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48 Telkom Annual Report 2009 Corporate governance (continued) Telkom Audit Services (TAS) is an independent and objective assurance and consulting function that focuses on a balance between value protection Internal controls Our internal control environment is monitored by the ARC, which: • Ensures that risks are identified and assessed. • Ascertains that all systems and processes to prevent and/or mitigate these risks are monitored; and • Reviews the quality of reporting and adherence to internal policies and other governance best practices. Our organisational structure facilitates and allows the flow of information upstream, downstream and across all business activities. This is supported by formal mechanisms in place to communicate the responsibilities and expectations of business activities at executive level. Section 404 of the Sarbanes-Oxley Act requires that companies listed on the NYSE annually evaluate and report on the effectiveness of their controls over financial reporting. We submit progress reports at least quarterly to the ARC which then reports to the Board. Our internal audit function plays a key role in providing an objective view and continuous assessment of the effectiveness of the internal control systems throughout the Group to both management and the ARC. Mechanisms are in place that capture and report on identified internal control and value enhancement weaknesses, including processes that ascertain the level at which deficiencies are reported. Significant deficiencies and material weaknesses in internal controls are reported to top management, the Board or the ARC, and the external auditors. Telkom Audit Services (TAS) TAS, in accordance with global best practices, is a value-adding, independent and objective assurance and consulting function, designed to add value to, and improve our operations. Its mandate is to provide an independent assessment on the reliability of financial reporting, validate control systems and provide an oversight of management and overall business activities, bringing a systematic, disciplined approach to the evaluation and improvement of the effectiveness of risk management, internal controls and corporate governance processes. In carrying out its mandate, TAS co-ordinates with other control and monitoring functions (enterprise risk management, compliance, security, legal, ethics, environment and external audit). TAS is required to provide reasonable assurance and to determine whether or not our control processes and systems are adequate and functioning to ensure that: • Resources and assets are effective and efficiently protected; used and adequately • Risks are appropriately identified and managed; • Significant financial, managerial and operating information is accurate, reliable and timely; • Employees’ actions are in compliance with policies, standards, procedures, applicable laws and regulations; • Significant legislative or regulatory issues impacting on us are recognised and addressed appropriately; and • An assessment is provided regularly of the adequacy and effectiveness of our corporate governance, risk and control processes for controlling our activities and managing our risks. To ensure the independence of TAS, the Group Executive: Telkom Audit Services reports functionally to the ARC Chairman and administratively to the Chief Financial Officer and has direct access to the Chief Executive Officer. In this context, the ARC oversees processes related to financial risks and internal controls, financial reporting and the monitoring of internal and external auditing processes. In carrying out its duties, the team has unrestricted access to all Telkom functions, records, property and personnel. The TAS team conducts audit work, or any other task, in accordance with the internal auditing standards set by the globally recognised Institute of Internal Auditing (IIA). This requires compliance with the Standards or Professional Practice of Internal Auditing (SPPIA) and, in particular,
the codes of conduct and ethics that are promulgated from time to time by relevant professional bodies and any other corporate governance initiatives. Internal audit practices and activities are also benchmarked independently by an authoritative external party as recommended by the SPPIA and required by the ARC. Telkom Annual Report 2009 49 The Network Operations Centre (NOC) Our world-class campus in Centurion, outside Pretoria, enables us to offer our customers an integrated solution to their network requirements. At its heart is the Network Operations Centre (NOC). Developed from the best in world-class practices and centres, it employs the latest technologies and houses high level technical skills and support teams. It offers full network monitoring, fault management, configuration management, accounting management, performance management and security management 24 hours a day, seven days a week. Group overview Management review Sustainability review Performance review Financial statements Company Financial Information
Page 1 and 2: We are... one of Africa’s largest
Page 3 and 4: Telkom shareholding as at March 31,
Page 5 and 6: Grow profitable revenue through wir
Page 7 and 8: 600 500 400 300 200 100 0 07 08 09
Page 9 and 10: The telecommunications industry Con
Page 11 and 12: egulation that stipulated standard
Page 13 and 14: a - Euros a - Euros a - Euros 0.25
Page 15 and 16: ated management team with experienc
Page 17 and 18: The regulatory environment The regu
Page 19 and 20: On target for 2010 Telkom Annual Re
Page 21 and 22: Online impairments, the fixed-line
Page 23 and 24: • Remodelling - reaching for new
Page 25 and 26: in this annual report has been upda
Page 27 and 28: Capital expenditure for the Group i
Page 29 and 30: More than100 years of combined tele
Page 31 and 32: Management team Telkom Annual Repor
Page 33 and 34: Telkom Annual Report 2009 33 Age at
Page 35 and 36: uild a partnership with communities
Page 37 and 38: Customers: Through our Customer Cen
Page 39 and 40: • Interfacing with the media Whil
Page 41 and 42: Partnering with Human Resources Gro
Page 43 and 44: The members’ resignations and app
Page 45 and 46: Share dealings In line with JSE Lis
Page 47: NYSE rules Telkom practice Telkom A
Page 51 and 52: Telkom Annual Report 2009 51 Enterp
Page 53 and 54: provider, we practice a risk manage
Page 55 and 56: egulate the business of dealers in
Page 57 and 58: addressing a number of significant
Page 59 and 60: There was a major Over the past dec
Page 61 and 62: payment policy that facilitates the
Page 63 and 64: Headcount movement Compensation and
Page 65 and 66: • Accelerated development of wome
Page 67 and 68: 14,500 union members participated i
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Page 71 and 72: ole in exposing students to the rea
Page 73 and 74: Sick leave indices • We saved R2
Page 75 and 76: These will be augmented by another
Page 77 and 78: Some of the key deliverables are:
Page 79 and 80: Fittingly, the initiative was launc
Page 81 and 82: Sponsorships Sponsorships continue
Page 83 and 84: Item Comment and reference Governan
Page 85 and 86: espond to competitive challenges Pe
Page 87 and 88: Operational review History and deve
Page 89 and 90: service. All costs including instal
Page 91 and 92: Traffic was adversely affected in b
Page 93 and 94: Telkom’s focus on bringing new in
Page 95 and 96: esponse of the CDMA operators to ou
Page 97 and 98: MWEB Africa On April 21, 2009, we a
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VPN model that allows other service
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services and also to support Telkom
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Telkom’s fixed-line voice busines
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Results of operations The Telkom Gr
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EBITDA can be reconciled to operati
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Telkom Annual Report 2009 109 Finan
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Fixed-line operating revenue increa
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The following table sets forth info
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Interconnection revenue Year ended
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Telkom Annual Report 2009 117 Fixed
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Fixed-line payments to other networ
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Service fees increased in the year
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Vodacom’s operating revenue from
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our fixed-line business, which were
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Vodacom’s selling, general and ad
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The increase in other operating rev
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commercial paper bills, as well as
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The following table sets forth our
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challeng Consolidated financial sta
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138 Telkom Annual Report 2009
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146 Telkom Annual Report 2009 Notes
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346 VOTING AND PROXIES Ordinary sha
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Notes Telkom Annual Report 2009 1.
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