Blue Label 2009 FY AFS

Annual Report 2009
When you keep looking forward, youll leave a lasting legacy behind
Its our time...
Annual Report 2009
Blue Label Telecoms Limited

(Incorporated in the Republic of South Africa)
Registration number
2006/022679/06
JSE Code
ISIN Code
BLU
ZAE000109088
75 Grayston Drive
Cnr Benmore Road
Morningside Ext 5
Sandton
2196
(PO Box 652261, Benmore, 2010)
This Annual Report can be viewed on our website under the

Investor Relations link.
www.bluelabeltelecoms.com
GROWTH
REPORT CONTENTS
Our group in brief
01
01
02
03
10
11
12
14
19
20
24
28
Nature of business
Corporate thumbnail
Vision, mission and values
Our markets and brands
Strategic and operational highlights
Financial highlights
Group structure
Board of directors
Segment heads
Chairmans report
Joint chief executive officers report
Segmental reviews
Governance & sustainability

50 Corporate governance
60 Remuneration report
62 Sustainability report
Financial statements
86
95
95
96
97
100
101
102
103
104
148
149
150
151
152
164
168
169
170
Chief financial officers report

Directors responsibility
Declaration by company secretary
Independent auditors report
Directors report
Group balance sheet
Group income statement
Group statement of changes in equity
Group cash flow statement
Notes to the group annual financial
statements
Company balance sheet
Company income statement
Company statement of changes in equity
Company cash flow statement
Notes to the company annual financial
statements
Notice of annual general meeting
Explanatory notes to resolutions for
consideration at the annual general meeting
Proxy form
Notes to the proxy form
page 1
CORPORATE PROFILE
Nature of business
Blue Label Telecoms and its subsidiaries and associate
companies core business is the virtual distribution of prepaid
secure electronic tokens of value and transactional services
across its global footprint of touch points.
Its prepaid product offerings include airtime, electricity and
bus ticketing. Other solutions provided include location-based
services, cell phone content and mobile applications.
Transactions are processed through points-of-presence ranging
from single entity retail outlets to national chain stores and
petroleum forecourts in South Africa and in several countries
beyond its borders.
The focus is on distribution in emerging markets where the
products and services are of significant value to the unbanked
and badly banked.
In-house proprietary technology to support the groups initiatives
plays an integral role in supporting the rollout of its bouquet of
products and services.
The groups stated strategy is to extend its global footprint of
touch points, both organically and acquisitively and to fulfil the
significant demand for the delivery of multiple prepaid products
and services through a single distribution base via various
delivery mechanisms.
CORPORATE THUMBNAIL
Why do consumers use prepaid products and services?
Prepaid products and services are the ultimate budgeting
tool, as consumers have absolute choice and control over
what they spend.
The majority of prepaid transactions are cash based and
using prepaid removes the requirement for credit checks.
Prepaid products and services can be conveniently topped
up, either virtually or physically, as and when required by
consumers.
Prepaid products and services are sold across a broad
footprint of traditional and non-traditional outlets.
Prepaid products and services enable the worlds unbanked
consumers to transact efficiently.
ITS OUR
page 2
CORPORATE THUMBNAIL
continued
How does Blue Label Telecoms add value to its

customers?
Within emerging and developing economies, the supply of
products and services via prepaid channels is becoming an
increasingly significant distribution model. This is because
the distribution of physical product is often logistically
difficult. A significant portion of the consumers within these
markets are unbanked and badly banked and therefore
transact in cash and many do not qualify for credit. Although
they are unbanked and badly banked and dont qualify for
credit, these consumers have cash and are now demanding
equal access to first world products and services.
VISION, MISSION AND VALUES

Vision statement
To become the leading global distributor of secure electronic
tokens of value and transactional services within emerging
markets.
Mission statement
We exist to provide world-class prepaid product and service
offerings to consumers within the middle and lower tiers
of the worlds economic pyramid. We aim to achieve this
through the development and acquisition of cutting-edge
technologies, the expansion of our global footprint of touch
points and adherence to our core values of enduring
relationships, entrepreneurship, innovation and respect.
ENDURING RELATIONSHIPS
ENTREPRENEURSHIP
Valuing our customers as

partners
Empowering people
Embracing
opportunities
Walking the talk
INNOVATION
RESPECT
Moving forward
with lessons learnt
Forward thinking
A member of the
Blue Label family
Interacting with
mutual respect
page 3
OUR MARKETS AND BRANDS...
PRIME
page 4
Distribution of prepaid secure electronic tokens of value (e-tokens) to the

South African wholesale and retail consumer markets.
page 5
START-UP
page 6
Our proven business model and bouquet of product and technology offerings, enables
customers to purchase prepaid airtime via multiple devices.
page 7
AIR
page 8
mibli powered by Microsoft OneApp is the groups most advanced on-phone service,
aimed at the mobile generation. It marks the entry into the direct-to-consumer market.
page 9
PLAY
page 10
STRATEGIC AND OPERATIONAL

HIGHLIGHTS
International expansion into Nigeria, Mexico,

United Kingdom and the United States of
America
Launch of mibli powered by Microsoft

OneApp in August 2009
Expansion of the bouquet of products and

services
Accolades:
The Prepaid Company was awarded
Vodacom Best Channel Partner for the
fourth year in succession
Number one prepaid distribution channel
partner of Telkom for the past five years.
page 11
FINANCIAL HIGHLIGHTS
Revenue
R billion
15,3
12,5
12,9
Actual
2008
Pro
forma
2008
18%
Revenues*
16%
Net profit after tax*
Actual
2009
R15,3 billion
Core net profit
19%
R million
427
371
Headline earnings per share*
270
31%
Operating profit*
Actual
2008
16%
Core earnings per share*
Pro
forma
2008
Actual
2009
R427 million
Core earnings per share
cents
55,93
48,40
R667 million
45,81
Cash generated from operating

activities
*When compared to core pro forma earnings.
Actual
2008
Pro
forma
2008
Actual
2009
55,93 cents
GROWTH TIME
page 12
GROUP STRUCTURE
BLUE LABEL TELECOMS
See page 28
South African distribution

The Prepaid Company
Crown Cellular
Ventury
Cigicell
Matragon
Comm Express
Kwikpay
Virtual Voucher
The Post Paid Company
See page 34
International distribution
Gold Label
Oxigen Services India 37,22%
Ukash 16,9%
Africa Prepaid Services 72%
Africa Prepaid Services DRC 80%
Africa Prepaid Services Mozambique 90%
Africa Prepaid Services Nigeria 51%
Blue Label Mexico 70%
Sharedphone 50,1%
Blue Label Australasia 50,5%
See page 40
Technology
Activi Technology Services
Transaction Junction 60%
Activi Development Services
Blue Label One Trading as Mobile Services Company (MSC)
See page 46
Value-added services
Datacel
Velociti
CNS
Cellfind
Content Connect Africa
* 100% owned by Blue Label Telecoms unless otherwise stated
page 13
Global presence
Bricks and mortar

Technology offerings
page 14
BOARD OF DIRECTORS
FROM LEFT TO RIGHT

Laurence (Larry) Nestadt
Brett Levy
Mark Levy
Mark Pamensky
David Rivkind
Gary Harlow
Herbert Cedrik Theledi
Joe Mthimunye
Lucy (Pani) Manage Tyalimpi
Neil Lazarus SC
Reitumetse Jackie Huntley
Sidney Ellerine
Peter Mansour*
*Not present at time of photo
page 15
page 16
BOARD OF DIRECTORS continued
Laurence (Larry) Nestadt
Mark Levy
Independent non-executive chairman
Joint chief executive officer
(Born: 1950)
(Born: 1971)
Larry has experienced a long and successful corporate

career, both in South Africa and internationally. Larry is
a co-founder and former executive director of Investec
Bank Limited. He assisted in the creation and strategic
development of a number of listed companies such as Capital
Alliance Holdings Limited, Super Group Limited, Hosken
Consolidated Investments Limited, SIB Holdings Limited and
Global Capital Limited. In addition to having served as past
chairman on the boards of these aforementioned companies,
he is currently the executive chairman of Global Capital
(Proprietary) Limited.
Larry has also served on the board of directors of Softline
Limited, JCI Limited and Abacus Technologies Holdings
Limited. Larry was a former director of the board on
a number of non-listed companies, both internationally
and locally; namely Stenham Limited (UK) and Prefsure
Life Limited (AUS), the Pro Shop Group, Melrose Nissan,
SellDirect Marketing (Proprietary) Limited, BCE Foodservice
Equipment (Proprietary) Limited and Placo Holdings
(Proprietary) Limited. Larry is a respected member of the
South African business community. His strategic vision and
experience contributes significantly to the board.
Brett Levy
BCompt (UNISA)
Mark graduated with a BCompt degree from UNISA in 1993.
After initially taking up a position as a commodity trader, Mark
decided to pursue his goal of becoming an entrepreneur in
earnest and has spent the past several years spearheading
Blue Label Telecoms impressive growth and international
expansion. Together with his brother Brett Levy, Mark won
the ABSA Jewish Business Achiever Non-Listed Company
Award (2007). Mark was nominated as an Ernst & Young
World Entrepreneur SA Finalist for 2007.
Mark Pamensky
Chief operating officer
(Born: 1972)
BCom (WITS), BCompt (Hons) (UNISA), CA(SA)

Mark completed his articles with PricewaterhouseCoopers
Inc. before moving to the corporate finance department of
Mercantile Bank. In 1999 he joined a boutique corporate
advisory firm, Nucleus Corporate Finance before joining Blue
Label Investments (Proprietary) Limited in 2001. Mark has
played an integral role in the new business development
and operational management of the Blue Label Telecoms
group and much of its telecommunications footprint can be
attributed to his strategic initiatives. Mark is a member of
SAICA and the Young Presidents Organisation (YPO).
(Born: 1975)
Brett has an impressive entrepreneurial history having

founded and operated a number of small businesses from
the early 1990s. During his career, Brett has been involved
in a wide range of industries, including the distribution of fast
moving consumer goods and insurance replacements for
electronic goods. His business achievements have seen him
secure a number of prestigious nominations and awards,
including the ABSA Bank Jewish Entrepreneur of the Year
Award (2003) and the ABSA Jewish Business Achiever NonListed Company Award (2007), which he won jointly with his
brother Mark Levy. Brett was nominated as an Ernst & Young
World Entrepreneur SA Finalist for 2007.
David Rivkind
Chief financial officer
(Born: 1972)
BAcc (UNISA), CA(SA)

David completed his articles at Papilsky Hurwitz and in
1999 joined Merrill Lynch International (UK) as a financial
controller. David was employed by Credit Suisse for a brief
period before his return to South Africa in 2002. David then
became the financial director at Integr8IT (Proprietary)
Limited prior to his appointment as the chief financial officer
for Blue Label Investments (Proprietary) Limited where he
contributed significantly to the rapid growth of the group.
David is a member of the South African Institute of Chartered
Accountants (SAICA).
page 17
Gary Harlow
Joe Mthimunye
Independent non-executive director
(Born: 1957)
(Born: 1965)
BBusSci (Hons) (UCT), FCMA, CA(SA)
BCom (Zululand), BCompt Hons/CTA (UNISA), CA(SA)
Gary matriculated in 1975 from the South African College

School in Cape Town. After graduating from the University of
Cape Town in 1979, he qualified as a Chartered Accountant
(SA) in 1982, an Associate of the Chartered Institute of
Management Accountants (UK) in 1983 and as a Fellow
Chartered Management Accountant (UK) in 1996. After
forging a career in merchant banking, Gary was appointed
adviser to the finance department of the African National
Congress in the early 1990s regarding developing black
economic empowerment policy. In 1992, he played an
instrumental role in the creation of Thebe Investment
Corporation and also served as joint chief executive officer
of Msele Corporate and Merchant Bank, South Africas first
black-controlled merchant bank.
Joe Mthimunye qualified as a Chartered Accountant in 1993.

After working for KPMG, he joined Nampak Limited in the
capacity of divisional accountant. In 1996, he co-founded
Gobodo Incorporated, an accounting practice with eight other
partners and it became the biggest black accounting firm
in South Africa at the time. In 1999, he led a management
buy-out of Gobodo Corporate Finance from the accounting
firm and re-branded it as aloeCap (Proprietary) Limited. He
currently serves as the executive chairman of aloeCap. He
also serves on the board of directors of non-listed companies
where aloeCap Private Equity is invested.
Gary was appointed group chief executive officer of Unihold

Limited in 1996, where he led the transformation from
an engineering conglomerate holding company to an
international IT and telecommunications focused group.
Subsequent to leading a management buy-out, Unihold
de-listed from the JSE in 2001. Gary has served on numerous
private and public company boards, including three listed
banking groups.
Herbert Cedrik Theledi

Non-executive director
(Born: 1964)
BCom (UNIN), HDip Ed (WITS)

Herbert matriculated from Thembeka High School in 1984.
He later obtained a BCom degree from the University
of the North. He currently serves as managing director
and chairperson of Nthwese Investments Holdings
Consortium (Proprietary) Limited. Herbert holds shares and
directorships in various multi-faceted businesses operating
in the property, warehousing, logistics, motor dealership and
distribution industries. Herbert serves in several business
and community forums in the country.
Lucy (Pani) Manage Tyalimpi

(Born: 1962)
BCom (Hons) (UNISA), MBL (UNISA), Diploma in Investment

and Portfolio Analysis
Pani is the divisional executive of the Development Bank
of Southern Africa, largely responsible for the funding of
municipality infrastructure programmes in the Eastern
Cape, Mpumalanga and KwaZulu-Natal. Prior to working at
the Development Bank of Southern Africa Pani worked for
several financial institutions, including Public Investment
Corporation (PIC) as the head of Isibaya Fund, being the
private arm of the PIC for the funding of BEE transactions,
infrastructure development in a socially responsible manner.
She also worked for African Harvest Capital and ABN Amro,
where she was employed in corporate advisory services. She
currently serves on the board of directors of a number of
companies and investment committees. Pani brings extensive
market and investment knowledge to the board.
page 18
BOARD OF DIRECTORS continued
Neil Lazarus SC
Sidney Ellerine**
(Born: 1958)
(Born: 1936)
BA LLB (WITS)
Neil graduated from the University of the Witwatersrand in
1981 with a BA LLB degree. After completing his articles, he
was admitted as an attorney in 1983. He was admitted as
an advocate in 1984 and practised at the Johannesburg bar.
He was appointed as senior counsel by President Mandela
in 1998. He also served as an acting judge. As an advocate,
Neil specialised in corporate restructures, mergers and
acquisitions and was involved in significant corporate
reorganisations both locally and internationally. Upon leaving
the profession in 2000 he became a director of Corpcapital
Limited where he established and participated in its
corporate finance business. Neil discharged both corporate
finance and legal mandates in respect of a number of local
and international transactions.
In 2004 Neil became a legal and corporate finance adviser
to Netcare Limited. He advised Netcare on its acquisition of
the General Hospital group in the UK in 2006. Neil advised
Blue Label Investments on its restructure in 2007 and
played an important role in helping the group to achieve its
listing in November 2007. Neil continues to render legal and
corporate advisory services to the group.
He advises the board of directors of a number of listed
and non-listed companies on strategic, legal and corporate
finance matters. Neil has served on the boards of directors
of a number of public and significant non-listed companies.
Reitumetse Jackie Huntley

(Born: 1962)
BProc, LLB (WITS)
Sidney served on the board of directors for Ellerine Holdings

Limited until his retirement. He was also actively involved in
the running of his family business, Ellerine Bros. (Proprietary)
Limited, a company involved in the private equity and real
estate industry.
Peter Mansour
(Born: 1970)
BSc (Economics), Minor in Engineering from the University

of California, San Diego
Peter began his career at Microsoft in 1995 as a Business
and Strategy Analyst for MSN. During this period, he helped
transition MSN from an internet access business to an
internet portal business. He provided analytical and strategic
support for several large acquisitions, including Hotmail
and WebTV. In 1998, Peter joined the fledgling Windows
CE team, where he served as the GPM for Pocket Outlook
for the HandheldPC and PocketPC, which would eventually
become Windows Mobile. In 2000, Peter left Microsoft to
start Sproqit Technologies, where he served as president and
CEO for six years. Sproqits patented thin-client architecture
increased performance and simplified development for
mobile applications.
Peter returned to Microsoft in 2006, where, as GM of
Strategy and Business Development for the Unlimited
Potential Group, he created Microsofts emerging markets
mobile payment strategy and lead equity investments in Blue
Label Telecoms in South Africa and Oxigen Services India in
India. Peter currently runs mobile engineering for Microsofts
emerging market division.
Jackie is a practising attorney with the law firm Mkhabela

Huntley Adekeye Incorporated. She obtained her BProc
and LLB degrees from the University of the Witwatersrand
and her Management Advance Programme (MAP) at Wits
Business School. Jackie joined Gold Fields of South Africa
Limited as a legal adviser in the commercial law department.
She subsequently joined Nedbank Limited, where she spent
four years.
Jackie has extensive experience in commercial and corporate
law, including telecommunications law. She also worked
extensively with issues pertaining to low cost housing and
advised both the Department of Housing and various other
institutions in the housing sector on housing policy issues and
their legal aspects. Jackie is also a member of the Telkom
board.
** Deceased.
page 19
SEGMENT HEADS
Panagiotis (Pedro) Christofides

Chief operating officer: South African distribution
BCom, BCompt (UNISA)
After completing his accounting articles at Combanis and
Associates, Pedro moved into the business world, where he
began his career as the owner and manager of eleven retail
outlets in the food and beverage industry.
In 1998 Pedro founded Comm Express, which quickly grew
into a leading distributor of prepaid airtime. Pedro headed up
Matragon (holding company of Comm Express) as the chief
executive officer. In 2008 Pedro was appointed COO of the
South African distribution segment and is responsible for
the management, coordination and business activities of this
segment.
Bradley Turkington
Chief operating officer: International distribution
BSoc Sci (Finance Hons) (Natal)
After completing his postgraduate degree in finance, Bradley
became the financial director of a London-based wholesaler.
Bradley returned to South Africa after four years abroad
and with the international relationships he had established
became involved in the South African cellular telephony
industry from inception. Bradley served on the local board
of a NASDAQ listed company, which was involved in bringing
prepaid to South Africa and many other markets. He joined
a subsidiary of Matragon as a consultant in March 2006, to
expand their international business. Bradley was responsible
for formulating Blue Label Investments international strategy
prior to listing. In November 2007 he was appointed COO of
the international distribution segment and is responsible for
all the international business operations and initiatives.
Dr David Fraser
Group chief technology officer
BSc(Eng), MSc(Eng), PhD (Natal), CEng(UK), MIET(UK),
MIEEE(USA), MSAIEE(SA), MSPE
David is a professional engineer who has considerable
international and local business experience in
telecommunications, IT and associated technologies. After
qualifying, David lectured and researched communications at
university after which he established a number of successful
companies, including a telecoms and broadcasting services
company and a scientific consultancy firm. Davids knowhow in the broadband wireless and related businesses
has assisted in the establishment and growth of several
European and USA-based companies. David became involved
at Sentech in South Africa with the development of the
countrys first public broadband 3G wireless data network,
and joined Blue Label Investments in 2005. Together with
Dr Angelo Roussos, David is responsible for the development
of integrated core technology solutions for the group, with

an emphasis on the conceptualisation and implementation
of cutting-edge mobile and media solutions. David is also
involved with business development at Blue Label Telecoms
and maintaining key relationships with the groups partners,
such as Microsoft.
Dr Angelo Roussos
Group chief information officer
BSc (Lab. Med.), MBBCh (Wits)
Angelo became interested in high-speed networking and
supercomputing while pursuing a postgraduate medical
degree, collaborating on the NSFNet, a precursor to the
modern internet. In 1990, he established one of the first
companies in South Africa to provide e-mail services, and
later the second SA business to provide commercial internet
services. With his partners, he created one of the largest
ISPs in SA in 1994. In 1998, Angelo left medicine to focus
full-time on IP-networking, and he formed InfoSat which was
the second company in the world to offer DVB/IP services
via satellite. Sentech, the largest signal distributor in Africa,
acquired a majority stake in InfoSat. From July 2002 until
October 2003, Angelo guided Sentech as group executive:
Multimedia Services and was responsible for the technology
selection, business strategy and business management of
the new multimedia business. Apart from his extensive IPbased telecoms experience, Angelo has engaged in strategic,
policy and regulatory representations to the SA government
and regulator. Together with Dr David Fraser, Angelo is
responsible for ensuring that the group remains ahead of
the trend through the development of new and innovative
technology solutions, with a focus on the transactional side of
the business.
Craig Ireland
Chief executive officer: Value-added services
(Datacel)
BCom (Natal)
Craig has been in the telecommunication and technology
industry for over 16 years, having spent 12 years with
Dimension Data, one of South Africas largest ITC companies.
While at Dimension Data Craig headed up a number of
strategic divisions including their call centre division. He spent
four years developing the local call centre technology market
in South Africa. In 2006 he assisted the Business Trust and
the Department of Trade and Industry in the development
of a business plan for South Africas outsourcing and BPO
market. At the same time he established Velociti, a call
centre outsourcing business, based in Durban South Africa.
Craig is responsible for the groups national call centre
businesses.
page 20
CHAIRMANS REPORT
Larry Nestadt
Blue Label Telecoms continues to be well-positioned to

exploit the growth in the use of mobile phones in the
developing world.
Larry Nestadt
Chairman
Larry Nestadt
Chairman
page 21
DEAR STAKEHOLDERS
developed markets now saturated the developing
I am pleased to report on the performance of
world will account for most of the growth in
Blue Label Telecoms Limited for the year ended
mobile penetration in the coming years and
31 May 2009.
predicts the number of mobile phones to reach

six billion by 2013.
Despite operating in a very difficult global

economic environment for much of the financial
The company aims to deliver prepaid products
year, the groups product and service offerings
and services to the unbanked and badly banked.
showed resilience to these adverse conditions,
Accordingly, it remains focused on growing its
which is reflected in the strong growth that was
points-of-presence (touch-points) and expanding
achieved.
its product offerings.
Revenue of R15,2 billion (representing a
Blue Label Telecoms continues to be well-
growth of 18%), increased margins and cash
positioned to exploit the growth in the use of
flow generation resulted in core net profit of
mobile phones in the developing world.
R427 million (representing a growth of 15%).

Core earnings per share increased from
In furtherance of the objectives set out in the
48,40 cents to 55,93 cents. Headline earnings
collaboration agreement between Blue Label
increased by 19%. Net cash flow generated of
Telecoms and Microsoft, we were pleased to
R429 million resulted in accumulated cash-on-
announce the development and launch of mibli
hand at year-end of R1,7 billion. This is a strong
powered by Microsoft OneApp. The Microsoft
foundation for the servicing of working capital
application was launched in South Africa as a
requirements and investment opportunities in
global first and is in the process of being used
the year ahead.
as the forerunner for Microsofts international

rollout. The groups proprietary services and
Further details of the companys financial
transactional technology have been integrated
performance is to be found in the chief financial
into Microsoft OneApp. Microsoft intends to
officers report on page 86.
partner with Blue Label Telecoms in the rollout of

the initiative in other territories.
A special report in The Economist magazine

recently noted that in the year 2000 developing
Development of in-country money transfer
countries accounted for one quarter of the
technology has been completed. The company is
worlds 700 million mobile phones users. By
currently exploring the regulatory and technology
the beginning of 2009 developing countries
requirements to extend this initiative to cross-
had grown this share to three-quarters of the
border money remittances.
total, which by then had risen to over four billion

phones. The Economist further reports that with
page 22
CHAIRMANS REPORT continued
During the year the company made a number of
Blue Label Telecoms is in the process of
strategic acquisitions and investments.
launching a number of group-wide training

initiatives aimed at enhancing and developing
The group also concentrated on consolidating its
priority skills among junior and middle
operations. A concerted effort has been made
management bands.
to achieve group-wide synergies, specifically in

terms of new product development, innovation,
CORPORATE CITIZENSHIP
technology and footprint growth. As a result
The Chairmans Fund remains a major
there have been improvements in efficiency,
contributor to the companys goodwill projects.
cost-effectiveness and coordination. This process

is likely to continue for some time as the four
The group invested in a Legacy Park, which is
segments of the group are aligned through more
focused on providing supervised recreational
effective consolidation and integration.
facilities for young people with a view to

developing skills and leadership qualities.
EMPLOYEE SHARE SCHEME

The Forfeitable Share Plan was introduced
The group remains actively involved in the
in November 2008 and will result in
Nomonde Childrens Home and provides funding
over 400 company employees becoming
on a monthly basis.
shareholders. In this regard 5,2 million shares

were purchased by the company during the
Other beneficiaries include The Trust, Feed SA
financial year under review and a further
and Malamulele Onward, a programme to
4,5 million were purchased subsequent to the
support caregivers of children with cerebral
year-end, for allocation to employees in the
palsy. The sustainability report contains more
current financial year.
detailed information on our corporate social

investment initiatives.
Further share allocations are discretionary and

performance-related.
PROSPECTS
The group is poised for further growth and is in
TRANSFORMATION AND BBBEE
a position to fund its growth both organically and
The board continues to embrace South Africas
acquisitively as a result of its cash resources and
codes on transformation and BBBEE. Framework
its ability to distribute additional products and
policies and guidelines have been developed with
services through its distribution network.
the objective of enhancing these credentials

across the group companies.
page 23
APPRECIATION
I would like to thank my fellow directors for the
contributions they have made over the past year.
The board expresses its appreciation to Mark
and Brett Levy and their executive team for their
entrepreneurial vision, energy and determination.
The group also expresses its gratitude to the
companys employees for their hard work and
achievements.
Sid Ellerine, our friend and colleague passed

away in July 2009. Sid made an invaluable
contribution to the development of the group. He
was respected by all who knew him and will be
sorely missed.
Larry Nestadt
Chairman
page 24
JOINT CHIEF EXECUTIVE OFFICERS REPORT

Mark and Brett Levy Joint CEOs
Our investment in technology and strategic acquisitions

will enhance our distribution capabilities, enabling the
group to strike an equitable balance between organic and
acquisitive growth.
Mark and Brett Levy

Joint CEOs
page 25
South Africa officially entered a recession in

mid-2009 resulting in soaring job losses with a
consequent decline in consumer affordability. These
negative conditions did not have an adverse effect
on the performance of the group as a whole. This
is attributable to the growing need of consumers
to have access to communication in the most
affordable and convenient way.
A combination of growth in subscribers and the
growing need for the groups bouquet of products
has resulted in growth in both revenue and
profitability at sustained levels of prepaid average
revenue per user (ARPU). This manifested itself in
revenue growth of 18% equating to an increase in
headline earnings per share of 19%.
The above growth was achieved through a
combination of the following:
An increase in local and international market
penetration
Expansion in the range of prepaid electronic
tokens of value and other services facilitated by
the group
Additional revenue from annuity income streams
Economies of scale derived from operational and
strategic integration.
International expansion is of primary importance
to the strategy and vision of the group. Various
initiatives were launched, including the establishment
of Blue Label Mexico, Blue Label USA, Africa Prepaid
Services Nigeria and an investment in Ukash, a
United Kingdom based company.
These initiatives augmented our existing presence
in India, Australia, Mozambique and the Democratic
Republic of Congo.
The significance of the groups presence in South
Africa, together with its growing international
footprint, drives the expansion in the range of
products and services so as to allow the group to
capitalise on its distribution network. Our future
product and service offerings include ticketing
solutions, prepaid insurance, a single voucher for
multiple prepaid products and services, lotto sales
from mobile phones and till points and money
remittances.
Consumers will be able to transact by means of

credit/debit cards, bank accounts, cash or Ukash
vouchers at their discretion.
MICROSOFT
Our relationship with Microsoft is an ongoing
strategic imperative. We share the common goal
of engaging consumers and profiling them more
effectively. Access to cutting-edge technology and
products enable efficient delivery to the market.
LiveID will facilitate inter-operability between
cellphones and personal computers, providing
substantial flexibility as products and solutions
become device agnostic.
Over the past 18 months, we have worked with
Microsoft to deliver the next generation of mobile
services to the mass markets of the developing
world. mibli powered by Microsoft OneApp, a
completely integrated mobile eco-system was
launched in August 2009. This world first embodies
three solutions, namely:
Transactional capability
The mobile services functionality of our subsidiary,
the Mobile Services Company (MSC)
Microsofts OneApp on-phone software.
mibli powered by Microsoft OneApp is free
to download and incorporates a wide range of
interactive features, such as Facebook, Twitter,
miLocate and a mobile wallet. An Apps store is
scheduled to be released shortly, which will add to
the revenue streams of white labelling, advertising
and content downloads.
Accessed through a single window in the installations
menu of mobile phones, mibli powered by
Microsoft OneApp works on nearly every brand
and model of phone. GPRS and Java are the only
prerequisites from a functionality perspective.
Previously, this level of interactivity was only available
on top-of-the-range smartphones.
The majority of mobile phones used in South Africa
are capable of running mibli powered by Microsoft
OneApp. Given the vast number of mobile phones
in use, the scale of opportunity to generate additional
revenue is substantial in that every user has the
ability to access and vend our prepaid products and
services through the mobile wallet feature.
page 26
JOINT CHIEF EXECUTIVE OFFICERS REPORT continued
In addition, mibli powered by Microsoft OneApp

offers social networking platforms, which the
majority of consumers were not able to access
in the past.
NEW PRODUCT DEVELOPMENT

The mandate is to create and formalise internal
product integration processes and develop
an internal set of skills, focused on product
development. This involves the identification of
products which fit and complement the existing
prepaid product range.
The PowerPin voucher, which is an off-line prepaid
electricity top-up, consolidates the purchase of
prepaid electricity across national municipalities.
The product offering of Cellfind has been enhanced
with the introduction of miTRAFFIC, an MMS report
on the status of traffic within a 50km radius of the
subscriber.
Prepaid insurance is our most recent product
to enter a pilot phase. We have partnered with
Metropolitans Cover2Go to offer a range of
products, such as funeral and commuter cover.
In-country and cross-border remittances will be an
important focus in the future.
STRATEGIC ACQUISITIONS AND INVESTMENTS

Africa Prepaid Services Nigeria
In December 2008 Africa Prepaid Services
(Proprietary) Limited (APS) concluded a distribution
agreement with Multi-Links Telkom Limited, a
subsidiary of Telkom South Africa. This agreement
embraces the servicing of the entire distribution
channel of Multi-Links in Nigeria. Operations
successfully commenced in May 2009 and are
gaining momentum on a monthly basis.
Blue Label Mexico
Blue Label Mexico commenced trading operations in
May 2009.
distribution channels, spanning multi-lane retailers

and petroleum forecourts, convenience outlets and
informal sales channels.
A public telephony launch, in conjunction with
SharedPhone and Telefonica (a network provider in
Mexico), is currently in pilot phase over a platform of
2 000 units.
Virtual Private Network (VPN)
In December 2008, Blue Label USA, a wholly owned
subsidiary of the group, entered into a limited
partnership agreement with wholesale distributors
of physical international calling cards. The limited
partnership, namely VPN was established with the
objective of converting a captive client base from
physical to virtual distribution.
In July 2009 Blue Label USA withdrew its capital
investment in the partnership and replaced it with a
technical agreement with Activi, another subsidiary
of Blue Label Telecoms. Blue Label USA was refunded
its full capital investment in the sum of US$5 million.
This technical agreement, which embodies
installation of intellectual property, maintenance and
support, will result in Activi receiving annual licence
fees and transactional fees generated from sales to
the country-wide captive base of the wholesalers.
Ukash
The strategic investment holding in Smart Voucher
Limited trading as Ukash has provided the group
with technology that enables it to supply the end
user with prepaid Ukash vouchers which effectively
digitises cash. This voucher enables the customer to
transact on-line for multiple products and services
through a single prepaid voucher.
The Ukash initiative has given the group the ability
to provide its products and services to a footprint
established by Ukash, covering several countries in
Europe.
The company is growing the number of points-ofpresence and transactions per site.
The Ukash issuing, redemption and settlement

platform facilitates integration with third party
devices and technology, ensuring rapid deployment
and broad-based coverage.
Key agreements have been concluded with both

mobile operators and important sales channels.
In the forthcoming year the company is targeting
points-of-presence which will cover a wide range of
Ukash has concluded a technology deal with

MasterCard RePower to be the recharge provider
for the launch of the prepaid debit cash loading
platform in Europe.
page 27
Our medium/long-term strategy is that Ukash

will provide consumers with the means to cash-in,
utilise cash and cash-out at their own convenience.
This business model is aligned with our over-riding
purpose of delivering products and services to
communities, where such products and services
were previously inaccessible.
PROSPECTS
We are well positioned to grow our footprint
organically and through strategic acquisitions. Our
global reach provides access to a wide range of
prepaid products and value-added services that
are viable additions to our existing offering in South
Africa and other emerging markets.
It is anticipated that revenue will continue to grow
organically, not only through the existing product
offering, but also through the additional product
offerings that have been developed in-house and
which are expected to be rolled out across the
groups points-of-presence during the forthcoming
year.
The appointment of Oxigen as a service provider

of airtime sales in all Nokia branches.
The Ukash transaction flow is expected to increase
with the advent of high-end redemption merchants
that have been added to its client portfolio. Its global
issuing footprint will continue to expand into new
territories which in turn will compound transactional
revenue.
Technology partnerships will be pursued in line with
the model established in the USA.
We constantly strive to increase shareholder value
through the expansion of the distribution base and
product and service offerings. Expense management
and stringent asset management will ensure positive
cash flow generation and growth in profitability.
We anticipate that our investment in technology and
strategic acquisitions will enhance our distribution
capabilities, enabling the group to strike an equitable
balance between organic and acquisitive growth.
The Nigerian distribution initiative is expected

to contribute to the growth of our international
segment.
APPRECIATION
Blue Label Mexico is steadily increasing its pointsof-presence and turnover in accordance with its
business plan.
We also express our sincere gratitude to our

executive team and employees for their invaluable
contribution to the success of Blue Label Telecoms.
There has been an improvement in the financial

performance of Oxigen India which is expected to
persist. Continued growth in outlets supplied and
new initiatives implemented in Oxigen is expected to
contribute towards Oxigens improvement in the year
ahead. These initiatives include the following:
Reduction in monthly expenditure
Consolidation of technology competencies
Improvement of connectivity and reliability of the
communications interface
Introduction of prepaid e-toll recharge vouchers
Piloting of prepaid railway ticketing
An agreement with The State Bank of India to
pilot the PIN-less top-up of airtime and Oxicash
via mobile phones to its consumer base (the
integration is complete and testing is underway)
An agreement with Nokias Ovi stores to utilise
Oxicash as a payment mechanism for all Nokia
N-Gage products during the extended warranty
period
We thank the members of our board for their

guidance and leadership.
Mark Levy and Brett Levy

Joint chief executive officers
page 28
SEGMENTAL REVIEWS
page 29
The subsidiaries encompassing this segment all fulfil specific

roles while simultaneously benefiting from the purchasing
power and vertical integration of the group.
page 30
SEGMENTAL REVIEWS continued
continued
Pedro Christofides
Chief operating officer:
This segment distributes prepaid secure electronic tokens of value (e-tokens) to the South African
wholesale and retail consumer markets.
The subsidiaries encompassing this segment all fulfil specific roles while simultaneously benefiting
from the purchasing power and vertical integration of the group.
The Prepaid Company (TPC)

Established in 2001, TPC was the original company that spearheaded the groups entrance into the
prepaid airtime industry. It remains the major contributor to group revenue and profitability.
TPC supplies virtual and physical e-tokens to all of the major chain stores in South Africa and is a leading
distributor of airtime on behalf of all of the major networks.
Distribution of all virtual products and starter packs is facilitated by proven technology developed
in-house which ensures ultimate efficiency at purchasing, distribution and control levels.
Crown Cellular (Crown)

Crown trades as a wholesale and retail distributor of physical and virtual prepaid airtime and starter
packs, servicing the informal market. Crown operates free-standing stores as well as several kiosks
within large independent stores. Its entire inventory is purchased from TPC.
page 31
The introduction of prepaid electricity vouchers into the

channels serviced by the South African distribution segment,
has demonstrated the ability to quickly grow the distribution
of additional products to access the segments vast footprint.
Comm Express Services (CES)

CES markets and distributes prepaid airtime through in-house manufactured vending machines. The
technology applied to this method of distribution is managed by Activi, the subsidiary of Blue Label
Telecoms responsible for technology development, implementation and maintenance.
CES also downloads virtual prepaid airtime directly into point-of-sale devices of independent retailers.
Cigicell
Cigicell is a distributor of virtual prepaid airtime and electricity through a broad network of distribution
channels including the forecourts of the major oil companies.
Virtual Voucher
Distributor of prepaid airtime through an integrated prepaid voucher management system to in excess
of 500 Engen petroleum sites nationwide.
Kwikpay
Distributes virtual prepaid airtime, electricity vouchers and bill payments through multi-application and
managed terminal vending solutions and integrated point-of-sale devices.
2008
Revenue*
2009
Revenue
2008
EBITDA*
2009
EBITDA
94,3%
92,9%
97,8%
109,9%
*When compared to core pro forma earnings
page 32
continued
The introduction of RICA

