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BLUE LABEL INTEGRATED ANNUAL REPORT 2016
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DIRECTORS’ REPORT
The Directors have pleasure in presenting the Group and Company 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 2016.
Principal activities and strategy
Blue Label Telecoms’ core business is the virtual distribution of secure electronic tokens of value and transactional services
across its global footprint of touch points. The Group’s stated strategy is to extend its global 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 Group recorded a net profit after tax attributable to equity holders for the year ended 31 May 2016 of R692 million
(2015: R578 million). 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. The Group and Company annual financial
statements for the year ended 31 May 2016 were approved by the Board and signed on its behalf on 23 August 2016.
Going concern
The financial statements have been prepared on the going concern basis, since the Directors have every reason to believe
that the Blue Label Telecoms Group and the Company have adequate resources in place to continue in operation for the
foreseeable future.
Disposal
On 30 October 2015 the Group disposed of its interest in Velociti Proprietary Limited for an amount of R16.5 million. Refer
to note 2.2 of the Group annual financial statements for further information.
Acquisitions
The Group’s effective shareholding in Oxigen Services India Private Limited (OSI) prior to March 2016 was 55.83%. Of this
shareholding, 37.22% was held by Gold Label Investments (GLI), a wholly owned subsidiary of the Group and 18.61%
indirectly through the Group’s 50% shareholding in 2DFine Holdings Mauritius. In March 2016, rights issue was offered by
OSI for USD10.5 million (R167 million). The Group exercised its rights for the entire amount through GLI congruent with
2DFine Holdings Mauritius waiving its rights. The effect of this is that GLI’s shareholding has increased from 37.22% to
40.97% and its indirect shareholding of 18.61% has been diluted to 17.21%. The latter has in turn resulted in a gain of
R30 million on dilution, being the Group’s share of the increased net asset value emanating from the rights issue. The Group’s
effective shareholding in OSI therefore increased by 2.35% to 58.18%.
In September 2015 the Group increased its holding by 0.92% to 47.56% in Blue Label Mexico S.A. de C.V. for an amount
of R42.5 million.
Refer to note 2.1 of the Group annual financial statements for further information.
Share capital
Full details of the authorised, issued and unissued capital of the Company at 31 May 2016 are contained in note 6 of the
Group annual financial statements. There were no shares issued during the financial year ended 31 May 2016 (2015: nil).
Subsequent events
Subsequent to year-end, dividend number 7 was declared and approved by the Board.
Dividend
On 23 August 2016 the Board approved a dividend of 36 cents per ordinary share. The dividend in respect of ordinary shares
for the year ended 31 May 2016 of R242 823 255 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
Tuesday, 13 September 2016
Shares commence trading ex dividend
Wednesday, 14 September 2016
Record date
Friday, 16 September 2016
Payment of dividend
Monday, 19 September 2016
Share certificates may be dematerialised or rematerialised between Wednesday, 14 September 2016 and Friday,
16 September 2016, both days inclusive.