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AFRICAN DAWN CAPITAL LIMITED - CANCELLATION OF S366622 Unaudited consolidated statements for the six months ended 31 August 2015

Release Date: 23/12/2015 07:34
Code(s): ADW     PDF:  
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CANCELLATION OF S366622 Unaudited consolidated statements for the six months ended 31 August 2015

AFRICAN DAWN CAPITAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/020520/06)
JSE Code: ADW
ISIN: ZAE000060703
("the company" or "the group" or "Afdawn")

Unaudited Consolidated Statements
for the six months ended 31 August 2015

Consolidated Statements of Financial Position as at 31 August 2015

                                       31 August         31 August        31 August   28 February
                                            2015              2014             2013          2015
                                           R'000             R'000            R'000         R'000
                                     (Unaudited)        (Restated)       (Restated)     (Audited)
Assets
Non-current assets
Property, plant and equipment                 1 070          1 105            1 145           937
Goodwill                                      8 076          8 076                0         8 076
Intangible assets                             5 746          8 541            2 410         6 479
Investment in associate                           -              3            1 663             -
                                             14 892         17 725            5 218        15 492
Current assets
Other financial assets                          354          1 727            1 412           724
Properties in possession                     22 688         24 748           25 168        22 968
Trade and other receivables                  38 287         53 855           75 040        39 835
Current tax receivable                          397            512               95             -
Cash and cash equivalents                    10 262         18 645            7 256        15 397
                                             71 988         99 487          108 971        78 924
Total assets                                 86 880        117 212          114 189        94 416

Equity and liabilities
Equity
Share capital and share premium             313 943        313 943          284 634       313 943
Accumulated loss                          (283 678)      (261 966)        (230 909)     (284 532)
                                             30 265         51 977           53 725        29 411
Liabilities
Non-current liabilities
Loans from directors                            121              -                -         1 535
Deferred tax                                  1 196          1 679                -         1 365
Borrowings                                   11 142         10 247           25 209        13 298
Finance lease liabilities                         6            135              257            60
                                             12 465         12 061           25 466        16 258
Current liabilities
Current tax payable                          14 963         18 562           18 220        14 840
Borrowings                                   14 054         23 144            9 001        17 782
Finance lease liabilities                       122            122              124           122
Loans from directors                            731          3 555                -         3 777
Operating lease liability                         -              -                -            23
Trade and other payables                     14 280          7 791            7 653        11 729
Deferred income                                   -              -                -           474
                                             44 150         53 174           34 998        48 747
Total liabilities                            56 615         65 235           60 464        65 005
Total equity and liabilities                 86 880        117 212          114 189        94 416

Consolidated Statements of Profit or Loss and Other Comprehensive Income for the six months ended
31 August 2015
                                                                                   31 August         31 August   28 February
                                                                                        2015              2014          2015
                                                                                       R'000             R'000         R'000
                                                                                 (Unaudited)        (Restated)     (Audited)
Continuing operations
Revenue                                                                               20 672            17 827        40 149
Cost of sales                                                                        (1 579)             (269)         (268)
Gross profit                                                                             19 093              17 558            39 881
Other income                                                                                428               1 772             7 417
Operating expenses                                                                     (20 303)            (25 697)          (65 508)
Operating loss                                                                            (782)             (6 367)          (18 210)
Investment income                                                                           150                 344               735
Profit on release from vendor liabilities                                                 4 095                   -                 -
Loss on fair value of contingent consideration                                                -                   -           (2 000)
Deemed interest expense                                                                   (313)                   -             (110)
Impairment of properties in possession                                                        -                   -           (1 500)
Loss from equity accounted investment                                                         -             (2 256)           (2 259)
(Loss) / profit on disposal of property, plant and equipment                               (10)                  19                 -
Finance costs                                                                           (1 750)             (1 596)           (8 633)
Profit/(loss) before taxation                                                             1 390             (9 856)          (31 977)
Taxation                                                                                  (536)               (579)           (1 035)
Profit/loss) from continuing operations                                                     854            (10 435)          (33 012)
Loss from discontinued operations                                                             -                (11)                 -
Profit / (loss) for the period / year                                                       854            (10 446)          (33 012)
Profit / (loss) attributable to:
Owners of the parent:
Continuing operations                                                                      854            (10 435)           (33 012)
Discontinued operations                                                                      -                (11)                  -
Total comprehensive profit / (loss) for the period / year                                  854            (10 446)           (33 012)

Basic and diluted earnings / (loss) per share (c) from continuing operations              0.10              (1.24)             (3.75)
Basic and diluted earnings / (loss) per share (c) from discontinued operations            0.00                0.00                  -
Basic and diluted earnings / (loss) per share (c)                                         0.10              (1.24)             (3.75)

Consolidated Statements of Changes in Equity for the six months ended 31 August 2015

                                                          Share    Share premium   Total share        Accumulated loss    Total equity
                                                        capital                        capital


Balance at 28 February 2013 (restated)                    5 074          279 560         284 634             (227 707)          56 927
Total comprehensive loss for the six months
to 31 August 2013                                             -                -               -               (3 202)         (3 202)
Balance at 31 August 2013                                 5 074          279 560         284 634             (230 909)          53 725
Total comprehensive loss for the six months
01 September 2013 to 28 February 2014                                                                        (20 611)        (20 611)
Balance at 28 February 2014 (restated)                    5 074          279 560        284 634             (251 520)          33 114
Issue of shares                                           3 729           25 580         29 309                     -          29 309
Total comprehensive loss for the six months to
31 August 2014                                                -                -              -              (10 446)         (10 446)
Balance at 31 August 2014 (restated)                      8 803          305 140        313 943             (261 966)           51 977
Total comprehensive loss for the six months
01 September 2014 to 28 February 2015                         -                -              -              (22 566)         (22 566)
Balance at 28 February 2015                               8 803          305 140        313 943             (284 532)           29 411
Total comprehensive income for the six months to
31 August 2015                                                -                -              -                   854             854
Balance at 31 August 2015                                 8 803          305 140        313 943             (283 678)          30 265

