YEBOYETHU (RF) LIMITED - Condensed interim financial statements for the six months ended 30 September 2017

Release Date: 13/11/2017 10:53
Code(s): YYLBEE
 
Wrap Text
Condensed interim financial statements for the six months ended 30 September 2017

YEBOYETHU (RF) LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2008/014734/06
Share code: YYLBEE
ISIN: ZAE000218483

CONDENSED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 September 2017

13 November 2017

Overview - understanding the performance of your investment

YeboYethu (RF) Limited ('YeboYethu') was established as part of Vodacom (Pty) Limited's (Vodacom SA) Broad-based Black Economic Empowerment
('BBBEE') transaction in October 2008 for the sole purpose of acquiring a 3.44% interest in Vodacom SA. The financial success of YeboYethu is therefore
fundamentally linked to the performance of Vodacom SA.

Vodacom SA is a leading mobile communications company providing a wide range of communication services, including voice, messaging, data and
converged services to 40 million customers in South Africa.

This announcement reviews Vodacom SA's performance for the six months ended 30 September 2017. It also explains the performance of YeboYethu and
provides important information relating to the affairs of YeboYethu. Shareholders are advised to visit the YeboYethu website for important additional
information.

Vodacom SA

Service revenue increased 4.7% to R26.7 billion supported by strong customer gains and growth in data and enterprise services. Revenue growth was
stronger at 7.7% to R33.9 billion, boosted by equipment revenue growth of 18.4%, reflecting the improved exchange rate to the US dollar that assisted in
Vodacom SA's continued strategy of driving uptake of affordable smart devices. The sale of smartphones grew by 18.3%, comprising 59.5% of total device sales.

Vodacom SA added 2.9 million customers in the period, reaching 40.0 million, up 12.1% on the previous year, supported by the segmentation and bundle
strategy. Prepaid customers increased by 2.8 million to 34.8 million, up 13.4%, driven by the success of improved value propositions through the 'Just 4
You' offers and customer segmentation. Prepaid ARPU was down 6.5%, as a result of high volumes of low ARPU gross connections, driven by the
distribution channels accelerating the connection of sim cards ahead of implementation of improvements to customer registration processes. Underlying
ARPU remains strong. Contract customers increased by 107 000 in the first half, to 5.2 million. Migration to the new "more data" contracts, which have a
larger data allocation, accelerated during this period to 25% of the base, to meet customers' demand for more data. Contract ARPU declined by 3.9% to
R392 as a result of change in deal structures and due to a higher rollover of unused bundle allocations, as customers grow into fully utilising these larger
bundles over time and also reduce their exposure to out-of-bundle usage.

Vodacom SA's segmentation and bundle strategy continues to successfully address its customers' individual needs and usage behaviours. The youth
proposition (NXT LVL) has reached over 2 million youth customers, while the Siyakha platform offers greater benefits to the emerging prepaid customers,
such as free health and information services for expectant mothers and prepaid funeral cover. Machine learning, is enabling Vodacom SA to customise
bundle offers based on size, validity period and now with the added sophistication of app-specific data. Total bundles sold increased 64.8% to almost 1.1
billion in the first half of the year. Of these, 800 million were voice bundles, enabling Vodacom SA to reduce its effective price per minute by 10.9%. The
success of the personalised voice bundle strategy through the 'Just 4 You' platform has resulted in low voice revenue decline of 4.8%.

Data revenue grew 15.0% to R11.4 billion, contributing 42.6% of service revenue surpassing the contribution of voice revenue. This was slightly down in the
second quarter as a result of a strong comparative quarter and the introduction of promotional initiatives, such as Meg Your Day, to drive data uptake.
Encouragingly, this has enabled an expanding customer base and increased usage. Vodacom SA added 356 000 data customers to 19.9 million, up 9.6% or
half of the mobile customer base. 4G customers on the network increased 62.8% to 6.0 million, while the average monthly data usage on smart devices
increased 19.5% to 776MB. The pricing transformation strategy and targeted personalised offers continue to provide customers with greater value. Data
bundles sales grew by 55.5% to 347 million. New initiatives have been introduced to improve the customer experience on out-of-bundle-data spend, and
are driving data-usage education to give customers more control. Improved in-bundle usage has resulted in a 24.2% reduction in the effective price per MB.

