Notice is hereby given that the eighteenth annual general meeting of the company will be held in The Bill Gallagher Room, Sandton Convention Centre, Maude Street, Sandton, South Africa on Tuesday, 24 August 2010.
Shareholders are advised that the annual report containing audited financial statements for the year ended 31 March 2010 is expected to be dispatched to shareholders on Monday, 2 August 2010. The condensed consolidated provisional annual financial statements released by Telkom on 21 June 2010 relating to contingencies required amendment.
Subsequent to the release of the results, it has come to Telkom's attention that there was an inaccurate reflection of the amounts being disclosed with regards to Phuthuma's claim in Note 12 to the condensed consolidated provisional annual financial statements. This matter has been corrected and the annual financial statements were reapproved by the directors on the 22 July 2010. Ernst & Young have issued a modified unqualified (emphasis of matter) report on 22 July 2010 on the basis that the previously issued report dated 18 June 2010 was withdrawn due to the fact that they believed the inaccurate reflection to be material.
The amended relevant section on contingencies is set out below:
Phuthuma Networks (Proprietary) Limited ('Phuthuma')
Phuthuma served a summons on Telkom on 20 August 2009, wherein it is claiming various amounts as damages. Phuthuma's claim for damages arises from an allegation that Telkom had failed to adjudicate a tender in accordance with a fair, transparent, competitive and cost-effective procurement policy. The tender was published on 30 November 2007 for the outsourcing of Telkom's Telex and Gentex Services and for the provision of a solution to support the maritime industry requirements. The validity period was 180 days during which period Telkom was required to make an award. Telkom had cancelled the tender on 10 June 2009 without making any award, due to the expiry of the validity period. Phuthuma is claiming damages of R1.5 billion, alternatively R3.8 billion and further alternatively R496 million plus interest at 15.5 percent per annum from April 2008.
During November 2009, Phuthuma amended its summons by increasing the amount of damages alleged to have suffered by it as follows:
The amount of R1.5 billion was increased to R3.7 billion. The alternative claim increased to R5.5 billion. The further alternate claim for damages was increased to R1.8 billion. Telkom is defending the matter. The matter has been set down for trial in the North Gauteng High Court for 17 February 2011.
The Complaints and Compliance Committee at ICASA informed Telkom in February 2010 that Phuthuma also filed a complaint against Telkom at ICASA in respect of an alleged contravention of the Preferential Procurement Framework Act and the Broad Based Black Economic Empowerment Act.
Phuthuma has also filed a complaint against Telkom at the Competition Commission regarding a contravention of the Competition Act and the Johannesburg Stock Exchange. The Competition Commission has in the interim decided not to refer the complaint to the Competition Tribunal.
15 July 2010
Sponsor: UBS South Africa (Pty) Ltd