and
capacity expansions. TNM developed its core network capacity to serve
a base of two million subscribers, allowing for substantial future growth
with minimum capital outlay.
Looking ahead, our focus will be a continued aggressive rollout
of coverage and capacity expansion, while at the same time, looking to
enhance efficiencies from a cost perspective. The result will be further
improvement in availability, reliability, and quality.
In the coming year, TNM is looking forward to expanding itscommitment to the environment and clean energy with the introduction
of hybrid electric power supplies in rural areas. This will result in less
reliance on generators and diesel fuel.
We continue to value our Malawian identity. As a Malawian
company that is successful and capable of delivering services of an
internationally competitive standard, we are creating a new model and
becoming an industry leader. TNM understands Malawi and the market
because we are a part of it. We are making decisions as Malawians, which
allows us to better serve our clients.
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Matthews Chikaonda 3 April 2009
Dividends
Total dividends of MK 602.4 million (MK0.06 per share) will have been declared and
paid for the year ended 31 December 2009 as follows:-
MK 200.8 million 2t per share was declared and paid in October 2009
MK 200.8 million 2t per share was declared in December 2009 and was paid in
January 2010.
MK 200.8 million 2t to be declared at the upcoming AGM
Subscribers and Summary Financial Results
The program of network expansion continued through 2009 with an expenditure of
MK4.4billion on new network elements. This included acquisition of a new switch to
provide enhanced capacity and redundancy, commissioning of a further 77 BTS sites,
roll out of GPRS/Edge, first to launch 3.5G services in the major cities of Blantyre and
Lilongwe, electronic voucher distribution and several new value added offerings.
Investment in the network and related marketing initiatives has seen a 60%
growth in subscriber base from 517,000 (end 2008), representing a 29% market share,
to 828,000 (end 2009), representing a 33% market share based on active customer
definition of chargeable outgoing call activity within 90 days. This translated into a 22%
increase in revenues as, not unexpectedly, ARPU declined from US$8.2 to US$6.9
which remains healthy in comparison to peer markets.. This translated into a 22%
increase in revenues as, not unexpectedly, ARPU declined from US$8.2 to US$6.9
which remains healthy in comparison to peer markets.
Revenue, EBITDA and ARPU
EBITDA margin was also negatively impacted by the cost of mitigating persistent outagesof power supply and a 50% increase in the cost of subsidizing low cost handsets to
increase market penetration. Nevertheless, in absolute monetary terms, 2009 EBITDA
was 6% higher than that achieved in 2008. However, an increase of MK440million in
depreciation charge on the company's greatly enhanced fixed asset base and finance
charges of MK115 million on local borrowings has seen net profit decline from
MK1.5billion in 2008 to MK1.2billion in 2009.
Prospects and Forecast 2010
Moving into 2010, TNM continues to invest in network quality, capacity and coverage,positioning itself to further grow its subscriber base. In line with our mission statement,
we remain committed to connecting the country and will continue to roll out coverage
network to more areas. The 3.5G layer will be made available in more centres, thus
providing subscribers with higher speed data transfer and internet access.
We remain focused on increasing the subscriber base, customer retention, and
revenue maximization while maintaining strategic cost control. Despite many challenges,
principal among which is limited access to foreign exchange, the company is confident
of delivering real growth in line with expected overall economic growth, and an increase
in national telephone penetration levels.
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Dr. Matthews AureliousPadzuwa Chikaonda,56,Chairman and non-executive Director BA(Hons), Dip. Business,MBA, Ph. D. Dr
Chikaonda served asAssistant and AssociateProfessor of Finance(1988-1991 and 1992-94, respectively) atMemorial University of Newfoundland inCanada. In addition toexecutive managementand corporaterestructuringexperience, Dr.Chikaonda has over 14
years experience ineconomic management,policy formulation andimplementation atnational level. Dr Chikaonda served asDeputy Governor (1994-1995) and later as Governor (1995-2000) of the ReserveBank of Malawi. InMarch 2000, he was
appointed to theCabinet and served in the Government of Malawi as Minister of Finance and EconomicPlanning until January 2002. Dr. Chikaonda hasbeen Chairman of theTNM Board since hisappointment thereto on5th April 2007. In April2002, Dr Chikaonda wasappointed to his presentposition of Group Chief Executive of PCL.