Enterprise has delivered strong growth, with service revenue up 10.0% to R6.8 billion. Enterprise service revenue now contributes 25.3% (2017: 24.1%) of
service revenue. Fixed-line services revenue increased 11.7%, underpinned by solid growth in connectivity revenue, cloud and hosting revenue and IPVPN
revenue. Vodacom SA is progressing on migrating customers from the mobile voice and data communications contract secured last year with South
Africa's national and provincial government departments, although this is at a slower rate than projected. Internet of Things (IoT) revenue was up 22.4% to
R399 million as Vodacom SA continues to develop innovative solutions in e-health, connected agriculture, smart metering and logistics. The IoT customer
base grew 24.6% to 3.3 million connections.

EBIT declined 2.2% to R9.9 billion, impacted by an increase in depreciation and amortisation costs, as a result of a write back of depreciation of assets with
nil book value in the prior year, increased bad debt charges, following a temporary delay as Vodacom SA introduced new programs to make it easier for
customers to settle outstanding debt, and earlier phasing of publicity costs from the global brand refresh campaign. EBIT margin contraction of 2.9ppts to
29.2% was affected by the higher contribution from low margin equipment sales, as well as the cost of the new roaming agreement with WBS.
Capital expenditure of R3.9 billion was focused on maintaining the network lead; with widest coverage and fastest Internet, as well as enhancing IT
systems. This enables Vodacom SA to provide truly segmented and personalised experiences for its customers, which is critical to delivering the strategic
ambition of becoming a leading digital company. Vodacom SA's continued investment in infrastructure resulted in 76.7% 4G and 99.3% 3G population
coverage, compared with 68.7% 4G coverage a year ago.

YeboYethu - numbers explained

YeboYethu's condensed interim financial statements for the six months ended 30 September 2017 have been prepared in accordance with International
Financial Reporting Standards ('IFRS') and complies with the disclosure requirements set out in International Accounting Standard 34: Interim Financial
Reporting ('IAS 34'), the Financial Reporting Guides as issued by the South African Institute of Chartered Accountants ('SAICA') Accounting Practices
Committees and the requirements of the Companies Act of South Africa. The results have been presented together with the results for the six months
ended 30 September 2016 and year ended 31 March 2017.

Some of the salient features of YeboYethu's results for the six months are as follows:
- Gain on remeasurement of financial instrument increased by R265.6 million (2016: R10.6 million);
- Vodacom SA option asset up 16.25% to R1.90 billion (2017: R1.63 billion);
- Basic earnings per share of 1 490.0 cents (2016: 108.9 cents);
- During the six months ended 30 September 2017, YeboYethu incurred expenses of R2.4 million, a decrease of 7.1% from R2.5 million in the prior period.
  The expenses incurred are mainly attributable to the printing and postage of the annual report, dividend pay away transaction fees, the cost of hosting
  the annual general meeting, Johannesburg Stock Exchange ('JSE') fee, fee to STRATE, JSE sponsor fee and transfer secretary costs.

  YeboYethu hosted its ninth annual general meeting ('AGM') on 31 July 2017, where shareholders adopted the annual financial statements for the year
  ended 31 March 2017, voted on the election of directors, appointed PricewaterhouseCoopers Inc., appointed the members of the audit committee and
  approved non-executive directors fees. Prior to the AGM, shareholders were provided with a presentation to improve their knowledge on how to register
  and trade their YeboYethu shares. The results of the AGM are available on www.yeboyethu.co.za

Dividends

Dividends are declared and paid annually as per the dividend policy. The final gross dividend of 112 cents per ordinary share, paid on 12 June 2017 (2016:
111 cents per ordinary share paid on 31 May 2016).

Condensed statement of comprehensive income
                                                                         Six months ended       Year ended
                                                                           30 September           31 March

                                                                          2017          2016          2017
R000                                                         Notes    Reviewed      Reviewed       Audited

Income                                                                  13 176        11 932        19 445
Expenditure                                                      3      (2 367)       (2 548)       (4 191)

Operating profit                                                        10 809         9 384        15 254
Finance income                                                             434           437           931
Finance cost                                                                (1)           (*)           (*)
Gains on remeasurement of financial instrument                   4     265 613        10 596       352 739

Profit before tax                                                      276 855        20 417       368 924
Taxation                                                               (62 363)       (4 747)      (79 274)

Net profit                                                             214 492        15 670       289 650

Total comprehensive income                                             214 492        15 670       289 650

(*) Less than R500.

