The Corporation has facilities with its bankers amounting to P110,000,000
(2014 : P110,000,000) in respect of letters of credit and guarantees.The banking
facilities are unsecured.
BOTSWANA TELECOMMUNICATIONS CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
2015 2014 P’000 P’000
22 CAPITAL COMMITMENTS
Contracted but not paid 108,656 123,943 Authorised but not contracted 323,902 317,615 Total capital commitments 432,558 441,558
These commitments will be financed by equity contributions, development grants, long term
borrowings and internally generated funds.
23 OPERATING LEASE COMMITMENTS-COMPANY AS LESSEE
Future minimum lease payments payable under non-cancellable operating leases are as follows:
Operating leases 20,141 8,538
20,141 8,538
Balance due within one year 6,669 8,538 Balance due between two and five years 8,286 -
Balance due after five years 5,186 -
20,141 8,538
OPERATING LEASE COMMITMENTS-COMPANY AS LESSOR
Future minimum lease receivables under non-cancellable operating leases as at 31 March 2015
are as follows:
Operating leases 6,114 7,616
Balance due within one year 1,381 1,502 Balance due between two and five years 2,887 3,804 Balance due after five years 1,846 2,310
6,114 7,616
In addition to the above, the Company has entered into service and maintenance contracts with
third parties.The majority of the operating leases with the company as lessor are in respect of sites
on which radio site premises have been built and sub-let by the Corporation to its customers. These
leases comprise of fixed rentals payable on a monthly basis with annual escalations of 10% per
annum generally with a one month notice period.`
BOTSWANA TELECOMMUNICATIONS CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
24 RELATED PARTY TRANSACTIONS
Relationships
Owner with 100% ownership Government of Botswana
Members of the Board of Directors Refer to General information Page 158
Members of Key management Paul Taylor Anthony Masunga Abel Bogatsu Joy-Marie Marebole Thabo Nkala Mokgethi Nyatseng Christopher Diswai Same Kgosiemang Boitumelo Masoko Masego Mathambo Kaelo Radira Trading transactions
The following related party transactions were on an arm’s length basis:
revenue billed balance due 2015 2014 2015 2014 P’000 P’000 P’000 P’000
Sales and outstanding balances from related parties
The Government of the Republic of Botswana 382,443 396,809 26,757 71,238
Parastatals 69,769 59,491 8,733 4,995
452,212 456,300 35,490 76,233
Purchases from related parties
Parastatals 269,759 257,179 20,866 35,317
Terms and conditions of transactions with related parties
The sales to and purchases from related parties are the rendering or receiving of services and are made at terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.
Individually significant transactions
Global connectivity projects (EASSY and WACS): The Government of Botswana owes BTCL P9,455,477.63 (2014 : P14,024,933.82) for payments which were made on behalf of the
government towards procuring the Indefeasible right of use (IRU). BTCL is now leasing on an arms length basis network capacity from the government of Botswana on an operating lease basis.
BOFINET (Botswana Fibre Network)
BOFINET offered BTCL an IRU worth Pula 340 million for 10 years which translates to an annual charge of Pula 34 million.During the
year Pula 68 million has been paid to date. Government of Botswana
The Government of Botswana has provided a letter of support worth Pula 250 million to BTCL .Please refer to Note 29.2 for more
details.
BOTSWANA TELECOMMUNICATIONS CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
2015 2014
P’000 P’000
Compensation of key management personnel
Short term benefits 12,030 10,383
Termination benefits 4,156 3,692
16,186 14,074
The Compensation of Key management personnel figures above are inclusive of remuneration paid to members of the Board of Directors of BTCL and executive management. The remuneration for key management staff is determined by the remuneration committee and that
of directors is consistent with Government rates.
The non-executive members of the Board do not receive pension entitlement from the Company.