Consolidated Statements of Cash Flows for the six months ended 31 August 2015
                                                                                Six months             Six months
                                                                                     ended                  ended           Year ended
                                                                            31 August 2015         31 August 2014     28 February 2015
                                                                                     R'000                  R'000                R'000
                                                                               (Unaudited)             (Restated)            (Audited)
Cash flows from operating activities
Cash generated from / (used in) operations (refer to note 15)                        4 047               (2 772)              (2 280)
Investment income                                                                      150                   344                  735
Finance costs                                                                      (1 046)               (1 596)              (3 115)
Tax paid                                                                           (1 162)                 (375)                (574)
Net cash from operating activities                                                   1 820               (4 399)              (5 234)
Cash flows from investing activities
Purchase of property, plant and equipment                                               (97)               (250)                (346)
Proceeds on disposal of property, plant and equipment                                    4                  19               56
Purchase of intangible assets                                                        (246)                   7                -
Business combinations                                                                    -                   -               16
Sale of business                                                                         -                   -            (396)
Net cash from investing activities                                                   (339)               (224)            (670)
Cash flows from financing activities                                                     -                   -                -
Proceeds on share issue                                                                  -              20 309           20 309
Borrowings repaid                                                                  (6 197)             (2 354)          (4 003)
Finance lease payments                                                                (54)                (24)             (99)
Repayment of directors' loans acquired in business combinations                          -                   -             (21)
Repayment of directors' loans                                                        (365)                (21)            (243)
Net cash from financing activities                                                 (6 616)              17 910           15 943
Total cash movement for the period / year                                          (5 135)              13 287           10 039
Cash at the beginning of the period / year                                          15 397               5 358            5 358
Total cash at end of the period / year                                              10 262              18 645           15 397

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1.   Reporting entity

African Dawn Capital Limited is domiciled in the Republic of South Africa. The unaudited consolidated interim financial
statements for the six months ended 31 August 2015 comprise the results of the Company and its subsidiaries ("the Group")
and the Group's interests in its associate.

2.   Basis of preparation

The consolidated interim financial statements have been prepared using the historical cost convention, as modified for certain
items measured at fair value.

The consolidated interim financial statements have been prepared in accordance with:
     -     International Financial Reporting Standards (IFRS);
     -     IAS 34 - Interim Financial Reporting;
     -     The requirements of the South African Companies Act (Act No 71 of 2008), as amended;
     -     The JSE Listings Requirements;
     -     The SAICA Financial Reporting Guides as issued by the Accounting Practices Committee; and
     -     The Financial Pronouncements as issued by the Financial Reporting Standards Council.

These consolidated interim financial statements should be read in conjunction with the annual financial statements for the
year ended 28 February 2015.

3.   Approval

The consolidated interim financial statements were prepared by D Kohler Professional Accountant (SA) and supervised by the
CEO and the Company's IFRS consultant. They were approved by the Board on 21 December 2015.

4.   Significant accounting policies

The accounting policies adopted in the preparation of the consolidated interim financial statements are consistent with those
applied in the consolidated annual financial statements for the year ended 28 February 2015. For a full list of standards and
interpretations, which have and have not been adopted, refer to the 28 February 2015 consolidated annual financial
statements.

5.   Significant judgements and accounting estimates

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may
differ from these estimates.

In preparing these consolidated interim financial statements, the significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied in the
consolidated financial statements for the year ended 28 February 2015 (refer to note 1.20 of the consolidated annual financial
statements for the year ended 28 February 2015).

6.   Significant transactions
As announced on SENS on 1 July 2015, the vendors of Knife Capital released Afdawn Group from the second NAV liability,
the share issue liability and the contingent liability relating to the additional remuneration. (Refer to notes 20, 37 and 45 in the
consolidated annual financial statements for the year ended 28 February 2015).

As a result of this, a profit of R4 095 000 has been recognised in profit or loss, made up as follows:
- Second NAV liability (a)         R2 095 000
- Share issue liability (b)        R2 000 000

(a)    The debit of R2 095 000 was previously recognised as part of the purchase price and thus affected goodwill.
(b)    The debit of R2 000 000 was previously recognised in profit or loss (loss on fair value relating to contingent consideration).

7.    Reclassifications and prior period errors relating to August 2014 and August 2013

August 2014 – prior period errors
Refer to notes 13 and 14 which explain the prior period errors and the impact on the Knife purchase price and the allocation thereof to
the net assets.

August 2014 and August 2013 – prior period errors
Refer to notes 13 and 14 which explain the prior period errors relating to the equity accounting of Elite Two.

August 2014 and August 2013 – reclassifications
Refer to notes 13 and 14 which explain the reclassifications relating to Elite, Elite Cell Captive and Nexus as a result of these
no longer being discontinued operations.

8.    Business combinations

There were no business combinations or disposals in the six-month period to 31 August 2015.

