Notes to the Financial Statements continued Group Company 2015 R’000 2014 R’000 AFRICAN DAWN 103 ANNUAL REPORT 2015 2015 R’000 2014 R’000 Carrying amount of net assets disposed of Trade and other receivables gross (43,309) - - - Trade and other receivables impairment 38,181 - - - (refer to note 44) Tax liabilities (refer to note 35) 6,497 - - - Borrowings 5,000 - - - Cash (396) - - - Amount due from Elite (2,742) - - - Total net assets disposed 3,231 - - - Net assets on disposal 3,231 - - - Profit on disposal (refer to note 25) (3,231) - - - - - - - 38. Liquidation of Nexus No consideration was received. Cash outflow on liquidation Cash disposed of (396) - - - 39. Contingencies Knife Capital Group incentive scheme The agreement relating to the acquisition of Knife Capital Group outlined various future incentives that the sellers would be entitled to. It stated that these amounts would be agreed upon by the effective date (being March 2014). This has not been done and therefore the amount of the liability could not be measured with sufficient reliability. At year end it was not possible to estimate the financial effect of this liability, nor when it would be settled, for this reason a liability was not recognised. There was no possibility of any reimbursement. Subsequent to year end, and as announced on SENS on 1 July 2015, the vendors of Knife Capital have released Afdawn Group from these incentives. Sandown legal fees At the time that Elite acquired 100% of Elite Two from Sandown, Sandown took over debtors with a value of R14 337 165 (refer to note 7). The claims against those debtors will be pursued in Sandown’s name. However, the costs of the legal proceedings will be shared equally by Elite and Sandown. If at least R10 million of this amount is collected, Elite will be paid a fee of 50% of the excess. However, Elite is not liable for any amount that is not collected. With respect to the legal claims, no legal work had been done by the reporting date. Between 1 March 2015 and 31 August 2015, costs of R94 181 had been incurred. A contingent liability exists for possible future legal fees but the amount cannot be reliably determined. Greenoaks third party liability There is a further possible claim relating to Greenoaks (refer to notes 1.20 and 10). In an attempt to stop the transfer of Greenoaks from Blue Dot to Candlestick, the claimant applied for the liquidation of Blue Dot Properties in December 2010. The Group does not believe that this meets the definition of a liability. However, due to the nature of the dispute, no further information has been disclosed because such disclosure would seriously prejudice the position of the Group.
AFRICAN DAWN 2015 Annual Report
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