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AFRICAN DAWN ANNUAL REPORT 14

AFRICAN DAWN 2 8 ANNUAL REPORT 2014 Directors’ Report The directors have pleasure in submitting their report on the financial statements of African Dawn Capital Limited and the group for the year ended 28 February 2014. 1. Review of activities Main business and operations Afdawn is an active investment holding company acquiring shareholdings in entrepreneurial companies, with strong innovation drive, which are in a proven growth phase by enhancing the capabilities of these entities to accelerate long term sustainable growth. The group through its wholly owned subsidiary Elite provides unsecured personal loans (micro finance). Effective March 2014, the Company acquired 100% of the issued share capital of Knife Capital in order to have the intellectual capital, capacity and capabilities to help execute its vision to become an active investment holding company. 2. Going concern The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The group reports a loss of R 19,8m (2013: R2,1million) for the period ended 28 February 2014. The group’s net asset value decreased to R43,4m (2013: R63,3million) for the period ended 28 February 2014 due to the reported loss. 3. Events after the reporting period 3.1 Rights issue: A detailed Circular on the rights issue was published and posted on 7 March 2014. The capital raising was completed on 4 April 2014 with final results as follows: * Rights taken up under rights offer amounted to R 21,8 million (rights @ 8 cents per share). * The total cost associated to the rights issue amounted to R 1,7 million. Shares were issued as follows: * Rights offer shares subscribed for: 222 086 442 (44% take up on available rights). * Rights offer shares underwritten: 50 000 000 (10% take up on available rights). * Total shares: 272 086 442. 3.2 Acquisition of Knife Capital In terms of a SENS issued on 13 December 2013, the Company entered into an agreement to acquire the entire issued share capital of Knife Capital for R10 000 000 by issuing 100 000 000 shares at 10c per share. The conditions underlying this acquisition were fulfilled and reported on in terms of a SENS issued on 28 March 2014 and the shares were issued on 8 April 2014. 4. Authorised and issued share capital The authorised ordinary share capital amounts to 5 000 000 000 par value shares. The issued share capital on 28 February 2014 amounted to 508 184 155 shares. As a result of the rights issue, as detailed above , 272 086 442 new shares were issued on 4 April 2014 at 8c per share, including shares paid in terms of the rights offer underwriting agreement as detailed in the circular dated 7 March 2014. The cash generated from the rights issue and guaranteed underwriting allocations amounted to R21,8 million. As a result of the acquisition of Knife Capital , as detailed per paragraph 11 below, a further 100 000 000 shares were issued at 10c per share on 8 April 2014 in exchange for shares in Knife Capital. The number of shares in issue following the conclusion of the rights issue and the Knife Capital acquisition and as at the date of this Directors' Report is 880 270 597. Treasury shares - The Company currently holds 3 268 000 treasury shares in its own name which shall be cancelled. 5. Borrowing limitations In terms of the Memorandum of Incorporation of the company, the directors may exercise all the powers of the company to borrow money, as they consider appropriate.


AFRICAN DAWN ANNUAL REPORT 14
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