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Financials
Directors' report

for the year ended 31 March 2018

To the members of Telkom SA SOC Limited

The directors have pleasure in submitting the annual financial statements of the group for the year ended 31 March 2018.

Nature of business

Telkom is a leading information and communications technology (ICT) services provider in South Africa, offering fixed-line, mobile, data and information technology (IT) services.

Financial results

Profit for the year ended 31 March 2018 was R3 158 million (March 2017: R3 854 million) representing basic earnings per share of 602.3 cents per share (March 2017: 738.8 cents per share) and headline earnings per share of 597.0 cents per share
(March 2017: 721.1 cents per share). Full details of the financial position and results of the group are set out in the accompanying company and group annual financial statements.

Dividends

Interim dividend number 21 of 118.114 cents per share (March 2017: 131.23874 cents per share) declared payable on Monday, 4 December 2017 to shareholders recorded in the register of the group at close of business on Friday, 1 December 2017. Ordinary dividend number 22 of 236.97446 cents per share (March 2017: 290.75253 cents per share) declared payable on Monday, 25 June 2018 to shareholders recorded in the register of the group at close of business on Friday, 22 June 2018.

Subsidiaries, associates and other investments

Particulars of the material subsidiaries of the group are set out in note 40 of the accompanying group annual financial statements. The attributable interest of the group in the after-tax earnings of its subsidiaries for the year ended 31 March 2018 was:

  2018
Rm
  2017
Rm
 
Aggregate amount of profit after taxation 2 002   1 199  

Share capital

Details of the authorised, issued and unissued share capital of the company as at 31 March 2018 are contained in note 22 of the accompanying annual financial statements.

Share repurchase

In line with its capital allocation framework, management took the opportunity to repurchase shares in the market in the period under review. This framework seeks to guide the allocation of financial resources of the group in the most efficient manner to ultimately ensure optimal stakeholder value. The repurchase was executed at a weighted average price of R47.50 per share, funded by cash held in our cell captive and did not increase the net debt of the group. Between 15 November 2017 and 16 February 2018 Telkom purchased 15 808 461 shares, representing 3 percent of its issued share capital. The shares have been cancelled.

In addition, Telkom purchased 1 300 561 shares from the market through Rossal No 65 (Pty) Ltd for the purpose of the employee share plan.

Borrowing powers

Telkom's directors may mortgage or encumber Telkom's property or any part thereof and issue debentures, whether secured or unsecured, whether outright or as security for debt, liability or obligation of Telkom or any third party. For this purpose the borrowing powers of Telkom are unlimited, but are subject to the restrictive financial covenants as well as specific restrictive clauses in the current funding arrangements.

Capital expenditure and commitments

Details of the company and group's capital commitments on property, plant and equipment as well as intangible assets are set out in note 36 in the accompanying group annual financial statements.

Significant events and transactions

Significant events and transactions during the year under review is disclosed in note 41 in the accompanying group annual financial statements.

Events after the reporting date

Events subsequent to the reporting date are set out in note 42 of the accompanying group annual financial statements.

Directorate

The following changes occurred in the composition of the board of directors from 1 April 2017 to the date of this report:

Appointments

  Date  
D Mokgatle 20 March 2018  
S Moloko 20 March 2018  
S Luthuli 25 May 2018  

Resignations

  Date  
T Skweyiya (Dingaan) 10 May 2017  

The board of directors at the date of this report is as follows:

  • JA Mabuza (Chairman)
  • SN Maseko (Group chief executive officer)
  • DJ Fredericks (Group chief financial officer)
  • SL Botha
  • GW Dempster
  • N Kapila
  • I Kgaboesele
  • KT Kweyama
  • KW Mzondeki
  • F Petersen-Cook
  • RG Tomlinson
  • LL von Zeuner
  • H Touré
  • D Mokgatle
  • S Moloko
  • S Luthuli

Details of each director may be found in our integrated report.

Directors' interest

At 31 March 2018, the following directors held a beneficial interest in the shares of Telkom SA SOC Ltd.

Executive    
SN Maseko 52 520  
DJ Fredericks 49 245  
Non-executive    
JA Mabuza 26 000  
I Kgaboesele 12 000  
KW Mzondeki 748  

25 May 2018