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COMMAND HOLDINGS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1999/014759/06)
(PREVIOUSLY OCTOLITH INVESTMENTS (PROPRIETARY) LIMITED)
("COMMAND")
ABRIDGED PROSPECTUS
RELATING TO
A PRIVATE PLACING OF FULLY PAID RENOUNCEABLE LETTERS OF ALLOCATION IN RESPECT
OF 47 000 000 ORDINARY SHARES OF 0,001 CENT EACH ("ORDINARY SHARES") IN THE
SHARE CAPITAL OF COMMAND AT A PRICE OF 100 CENTS PER ORDINARY SHARE.
THE PRIVATE PLACING WAS OPEN DURING THE PERIOD WEDNESDAY, 19 JANUARY 2000 TO
MONDAY, 31 JANUARY 2000.
THIS ABRIDGED PROSPECTUS IS NOT AN INVITATION TO THE PUBLIC TO SUBSCRIBE FOR
SHARES IN COMMAND, BUT IS ISSUED IN COMPLIANCE WITH THE LISTINGS REQUIREMENTS
OF THE JOHANNESBURG STOCK EXCHANGE ("THE JSE") FOR THE PURPOSE OF PROVIDING
INFORMATION TO THE PUBLIC REGARDING COMMAND. THE INFORMATION HAS BEEN EXTRACTED
FROM THE DETAILED PROSPECTUS OF COMMAND.
THE DIRECTORS OF COMMAND, COLLECTIVELY AND INDIVIDUALLY, ACCEPT FULL
RESPONSIBILITY FOR THE ACCURACY OF THE INFORMATION GIVEN AND CERTIFY THAT, TO
THE BEST OF THEIR KNOWLEDGE AND BELIEF, THERE ARE NO OTHER FACTS, THE OMISSION
OF WHICH WOULD MAKE ANY STATEMENT FALSE OR MISLEADING, THAT THEY HAVE MADE ALL
REASONABLE ENQUIRIES TO ASCERTAIN SUCH FACTS AND THAT THE PROSPECTUS CONTAINS
ALL INFORMATION REQUIRED BY LAW.
THE ORDINARY SHARES ISSUED PURSUANT TO THE FULLY PAID RENOUNCEABLE LETTERS OF
ALLOCATION ("RLA'S"), WHICH WERE PLACED IN TERMS OF THE PROSPECTUS, RANK PARI
PASSU WITH ALL THE ISSUED ORDINARY SHARES IN THE SHARE CAPITAL OF COMMAND.
AN ENGLISH COPY OF THE PROSPECTUS, ACCOMPANIED BY THE DOCUMENTS REFERRED TO
UNDER "REGISTRATION OF PROSPECTUS AND SUPPORTING DOCUMENTS" IN PARAGRAPH 18 OF
THE PROSPECTUS, WAS REGISTERED BY THE REGISTRAR OF COMPANIES AT PRETORIA ON
TUESDAY, 18 JANUARY 2000 IN TERMS OF SECTION 155(1) OF THE COMPANIES ACT, 1973
(ACT 61 OF 1973), AS AMENDED.
1. RESULTS OF THE PLACING
THE LETTERS OF ALLOCATION IN RESPECT OF THE 47 000 000 ORDINARY SHARES OF 0,001
CENT EACH IN THE SHARE CAPITAL OF COMMAND AT AN ISSUE PRICE OF 100 CENTS PER
ORDINARY SHARE OFFERED IN TERMS OF THE PROSPECTUS, WERE PLACED WITH
INSTITUTIONS, MEMBERS OF THE PUBLIC, VENDORS OF THE ORIGINAL BUSINESSES TO SSI
AND ASSOCIATES OF THE CONTROL CONSORTIUM HEADED BY MR JOHNNY IMERMAN.
2. HISTORY
COMMAND WAS INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA ("SOUTH AFRICA") AS A