The introduction of the Regulation of Interception of Communications and Provision of
Communication-Related Information Act (RICA) requires the registration of personal
details of all South African cell phone subscribers. All new starter pack activations
subsequent to 1 August 2009 require such registration. Furthermore, all historically
active users of cell phones will have to be registered within eighteen months from that
date.
Registration is administratively complex and has the potential to slow down activations.
As a solution to this, Activi has developed a suite of data collection products that are
designed to complement existing point-of-sale devices, enabling registration to be
seamlessly implemented.
Prepaid electricity
The introduction of prepaid electricity vouchers into the channels serviced by the
South African distribution segment, has demonstrated the ability to quickly grow the
distribution of additional products to access the segments vast footprint.
Accolades
For the fourth year in succession, Blue Label Telecoms has been awarded the Vodacom
Best Channel Partner. This award is measured on volume, growth, average revenue
per user (ARPU) and churn.
The group has also been recognised as the number one prepaid distribution channel
partner of Telkom for the past five years.
page 33
For the fourth year in succession, Blue Label Telecoms

has been awarded the Vodacom Best Channel Partner.
This award is measured on volume, growth, average
revenue per user (ARPU) and churn.
PROSPECTS
It is anticipated that revenue will continue to grow organically, not only through the
existing product offering, but also through the additional product offerings that have been
developed in-house and which are expected to be rolled out across the groups points-ofpresence during the forthcoming year. These initiatives include:
A technical arrangement with Gidani, the licensed operators of Lotto in South Africa to
integrate their products into till points and other distribution channels
Prepaid electricity distribution contracts with additional municipalities
The introduction of off- line prepaid top-up electricity that will complement the current
on-line top-up facility that is currently being offered
Prepaid bus ticketing
Money remittances throughout the groups touch points.
page 34
page 35
The overall strategy is to ensure growth in the groups global

presence through a combination of establishing bricks and
mortar operations in selected markets, entering into strategic
partnerships and providing technology licences to third parties.
page 36
continued
Bradley Turkington
During the period under review Blue Label Telecoms considered several international opportunities and
potential investments. This culminated in the launching of Blue Label Mexico, Africa Prepaid Services
Nigeria and investments into the United States of America and the United Kingdom, augmenting the
groups presence in India, Australia, Mozambique and the Democratic Republic of Congo.
The overall strategy is to ensure growth in the groups global presence through a combination
of establishing bricks and mortar operations in selected markets, entering into strategic
partnerships and providing technology licences to third parties.
Blue Label Mexico

Blue Label Mexico commenced trading operations in May 2009.
Technology developed by Activi has enabled the company to facilitate on-line real time direct recharge
of prepaid accounts.
The company is growing the number of points-of-presence and an increase in the average number of
transactions per site.
A number of key agreements have been concluded with both mobile operators and important sales
channels. In the forthcoming year the company is targeting points-of-presence which will cover a wide
range of distribution channels, from multi-lane retailers and petroleum forecourts, to convenience
outlets and informal sales channels.
page 37
The Ukash initiative has given the group the ability

to provide its products and services to a footprint
established by Ukash, covering several countries in
Europe.
Africa Prepaid Services Nigeria

In December 2008 Africa Prepaid Services (Pty) Limited concluded an agreement with Multi-Links
Telkom Limited a subsidiary of Telkom South Africa, to service all of their distribution channels in Nigeria.
Operations successfully commenced in May 2009.
APS Nigeria is expected to be the major contributor to revenue and profits for the African initiative of
Blue Label Telecoms.
Virtual Private Network
In December 2008, Blue Label USA, a wholly owned subsidiary of the group, entered into a limited
partnership agreement with wholesale distributors of physical international calling cards. The objective
of this new venture was to convert a captive client base from physical to virtual distribution. This
conversion would be powered by the virtual distribution technology developed by Activi.
In July 2009 Blue Label USA chose to withdraw its capital investment in the partnership and to replace
it with a technical agreement with Activi, another subsidiary of Blue Label Telecoms. Blue Label received
a refund of its capital investment in the sum of $5 million. This technical agreement, which embodies
installation of intellectual property, maintenance and support, will result in Activi receiving annual licence
fees and transactional fees generated from sales to the country-wide captive base of the wholesalers.
The effect of this transaction is to afford the Blue Label group access to the footprint of the client base
of the wholesale distributors.
Ukash
The strategic investment holding in Ukash has provided the Blue Label group with technology that
enables it to supply the end user with prepaid Ukash vouchers which effectively digitises cash. This
voucher enables the customer to transact on-line for multiple products and services through a single
prepaid voucher.
2008
Revenue*
2009
Revenue
2008
EBITDA*
2009
EBITDA
3,9%
4,8%
5,2%
1,1%
page 38
International distribution continued
The Ukash initiative has given the group the ability to provide its products and services to a
footprint established by Ukash, covering several countries in Europe.
The Ukash issuing, redemption and settlement platform facilitates integration with third
party devices and technology, ensuring rapid deployment and broad-based coverage.
Ukash has concluded a technology deal with MasterCard RePower to be the recharge
provider for the launch of the prepaid debit cash loading platform in Europe.
Oxigen India
Although Oxigen India has not as yet turned to profitability, a combination of continued
growth in outlets supplied and new initiatives resulted in an improvement towards the end
of the financial year under review.
These initiatives include the following:
Reduction in monthly expenditure
Consolidation of technology competencies
Improvement of connectivity and reliability of the communications interface
Introduction of prepaid E-Toll recharge vouchers
Piloting of prepaid railway ticketing
Agreement with The State Bank of India to pilot the PIN-less top-up of airtime and
Oxicash via mobile phones to its consumer base (the integration is complete and testing
is underway):
An agreement with Nokias Ovi stores to utilise Oxicash as a payment mechanism for all
Nokia N-Gage products during the extended warranty period
The appointment of Oxigen as a service provider of airtime sales in all Nokia branches.
Content Connect Australia
This company was established as an aggregator of localised content to mobile operators
and third-party clients. It is the intention to enhance the range of products distributed by
the company in order to encompass all the e-tokens of value that comprise the bouquet of
products and services that Blue Label Telecoms affords to customers globally.
Democratic Republic of Congo
The negative economic climate in the DRC has necessitated a restructure of the business
model. Operating costs have been reduced in line with the elimination of an element of the
product offering.
page 39
The current mobile penetration level of 45% in Nigeria

augurs well for potential future growth, considering
that most established markets have penetrations in
excess of 100%.
Mozambique
APS Mozambique established five additional branches. This initiative together with an
escalation in starter pack activations resulted in improved margins emanating from
additional volume discounts from the networks.
SharedPhone International
SharedPhone operates a SIM-card mobile payphone solution that allows vendors in rural
areas including other African countries to offer consumers access to a public payphone
and the means to vend prepaid airtime and prepaid electricity.
The company has penetrated several international markets over the past year (with
particular success in Africa) by:
becoming the leading connector of CST payphones in South Africa;
concluding an exclusive rollout in Rwanda with the leading GSM network;
pioneering in Liberia as the first GSM PayPhone supplier; and
making notable inroads in Mozambique.
The company has successfully implemented pilot operations with Blue Label Mexico,
positioning itself for expansion into Latin America in 2010.
PROSPECTS
Africa Prepaid Services is expected to contribute significant growth to the international
segment primarily through its strategic 51% shareholding in Africa Prepaid Services
Nigeria. The current mobile penetration level of 45% in Nigeria augurs well for potential
future growth, considering that most established markets have penetrations in excess of
100%.
Blue Label Mexico is steadily increasing its points-of-presence and turnover in accordance
with its business plan.
There has been an improvement in the financial performance of Oxigen India which is
expected to continue.
Ukash will provide consumers with the means to cash-in, utilise cash, and cash-out at their
own convenience. The current economic climate has seen an increased acceptance of the
prepaid model, even in developed markets. Ukash is well positioned to exploit this trend.
Technology partnerships will be pursued in line with the model established in the USA.
page 40
Technology
page 41
The aim is to provide one central hosting facility for the

South African business and a blueprint for international
hosting, with a local, decentralised field support team.
page 42
Technology
continued
Angelo Roussos
Chief information officer
The technology platforms segment houses all group companies which focus on the development,
integration and management of the groups IT systems, infrastructure and technology solutions.
The groups technology includes business-to-business and direct-to-consumer solutions.
BUSINESS-TO-BUSINESS TECHNOLOGY SOLUTIONS
Activi Technology Services (Activi)
Activi develops, operates and maintains all core transactional and service platforms for the group. As such,
focus is on providing:
Secure financial transactions
Secure e-tokens
Support and field support
Hosting/management of IT infrastructure
Manufacturing and maintenance.
page 43
Activi remains focused on the development and support

of commercially viable and functionally rich transaction
engines that provide robust and stable platforms.
During the past year, significant progress has been made in the following key areas:
Consolidation, management and enhancement of the technology platforms throughout the group
Integration of Lottery dispensers, on behalf of Gidani, into till points, allowing consumers to purchase
Quick Picks when paying for other goods
Development and implementation of a mobile application facilitating the purchase of lottery numbers via
cell phones
Integration of live bill payments into point-of-sale devices
Development of mobile services technologies, in association with Microsoft.
DIRECT-TO-CONSUMER TECHNOLOGY SOLUTIONS
Blue Label One, trading as the Mobile Services Company (MSC)
MSC consists of divisions that offer business-to-business and direct-to-consumer products and services:
The direct-to-consumer division consolidates all products and services associated with mibli powered
by Microsoft OneApp
An m-Commerce division provides a mobile wallet, which is a feature of mibli powered by Microsoft
OneApp
MSC Media is the mobile advertising division. The groups physical and virtual prepaid airtime inventory
and distribution channels constitute valuable marketing space for certain brands and provide an
innovative revenue stream for the group.
2008
Revenue*
2009
Revenue
2008
EBITDA*
2009
EBITDA
0,2%
0,1%
(2,28%)
(8,5%)
page 44
Technology
continued
Dr David Fraser
Chief technology officer
mibli powered by Microsoft OneApp which was launched post year end, is the groups most advanced
on-phone service, aimed at the mobile generation. The group is uniquely positioned to leverage its global
transactional experience and footprint to enable mibli powered by Microsoft OneApp to become a
revenue-based, transaction-centric mobile services eco-system, in which many different products/
services are combined in one mobile interface, supported by a single, integrated back-end.
MSCs systems and technology platforms have the capacity and capability to support the mobile service
requirements of Blue Label Telecoms, as well as any third-party client.
The MSC eco-system and Activis transaction system are integrated and supply the groups products and
transactional services through the mobile channel.
PROSPECTS
Activi remains focused on the development and support of commercially viable and functionally rich
transaction engines that provide robust and stable platforms. It strives to optimise the groups technology
investments, while standardising deployment processes, templates and methodologies.
page 45
mibli powered by Microsoft OneApp is the groups

most advanced on-phone service, aimed at the mobile
generation.
The aim is to provide one central hosting facility for the South African business and a blueprint for
international hosting, with a local, decentralised field support team. This model drives the group objective of
increasing points-of-presence and footprint globally.
Once the mibli powered by Microsoft OneApp App store is operational, significant interest from
developers and advertisers is anticipated.
South Africa is the first emerging market to launch mibli powered by Microsoft OneApp. The group
anticipates partnering with Microsoft in launching the application in other emerging markets in due course.
page 46
page 47
Specialises in telemarketing of cellular products and various

financial services instruments and provides inbound customer
care and technical support.
page 48
Value-added services continued
Craig Ireland
Value-added services (Datacel)
The value-added services segment houses all group companies that are broadly aligned with the South
African information and communication technologies (ICT) industry.
Datacel
Datacel is a national business process outsourcing company, operating both inbound and outbound call centre
services. During the year under review these functions are delivered through its subsidiaries Velociti, CNS and
Blue Label Call Centre.
It specialises in telemarketing of cellular products and various financial services instruments and provides
inbound customer care and technical support.
Services are provided for third parties and several companies within the Blue Label group.
The outbound call centre insurance business underperformed, resulting in the consolidation of three call
centres into two. Blue Label Call Centre was consequently closed post year-end.
The Velociti Call Centre has expanded its cellular contract telemarketing area and inbound capabilities. This
division has performed well.
The outbound direct selling model continues to have good growth prospects as companies develop more
products and services for the emerging income groups which are sold through the call centres.
Cellfind
Cellfind remains focused on delivering annuity income-driven location-based services via Vodacom and MTN,
as well as providing WASP services.
page 49
Cellfind remains focused on delivering annuity incomedriven location-based services via Vodacom and MTN,
as well as providing WASP services.
Key drivers of success are:

Network operator performance
Co-marketing opportunities
Uptake of new services
New value-added location-based services
Extended WASP service offerings
Extended white label offerings.
In May 2009, the company expanded its product offering with the launch of miTRAFFIC, an MMS report on the
traffic situation within a 50km radius of the cellphone subscriber. GuardMe, a mobile safety alert, was added to the
MTN 2MyAid and Vodacom Look4Me emergency services.
Further corporate and consumer location-based services and information products are scheduled for launch during the
forthcoming financial year.
Content Connect Africa (CCA)
CCA is an aggregator of on-portal and off-portal localised content for mobile operators and third party clients throughout Africa.
Additional offerings include the conceptualisation, production and execution of digital marketing campaigns on behalf of the major
cellular networks in South Africa.
PROSPECTS
The predominantly outbound call centres are constantly procuring additional product offerings to the databases that they
communicate with, utilising the existing infrastructure of call centre seats to achieve additional revenue.
Additional location based services that were introduced in the latter part of the financial year-end 2009 are expected
to gain momentum over a full year cycle. The company is exploring the introduction of value-added services in territories
outside South Africa.
2008
Revenue*
2009
Revenue
2008
EBITDA*
2009
EBITDA
1,6%
2,2%
10,75%
13,2%
page 50
CORPORATE GOVERNANCE
INTRODUCTION
The group continues to develop its governance
policies and procedures in line with an integrated
governance, risk and compliance framework.
The board regards corporate governance as
fundamentally important to the success of the
companys business and is unreservedly committed
to applying the principles of good corporate
governance in the management of the company.
The board is the focal point of the governance
system and is ultimately accountable and
responsible for the performance and affairs of the
company. The board exercises leadership, integrity
and sound judgement in directing the company to
enable it to achieve its objectives and goals.
GOVERNANCE APPROACH AND COMPLIANCE

Blue Label Telecoms is committed to the governance
principles of the Code of Corporate Conduct set
out in the King Report on Corporate Governance
2002 (King II). Standards of disclosure have
increased significantly and internal governance
structures have been reviewed and improved to
reflect the principles of King II. This has occurred
at both board and subsidiary level. The directors
believe that Blue Label Telecoms has complied with
all material aspects of King II during the year under
review.
In applying the governance principles of King II
the company follows a principle-based approach
rather than a rules-based approach. Accordingly
this governance review is based on the comply or
explain principle.
BOARD STRUCTURE AND BOARD

COMMITTEES
Board composition
Blue Label Telecoms is headed by a unitary board
that leads and controls the company. The board
comprised 13 directors: four executive directors
and nine non-executive directors, five of whom are
independent. The board composition provides a
balance of power to ensure that no one individual
has undue influence and that the interests of
shareholders are protected. The balance between

executive, non-executive and independent nonexecutive directors in the board composition allows
for appropriate and efficient decision-making.
There is a clear division of responsibilities between
the executive responsibility for the running of the
companys business and the leadership of the
board. The chairman of Blue Label Telecoms is an
independent non-executive director.
It was with deep sadness that Blue Label Telecoms
announced the passing of Mr Sidney Ellerine on
Friday, 17 July 2009. Mr Ellerine provided significant
leadership and direction to the board and to
executive management and always conducted
himself with the utmost integrity and highest regard
for the interests of the company.
All directors are subject to retirement by rotation
every three years. At the first annual general
meeting of the company all directors were required
to retire by rotation. The shareholders resolved at
the annual general meeting held on 12 November
2008 that all the directors be reappointed. The
articles of association require that one third of the
directors retire by rotation each year but are eligible
for re-election by the shareholders.
The detailed categorisation of the directors as well
as a brief curriculum vitae of each director appear
on pages 16 to 18 of this report.
Board responsibilities and charter
The boards primary responsibilities include
determining the companys purpose and values
and giving strategic direction to the company.
This involves, but is not limited to, identifying key
risk areas and key performance indicators of the
companys business, monitoring the performance
of the company against agreed objectives including
transformation goals, advising on significant financial
matters and reviewing the performance of executive
management against defined objectives and, where
applicable, industry standards.
page 51
A board charter has been adopted by the board, the

salient points of which are set out below.
The charter aims to:
provide an overview of the parameters within
which the board operates;
ensure the application of the core principles
of integrity, transparency, accountability and
responsibility in all dealings by, in respect and on
behalf of, the company;
set out the specific responsibilities to be
discharged by board members collectively, as well
as the roles and responsibilities incumbent upon
directors as individuals; and
provide an overview of the policies and practices
of the board with regard to matters such as
board governance, dealings by directors in
securities, disclosure and conflicts of interest,
board meeting documentation and proceedings
and the nomination, appointment, induction,
training and evaluation of directors and members
of board committees.
Key features of the charter include:
the roles of the chairman, joint chief executive
officers and individual board members
board composition (including qualifications and
key competencies for board membership)
disclosures of interest with a view to avoiding and
managing conflicts
remuneration of board members
director orientation, induction and training
the role of the board (including the adoption of
strategic plans and monitoring of operational
performance and management)
board governance (including board, strategic and
committee meetings)
matters reserved for the board and its
committees, including the approval of:
group objectives, strategy, strategic financial
plans, business plans and annual budgets and
the monitoring of performance against agreed
criteria;
annual financial statements, interim reports

and related financial matters;
appointments to and removals from the board
including chairman, joint chief executive officers,
executive and non-executive directors;
delegations of authority
board committee mandates, authorities and
membership;
adoption of any significant change in the
accounting policies and practices of the
company;
the making of any political, religious or
charitable donations;
the adoption of appropriate risk management
and internal control strategies
share-dealing procedures
internal audit and controls
stakeholder communications
board/individual director performance evaluation
Board procedure and related matters

The board retains full and effective control over the
organisation and monitors executive managements
implementation of approved plans and strategies.
The board meets quarterly and additional board
meetings are convened as circumstances dictate.
Where directors are unable to attend meetings
personally, teleconferencing facilities are made
available to enable their participation.
All directors are entitled to liaise with the company
secretary in regard to items on the agendas
for board meetings. Management ensures that
all relevant information and facts are provided
to board members timeously to enable them
to make informed decisions. Board agenda and
meeting structures have been adapted to focus on
performance monitoring, strategy, risk management
and internal controls, governance and related
matters. This ensures constructive discussion and
efficient decision-making.
page 52
CORPORATE GOVERNANCE continued
The number of meetings held during the year under review and the attendance of the directors are detailed below:
Attendance at meetings
Director
Aug
Oct
Oct
Nov
Jan
Feb
LM Nestadt (Chairman)
BM Levy
MS Levy
S Ellerine
GD Harlow
RJ Huntley
NN Lazarus SC
P Mansour
JS Mthimunye
MV Pamensky
DB Rivkind
HC Theledi
LM Tyalimpi
Legend: (P) Attendance (A) Apologies submitted and leave of absence granted
Special board meetings held on the 13th and 28th of October
Alternate director to Peter Mansour attended in person
Peter Mansour is based in United States of America and attended board meetings via teleconference
Directors and director appointments

The non-executive directors bring leadership,
judgement and insight to the board. They are individuals
of high calibre and integrity and provide a depth of
wisdom based on knowledge and experience on a
wide range of issues. Non-executive directors have
access to management and may meet separately
with management without the attendance of executive
directors. The directors are empowered to obtain
independent professional advice, at the groups
expense, should they deem it necessary to do so.
The board, with the support of the Remuneration
and Nomination Committee, ensures that it
collectively contains the skills, experience, diversity in
demographics and mix of personalities appropriate
for the strategic direction of the company and
necessary to secure its sound performance.
Directors are selected and appointed by the board
based on the recommendation of the Remuneration
and Nomination Committee. The non-executive
directors have no fixed term of appointment and
no service contracts with the group. Their fees are
independent of the groups financial performance

and they receive no bonuses and do not participate
in the companys Forfeitable Share Plan. Executive
directors are bound by a three-year employment
contract which commenced in November 2007. The
contracts may be renewed on expiration thereof for
a further three-year period.
To avoid conflicts of interest, board members
must disclose their interests in material contracts
involving the group, their shareholdings in Blue
Label Telecoms, as well as any other directorships.
Board members are required to make appropriate
disclosures when participation in deliberations
or decision-making processes could in any
way be affected by vested interests and, if the
circumstances require, must recuse themselves
from participation.
Board performance assessment
The first evaluation exercise comprising a board
self-evaluation and director peer review was
completed in 2009. This self-evaluation focused,
page 53
as the first evaluation exercise, on the board as a

whole and how the board discharges its duties and
responsibilities. The results were collated in terms
of board role, size and composition, independence
of the board and its committees, board teamwork
and management relations, board and committee
meetings, director orientation and development,
compensation of directors, succession planning,
ethics and constituencies. The overall findings of the
assessment are summarised as being satisfactory
with the overall grading for board and committee
meetings being consistently good. The areas
for improvement have been identified and will be
addressed during the ensuing financial year.
The chairman performs an annual review of
individual non-executive directors. The purpose of
the director peer review is to evaluate individual
director performances and the performance of
fellow directors on the board. The outcome of the
aforementioned process is discussed individually
between the respective non-executive directors and
the chairman. The chairman presents his findings
to the Remuneration and Nomination Committee
to make the appropriate recommendations to
the board. The board as a whole considers the
recommendations of the Remuneration and
Nomination Committee.
Board committees
The board has established a number of boardappointed committees to assist them in discharging
their duties and responsibilities. The responsibilities
delegated to each board committee are formally
documented in board-approved terms of reference.
There is transparency and full disclosure from board
committees to the board via the subcommittee
chairmans report to the board on recent committee
activities as well as inclusion of the committee
minutes in the board pack. Board committees
are empowered to take independent professional
advice as and when deemed necessary. The board
recognises that it is ultimately accountable and
responsible for the performance and affairs of
the group and that the appointment of board
committees and delegation of authority to these

committees, in no way absolves the board and its
directors of the obligation to carry out their duties
and responsibilities.
The membership and principal functions of the
committees are set out below. The board is of the
view that the committees effectively discharged
their responsibilities as contained in their respective
terms of reference.
Audit, Risk and Compliance Committee (ARCC)
The functions of the Audit and Risk Management
Committee were increased by the board during
the period under review to include compliance
management. In this regard the committee name
was changed to the ARCC.
Members: JS Mthimunye (Chairman), GD Harlow,
LM Tyalimpi
Composition and meeting procedures: All the
members of the ARCC are independent nonexecutive directors as defined in the Corporate
Laws Amendment Act, 2006 (CLAA). Mandatory
attendees of the ARCC include the joint chief
executive officers, chief financial officer, chief
financial officer of TPC, the major subsidiary of
Blue Label Telecoms, the senior audit partner from
PricewaterhouseCoopers Inc. and the head of the
outsourced internal audit function from KPMG
Services (Proprietary) Limited. The quorum for an
ARCC meeting is two members present throughout
the meeting.
The ARCC meets quarterly and at every meeting the
external and internal auditors have an opportunity to
have separate private discussions with the ARCC. The
internal and external auditors have unrestricted access
to the chairman of the ARCC. Committee agendas are
planned in accordance with the yearly meeting plan
to ensure that the committee considers all relevant
matters pertaining to internal controls, internal audit,
external audit, financial policies and reporting, risk
management and compliance.
page 54
Mandate: The committee is specifically mandated

to perform the functions required under section
270A(1) of the CLAA and the recommendations
of the King Report on Corporate Governance for
South Africa, on behalf of the group. In this regard
the committee supported the formation of an
Internal Risk and Compliance Committee to assist
it in discharging its duties and responsibilities with
regard to the subsidiary companies by collating
and recording the information that the committee
requires to perform its duties.
Role and functions: The ARCC assists the board in
discharging its duties relating to the safeguarding
of assets, the operation of adequate systems and
internal controls, the preparation of accurate
financial reporting in compliance with all applicable
legal requirements and accounting standards, the
responsibility and authority of the risk management
function within the group as well as monitoring the
groups compliance with its legal and regulatory
obligations.
Responsibilities of the ARCC set out in its terms of
reference include:
dealing with matters pertaining to the groups
financial statements and reporting of interim
and final results, the accompanying message
to stakeholders and any other announcements
regarding the companys results or other financial
information to be made public;
monitoring and supervising the effective function
of internal audit, including the review and/or
approval of the internal audit charter, internal
audit plans, reports and findings;
reviewing and assessing the integrity of the risk
control environment of the group to ensure that
all risks to which the group are exposed are
identified and managed;
considering and making recommendations
to the board with regard to the appointment,
re-appointment and removal of the companys
external auditors as well as fees payable to such
auditors;
reviewing and/or approving external audit plans,
findings and reports;
considering whether any non-audit services

rendered by the external auditors substantively
impairs their independence;
evaluating the independence and effectiveness of
the external auditors;
monitoring compliance by the group with relevant
laws, regulations, policies and procedures and
ensuring that compliance is managed and
reported in accordance with the Internal Audit
Charter.
The audit committee confirms that it has carried out
its functions in terms of the CLAA by:
nominating the appointment of
PricewaterhouseCoopers Inc. (PWC) as the
groups registered independent auditor after
satisfying itself through enquiry that PWC and
Mr Eben Gerryts, the designated auditor, are
independent of the company;
approving the terms of engagement and fees to
be paid to PWC; and
determining the nature and extent of any nonaudit services which the external auditors may
provide to the company.
The non-audit services rendered by the external
auditors during the 12-month period ended
31 May 2009 consist of tax advisory services,
tax compliance services, due diligence work and
accounting advisory services. The fees applicable
to the aforementioned services amounted to
R4,4 million in total. Prohibited non-audit related
services include:
performing any internal audit or internal audit
outsourcing services to Blue Label Telecoms or
any of its relevant subsidiaries;
performing any valuations on any business assets
of Blue Label Telecoms, or any of its relevant
subsidiaries for which the external auditors will be
required to subsequently issue an audit opinion.
In accordance with paragraph 3.84(h) of the JSE
Limited Listings Requirements, the committee
considered the appropriateness of the expertise and
experience of the financial director of the company.
The ARCC was satisfied that David Rivkind, chief
page 55
financial officer of Blue Label Telecoms, possesses

the appropriate expertise and experience to meet
his responsibilities in that position.
Members
(and invitees)
July
Aug
Nov
Feb
JS Mthimunye
(Chairman)
GD Harlow
LM Tyalimpi
BM Levy^
MS Levy^
DB Rivkind^
DA Suntup^
Legend: (P) Attendance (A) Apologies submitted and leave of

absence granted
^Attends by invitation and is not a member of the committee
The internal and external auditors, in their respective

capacities, attended and reported at all meetings of
the ARCC.
Remuneration and Nomination Committee (RNC)
Members: NN Lazarus SC (Chairman), GD Harlow,
RJ Huntley, S Ellerine
Composition and meeting procedures: All members
of the RNC are non-executive directors. The joint
chief executive officers and chief financial officer
attend meetings by invitation, but do not participate
in discussions and decisions regarding their own
remuneration and benefits. The chairman, at his
discretion, may invite other executives or employees
to attend and to be heard at meetings of the
committee. Meetings are held at least twice a year.
The quorum for an RNC meeting is two members
present throughout the meeting.
Mandate: To assist the board in fulfilling its
responsibilities in respect of maintaining an
appropriate remuneration strategy, ensuring the
directors and senior executives are fairly rewarded,
providing for succession planning, assessing the
effectiveness of the composition of the board
and evaluating the board and individual directors

performance.
Role and functions: Some of the responsibilities of
the RNC is to:
determine and agree with the board the
framework or broad policy for the remuneration
of the executive directors, non-executive directors
and such other members of the executive
management as it is designated to consider;
review, for recommendation to the board, the
design of, and targets for, any performance
related pay schemes operated by the company
and to approve the total annual payments made
under such schemes;
review the design of all share incentive plans for
approval by the board and shareholders and to
determine each year whether awards will be
made, and if so, the overall and individual amounts
of such awards;
make recommendations to the board regarding
the remuneration of non-executive directors for
final approval by the shareholders;
identify and nominate candidates for the approval
of the board to fill vacancies as and when they
arise;
make recommendations to the board concerning
the:
formulation of succession plans for both
executive and non-executive directors and in
particular, for the key roles of chairman and
chief executive officer;
appointment of new executive and non-executive
directors, including making recommendations
on the composition of the board and the
balance between executive and non-executive
directors and any adjustments that are deemed
necessary;
reappointment of any director under the
retirement by rotation provisions of the
articles of association, having due regard
to their performance and ability to continue
to contribute to the board in light of the
knowledge, skills and experience required.
page 56
Members
(and invitees)
Jun
Aug
Sept
NN Lazarus SC (Chairman)
S Ellerine
GD Harlow
Members
(and invitees)
Jun Jun Sept Sept
Nov
GD Harlow
(Chairman)
S Ellerine
RJ Huntley
D Hilewitz
BM Levy^
NN Lazarus SC
MS Levy^
BM Levy
DB Rivkind^
MS Levy
JS Mthimunye
MV Pamensky
DB Rivkind
DA Suntup
HC Theledi

absence granted
Investment Committee (IC)

Members: GD Harlow (Chairman), NN Lazarus SC,
HC Theledi, JS Mthimunye, S Ellerine, BM Levy,
MS Levy, MV Pamensky, DB Rivkind, DA Suntup and
D Hilewitz
Composition and meeting procedures: The IC
comprises an equal number of executive and nonexecutive directors. Meetings are held at least four
times per year. The quorum for an IC meeting is four
members, of which two are executive and two nonexecutive, present throughout the meeting.
Mandate: To review, consider and approve proposed
acquisitions and investments of Blue Label Telecoms
and its subsidiaries in accordance with the limits of
authority as defined by the board.
Role and functions: The responsibilities of the IC
include:
the review of acquisitions and investments made
by the executive committee in accordance with
the authority granted to it by the board;
the review, consideration and approval of
acquisitions and investments of the group ranging
between R20 million and R100 million;
making recommendations to the board on
acquisitions and investments of the group above
R100 million;
reviewing the performance of investments made.

absence granted
Two committee meetings held in June 2008 on the 1st and 12th
respectively
Two committee meetings held in September 2008 on the 16th
and 26th respectively
Transformation Committee (TC)

Members: RJ Huntley (Chairman), S Ellerine,
LM Tyalimpi, BM Levy, DB Rivkind (alternate to BM Levy)
Composition and meeting procedure: The
committee comprises at least three members with
a majority being non-executive directors. The quorum
for a TC meeting is two members of the committee
present throughout the meeting. Meetings are
held at least two times per year. The chairman,
at her discretion, may invite other executives or
employees to attend and to be heard at meetings
of the committee. The group human resource and
transformation manager is a mandatory attendee of
the TC meetings.
Mandate: To develop framework policies and
guidelines for the management of transformation
issues including affirmative procurement, enterprise
development, employment equity, human resource
development, social development matters and
ensuring their progressive implementation
throughout Blue Label Telecoms and its subsidiaries.
page 57
Role and functions: The responsibilities of the TC

include:
developing a transformation framework and policy;
monitor and oversee the implementation of the
transformation framework and policy;
oversee the BBBEE accreditation process of the
group and monitor the groups compliance with
the dti Codes of Good Practice.
Members (and invitees)
Aug
Nov
Feb
RJ Huntley (Chairman)
S Ellerine
BM Levy
LM Tyalimpi
I Hindley^

absence granted
David Rivkind as alternate to Brett Levy attended in person
Executive Committee (Exco) and the Strategy

Implementation Committee
Members: MS Levy (Chairman), BM Levy,
MV Pamensky, DB Rivkind
Composition and meeting procedure: Exco
meetings take place on a weekly basis. The chief
financial officer of TPC, a major subsidiary of Blue
Label Telecoms and the group legal adviser, attend
Exco meetings by invitation.
Mandate: Exco is responsible for managing and
monitoring the business affairs of the company in
line with board-approved plans, budgets, delegations
and limits of authority, prioritising the allocation
of capital and other resources and establishing
best management and operating practices. Exco is
also mandated, empowered and held accountable
for implementing the strategies, business plans
and policies determined by the board. In assisting
Exco with the implementation of strategies,
business plans and policies throughout the group,
a Strategic Implementation Committee (SIC) was
established. The SIC meets monthly and comprises
15 members, which include the Exco members, the
chief information officer, the chief technology officer,
senior managers of the group responsible for the

four organisational segments, as well as the heads
of product development and commercial product
offerings.
The role and function of the SIC include:
assisting Exco with group strategy and direction;
responsibility for implementing board decisions
regarding strategy and direction throughout the
group;
ensuring all subsidiaries, associates and partners
are aligned and striving to achieve the same goals
and objectives;
ensuring that correct and consistent information
is conveyed to all customers and suppliers;
ensuring that the group is functioning as one
combined company;
implementing the groups values and mission.
COMPANY SECRETARY
All directors have access to the advice of the
group company secretary and may liaise with the
group company secretary on agenda items for
board meetings. The company secretary provides
guidance to the board as a whole and to individual
directors with regard to their responsibilities and
plays a pivotal role in ensuring compliance with
procedures and applicable statutes and regulations.
Responsibilities of the group company secretary,
include inter alia:
induction of new or inexperienced directors;
assisting the chairman and joint chief executive
officers in determining the annual board plan;
assisting with other strategic issues of an
administrative nature;
facilitating full and timely access by directors to all
information such as corporate announcements,
investor communications and other developments
which may affect Blue Label Telecoms or its
operations;
acting as a central source of guidance on matters
of ethics and governance.
The group company secretary is furthermore
responsible for the functions specified in section
268(G) of the Companies Act No 61 of 1973, as
amended (the Act). All meetings of shareholders,
directors, and board subcommittees are properly
page 58
recorded as per the requirements of section 242

of the Act. The removal of the group company
secretary is a board decision.
RISK MANAGEMENT
The board has committed Blue Label Telecoms to a
process of risk management that is aligned to the
principles of King II. The features of this process
are outlined in the Blue Label Telecoms Enterprise
Wide Risk Management Policy Framework (risk
framework). The risk framework is applicable to the
entire Blue Label Telecoms group. This enterprise
wide approach adopted by the company, means that
every risk in the group will be identified, assessed
and monitored in a structured and systematic
process of risk review and management.
Management is accountable to the board for
designing, implementing and monitoring the process
of risk management and integrating it into the
day-to-day activities of Blue Label Telecoms. In this
regard, management established an Internal Risk
and Compliance Committee (IRC) to identify, evaluate
and measure group-wide risks and compliance in
all functional areas and to implement and maintain
adequate internal controls. The IRC is chaired by
the chief financial officer of Blue Label Telecoms
and reports directly to the ARCC at the quarterly
meetings. The members of the IRC comprise the
senior managers of the group responsible for
the four organisational segments as well as the
heads of product development and commercial
product offerings, the group legal adviser, group
company secretary and group human resource
and transformation manager. The head of external
audit and the head of the outsourced internal audit
function also attend the IRC meetings.
The IRC has conducted group-wide risk assessments
to identify and prioritise major risks in accordance
with the impact and likelihood of these risks. In line
with the groups risk framework the potential impact
of the risks are quantified on a five point scale
comprising catastrophic, critical, serious, significant
and minor/insignificant. Risks are then further
quantified in terms of the probability of occurrence in
accordance with probability factors, namely; almost
certain, likely, possible, unlikely and rare. Internal
controls to mitigate the identified risks are evaluated
to establish the appropriateness and adequacy of

the existing controls to ensure that they perform
the required risk mitigation. Management decides
on the acceptance of the identified risk or exposure
and, if considered high, an action plan and timeframe
are put in place to reduce the level of risk to a more
acceptable level.
INTERNAL AUDIT AND CONTROL

The Blue Label Telecoms internal audit function
is an integral part of the group, and functions
under the internal audit charter approved by the
board. Internal audit is responsible to both the
board and management, providing them with
reasonable assurance regarding the effectiveness
of the groups governance and risk management
processes as well as systems of internal control.
The Blue Label Telecoms internal audit function is
outsourced to KPMG Services (Proprietary) Limited
(KPMG).
The activities of the internal audit function as detailed
in the approved internal audit charter, include but
are not restricted to:
evaluating the effectiveness of controls over
the reliability and integrity of information for
management purposes, with particular emphasis
on financial information;
ascertaining the level of compliance with policies,
plans, procedures, laws and regulations;
assessing the adequacy of controls to safeguard
assets, including intangible assets;
appraising the economy and efficiency with which
resources are employed;
reviewing operations to ascertain whether
established objectives and goals are being
achieved as planned; and
assisting management in identifying business
risks and assessing the adequacy of their risk
management processes.
During the period under review, KPMG Internal
Audit, Risk and Control Services (IARCS), performed
an internal audit over the corporate governance
and human resource and payroll processes of Blue
Label Telecoms. Both of these risk-based audits were
assigned an overall acceptable rating, meaning
that a good control framework is in place, but
improvements are needed in certain key control
page 59
activities. The majority of the key findings were,

subsequent to the review, discussed at the ARCC
and the RNC respectively as appropriate, and were
addressed. The ARCC is satisfied that internal audit
has met its responsibilities for the year with respect
to its terms of reference.
SHARE DEALINGS
Blue Label Telecoms and TPC, its major subsidiary,
have adopted an Insider Trading and Dealings in
Securities policy. This policy requires all relevant
directors who wish to deal in Blue Label Telecoms
shares to obtain prior written clearance from the
chairman of the Remuneration and Nomination
Committee and either the chief financial officer or
group company secretary. The same restriction
applies to the group company secretary. In his
own case, the chairman of the Remuneration and
Nomination Committee must obtain clearance
to deal in Blue Label Telecoms shares from the
chairman of the board and the chief financial officer
of Blue Label Telecoms.
The group operates closed periods as defined

in the JSE Limited Listings Requirements. These
periods are communicated to directors, officers
and employees in the group via the policy document
and special electronic notices announcing the
commencement or termination of closed periods.
During these closed periods, the groups directors
and their associates, officers and employees may not
deal in Blue Label Telecoms shares. Additional closed
periods may be enforced, when required, in terms
of corporate activities. There was no requirement
for additional closed periods during the period under
review.
GOING CONCERN
The board has considered and recorded the facts
and assumptions on which it relies to conclude that
the business will continue as a going concern in
the ensuing financial year. The directors are of the
opinion that the business will be a going concern in
the year ahead and their statement in this regard is
also contained in the statement on the responsibility
of the directors for the consolidated financial
statements on page 95 of this report.
CODE OF BUSINESS CONDUCT

