We are obliged to pay the interest rate stated in the Prospectus
Q: What is a Debenture?
A. A debenture is a document evidencing an indebtedness arising
from a loan to a company and bearing interest at a fixed
percentage rate. Debentures are frequently termed 'loan. capital',
in contrast to 'share capital', although they are not strictly
speaking capital. Debentures differ from shares in that .
shareholders are members (or owners) of the company, while
debenture holders are creditors.
Debentures can be issued for differing nominal amounts at
differing interest rates. Those issued by Edwafin are in
denominations of R1 000 each, bear interest at the rate of 15%
per annum and are for a fixed period of 63 months. At the en.d
of the 63 month period, the nominal value of the debenture IS
repaid to the debenture holder, who has received interest
monthly on the loan during the 63 month period.
As the Edwafin debentures are being offered to the public, the
Companies Act 1973 provides that they have to be offered in
terms of a Prospectus which is registered with the Registrar of
Companies in Pretoria (Cl PRO).
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Q: How long has the Company been in existence?
A: Edwafin Investment Holdings Limited is an unlisted public
company and was registered on 29 October 2003.
Q: What is the projected number of Debenture Holders and
what is the projected total value of the Debentures?
A: It is anticipated that Edwafin Investment HOldings Limited will
have about 1 000 debenture holders, with a total value of
approximately R100 million.
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Q: What is the core business of Edwafin Investment Holdings
Limited?
A: Edwafin operates through the Ruwenzori Investment Trust,
which specialises in joint ventures (JVs). Existing joint venture
projects encompass property development~ the entertain.ment
industry, the meat I poultry industry, the paint and adhesives
industry, the medical field and various manufacturing businesses.
The Trust also owns an information technology (IT) company
and a corporate gifts and promotions company.
Q: Do we carry fidelity liability insurance?
A: We confirm that Edwafin Investment Holdings Limited carries
fidelity liability insurance cover.
The policy is paid annually in advance and is available for
inspection and perusal at our offices, upon request.
Q: Is our interest rate fixed and how do we achieve it?
A: We achieve our interest rate by running our wholly owned
companies profitably and investing in carefully resea~ched
and profitable joint ventures in which we hold the majority
shares.
to the debenture holder for the full term of the debenture.
In the event of the company being unable to pay the interest,
the principal amount of the debentures becomes due and
payable, together with any outstanding interest, within 30 days.
(Prospectus: Clause 12.2)
We are audited once a year and our financial statements are
available to the debenture holders, upon request.
Q: Who are we registered with, and how are we regulated?
A: We are registered in terms of The Companies Act, 1973, as
amended, and regulated by the Companies and Intellectual
Property Registration Office (Cl PRO), which operates under
the auspices of The Department of Trade and Industry .(DTI),
which has a regulatory body monitoring business practice.
Together with our legal advisors, and in consultation with the
relevant regulatory bodies, it is established that we are not
Financial Services Providers (FSP), nor financial advisors,
intermediaries, nor a Collective Investment Scheme (CIS) and
therefore do not fall under the ambit of the Financial and
Intermediary Services Act (FAIS). We are in fact prohibited
from offering financial advice, or marketing financial services
products, and hold no agreements or contracts in this regard.
We do not market debentures through intermediaries, brokers
or financial service providers (FSPs) as this would violate the
FAIS Act. Our debentures sales force is employed by Edwafin
Investment Holdings Limited, and is mandated to only negotiate
Edwafin Investment Holdings Limited debentures on our behalf,
strictly in terms of our Prospectus. We do, however, voluntarily
subscribe to FICA (Financial Intelligence Centre Act). In 2003
the Financial Services Board (FSB) conducted an investigation
into the activities of the Edwafin Group and confirmed our
compliance with the above.
The debentures are issued within the prescriptions of the
Commercial Paper Regulations to the Banks Act. In particular
they are issued for a period of 63 months, hence fall.ing within
the provisions of paragraph 3(1 )(c) of the Commercial 'paper
Regulations. In order to confirm that we fully comply With the
Commercial Paper Regulations of the Banks Act, the South
African Reserve Bank's Bank Supervision Department
conducted a five-month forensic investigation into Edwafin's
activities.
Q: What happens if I die before the Debenture term is
completed?
A: Upon death of the debenture holder, before the end of the
debenture's fixed period, the debenture is transferred to the
debenture holder's named successor for the duration of the
debenture period. The successor therefore becomes the
owner of the debenture and continues to receive the benefits
thereof.
Failing a successor being named it is treated as a deferred
asset in the Estate and is payable to the deceased estate at
the end of the 63 month period.