Telkom AR front.qxp

58
Telkom Annual Report 2009
Black economic empowerment
We constantly strive to maintain our
momentum
in terms of implementing our
BBBEE transformation pillars
In the year under review, we continued to
make a significant contribution towards the
achievement of the objectives of our
government’s Broad-Based Black Economic
Empowerment (BBBEE) policies and the
transformation of the Information and
Communications Technology (ICT) sector.
One of our strategic goals is to become
one of South Africa’s leading empowered
companies. Our BBBEE Strategy and
Implementation Roadmap, which are the
enablers to achieve the objectives of our
2010 Strategic Plan, have both been
approved by the Board.
Our BBBEE self-assessment has revealed a
number of highlights.
• In ownership, a series of landmark
transactions – the sale of 15% of our
shares in Vodacom, the declaration of a
special dividend and the listing and
unbundling of Vodacom shares –
unlocked value for our shareholders, the
majority of whom are public entities and
black shareholders.
• In management control, we were
ranked the second most empowered
company on the JSE Securities
Exchange by the Financial Mail Top
Companies Survey. This ranking
reflected the total transformation of our
Board and top management structures
to significantly exceed government’s
targets for this element of BBBEE.
• In preferential procurement, we were
again ranked one of the best performers
on the JSE Securities Exchange by the
Financial Mail Top Empowerment
Companies Survey. Our Preferential
Procurement is recognised as a champion
in driving economic transformation
among JSE Listed companies, stateowned
enterprises and within the ICT
sector. During the past financial year,
we procured goods and services
worth R4.1 billion from black-owned
companies, equivalent to 33.2% of total
measured procurement spend. This
figure exceeds the 15% target in the
BEE Codes by a significant margin. BEE
2007/ 2008/
BBBEE element Target 08 09
BBBEE procurement spend from all suppliers 50% 55% 70.4%
BBBEE procurement spend from qualifying small
enterprises or exempted micro-enterprises 10% 6.7% 5.1%
BBBEE procurement from black-owned suppliers 9% 23.4% 33.2%
BBBEE procurement from black women-owned
suppliers 6% 6.3% 4.8%
recognised procurement spend from all
suppliers was R8.8 billion, equivalent to
70.4% of total measured procurement
spend. Again, this figure significantly
exceeds the 50% target in the BEE
Codes. BEE recognised procurement
spend from Qualifying Small Enterprises
(QSEs) and Exempted Micro-Enterprises
(EMEs) declined slightly as many of our
small suppliers graduated to become
large enterprises measured under the
Generic Scorecard of the BEE Codes of
Good Practice.
In this regard, we have a dual BEE
evaluation policy that considers both the
DTI scorecard (broad-based BEE
evaluation criteria) and levels of black
ownership (narrow-based BEE criteria)
when making procurement decisions.
This policy is in line with best practices in
the South African economy. Our
preferential procurement policy also
seeks to move beyond BBBEE
compliance and achieve other qualitative
and industrial policy objectives such as
reducing our dependence on
international resources, the development
of domestic technology production
capabilities and the creation of
sustainable black-owned ICT companies.
Although our preferential procurement
policy is perceived to be stringent, the
majority of our large suppliers, many of
them multi-national companies, have set
up local operations, sold equity to black
shareholders and developed BBBEE
Commitment Plans that are in line with
our policy.