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312 Telkom Annual Report 2009 Notes to the annual financial statements (continued) for the three years ended March 31, 2009 33. ACQUISITION OF MINORITY INTEREST IN SUBSIDIARY Multi-Links Telecommunications (Proprietary) Limited (Multi-Links) Telkom acquired 75% of the issued share capital of Multi-Links Telecommunications Limited through Telkom International (Proprietary) Limited, from Kenston Investment Limited on May 1, 2007. Telkom also granted Kenston the irrevocable right and option (put option) to require Telkom to acquire all of the shares held by Kenston (25% shareholding) in Multi-Links, at any time during the 90 day period following the second anniversary of the effective date. The put option was exercised on January 21, 2009 for R1,328 million (US$130 million at US$1 = R10,2188). 34. COMMITMENTS 2007 2008 2009 Rm Rm Rm Capital commitments Capital commitments authorised 7,000 7,000 6,991 Commitments against authorised capital expenditure 507 652 539 Authorised capital expenditure not yet contracted 6,493 6,348 6,452 Capital commitments comprise commitments for property, plant and equipment and software included in intangible assets. Management expects these commitments to be financed from proceeds of Vodacom sale. 2010 FIFA World Cup commitments The FIFA World Cup commitment is an executory contract which requires the Company to develop the fixed-line components of the necessary telecommunications infrastructure needed to broadcast this event to the world. This encompasses the provisioning of the fixedline telecommunications related products and services and, where applicable, the services of qualified personnel necessary for the planning, management, delivery, installation and de-installation, operation, maintenance and satisfactory functioning of these products and services. Furthermore as a National Supporter, Telkom owns a tier 3 sponsorship that grants Telkom a package of advertising, promotional and marketing rights that are exercisable within the borders of South Africa. Telkom entered into a barter transaction in return for which it has an outstanding commitment to FIFA of R243 million (2008: R260 million). This has been recognised in intangible assets (note 10).
Notes to the annual financial statements (continued) for the three years ended March 31, 2009 34. COMMITMENTS (continued) Telkom Annual Report 2009 313 Total 5 years Rm Rm Rm Rm Operating lease commitments and receivables 2009 Cash flow Land and buildings 432 158 262 12 Rental receivable on buildings (271) (99) (170) (2) Vehicles 1,137 261 876 – Equipment 15 6 9 – Customer premises equipment receivable 88 49 39 – Total cash flow 1,401 375 1,016 10 The above figures represent actual cash flows relating to operating leases expected during the periods specified. However, due to the straight-lining effect of operating leases, the amounts that would be recognised in the income statement in the periods specified, would be as follows: Income statement Land and buildings 399 152 237 10 Rental receivable on buildings (250) (96) (153) (1) Vehicles 1,137 261 876 – Equipment 15 6 9 – Customer premises equipment receivable 88 49 39 – Total to be recognised in the income statement 1,389 372 1,008 9 Vehicles, equipment and customer premises equipment have no fixed annual escalation, therefore the cash flows and income statement recognition would be the same. 2008 Cash flow Land and buildings 366 141 224 1 Rental receivable on buildings (266) (94) (169) (3) Vehicles 1,430 226 1,204 – Equipment 13 10 3 – Customer premises equipment receivable (84) (45) (39) – Total cash flow 1,459 238 1,223 (2) Income statement Land and buildings 330 133 196 1 Rental receivable on buildings (246) (92) (152) (2) Vehicles 1,430 226 1,204 – Equipment 13 10 3 – Customer premises equipment receivable (84) (45) (39) – Total to be recognised in the income statement 1,443 232 1,212 (1)
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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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