Notes to the financial statements | Note 9.2

9. Equity structure
9.2 Share-based compensation reserve
 

Telkom's shareholders approved the Group share scheme at the September 2013 annual general meeting. The scheme covers certain operational and management employees and is aimed at giving shares to Group employees, at a Rnil exercise price at the end of the vesting period. Although the number of shares awarded to employees was communicated at the grant date, the ultimate number of shares that vest may differ based on certain performance conditions being met (refer to note 10.7).

  Group Company
The movement within the share-based compensation reserve is: 31 March
2023
Rm		 31 March
2022
Rm 		31 March
2023
Rm		 31 March
2022
Rm
Balance at the beginning of the year
1 238 1 036 1 128 964
Net increase in equity 176 202 122 164
Employee cost (refer to note 3.4.3) 176 203 80 164
Openserve share-based compensation reserve1 – – 42 –
 Vesting of shares – (1) – –
Balance at the end of the year 1 414 1 238 1 250 1 128
 
1 From 1 September 2022, Openserve is a 100% owned subsidiary of the Group. Refer to notes 7.2.1 and 12.2 for more information. For shares granted before 1 September 2022, where Openserve does not have an obligation to pay for the shares, it has been assessed that these shares need to be equity-settled in Telkom Company. This is because Telkom has the obligation to settle for the services rendered to Openserve. For services rendered by the Openserve employees post the carve-out date, the share-based compensation reserve was increased in the current financial year by R42 million with the corresponding entry to the investment in Openserve.