Mr. Hitesh NatwarlalAnadkat, 49, Vice
Chairman and non-
executive Director
Masters of Business
Administration, Bachelor
of Science Economics(Hons). Prior to
returning to Malawi to
establish First Merchant
Bank, Mr Anadkat
worked in a corporate
finance house in USA
specialising in mergers,
acquisitions and
valuations. Mr. Anadkat
holds chairmanships and
Directorates andbusiness interests in a
number of other sectors
of the Malawian
economy, principally
banking, manufacturing
and property
development.
Mr. Kenneth HudsonPeter Mthuzi, 48, non-executive Director Bachelor of Commerce,Diploma BusinessAdministration, Fellow
Chartered CertifiedAccountant. Mr. Mthuzicurrently serves as Chief Corporate Affairs Officer of MTL prior to whichhe served asMTL’sInterim Director of Finance. He haspreviously worked for Deloitte and Touche andPress Corporation asHead Group InternalAudit.
Mr. Pius Percy Mulipa,56, non-executiveDirector Bachelor of Arts, Diploma (Mgt.),MSc (Mgt.) Mr. Mulipa isGroup Operations
Executive in PressCorporation and isresponsible for theoperations of seven of the Press Group’ssubsidiary and associatecompanies. He has heldvarious senior management positionswithin the PressCorporation Groupover the previous 17years.
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Your directors
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Mr. John M. O’Neill, 55,non-executive Director BSc in Mathematics andManagement Sciences,FCA. Mr. O’Neill is anExecutive Director of
First Merchant Bank andhis previous experienceincludes a career of 17years with internationalaccountancy firmDeloitte, in the UK andMalawi, including sixyears as a partner in itsMalawi practice. Heholds numerous other Directorships incompanies in varioussectors of the economy.
Dr Stephanus JohannesMinnar 42 Steve holdsa PhD in Engineeringfrom StellenboschUniversity, where he alsocompleted his B.Eng and
M.Eng degrees inindustrial/ MechanicalEngineering. He alsoholds a B.Com(honours) degree inFinance from theUniversity of Cape Townand is a CFA charter holder. He serves on theadvisory committee of the Engineering faculty of the University of Stellenbosch.
Dr Harry SamHarrisson Gombachika45 , BSc EEng, Dip Eng,MSc EEng, PhD(Telecommunication). Dr Gombachika is a senior
Lecturer inTelecommunicationEngineering at theMalawi Polytechnic,University of Malawi.Heis currently the Dean of Postgraduate Studies andResearch at thePolytechnic. He hasserved in variousUniversity of MalawiCommittees. Currently he is a Senate
Representative of theUniversity Council. Inaddition he is an externalexaminer for MastersDegree(TelecommunicationMajor) thesis at theUniversity of Botswana.He has conductedresearch and publishedon various issues of wireless networking
both fixed and mobile.
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Mr. James AdhemarRegout, 59 , non-executiveDirector Masters of Business Administration inEconomics. Mr. Regout isan experienced portfolio
manager currently servesas External InvestmentsManager for Old MutualInvestment Group (SA)with executiveresponsibility for OldMutual Malawi’s assetmanagement operations,regional listed equity portfolios and a globalprivate equity fund of funds. Mr. Regout also holdsDirectorates in a number
of prominent companiesin the Malawi economy.
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The Executive Management team prides itself on effective leadership.
When an issue arises the team works together to solve problems
harmoniously and by prioritizing the needs of the company.
There is intense staff engagement at all levels, which results in a
strong work ethic and feeling of being part of a team. TNM has a clear
open-door policy, a receptive forum for ideas, and an intentional lack of
bureaucracy.
We focus on development and training, enabling all of our staff
to expand skills and fostering initiative. This year we have prioritized
investing in staff capacity and in building knowledge expertise both at
home and abroad.
This included a staff fact-finding missions to both France and China.