                                                                         Cents         Cents         Cents

Basic earnings per share                                         2     1 490,0         108,9       2 012,1
Diluted earnings per share                                       2     1 032,0          79,7       1 433,2


Condensed statement of financial position
                                                                         Six months ended       Year ended
                                                                           30 September           31 March

                                                                          2017          2016          2017
R000                                                         Notes    Reviewed      Reviewed       Audited

Assets
Non-current assets                                                           -     1 292 616     1 634 759

Financial assets                                                 4           -     1 292 616     1 634 759

Current assets                                                       1 916 830        18 632        23 892

Financial assets                                                 4   1 900 372             -             -
Accounts receivable                                                     11 894        14 296        19 472
Tax receivable                                                              16             -             2
Restricted cash                                                            283           276           244
Cash and cash equivalents                                                4 265         4 060         4 174

Total assets                                                         1 916 830     1 311 248     1 658 651

Equity and liabilities
Share capital                                                                *             *             *
Ordinary share premium                                                 359 883       359 883       359 883
Retained earnings                                                    1 206 504       734 155     1 008 135

Total equity                                                         1 566 387     1 094 038     1 368 018
Non-current liability                                                  345 064       208 927       285 567

Deferred tax                                                           345 064       208 927       285 567

Current liabilities                                                      5 379         8 283         5 066

Accounts payable                                                 5       1 951         2 572         1 612
Tax payable                                                                  -         2 233             -
Bank overdraft                                                               -            19             -
Dividends payable                                                        3 428         3 459         3 454

Total equity and liabilities                                         1 916 830     1 311 248     1 658 651

(*) Less than R500.


Condensed statement of changes in equity

                                                               Share
                                                         capital and
                                                            ordinary
                                                               share        Retained           Total
R000                                                         premium        earnings          equity

Balance at 1 April 2017                                      359 883       1 008 135       1 368 018
Net profit                                                         -         214 492         214 492
Dividends                                                          -         (16 123)        (16 123)

Balance at 30 September 2017 - Reviewed                      359 883       1 206 504       1 566 387

Balance at 1 April 2016                                      359 883         733 498       1 093 381
Net profit                                                         -          15 670          15 670
Net dividends#                                                     -         (15 013)        (15 013)

Balance at 30 September 2016 - Reviewed                      359 883         734 155       1 094 038

Balance at 1 April 2016                                      359 883         733 498       1 093 381
Net profit                                                         -         289 650         289 650
Net dividends#                                                     -         (15 013)        (15 013)

Balance at 31 March 2017 - Audited                           359 883       1 008 135       1 368 018

# Net dividends paid comprises of dividends declared less forfeited dividends.


Condensed statement of cash flows

                                                               Six months ended       Year ended
                                                                 30 September           31 March
                                                               2017          2016           2017
R000                                                       Reviewed      Reviewed        Audited

Cash flow from operating activities
Cash generated from operations                               11 651         9 313         13 015
Tax paid                                                     (2 880)         (143)          (265)
Dividends paid                                              (16 149)      (14 664)       (14 669)

Net cash flows utilised in operating activities              (7 378)       (5 494)        (1 919)

Cash flows from investing activities
Finance income received                                         434           437            931

Net cash flows generated from investing activities              434           437            931

Cash flows from financing activities
Finance cost paid                                                (*)           (*)            (*)
Overnight deposit movement                                    7 035         5 322          1 386

Net cash flows generated from financing activities            7 035         5 322          1 386

Net movement in cash and cash equivalents                        91           265            398
Cash and cash equivalents at the beginning of the
period/year                                                   4 174         3 776          3 776

Cash and cash equivalents at the end of the period/
year                                                          4 265         4 041          4 174

(*) Less than R500.