Refer to note 37 in the consolidated annual financial statements for details of the acquisition of the Knife Capital Group in March 2014. This has
been recognised in the year ended 28 February 2015 (and therefore also in the six-month interim period to 31 August 2014).

Refer to notes 13 and 14 in this consolidated interim report which explain the prior period errors as at August 2014 relating to
the Knife purchase price and the allocation thereof.

9.    Restrictions, guarantees and contingencies

The restrictions, guarantees and contingencies are the same as those disclosed in the consolidated annual financial
statements for the year ended 28 February 2015 (refer to notes 39, 45, 47 and 49) in the consolidated annual finanial statements for the year ended 28 February 2015.

10. Events after the reporting period

Other than as explained below, the events after the reporting period are the same as those disclosed in the consolidated annual financial
statements for the year ended 28 February 2015:

Elite Group transaction
As announced on SENS on 7 December 2015, Afdawn has entered into an agreement to dispose of a portion of Elite Group ("the Transaction").

The Transaction will establish a new black-empowered financial services business, Dzothe Finance Solutions, with Elite's technology forming
the basis of its lending platform. The Transaction capitalises Elite for future growth and positions Afdawn to participate in the growth of this
newly established black-empowered financial services business.

Knife Capital
Subsequent to the period end and the publication of the annual report, Knife Capital was notified of an amendment to the terms of a contract.
As a result of this an impairment of approximately R2 000 000 has arisen and will be recognised in the year ended 29 February 2016.

11. Impairment of trade and other receivables

The carrying amount of trade and other receivables was assessed for impairment at the interim dates and resulted in the following
changes:

Impairment
                                                                               31-Aug-15            31-Aug-14            28-Feb-15
                                                                                   R'000                R'000                R'000
 Movement in impairment provision                                                (1 593)                (708)             (35 824)
12. Segment report

     The Group's reportable segments are unchanged from those disclosed in the consolidated annual financial statements for
     the year ended 28 February 2015. The segment report for the six-month period to 31 August 2014 has been restated to
     comply with this format.

     All the segments operate only in South Africa, largely in the Gauteng and Western Cape provinces therefore no
     geographical information is provided. Similarly all non-current assets are in South Africa.

     31 August 2015
                                                                    Investment
                                                                  advisory and                      Rentals of
                                                                    investment                   properties in
                                                                    management   Micro finance      possession      Other        Total
                                                                         R'000           R'000           R'000      R'000        R'000
     Revenue                                                             5 157          12 366           2 715        434       20 672
     Cost of sales                                                     (1 653)            (61)               -        135      (1 579)
     Other income                                                            1             426               -          1          428
     Investment income                                                      57             246               1      (154)          150
     Finance costs                                                           -           (760)           (372)      (618)      (1 750)
     Operating expenses                                                (2 990)        (11 021)         (1 711)    (4 581)     (20 303)
     Impairment trade receivables                                            -         (2 040)             447          -      (1 593)
     Bad debts written off                                                   -           3 266              23          -        3 289
     Gain on release from vendor liabilities                                 -               -               -      4 095        4 095
     Deemed interest expense                                                 -           (199)               -      (114)        (313)
     Loss on sale of property, plant and equipment                           -             (6)               -        (4)         (10)
     Profit/(loss) before taxation                                         572             736             632      (550)        1 390
     Taxation                                                            (190)               -           (177)      (169)        (536)
     Total comprehensive profit/(loss)                                     382             736             455      (719)          854
     Total assets                                                        4 129          30 304          20 608     31 839       86 880
     Total liabilities                                                   1 509          43 454          21 437    (9 786)       56 615
     Intangible assets                                                   4 726           1 020               -          -        5 746
     Goodwill                                                            8 076               -               -          -        8 076
     Property, plant and equipment                                          80             623              11        356        1 070

     31 August 2014
                                                                    Investment
                                                                  advisory and                      Rentals of
                                                                    investment                   properties in
                                                                    management   Micro finance      possession       Other       Total
                                                                         R'000           R'000           R'000       R'000       R'000
     Revenue                                                             2 837          12 752           2 619       (381)      17 827
     Cost of sales                                                     (1 188)           (105)               -       1 023       (269)
     Other income                                                            -             456               -       1 316       1 772
     Investment income                                                       3               -               1         339         344
     Finance costs                                                         (1)         (1 006)           (380)       (208)     (1 596)
     Operating expenses                                                (1 868)        (21 725)          (1 230)      (874)    (25 697)
     Impairment trade receivables                                            -         (2 933)           (145)       2 371       (708)
     Bad debts written off                                                   -         (5 378)            (43)           -     (5 421)
     Equity accounted loss                                                   -         (2 256)               -           -     (2 256)
     Profit on disposal of property,
     plant and equipment                                                     -               -              -          19           19
     (Loss)/profit before taxation                                       (216)        (11 884)          1 009       1 236      (9 856)
     Taxation                                                            (296)               -          (283)           -        (579)
     Discontinued operations                                                 -               -              -        (11)         (11)
     Total comprehensive profit/(loss)                                   (512)        (11 884)            726       1 224     (10 446)
     Total assets                                                        1 741          35 403         22 302      57 767      117 212
     Total liabilities                                                   2 036          43 954         22 622     (3 377)       65 235
     Intangible assets                                                   5 995           2 546              -           -        8 541
     Goodwill                                                            8 076               -              -           -        8 076
     Property, plant and equipment                                          40             823              -         241        1 105

13. Changes to prior year amounts

Prior year amounts have been restated (as indicated in note 14) and as explained below:
Discontinued operations - reclassifications

Elite – reclassification from discontinued to continuing operations

The results of Elite have been reclassified from discontinued operations to continuing operations, for all reporting periods.
The amounts for prior periods are described as having been re-presented.