PUBLIC COMPANY ON 10 NOVEMBER 1999 FOR THE PURPOSE TO RENDER COMPREHENSIVE
SERVICES TO THE CRIMINAL JUSTICE AND SECURITY INDUSTRIES IN THE PRIVATE AND
GOVERNMENT SECTORS. COMMAND WAS INITIALLY INCORPORATED AS OCTOLITH INVESTMENTS
(PROPRIETARY) LIMITED BUT CHANGED ITS NAME TO COMMAND HOLDINGS LIMITED ON 9
JULY 1999. ON 8 DECEMBER 1999, IT ENTERED INTO THE SEVENTY SEVEN INVESTMENT
(PROPRIETARY) LIMITED ("SSI") BUSINESS ACQUISITION AGREEMENT WITH SSI IN TERMS
OF WHICH IT ACQUIRED, THROUGH COMMAND SECURITY SERVICES ("CSS"), A WHOLLY-OWNED
SUBSIDIARY OF COMMAND, THE SSI BUSINESS, AS A GOING CONCERN, WITH EFFECT FROM
31 DECEMBER 1999.
DURING THE PERIOD OF APPROXIMATELY 18 MONTHS PRIOR TO THE LISTING, MESSRS
JOHNNY IMERMAN AND HENK BRUYN INVESTIGATED THE OPERATIONS OF APPROXIMATELY 30
SECURITY SERVICE PROVIDERS WITH THE PURPOSE OF ESTABLISHING A CORE BUSINESS
UNIT FOR COMMAND. AFTER CAREFULLY SELECTING THE MOST SUITABLE OF THOSE, AN
EXTENSIVE DUE DILIGENCE INVESTIGATION INTO EACH OF THE BUSINESSES WAS
COMMISSIONED AND DELOITTE & TOUCHE ("D&T") PERFORMED AUDITS ON THESE BUSINESSES
IN ORDER TO ESTABLISH, INTER ALIA, APPROPRIATE SELLING PRICES FOR THE
BUSINESSES. FINALLY, 14 BUSINESSES OPERATED BY 21 DIFFERENT COMPANIES AND/OR
CLOSE CORPORATIONS, WERE SELECTED TO BE ACQUIRED BY SSI AS A FIRST STEP IN
SETTING UP THE COMMAND GROUP. IT WAS AGREED WITH THE ORIGINAL VENDORS THAT THE
FIRST TRANCHES OF THE VARIOUS PURCHASE CONSIDERATIONS, IN AGGREGATE AMOUNTING
TO R44 102 435 PLUS ACCRUED INTEREST UNTIL DATE OF SETTLEMENT, WOULD BE SETTLED
IN CASH AND THAT THE BALANCE THEREOF, IN AGGREGATE AMOUNTING TO R24 266 696,
WOULD BE SETTLED, ON THE FIRST ANNIVERSARY DATES OF THE VARIOUS ACQUISITIONS,
AT THE ELECTION OF THE VENDORS CONCERNED, IN CASH OR IN THE FORM OF COMMAND
ORDINARY SHARES AT R1,00 PER ORDINARY SHARE. THIS PROVIDES COMMAND WITH THE
FLEXIBILITY TO SET UP A NATIONAL AND REGIONAL MANAGEMENT STRUCTURE WHICH DOES
NOT NECESSARILY HAVE TO INCORPORATE ANY OR ALL OF THE INDIVIDUALS PREVIOUSLY
ASSOCIATED WITH THE OWNERSHIP OF THE BUSINESSES.
SSI HAS SINCE RESTRUCTURED THE BUSINESSES INTO A NATIONAL OPERATION COMPRISING
A NORTHERN AND SOUTHERN REGION, WITH THE HEAD OFFICE IN CAPE TOWN. SSI HAS
AGREED TO DISPOSE OF ITS BUSINESS, AS A GOING CONCERN, TO CSS FOR A
CONSIDERATION OF R70 000 400. FOLLOWING THE SUCCESSFUL PLACING BY SSI OF RLA'S
IN RESPECT OF 47 000 000 COMMAND ORDINARY SHARES PURSUANT TO THE PRIVATE
PLACING, SSI WILL SUBSCRIBE FOR 5 000 000 COMMAND ORDINARY SHARES IN ORDER TO
PROVIDE WORKING CAPITAL FOR THE GROUP.
THE PURCHASE CONSIDERATION FOR THE SSI BUSINESS WAS SETTLED BY COMMAND ON
BEHALF OF CSS BY THE DELIVERY OF RLA'S IN RESPECT OF 70 000 000 ORDINARY SHARES
TO BE ISSUED AT R1,00 PER ORDINARY SHARE AND THE DELIVERY OF RLA'S IN RESPECT
OF 40 000 000 PREFERENCE SHARES TO BE ISSUED AT PAR ("THE SSI PREFERENCE
SHARES"). THE PREFERENCE SHARES HAVE FULL VOTING RIGHTS AT MEETINGS OF THE
ORDINARY SHAREHOLDERS OF COMMAND. THE SSI PREFERENCE SHARES ARE CONVERTIBLE
INTO ORDINARY SHARES ON A ONE-FOR-ONE BASIS, AS FOLLOWS:
AFTER THE FINANCIAL YEAR ENDING 31 DECEMBER 2000:
A = B - (C X 0,14332)
0,14332
WHERE:
A = NUMBER OF SSI PREFERENCE SHARES TO BE CONVERTED (MAXIMUM 40 000 000);
B = COMMAND'S PROFIT AFTER TAXATION FOR THE YEAR, CALCULATED ON THE BASIS OF A
NOTIONAL TAX RATE OF 30%;
C = WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES IN ISSUE DURING THE YEAR,
DILUTED AS MAY BE APPLICABLE AT THE TIME BUT NOT IN RESPECT OF THE SSI
PREFERENCE SHARES; AND
0,14332 = FORECAST FULLY DILUTED EARNINGS PER SHARE FOR THE YEAR AS PER THIS
PROSPECTUS, EXPRESSED IN RAND.
