For the year ended 31 march 2015
All Board members were re-elected as per the Annual general meeting ordinary resolutions with the exception of Mr L Maasdorp who withdrew his nomination to be re-elected as director with effect from 27 August 2014.
Telkom announced on 8 August 2014 that Mr Jacques Schindehütte retired from the Board with full benefits and the disciplinary proceedings have been discontinued. Telkom settled the retirement benefit with Mr Schindehütte during November 2014.
Telkom announced on 15 September 2014 that Mr Deon Fredericks had been appointed as an Executive Director and Chief Financial Officer of Telkom SA SOC Ltd effective from 12 September 2014.
Telkom announced on 1 December 2014 that Ms Thembisa Dingaan, Mr Graham Dempster, Mr Rex Tomlinson and Ms Nunu Ntshingila have been appointed as Non-Executive Directors with effect from 3 December 2014.
Telkom announced on 3 December 2014 that Dr Clive Fynn had resigned as a non-executive director with immediate effect.
During November 2014 Telkom provided the Post 1994 pensioners the option to transfer their post retirement medical aid benefit to an insurer. All except three pensioners exercised their option to transfer their benefit to the insurer. A settlement gain was recognised in the current financial year.
On 7 March 2014, Telkom signed a heads of agreement in terms of which MTN South Africa would take over the financial and operational responsibility for the roll-out and operation of Telkom's RAN. The parties will conclude reciprocal roaming agreements to enable customers of either party to roam on each other's network.
The proposed transaction is subject to conclusion by the parties of various binding commercial agreements to give effect to the transaction, and various other approvals, including approvals by regulatory authorities as may be required for the implementation of the proposed transaction.
On 22 May 2014, Telkom announced its firm intention to make an offer to acquire the entire issued share capital of BCX in a bid to improve performance and restore profitability.
Shareholders of BCX approved the acquisition by Telkom at an Ordinary Scheme Meeting held on 11 August 2014. On 13 May 2015 the Competition Commission of South Africa approved the acquisition subject to certain conditions. Both parties are awaiting approval from the Competition Tribunal and discussions are being held with the Independent Communications Authority of South Africa.
In April 2014, as part of the larger Telkom turnaround strategy the company initiated discussions with organised labour, with a focus on an organisational restructuring process that would result in headcount reduction.
The staff affected by this organisational restructuring, was limited to the management and specialist layers. Telkom consulted with organised labour on an ongoing basis since 4 May 2014, regarding possible dismissals in terms of S189 of the Labour Relations Act, on all elements of the restructuring process. At the end of September 2014, the Section 189 process was concluded in relation to the affected staff.
The intention of the Telkom turnaround strategy is to secure the future commercial sustainability of the business. The sustainable success of the company is largely dependent on both the attraction and retention of qualified, competent and experienced professional staff. The organisational restructuring is not driven so much by headcount reduction targets as it is by business imperatives that will shape the long-term commercial sustainability of the company.
Telkom has also been engaging with organised labour in relation to the outsourcing of various business operations in an effort to unlock operating and cost efficiencies in line with the company’s multi-year turnaround strategy. This necessitated invoking a process in terms of Section 197 of the Labour Relations Act, in a bid to outsource certain services as going concerns. Telkom’s call centre operations, internal printing division as well as the network and operations and retail supply chain sections, were transferred and outsourced on 30 April 2015.
Telkom also offered Voluntary Severance (VSPs) and Voluntary Early Retirement Packages (VERPs) to employees affected by the Section 197 process and who opted for severance or early retirement packages. These employees exited Telkom’s services on 30 April 2015.
In a continuous bid to unlock cost efficiencies Telkom conducted a detailed analysis of the viability of the 95 Telkom Direct Stores. Certain stores were unprofitable and deemed unviable, making closure inevitable. Section 189 notices were issued to organised labour in relation to the affected staff in this environment. After exploring every option to place affected employees in other areas of business, unsuccessful employees were retrenched.
On 7 May 2015 Telkom launched the Future Makers programme in terms of which it will invest over R100 million for enterprise and supplier development. Future Makers focuses on driving innovation in the ICT sector by growing access to technology and by offering long-term business support, mentorship and funding to small, medium and micro-enterprises.
There are currently two Telkom Campuses in Tshwane i.e. the Corporate Offices within the Pretoria CBD area, which Telkom is leasing from the Telkom Retirement Fund (TRF) and secondly, the Centurion Campus. The financial and business objectives are to create a single Telkom Corporate Office at Telkom’s owned Centurion Campus by virtue of expanding and revamping the facility. The current Telkom offices in the CBD are outdated and do not represent a look and feel that portraits a modern company and a conducive working environment. In addition, the space allocated to staff is considered to be non-economical as space can be better utilized by having a more open plan concept.
Telkom intends to vacate the CBD premises and settle the outstanding lease and other obligations with the TRF. The benefits to Telkom includes; savings pertaining to rental, utility and maintenance expenditure at the Pretoria CBD Campus, establishment of a modern Campus at Centurion with associated facilities, a conducive working environment with a better look and feel, better utilization of accommodation and future expansion opportunities.
The exit strategy pertaining to the corporate offices within the Pretoria CBD, which is subject to a lease that expires in 2019, is being assessed.