Committees

The Board is assisted in discharging its duties through its committees. During the year under review, the Board merged the Investment and Strategy Committees.

Executive committee

This committee consists of the two executive directors that serve on the Board of directors and chief executives of the Telkom Group. The Chief Executive Officer is the Chairman of this committee and has the power of authority to, among other things:

• Implement approved business plans, annual budgets and all other matters and issues relating to the achievement of Telkom's obligations under its licences, including without limitations network expansion, equipment procurement, tariff setting and packaging, customer service and marketing; and
• Prepare, review and recommend to the Board the annual budgets and any amendments thereto.

Audit and risk committee (ARC)

The ARC is chaired by Mr PCS Luthuli, a non-executive director; it held four scheduled meetings and six special meetings during the financial year. Mr Luthuli is considered an audit committee financial expert within the meaning of the requirements of the US Securities and Exchange Commission (SEC). He is a chartered accountant.

In terms of its charter, the ARC evaluates the Group's systems of internal and financial control; reviews accounting policies and financial information issued to the public; reviews the performance of the internal and external auditors and determines the fees payable to the external auditors. It also determines and monitors the use of the external auditors for non-audit related services. The committee examines, reviews financial results and recommends same to the Board for approval. A quorum for a meeting is two members.

As at March 31, 2009, the committee comprised four non-executive directors of which three are considered independent:

• Mr PCS Luthuli (independent)
• Mr RJ Huntley
• Mr DD Barber (independent)
• Mr PG Joubert (independent)

The new terms of reference of the committee were approved during the year.

At the time of the Chief Financial Officer's appointment on December 8, 2008 the audit and risk committee satisfied itself of the appropriateness of his credentials, professionalism, technical competency and experience.

The audit and risk committee will conduct a similar review on an annual basis as required by the JSE Listings Requirements.

The internal and external auditors have unlimited access to the Chairman of the audit and risk committee.

The audit and risk committee is satisfied that Ernst & Young is independent in accordance with section 270A of the Corporate Laws Amendment Act, and nominated the re-appointment of Ernst & Young as registered auditors for the 2009/2010 financial year.

Nominations committee

The nomination committee, which must have a minimum of three members and is chaired by an independent non-executive director, consists of Mr PCS Luthuli (Chairman),Ms ST Arnold and Mr B du Plessis. A quorum for a meeting is two members.

The committee makes recommendations to the Board on the composition of the Board, and the balance between executive, nonexecutive and independent non-executive directors with regard to all aspects of diversity and experience.

The committee is responsible for identifying and nominating candidates and formulating succession plans for the approval of thea Board.

In addition, the committee recommends to the Board continuation (or not) of services of any director who has reached the retirement age as well as directors who are retiring by rotation, for re-election.

Investment and strategy committee

The investment and strategy committee, consists of Mr DD Barber (Chairman), Dr E Spio-Garbrah, Mr RJ Huntley, Mr RJ September, Mr PG Nelson and Dr VB Lawrence.

The function of the committee is to assist the Board in evaluating investments, corporate actions and key funding and financial proposals.

Human resources review and remuneration committee (HRRRC)

The committee consists entirely of nonexecutive directors. Mr B du Plessis, an independent non-executive director, was appointed as Chairman of the HRRRC as of June 2008.

The HRRRC comprises the following non-executive directors, of which two must be independent:

• Mr B du Plessis (Chairman)
• Mr PG Joubert (independent)
• Ms KST Matthews
• Mr E Spio-Garbrah

The HRRRC held four scheduled meetings and one special meeting during the financial year. This committee, in consultation with management, ensures that the Group's directors and senior executives are fairly rewarded for their individual contribution to the Group's performance. In fulfilling its duties, the HRRRC gives consideration to industry and local benchmarks to ensure that remuneration packages remain competitive. Senior executives receive a salary, short-term incentive and an allocation in terms of the rules of the Conditional Share Plan. Medical and retirement benefits are also offered. Remuneration packages are reviewed annually and performance bonuses are linked both to individual performance and to the performance of the Group. Non-executive directors are paid fees for their services as directors of the Company and for their participation as members of the Board committees.