Elite Cell – reclassification from discontinued to continuing operations

The results of Elite Cell have been reclassified from discontinued operations to continuing operations, for all reporting
periods. The amounts for prior periods are described as having been re-presented

Nexus - reclassification from discontinued to continuing operations

The results of Nexus have been reclassified from discontinued operations to continuing operations, for all reporting periods.
The amounts for prior periods are described as having been re-presented.

As disclosed in the year ended 28 February 2015, Nexus went into liquidation in October 2014.

Material prior period errors and other reclassifications

The prior period amounts have been restated for material prior period errors and additional items that have been
reclassified as explained below:

Knife Capital Group acquisition (2014)

The acquisition of the Knife Capital Group was not correctly accounted for, in terms of IFRS 3 – Business Combinations, in
the six-month period to 31 August 2014.

The impact of the restatements is as follows:

Goodwill increased by                                                                                  R4 046 000
Intangible assets decreased by                                                                           (R2 000)
Deferred tax liability increased by (not recognised on the acquired intangible assets)               (R1 833 000)
Loans to directors increased by (second NAV top-up as a result of
28 February 2014 prior period errors)                                                                (R2 095 000)
Share capital and share premium increased                                                              (R312 000)
Trade payables decreased by                                                                              R196 000

In addition, the amortisation of the intangible assets led to a reversal of a portion of the deferred tax liability of R1 833 000
referred to above. The impact of this is that the deferred tax liability decreases by R154 000 with an equivalent credit in
profit or loss.

Elite trade receivables - doubtful debt impairment error (2014 and 2013)

As disclosed in the year ended 28 February 2015, a material prior period error relating to the additional impairment of trade receivables
in Elite was discovered during the year.

It is impracticable to determine the impact as at 31 August 2013 because management would have to re-create debtors'
records which would involve too much subjectivity. The impairment was therefore recognised in the year ended
28 February 2014. There was no adjustment required to the amount originally recognised as at 31 August 2014.

The Company did not recognise any taxation during 2014 and 2013 and does not recognise deferred tax on assessed losses
because it does not meet the requirements in IAS 12. As a result, the prior year period has no impact on tax or
deferred tax.

Elite Two error (2014 and 2013)

As disclosed in the year ended 28 February 2015, Elite had significant influence over Elite Two from 2011 until it obtained
control in November 2014. In light of the fact that Elite had not previously accounted for any investment in an associate,
no equity accounted earnings relating to Elite Two were recognised in the six-month periods 31 August 2014 and 31 August 2013.

The adjustment resulted in R2,256 million being recognised as a profit from the equity account investment in the six-month
period to 31 August 2014.
The Company did not recognise any taxation during 2014 and 2013 and does not recognise deferred tax on assessed losses
because it does not meet the requirements in IAS 12. As a result, the prior period adjustment has no impact on tax or
deferred tax.

Non-cash items in the cash flow statement (2014)

As disclosed in the year ended 28 February 2015, several non-cash items were previously not adjusted against the loss from
operations to arrive at the cash generated from operations. These have subsequently been adjusted in the six-month
period to 31 August 2014.

This prior period adjustment has no impact on tax or deferred tax.

The impact of the 2014 restatements on loss and loss per share as well as headline loss and headline loss per share is as
follows:

Loss per share from continuing operations 31 August 2014                  Gross amount        Tax effect            Impact
                                                                                R'000             R'000         cents per
                                                                                                                    share
Loss as previously reported                                                   (2 328)                 -            (0.29)
Knife acquisition error                                                           154                 -              0.02
Elite cell error                                                                 (69)                 -            (1.01)
Reclassification of discontinued operations to continuing                     (8 192)                 -            (1.02)
Weighted average adjustment for rights issue 2015 (A)                               0                 -              0.06

                                                                             (10 435)                 -            (1.24)

Loss per share discontinued operations 31 August 2014                     Gross amount        Tax effect           Impact
                                                                                R'000             R'000         cents per
                                                                                                                    share
Loss as originally stated                                                     (8 203)                 -            (1.02)
Reclassification of discontinued operations to continuing                       8 192                 -              1.02
Weighted average adjustment for rights issue 2015 (A)                               0                 -              0.00
                                                                                 (11)                 -              0.00

Headline loss per share from continuing operations 31 August 2014         Gross amount       Tax effect            Impact
                                                                                 R'000            R'000         cents per
                                                                                                                    share
Headline loss as previously reported                                           (5 894)                -            (0.73)
Profit on disposal of property, plant
and equipment (tax effect not previously shown                                       0                5              0.00
Impairment reclassification reversal)                                            3 547                -              0.44
Reclassifications of discontinued operation to continuing                      (8 192)                -            (1.02)
Elite cell                                                                        (69)                -            (0.02)
Knife Capital                                                                      154                -              0.02
Weighted average adjustment for rights issue 2015 (A)                                0                -              0.06

                                                                              (10 454)                5            (1.24)

Headline loss per share from discontinued operations 31 August 2014                          Tax effect    HEPS effect in
                                                                          Gross amount            R'000         cents per
                                                                                 R'000                              share
As originally stated                                                           (8 203)                -            (1.02)
Reclassification from discontinued operations to continuing                      8 192                -              1.02
Weighted average adjustment for rights issue 2015 (A)                                -                -              0.00
                                                                                  (11)                -                 -

(A) This relates to the rights issue that took place in the 2015 financial year – refer to the annual financial statements,
for the year ended 28 February 2015.

