Letter from the Minister of Communications dated 2 November 2005 to the Speaker of the National Assembly, in terms of section 65(2)(a) of the Public Finance Management Act, 1999 (Act No 1 of 1999), explaining the delay in the tabling of the Annual Report of Telkom for 2004-2005:

I refer to your letter dated 17 October 2005 regarding the non-tabling of Telkom’s Annual Report and Financial Statements for 2004/05 financial year.

As you may be aware, Telkom applied for an exemption from certain provisions of the Public Finance Management Act (PFMA) of 1999. The application was based on the fact that with the listing of Telkom, it would be impossible for Telkom to comply with certain provisions of the PFMA and the listing requirements of the Johannesburg Stock Exchange and New York Stock Exchange. In line with Section 92 of the PFMA, the Minister of Finance exempted Telkom and its subsidiaries and any other entities under its ownership control, from certain provisions of the PFMA on 23 October 2001, as published in the Government Gazette No. 22801 dated 09 November 2001, Notice No. 1097. The exemptions were for a period of three years, and included Section 55, which makes provision for the submission of Annual Reports and Audited Financial Statements by public entities.

At the lapse of the three-year exemption period, the exemptions were reviewed and on 5 November 2004, the Minister of Finance granted Telkom an extension for a further period of three years, as published in the Government Gazette No. 26981 dated 19 November 2004, Notice No. 1334. As a result, Telkom is exempted from Sections 6(2)(e), 6(2)(f), 7(2), 7(4), 49, 50(1)(c), 50(1)(d), 51(1)(b)(ii), 51(1)(f), 51(1)(g), 52, 54(1), 54(2), 54(4), 55, 56, 58, 59, 60, 61, 62, 66(1), 66(3), 66(6), 66(7), 68, 76(4), 83 and 86 of the PFMA; and all provisions of the Treasury Regulations issued in terms of the PFMA.

Notwithstanding Telkom’s exemptions, I will in future submit to the national Assembly, in accordance with Section 65(2)(a) of the PFMA, a written explanation regarding the non-tabling of Telkom’s Annual report and Financial Statements, in line with the entity’s exemption from Section 55 of the PFMA.

Kind regards