TELEMASTERS HOLDINGS LIMITED

(Incorporated in the Republic of South Africa)

Registration number 2006/015734/06

Share code: TLM & ISIN Number: ZAE000093324

("TeleMasters" or "the Company" or "the Group")

TELEMasters

REVIEWED PROVISIONAL CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED30 SEPTEMBER 2011

REVIEWEDCONDENSED CONSOLIDATED STATEMENTSOF COMPREHENSIVE INCOME 30 September

2011R

Revenue268,142,485

Cost of sales

Gross profit(225,784,306)

42,358,179

Investment revenueOther gains and lossesAuditor's remunerationDepreciationAmortisationDirectors' emolumentsOperating lease rentalsEmployee costsBad debtProfessional feesOther expensesFinance costsProfit before taxationIncome tax expenseProfit for the year

876,0414,670

(365,380)(4,778,466)

(930,550)(3,145,858)(1,095,144)(8,948,024)(1,639,496)(1,533,099)(5,506,604)

(482,418)14,813,851

(4,813,500)10,000,351

Total comprehensive income for theperiod 10,000,351

Profit and total comprehensiveincome attributable to theshareholders of the Company 10,000,351

AUDITED

30 September2010

R

236,899,745

(200,721,228)36,178,517

880,159(318,187)(325,020)

(3,973,114)(996,991)

(3,289,417)(738,313)

(6,989,196)(1,310,892)(1,241,451)(4,561,532)

(773,697)12,540,866

(4,726,509)7,814,357

7,814,357

7,814,357

EARNINGS AND HEADLINE EARNINGS PERSHARE

Earnings and diluted earnings pershare (cents)Headline earnings and dilutedheadline earnings per share (cents)

The Earnings per share and Headlineearnings per share were determinedusing the following information:

Earnings used in the calculation ofearnings per share and dilutedearnings per shareProfit attributable to shareholdersof the Company

HEADLINE EARNINGS:

Profit attributable to shareholdersof the CompanyAdjusted for:(Loss)/profit on disposal ofProperty plant and equipment

Headline earnings for the period

Weighted number of ordinary shares

Shares as at 30 September 2011Shares as at 30 September 2010

Dividends declared and paid pershare (cents)Capital distributions declared andpaid per share (cents)

23.81

23.80

10,000,351

10,000,351

(4,670)

9,995,681

Number of sharesin issue

42 000 00042 000 000

17.00

18.61

19.36

7,814,357

7,814,357

318,187

8,132,544

Weightedaverage number

of shares inissue

42 000 00042 000 000

9.00

5.00

27,256,316 28,155,2602,305,928 2,426,455

122,260 2,044,08565,311 72,179

29,749,815 32,697,979

30,086,594 34,794,707

63,014,328 64,862,090

42,000,000 42,000,00078.40 71. 59

CONDENSED CONSOLIDATED STATEMENTSOF FINANCIAL POSITION

REVIEWED30 September

2011R

ASSETSNon-current assetsProperty, plant & equipmentIntangible assetsGoodwillDeferred tax

14,008,5391,912,0812,415,6854,233,304

22,569,609Current assetsTrade and other receivablesCash and cash equivalents

20,024,14720,420,57240,444,71963,014,328Total assets

EQUITY AND LIABILITIESEquity and reservesIssued capitalRetained earnings

48,05932,879,67532,927,734

Non-current liabilitiesFinance lease liabilities 336,779

336,779

Current liabilitiesTrade and other payablesFinance lease liabilitiesCurrent tax liabilitiesBank overdraft

Total liabilities

Total equity and liabilities

Number of shares in issueNet asset value per share (cents)

AUDITED30 September

2010R

16,600,9712,842,6312,686,7793,860,944

25,991,325

18,726,56120,144,20438,870,76564,862,090

48,05930,019,32430,067,383

2,096,7282,096,728

Net tangible asset value per share(cents) 68.10

CONDENSED CONSOLIDATED STATEMENTSOF CASH FLOWS

REVIEWED30 September

2011R

Cash flows from operatingactivities

Profit for the yearIncome tax expenseInterest receivedDividends receivedGain/ Loss on disposal of plant &equipmentDepreciationAdjustment to plant & equipmentAmortisationAdjustment to intangible assetsFinance costs

10,000,3514,813,500(639,058)(236,982)

(4,670)4,778,466

930,550

482,41820,124,575

Movements in working capital:Decrease/ (Increase) in trade andother receivablesIncrease/ (Decrease) in trade andother payablesCash generated by operationsFinance costIncome taxes paidNet cash generated from operatingactivities

(1,297,586)

(898,944)17,928,045

(482,418)(6,836,590)

10,609,037

Cash flow from investing activities

Interest receivedDividends receivedAcquisition of subsidiaryAdditions to plant and equipmentProceeds from disposal of plant andequipmentAdditions to intangible assetsNet cash used in investingactivities

639,058236,982

(2,765,418)

584,054

(1,305,324)

58.42

AUDITED30 September

2010R

7,814,3574,726,509(565,360)(314,799)