Extensive training from foreign specialists maximizes knowledge transfer
and results in superior competence in new technologies and equipment.
TNM's Human Resource Department is mid-way through a two
year strategic initiative focusing on three areas: talent management, staff engagement, and the creation of an enabling environment. Our entire
staff participated in an employee satisfaction survey and we achieved an
outstanding 65% satisfaction level, clearly demonstrating that employee
satisfaction is at a record high.
We also implemented the Paterson Based Grading System, which
allowed us to take an over-arching, comprehensive look at each position
description and evaluate and improve each one. The new system has
resulted in greater staff engagement and retention. We have also rolled
out a Balanced Scorecard which allows each staff member to evaluate
his/her contribution to the company's mission.
This is one of the most prominent systems in the world, and
because it is not yet common among other Malawian companies, it makes
TNM an industry leader in performance management.
Finally, one of the most exciting initiatives undertaken this year is the Staff
Wellness programme. Activities range from HIV/AIDS counseling to stress
management and healthy eating.
This is just one more innovative way that we encouraged
healthy living amongst the TNM family.
"Being a team means you have a common purpose, common values, thatyou have cohesion and are all moving in the same direction. It means that
success in business is shared - no one here feels that one person is
"Being a team means you have acommon purpose, common values, that youhave cohesion and are all moving in thesame direction. It means that success inbusiness is shared - no one here feels that one person is responsible - success is achieved and enjoyed as a team."
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"TNM's corporate culture is a feeling of personal
empowerment within the company. This is true in terms
of ownership, in terms of decision making, in terms of
engagement, and perhaps most importantly, in terms of
mutual respect." David Chetty, Chief Technical Officer
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responsible - success is achieved and enjoyed as a team."
Charles Kamoto, Head of Commercial
Products and Services
"It is important that TNM is a Malawian company; it means
that we know the country, know the people, and know the
market. It means that we can develop products tailor made
for Malawi. It allows us to be more innovative and deliver
products that our customers need and want." - Reuben
Kocherani, Regional Distribution Manager
The key focus in 2009 was in data services. In a rapidly
changing world and competitive industry, significant
investment has been placed into ensuring high quality
services and up to date technologies. In the first part of
2009 TNM launched GPRS services, which enabled it todevelop solutions for Corporate and individual needs
giving TNM opportunity to grow.
The launch of GPRS made the access of internet
easier as it has enabled customers to use their handsets
to connect to the world. This is especially true with the
youth, who are now able to access popular social websites
such as facebook, with ease and at affordable rates. The
youth has been an important consideration in the launch
of products launched in 2009.This led TNM to launch such services as SMS
fun and caller tunes. On the Corporate front the launch
of GPRS allowed TNM to launch windows mobile in
November 2009. This is the ideal solution for many
corporate executives who are always on the go. Through
Windows Exchange Server, users are able to connect
and synchronise with their Windows based mail, calendar
and Office pragrams
As TNM aims to be the leader in broad band
connectivity services and in December 2009, TNMbecame the first mobile operator to launch 3g services.
The launch means TNM can now offer cutting
edge services such as video calls, video and music streaming,
high speed wireless internet access services 4-5 times
faster than 2.5g and any other ISP provider on the market.
With a maximum connection speed of 3.6
megabits per second TNM’s internet connection will
transform the data service market in Malawi as well as
contribute to the development of the country."Developing products and services with Integrity
means promising something and being able to deliver." -
Daniel Makata, Strategy and Planning Manager.
We are proud that
with the exception
of two seniorexecutives,
Malawians run this
company.
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Developing products and services withIntegrity means promising something and being able to deliver
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Network (Technical)
Our technical achievements for 2009 were truly
outstanding as we successfully completed major upgrades
and capacity expansions. We introduced a new multi-
vendor strategy that includes Alcatel as well as Huawei.
The Legacy Alcatel network was fully replaced with
NGN and further capacity upgrades for Huawei NGN
are planned. Huawei Call Server and Media Gateway
were commissioned and there was a Huawei OCS trial.
