Notes to the Group Annual Financial Statements | Note 6.1

Ordinary shares are classified as equity and the shares are fully paid up.

Shares acquired by Blue Label Telecoms for its own employees’ equity compensation benefit scheme, as well as the shares procured by the subsidiaries in terms of this scheme, are accounted for as treasury shares in the Group statement of financial position.

The Company acquired no shares in the current year and sold 64 716 shares to associate companies in terms of the equity-settled conditional share plan, at which point the shares were no longer considered to be treasury shares of the Group. In the prior year, the Company acquired 10 575 666 shares at an average price of R6.58 on the JSE in order to grant conditional shares to employees and Directors as part of the Group’s conditional share plan. Of the total shares acquired in the prior year, 9 973 803 related to shares awarded to employees of subsidiary companies in terms of the equity-settled conditional share plan, which are held as treasury shares and accounted for against share premium. The remaining shares of 601 863 in the prior year related to shares awarded to employees of associate companies in terms of their cash-settled conditional share plan and are not considered to be treasury shares of the Group.

The amount paid to acquire the treasury shares in the prior year was R66.0 million and was deducted from shareholders’ equity.

Refer to note 5.1 for details on the conditional shares.