14. Comparative amounts

The effects of the restatements and reclassifications explained in note 42 in the consolidated annual financial statements for the year 28 February 2015 affected most
disclosure items indicated in the following tables:
                                        As                                              Elite Two
                                previously                                  Debtors        equity    Elite Cell                                  Reclassifi-
                                  reported                  Elite        impairment    accounting       Captive         Knife     Impairment      cation and
                                  Aug 2014       reclassification             error         error         error   acquisition   reclassified        rounding           Total
Non-current assets
Property, plant and
equipment                              282                   823                   -             -            -             -                -               -          1 105
Intangible assets                    5 995                 2 546                   -             -            -           (2)                -               2          8 541
Goodwill                             4 030                     -                   -             -            -         4 046                -               -          8 076
Investment in associate                  -                 2 259                   -       (2 256)            -             -                -               -              3
                                    10 307                 5 628                   -       (2 256)            -         4 044                -               2         17 725
Current assets
Properties in possession           24 748                      -                  -             -             -             -                -               -         24 748
Trade and other receivables        19 900                 44 785           (14 188)             -         (189)             -            3 547               -         53 855
Other financial assets                  -                  1 554                  -             -           173             -                -               -          1 727
Current tax receivable                131                    381                  -             -             -             -                -               -            512
Cash and cash equivalents          17 208                  1 437                  -             -             -             -                -               -         18 645
                                   61 987                 48 157           (14 188)             -          (16)             -            3 547               -         99 487
Non-current assets held for
sale                               51 475               (50 184)                  -         2 256             -             -          (3 547)               -           -
Total assets                      123 769                  3 601           (14 188)             -          (16)         4 044                -               2     117 212

Equity
Share capital and share
premium                           313 633                      -                   -            -             -           312                -             (2)     313 943
Accumulated loss                (251 754)               (10 297)                   -            -          (69)           154                -               -   (261 966)
                                   61 879               (10 297)                   -            -          (69)           466                -             (2)      51 977
Non-current liabilities
Borrowings                          8 985                  2 787                   -            -             -             -                -         (1 525)         10 247
Deferred tax liabilities                -                      -                   -            -             -         1 679                -               -          1 679
Finance lease liabilities               -                    135                   -            -             -             -                -               -            135
                                    8 985                  2 922                   -            -             -         1 679                -         (1 525)         12 061
Current liabilities
Loans from directors (Knife
vendors)                                -                      -                  -             -             -         2 095                -           1 460          3 555
Borrowings                          8 616                 14 462                  -             -             -             -                -              66         23 144
Current tax payable                18 563                    344              (344)             -             -             -                -             (1)         18 562
Finance lease liabilities               -                    122                  -             -             -             -                -               -            122
Operating lease liability               9                      -                  -             -             -             -                -             (9)              -
Trade and other payables            5 553                  2 368                  -             -            53         (196)                -              13          7 791
                                   32 741                 16 952                  -             -            53         1 899                -           1 529         53 174
Liabilities of disposa
groups                              20 164              (20 164)                   -            -             -             -                -               -           -
Total liabilities                   61 890                 (290)                   -            -            53         3 578                -               4      65 235
Total equity and liabilities       123 769              (10 587)                   -            -          (16)         4 044                -               2     117 212

Statement of comprehensive income 31 August 2014

                                          As                            Reclassification    Elite Two
Statement of Profit or Loss       previously                                       Nexus       equity    Elite Cell           Knife                     Reclassifi
and Other Comprehensive             reported                   Elite        discontinued   accounting       Captive     acquisition   Impairment        cation and
Income - 2014                       Aug 2014        Reclassification           operation        error         error           error reclassified          rounding          Total
Revenue                                5 040                  13 231                  35            -         (479)               -            -                 -         17 827
Cost of sales                           (37)                   (170)               (127)            -            65               -            -                 -          (269)
Gross profit                           5 003                  13 061                (92)            -         (414)               -            -                 -         17 558
Other income                           1 335                     456                   -            -             -               -            -              (19)          1 772
Operating expenses                   (7 841)                (24 130)                 (5)        2 256           322             154        3 547                 0       (25 697)
Operating loss                       (1 503)                (10 613)                (97)        2 256          (92)             154        3 547              (19)        (6 367)
Investment income                        344                      44                   -            -          (44)               -            -                 -            344
Profit on disposal of
property, plant and equipment                -                      -                  -             -              -              -               -              19            19
Loss from equity
accounted investment                        -                      -                   -       (2 256)              -              -               -               -       (2 256)
Finance costs                           (591)                (1 006)                   -             -              -              -               -               1       (1 596)
Loss for the period before
tax                                (1 750)           (11 575)                (97)                  -                  (136)             154          3 547               1           (9 856)
Taxation                             (578)               (67)                   -                  -                     67                              -             (1)             (579)
Loss for the period from
continuing operations              (2 328)           (11 642)                (97)                  -                   (69)             154          3 547                  -        (10 435)
Loss from discontinued
operations                         (8 203)                11 642               97                  -                      -               -        (3 547)                  -            (11)
Loss for the period               (10 531)                     -                -                  -                   (69)             154              -                  -        (10 446)
Other comprehensive
income                                   -                     -                -                  -                      -               -              -                  -               -
Total comprehensive loss
for the period                    (10 531)                     -                -                  -                   (69)             154              -                  -        (10 446)

