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Directors’ report
The directors have pleasure in presenting the annual financial statements of Blue Label Telecoms Limited (Blue Label Telecoms or the company) and its subsidiary, associate and joint venture companies (the group) for the year ended 31 May 2011.
Principal activities and strategy
Blue Label Telecoms is a leading distributor of prepaid secure electronic tokens of value and transactional services within emerging and developing economies across its global footprint of touch points. The group’s stated strategy is to extend its local and international footprint of touch points, both organically and acquisitively, to meet the significant demand for the delivery of multiple prepaid products and services through a single distributor, across various delivery mechanisms and via numerous merchants or vendors.
Financial results
The financial statements have been prepared on the going concern basis, since the directors have every reason to believe that Blue Label Telecoms and the group have adequate resources in place to continue in operation for the foreseeable future. The annual financial statements for the year ended 31 May 2011 were approved by the board and signed on its behalf on 23 August 2011.
Full details of the financial position and results of the company, the group and its segments are set out in the annual financial statements, and group annual financial statements.
Subsidiaries, associates and other investments
Particulars of the principal subsidiaries, joint ventures and associates of the Blue Label Telecoms group are provided in note 33 to the annual financial statements.
Disposals
On 23 February 2011, a strategic alliance was entered into between Blue Label Mexico S.A de C.V. (‘BLM’) and Grupo Bimbo S.A.B de C.V. (‘Bimbo’), a distributor of consumer goods. In terms of this arrangement Bimbo purchased 40% of BLM for US$20 million by subscribing to a fresh issue of shares. This dilution in interest resulted in a profit for the group of R146 million.
For further details of disposals during the year, refer to note 27 to the annual financial statements.
Share capital
Full details of the authorised, issued and unissued capital of the company at 31 May 2011 are contained in note 16 to the financial statements. There were no shares issued during the financial year ended 31 May 2011.
Subsequent events
In June 2011, Microsoft sold its 37.22% shareholding in Oxigen Services India to 2D Fine Investments Mauritius, a wholly owned subsidiary of 2D Fine Holdings Mauritius. The shareholding in the latter is a joint venture between Gold Label Investments, a wholly owned subsidiary of Blue Label Telecoms, and 2D Fine Holdings Limited. The latter is a company controlled by the management of Oxigen Services India. The effect of the above is that Blue Label Telecoms has increased its effective shareholding in Oxigen Services India above 50%, however, the group does not exercise control.
Dividends
On 23 August 2011, the board approved a dividend of 14 cents per ordinary share, equating to a cover of 3.3 times on HEPS. The dividend in respect of ordinary shares for the year ended 31 May 2011 of R107 092 578 (STC: R10 709 258) has not been recognised in the financial statements as it was declared after this date. The salient dates are as follows:
| Last date to trade cum dividend | Friday, 9 September 2011 | |
| Shares commence trading ex dividend | Monday, 12 September 2011 | |
| Record date | Friday, 16 September 2011 | |
| Payment of dividend | Monday, 19 September 2011 |
Share certificates may not be dematerialised or rematerialised between Monday, 12 September and Friday, 16 September 2011, both days inclusive.
Directorate
The following were directors of the company for the year under review:
| Name | Office | Appointment date | Date and nature of change | ||||
| Larry M Nestadt | Independent non-executive chairman | 5 October 2007 | – | ||||
| Brett M Levy | Joint chief executive officer | 1 February 2007 | – | ||||
| Mark S Levy | Joint chief executive officer | 1 February 2007 | – | ||||
| Kevin M Ellerine | Non-executive director | 8 December 2009 | – | ||||
| Gary D Harlow | Independent non-executive director | 5 October 2007 | – | ||||
| Neil N Lazarus SC | Non-executive director | 5 October 2007 | – | ||||
| Peter Mansour | Non-executive director | 21 May 2008 | Resigned in October 2010 | ||||
| Joe S Mthimunye | Independent non-executive director | 5 October 2007 | – | ||||
| Mteto Nyati | Non-executive director | 12 October 2010 | – | ||||
| Mark V Pamensky | Chief operating officer | 5 October 2007 | – | ||||
| David B Rivkind | Financial director | 5 October 2007 | – | ||||
| Lucy (Pani) M Tyalimpi | Independent non-executive director | 5 October 2007 | – |
Directors’ interests
The individual interests declared by directors and officers in the company’s share capital as at 31 May 2011, held directly or indirectly were as follows:
| Nature of interest | |||||||||
| Direct beneficial | Indirect beneficial | ||||||||
| Director | 2011 | 2010 | 2011 | 2010 | |||||
| BM Levy | 74 340 553 | 74 340 553 | 8 272 778 | 8 272 778 | |||||
| MS Levy | 66 933 145 | 66 933 145 | 8 272 777 | 8 272 777 | |||||
| KM Ellerine | — | — | 296 297 | 296 297 | |||||
| JS Mthimunye | 20 000 | 20 000 | — | — | |||||
| MV Pamensky | — | — | 5 565 738 | 7 565 738 | |||||
| LM Nestadt | — | — | 8 204 674 | 8 204 674 | |||||
| GD Harlow | — | — | 2 000 000 | 3 000 000 | |||||
| NN Lazarus | 4 803 424 | 4 803 424 | — | — | |||||
| DB Rivkind | — | — | 3 700 000 | 3 431 669 | |||||
The aggregate interest of the current directors in the capital of the company was as follows:
| Number of shares | |||||
| 2011 | 2010 | ||||
| Beneficial | 182 409 386 | 185 141 055 | |||
The beneficial interest held by directors and officers of the company constitutes 24.12% of the issued share capital of the company.
Resolutions
The company passed and registered a special resolution in October 2010, approving the acquisition of the company’s shares by the company or any of its subsidiaries.
Except for the aforementioned, no other special resolutions, the nature of which might be significant to shareholders in their appreciation of the state of affairs of the group, were passed by the company or its subsidiaries during the period covered by this annual report.
SECRETARY
The company secretary is E Viljoen. The business and postal address of the company secretary appear on the inside back cover.
Auditors
PwC will continue in office in accordance with section 90 (6) of the Companies Act.
Larry Nestadt
Chairman