Telkom Group Annual Report 2003 world-class Our vision is to be a communications group Contents Profile Operational highlights
www.telkom.co.za Telkom SA Limited is one of the largest companies registered in the Republic of South Africa and is the larges
Operational highlights for the year ended March 31 2002 2003 % change Fixed-line Fixed access lines (thousands) ISDN channels (
Financial highlights for the year ended March 31 (ZAR millions) Operating revenue EBITDA1 Operating profit Net profit Number of
Chairman’s statement Taking responsibility A characteristic of great companies is the foresight and commitment to take the nece
The strength of the leadership team was tested and evidenced in the defining events and significant change that characterised t
Chief executive officer’s review Touching tomorrow It has been a remarkable year for the Telkom Group. While the year may have
A focused strategy Our strategy for the Group is focused on improving returns to shareholders. We have undertaken to maximise s
Chief executive officer’s review continued to avoid the need for further adjustments in the face of new competition. While we a
Our investment in our fixed-line employees is directed towards defined, focused internal change programmes. These impact the ap
Executive management team 1 2 5 3 4 6 10 Telkom SA Limited Group Annual Report 2003
1. Sizwe Nxasana (45) Chief Executive Officer Sizwe Nxasana was appointed Chief Executive Officer in April 1998. Prior to joini
Management team continued Godfrey Ntoele (42) Managing Executive: Business Markets Bachelor of Arts (Law) Joined Telkom in 1997
2 1 Board of Directors 3 4 5 6 7 8 9 10 Telkom SA Limited Group Annual Report 2003 13
“True colours” The unveiling of the new flag was a defining moment, symbolising the birth of a new era. Now, nine years later,
Corporate governance The Board is committed to ensuring that the affairs of the Company are conducted with integrity and in acc
Corporate governance continued Directors’ attendance of Board meetings Scheduled Number of meetings Non-executive NE Mtshotshis
Audit and Risk Management Committee The Audit and Risk Management Committee comprises three non-executive directors. A nonexecu
Corporate governance continued Remuneration Committee Prior to March 2003, the Human Resources Review Committee and the Remuner
Financial statements The Board of Directors is responsible for preparing Telkom’s accounts and requires Telkom’s external audit
“New life” 35 years ago Dr Chris Barnard brought hope where there was none. He penetrated the mysteries of the human heart and
Human capital management Fixed-line employees by function Breakdown (%) Technical Customer facing Information technology Suppor
Human capital management continued In compliance with the Employment Equity Act, the Company submits employment equity plans, a
Remuneration and benefits The purpose of Telkom’s remuneration and reward strategy is to attract, retain and motivate employees
“Class” Overcoming adversity. A never say die attitude. Indomitable courage. Determination. This is what makes South African, N
Human capital management continued Conditions of service and service benefits Conditions of service and service benefits are co
Human capital management continued Leadership development An Individual Development Programme (IDP) was launched to provide a p
Communications; MarPless Communication Technologies; Molapo Technologies; Siemens; Sun Microsystems and Tellabs. not represente
“African gateway” Mysterious and comforting, Table Mountain anchors the continent at its southernmost tip, saying to the world
Safety, health and environment Telkom strives to conduct its business in a manner that considers economic, social, safety, heal
Safety, health and environment continued management of short and long-term health issues. It will enable the Company to underst
Environment Telkom first introduced its Environmental Management System in 1997, aimed at ensuring compliance with all relevant
“Giving voice” In 1994 South Africans cast their votes in the country’s first democratic elections. For the majority it was a n
Corporate social investment The Telkom Foundation pursues a philosophy of focused empowerment and sustainable development. Key
Corporate social investment continued people from disadvantaged communities to compete effectively. The Foundation sponsored th
Economic empowerment A business imperative While supporting Government’s commitment to transformation as demonstrated in its ec
Five-year financial review For the year ended March 31, Amounts in accordance with IFRS Income statement data 1999 ZAR (unaudit
Five-year operational review For the year ended March 31, Fixed-line data Fixed access lines (thousands) Postpaid – PSTN Postpa
Group structure Shareholders Government 39.3% The Government of the Republic of South Africa is the majority shareholder of Tel
Operational review Fixed-line communications The fixed-line segment is the largest, based on revenue and profit contribution an
Operational review – fixed-line continued Telkom groups its fixed-line customer base into three categories to more effectively
We offer a broad range of internet-based customer care tools. We operate, for example, an e-mail service centre where our custo
Operational review – fixed-line continued Data transmission services Data transmission services provide the connection of infor
basket may not be used to subsidise other products and services outside the basket. Currently, the overall tariffs for all serv
Operational review – fixed-line continued network, with its network management capability, provides for faster provision and mo
Operational review Mobile communications Telkom participates in the South African mobile communications market through a 50% in
Operational review – mobile continued South Africa As of March 31, 2003 Vodacom had 7.9 million customers in South Africa. Voda
using the networks of operators with whom Vodacom has international roaming agreements. As of March 31, 2003, Vodacom had inter