AFTER THE FINANCIAL YEAR ENDING 31 DECEMBER 2001:
SHOULD ANY OF THE REMAINING SSI PREFERENCE SHARES BE UNCONVERTED AFTER THE
FINANCIAL YEAR ENDING 31 DECEMBER 2000 ("THE UNCONVERTED SSI PREFERENCE
SHARES"), THE SAME FORMULA WILL APPLY IN RESPECT OF THE FINANCIAL YEAR ENDING
31 DECEMBER 2001, EXCEPT THAT THE FIGURE OF
0,14332 WILL BE SUBSTITUTED BY 0,20445 AND THAT THE MAXIMUM NUMBER OF SSI
PREFERENCE SHARES SUBJECT TO BEING CONVERTED IN TERMS OF THE FORMULA WILL BE
EQUAL TO THE UNCONVERTED SSI PREFERENCE SHARES.
ANY SSI PREFERENCE SHARES THAT REMAIN UNCONVERTED AFTER THE FINANCIAL YEAR
ENDING 31 DECEMBER 2001, WILL IMMEDIATELY BE REDEEMED BY COMMAND IN CASH AT THE
PAR VALUE THEREOF.
3. NATURE OF BUSINESS
3.1 INTRODUCTION
COMMAND HAS BEEN FORMED TO PROVIDE A RANGE OF QUALITY CRIMINAL JUSTICE RELATED
AND PRIVATE SECURITY SERVICES IN THE NEW ENVIRONMENT EMERGING IN SOUTH AFRICA.
THE BUSINESSES CURRENTLY OPERATING WITHIN SSI, UPON WHICH THE PROFIT FORECASTS
ARE SUBSTANTIALLY BASED, ENJOY PRE-EMINENT POSITIONS IN THE PROVISION OF
SECURITY SERVICES MAINLY TO THE PRIVATE SECTOR. THESE OPERATIONS WILL PROVIDE
THE BASE FOR THE EXPANSION OF THE GROUP. THE NEED FOR THESE ACTIVITIES EMERGES
FROM THE RAPID GROWTH AND INCREASING SOPHISTICATION OF BOTH COMMON AND
WHITE-COLLAR CRIME AND THE STATE'S NEED FOR ASSISTANCE IN DEALING WITH IT.
3.2 EXISTING OPERATIONS - SOLID PROFIT CONTRIBUTION AND THE BASE FOR FUTURE
GROWTH
THE MAIN CURRENT AREAS OF OPERATION ARE THE WESTERN CAPE (WITH PARTICULAR
STRENGTH IN THE PENINSULA, BOLAND AND WEST COAST) AND GAUTENG/MPUMALANGA. THE
BUSINESSES ACQUIRED WERE SUBJECTED TO STRINGENT DUE DILIGENCE TESTS BOTH
FINANCIALLY BY D&T AND OPERATIONALLY BY HENK BRUYN AND HIS SPECIALLY SELECTED
TEAM. MODERN TECHNOLOGY ENABLES SIGNIFICANT SAVINGS TO BE EFFECTED BY
CENTRALISING CONTROL IN EACH GEOGRAPHICAL AREA. THE MOST SUITABLE MANAGERS WERE
SELECTED FROM THOSE COMPANIES ACQUIRED AND THE SERVICES OF THE BALANCE OF THE
VENDORS HAVE BEEN TERMINATED BY MUTUAL AGREEMENT AT NO EXTRA CONSIDERATION,
RESULTING IN SIGNIFICANT SAVINGS IN THE PERIODS AHEAD AND EQUIPPING THIS
DIVISION WITH TOP-CALIBRE MANAGEMENT. THESE OPERATIONS MAINLY FOCUS ON THE
UPPER END OF INDUSTRIAL AND COMMERCIAL SECURITY SERVICES. HIGH LEVELS OF
TRAINING, RIGID SYSTEMS, PROVEN BACKUP PROCEDURES AND ADHERENCE TO INDUSTRY
BEST PRACTICE INSULATE AND DISTANCE COMMAND FROM THE EVER-PRESENT, ENTRY-LEVEL
INDUSTRY PARTICIPANTS.