Statement of changes in equity
                                                                                                  Equity
                                                     As                                          accounted
                                             previously                    Debtors              instrument               Impairment      Elite Cell                Knife        Reclassifi-
Statement of Changes in                        reported     impairment prior error             error prior             reclassified         Captive          acquisition         cation and
Equity - 2014                                  Aug 2014                       year                    year               prior year           error                error           rounding         Total
Total share capital                             313 633                          -                       -                        -               -                  312                (2)       313 943
Accumulated loss                              (251 754)                   (10 297)                       -                        -            (69)                  154                  -     (261 966)
Total equity                                     61 879                   (10 297)                       -                        -            (69)                  466                (2)        51 977

Statement of Financial Position – 2013
                                                       Elite Two                                                                                  Elite Two
                                                          equity      Elite debtors         Reclassification            Reclassification             equity                           Reclassification
                                    As previously     accounting         impairment                    Elite                       Nexus         accounting        Elite Cell                 PIP from
                                     reported        error prior        error prior             discontinued                discontinued              error      discontinued              receivables          Total
                                            Aug 2013        year               year                operation                   operation            current         operation             and rounding       Restated
Statement of Financial Position - 2013
Non-current assets
Property, plant and equipment                 102              -                    -                    1 043                            -               -                      -                    -         1   145
Intangible assets                               -              -                    -                    2 410                            -               -                      -                    -         2   410
Investment in associate                         -            787                    -                        -                            -             876                      -                    -         1   663
                                              102            787                                         3 453                            -             876                      -                    -         5   218
Current assets
Properties in possession                   21 327              -                 -                                -                       -               -                 -                     3 841        25 168
Trade and other receivables                31 436              -            (7 455)                      54 899                           -               -                 -                   (3 840)        75 040
Other financial assets                          -              -                   -                          -                           -               -             1 412                         -         1 412
Current tax receivable                         95              -                   -                          -                           -               -                 -                         -            95
Cash and cash equivalents                   2 577              -                   -                      4 678                           -               -                 -                         1         7 256
                                           55 435              -            (7 455)                      59 577                           -               -             1 412                         2       108 971
Non-current assets held for sale           64 442              -                   -                   (63 030)                           -               -           (1 412)                         -             -
Total assets                              119 979            787            (7 455)                           -                           -             876                 -                         2       114 189
Equity
Share capital and share premium           284 634              -                 -                            -                           -               -                      -                    -       284 634
Accumulated loss                        (225 462)            787           (7 111)                            -                           -             876                      -                    1     (230 909)
                                           59 172            787           (7 111)                            -                           -             876                      -                    1        53 725
Non-current liabilities
Borrowings                                  9 474              -                        -                15 735                           -                  -                   -                    -        25 209
Finance lease liabilities                       -              -                        -                   257                           -                  -                   -                    -           257
                                            9 474              -                        -                15 992                           -                  -                   -                    -        25 466
Current liabilities
Borrowings                                  7 756              -                  -                       1 245                           -               -                    -                      -         9 001
Current tax payable                        18 188              -              (344)                         283                           -               -                   93                      -        18 220
Finance lease liabilities                       -              -                  -                         124                           -               -                    -                      -           124
Trade and other payables                    3 984              -                  -                       3 555                           -               -                  113                      1         7 653
                                           29 928              -              (344)                       5 207                           -               -                  206                      1        34 995
Liabilities of disposal groups             21 405              -                  -                    (21 199)                           -               -                (206)                      -             -
Total liabilities                          60 807              -              (354)                           -                           -               -                    -                      1        60 464
Total equity and liabilities              119 979            787            (7 455)                           -                           -             876                    -                      2       114 189

                                                              Elite Two                                                                             Elite Two
                                                                 equity    Elite debtors         Reclassification             Reclassification         equity
                                         As previously       accounting       impairment                    Elite                        Nexus     accounting        Elite Cell         Reclassification
Statement of Profit or Loss and Other         reported      error prior      error prior             discontinued                 discontinued          error      discontinued                 PIP from            Total
Comprehensive Income - 2013                      Aug 2013               year               year             operation            operation       current        operation              receivables       Restated
Revenue                                             3 143                  -                                   15 196                  282             -              580                    (385)         18 816
Cost of sales                                           -                  -                                     (95)                (185)             -            (495)                      185          (590)
Gross profit                                        3 143                  -                    -              15 101                   97             -               85                    (200)         18 226
Other income                                        1 344                  -                                      500                    3             -                 -                       -          1 847
Operating expenses                                (6 287)                  -          (7 455)                 (6 342)                 (48)             -            (348)                      200       (20 280)
Operating loss                                    (1 800)                  -          (7 455)                   9 259                   52             -            (263)                        -          (207)
Investment income                                      41                  -                                        1                    -             -              38                         -             80
Profit from equity accounted
investment                                              -                787                                      (787)                    -            876             -                        -            876
Finance costs                                       (524)                                                       (1 705)                    -              -             -                        -        (2 229)
Loss for the period before tax                    (2 283)               787           (7 455)                     6 768                   52            876         (225)                        -        (1 480)
Taxation                                            (219)                                 344                     (360)                    -              -          (33)                        -          (268)
Loss for the period from continuing
operations                                        (2 502)               787          (7 111)                        6 408               52               876        (258)                        -        (1 748)
Loss from discontinued operations                 (1 577)                                                            (84)             (52)                 -          258                        -        (1 455)
Loss for the period                               (4 079)               787           (7 111)                       6 324                -               876            -                        -        (3 203)
Other comprehensive income                             -                                                                -                -                 -            -                        -              -
Total comprehensive loss for the
period                                                (4 079)            787        (7 111)                         6 324                  -             876                  -                  -        (3 203)

