Telkom AR front.qxp

Notes to the annual financial statements (continued)
for the three years ended March 31, 2009
12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)
12.4. Liquidity risk management (continued)
Contractual
Telkom Annual Report 2009 281
Carrying cash < 6 6 – 12 1 – 2 2 – 5
amount flows months months years years > 5 years
Notes Rm Rm Rm Rm Rm Rm Rm
2007
Non-derivative financial liabilities
Interest-bearing debt (excluding
finance leases) 23 8,231 10,416 1,350 4,680 – 1,806 2,580
Trade and other payables 27 4,333 4,333 3,887 446 – – –
Finance lease liabilities 34 852 1,903 59 61 137 356 1,290
Derivative financial liabilities
Other financial liabilities 18 57 57 51 6 – – –
Interest rate swaps 26 26 26 – – – –
Forward exchange contracts 31 31 25 6 – – –
13,473 16,709 5,347 5,193 137 2,162 3,870
12.5. Foreign currency exchange rate risk management
The Company manages its foreign currency exchange rate risk by economically hedging all identifiable exposures via various financial
instruments suitable to the Company’s risk exposure.
Forward exchange contracts have been entered into to reduce the foreign currency exposure on the Company’s operations and liabilities.
The Company also enters into foreign forward exchange contracts to economically hedge interest expense and purchase and sale
commitments denominated in foreign currencies (primarily United States dollars and euros). The purpose of the Company’s foreign currency
hedging activities is to protect the Company from the risk that the eventual net cash flows will be adversely affected by changes in exchange
rates.
There were no changes in the exposure to foreign currency exchange rate risk and its objectives, policies and processes for managing and
measuring the risk from the previous period.