3.2.1 ASSET AND PROPERTY PROTECTION DIVISION
THIS DIVISION PROVIDES TRADITIONAL OUTSOURCED GUARDING SERVICES. REDUCED COSTS
AND SAFER WORKING ENVIRONMENTS THROUGH GUARDING, PARKING AND PEDESTRIAN
CONTROLS AND MAINTENANCE, COMBINED WITH THE KNOWN ABILITY OF A TRUSTED RESPONSE
IN A CRISIS SITUATION, IMPROVES EFFICIENCIES AND PROVIDES COST BENEFITS TO
CUSTOMERS.
3.2.2 INDUSTRIAL/COMMERCIAL GUARDING AND ARMED RESPONSE DIVISION
THIS DIVISION HAS APPROXIMATELY 2 000 SUBSCRIBERS AND IS GROWING RAPIDLY.
CONTRACTS ARE NORMALLY SIGNED FOR A YEAR AT A TIME, WITH 30% TO 40% OF
SUBSCRIBERS PAYING BY DEBIT ORDER OR SIMILAR ARRANGEMENTS.
3.2.3 SECURITY SYSTEMS DIVISION
IN PROVIDING THE COMPLETE SECURITY SOLUTION, THE GROUP IMPLEMENTS HIGH
TECHNOLOGY SURVEILLANCE OPERATIONS PROVIDING FIRE DETECTION, SECURITY SYSTEMS
AND ACCESS CONTROL.
3.2.4 CITY POLICING AND TOURIST PROTECTION
THE CONCEPT OF CITY POLICING HAS ALREADY COMMENCED IN SOUTH AFRICA, AND A PART
OF THE COMMAND GROUP IS RENDERING MUNICIPAL POLICING SERVICES IN SUPPORT OF
CRIME PREVENTION STRATEGIES BOTH FOR THE PRETORIA MUNICIPALITY AND THE SA
POLICE SERVICE.
3.2.5 OTHER DIVISIONS
COMMAND PROVIDES A RANGE OF OTHER RELATED SERVICES INCLUDING:
- CASH-IN-TRANSIT SERVICES, MAINLY IN RURAL AREAS;
- VIP PROTECTION INCLUDING EMBASSY SECURITY;
- CRIMINAL INVESTIGATION OF VIOLENT AND NON-VIOLENT CRIME INCLUDING WHITE
COLLAR AND INTERNATIONAL CRIME, OFFERING FORENSIC AND OTHER SERVICES; AND
- PROFILING OF INDIVIDUALS IN ORDER TO ESTABLISH DEVIATIONS FROM NORMS THAT
MIGHT POINT TO WHITE COLLAR OR OTHER CRIMINAL ACTIVITIES.
3.3 INTENDED FUTURE OPERATIONS
3.3.1 CYBER SECURITY
INTERNET CRIME IS PRESENTLY GROWING AT THE SAME RATE AS THE EXPLODING
E-COMMERCE MARKET. VERY CLOSELY RELATED TO THIS IS THE CURRENT INSECURE STATUS
OF TRANSFER OF INFORMATION VIA A WEB-BASED MEDIUM. DOCUMENTS SENT VIA THE NET
ARE VERY VULNERABLE TO INTERCEPTION, DUE TO A LACK OF INTERNET SECURITY.
ICYBERSECURITY.COM, AN AMERICAN-FUNDED BUSINESS, HAS IRREVOCABLY UNDERTAKEN TO
ASSIGN TO COMMAND THE RIGHTS FOR THE USE OF PROPRIETARY SOFTWARE IN AFRICA
WHICH, INTER ALIA, OFFERS SECURE TRANSFER AND STORAGE OF SENSITIVE AND
CONFIDENTIAL INFORMATION WORLD-WIDE IN SEVEN LANGUAGES. THE FEATURES AVAILABLE
INCLUDE:
- TOPSECRETEMAIL.COM
- TOPSECRETTRANSACTION.COM
- TOPSECRETDOCUMENTATION.COM
THE MAJOR USERS ARE SEEN AS LAWYERS, ACCOUNTANTS, BUSINESSES IN GENERAL, OR
ANYBODY WHO IS VULNERABLE TO INFORMATION ENDING UP IN THE WRONG HANDS, WHICH
COULD RESULT DIRECTLY OR INDIRECTLY IN LOSS OF INTELLECTUAL PROPERTY INCLUDING
STRATEGIC BUSINESS INFORMATION OR TANGIBLE ASSETS. ICYBERSECURITY.CO.ZA, A
PROPOSED DIVISION OF COMMAND, WILL BE AN EFFECTIVE FORCE IN THE PREVENTION AND
INVESTIGATION OF
CYBER CRIME.
