Notes to the Group Annual Financial Statements – Note 29

29. Related party transactions
29.1 Directors
 

Details relating to Directors’ emoluments are disclosed in note 20. There are no loans to Directors.

The Directors’ shareholdings are disclosed on page 7 of the Annual Financial Statements. Transactions within the Group are listed below.

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 purchased the A class shares in the current 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. The minimum threshold per the stipulated formula was not achieved for the purchase of the shares. The shares will now be transferred to ACT Healthcare Assets Proprietary Limited.

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 has 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. This was completed in the 2017 financial year.
29.2 Transactions with entities in the Group
 

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

  Group  
  30 June 2018
R’000		   30 June 2017
R’000		  
Directors        
Medical aid contributions paid by directors – to schemes administered by Medscheme Holdings Proprietary Limited 164   242  
Mr MJ Madungandaba (70%) and Dr ATM Mokgokong (30%) control Namane Financial Services – Consulting and marketing fees paid to Namane Financial Services –   2 532  
Mr SM Rothbart has a controlling interest in Rothbart Inc. – Consulting fees paid by Medscheme Holdings Proprietary Limited –   1 474  
Mr MJ Madungandaba (42%) and Dr ATM Mokgokong (18%) control Mesure Facilities Management Proprietary Limited – Management fees and other expenses paid to Mesure Facilities Management Proprietary Limited. The fees represents outsourced facilities management for the AfroCentric Group that represent the following categories 71 526   90 883  
– Salaries 14 414   13 584  
– Cleaning and security 23 117   25 672  
– Refurbishments, projects and capex 10 785   33 844  
– Utilities 20 541   15 518  
– Other 2 669   2 265  
Mr MJ Madungandaba (41.91%) and Dr ATM Mokgokong (17.96%) collectively control Skynet South Africa Proprietary Limited – Courier fees to Skynet South Africa 1 552   1 278  
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 17 921   17 281  
Associates        
Invisible card company Proprietary Limited – loan advanced by AfroCentric Health Limited –   3 000  
The Cheese Has Moved Proprietary Limited – interest charged on loan from AfroCentric Health Proprietary Limited 289   51  
Subsidiaries        
AfroCentric Health Limited – management fees paid to Medscheme Holdings Proprietary Limited 13 051   914  
AfroCentric Management Services Proprietary Limited – profile fees paid to Helios IT Solutions Proprietary Limited 62   51  
AfroCentric Management Services Proprietary Limited – Telkom ,TMS and printer fees paid to Helios IT Solutions Proprietary Limited 36   34  
AfroCentric Management Services Proprietary Limited – IT support services paid to Helios IT Solutions Proprietary Limited 2   18  
Aid for Aids Management Proprietary Limited – management fees paid to Medscheme Holdings Proprietary Limited –   4 674  
Aid for Aids Management Proprietary Limited – management fees paid to AfroCentric Health Proprietary Limited 7 792   –  
Aid for Aids Management Proprietary Limited – Telkom ,TMS and printer fees paid to Helios IT Solutions Proprietary Limited 596   655  
Aid for Aids Management Proprietary Limited – profile fees paid to Helios IT Solutions Proprietary Limited 2 348   2 325  
Allegra Proprietary Limited – switching fees paid to Helios IT Solutions Proprietary Limited 5 201   5 281  
Allegra Proprietary Limited –TMS and Telkom fees paid to Helios IT Solutions Proprietary Limited 17   24  
Allegra Proprietary Limited – Licence and support fee paid to Helios IT Solutions Proprietary Limited 1 434   1 342  
Allegra Proprietary Limited – Dividend paid to Helios IT Solutions Proprietary Limited –   3 168  
ACT Healthcare Assets Proprietary Limited – dividends paid to AfroCentric Investment Corporation Limited 119 784   35 650  
Medscheme Namibia Proprietary Limited – dividends paid to Medscheme Holdings Proprietary Limited 9 473   43 324  
Pharmacy Direct Proprietary Limited – inventory purchases from Curasana Wholesalers Proprietary Limited 867 827   758 233  
Aid for Aids Management Proprietary Limited – NAPWA fees paid to Glen Eden Trading 58 Proprietary Limited –   234  
Helios IT Solutions Proprietary Limited – consulting fees paid to Glen Eden Trading 58 Proprietary Limited 36 843   33 095  
Pharmacy Direct Proprietary Limited – rental costs, electricity and security costs paid to Curasana Wholesalers Proprietary Limited 3 571   2 784  
Medscheme International – management fees paid to Medscheme Holdings Proprietary Limited –   28  
Medscheme International – management fees paid to AfroCentric Health Proprietary Limited 30   –  
Medscheme Mauritius – management fees paid to AfroCentric Health Proprietary Limited 267   –  
Medscheme Zimbabwe – management fees paid to AfroCentric Health Proprietary Limited 238   –  
AfroCentric Health Limited – IT support services paid to Helios IT Solutions Proprietary Limited 595   –  
AfroCentric Health Limited – TMS and Telkom fees paid to Helios IT Solutions Proprietary Limited 119   –  