Statement of Changes in equity
                                                            Elite Two                                                                       Elite Two
                                                               equity     Elite debtors         Reclassification       Reclassification        equity
                                      As previously        accounting        impairment                    Elite                  Nexus    accounting        Elite Cell           Reclassification
                                           reported       error prior       error prior             discontinued           discontinued         error      discontinued                   PIP from           Total
                                           Aug 2013              year              year                operation              operation       current         operation                receivables        Restated
Statement of Changes in Equity -
2013
Share capital                                5 074                 -                  -                         -                     -              -                    -                          -        5   074
Share premium                              279 560                 -                  -                         -                     -              -                    -                          -      279   560
Total share capital                        284 634                 -                  -                         -                     -              -                    -                          -      284   634
Accumulated loss                         (225 462)               787            (7 111)                         -                     -            876                    -                          1      230   909
Total equity                                59 172               787            (7 111)                         -                     -            876                    -                          1       53   725

15. Cash generated from / (used in) operations
                                                                   31-Aug-15     31-Aug-14          28-Feb-15
                                                                       R'000         R'000              R'000
Profit/(loss) before taxation                                          1 390       (9 856)           (31 977)
Adjustments for:
Depreciation                                                              150          239                424
Loss/(profit) on disposal of property, plant and equipment                 10         (19)                 23
Movement in operating lease liability                                    (23)        (174)              (151)
Gain on present value adjustments on interest free                          -            -              (661)
borrowings
Equity accounted loss                                                     -         2 256               2 259
Investment income                                                     (150)         (344)               (735)
Finance costs                                                         1 398         1 596               3 115
Fair value of contingent consideration                                    -             -               2 000
Profit on release from vendor liabilities                           (4 095)             -                   -
Non-cash finance costs (penalties and interest on income tax)                                           5 518
Amortisation                                                             779              839           1 758
Deemed interest expense                                                  313                -             110
Profit on disposal of Nexus                                                -                -         (3 231)
Impairment of properties in possession                                     -                -           1 500
Non-cash portion of NHFC guarantee                                         -                -           1 750
Impairment of intangible asset                                             -                -           1 150
Changes in working capital:
Properties in possession                                                  280           -                280
Trade and other receivables                                             1 548       5 192             14 798
Trade and other payables                                                2 551     (2 328)            (1 514)
Deferred income                                                         (474)           -                474
Other financial assets                                                    370       (173)                830
                                                                        4 047     (2 772)            (2 280)
16. Related parties
Related party relationships – other than as disclosed below, there have been no significant changes from the disclosures in the consolidated annual
financial statements for the year ended 28 February 2015.

Executive and non-executive directors             As per directors' report in the consolidated annual financial statements
                                                  for the year ended 28 February 2015
                                                  CM Bull (Resigned 12 June 2015)
Other key management
                                                  DD Breedt
                                                  GE Stoop (Resigned 11 August 2014)
                                                  DA Turner (Resigned 11 August 2014)

Related party transactions                                                    31 August 2015
                                                                                       R'000
Release from obligation to settle liabilities relating to the
acquisition of Knife Capital
EA van Heerden                                                                          1,365
JK van Zyl                                                                              1,365
A Bohmert                                                                               1,365

Cash paid to directors relating to the acquisition of Knife Capital
EA van Heerden                                                                             122
JK van Zyl                                                                                 122
A Bohmert                                                                                  122

17. Earnings / (loss) per share

Basic and diluted earnings / (loss) per share

Basic and diluted earnings / (loss) per share are calculated by dividing the profit / (loss) attributable to equity holders of the
Company by the weighted average number of ordinary shares in issue during the period (excluding ordinary shares held as
treasury shares).

                                                         31 August 2015    31 August 2014

Basic and diluted earnings / (loss) per share
From continuing operations (c)                                     0.10            (1.24)
From discontinued operations (c)                                      -                 -
                                                                   0.10            (1.24)
Reconciliation of weighted average number of
ordinary shares
Number of ordinary shares in issue                              880 271          508,184
Adjusted for:
Rights issue                                                          -           246,345
Shares issued Knife Capital Group acquisition 28 March                -            85,326
2014

Weighted average number of shares used for loss
and headline loss per share                                     880 271          839 855

Headline and diluted headline earnings / (loss) per share

From continuing operations (c)                                     0.10           (1.24)
From discontinuing operations (c)                                     -                -
Total                                                              0.10           (1.24)

Headline earnings / reconciliation
Profit/(loss) for the period for continuing operations              854          (10 435)
Adjusted for:
Loss / (profit) on disposal of property, plant and equipment         10             (19)
Tax effect on disposal of property, plant and equipment             (3)                5
Headline profit/(loss) - continuing operations                      861         (10 449)
Loss for the period – discontinued operations                         -             (11)
Headline earnings/(loss) for the period                             861         (10 460)
COMMENTS FROM THE BOARD

REVIEW FOR THE PERIOD

The board is pleased to report that the results for the six-month period ended 31 August 2015 show an improvement on the comparable period ended
31 August 2014 and also an improvement on 28 February 2015. In comparison to the period ended 31 August 2014 revenue increased from R17,8 million
to R20,7 million and operating expenses decreased from R25,7 million to R20,3 million. The loss reduced from R10,4 million to a profit of R854 000.
The release of R4,09 million of Knife Capital Vendor liabilities and reduced finance costs had the net effect of a Headline Earnings per share of
0.10 cents versus a Headline Loss per share 1,24c for the comparable period. The results were also affected by increased audit and consulting expenses
related to the prior year error. The repayment of R6.6 million of liabilities and R1,8 million cash generated from operations resulted in a decrease of
cash resources by R5,1 million to R10,2 million.

