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commercial paper bills, as well as entering
into call and term loans of R5,600 million
to fund the redemption of the TK01 bond
and other cash flows from investing
activities, including R1.6 billion of
additional bank borrowings and interest
bearing debt by Vodacom. This was
partially offset by the maturing commercial
paper debt of R15,773 million nominal
value, the repayment of the TK01 bond
with a nominal value of R4,680 million
and R1,647 million paid for the
repurchase of shares during the year.
In the 2007 financial year, loans and finance
leases repaid and shares repurchased and
cancelled exceeded loans raised and the
decrease in net financial assets, by
R2,920 million. In the 2007 financial year
cash flows used in financing activities
increased primarily due to the lower sale of
repurchase agreements and derivative
instruments that were sold in the 2006
financial year to fund dividends and tax
payments. On October 31, 2006, we
repaid the TL06 local bond having a nominal
value of R2,100 million and during the
2007 financial year, we repaid
R3,731 million in nominal value of
commercial paper bill debt. Commercial
paper bills having a nominal value of
R4,651 million were issued in the 2007
financial year.
Working capital
We had negative consolidated working
capital from continuing operations of
approximately R6.2 billion as of March 31,
2009, we had negative consolidated
working capital from total operations of
approximately R9.3 billion as of March 31,
2008 and approximately R8.2 billion as of
March 31, 2007. Negative working
capital arises when current liabilities are
greater than current assets. The increase in
the Company’s negative working capital in
the 2009 financial year was mainly as a
result of an increase in interest bearing debt
payable, partially offset by higher financial
assets in the form of repurchase agreements.
The increase in negative working capital in
the 2008 financial year was primarily due
to an increase in the current portion of
interest bearing debt due to the repayment
of the TK01 local bond with short-term debt
that was subsequently partially refinanced
Telkom Annual Report 2009 131
by the TL12 and TL15 bonds after the year
end, a reduction in cash available due to
acquisition activities, increased capital
expenditure, increased dividends paid,
shares repurchased and an increase in trade
and other payables. Telkom is of the opinion
that the Telkom Group’s cash flows from
operations, together with proceeds from the
Vodacom transaction and the proceeds from
liquidity available under credit facilities and
in the capital markets, will be sufficient to
meet the Telkom Group’s present working
capital requirements for the 12 months
following the date of this annual report. We
intend to fund current liabilities through a
combination of operating cash flows and
with new borrowings and borrowings
available under existing credit facilities. We
had R6.2 billion available under existing
credit facilities as of March 31, 2009.
Capital expenditures and investments
The following table shows the Telkom
Group’s investments in property, plant and
equipment including intangible assets,
including our 50% share of Vodacom’s
investments, for the periods indicated.
2007
Year ended March 31,
2008 2009 2008/2007 2009/2008
(in millions, except percentages) ZAR ZAR ZAR % change % change
Group capital expenditure
Fixed-line 6,594 6,794 6,690 3.0 (1.5)
Baseline 3,409 4,039 3,343 18.5 (17.2)
Revenue generating 159 57 30 (64.2) (47.4)
Network evolution 784 1,092 1,373 39.3 25.7
Sustainment 416 277 115 (33.4) (58.5)
Effectiveness and efficiencies 1,141 841 603 (26.3) (28.3)
Company support 497 451 790 (9.3) 75.2
Regulatory 188 37 436 (80.3) 1,078.4
Mobile 3,608 3,460 3,569 (4.1) 3.2
Multi-Links – 1,312 2,791 – 112.7
Other 44 334 184 659.1 (44.9)
Total investment in property, plant and
equipment and intangible assets 10,246 11,900 13,234 16.1 11.2
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