Notes to the condensed interim financial statements
1.    Basis of preparation
      The condensed interim financial statements have been prepared in accordance with the
      framework concepts, the recognition and measurement criteria of IFRS and in accordance with
      and containing the information required by IAS 34 as issued by the IASB, the Financial Reporting
      Guides as issued by the SAICA Accounting Practices Committee, Financial Pronouncements as
      issued by the Financial Reporting Standards Council, the JSE Listings Requirements and the
      requirements of the Companies Act of of 2008, as amended. They have been prepared on the
      historical cost basis, except for certain financial instruments which are measured at fair value or
      at amortised cost, and are presented in South African rand, which is the company's functional
      and presentation currency.

      The significant accounting policies, judgements, estimates of amounts and methods of
      computation are consistent in all material respects with those applied in the annual financial
      statements for the year ended 31 March 2017. The significant accounting policies are available
      for inspection at the company's registered office.

      The company adopted the new, revised or amended accounting pronouncements as issued by
      the IASB, which were effective and applicable to the company from 1 April 2017, none of which
      had any material impact on the company's financial results for the year.

      Full details on changes in accounting policies will be disclosed in the company's annual
      financial statements for the year ending 31 March 2018.

                                                                     Six months ended     Year ended
                                                                       30 September         31 March
                                                                     2017          2016         2017
      Cents                                                      Reviewed      Reviewed      Audited

2.    Earnings and dividends per share
      Basic earnings per share                                    1 490,0         108,9      2 012,1
      Diluted earnings per share                                  1 032,0          79,7      1 433,2
      Headline earnings per share                                 1 490,0         108,9      2 012,1
      Diluted headline earnings per share                         1 032,0          79,7      1 433,2
      Dividends per share                                               -             -        112,0

      Earnings per share calculations are based on earnings and the weighted average number of
      ordinary shares outstanding as set out below:

                                                                     Six months ended     Year ended
                                                                       30 September         31 March
                                                                     2017          2016         2017
      R000                                                       Reviewed      Reviewed      Audited

2.1   Earnings reconciliation
      Earnings, attributable to equity shareholders, for basic
      and diluted earnings per share                              214 492        15 670      289 650
      Headline earnings for headline and diluted headline
      earnings per share                                          214 492        15 670      289 650

      This disclosure is a requirement of the JSE Limited and is not a recognised measure under IFRS.

      It has been calculated in accordance with Circular 2/2015 as issued by SAICA.


                                                                  Six months ended         Year ended
                                                                    30 September             31 March
                                                                 2017             2016           2017
                                                             Reviewed         Reviewed        Audited

2.2   Reconciliation of weighted average number of
      ordinary shares outstanding
      For basic and headline earnings per share            14 395 300        14 395 300    14 395 300
      'N' ordinary shares convertible into ordinary
      shares                                                6 388 619         5 260 403     5 815 102

      For diluted earnings and diluted headline
      earnings per share                                   20 783 919        19 655 703    20 210 402

      On the YeboYethu Employee Participation Trust's conversion date, 30 September 2018, each 'N'
      share shall automatically convert into one ordinary share with a simultaneous repurchase of a
      variable number of shares at par value. The variable number of shares will be calculated based
      on a specified formula which takes into account the outstanding balance of the notional loan
      and the underlying value of the shares held in Vodacom SA. The formula ensures that the
      YeboYethu Employee Participation Trust will, after Vodacom SA's repurchase of a portion of the
      Vodacom SA shares held by the company and the consequent repurchase by the company of a
      portion of the company's shares held by the YeboYethu Employee Participation Trust, hold that
      percentage shareholding in the company as is equal to the YeboYethu Employee Participation
      Trust 'A' shares held by the company, as a percentage of all Vodacom SA shares held by it.

3.    Directors emoluments
      Included in Expenditure for the current financial period is directors emoluments (refer Note 10)
      as follows:

                                                                                               Salary
                                                                                                    R

      ZBM Bassa*                                                                               61 427
      SM Radebe*                                                                               40 280
      AM Hall*                                                                                 27 189
      S Sithole*                                                                               44 308
                                                                                              173 204
      * Independent non-executive directors.

      V Jarana resigned effective 21 September 2017.

