Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions –
that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration
paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or
losses on disposals to non-controlling interests are also recorded in equity.
Associates
Associates are all entities over which the Group has significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for
using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the investor’s share of the profit or loss and other comprehensive
income of the investee after the date of acquisition. Dividends received or receivable from associates are recognised as a
reduction in the carrying amount of the investment.
The Group’s share of post-acquisition profit or loss is recognised in the statement of comprehensive income in the profit
and loss section, and its share of post-acquisition movements in other comprehensive income is recognised in other
comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s
share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables,
the group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on
behalf of the associate.
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate
is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable
amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit/(loss) of associates
in the income statement.
Profits and losses and unrealised gains resulting from upstream and downstream transactions between the Group and its
associate are recognised in the Group’s financial statements only to the extent of unrelated investor’s interests in the
associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Functional and presentation currency
Items included in the Annual Financial Statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (functional currency). The Consolidated Annual Financial
Statements are presented in South African Rand, which is the Company’s functional and presentation currency.
Non-controlling interest does not share in the foreign exchange profit/loss.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement. Foreign exchange gains and losses that relate
to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or costs’.
Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying
amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or
loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial
assets, such as equities classified as available for sale, are included in other comprehensive income.
The results and financial position of all the group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
| a) |
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet. |
| b) |
Income and expenses for each income statement are translated at average exchange rates (unless this average is not
a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the rate on the dates of the transactions). |
| c) |
All resulting exchange differences are recognised in other comprehensive income and accumulated in equity as a
foreign currency translation reserve. |
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Property and equipment
Property, office equipment, motor vehicles, furniture and fittings, computer equipment and building infrastructure are
initially recorded at cost. Subsequently these are measured at cost less accumulated depreciation and impairment.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset when they meet the
recognition criteria of property, plant and equipment. All other repairs and maintenance are charged to the statement of
comprehensive income during the financial period in which they are incurred.
Depreciation is charged on the straight-line basis over the estimated useful lives of the assets.
The estimated maximum useful lives are:
| • Property and office equipment |
5 to 20 years |
| • Motor vehicles |
5 years |
| • Computer equipment |
3 to 7 years |
| • Buildings |
30 years |
| • Furniture and fittings |
5 to 10 years |
The residual values and useful lives of assets are reviewed on an annual basis and if appropriate are adjusted accordingly.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in profit or loss.
Derecognition
The carrying amount of an item of plant and equipment is derecognised on disposal or when no future economic benefits
are expected from its use or disposal and the gain or loss arising from the derecognition of an item of plant and
equipment is included in profit and loss when the item is derecognised.
Initial recognition
Investment property is initially recognised at cost. Transaction costs is included in the initial measurement.
Subsequent measurement
An investment property is subsequently measured at fair value per IAS 40 and gains or losses from the fair value
adjustments are recognised in profit or loss. The valuation is prepared by an independent valuer.
Derecognition
An investment property is derecognised on disposal or when the investment property is permanently withdrawn from use
and no future economic benefits are expected from its disposal. Gains or losses from derecognition of an investment
property are determined as the net disposal proceeds less the carrying amount and are recognised in profit or loss.
Intangible assets are initially recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on the straight-line basis over the estimated useful lives of the assets.
The estimated maximum useful lives are:
| • Contractual customer relationships |
5 to 10 years |
| • Trademarks, brands and intellectual property |
10 years |
| • Internally generated computer software development costs |
Less than 15 years |
| • Computer software acquired |
4 to 5 years |
| • Goodwill |
Indefinate |
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisition of associates is included in the
carrying amount of investments in associates and is tested for impairment as part of the overall balance. Goodwill on
acquisitions of subsidiaries is included in intangible assets.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Cash
Generating Unit (“CGU”), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit
or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is
monitored for internal management purposes. Goodwill is monitored at the operating segment level.
Contractual customer relationships
Acquired contractual customer relationships from business combinations are recognised at fair value at acquisition date.