All the main operating entities made a profit in the 2015 interim period

DIRECTORATE

The directors in office at the date of this report are:

Director           Office                    Designation                   Changes
                   Chief Executive Officer
                   (CEO) and acting
WJ Groenewald      Chairman                  Executive(a)
HH Hickey          Chair Audit Committee     Independent Non-executive
V Lessing                                    Independent Non-executive
SM Roper                                     Independent Non-executive     Appointed 22 April 2014
EA van Heerden     Chief Financial           Executive                     Appointed 27 March 2014
                   Officer
JK van Zyl                                   Executive (b)
A Böhmert                                    Executive                     Appointed 22 April 2014
JS van der Merwe   Chairman                  Non-executive (c)             Resigned 2 June 2014
CM Bull            Chairman                  Independent Non-executive     Appointed 31 October 2014, resigned
                                                                           12 June 2015

(a) Appointed CEO on 28 March 2014 and acting Chairman from 4 June 2014 – 31 October 2014. Currently acting Chairman from 12 June 2015.
(b) Changed from non-executive to Executive on 28 March 2014.
(c) Changed from Executive to Non-executive on 24 February 2014.

GOING CONCERN
These results have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be
available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments
will occur in the ordinary course of business.

Certain material uncertainties relating to events or conditions which may cast doubt upon the ability to continue as a going concern were
outlined in note 1.20 of the Annual Financial Statements for the year ended 28 February 2015. The following actions were implemented to reduce
these uncertainties:

  -   Timing of the amount payable to SARS (please refer to SARS note below)
  -   Ability of Afdawn and all of its subsidiaries to meet ongoing commitments. The risk of this uncertainty materialising in a manner that could affect
      the relevance of the going concern assumption could arise:
           -   The Elite transaction (as anounced on 7 December 2015) will recapitalise Elite and provide access to funding to grow the business. Sandown has
               also agreed to lengthen the term of the loan to April 2017. Afdawn will receive a R1.37 million cash injection and will receive a monthly management fee.
           -   Almika sales continue to proceed as expected and a further 17 units were transferred after year-end. A further 22 units are exprected to
               be transferred during the next three months.
           -   The Knife Capital settlement announced on 01 July 2015 reduced the Knife Capital vendor liability by R4 million.
           -   The Group also reduced debt during the period by R6 million while cash balances decreased by R5.1 million.

SOUTH AFRICAN REVENUE SERVICES ("SARS")
A Section 200 application was made in June 2013 and was declined in May 2015 on the basis that Afdawn Group's financial position did not warrant a
compromise. A new submission has subsequently been made to SARS in October 2015 with a view to reaching a settlement on this. The current relationship
with SARS is constructive and conducive to an amicable outcome.

A liability has been recognised in full for all interest and penalties that are payable to SARS.

ALLEGRO HOLDINGS PROPRIETARY LIMITED ("ALLEGRO") STATUS
Afdawn has 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 previous conclusion. At the date of signing this interim report no claims
have been received by Afdawn, nor has it been able to establish any basis for a potential claim against Afdawn and therefore no
provisions have been made for any such contingency.

NATIONAL HOUSING FINANCING CORPORATION ("NHFC")
In terms of the settlement agreement with the NHFC that was signed on 30 May 2011, Nexus' (a wholly-owned subsidiary of Afdawn) facility of
R5 million became payable in October 2013. Nexus had ceded its debtors book as security for payment of the amount. NHFC demanded payment
from Afdawn. Nexus was liquidated in October 2014 and NHFC instituted arbitration proceedings against Afdawn for the payment of R5 million
plus interest and costs in terms of the settlement agreement. In terms of the out-of-court settlement, Afdawn is, by virtue of being guarantor,
liable for payment of an amount of R3,75 million. R2 million was paid on 6 February 2015 and R1.75 million was repaid on 20 September 2015.

RESTRUCTURING OF THE AFDAWN BOARD
The Board is pleased to announce that Mr Graham Hope will join the Board as Chief Financial officer with effect from 11 January 2016. Graham brings a
wealth of experience to the Group and he will also serve as FD in both Dzothe Finance Solutions and Elite Group. As previously announced Eben van Heerden
will step down as Chief Financial Officer and will focus on his role as CEO of Knife Capital. Furthermore, the Board will consist of only two
executive directors, being the Group CEO and the Group FD, with the rest being non-executive directors as from 11 January 2014.

DIVIDENDS
No dividends have been declared for this interim period (August 2014: R0).

PROSPECTS
As stated in the memorandum published on 8 December 2015 clarification on vision and strategy will be announced in due course.
The SARS liabilities remains the main risk to the Group going forward.

ADMINISTRATION

Registered office                                      Company secretary
202 Waterfront Terraces                                A Rich (on behalf of Statucor Proprietary Limited)
Waterfront Road                                        Auditors
Tygervalley Waterfront                                 Grant Thornton Cape Inc.
7530                                                   Designated Advisor
Tel: +27 (12) 914 5566                                 PSG Capital

Transfer secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001

Date: 22 December 2015

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