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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
Notes
to the Group annual financial statements
continued
For the year ended 31 May 2017
2.
Group composition
continued
2.1 Investments in and loans to associates and joint ventures continued
Shares in associates and joint ventures acquired during the current year
Date acquired
Effective
percentage
United Call Centre Solutions Proprietary Limited
Joint venture
19-Dec-16
50
Oxigen Online Services India Private Limited
Associate
01-Jun-16
58.18
Utilities World Proprietary Limited
Associate
01-Jun-16
25.1
On 1 June 2016 Oxigen Services India was demerged into two entities. The second entity, Oxigen Online, mirrored the shareholding
of Oxigen Services India. Refer to note 2.2.
Utilities World was acquired on 1 June 2016 for a payment of R7.5 million and a further contingent payment of R5 million. The
potential undiscounted amount of this contingent payment that the Group could be required to make under this arrangement is
between Rnil and R4.97 million.
The fair value of the contingent consideration arrangement of R4.5 million was estimated by applying the income approach. The fair
value estimates are based on a discount rate of 10.5%. Management has assumed a probability of 100%. In determining these
probabilities management has assessed the cash flow projections based on financial budgets approved by the Board of Directors for
the forthcoming year which are based on assumptions of the business, industry and economic growth.
Shares in associates and joint ventures acquired during the prior year
Date
acquired
Effective
percentage
Banosign Proprietary Limited
Joint venture
01-Apr-16
50.1
Oxigen Services India Private Limited
Associate
01-Mar-16
2.35
Blue Label Mexico S.A. de C.V.
Joint venture
01-Sep-15
0.92
The Group’s effective shareholding in OSI prior to March 2016 was 55.83%. Of this shareholding, 37.22% was held by Gold Label
Investments (GLI), a wholly owned subsidiary of the Group and 18.61% indirectly through the Group’s 50% shareholding in
2DFine Holdings Mauritius. In March 2016, a rights issue was offered by OSI for USD10.5 million. The Group exercised its rights for
the entire amount through GLI congruent with 2DFine Holdings Mauritius waiving its rights. The effect of this is that GLI’s
shareholding has increased from 37.22% to 40.97% and its indirect shareholding of 18.61% has been diluted to 17.21%. The latter
has in turn resulted in a gain of R30 million on dilution, being the Group’s share of the increased net asset value emanating from the
rights issue. The Group’s effective shareholding in OSI therefore increased by 2.35% to 58.18%. The amount paid for this was
R159.4 million, the difference of R8.3 million relates to foreign exchange differences.
In September 2015 BLT increased its holding by 0.92% to 47.56% in BLM for an amount of R42.5 million.
Shares in associates disposed of during the prior year
Date
disposed
Effective
percentage
Forensic Intelligence Data Solutions Proprietary Limited
Associate
01-Dec-15
20.25
The Group disposed of Forensic Intelligence Data Solutions Proprietary Limited for a nominal value.
BLT’s co-shareholder in BLM, Grupo Bimbo S.A.B DE C.V (“Bimbo”) has guaranteed the performance of BLM’s obligation to
Radiomovil Dipsa S.A. de C.V (trading as Telcel) (“Telcel”). BLT has in turn provided Bimbo with a back to back guarantee in terms
of which BLT shall reimburse Bimbo a percentage of any loss it incurs as a result of Telcel calling on the aforesaid guarantee, which
percentage it shall pro-rata to BLT’s shareholding in BLM (currently 47.56%). At year-end there is no amount due to Telcel by BLM.
There are no other contingent liabilities relating to the Group’s interest in joint ventures.
For details on related-party transactions, refer to note 8.