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286 Telkom Annual Report 2009 Notes to the annual financial statements (continued) for the three years ended March 31, 2009 12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued) 12.6 Sensitivity analysis (continued) Foreign exchange currency risk (continued) +10% movement –10% movement (depreciation) (appreciation) Other Other movements movements Profit in equity Profit in equity Rm Rm Rm Rm 2008 Assets Trade and other receivables 10 – (10) – Investments 91 – (91) – Other financial assets 331 – (331) – Forward exchange contract 331 – (331) – Liabilities Interest-bearing debt (10) – 10 – Trade and other payables Other financial liabilities (95) – 95 – Forward exchange contract (153) – 153 – 174 – (174) – 2007 Assets Trade and other receivables 10 – (10) – Other financial assets 74 – (74) – Forward exchange contract 74 – (74) – Liabilities Interest-bearing debt (10) – 10 – Trade and other payables (40) – 40 – Other financial liabilities 11 – (11) – Forward exchange contract 11 – (11) – 45 – (45) – 2007 2008 2009 R R R 12.7. Exchange rate table (closing rate) 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
Notes to the annual financial statements (continued) for the three years ended March 31, 2009 12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued) 12.8. Capital management Telkom Annual Report 2009 287 The Board’s policy is to maintain a strong capital base so as to sustain investor, creditor, market confidence and future development of the business. Capital comprises equity attributable to equity holders of the Company. The Company monitors capital using net debt to EBITDA ratio. The Company’s policy is to keep the net debt to EBITDA ratio of between 1 and 2 times. Included in net debt are interest-bearing debts, 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 us to achieve our 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 Company has access to financing facilities, the total unused amount of which is R6,226 million at the balance sheet date. There were no changes in the Company’s approach to capital management during the year. The Company is not 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 3,308 7,336 10,193 Current portion of interest -bearing debt 5,775 6,026 7,511 Other financial liabilities 57 168 225 Less: Cash and cash equivalents (176) (483) (941) Plus: Credit facilities utilised – 41 106 Less: Other financial assets (229) (443) (1,198) Net debt 8,735 12,645 15,896 EBITDA 12,489 11,848 8,704 Net debt to EBITDA ratio 0.70 1.07 1.83
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We are... one of Africa’s largest
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Telkom shareholding as at March 31,
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Grow profitable revenue through wir
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600 500 400 300 200 100 0 07 08 09
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The telecommunications industry Con
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egulation that stipulated standard
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a - Euros a - Euros a - Euros 0.25
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ated management team with experienc
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The regulatory environment The regu
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On target for 2010 Telkom Annual Re
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Online impairments, the fixed-line
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• Remodelling - reaching for new
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in this annual report has been upda
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Capital expenditure for the Group i
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More than100 years of combined tele
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Management team Telkom Annual Repor
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Telkom Annual Report 2009 33 Age at
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uild a partnership with communities
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Customers: Through our Customer Cen
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• Interfacing with the media Whil
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Partnering with Human Resources Gro
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The members’ resignations and app
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Share dealings In line with JSE Lis
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NYSE rules Telkom practice Telkom A
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the codes of conduct and ethics tha
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Telkom Annual Report 2009 51 Enterp
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provider, we practice a risk manage
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egulate the business of dealers in
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addressing a number of significant
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There was a major Over the past dec
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payment policy that facilitates the
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Headcount movement Compensation and
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• Accelerated development of wome
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14,500 union members participated i
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were admitted to the university in
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ole in exposing students to the rea
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Sick leave indices • We saved R2
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These will be augmented by another
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Some of the key deliverables are:
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Fittingly, the initiative was launc
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Sponsorships Sponsorships continue
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Item Comment and reference Governan
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espond to competitive challenges Pe
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Operational review History and deve
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service. All costs including instal
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Traffic was adversely affected in b
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Telkom’s focus on bringing new in
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esponse of the CDMA operators to ou
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MWEB Africa On April 21, 2009, we a
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VPN model that allows other service
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services and also to support Telkom
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Telkom’s fixed-line voice busines
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Results of operations The Telkom Gr
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EBITDA can be reconciled to operati
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Telkom Annual Report 2009 109 Finan
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Fixed-line operating revenue increa
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The following table sets forth info
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Interconnection revenue Year ended
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Telkom Annual Report 2009 117 Fixed
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Fixed-line payments to other networ
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Service fees increased in the year
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Vodacom’s operating revenue from
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our fixed-line business, which were
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Vodacom’s selling, general and ad
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The increase in other operating rev
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commercial paper bills, as well as
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The following table sets forth our
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challeng Consolidated financial sta
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138 Telkom Annual Report 2009
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140 Telkom Annual Report 2009 Direc
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142 Telkom Annual Report 2009 Conso
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144 Telkom Annual Report 2009 Conso
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146 Telkom Annual Report 2009 Notes
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338 Telkom Annual Report 2009 Share
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346 VOTING AND PROXIES Ordinary sha
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Notes Telkom Annual Report 2009 1.
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