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56
JOHN DANIEL HOLDINGS LIMITED AND ITS SUBSIDIARIES
INTEGRATED ANNUAL REPORT 2011
3. Going concern
We draw attention to the fact that at 30 September 2011,
the company had accumulated losses of R 41 518 598.
The annual financial statements 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 set-
tlement of liabilities, contingent obligations and commit-
ments will occur in the ordinary course of business.
The ability of the group to continue as a going concern is
dependent on a number of factors. The most significant
of these is that the directors continue to procure fund-
ing for the ongoing operations for the group. The Board
has obtained a letter of continued financial support from
Escalator in terms of the finance restructure agreement
signed on 8 September 2010.
4. Events after the reporting period
The board reviewed various options during the 15 month
period aimed at strengthening the Group’s statement of
financial position. On 10 June 2011 the board announced
the following partially underwritten rights offers:
•
a R15 million JDH Rights Offer at 7 cents per share
underwritten to the value of R10 million by Escala-
tor; and
•
a R4.4 million Lazaron Rights Offer underwritten to a
minimum value of R1.5 million by JDH.
The main objectives of the corporate actions are to re-
capitalise the Group and return the statement of finan-
cial position to solvency.
The JDH Rights Offer was approved by the JSE and
closed out on 14 October 2011. The Rights Offer of up
to R15 million at the rights offer price of 7 cents per
share was successfully subscribed for in its entirety.
The 214 285 714 rights offer shares were issued to ex-
isting shareholders, shareholders applying for excess
shares and the underwriter, Escalator.
Included in the Lazaron Rights Offer circular is a Sec-
tion 112 resolution, approve by Lazaron shareholders on
7 December 2011, to dispose of the Lazaron sales infra-
structure and the Lazaron laboratory equipment to JDH,
who in turn will on sell these assets to Cryo-Save SA. This
transaction removes all significant overheads from the
Lazaron company while it retains annuity income on its
existing client base.
In addition, a General Offer to Lazaron non-controlling
shareholders to swap their Lazaron shares for JDH shares
is included in the corporate action. The swap provides
Lazaron shareholders with incremental value and en-
hanced tradability.
5. Directors’ interest in the company
Total
shares
%
holding
Beneficial
Non-
beneficial
Direct Indirect Direct Indirect
S Tshiki
4,820 0.003 4,820
-
-
-
There were no changes from in the directors’ interest dur-
ing the 15 month period ending 30 September 2011 and
up to the date of approval of the financial statements .
6. Accounting policies
The financial statements have been prepared in accor-
dance with International Financial Reporting Standards
and in the manner required by the Companies Act and
the JSE Listing Requirements. The principle accounting
policies adopted in preparation of these financial state-
ments are consistent with those of the prior year, except
for the changes set out in notes 2 and 3.
7. Authorised and issued share capital
The authorised share capital was increased from R1 500
000 divided into 150 000 000 ordinary shares of one cent
each, to R10 000 000 divided into 1 000 000 000 ordinary
shares of one cent each.
The increase in authorised share capital was approved by
the shareholders at the annual general meeting held on
28 January 2011 and subsequenlty lodged with CIPC.
Directors’ Report -
Continued