AFRICAN DAWN ANNUAL REPORT 2018 48 Accounting Policies continued Uncertainty Action Status Timing of the collection of R4.7million from a long outstanding debtor. Refer Note 27 and Note 36. The ability to secure funding for Afdawn and/ or Elite. Afdawn’s ability to pay ongoing operational expenses, including the remaining outstanding tax liability amounting to R5.658million at February 2018. Repayment of loans provided by Directors in good faith for the payment of the SARS liability. The payment schedule that was in place and that had failed, has been restructured subsequent to year-end. A non-binding Letter of Intent has been signed with a party that is currently performing a due diligence to support either capital raising for Afdawn and/or secure funding for Elite or a combination of both. A cautionary statement in this regard was published on 25 June 2018. Directors and various parties have provided and continue to provide funding for the payment of the SARS liability and other ongoing operational expenses. Management are investigating other opportunities for revenue growth. Directors have, and continue to show good faith in supporting the Group and have no intention of calling on the loans to the detriment of the Group. Agreements incorporating the restructured arrangements have been concluded. The restructured arrangement significantly increases the likelihood of payment by the debtor in the next 12 months. The SARS settlement agreement has eliminated the uncertainty about the SARS liability. This, coupled with R5.75 million of the R8.24million settlement amount having been paid by the end of June 2018 is making it possible for management to seek a funding partner for Afdawn and /or Elite. Subsequent to year-end the Directors had contributed another R2.4million. The director has waived his right to claim, call up, or access the loan account contributions after year end to the sum of R 2.4million, which shall only become due, owing and payable at such time when the restructured arrangement relating to the long outstanding debtor of R4.7million has been paid or discharged in full. It was also determined that if the board of directors of the company determine that the debt is no longer recoverable, then and in such event the director irrevocably waive his right, title and interest in and to the loan account. Directors’ ongoing support for the Group by means of loans is acknowledged and accepted by the board. Having regard to the nature of the uncertainties, the actions being taken and also the current status of these uncertainties, the judgment of the management and board is that it is appropriate that the financial statements be prepared on the going concern basis.
AFRICAN DAWN 2018 Annual Report
To see the actual publication please follow the link above