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190
Telkom Annual Report 2009
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)
13.7 Exchange rate table (closing rate)
2007 2008 2009
R R R
United States Dollar 7.248 8.132 9.484
Euro 9.649 12.854 12.617
Pound Sterling 14.189 16.166 13.555
Swedish Krona 1.033 1.370 1.153
Japanese Yen 0.061 0.082 0.097
13.8 Capital management
The Group’s policy is to maintain a strong capital base so as to sustain investor, creditor and market confidence and to sustain future
development of the business. Capital comprises equity attributable to equity holders of Telkom. The Group monitors capital using net debt
to EBITDA ratio. Telkom’s policy is to keep the net debt to EBITDA ratio between 1 and 2 times. Included in net debt are interest-bearing
loans and borrowings, credit facilities and other financial liabilities, less cash and cash equivalents and other financial assets.
Telkom plans on continuing its share buy-back strategy based on certain criteria, including market conditions, availability of cash and other
investment opportunities and needs.
All of Telkom’s issued and outstanding ordinary shares, including the class A ordinary share and the class B ordinary share, rank equal for
dividends. No dividend may be declared to a holder of the class A ordinary share or class B ordinary share, unless the same dividend is
declared to holders of all ordinary shares. Telkom’s current dividend policy aims to provide shareholders with a competitive return on their
investment, while assuring sufficient reinvestment of profits to enable the Group to achieve its strategy. Telkom may revise its dividend policy
from time to time. The determination to pay dividends and the amount of the dividends, will depend upon, among other things, the earnings,
financial position, capital requirements, general business conditions, cash flows, net debt levels and share buy-back plans.
The Group has access to financing facilities; the total unused amount is R6,237 million (2008: R7,565 million; 2007: R8,658 million) at
the balance sheet date.
There were no changes in the Group’s approach to capital management during the year.
Neither the Group nor any of its subsidiaries are subject to externally imposed capital requirements.
The net debt to EBITDA ratio is as follows:
2007 2008 2009
Rm Rm Rm
Non-current portion of interest-bearing debt 4,338 9,403 10,653
Current portion of interest -bearing debt 6,026 6,330 7,622
Credit facilities utilised 441 1,342 127
Non-current portion of other financial liabilities 36 919 –
Current portion of other financial liabilities 193 371 228
Less: Cash and cash equivalents (749) (1,134) (1,931)
Less: Other financial assets (259) (614) (1,202)
Net debt 10,026 16,617 15,497
EBITDA 13,352 13,203 11,668
Net debt to EBITDA ratio 0.75 1.26 1.33