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AFRICAN DAWN Annual Report 2016

continued Notes to the Financial Statements Annual Financial Statements For the year ended 29 February 2016 38. Events after the reporting period Non-adjusting events Elite Disposal On 4 December 2015, Afdawn and Dzothe Investments have entered into an agreement whereby Afdawn will convert a portion of its shareholder loan into equity of Elite and Dzothe Investments will acquire 51% of the economic interest of Elite and recapitalize Elite. This will give Elite the ability to generate the required cash flow to fund operations, growth and other financial obligations. African Dawn shareholders still need to approve this transaction. Disposal of Rental Enterprise by Candlestick On 8 April 2016 Candlestick has entered into a sale of rental enterprise agreement (“Green Oaks Transaction”) with SJJM Property for a consideration for R32,500 million. Based on the settlement agreement signed on 23 December 2015 Afdawn expects to receive proceeds of R8,700 million on transfer date. Afdawn shareholders still need to approve the Green Oaks transaction. 39. Segment report The segment information has been prepared in accordance with IFRS 8 - Operating Segments which defines the requirements for the disclosure of financial information of an entity’s operating segments. IFRS 8 requires segmentation based on the group’s internal organisation and reporting of revenue and operating income based upon internal accounting methods. The group discloses its operating segments according to the components regularly reviewed by the chief operating decision-makers, being the executive directors. These amounts have been reconciled to the consolidated financial statements. The measures reported by the group are in accordance with the accounting policies adopted for preparing and presenting the consolidated financial statements. Segment revenue excludes value added taxation and includes inter- segment revenue which is R2,642 million (2015: nil). Net revenue represents segment revenue from which intersegment revenue has been eliminated. Sales between segments are made on a commercial basis. Segment operating profit before capital items represents segment revenue less segment expenses. Segment expenses consist of operating expenses. Depreciation, amortisation and impairments have been allocated to the segments to which they relate. The segment assets comprise all assets of the different segments that are employed by the segment and that are either directly attributable to the segment, or can be allocated to the segment on a reasonable basis. The group’s reportable segments are based on the following lines of business: a. Investment advisory and investment management This segment consists of the Knife Capital Group which provides investment advisory and investment management services to entrepreneurial and innovative companies. b. Micro finance This segment consists of Elite and Elite Two. These companies are involved in micro finance in the unsecured lending industry and have a wide base of customers (mostly individuals). c. Rentals of properties in possession This segment consists of a residential complex with 76 units (a mix of 2 and 3 bedrooms), that are rented out on annual leases to individuals. d. Other Other consists of the holding company together with other smaller entities not dealt with in other segments. Segment information has been restated to comply with the segments identified above. All the segments operate only in South Africa, largely in the Gauteng and Western Cape provinces therefore no geographical information is provided. Similarly all non-current assets are in South Africa. AFRICAN DAWN ANNUAL REPORT 2016 105


AFRICAN DAWN Annual Report 2016
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