Through Huawei, we were able to introduce
3.5G. Phase 1 of 40 Node B's will be completed in
early 2010 and this past year saw the completion of the Lilongwe Technical Centre. We also established
Optima, Connect and Asset from AirCom and
completed Phase 2 of Swap out.
There are a total of 77 new BTS sites and 50
Capacity Upgrades. New SMSC resulted in value added
services platforms and there was full redundancy of
both the core and the transmission networks. We are
also proud to have introduced a real time network
performance monitoring system.
In terms of connectivity, we strengthened our
quality and reliability through the International Satellite
Gateway and now offer higher bandwidth and internet
speed through our connection to the SEACOM Cable
running via Mozambique.
"TNM is unique in that all of our technicians
are TNM employees. We don't outsource. This means
we are always on call; it means that we are efficient and
that we can immediately respond to problems and find
effective solutions." - Fyness Zulumbi, NSS Senior Technician
Sales and Services
"Let me tell you what it means to be customer-centric:
all of our decisions are driven by the customer. New
products, new pricing, new networking - all of it is first
put to a customer focus group. When we have
something new, we offer it because we know firsthand
that there is demand for it, not because it might be the
new hot technology." - Daniel Makata, Strategy and
Planning Manager
TNM promised growth and expansion and we delivered.
TNM maintained above 60% market share on Post Paid
(handset based long term contracts) through a successful,
proactive, major account approach. In the past year,
we tripled the number of Points of Sale, achieving a
95% service level. TNM also took the lead in third party
distribution and we maintain a hugely competitive positionwithin the corporate and high-end segment of the mobile
market, as well as the mixed and low-end segment.
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"It is important that TNM is a Malawian company; it
means that we know the country, know the people, and
know the market. It means that we can develop products
tailor made for Malawi. It allows us to be more innovative
and deliver products that our customers need and want."
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Wilma Chalulu, Public Relations and Sponsorship Manager
Our loyalty bonus program continues to lead in the industry. Its
ease of use allows clients to benefit from their bonuses without
restriction. Customers are automatically credited every sixteenth
day. This programme benefits customers and will further ensure
customer retention.
Distribution
"I always strive for excellence. I am results driven. To achieve
excellence in distribution, our strategy is 'everywhere all the time.'
That is excellence." - Tom Kaponda, Distribution Manager
Strengthening market position and increasing area coverage in
2009 meant a close analysis of our distribution strategy. Thisresulted in many innovative improvements and fine-tuning our
distribution policies and procedures. In particular, we decentralized
our distribution management systems.
The introduction of three regional managers has resulted
in increased output, improved responsiveness, and enhanced
overall management.
In 2009, we increased our number of distributors to 30, from 22
in 2008. We also increased our retail dealers from 5,000 in 2008
to over 12,000 in 2009.
Another outstanding development was the introduction
of the wholesale channel, which fills the gaps between sales visits
in rural areas. With a total of 168 wholesalers, TNM increases
its availability of services and can truly be everywhere all the time.
This new programme allowed for an automatic penetration of
TNM airtime in the wholesale market.
Finally, we were able to introduce EVD and bank ATMs,
including NB, Standard Bank, NBS, IndeBank, EcoBank, and FMB.
This results in greater access to TNM products and ease of use
for customers. "I know all of our Distributers. I know their names. I know their cell phone numbers.
They call me anytime they need something, any time of
day, even on the weekends. We make sure that we mean 'TNM,
always with you.' Thanks to our team and our distributers, we
are always with you." - Reuben Kocherani, Regional Distribution
Manager
Research and Development (PP - IT, Customer Operations)
"I have a passion for customer service. When customers call, Iput myself in their shoes. I understand where they are coming
from and then work to find a solution. TNM is a pioneer in quality
customer service and I love being a part of that." - Maggie Bisani,
Team Leader, Call Center
TNM understands that when products and services are
similar, it is the customer service that sets us apart from the
competition. Exceptional customer service delivery gives us a
competitive edge and differentiates us from the competition.
Excellent customer service is paramount to our success. One of the most important developments this year has been the
deployment of our new Customer Relationship Management tool,
Maximizer.
