GROUP ACCOUNTING POLICIES (continued) 3. Consolidation The financial statements include the assets, liabilities, and results of the operations of PPS Holdings Trust (‘Parent’) and its subsidiaries (together ‘the Group’). Subsidiaries Subsidiaries are entities over which the Group directly or indirectly has control. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investees and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date on which the Group obtains control. Subsidiaries are deconsolidated when control ceases. All the Group subsidiaries were established by the Group. There are no acquired subsidiaries and there is no goodwill arising on consolidation. All unit trusts and pooled funds under the control of a PPS entity, are consolidated based on the IFRS 10 definition of control. Third party unit trust holders’ interests in unit trusts are liabilities of the unit trust and are classified as such in the Group. Intra-group transactions, balances and unrealised gains on transactions are eliminated on consolidation. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. In the Parent’s separate annual financial statements, the interests in subsidiaries are accounted for at cost. A provision for impairment is recognised if there is evidence of impairment. Interests in associates and joint ventures An associate is an entity over which the Group has the ability to exercise significant influence, but not control, through participation in the financial and operating policy decisions of the entity. Judgement is applied in assessing which entities the Group has the ability to exercise significant influence over. The Group has no shareholding in the associate, and therefore has no rights to either net profits/losses, or net assets of this associate. PPS Mutual Limited and PPS Mutual Insurance Proprietary Limited (PPS Mutual Limited Group) are associates of the Group. PPS Insurance Company has significant influence over PPS Mutual Limited Group through its representation on their boards. The PPS Group has no shareholding in PPS Mutual Limited Group and therefore no rights to either net profits/losses, or net assets. Joint ventures are entities over which the Group has joint control, but not control, and are accounted for using the equity method after initially being recognised at cost in the consolidated statement of financial position. The Group determines the dates of obtaining or losing joint control of another entity based on an assessment of all pertinent facts and circumstances that affect the ability to jointly control the relevant activities of that entity. Facts and circumstances that have the most impact include the contractual agreements agreed with the counterparty, the manner in which those arrangements are expected to operate in practice, and whether regulatory approval is required (including the nature of such approval). The acquisition or disposal date does not necessarily occur when the transaction is closed or finalised under the law. The Group currently holds 10% of the shares in Ausmanco (Pty) Ltd and Mr MG Pillemer currently holds 53.1%. Practically, the Group and Mr MG Pillemer will both be required to give approval and unanimous consent before all decisions are taken. This investment constitutes a joint arrangement and the Group accounts for the investment in Ausmanco (Pty) Ltd as a joint venture on the basis of exercising joint control. The Group uses the equity accounting method to account for its share of Ausmanco (Pty) Ltd’s profit after tax. The Group has a 49% equity interest, with equal voting power, in Health Risk Management Botswana Proprietary Limited (HRMB), a joint venture in the business of healthcare administration and risk management services in Botswana. The Group and Reagile must act together to direct the activities that significantly affect the returns of HRMB. The Group and Reagile have rights to the net assets of the arrangements as profits made by HRMB will be distributed 100% to the Group and Reagile based on their proportionate shareholding. The Group accounts for its 49% investment in HRMB as an Investment in a Joint Venture and recognises its Share of Profit in the Joint Venture. 109 Group Accounting Policies
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