As contractual customer relationships have a finite useful life, they are subsequently carried at cost less accumulated
amortisation and impairment losses.
Trademarks, brands and intellectual property
Trademarks, brands and intellectual property have a finite useful lives and are initially measured at fair value and
subsequently amortised over its useful lives.
Internally generated computer software development costs
Costs associated with maintaining computer software programmes are generally expensed as incurred.
Development costs that are clearly associated with an identifiable and unique product, which will be controlled by the
Group and have a profitable benefit exceeding the cost beyond one year, are recognised as intangible assets.
The following criteria are required to be met before the related expenses can be capitalised as an intangible asset.
- It is technically feasible to complete the software so that it will be available for use
- Management intends to complete the software and use or sell it
- There is an ability to use or sell the software
- It can be demonstrated how the software will generate probable future economic benefits
- Adequate technical, financial and other resources to complete the development and to use or sell the software are
available, and
- The expenditure attributable to the software during its development can be reliably measured
Research and development expenditure that does not meet the criteria above are recognised as an expense as incurred.
Development costs previously expensed are not recognised as an asset in a subsequent period. Expenditure that
enhances and extends the benefits of computer software programmes beyond their original specifications and lives is
recognised as a capital improvement and added to the original cost of the software.
Computer software acquired
Acquired computer software licences are capitalised on the basis of the cost incurred to acquire and bring to use the
specific software.
Directly attributable costs associated with the acquisition and installation of software are capitalised.
Impairment of non-financial assets
Goodwill and intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to
amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating
units). Prior impairments of non financial assets (other than goodwill) are reviewed for possible reversal at each reporting
date.
The Group is the lessee
Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases.
Rentals payable under operating leases are charged to the statement of comprehensive income on a straight-line basis
over the term of the relevant lease.
Initial recognition and measurement
Financial instruments include all financial assets and liabilities, typically held for liquidity, investment or trading purposes.
All financial instruments are initially recognised at fair value plus directly attributable transaction costs, except those
carried at fair value through profit or loss where transaction costs are recognised immediately in profit or loss. Financial
instruments are recognised on the date the Group becomes party to a contract that gives rise thereto. At initial
recognition, management determines the appropriate classification of financial instruments, as follows:
- Financial instruments at fair value through profit and loss (“FVPL”) comprise financial instruments held for short-term
profit-taking.
- Loans and receivables originated by the entity are non-derivative financial assets that are created by the Group by
providing money, goods or services directly to a debtor other than those that are originated with the intention to sell in
the short term.
- Investments are designated as available-for-sale financial assets if they do not have fixed maturities and fixed or
determinable payments, and management intends to hold them for the medium to long term. Financial assets that are
not classified into any of the other categories (at FVPL, loans and receivables or held-to-maturity investments) are also
included in the available-for-sale category.
- Financial instruments at amortised cost are instruments that are neither held for trading nor designated at fair value.
Subsequent to initial measurement, financial instruments are measured either at fair value or amortised cost, depending
on their classifications below.
- Financial assets and liabilities designated at fair value through profit or loss
Subsequent to initial recognition, the fair values are remeasured at each reporting date, with arising gains and losses reported in profit or loss in the fair value gains/(losses) for the period.
- Available-for-sale
Available-for-sale financial assets are subsequently measured at fair value. Unrealised gains or losses are recognised
directly in the revaluation reserve in other comprehensive income until the financial asset is derecognised or impaired.
When the available-for-sale financial assets are disposed of, the cumulative fair value adjustments in the revaluation
reserve in other comprehensive income are reclassified to profit or loss in the fair value gains/(losses) for the period.
Interest income/(expense), calculated using the effective interest method is recognised in profit or loss. Dividends
received on debt or equity instruments are recognised in profit or loss in finance income when the Group’s right to
receive the payment has been established.
- Loans and receivables
Loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Origination transaction costs and origination fees received that are integral to the effective rate are capitalised to the value of the loans and amortised through interest income as part of the effective interest rate.
