Explanatory notes

Presentation of the annual financial statements

In terms of section 61(8)(a) of the Act, the directors’ report, audited Group and Company annual financial statements for the immediately preceding financial year and the Audit, Risk and Compliance Committee report is to be presented to shareholders at the AGM.

Ordinary resolution numbers 1 to 4 (inclusive): Election and re-election of Directors

The Company’s Memorandum of Incorporation states that, any person appointed to fill a causal vacancy or as an addition to the Board shall retain office only until the following annual general meeting of the Company and shall then retire and be eligible for election. Mr DA Suntup retires from the Board in accordance with article 25.5 of the Company’s Memorandum of Incorporation.

In accordance with the Memorandum of Incorporation, one third of the directors are required to retire at each annual general meeting and may offer themselves for re-election. Messrs KM Ellerine, JS Mthimunye and LM Nestadt retire by rotation at the AGM in accordance with article 25.17 of the Memorandum of Incorporation, and have offered themselves for re-election. Brief biographies in respect of Directors offering themselves for re-election are contained on pages 21 to 26 of the integrated annual report.

The Board is satisfied with the performance of each of the Directors standing for election and re-election, as appropriate, and that they continue to make an effective and valuable contribution to the Company and to the Board.

The Board recommends to shareholders that they should vote in favour of the election and re-election of the Directors referred to in ordinary resolution numbers 1 to 4 (inclusive).

Ordinary resolution number 5: Re-appointment of external auditors

In terms of section 90(1) of the Act, each year at its annual general meeting, the Company must appoint an auditor meeting the requirements of section 90(2) of the Act.

PwC has expressed its willingness to continue in office and this resolution proposes the re-appointment of PwC as the Company’s auditors until its next annual general meeting. In addition, Mr EJ Gerryts is re-appointed as the individual registered auditor for the ensuing year as contemplated in section 90(3) of the Act.

The Audit, Risk and Compliance Committee has satisfied itself that the proposed auditor, PwC and Mr Gerryts, are independent of the Company in accordance with sections 90 and 94 of the Act and the applicable rules of the International Federation of Accountants.

The Audit, Risk and Compliance Committee has recommended the re-appointment of PwC as independent registered auditor of Blue Label for the 2014 financial year.

Ordinary resolution numbers 6 to 9 (inclusive): Election of Audit, Risk and Compliance Committee members

In terms of section 94(2) of the Act, each audit committee member must be elected by shareholders at an annual general meeting. King III likewise requires shareholders of a public company to elect each member of an audit committee at an annual general meeting.

In terms of Regulation 42 of the Companies Regulations, 2011, relating to the Act, at least one third of the members of the Company’s Audit, Risk and Compliance Committee at any particular time must have academic qualifications, or experience in economics, law, corporate governance, finance, accounting, commerce, industry, public affairs or human resource management. Each of the proposed members is duly qualified, as is evident from the curriculum vitae of each member, as contained on pages 24 and 25 of the integrated annual report.

Ordinary resolution number 10: Directors’ authority to implement ordinary and special resolutions

The reason for ordinary resolution number 10 is to authorise any Director of the Company to do all things necessary to implement the ordinary and special resolutions passed at the AGM and to sign all such documentation required to give effect and to record the ordinary and special resolutions.

Advisory vote: Endorsement of the remuneration policy

King III requires a company to table its remuneration policy for a non-binding advisory vote by shareholders at its annual general meeting. This vote enables shareholders to endorse the remuneration policy adopted for executive directors. The Blue Label remuneration policy is contained in pages 53 to 57 of the integrated annual report.

The advisory vote is of a non-binding nature only and therefore failure to pass this resolution will not have any legal consequences relating to existing arrangements. However, the Board will take cognisance of the outcome of the vote when considering the Company’s remuneration policy and the remuneration of Executive Directors.

Special resolution number 1: Non-Executive Directors’ remuneration

Special resolution number 1 is proposed to enable the Company to comply with the provisions of sections 65(11)(h), 66(8) and 66(9) of the Act, which stipulate that remuneration to directors for their services as directors may be paid only in accordance with a special resolution approved by shareholders.

Special resolution number 1 thus requires shareholders to approve the fees payable to the Company’s Non-Executive Directors for the period 1 June 2013 to 31 May 2014.

Full particulars of all remuneration paid to Non-Executive Directors for their services as Directors as well as remuneration paid for consulting services rendered, are contained on pages 190 and 191 of the integrated annual report.

Special resolution number 2: General authority to repurchase shares

Special resolution number 2 seeks to allow the Group by way of a general authority to acquire its own issued shares (reducing the total number of ordinary shares of the Company in issue in the case of an acquisition by the Company of its own shares). Any decision by the Directors to use the general authority to acquire shares of the Company will be taken with regard to the prevailing market conditions, share price, cash needs of the Group, together with various other factors, and in compliance with the Act, Listings Requirements and the Memorandum of Incorporation.

The Directors are of the opinion that the renewal of this general authority is in the best interests of the Company as it allows the Group to repurchase the securities issued by the Company through the order book of the JSE Limited should market conditions and price justify such action.

ELECTRONIC PARTICIPATION AT THE AGM

(a)

Shareholders wishing to participate electronically in the AGM are required to:

(i)	deliver written notice to the Company at 75 Grayston Drive, corner Benmore Road, Morningside Extension 5, 2196 (marked for the attention of the Group Company Secretary) that they wish to participate via electronic communication at the AGM; or
(ii)	register on the Company’s website at www.bluelabeltelecoms.com, where a link to the registration page will be placed, by no later than 10:00 on Wednesday, 27 November 2013 (“Electronic Notice”).

(b)

In order for the Electronic Notice to be valid it must contain:

(i)	if the Blue Label shareholder is an individual, a certified copy of his/her identity document and/or driver’s license and/or passport;
(ii)	if the Blue Label shareholder is not an individual, a certified copy of a resolution or letter of representation by the relevant entity and a certified copy of the identity documents and/or passports of the persons who passed the relevant resolution or signed the relevant letter of representation. The letter of representation or resolution must set out who from the relevant entity is authorised to represent the entity at the AGM via electronic communication;
(iii)	a valid e-mail address and/or facsimile number (“Contact address/number”); and
(iv)	if the shareholder wishes to vote via electronic communication, set out that the shareholder wishes to vote via electronic communication. By no later than 24 (twentyfour) hours before the AGM the Company shall use its reasonable endeavours to notify a shareholder at its contact address/number who has delivered a valid Electronic Notice, of the relevant details through which the shareholder can participate via electronic communication.

(c)

Should a shareholder wish to participate in the AGM by way of electronic communication as aforesaid, the shareholder, or his/her/its proxy/ies, will be required to dial-in on the date and commencement time of the AGM. The dial-in facility will be linked to the venue at which the AGM will take place. The dial-in facility will enable all persons to participate electronically in the AGM in this manner (and as contemplated in section 63(2) of the Act) and to communicate concurrently with each other without an intermediary, and to participate reasonably effectively in the AGM. The costs borne by the shareholder or his/her/its proxy/ies in relation to the dial-in facility will be for his/her/its own account.