4.   Financial assets
     The company acquired a 3.44% investment in Vodacom SA during the 2009 financial year by
     obtaining ordinary shares and 'A' ordinary shares for the benefit of its shareholders as part of the
     Broad-Based Black Economic Empowerment ('BBBEE') transaction as follows:

                                                                      Six months ended      Year ended
                                                                        30 September          31 March
                                                                     2017          2016           2017
     R000                                                        Reviewed      Reviewed        Audited

     Financial asset at fair value through profit or loss
     Vodacom South Africa option asset
     7 200 000 ordinary shares at R25.00 each                     180 000       180 000        180 000
     82 800 000 'A' ordinary shares at R2.1739 each               180 000       180 000        180 000
     75 000 000 'A' ordinary shares at R0.00001 each                    1             1              1
                                                                  360 001       360 001        360 001
     Accumulated fair value adjustment                          1 540 371       932 615      1 274 758
                                                                1 900 372     1 292 616      1 634 759

     The financial asset namely the Vodacom South Africa option asset had been classified from
     non current to current in the current financial period as the maturity date of the option asset is
     30 September 2018.

                                                                     Six months ended       Year ended
                                                                       30 September           31 March
                                                                     2017          2016           2017
     R000                                                        Reviewed      Reviewed        Audited

     Reconciliation
     Opening balance                                            1 634 759     1 282 020      1 282 020
     Fair value adjustment                                        265 613        10 596        352 739
     Closing balance                                            1 900 372     1 292 616      1 634 759

     Within the Monte Carlo method, the following input parameters were used to simulate the
     Vodacom SA option asset value: the equity value of the underlying share at the valuation date,
     the expected dividend yield of the underlying share over the life of the option, the expected
     volatility of the underlying share over the life of the option, and the risk-free interest rate over
     the life of the model. In addition to these, the strike price is based on the simulated closing
     balance of the notional funding at maturity date.

     The fair value of R1 900 million (30 September 2016: R1 292 million, 31 March 2017: R1 635
     million) was calculated using the following assumptions as at 30 September 2017:

     - The risk-free interest rates were determined from the South African interest rate swap zero
       curve, which is based on inputs from money-market and interest rate swap rates on the
       valuation date;
     - The dividend yield was based on Vodacom SA's forecasted earnings and dividend policy based
       on a range from 30 March 2018 of 3.48% to 30 September 2018 of 4.85% (30 September
       2016: 31 March 2017 of 3.22% to 30 September 2018 of 5.64%, 31 March 2017: 30 May 2017
       of 1.56% to 28 September 2018 of 5.11%);
       Maturity date - 30 September 2018;
     - Volatility was calculated by applying the equally weighted methodology to the historical
       share price data of Vodacom Group Limited. The Vodacom Group Limited volatility was applied
       as a proxy for Vodacom SA, calculated at one year equally weighted volatility of 19.21% as at
       29 September 2017, two years equally weighted volatility of 20.65% as at 30 September
       2016, one and a half years equally weighted volatility of 17.41% as at 31 March 2017,
       respectively.
     - Strike price - the notional funding as at valuation date provided by Vodacom SA amounted to
       R4 474 million (30 September 2016: R4 848 million, 31 March 2017: R4 768 million). Interest
       accrues at a notional rate of 8.0% NACD (30 September 2016: 8.0% NACD, 31 March 2017:
       8.0% NACD). The simulated notional funding balances at maturity represents the strike price;
       and
     - The equity value of Vodacom SA was estimated at R134 110 million (30 September 2016:
       R120 013 million, 31 March 2017: R130 549 million) by applying the results of the five year
       Long Range Plan (LRP) forecast as the inputs into the Adjusted Present Value methodology.
       The terminal year free cash flow value is based on the final year of the LRP, capitalised into
       perpetuity. The cash flow projections are based on the five year LRP approved by the board.
     
     Key cash flow assumptions included market share, revenue per user, EBITDA margin and revenue
     growth.

     Key equity value assumptions include the perpetual growth rate of 2.75% (30 September 2016:
     2.68%, 31 March 2017: 2.67%), the pre-tax cost of debt of 8.67% (30 September 2016: 9.39%, 31
     March 2017: 8.68%) and cost of equity of 13.05% (30 September 2016: 13.25%, 31 March 2017:
     13.19%). The discount rate used in the valuation model includes a risk free rate of 8.65% (30
     September 2016: 8.85%, 31 March 2017: 8.79%), market risk premium of 5.50% (30 September
     2016: 5.50%, 31 March 2017: 5.50%), lack of control discount of 10.00% (30 September 2016:
     10.00%, 31 March 2017: 10.00%) and marketability discount of 5.00% (30 September 2016:
     5.00%, 31 March 2017: 5.00%), respectively.

