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130
Telkom Annual Report 2009
Financial review (continued)
Liquidity and capital resources
Group liquidity and capital resources
Cash flows
The following table shows information regarding our consolidated cash flows for the periods indicated.
2007
Year ended March 31,
2008 2009 2008/2007 2009/2008
(in millions, except percentages) ZAR ZAR ZAR % change % change
Cash flows from operating activities 9,356 10,603 11,432 13.3 7.8
Cash flows from investing activities (10,412) (14,106) (17,005) 35.5 20.6
Cash flows from financing activities (2,920) 2,943 7,093 200.8 141.0
Net (decrease)/increase in cash and cash
equivalents (3,976) (560) 1,520 85.9 371.4
Effect of foreign exchange rate differences
Net cash and cash equivalents at the beginning
29 44 (30) 51.7 (168.2)
of the year 4,255 308 (208) (92.8) (167.5)
Net cash and cash equivalents at the end of
the year 308 (208) 1,282 (167.5) 716.3
Cash flows from operating activities
Our primary sources of liquidity are cash
flows from operating activities and
borrowings. We intend to fund our
expenses, indebtedness and working
capital requirements from cash generated
from our operations and from capital raised
in the markets. The increase in cash flows
from operating activities in the 2009
financial year is mainly due to a lower
dividend payment in respect of the 2008
financial year and lower taxation paid,
partially offset by higher finance charges
and a decrease in cash generated from
operations. The increase in cash flows from
operating activities in the 2008 financial
year is mainly due to lower taxation
payments as well as an increase in cash
generated from operations, partially offset
by higher dividends paid.
Cash flows from investing activities
Cash flows from investing activities relate
primarily to investments in our fixed-line
network, our other segment’s networks and
our 50% share of Vodacom’s investments in
its mobile networks in South Africa and
other African countries. The increase in
cash flows used in investing activities in the
2009 financial year was as a result of the
increased capital expenditure of Multi-Links
as well as the acquisition of Gateway by
Vodacom and the acquisition of the
remaining 25% share in Multi-Links. The
increase in cash flows used in investing
activities in the 2008 financial year was
mainly the result of R1,985 million cash
utilised for the purchase of Multi-Links and
increased equity investments in Smartphone,
increased capital expenditures in our fixedline,
mobile and other segments and lower
proceeds on the disposal of investments,
partially offset by higher proceeds on the
disposal of property, plant and equipment
and intangibles.
Cash flows from financing activities
Cash flows from financing activities are
primarily a function of borrowing and share
buy-back activities.
In the 2009 financial year, loans raised
exceeded loans repaid and the increase in
net financial assets. In the 2009 financial
year, cash flows from financing activities
were primarily due to the issuance of
R11,025 million nominal value of
commercial paper bills, the issue of the
new local bonds, the TL12 and TL15 with
a nominal value of R1,060 million and
R1,160 million, respectively, as well as
entering into a syndicated loan agreement
with a nominal value of R4,100 million.
This was partially offset by the repayment of
a term loan of R1,000 million, a bank
facility of R1,000 million, bridging finance
of R1,600 million and maturing commercial
paper bills of R9,849 million nominal value.
In the 2008 financial year, loans raised
and the decrease in net financial assets
exceeded loans repaid, shares bought
back and cancelled and finance lease
obligation repaid. In the 2008 financial
year, cash flows from financing activities
were primarily due to the issuance of
R18,806 million nominal value of