- Financial assets and liabilities at amortised cost
Financial liabilities that are neither held for trading nor designated at fair value are measured at amortised cost using the effective interest method. Interest expense, calculated using the effective interest method is recognised in profit or loss in the finance costs.
Impairment of financial assets
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are
incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial
recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of
the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified
as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered an
indicator that the assets are impaired.
Trade and other receivables
Trade and other receivables comprise loans and receivables. A provision for impairment of trade and other receivables is
established when there is objective evidence that the Group will not be able to collect all amounts due according to the
original terms of the receivables. The amount of the provision is the difference between the assets carrying amount and
the present amount of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in the statement of comprehensive income within ‘bad debt write-off’. When a trade receivable is
uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts
previously written off are credited to ‘bad debts recovered’.
Impairment of assets held at amortised cost
A provision for impairment of debt securities held at amortised cost is established when there is objective evidence that
the Group will not be able to collect all amounts due according to their original terms.
Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the
attention of the Group about the following events:
| (i) |
Significant financial difficulty of the issuer or debto |
| (ii) |
A breach of contract, such as a default or delinquency in payments |
| (iii) |
It becoming probable that the issuer or debtor will enter bankruptcy or other financial reorganisation |
| (iv) |
The disappearance of an active market for that financial asset because of financial difficulties |
| (v) |
Observable data indicating that there is a measurable decrease in the estimated future cash flow from a group of
financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the
individual financial assets in the Group, including:
- adverse changes in the payment status of issuers or debtors in the Group; or
- national or local economic conditions that correlate with defaults on the assets in the Group.
|
The Group first assesses whether objective evidence of impairment exists individually for financial assets that are
individually significant. If the Group determines that no objective evidence of impairment exists for an individually
assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of
impairment.
If there is objective evidence that an impairment loss has been incurred on investments carried at amortised cost, the
amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have been incurred) discounted at the financial asset’s original
effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the
amount of the loss is recognised in the statement of comprehensive income. If an investment held at amortised cost or a
loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate
determined under contract. As a practical expedient, the Group may measure impairment on the basis of an instrument’s
fair value using an observable market price.
Prepayments and deposits
Prepayments and deposits are recognised initially at fair value and subsequently measured at amortised cost using the
effective interest method, less provision for impairment if they relate to financial assets. The prepayments and deposits
which relate to the receipt of goods or services are initially and subsequently measured at cost.
Cash and cash equivalents
Cash and cash equivalents are carried at amortised cost. For the purpose of the statement of cash flows, cash includes
cash on hand, demand deposits and other short-term highly liquid investments with original maturities of three months or
less, that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade and other payables
Trade and other payables comprise of payables classified as financial liabilities. Payables classified as financial liabilities
are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Contingent liabilities
Contingent liabilities have been recognised as part of business combinations detailed in note 4. Contingent liabilities are
liabilities for which a reliable estimate can be made, yet the probability of an outflow of economic benefits is remote.
The fair values of contingent liabilities recognised as part of the business combinations have been determined by
management as the amounts that a third party would charge to assume the contingent liabilities. These amounts
reflect all expectations about possible cash flows and not the single most likely or the expected maximum or minimum
cash flow.
After their initial recognition, the Group measures contingent liabilities that are recognised separately due to a business
combination at the higher of:
| (i) |
the amount that would be recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent
Assets; and |
| (ii) |
the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with
IAS 18 Revenue. |
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, for
which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as interest expense in the statement of
comprehensive income as finance costs.
Pension and provident fund obligations
The Group operates a number of defined contribution plans, the assets of which are held in separate trustee-administered
funds. The pension and provident plans are funded by payments from employees and by the Group, taking account of
the recommendations of independent qualified actuaries. The funds are administered in terms of the Pension Funds Act
and periodic actuarial valuations are performed.
The Group’s contributions to the defined contribution pension and provident plans are charged to the statement of
comprehensive income in the year to which they relate. The Group has no further payment obligations once the
contributions have been paid.