3.3.2 PAROLE SUPERVISION
THE INTRODUCTION OF A MORE EFFICIENT ELECTRONIC PAROLEE SUPERVISION SYSTEM
SHOULD ALLEVIATE PRESSURE ON PRISON ACCOMMODATION CAUSED BY OFFENDERS FOR MINOR
CRIMES. CORRECTIONAL AND PAROLE SUPERVISION WAS INTRODUCED IN SOUTH AFRICA IN
1991 AND THERE ARE PRESENTLY APPROXIMATELY 60 000 OFFENDERS UNDER PAROLE AND
CORRECTIONAL SUPERVISION IN THE COMMUNITY WITH HOUSE ARREST OR A CURFEW
ARRANGEMENT. THE SOUTH AFRICAN GOVERNMENT HAS ANNOUNCED THAT OFFENDERS UNDER
COMMUNITY CORRECTIONS WILL BE PLACED UNDER ELECTRONIC MONITORING ("EM"). THIS
ACTIVITY WILL BE CONTRACTED OUT TO THE PRIVATE SECTOR IN THE 2000/2001
FINANCIAL YEAR. COMMAND HAS PROCURED THE SOUTH AFRICAN RIGHTS FOR THE USE OF
DIGITAL PRODUCTS
CORPORATION'S ("DIGITAL") ELECTRONIC PAROLE SYSTEMS. DIGITAL IS ONE OF THE
REPUTABLE SUPPLIERS OF SYSTEMS USED IN THE US. THIS SYSTEM HAS A PROVEN TRACK
RECORD OF SUCCESS IN THE US AND COMPLIES WITH THE STANDARDS AND OPERATIONAL
REQUIREMENTS USED BY THE SOUTH AFRICAN GOVERNMENT IN THE PILOT STUDY WHICH LED
TO THE DECISION TO EMPLOY EM IN SOUTH AFRICA.
3.3.3 PRIVATISED PRISONS
DURING 1999, THE CORRECTIONAL SERVICES ACT WAS PASSED, MAKING PROVISION FOR
PRIVATISED PRISONS TO BE OPERATED ON CONTRACT BY APPROVED PRIVATE OPERATORS.
COMMAND, THROUGH ITS RELATIONSHIP WITH SSI, IS READY TO COMPETE FOR ANY TENDER
OR REQUEST FOR A PROPOSAL THAT GOVERNMENT MAY PUBLISH FOR THE DESIGN,
CONSTRUCTION, COMMISSIONING AND OPERATION OF ANY CORRECTIONAL FACILITY RANGING
FROM JUVENILE CENTRES THROUGH FEMALE FACILITIES TO SUPER MAXIMUM SECURITY
INSTITUTIONS, REGARDLESS OF SIZE OR LOCATION. THIS ENABLES COMMAND TO COMPETE
DIRECTLY WITH OVERSEAS OPERATORS WHO HAVE, UNTIL NOW, DOMINATED THIS MARKET.
3.3.4 CRIMINAL JUSTICE CENTRES
COMMAND WILL SEEK TO INTRODUCE A NEW CONCEPT IN SOUTH AFRICA TO HANDLE, IN ONE
LOCATION, THE FUNCTIONS OF THE DEPARTMENTS OF JUSTICE, SAFETY AND SECURITY AND
CORRECTIONAL SERVICES. COMMAND, THROUGH THE CRIMINAL JUSTICE CENTRES, WILL
OFFER, AS A MORE COST-EFFECTIVE ALTERNATIVE TO SYSTEMS CURRENTLY IN USE, A NEW
APPROACH IN MULTI-PURPOSE DESIGN AND OPERATIONS WHEREBY THE FLOW OF PERSONS IN
THE CRIMINAL JUSTICE SYSTEM IS CUT DOWN AND CONFINED TO ONE BUILDING OR
COMPLEX, THEREBY CREATING A HIGH DEGREE OF SAFETY WITH NO INMATE TRANSPORTATION
AND REDUCED RISK OF ESCAPE. BY COMBINING THE FUNCTIONS OF THE COURTS, POLICE
AND CORRECTIONAL SERVICES UNDER ONE ROOF, A CRIMINAL JUSTICE CENTRE ACHIEVES
MAJOR SAVINGS IN BOTH CAPITAL AND OPERATING COSTS, WHILE ENHANCING SERVICE
DELIVERY. IT ALSO ENABLES THE CATEGORISATION OF PRISONERS WITH FURTHER
ATTENDANT COST SAVINGS.
