This report covers the financial year 1 April 2021 to 31 March 2022 and includes significant subsequent events up to the date of approval of the report.
This report is prepared for our providers of financial capital and other stakeholders. It communicates Telkom’s progress towards achieving the United Nations Global Compact regarding human rights, labour, the environment, and our anti-corruption efforts.
We used the IIRC’s <IR> Framework in compiling this report. We adhere to the JSE Listings Requirements and we are a constituent of the FTSE/JSE Responsible Investment Index. We aligned our definitions of sustainability KPIs to the Global Reporting Initiative Standards’ definitions of those KPIs.
The report complies with the JSE Listings Requirements, and specifically the corporate governance requirements contained in paragraph 3.84 of the JSE Listings Requirements.
Our report focuses on material themes that substantively impact our ability to create value for our stakeholders over time. Refer to Material aspects of our value creation process for our materiality determination process and material themes. This report shows the connection between our material themes, strategy, governance, performance and prospects. It addresses our divisions and our subsidiaries (business units), unless otherwise stated.
We considered the disclosure guidelines of King IV while preparing our report. We applied and explained the 16 relevant principles and demonstrated how we achieved governance outcomes. A King IV application report, which sets out the principles and summarised application, is available on our website at www.telkom.co.za/ir/Governance/Governance.shtml.
King IV principle disclosures are indicated with this icon IV throughout the report. The following summary states what is required from a governing body (i.e. the Board).
Principle 1
Lead ethically and effectively
Principle 2
Govern the ethics of the organisation in a way that supports the establishment of an ethical culture
Principle 3
Ensure that the organisation is and is seen to be a responsible corporate citizen
Principle 4
Appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are inseparable elements of the value creation process
Principle 5
Ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance and its short, medium and long-term prospects
Principle 6
Serve as the focal point and custodian of corporate governance in the organisation
Principle 7
Comprise the appropriate balance of knowledge, skills, experience, diversity and independence to discharge its governance role and responsibilities objectively and effectively
Principle 8
Ensure that arrangements for delegation within the governing body structures promote independent judgement, and assist with the balance of power and the effective discharge of its duties
Principle 9
Ensure that the evaluation of its own performance and that of its Committees, its Chairperson and its individual Members, support continued improvement in its performance and effectiveness
Principle 10
Ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities
Principle 11
Govern risk in a way that supports the organisation in setting and achieving its strategic objectives
Principle 12
Govern technology and information in a way that supports the organisation setting and achieving its strategic objectives
Principle 13
Govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen
Principle 14
Ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic and positive outcomes in the short, medium and long term
Principle 15
Ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports
Principle 16
Adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time
Combined assurance relating to our integrated reportWe follow a combined assurance approach, which integrates our internal audit function, TGIA, other independent assurers and risk management activities across the Group. TGIA assessed the completeness and accuracy of a sample of strategic, non-financial KPIs presented in this report. We are in the process of enhancing our combined assurance framework to be applied across all combined assurance functions.
PwC and SizweNtsalubaGobodo Grant Thornton Inc. are the joint independent external auditors. They provided assurance over our consolidated annual financial statements and expressed an unmodified opinion. Refer to https://www.telkom.co.za/ir/financial/financial-results-2022.shtml.
Our reporting suite as outlined below can be found at www.telkom.co.za/ir.
We recognise that integrated reporting and stakeholder information requirements continue to evolve. We welcome feedback to improve our integrated report. Comments and feedback can be sent to our investor relations team at telkomir@telkom.co.za.
Many of the statements in this document, and verbal statements that may be made by Telkom or by Officers, Directors or employees acting on Telkom’s behalf, constitute or are based on forward-looking statements.
All statements, other than statements of historical facts, including, among others, statements regarding our strategy, future financial position and plans, objectives capex, projected costs and anticipated cost savings and financing plans, and projected levels of growth in the communications market, are forward-looking statements. Forward-looking statements can generally be identified by terminology such as “may”, “will”, “should”, “expect”, “envisage”, “intend”, “plan”, “project”, “estimate”, “anticipate”, “believe”, “hope”, “can”, “is designed to”, "forecast", "guidance" or similar phrases. However, the absence of such words does not necessarily mean that a statement is not forward looking. Forward-looking statements involve several known and unknown risks, uncertainties and other factors that could cause our actual results and outcomes to be materially different from historical results or 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 the strategic risks section of this report, Enterprise risk management and compliance .
Telkom cautions readers not to place undue reliance on these forward-looking statements. All written and verbal forward-looking statements attributable to Telkom, 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 report, so that they conform either to the actual results or to changes in our expectations.
Any forward-looking financial information disclosed in this report has not been reviewed or audited or otherwise reported on by our external joint auditors.
Certain financial information presented in the results announcement released on 14 June 2022 and in the integrated report constitutes pro forma financial information. This is presented for illustrative purposes only. Because of its nature, the pro forma financial information may not fairly present Telkom’s financial position, changes in equity and results of operations or cash flows. The pro forma financial information is the responsibility of Telkom’s Board.
The pro forma financial information in the results announcement released on 14 June 2022 was reviewed by the Group’s joint independent external auditors and their unmodified limited assurance report prepared in terms of ISAE 3420 relating to the results announcement is available for inspection at https://www.telkom.co.za/ir/financial/financial-results-2022.shtml.
The financial information presented in the results announcement was prepared excluding the impact of the VSP, VERP and S189 costs and constitutes pro forma financial information to the extent that it is not extracted from the segment disclosure included in the audited consolidated financial statements for the years ended 31 March 2021 and 31 March 2022. This pro forma financial information was presented to eliminate the impact of the pro forma adjustments from the consolidated financial results for the years ended 31 March 2021 and 31 March 2022 to achieve a comparable year-on-year analysis and show the underlying performance of the business.
Reported March 2021 and March 2022 refers to the March 2021 and March 2022 financial information, respectively, as included in the audited consolidated financial statements.
The joint independent auditors’ report by PwC and SizweNtsalubaGobodo Grant Thornton Inc. does not report on the information contained in the integrated report. Therefore, shareholders are advised that, to obtain a full understanding of the nature of the joint independent auditors’ engagement, they should obtain a copy of the joint independent auditors’ audit report together with the accompanying financial information from Telkom’s website at: https://www.telkom.co.za/ir/financial/financial-results-2022.shtml.
The Directors of Telkom take full responsibility for the preparation of the integrated report including the pro forma financial information that was correctly extracted from the underlying audited financial statements.