     Our calculations indicate that the acceptable range of equity values for Vodacom SA, would be a
     range of up to 10.0% higher or lower than the equity value used in the determination of the
     option value. The following table shows the sensitivity of the fair value of the option asset to this
     reasonable alternative range of assumptions as at 30 September 2017, 30 September 2016 and
     31 March 2017, respectively:

                                                                         Favourable       Unfavourable
                                                                             change             change
     30 September 2017
     Total change from base (Rm)                                                457            (R448.2)
     Total change from base (%)                                               24,1%             (23.6%)
     30 September 2016
     Total change from base (Rm)                                                376            (R350.5)
     Total change from base (%)                                               29,1%             (27.1%)
     31 March 2017
     Total change from base (Rm)                                              437,8            (R422.0)
     Total change from base (%)                                               26,8%             (25.8%)

     It is therefore important that shareholders and other users of these financial statements
     understand the sensitivity of the option value actually recorded to changes in any or all of the
     assumptions used in determining the option value.

     Notional funding

     The notional funding does not give rise to a legal obligation but only facilitates the share
     repurchase mechanism. Initially, the notional funding carried an interest rate of 9.8%
     compounded daily. The interest rate was however reduced to 8.0% compounded daily from 1
     April 2015 onwards. The company received a notional dividend on these shares calculated on
     the basis of the actual dividend paid to ordinary shareholders. The holders of ordinary shares are
     entitled to dividends but the holders of 'A' ordinary shares will only be entitled to dividends once
     the notional funding has been settled.

     The closing balance as at 30 September 2017 of the notional funding after the interest and
     dividends for the employee scheme and black public and business partners is as follows:

                                                                   Six months ended        Year ended
                                                                     30 September            31 March
                                                                    2017          2016           2017
     R000                                                       Reviewed      Reviewed        Audited

     Reconciliation of notional funding
     Opening balance                                           2 842 675     3 005 118      3 005 118
     Notional interest accrued                                   114 449       121 472        238 684
                                                               2 957 124     3 126 590      3 243 802
     Less: notional dividend received                           (271 804)     (246 142)      (401 127)

     Closing balance                                           2 685 320     2 880 448      2 842 675

5.   Accounts payable
     Supplier accounts payable                                     1 495         2 296          1 229
     Intercompany payables                                           173             -              -
     Value added tax                                                   -             -            139
     JSE Empowerment segment                                         283           276            244
                                                                   1 951         2 572          1 612

     The average credit period is 30 days (six months period ended 30 September 2016: 30 days,
     year ended 31 March 2017: 30 days). No interest is charged on trade payables.

6.   Related parties
     All transactions with related parties have been made on terms equivalent to those that prevail in
     arm's length transactions.

                                                                     Six months ended       Year ended
                                                                       30 September           31 March
                                                                    2017           2016           2017
     R000                                                       Reviewed       Reviewed        Audited

6.1  Balances with related parties
     Accounts receivable
     Vodacom Group Limited                                         9 243         12 343         16 279
     Vodacom Proprietary Limited                                   2 491          1 934          3 187
     Accounts payable
     Vodacom Group Limited                                           112              -             -
     Vodacom Proprietary Limited                                      61              -             -

6.2  Transactions with related parties
     Vodacom Group Limited
     Finance income received                                         307            289           667
     Vodacom Proprietary Limited
     Dividends received                                           13 176         11 932        19 445
     The Innovator Trust (entity within the Vodacom Group
     structure)
     Dividends paid                                               (1 343)        (1 183)       (1 183)

     The following costs are incurred by Vodacom Proprietary Limited and not charged to the
     company:
     - accounting services;
     - company secretarial services;
     - risk management services; and
     - access to research information and assistance for the company to enable Vodacom
       Proprietary Limited to meet or improve its empowerment standards.