Directors’ Interests
Emoluments per director (in Pula) (2015)
Performance Fringe and
Director Fees Remuneration bonus other benefits Total
Leonard Makwinja 6,090 - - - 6,090 Paul Taylor (Managing Director) - 3,790,670 643,243 362,349 4,796,261
Alan Boshwaen 23,100 - - - 23,100 Choice Pitso 26,204 - - 5,789 31,993 Serty Leburu 22,050 - - - 22,050 Cecil Masiga - - - - - Rejoice Tsheko 24,360 - - - 24,360 Gerald Nthebolan 20,790 - - - 20,790 Daphne Matlakala 31,710 - - - 31,710
Total emoluments paid by BTCL 154,304 3,790,670 643,243 368,138 4,956,354
Directors’ Interests
Emoluments per director (in Pula) (2014)
Performance Fringe and
Director Fees Remuneration bonus other benefits Total
Leonard Makwinja 29,610 - - - 29,610 Paul Taylor (Managing Director) - 2,254,144 695,652 387,148 3,336,944
Alan Boshwaen 12,600 - - - 12,600 Choice Pitso 10,920 - - 5,789 16,709 Serty Leburu 14,280 - - - 14,280 Cecil Masiga 840 - - - 840 Dr Geoffrey Seleka 11,760 - - - 11,760 Gerald Nthebolan 8,400 - - - 8,400
BOTSWANA TELECOMMUNICATIONS CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
25 FINANCIAL RISK MANAGEMENT 25.1 Financial risk management objectives and policies
The Company’s principal financial liabilities are trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables and cash and short-term deposits, which
arise directly from its operations.
The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.
Exposure to currency, liquidity, interest rate and credit risk arises in the normal course of the Company’s business.
25.2 Currency risk:
The Company undertakes certain transactions denominated in foreign currencies with international operators and other foreign suppliers.
Hence, exposure to exchange rates fluctuations arise. The carrying amount of the Company’s foreign currency denominated monetary
assets and monetary liabilities at the reporting date are as follows (the analysis below gives a combined impact of assets and liabilities): exchange rates Amount in Foreign Currency 2015 2014 2015 2014 Currency Liabilities: Euro 0.0910 0.0810 (313,360 ) (8,530 ) Rand 1.1875 1.1705 (3,746,886 ) (3,562,138 ) SDR 0.0703 0.0737 (2,754,133 ) (3,438,599 ) US Dollar 0.0970 0.1100 (1,859,354 ) (1,145,992 ) GBP 0.0668 0.0672 - (46,440 ) Assets: SDR 0.0750 0.1737 3,445,973 3,540,216 US Dollar 0.1035 0.1175 665,926 924,120 Combined Net Liability Position (4,561,834) (3,737,363 )
The Company’s currency risk exposure is partly hedged by USD ,EURO and RAND deposit accounts held which at 31 March 2015 amounted to USD 54,826.86 (2014: 42,231) ; EURO 1,107.95(2014:739) and RAND 467,622.14 ( 2014: 652,260).
25.3 Foreign Currency sensitivity analysis
The Company is mainly exposed to the currencies of South Africa (Rand), the United States (US Dollar), the European Union (Euro) and
the SDR (Special Drawing Rights) which is a potential claim on the freely usable currencies of International Monetary Fund members.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Pula against the relavant foreign currencies. 10% is the sensitivity rate when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates an increase in profit.
The analysis below gives a combined impact of assets and liabilities. BOTSWANA TELECOMMUNICATIONS CORPORATION LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
2015 2014
Pula Pula
10% decrease
Euro (2,852 ) (69 )
Rand (444,943 ) (416,948 )
Special Drawing Rights (SDR) (19,362 ) (25,342 )
United States Dollar (18,036 ) (12,606 ) British Pound - (312 ) Net Effect (485,191 ) (455,277 ) 10% increase Euro 2,852 69 Rand 444,943 416,948
Special Drawing Rights (SDR) 19,362 25,342
United States Dollar 18,036 12,606
British Pound - 312
Net Effect 485,191 455,277