Notes to the group financial statements l Note 10.1

10.1 Related party transactions
 
Related party transactions constitute the transfer of resources, services or obligations between the group and a party related to the group, regardless of whether a price is charged. For the purposes of defining related party transactions with key management, key management has been defined as directors and the group’s executive committee and includes close members of their families and entities controlled or jointly controlled by these individuals.

  2017
Rm		   2016
Rm		  
Key management compensation        
Salaries and other short-term employee benefits 123   112  
Post-employment benefits 7   5  
Other benefits 26   61  
Bonuses 113   47  
Compensation for loss of office –   4  
Total 269   229  

Details of directors’ remuneration are disclosed in note 10.2 of the financial statements.

Subsidiaries

Details of investments in subsidiaries are disclosed in note 9.1 of the financial statements.

Changes in shareholding

There were no material transactions with non-controlling shareholders or changes in shareholding in any of the group’s subsidiaries during the current or prior years (note 9.3).

Joint ventures and associates

Details of the group’s investments in and share of results and dividend income from its joint ventures and associates are disclosed in note 9.2 of the financial statements.

Details of other transactions and balances with joint ventures and associates are set out below:

  Joint ventures   Associates  
  2017
Rm		   2016
Rm		   2017
Rm		   2016
Rm		  
Balances outstanding at 31 December                
Trade and other payables owing to joint ventures/associates   233     216     156     145  
Loan receivable from joint ventures/ associates   5 426     11 884     1 357     5 013  
Trade and other receivables from joint ventures/associates   773     696     250     242  
Capital call commitments payable to joint ventures/associates   1 195     1 934     –     –  
Transactions for the year ended 31 December                
Dividends declared by joint ventures/ associates   1 764     3 284     213     205  
Interest income 213   1 142   298   230  
Capital call notices paid 892   1 098   –   –  
Repayment of loan receivable from joint venture   6 509     6 478     –     –  

Transactions between members of the group

Scancom Limited (MTN Ghana) entered into operating lease agreements with Ghana Tower InterCo B.V. in prior years. The operating lease commitments amount to R8 446 million at 31 December 2017 (2016: R6 795 million). The expense recorded amounted to R627 million for the 2017 financial year (2016: R532 million). The rental amounts escalate every year by inflation and the initial term is 10 years, followed by four times five-year renewal periods.

MTN Uganda Limited entered into operating lease agreements with Uganda Tower InterCo B.V. in prior years. The operating lease commitments amount to R1 636 million at 31 December 2017 (2016: R2 187 million). The expense recorded amounted to R558 million for the 2017 financial year (2016: R432 million). The rental amounts escalate every year by inflation and the initial term is 10 years, followed by four times five-year renewal periods.

MTN Nigeria Communications Limited entered into operating lease agreements with INT Towers Limited in prior years, a wholly owned subsidiary of Nigeria Tower InterCo B.V. INT Towers Limited is no longer part of MTN Group from 31 January 2017, refer to note 9.2 and 2.3. The operating lease commitments amounted to R85 810 million as at 31 December 2016. The expense recorded amounted to R464 million for the 2017 financial year (2016: R4 254 million) representing one month’s lease costs to January 2017. The initial term is 10 years (extended to 15 years in 2016), followed by four times five-year renewal periods.

Transactions with an entity associated with a director

On 28 December 2017, 14 750 000 MTN Zakhele Futhi shares, acquired by the group in terms of the 2016 MTN Zakhele Futhi underwrite option, were sold for a total consideration of R295 million. The shares were purchased by Main Street 1561 Proprietary Limited, a wholly owned company of PF Nhleko, non-executive chairman of MTN Group.

Shareholders

The principal shareholders of the company are disclosed in annexure 1, which is unaudited.

Notes to the group financial statements l Note 10.1