The code of business conduct (code), guides how the group interacts with its respective stakeholders in support
of the groups values. The fundamental principles that underpin the groups values include integrity, respect,
accountability, competitiveness and innovation.
INTEGRITY
RESPECT
We value peoples differences.
We value diverse opinions.
We treat stakeholders fairly with respect and
dignity.
We do not discriminate on the basis of race,
religion, gender or sexual orientation.
We are honest and trustworthy in all of our

dealings with all of our employees, customers,
business partners, suppliers, competitors, and
other stakeholders.
We adhere to business practices and all laws
and regulations governing our business.
ACCOUNTABILITY
We admit mistakes, learn from them and ask
for help.
We take ownership and responsibility for our
actions and performance.
We take initiative to make a difference and to
help.
We focus on results.
We recognise and celebrate our successes.
CODE OF
BUSINESS
CONDUCT
COMPETITIVENESS
We are determined in our pursuit of success.
We strive to be leaders in the markets we
serve.
We are committed to ensuring that we have
the best people, technology, quality, service, and
market knowledge.
We act with a sense of urgency, and we strive
for excellence in everything we do.
INNOVATION
We work creatively to develop new ways to provide value to our
customers.
We drive our innovation by understanding our markets needs,
and we are the first to deliver against those needs.
We create new markets with unique technologies and solutions.
page 60
REMUNERATION REPORT
INTRODUCTION
ADVISORS
This report has been prepared by the remuneration and

nomination committee (RNC) to provide stakeholders
with an overview of the remuneration policy and
practices applicable to executive directors and nonexecutive directors of the company.
In determining the remuneration of executive and nonexecutive directors and certain senior executives the
RNC obtains information on remuneration trends and
seeks advice from external independent remuneration
consultants.
REMUNERATION PHILOSOPHY
REMUNERATION POLICY
Blue Label Telecoms remuneration philosophy promotes

remuneration at market related levels to attract, retain
and motivate the talent required by the company to
achieve its strategic and operational objectives. The
philosophy seeks to achieve an optimum balance
between the interests of shareholders and providing
attractive and competitive remuneration packages.
The groups remuneration structure for executive and

senior management has three components:
Fixed remuneration fixed monthly salary and
benefits;
Variable remuneration a short-term performance
related bonus scheme;
Forfeitable Share Plan a long-term performance
related incentive scheme.
GOVERNANCE
The board remains ultimately responsible for the
remuneration policy and the RNC operates under
approved terms of reference. The focus of its activities
is on the groups remuneration framework, the
determination of levels of remuneration for executive
and non-executive directors, annual salary adjustments
and bonuses and the determination of awards to
be made in terms of the companys Forfeitable
Share Plan (share plan). The chairman of the RNC
reports to the board at quarterly board meetings
and submits recommendations made by the RNC to
the board for consideration. The board accepted the
recommendations made by the RNC during the year.
Fixed remuneration is reviewed annually to ensure that

the executives and senior management who contribute
to the success of the group remain remunerated at
appropriate levels in accordance with the remuneration
philosophy. The variable pay element provided by the
short-term bonus scheme is intended to enhance total
pay opportunities, should that be merited by corporate
and individual performance. Long-term incentives, in the
form of forfeitable shares awarded under the share
plan, are based on a percentage of total annualised
salary packages and are intended to reward sustained
long-term performance and to align the interests of
the executive and senior management with those of
shareholders.
COMPOSITION AND ROLE OF THE RNC

The composition, meeting procedure, role and functions
of the RNC as well as the attendance of the RNC
meetings, are reflected in the governance review on
page 55 of this report. All the members of the RNC
have the relevant skills and experience to perform their
duties.
The key activities of the RNC during the period under
review included:
the introduction and design of a balanced scorecard
for executive directors and senior management;
the determination of the remuneration of executive
directors and subject to shareholder approval, the
remuneration of the group chairman and nonexecutive directors;
the determination of increases in the fixed
remuneration of executive directors and senior
management across the group;
the confirmation of bonus structures in the group
with reference to the achievement of stipulated
performance criteria;
the determination of awards to be made to executive
directors and senior management in accordance
with the rules of the share plan.
The purpose of the annual performance related bonus

scheme is to reward and motivate the achievement
of group and subsidiary financial targets, as well as to
motivate strategic and personal performance. The joint
chief executive officers may earn an annual incentive
bonus of up to 120% of fixed remuneration and other
executive directors up to 70%. Senior management
may earn up to 50% of their annualised salary
package. For the year ended 31 May 2009 the joint
chief executive officers and the chief operating officer
elected not to take up their bonus allocations in view of
the current economic climate.
Details of the directors emoluments for the period
ended 31 May 2009 appear on pages 140 141 of this
report.
SERVICE CONTRACTS
The company concluded three-year employment
contracts with the executive directors in November
2007. The contracts provide for an option to renew (by
mutual agreement) upon the expiry of the initial term.
page 61
NON-EXECUTIVE DIRECTORS REMUNERATION

Non-executive directors receive fees for service on the board and board committees, dependent on attendance. Nonexecutive directors do not receive short-term incentives nor do they participate in the share plan of the company.
The fees payable to the chairman and non-executive directors are recommended by the RNC to the board, which in
turn proposes the fees for approval by the shareholders at the annual general meeting. Details of the fees paid to the
respective non-executive directors during the period under review are reflected on pages 140 141 of this report.
The proposed fees payable to the non-executive directors for the period 1 June 2009 to 31 May 2010 are as
follows:
Proposed
capped
fee per
annum **
Current
fee per
meeting
Proposed
fee per
meeting *
Services as directors
chairman of the board
board members
R30 000
R32 550
R700 000
R162 750
Audit, risk and compliance committee

chairman
member
R41 666
R25 000
R45 208
R27 125
R180 832
R108 500
Remuneration committee
chairman
member
R33 333
R20 000
R36 166
R21 700
R144 664
R86 800
Investment committee
chairman
member
R25 000
R15 000
R27 125
R16 275
R217 000
R130 200
Transformation committee
chairman
member
R25 000
R15 000
R27 125
R16 275
R108 500
R65 100
Ad hoc committee
chairman
member
R25 000
R15 000
R27 125
R16 275
R108 500
R65 100
* In the event that there are fewer meetings than envisaged, the member shall receive the fee in respect of the number of meetings attended.
** In the event that there are more meetings per year than initially planned, directors fees will be paid only up to the cap.
The annual fee paid to the chairman in respect of the year ended 31 May 2009 amounted to R600 000.
FORFEITABLE SHARE PLAN

The group implemented the share plan as approved by shareholders at the annual general meeting held on
12 November 2008. During the year forfeitable shares were granted to executive directors and qualifying
employees. Particulars relating to the share plan are set out in note 30 to the financial statements.
Forfeitable shares held by executive directors of Blue Label Telecoms
BM Levy
MS Levy
MV Pamensky
DB Rivkind
Balance
1 June 2008
0
0
0
0
Issue date
Forfeitable
shares
awarded
Balance
31 May 2009
Vesting date
26/02/2009
26/02/2009
26/02/2009
26/02/2009
369 936
369 936
269 745
138 726
369 936
369 936
269 745
138 726
01/09/2010
01/09/2010
01/09/2010
01/09/2010
page 62
SUSTAINABILITY REPORT
Our responsibility
page 63
The company aims to sustain its business model by

growing the range of users to which its technology
and distribution footprints may be put to use, thereby
positively impacting upon the lives of its customers.
page 64
SUSTAINABILITY REPORT continued
Blue Label Telecoms primary focus is to deliver

goods and services to unbanked and badly banked
people in communities which have previously been
ignored or under-serviced. The Economist reports a
recent study that demonstrates that adding an extra
10 mobile phones per 100 people in a typical
developing country can lead to a boost in GDP per
person of 0,8%. Blue Label Telecoms recognises that
the well-being of the communities that it services
impacts upon the sustainability of the company, and
attempts to manage its business practices in a
manner which positively impacts its economic, social
and environmental responsibilities to those
communities.
The company aims to sustain its business model by
growing the range of uses to which its technology
and distribution footprints may be put to use, thereby
positively impacting upon the lives of its customers
while ensuring the continuity of the business model.
Also key to the sustainability of the company is a
focus on its governance structures, targets and risk
management.
REPORT BOUNDARIES AND REPORTING

STANDARDS
Blue Label Telecoms was guided by the Sustainability
Reporting Guidelines prepared by the Global
Reporting Initiative (GRI) in compiling this
sustainability report. This report provides
information in respect of the financial year ended
31 May 2009.
Since Blue Label Telecoms is still a newly listed
company, joining the JSE Limited (JSE) two years
ago, processes for reporting continue to be in an
improvement phase. Thus, this report represents
the groups first sustainability report in compliance
with GRI G3 guidelines, and therefore contains no
comparable data. However, systems and processes
have been implemented from the commencement of
the 2010 financial year to assist in the more
accurate recording of those aspects of its business
practices which will affect the sustainability issues
herein reported.
In most cases, the scope of this report
predominantly incorporates information on the
activities and initiatives of the South African
operations of the group and statistical non-financial
data is limited to where systems and processes
allow (e.g. employment statistics).
The content of this report has been set according to
GRIs guidance on materiality; to the best of the
companys ability, noting that while areas of material
risk and/or opportunity have been identified upon
which there are currently inadequate systems and/
or information to report on, the content is
nonetheless a fair representation of the companys
ability to respond to the concerns and interests of its
varied stakeholders.
Where necessary, re-statements of financial and/or
operational data will have been disclosed in the
directors report (e.g. new acquisitions). However,
because this is Blue Label Telecoms first
sustainability report, there are no re-statements of
sustainability information or measurement
techniques to be discussed.
page 65
VALUE-ADDED STATEMENT
Value added is the measure of wealth the group has created in its operations by adding value to the cost of
products and services. The statement below summarises the total wealth created and shows how it was
shared by employees and other parties who contributed to its creation. Also set out below is the amount
retained and re-invested in the group for the replacement of assets and the further development of operations
VALUE-ADDED
Value-added by operating activities
Revenue
Net operating expenses
Value added by investing activities
Fair value movement on financial assets at
fair value through profit or loss
Interest income
2009
R000
2009
%
847 005
15 281 449
(14 434 444)
158 539
84,2
278 970
278 970
4 891
4 891
190 144
190 144
166 574
93 220
61 269
27 445
(15 360)
364 965
390 547
(25 582)
1 005 544
2008
%
594 545
12 545 471
(11 950 926)
176 002
32
158 507
1 005 544
VALUE DISTRIBUTED
Distributed to employees
Salaries, wages, medical and other benefits
Distributed to providers of finance
Finance costs
Distributed to the state
Income tax
STC
Value reinvested
Depreciation, amortisation and impairment
Net discounting finance cost
Share of losses of associates
Deferred taxation
Value retained
Retained profit
Minority shareholders interest
15,8
2008
R000
77,2
22,8
(1 375)
177 377
100
770 547
100
27,7
265 003
265 003
46 575
46 575
102 009
101 759
250
149 168
58 670
85 225
17 441
(12 168)
207 792
180 891
26 901
34,4
770 547
100
0,5
18.9
16,6
36,3
100
2009
6,0
13,2
19,4
27,0
2008
27,0%
27,7%
34,4%
Distributed to employees
36,3%
Distributed to providers of finance

0,5%
18,9%
16,6%
Distributed to the state

Value reinvested
19,4%
6,0%
Value retained
13,2%
page 66
STAKEHOLDER RELATIONS
The building of long-term and transparent relationships with our stakeholders is a business imperative. The
group has a deliberate and measured approach to its interaction with stakeholders, developed over the course
of a number of years. These interactions take account of the impact that the stakeholders may have on the
business. The frequency and form of that engagement is commensurate with such estimated impact.
Initiatives such as media roundtables, bi-annual analyst perception audits and feedback from employees result
in stakeholder concerns being identified and presented to the executive committee for consideration and/or
further action.
Blue Label Telecoms has identified the following as the stakeholders that contribute to its sustainability, either
directly or indirectly:
Stakeholder group
Stakeholder engagement
Employees
Communication with employees is achieved via the intranet, staff meetings,

monthly newsletter and e-mail correspondence providing information in respect
of new products, competitions, business initiatives, charitable initiatives and the
like. Once a month the group holds a one-day strategy meeting for senior
managers to agree and plan the most effective manner of implementing the
board strategy. Senior managers are thereafter required to convey the group
strategy to their businesses.
Shareholders, investors,
analysts and the media
Presentations covering the financial performance of the group and an overview

of the strategic direction of the group are made to the investor community by
the joint chief executive officers and the chief financial officer at year-end and
interim stages. Meetings and discussions are held during the year with these
parties on an ad hoc basis. The company also held a media roundtable in
May 2009 to provide the media with a better insight to Blue Label Telecoms
and its operations and to introduce the respective segment heads of the group.
Results and presentations of the group are published in the press and company
website.
Customers
The groups customer base is comprised of corporate clients, chainstores,

large independent retail clients, wholesale/cash-and-carry stores, and
petroleum industry forecourts. Field representatives and key account
managers engage directly on a continual basis with these customers in terms
of new products, market trends, business queries, device installations and
marketing. Blue Label Telecoms senior management liaise regularly with senior
management of customers and suppliers, as appropriate, to achieve enduring
relationships.
page 67
Stakeholder group
Business partners
The relationships that Blue Label Telecoms has with its business partners such
as Microsoft, Vodacom, MTN, Cell C, Telkom, municipalities and parastatals,
among others, are managed in terms of distributor and/or dealer agreements
and collaboration agreements. Relationship managers are appointed to each
partner to provide a single and dedicated point of contact. In most instances
engagement with these business partners occurs regularly and at least once a
month in the form of informal and formal meetings.
Communities
The Prepaid Company formed a community division known as TPC Community

Channel. This division specialises in the development and empowerment of
broad-based communities through the deployment of mobile technology and
products. The community channel aims to not only distribute the groups
products more widely but to create job opportunities for the members of the
communities and to share a portion of the revenues earned with those
communities.
Government, regulatory
bodies and the public sector
The group regularly engages government (at a national and local level),
parastatals and other public organisations through various tender processes.
From a compliance point of view, the completion and rendition of statutory
returns is undertaken diligently. Blue Label Telecoms is not a member of any
industry association and/or national/international advocacy organisation in
which the company has positions in governance bodies, participates in projects
or committees or provides substantive funding.
Suppliers
Suppliers are subjected to a formal procurement process whereby issues such

as quality of product, credit worthiness and BBBEE status are confirmed prior
to becoming suppliers. Suppliers of services are, if appropriate, initially engaged
through a tender process and if successful, agreements are concluded which
are then managed by Blue Label Procurement. The majority of the groups
goods and services are procured from locally based suppliers.
page 68
SHAREHOLDER ANALYSIS
Below is a synopsis of Blue Labels shareholder spread, distribution of shareholders and beneficial shareholders
holding 3% or more of the issued share capital of the company.
No of
shareholdings
No of shares
Shareholder spread
1 1 000 shares
1 001 10 000 shares
10 001 100 000 shares
100 001 1 000 000 shares
1 000 001 shares and over
626
1 251
479
107
56
24,85
49,66
19,02
4,25
2,22
361 248
4 669 913
14 680 162
33 434 847
713 214 724
0,05
0,61
1,92
4,36
93,06
Total
2 519
100,00 766 360 894
100,00
Distribution of shareholders
Banks
Close corporations
Empowerment
Endowment funds
Individuals
Insurance companies
Investment companies
Medical schemes
Mutual funds
Nominees and trusts
Other corporations
Retirement funds
Private companies
Public companies
Treasury stock
24
61
1
13
1 982
11
18
2
41
216
28
28
85
8
1
Totals
Public/non-public shareholders
Non-public shareholders
Directors and associates
Strategic holdings (more than 10%)
Treasury stock
Public shareholders
Total
0,95
2,42
0,04
0,52
78,68
0,44
0,71
0,08
1,63
8,58
1,11
1,11
3,37
0,32
0,04
77 433 972
1 380 644
76 441 268
536 704
202 910 208
7 973 414
31 397 804
19 000
36 289 943
57 454 925
197 226
16 300 887
157 553 936
95 269 250
5 201 713
10,10
0,18
9,97
0,07
26,48
1,04
4,09
0,00
4,74
7,50
0,03
2,13
20,56
12,43
0,68
2 519
100,00 766 360 894
100,00
20
18
1
1
2 499
0,79 346 066 942

0,71 249 013 377
0,04
91 851 852
0,04
5 201 713
99,21 420 293 952
45,16
32,49
11,99
0,68
54,84
2 519
100,00 766 360 894
100,00
Beneficial shareholders holding 3% or more
No of shares
Shotput Investments (Proprietary) Limited

Microsoft Corporation
Levy, BM
Nthwese Investment Holdings Consortium (Proprietary) Limited
Levy, MS
Investec Asset Management
116 736 000

91 851 852
82 613 331
76 441 268
75 205 922
43 667 468
15,23
11,99
10,78
9,97
9,81
5,70
Total
486 515 841
63,48
page 69
ETHICAL PRACTICES
Blue Label Telecoms strives to become the leading global distributor of secure electronic tokens of value and
transactional services, including non-banking value-added transactional services, within emerging and
developing markets. In pursuing this vision we are committed to behaving and interacting with all stakeholders
in a professional and ethical manner.
The values that underpin our interaction with stakeholders include:
Integrity
Respect
Accountability
Innovation
Competitiveness.
Blue Label Telecoms is a proud supporter of Business Against Crime South Africa.
Key impacts and risks
The group has identified the following key impacts and risks to the group.
Impact/Risk
Comment
Response
General economic
conditions
In an economic downturn consumers

are forced to limit expenditure,
particularly on non-essential needs.
This could have an adverse effect on
revenue and profitability.
It has been the groups experience thus

far that its mix of products, services
and distribution channels has limited its
exposure to economic downturns, in
that the bulk of the product mix
consists of goods, the demand for
which thus far appears inelastic.
Consumers appear to be unwilling to
reduce spending on utilities, transport
and airtime.
High volume/low margin

business which is sensitive
to supplier pricing
Network operators determine the

margins available to the prepaid
airtime distribution channel. Blue
Label Telecoms may not always be
able to pass on to the retailer or
customer any margin compression
enforced by the network operators.
Management is confident that based

on the terms of the groups customer
agreements and business model it
should be able to pass on margin
compression to its customers. The
possible margin compression is also
likely to force marginal distributors out
of the distribution chain.
Regulation of Interception
of Communications and
Provision of
Communication-Related
Information Act (RICA)
RICA requires the registration of

personal details of all South African
cell phone subscribers. All new
starter pack activations subsequent
to 1 August 2009 require such
registration.
Activi, the technology arm of the group,

has developed a suite of data collection
products that are designed to
complement existing point-of-sale
devices, enabling the immediate
registration of RICA details.
Furthermore, all historically active

users of cell phones will have to be
registered within eighteen months
from that date.
Once RICAd the starter pack base is

likely to be more stable and less likely
to churn. By developing superior
capabilities to RICA customers this
presents both an opportunity and a
competitive edge for the group.
Registration is administratively
complex and leads to a delay in the
ultimate activation of starter packs.
page 70
Key impacts and risks (continued)

Impact/Risk
Comment
Response
Reduction of inter-connect
fees
Parliamentary intervention to reduce

cellular inter-connect fees in the
immediate future appears likely.
It is managements view that prepaid

customers currently consume not as
much airtime as they require, but as
much as they are able to afford. It
would therefore appear likely that
prepaid consumers spend will remain
the same, but consumers will receive
more value for that spend.
This, in turn, is likely to lead to lower

cellular airtime prices. Lower pricing
may lead to margin compression by
the networks.
Inability to attract and

retain key personnel and
qualified employees, in
whom intellectual capital
resides.
Non-exclusivity of various
supply, distribution and
WASP agreements
Blue Label Telecoms

conducts the majority of its
existing business in South
Africa and is subject to
certain political, social,
environmental and
economic conditions in
South Africa
The groups future performance will

depend largely on the efforts and
abilities of its key personnel and
employees. The existing management
at Blue Label Telecoms pioneered the
mass prepaid market and established
the groups business model. Blue
Label Telecoms future success will
depend, in part, upon its ability to
continue to attract, retain and
motivate the necessary personnel,
including the succession of executive
officers and certain other key
employees.
Certain of the groups supply,

distribution and WASP agreements
are non-exclusive and can be
terminated at short notice. This type
of agreement is standard in the
industry.
While South Africa features a highly

developed financial and legal
infrastructure at the core of its
economy, it has high levels of
unemployment, poverty and crime.
Particular considerations include how
the South African Government will
ultimately address the political
tensions and social and economic
problems, to what extent its efforts
will be successful, the political, social
and economic consequences of such
efforts and the effect on South
African businesses of the continuing
integration of the South African
economy with the economies of the
rest of the world.
For these reasons management

believes that the groups business will
not be materially affected by the
reduction in inter-connect fees.
The joint chief executive officers and
co-founders are both substantial
shareholders and are dedicated to the
sustainability and growth of the group.
Key members of the management
team are bound by service
agreements, restraint of trade
undertakings and are also strategic
shareholders in the group.
Blue Label Telecoms remuneration
committee has designed remuneration
policies that include long-term
retention and incentives. The group
also focuses on training existing staff
to develop required skills internally.
Management is committed to continue
to grow the groups footprint by
increasing its points-of-presence (touch
points) and owning the entire
technological value chain, which drives
the groups products and services. This
has placed the group in a strong
position in the distribution chain.
Relationships with and service to
suppliers and customers are of
paramount importance and an
important factor in managements
time allocation.
Blue Label Telecoms believes that the
economic sentiment is broadly positive
for the future. The group continues to
expand its operations beyond the
borders of South Africa, with particular
focus on emerging markets.
page 71
Key impacts and risks (continued)

Impact/Risk
Comment
Response
As the group diversifies its operations

Rapid growth of off-shore
operations in territories far to earn income from off-shore
removed from head office. companies, executive managements
ability to closely oversee those
operations could be diminished.
The group always enters international

territories with a local partner, whom it
carefully selects. The group also has a
policy of seconding senior managers
from within the South African
operation to off-shore subsidiaries. This
is designed to ensure Blue Label
Telecoms strategy and culture is
effectively and consistently applied
throughout the group.
Vulnerability of the middle

man
From its inception, the objective of the

group was to become a one stop
destination for the supply and
distribution of all of the networks
offerings. This would provide both
convenience and efficiency to the
retailer and customer. Furthermore
the technology and footprint developed
by the group allows retailers to earn
additional revenue by the introduction
of additional products. This would make
it difficult to disintermediate the group.
In most industries a wholesaler is at

risk of being eliminated from the
supply chain if the supplier elects to
supply the customer directly.
No single network can offer this

complete solution.
SOCIAL PRACTICES
Transformation and broad-based black economic
empowerment
The group decided that BBBEE verification at
subsidiary level, as opposed to group verification, was
more effective in terms of mitigating commercial risk
and developing priority skills for the specific subsidiary
companies. The board-appointed transformation
committee has developed transformation targets for
the South African subsidiaries of the group. Subsidiary
companies that have completed the formal verification
process include:
Subsidiary
Demtrade 11 (Proprietary)
Limited trading as Blue Label
Procurement
Cigicell (Proprietary) Limited
Activi Technology Services
(Proprietary) Limited
Comm Express Services SA
Velociti (Proprietary) Limited
BBBEE status
Level 2 contributor
Level 4 contributor
Level 5 contributor
Level 6 contributor
Level 6 contributor
Socio-economic development (SED)

The groups main SED areas of focus are the youth,
sports development and HIV/AIDS. During the year
under review the groups main initiatives have
revolved around Nomondes Childrens Home, Legacy
Parks, Jakaranda Childrens Home and Malamulele
Onward. The group budgeted and disbursed
approximately R2,3 million in respect of these
initiatives.
page 72
Nomondes Childrens Home

Nomonde Duda is a retired nursing sister who
cares for abandoned HIV/AIDS children. Blue
Label Telecoms in conjunction with Nedbank
Limited and Watprop, secured suitable premises
in Lombardy East for Nomonde and her children
and assisted in renovating the home to better
suit the requirements of the home. A nursery for
the babies and a sick bay were built. Currently a
nursery school and after-care facility are
operated daily for the toddlers and school-going
children. Blue Label Telecoms hosted a Christmas
party for the children at the home in December
2008.
LEGACY PARKS
The South African Rugby Legends Association has
been running a number of projects designed
primarily to uplift disadvantaged youth. One of these
projects is Legacy Parks which involves the
development of sporting facilities in previously
disadvantaged areas. Blue Label Telecoms joined
forces with South African Rugby Legends
Association, the Gauteng government, Lucas
Radebe and the Protea Glen Community Forum by
sponsoring the Lucas Radebe Sustainable Legacy
Park in Protea Glen, Soweto.
The sporting facilities are used during the day to
host school-run sports clinics free of charge for the
youth in the community. These clinics also help
identify talent and occupy the youth in constructive
and sociable activities. In the early evenings the
park is used by corporate leagues, that pay a fee, in
order to ensure the sustainability and maintenance
of the park. At night, the Police Services assist at
the park to hand out meals and provide positive role
models to homeless children who use the park as a
place of security.
MALAMULELE ONWARD
Malamulele Onward is a non-profit organisation
that has taken on the substantial task of identifying
and helping caregivers of children with cerebral
palsy (CP) in some of the most deprived areas
of southern Africa. The project started in the
Malamulele area of Limpopo Province and rapidly
expanded to the Eastern Cape. Children severely
disabled by CP survive, often into adulthood, but
they and their families are neglected by the health
and education systems.
Malamulele Onwards programmes aim to address
the rehabilitation needs of children with CP through
the provision of hands-on therapy and equipment
to children living in the most disadvantaged areas
page 73
of the region; training and empowerment of

caregivers and local rehabilitation workers; and
the provision of training to therapists caring for
children with CP in southern and central African
countries (notably Rwanda, Tanzania, Lesotho;
Mozambique, Swaziland and Botswana.)
Malamulele Onward has been operating for
nearly four years. To date, eight outreach
projects in Limpopo and in the Eastern Cape
have been completed involving 166 children and
their caregivers and over 20 local rehabilitation
therapists.
The group has also provided financial support to

Training @ Work, an accredited training service
provider. This organisation is a black-owned
exempted micro enterprise that provides a vast
range of practical oriented learning and skills
development programmes aimed at developing
the competencies of young people and local
communities including the unemployed, corporates
and government agencies. The funding received
from the group has been used towards improving
their business marketing, human resources and IT
capacities.
Blue Label Telecoms has supported this cause

by making donations to Malamulele Onward
which have been used to purchase equipment for
the children. These include specialised seating
equipment, wheelchairs and computers.
Going forward, the group will be utilising the training

services offered by Training @ Work, in particular,
sales and call centre training.
Enterprise development
Blue Label Telecoms, through its major subsidiary
The Prepaid Company continued to provide financial
assistance on an interest-free basis to ZOK Cellular
(Proprietary) Limited (ZOK). In addition Blue Label
Telecoms provides management and strategic
support and other resources to ZOK. ZOK aims
to empower budding entrepreneurs from South
Africas previously disadvantaged communities by
equipping them with a ready-made FMCG retailing
solution in the form of a ZOK container. This
container is a licensed business unit designed as a
self contained turn-key business with start-up stock
for the retail section, starter packs and airtime,
public phones, fax facilities, internet services and
ATM facilities. The placement of ZOK containers
in previously disadvantaged areas is intended to
bridge the gap in telecommunications, ICT and
banking services in such areas, as well as to
uplift the communities in the areas served by the
containers.
page 74
PRESS RELEASE BY ZOK CELLULAR CIRCULATED

TO MEDIA ATTENDING THE LAUNCH
ZOK Cellular (Proprietary) Limited. Schools initiative
launch:
Johannesburg: 5 August 2009: ZOK Cellular
(Proprietary) Limited today launches a project
that seeks to ensure that schools in previously
disadvantaged communities are able to generate
revenue that will help them improve the running of
their schools. Hlonipha Secondary School in Kwa
Ndebele (Mpumalanga) is the first recipient of this
opportunity and has been selected to pilot this project.
The ZOK School Income project is informed by the
realisation that in providing for better education
in previously disadvantaged schools government
resources have been significantly stretched and there
is just not enough to cover all the needs of a school.
ZOK Cellular (Proprietary) Limited has come on board
and is offering a sustainable income generating
business to schools.
ZOK Cellular (Proprietary) Limited is offering this high

achieving school a ZOK Container Business Unit. A
ZOK container is a licensed business unit designed
as a self-contained business, enabling the operator
of the business to offer retail, public telephones, and
banking, internet and fax facilities. The container
comes completely equipped and once delivered starts
operating immediately Plug and Play. ZOK believes
the initiative will give the school a platform to be more
self-reliant.
Other advantages of such a contribution are the
fact that both learners and educators who will
be managing the operations of the container will
have first hand practical experience of running
an enterprise and the possibility of becoming
entrepreneurs themselves. Our learners also
benefit from the container because now they can
use the internet for research and join the global
information highway, said Mr Mabasa, Principal of
Hlonipha Secondary School.
page 75
For ZOK a clear benefit is the ability to bring services

closer to communities that previously had to travel
long distances to access them. Before the ZOK
container arrived, the community around Hlonipha
Secondary School had to travel long distances in
order to access products that we in the cities take
for granted, like ATM machines, prepaid electricity,
photocopiers, telephones and faxes. Through this
initiative we have brought services to our people
and saved them money, said ZOK CEO, Nonhlanhla
Matshazi.
It is ZOK Cellulars intention to continue to introduce
more products that help to improve the quality of life
of ordinary South Africans.
We are excited about the ZOK container because
it is not just for the School of Hlonipha, but will
bring much needed services to our community,

said Principal Mabasa. The pilot with Hlonipha
Secondary will also include comprehensive training
on all products and services as well as the business
management of the container.
The ZOK Container Business Unit is worth
R300 000 complete with its products and services.
The cost of the manufacture of the container is
supported through partnerships between ZOK and
key service suppliers within the container such as
Premier Foods, ABSA Bank, Vodacom and iBurst.
The school will be continually supported by ZOK
Cellular as per our current operations with regard
to licensees but will also be monitored on an ongoing
basis with regards to upkeep of the school, where
the money is going to, renovations etc.
Gifts were handed out to the invited guests, students and community at the launch event:
page 76
Preferential procurement
The group has initiated a move to procure on a
centralised basis via Blue Label Procurement. The
centralisation of group procurement will ensure
greater efficiencies and coordination of the groups
transformation procurement initiatives. Blue
Label Procurement completed its formal BBBEE
verification and achieved a Level 2 contributor
status.
As part of the centralisation process a database has
been set up to continually keep track of the groups
suppliers and their BEE status. The group strives to
procure all goods and services from BEE certified
suppliers, where possible.
HUMAN CAPITAL
The group recognises that its employees are its
most important asset. Executive management
ensures that the groups value and belief system is
inculcated throughout the group by the adherence
to the groups Code of Conduct including ethics,
environment, health and safety. All new employees
undergo an induction session during which they
receive their staff manual comprising of the
groups visions, mission, values, conditions of
employment, standard group practices, procedures
and policies, as well as a health and safety booklet.
Blue Label Telecoms human resource department
oversees the groups skills development and
training initiatives. Senior management in each
of the subsidiaries are responsible for ensuring
that group strategy and culture are implemented
consistently.
All permanent employees are automatically included
in various group-wide schemes, namely group
life as well as group benefits such as miTRAFFIC,
Look4help, Look4me, MTN WhereRU and
MTN 2MyAid.
Group life is an employer-funded benefit which

includes death benefit, disability benefit and a
funeral benefit. All employees are given the option of
joining Discovery Health. All changes to terms and
conditions of employment, inclusive of changes to
significant operational matters are dealt with on the
basis of consultation with staff and mutual buy-in.
Employment equity
The group is committed to achieving equity in the
workplace by promoting equal opportunity and fair
treatment in employment. The ultimate objective is
to create an environment in which all employees are
able to compete for job opportunities on the sole
criterion of merit and where the demographics at all
levels within the workplace are a fair representation
of the demographics of the relevant general and
regional population.
Each individual subsidiary company monitors their
employment equity statistics in line with the targets
set for the specific subsidiary company. It has been a
group focus area to ensure that job descriptions and
functionalities of top, senior and junior management
were accurately reflected in the Employment Equity
reports submitted on an annual basis to ensure
alignment between the dti Codes of Good Practice
(CoGP) and the EE2A reports. Blue Label Telecoms is
a non-unionised environment.
page 77
The table below depicts the demographics of the employee base in the group:
Male
Female
African Coloured Indian White African Coloured Indian White
Top management
Senior management
Professionally qualified,
experienced specialists
and mid-management
Skilled technical and
academically qualified
workers, junior
management,
supervisors, foremen,
and superintendents
Semi-skilled and
discretionary
decision-making
Unskilled and defined
decision-making
Total permanent
Non-permanent
employees
Grand total
Foreign
nationals
Male Female
2009
Total
2008
Total
2
1
0
2
0
6
44
26
0
1
1
0
0
2
6
10
0
0
0
0
53
48
45
50
10
15
71
45
162
75
68
22
39
96
11
11
24
43
317
146
206
39
22
14
293
85
38
80
786
654
15
67
88
86 256
325
104
68
185
14
35
322
69
76
398
25 109
4 1 433 1 058
13
133
36 148
94 195 269
458
140 216
191
14
546
558
1 979 1 616
The increase in the total number of employees compared to the previous reporting period is attributable to the
groups expansion and its consequent support requirement.
page 78
TRAINING AND SKILLS DEVELOPMENT
LEADERSHIP DEVELOPMENT SKILLS
Detailed training plans addressing the requirements

of each individual subsidiary company have been
compiled for the majority of the group. These
plans are aligned with business and individual
requirements as well as the annual work place
skills plan. The execution of the training and skills
development plans is managed in consultation with
the group human resource and transformation
manager.
A number of the groups subsidiaries have run

leadership programmes aimed at their junior
management staff levels. It is based on creating a
leadership model that includes self-awareness, group
awareness and behaviour design. The workshop
develops the staff at both a team and individual level
and facilitates the identification of high-potential
members for the succession planning process.
LIVING LEADERSHIP
The group is currently reviewing a number of
competency-based performance assessment
systems to be implemented as a group-wide initiative,
which will enable Blue Label Telecoms to assess
the performance of employees and hence identify
individual training needs, career development
objectives, succession planning, remuneration benchmarking and the like. It is anticipated that this will only
be in place in the early part of the next financial year.
Velociti (Proprietary) Limited, a subsidiary of

Blue Label Telecoms, runs a Living Leadership
programme aimed at developing their management
levels. This workshop has been highly effective and
looks at leadership and its relevance in order to
transform both the individual and business. It focuses
on insights and skills to enable staff to realise their
full potential and to use those skills within the work
environment.
The group has planned and implemented new

training and development initiatives during the year
as follows:
SAFETY AND HEALTH PRACTICES
LEARNERSHIP INITIATIVES
Cigicell (Proprietary) Limited, a subsidiary of Blue
Label Telecoms, is participating in the contact
centre support learnership programme offered
by the Services Sector Education and Training
Authorities (SSETA). The initiative is proving to be
successful, providing skills training and development
as well as the possibility of employment to those
who would not ordinarily have the opportunity to
obtain a qualification. The qualification aims to
enhance the provision of entry-level service within
the contact centre industry. Contact centres have
become key business tools that form an integral
part of the way in which organisations are run. The
group runs a few contact centre operations, both
inbound and outbound and hopes to implement the
programmes on a regular basis in the future, across
its subsidiaries.
A healthy, safe and incident-free working

environment enhances productivity and contributes
towards employee wellbeing. A group health and
safety officer has been appointed with the express
intention of enhancing the existing health and safety
policy, compliance with legislative requirements,
monthly health and safety meetings and health
and safety audits. Awareness of the companys
health and safety requirements is created for all
new employees as part of their induction process.
Frequent information updates are circulated via
e-mail to all existing employees.
Trained first-aid employee representatives are
available on site to assist with any incident. The
group had no major safety and health incidents
during the year under review.
page 79
Blue Label Telecoms has a comprehensive HIV/AIDS

strategy to minimise the risk to exposure by way of:
instilling a prevention culture within the
organisation;
providing employees with an opportunity to
volunteer to have an HIV/AIDS test resulting in
detection of infections; and
providing medication and treatment to affected
employees as the final element to the strategy.
Workplace awareness programmes include
awareness activities, condom distribution, voluntary
HIV testing, infection control, counselling and
treatment. The company has a partnership with the
Bryanston Assessment Centre and all employee
matters of a psychological nature are referred
and treated accordingly. In addition, as Discovery
Health is the chosen medical aid service provider,
all employees are referred to the existing disease
management forums within Discovery Health such
as the oncology, diabetes and HIV management
forums.
A number of other initiatives, however, are under way

reflecting the groups commitment to the environment.
These are:
Water use
Water consumption and use is limited to drinking
purposes and ablution facilities. During the year
under review infrared activated touch-free taps were
installed in the bathrooms of the main premises
situated at 75 Grayston Drive, Sandton.
90%
80%
70%
60%
50%
40%
30%
20%
10%
Long-term
cost
Water
saving
Process
ENVIRONMENTAL PRACTICES
Given the nature of Blue Label Telecoms business,
the groups environmental impact could be classified
as low.
The groups participation in the JSE SRI Index as a
newly listed company highlighted a number of areas
requiring improvement including environmental
management reporting. Blue Label Telecoms is
therefore evaluating the respective reporting areas
to ensure a more detailed report going forward. In
this regard processes and procedures are being
established to improve the measurement and
monitoring of the groups environmental impact
including carbon emissions.
We do not currently measure the following
environmental impacts:
Direct and indirect water use
Environmental supplier standards
Transportation/logistical impacts
Overall environmental expenditures.
Sensor taps
Normal taps
Energy
saving
page 80
Land use
The group occupies leased properties comprising
mainly office buildings, none of which is situated
in biodiversity-rich or ecologically significant
habitats as determined by the Global Reporting
Initiative. The company reached agreement with
its landlord to expand its main office building
situated at 75 Grayston Drive, Sandton, in support
of managements objective to retain as many
subsidiaries and employees as possible in one
environment to enhance communication and
to ensure alignment in culture and objectives.
The impact of the centralisation of the groups
business location has been considered and
management has agreed to overcome this potential
challenge by instituting three different work shifts
which employees may elect, dependent on their
circumstances. The landlord and its architects gave
due consideration to the environmental impact of
the building expansion and to this end incorporated
a wide spectrum of solutions and best practices
to ensure an eco-friendly building. On completion,
the entire building will be operated to reduce the
overall impact on human health and the natural
environment by more efficient use of energy, water
and other resources, as well as protecting occupant
health and improving employee productivity.
Energy efficiency
The energy consumption of Blue Label and its
subsidiaries located at the office building on
75 Grayston Drive, Sandton for the 12-month
period ended 31 May 2009 amounted to a total
to 1 648 186,64kWh. Energy saving initiatives
have been identified and will be implemented in the
existing building as well as the new building currently
being erected.
Recycling
Blue Label continues to recycle its office waste
such as paper and printer cartridges in an
environmentally friendly manner. Waste paper and
scrap, including printer cartridges, associated with
an office environment are collected by scrap dealers
for disposal in an environmentally friendly manner.
Greenhouse gas emissions

Business activities resulting in greenhouse gas
emissions include electricity usage, transportation,
waste treatment and disposal and industrial
processes such as air conditioning and the like.
The group is aware that it is necessary to take
reasonable steps to limit the effects of such
emissions.
During the year, no prosecutions or fines were
brought against the group for the contravention of
any environmental laws and regulations.
page 81
INDEPENDENT ASSURANCE STATEMENT
To the board and stakeholders of

Blue Label Telecoms:
SustainabilityAssurance.co.za (SA) was
commissioned by Blue Label Telecoms (hereafter,
BLT) to provide independent third-party assurance
over the 2009 sustainability report (the report,
covering the period 1 June 2008 to 31 May
2009) contained within BLTs integrated annual
report. The assurance team comprised primarily
of Michael H Rea, our principal corporate social
responsibility (CSR) consultant, with experience
in environmental and social performance
measurement. Over the past 10 years, Michael has
undertaken over 30 assurance engagements in
various countries, including Sudan, Kenya, the DRC,
Nigeria, Cameroon, Swaziland, Zimbabwe, Namibia,
South Africa, Peru and Canada: working either as
part of a team (while in the employ of PWC and
KPMG), or as an Independent CSR consultant.
INDEPENDENCE
SA was not responsible for the preparation of
any part of this report and has not undertaken
any commissions for BLT in the reporting period
concerning reporting or data collection. SAs
responsibility in performing its assurance activities is
to the management of BLT alone and in accordance
with the terms of reference agreed with them.
ASSURANCE OBJECTIVES
The objectives of the assurance process were
to provide stakeholders of BLT with a low level
independent assurance opinion on whether the
report meets standard reporting principles of
completeness, accuracy, consistency and neutrality,
as well as to assess the degree to which the report
is consistent with the Global Reporting Initiative
(GRI) G3 guidelines, with the objective of establishing
whether or not the report has met the Global
Reporting Initiative (GRI) G3 Application Level C
reporting requirements.
SCOPE OF WORK PERFORMED

The process used in arriving at this assurance
statement is based on best practices in sustainability
reporting assurance. Our approach to assurance
included the following:
Reviews of drafts of the report for significant
data and/or assertion anomalies, and to assess
whether sufficient neutrality (ie success and
challenges) could be identified.
Interviews with individuals responsible for
writing the report in order to assess BLTs
measurement and reporting procedures, and to
ensure that selected claims/assertions could be
substantiated.
A review of the process used to define the
content of the report by looking at materiality of
issues included in the report, determination of
sustainability context and coverage of material
issues.
A review of the approach of management to
addressing topics discussed in the report.
An assessment of whether or not the requisite
number of GRI G3 performance indicators have
been covered in the report to meet Application
Level C requirements.
FINDINGS
In general, the companys sustainability reporting
processes are adequate, and this report reflects a
significant improvement over BLTs 2008 report.
However, it was found that:
Although BLT actively engages an array of key
stakeholders, as defined within this report, the
assurance process did not allow for additional
engagement to confirm or refute BLTs
assertion that the report adequately reflects
the information requirements of their key
stakeholders.
Although additional performance data would
be required to enhance the overall quality of
BLTs sustainability reports, this report appears
to reflect an accurate accounting of BLTs
sustainability performance for the period ending
31 May 2009.
page 82
INDEPENDENT ASSURANCE STATEMENT continued
Based on our review of the report, as well as

the processes employed to collect and collate
information reported herein, it is our assertion
that this report meets the GRI G3s requirements
for Application Level C (responses to all required
indicators, as well as no fewer than 10 core
indicators, with at least one from each of social,
economic and environment). However, it was found
that:
The reporting of performance against some
GRI G3 indicators continues to require either
data quality improvements, or further detail
in disclosure, particularly with respect to
environmental performance. Indicator-specific
performance is identified in BLTs GRI G3 indicator
table.
RECOMMENDATIONS
While we are satisfied that this report is a fair
demonstration of BLTs ability to collect, collate
and report on its sustainability performance, the
following recommendations have been identified:
BLT should ensure that stakeholder engagement
procedures include an assessment of whether or
not this report, and all future reports, adequately
reflect the reporting requirements of key
stakeholders.
BLT should continue to improve its reporting
according to international best practice, including
the principles of inclusiveness, materiality,
and responsiveness, as guided by AA 1000AS
(2008), ultimately seeking an AA1000AS form of
assurance in future reports.
Having addressed the requirements of GRI G3
Application Level C, it is our recommendation that
BLT review the process followed in compiling the
report and, while making further improvements
on the quality of data required for Application
Level C, begin addressing the requirements of
Application Level B.
CONCLUSIONS
Based on the information reviewed, and citing BLTs
status as a recently listed company (second year of
JSE Limited listing), SustainabilityAssurance.co.za
is satisfied that this report provides a reasonably
comprehensive and balanced account of the
environmental, safety and social performance
of BLT during the period under review. The data
presented is based on policies and procedures that
are, in many cases, still in the process of further
development and/or implementation, and we are
satisfied that the reported performance data
reasonably represents the current environmental,
safety and social performance of BLT. Moreover,
and although the quality or quantity of data of
many GRI G3 indicators can yet be improved, this
report appears to meet the GRI G3s requirements
for Application Level C (C+ with this assurance
engagement).
SustainabilityAssurance.co.za
22 October 2009
page 83
GRI G3 APPLICATION LEVEL REQUIREMENTS
This is BLTs first attempt at ensuring compliance to the Global Reporting Initiative (GRI) G3 sustainability
reporting requirements, as recommended by King II. As such, we have opted to seek C+ Level of GRI G3
compliance. The following tables provide a summary of the GRIs requirements, as well as a quick reference
to our self-assessment of compliance.
Standard Disclosures
Not Required
G3 Management
Approach Disclosures
G3 Performance
Indicators & Sector
Supplement
Performance
Indicators
Report on a minimum
of 10 Performance
Indicators, including at
least one from each of:
social, economic, and
environment
B+
Report on all criteria

listed for Level C plus:
1.2
3.9, 3.13
4.5 4.13, 4.16 4.17
Same as requirement
for Level B
Management
for each Indicator
Category
Management
for each Indicator
Category
Report on a minimum
of 20 Performance
Indicators, at least
one from each of:
economic, environment, human rights,
labour, society, product
responsibility
Respond on each
core G3 and Sector
Supplement* indicator
with due regard to the
Materiality Principal
by either: a) reporting
on the
indicator or b) explaining the reason for its
omission
A+
Report Externally Assured
Report on:
1.1
2.1 2.10
3.1 3.8, 3.10 3.12
4.1 4.4, 4.14 4.15
C+
Report Externally Assured
G3 Profile Disclosures
Report Assured by SustainabilityServices.co.za
Report Application Level
REQUEST FOR FEEDBACK

Because this is only our first attempt at producing a sustainability report, we are mindful of the possibility that
we could fall short of the reporting expectations of at least some of our key stakeholders. As such, we are
hopeful that you, the reader of this report, will contact us and offer us your views on the quality and usefulness
of this document.
Should you have any questions about our company, or comments about anything contained within this report,
please contact Elizna Viljoen via e-mail at eliznav@blts.co.za.
page 84
GRI CONTENT TABLE

ECONOMIC
VISION & STRATEGY

Strategy and analysis
1.1
2123
1.2
1011, 2849
Organisational profile
2.1
FC
2.2
19, 2849
2.3
19, 2849
2.4
IFC
2.5
1213, 2849
2.6
IFC
2.7
1213, 2849
2.8
113, 2849
2.9
2149
2.10
32, 85
Report profile
64
3.1
3.2
64, 101
3.3
64
3.4
32, 85
Report scope and boundary
3.5
64
3.6
64
3.7
64
3.8
2849, 64
3.9
79
3.10
64
3.11
64
GRI content index
3.12
85
Assurance
3.13
8182
Governance, commitments
and engagement
1418, 5059
4.1
4.2
1418, 5059
4.3
1418, 5059
4.4
6667
4.5
5061
4.6
6667
4.7
5061
4.8
12, 59, 69,
7980
4.9
5061
4.10
5061
Commitment to external
initiatives
5061
4.11
4.12
5061, 64, 69,
7980
4.13
6667
6667
4.14
4.15
6667
4.16
6667
4.17
6667
Core
SOCIAL
Additional
Economic performance
EC1
65
EC3
7678, 113114
Market presence
EC6
7376
EC7
7177
7879
LA8
7879
LA13
SO1
EN2
80
7778
SO3
LA12
7778
SO7
67
PR5
67
7176
59, 76
Public policy
80
EN5
7980
EN7
7980
Anti-competitive behaviour
Products and services
EN11
80
EN13
7980
EN12
80
EN14
80
Emissions, effluents and waste

EN18
7980
7980
Products and services

7980
Compliance
EN28
7778
1418, 5059,
7778
SO5
67
Biodiversity
EN26
LA11
Corruption
Energy
EN22
N/A
Community
Materials
7980
LA9
Diversity and opportunity
ENVIRONMENTAL
EN3
LA7
LA10
7176
EN1
Additional
Training and education
Indirect economic impacts

EC8
Core
Health and safety
80
SOCIAL
Core
Additional
Employment
LA1
7677
LA2
7677
Labour/management relations
LA4
N/A
LA5
N/A
Key
Included
Included, but requires future improvement
page 85
Awards
page 86
CHIEF FINANCIAL OFFICERS REPORT

David Rivkind
Core net profit after tax of R427 million increased

by R56 million (15%), equating to core earnings per share
of 55,93c.
David Rivkind
Chief Financial Officer
page 87
The financial results of the group for the year ended 31 May 2009 demonstrated the resilience of its
product offerings to negative changes in economic conditions. An increase in demand for prepaid
electronic tokens of value has resulted in a sound performance by the group. Organic growth contributed
significantly to the increase in core earnings of 15%.
The above growth, together with the companys continued focus on stringent asset management, resulted
in a substantial increase in cash generation.
OVERVIEW
2009
Actual
R000
Revenue
Cost of inventories sold
Gross profit
Other income
Employee compensation and benefit expense
Other expenses
2008
Core
pro forma
R000
2008
Actual
R000
15 281 449 12 930 609 12 545 471

(14 215 840) (12 211 507) (11 875 606)
1 065 609
22 368
(278 970)
(240 940)
719 102
68 142
(195 629)
(155 686)
669 865
69 545
(265 003)
(146 240)
EBITDA
Depreciation, amortisation and impairment charges
568 067
(93 220)
435 929
(73 675)
328 167
(58 670)
Operating profit
Finance expense
Finance income
Share of losses from associates
474 847
(112 699)
205 046
(27 445)
362 254
(106 604)
239 470
(19 661)
269 497
(147 704)
193 281
(17 441)
Net profit before taxation

Taxation
539 749
(174 784)
475 459
(138 929)
297 633
(89 841)
Net profit for the year

Minority interest
364 965
25 582
336 530
(507)
207 792
(26 901)
Basic earnings
Once-off employee compensation and benefit expense net of tax
390 547
336 023
180 891
57 600
36 653
34 919
22 937
9 000
Core net profit for the year
427 200
370 942
270 428
Earnings per share (cents)

Basic
Headline
Core earnings
51,13
51,63
55,93
43,85
43,55
48,40
30,65
30,26
45,81
Amortisation on intangibles raised through business

combinations net of tax
Cancellation of onerous contract
Although net attributable earnings of R391 million exceeded the earnings for the 2008 relative period by
R210 million, equating to a growth in basic earnings per share from 30,65c to 51,13c (66,82%), the board of
directors believes it is more prudent to compare actual earnings to historical core pro forma earnings in order
to evaluate the real growth of the group.
page 88
CHIEF FINANCIAL OFFICERS REPORT continued
Core pro forma earnings are adjusted for nonrecurring and non-operational items that applied
during the comparative period and assume that the
listing and restructuring of the group took place on
1 June 2007.
The salient comparisons of the performance for the
year against historical core pro forma results were
as follows:
Revenue
Revenues increased by R2,4 billion to R15,3 billion
(18%) which was predominantly volume related.
Gross profit
Gross profit increased from R719 million to
R1,065 billion (48%).
This growth was attributable to a combination of the
above turnover growth and an increase in margin
from 5,56% to 6,97%.
The groups trading environment is characterised
by high volumes and relatively low margins. The
increase in GP margins by 1,41% resulted from the
increased purchasing power of the South African
distribution division and the growth in value added
services.
Employee costs
The increase in employee costs from R195 million to
R278 million (42,60%) was attributable to the
following:
Acquisitions and start-ups during the year 11,6%
Additional headcount and salary increases 28%
Forfeitable share plan expense 3%
Other expenses
Other expenses increased from R156 million to
R241 million (54,48%).
Acquisitions and start-ups accounted for R47 million.

The balance of R38 million related to a growth in
expenditure in the remaining group companies,
equating to 24,35%.
EBITDA
EBITDA of R568 million increased by R132 million
(30%) and the EBITDA margin increased from
3,37% to 3,72%.
Finance expense
Of the finance expense of R113 million, R108 million
related to imputed interest payable on creditor
balances in terms of IFRS requirements.
Finance income
Finance income of R205 million was earned by the
group. Of this amount R47 million related to imputed
interest receivable on debtor balances in terms of
IFRS requirements and R158 million yielded from
liquid working capital.
Finance income earned in the comparative pro
forma period amounted to R239 million of which
R16 million applied to imputed interest receivable on
debtor balances in terms of IFRS requirements.
The above equated to a net decline of R65 million in
finance income earned on cash resources mainly
due to the application of an element of cash in
order to gain early settlement discounts, the
investment of R134 million on acquisitions and the
incremental decline in interest rates by 3,5%
during the year.
Depreciation
The increase in depreciation of R20 million was
largely due to capital expenditure of R103 million.
page 89
Share of losses from associates and joint ventures

% holding
2009
R000
2008
R000
% growth
Oxigen Services India Pvt Limited
37,22
(25 940)
(19 661)
(31,9)
Smart Voucher Limited (Ukash)
16,90
(2 286)
781
Associates and joint ventures
Other
Total
Oxigen Services India

Although Oxigen Services India continued to incur
losses as anticipated, an improvement in the
companys performance in the last quarter of the
financial year was evident.
Revenue for the year ended 31 March 2009
(year-end pertaining to Oxigen Services India Pvt
Limited) increased from R1,02 billion to R1,34 billion
(30,83%) in line with the continued rollout of
point-of-sale devices.
Smart Voucher Limited t/a Ukash
The minority stake that was acquired in October
2008 was primarily for strategic reasons. Ukashs
technology offering of electronic pins, enabling the
redemption of online products and services, is in line
with the groups objective to increase its bouquet of
value-added services across its global footprint.
Core net profit after tax
Core net profit after tax of R427 million increased by
R56 million (15%), equating to core earnings per
share of 55,93c
(27 445)
(19 661)
(39,6)
Segmental report
The following are the divisional segments that
constitute the group profile:
Distribution of secure electronic tokens of value
encompassing prepaid airtime and starter packs,
bill payments, prepaid electricity, prepaid
insurance and redeemable prepaid vouchers for
online products and services.
Replication of the South African distribution model
internationally, currently in operation in Mexico,
Australia, Mozambique, Democratic Republic of
the Congo, Nigeria, Europe, United Kingdom and
India.
Telemarketing of cellular and financial services
products, inbound customer care and technical
support via the groups call centres.
Marketing of the location-based products of
Look4Me and Look4Help (Vodacom) Where
are U and 2MyAid (MTN), miTraffic and
Look4Music.
Aggregation of localised content for mobile
operators and third-party clients.
Technology
Development, integration and management of the
groups IT systems and technologies.
page 90
Revenue
Segments
2009
2008
% of total
R000
R000
2009
2008
% growth
14 199 031
12 194 815
92,9
94,3
16,4
724 163
500 268
4,8
3,9
44,8
335 743
207 676
2,2
1,6
61,7
22 512
27 850
0,1
0,2
(19,2)
15 281 449 12 930 609
100
100
18,2
Technology
Total

The growth of 16,4% was entirely volume related.
The South African distribution continues to be the
major contributor to group revenue.
Total growth in this segment was R128 million
(61,7%) of which R48 million (23,2%) was acquisitive
and R80 million (38,5%) organic.
The revenue reflected is in respect of subsidiaries
only and does not include turnover from associate
companies, namely, Ukash (United Kingdom and
Europe) and Oxigen Services India.
Technology
The focus on in-house technological support and
product development and enhancement has resulted
in a conscious decision to reduce service and
support to third parties. This has resulted in a
decline in revenue from third parties by R5 million.
A hybrid of organic growth and contributions by

start-up operations resulted in an increase in
revenue of R224 million (44,8%).
EBITDA
Segments
Total trading operations
2009
R000
2008
R000
% growth
624 346
426 245
46,5
6 144
21 873
(71,9)
75 239
46 866
60,5
705 729
494 984
42,6
Technology
(48 502)
(9 929)
Corporate
(89 160)
(49 126)
Total support
(137 662)
(59 055)
Net total
568 067

The growth in EBITDA of R198 million (46,5%),
largely due to the increase in revenue, gross profit
percentage margins and containment of
expenditure, equated to an increase in EBITDA
margin from 3,50% to 4,40%.
435 929
30,3
There was a decline in EBITDA of R19 million
comprising R4 million from Polsa Holdings trading
operations, which was disposed of in March 2009,
the loss on disposal thereof of R4 million and
R11 million from start-up operations in the USA,
Mexico and Australia.
page 91
This decline was set-off by a growth in EBITDA of

R5 million from R16 million to R21 million (25%) by the
remaining companies encompassing this segment.
Acquisitive contributions of R9 million (19,2%) and
organic growth of R19 million (41,3%) equated to a
growth of R28 million (60,5%) in EBITDA.
The marginal decline in EBITDA percentage to
revenue from 22,6% to 22,4% was in line with the
decision to incur additional expenditure on
infrastructure costs in order to enhance the
platform for growth in the future.
Technology and corporate

The growth in EBITDA generated by the trading
operations from R495 million to R705 million
(42,6%) could not have been achieved without skilled
technological, administrative and managerial
support.
The increase in negative earnings by these segments
of R79 million is in line with the need to invest in skills
and product development in order to strengthen the
foundation for future expansion both locally and
internationally. The very nature of international
expansion requires extensive overseas travel and
professional support delivered by both the
technology and corporate divisions of the group.
Core net profit

2009
R000
2008
R000
Growth
R000
537 815
407 320
130 495
(10 947)
(9 060)
(1 887)
49 497
33 450
16 047
576 365
431 710
144 655
Segments
Total trading operations

Technology
(55 250)
(11 339)
(43 911)
Corporate
(93 915)
(49 429)
(44 486)
Total support
(149 165)
(60 768)
(88 397)
Net total
427 200
370 942
56 258
The growth in core earnings of operational companies was 34% and net growth after technology and
corporate expenses of 15%.
Balance sheet
Assets
Total assets increased by R658 million (20,4%) to
R3,9 billion primarily as a result of an increase in
current assets, of which R432 million related to a
growth in cash resources.
Non-current assets
The net increase in non-current assets was R24 million.
This was attributable to:

Capital expenditure net of disposals and
depreciation on property, plant and equipment of
R42 million, predominantly applied to expenditure
on point-of-sale devices required in both the South

African and international distribution segments.
Disposal of property, plant and equipment of
subsidiaries previously owned totalling R6 million.
A decrease in intangible assets, comprising
goodwill and intangibles of R29 million, net of
acquisitions, disposals and amortisation.
Investments in associates of R28 million
comprising acquisitions of R55 million less share
of losses of R27 million.
A net decrease in unactivated starter packs of
R18 million. Financial assets at amortised cost
relate to starter packs which have been sold but
not yet activated.
page 92
Current assets
Current assets increased by R634 million. The increase
was mainly due to the growth in cash and cash
equivalents of R432 million, trade and other receivables
of R268 million less a reduction in inventories of
R100 million. The stock turn averaged three times per
month and debtors collections were 21 days.
The trade creditor payment terms equated to 40 days.
Capital and reserves

The share capital and share premium declined by
R26 million due to the purchase of shares for the
groups staff share incentive scheme.
Net interest received of R154 million compounded

this cash generation to R900 million. Of these funds
generated R233 million was applied to taxation paid,
resulting in net cash flows from operating activities
of R667 million.
Goodwill arising on transactions with minorities of

R914 million is recognised against reserves on the
balance sheet, as minority shareholders are treated
as equity participants. This is in accordance with the
economic entity method which was adopted by the
group in the prior year.
Liabilities
Total liabilities increased by R331 million, the material
items being an increase in minority shareholders
loans to subsidiaries of R28 million and an increase in
trade creditors of R366 million. These amounts are
set off against a reduction in tax liabilities of
R43 million.
Cash flow
Growth in profitability and the benefits of stringent
working capital management have resulted in the
positive cash generated from trading operations of
R746 million.
Against the above, R207 million was applied to

investing activities and R10 million was applied to
financing activities.
The resultant increase in net cash generation
resulted in funds on hand accumulating to
R1,76 billion at year-end.
Dividends
In line with the groups current dividend policy, no
dividends have been declared.
Directors dealings in securities post year-end

Further to the disclosure of directors interests on page 98, the interests of the directors changed as follows
from the end of the financial year to the most recent information available at the date of publishing this report:
Director
Nature of change
No of shares
Nature of interest
NN Lazarus SC
Shares disposed
3 401 249
Direct beneficial
GD Harlow
Shares disposed
277 871
Indirect beneficial
APPRECIATION
I wish to acknowledge and express my appreciation
to the staff of the group, in particular the finance
team for their concerted efforts and high-quality
performance.
David Rivkind
page 93
Annual financial statements
page 94
FINANCIAL STATEMENTS
Annual financial statements contents

95
95
96
97
100
101
102
103
104
148
149
150
151
152
Directors responsibility
Declaration by company secretary
Independent auditors report
Directors report
Group balance sheet
Group statement of changes in equity
Group cash flow statement
Notes to the group annual financial
statements
Company balance sheet
Company income statement
Company statement of changes in equity
Company cash flow statement
Notes to the company annual financial
statements
page 95
DIRECTORS RESPONSIBILITY
The directors are responsible for the maintenance of adequate accounting records and the preparation and integrity of the financial statements
and the related information including pro forma information. The auditors are responsible for reporting on the fair presentation of the financial
statements. The financial statements have been prepared in accordance with International Financial Reporting Standards and in the manner
required by the Companies Act, 1973.
The directors are also responsible for the companys system of internal financial control. These are designed to provide reasonable, but not
absolute, assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability of the assets,
and to prevent and detect misstatement and loss. Nothing has come to the attention of the directors to indicate that any material breakdown in
the functioning of these controls, procedures and systems has occurred during the year under review.
The financial statements have been prepared on the going-concern basis, since the directors have every reason to believe that the company has
adequate resources in place to continue in operation for the foreseeable future.
The financial statements have been audited by the independent auditors, PricewaterhouseCoopers Incorporated, which was given unrestricted
access to all financial records and related data, including minutes of all meetings of shareholders, the board of directors and committees of the
board. The directors believe that all representations made to the independent auditors during their audit are valid and appropriate.
Approval of the financial statements
The financial statements which appear on pages 97 to 163 were approved by the directors on 25 August 2009 and are signed on its behalf.
LM Nestadt
Non-executive chairman
DB Rivkind
BM Levy
MS Levy
DECLARATION BY COMPANY SECRETARY
In terms of section 268G(d) of the South African Companies Act, 1973, as amended (Act), I certify that Blue Label Telecoms Limited has
lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act. Further, that such returns
are true, correct and up to date.
E Viljoen
Company secretary
Sandton
25 August 2009
page 96
INDEPENDENT AUDITORS REPORT

for the year ended 31 May 2009
To the members of Blue Label Telecoms Limited

We have audited the group annual financial statements and annual financial statements of Blue Label Telecoms Limited, which comprise the
consolidated and separate balance sheets as at 31 May 2009, and the consolidated and separate income statements, the consolidated and
separate statements of changes in equity and consolidated and separate cash flow statements for the year then ended, and a summary of
significant accounting policies and other explanatory notes, and the directors report, as set out on pages 97 to 163.
Directors responsibility for the financial statements
The companys directors are responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes:
designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that
are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditors responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the consolidated and separate financial position of Blue Label
Telecoms Limited as at 31 May 2009, and its consolidated and separate financial performance and its consolidated and separate cash
flows for the year then ended in accordance with International Financial Reporting Standards and in the manner required by the Companies
Act of South Africa.
PricewaterhouseCoopers Inc
Director: EJ Gerryts
Registered Auditor
Johannesburg
25 August 2009
National executive:
SP Kana (Chief Executive Officer), TP Blandin de Chalain, DJ Flscher, GM Khumalo, IS Sehoole, S Subramoney, F Tonelli.
Resident director in charge: ER Mackeown
The Companys principal place of business is at 2 Eglin Road, Sunninghill where a list of directors names is available for inspection.
PricewaterhouseCoopers Inc is an authorised financial services provider.
VAT reg.no. 4950174682
page 97
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 2009.
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 groups stated strategy is to extend its
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 goingconcern 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 2009
were approved by the board and signed on its behalf on
25 August 2009.
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.
Sidney Ellerine
It is with sadness that the directors note the passing away of
Sidney Ellerine on 17 July 2009. Mr Ellerine was involved with the
group from its inception and was both a mentor and a partner to
the groups executive management. He provided great leadership
and direction to the board as well as to executive management
and always conducted himself with the utmost integrity and
highest regard for the interests of the company.
Subsidiaries, associates and other investments
Particulars of the principal subsidiaries, joint ventures and
associates of the Blue Label Telecoms group are provided in
note 31 to the annual financial statements.
Acquisitions and disposals
In August 2008 Datacel Direct (Proprietary) Limited (Datacel),
established Datacel Data Services (Proprietary) Limited (DDS)
as an 81% held subsidiary. DDS is a database accumulator,
generating its income from the sale of its data to companies
within the group, as well as to outside companies. In addition,
Datacel purchased the remaining 20% of the shares in CNS Call
Centre (Proprietary) Limited in October 2008.
Ventury Group (Proprietary) Limited disposed of its 51% (fifty-one
percent) interest in Iveri Payment Technologies (Proprietary)
Limited to ADC IT and Payment Solutions in October 2008.
Blue Label Telecoms disposed of its 51% (fifty-one percent)
interest in E-Voucha (Proprietary) Limited in November 2008,

as well as its 50% interest in Polsa Holdings Limited in March
2009.
Africa Prepaid Services (Proprietary) Limited (APS) (a 72% held
subsidiary of the company) entered into an agreement to establish
Africa Prepaid Services Nigeria Limited as a 51% held subsidiary
in Nigeria in December 2008 . The balance of the shares in the
company are held by local Nigerian partners. The company was
established to distribute prepaid cellular products including prepaid airtime, starter packs and data cards on behalf of Multilinks
Telecommunications Limited, a wholly owned subsidiary of Telkom
SA Limited.
Blue Label formed a wholly owned subsidiary in the United States
of America (BLT USA Incorporated) in December 2008 as an
investment vehicle into VPN (Virtual Prepaid Network). BLT USA
Inc acquired 50,01% of VPN for an initial amount of $1 000 and
subsequently injected US$5 million into a capital account in its
name. The balance of the shares in VPN were held by the KAP
Holdings group, its local partner. VPN was established to assist
KAP Holdings in converting its physical distribution business of
international calling cards into a virtual distribution model through
the rollout of point-of-sale devices.
Subsequent to year-end, BLT USA terminated its equity
investments in VPN by mutual consent and entered into a
technology licence arrangement with the KAP Holdings group.
VPN repaid the US$5 million capital invested in the business to
BLT USA. The licence agreement allows Blue Label to pursue its
efforts to grow a distribution footprint in the USA.
The Prepaid Company (Proprietary) Limited disposed of its
40% interest in The Hub Pretalk (Proprietary) Limited in May
2009.
For further details of acquisitions and disposals during the year,
refer to notes 24 and 25 to the annual financial statements.
Share capital
Full details of the authorised, issued and unissued capital of
the company at 31 May 2009 are contained in note 14 to the
financial statements. There were no shares issued during the
financial year ended 31 May 2009.
Forfeitable share plan (share plan)
The group implemented the share plan as approved by the
shareholders at the annual general meeting held on 12 November
2008. Particulars relating to the share plan are set out in note 30
to the financial statements.
Dividends
Blue Label Telecoms expects to initiate a dividend policy from the
financial year commencing 1 June 2010. It is anticipated that interim
dividends will be paid in February and final dividends will be paid in
August of each financial year, in the approximate proportion of onethird and two-thirds of the annual dividend, respectively.
page 98
DIRECTORS REPORT continued
Directorate
The following were directors of the company for the year under review:
Name
Office
Appointment date
Larry M Nestadt
Independent non-executive chairman
5 October 2007
Brett M Levy
1 February 2007
Mark S Levy
1 February 2007
Sidney Ellerine*
5 October 2007
Gary D Harlow
5 October 2007
Reitumetse J Huntley
5 October 2007
Neil N Lazarus SC
5 October 2007
Peter Mansour
21 May 2008
Joe S Mthimunye
5 October 2007
Mark V Pamensky
Chief operating officer
5 October 2007
David B Rivkind
5 October 2007
Herbert C Theledi
5 October 2007
Lucy (Pani) M Tyalimpi
5 October 2007
Directors interests
The individual interests declared by directors and officers in the companys share capital as at 31 May 2009, held directly or indirectly were
as follows:
Nature of
interest
Direct beneficial
Indirect beneficial
Direct non-beneficial
Indirect non-beneficial
Director
2009
2008
2009
2008
2009
2008
2009
2008
BM Levy
74 340 553
73 290 553
8 272 778
7 272 778
MS Levy
66 933 145
65 883 145
8 272 777
7 272 777
S Ellerine*
15 409 152
15 409 152
2 222 222
2 222 222
HC Theledi
42 959 992
44 992 807
MV Pamensky
7 565 738
6 565 738
LM Nestadt
8 204 674
8 204 674
GD Harlow
3 277 871
3 277 871
14 815
14 815
8 204 673
8 204 673
177 779
177 779
RJ Huntley
2 140 355
2 241 634
DB Rivkind
3 431 669
NN Lazarus
*Mr Ellerine passed away on 17 July 2009. His shares are owned by several trusts.
page 99
The aggregate interest of the current directors in the capital of the company was as follows:
Number of shares
Beneficial
Non-beneficial
The beneficial interest held by directors and officers of the

company constitutes 32,71% of the issued share capital of the
company and the non-beneficial interest represents 0,32% of the
issued share capital.
Resolutions
The company passed and registered a special resolution in
November 2008, approving the acquisition of the companys
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
2009
2008
249 013 377
242 615 802
2 414 816
2 414 816
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 page 167.
Auditors
PricewaterhouseCoopers Incorporated will continue in office in
accordance with section 270 (2) of the Companies Act.
page 100
GROUP BALANCE SHEET

as at 31 May 2009
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Investment in associates and joint ventures
Financial asset at amortised cost
Deferred taxation assets
Current assets
Financial assets at fair value through profit and loss
Financial assets at amortised cost
Inventories
Loans receivable
Trade and other receivables
Current tax assets
Cash and cash equivalents
Note
2009
R000
2008
R000
4
5
5
6
7
8
736 634
105 011
202 830
257 495
109 837
54 096
7 365
712 759
69 484
223 544
266 242
81 356
72 133
3 143 109
10
67 449
384 361
29 920
898 571
2 101
1 760 697
2 509 470
5 672
53 163
484 501
7 103
630 687
1 328 344
3 879 743
3 222 229
2 244 120
*
4 404 737
(25 562)
(1 843 912)
(13 399)
(914 399)
9 371
1 231
635 305
2 253 372
(9 252)
1 917 944
*
4 404 737
(1 843 912)
2 552
(898 564)
244 758
1 909 571
8 373
9
7
10
11
12
13
Total assets
EQUITY AND LIABILITIES
Share capital
Share premium
Treasury shares
Restructuring reserve
Foreign currency translation reserve
Transaction with minority reserve
Equity compensation benefit reserve
Share-based payment reserve
Retained earnings
14
Minorities interest
Non-current liabilities
Deferred taxation
Interest bearing borrowings
Current liabilities
Trade and other payables
Non-interest bearing borrowings
Current tax liabilities
Bank overdraft
Current portion of interest bearing borrowings
Total equity and liabilities
*Less than R1 000.
8
15
16
17
13
15
69 664
49 544
20 120
58 056
55 111
2 945
1 565 959
1 518 853
28 039
3 891
15 176
1 246 229
1 152 969
9 041
71 146
50
13 023
3 879 743
3 222 229
page 101
GROUP INCOME STATEMENT

Note
Revenue
Other income
Changes in inventories of finished goods
Other expenses
2009
R000
2008
R000
15 281 449
22 368
(14 215 840)
(278 970)
(93 220)
(240 940)
12 545 471
69 545
(11 875 606)
(265 003)
(58 670)
(146 240)
Operating profit
Finance costs
Finance income
18
19
19
6
474 847
(112 699)
205 046
(27 445)
269 497
(147 704)
193 281
(17 441)
Net profit before taxation

Taxation
20
539 749
(174 784)
297 633
(89 841)
364 965
207 792
390 547
(25 582)
180 891
26 901

Attributable to:
Equity holders of the parent
Minorities interest
Earnings per share for profit attributable to
equity holders (cents)
Basic
21
51,13
30,65
page 102
GROUP STATEMENT OF CHANGES IN EQUITY

Restructuring
reserve1
R000
Transaction
with
minority
reserve2
R000
Employee
compensation
benefit
reserve
R000
63 867 (1 843 912)
180 891
4 188
(14 893)
288 783
2 364 928
(39 724)
180 891
129 238 418 021

2 364 928
(39 724)
26 901 207 792
(998)
(998)
(883 671)
(883 671)
(146 294) (1 029 965)
(1 636)
Share
premium
R000
Treasury
shares
R000
* 2 079 533
* 2 364 928
(39 724)
Exchange losses on translation

of foreign operations
Balance as at 31 May 2008
* 4 404 737
390 547
Treasury shares purchased
(25 562)
Asset acquired for shares
Equity compensation benefit

movement
Minorities acquired/(disposed
of) during the year

of equity loans
of foreign operations
Note
Balance as at 1 June 2007
Shares issued during the year
Share issue costs
Dividends
Minorities disposed of during
the year
13
Share
capital
R000
Foreign
currency
translation
reserve
R000
Retained
earnings
R000
Sharebased
payment
reserve
R000
Total
ordinary
shareholders
equity
R000
Minority
interest
R000
Total
equity
R000
(1 636)
244 758 (1 843 912)
2 552
(898 564)
1 909 571
390 547
(25 582)
364 965
(25 562)
(25 562)
1 231
1 231
1 231
9 371
9 371
195
9 566
(15 835)
(15 835)
3 458
(12 377)
(15 107)
(15 107)
(15 107)
(844)
(844)
4 304
3 460
* 4 404 737
(25 562)
(13 399) (914 399)
9 371
635 305 (1 843 912)
1 231 2 253 372
(474)
(2 110)
8 373 1 917 944
(9 252) 2 244 120
* Less than R1 000.

1
The restructuring reserve arose as a result of the restatement of group comparatives, as required in terms of the principles of predecessor accounting. This reserve represents the
difference between the fair value of the entities under the groups control and their respective net asset values, as at the assumed restructure date of 1 June 2006.
The transaction with minority reserve relates to the excess payments over the carrying amounts arising on transactions with minority shareholders as these are treated as equity
participants. (Refer to note 6 and 24)
page 103
GROUP CASH FLOW STATEMENT

Note
Cash flows from operating activities
Cash received from customers
Cash paid to suppliers and employees
2009
R000
2008
R000
15 013 566
(14 267 551)
12 193 526
(12 272 774)
746 015
158 507
(4 891)
(232 637)
(79 248)
177 377
(46 575)
(71 350)
Net cash flows from operating activities
666 994
(19 796)
Cash flows from investing activities

Proceeds on disposal of intangible assets
Acquisition of intangible assets
Acquisition of financial assets at fair value through profit or loss
Proceeds on disposal of financial assets at fair value through profit or loss
Acquisition of associates
Exercise of share warrants in associate
Acquisition of business combinations net of cash acquired
Disposal of subsidiaries net of cash acquired
Loans advanced to associates
Dividends received
Proceeds on disposal of property, plant and equipment
Acquisition of property, plant and equipment
(28 716)
(10)
5 428
(52 264)
(50 098)
(9 523)
(2 321)
5 553
(74 780)
889
(22 898)
(1 391)
11 722
(7 021)
(313 364)
(38 618)
120
12 642
(47 238)
(206 731)
(405 157)
Cash flows from financing activities

Proceeds from/(repayment of) interest bearing borrowings
Proceeds from/(repayment of) non-interest bearing borrowings
Proceeds from issue of shares
Share issue costs
Acquisition of treasury shares
6 583
8 355
(25 562)
(590 076)
(28 031)
1 319 613
(39 724)
Net cash flows from financing activities
(10 624)
661 782
449 639
1 328 294
(21 127)
236 829
1 090 044
1 421
1 756 806
1 328 294
Cash generated/(utilised) by operations

Interest received
Interest paid
Taxation paid
22
19
19
23.1
23.2
6
24
25
Net cash flows from investing activities
Increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year
Translation difference
Cash and cash equivalents at the end of the year
13
page 104
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS

as at 31 May 2009
Blue Label Telecoms Limited (the company) and its subsidiaries

(together referred to as the group) is involved in the procurement,
selling and distribution of prepaid products for inter alia fixed and
mobile networks and all business ancillary thereto.
The annual financial statements comprise the consolidated
financial statements of the group and the stand-alone financial
statements of the company and were authorised by the board of
directors, as indicated on page 95.
1.
Significant accounting policies

Statement of compliance
The annual financial statements have been prepared
in accordance with International Financial Reporting
Standards (IFRS) and its interpretations adopted by the
International Accounting Standards Board (IASB) and
the Companies Act, No. 61 of 1973, as amended. These
financial statements are prepared in accordance with IFRS,
issued and effective as at 31 May 2009. The group has
early adopted IFRS 8 Operating Segments.
Basis of preparation
The annual financial statements and group financial
statements are prepared under the historical cost
convention, as modified by the revaluation of certain
financial instruments. The preparation of financial
statements in conformity with IFRS requires management
to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates
and associated assumptions are based on historical
experience and various other factors that are believed to
be reasonable under the circumstances. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both
current and future periods.
Judgements made by management in the application
of IFRS that have a significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 2.
Standards, interpretations and amendments to
published standards that are not yet effective
Certain new standards, amendments and interpretations
to existing standards have been published that are
mandatory for the financial year commencing 1 June
2009, but which the group has not early adopted, are as
follows:
Standards, amendments and interpretations not yet

effective
The group has evaluated the effect of all new standards,
amendments and interpretations that have been issued
but which are not yet effective. Based on the evaluation,
management does not expect these standards,
amendments and interpretations to have a significant
impact on the groups results and disclosures. The
expected implications of applicable standards, amendments
and interpretations are dealt with below.
IAS 1 (Revised) Presentation of Financial Statements

The revised IAS 1 requires information in financial
statements to be aggregated on the basis of shared
characteristics and to introduce a statement of
comprehensive income. This will enable readers to analyse
changes in a companys equity resulting from transactions
with owners in their capacity as owners separately from
non-owner changes. The revisions include changes in the
titles of some of the financial statements to reflect their
function more clearly (for example, the balance sheet is
renamed a statement of financial position). The new titles are
not mandatory for use in financial statements.
The changes relate to disclosure in the financial statements
and are unlikely to have a significant impact on the groups
financial statements. These changes are effective for the
financial year commencing on 1 June 2009.
IAS 23 (Revised) Borrowing Costs

Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset
form part of the cost of that asset and may no longer be
expensed. Other borrowing costs are recognised as an
expense.
The group has not previously capitalised borrowing costs
and furthermore does not have any qualifying projects,
therefore no impact is expected.
IAS 27 (Revised) Consolidated and Separate Financial

Statements
This standard requires the effects of all transactions with
non-controlling interests to be recorded in equity if there is
no change in control. They will no longer result in goodwill
or gains and losses. The standard also specifies the
accounting when control is lost. Any remaining interest in
the entity is re-measured to fair value and a gain or loss is
recognised in profit or loss.
The group already applies the economic entity model in
their financial statements and therefore management
believe their will be limited effects from the application of
IAS 27R.
page 105
IAS 27R and IFRS 3R Business Combinations have to be

adopted in the same period. Both these standards are
effective for the period commencing on 1 July 2009.
IFRS 2 Amended Share-based Payments Vesting Conditions

and Cancellations
IFRS 2 was amended to provide more clarity on vesting
conditions and cancellations. There will be no impact to the
group.
IFRS 3 (Revised) Business Combinations
The new standard continues to apply the acquisition
method to business combinations, with some significant
changes. For example, all payments to purchase a business
are to be recorded at fair value at the acquisition date,
with some contingent payments subsequently re-measured
at fair value through income. Goodwill may be calculated
based on the parents share of net assets or it may include
goodwill related to the minority interest. All transaction
costs will be expensed.
As the standard will only be applicable to acquisitions on or
after 1 July 2009, no effect has yet been considered.
IAS 32 Financial Instruments: Presentation and IAS 1

Presentation of financial statements Puttable Financial
Instruments and Obligations Arising on Liquidation
The amendments to these standards require entities
to classify the following types of financial instruments as
equity, provided they have particular features and meet
specific conditions: a) puttable financial instruments;
b) instruments, or components of instruments, that
impose on the entity an obligation to deliver to another
party a pro rata share of the net assets of the entity only
on liquidation. Additional disclosures are required about the
instruments affected by the amendments.
These changes are effective for the financial year
commencing on 1 June 2009 and will not have an impact
on the groups financial statements.
Amendments to IFRS 1 First-Time Adoption of International
Financial Reporting Standards and IAS 27 Consolidated and
Separate Financial Statements: Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associate
The amendment allows first-time adopters to use a
deemed cost of either fair value, or the carrying amount
under previous accounting practice to measure the initial
cost of investments in subsidiaries, jointly controlled entities
and associates in the separate financial statements. The
amendment also removes the definition of the cost method
from IAS 27 and replaces it with a requirement to present
dividends as income in the separate financial statements of
the investor.
These changes are not applicable to the group as the
group reports in terms of IFRS.
Amendments to IAS 39 Financial Instruments: Recognition

and Measurement Exposures Qualifying for Hedge Accounting
The amendment makes two significant changes. It prohibits
designating inflation as a hedgeable component of a fixed
rate debt. It also prohibits including time value in the onesided hedged risk when designating options as hedges.
These changes are effective for the financial year
commencing on 1 June 2009 and will not have an impact
on the groups financial statements.
IFRIC 13 Customer Loyalty Programme

This interpretation addresses how companies that grant
their customers loyalty awards credits when buying
goods or services, should account for their obligation to
provide free or discounted goods, or services, if and when
customers redeem the points.
This interpretation will not have a material effect on the
group.
IFRIC 15 Agreements for the Construction of Real Estate

The interpretation will standardise accounting practice
across jurisdictions for the recognition of revenue
among real estate developers for sales of units, such as
apartments or houses, off plan, ie before construction is
complete.
The interpretation provides guidance on how to determine
whether an agreement for the construction of real estate
is within the scope of IAS 11 Construction Contracts or
IAS 18 Revenue and when revenue from the construction
should be recognised.
The main expected change in practice is a shift for some
entities from recognising revenue using the percentage
of completion method (ie as construction progresses, by
reference to the stage of completion of the development)
to recognising revenue at a single time (ie at completion
upon or after delivery).
This interpretation is not applicable to the group.
IFRIC 16 Hedges of a Net Investment in a Foreign Operation

IFRIC 16 applies to an entity that hedges the foreign
currency risk arising from its net investments in foreign
operations and wishes to qualify for hedge accounting in
accordance with IAS 39.
For convenience the interpretation refers to such an entity as
a parent entity, however, all references to a parent entity apply
equally to an entity that has a net investment in a foreign
operation that is a joint venture, an associate or a branch.
The Interpretation does not apply to other types of hedge
accounting; it should not be applied by analogy.
page 106
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS continued

as at 31 May 2009
1.
Significant accounting policies (continued)

Standards, amendments and interpretations not yet
effective (continued)
IFRIC 17: Distributions of Non-cash Assets to Owners
IFRIC 17 applies to the accounting for distributions of noncash assets (commonly referred to as dividends in specie)
to the owners of the entity. The interpretation clarifies
that: a dividend payable should be recognised when the
dividend is appropriately authorised and is no longer at
the discretion of the entity; an entity should measure the
dividend payable at the fair value of the net assets to be
distributed; and an entity should recognise the difference
between the dividend paid and the carrying amount of the
net assets distributed in profit or loss.
IFRIC 18: Transfers of assets from customers

IFRIC 18 clarifies the accounting treatment for transfers of
property, plant and equipment received from customers.
This interpretation applies to agreements with customers
in which the entity receives cash from a customer when
that amount of cash must be used only to construct or
acquire an item of property, plant and equipment and
the entity must then use the item of property, plant and
equipment either to connect the customer to a network or
to provide the customer with ongoing access to a supply of
goods and services, or to do both.
Annual Improvements Project
The IASB decided to initiate an annual improvements
project in 2007 as a method of making necessary, but nonurgent, amendments to IFRS that will not be included as
part of another major project. The IASBs objective was to
ease the burden for all concerned.
Unless otherwise specified the amendments are effective
for annual periods beginning on or after 1 January 2009,
although entities are permitted to adopt them earlier.
The following standards have been effected by the project:
t IFRS 5 Non-current Assets Held for Sale
t IAS 1 Presentation of Financial Statements
t IAS 16 Property, Plant and Equipment
t IAS 19 Employee Benefits
t IAS 20 Accounting for Government Grants
t IAS 23 Borrowing Costs
t IAS 27 Consolidated and Separate Financial Statements
t IAS 28 Investments in Associates
t IAS 31 Interests in Joint Ventures
t IAS 29 Financial Reporting in Hyperinflationary Environment
t IAS 36 Impairment of Assets
t IAS 38 Intangible Assets
t IAS 39 Financial Instruments: Recognition and
Measurement
t IAS 40 Investment Property
t IAS 41 Agriculture
Management are currently considering the effect of the

changes.
The group has early adopted IFRS 8 Operating Segments.
The standard requires the segmental disclosures to be
reported based on the management approach. The reporting
would be based on the information that management uses
internally for evaluating segment performance and when
deciding to allocate resources to operating segments. IFRS 8
will supersede the current standard dealing with segmental
reporting, IAS 14. The group had not previously applied the
requirements of IAS 14. Refer to note 28.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including special purpose
entities) in which the group has an interest of more than
one half of the voting rights or otherwise has power to
govern the financial and operating policies.
The existence and effect of potential voting rights that
are presently exercisable or presently convertible are
considered when assessing whether the group controls
another entity.
Subsidiaries are consolidated from the date on which
control is transferred to the group and are no longer
consolidated from the date that control ceases. The
purchase method of accounting is used to account for the
acquisition of subsidiaries. The cost of an acquisition is
measured as the fair value of the assets given up, shares
issued, or liabilities undertaken at the date of acquisition
plus costs directly attributable to the acquisition. Identifiable
assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially
at their fair values at the acquisition date, irrespective of
the extent of any minority interest.
Transactions in which combining entities are controlled by
the same party or parties before and after the transaction,
and that control is not transitory, are referred to as
common control transactions.
Intercompany transactions, balances and unrealised gains
on transactions between group companies are eliminated;
unrealised losses are also eliminated unless costs cannot
be recovered. The interests of minority shareholders in
the consolidated equity and results of the group are shown
separately in the consolidated balance sheet and income
statement, respectively. Where the losses attributable
to the minority shareholders in a consolidated subsidiary
exceed their interest in that subsidiary, the excess, and
any further losses attributable to them, are recognised by
the group and allocated to those minority interests only to
the extent that the minority shareholders have a binding
obligation and are able to fund the losses. Where the group
previously did not recognise the minority shareholders
portion of losses and the subsidiary subsequently turns
profitable, the group recognises all the profits until the
minority shareholders share of losses previously absorbed
by the group has been recovered.
page 107
A listing of the groups principal subsidiaries and associates

is set out in note 29 to the financial statements. The
financial effects of the acquisition and disposal of the
subsidiaries and associates are disclosed separately in the
notes to the financial statements.
Minority interest is stated at the minoritys proportion

of the fair values of the identifiable assets and liabilities
recognised. The group applies the economic entity method
in accounting for transactions with minority shareholders.
Minority shareholders are treated as equity participants.
Acquisitions of minorities or disposals by the group of its
minority interests in subsidiary companies where control
is maintained subsequent to the disposal are accounted
for as equity transactions with minorities. Consequently,
the difference between the purchase price and the book
value of a minority interest purchased is recorded in equity.
All profits and losses arising as a result of the disposal
of interests in subsidiaries to minorities where control is
maintained subsequent to the disposal, are also recorded
in equity.
Joint ventures
A joint venture is a contractual arrangement whereby two or
more parties undertake an economic activity that is subject to
joint control. Joint control is the contractually agreed sharing
of control over an economic activity, and exists only when the
strategic financial operating decisions relating to the activity
require the unanimous consent of the parties sharing control
(venturers).
The groups interest in its joint venture is accounted for under
the equity method of accounting whereby an interest in jointly
controlled entities is initially recorded at cost and adjusted
thereafter for post-acquisition changes in the groups share of
net assets of the joint venture. The income statement reflects
the groups share of the results of operations of the joint
venture.
When necessary, accounting policies of subsidiaries have

been changed to ensure consistency with the policies
adopted by the group.
The company financial statements account for subsidiaries
at cost less any accumulated impairment.
Associates
Associates are all entities over which the group has
significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting
rights. Investments in associates are accounted for by the
equity method of accounting and are initially recognised at
cost. The groups investment in associates includes goodwill
(net of any accumulated impairment loss) identified on
acquisition.
The groups share of its associates post-acquisition profits
or losses is recognised in the income statement, and
its share of post-acquisition movements in reserves is
recognised in reserves. The cumulative post-acquisition
movements are adjusted against the carrying amount of
the investment. When the groups share of losses in an
associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the group
does not recognise further losses, unless it has incurred
obligations or made payment on behalf of the associate.
Unrealised gains on transactions between the group
and its associates are eliminated to the extent of the
groups interest in the associate. Unrealised losses are
also eliminated to the extent of the groups interest in the
associate unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure
consistency with the policies adopted by the group.
The company financial statements account for associates
at cost less any accumulated impairment.
Dilution gains and losses arising in investments in
associates are recognised in the income statement.
The company financial statements account for joint ventures at

cost less any accumulated impairment.
Options to acquire control are not accounted for as derivatives
in terms of IAS 39 Financial Instruments.
(a)
(b)
Foreign currencies
Functional and presentation currency
Items included in the financial statements of each of the
groups entities are measured using the currency of the
primary economic environment in which the entity operates
(the functional currency). The consolidated financial
statements are presented in rand, which is the companys
functional and presentation currency.
Transactions and balances

Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement.
Changes in the fair value of monetary securities
denominated in foreign currency classified as available-forsale are analysed between translation differences resulting
from changes in the amortised cost of the security and
other changes in the carrying amount of the security.
Translation differences related to changes in the amortised
cost are recognised in profit or loss, and other changes in
the carrying amount are recognised in equity.
page 108

as at 31 May 2009
1.
(b)
(c)
The purchases and sales of financial assets that require

delivery are recognised on trade date, being the date on which
the group commits to purchase or sell the asset.

Foreign currencies (continued)
Transactions and balances (continued)
Translation differences on non-monetary financial assets and
liabilities are reported as part of the fair value gain or loss.
Translation differences on non-monetary financial assets and
liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value
gain or loss. Translation differences on non-monetary financial
assets such as equities classified as available-for-sale are
included in the available-for-sale equity reserve.
Group companies
The results and financial position of associates (none of
which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
assets and liabilities are translated at the closing rate at
the date of that balance sheet; and
income and expenses are translated at average
exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case
income and expenses are translated at the dates of the
transactions); and
all resulting exchange differences are recognised as a
separate component of equity.
The group recognises a financial asset or a financial liability on

its balance sheet when, and only when, the group becomes a
party to the contractual provisions of the instrument.
Financial assets are derecognised when the rights to receive
cash flows from the financial asset have expired or have been
transferred and the group has transferred substantially all
risks and rewards of ownership. Financial liabilities (or a part of
a financial liability) are removed from its balance sheet when,
and only when, they are extinguished ie when the obligation
specified in the contract is discharged or cancelled or expires.
Financial assets
The group classifies its financial assets in the following
categories: financial assets at fair value through profit or
loss, loans and receivables, and available-for-sale financial
assets. The classification depends on the purpose for
which the financial assets were acquired. Management
determines the classification of its investments at initial
recognition.
(a)
On consolidation, exchange differences arising from the

translation of the net investment in foreign entities, and of
borrowings and other currency instruments designated
as hedges of such investments, are taken to shareholders
equity. When a foreign operation is sold, such exchange
differences are recognised in the income statement as
part of the gain or loss on sale.
Financial assets at fair value through profit or loss are initially

recognised at fair value. Transaction costs are expensed in the
income statement. These assets are subsequently measured
at fair value. All related realised and unrealised gains and losses
arising from changes in fair value are recognised in the income
statement.
Goodwill and fair value adjustments arising on the

acquisition of a foreign entity are treated as the foreign
entitys assets and liabilities and are translated at the
closing rate.
Financial instruments
Financial instruments carried on the balance sheet include:
financial assets at fair value through profit or loss;
financial assets at amortised cost;
loans receivable;
trade and other receivables;
cash and cash equivalents;
borrowings;
trade and other payables; and
bank overdraft.
The particular recognition methods adopted are disclosed in
the individual policy statements associated with each item.
Financial assets at fair value through profit or loss

This category has two sub-categories: financial assets held-fortrading, and those designated at fair value through profit or
loss at inception. A financial asset is classified in this category
if acquired principally for the purpose of selling in the short
term or if so designated by management. Derivatives are also
categorised as held-for-trading unless they are designated as
hedges. Assets in this category are classified as current assets
if they are either held-for-trading or are expected to be realised
within 12 months of the balance sheet date.
(b)
Loans and receivables

Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an
active market. This category does not include those loans and
receivables that the group intends to sell in the short term or
that it has designated as at fair value through profit or loss
or available-for-sale. These assets are included in current
assets, except for maturities greater than 12 months after the
balance sheet date, which are classified as non-current assets.
Financial assets classified as loans and receivables are initially
recognised at fair value plus transaction costs. Subsequent
page 109
it becoming probable that the debtor will enter bankruptcy

or other financial reorganisation.
to initial recognition, loans and receivables are carried at

amortised cost using the effective interest rate method, less
any provision for impairment.
Loans and receivables comprise loans receivable (including
loans to associates), trade and other receivables (excluding
prepayments and VAT), cash and cash equivalents as well as
starter pack assets.
The amount of the provision is the difference between the

carrying amount and the recoverable amount of the assets
being the present value of expected cash flows discounted
at the original effective interest rate. The amount of the
provision is recognised as a charge in the income statement.
A starter pack is a tool which enables the connection of a

mobile device to a mobile network operator, also known as SIM
(subscriber identity module) card.
When a receivable is uncollectible, it is written off against

the provision. Subsequent recoveries of amounts previously
written off are credited to the income statement.
Starter pack assets that have been sold and not yet activated
are accounted for as financial assets as they represent a
contractual right for the group to receive cash.
(c)
Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that
are either designated in this category or not classified in
any of the other categories. They are included in noncurrent assets unless management intends to dispose of
the investment within 12 months of the balance sheet date.
Financial assets classified as available-for-sale are initially
recognised at fair value plus transaction costs. Subsequent
to initial recognition, available-for-sale financial assets are
carried at fair value. Unrealised gains and losses arising
from the change in fair value are recognised directly in
equity until the financial asset is derecognised or impaired,
at which time the cumulative gain or loss previously
recognised in equity is recognised in the income statement.
Interest and dividend income received on available-for-sale
financial assets are recognised in the income statement.
The group did not hold any available-for-sale financial assets
at balance sheet date.
Impairment of financial assets
A financial asset is impaired if its carrying amount is
greater than its estimated recoverable amount.
(a)
Loans and receivables

The group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group
of financial assets is impaired. A provision for impairment
is established when there is objective evidence that the
group will not be able to collect all amounts due according
to the original terms of the receivables. Objective evidence
that receivables are impaired includes observable data that
comes to the attention of the company about the following
events:
significant financial difficulty of the debtor
a breach of contract, such as default or delinquency in
payments
(b)
Available-for-sale financial assets

The group assesses whether there is objective evidence
that a financial asset carried at fair value is impaired
at each balance sheet date. If any objective evidence of
impairment exists for available-for-sale financial assets (for
example, a significant or prolonged decline in the fair value
of a security below its cost), the cumulative loss, measured
as the difference between the acquisition cost and current
fair value, less any impairment loss on the financial asset
previously recognised in profit or loss, is removed from
equity and recognised in the income statement. If, in a
subsequent period, the fair value of a debt instrument
classified as available-for-sale increases and the increase
can be related objectively to an event occurring after
the impairment loss was recognised in profit or loss, the
impairment loss is reversed through the income statement.
Financial liabilities and equity
Financial liability and equity instruments issued by the group
are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial
liability and an equity instrument. An equity instrument
is any contract that evidences a residual interest in the
assets of the group after deducting all of its liabilities.
Refer to accounting policies on borrowings and trade
and other payables for financial liabilities (which exclude
employee related liabilities and VAT), and share capital for
equity instruments issued by the group.
Fair value estimation
The best evidence of fair value on initial recognition is
the transaction price, unless the fair value is evidenced
by comparison with other observable current market
transactions in the same instrument or based on
discounted cash flow models and option pricing valuation
techniques whose variables include only data from
observable markets. Subsequent to initial recognition, the
fair values of quoted financial assets are based on current
bid prices. If the market for a financial asset is not active
(and for unlisted securities), the group establishes fair value
by using valuation techniques.
page 110

as at 31 May 2009
1.
Major leasehold improvements are amortised over the

shorter of their respective lease periods and estimated
useful life.

Fair value estimation (continued)
These include the use of recent arms length transactions,
reference to other instruments that are substantially the
same, discounted cash flow analysis, and option pricing models
refined to reflect the issuers specific circumstances.
Borrowing costs directly attributable to the acquisition,

construction or production of qualifying assets are
not capitalised as part of the cost of those assets. All
borrowing costs are expensed under the benchmark
treatment, in the period in which they are incurred. No such
qualifying assets exist at balance sheet date.
Derivative financial instruments

Derivatives are recognised initially at fair value on the date
the derivative contract is entered into and are subsequently
remeasured at their fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and, if so, the nature of the
item being hedged.
The assets residual values and useful lives are reviewed,

and adjusted if appropriate at each balance sheet date.
Gains and losses on disposal of property, plant and
equipment are determined as the difference between the
carrying amount and the fair value of the sale proceeds,
and are included in operating profit.
Certain derivative instruments do not qualify for hedge

accounting and are accounted for at fair value through
profit or loss. Changes in the fair value of these derivative
instruments that do not qualify are recognised immediately
in the income statement.
Where the carrying amount of an asset is greater than

its estimated recoverable amount, it is written down
immediately to its recoverable amount.
The group did not hold any derivative instruments at balance

sheet date.
Property, plant and equipment are initially recorded at cost,
being the purchase cost plus any cost to prepare the assets
for their intended use. Subsequent costs are included in the
assets carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the
cost of the item can be measured reliably. All other repairs
and maintenance are charged to the income statement
during the financial period in which they are incurred.
(a)
Costs associated with developing or maintaining computer

software programmes are recognised as an expense
as incurred. Costs that are directly associated with the
production of identifiable and unique software products
controlled by the group, and that will probably generate
economic benefits exceeding costs beyond one year, are
recognised as intangible assets. Direct costs include the
software development employee costs and an appropriate
portion of relevant overheads. Costs associated with the
maintenance of existing computer software programmes
are expensed as incurred.
Property, plant and equipment are subsequently carried at

cost less accumulated depreciation and any accumulated
impairment losses.
Property, plant and equipment, with the exception of land,
are depreciated on the straight-line basis over each assets
estimated useful life. Land is not depreciated as it is deemed
to have an indefinite life.
Computer software development costs recognised as

assets are amortised over their estimated useful lives.
Depreciation is calculated on the straight-line basis to write

off the cost of the assets to their residual values over their
estimated useful lives as follows:
Motor vehicles
Furniture and fittings
Office equipment
Computer equipment
Electronic terminals
Security equipment
Vending machines
Media equipment
Plant and machinery
Buildings
20% 25%
16,67% 25%
25%
25% 33,33%
16,67%
20% 33,33%
16,67%
33,33%
2%
8,33%
Intangible assets
Computer software development
Acquired computer software licences are capitalised on
the basis of the costs incurred to acquire and bring to use
the specific software. These costs are amortised over their
estimated useful lives (three years).
Costs associated with research activities and the

maintenance of existing computer software programmes
(b)
Trademarks and licences

Trademarks and licences are shown at historical cost.
Trademarks and licences have a finite useful life and are
subsequently carried at cost less accumulated amortisation.
Amortisation is calculated using the straight-line method
to allocate the cost of trademarks and licences over their
estimated useful lives (10 years).
page 111
(c)
(d)
Databases, customer listings and distribution agreements

Databases, customer listings and distribution agreements
acquired through business combinations are initially shown
at fair value as determined in accordance with IFRS 3
Business combinations, and are subsequently carried at the
initially determined fair value less accumulated amortisation
and impairment losses. Amortisation is calculated using the
straight-line method to allocate the value of these assets
over their estimated useful lives (three five years).
Research and development
Costs incurred on development projects are recognised as
intangible assets when the following criteria are fulfilled:
it is technically feasible to complete the intangible asset
and that it will be available for use or sale
management intend to complete the intangible asset and
use or sell it
there is an ability to use or sell the intangible asset
it can be demonstrated how the intangible asset will
generate probable future economic benefits
adequate technical, financial and other resources
to complete the development and to use or sell the
intangible asset are available
the expenditure attributable to the intangible asset
during its development can be reliably measured.
Research expenditure is recognised as an expense as
incurred. Other development expenditures that do not meet
these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.
Capitalised development costs are recorded as intangible
assets and amortised from the point at which the asset is
available for use (ie when it is in the location and condition
necessary for it to be capable of operating in the manner
intended by management) on a straight-line basis over its
useful life (10 years).
Direct costs include the product development employee
costs and an appropriate portion of relevant overheads.
Costs associated with the maintenance of existing products
(e)
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the groups share of the net
identifiable assets of the acquired subsidiary, associate or
jointly controlled entity at the date of acquisition. If the cost
of acquisition is less than the net assets of the subsidiary
acquired, the difference is recognised directly in the income
statement. Goodwill on the acquisition of subsidiaries is
included in goodwill in the balance sheet. Goodwill on
acquisitions of associates and joint ventures is included
in investments in associates, and investments in joint
ventures respectively.
Goodwill is allocated to cash-generating units for the

purpose of impairment testing. Impairment is determined
by assessing the recoverable amount of the cashgenerating unit, to which the goodwill relates. Where the
recoverable amount of the cash-generating unit is less than
the carrying amount, an impairment is recognised.
Separately recognised goodwill is tested annually for
impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not
reversed. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity
sold.
Impairment of non-financial assets
The group evaluates the carrying value of assets with
finite useful lives when events and circumstances indicate
that the carrying value may not be recoverable. Intangible
assets that have an indefinite useful life are not subject
to amortisation and are tested annually for impairment.
Intangible assets not yet available for use are tested
annually for impairment.
An impairment loss is recognised in the income statement
when the carrying amount of an asset exceeds its
recoverable amount. An assets recoverable amount is
the higher of the fair value less cost to sell (the amount
obtainable from the sale of an asset in an arms length
transaction between knowledgeable willing parties), or its
value in use. Value in use is the present value of estimated
future cash flows expected to arise from the continuing use
of an asset and from its disposal at the end of its useful life.
The estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset. For the purposes of
assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows.
An impairment loss recognised for an asset, other than
goodwill, in prior years is reversed if there has been a
change in the estimates used to determine the assets
recoverable amount since the last impairment loss was
recognised and the recoverable amount exceeds the new
carrying amount. The reversal of the impairment is limited
to the carrying amount that would have been determined
(net of depreciation or amortisation) had no impairment
loss been recognised in prior years. The reversal of such an
impairment loss is recognised in the income statement in
the same line item as the original impairment charge.
page 112

as at 31 May 2009
1.

Fair value estimation (continued)
Leased assets
Finance leases
Lease agreements that transfer substantially all the risks
and rewards of ownership are classified as finance leases
at inception of the lease. The asset is capitalised at the
lower of the fair value of the asset or the present value
of the minimum lease payments at inception of the lease,
with an equivalent amount being stated as a finance lease
liability. Finance lease liabilities are classified as non-current
or current liabilities, as appropriate. Each lease payment is
allocated between the liability and finance charges using the
effective interest rate. Finance costs are charged to the
income statement over the lease period.
The capitalised asset is depreciated over the shorter of
the useful life of the asset or the lease term to its residual
value.
Operating leases
Leases in which all the risks and benefits of ownership are
effectively retained by the lessor are classified as operating
leases. Payments under operating leases, net of incentives,
are charged to the income statement on a straight-line
basis over the period of the lease. When an operating
lease is terminated before the lease period has expired,
any payment required to be made to the lessor by way of
penalty is recognised as an expense in the period in which
termination takes place.
Inventories
Inventories are stated at the lower of cost or estimated net
realisable value. Cost comprises direct materials and, where
applicable, overheads that have been incurred in bringing the
inventories to their present location and condition, excluding
borrowing costs. The cost of the inventory is determined by
means of the weighted average cost basis. Net realisable
value is the estimate of the selling price in the ordinary course
of business, less selling expenses. Provisions are made for
obsolete, unusable and unsaleable inventory and for latent
damage first revealed when inventory items are taken into use
or offered for sale.
Trade receivables
Trade receivables are recognised initially at fair value
and subsequently measured at amortised cost using the
effective interest method, less provision for impairment. A
provision for impairment of trade receivables is established
when there is objective evidence that the group will not be
able to collect all amounts due according to the original
terms of receivables. The amount of the provision is the
difference between the assets carrying amount and the
present value of estimated future cash flows, discounted
at the original effective interest rate. The amount of the
provision is recognised in the income statement.

Cash and cash equivalents includes cash in hand, deposits
held at call with banks, other short-term highly liquid
investments with original maturities of three months or
less, and bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities on the balance sheet.
Share capital
Ordinary shares are classified as equity and the shares are
fully paid up.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of
tax, from the proceeds. Share issue costs incurred directly
in connection with a business combination are shown as a
deduction from equity.
Provisions
Provisions are recognised when the group has a present
legal or constructive obligation as a result of past events, it is
more likely than not that an outflow of resources embodying
economic benefits will be required to settle the obligation and a
reliable estimate of the amount of the obligation can be made.
Provisions are not recognised for future operating expenses.
Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation
using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the
obligation. The increase in the provision due to the passage of
time is recognised as an interest expense.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred when the relevant contracts are
entered into. Borrowings are subsequently stated at amortised
cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income
statement over the period of the borrowings using the effective
interest method.
Financial liabilities are derecognised when the obligation
specified in the contract is discharged, cancelled or expires.
Borrowings are classified as current liabilities unless the
group has an unconditional right to defer settlement of the
liability for at least 12 months after the balance sheet date.
Normal taxation
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
balance sheet date in the countries where the companys
subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
page 113
Deferred taxation
Deferred taxation is provided using the liability method for all
temporary differences arising between the tax bases of assets
and liabilities and their carrying values for financial reporting
purposes. However, if the deferred income tax arises from
initial recognition of an asset or liability in a transaction other
than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss, it is not
accounted for. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially
enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that
it is probable that future taxable profit will be available against
which the temporary differences can be utilised. Deferred
income tax is provided on temporary differences arising on
investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled
by the group and it is probable that the temporary difference
will not reverse in the foreseeable future.
Revenue from the sale of goods and the rendering

of services is recognised when it is probable that the
economic benefits associated with a transaction will flow to
the group and the amount of revenue, and associated costs
incurred or to be incurred, can be measured reliably.
The main categories of revenue and the bases of
recognition are as follows:
(a)
Sale of starter packs

Activation bonuses received from the networks are
recognised when the SIM-card is activated on the relevant
cellular phone network. Ongoing rebates and other
incentives are recognised once certain criteria have been
met and the significant act has been completed.
(b)
Sales of prepaid airtime

Sales of prepaid airtime are recognised when the group
sells the airtime to the customer. Sales are recorded
based on the price specified in the sales contracts, net of
discounts at the time of sale.
(c)
Sales of services
Sales of services are recognised in the accounting period
in which the services are rendered, by reference to
completion of the specific transaction assessed on the
basis of the actual service provided as a proportion of the
total services to be provided.
(d)
Interest income
Interest income is recognised on a time-proportion basis
using the effective interest method. When a receivable
is impaired, the group reduces the carrying amount to
its recoverable amount, being the estimated future cash
flow discounted at original effective interest rate of the
instrument, and continues unwinding the discount as
interest income. Interest income on impaired loans is
recognised using the original effective interest rate.
(e)
Dividend income
Dividend income is recognised when the right to receive
payment is established.
Secondary tax on companies (STC)

South African companies are subject to a dual corporate
tax system, one part of the tax being levied on the taxable
income and the other, a secondary tax (STC) on distributed
income. STC is not a withholding tax on shareholders but a
tax on companies.
The STC tax consequence of dividends is recognised when
a liability to pay the dividend is recognised. The STC liability
is reduced by dividends received during the dividend cycle,
and where dividends received exceed dividends declared
within a cycle, there is no liability to pay STC. The potential
tax benefit related to excess dividends received is carried
forward to the next dividend cycle. Deferred tax assets are
recognised on unutilised STC credits to the extent that it
is probable that the group will declare future dividends to
utilise such STC credits.
Where dividends declared exceed the dividends received
during a cycle, STC is payable at the current STC rate.
STC is a charge against income, and is recognised in the
taxation charge in the income statement in the same
period as the related dividend is accrued as a liability.
Trade payables are measured initially at fair value and
are subsequently measured at amortised cost, using the
effective interest rate method.
Revenue recognition
Revenue comprises the fair value of the consideration
received or receivable for the sale of goods and services
in the ordinary course of the groups activities. Revenue is
shown net of indirect taxes, estimated returns, rebates and
discounts and after eliminated sales within the group.
(a)
Employee benefits
The group operates an equity settled forfeitable share
incentive plan, under which the entity receives services from
employees as consideration for equity instruments of the
group. The fair value of the services received in exchange for
the grant of forfeitable shares is recognised as an expense.
The total amount to be expensed is determined by the fair
value of the forfeitable shares granted. The total amount
expensed is recognised over the vesting period, which is
the period over which all of the vesting conditions are to be
satisfied. At each balance sheet date, the entity recognises
the impact of any shares that have been forfeited prior to
the end of the vesting period, if any, in the income statement
with a corresponding adjustment to equity.
page 114

as at 31 May 2009
1.
(a)

Employee benefits (continued)
Equity compensation benefit (continued)
The group views Blue Label Telecoms Limited to be the
grantor of the award and therefore in terms of IFRIC 11
IFRS 2 Group and treasury share transactions the
awards are also accounted for as equity-settled in the
subsidiary financial statements. An expense is recognised
in the companys income statement with a corresponding
increase in equity as a contribution from the parent.
2.
The group makes estimates and assumptions concerning

the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below.
(a)
The company has procured the shares in order to settle

the award but these are accounted for as a purchase of
shares in the holding company and only once the shares
vest as the performance conditions are met would the
share be derecognised. When shares are derecognised
the investment in shares in Blue Label Telecoms Limited will
be credited and equity will be debited as a contribution to
the shareholder.
(b)
(c)
(d)
Leave pay accrual

The group recognises a liability and an expense for leave.
The accrued liability is determined by valuing all future leave
expected to be taken and payments expected to be made in
respect of benefits.
Dividend distribution
Dividend distribution to the companys shareholders
is recognised as a liability in the groups financial
statements in the period in which they are approved by the
shareholders.
Assessment of goodwill for impairment

The group tests annually whether goodwill has suffered
any impairment, in accordance with the accounting policy.
The recoverable amounts of cash-generating units have
been determined based on value-in-use calculations. These
calculations require the use of estimates.
Goodwill is allocated to cash-generating units (CGUs)
for the purpose of impairment testing. The recoverable
amount of CGUs has been determined based on value-inuse calculations, which is the higher of fair value less cost
to sell and value in use. These calculations use cash flow
projections based on financial budgets approved by the
board of directors for the forthcoming year and forecasts
for up to five years which are based on assumptions of the
business, industry and economic growth. Cash flows beyond
this period are extrapolated using terminal growth rates,
which do not exceed the expected long-term economic
growth rate.
Defined contribution plans

A defined contribution plan is one under which the group
pays a fixed percentage of employees remuneration as
contributions into a separate entity (a fund), and will have
no further legal or constructive obligations to pay additional
contributions if the fund does not hold sufficient assets
to pay all employee benefits relating to employee service
in the current and prior periods. Contributions to defined
contribution plans in respect of services rendered during
a period are recognised as an employee benefit expense
when they are due. The group does not have any defined
benefit plans.
Profit sharing and bonus plans
The group recognises a liability and an expense for bonuses
and profit sharing which is determined based on a formula
that takes into consideration the profit attributable to
the shareholders after certain adjustments. A provision
is recognised where the group is contractually obliged
or where there is a past practice that has created a
constructive obligation.
Critical accounting estimates and assumptions
The average growth rates applied were between 3%

and 5,3%. The weighted average cost of capital used to
discount these cash flows ranged between 16% and 36%.
The discount rates used are pre-tax and reflect specific
risks relating to the relevant companies.
The valuation of the goodwill balances resulted in no
goodwill impairment charges for the year (2008: Rnil).
(b)
Classification of financial assets at amortised cost

The group assesses at each balance sheet date the
classification of financial assets carried at amortised cost
between current and non-current. This assessment takes
into consideration historical trends and an analysis of the
expected period to receipt of the cash. These calculations
require the use of estimates and assumptions.
(c)
Capitalisation of development cost

The group capitalises development relating to software
development. Costs incurred on development projects of
identifiable and unique products which are controlled by
the group are recognised as intangible assets when it is
probable that the project will be profitable considering its
commercial and technical feasibility, and its costs can be
measured reliably. Management makes some estimates
on the technical feasibility of project and, based on the
estimates and the recognition criteria, cost are capitalised.
page 115
(d)
(e)
Contingent consideration for acquisitions

Contingent payments for business acquisitions are
generally conditional on the future revenue and/or profits
achieved by the acquired business. On acquisition date,
estimates are made of the expected future revenue and
profit based on forecasts made by management. These
estimates are reassessed at each reporting date and
adjustments are made to the deferred consideration and
related goodwill balances, where necessary. Amounts
of deferred consideration payable after one year are
discounted using discount rates that reflect the current
market assessment of the time value of money and, where
appropriate, the risks specific to the acquired business.
In determining the number of forfeitable shares that
will vest due to performance conditions being met,
management assesses the attrition rates of staff based on
the grades of staff that have been granted awards as well
as the historic staff turnover.
All decisions relating to the forfeitable share scheme
are made by the groups Remuneration Committee.
Accordingly, BLT is considered to be the grantor of these
awards.
(f)
(g)
3.
Financial risks
In the course of its business, the group is exposed to
a number of financial risks: credit risk, liquidity risk and
market risk (including foreign currency, interest rate
and other price risks). This note presents the groups
objectives, policies and processes for managing its financial
risk and capital.
Credit risk
Credit risk arises because a counterparty may fail to
meet its obligations to the group. The group is exposed
to credit risk on financial assets mainly in respect of
trade receivables, loans receivable and cash and cash
equivalents.
Trade receivables consist primarily of invoiced amounts
from normal trading activities. The group has a diversified
customer base and policies are in place to ensure sales
are made to customers with an appropriate credit history.
Individual credit limits are set for each customer and the
utilisation of these credit limits is monitored regularly.
Where necessary, a provision for impairment is made. A
significant portion of the groups customer base is made up
of major retailers, with the balance of the customer base
being widely dispersed.
Deferred tax assets

Deferred tax assets are recognised to the extent that it is
probable that taxable income will be available in the future
against which these can be utilised. Future taxable profits
are estimated based on business plans which include
estimates and assumptions regarding economic growth,
interest rates, inflation and competitive forces.
Loans are only granted to holders with an appropriate

credit history, taking into account the holders financial
position and past experience.
Changes in the estimates of the consideration could result

in the recognition of material adjustments in future periods.
The group has no significant concentrations of credit risk.
Valuation of intangible assets acquired as part of a

business combination
The fair values of all of the identifiable intangible assets
acquired as part of a business combination are determined
using recognised valuation techniques. Such techniques
often rely on forecasts of future cash flows and the use
of appropriate discount rates that reflect the risk factors
associated with the cash flows.
These valuations are based on information at the time of
the acquisition and the expectations and assumptions that
have been deemed reasonable by the groups management.
The risk exists that the underlying assumptions or events
associated with such assets will not occur as projected. For
these reasons, among others, the actual cash flows may
vary from forecasts of future cash flows.
The group places cash and cash equivalents with major

banking groups and quality institutions that have high credit
ratings.
The groups maximum credit risk exposure is the carrying

amount of all financial assets on the balance sheet and
guarantees provided with the maximum amount the
group could have to pay if the guarantees are called on,
amounting to R11,8 million (2008: R6,5 million).
Liquidity risk
Liquidity risk arises when a company encounters difficulties
in meeting commitments associated with liabilities and
other payment obligations. The groups objective is to
maintain prudent liquidity risk management by maintaining
sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit
facilities and the ability to close out market positions. Due
to the dynamic nature of the underlying businesses, the
company aims to maintain flexibility in funding by keeping
committed credit lines available.
page 116

as at 31 May 2009
3.
Financial risks (continued)

Maturity of financial liabilities
Less than
1 month or on
demand
R000
More than
1 month but
not exceeding
1 year
R000
Payable in:
More than
1 year but not
exceeding
2 years
R000
More than
2 years but
not exceeding
5 years
R000
More than
5 years
R000
10 434
596 783
3 891
611 108
4 742
871 029
875 771
4 631
4 631
16 755
16 755
2008
11 285
8 539
Trade and other payables*
171 637
Bank overdraft
50
Total
191 511
*Trade and other payables exclude non-financial instruments.
1 738
502
925 978
928 218
1 608
1 608
1 337
1 337
2009
Bank overdraft
Total
Market risk
The group is exposed to risks from movements in foreign exchange rates and interest rates that affect its assets, liabilities and
anticipated future transactions.
Cash flow and fair value interest rate risk

The groups cash flow interest rate risk arises from loans receivable, cash and cash equivalents and borrowings carrying interest
at variable rates. The group is not exposed to fair value interest rate risk as the group does not have any fixed interest bearing
instruments carried at fair value.
The groups exposure to interest rate risk is reflected under the respective borrowings, loans receivable and cash and cash equivalents
notes (notes 15, 11 and 13). As part of the process of managing the groups exposure to interest rate risk, interest rate characteristics
of new borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates.
Foreign currency risk

The group is exposed to foreign currency risk from transactions and translation. Transaction exposure arises because affiliated
companies undertake transactions in currencies other than their functional currency. Translation exposure arises from the
consolidation of subsidiaries with a functional currency other than the groups reporting currency (rand).
The group manages its exposure to foreign currency risk by ensuring that the net foreign currency exposure remains within
acceptable levels. Hedging instruments are used in certain instances to reduce risks arising from foreign currency fluctuations.
The group did not enter into any forward exchange contracts during the period under review.
IFRS 7 Sensitivity analysis

The group has used a sensitivity analysis technique that measures the estimated change to the income statement of either an
instantaneous increase or decrease of 1% (100 basis points) in market interest rates or a 10% strengthening or weakening of the
rand against all other currencies, from the rates applicable at 31 May 2009, for each class of financial instrument with all other
variables remaining constant. This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation.
Interest rate risk
The interest rate sensitivity analysis is based on the following assumptions:
Changes in market interest rates affect the interest income or expense of variable interest financial instruments
Changes in market interest rates only affect interest income or expense in relation to financial instruments with fixed interest rates
if these are recognised at fair value.
Under these assumptions, a 1% increase or decrease in market interest rates at 31 May 2009 would increase or decrease profit
before tax by R17,4 million (2008: R13,2 million).
page 117
3.
Financial risks (continued)

Financial instruments by currency
2009
Financial assets
Trade and other receivables*
Loans receivable (including
loans to associates)
Financial assets at fair value
through profit or loss
Financial assets at amortised
cost
Financial liabilities
Bank overdraft
Net financial position
2008
Financial assets
Trade and other receivables*
Loans receivable (including
loans to associates)
Financial assets at fair value
through profit or loss
Financial assets at amortised
cost
Non-interest bearing
borrowings
Bank overdraft
ZAR
R000
USD
R000
AUD
R000
MxM
R000
NgN
R000
MZN
R000
Total
R000
1 625 586
725 645
57 959
68 835
95
18
650
1
71 932
23 022
4 475
3 231
1 760 697
820 752
34 421
19 710
54 131
10
10
117 546
2 503 208
2 419
148 923
113
651
94 954
1 580
9 286
121 545
2 757 135
18 364
1 128 684
3 891
1 150 939
1 352 269
18 198
84 323
102 521
46 402
128
128
(15)
160
160
491
232 752
232 752
(137 798)
36 562
21 765 1 467 812
3 891
21 765 1 508 265
(12 479) 1 248 870
ZAR
R000
USD
R000
EUR
R000
CDF
R000
MZN
R000
Total
R000
1 313 550
553 859
5 933
20 550
8 456
2 686
404
9 525
1 328 344
586 620
5 788
20 149
830
26 777
5 320
352
5 672
119 134
1 997 661
3 227
49 859
12 324
2 935
12 864
125 296
2 072 709
15 968
15 968
544
1 052 172
50
1 068 734
928 927
16 886
16 886
32 973
8 497
10 020
18 517
(6 193)
18 538
18 538
(5 674)
9 041
1 097 616
50
1 122 675
950 034
*Trade and other receivables, and trade and other payables exclude non-financial instruments.
With a 10% strengthening or weakening in the rand against all other currencies, profit before tax would have decreased or increased
by R10,3 million respectively (2008: R2,1 million).
Capital risk
The companys objectives when managing capital are to safeguard the companys ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust this capital structure, the company may issue new shares, adjust the amount of dividends paid to
shareholders, return capital to shareholders or sell assets to reduce debt.
The group defines capital as capital and reserves and non-current borrowings.
The company is not subject to externally imposed capital requirements.
There were no changes to the groups approach to capital management during the year.
Fair value measurement
For all short-term financial assets and liabilities, the carrying amount is regarded as an approximation of the fair value.
The fair value of all non-current loans receivable and borrowings are calculated using a discounted cash flow model based on
prevailing market interest rates.
page 118

as at 31 May 2009
Computer
equipment
R000
4.
Furniture
and fittings
R000
Motor
vehicles
R000
Office
equipment
R000
Terminals
R000
Property, plant and

equipment
Year ended 31 May 2009
Opening carrying amount
Additions
Disposals
Depreciation charge
Translation differences
12 088
13 855
(6 094)
(6 471)
129
7 377
4 373
(748)
(2 081)
131
9 658
10 580
(2 574)
(3 941)
(277)
2 622
2 436
(283)
(1 113)
35
7 896
6 313
(438)
(2 603)
Closing carrying amount
13 507
9 052
13 446
3 697
11 168
At 31 May 2009
Cost
Accumulated depreciation
Carrying amount
29 544
(16 037)
13 507
12 590
(3 538)
9 052
19 389
(5 943)
13 446
5 584
(1 887)
3 697
21 870
(10 702)
11 168

Additions
Disposals
Depreciation charge
5 748
12 189
(762)
(5 494)
407
12 088
3 150
6 148
(583)
(1 393)
55
7 377
6 918
7 251
(1 862)
(2 899)
250
9 658
1 339
2 027
(172)
(605)
33
2 622
5 879
3 048
(306)
(1 067)
342
7 896
At 31 May 2008
Cost
20 744
(8 656)
10 365
(2 988)
14 309
(4 651)
3 919
(1 297)
9 940
(2 044)
Carrying amount
12 088
7 377
9 658
2 622
7 896
Property, plant and equipment include the following amounts where the company is a lessee under a finance lease:
2009
R000
2008
R000
2 579
1 601
Motor vehicles
Cost
Carrying value at 31 May
These assets have been pledged as surety against the liability.
(696)
1 883
(657)
944
page 119
Leasehold
improvements
R000
Vending
machines
R000
Media
equipment
R000
Plant and
machinery
R000
Land
R000
Buildings
R000
Total
R000
2 893
8 831
(137)
(1 964)
(349)
20 300
26 545
(2 475)
(6 138)
5 207
798
(202)
(1 710)
587
234
(111)
856
976
69 484
74 941
(12 951)
(26 132)
(331)
9 274
38 232
4 093
710
1 832
105 011
11 253
(1 979)
9 274
50 872
(12 640)
38 232
9 083
(4 990)
4 093
812
(102)
710
1 832
1 832
162 829
(57 818)
105 011
358
3 055
(248)
(277)
5
2 893
13 283
13 594
(2 882)
(3 695)
20 300
1 846
4 800
(1 439)
5 207
25
2 654
(1 996)
(96)
587
1 176
(1 176)
3 794
(2 937)
856
43 516
54 766
(12 924)
(16 965)
1 091
69 484
3 239
(346)
25 995
(5 695)
7 787
(2 580)
716
(129)
856
97 870
(28 386)
2 893
20 300
5 207
587
856
69 484
page 120

as at 31 May 2009
5.
Customer Distribution
listing agreement
R000
R000
Computer
software
R000
Internally
generated
software
R000
Franchise
fees
R000
Customer
relationships
R000
Supplier
relationships
R000
Total
R000
Goodwill
R000
Trademarks
R000

Additions
Disposals
Amortisation charge
Adjustment**
266 242
2 489
(8 235)
(279)
(2 722)
5 966
3 278
(4 142)
(281)
7 721
21 087
(6 264)
(3 565)
11 336
(1 642)
(2 174)
(80)
49 961
14 817
(1 345)
(9 497)
(364)
11 996
14 174
(929)
(3 128)
(37)
1 901
(121)
133 607
(39 755)
1 056
(746)
489 786
55 845
(12 151)
(65 827)
(4 606)
(2 722)
257 495
4 821
18 979
7 440
53 572
22 076
1 780
93 852
310
460 325
257 495
257 495
11 598
(6 777)
4 821
47 765
(28 786)
18 979
11 806
(4 366)
7 440
75 808
(22 236)
53 572
25 812
(3 736)
22 076
2 418
(638)
1 780
154 907
(61 055)
93 852
1 490 589 099

(1 180) (128 774)
310 460 325
46 907
225 828
(6 493)
266 242
6 004
1 493
(1 531)
5 966
17 601
924
(10 804)
7 721
3 973
8 375
(1 223)
211
11 336
43 278
13 259
(372)
(6 208)
4
49 961
1 257
11 640
(901)
11 996
2 022
(121)
1 901
154 907
(21 300)
133 607
1 491
(435)
1 056
119 020
419 939
(372)
(42 523)
215
(6 493)
489 786
266 242
266 242
8 206
(2 240)
5 966
29 225
(21 504)
7 721
13 102
(1 766)
11 336
59 989
(10 028)
49 961
12 960
(964)
11 996
2 022
(121)
1 901
154 907
(21 300)
133 607
1 491
(435)
1 056
548 144
(58 358)
489 786
Intangible assets
At 31 May 2009
Cost
Accumulated amortisation
Carrying amount
Additions
Disposals
Amortisation charge
Adjustment*
At 31 May 2008
Cost
Carrying amount
* This adjustment arose due to a reversal of the present value of a contingent purchase price liability that is no longer applicable due to the
restructuring of the group.
** Goodwill in respect of Content Connect Africa has been reduced as a result of warranty claims that have materialised.
page 121
2009
R000
2008
R000
81 356
61 804
122 357
(27 445)
(26 105)
(1 882)
527
15
(7 297)
3 544
(8 949)
(17 441)
(17 426)
(21)
6
(120)
(336)
7 021
(9 043)
82 210
(19 919)
Movement in loans
Loans granted to associates and joint ventures
Loans repaid by associates
Loans received from associates and joint ventures
Prepayment in prior period for additional interest purchased
Unrealised foreign exchange gains on loans to associates
4 501
(914)
(1 266)
(57 000)
950
50 724
(12 106)
853
(53 729)
39 471
Closing net book value
109 837
81 356
Note
6.

Opening net book value
Acquisition of associates and joint ventures
Movements through net profit
Share of results after tax
Amortisation of intangible asset
Deferred tax on intangible assets amortisation
Profit on dilution
Dividends received
Foreign currency translation reserve
Share scheme reserve
Transaction with minority reserve
Exercise of share warrants in associate
Associates converted to subsidiaries
Disposal of associate and joint ventures
24
The directors believe that the carrying value of the shares approximates their fair value.
The loans are neither past due nor impaired with a low risk of default.
* Less than R1 000.
Associates
2009
Shares in associates acquired during the year:
Oxigen Services India (Private) Limited

Smart Voucher Limited
Dual Data (Proprietary) Limited
BLK (Proprietary) Limited
Date
acquired
1 June 2008
1 October 2008
1 October 2008
17 December 2008
Effective
percentage
acquired
3,85
17,25
50
25
page 122

as at 31 May 2009
6.
Investment in associates and joint ventures (continued)

The groups interest in its principal associates, which are unlisted, is as follows:
Name
India
United
Kingdom
Dual Data (Proprietary) Limited South Africa
BLK Risk Services
South Africa
2008
(Private) Limited
India
Net book
value
R000
Assets
R000
Liabilities
R000
Revenues
R000
167 511
92 610
1 434 602
(64 078)
37,22
61 920
122 343
1 341
110 888
1 340
45 112
3 954
(12 009)
16,9
50
40 851
1 324
429
1 247
893
25
220
208 093
128 070
1 057 732
(56 175)
35
81 356
Country of
incorporation
2009
(Private) Limited
Effective
percentage
interest
held
Profit/
(loss)
R000
There are no contingent liabilities relating to the groups interest in associates. For details on related party transactions refer to note 29.
On 14 November 2007, the group increased its shareholding in the following associates to obtain a controlling interest:
House of Business Solutions (Proprietary) Limited
Cellfind (Proprietary) Limited
Africa Prepaid Services (Proprietary) Limited
Virtual Voucher (Proprietary) Limited
Datacel Direct (Proprietary) Limited
Refer to note 24 for details of these acquisitions.
Joint ventures
Shares in joint ventures acquired during the year:
Date
acquired
1 June 2008
Demtrade 11 (Proprietary) Limited
Effective
percentage
acquired
50
The group disposed of the following interests in joint ventures:

Date
disposed
25 May 2009
The Hub Pretalk (Proprietary) Limited
Effective
percentage
disposed
40
Set out below is the summarised financial information of joint ventures:

Profit/
(loss)
R000
Effective
percentage
interest
held
Net book
value
R000
Country of
incorporation
Assets
R000
Liabilities
R000
Revenues
R000
2009
Premet Cellular
SA
1 026
6 998
14 731
(1 061)
40
Demtrade 11
SA
7 554
6 382
9 086
1 121
50
6 846
SA
2 585
5 523
19 651
(1 774)
40
SA
2 303
7 214
297 945
(2 602)
40
2008
The Hub Pretalk
Premet Cellular
There are no contingent liabilities relating to the groups interest in joint ventures.
* Less than R1 000.
page 123
2009
R000
7.
2008
R000
Financial assets at amortised cost

Starter packs
Balance at the beginning of year
Additions
Disposals
At the end of year
Less: Current portion
125 296
45 266
(49 399)
382
121 545
(67 449)
84 383
114 855
(74 412)
470
125 296
(53 163)
54 096
72 133
The credit risk in respect of the balance at the end of the year is considered low.
This is based on the historical trends of connections of starter packs in the market.
Capital
allowances
R000
8.
Fair
value
gains
R000
Provisions
R000
Tax
losses
R000
Prepayments
R000
Other
R000
Total
R000
Deferred taxation
At 31 May 2007
Charge/(credited) to income statement
Tax rate change
Acquisition of subsidiary (note 24)
At 31 May 2008
Charge/(credited) to income statement
Disposal of subsidiary (note 25)
Foreign currency translations
(93)
951
(9)
337
1 186
1 677
18 442
(9 915)
(467)
46 951
55 011
(14 544)
(1 435)
(1 128)
(244)
(541)
(3 348)
(427)
68
(99)
(18)
(1 162)
1
(553)
(1 732)
(9 334)
77
86
27
38
151
1 238
4 103
234
(494)
3 843
6 030
384
1 998
At 31 May 2009
2 863
40 467
(3 806)
(10 989)
1 389
12 255
2009
R000
Deferred tax asset comprises:

Capital allowances
Fair value gains
Provisions
Tax losses
Prepayments
Other
21 085
(10 993)
(1 175)
46 194
55 111
(15 360)
452
1 976
42 179
2008
R000
1 080
1 996
(2 164)
(10 488)
(328)
2 539
Total deferred tax asset
(7 365)
Deferred tax liability comprises:

Capital allowances
Fair value gains
Provisions
Tax losses
Prepayments
Other
1 784
38 472
(1 642)
(502)
1 716
9 716
1 186
55 011
(3 348)
(1 732)
151
3 843
Total deferred tax liability
49 544
55 111
Net deferred taxation
42 179
55 111
Deferred tax assets are recognised for tax loss carry forwards to the extent that the realisation of the related tax benefit through
future taxable profits is probable. The group did not recognise deferred income tax assets of R17,1 million (2008: R5,9 million) in
respect of losses amounting to R55 million (2008: R20,5 million) that can be carried forward against future taxable income.
Deferred income tax liabilities of R2,1 million (2008: R2,3 million) have not been recognised.
page 124

as at 31 May 2009
Note
9.
2008
R000
5 672
10
(5 427)
32
28
(305)
16 183
1 391
(10 527)
(1 375)
Financial assets at fair value through profit or loss

Balance at beginning of year
Additions
Disposals
Fair value movements
Disposal of subsidiary
25
10
5 672
384 361
484 501
384 361
484 501
29 120
800
3 593
3 510
29 920
7 103
At the end of year

Changes in the fair value of these assets are recorded in other income.
The fair value of financial assets is based on quoted market prices as at 31 May.
10.
2009
R000
Inventories
Airtime and related products
A general notarial bond is held by Investec Bank Limited over airtime up to
R550 million (2008: R250 million).
11.
Loans receivable
Interest free
Bearing interest at the prime linked interest rates
Loans are unsecured and have no fixed terms of repayment. Included in interest-free
loans is an amount of R28 million to ZOK Cellular (Proprietary) Limited (ZOK). The loan
to ZOK in the prior year of R27 million was included in trade receivables.
12.

Trade receivables
Less: Provision for impairment
Sundry debtors and prepayments
VAT
The ageing of trade receivables at the reporting date was:

31 May 2009
Fully performing
Past due by 1 to 30 days
Past due by more than 90 days
31 May 2008
Fully performing
726 862
(3 192)
723 670
169 456
5 445
556 974
(5 299)
551 675
55 703
23 309
898 571
630 687
Gross
R000
Impairment
R000
682 922
15 101
8 479
2 679
18 650
727 831
3
17
1 717
12
1 443
3 192
527 010
10 123
12 668
4 498
11 413
25
53
622
4 599
565 712
5 299
Receivables in respect of starter packs are included in fully performing debtors above. Ongoing activation revenue due to these
debtors is set off against the receivable balance as and when it is earned by them.
The effect of discounting of the trade receivables balance is not taken into account in the above table.
The trade receivables that are neither past due nor impaired are considered to have a low risk of default.
page 125
12.
2009
R000
2008
R000
5 299
2 876
(4 983)
1 071
613
3 815
(200)
3 192
5 299
Cash at bank
Cash on hand
1 751 775
8 922
1 317 963
10 381
Favourable balances
Bank overdraft
1 760 697
(3 891)
1 328 344
(50)
1 756 806
1 328 294
Trade and other receivables (continued)

Provision for impairment of receivables
At 1 June
Acquisition of subsidiaries
Allowances made during the year
Amounts used and reversal of unused amounts
At 31 May
Impairment of receivables is determined after assessing the nature of the customer,
their geographic location and specific circumstances.
Based on historic trend of the customers performance, the group believes that the
above provision for impairment of receivables sufficiently covers the risk of default.
There is a cession of trade receivables of R462,1 million (2008: R391,8 million) in
favour of Investec Bank Limited.
13.
The PACS facility granted by First National Bank is secured by a cession of cash to the value of R1,2 million.
Cash and cash equivalents of R1 282 million (2008: R1 055 million) are restricted.
14.
2009
Number
of shares
2008
Number
of shares
2009
R000
2008
R000
1 000 000 000
1 000 000 000
766 360 894
(5 201 713)
378 097 993

388 262 901
*
*
761 159 181
766 360 894
Share capital
Authorised
Total authorised share capital of ordinary shares
(par value of R0,000001 each)
Issued
Balance at the beginning of the year
Shares acquired during the year
Balance at the end of the year
The company acquired 5 201 713 shares on the Johannesburg stock exchange in order to grant forfeitable shares to employees
and directors.
The amount paid to acquire these shares was R25 710 333. An amount of R25 561 982 has been deducted from shareholders
equity. These shares are held as treasury shares. (The difference of R148 351 relates to shares held by equity accounted group
companies.) See note 30 for details on the forfeitable shares.
The directors of the company have unrestricted authority until the following annual general meeting to allot up to 3% of the
number of ordinary shares issued in the company as at 31 May 2008, subject to the provisions of section 221 of the Companies
Act, 1973, and the JSE Listings Requirements.
page 126

as at 31 May 2009
14.
Number
Issue
price
per share
R
Share
capital
R000
Share
premium
R000
190 131 616
5,50
1 045 724
14 545 455
5,50
80 000
148 148 148

35 437 682
6,75
6,75
*
*
1 000 000
239 204
2 364 928
Share capital (continued)

Shares issued in the prior year
Shares issued to buy out minority shareholders
on restructuring1
Shares issued to Brett Levy and Mark Levy to terminate
the management bonus agreement2
Shares issued as part of the preferential allocation in
the private placement
Shares issued to Microsoft Corporation
388 262 901
*Less than R1 000.

1
Please refer to pre-listing statement for details of the minority shareholders who received shares as part of the restructuring (Step 4 13 in the
overview of the restructuring).
2
Please refer to pre-listing statement for details of the management bonus settlement agreement (Section 20.1).
15.
2009
R000
2008
R000
206
608
2 221
32 261
35 296
(15 176)
794
3 918
11 256
15 968
(13 023)

Liabilities under non-cancellable finance leases
Instalment sale liabilities
Bank borrowings
Other borrowings
Less: Amounts included in current portion of borrowings
20 120
2 945
Finance lease liabilities minimum lease payments due:

Not later that one year
Later than one year and not later than five years
101
134
427
514
Future finance charges on finance leases
235
(29)
941
(147)
206
794
380
306
1 855
2 918
Future finance charges on finance leases
686
(78)
4 773
(855)
Present value of finance lease liabilities
608
3 918
Present value of finance lease liabilities

Instalment sale liabilities minimum payments due:
Not later than one year
Later than one year and not later than five years
The group did not default on any loans or finance lease liabilities, or breach any terms of the underlying agreements during the period.
Liabilities under non-cancellable finance leases
Liabilities under capitalised finance leases are payable over periods of one to five years at effective interest rates linked to the prime
interest rate per annum. They are secured by the motor vehicles to which they relate.
Instalment sale liabilities
All instalment sale liabilities are secured over the plant and equipment to which they relate, are repayable in monthly instalments and
are subject to interest at prime linked rates.
Bank borrowings
The bank borrowings are repayable in 24 fixed monthly instalments. The loan bears interest at 12% per annum.
Other borrowings
Other borrowings are unsecured and have no fixed terms of repayment. These borrowings bear interest at prime linked rates.
page 127
16.
2008
R000
1 362 803
1 072 565

Trade payables
17.
2009
R000
Accruals
58 655
45 670
Sundry creditors
67 628
23 694
VAT
29 767
11 040
1 518 853
1 152 969
Bank borrowings
The loan is unsecured. The bank has the right to request full payment in cash unless
otherwise negotiated.
300
Other borrowings
8 741
9 041
11 951
7 590
4 434
The loans are unsecured and have no fixed terms of repayment.
18.
Operating profit
The following items have been charged/(credited) in arriving at operating profit:
Audit fees services as auditors
Audit fees other
Consulting fees
Courier and postage
Excess of acquirers interest in the net fair value over cost
Fair value movements on financial assets at fair value through profit or loss
14 008
2 383
7 027
4 599
(2 585)
(32)
1 375
Foreign exchange profit realised
(7 851)
(520)
Foreign exchange profit unrealised
(1 970)
(1 969)
Foreign exchange loss realised
6 432
Foreign exchange loss unrealised
9 312
(43 000)
Gain on derecognition of financial asset
Impairment of loans
1 261
Impairment of trade receivables
6 090
3 244
Insurance
12 833
5 189
Legal fees
6 261
1 978
(2 335)
Loan release
Loss on disposal of intangible asset
967
Loss on disposal of property, plant and equipment
640
422
Loss on disposal of subsidiaries
4 933
Management fees paid
4 614
1 468
(4 089)
(8 157)
Management fees received
6 146
2 356
Operating lease rentals premises
24 831
12 140
Overseas travel
15 761
7 861
Operating lease rentals equipment
Profit on disposal of subsidiaries

Rent received
(352)
(244)
Rent and security
3 883
711
Repairs and maintenance
3 996
1 927
page 128

as at 31 May 2009
2009
R000
19.
Finance (income)/costs
Interest received
Bank
Loans
Other
Discounting of receivables
Interest paid
Bank
Loans
Finance leases
Other
Discounting of payables
Net finance income
20.
(157 759)
(333)
(415)
(46 539)
(175 496)
(959)
(922)
(15 904)
(205 046)
(193 281)
1 477
2 231
576
607
107 808
34 194
9 596
645
2 140
101 129
112 699
147 704
(92 347)
(45 577)
190 144
101 759
190 406
(262)
101 759
(15 360)
(12 168)
(15 360)
(12 168)
Taxation
Current tax
current year
prior year adjustment
Deferred tax
current year
250
174 784
89 841
Profit before tax
539 749
297 633
Tax at 28%
Income not subject to tax
Expenses not deductable for tax purposes
Secondary tax on companies
Capital gains
Effect of tax rate changes
Utilisation of previously unrecognised tax losses
Tax effect of assessed losses not recognised
Prior year adjustment
Effect of different tax dispensations
151 130
(1 457)
7 293
(174)
(1 468)
12 944
7 685
(262)
(907)
83 337
(3 504)
8 187
250
(1 453)
(1 175)
(3 532)
3 391
4 883
(543)
Tax charge
174 784
89 841
390 547
763 834
51,13
180 891
590 264
30,65
STC
21.
2008
R000
Earnings per share

a) Basic
Basic earnings per share are calculated by dividing the profit attributable to equity holders of
the company by the weighted average number of ordinary shares in issue during the year.
Profit attributable to equity holders of the company (R000)
Weighted average number of ordinary shares in issue (thousands)
Basic earnings per share (cents per share)
b) Headline
Headline earnings are calculated applying the principles contained in SAICA circular 8/2007. The weighted average number of shares
used is as for the basic earnings per share figure discussed above.
page 129
21.
Earnings per share (continued)

2009
audited
Profit before
tax and
minorities
R000
Profit attributable to equity holders of the company
Loss on disposal of subsidiaries
Profit on disposal of subsidiaries
Headline earnings
Weighted average number of ordinary shares in issue
(thousands)
Headline earnings per share (cents per share)
539 749
640
4 933
(352)
Tax
R000
(174 784)
(179)
(1 237)
Minorities
R000
25 582
(5)
Headline
earnings
R000
390 547
456
3 696
(352)
394 347
763 834
51,63
2008
audited
Profit attributable to equity holders of the company

Excess of acquirers interest in the net fair value over
cost
Headline earnings
(thousands)
Headline earnings per share (cents per share)
Profit before
tax and
minorities
R000
297 633
422
Tax
R000
(89 841)
(118)
Minorities
R000
(26 901)
(2 585)
Headline
earnings
R000
180 891
304
(2 585)
178 610
590 264
30,26
c) Diluted basic and headline

Diluted earnings per share are calculated by adjusting the number of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares. The only dilutive potential ordinary shares that the company has is the forfeitable shares granted. For this calculation an
adjustment is made for the number of shares that would be issued on vesting under the forfeitable share plan.
2009
Basic earnings (R000)

Issued number of ordinary shares in issue (thousands)
Adjusted for forfeitable shares (thousands)
Weighted average number of ordinary shares for dilutive earnings (thousands)
Dilutive basic earnings per share (cents)
390 547
761 159
5 152
766 361
50,96
Headline earnings (R000)

Weighted average number of ordinary shares for dilutive headline earnings (thousands)
Dilutive headline earnings per share (cents)
394 347
766 361
51,46
In 2008 there were no potentially dilutive instruments
page 130

as at 31 May 2009
21.
2009
unaudited
R000
2008
unaudited
R000
d) Core (unaudited)
Core earnings per share is calculated after adding back the amortisation of intangible assets
as a consequence of the purchase price allocations exercised in terms of IFRS 3: Business
Combinations, the costs incurred in terms of the Management Bonus Settlement Agreement
and the termination of the Otter Mist Trading cc consulting agreement, as explained in the
pre-listing statement.
Reconciliation between net profit for the period and core net profit for the period:
Net profit for the period
Management bonus settlement net of tax
Amortisation on intangibles raised through business combinations net of tax
390 547
36 653
180 891
57 600
22 937
9 000
Core net profit for the period
427 200
270 428
Earnings per share (continued)
Core net profit for the year attributable to:

Equity holders of parent
Minority interest
Core earnings per share (cents per share)
22.
403 782
427 200
(23 418)
763 833 909
55,93
301 409
270 428
30 981
590 263 513
45,81
2009
R000
2008
R000
474 847
269 497
26 132
65 827
46 539
(107 808)
1 261
640
967
4 581
(32)
6 022
7 342
16 965
42 523
53
(43 000)
15 904
(101 129)
422
(2 585)
1 375
65 851
(307 977)
454 907
3 844
3 072
(194 417)
(252 084)
205 078
5 032
(40 913)
Cash generated by operations

Reconciliation of operating profit to cash generated by operating activities:
Operating profit
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Loss on disposal of investments
Gain on derecognition of financial asset
Discounting of receivables
Discounting of payables
Impairment of loan
Loss on disposal of intangible assets
Net loss on disposal of subsidiaries
Fair value movements on investments
Share incentive scheme expense
Net unrealised forex loss/(gains)
Changes in working capital (excluding the effects of acquisitions and disposals):
Decrease/(increase) in inventories
Increase in trade and other receivables
Increase in trade and other payables
Decrease in loans receivable
Decrease/(increase) in financial assets at amortised cost
746 015
(1 969)
(79 248)
page 131
2009
R000
23.
23.1
Taxation paid
Balance outstanding at beginning of year
Taxation charge
Acquisition of subsidiaries
Disposal of subsidiaries
Net payable outstanding at end of year
23.2
71 146
(2 096)
190 144
(619)
(25 938)
31 617
50
102 009
8 820
(71 146)
232 637
71 350
Acquisition of associates
Acquisition of associates and joint ventures
Cash advanced in the prior year
Cash paid in current year
24.
24.1
2008
R000
122 357
(70 093)
52 264
Business combinations
Acquisition of subsidiaries and start-up operations
31 May 2009
Initial acquisition
Date acquired
Blue Label**
Data
Solutions
Celebia**
Holdings
Blue Label**
Telecoms
Blue Label**
USA Inc
USA, LLC
Blue Label** Blue Label

Mexico Australasia
Answers
Direct
Distributor of
Company
prepaid
distributes
cellular
Blue Label
airtime in
products
Mexico and services
in the
Australasian
markets
Call centre
operation
Provider of
data for
use in call
centres
Investment
holding
company
situated in
Cyprus
Investment
holding
company
situated in
the USA
Africa
Prepaid
Services
Nigeria**
Limited
Distributor of Distributor of
prepaid
prepaid
calling cards
cellular
in the USA airtime and
starter
packs in
Nigeria
% acquired
18 July
2008
70
19 August
2008
50,5
1 August
2008
80
1 August
2008
81
1 July
2008
100
2 December
2008
100
2 December
2008
50,01
1 December
2008
51
Assets
Liabilities
R000
20 534
1 358
R000
119
3 209
R000
2 120
1 478
R000
3 595
709
R000
35
1 386
R000
39 947
50 948
R000
119 481
90 679
R000
224 401
233 430
Revenue
Profit/(loss) after tax since acquisition
292
(6 098)
(3 637)
7 037
460
3 004
1 625
(101)
(1 559)
134 263
(12 022)
110 713
(15 972)
Had these acquisitions of subsidiaries been made at the beginning of the financial year they would have contributed R7,037 million to revenue and (R5,036) million loss to
net profit after tax. The actual contribution to revenue and net profit after tax for the year was R7,037 million and (R3,177) million loss. (This excludes the effect of start-up
operations).
** These represent start-up operations.
page 132

as at 31 May 2009
24. Business combinations (continued)

24.1 Acquisition of subsidiaries and start-up operations (continued)
31 May 2009
The fair value of the net assets approximated the assets acquired
Blue Label** Blue Label

Mexico
Australasia
R000
R000
Property, plant
and equipment
Intangible assets
Goodwill
Inventories
Receivables
Borrowings
Payables
Fair value of subsidiaries acquired
Minority interests
Fair value of net assets acquired
Goodwill
Transaction with minorities
reserve
Total purchase consideration
Subsequent capital contribution
Still to be settled
Settled in cash
Less cash and cash equivalents in
subsidiary
Cash flow on acquisition
* Less than R1 000 .
** These represent start-up operations.
Answers
Direct
R000
Blue Label**
Data
Solutions
R000
Celebia**
Holdings
R000
Blue Label**
Telecoms
Blue Label**
USA Inc
USA, LLC
R000
R000
Africa
Prepaid
Services
Nigeria**
Limited
R000
Total
R000
30 404
1 109
149
31 663
30 404
(9 121)
21 283
11
1 964
24
(2 511)
(68)
529
(261)
268
1 659
150
800
(800)
150
(30)
120
30
*
*
*
19 856
54
910
(19 856)
(1 234)
(121)
(121)
814
814
(399)
415
161
21 820
800
54
1 748
(23 167)
(1 302)
31 777
(9 811)
21 966
1 689
5 861
27 144
27 144
1 927
1 927
150
150
130
9
49 630
49 639
415
(415)
5 991
29 646
49 630
(415)
78 861
(30 404)
(3 260)
(1 109)
818
150
(1)
(149)
49 490
(31 663)
47 198
page 133

31 May 2008
Virtual
Voucher
Africa
Prepaid
Services
House of
Business
Solutions
Group
Provider of a
Distributor of Holding company
fully integrated prepaid cellular
of Datacel
prepaid voucher
airtime and
Direct group.
management Vodacom starter
The group is
system packs in Africa,
a provider of
operating in
excluding direct marketing
over 500 Engen
South Africa
of short-term
petroleum
insurance
forecourts
products to
various
databases
Cellfind
Provider of
location-based
services
CNS
Call Centre
Call centre
operations
specialising in
insurance policy
sales
Content
Connect
Africa
Provider of
content for
mobile
devices
Little River
Trading 181
The procurement, selling
and distribution
of prepaid
products for
inter alia fixed
and mobile
networks and all
business
ancillary thereto
POS
Control
Services
Assembles and
sells point-ofsale devices
Initial acquisition
Date acquired
% acquired
1 June
2006
15%
1 June
2006
28%
1 June
2006
33,3%
1 June
2006
42,7%
14 November
2007
85%
R000
32 538
15 556
365 015
14 November
2007
44%
R000
49 243
61 374
212 471
14 November
2007
66,7%
R000
303
42
14 November
2007
57,3%
R000
25 131
5 122
45 039
1 January
2008
80%
23 January
2008
100%
1 March
2008
100%
1 March
2008
52%
Further
acquisition
Date acquired
% acquired
Assets
Liabilities
Revenue
Profit/(loss)
after tax since
acquisition
4 327
220
8 231
18 453
R000
10 523
2 341
11 044
R000
7 595
3 685
4 500
R000
56 254
54 165
342 271
R000
651
719
609
1 062
(32)
2 089
(68)
page 134

as at 31 May 2009

31 May 2008
House of
Africa
Business
Virtual
Prepaid
Solutions
Voucher
Services
Group
Cellfind
R000
R000
R000
R000
Cash and cash
equivalents
Property, plant and
equipment
Intangible assets
Intangible assets
revalued
Goodwill
Investments
Inventories
Receivables
Loan receivable
Deferred tax
Deferred tax revalued
Borrowings
Payables
Fair value of subsidiaries
acquired
Minority interests
Investments in
associates cost as at
restructure date
Fair value of net assets
acquired
Amounts transferred
to transactions with
minority reserve
Goodwill
Total purchase
consideration
Settled in shares
Settled in cash
Less cash and cash
equivalents in subsidiary
CNS
Call Centre
R000
Content
Connect
Africa
R000
Little River
Trading 181
R000
POS
Control
R000
Total
R000
(5 296)
2 973
2 920
4 614
6 145
11 356
183
35
2 774
1 366
3 069
669
117
2 002
718
248
667
7 528
4 320
13 043
15 069
(1 644)
(8 735)
29 875
1 127
10 265
20 741
553
(8 365)
(17 924)
(31 904)
28 289
3 319
1 209
4 428
5 313
(134)
(7 921)
(16 344)
(5 332)
62 686
9 664
128
(17 564)
(14 967)
924
5 488
(259)
6 387
2 983
(1 788)
(37)
(5 817)
38 732
(10 845)
166 893
9 934
1 209
23 308
52 885
5 313
547
(46 742)
(35 949)
(66 755)
12 655
11 481
(2 365)
19 485
46 680
7 119
(1 424)
8 540
27 887
133 847
(3 789)
(2 703)
2 478
(5 651)
(3 167)
(9 043)
9 952
11 594
13 834
43 513
5 695
8 540
27 887
121 015
16 354
11 728
12 705
13 296
44 876
79 897
101 251
21 406
5 660
21 460
62 113
175 186
215 560
38 034
(19 125)
18 909
37 595
(23 925)
13 670
138 607
(68 821)
69 786
166 170
(137 170)
29 000
11 355
11 355
30 000
30 000
90 000
90 000
511 761
(249 041)
262 720
5 296
(2 973)
(2 920)
(4 614)
(6 145)
(11 356)
24 205
10 697
66 866
24 386
11 355
23 855
90 000
251 364
* Less than R1 000.
24.2 Acquisition of minorities shareholdings

31 May 2009
CNS
Call Centre
Call centre
operations
specialising
in insurance
policy sales
Initial acquisition
Date acquired
% acquired
Assets
Liabilities
Revenue
Profit/(loss) after tax since acquisition
1 October 2008
20
R000
13 615
2 019
26 916
1 507
page 135

24.2 Acquisition of minorities shareholdings (continued)
31 May 2009
Minority interests
Amounts transferred to transactions with minority reserve
Settled in cash
Cash outflow on acquisition
CNS
Call Centre
R000
2 005
2 005
895
2 900
2 900
2 900
Total
R000
2 005
2 005
895
2 900
2 900
2 900
Budding
Trade
1170
Ventury
Group
31 May 2008
The Prepaid
Company
Initial acquisition
Date acquired
% acquired
Further acquisition
Date acquired
% acquired
Date acquired
% acquired
Date acquired
% acquired
Assets
Liabilities
Revenue
Profit/(loss) after tax
since acquisition
Matragon
Kwikpay SA
The Matragon is
procurement,
the holding
selling, company of
distribution
Comm
of prepaid
Express
products for Services SA
inter alia fixed
which is a
and mobile
distributor
networks and
of prepaid
all business airtime and
ancillary other prepaid
thereto products and
starter packs.
Distribution
channels
include
terminals,
vending
machines
and software
embedded on
POS devices
Supply of
electronic
vouchers
and related
services
1 June
2006
69,6%
1 June
2006
50%
1 June
2006
60%
Velociti
Blue Label
One
Call centre
Focus on
Company
Group
operations
technology holds Telkom
company
specialising strategy and
licence consisting of:
in insurance new product
1. Ventury
policy sales development
Group
and cellular
2. Cigicell
contract
3. iVeri
sales
Distributor
of prepaid
airtime
through own
terminals.
Multi-channel
payment and
transaction
processing
group
1 June
2006
51%
1 June
2006
75%
1 June
2006
50%
1 June
2006
90%
14 November 14 November 14 September 14 November 14 November 14 November

2007
2007
2006
2007
2007
2007
30,4%
50%
15%
49%
25%
50%
1 March
2007
20%
14 November
2007
5%
22 April
2008
10%
R000
R000
R000
R000
R000
R000
R000
2 311 711
1 973 312
10 342 528
100 264
378 312
331 916
4 132 280
23 579
107 615
88 048
630 302
7 121
13 086
14 058
32 569
2 736
9 685
17 611
(3 596)
137 184
41 454
1 638 497
5 476
page 136

as at 31 May 2009

24.2 Acquisition of minorities shareholdings
31 May 2008
Velociti
R000
Blue Label
One
R000
Budding
Trade
1170
R000
Ventury
Group
R000
Total
R000
791
791
(1 556)
(1 556)
*
*
10 992
10 992
150 083
150 083
71 265
7 185
11 556
3 000
708 485
97 000
(48 500)
48 500
48 500
334
1 125
(1 125)
7 185
(3 592)
3 593
3 593
10 000
(10 000)
3 000
(1 500)
1 500
1 500
(2 585)
8 407
8 407
8 407
(2 251)
856 317
(794 317)
62 000
62 000
E-Voucha
30 November
2008
51
E-Voucha
R000
iVeri
31 October
2008
51
iVeri
R000
Polsa
31 March
2009
50
Polsa
R000
Total
R000
4
535
1 140
2 500
83
13 145
384
(205)
(1 923)
(16 352)
(689)
338
2 499
2 148
352
2 500
1 777
635
50
132
68
(300)
(42)
(861)
1 459
(687)
2 835
3 607
(607)
3 000
12 376
4 611
1 759
305
12 035
11 886
(20 228)
(577)
(14 161)
8 006
(3 999)
400
4 407
(4 326)
81
14 157
5 781
2 949
2 500
305
12 118
25 163
452
(205)
(22 451)
(619)
(31 374)
8 776
(4 348)
5 734
10 162
(4 581)
5 581
To be settled
Received in cash
Less: Cash and cash equivalents in subsidiary
(1 071)
1 429
201
3 000
(1 777)
(81)
(12 376)
(1 152)
4 429
(13 952)
Cash outflow on disposal
1 630
1 223
(12 376)
(9 523)
Minority interests
Amounts transferred to transactions
with minority reserve
Goodwill/(excess of acquirers interest
in the net fair value over cost)
Settled in shares
Settled in cash
The Prepaid
Company
R000
Matragon
R000
Kwikpay SA
R000
114 121
114 121
25 735
25 735
615 479
729 600
(729 600)
* Less than R1 000.
25.
Disposal of subsidiaries
31 May 2009
Date disposed
% disposed
The fair value of the net assets disposed of:

Intangible assets
Goodwill
Investments
Inventories
Receivables
Deferred tax
Bank overdraft
Borrowings
Payables
Fair value of subsidiaries disposed of
Minority interests
Goodwill
Fair value of net assets disposed of
Profit/(loss) on disposal of subsidiary
Total proceeds on disposal
page 137
26.
2009
R000
2008
R000
23 859
61 399
11 175
16 589
57 555
7 818
10 670
13 158
15
120 276
6 321
10 586
46
98 915
Commitments
Future operating lease commitments:
The group leases various offices and warehouses under non-cancellable operating
lease agreements. The lease terms are between 1 and 5 years, and the majority of lease
agreements are renewable at the end of the lease period at market rate.
The group also leases various plant and machinery under cancellable operating lease
agreements. The group is required to give a six-month notice for the termination of the
majority of these agreements. The lease expenditure charged to the income statement
during the year is disclosed in note 18.
The future aggregate minimum lease payments under non-cancellable operating leases are
as follows:
Premises
Payable within one year
Payable in two to five years
Payable in greater than five years
Equipment
Payable in greater than five years
27.
Related party transactions

For details of subsidiaries, associates and joint ventures refer to note 31.
For details of the companys directors, refer to the Directors report.
ZOK Cellular (Proprietary) Limited, BSC Technologies (Proprietary) Limited, Moneyline 311 (Proprietary) Limited, PLL Investments
(Proprietary) Limited, Friedshelf 669 (Proprietary) Limited, WBS Holdings (Proprietary) Limited, and Ellerine Bros. (Proprietary) Limited
are a related parties due to the companies having certain common directorships.
For details of the shareholdings in the company, refer to the Directors report.
page 138

as at 31 May 2009
27.
2009
R000
2008
R000
2 475
6 601
965
6
493
280 386
15 594
1 650
74 875
1 104
91
105
3 356
18
2 796
204
103
19 911
4 996
1 519
2 550
54
3 002
41
180
160
414
146
249
401
469
3 210
1 954
119
108
4 449
1 200
101
Related party transactions (continued)

The following transactions were carried out with related parties
Directors emoluments (refer to note 28)
Sales to related parties
ZOK Cellular (Proprietary) Limited
Premet Cellular (Proprietary) Limited
The Hub (Proprietary) Limited
BSC Technologies (Proprietary) Limited
Purchases from related parties
WBS Holdings (Proprietary) Limited
Moneyline 311 (Proprietary) Limited
Cost recoveries from related parties
Interest paid to related parties
Interest received from related parties
Management fees received from related parties
Management fees paid to related parties
Rent received from related parties
page 139
27.
2009
R000
2008
R000
56
69
3 664
1 810
194
1 947
1 880
828
240
1 767
19 710
4 353
27 866
19 673
27 271
1 266
118
282
159
1 105
4 147
3 476
44
64
310
1 272
2 850
188
16
113

Rent paid to related parties
PLL Investments (Proprietary) Limited
Friedshelf 669 (Proprietary) Limited
Ellerine Bros. (Proprietary) Limited
Loans to related parties
Oxigen Services (India) Pvt Limited
Loans from related parties
Amounts due from related parties
PLL Investments (Proprietary) Limited
Amounts due to related parties
Basis of transactions
All transactions with related parties are conducted on an arms length basis
page 140

as at 31 May 2009
28.
Services as
directors of
Blue Label
Telecoms
Limited
R000
Salary and
allowances
R000
Bonuses and
performance
related
payments
R000
Other
benefits
R000
Subtotal
R000
5 210
5 215
3 824
1 953
16 202
1 387
1 387
75
69
29
29
202
5 285
5 284
3 853
3 369
17 791
600
300
465
315
340
362
195
230
2 807
2 807
16 202
1 387
202
600
300
465
315
340
362
195
230
2 807
20 598
2 763
2 763
2 026
1 034
8 586
3 360
3 360
1 429
735
8 884
37
37
16
16
106
6 160
6 160
3 471
1 785
17 576
325
230
330
205
228
233
150
115
1 816
1 816
8 586
8 884
106
325
230
330
205
228
233
150
115
1 816
19 392
Directors emoluments
For the year ended 31 May 2009
Executive directors
Levy, BM
Levy, MS
Pamensky, MV
Rivkind, DB
Non-executive directors
Nestadt, LM
Ellerine, S
Harlow, GD
Huntley, RJ
Lazarus, NN
Mansour, P
Mthimunye, J
Theledi, HC
Tyalimpi, LM
For the year ended 31 May 2008

Executive directors
Levy, BM
Levy, MS
Pamensky, MV
Rivkind, DB
Non-executive directors
Nestadt, LM
Ellerine, S
Harlow, GD
Huntley, RJ
Lazarus, NN
Mansour, P
Mthimunye, J
Theledi, HC
Tyalimpi, LM
*The sum of R80 million was paid to Brett and Mark Levy in lieu of their pre-listing contractual bonus entitlements. The R80 million was used to acquire BLT shares.
page 141
Cancellation
of pre-listing
management
bonus
participation
agreement*
R000
Other
benefits
from
subsidiaries
R000
Corporate
finance and
legal fees
for services
rendered to
Blue Label
Telecoms
Limited
subsidiaries
R000
5 285
5 284
3 853
3 369
17 791
1 330
1 330
1 330
600
300
465
315
1 670
362
195
230
4 137
21 928
40 000
40 000
80 000
23
25
10
8
66
200
201
200
101
702
50 384
49 484
6 454
2 822
109 144
80 000
66
600
1 219
1 819
1 819
702
325
230
930
235
1 447
278
150
140
3 735
112 879
Bonuses and
performancerelated
payments
from
subsidiaries
R000
Services as
directors of
subsidiaries
of Blue Label
Telecoms
Limited
R000
Salary and
allowances
from
subsidiaries
R000
4 001
3 098
1 752
403
9 254
1 021
525
1 546
30
45
25
100
100
9 254
1 546
Retirement
and related
benefits
from
subsidiaries
R000
Total
R000
page 142

as at 31 May 2009
29.
Segmental summary
The groups segment reporting follows the organisational structure as reflected in its internal management reporting systems, which
are the basis for assessing the financial performance of the business segments and for allocating resources to the business segments.
Managements assessment of the groups organisational structure takes the geographical location of the segments into account. All
reporting segments located outside of South Africa are included in the International distribution segment. Operations included in all other
segments are located within South Africa.
At 31 May 2009, the group is managed on the basis of five main business segments:
South African distribution, which includes the distribution of physical and virtual prepaid airtime of the South African mobile network
operators and Telkom, and the distribution of starter packs in South Africa.
International distribution, which includes international distribution of physical and virtual prepaid airtime in India and Africa, and the
distribution of starter packs in Africa.
Technology, which includes technological innovation, development and support for the operations of the group.
Value-added services, which includes other value-added services of the group, leveraging off its existing products and distribution
network as well as the development of new mobile services to take to market.
Corporate, which includes head office administration.
Transactions between reportable segments are conducted at arms length.
Total
2009
R000
South African distribution**

2008
R000
2009
R000
2008
R000
The segment results for the year ended 31 May are as follows:
Total segment revenue
Inter-segment revenue
25 198 131
(9 916 682)
18 044 759
(5 499 288)
24 038 712
(9 839 681)
17 451 794
(5 490 224)
Revenue
15 281 449
12 545 471
14 199 031
11 961 570
Segment result
Operating profit before depreciation, amortisation and impairment
charges
Depreciation and amortisation and impairment charges
Finance costs
Finance income
Share of (losses)/profits from associates
Taxation
568 067
(93 220)
(112 699)
205 046
(27 445)
(174 784)
328 167
(58 670)
(147 704)
193 281
(17 441)
(89 841)
624 346
(31 897)
(98 916)
195 779
(163 379)
339 352
(28 376)
(144 769)
188 797
545
(84 431)
364 965
207 792
525 933
271 118
Non-cash items
Net (loss)/profit on sale of subsidiaries
Fair value adjustment
The segment assets and liabilities at 31 May are as follows:
Assets excluding investments in associates and joint ventures
3 769 906
109 837
3 140 873
81 356
2 227 849
1
2 687 522
1
Total assets
3 879 743
3 222 229
2 227 850
2 687 523
74 941
55 845
119 327
3 030
54 766
419 939
40 936
4 331
31 046
119 630
1 635 623
1 304 285
1 159 605
1 125 116
Additions to non-current assets

Intangible assets
Investment in associates
Investment in joint ventures
Total liabilities
1 689
(4 581)
32
2 585
(1 375)
* Less than R1 000.

** Although segment names have changed, the composition of the underlying segments remained the same.
(607)
32
2 585
(1 375)
page 143
International distribution**
2009
R000
2008
R000
Technology**
Value-added services**
2009
R000
2008
R000
2009
R000
Corporate
2008
R000
2009
R000
2008
R000
725 288
(1 125)
383 749
(344)
94 793
(72 281)
35 594
(7 713)
339 338
(3 595)
173 622
(1 007)
724 163
383 405
22 512
27 881
335 743
172 615
6 144
(16 915)
(12 569)
7 486
(28 226)
3 789
17 968
(7 891)
(888)
51
(19 176)
(2 093)
(48 502)
(8 452)
(658)
147
(657)
(9 796)
(4 079)
(528)
93
1 428
75 239
(33 601)
(349)
1 371
781
(12 081)
42 247
(17 473)
(1 030)
976
1 190
(3 369)
(89 160)
(2 355)
(207)
263
(2 456)
(61 604)
(851)
(489)
3 364
_
(1 376)
(40 291)
(12 029)
(58 122)
(12 882)
31 360
22 541
(93 915)
(60 956)
1 659
(4 326)
30
352
507 285
102 770
157 451
81 355
60 630
40 543
254 522
7 066
282 567
719 620
(27 210)
610 055
238 806
60 630
40 543
261 588
282 567
719 620
(27 210)
14 049
24 557
119 327
5 038
46 523
9 340
14 112
7 883
9 231
6 652
8 554
3 030
9 966
242 904
3 964
4 291
832
1 651
373 191
80 654
22 692
9 737
41 861
63 547
38 274
25 230
page 144

as at 31 May 2009
30.

Forfeitable shares
During the year, forfeitable shares were granted to executive directors and qualifying employees. The participant will forfeit the forfeitable shares if
he/she ceases to be an employee of an employer company before the vesting date or if the specified performance condition has not been met, unless
otherwise specified by the rules or determined by the board. In the event that the participant is not in the employ of the group, or the performance
conditions are not met, then the shares allocated to the participant will be forfeited and will be sold on the open market by the escrow agent. The
proceeds will be returned to the participating employer.
Dividends declared in respect of these forfeitable shares are held in escrow until such time as the performance conditions are met and the shares have
vested. Shares forfeited during the vesting period will forfeit any dividends pertaining to such shares. No dividends have been declared during the year.
The release of forfeitable shares will be subject to the achievement of a specified performance condition. The performance condition for the first award
grant of forfeitable shares is:
30% of shares will vest when the company core HEPS at the end of the performance period, being May 2010, exceeds the core HEPS per ordinary
share as at the beginning of the performance period, being May 2008, by the percentage change in the CPI index over the performance period, plus
20% (threshold performance criteria);
100% of shares will vest when the core HEPS at the end of the performance period, being May 2010, exceeds the core HEPS per ordinary share
as at the beginning of the performance period, being May 2008, by the percentage change in the CPI index over the performance period, plus
30% (target performance criteria);
Performance below the threshold performance criteria will result in the forfeitable award not vesting, unless otherwise determined by the board;
Linear vesting of the forfeitable award will occur between threshold performance and target performance stated above.
Movements in the number of forfeitable shares outstanding during the year are as follows:
Grant date
At beginning of the year
Granted during the year
Shares forfeited during the year
Shares vested during the year
Vesting date
Number of shares
Fair value of grant
28 November 2008 1 September 2010

26 February 2009 1 September 2010
2 882 000
2 269 814
14 409 999
11 349 073
5 151 814
25 759 072
At end of year
The fair value of the shares is based on the value paid for the shares on the open market at grant date.
The total number of forfeitable shares issued to executive directors during the period is 1 148 343.
page 145
Number of
issued ordinary
Country
shares
31.
Percentage
held
Interest in subsidiaries, associates and joint ventures

2009
Subsidiaries
Directly held:
Subsidiaries of Blue Label Telecoms Limited:
Activi Technology Services (Proprietary) Limited
Blue Label Australasia (Proprietary) Limited
Blue Label One (Proprietary) Limited
Blue Label Investments (Proprietary) Limited
Blue Label Mexico S.A. de C.V.
Blue Label Telecoms USA Incorporated
Budding Trade 1170 (Proprietary) Limited
Celebia Holdings Limited
Content Connect Africa (Proprietary) Limited
Kwikpay SA (Proprietary) Limited
Matragon (Proprietary) Limited
Matrix Investments No 4 (Proprietary) Limited
SharedPhone International (Proprietary) Limited
The Prepaid Company (Proprietary) Limited
The Post Paid Company (Proprietary) Limited
Uninex (Proprietary) Limited
Ventury Group (Proprietary) Limited
Indirectly held:
Subsidiaries of Blue Label Investments (Proprietary) Limited:
Gold Label Investments (Proprietary) Limited
Subsidiary of The Prepaid Company (Proprietary) Limited:
Little River Trading 181 (Proprietary) Limited (trading as Crown Cellular)
Subsidiaries of Ventury Group (Proprietary) Limited:
Subsidiaries of Matragon (Proprietary) Limited:
Airtime Xpress (Proprietary) Limited
Comm Express Services SA (Proprietary) Limited
POS Control Services (Proprietary) Limited
Subsidiaries of Activi Technology Services (Proprietary) Limited:
Activi Deployment Services (Proprietary) Limited
IT Experts (Proprietary) Limited
Transaction Junction (Proprietary) Limited
Subsidiaries of Africa Prepaid Services (Proprietary) Limited:
Africa Prepaid Services (Mozambique) Limitada
Africa Prepaid Services RDC SPRL
Africa Prepaid Services Nigeria Limited
Subsidiaries of Blue Label Telecoms USA Incorporated
Blue Label USA, LLC
Subsidiaries of Datacel Direct (Proprietary) Limited:
Blue Label Call Centre (Proprietary) Limited
CNS Call Centre (Proprietary) Limited
Answers Direct (Proprietary) Limited
Blue Label Data Solutions (Proprietary) Limited
Associate
Indirectly held:
Associate of Gold Label (Proprietary) Limited:
Smart Voucher Limited (trading as Ukash)
Associates of Datacel Direct (Proprietary) Limited:
BLK Risk Services (Proprietary) Limited
Associate of Demtrade 11 (Proprietary) Limited:
Phutuma Procurement (Proprietary) Limited
Joint ventures
Joint ventures of Blue Label Telecoms Limited:
Joint ventures of The Prepaid Company (Proprietary) Limited:
RSA
RSA
Australia
RSA
RSA
Mexico
USA
RSA
Cyprus
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
300
150
201
300
1 200 000
1 100
100
100
100
1 000
100
100
1 000
100
100
100
500 000
10 000
200
100
2 000
200
100
72
50,5
100
100
70
100
100
100
100
100
100
100
100
100
100
50,1
100
51
100
100
100
RSA
1 000
100
RSA
100
100
RSA
100
100
RSA
RSA
RSA
200
100
100
100
100
52
RSA
RSA
RSA
100
300
120
100
100
60
Mozambique
DRC
Nigeria
300
10 000 000
90
80
51
USA
50,01
RSA
RSA
RSA
RSA
RSA
300
1 000
1 000
1 000
100
India
United Kingdom
14 244 294
46 353 933
37,22
16,9*
RSA
RSA
100
100
50*
25
RSA
200
39
RSA
160
50
RSA
100
40
*Significant influence is demonstrated by the company as a result of representation on the board of directors.
100
100
100
80
81
page 146

as at 31 May 2009
Number of
issued ordinary
shares
Country
31.
Percentage
held
Interest in subsidiaries, associates and joint ventures (continued)

2008
Subsidiaries
Directly held:
Subsidiaries of Blue Label Telecoms Limited:
Budding Trade 1170 (Proprietary) Limited
E-Voucha (Proprietary) Limited
The Post Paid Company (Proprietary) Limited
Indirectly held:
Subsidiaries of Blue Label Investments (Proprietary) Limited:
Polsa Holdings Limited
Subsidiary of The Prepaid Company (Proprietary) Limited:
Little River Trading 181 (Proprietary) Limited (trading as Crown Cellular)
Subsidiaries of Ventury Group (Proprietary) Limited:
iVeri Payment Technologies (Proprietary) Limited
Subsidiaries of Matragon (Proprietary) Limited:
Airtime Xpress (Proprietary) Limited
Comm Express Services SA (Proprietary) Limited
POS Control Services (Proprietary) Limited
Subsidiaries of Activi Technology Services (Proprietary) Limited:
Activi Deployment Services (Proprietary) Limited
Subsidiaries of Africa Prepaid Services (Proprietary) Limited:
Africa Prepaid Services (Mozambique) Limitada
Africa Prepaid Services RDC SPRL
Subsidiaries of Datacel Direct (Proprietary) Limited:
Associate
Indirectly held:
Associate of Gold Label (Proprietary) Limited:
Joint ventures
Joint ventures of The Prepaid Company (Proprietary) Limited:
The Hub Pretalk (Proprietary) Limited
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
RSA
300
150
300
100
100
1 000
100
100
1 000
1 000
100
100
100
500 000
10 000
200
2 000
200
100
72
100
100
100
100
100
100
51
100
100
100
100
50,1
100
51**
100
100
RSA
Cyprus
1 000
17 600
100
50*
RSA
100
100
RSA
RSA
100
1 000
100
51
RSA
RSA
RSA
200
100
100
100
100
52
RSA
RSA
RSA
100
300
120
100
100
60
Mozambique
DRC
300
90
80
RSA
RSA
RSA
300
1 000
1 000
100
80
100
India
12 502 110
35
RSA
RSA
300
100
40
40
**49% was disposed of on 1 April 2008 for a nominal amount. No further disclosure has been made as the effect of this transaction is below R1 000.
32.
Post balance sheet events

Refer to the directors report for details on the disposal of VPN.
page 147
COMPANY ANNUAL FINANCIAL STATEMENTS CONTENTS
148 Company balance sheet

149 Company income statement
150 Company statement of changes in equity
151 Company cash flow statement
152 Notes to the company annual financial statements
page 148
COMPANY BALANCE SHEET

as at 31 May 2009
Note
ASSETS
Non-current assets
Intangible assets
Deferred taxation asset
Investment in subsidiaries
Investment in joint venture
Current assets
Loans receivable
Loans to subsidiaries
Receivables
Current tax assets
Total assets
EQUITY AND LIABILITIES
Share capital
Share premium
Treasury shares
Accumulated loss
Non-current liabilities
Deferred taxation liability
Current liabilities
Loans from subsidiaries
Bank overdraft
Total equity and liabilities
*Less than R1 000.
3
4
5
6.1
6.2
7
6.1
8
9
10
10
5
12
6.1
9
2009
R000
2008
R000
3 298 627
3 064
5 222
3 287 162
3 179
1 160 702
875
1 151 391
6 927
800
709
4 459 329
3 267 104
1 212
1 671
136
3 264 085
1 210 276
476
1 174 310
34 878
612
4 477 380
4 393 111
*
4 404 737
(9 567)
4 395 170
1 939
(3 998)
2 826
2 826
63 392
14 388
48 000
1 004
4 403 436
*
4 404 737
4 404 737
(1 301)
4 459 329
4 447 380
73 944
23 815
48 866
1 214
49
page 149
COMPANY INCOME STATEMENT

Note
Other income
Other expenses
2009
R000
2008
R000
89 035
(51 049)
(2 355)
(40 805)
43 516
(29 478)
(3 444)
(14 513)
Operating loss
Finance costs
Finance income
13
14
14
(5 174)
(120)
5 559
(3 919)
(11)
3 706
Net profit/(loss) before taxation

Taxation
15
265
(2 962)
(224)
(1 077)
(2 697)
(1 301)
Net loss for the year
page 150
COMPANY STATEMENT OF CHANGES IN EQUITY

Note
Share issue costs
Shares purchased during
the year
Equity based compensation
movements
10
Share
capital
R000
Share
premium
R000
Treasury
shares
R000
Equity
based
compensation
reserve
R000
*
*
4 444 461
(39 724)
4 404 737
(9 567)
Accumulated
loss
R000
(1 301)
(1 301)
1 939
(2 697)
4 404 737
1 939
(3 998)
* Less than R1 000.
11
(9 567)
Total
equity
R000
4 444 461
(39 724)
(1 301)
4 403 436
(9 567)
1 939
(2 697)
4 393 111
page 151
COMPANY CASH FLOW STATEMENT

Note
Finance income
Finance costs
Taxation paid
16
14
14
17
Net cash flows from operating activities

Cash flows from investing activities
Acquisition of property, plant and equipment
Disposal of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment in subsidiaries
Disposal of investment in subsidiaries
Loans repaid by/(advanced to) subsidiaries
Acquisition of investment in joint venture
Loans advanced to joint venture
2009
R000
2008
R000
20 796
5 559
(120)
(2 014)
(12 015)
3 706
(11)
24 221
(8 320)
(2 988)
40
(4 290)
(28 577)
1 429
22 053
(3 030)
(149)
(1 244)
(1 719)
(180 203)
(1 128 806)
(15 512)
(1 311 972)
Cash flows from financing activities

Proceeds from issue of shares
Treasury shares acquired
Share issue costs
(9 567)
1 360 579
(39 724)
Net cash flows from financing activities
(9 567)
1 320 855
(858)
563
563
*
(295)
563
Net cash flows from investing activities
(Decrease)/increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
* Less than R1 000.
page 152
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS

as at 31 May 2009
1.
The company places cash and cash equivalents with major

banking companies and quality institutions that have high
credit ratings.
Accounting policies
The accounting policies applied to the company annual
financial statements are consistent with the group
accounting policies as detailed on pages 104 to 114.
2.
Financial risks
In the course of its business, the company is exposed to
a number of financial risks: credit risk, liquidity risk and
market risk (including foreign currency and other price
risk). This note presents the companys objectives, policies
and processes for managing its financial risk and capital.
Credit risk
Credit risk arises because a counterparty may fail to meet
its obligations to the company. The company is exposed to
credit risks on financial instruments such as receivables,
loans receivable and cash.
Receivables consist primarily of invoiced amounts from
normal trading activities. The company has a diversified
customer base and policies are in place to ensure sales
are made to customers with an appropriate credit history.
Individual credit limits are set for each customer and the
utilisation of these credit limits is regularly monitored.
Where necessary, a provision for impairment is made.
Loans are only granted to holders with an appropriate

credit history, taking into account the holders financial
position and past experience.
The company has no significant concentrations of credit risk.
The companys maximum credit risk exposure is the
carrying amount of all financial assets on the balance sheet
and guarantees provided with the maximum amount the
company could have to pay if the guarantees are called on
amounting to R554,7 million.
Liquidity risk
Liquidity risk arises when a company encounters difficulties
to meet commitments associated with liabilities and other
payment obligations. The companys objective is to maintain
prudent liquidity risk management by maintaining sufficient
cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities
and the ability to close out market positions. Due to the
dynamic nature of the underlying businesses, the company
aims to maintain flexibility in funding by keeping committed
credit lines available.
Maturity of financial liabilities

Payable in:
Less than
1 month or
on demand
(R000)
More than
1 month
but not
exceeding
1 year
(R000)
More than
1 year
but not
exceeding
2 years
(R000)
More than
2 years
but not
exceeding
5 years
(R000)
More than
5 years
(R000)

Bank overdraft
48 000
3 145
1 004
Total
52 149
2008
Bank overdraft
48 866
13 640
49
4 515
-
Total
62 555
4 515
2009
*Trade and other payables exclude non-financial instruments.
Market risk
The company is exposed to risks from movements in
foreign exchange rates and interest rates that affect its
assets, liabilities and anticipated future transactions.
Cash flow and fair value interest rate risk

The companys cash flow interest rate risk arises from
loans receivable and cash and cash equivalents. The
company is not exposed to fair value interest rate risk
as the company does not have any fixed interest bearing

instruments carried at fair value nor any interest bearing
borrowings.
As part of the process of managing the companys
exposure to interest rate risk, interest rate characteristics
of new borrowings and the refinancing of existing
borrowings are positioned according to expected
movements in interest rates.
page 153

The company is exposed to foreign currency risk from
transactions. Transaction exposure arises due to the company
granting loans to affiliated companies in foreign currencies.
The sensitivity analysis is based on the following assumptions:

Interest rate risks
The interest rate sensitivity analysis is based on the
following assumptions:
Changes in market interest rates affect the interest
income or expense of variable interest financial
instruments
Changes in market interest rates only affect interest
income or expense in relation to financial instruments
with fixed interest rates if these are recognised at fair
value.
The company manages its exposure to foreign currency risk

by ensuring that the net foreign currency exposure remains
within acceptable levels. Hedging instruments are used in
certain instances to reduce risks arising from foreign currency
fluctuations. The company did not enter into any forward
exchange contracts during the period under review.
IFRS 7 Sensitivity analysis

The company has used a sensitivity analysis technique that
measures the estimated change to the income statement
of either an instantaneous increase or decrease of 1%
(100 basis points) in market interest rates or a 10%
strengthening or weakening of the rand.
Under these assumptions, a 1% increase or decrease

in market interest rates at 31 May 2009 would increase
or decrease profit before tax by R460 195 (2008:
R173 194).

Financial instruments by currency
Financial assets
Cash
Receivables*
Loans receivable
Bank overdraft
ZAR
R000
2009
Euro
R000
Total
R000
ZAR
R000
2008
USD
R000
Total
R000
709
5 233
1 149 959
2 456
709
5 233
1 152 415
612
32 084
1 174 310
476
612
32 084
1 174 786
1 155 901
2 456
1 158 357
1 207 006
476
1 207 482
48 000
3 145
1 004
48 000
3 145
1 004
48 866
18 155
49
48 866
18 155
49
52 149
52 149
67 070
67 070
1 103 752
2 456
1 106 208
1 139 936
476
1 140 412
*Receivables and trade and other payables exclude non-financial instruments.
With a 10% strengthening or weakening in the rand against all other currencies, profit before tax would have decreased or increased
by R245 594 (2008: R47 525) respectively.
Capital risk
The companys objectives when managing capital are to safeguard the companys ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust this capital structure, the company may issue new shares, adjust the amount of dividends paid to
shareholders, return capital to shareholders or sell assets to reduce debt.
The company defines capital as capital and reserves and non-current borrowings.
The company is not subject to externally imposed capital requirements.
There were no changes to the companys approach to capital management during the year.
Fair value measurement
For all short-term financial assets and liabilities, the carrying amount is regarded as an approximation of the fair value.
The fair value of all non-current loans receivable and borrowings are calculated using a discounted cash flow model based on
prevailing market interest rates.
page 154
NOTES TO THE COMPANY ANNUAL FINANCIAL STATEMENTS continued

as at 31 May 2009
Computer
equipment
R000
3.
Office
equipment
R000
Leasehold
improvements
R000
Total
R000
270
223
(33)
(136)
324
484
564
(265)
783
329
610
(136)
803
129
360
(104)
385
1 231
(462)
769
1 212
2 988
(33)
(1 103)
3 064
462
(138)
324
1 049
(266)
783
959
(156)
803
491
(106)
385
1 231
(462)
769
4 192
(1 128)
3 064
279
(9)
270
485
(1)
484
349
(20)
329
131
(2)
129
1 244
(32)
1 212
279
(9)
270
485
(1)
484
349
(20)
329
131
(2)
129
1 244
(32)
1 212
Computer
software
R000
Internally
developed
software
R000
Total
R000
Intangible assets
Additions
Amortisation charge
At 31 May 2009
Cost
Carrying amount
Additions
Amortisation charge
At 31 May 2008
Cost
Carrying amount
5.
Motor
vehicles
R000
Property, plant and

equipment
Additions
Disposals
Depreciation charge
At 31 May 2009
Cost
Carrying amount
Additions
Depreciation charge
At 31 May 2008
Cost
Carrying amount
4.
Furniture
and fittings
R000
1 671
711
(739)
1 643
3 579
3 579
1 671
4 290
(739)
5 222
2 430
(787)
1 643
3 579
3 579
6 009
(787)
5 222
1 719
(48)
1 671
1 719
(48)
1 671
1 719
(48)
1 671
1 719
(48)
1 671
2009
R000
2008
R000
136
Deferred taxation
At 31 May
Credited to income statement:
Provisions
Capital allowances
Tax losses
Prepayments
Other
At 31 May
Deferred taxation comprises:
Provisions
Capital allowances
Tax losses
Prepayments
Other
153
(1 015)
493
(474)
(2 119)
(2 826)
117
19
136
270
(1 015)
493
(474)
(2 100)
(2 826)
117
19
136
page 155
2009
R000
6.
6.1
2008
R000
Investments in subsidiaries and joint venture

Investments in subsidiaries
Shares at cost less amounts written off
Loans owing by subsidiaries
Loans owing to subsidiaries
Shares at
cost less
amounts
written off
R000
Details are reflected below:
2009
Africa Prepaid Services (Proprietary) Limited1
Budding Trade (Proprietary) Limited
Cellfind SA (Proprietary) Limited
Content Connect Africa (Proprietary) Limited1
Content Connect Australia (Proprietary) Limited2
Datacel Direct (Proprietary) Limited1
The Postpaid Company (Proprietary) Limited1
SharedPhone International (Proprietary) Limited1
2008
Africa Prepaid Services (Proprietary) Limited1
Budding Trade (Proprietary) Limited
Datacel Direct (Proprietary) Limited1
The Postpaid Company (Proprietary) Limited
SharedPhone International (Proprietary) Limited1
61 520
5 000
*
108 416
26 650
40 000
6 000
1
290 000
27 000
1 926
150 000
29 400
22 500
194 000
4 160
*
20 000
2 150 214
*
7 185
98 406
44 784
3 287 162
1 151 391
(48 000)
3 264 085
1 174 310
(48 866)
4 390 553
4 389 529
Loans
owing by
subsidiaries
R000
Loans
owing to
subsidiaries
R000
35 112
1 962
50 540
595
713
38
739
719
2 713
6 293
149 315
735
32 996
942
2 745
861 277**
976
1 806
1 055
120
(48 000)
3 287 162
1 151 391
(48 000)
61 520
5 000
108 416
40 000
6 000
290 000
30 000
150 000
2 500
29 400
22 500
194 000
4 160
*
20 000
2 150 214
7 185
98 406
44 784
3 264 085
13 539
7 120
100 340
30 377
3 216
1 018 903**
815
1 174 310
(866)
(48 000)
(48 866)
* Less than R1 000.

** R750 million (2008: R450 million) of this balance is subordinated in favour of other creditors of The Prepaid Company (Proprietary) Limited.
All subsidiaries are based in the Republic of South Africa. For details on percentage held and issued shares refer to note 31 in the group notes.
The directors believe that the carrying value of the shares approximate their fair value.
The shares in The Prepaid Company (Proprietary) Limited are pledged to Investec Bank.
1
These loans bear interest at prime plus 2% and have no fixed terms of repayment.
2
This loan bears interest at prime plus 3% and has no fixed terms of repayment.
All other loans are interest free and have no fixed terms of repayment.
page 156

as at 31 May 2009
2009
R000
6.
6.2
Investment in subsidiaries and joint venture (continued)

Investments in joint venture
Shares at cost less amounts written off
Loans owing by joint venture
Date
Country of
acquired incorporation
2009
Demtrade 11
7.
8.
2008
R000
1 June 2008
South Africa
3 030
149
3 179
Assets
R000
Liabilities
R000
Revenues
R000
Profit
R000
Percentage
interest held
7 554
6 382
9 086
1 121
50
2009
R000
2008
R000

Interest free
859
16
476
Loans are unsecured and have no fixed terms of repayment
875
476
1 149
5 778
32 104
2 774
6 927
34 878
Gross
R000
Impairment
R000
925
103
71
50
1 149
31 963
67
74
32 104
Loans receivable

Trade receivables
Sundry debtors and prepayments
The ageing of trade receivables at the reporting date was:

31 May 2009
Fully performing
31 May 2008
Fully performing
Based on the credit history of the relevant debtors, management does not consider there to be
any indications of potential default in respect of the fully performing book.
page 157
2009
R000
9.
2008
R000

Cash at bank
Cash on hand
Favourable balances
Bank overdraft
697
12
709
(1 004)
611
1
612
(49)
(295)
563
Cash and cash equivalents of R600 000 are restricted
10.
2009
Number
of shares
2008
Number
of shares
2009
R000
2008
R000
1 000 000 000
1 000 000 000
Share capital
Authorised
Total authorised share capital of ordinary shares
(par value of R0,000001 each)
Issued
Balance at the beginning of the year
Shares issued during the period
Shares acquired during the period
766 360 894
(5 201 713)
1
766 630 893
Balance at the end of the year
761 159 181
766 360 894
The company acquired 5 201 713 shares on the Johannesburg stock exchange in order to grant forfeitable shares to employees and
directors of the group.
The cost to the company to acquire these shares of R9 566 822 has been deducted from shareholders equity. These shares are
held as treasury shares. See note 11 for details on the forfeitable shares.
Shares issued during the prior period

Shares issued to buy out minority shareholders on
restructuring1
Shares issued to Brett Levy and Mark Levy to
terminate the management bonus agreement2
Shares issued to the previous shareholders of Blue
Label Investments (Proprietary) Limited to purchase
the said company3
Shares issued as part of the preferential allocation in
the private placement
Shares issued to Microsoft Corporation
Number
Issue
price
per share
R
Share
capital
R000
Share
premium
R000
190 131 616
5,50
1 045 724
14 545 455
5,50
80 000
378 097 993
5,50
2 079 533
148 148 148

35 437 682
766 360 894
6,75
6,75
*
*
*
1 000 000
239 204
4 444 461
* Less than R1 000.

Please refer to pre-listing statement for details of the minority shareholders who received shares as part of the restructuring (Step 4 13 in the
overview of the restructuring).
2
Please refer to pre-listing statement for details of the management bonus settlement agreement (Section 20.1).
3
Please refer to pre-listing statement for details (step 3 in the overview of the restructuring).
1
page 158

as at 31 May 2009
11.

Forfeitable shares
During the year, forfeitable shares were granted to executive directors and qualifying employees. The participant will forfeit
the forfeitable shares if he/she ceases to be an employee of an employer company before the vesting date or if the specified
performance condition has not been met, unless otherwise specified by the rules or determined by the board. In the event that the
participant is not in the employ of the group, or the performance conditions are not met, then the shares allocated to the participant
will be forfeited and will be sold on the open market by the escrow agent. The proceeds will be returned to the participating employer.
The release of forfeitable shares will be subject to the achievement of a specified performance condition. The performance condition
for the first award grant of forfeitable shares is:
30% of shares will vest when the company core HEPS at the end of the performance period, being May 2010, exceeds the core
HEPS per ordinary share as at the beginning of the performance period, being May 2008, by the percentage change in the CPI
index over the performance period, plus 20% (threshold performance criteria);
100% of shares will vest when the core HEPS at the end of the performance period, being May 2010, exceeds the core HEPS per
ordinary share as at the beginning of the performance period, being May 2008, by the percentage change in the CPI index over the
performance period, plus 30% (target performance criteria);
Performance below the threshold performance criteria will result in the forfeitable award not vesting, unless otherwise determined
by the board.
Movements in the number of forfeitable shares outstanding during the year are as follows:
At beginning of the year

Shares forfeited during the year
Shares vested during the year
At end of year
Grant date
Vesting date
28 November 2008
26 February 2009
1 September 2010
1 September 2010
Number of
shares
518 630
1 404 407
Fair value of grant

R000
2 593
7 022
1 923 037
9 615
The fair value of the shares is based on the value paid for the shares on the open market at grant date.
The total number of forfeitable shares issued to executive directors during the period is 1 148 343.
12.
2009
R000
2008
R000
159
11 666
1 572
991
2 753
15 630
1 542
3 890
14 388
23 815

Trade payables
Accruals
Sundry creditors
VAT
page 159
2009
R000
13.
Operating loss
The following items have been charged/(credited), in arriving at operating loss:
Management fees received
Consulting fees
Foreign exchange loss
Impairment of loans
Profit on disposal of property, plant and equipment
Insurance
Legal fees
Operating lease rentals premises
Overseas travel
Security
Repairs and maintenance
Audit fees
14.
(88 871)
9 718
393
513
(7)
1 716
2 644
1 625
7 435
541
1 939
47
3 403
(43 268)
114
730
3 365
988
282
717
3 724
156
16
2 267
(130)
(5 429)
(2 631)
(1 075)
(5 559)
(3 706)
Finance (income)/costs
Interest received
Bank
Loans
Interest paid
Bank
120
120
Net finance income
15.
2008
R000
11
11
(5 439)
(3 695)
2 962
2 962
1 214
1 214
(137)
(137)
2 962
1 077
265
74
(224)
(62)
2 888
(118)
1 257
2 962
1 077
Taxation
Current tax
current year
Deferred tax
current year
Tax rate reconciliation

Net profit/(loss) before tax
Tax at 28%
Adjusted for:
income not taxable
expenditure not deductible
page 160

as at 31 May 2009
16.
(5 174)
(3 919)
1 103
739
513
(7)
1 939
32
48
3 363
32 022
(9 427)
(912)
(34 878)
23 815
(476)
20 796
(12 015)
1 214
800
1 214
(1 214)
2 014
1 392
666
1 265
2 057
2 058
3 322
Taxation paid
Balance outstanding at beginning of year
Taxation charge
Balance due/(outstanding) at end of year
18.
2008
R000

Reconciliation of operating profit to cash flows
from operating activities:
Operating loss
Adjustments for:
Depreciation of property, plant and equipment
Amortisation on intangible assets
Impairment of loan
Profit on disposal of property, plant and equipment
Changes in working capital
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Increase in loans receivable
17.
2009
R000
Commitments
Future operating lease charges for:
Premises
page 161
19.
2009
R000
2008
R000
27
28
351
2 987
253
392
1 261
469
68
1 060
16
60
324
814
436
2 160
1 395
1 540
338
600
90
60
1 536
580
1 954
150
75 560
60
465
540
210
20
174
720
330
160
350
20
195
210
39 597
370
99
1 200
1 566
717
Related party transactions

Related party relationships
For details of subsidiaries, associates and joint ventures refer to note 31 in the group notes.
For details of the companys directors, refer to the Directors report.
ZOK Cellular (Proprietary) Limited.
Moneyline 311 (Proprietary) Limited are related parties due to the company having common
directorships.
For details of the shareholdings in the company, refer to the Directors report.
The following transactions were carried out with related parties
Sales to related parties
Purchases from related parties
Interest received from related parties
Content Connect Australia (Proprietary) Limited
Management fees received from related parties
Blue Label USA, LLC
Comm Express Service SA (Proprietary) Limited
Management fees paid to related parties
Rent paid to related parties
1 245
page 162

audited results as at 31 May 2009
19.
2009
R000
2008
R000
1 962
35 112
120
318
108
595
713
50 540
38
739
228
719
2 713
6 293
149
149 315
735
28
32 996
2 745
861 277
942
57
976
1 806
1 055
120
13 539
7 120
100 340
30 377
3 216
1 018 903
815
48 000
866
48 000
436
21
338
108
159
6
11
31 920
113
42
2
108
400
866

Answers Direct (Proprietary) Limited
Blue Label Data Solutions (Proprietary) Limited
Little River 181 Trading (Proprietary) Limited
Loans from related parties
Amounts due from related parties
Blue Label USA, LLC
Comm Express Service SA (Proprietary) Limited
Amounts due to related parties
Purchase of property, plant and equipment from related party
Basis of transactions
All transactions with related parties are conducted on an arms length basis
page 163
ANNEXURE 1
Reconciliation between group net profit and group pro forma net profit:
The table below sets out the unaudited pro forma information of BLT. The unaudited group pro forma income statement has been prepared
for illustrative purposes only.
Revenue
Other income
Changes in inventories of finished goods
Other expenses
Operating profit
Finance income
Finance expense
Share loss of associates
Profit for the period before taxation
Taxation
Net profit
Reconciliation between net profit and core net profit attributable to
equity holders:
Net profit
Management bonus settlement net of tax
Amortisation on intangibles raised through business combinations
net of tax
Core net profit
Net profit attributable to:
Minority interest
Core net profit attributable to:
Minority interest
Earnings per share on profit attributable to equity holders (cents)*
Basic
Headline
Core
Number of ordinary shares in issue
31 May 2008
Actual(1)
Audited
R000
Restructuring
and
acquisitions(2)
R000
Cash
effects(3)
R000
31 May 2008
Pro forma(4)
Unaudited
R000
12 545 471
69 545
(11 875 606)
(265 003)
(58 670)
(146 240)
269 497
193 281
(147 704)
(17 441)
297 633
(89 841)
207 792
385 138
(1 403)
(335 901)
(10 626)
(15 005)
(18 446)
3 757
(215)
(1 433)
(2 220)
(111)
(1 785)
(1 896)
46 404
42 533
88 937
(24 903)
64 034
12 930 609
68 142
(12 211 507)
(275 629)
(73 675)
(164 686)
273 254
239 470
(106 604)
(19 661)
386 459
(116 529)
269 930
180 891
57 600
24 498
64 034
269 423
57 600
22 937
9 000
270 428
207 792
180 891
26 901
301 409
270 428
30 981
11 982
36 480
(1 896)
24 498
(26 394)
7 650
36 480
(28 830)
64 034
64 034
64 034
64 034
64 034
34 919
9 000
370 942
269 930
269 423
507
373 093
370 942
2 151
30,65
30,26
45,81
766 360 894
590 263 513
35,16
34,86
48,40
766 360 894
766 360 894
*There are no potentially dilutive equity instruments in issue
Notes
1. Extracted from the audited group income statement of BLT for the year ended 31 May 2008.
2. Represents the effects of the group restructure based on the assumption that minority acquisitions occurred on 1 June 2007.
The following subsidiaries are therefore consolidated as wholly owned for the full year:
The Prepaid Company
Kwikpay
Matragon
Blue Label One
Similarly, the following associates are consolidated as subsidiaries for the full year:
72% Africa Prepaid Services
100% Virtual Voucher
100% Cellfind SA
100% Datacel
100% House of Business Solutions
3. Represents the positive impact on finance income and expense assuming cash raised on listing was received 1 June 2007.
4. Represents the pro forma unaudited group income statement of BLT on the assumption that the restructuring, listing and minority acquisitions were effective
1 June 2007.
5. All adjustments are expected to have a continuing effect on BLT.
page 164
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the second annual general meeting of the shareholders of Blue Label Telecoms will be held in the Boardroom,
Blue Label Telecoms Corporate Offices, 75 Grayston Drive, Sandton, on Wednesday, 25 November 2009 at 10:00 to conduct the following
business:
1. To receive, consider and adopt the annual financial statements of the company and of the Blue Label Telecoms group for the year ended
31 May 2009, including the directors report and auditors report thereon.
2. To re-elect (by separate and stand-alone resolutions) the following directors who retire by rotation, but being eligible for re-election, have
offered themselves for re-election: Mr GD Harlow, Ms RJ Huntley and Mr NN Lazarus SC.
Resolved that Mr GD Harlow who is required to retire by rotation as a director of the company at this annual general meeting and who
is eligible for re-election and who has offered himself for re-election, be and is hereby reappointed as a director of the company with
immediate effect.
Resolved that Ms RJ Huntley who is required to retire by rotation as a director of the company at this annual general meeting and who
is eligible for re-election and who has offered herself for re-election, be and is hereby reappointed as a director of the company with
immediate effect.
Resolved that Mr NN Lazarus SC who is required to retire by rotation as a director of the company at this annual general meeting and
who is eligible for re-election and who has offered himself for re-election, be and is hereby reappointed as a director of the company
with immediate effect.
Abbreviated curriculum vitae in respect of each director offering himself/herself for re-election are contained on pages 17 and 18 of this
annual report.
3. To reappoint PricewaterhouseCoopers Inc as independent registered auditors of the company for the ensuing year and to authorise
the directors to determine the remuneration of the auditors for the past years audit as reflected in note 18 of the annual financial
statements. The individual registered auditor who will undertake the audit during the financial year ending 31 May 2010 is Mr EJ Gerryts.
To consider and, if deemed fit, pass with or without modification the following special resolution and ordinary resolutions.
4. Special resolution number 1 General Authority to Repurchase Shares
Resolved that the company and any of its subsidiaries be and they are hereby authorised, by way of a general approval, to acquire
ordinary shares issued by the company, in terms of section 85 and 89 of the Companies Act, No 61 of 1973, as amended (the
Companies Act), and in terms of the JSE Limited (the JSE) Listings Requirements, being that:
any such acquisition of ordinary shares shall be effected through the order book operated by the JSE trading system and done without
any prior understanding or arrangement with the counterparty;
this general authority shall be valid until the companys next annual general meeting, provided that it shall not extend beyond
15 (fifteen) months from the date of passing of this special resolution number 1;
an announcement will be published as soon as the company or any of its subsidiaries have acquired ordinary shares constituting, on a
cumulative basis, 3% of the number of ordinary shares in issue and for each 3% in aggregate of the initial number acquired thereafter,
in compliance with paragraph 11.27 of the JSE Listings Requirements;
acquisition of shares in aggregate in any one financial year may not exceed 20% of the companys ordinary issued share capital as at
the date of passing of this special resolution number 1;
ordinary shares may not be acquired at a price greater than 10% above the weighted average of the market value at which such
ordinary shares are traded on the JSE as determined over the five business days immediately preceding the date of repurchase of
such ordinary shares;
the company has been given authority by its articles of association;
at any point in time, the company and/or its subsidiaries may only appoint one agent to effect any repurchase;
the company and/or its subsidiaries undertake that they will not enter the market to repurchase the companys shares until the
companys sponsor has provided written confirmation to the JSE regarding the adequacy of the companys working capital in
accordance with Schedule 25 of the JSE Listings Requirements;
the company remains in compliance with the shareholder spread requirements of the JSE Listings Requirements; and
the company and/or its subsidiaries not repurchasing any shares during a prohibited period, as defined in the JSE Listings
Requirements unless a repurchase programme is in place, where dates and quantities of shares to be traded during the prohibited
period are fixed and full details of the programme have been disclosed in an announcement over the Securities Exchange News Service
(SENS) prior to the commencement of the prohibited period.
page 165
Before entering the market to effect the general repurchase, the directors, having considered the effects of the repurchase of the
maximum number of ordinary shares in terms of the aforegoing general authority, will ensure that for a period of 12 (twelve) months
after the date of the notice of annual general meeting:
the company and the Blue Label Telecoms group will be able, in the ordinary course of business, to pay its debts;
the consolidated assets of the company and the Blue Label Telecoms group, fairly valued in accordance with International Financial
Reporting Standards, will exceed the liabilities of the company and the Blue Label Telecoms group;
the company and the Blue Label Telecoms groups ordinary share capital, reserves and working capital will be adequate for ordinary
business purposes; and
the working capital of the company and the Blue Label Telecoms group will be adequate for the purposes of the business of the
company and the Blue Label Telecoms group.
The following additional information, some of which may appear elsewhere in the annual report of which this notice forms part, is provided
in terms of the JSE Listings Requirements for purposes of the general authority:
directors and management pages 16 to 19
major beneficial shareholders page 68
directors interests in shares pages 61, 92 and 98
share capital of the company page 157
Litigation statement
In terms of paragraph 11.26 of the JSE Listings Requirements, the directors, whose names appear on pages 16 to 19 of this annual
report of which this notice forms part, are not aware of any legal or arbitration proceedings that are pending or threatened, that may
have or had in the recent past, being at least the previous 12 (twelve) months, a material effect on the Blue Label Telecoms groups
financial position.
Directors responsibility statement
The directors, whose names appear on page 14 of this annual report confirm that to the best of their knowledge and belief:
the statements made in the annual report are true and correct;
there are no facts which have been omitted which would make any statements false or misleading, and that all reasonable enquiries to
ascertain such facts have been made;
the annual report contains all information required by law and the JSE Listings Requirements.
Material change
Other than the facts and developments reported on in this annual report, there have been no material changes in the affairs or financial
position of the company and its subsidiaries since the date of signature of the audit report and up to the date of this notice.
The reason for and effect of this special resolution is to grant the directors of the company or its subsidiaries a general authority in terms
of the Companies Act and the JSE Listings Requirements for the repurchase by the company or a subsidiary company of the company, of
the companys shares.
The directors have no specific intention, at present, for the company or its subsidiaries to repurchase any of the companys shares but
consider that such a general authority should be put in place should an opportunity present itself to do so during the year.
page 166
NOTICE OF ANNUAL GENERAL MEETING
continued
5. Ordinary resolution number 1 Non-executive directors remuneration

Resolved that the fees payable to the non-executive directors for the ensuing 12-month period be set as follows:
Current fee
per meeting
Proposed
fee per
meeting*
Proposed
capped fee
per annum**
R700 000
R30 000
R32 550
R162 750
chairman
R41 666
R45 208
R180 832
member
R25 000
R27 125
R108 500
chairman
R33 333
R36 166
R144 664
member
R20 000
R21 700
R86 800
chairman
R25 000
R27 125
R217 000
member
R15 000
R16 275
R130 200
chairman
R25 000
R27 125
R108 500
member
R15 000
R16 275
R65 100
chairman
R25 000
R27 125
R108 500
member
R15 000
R16 275
R65 100
Services as directors
chairman of the board
board members
Audit, risk and compliance committee
Remuneration committee
Investment committee
Transformation committee
Ad hoc committee
* In the event that there are fewer meetings as envisaged, the member shall receive the fee in respect of the number of meetings attended.
** In the event that there are more meetings per year than initially planned, directors fees will be paid only up to the cap.
The annual fee paid to the chairman in respect of the year ended 31 May 2009 amounted to R600 000.
6. Ordinary resolution number 2 Control of authorised but unissued shares

Resolved that a general authority be granted to the directors to allot and issue the unissued ordinary shares of the company subject to
the following limitations:
the authority shall be valid until the date of the next annual general meeting of the company, provided it shall not extend beyond
15 (fifteen) months from the date of this annual general meeting.
Issues in terms of this authority will not, in any financial year, in aggregate exceed 3% of the number of ordinary shares in the
companys issued share capital as at 31 May 2009.
Issues in terms of this authority shall be subject to the provisions of the Companies Act and the JSE Listings Requirements.
7. Ordinary resolution number 3 General authority to issue shares for cash
Resolved that subject to the general authority proposed in terms of ordinary resolution number 2 above and in terms of the JSE Listings
Requirements, shareholders grant the directors a general authority for the allotment and issue of ordinary shares in the capital of the
company for cash as and when suitable situations arise, subject to the following limitations:
any issue of shares shall be to public shareholders as defined by the JSE Listings Requirements;
this authority shall be valid until the date of the next annual general meeting of the company, provided it shall not extend beyond
15 (fifteen) months from the date of this annual general meeting;
a paid press announcement giving details, including the impact on net asset value and earnings per shares, will be published at the
time of any such allotment and issue of shares representing, on a cumulative basis within one year, 3% or more of the ordinary number
of issued shares prior to any such issues;
page 167
that issues in the aggregate in any one financial year shall not exceed 3% of the ordinary shares in the issued share capital of the
company from time to time.
in determining the price at which an allotment and issue of shares will be made in terms of this authority, the maximum discount
permitted will be 10% of the weighted average traded price of the ordinary shares over the 30 days prior to the date that the price of
issue is determined or agreed by the directors of the company.
In terms of the JSE Listings Requirements, the approval of 75% majority of the votes cast by shareholders present or represented by
proxy at this annual general meeting will be required for ordinary resolution number 3 to become effective.
8. Ordinary resolution number 4 Signature of documents
Resolved that any one director or the secretary of the company be and is hereby authorised to do all such things and sign all documents
and take all such action as they consider necessary to implement the resolutions set out in the notice convening this annual general
meeting at which this ordinary resolution will be considered.
By order of the board
E Viljoen
Group company secretary
26 October 2009
VOTING AND PROXIES

Shareholders may appoint a proxy to attend, speak and, in respect of the applicable resolution(s), vote in their stead. Shareholders holding
dematerialised shares but not in their own name must furnish their Central Securities Depository Participant (CSDP) or broker with their
instructions for voting at the annual general meeting should they wish to vote. If your CSDP or broker, as the case may be, does not obtain
instructions from you, it will be obliged to act in terms of your mandate furnished to it, or if the mandate is silent in this regard, to complete
the relevant form of proxy attached. Unless you advise your CSDP or broker, in terms of the agreement between you and your CSDP or
broker by the cut-off time stipulated therein, that you wish to attend the annual general meeting or send a proxy to represent you at the
annual general meeting, your CSDP or broker will assume you do not wish to attend the annual general meeting or send a proxy. If you wish
to attend the annual general meeting or send a proxy, you must request your CSDP or broker to issue the necessary letter of representation
to you.
Shareholders holding dematerialised shares in their own name, or who hold shares that are not dematerialised, and who are unable to
attend the annual general meeting and wish to be represented thereat, must complete the relevant form of proxy attached in accordance
with the instructions therein and lodge it with, or mail it to, the transfer secretaries.
Forms of proxy should be forwarded to reach the companys transfer secretaries at the address given below by not later than 10:00 on
Tuesday, 24 November 2009. The completion of a form of proxy will not preclude a shareholder from attending the annual general meeting.
Transfer secretaries
Registered office
Computershare Investor Services (Pty) Limited

70 Marshall Street
Johannesburg
2001
(PO Box 61051, Marshalltown, 2107)
75 Grayston Drive
Cnr Benmore Road
Morningside Ext 5
Sandton
2196
(PO Box 652261, Benmore, 2010)
page 168
EXPLANATORY NOTES TO RESOLUTIONS FOR CONSIDERATION AT

THE ANNUAL GENERAL MEETING
1. Adoption of annual financial statements

The directors are required to present to shareholders at the annual general meeting the annual financial statements incorporating the
directors report and the report of the auditors, for the year ended 31 May 2009. These are contained within the annual report.
2. Re-election of directors
In accordance with the articles of association of the company, one third of the directors are required to retire at each annual general
meeting and may offer themselves for re-election. Messrs GD Harlow, NN Lazarus SC and Ms RJ Huntley retire by rotation at the annual
general meeting in accordance with article 15.1 of the articles of association of the company, and have offered themselves for re-election.
Abbreviated curriculum vitae in respect of each director offering himself/herself for re-election are contained on pages 17 and 18 of this
annual report.
The Blue Label Telecoms board of directors recommends to shareholders the re-election of the directors who retire by rotation.
3. Reappointment of independent auditors and determination of auditors fees
PricewaterhouseCoopers Inc. has expressed its willingness to continue in office and resolution number 3 proposes the reappointment of
that firm as the companys auditors until the next annual general meeting. The resolution also gives authority to the directors to fix the
remuneration of the auditors, which fee determination will be reviewed and recommended by the Audit, Risk and Compliance Committee.
In accordance with section 270A of the Corporate Laws Amendment Bill, the Audit, Risk and Compliance Committee has satisfied itself
that the proposed auditor, PricewaterhouseCoopers Inc, is independent of the company.
4. Special resolution number 1 General authority to purchase shares
The effect of this special resolution and its rationale is to grant the company and any of its subsidiaries a general authority in terms of the
Companies Act 61 of 1973, as amended (the Companies Act), for the acquisition by the company and any of its subsidiaries of the companys
shares, which general approval shall be valid until the earlier of such next annual general meeting of the company or its variation or revocation by
special resolution at any subsequent general meeting of the company, provided that the general authority shall not extend beyond 15 months from
the date of this annual general meeting.
The directors are of the opinion that the granting of this general authority is in the best interest of the company as it allows the company and any
of its subsidiaries to repurchase the securities issued by the company through the order book of the JSE, should the market conditions and price
justify such action.
5. Ordinary resolution number 1 Non-executive directors remuneration
Shareholders are requested to approve the fees payable to the companys non-executive directors for the period 1 June 2009 to
31 May 2010. The proposed fees have been reviewed by the Remuneration and Nomination Committee and are recommended by
the board of directors. Particulars of the process followed by the Remuneration and Nomination Committee are contained in the
Remuneration Report on page 61 of this annual report.
6. Ordinary resolutions numbers 2 and 3 Control of authorised but unissued shares and general authority to issue shares for cash
The existing authorities granted by the shareholders at the previous annual general meeting held on 12 November 2008 expire at the
following annual general meeting unless renewed. The authorities granted under these resolutions are subject to the Companies Act
and the JSE Listings Requirements and will not, in any financial year, exceed in aggregate 22 990 825 ordinary shares, being 3% of the
number of ordinary shares in the companys issued share capital as at 31 May 2009.
Ordinary resolution numbers 2 and 3 respectively require a 50% and 75% majority of the votes, cast by shareholders present or
represented by proxy at the annual general meeting to become effective.
The directors are of the opinion that the granting of this general authority is in the best interests of the company as it allows the company
to take advantage of business opportunities that may arise in the future.
page 169
PROXY FORM
Blue Label Telecoms Limited

(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/06)
Share code: BLU ISIN: ZAE000109088
(Blue Label Telecoms or the company)
TO BE COMPLETED BY CERTIFICATED SHAREHOLDERS AND DEMATERIALISED SHAREHOLDERS WITH OWN NAME REGISTRATION ONLY.
For completion by registered members of Blue Label Telecoms unable to attend the second annual general meeting of the company to be
held at 10:00 on Wednesday, 25 November 2009 at the Blue Label Telecoms Corporate Offices, 75 Grayston Drive, Sandton or at any
adjournment thereof,
I/We
(Please print)
of address
Being the registered holder(s) of
ordinary shares in the capital of the company do hereby appoint
1.
2.
the chairman of the annual general meeting as my/our proxy to act for me/us and on my/our behalf at the second annual general meeting
of the company which will be held on Wednesday, 25 November 2009 at 10:00 for the purpose of considering and, if deemed fit, passing,
with or without modification, the resolutions to be proposed thereat and at any adjournment thereof, and to vote for and/or against the
resolutions and/or abstain from voting in respect of the shares registered in my/our name/s, in accordance with the following instructions:
For
Against
Abstain
1. Adoption of annual financial statements

2. Re-election of directors
2.1 GD Harlow
2.2 RJ Huntley
2.3 NN Lazarus SC
3. Reappointment of independent auditors
4. Special resolution: General authority to repurchase shares
5. Ordinary resolution number 1: Approval of non-executive director fees
6. Ordinary resolution number 2: Control of authorised but unissued shares
7. Ordinary resolution number 3: General authority to issue shares for cash
8. Ordinary resolution number 4: Signature of documents
Please indicate with an X in the appropriate spaces provided above how you wish your vote to be cast. If no indication is given, the proxy will
be entitled to vote or abstain as he/she deems fit.
Signed at
Signature
Assisted by me (where applicable)
on
2009
page 170
NOTES TO THE PROXY FORM
1. A form of proxy is only to be completed by those ordinary shareholders who are:

a. holding shares in certificated form; or
b. recorded on the sub-register in electronic form as own name.
2. Shareholders holding dematerialised shares (without own name registrations) who wish to attend the annual general meeting must
request their Central Securities Depository Participant (CSDP) or broker to provide them with a letter of representation or, alternatively,
instruct their CSDP or broker to vote by proxy on their behalf in terms of the agreement entered into with their CSDP or broker.
3. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholders choice in the space provided
and any such proxy need not be a shareholder of the company. Should a proxy not be specified, this will be exercised by the chairman of
the annual general meeting.
4. An ordinary shareholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each ordinary share held.
5. If a shareholder does not indicate on the form of proxy that his/her proxy is to vote in favour of, against any resolution or to abstain
from voting, or should any further resolution(s) or any amendment(s) which may be properly put before the annual general meeting be
proposed, the proxy shall be entitled to vote as he/she thinks fit.
6. Documentary evidence establishing the authority of a person signing the proxy form in a representative capacity must be attached to
this form, unless previously recorded by the company or waived by the chairman of the annual general meeting.
7. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
8. The chairman of the annual general meeting may reject or accept a form of proxy which is completed and/or received other than in
accordance with these notes.
9. This proxy form should be completed and returned to the companys transfer secretaries, Computershare Investor Services
(Pty) Limited, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), so as to reach them by not later than
Tuesday 24 November 2009 at 10:00.
ADDITIONAL FORMS OF PROXY ARE AVAILABLE FROM THE TRANSFER SECRETARIES ON REQUEST
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Annual Report 2009

Its our time...

Annual Report 2009

Blue Label Telecoms Limited

This Annual Report can be viewed on our website under the

Governance & sustainability

Chief financial officers report

How does Blue Label Telecoms add value to its

VISION, MISSION AND VALUES

Valuing our customers as

OUR MARKETS AND BRANDS...

Distribution of prepaid secure electronic tokens of value (e-tokens) to the

STRATEGIC AND OPERATIONAL

International expansion into Nigeria, Mexico,

Launch of mibli powered by Microsoft

Expansion of the bouquet of products and

Headline earnings per share*

Cash generated from operating

BLUE LABEL TELECOMS

South African distribution

* 100% owned by Blue Label Telecoms unless otherwise stated

Bricks and mortar

FROM LEFT TO RIGHT

*Not present at time of photo

BOARD OF DIRECTORS continued

Laurence (Larry) Nestadt

Independent non-executive chairman

Joint chief executive officer

Larry has experienced a long and successful corporate

BCom (WITS), BCompt (Hons) (UNISA), CA(SA)

Brett has an impressive entrepreneurial history having

BAcc (UNISA), CA(SA)

Independent non-executive director

Independent non-executive director

BBusSci (Hons) (UCT), FCMA, CA(SA)

BCom (Zululand), BCompt Hons/CTA (UNISA), CA(SA)

Gary matriculated in 1975 from the South African College

Joe Mthimunye qualified as a Chartered Accountant in 1993.

Gary was appointed group chief executive officer of Unihold

Independent non-executive director

Herbert Cedrik Theledi

BCom (UNIN), HDip Ed (WITS)

Lucy (Pani) Manage Tyalimpi

BCom (Hons) (UNISA), MBL (UNISA), Diploma in Investment

BOARD OF DIRECTORS continued

Reitumetse Jackie Huntley

BProc, LLB (WITS)

Sidney served on the board of directors for Ellerine Holdings

BSc (Economics), Minor in Engineering from the University

Jackie is a practising attorney with the law firm Mkhabela

Panagiotis (Pedro) Christofides

of integrated core technology solutions for the group, with

Blue Label Telecoms continues to be well-positioned to

developed markets now saturated the developing

I am pleased to report on the performance of

world will account for most of the growth in

Blue Label Telecoms Limited for the year ended

mobile penetration in the coming years and

predicts the number of mobile phones to reach

Despite operating in a very difficult global

The company aims to deliver prepaid products

year, the groups product and service offerings

and services to the unbanked and badly banked.

showed resilience to these adverse conditions,