Financial definitions

The following financial terms are used in the annual financial statements with the meanings specified:

Asset exchange transactions		Transactions where one or more items of property, plant and equipment are acquired in exchange for non-monetary assets, or a combination of monetary and non-monetary assets.
Associates		All entities over which the Group has significant influence, but not control, over the financial and operational policies.
Available-for-sale		Non-derivative financial assets either designated as available-for-sale or not classified in any of the three categories of financial instruments.
Cash-generating unit		The smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets.
Carrying amount		Is the amount at which the asset is recognised after deducting any accumulated depreciation (amortisation) and accumulated impairment losses thereon.
Commercial substance		A transaction has commercial substance if the difference in either of the points below is significant relative to the fair value of the assets exchanged: the configuration of the cash flows of the asset received differs from the configuration of the cash flows of the asset given up; or the entity-specific value of the part of the operations affected by the transaction changes as a result of the exchange.
Contingent liabilities		Represent possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. Contingent liabilities also represent present obligations that arise from past events but are not recognised because an outflow of resources is not probable or a reliable estimate cannot be made.
Control		When the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group has power over an entity when it has existing rights that gives it the current ability to direct the relevant activities that significantly affect the entity’s returns.
Defined contribution plan		A post-employment benefit plan (such as a pension plan) under which the Group pays a fixed percentage of employees’ remuneration as contributions into a separate entity (a fund), and will have no further legal or constructive obligations to pay additional contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
EBITDA		Earnings before interest, tax, depreciation, amortisation and goodwill impairment.
Financial assets at fair value through profit or loss		A financial asset that is held for trading (acquired principally for the purpose of selling the item in the short term) or designated upon initial recognition as at fair value through profit or loss.
Finance leases		Leases over property, plant and equipment are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Functional currency		The currency that best reflects the primary economic environment in which the entity operates.
Gain or loss on disposal of an asset		The difference between the proceeds from the disposal and the carrying amount of the asset.
Goodwill		The excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed.
Held-to-maturity investments		Non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity other than those that the Group upon initial recognition designates as at fair value through profit or loss and those that are loans and receivables.
Interconnect revenue		Revenue derived from other operators for local and international incoming voice minutes, short messaging service (SMS) and multimedia service (MMS).
Joint arrangement		A contractual arrangement whereby the Company and other parties undertake an economic activity which is subject to joint control.
Joint operation		Joint arrangements whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement.
Joint ventures		Joint arrangements whereby the parties that have joint control of the arrangement by unanimous consent have rights to the net assets of the arrangement.
Loans and receivables		Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Measurement period adjustments		Adjustments that arise from additional information obtained during the “measurement period” about facts and circumstances that existed at the acquisition date. The measurement period constitutes the period after the acquisition date during which the acquirer may adjust the provisional amounts recognised for a business combination. This period shall not exceed one year from the acquisition date.
Multiple element arrangements		Postpaid and prepaid products with multiple deliverables.
Non-controlling interests		The amount of those interests at the date of the business combination and the non-controlling interests’ share of changes in equity since the acquisition date.
Postpaid product		The sale of a service contract, which may include the sale of a handset.
Prepaid product		The sale of a subscriber identification module (SIM) card and airtime.
Presentation currency		The currency in which the financial statements are presented.
Qualifying asset		An asset which takes more than 12 months to acquire, construct or produce.
Recoverable amount		The greater of an asset’s value in use and its fair value less costs to sell.
Relative fair value method		The allocation of the consideration received /receivable in a transaction to each element of a multiple element (or bundled) arrangement according to their stand-alone selling prices.
Revenue		The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.
Roaming revenue		Revenue generated from subscribers making calls when using other networks, including MTN networks outside the country of operation.
Significant influence		The power to participate in the financial and operating policy decisions of an entity. It is presumed to exist when the Group holds between 20% and 50% of the voting power of an entity.
Structured entities (SEs)		Entities that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the entities, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements.
Subsidiaries		Subsidiaries are all entities (including structured entities) over which the Group has control.
Termination benefits		Benefits that may be payable when an employee’s employment is terminated before the normal retirement date due to retrenchment or whenever an employee accepts voluntary redundancy in exchange for these benefits.
Value in use		The present value of the future cash flows expected to be derived from an asset or cash-generating unit.