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"TNM has been with us through thick and thin. It is an
amazing gift to have such a true friend to the sport.
TNM is unique in this sponsorship as they committed
generously when other companies shied away. They saw
the wisdom in investing in football and we have notdisappointed them. TNM is football in this country."Walter Nyamilandu Manda, President of the Football Associate of Malawi
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Corporate Social Responsibility and the Sponsorship
TNM and the EnvironmentTNM has always emphasized being "green", believing that while
Malawi is one of the most beautiful countries in the world, we
are suffering from environmental degradation. This year, TNM
demonstrated its commitment to environmental responsibility
through two CSR programmes.
The first is a tree planting initiative, Every Child Plant a
Tree Programme, in partnership with Heritage Environmental
Trust. Sixteen schools were selected in Zomba for the pilot
programme and TNM provided trees for every child in theseschools. Together with the youth, TNM staff helped plant the
thousands of trees, giving us an opportunity to teach these children
about grassroots development, sustainable growth, and Malawi's
inherent beauty.
The most exciting element of the project is that we are imparting
values and helping Malawian youth acquire habits that will lead
to a healthier and more beautiful country. The programme wassuccessful and TNM will continue to support such initiatives
helping to keep Malawi forever green.
Our second environmental CSR programme was to
create environmental awareness within the city of Blantyre. At
the end of a month long Sanitation awareness campaign, TNM
donated dustbins to the city, hoping to encourage a promotion
of environmental issues.
The dustbins were placed strategically around the city in
an effort to keep Blantyre clean. TNM hopes to build on this
programme, create Clean Campaigns and further beautify Blantyre.
TNM Super League
TNM is the proud sponsor of the largest Football League in
Malawi. TNM began its relationship with Malawian football in
2005 when we signed an unprecedented MK150 million three
year contract. TNM was able to come in at a time when
Malawian football was really in need and Malawians were
unable to support the game they love most. Without TNM's
commitment, there was a chance that on a Corporate Sponsorshiplevel, the sport would become extinct.
The sponsorship has been incredibly successful and fruitful
and this year, we signed an additional three year contract worth
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Our staff is so committed to our corporate and social responsibility projects
that they actually fight over who gets toparticipate. Everyone wants to beassociated with our various programmes.
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MK180 million.
Through a careful and responsible sponsorship, TNM has helped
football grow and develop in healthy ways, ensuring that the sport
is played with honor and integrity. We believe that football brings
people together; it cuts across the fabric of our society, and unites
Malawi.
Football in this country is moving forward and we are getting
recognition on an international level. This year, Malawi qualified
for the Africa Cup of Nations for the first time in twenty-five
years. The Super League provides a platform from which talented
players can excel and be recognized internationally.
This League is a chance to thank our supporters and give
back to our fellow country men and women. "TNM has been
with us through thick and thin. It is an amazing gift to have such
a true friend to the sport. TNM is unique in this sponsorship as
they committed generously when other companies shied away.
They saw the wisdom in investing in football and we
have not disappointed them. TNM is synonymous with football.
TNM is football in this country." - Walter Nyamilandu Manda,
President of the Football Associate of Malawi
Golf TNM has been a friend to golf for many years. In 2009 we were
again proud to be associated with the prestigious Malawi Open
– the biggest golf tournament in Malawi. The quarterly mug
sponsorships also continued in Blantyre and Lilongwe Golf Clubs.
We believe these Sponsorships will strengthen the brand and
foster loyalty.
Earthquake Victims
TNM is part of a larger community. When we see our fellow
Malawians in trouble, it is our duty to contribute and to help in
any way we can. When the earthquake hit Karonga in December,
TNM was there, on the ground, assessing needs and distributing
goods. As the biggest need was for shelter, TNM donated large
family tents and also contributed airtime so that both community
members and emergency workers could easily communicate. In
total, TNM contributed MK 1.5 million worth of goods and services
to those in need.
This was a short term project but one that made a
difference and emphasized TNM's commitment to the larger Malawian family.
"The TNM staff are exceptional in their commitment and
Malawi is passionate about footballand TNM's sponsorship is a way to giveback to the people who make us
successful.
