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Overview
Our report's basis of preparation

Telkom believes that complete and accurate information enables our stakeholders to make informed decisions. Our 2018 integrated report explains how we create value through our strategy, governance, performance and prospects.

Telkom SA SOC Ltd represents Telkom group, which comprises Telkom company (including the divisions Openserve and Telkom Consumer) and its subsidiaries, BCX, Gyro and Yellow Pages (known as Trudon). Refer to page 10 for our structure.

In the report we refer to Telkom group as Telkom or the group. In the context of our new operating model the term business units represents our divisions and subsidiaries.

Considerations in preparing this report

We used the International Integrated Reporting Council's (IIRC) Integrated Reporting () Framework and the Global Reporting Initiative's (GRI) Standards in compiling this report. As a listed company, we adhere to the JSE Listings Requirements and we are a constituent of the FTSE/JSE Responsible Investment Index. Telkom was included in the FTSE/JSE Responsible Investment Top 30 Index, ranked by the FTSE ESG rating.

This report shows the connection between our strategy, material themes, governance, performance and prospects. We report according to the six capitals to provide a balanced view of our value creation. We have renamed manufactured capital to productive capital.

We considered the guidelines of the King IV Report on Corporate Governance for South Africa, 2016 (King IV) while preparing our report. We have applied and explained the 16 relevant principles and demonstrated how we achieve governance outcomes. A King IV application report which sets out the principles and disclosure is available on the website (refer www.telkom.co.za/ir). King IV principle disclosures are indicated with this icon throughout the report.

Reporting scope and boundary

This report covers the annual financial year ended 31 March 2018. Subsequent significant events up to the date of approval of the integrated report are also included. The report addresses our divisions, including Openserve and Telkom Consumer, and our subsidiaries, BCX, Gyro and Yellow Pages, unless otherwise stated.

This report is prepared for our providers of financial capital and other stakeholders at large. It also communicates Telkom's progress to the United Nations Global Compact regarding human rights, labour, the environment, and our anti-corruption efforts.

Material themes determination process

To keep our report concise, we focus on material themes that substantively affect our ability to create value for our stakeholders over time. Refer to page 19 for our materiality determination process, and page 31 for our material themes.

Combined assurance

We follow a combined assurance approach (page 95), which integrates Telkom Audit Services (TAS), other independent assurers and risk management activities across the group. Our integrated report was reviewed and approved by the executive committee (exco), audit committee and the board of directors.

Ernst & Young (EY) is the external auditor who provided assurance over our consolidated annual financial statements and expressed an unmodified opinion (refer to page 10 of the consolidated annual financial statements) which is available online at www.telkom.co.za/ir.

IBIS ESG Assurance provided assurance over certain non-financial indicators in the report. Assured non-financial indicators are indicated with this icon .
For the purpose of assuring non-financial indicators, Yellow Pages has been excluded on the basis of immateriality. The external assurance focused on the outh African operations of Telkom company, Gyro and BCX.

The internal audit function assessed the completeness and accuracy of a sample of strategic, non-financial key performance indicators (KPIs) presented in the integrated report.

Reporting suite

Our reporting suite that is outlined in the table below can be found at www.telkom.co.za/ir.

           
Report   Framework     Assurance provider
Integrated report, including the notice of annual general meeting  
  • IIRC Framework
  • GRI Standards
  • King IV
  • Companies Act of South Africa, 71 of 2008, as amended (Companies Act)
  • JSE Listings Requirements
   
  • Management
  • Audit committee
  • Board
  • IBIS ESG Assurance
  • Internal audit
Consolidated annual financial statements  
  • International Financial Reporting Standards (IFRS)
  • Companies Act
   
  • Management
  • Audit committee
  • Board
  • EY
Assurance statement  
  • AA1000AS Standard
   
  • IBIS ESG Assurance
King IV application report  
  • King IV
   
  • Management
  • Audit committee
  • Board
Annual results presentation  
  • Not applicable
   
  • Management
  • Audit committee
  • Board
B-BBEE certificate  
  • Amended ICT sector codes
   
  • BEE Online

Forward-looking statements

Many of the statements in this document, as well as verbal statements that may be made by us or by officers, directors or employees acting on our behalf, constitute or are based on forward-looking statements.

All statements, other than statements of historical facts, including, among others, statements regarding our convergence and other strategies, future financial position and plans, objectives, capital expenditures, projected costs, anticipated cost savings and financing plans, as well as projected levels of growth in the communications market, are forward-looking statements. Forward-looking statements can generally be identified by the use of words such as "may", "will", "should", "expect", "envisage", "intend", "plan", "project", "estimate", "anticipate", "believe", "hope", "can", "is designed to" or similar phrases, although the absence of such words does not necessarily mean that a statement is not forward looking. These forward-looking statements involve a number of known and unknown risks, uncertainties and other factors that could cause our actual results and outcomes to be materially different from historical results or from any future results expressed or implied by such forward-looking statements.

Factors that could cause our actual results or outcomes to differ materially from our expectations include, but are not limited to, those risks identified in Telkom's most recent integrated report, which is available on Telkom's website at www.telkom.co.za/ir.

We caution you not to place undue reliance on these forward-looking statements. All written and verbal forward looking statements attributable to us, or persons acting on our behalf, are qualified in their entirety by these cautionary statements. Moreover, unless we are required by law to update these statements, we will not necessarily update any of these statements after the date of this document, so that they conform either to the actual results or to changes in our expectations.

Board approval

The board acknowledges its responsibility for the integrity of our integrated report. It confirms that it collectively reviewed the report's contents and leveraged off the assurance obtained from our various internal and external assurance providers, including assessments on risk and internal controls.

The board is of the view that Telkom's integrated report addresses all matters material to its stakeholders' decision-making, and concluded that the information herein is in all material respects fairly presented in accordance with the IIRC Framework. The board approved the report on 5 July 2018.

Board approval