| 21. |
INVESTMENTS IN ASSOCIATES
The group has the following interests in its material associates:
Unlisted
- 25.9% (2019: 25.9%) in International Hotel Properties Limited (‘IHPL’), incorporated in the British Virgin Islands. IHPL will pursue hotel opportunities in the United Kingdom and Europe, the hotels to be managed by RBH Hotel Group (refer
below). The shares were delisted as the listing has not provided the anticipated liquidity or access to equity capital markets to facilitate the growth of the company. The company has a 31 August year-end; however, trading results for
the 12 months ended 31 March is included in the consolidated numbers.
- 26.38% (2019: 25%) in RBH Hotel Group Limited (‘RBH’), a leading independent hotel management company incorporated in the United Kingdom. This associate provides the group with access to additional management expertise, exposure to new markets and the potential for opportunities to deploy capital in attractive investments in the European hotel market in the future. The company has a 31 August year-end; however, trading results for the 12 months ended 31 March is included in the consolidated numbers.
|
|
2019
Rm |
| At 1 April |
|
488 |
477 |
| Acquisition of investment in associates |
|
8 |
– |
| Impairment of associate |
|
(17) |
– |
| Share of (loss)/profit after tax and other interests of associates |
|
(7) |
23 |
| Dividends received |
|
(26) |
(12) |
| At 31 March |
|
446 |
488 |
| Made up as follows: |
|
|
|
| Listed |
|
– |
– |
| Unlisted |
|
446 |
488 |
| At 31 March |
|
446 |
488 |
Summarised financial information for associates, which in the opinion of the directors are material to the group, on 100%
basis after adjustments to comply with the group’s accounting policies, is as follows:
|
|
RBH Hotel Group |
International Hotel Properties |
|
|
2019
Rm |
2019
Rm |
| Summarised balance sheets |
|
|
|
|
|
|
|
| Total non-current assets |
|
41 |
|
58 |
3 059 |
|
2 223 |
| Total current assets |
|
161 |
|
190 |
126 |
|
74 |
| Total assets |
|
202 |
|
248 |
3 185 |
|
2 297 |
| Total non-current liabilities |
|
– |
|
– |
1 344 |
|
890 |
| Total current liabilities |
|
227 |
|
209 |
423 |
|
139 |
| Total liabilities |
|
227 |
|
209 |
1 767 |
|
1 029 |
| Net assets |
|
(25) |
|
39 |
1 418 |
|
1 268 |
| Summarised statement of comprehensive income/(loss) |
|
|
|
|
|
|
|
| Revenue |
|
1 405 |
|
1 362 |
159 |
|
156 |
| Profit/(loss) from operations |
|
36 |
|
66 |
(66) |
|
22 |
| Profit/(loss) for the year and total comprehensive income |
|
36 |
|
66 |
(66) |
|
22 |
| A reconciliation of the summarised financial information to the carrying amount of the group’s interests in its associates is as follows: |
|
|
|
|
|
|
|
| Opening net assets attributable to owners |
|
39 |
|
71 |
1 268 |
|
1 080 |
| Profit/(loss) for the year |
|
36 |
|
66 |
(66) |
|
22 |
| Foreign currency translation reserve |
|
(15) |
|
(87) |
216 |
|
166 |
| Total comprehensive income |
|
60 |
|
50 |
1 418 |
|
1 268 |
| Dividends paid |
|
(85) |
|
(11) |
– |
|
– |
| Closing net (liabilities)/assets attributable to owners |
|
(25) |
|
39 |
1 418 |
|
1 268 |
| Interest in associate (%) |
|
26.38 |
|
25.00 |
25.90 |
|
25.90 |
| Interest in associate |
|
(7) |
|
10 |
367 |
|
329 |
| Intangible assets |
|
89 |
|
89 |
– |
|
– |
| Goodwill |
|
30 |
|
30 |
41 |
|
41 |
| Impairment(1) |
|
(17) |
|
– |
– |
|
– |
| Translation |
|
34 |
|
25 |
(91) |
|
(36) |
| Carrying value of investments in associates |
|
129 |
|
154 |
317 |
|
334 |
| (1) |
The UK experienced an economic slowdown, mainly due to COVID-19, that resulted in the medium term outlook for trading being negative
that indicated that the investment is possibly impaired. Based on the value in use of the investment, discounting future cash generated by the
investment at a weighted average cost of capital of 7.8%, an impairment of R17 million was raised and disclosed in other operating expenses
in note 11. Impairment will be allocated to reduce the carrying amount of goodwill first. |
The group has no further contingent liabilities or commitments in relation to the associates.
|
