AFRICAN DAWN ANNUAL REPORT 2018 5 From the Chair continued • The further lowering of operating expenses by R1,68million to R15,68million was as results of • Decrease in employee cost by R0,60million • Decrease in operating lease charges by R0.15million • Decrease in other costs by R1,02million • Cash generated by operations was R2.2million • Total liabilities were further reduced by R1.64million to improve the balance sheet. The velocity of money is an important driver in the Elite business model, as the average term of the loan is three months. For every R1million of new funding, roughly R4million of new advances can be made throughout the year if the funding stays in the business. The Elite in-house lending platform gives it the flexibility to provide simplified products to its clients and to continue reducing the cost of production of a loan. The passion and perseverance of the Elite team is evident in the continued focus to improve the business under very difficult circumstances. After the Afdawn SARS settlement agreement we are in position to access capital markets again. YueDiligence YueDiligence is an actionable, light-touch due diligence tool for investors, entrepreneurs, and service providers to SMEs. It is used to assess SMEs for growth gaps to advance partnership & fundraising preparation. Afdawn retained YueDiligence after the disposal of Knife Capital in September 2017. SARS The SARS settlement agreement was concluded in December 2017 and has eliminated the uncertainty about the SARS liability for the Group. R5.75million of the R8.24 million settlement amount has been paid by the end of June 2018 and this enables the Group to access capital markets to fund growth. Properties in Possession and other The sale of the Greenoaks property was approved by shareholders on 18 October 2016 and the transfer to the purchaser was finalized in May 2017. The proceeds were used to reduce the liabilities of the Group. Looking ahead The Group is now in position to access capital markets. Sourcing funding will enable the Group to pursue a growth strategy by leveraging the lending platform of Elite together with the YueDiligence online platform. Appreciation We have learnt to adapt and survive through a very difficult period. I would like to thank the board, management and staff of the various operations, for their dedication and hard work during a tough year. WJ Groenewald 30th July 2018
AFRICAN DAWN 2018 Annual Report
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