4. FINANCIAL INFORMATION
PRO FORMA PROFIT HISTORY AND PROFIT FORECAST
ANNUALISED PRO FORMA
FORECAST LIMITED AUDITED UNAUDITED
YEAR TO PERIOD YEAR TO 12 MONTHS ENDED
31 DECEMBER AUDITS* 28 FEBRUARY 28 FEBRUARY
2000 (NOTE 4.1) 1999 1998 1997
R'000 R'000 R'000 R'000 R'000
TURNOVER 142 752 105 820 66 245 45 659 30 610
OPERATING INCOME BEFORE
INTEREST 26 898 21 440 4 015 1 445 638
NET INTEREST RECEIVED/
(PAID) 1 766 (1 009) (1 272) (858) (767)
INCOME/(LOSS) BEFORE
TAXATION 28 664 20 431 2 743 587 (129)
TAXATION (8 599) (6 129) (935) (142) (74)
INCOME/(LOSS) AFTER
TAXATION 20 065 14 302 1 808 445 (203)
ORDINARY SHARES IN ISSUE
(FULLY DILUTED)
('000) 140 000 140 000 140 000 140 000 140 000
PRO FORMA EARNINGS/(LOSS)
PER ORDINARY SHARE
(CENTS) 14,3 10,2 1,3 0,32 (0,21)
PRICE: EARNINGS RATIO AT
PLACING PRICE 6,99 9,80 76,92 314,61 -
NOTES TO THE PROFIT HISTORY AND PROFIT FORECAST
4.1 PROFIT SUBSEQUENT TO 28 FEBRUARY 1999
IN ORDER TO ASSIST IN THE PRICING OF THE ACQUISITION OF THE BUSINESSES, SSI
RETAINED D&T TO PERFORM AUDITS, MOST IN RESPECT OF LIMITED PERIODS FOLLOWING 28
FEBRUARY 1999. THE BUSINESSES HAVE A HIGH LEVEL OF ANNUITY INCOME BASED ON
CONTRACTS. THEREFORE IT IS REASONABLE TO ANNUALISE EARNINGS BASED ON LIMITED
PERIOD AUDITS. THE PROFITS WERE ANNUALISED ON A STRAIGHT-LINE BASIS.
4.2 DIVIDENDS
NO DIVIDENDS WERE DECLARED DURING THE YEAR ENDED 28 FEBRUARY 1999.
4.3 TAXATION
IN THE FORECAST PERIOD, A 30% TAX RATE HAS BEEN APPLIED.
4.4 EARNINGS PER ORDINARY SHARE
THE EARNINGS PER ORDINARY SHARE FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 1999
AND THE ANNUALISED AUDITED LIMITED PERIODS ARE BASED ON A FULLY DILUTED NUMBER
OF 140 000 000 ORDINARY SHARES IN ISSUE AS THOUGH THE 40 000 000 ISSUED
PREFERENCE SHARES HAD BEEN CONVERTED INTO ORDINARY SHARES AND HAD BEEN IN ISSUE
FOR THE ENTIRE PERIOD. THE EARNINGS PER ORDINARY SHARE FOR THE 2000 FORECAST
ARE BASED ON A FULLY DILUTED NUMBER OF 140 000 000 ORDINARY SHARES IN ISSUE
THROUGHOUT THE FINANCIAL YEAR.
4.5 PROFIT FORECAST FOR THE YEAR ENDING 31 DECEMBER 2000
THE KEY ASSUMPTIONS USED IN THE FORECAST ARE AS FOLLOWS:
4.5.1 ADDITIONAL CONTRACT REVENUE WILL FLOW FROM A BLACK EMPOWERMENT PARTNER
ACQUIRING AN EQUITY STAKE IN COMMAND, OR ENTERING INTO A JOINT VENTURE
ARRANGEMENT WITH COMMAND; AND
4.5.2 CSS WILL BE AWARDED ELECTRONIC MONITORING CONTRACTS FOR THE SUPERVISION
OF CRIMINAL OFFENDERS FREED ON PAROLE.
THE TURNOVER AND INCOME AFTER TAX IN RESPECT OF THESE TWO KEY ASSUMPTIONS FOR
THE YEAR ENDING 31 DECEMBER 2000 AMOUNTS TO 10% AND 11%, RESPECTIVELY, OF THE
FORECAST. IT IS THE INTENTION OF THE BOARD OF DIRECTORS OF COMMAND NOT TO PAY
ANY DIVIDENDS IN RESPECT OF THE FINANCIAL YEAR ENDING 31 DECEMBER 2000.
THEREAFTER, PAYMENT OF DIVIDENDS WILL DEPEND ON COMMAND'S CASH POSITION AND THE
QUANTUM AND NATURE OF ITS FUTURE FUNDING REQUIREMENTS.
5. SHARE CAPITAL
AFTER THE CLOSING DATE OF THE PLACING, THE AUTHORISED SHARE CAPITAL OF COMMAND
COMPRISES
1 000 000 000 ORDINARY SHARES OF 0,001 CENT EACH AND 100 000 000 VARIABLE RATE
CUMULATIVE CONVERTIBLE REDEEMABLE PREFERENCE SHARES OF 0,001 CENT EACH. THE
ISSUED SHARE CAPITAL OF COMMAND COMPRISES 100 000 000 ORDINARY SHARES OF 0,001
CENT EACH AND 40 000 000 VARIABLE RATE CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERENCE SHARES OF 0,001 CENT EACH.
