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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
Independent auditor’s
report to the
shareholders of Blue Label Telecoms Limited
Report on the audit of the consolidated and separate financial statements
Our opinion
In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and
separate financial position of Blue Label Telecoms Limited (the Company or BLT) and its subsidiaries (together the Group) as at
31 May 2017, 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 (IFRS) and the requirements of the
Companies Act of South Africa.
What we have audited
Blue Label Telecoms Limited’s consolidated and separate financial statements set out on pages 96 to 197 comprise:
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the Group and Company statements of financial position as at 31 May 2017;
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the Group income statement for the year then ended;
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the Group and Company statements of comprehensive income for the year then ended;
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the Group and Company statements of changes in equity for the year then ended;
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the Group and Company statements of cash flows for the year then ended; and
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the notes to the financial statements, which include a summary of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit of the consolidated and separate financial
statements
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the
Independent Regulatory Board for Auditors Code of Professional
Conduct for Registered Auditors (IRBA Code)
and other independence requirements applicable to performing audits of
financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and
in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent
with the International Ethics Standards Board for Accountants
Code of Ethics for Professional Accountants
(Parts A and B).
Our audit approach
Overview
Overall Group materiality
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Overall Group materiality: R49.6 million, which represents 5% of consolidated profit
before tax adjusted for the significant gain on the fair value assessment of the investments
in Oxigen Services India Private Limited, Oxigen Online Services Private Limited and 2DFine
Holdings Mauritius (OSI).
Group audit scope
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We conducted full scope audits for 10 reporting components based on their financial
significance.
Key audit matters
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Impairment assessment of goodwill arising from business combinations and impairment
assessment of investment in Blue Label Mexico S.A. de C.V. (BLM).
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Fair value assessment of investment in OSI.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated
and separate financial statements. In particular, we considered where the directors made subjective judgements; for example,
in respect of significant accounting estimates that involved making assumptions and considering future events that are
inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including
among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement
due to fraud.