318,1873,973,114

102,442996,991(2,870)773,697

17,822,268

4,314,045

4,050,51826,186,831

(773,697)(9,925,144)

15,487,990

565,360314,799

(1,800,000)(3,374,881)

358,066(27,234)

(3,963,890)

Cash flow from financing activities

Capital reduction of share premium

Dividends paidProceeds from borrowingsRepayment of borrowingsNet cash used in financingactivities

Total cash movement for the periodCash and cash equivalents at thebeginning of yearCash and cash equivalents at theend of year

CONDENSEDCONSOLI OATEDSTATEMENTSOF CHANGESIN EQUITY

ShareCapital

('000)

Share

premiumBalance at30September2009Comprehen-siveincome- Profit- Other

comprehen-siveincomeTotalcomprehen-siveincomeTrans-actionwith

4,200 2,143,859

(7,140,000)664,957

(2,545,435)

(9,020,478)

283,235

20,072,026

20,355,261

Totalshare Retained

capital income

2,148,059 25,984,966

7,814,357

7,814,357

(2,100,000)(3,743,538)

1,214,451(2,988,667)

(7,617,754)

3,906,346

16,165,680

20,072,026

Total

Equity

28,133,025

7,814,357

7,814,357

owners- Distri-

bution ofsharepremium (2,100,000) (2,100,000) (2,100,000)- Divi-

dends (3,780,000) (3,780,000)Totaltrans-actionswithowners (2,100,000) (2,100,000) (3,780,000) (5,880,000)Balance at30September2010 4,200 43,859 48,059 30,019,324 30,067,383Comprehen-siveincome- Profit 10,000,351 10,000,351- Other

comprehen-siveincomeTotalcomprehen-siveincome 10,000,351 10,000,351Trans-actionwithowners- Distri-

bution ofsharepremium- Divi-

dends (7,140,000) (7,140,000)Totaltrans-actionswithowners (7,140,000) (7,140,000)Balance at30September2011 4,200 43,859 48,059 32,879,675 32,927,734

SEGMENT REPORT

REVIEWED30

September2011

R

The Group does not have different operatingsegments. The business is conducted inSouth Africa and is managed centrally withno branches. The Group is managed as oneoperating unit. Accordingly there is nomeaningful segmental information to reportother than the following information

Revenue by NatureSale of Fixed Cellular airtimeSale of Fixed Line airtimeConnection Incentive BonusesOther

261,529,9761,167,171

5,1505,440,188

268,142,485

Major customers

Revenues from transactions with externalcustomers amounting to 10 percent or moreof the Group's revenue, are disclosedbelow:

Customer A 16,857,957

Customer B 85,210,724

AUDITED30

September2010

R

225,923,904

5,602,2445,373,597

236,899,745

57,544,438

Other 166,073,804 179,355,307

268,142,485 236,899,745

1. COMPANY PROFILE

TeleMasters is a specialist tele-management and business communicationstrategy player operating exclusively in the South African corporatemarket. It is now a full ICASA licensed Fixed Line Service Provider.The Company provides current and future clients access to the mostefficient and effective digital telecommunication technologies.

2. FINANCIAL RESULTS

2.1 Statement of compliance and basis of preparationThe provisional reviewed financial information for the year ended30 September 2011 has been presented in accordance with theframework concepts and the measurement and recognition requirementsof International Financial Reporting Standards ("IFRS"), theinformation required by IAS 34: Interim Financial Reporting, theSouth African Companies Act, as amended, the AC500 Standards asissued by the Accounting Practices Board and the JSE ListingsRequirements. The results have been prepared in accordance withaccounting policies of the Company that are in terms of IFRS andare consistent with those applied in the audited annual financialstatements for the year ended 30 September 2010.

These results were prepared under the supervision of Brandon TophamCA (SA) and have been reviewed by BOO South Africa Incorporated,whose unmodified review opinion is open for inspection at theCompany's registered office.

2.2 Commentary on operating results

The last financial year has been a transitional operational period.Due to the changes in the telecoms environment, the technologyutilised by the Group to provide telecommunication access to ourclients is being upgraded to that of a fully licensed fixed lineoperator. This transition is taking place at clients where greatersavings can be offered by embracing the new technology which wehave implemented to make cost efficient, clear and reliable voicecalls. Thus we utilise different platforms for different clientsdepending on the circumstances and needs of the client. Thistransition is taking longer than expected due to various system andsales changes we have needed to develop. The changing of theplatform away from pure cellular least-cost routing has meant agreater investment in time and to a lesser degree capital, to tweakthe offering which has only become fully marketable in the lastquarter of the year. This change is important for the Group in thelonger term as the margins from the fixed line operation are moresustainable and potentially more profitable.

Our Revenue growth of 13% is on the back of the sale of airtime toa large once off client. These sales of R85 210 724 are notexpected to be a recurring business in the new year. The growth andstabilisation of the Group's revenue in the new year is anticipatedto be on the back of our fixed line platform. The reduction in thedifferential due to changes in the interconnect rates resulted insmaller clients agreements being mutually terminated. Our business

model remains strictly based on ensuring that healthy operatingmargins take preference over revenue which is not profitable. Webelieve that our pruning efforts will assist in the growth in thecoming years as our Group's attention will not be misdirected topoor profitability business relationships.