Post-employment medical obligations
Some of the retired employees are provided with post-employment healthcare benefits. No further post-employment
healthcare benefits will be granted. These obligations are valued annually by independent qualified actuaries using the
projected unit credit method. Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Interest
costs are charged to the statement of comprehensive income as finance costs.
Annual leave
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the
estimated liability for annual leave as a result of services rendered by employees up to the statement of financial position
date. This provision is recognised in the statement of financial position under ‘Employment benefit liability’.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when
it is demonstrably committed to either:
- terminating the employment of current employees according to a detailed formal plan without possibility of
withdrawal; or
- providing termination benefits as a result of an offer made to encourage voluntary redundancy.
Benefits falling due more than twelve months after statement of financial position date are discounted to present value.
Short-term benefits
Short-term benefits consist of salaries, accumulated leave payments, profit share, bonuses and any non-monetary
benefits such as medical aid contributions. Short-term employee benefit obligations are measured on an undiscounted
basis and are expensed as the related service is provided, to the ‘Employee benefit costs’ in the statement of
comprehensive income.
The Group recognises a liability and an expense for bonuses based on a formula where there is a contractual obligation
or a past practice that created a constructive obligation. The Group has an incentive scheme (refer to note 20). The
expense is recognised as ‘Employee benefit costs’ in the statement of comprehensive income. Factors that are taken into
account when determining the incentive bonus amount include key performance indicators and performance of both the
individual and the Company.
Investments in subsidiaries are accounted for at cost less accumulated impairment in the Separate Annual Financial
Statements of the Company.
Revenue comprises the fair value of the consideration received or receivable for services provided in the ordinary course
of business.
The Group recognises revenue when the amount can be measured reliably, and it is probable that the future economic
benefits will flow to the entity.
All revenue excludes Value Added Tax (“VAT”). All expenditure on which input VAT can be claimed, excludes VAT.
Revenue is derived substantially from administration of healthcare benefits services provided to various organisation
within and outside South Africa and comprises administration fees, health risk management fees, management fees, IT
and other revenue. Gross fees for the administration of medical schemes, and the provision of managed care services,
are recognised as revenue on the accrual basis as the services are provided. Administration fees are accounted for as
revenue in the statement of comprehensive income.
Revenue from sale of goods
Revenue from the sale of goods is recognised when all the following conditions have been satisfied:
- the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;
- the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the economic benefits associated with the transaction will flow to the Company; and
- the costs incurred or to be incurred in respect of the transaction can be measured reliably.
When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with
the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period.
The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:
- the amount of revenue can be measured reliably;
- it is probable that the economic benefits associated with the transaction will flow to the Company;
- the stage of completion of the transaction at the end of the reporting period can be measured reliably; and
- the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
Finance income
Interest income is recognised on a time-proportion basis using the effective interest method. Interest income on impaired
loans should continue to be recognised on a time proportion basis using the effective interest method on the impaired
balance.
Dividend income
Dividend income is recognised when the right to receive payment is established (date of declaration).
Other expenditure
All other expenditure is recognised as and when incurred.
Cost of sales
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which
the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of
inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any
write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of
inventories recognised as an expense in the period in which the reversal occurs.
Inventories include assets held for sale in the ordinary course of business such as pharmaceutical products as well as
highly specialised high-value medical equipment.
Inventories are measured at the lower of cost and net realisable value on the first-in, first-out basis.
The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.
Direct taxation
Direct taxation includes all domestic and foreign taxes based on taxable profits and capital gains tax. Current tax is
determined for current period transactions and events and deferred tax is determined for future tax consequences. Current
and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity.
The current income tax charge is calculated on the tax laws enacted or substantively enacted at the statement of financial
position date in the countries where the Group’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions, where appropriate, on the basis of amounts expected
to be paid to the tax authorities.
