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AFRICAN DAWN ANNUAL REPORT 14

Comments from the Board Strategic Intent As alluded to in the Chairman’s report, the past period has seen a concerted effort given to transforming and preparing the company to enable it to execute on the announced change in vision to become an active investment holding company. The company will focus on acquiring shareholdings in entrepreneurial companies, with strong innovation drive, which are in proven growth phases and by enhancing the capabilities of these entities to accelerate long term sustainable growth. We remain cognisant of the remaining challenges and believe that prudently constructed plans will prove sustainable. Changes to the board of directors The composition of the Board has changed significantly since the last year end as the company embarked on sourcing the appropriate capabilities at board level to execute the new vision. Changes up to 28 February 2014: On 10 April 2013 Mr. TF Kruger stepped down as CEO and was appointed as financial director and on the same date, Mr. JS van der Merwe was appointed as executive chairman and CEO. Further changes occurred to the Board with the appointments of Ms. WN Luhabe, Ms. V Lessing, Mr. JK van Zyl on 28 May 2013 and Mr. WJ Groenewald as acting CEO (24 February 2014). The Board accepted the resignations of Ms. L Taylor (29 May 2013), Mr. CF Wiese (10 June 2013), Ms. WN Luhabe (30 September 2013), Dr. GE Stoop (5 November 2013) and Mr. TF Kruger (1 February 2014). Changes subsequent to 28 February 2014: The appointment of Mr. EA van Heerden as financial director (27 March 2014), Mr WJ Groenewald as CEO (28 March 2014), Ms. A Böhmert (22 April 2014) and Mr. SM Roper (22 April 2014). The board accepted the resignation of Mr. JS van der Merwe (2 June 2014) and appointed Mr. WJ Groenewald as acting chairman on the same date. South African Revenue Services (“SARS”) liability Afdawn continues to work closely with SARS on all aspects relating to the company’s tax position in terms of the agreed action plan with SARS. Documentation as set out in Section 200 of the Income Tax Act, which enables companies to settle their tax obligations with SARS, has been submitted and queries raised by SARS answered. Afdawn has vigorously explored and consulted with various independent tax experts to ensure that a beneficial outcome for Afdawn could be achieved. The SARS liability has been fully provided for in the accounts with regards to returns that have been assessed and disagreements were provided for to the extent of the most likely outcome. Allegro Properties Limited (“Allegro”) Status Afdawn previously concluded a Memorandum of Understanding (28 February 2013) which will facilitate an amicable conclusion to the matter. Progress has been slow in this regard. Thus far the company has not become aware of any information during its deliberations that will alter the conclusion reached previously. To the date of signing this report no claims have been received by Afdawn, nor has it been possible to establish any basis for a potential claim against Afdawn and therefore no provisions have been made for any such contingency. National Housing Financing Corporation ("NHFC") In terms of the settlement agreement with the NHFC that was signed on 30 May 2011, Nexus (a wholly owned subsidiary of Afdawn) had a facility of R5 million that became payable in October 2013. Nexus is currently negotiating extending the terms with the NHFC. Update on investigation into past board members and professional advisors Following on from the forensic investigation commissioned in 2010, we are cooperating with the various regulatory bodies and South African Police Services. We can advise that progress remains slow and frustrating. AFRICAN DAWN 7 ANNUAL REPORT 2014


AFRICAN DAWN ANNUAL REPORT 14
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