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YONECO has a real partnership with TNM. When we
see a social problem arise, we approach TNM and work
out solutions together. YONECO is supported on every
level by TNM's staff, all the way to the CEO who makespersonal appearances at YONECO events and programmes.
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The TNM staff are exceptional in their commitment and
excitement. Everyone is passionate about being Malawian.
TNM is a truly Malawian company, not only looking atMalawi today, but Malawi in the future.
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excitement. I think it comes back to being Malawian.
Everyone here is so passionate about being Malawian and TNM being a Malawian company and
they are ready to give back." – Mpezenji Gonani, Human Resources Officer.
YONECO
YONECO, or Youth Net and Counseling, is a national non-profit, non-governmental organization
created in 1997. Its vision is a self-reliant HIV/AIDS free society that respects democratic values
and principles. YONECO focuses on several areas, including Youth Development, which includes
economic development, youth leadership, health, and education. The Care and Support programme
offers innovative initiatives that promote self-reliance through material and psychological support.
YONECO has also developed a Human Rights and Democracy programme intended to
promote public service and accountability, civic education, political participation and human rightsmonitoring.YONECO's Women and Children programme promotes women's education, economic
empowerment, and health. Within this programme, YONECO has partnered with TNM to establish
the first national Tithandizane Helpline, a free phone line that connects youth to professional
counselors who can provide information on sexual and reproductive health, human rights, HIV/AIDS,
and respond to reports of child abuse.
The Helpline receives more than two hundred calls every day. TNM provides the airtime, allowing
the helpline to remain free for callers. TNM further demonstrated its commitment to this issue by
sponsoring the Fifth Africa Regional Child Helpline Consultation Conference in September of 2009.
YONECO has a real partnership with TNM. When we see a social problem arise, YONECO
can approach TNM and work out solutions together. We work together to support initiatives on
the ground and react quickly. YONECO is supported by every level of TNM's staff, all the way to
the CEO who makes personal appearances at YONECO events and programmes’” - Macbain
Mkandawire, Executive Director, YONECO.
As stated on the cover of this 2009 Annual Report: “We promised expansion and growth.
We delivered”. I can guarantee you that all at TNM will continue to do so in the years to come.
On behalf of the team,
TNM is a profit driven company
but they realize that they owe their success to the Malawian peopleand they are eager to invest their profits back into the community -
into the future of the country, and the future is young people.
Werner Schrijver Chief Executive Officer
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Executive management
Mr. Werner Schrijver, 58, Chief Executive Officer Mr. Werner
Schrijver holds a Bachelor of Arts in Business Administration
and has been commercially responsible for three international
mobile telecommunications start-ups having worked for such
companies as T-Mobile International, Tele Denmark International
and KPN Telecom International. In both the B2B and B2Cmarkets, Mr. Schrijver has had more than 20 years experience
managing large units (1,000 employees plus) at board level.
Mr. David Chetty, 45, Chief Technical Officer Mr. David Chetty
holds a National Telecommunications Diploma and a National
Higher Diploma in Post-School Education and since 1984 has
experience in start up telecommunications companies and
has worked in senior management positions with MTN,
Celtel, Swedtel and Nokia in Africa and the Middle East
Mr. Macleod Duncan Matandika, 40, Chief Financial Officer
Mr. Macleod Matandika holds a Masters in Business
Administration and is an accountant from the Polytechnic.
He joined the company at its commencement as the
Operations Accountant up to 1998. He has wide experience
in the mobile industry and has been part of the growth of
the company. Prior to his appointment as Chief Financial
Officer in April 2008 he worked as a Management Accountant.
Mr. Charles Kamoto, 35, Head -Commercial Mr. Charles Kamoto
holds a Bachelor of Business Administration and currently
undertaking an MBA program. Mr. Kamoto has over 9 years
experience in the Telecommunications arena. Having joined
the Company as Branch Executive in 2000.He has held a
range of positions during his tenure 6 of which has been in
excecutive management.
