NOTES

NOTE 1: INTANGIBLE ASSETS

      Carrying value        Amortisation    
   Unaudited 
six months 
ended 
31 December 
2021 
R’000 
Unaudited 
six months 
ended 
31 December 
2020 
R’000 
Audited 
year 
ended 
30 June 
2021 
R’000 
Unaudited 
six months 
ended 
31 December 
2021 
R’000 
Unaudited 
six months 
ended 
31 December 
2020 
R’000 
Audited 
year 
ended 
30 June 
2021 
R’000 
Goodwill  1 564 269  1 396 316  1 407 497  —  —  — 
Goodwill – AfroCentric Health  473 980  474 932  473 980  —  —  — 
Goodwill – Pharmacy Direct and Curasana  473 954  473 954  473 954  —  —  — 
Goodwill – Activo  424 645  424 464  424 645  —  —  — 
Goodwill – DENIS  34 918  22 966  34 918  —  —  — 
Goodwill – Activo Healthcare Assets*  156 772  —  —  —  —  — 
Intangible assets  1 550 803  1 404 977  1 375 369  (114 272) (96 591) (195 027)
Customer relationships – Pharmacy Direct and Curasana  25 076  34 024  29 550  (4 474) (4 474) (8 948)
Activo Dossiers  268 589  271 890  266 313  (7 884) (7 884) (15 767)
Customer relationships – DENIS  48 763  59 587  55 265  (6 502) (5 431) (9 753)
Activo Healthcare Assets Dossiers*  180 894  —  —  (9 675) —  — 
AfroCentric Health intangible assets  234 399  320 600  232 543  (16 548) (16 829) (34 451)
AfroCentric Health intangible PPA  20 672  33 030  26 665  (5 993) (6 703) (13 068)
AfroCentric Health intangible software  213 727  287 570  205 878  (10 555) (10 126) (21 383)
Administration Systems – Self Generated  786 083  654 687  762 254  (63 098) (46 168) (110 342)
Nexus & Other Healthcare Administration Systems  636 751  486 135  602 573  (52 749) (37 297) (92 600)
AfroCentric Health Fusion  149 332  168 552  159 681  (10 349) (8 871) (17 742)
Insurance Fraud Manager (Fraud Management Sofware) 6 999  64 189  29 444  (6 091) (15 805) (15 766)
   3 115 072  2 801 293  2 782 866  (114 272) (96 591) (195 027)
* The intangible assets relating to Activo Healthcare Assets represent the Forrester Pharma acquisition that was completed on August 2021.

NOTE 2: BORROWINGS

  Unaudited
six months
ended
31 December
2021
R’000
Unaudited
six months
ended
31 December
2020
R’000
Audited
year ended
30 June
2021
R’000
Borrowings (non-current) 687 417 508 140 655 785
Borrowings (current) 120 000 139 967 120 000
Total borrowings 807 417 648 107 775 785

NOTE 3: SEGMENTAL CHANGES
For the year ended 30 June 2021, Denis Group was moved from the Healthcare Retail segment to the Healthcare Services segment to align presentation with the Group’s operations and strategy.

Furthermore, for the year ended 30 June 2021, Scriptpharm’s capitation costs were moved from Healthcare retail operating costs to Healthcare retail cost of sales to align presentation to the nature of the business.

Consequently, the unaudited six months ended 31 December 2020 were represented as follows:

 

Subsidiary  As previously 
reported 
R’000 
Adjustment relating 
to Denis Group 
R’000 
Adjustment relating 
to Scriptpharm 
R’000 
Represented 
R’000 
Healthcare services revenue  1 693 222  132 212  —  1 825 434 
Healthcare services operating costs  (1 379 673) (128 917) —  (1 508 590)
Healthcare services operating profit  313 549  3 295  —  316 844 
Healthcare retail revenue  2 204 995  (132 212) —  2 072 783 
Healthcare retail cost of sales  (927 317) —  (769 327) (1 696 644)
Healthcare retail operating costs  (1 122 117) 128 917  769 327  (223 873)
Healthcare retail operating profit  155 561  (3 295) —  152 266 

NOTE 4: DISCONTINUED OPERATIONS
The note is included for comparative purposes, as the Group disposed of the following subsidiaries during the prior financial year:

Subsidiary Effective date of sale
Medscheme Administrators Eswatini Proprietary Limited 31-May-21
Medscheme Health Insurance Eswatini Limited 31-May-21
Medscheme Zimbabwe Private Limited 30-Apr-21
AfroCentric Integrated Health Risk Managers Proprietary Limited 02-Jul-20

Financial information relating to the discontinued operations for the prior period to the date of disposal are set out below:

Note 4.1: Profit/(loss) from discontinued operations excluding gains and losses from measurement or disposal are as follows:

   30 June 2021 
R’000 
Revenue  20 627 
Cost of sales  — 
Gross profit  20 627 
Other income  99 
Depreciation  (135)
Right of use asset depreciation  (19)
Amortisation  (27)
Interest on lease liability  (2)
Other expenses  (24 013)
Reclassification of foreign currency translation reserve  (10 401)
Loss before tax  (13 871)
Income tax  (137)
Loss for the year  (14 008)
Exchange differences on translation of discontinued operations  11 658 
Other comprehensive income from discontinued operations  11 658 

Note 4.2: Cash flows from discontinued operations

   30 June 2021 
R'000 
Net cash flows from operating activities  2 553 
Net cash flows utilised in investing activities  (3 862)
Net cash flows utilised in financing activities  (768)

(2 077)
Proceeds on sale of subsidiaries  — 
Less cash balances disposed  (2 835)
Net cash outflow on disposal of subsidiaries  (2 835)

Note 4.3: Details of the sale of the subsidiaries

   30 June 2021 
R'000 
Consideration received or receivable: 
Cash  — 
Fair value of contingent consideration  — 
Total disposal consideration  — 
Carrying amount of net assets sold  10 014 
Loss on sale  (10 014)
Reclassification of foreign currency translation reserve  — 
Income tax expense on gain  — 
Loss on sale after income tax  (10 014)

The carrying amounts of assets and liabilities as at the date of sale were:


 
AfroCentric 
Integrated 
Health Risk 
Managers 
R'000 
Medscheme 
Zimbabwe 
R'000 
Medscheme 
Administrators 
Eswatini 
R'000 
Medscheme 
Health 
Insurance 
Eswatini 
R'000 
Property, plant and equipment  —  —  235  — 
Intangible assets  —  —  — 
Deferred tax asset  77  149  10 854  722 
Trade and other receivables  601  1 641  49  — 
Current tax asset  130  —  330  — 
Cash and cash equivalents  11  140  39  2 645 
Loans to group companies  —  —  —  4 883 
Total assets  819  1 930  11 510  8 250 
         
Loans from group companies  —  —  4 883  — 
Trade and other payables  188  904  —  3 109 
Current tax liability  —  306  —  29 
Provisions  274  —  —  — 
Total liabilities  462  1 210  4 883  3 138 
         
Net assets sold  357  720  6 627  5 112 
Non-distributable reserves  —  —  (1 675) — 
Non-controlling interest  —  (3 775) 3 597  (949)
Carrying amount of net assets sold  357  (3 055) 8 549  4 163