THE AUTHORISED AND ISSUED SHARE CAPITAL OF COMMAND, BEFORE AND AFTER THE
PLACING AND THE SUBSCRIPTION, AND BEFORE THE PAYMENT OF PRELIMINARY EXPENSES
AND THE ESTIMATED EXPENSES OF THE PLACING OF R3 000 000, WHICH WILL BE
WRITTEN-OFF AGAINST SHARE PREMIUM, WILL BE:
R'000
AUTHORISED
1 000 000 000 ORDINARY SHARES OF 0,001 CENT EACH 10,00
100 000 000 VARIABLE RATE CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERENCE SHARES OF 0,001 CENT EACH 1,00
11,00
ISSUED, BEFORE THE SSI BUSINESS ACQUISITION, THE PLACING
AND THE SUBSCRIPTION 25 000 000 ORDINARY SHARES OF 0,001
CENT EACH 0,25
SHARE PREMIUM -
0,25
ISSUED, AFTER THE SSI BUSINESS ACQUISITION, THE PLACING
AND THE SUBSCRIPTION 100 000 000 ORDINARY SHARES OF 0,001
CENT EACH 1,00
40 000 000 VARIABLE RATE CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERENCE SHARES OF 0,001 CENT EACH 0,40
SHARE PREMIUM (BEFORE WRITING-OFF THE EXPENSES OF THE
LISTING AND AFTER WRITING-OFF GOODWILL/TRADE NAMES ARISING
ON THE SSI BUSINESS ACQUISITION) 9 669,13
9 670,53
6. DIRECTORS
THE FULL NAMES, ADDRESSES, ACADEMIC AND PROFESSIONAL QUALIFICATIONS, RELEVANT
EXPERIENCE, OCCUPATIONS AND NATIONALITIES (IF NOT SOUTH AFRICAN) OF THE
DIRECTORS OF COMMAND ARE AS FOLLOWS:
6.1 EXECUTIVE DIRECTORS
JOHNATHAN IMERMAN (43)
EXECUTIVE DEPUTY CHAIRMAN
552 HACKNEY DRIVE, MARIETTA
G.A. 30067, GEORGIA, USA
JOHNNY IMERMAN HAS AN EXTENSIVE HISTORY, SINCE 1976, OF STARTING UP NEW
BUSINESSES, ESPECIALLY IN THE MINING AND METALS-RELATED INDUSTRIES AND THE
BUILDING UP THEREOF TO SUCCESSFUL OPERATIONS. IN THE PROCESS, HE EMIGRATED TO
THE USA DURING 1986 AND CONTINUED EXPANDING HIS LOCAL BUSINESSES INTO THAT
COUNTRY. HE ALSO STARTED AND GREW NEW BUSINESSES IN THE USA WITH GREAT SUCCESS,
TO THE EXTENT THAT HE WAS VOTED "BUSINESSMAN OF THE YEAR" IN THE STATE OF
GEORGIA FOR 1994. DURING 1989, HE FORMED THE SA EDUCATION FUND FOR
DISADVANTAGED EXILES IN THE USA AND IS CURRENTLY THE EMERITUS CHAIRMAN THEREOF.
DURING 1990, HE FORMED THE UNITED STATES - ISRAELI CHAMBER OF COMMERCE FOR THE
SOUTH EAST USA AND ACTED AS CHAIRMAN THEREOF UNTIL 1996. HE IS CURRENTLY,
TOGETHER WITH HENK BRUYN, INVOLVED IN THE PRIVATISATION OF THE SOUTH AFRICAN
GOVERNMENT'S CRIMINAL JUSTICE PROGRAMMES AND IN MANAGING CSS'S BUSINESSES. HE
IS ALSO A NON-EXECUTIVE DIRECTOR OF DEL MONTE ROYAL CORPORATION LIMITED. ONE OF
HIS TASKS WILL BE TO EXPLORE OPPORTUNITIES FOR COMMAND TO EXPAND ITS BUSINESS
ABROAD.
HENDRIK JACOBUS BRUYN (50)
BA (CRIMINOLOGY)
CHIEF EXECUTIVE OFFICER
12 MOPANIE STREET
PLATTEKLOOF II, 7506
HENK BRUYN IS A FORMER NATIONAL COMMISSIONER OF CORRECTIONAL SERVICES, A
POSITION TO WHICH HE WAS APPOINTED BY FORMER PRESIDENT, NELSON MANDELA. AS
SUCH, HE HAS MANAGED A R3,5 BILLION ANNUAL BUDGET, 30 000 STAFF, 240 BRANCH
PRISONS AND 21 PRODUCTION WORKSHOPS AND GAINED EXTENSIVE EXPERIENCE IN PHYSICAL
AND STATIC SECURITY. HE WAS THE NATIONAL CORRESPONDENT TO THE UNITED NATIONS ON
CRIME PREVENTION AND TREATMENT OF OFFENDERS. WHEN THE NEW GOVERNMENT CAME INTO
POWER IN 1994, HENK, WITHIN THREE MONTHS, SUCCESSFULLY REINTEGRATED THE THEN
EXISTING FIVE DEPARTMENTS OF CORRECTIONAL SERVICES INTO ONE NATIONAL
DEPARTMENT. IN THE PROCESS, HE DEALT WITH ALL RELEVANT ACCOUNTING SYSTEMS,
INTERNAL CONTROL MECHANISMS AND OPERATIONAL MATTERS.