Mrs. Christina Mwansa, 36, Head- Legal & Corporate AffairsMrs. Christina Mwansa holds a Bachelor of Laws Honours
Degree from Chancellor College, University of Malawi. She
joined the Company in 2000 as Legal Officer and later the
same year was appointed Company Secretary. She has been
a licensed legal practitioner for over 10 years.
Mr. Patrick Mtamba, 36, Head - Human Resources &
Administration Mr. Patrick Mtamba hold a Bachelor of
Business Administration. He joined TNM in 2009 and hasextensive experience in Human Resource Management &
Administration.
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Mr. Charles Kamoto, Mr. Patrick Mtamba, Mrs. Christina Mwansa, Mr. Werner Schrijver,
Mr. Macleod Duncan Matandika, Mr. David Chetty
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Our management team implements the long term strategyand vision of the company to generate shareholder value
and positive relations with stakeholders
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Form of Proxy: TNM 15th Annual General Meeting
Please read the Notes overleaf before completing this form. This form is for use only byregistered or certified shareholders.
Form of Proxy for the 14th Annual General Meeting [AGM] of Telekom Networks MalawiLimited.
I/We………………………………………………………………………………………………….…………………[name(s) in block letters]
of ……………………………………………………………………………………………………..………………….[address]
being a shareholder / member of the above-named company and entitled to
do hereby appoint
1. …………………………………………………………..….of……………….……………………………………[or failing him/her]
2.……………………………………………………………….of……………….……………………………………[or failing him/her]
3. the Chairperson of the meeting
as my/our proxy to attend, speak and vote for me/us or on my/our behalf at the AnnualGeneral Meeting of the company to be held at the Njamba Room, Mount Soche Hotel on18th June, 2009 at 2-00pm and at any adjournment thereof as follows:
Agenda item
1. Approval of minutes of previous AGM
2. Adoption of the 2008 annual financial statements
3. Re-election and appointment of the following directors
3.1 To re-elect Mr Pius Percy Mulipa
3.2 To re-elect Mr John Michael O’Neil
3.3 To confirm Dr. Harry Sam Harrison Gombachika’s
appointment
3.4 To confirm Dr. Stephanus Johannes Minaar’s
appointment
4. Approval of directors’ remuneration
5. Approval of audit fees
6. Appoint Deloitte & Touche as Auditors for the 2009 financial year
7. Declaration of final dividend
Mark with ‘X’ where applicable
Number of votes
[ 1 Share = 1 vote]
In favour Against Abstain
62
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Signed at ……………………………………… on this …….…………….. day of
..………………… 2009
Signature
………………………………………………………………………………………………
Assisted by me [where applicable] [see Note 3] ……………………………………….............
Assisted by me [where applicable] [see Note 3] ……………………………………….............
Full name(s) of signatory(ies) if signing in a representative capacity [see Note 4]
………………………………………………………………………………………………
…………………………
Notes:
A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak and vote in his/her/its stead. A proxy need not be a member of the company.
If this proxy form is returned without any indication as to how the proxy should vote, the proxy
will be entitled to vote or abstain from voting as he/she thinks fit.
A minor must be assisted by his/her guardian.
The authority of a person signing a proxy in a representative capacity must be attached to the
proxy unless the company has already recorded that authority.
In order to be effective, proxy forms must reach the registered office of the Company;, Livingstone
Towers, Fifth Floor, Glyn Jones P.O. Box 3039, Blantyre, Malawi or the transfer secretaries; FMB
Transfer Secretaries, Livingstone Towers,2nd Floor Glyn Jones Road, Private Bag 122, Blantyre,Malawi by no later than forty eight (48) hours before the time of holding the meeting.
The delivery of a duly completed proxy form shall not preclude any member or his/her/its duly
authorised representative from attending the meeting, speaking and voting instead of such duly
appointed proxy.
If two or more proxies attend the meeting, then that person attending the meeting whose
name appears first on the proxy form, and whose name is not deleted, shall be regarded as
the validly appointed proxy.
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& P r i n t e d b y N o t i o n
C o m m u n i c a t i o n s L t d T e l 0 1 8 3
2 0 3 5 / 0 3 6 i n f o @ n o t i o n l i v e . c o m