AFRICAN DAWN ANNUAL REPORT 2017 Notes to the Financial Statements Annual Financial Statements For the year ended 28 February 2017 continued 73 31. Tax paid Group Group Company Company 2017 2016 2017 2016 R’000 R’000 R’000 R’000 Balance at beginning of the year (15,054) (14,840) (8,220) (7,805) Current tax for the year recognised in profit or loss (66) (583) - - Current tax recognized for prior year profit or loss 4 - - - Adjustment in respect of penalties and interest (842) (938) (453) (415) Balance at end of the year 16,280 15,054 8,673 8,220 322 (1,307) - - 32. 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. 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 . 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. Allegro Holdings Proprietary Limited (“Allegro”) Afdawn Group previously concluded a Memorandum of Understanding (28 February 2013) which will facilitate an amicable conclusion to the matter. Progress has been slow in this regard. Thus far the company has not become aware of any information during its deliberations that will alter its conclusion reached previously. To the date of signing this report no claims have been received by Afdawn Group, nor has it been possible to establish any basis for a potential claim against Afdawn Group and therefore no provisions have been made for any such contingency. 33. Related parties Relationships Subsidiaries Refer to note 6 Subsidiaries loan accounts Refer to note 10 Significant shareholder with borrowings Sandown Capital Proprietary Limited refer note 15 Company controlled by a director providing services to the group Integrated Thinking Laboratory (Pty) Ltd – controlled by S Roper Directors' loans and subsequent change Refer to notes 1.18 and note 32 Executive and non-executive directors Refer to directors' report Key management DD Breedt
AFRICAN DAWN 2017
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