To the members of Telkom SA SOC Limited

The directors have pleasure in submitting the annual financial statements of the Company and the Group for the year ended
31 March 2013.

NATURE OF BUSINESS

Telkom is a leading integrated communications service provider in South Africa and on the African continent.

FINANCIAL RESULTS

Loss from continuing operations for the year ended 31 March 2013 was R11,499 million (2012: R179 million profit) representing basic earnings per share from continuing operations of 2,276.2 cents loss per share (2012: 10.4 cents profit 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

The ordinary dividend has been considered with reference to Telkom’s current and expected future challenges, performance, debt and cash flow levels. Telkom’s strategic objectives of network transformation and the building of its mobile business will see dividends being considered on an annual basis based on the performance of the Group. Telkom has decided not to declare a dividend in respect of the financial year ended 31 March 2013. While our current financial position should allow us to fund network transformation and build our data driven mobile offering, the Board has decided that it is prudent to allow for more internally generated funding for the capital expenditures planned over the next three years. This will better position Telkom to weather uncertainties as we advance our value building strategy.

SUBSIDIARIES, ASSOCIATES AND OTHER INVESTMENTS

Particulars of the material subsidiaries of the Group are set out in note 16 of the accompanying Group annual financial statements.

The attributable interest of the Group in the after-taxearnings from continuing operations of its subsidiaries for the year ended 31 March 2013 were:

SHARE CAPITAL

Details of the authorised, issued and unissued share capital of the Company as at 31 March 2013, are contained in note 24 of the accompanying Group annual financial statements.

SHARE REPURCHASE

The Company did not repurchase any shares during the year under review.

BORROWING POWERS

In terms of the Company’s memorandum of incorporation, Telkom has unlimited borrowing powers subject to the restrictive financial covenants of the TL20 bond and syndicated loans.

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 37 of the accompanying Group annual financial statements.

Details of the Company and Group’s capital expenditure on property, plant and equipment as well as intangibles are set out in notes 13 and 14 of the accompanying Group annual financial statements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

As mentioned in note 38 to the consolidated financial statements in the report on the SAVA matter, the Competition Tribunal found Telkom to be in contravention of section 8(b) and section 8(d)(i) of the Competition Act and imposed an administrative penalty of R449 million on Telkom. Telkom appealed the matter and the Competition Commission filed a cross-appeal but, pursuant to settlement discussions between the parties, the respective appeals were subsequently withdrawn. Accordingly, the Competition Tribunal’s award stands unaltered.

As a result of the Competition Tribunal’s finding of a contravention of the Competition Act by Telkom, Telkom’s external auditors, Ernst & Young Inc., reported a reportable irregularity (RI) to the Independent Regulatory Board for Auditors (IRBA). In response to a request from Ernst & Young Inc. for further information regarding the RI, Telkom confirmed that the RI is no longer taking place and that there are no losses to be recovered pursuant to the RI. The auditors have reported this in their findings to IRBA and it is expected that the RI will be finalised on this basis.

As mentioned in note 38 to the consolidated financial statements in the report on the Multiple Complaints Referral matter, the CC signed a settlement agreement on 13 June 2013, in an attempt to settle the MIV referral. In terms of this settlement agreement, Telkom has admitted that its conduct during the complaint period amounted to a contravention of sections 8(c) (margin squeeze) and 8(d)(iii) (bundling and tying) of the Competition Act. Telkom furthermore committed to certain price reductions over the next three years, behavioural remedies which include a form of functional separation between its wholesale and retail business and has agreed to pay an administrative penalty of R200 million, payable in three equal instalments. This settlement agreement is subject to confirmation by the CT and Telkom is awaiting a date on which the CT will hear the matter.

As a result of the admissions by Telkom in the abovementioned settlement agreement, Telkom’s external auditors, Ernst & Young Inc., reported an RI to the IRBA.

EVENTS SUBSEQUENT TO REPORTING DATE

Events subsequent to the reporting date are set out in note 43 of the accompanying Group annual financial statements.

DIRECTORATE

The following changes occurred in the composition of the board of directors from 1 April 2012 to the date of this report:

Appointments

Resignations

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

Details of each director may be found on pages 60 and 61 of this integrated report.

DIRECTORS’ INTERESTS

At 31 March 2013, none of Telkom’s directors other than NT Moholi, J Molobela, K Mzondeki and Dr CA Fynn held any direct and indirect, beneficial and non-beneficial interests in the share capital of the Company. NT Moholi, J Molobela, K Mzondeki and Dr CA Fynn directly held 37,004, 276, 276 and 202 ordinary shares in Telkom, respectively.

Details of the company secretary’s business address and the Group’s registered office are set out on the inside back cover of this integrated report.