NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS – NOTE 32

32. RELATED PARTY TRANSACTIONS
32.1

Directors

Details relating to Directors’ emoluments are disclosed in Note 23. There are no loans to Directors.

The Directors’ shareholdings are disclosed in the Annual Financial Statements. Transactions within the Group are listed below.
32.2

Relationships with Directors in the Group

WAD Holdings Proprietary Limited – Mr AV Van Buuren (Group Chief Executive Officer) and WH Britz (Executive Director) each hold 33.3% of WAD Holdings Proprietary Limited.

WAD Holdings Proprietary Limited holds A class shares in the Glen Eden Trading 58 Proprietary Limited. The Glen Eden A class shares will be entitled to 10% of the votes at any meeting attended by WAD Holdings Proprietary Limited or its proxy. The Glen Eden A class shares will not be entitled to any dividends or profit before 1 January 2017 and will rank pari passu with ordinary shares in terms of voting rights and distribution rights from 1 January 2017. AfroCentric will purchase the A class shares in the 2018 financial year for an amount of R194.5 million.

WAD Holdings Proprietary Limited holds A class shares in Pharmacy Direct Proprietary Limited and Curasana Wholesaler Proprietary Limited. The A class shares shall have no voting rights but shall have right to 100% of the distribution of the after tax profits attributable to the Department of Health contract from 1 July 2018. In the 2019 financial year AfroCentric has a right to purchase the A class shares by 1 September 2018.

WAD Holdings Proprietary Limited is the 100% shareholder of Northern Lights Trading 172 Proprietary Limited. Curasana Wholesaler entered into an agreement with Northern Lights Trading 172 Proprietary Limited on 29 February 2016 whereby Curasana Wholesaler purchased Portion 3 of Erf 1903, Zwartkop X15, which is the premises of the main business operations and was leased from Northern Lights Trading 172 Proprietary Limited for the amount of R32 000 000.
32.3

Transactions with entities in the Group

During the period the Group entered into the following related party transactions:

  GROUP  
  June 2017
R’000		   June 2016  
R’000  		  
Directors        
Medical aid contributions paid by Directors to schemes administered by Medscheme Holdings (Pty) Ltd 242   356    
Mr MJ Madungandaba (70%) and Dr ATM Mokgokong (30%) control Namane Financial Services – Consulting and marketing fees paid to Namane Financial Services 2 532   2 215    
Mr SM Rothbart has a controlling interest in Rothbart Inc. – Consulting fees paid by Medscheme Holdings (Pty) Ltd 1 474   1 955    
Mr MJ Madungandaba (42%) and Dr ATM Mokgokong (18%) control Mesure Facilities Management (Pty) Ltd – Management fees and other expenses paid to Mesure Facilities Management (Pty) Ltd. The fees represent outsourced facilities management for the AfroCentric Group that represents the following categories 90 883   82 107*  
– Salaries 13 584   11 825    
– Cleaning and security 25 672   21 905    
– Refurbishments, projects and capex 33 844   30 554    
– Utilities 15 518   15 800    
– Other 2 265   2 023    
Mr J Rothbart (son of SM Rothbart) is paid via Eyecom Outdoor Advertising (Pty) Ltd – Remuneration for services as the previous Group CEO –   300    
Mr JG Appelgryn has a joint interest (50%) in Sinergi Corporate Advisors (Pty) Ltd – Consulting fees paid by AfroCentric Investment Corporation Limited –   8 350    
Mr MJ Madungandaba (41.91%) and Dr ATM Mokgokong (17.96%) collectively control Skynet South Africa (Pty) Ltd – Courier fees to Skynet South Africa 1 278   1 099    
Mr MJ Madungandaba (8.29%) and Dr ATM Mokgokong (3.55%) have an interest in Jasco Electronics Holdings Limited – IT service fees to Jasco Electronics Holdings Limited 17 281   20 639    
Associates        
Invisible Card Company (Pty) Ltd – Loan advanced by AfroCentric Health Limited 3 000   5 700    
AfroCentric Health Limited – Interest charged on loan to Invisible Card Company (Pty) Ltd –   757    
The Cheese Has Moved (Pty) Ltd – Interest charged on loan from AfroCentric Health (Pty) Ltd 51   –    
Subsidiaries        
AfroCentric Health Limited – Management fees paid to Medscheme Holdings (Pty) Ltd 914   914    
AfroCentric Management Services (Pty) Ltd – Profile fees paid to Helios IT Solutions (Pty) Ltd 51   371    
AfroCentric Management Services (Pty) Ltd – Telkom, TMS and printer fees paid to Helios IT Solutions (Pty) Ltd 34   18    
AfroCentric Management Services (Pty) Ltd – IT support services paid to Helios IT Solutions (Pty) Ltd 18   97    
Aid for Aids Management (Pty) Ltd – Management fees paid to Medscheme Holdings (Pty) Ltd 4 674   4 431    
Aid for Aids Management (Pty) Ltd – Telkom ,TMS and printer fees paid to Helios IT Solutions (Pty) Ltd 655   569    
Aid for Aids Management (Pty) Ltd – Profile fees paid to Helios IT Solutions (Pty) Ltd 2 325   2 174    
Klinikka (Pty) Ltd – Management fees paid to AfroCentric Health Limited –   1 774    
Allegra (Pty) Ltd – Switching fees paid to Helios IT Solutions (Pty) Ltd 5 281   3 654    
Allegra (Pty) Ltd – TMS and Telkom fees paid to Helios IT Solutions (Pty) Ltd 24   48    
Allegra (Pty) Ltd – Licence and support fee paid to Helios IT Solutions (Pty) Ltd 1 342   1 342    
Allegra (Pty) Ltd – Dividend paid to Helios IT Solutions (Pty) Ltd 3 168   602    
ACT Healthcare Assets (Pty) Ltd – Dividends paid to AfroCentric Investment Corporation Limited 35 650   –    
Medscheme Namibia (Pty) Ltd – Dividends paid to Medscheme Holdings (Pty) Ltd 43 324   16 954    
Pharmacy Direct (Pty) Ltd – Inventory purchases from Curasana Wholesalers (Pty) Ltd 758 233   597 525    
Aid for Aids Management (Pty) Ltd – NAPWA fees paid to Glen Eden Trading 58 (Pty) Ltd 234   528    
Helios IT Solutions (Pty) Ltd – Consulting fees paid to Glen Eden Trading 58 (Pty) Ltd 33 095   23 802    
Pharmacy Direct (Pty) Ltd – Rental costs, electricity and security costs paid to Curasana Wholesalers (Pty) Ltd 2 784   953    
Medscheme International – Management fees paid to Medscheme Holdings (Pty) Ltd 28   26    
AfroCentric Distribution Services (Pty) Ltd – On site support fees paid to Helios IT Solutions (Pty) Ltd 34   34    
Medscheme Mauritius – Management fees paid to Medscheme Holdings (Pty) Ltd 250   237    