Operational review – mobile continued Vodacom Service Provider Company seeks to enter into exclusive relationships with leading
2002, Vodacom was unable to enter into commercially acceptable interconnection agreements with local operators in Mozambique. T
Financial review Telkom’s strong group results in 2003 are supported by solid revenue growth, improvements in operational effic
Net profit and earnings per share Net profit increased 33.5% to R1,630 million (2002: R1,221 million) in the year ended March 3
Financial review continued Segment commentary The operating structure comprises two segments, fixed-line and mobile. The fixed-
Mobile The mobile segment accounted for 22.3% of group operating revenues (2002: 19.3%) and 33.3% of group operating profits (2
Telkom SA Limited Content to annual financial statements For the year ended March 31, 2003 Consolidated Page Directors’ respons
Directors’ responsibility statement The directors are responsible for the preparation of the annual financial statements of the
Report of the joint independent auditors Chartered Accountants (SA) PO Box 2322 Johannesburg 2000 South Africa Tel +27 11 772 3
Report of the independent auditors Chartered Accountants (SA) PO Box 2322 Johannesburg 2000 South Africa Tel +27 11 772 3000 Fa
Directors’ report Nature of business Telkom SA Limited (“the Company”), incorporated in South Africa, is an integrated communic
The following served as directors of the Company at its financial year-end: NE Mtshotshisa (Chairman) SE Nxasana (Chief Executi
Consolidated income statement for the three years ended March 31, 2003 Notes 2001 Rm 31,352 206 6,590 4,983 7,118 1,539 1,292 5
Consolidated balance sheet at March 31, 2003 Notes 2001 Rm 2002 Rm 2003 Rm Assets Non-current assets Property, plant and equipm
Consolidated statement of changes in equity for the three years ended March 31, 2003 Share capital Rm Share premium Rm 2,723 2,
Consolidated cash flow statement for the three years ended March 31, 2003 Notes 2001 Rm 6,165 31,072 (21,181) 33 34 35 9,891 52
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 1. Overview of business activiti
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2. Significant accounting polici
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2. Significant accounting polici
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2. Significant accounting polici
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2. Significant accounting polici
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2. Significant accounting polici
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 34,197 27,606 6,
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 5. 5.1 O
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 5. 5.5 O
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 873 787 581 206
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2003 Accumulated Cost depreciati
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 Carrying value at beginning of y
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2003 Accumulated Cost amortisati
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 Carrying value at beginning of y
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 11. Inve
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 549 853 (250) (4
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 1,081 899 182 20
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm (98) 723 1 724 (
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 19. Non-
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 21,505 17,991 15
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 22. Inte
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 22. Inte
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 1,028 1,033 2003
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 25. Prov
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 6,663 4,877 1,12
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 28. Commitments (continued) Oper
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 2001 Rm 2002 Rm 2003 Rm 29. Cont
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 30. Financial instruments and ri
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 31. Undrawn borrowing facilities
Notes to the consolidated annual financial statements for the three years ended March 31, 2003 32. Employee benefits The Group
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Touch Tomorrow Telkom SA Limited
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Telkom Group Annual Report 2003 world-class Our vision is to be
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www.telkom.co.za Telkom SA Limited is one of the largest compan
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Operational highlights for the year ended March 31 2002 2003 %
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Financial highlights for the year ended March 31 (ZAR millions)
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Chairman’s statement Taking responsibility A characteristic of
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The strength of the leadership team was tested and evidenced in
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Chief executive officer’s review Touching tomorrow It has been
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A focused strategy Our strategy for the Group is focused on imp
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Chief executive officer’s review continued to avoid the need fo
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Our investment in our fixed-line employees is directed towards
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Executive management team 1 2 5 3 4 6 10
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1. Sizwe Nxasana (45) Chief Executive Officer Sizwe Nxasana was
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Management team continued Godfrey Ntoele (42) Managing Executiv
