The Group is regularly subject to an evaluation by tax authorities of its direct and indirect tax filings. The consequence of such reviews is that disputes can arise with tax authorities over the interpretation or application of certain tax rules applicable to the Group’s business. These disputes may not necessarily be resolved in a manner that is favourable to the Group. Additionally, the resolution of the disputes could result in an obligation to the Group. The Group has made sufficient provision for any losses arising from tax exposures that are more likely to occur than not.

The Group has discussions with relevant tax authorities on specific matters regarding the application and interpretation of tax legislation affecting the Group and the industry in which it operates. All reliable assessments of tax exposure identified have been quantified and accounted for as appropriate.

The Group has considered all matters in dispute with tax authorities and has accounted for any exposure identified, if required.

The Group is currently involved in various legal proceedings and has, in consultation with its legal counsel, assessed the outcome of these proceedings. Following this assessment, the Group’s management has determined, after assessing recoverability, that adequate provision has been made in respect of these legal proceedings as at 31 March 2018.

Vodacom Congo contracted GHI to install ultra-low cost base stations on a revenue share basis. Shortly after rolling out the first sites GHI sought to renegotiate the contractual terms, which Vodacom Congo declined. GHI then accused Vodacom Congo of infringing its intellectual property rights and demanded payment of compensation in the sum of US$1.16 billion, later revised down to US$200 million. In July 2016, Vodacom Congo filed a request for arbitration with the International Chamber of Commerce’s International Court of Arbitration (ICC). GHI failed to pay its share of the arbitration fees to the ICC, resulting in the matter being struck out from the ICC roll.

A patent infringement claim was filed in July 2016 against Vodacom Congo. The plaintiff was asking the Commercial Court of Kinshasa/Gombe, inter alia, to prohibit Vodacom Congo from providing the M-Pesa service and to order Vodacom Congo to pay damages in excess of US$200 million for losses resulting from the alleged patent infringement. On 22 November 2017, the Commercial Court issued a judgment in favour of Vodacom Congo, barring the action and claim that Plaintiff had initiated against Vodacom Congo.

Negotiations in accordance with the Constitutional Court order to determine a reasonable compensation for Mr Makate for a business idea that led to a product known as ’Please Call Me’ have deadlocked and the matter has been referred to the Group’s Chief Executive Officer to determine reasonable compensation in accordance with the Constitutional Court order.

The Group issued various guarantees, relating to external financial obligations of its subsidiaries, which amounted to R116 million (2017: R119 million).

Foreign denominated guarantees amounting to R889 million (2017: R1 005 million) are in issue in support of Vodacom Congo (RDC) SA relating to liabilities included in the consolidated statement of financial position.

Vodacom (Pty) Limited provides a guarantee for borrowings entered into by Vodacom Group Limited. At 31 March 2018, and in prior years, none of the borrowings under guarantee were utilised.