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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 17. Compound instruments Convertible bond During the 2012 financial year two separate convertible bonds were issued. The holders of the instruments had the ability to elect to redeem the amounts owing in cash or convert the amount owing into equity shares. This discretion gave rise to the existence of a contractual obligation of one party to deliver cash or another financial asset to another party, or to exchange financial assets or liabilities under conditions that are potentially unfavourable. They were therefore classified as financial liabilities. The terms of the bonds were similar, being convertible over 36 months from issue (3 November 2011), conversion price set at 14 cents for capital plus any arrear interest at JIBAR + 600 points. • The convertible bond agreement to Sandown was for a subscription of R10 million which was settled. In 2012 Afdawn group negotiated with Sandown to repay the unutilised portion of the convertible bond under an acknowledgment of debt agreement. The remaining portion was drawn down in 2013. • The PCI convertible bond loan was paid in terms of the agreement to the amount of R1,700,000 and the interest has been raised and repaid quarterly in terms of the agreement. During the 2013 period, the Board signed a cession that resulted in the PCI convertible bond being transferred to STRB Lewende Trust. The cession stipulates that the new owner has the same rights and responsibilities as the previous owner with all terms and conditions remaining the same. Both bonds became due during the 2015 financial year and neither Sandown nor PCI chose to convert to shares. The STRB Lewende Trust was paid for the balance due on the bond. Sandown Capital negotiated a repayment of the bond over a 2 year period by Elite with the conversion option falling away. Refer to note 15 for further details on the liability. Group Company 2016 R’000 2015 R’000 2016 R’000 2015 R’000 Sandown Convertible Bond (refer to note 15) Opening balance - 12,486 - - Capital drawn - - - - Interest on loan capitalized - 886 - - Loan renegotiated no longer convertible - (13,372) - - (refer to note 15) - - - - STRB Lewende Trust (Previously PCI convertible bond) (refer to note 15) Opening balance - 1,663 - - Repaid portion acknowledged - (1,700) - - Interest raised - 37 - - - - - - 80 AFRICAN DAWN ANNUAL REPORT 2016


AFRICAN DAWN Annual Report 2016
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