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2 1 Board of Directors 3 4 5 6 7 8 9 10 Te
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“True colours” The unveiling of the new flag was a defining mom
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Corporate governance The Board is committed to ensuring that th
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Corporate governance continued Directors’ attendance of Board m
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Audit and Risk Management Committee The Audit and Risk Manageme
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Corporate governance continued Remuneration Committee Prior to
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Financial statements The Board of Directors is responsible for
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“New life” 35 years ago Dr Chris Barnard brought hope where the
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Human capital management Fixed-line employees by function Break
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Human capital management continued In compliance with the Emplo
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Remuneration and benefits The purpose of Telkom’s remuneration
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“Class” Overcoming adversity. A never say die attitude. Indomit
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Human capital management continued Conditions of service and se
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Human capital management continued Leadership development An In
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Communications; MarPless Communication Technologies; Molapo Tec
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“African gateway” Mysterious and comforting, Table Mountain anc
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Safety, health and environment Telkom strives to conduct its bu
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Safety, health and environment continued management of short an
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Environment Telkom first introduced its Environmental Managemen
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“Giving voice” In 1994 South Africans cast their votes in the c
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Corporate social investment The Telkom Foundation pursues a phi
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Corporate social investment continued people from disadvantaged
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Economic empowerment A business imperative While supporting Gov
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Five-year financial review For the year ended March 31, Amounts
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Five-year operational review For the year ended March 31, Fixed
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Group structure Shareholders Government 39.3% The Government of
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Operational review Fixed-line communications The fixed-line seg
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Operational review – fixed-line continued Telkom groups its fix
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We offer a broad range of internet-based customer care tools. W
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Operational review – fixed-line continued Data transmission ser
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basket may not be used to subsidise other products and services
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Operational review – fixed-line continued network, with its net
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Operational review Mobile communications Telkom participates in
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Operational review – mobile continued South Africa As of March
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using the networks of operators with whom Vodacom has internati
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Operational review – mobile continued Vodacom Service Provider
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2002, Vodacom was unable to enter into commercially acceptable
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Financial review Telkom’s strong group results in 2003 are supp
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Net profit and earnings per share Net profit increased 33.5% to
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Financial review continued Segment commentary The operating str
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Mobile The mobile segment accounted for 22.3% of group operatin
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Telkom SA Limited Content to annual financial statements For th
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Directors’ responsibility statement The directors are responsib
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Report of the joint independent auditors Chartered Accountants
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Report of the independent auditors Chartered Accountants (SA) P
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Directors’ report Nature of business Telkom SA Limited (“the Co
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The following served as directors of the Company at its financi
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Consolidated income statement for the three years ended March 3
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Consolidated balance sheet at March 31, 2003 Notes 2001 Rm 2002
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Consolidated statement of changes in equity for the three years
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Consolidated cash flow statement for the three years ended Marc
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