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AFRICAN DAWN 2015 Annual Report

Notes to the Financial Statements continued Group Company 2015 R’000 2014 R’000 AFRICAN DAWN 92 ANNUAL REPORT 2015 19. Compound instruments Convertible bond 2015 R’000 2014 R’000 During 2012 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 current financial year and neither Sandown nor PCI chose to convert to shares. The STRB Lewende Trust was paid cash 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 17 for further details on the liability. Sandown Convertible Bond (refer to note 17) Opening balance 12,486 10,574 - - Capital drawn - - - - Interest on loan capitalized 886 1,912 - - Loan renegotiated no longer convertible (13,372) (refer to note 17) - 12,486 - - STRB Lewende Trust (Previously PCI convertible bond) (refer to note 17) Opening balance 1,663 1,621 - - Repaid portion acknowledged (1,700) (143) - - Interest raised 37 185 - - - 1,663 - -


AFRICAN DAWN 2015 Annual Report
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