NOTES

 

NOTE 1

      Carrying value
2020
R’000
  Carrying value
2019
R’000
  Amortisation
for the year
2020
R’000
  Amortisation
for the year
2019
R’000
   
Goodwill        1 373 350     1 336 842     –     –       
Goodwill – AfroCentric Health        474 932     460 460     –     –       
Goodwill – WAD Healthcare Assets        473 954     473 954     –     –       
Goodwill – Activo*        424 464     402 428     –     –       
Intangible Assets        1 321 837     1 219 170     (164 153)    (110 941)      
Customer relationships – Retail cluster        38 498     46 708     (8 206)    (10 591)      
Activo Dossiers        271 911     286 365     (14 454)    (3 613)      
AfroCentric Health intangible assets        292 761     332 146     (54 131)    (44 570)      
AfroCentric Health intangible PPA        39 733     55 149     (15 418)    (8 367)      
AfroCentric Health intangible Software  253 028     276 997     (38 713)    (36 203)      
Administration Systems – Self Generated        638 673     448 317     (61 722)    (21 393)      
Nexus & Other Healthcare Administration Systems        461 250     253 152     (43 980)    (21 393)      
AfroCentric Health Fusion  177 423     195 165     (17 742)    –       
Insurance Fraud Manager (Fraud Management Sofware)       79 994     105 634     (25 640)    (30 774)      
         2 695 187     2 556 012     (164 153)    (110 941)      
* Post the acquisition of Activo Health in March 2019, a pre-acquisition dividend to the value of R22 million was declared and payment effected in December 2019. In terms of IFRS 3: Business Combination, the provisional accounting applied to the acquisition of Activo Health is finalised in December 2019, resulting in an increase in the trade and other payables by R22 million, with a corresponding increase in Goodwill.

NOTE 2

Borrowings

  %
change
  Year ended
30 June
2020
R’00
  Year ended
30 June
2019
R’000
 
Borrowings (non-current)       266 311   371 566  
Borrowings (current)       120 000   120 000  
   21.4      386 311   491 566  

 

NOTE 3 RESTATEMENT OF JUNE 2019 RESULTS

Note 3.1

Statement of financial position

In the 2019 financial period, the Group had presented the taxation receivable net of its taxation payable obligations.

The restatement has been performed to comply with the requirements of IAS 12 as AfroCentric does not have a legal enforceable right to set off these amount, and does not intend to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Table below illustrates the impact of the statement of financial position restatement:

Consolidated statement of financial position 2019 
As previously 
reported 
R’000 
  Adjustment 
increase/ 
(decrease)
R’000 
  2019 
Restated 
R’000 
 
Current assets  1 085 620     32 279     1 117 899    
Trade and other receivables  531 494     –     531 494    
Cash and cash equivalents  265 296     –     265 296    
Inventory  283 732     –     283 732    
Current tax asset  5 098     32 279     37 377    
Current liabilities  686 046     32 279     718 325    
Trade and other payables  415 836     –     415 836    
Borrowings  120 000     –     120 000    
Employment benefit liability  88 659     –     88 659    
Lease liability  61 551     –     61 551    
Taxation  –     32 279     32 279    

 

Note 3.2

Statement of comprehensive income

In the 2019 financial period, the Group had presented the courier costs associated with the delivery of medication by Pharmacy Direct to its clients as "Healthcare operating expenses".

Due to the nature of these expenses, being associated with the final products, they have been reclassified to "Healthcare retail cost of sales".

This has been corrected as follows:

Statement of comprehensive income  2019 
As previously 
reported 
R'000 
   Adjustment  
(increase)/
/decrease  
R'000  
   2019 
Restated 
R'000 
  
Healthcare retail operating profit  129 233     –      129 233    
Healthcare retail revenue  2 038 135     –      2 038 135    
Healthcare retail cost of sales  (1 565 338)    (75 941)    (1 641 279)   
Healthcare retail operating costs  (343 563)    75 941     (267 622)   

Note 3.3

Cashflow restatement

On the early adoption and implementation of IFRS 16: Leases, the cash flows relating to the lease liability (i.e. lease liability interest repayment and lease liability capital repayment) were incorrectly accounted for on the cash flow statement disclosed on the annual results.

The total lease liability repayment (capital and interest) was incorrectly incorporated on the computation of the cash generated from operations, and the interest on the lease liability was not deducted from the cash generated from operations in computing the cash flows from operating activities.

The resultant impact is that the lease liability capital repayment was incorrectly recognised as a cash flow from operating activities instead of recognition as a cash flow from financing activities.

This has been corrected as follows:

Extract of the cash flows from operating activities

Financial Statement Lime  2019 
As previously 
reported 
R'000 
   Adjustment  
(increase)/
decrease   
R'000  
   2019 
Restated 
R'000 
  
Cash generated from operations  569 062     94 474     663 536    
Net finance income/ (cost) 4 471     (31 822)    (27 351)   
Distribution to shareholders  (196 662)    –     (196 662)   
Dividends received  4 168     –     4 168    
Tax and other payments  (136 924)    –     (136 924)   
Net cash flows from operating activities  244 115     62 652     306 767    

Extract of the cash flows from financing activities

Financial Statement Lime  2019 
As previously 
reported 
R'000 
   Adjustment  
(increase)/
decrease  
R'000  
   2019 
Restated 
R'000 
  
Increase in borrowings  491 566     –      491 566    
Lease liability capital repayment  –     (62 652)    (62 652)   
Net cash flows from financing activities  491 566     (62 652)    428 914    

The net impact of the restatement is the correct disclosure of the lease liability capital repayment as a cash flow from financing activities. This correction has not had an impact on the cash and cash equivalents.