AfroCentric Health Limited – Profile fees paid to Helios IT Solutions Proprietary Limited 4 884   –  
Aid for Aids Management Proprietary Limited – dividends paid to AfroCentric Health Proprietary Limited 70 400   –  
AfroCentric Health Proprietary Limited – dividends paid to ACT Healthcare Assets Proprietary Limited 168 000   –  
Glen Eden Proprietary Limited – dividends paid to ACT Healthcare Assets Proprietary Limited 57 234   –  
Medscheme Limited – dividends paid to AfroCentric Health Proprietary Limited 43 999   –  
AfroCentric Distribution Services Proprietary Limited – on site support fees paid to Helios IT Solutions Proprietary Limited 161   34  
AfroCentric Distribution Services Proprietary Limited – Out Of scope fees paid to Helios IT Solutions Proprietary Limited 223   –  
Medscheme Mauritius – management fees paid to Medscheme Holdings Proprietary Limited –   250  
Helios IT Solutions Proprietary Limited – management fees paid to Medscheme Holdings Proprietary Limited –   15 359  
Helios IT Solutions Proprietary Limited – management fees paid to AfroCentric Health Proprietary Limited 16 358   –  
Medscheme Zimbabwe – management fees paid to Medscheme Holdings Proprietary Limited –   223  
Medscheme Holdings Proprietary Limited – TMS and Telkom fees paid to Helios IT Solutions Proprietary Limited 15 647   17 151  
Medscheme Holdings Proprietary Limited – out of scope and recovery costs paid to Helios IT Solutions Proprietary Limited 1 101   929  
Klinikka Proprietary Limited – hosting fees paid to Helios IT Solutions Proprietary Limited –   188  
AfroCentric Health Limited – hosting fees paid to Helios IT Solutions Proprietary Limited –   51  
Medscheme Administrators Swaziland Proprietary Limited – management fees paid to Medscheme Holdings Proprietary Limited –   1 469  
Medscheme Administrators Swaziland Proprietary Limited – management fees paid to AfroCentric Health Proprietary Limited 1 565   –  
Klinikka Proprietary Limited – corporate service fees paid to Helios IT Solutions Proprietary Limited 74   70  
Medscheme Administrators Swaziland Proprietary Limited – IT support services paid to Helios IT Solutions Proprietary Limited 463   815  
Medscheme Administrators Swaziland Proprietary Limited – profile fees paid to Helios IT Solutions Proprietary Limited 125   323  
Medscheme Administrators Swaziland Proprietary Limited – licence and support fees paid to Helios IT Solutions Proprietary Limited –   3 026  
AfroCentric Health Limited – sales to Klinikka Proprietary Limited –   2 800  
Medscheme Holdings Proprietary Limited – management fees paid to AfroCentric Management Services Proprietary Limited 20 400   27 540  
Mmed Proprietary Ltd – IT Support service fees paid to Helios IT Solutions Proprietary Limited 8   –  
Medscheme Holdings Proprietary Limited – IT support services paid to Helios IT Solutions Proprietary Limited 69   69  
Medscheme Holdings Proprietary Limited – management fees paid to AfroCentric Health Limited 147 836   2 089  
Medscheme Holdings Proprietary Limited – Switching fees paid to Allegra Proprietary Limited 33 439   31 787  
Medscheme Holdings Proprietary Limited – management fees paid to AfroCentric Health Limited –   30 000  
Medscheme Holdings Proprietary Limited – management fees paid to AfroCentric Management Services Proprietary Limited –   7 000  
Curasana Wholesaler Proprietary Limited – management fees paid to AfroCentric Management Services Proprietary Limited 2 372   –  
Medscheme Holdings Proprietary Limited – information technology admin fees paid to Helios IT Solutions Proprietary Limited 148 271   143 315  
Helios IT Solutions Proprietary Limited – Commission payable to Medscheme Holdings Proprietary Limited for services rendered (CIMAS and First Mutual Life) 2 395   3 715  
Medscheme Holdings Proprietary Limited – profile fees paid to Helios IT Solutions Proprietary Limited 95 535   92 433  
Medscheme Holdings Proprietary Limited – Dividend paid to AfroCentric Health Limited 168 000   –  
Medscheme Namibia Proprietary Limited – licence and support fees paid to Helios IT Solutions Proprietary Limited 5 869   5 614  
Medscheme Namibia Proprietary Limited – profile fees paid to Helios IT Solutions Proprietary Limited 1 188   977  
Medscheme Namibia Proprietary Limited – management fees paid to Medscheme Holdings Proprietary Limited 1 011   935  
Klinikka Proprietary Limited – interest charged on loan from AfroCentric Health Limited 211   563  
Pharmacy Direct Proprietary Limited – interest charged on loan from Medscheme Holdings Proprietary Limited –   40  
Curasana Wholesalers Proprietary Limited – interest charged on loan from Medscheme Holdings Proprietary Limited –   12  
  Company  
  30 June 2018
R’000		   30 June  2017 
R’000 		  
AfroCentric Health Proprietary Limited loan account 9 519   (10 242)  
   
29.3 Key management personnel
 
  Group   Company  
  30 June 2018
R’000		   30 June 2017
R’000		   30 June 2018
R’000		   30 June 2017
R’000		  
Short-term employee benefits 7 687   7 904   –   –  
Share-based payments (note 27) 3 501   2 096   –   –  

Key management personnel comprise executive Directors within the AfroCentric Health Proprietary Limited Group.
29.4 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 29