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AFRICAN DAWN 2015 Annual Report

From the Chair continued process that follows the Find, Make, Grow and Realise approach designed to decrease risk and maximise stakeholder value. Support for local entrepreneurs has gained further momentum this year with a number of business accelerators launched or in the process of being launched. Although the need for more growth equity investors is widely broadcasted, there is still a significant mismatch in the demand versus supply of growth equity investors. Knife Capital, and its subsidiary Grindstone, in many respects mirror this trend. Over the reporting period, Grindstone secured various third party sponsors to continue its structured entrepreneurial support programme. It has progressed well in proving its business model with, on the one hand its advisory services contributing to the business building of its candidates and on the other, contributing to securing a high-profile trade sale of one of its candidates. Knife Capital likewise had a very successful year in terms of short-term advisory services but has yet to secure the required investment capital to roll out the vision. Knife Capital is in the process of raising a venture capital fund. Events (such as the Elite restatements referred to above) lead to the NAV of the Afdawn group falling below the 10 cents threshold as envisaged in the Knife Capital acquisition. This reduction in NAV triggered significant liabilities owed by the group to the Knife Capital Vendors. An agreement was subsequently concluded with the Knife Capital vendors in terms of which Afdawn was released from a portion of these liabilities. SARS A Section 200 application was made in June 2013 and was declined in May 2015 on the basis that Afdawn’s financial position did not warrant a compromise. A new submission has subsequently been made to SARS with a view to reaching a settlement on this. A liability has been recognised in full for all interest and penalties that are payable to SARS. Properties in possession Progress has been made in disposing of the properties in possession. Discussions are currently under way with potential buyers of the Greenoaks property. In addition, 4 of the 50 units of Almika were sold by February 2015 and a further 16 have been sold and transferred since. All these events had a negative influence on the implementation of strategy and the main focus changed to make Afdawn investment-ready instead of focusing on new investments as was anticipated. Looking ahead To implement the stated vision we are considering forming partnerships with bigger players to enable us to access the capital markets when the group has regained the confidence of investors. Appreciation This has been a challenging year and I would like to place on record my sincere appreciation for the support and cooperation of all stakeholders including my fellow board members, staff and my fellow shareholders. AFRICAN DAWN 5 ANNUAL REPORT 2015


AFRICAN DAWN 2015 Annual Report
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