7.   Carrying amounts of financial instruments

     Carrying amounts of financial instruments analysed by category are as follows:

                                                                    Six months ended       Year ended
                                                                      30 September           31 March
                                                                     2017          2016          2017
     R000                                                        Reviewed      Reviewed       Audited

     Assets
     Financial assets at fair value through profit or loss      1 900 372     1 292 616     1 634 759
     Available-for-sale financial asset                                 *             *             *
     Loans and receivables                                         16 000        18 337        23 642
     Financial assets at amortised cost                               283           276           244
                                                                1 916 655     1 311 229     1 658 645
     Liabilities
     Financial liabilities measured at amortised cost               5 379         6 050         4 927

     (*) Less than R500.


8.   Fair value hierarchy

     An analysis of the financial instrument, Vodacom SA option asset, measured at fair value and
     disclosed as level three based on the degree to which the fair value is observable, is as follows:

                                                                    Six months ended      Year ended
                                                                      30 September          31 March
                                                                    2017          2016          2017
     R000                                                       Reviewed      Reviewed       Audited

     Level three
     Financial assets at fair value through profit or loss,
     classified as held for trading                            1 900 372     1 292 616     1 634 759
     Level three uses data inputs for the valuation of the
     asset that are not based on observable market data.
     Reconciliation of fair value
     Measurement in level three
      Opening balance                                          1 634 759     1 282 020     1 282 020
      Recognised in net gains on remeasurement and
      disposal of financial instruments                          265 613        10 596       352 739
      Closing balance                                          1 900 372     1 292 616     1 634 759

9.   Operating commitments                                           998         4 863           996

     The operating commitments will be financed through internal cash generation.

10.  Non-executive directors' fees

     At the company's ninth annual general meeting held on 31 July 2017, Special resolution
     number one was approved that fees for non-executive directors be paid. The non-executive
     directors fees was disclosed in the company's annual report for the year ended 31 March 2017
     and is available for inspection on the company's website.

11.  Events after the reporting period

     The directors are not aware of any matter or circumstance arising since the end of the reporting
     period, not otherwise dealt with in the condensed interim financial statements, which
     significantly affected the financial position of the company as at 30 September 2017 and the
     results of its operations and cash flows for the six months ended 30 September 2017.

Midrand
10 November 2017

Non-IFRS information

These condensed consolidated interim financial statements have been reviewed by PricewaterhouseCoopers Inc., who expressed an unmodified review
conclusion. A copy of the auditor's review report is available for inspection at the Company's registered office, together with the financial statements
identified in the auditor's report. The auditor's report does not necessarily cover all of the information contained in this announcement. Shareholders are
therefore advised that in order to obtain a full understanding of the nature of the auditor's work they should obtain a copy of that report together with the
accompanying financial information from the registered office of the company.

Forward-looking statements

This announcement which sets out the interim results for YeboYethu (RF) Limited for the six months ended 30 September 2017 may contain 'forward-
looking statements', with respect to the Vodacom SA results referenced in the announcement which have not been reviewed or reported on by the
company's auditors. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'will',
'anticipates', 'aims', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans' or 'targets'. By their nature, forward-looking statements are inherently
predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future, involve
known and unknown risks, uncertainties and other facts or factors which may cause the actual results, performance or achievements of the company, or its
industry to be materially different from any results, performance or achievement expressed or implied by such forward-looking statements. Forward-
looking statements are not guarantees of future performance and are based on assumptions regarding the company's and Vodacom SA's present and
future business strategies and the environments in which they operate now and in the future.

YeboYethu contact details
Internet address: www.yeboyethu.co.za
Email us at: support@yeboyethushares.co.za
Call centre: 010 285 0090 (standard call rates apply) or 082 241 0001 (Toll-free from your Vodacom cellphone)

REGISTERED OFFICE:
Vodacom Corporate Park
082 Vodacom Boulevard, Midrand 1685

TRANSFER SECRETARIES:
Physical address:
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein 2001
Postal address:
PO Box 4844, Johannesburg, 2000

DIRECTORS:
Zarina Bassa (Chairperson)
Adele Hall
Vuyani Jarana (resigned 21 September 2017)
Matimba Mbungela
Stefaan Sithole
Seth Radebe

SECRETARY:
Avinash Dhanasir

JSE SPONSOR:
UBS

www.yeboyethu.co.za

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