T UG E LA

TELECOMS PTY (LTD)

ANNUAL FINANCIAL STATEMENTS

Year ended 28 February 2014 Reg No 1804/119828/23

TUGELA TELECOMS PTY (LTD)
Reg No 1804/119828/23 TUGELA
TELECOMS PTY (LTD)
REPORT OF THE INDEPENDENT AUDITOR

Directors’ responsibility for the financial statements

The Company’s directors are responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting Standards.
This responsibility includes: designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from material misstate-
ment, whether due to fraud or error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements present fairly, in all material respects, the consolidated
and separate financial position of Tugela Telecoms PTY (LTD) as at 28 February 2014, and its
consolidated and separate financial performance and its consolidated and separate cash flows for
the year then ended in accordance with International Financial Reporting Standards.

……………………………….
Dewey Cheatem Andhow

Dewey Cheatem Andhow and Co - Chartered Accountants

7th March 2014
404 Edgware Road
London
SW12 9RT

TUGELA TELECOMS PTY (LTD) Reg No 1804/119828/23

TUGELA TELECOMS PTY (LTD)
Reg No 1804/119828/23 TUGELA
STATEMENT OF FINANCIAL POSITION TELECOMS PTY (LTD)
as at 28 February 2014

2014 2013
ASSETS $’000 $’000
Non Current Assets
Property, plant and Equipment 650 000 500 000
Less : Accumulated Depreciation (437 489) (350 000)
Intangible Assets 1 000 000 1 000 000
Less: Amortisation (900 000) (800 000)
Total Fixed Assets 312 511 350 000

Current Assets
Accounts Receivable 1 402 179 1 235 176
Current Account 793 331 486 765
Inventory 95 000 195 000
Total Current Assets 2 290 510 1 916 941

TOTAL ASSETS 2 603 021 2 266 941

EQUITY AND LIABILITIES

Share Capital
100 100
Retained Income 1 831 088 1 254 811
Shareholders’ Equity 1 831 188 1 254 911

Non-current Liabilities
Borrowings 450 532 551 687
Provisions 35  939 32  978
Total Non-current Liabilities 486 471 584 665

Current Liabilities
Accounts payable 198 743 213 786
Taxation payable 86 619 213 579
285  362 427 365

TOTAL MEMBERS INTEREST AND LIABILITIES 2 603 021 2 266 941

TUGELA TELECOMS PTY (LTD) Reg No 1804/119828/23

TUGELA TELECOMS PTY (LTD)
Reg No 1804/119828/23 TUGELA
STATEMENT OF FINANCIAL PERFORMANCE TELECOMS PTY (LTD)
as at 28 February 2014

$’000
Revenue 7 
200 
000

Direct operating costs (2 874 758)

Staff Expenses (103  546)
Other operating expenses (3 178 167)
Depreciation (87  489)
Amortisation of intangible assets (100 000)

Operating Profit 856 040

Finance Costs (66 202)

Interest income 10 547

Profit before tax 800 385

Taxation (224 
108)

NET PROFIT 576 

277

TUGELA TELECOMS PTY (LTD) Reg No 1804/119828/23

TUGELA TELECOMS PTY (LTD)
Reg No 1804/119828/23 TUGELA
TELECOMS PTY (LTD)
BUDGET ASSUMPTIONS FOR THE 2015 YEAR:

Using the statements of financial postion and performance of Tugela Telecoms attached, draw up
a projected statement of financial performance for the following year, taking the following infor-
mation into account:

1 Revenue is budgeted to increase by 8%

2 Staff costs are to increase by 10%
3 All operating expenses are to increase by 7%
4 New capital expenditure of $120 million will take place evenly throughout the year.
The depreciation rate on this is 25%
5 We expect the licence to be renewed, for 10 years at a cost of $2 billion, in 2 years time
6 The interest rate is expected to decrease from 12% to 10%
7 The capital portion of the loan repayments is expected to be $100 million, paid evenly
throughout the year.
8 The tax rate will remain at 28%

Exercise...

1. Calculate Tugela Telecoms new 2015 budget forecast using the information above and
client interviews.

2. Calculate your 2015 management forecast for the business taking into account all the
savings and operational efficiencies your team can introduce.

3. Present your forecasted earnings to the Board of Directors and justify whether you intend
to buy the business and the property, what you will offer and what your ROI strategy is.
Be prepared to justify your budget assumptions and make sure you have fully analyzed the
full return on investment choices available to you.

TUGELA TELECOMS PTY (LTD) Reg No 1804/119828/23

TUGELA TELECOMS PTY (LTD)
Reg No 1804/119828/23 TUGELA
BUDGETING TELECOMS
PTY (LTD)
for the year ended 28 February 2015

2015 Client’s Forecast 2015 Your Forecast

Revenue

Direct operating costs

Staff Expenses

Other operating expenses

Depreciation

Amortisation of intangible assets

Operating Profit

Finance Costs

Interest income

Profit before tax

Taxation

Net profit

TUGELA TELECOMS PTY (LTD) Reg No 1804/119828/23