Significant expenses are set out in the Condensed ConsolidatedStatement of Comprehensive Income. Depreciation has increased by20% on the back of the capital purchased during the preceding andcurrent financial years to enable our new technology platform to beimplemented.

The rise in the operating lease is a direct result of the move inDecember 2010 to new larger premises in the Route 21 CorporateOffice Park.

The Company remains cash positive despite paying out 17 cents(2010: 14 cents) per share in dividends and reducing long termborrowings to the point that during the next financial period wewill once again be almost debt free. Our net asset value per shareincreased 9.5% to 78.40 cents per share after paying out 71% of ourearnings to shareholders as we did not require the cash for growthduring this transitory period to fixed line operator.

Earnings per share grew by 27.94% over the past year during adifficult operating environment in the telecommunications industry.The decision to not renew long term contracts on the cellularservice platform can be clearly seen by the lack of connectionincentive bonus received. This decision has enabled us to be in aposition to move our platform from least-cost routing to fixed lineoperator. The full financial effect of this will only becomeevident in the medium term.

2.3 DividendsThe following dividends were declared during the year to date:• First quarter: A dividend of 4 cents (2010: 4 cents) per share

was declared on 22 December 2010 and paid to all shareholdersrecorded in the share register of the Company at the close ofbusiness on Friday, 21 January 2011;

• Second quarter: A dividend of 4 cents (2010:was declared on 31 March 2011 and paid torecorded in the share register of the Companybusiness on Friday 29 April 2011;

• Third quarter: A dividend of 5 cents per share was declared on22 June 2011 and paid to all shareholders recorded in the shareregister of the Company at the close of business on Friday 15July 2011. During the third quarter of the prior year a capitaldistribution from share premium of 2 cents per share wasdeclared.

4 cents) per shareall shareholdersat the close of

• Fourth quarter: A dividend of 4 cents per share was declared on23 September 2011, and paid to all shareholders recorded in theshare register of the Company at the close of business on Friday21 October 2011. During the fourth quarter of the prior year acapi tal distribution from share premium of 3 cents per shareplus a cash dividend of 1 cent per share was declared .

• First quarter of 2012. A dividend of 1 cent (2011: 4 cents) pershare has been declared and is payable to all shareholdersrecorded in the share register of the Company at the close ofbusiness on Friday 20 January 2012.

The board will continuedividends but draw yourunder future prospects.

with theattention

policyto the

of declaringfactors set

quarterlyout below

2.4 Acquisition of property, plant and equipment

Property, plant and equipment acquired during the year comprisesvarious items of Furniture and fittings, Motor vehicles, Officeequipment, IT equipment and Routers and handsets.

3. SUBSEQUENT EVENTS

The directors are not aware of any matter or circumstance arising sincethe reporting date which would have a material effect on theconsolidated results or the consolidated financial position of theCompany as reported other than the intended delisting from the JSE asannounced previously.

4. LITIGATION

There are currently no legal or arbitration proceedings against theGroup of which the Group is aware which may have, or have had in the 12months preceeding the date of this report, a material effect on theconsolidated position of the Group. As reported previously a subsidiaryof the company, Skycall Networks (Pty) Ltd has a potential claimagainst it by a supplier which existed at consolidation date and whichwas provided for at the time of acquisition.

5. SHARE CAPITAL

No changes to share capital occurred during the past financial year.

6. FUTURE PROSPECTS

The boardprospectscellularcontinues

of directors ("BoardU) is confident about the futureof the Company, as the conversion from its traditional

least-cost routing business to an ICASA licensed businessto take place. However the Board points out that the

conversion process will take a longer period before the increased

profi tabili ty will be realised. This, combined with the poor tradingconditions currently in South Africa, has resulted in the Board takinga cautious view regarding the working capital of the Group andprudently deciding to recommend a lower dividend than previously paid.This will have the effect that the Group is able to self-fund theswitch-over to the services of a fixed line operator. The Board willtake every effort to ensure that the Group remains profitable and cashflush but cautions shareholders that dividends may be lower during thenext few quarters until trading conditions improve.

For and on behalf of the Board:

MB PretoriusChief Executive Officer

BR TophamChief Financial Officer

10 January 2012

Corporate informationDirectors: OS van Der Merwe*#, J Voigt*, VI Beck*#, MB Pretorius, BRTopham,(* non-executive, # independent)Registered address: 90 Regency Drive, Route 21 Corporate Office Park,Irene, 0157, Pretoria (P.O. Box 68255, Highveld Park, 0169)Company secretary: Brandon Topham Inc.Auditors: BOO South Africa Inc., Block C, Riverwalk Office Park, 41Matroosberg Avenue, Ashlea Gardens, PretoriaTransfer secretaries: Computershare Investor Services (Proprietary)Limited, 70 Marshall Street, Johannesburg, 2001 (P.O. Box 61051,Marshalltown, 2107)Designated Advisor: Arcay Moela Sponsors (Proprietary) LimitedWebsite: www.telemasters.co.za