= Directors' report | Blue Label Telecoms | Integrated Annual Report 2023

Directors' report

The Directors have pleasure in presenting the Group 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 2023.


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.


The Group recorded a net profit after tax attributable to equity holders for the year ended 31 May 2023 of R269 million (2022: R1 027 billion). Full details of the financial position and results of the Group and its segments are set out in the Group annual financial statements. The Group annual financial statements for the year ended 31 May 2023 were approved by the Board and signed on its behalf on 29 August 2023.


Full details of the authorised, issued and unissued capital of the Company at 31 May 2023 are contained in note 6.1 of the Group annual financial statements.


The Board of Directors have elected not to declare a dividend.


On 26 August 2021, TPC concluded a term sheet for an Airtime Purchase transaction with Investec Bank Limited, FirstRand Bank Limited (acting through its Rand Merchant Bank division) and other financiers, the proceeds of which were intended to be utilised for the recapitalisation of Cell C. This arrangement was subject to the conclusion of all legal documentation and fulfilment of all conditions precedent under such legal documentation, which occurred at the end of September 2022. On 15 March 2022, Blue Label concluded a non-binding term sheet (Umbrella Restructure Term Sheet) with Cell C and various Cell C financial stakeholders (including certain shareholders and creditors of Cell C). In terms of the Umbrella Restructure Term Sheet, Cell C was to be restructured and refinanced (the Recapitalisation Transaction) with the purpose of deleveraging its balance sheet, providing it with liquidity with which to operate and grow its businesses and to position itself to achieve long-term success for the benefit of its customers, employees, creditors, shareholders and its other stakeholders. The Umbrella Restructure Term Sheet was non-binding, save for stand-still provisions and certain provisions of a general nature which were binding. The binding long-term agreements and the recapitalisation process, the completion of which endured for longer than initially anticipated, was effective and closed end September 2022. Refer to note 2.1.1 of the annual financial statements for details of the transaction.


The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within its current funding levels into the foreseeable future.

After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources and facilities to continue in operational existence for the foreseeable future and is not at risk of breaching its covenants. The Group therefore continues to adopt the going concern basis in preparing the financial statements.


The following are the details of the Company's Directors:

Name Office Appointment date Date and nature of change
Larry M Nestadt (Chairman) Independent Non-Executive Director 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 Resigned 5 June 2023
Gary D Harlow Independent Non-Executive Director 5 October 2007 Resigned 19 October 2022
Nomavuso P Mnxasana Independent Non-Executive Director 18 September 2020
Joe S Mthimunye Independent Non-Executive Director 5 October 2007
Dean A Suntup Financial Director 14 November 2013
Jeremiah S Vilakazi Independent Non-Executive Director 19 October 2011
Lazarus P Zim Independent Non-Executive Director 23 October 2020 Resigned 22 February 2023
Lindiwe E Mthimunye Independent Non-Executive Director 1 November 2022
Happy Masondo Independent Non-Executive Director 1 August 2023



The individual interests declared by Directors in the Company's share capital as at 31 May 2023, held directly or indirectly, were as follows:

  Nature of interest 
  Direct beneficial  Indirect beneficial

   2023 2022  2023 2022
LM Nestadt (Chairman)   10 000 000 10 000 000
BM Levy 69 591 549 67 424 914 17 772 777 17 772 777
MS Levy 62 184 141 60 017 506 17 772 777 17 772 777
KM Ellerine* 120 000 000 120 000 000
GD Harlow# 1 285 114
JS Mthimunye 130 000 130 000 242 573 242 573
DA Suntup 5 106 011 3 958 476 177 778 177 778
SJ Vilakazi 8 200 8 200
* KM Ellerine is a beneficiary of these shares together with multiple other beneficiaries. KM Ellerine resigned subsequent to the financial year end, effective 5 June 2023.
# Resigned during the financial year, effective 19 October 2022.

There was no change in the interests held by Directors between 31 May 2023 and the date of approval of these annual financial statements.

The aggregate interest of the current Directors in the capital of the Company was as follows:

Number of shares
Director/officer  2023 2022
Beneficial 302 985 806 298 790 115

The beneficial interest held by Directors and officers of the Company constitutes 33.16% (2022 32.70%) of the issued share capital of the Company.

Details of Directors' emoluments and equity compensation benefits are set out in note 5.3 of the Group annual financial statements and details of the forfeitable share plan are set out in note 5.1.


On 24 November 2022, the Company passed and filed with the Companies and Intellectual Property Commission the following special resolutions:

  • approving the remuneration of Non-Executive Directors;
  • granting a general authority to repurchase the Company's shares; and
  • approval to grant financial assistance in terms of sections 44 and 45 of the Companies Act, No 71 of 2008.

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 at the date of signing these Group annual financial statements.


The Board is satisfied that Ms J van Eden has the requisite knowledge and experience to carry out the duties of a company secretary of a public company in accordance with section 88 of the Act and is not disqualified to act as such. She is not a Director of the Board and maintains an arm's-length relationship with the Board.

The business and postal address of the Company Secretary appear on the Company's website at www.bluelabeltelecoms.co.za.


Following the conclusion of a comprehensive tender process, the Audit, Risk and Compliance Committee has recommended, and the Board of Directors has endorsed, the appointment of SizweNtsalubaGobodo Grant Thornton Inc. (SNGGT) as the independent external auditors of Blue Label with effect from 6 February 2023. SNGGT will continue in office in accordance with section 90(6) of the Companies Act.

Larry Nestadt