Directors' report

To the members of Telkom SA SOC Ltd

The directors have pleasure in submitting the annual financial statements of the Group for the year ended 31 March 2021.

The directors confirm that Telkom complies with the provisions of the Companies Act and the laws of establishment, specifically relating to its incorporation; and it operates within conformity with its
memorandum of incorporation and all relevant constitutional documents.

Nature of business

Telkom is an integrated communications and information technology service provider for South Africa.

Financial results

Profit for the year ended 31 March 2021 was R2 428 million (Restated March 2020: R540 million) representing basic earnings per share of 489.9 cents per share (Restated March 2020: 107.5 cents per share) and headline earnings per share of 522.2 cents per share (Restated March 2020: 194.4 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

Final ordinary dividend number 26 declared for 31 March 2020 (50.08410 cents per share) was paid on Monday, 13 July 2020 to shareholders recorded in the register of the Group at close of business
on Friday, 10 July 2020.

In the current financial year, the Board suspended the dividend policy for the next three years from FY2021. No dividend was declared for the year ended 31 March 2021.

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 2021 were:

Share capital

Details of the authorised, issued and unissued share capital of the Company as at 31 March 2021, are contained in note 23 of the accompanying annual financial statements.

Share repurchases

Telkom purchased 8 million 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 notes 11 and 13 of the accompanying Group annual financial statements.

Significant events and transactions

Significant events and transactions during the year under review is disclosed on note 41 of 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 2020 to the date of this report:

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

• MS Moloko (Chairperson)
• SN Maseko (Group Chief Executive Officer)
• DJ Reyneke (Group Chief Financial Officer)
• N Kapila
• PCS Luthuli
• KW Mzondeki
• F Petersen-Cook
• KA Rayner
• AN Samuels
• SP Sibisi
• H Singh
• RG Tomlinson
• LL von Zeuner

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

Directors’ interest

At 31 March 2021, the following directors held a beneficial interest in the shares of Telkom SA.

* Resigned on 04 December 2020