Helios IT Solutions (Pty) Ltd – Management fees paid to Medscheme Holdings (Pty) Ltd 15 359   14 559    
Medscheme Zimbabwe – Management fees paid to Medscheme Holdings (Pty) Ltd 223   211    
Medscheme Holdings (Pty) Ltd – TMS and Telkom fees paid to Helios IT Solutions (Pty) Ltd 17 151   16 816    
Medscheme Holdings (Pty) Ltd – Out of scope and recovery costs paid to Helios IT Solutions (Pty) Ltd 929   –    
Klinikka (Pty) Ltd – Hosting fees paid to Helios IT Solutions (Pty) Ltd 188   –    
AfroCentric Health Limited – Hosting fees paid to Helios IT Solutions (Pty) Ltd 51   205    
Medscheme Administrators Swaziland (Pty) Ltd – Management fees paid to Medscheme Holdings (Pty) Ltd 1 469   1 393    
Klinikka (Pty) Ltd – Corporate service fees paid to Helios IT Solutions (Pty) Ltd 70   70    
Medscheme Administrators Swaziland (Pty) Ltd – IT support services paid to Helios IT Solutions (Pty) Ltd 815   702    
Medscheme Administrators Swaziland (Pty) Ltd – Profile fees paid to Helios IT Solutions (Pty) Ltd 323   440    
Medscheme Administrators Swaziland (Pty) Ltd – Licence and support fees paid to Helios IT Solutions (Pty) Ltd 3 026   2 409    
AfroCentric Health Limited – Sales to Klinikka (Pty) Ltd 2 800   2 800    
Medscheme Holdings (Pty) Ltd – Management fees paid to AfroCentric Management Services (Pty) Ltd 27 540   32 400    
Medscheme Holdings (Pty) Ltd – IT support services paid to Helios IT Solutions (Pty) Ltd 69   96    
Medscheme Holdings (Pty) Ltd – Management fees paid to AfroCentric Health Limited 2 089   2 089    
Medscheme Holdings (Pty) Ltd – Switching fees paid to Allegra (Pty) Ltd 31 787   28 657    
Medscheme Holdings (Pty) Ltd – Management fees paid to AfroCentric Health Limited 30 000   10 000    
Medscheme Holdings (Pty) Ltd – Management fees paid to AfroCentric Management Services (Pty) Ltd 7 000   10 000    
Medscheme Holdings (Pty) Ltd – Information technology admin fees paid to Helios IT Solutions (Pty) Ltd 143 315   163 454    
Helios IT Solutions (Pty) Ltd – Commission payable to Medscheme Holdings (Pty) Ltd for services rendered (CIMAS and First Mutual Life) 3 715   5 723    
Medscheme Holdings (Pty) Ltd – Profile fees paid to Helios IT Solutions (Pty) Ltd 92 433   76 169    
Medscheme Holdings (Pty) Ltd – Dividend paid to AfroCentric Health Limited –   77 704    
Medscheme Namibia (Pty) Ltd – Licence and support fees paid to Helios IT Solutions (Pty) Ltd 5 614   4 623    
Medscheme Namibia (Pty) Ltd – Profile fees paid to Helios IT Solutions (Pty) Ltd 977   847    
Medscheme Namibia (Pty) Ltd – Management fees paid to Medscheme Holdings (Pty) Ltd 935   886    
Klinikka (Pty) Ltd – Interest charged on loan from AfroCentric Health Limited 563   260    
Bonitas Marketing Company (Pty) Ltd – Interest charged on loan from Resticraft Health Limited –   134    
Allegra (Pty) Ltd – Interest charged on loan from Medscheme Holdings (Pty) Ltd –   48    
Pharmacy Direct (Pty) Ltd – Interest charged on loan from Medscheme Holdings (Pty) Ltd 40   –    
Curasana Wholesalers (Pty) Ltd – Interest charged on loan from Medscheme Holdings (Pty) Ltd 12   –    

* The prior year figure has been restated as rentals was included which is an agent/principal agreement.

  COMPANY  
  June 2017
R’000		   June 2016  
R’000  		  
AfroCentric Health (Pty) Ltd loan account (10 242)   (43 116)  
ACT Funding (Pty) Ltd loan account –   (1 361)  
32.4

Key management personnel compensations

  GROUP   COMPANY  
  June 2017
R’000		   June 2016
R’000		   June 2017
R’000		   June 2016  
R’000  		  
Short-term employee benefits 7 904   5 533   –   –    
Share-based payments (Note 30) 2 096   6 444   –   (1 708)  

Key management personnel comprises Executive Directors within the AfroCentric Health Proprietary Limited Group.
32.5

Inter-Group guarantees

The following Group companies have provided cross guarantees to the AfroCentric Health Proprietary Limited bankers for facilities offered to that Company:

  • Medscheme Holdings Proprietary Limited
  • Aids for Aids Management Proprietary Limited
  • Helios IT Solutions Proprietary Limited
  • Klinikka Proprietary Limited

NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS – NOTE 32