ROBERT JOHN BIESMAN-SIMONS (45)
B.COM, CA(SA)
FINANCIAL DIRECTOR
20 CARBROOK AVENUE
CLAREMONT, 7708
JOHN BIESMAN-SIMONS WORKED AS AN AUDIT PARTNER AT D&T AND HE ASSUMED
RESPONSIBILITY FOR THE HUMAN RESOURCES PORTFOLIO OF THE CAPE TOWN OFFICE IN
1988. HE HAS HAD EXTENSIVE EXPERIENCE IN A WIDE RANGE OF ACTIVITIES INCLUDING
CLIENT SERVICE RESPONSIBILITIES, D&T NATIONAL HUMAN RESOURCE TASK FORCE, D&T
STRATEGIC REMUNERATION TASK FORCE, PROCESS CHAMPION FOR THE D&T VISION 2000
BUSINESS PROCESS RE-ENGINEERING "WINNING BUSINESS" REDESIGN TEAM, CAPE TOWN
COMMITTEE MEMBER OF THE D&T MULTI-CULTURAL DEVELOPMENT PROGRAMME, HAS SERVED ON
COMMITTEES OF THE WESTERN CAPE SOCIETY OF CHARTERED ACCOUNTANTS, INCLUDING
CHAIRING ONE OF THE COMMITTEES, AND IS CURRENTLY CHAIR OF THE OOSTENBERG
MUNICIPALITY AUDIT COMMITTEE. JOHN BECAME INVOLVED WITH COMMAND AS THE AUDIT
PARTNER SERVING THE COMPANY. SINCE BEING APPROACHED BY COMMAND TO ACCEPT A
POSITION WITH THE COMPANY, HE HAS WITHDRAWN FROM ALL ATTEST FUNCTIONS RELATING
TO COMMAND AND RESIGNED FROM D&T ON 1 NOVEMBER 1999 TO TAKE UP THE POSITION AS
FINANCIAL DIRECTOR OF COMMAND.
6.2 NON-EXECUTIVE DIRECTORS
ZAKHELE JOHANNES SITHOLE (44) GARY KAPLAN (43)
CHAIRMAN B.ACC, CA(SA)
B.COM, B.ACC, CA(SA), H DIP (TAX) FIRST FLOOR
FHS HOUSE BARCLAYS HOUSE
15 GIRTON ROAD 261 OXFORD ROAD
PARKTOWN, 2193 ILLOVO, 2196
IVAN EPSTEIN (38) DR ROBERT R FRIEDMAN (52) (USA)
B.COMPT BS, MA, PHD, MSSW
SOFTLINE HOUSE DEPARTMENT OF CRIMINAL JUSTICE
EASTGATE EXTENSION 13 16 COMMERCE CRESCENT
SANDTON, 2196 GEORGIA STATE UNIVERSITY
ATLANTA, GEORGIA, USA
SAMUEL IMERMAN (74) PETER DORIAN WHARTON-HOOD (61)
DIP PHARM B.COM
APARTMENT 15F 4 TOWNSEND ROAD
2660 PEACH TREE STREET HYDE PARK, 2196
PARK PLACE
GEORGIA, USA
7. LISTING ON THE JSE
THE JSE HAS GRANTED A LISTING OF COMMAND'S ISSUED ORDINARY SHARES IN THE
INDUSTRIAL - "SERVICES" SECTOR, UNDER THE ABBREVIATED NAME "COMMAND", WITH
EFFECT FROM WEDNESDAY, 9 FEBRUARY 2000.
9 FEBRUARY 2000
MERCHANT BANK
THE BUSINESS BANK
ATTORNEYS
HR LEVIN
REPORTING ACCOUNTANTS AND AUDITORS
DELOITTE & TOUCHE
CHARTERED ACCOUNTANTS (SA)
SPONSORING BROKER
QUYNSEC
QUYN SECURITIES (PTY) LTD
FORMERLY LOMBERG PULFORD & CO (PTY) LTD
(REGISTRATION NUMBER 96/17428/07)
MEMBER OF THE JOHANNESBURG STOCK EXCHANGE
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