MIRA INFORM REPORT

Report Date :

16.05.2007

IDENTIFICATION DETAILS

Name :	TELKOM SA LTD

Registered Office :	Telkom Towers North, 152 Proes Street, Pretoria, Gauteng

Country :	South Africa

Date of Incorporation :	1 October 1991

Com. Reg. No.:	1991/005476/06

Legal Form :	Limited Liability Company

Line of Business :	Provides wire line and wireless services.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	Regular

Litigation :	Clear

COMPANY NAME

TELKOM SA LTD

Quoted on the JSE Securities Exchange South Africa on 4 March 2003 and the New York Stock Exchange.

SERVICE UNITS

INTERNATIONAL AND SPECIAL

MARKETING SERVICES

STRATEGIC PLANNING AND INTERNATIONAL DIVISION

TECHNOLOGY AND NETWORK SERVICES

PROCUREMENT SERVICES

INFORMATION TECHNOLOGY SERVICES

CORPORATE SALES

BUSINESS SALES

ACCESS NETWORK OPERATIONS

PUBLIC TELEPHONES

The unit groups are:

HUMAN RESOURCES SERVICES

CORPORATE COMMUNICATION

LEGAL SERVICES

CENTRE FOR LEARNING

GOVERNMENT & REGULATORY RELATIONS

NETWORK OPERATIONS

CONSUMER MARKETS

PHYSICAL ADDRESS

Head Office:

Telkom Towers North

152 Proes Street

PRETORIA

Gauteng

POSTAL ADDRESS

Private Bag X74 and Private Bag X881

PRETORIA PRETORIA

0001 0001

TELEPHONE NUMBER: 012 311 3911 / 2358 / 7743

FAX NUMBER: 012 311 4777

The address of Old Kempton Park Road, Olifantsfontein, 1665 is the address for the Centre For Learning which is a unit group in the company with postal address Private Bag X3, Olifantsfontein 1665, Tel No. 011 316 2442 and Fax No. 011 238 4011. The subject does training for Telkom employees of different courses being Electrical, IT, etc.

SHAREHOLDERS

38,1% GOVERNMENT OF SOUTH AFRICA

16,2% PUBLIC INVESTMENT COMMISSIONER

5,7% ELEPHANT CONSORTIUM

The remaining shares are held by the public and investors on the JSE Securities Exchange South Africa.

ASSOCIATE COMPANIES

VODACOM GROUP (PTY) LTD (50%)

Subsidiary companies:

TELKOM DIRECTORY SERVICES (PTY) LTD (64.9%)

SWIFTNET (PTY) LTD trading as Fast Net Wireless Data Services (100%)

INTERCOM (PTY) LTD (100%)

Q TRUNK (PTY) LTD (100%)

ACAJOA INVESTMENTS (PTY) LTD (100%)

TCI (PTY) LTD (100%)

ROSSEL NO 65 (PTY) LTD (100%)

The companies TELESAVE (PTY) LTD and MNATI FOODS (PTY) LTD were sold in 1999.

DIRECTORS

T MOSOLOLI

D D TABATA

Y TENZA

M MOSTERT

T MAHLOELE

B DU PLESSIS

P C LUTHULI

S T ARNOLD

K S T MATTHEWS

BANKERS

The subject deals mainly with ABSA BANK, CITIBANK and FIRST NATIONAL BANK branches countrywide.

DATE REGISTERED

1 October 1991

Registration Certificate Number: 1991/005476/06

Prior to 1991, the then DEPARTMENT OF POSTS AND TELECOMMUNICATIONS of the Republic of South Africa, which was originally established in the late 1800’s, provided telecommunications and post office services in South Africa on an exclusive basis. In 1991, the South African Government transferred the entire telecommunications enterprise to TELKOM as part of a commercialisation process intended to liberalise certain sectors of South Africa’s economy.

MAJOR OPERATION

The subject is South Africa’s leading integrated communications operator, which provides wire line and wireless services throughout South Africa. The fixed-line segment include, long-distance, fixed-to-mobile and international telephony, as well as interconnection and transit communications, value added services and customer premises equipment sales. Data Offerings range from local and international data transmission services such as leased lines and packet-based services to managed data networking, internet access and information technology services.

MAJOR SUPPLIERS

It was deemed not necessary by respondents to submit suppliers in view of the standing of the subject.

MAJOR CUSTOMERS OR BUSINESS SECTORS

General public and industry – It was stated that the subject serve 225 global and corporate customers, almost 550 000 small, medium and large businesses, approx. 2.6 million residential customers and hundreds of thousands of public payphone customers.

AREA OF DISTRIBUTION AND SELLING

South Africa

EXPORTS

None

TOTAL EMPLOYEES

Approximately 28 972 (excludes subsidiaries and VODACOM)

OTHER PREMISES

The subject has hundreds of branches throughout South Africa, 6 main regional offices plus small branches

OWNED OR LEASED

Some of the premises are reported to be owned while others are leased. It was stated that the subject has two main offices in Pretoria: the Proes Street premises and 178 Vermeulen Street Pretoria.

AUTHORISED SHARE CAPITAL

R10 000 000 000 divided into 1 000 000 000 ordinary shares of R10 each

ISSUED SHARE CAPITAL

R557 031 819

Please see latest available financial information from the JSE Handbook of South Africa attached.

AUDITORS

ERNST & YOUNG

YEAR END

MARCH

INSURANCE BROKERS

ALEXANDER FORBES

TRADE REFERENCES

NOT APPLICABLE

COMMENTS

This is a large, well connected company in South Africa that is partly owned by the South African Government. In view of the standing of the subject, it is considered equal to its normal business engagements.

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions