Blue Label Telecoms : Audited Results for year ended 31 May 2012

AUDITED RESULTS FOR THE YEAR ENDED 31 MAY 2012

1"4%

increase in revenue to

R18,7 billion

1"13% increase in gross profit to R1,2 billion

1"26% increase in EBITDA to R750 million*

1"40%

increase in headline earnings per share to 64,65 cents*

R458 million*

headline earnings

R528 million cash flows from operating activities

R392 million

12% share buy-back

1"64%

increase in dividend to

23 cents per share

SUMMARISED GROUP STATEMENT OF FINANCIAL

POSITION

as at 31 May 2012 2011

Property, plant and equipment 112 188 139 747
Intangible assets and goodwill 505 698 433 513
Investment in associates and joint ventures 357 471 239 997
Loans receivable 1 435 - Starter pack assets 4 501 20 361
Deferred taxation 11 783 18 047

Financial assets at fair value through profit and loss - 10
Starter pack assets 3 191 16 777
Inventories 539 221 1 012 594
Loans receivable 30 049 32 370
Trade and other receivables 1 387 650 914 164
Current tax assets 7 103 14 330
Cash and cash equivalents 1 975 242 2 226 697

*Includes a once off income receipt of R79,4 million.

SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY

for the year ended 31 May Share capital, Transaction with

Net profit/(loss) for the year - 431 448 - - - - (46 477) 384 971
Comprehensive loss - - - (910) - - (6 347) (7 257)

Treasury shares purchased (8 935) - - - - - - (8 935) Equity compensation benefit scheme shares vested 4 549 - - - - (4 549) - - Equity compensation benefit movement - - - - - 10 903 229 11 132
Share of equity movements in associates - - - - - 942 - 942

Dividends - (91 457) - - - - (950) (92 407) Share based payment movement - - - - - (234) 234 - Non-controlling interest disposed of during the year - - - - 5 861 - 5 620 11 481

Net profit/(loss) for the year - 438 104 - - - - (18 630) 419 474
Comprehensive profit - - - 39 140 - - 2 313 41 453

Treasury shares purchased (16 095) - - - - - - (16 095) Shares acquired (392 378) - - - - - - (392 378) Equity compensation benefit scheme shares vested 1 558 - - - - (1 517) (41) -

Equity compensation benefit movement - - - - - 21 929 197 22 126

Share capital, share premium and treasury shares
Restructuring reserve
Other reserves
Transaction with non-controlling interest reserve
Share-based payment reserve
Retained earnings
Non-controlling interest

Deferred taxation 21 598 22 196
Interest-bearing borrowings - 15 897
Trade and other payables 29 026 -

Trade and other payables 1 931 204 2 046 773
Provision 6 260 8 676
Current tax liabilities 21 041 22 326
Bank overdraft - 527
Non-interest-bearing borrowings 12 017 - Current portion of interest-bearing borrowings - 3 458

Liabilities of disposal group classified as held-for-sale - 13 872

Share of equity movements in associates - - - - - (596) - (596) Dividends - (107 044) - - - - (2 945) (109 989) Transaction with non-controlling interest reserve movement - - - - (566) - - (566) Non-controlling interest disposed of during the year - - - - - - (4 406) (4 406)

SEGMENTAL SUMMARY

for the year ended 31 May Total South Africa International Technology Mobile Solutions Corporate

Total segment revenue 30 173 943 29 855 365 17 429 28 405 96 084 176 660 -

Inter-segmental revenue (11 458 553) (11 432 351) - (11 731) (8 840) (5 631) -
Revenue 18 715 390 18 423 014 17 429 16 674 87 244 171 029 -

EBITDA 750 482 801 746 (15 901) (64 258) 97 359 38 927 (107 391)

Net profit/(loss) for the year attributable to equity holders of the parent 438 104 587 179 (30 277) (83 144) 69 270 21 259 (126 183)
- From continuing operations 443 597 587 179 (24 784) (83 144) 69 270 21 259 (126 183)
- From discontinued operations (5 493) - (5 493) - - - -
Amortisation on intangibles raised through business combinations net of tax and non-controlling
interest - continuing operations 17 693 8 716 3 841 379 4 692 65 -

Core net profit/(loss) for the year attributable to equity holders of the parent 455 797 595 895 (26 436) (82 765) 73 962 21 324 (126 183)
- From continuing operations 461 290 595 895 (20 943) (82 765) 73 962 21 324 (126 183)
- From discontinued operations (5 493) - (5 493) - - - -

Total assets 4 935 532 4 279 757 337 494 84 304 62 278 137 997 33 702
Net operating assets/(liabilities) 1 971 934 2 032 934 (10 126) (3 703) 5 247 7 385 (59 804)

Total segment revenue 30 224 202 29 954 525 30 252 22 902 94 121 122 402 -

Inter-segmental revenue (12 159 630) (12 132 920) (998) (6 082) (15 505) (4 125) -

Revenue 18 064 572 17 821 605 29 254 16 820 78 616 118 277 -

SUMMARISED GROUP STATEMENT OF

COMPREHENSIVE INCOME

for the year ended 31 May 2012 2011

Revenue 18 715 390 18 064 572
Other income 97 412 7 197

Change in inventories of finished goods (17 507 468) (16 996 939) Employee compensation and benefit expense (327 830) (263 360) Depreciation, amortisation and impairment charges (91 557) (145 985) Other expenses (227 022) (213 738)

EBITDA 597 732 711 767 (8 683) (61 766) 19 347 18 731 (81 664) Net profit/(loss) for the year attributable to equity holders of the parent 431 448 562 538 60 133 (85 312) (12 627) 5 033 (98 317)
- From continuing operations 337 547 562 538 (33 768) (85 312) (12 627) 5 033 (98 317)
- From discontinued operations 93 901 - 93 901 - - - -
Amortisation on intangibles raised through business combinations net of tax and non-controlling

interest - continuing operations 24 975 8 933 1 763 380 11 871 2 028 - Core net profit/(loss) for the year attributable to equity holders of the parent: 456 423 571 471 61 896 (84 932) (756) 7 061 (98 317)
- From continuing operations 362 522 571 471 (32 005) (84 932) (756) 7 061 (98 317)
- From discontinued operations 93 901 - 93 901 - - - -

Total assets 5 068 607 4 362 116 386 561 89 876 80 899 138 403 10 752

Net operating assets/(liabilities) 2 135 182 2 004 900 125 291 12 535 10 901 21 674 (40 119)

Finance expense (181 081) (115 845) Finance income 170 995 146 429

Share of losses from associates and joint ventures (19 835) (2 757)

Taxation (194 075) (152 176)

Net profit from continuing operations 434 929 327 398

Net (loss)/profit for the year from discontinued operations (15 455) 57 573

DISPOSAL OF SUBSIDIARY

Shares in the following subsidiary were disposed of during the year ended 31 May 2012

SharedPhone International Proprietary Limited 31-Jan-12 50,1

Details of the total net assets disposed and the resulting loss on disposal is as follows: Total

HEADLINE EARNINGS

for the year ended 31 May 2012 2011

Net profit attributable to equity holders of the parent 438 104 431 448
Net profit on disposal of property, plant and equipment (65) (109) Net loss/(profit) on disposal of subsidiaries 3 014 (6 759) Loss on disposal of associate 3 025 - Gain on remeasuring retained interest in Blue Label Mexico due to loss of control - (143 365) Impairment of intangible assets and property, plant and equipment 9 354 20 972
Impairment of goodwill 4 684 27 985

Impairment of available-for-sale financial asset - 15 056

Exchange profit/(loss) on translation of equity loans 5 395 (4 926) Exchange profit/(loss) on translation of foreign operations 36 058 (6 550) Foreign currency translation reserve recycled to profit or loss - 4 219

Total proceeds 3 907
Fair value of net assets disposed of 6 921

Loss on disposal (3 014)

Profit on disposal of investment (361) -
Foreign currency translation reserve reclassified to profit or loss - 4 219

Headline earnings 457 755 349 447

Headline earnings per share (cents) 64,65 46,20

COMMENTARY

FINANCIAL REVIEW

- From continuing operations 443 597 337 547
- From discontinued operations (5 493) 93 901

- From continuing operations (8 668) (10 149)
- From discontinued operations (9 962) (36 328)

Equity holders of the parent 477 244 430 538
Non-controlling interest (16 317) (52 824)
Cash and cash equivalents 1 406
Property, plant and equipment 278
Intangible assets 25
Inventories 9 422
Receivables 3 978
Deferred tax asset 476
Current tax assets 69
Borrowings (5 958) Payables (868)

Fair value of subsidiary disposed of 8 828
Non-controlling interest (4 406) Goodwill 2 499
Revenue increased by 4%. Gross profit margins increased from 5,91% to 6,45%. EBITDA increased by 26%. EBITDA included the once off other income receipt of R79,4 million. The disclosure of information regarding this receipt is restricted by a confidentiality agreement. Headline earnings per share increased by 40% from 46,20 cents to 64,65 cents. On exclusion of the above once off receipt, growth in headline earnings per share would have equated to 19%.
The SA Distribution segment remains the predominant contributor to group profitability. Prepaid airtime volumes continued to increase and commissions on the sale of prepaid electricity escalated by 39%. Compounded annuity revenue from starter pack bases added momentum to profitability.
On the international front, Oxigen Services India has become a profitable entity as a result of the addition of financial service offerings to its bouquet of products. Ukash has continued to make positive contributions to group profitability. Whilst Blue Label Mexico's ("BLM") footprint expansion initiatives have accelerated at a vast rate through the Grupo Bimbo distribution network, the costs of gearing up infrastructure in support of the roll out of point of sale devices resulted in BLM incurring additional losses in the past year.
Cash flows generated from operating activities amounted to R528 million. Following the repurchase of Microsoft's 12% interest in

the group for R392 million, as well as a dividend payment of R107 million and investing activities of R277 million, cash on hand at

- From continuing operations 62,65 44,63 Cash and cash equivalents of subsidiary disposed of 1 406
year end amounted to R1,98 billion.
The statement of financial position remains robust and liquid, reflecting accumulated equity of R2,91 billion.

FINANCIAL OVERVIEW

- From discontinued operations (0,78) 12,41

- From continuing operations 61,74 44,08
- From discontinued operations (0,78) 12,41

- From continuing operations 65,43 50,12
- From discontinued operations (0,78) (3,92)

Number of shares in issue 674 509 042 766 360 894
Number of shares excluding treasury and forfeitable share scheme shares 661 501 917 756 269 004
Weighted average number of shares 708 059 527 756 359 399
Diluted weighted average number of shares* 718 577 060 763 742 466
Cash inflow on disposal 2 501

ACQUISITION OF SUBSIDIARY

Shares in the following subsidiary were acquired during the year ended 31 May 2012

acquisition % acquired

Multiserv Proprietary Limited 1 January 2012 100

Details of the total net assets acquired and the resulting goodwill and reserves at

acquisition are as follows: Total

Total purchase consideration 8 933

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BASIS OF PREPARATION

The summarised group annual financial statements have been derived from the group annual financial statements and were prepared in accordance with the requirements of Section 8.57 of the JSE Limited Listings Requirements, the presentation and disclosure requirements of IAS 34 - Interim Financial Reporting and the AC500 standards as issued by the Accounting Practices Board. The group annual financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. A copy of the group annual financial statements can be obtained from the company's registered office.
This financial information has been prepared in accordance with the going concern principle, under the historical cost convention, except for certain financial and equity investments which have been measured at fair value. The accounting policies and methods

Fair value of net assets acquired 3 086

of computation are consistent with those used in the comparative financial information for the year ended 31 May 2011, with the

*Diluted earnings per share and diluted headline earnings per share is calculated by adjusting the number of shares in issue by the

Goodwill 5 847
exception of the standards that are effective for the first time in the current period. These have been disclosed in note 1 to the annual

number of shares that would be issued on vesting under the forfeitable share plan.

financial statements for the year ended 31 May 2012. These standards have not had a significant impact on the financial information.

In addition, the group uses core net profit as a non-IFRS measure in evaluating its performance. This supplements the IFRS measures

SUMMARISED GROUP STATEMENT OF CASH FLOWS

The assets and liabilites acquired through acquisition are as follows: Fair value at

Cash and cash equivalents 739
Property, plant and equipment 370
Intangible assets* 5 481
Loans receivable 2 091
Inventories 1 552
Receivables 1 212
Current tax assets 143
Deferred tax liability* (1 512) Borrowings (5 210)
disclosed. Core net profit is calculated by adjusting net profit for the year with the amortisation of intangible assets that arise as a consequence of the purchase price allocations completed in terms of IFRS 3(R): Business Combinations.
The summarised group annual financial statements should be read in conjunction with the group annual financial statements which include details of all related party transactions.

SEGMENTAL REPORT

SOUTH AFRICAN DISTRIBUTION

Revenue 18 423 014 17 821 605 601 409 3% Gross profit 1 048 893 925 398 123 495 13% EBITDA 801 746 711 767 89 979 13% Core net profit 595 895 571 471 24 424 4%
Payables (1 780)
for the year ended 31 May 2012 2011
Gross profit margin 5,69% 5,19%

Cash flows from operating activities 528 109 427 663
Cash flows from investing activities (276 991) (147 438) Cash flows from financing activities (519 984) (100 004)

Cash and cash equivalents at the beginning of the year 2 226 170 2 054 902
Translation difference 17 938 (8 953)

Fair value of net assets acquired 3 086

Cash and cash equivalents in subsidiary acquired 739
Total purchase consideration (8 933) Less loans acquired (5 068)

Cash outflow on acquisition (13 262)

*Intangible assets include R5,4 million of franchise fees which relates to the purchase price allocation performed in terms of IFRS3(R) - Business Combinations. Deferred tax to the value of R1,5 million was raised on recognition of this intangible asset. Multiserv Proprietary Limited was purchased with the objective of utilising their national footprint as a platform for the group's

strategy of marketing its products and services on a retail basis.
EBITDA margin 4,35% 4,00%

Prepaid airtime and annuity revenue generated from starter packs continued to be the major contributors to the increase in revenue of 3%. Commissions earned on the distribution of prepaid electricity amounted to R85 million (2011: R61 million) equating to revenue generated on behalf of utilities of R5,5 billion (2011: R3,4 billion). The group acts as an agent in the distribution of prepaid electricity.
Gross profit inclusive of IFRS adjustments increased by R123 million (13%), supported by margin increases from 5,19% to 5,69%. Commissions on prepaid electricity accounted for 0,11% of this margin increase. On exclusion of IFRS adjustments, margins increased from 5,09% to 5,28%.
The growth in EBITDA of 13% was inclusive of the effects of IFRS adjustments. On exclusion of these adjustments in both the comparative and current years, a more representative growth of R33 million was achieved, equating to a 5% increase.
www.bluelabeltelecoms.co.za

INTERNATIONAL DISTRIBUTION

Revenue 17 429 29 254 (11 825) (40%) Gross profit 2 574 8 052 (5 478) (68%) EBITDA (15 901) (8 683) (7 218) (83%)

Discontinued operations* (5 493) 93 901 (99 394) (106%) Africa Prepaid Services Nigeria (5 493) (40 813) 35 320 87%
Blue Label Mexico - 134 714 (134 714) (100%)

Share of losses from associates and joint ventures (19 182) (2 884) (16 298) (565%) Ukash 2 228 8 782 (6 554) (75%)

Oxigen Services India 4 616 (5 163) 9 779 189% Blue Label Mexico (24 873) (6 503) (18 370) (282%) Other (1 153) - (1 153) -
Core net loss from continuing operations (36 563) (41 609) 5 046 12%
- Equity holders of the parent (20 943) (32 005) 11 062 35%

- Non-controlling interests (15 620) (9 604) (6 016) (63%)
Core net (loss)/profit from discontinued operations (15 454) 57 573 (73 027) (127%)
- Equity holders of the parent (5 493) 93 901 (99 394) (106%)

- Non-controlling interests (9 962) (36 328) 26 366 73%

*Represents net (loss)/profit after taxation and non-controlling interests.

The decrease in revenue in the international segment was due to the disposal of SharedPhone International ("SPI"). The decline in EBITDA was due to this disposal of SPI as well as an increase in legal fees expended on the ongoing litigation relating to Africa Prepaid Services Nigeria. Forex gains of R7,6 million, limited this decline to R7,2 million.
The Group's objective in the international segment is to partner with local management in the countries in which it operates. These partnerships result in its international operations being equity accounted for. The group's current active international operations, namely, Ukash, Oxigen Services India and Blue Label Mexico are disclosed accordingly under share of losses from associates and joint ventures.

Discontinued operations

Africa Prepaid Services Nigeria

In line with a commitment made in May 2011 for the disposal of the assets and liabilities of Africa Prepaid Services Nigeria ("APSN"), the financial performance thereof for both the years ended 31 May 2011 and 31 May 2012 are required to be reflected as a discontinued operation. The Multi-links contract was cancelled in November 2010. The share of losses of R5,5 million incurred in the current year was attributable to the expenditure relating to the winding down of the operation. The comparative year's losses of R41 million comprised impairments of assets and goodwill amounting to R23 million, and the balance of R18 million being attributable to trading losses.

Blue Label Mexico

In February 2011, Grupo Bimbo acquired 40% of BLM by subscribing for new shares. Blue Label's 70% shareholding was diluted to 40% as a result of this transaction, with BLM's management retaining 20%. Accordingly, the group's share of trading losses of R11,3 million for the period June 2010 to February
2011 was reflected as a discontinued operation. Thereafter, the group's share of losses is reflected as "share of losses from associates and joint ventures".
The group's remaining 40% shareholding was required to be revalued based on the equity value payable by Grupo Bimbo for its 40% shareholding. This resulted in a net fair value gain of R146 million in the comparative year.

Share of losses from associates and joint ventures

Ukash

The comparative share of profits of R8,8 million included a deferred tax credit adjustment of R6,5 million, with trading profits net of amortisation of intangible assets amounting to R2,3 million. In the current year, prior to a deferred tax debit adjustment of R2,8 million, the share of profits earned on
a pure trading basis, net of the amortisation of intangible assets, amounted to R5 million. This represented an increase of R2,7 million (117%). This was achieved through growth in revenue of 57% with a gross profit margin increase from 49% to 53%, all reported in their local currency.

Oxigen Services India

Blue Label's share of profits equated to R4,6 million, compared to prior year share of losses of R5,2 million. This was mainly due to the addition of banking services to its prepaid airtime platform. These results were achieved through a 52% increase in revenue at gross profit margins of 2,95% (2011: 2,25%). EBITDA increased by 778%, all reported in their local currency.

Blue Label Mexico

The comparative share of losses of R6,5 million was for the period March 2011 to May 2011, during which period Blue Label's equity holding in BLM was reduced from 70% to 40%. The current year's share of losses of R25 million was for the full 12-month period. BLM's total losses increased from R32 million to R60 million. The increase in losses was largely due to costs incurred in the process of gearing up for an extensive roll out of point of sale devices through the Grupo Bimbo distribution network.

MOBILE

Revenue 87 244 78 616 8 628 11% Gross profit 66 059 62 444 3 615 6% EBITDA 97 359 19 347 78 012 403% Core net profit/(loss) 73 962 (756) 74 718 9 883%
This segment comprises Cellfind, Blue Label One and Content Connect Africa.
The growth in EBITDA of R78 million was inclusive of the once off income receipt of R79,4 million.
A net decline at depreciation level and the movement in taxation relating to the once off income receipt accounted for the growth in its contribution to core net profit.

SOLUTIONS

Revenue 171 029 118 277 52 752 45% Gross profit 79 505 58 582 20 923 36% EBITDA 38 927 18 731 20 196 108% Core net profit 21 324 7 061 14 263 202%
The Solutions segment houses the Datacel group which operates call centres and provides data and lead generation services. Improvements in the call centre operations and the constant growth in data accumulation continued to manifest themselves in growth at all levels.

TECHNOLOGY

Revenue 16 674 16 820 (146) (1%) Gross profit 10 891 13 157 (2 266) (17%) EBITDA (64 258) (61 766) (2 492) (4%) Core net loss (82 765) (84 932) 2 167 3%
Technology losses are representative of the costs of development and support of the group's Information Technology infrastructure. Income generation was limited to services to third parties.

CORPORATE

EBITDA (107 391) (81 664) (25 727) (32%) Core net loss (126 183) (98 317) (27 866) (28%)
The increase in core net losses of the corporate segment was mainly attributable to the cost of executive bonuses. No executive bonuses were paid in the prior year.

DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES

Depreciation declined by R4 million and amortisation of intangible assets in terms of purchase price allocations declined by R14 million. Impairments of goodwill, intangible assets and property, plant and equipment declined by R36 million.

NET FINANCE INCOME

Finance costs

Finance costs totalled R181 million, of which R3 million related to interest paid on borrowed funds and R178 million to imputed IFRS interest adjustments on credit received from suppliers. On a comparative basis, interest paid on borrowed funds was R8 million and the imputed IFRS interest adjustment was R108 million.

Finance income

Finance income totalled R171 million, of which R60 million was interest received on cash resources and R111 million pertained to IFRS adjustments. On a comparative basis interest received on cash resources amounted to R50 million and the imputed IFRS interest adjustment R96 million.

STATEMENT OF FINANCIAL POSITION

The decline in current assets was mainly attributable to the application of funds for an increase in investment in Oxigen Services India of R74 million, additional working capital provided to BLM of R26 million and the acquisition of starter pack bases for R121 million (included in intangible assets).
The acquisition of Microsoft's 12% shareholding in the group for R392 million and the purchase of treasury shares for R16 million accounted for the decline in share capital, share premium and treasury shares.
Inventory declined by R473 million, returning to its optimal level of 11 days.
The affording of additional credit to selected clients resulted in debtors collections increasing from 17 to 26 days. Creditor payment terms averaged 37 days.

STATEMENT OF CASH FLOWS

Cash flow of R528 million generated from operating activities was applied to investing activities to the extent of R277 million. This comprised the funding of an additional investment of R74 million in Oxigen Services India, the provision of working capital of R26 million to Blue Label Mexico and the acquisition of starter pack bases for R121 million.
A further R520 million was applied to financing activities to facilitate the purchase of Microsoft's 12% shareholding in the group for R392 million, Treasury shares R16 million and a dividend payment of R107 million.
The resultant accumulated cash resources of the group declined by R251 million to R1,98 billion.

FORFEITABLE SHARE SCHEME

Forfeitable shares totalling 4 828 644 (2011: 6 829 416) were issued to qualifying employees. During the year 1 067 905 (2011: 1 316 366) shares were forfeited and 311 637 (2011: 909 823) shares vested during the current period.

DIVIDEND NO 3

The group's current dividend policy is to declare an annual dividend. Accordingly, notice is hereby given that on Monday, 20 August 2012, the board approved a gross ordinary dividend (number 3) of 23 cents per ordinary share (19,55 cents per ordinary share net of dividend withholding tax) for the year ended
31 May 2012. The dividend, inclusive of withholding tax, equates to a 2,95 cover on headline earnings. The total declaration of R155 137 080 for the year ended 31 May 2012 has not been recognised in the financial statements as it was made after this date.
The dividend has been declared from income reserves. The company has no secondary tax on companies credits available. The dividend withholding tax rate is
15%. The issued share capital at the declaration date is 674 509 042 ordinary shares. The company's income tax reference number is 9062246179.
The salient dates are as follows:
Last date to trade cum dividend Friday, 7 September 2012
Shares commence trading ex dividend Monday, 10 September 2012
Record date Friday, 14 September 2012
Payment of dividend Monday, 17 September 2012
Share certificates may not be dematerialised or rematerialised between Monday, 10 September and Friday, 14 September 2012, both days inclusive.

PROSPECTS

The group is actively building its SMS aggregation capabilities through its own development and strategic acquisitions. The objective is to create economies of scale through mass aggregation, as well as enhancing the range of SMS services available to customers. Increasing customer awareness of the benefits of prepaid electricity and contracts with additional utility providers is likely to enhance commissions generated from prepaid electricity sales.
Annuity revenue from an expanding starter pack base is expected to compound accordingly.
The distribution capabilities of Grupo Bimbo, the largest bakery in the world, are expected to add significant momentum to the roll-out of point of sale devices in Mexico.
Oxigen Services India is expected to continue its drive into banking services initiatives in partnership with leading banks and financial institutions in India. The group will continue to focus on expanding its product range offerings and distribution network, organically and through acquisition.
The statement of financial position remains robust and liquid, which augurs well for future growth, acquisitions and distributions to shareholders.

SUBSEQUENT EVENTS

Subsequent to year end, dividend number 3 was declared and approved by the board.

CONTINGENCIES

Multi-Links Telecommunications Limited, a previously wholly owned subsidiary of Telkom Limited in Nigeria, concluded a Super Dealer agreement with Africa Pre-Paid Services (APS), in December 2008 in terms of which APS was appointed for an initial period of 10 years to sell, market and procure customers for Multi-links' range of products and services in Nigeria (the agreement). On 29 May 2009, APS ceded and assigned all of its rights and obligations in terms of the agreement to APSN. On 26 November 2010 APSN cancelled the agreement arising from Multi-Links' repudiation of its obligations under the contract.
On 13 June 2011 APSN launched arbitration proceedings in South Africa (as per contract) against Multi-Links claiming damages (9 claims) in the total sum of USD481 million. Multi-Links is defending the matter and has filed a counterclaim in the amount of USD123 million. Telkom sold its shareholding in Multi-Links to Hip Oils Topco Limited during September 2011. In addition, in terms of an indemnity contained in the Sale and Purchase agreement between Telkom and Hip Oils Topco Limited concluded in August 2011, Telkom has issued an indemnity in relation to the APSN claim for amounts in excess of $10 million.
The arbitration has been set down for hearing from 4 November until 15 December 2012.

INDEPENDENT AUDIT

PricewaterhouseCoopers Inc.'s unmodified audit reports on the group annual financial statements and the summarised group annual financial statements for the year ended 31 May 2012 are available for inspection at the company's registered office. Any reference to future financial performance in this announcement has not been audited or reported on by PricewaterhouseCoopers Inc.

APPRECIATION

The board of Blue Label Telecoms would once again like to express its appreciation to its suppliers, customers, business partners and staff for their ongoing support and loyalty.
For and on behalf of the board

*Supervised the preparation and review of the group financial statements.

(Incorporated in the Republic of South Africa) (Registration number 2006/022679/06)

JSE Share code: BLU ISIN: ZAE000109088 ("Blue Label" or "BLT" or "the company" or "the group")

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