The Group offsets current tax assets and current tax liabilities when it has a legally enforceable right to set off the recognised
amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax is recognised in full, using the balance sheet liability method, on all temporary differences arising between
the tax bases of assets and liabilities and their carrying values in the Annual Financial Statements. Deferred tax is
determined using tax rates and laws that have been enacted or substantially enacted by the statement of financial
position date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is
settled. However, deferred tax is not recognised if:
- initial recognition of goodwill;
- initial recognition of assets and liabilities in a transaction that is not a business combination, which affects neither
accounting nor taxable profits or losses; and
- investments in subsidiaries and associates where the Group controls the timing of the reversal of temporary
differences and it is probable that these differences will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that future taxable income will be available against
which the unused tax losses can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is no longer probable that the related tax benefit will be realised.
Dividends tax
Taxes on dividends declared by the Group are recognised as part of the dividends paid within equity as dividends tax
represents a tax on the shareholder and not the Group, at the rate of 20% (15% prior 22 February 2017). Tax on
dividends in specie will remain the liability of the Company declaring the dividend.
South African resident companies are exempt from the new dividends tax. Upon declaring a dividend (excluding dividends
in specie), the Group withholds the dividends tax on payment and, where the dividend is paid through a regulated
intermediary, liability for withholding dividends tax shifts to the intermediary. Dividend tax does not need to be withheld if a
written declaration is obtained from the shareholder stating that they are either entitled to an exemption or to double tax
relief.
Dividends tax withheld by the Group on dividends paid to its shareholders and payable at the reporting date to the South
African Revenue Service (“SARS”) is included in ‘Trade and other payables’ in the statement of financial position.
Dividends are recorded in the Group’s Annual Financial Statements in the period in which they are approved by the
Group’s shareholders.
Ordinary shares
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the
proceeds.
When the Group re-acquires its own equity instruments, those instruments (‘treasury shares’) shall be deducted from
equity. In the event that the shares are cancelled upon reacquisition, share capital and share premium are respectively
reduced with the original issue price of the shares re-acquired. Any difference between the original issue price and the
reacquisition price is recognised as an increase or decrease in the retained earnings. Where such treasury shares are
acquired and held other members of the consolidated Group the consideration paid or received is recognised directly in
equity as a treasury share reserve.
The Group issues equity-settled share-based awards to certain employees, which are measured at fair value at the date
of grant and expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest. Vesting assumptions are reviewed at each reporting period to ensure that they reflect current
expectations. The Group treats the share-based payment reserves in the same manner at Company and Group level.
At Company level, the reserves are accounted for at the same value as the Group due to the fact that ACT Company is
responsible for issuing the shares to the subsidiary participants. The share-based payment expense is accounted for
individually in each impacted subsidiary where the participants are employed. The Group IFRS 2 share-based payment
expense is recharged to the respective subsidiary which employs participants who qualify for participation in the scheme.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously.
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision-Maker. The Chief Financial Officer, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Chief Operating Decision-Maker as the person that makes strategic
decisions.
The conditional put obligation and reserve is measured at the present value of the full redemption value without taking
probabilities into account in terms of IAS 32. It is the policy of the Group to recognise finance costs related to the
conditional financial obligation through the statement of comprehensive income.
Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant
activities are directed by means of contractual arrangements. A structured entity often has some or all of the following
features or attributes: (a) restricted activities; (b) a narrow and well-defined objective, such as to provide investment
opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to
investors; (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial
support; and (d) financing in the form of multiple contractually linked instruments to investors that create concentrations
of credit or other risks (tranches).
The Group considers all of its investments in funds (‘collective investment schemes’) to be investments in unconsolidated
structured entities. The Group invests in collective investment schemes whose objectives range from achieving medium-to
long-term capital growth. The collective investment schemes are managed by asset managers and apply various
investment strategies to accomplish their respective investment objectives. The collective investment schemes finance
their operations by issuing units of the collective investment schemes which are puttable at the holder’s option and entitle
the holder to a proportional stake in the respective fund’s net assets. The Group holds units in each of the collective
investment schemes.
The change in fair value of each collective investment scheme is included in the statement of comprehensive income in
‘Fair value gains’.
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