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Audit, Risk and Compliance Committee’s
report
continued
The fair value assessment of the
investment in Oxigen, Oxigen
Online and 2DFine
The investments in Oxigen Services
India, Oxigen Online Services India,
collectively (Oxigen Services India), and
2DFine Holdings Mauritius (2DFine)
were historically accounted for as
investments in associates and joint
venture, applying the equity method
up until 30 November 2016. From that
date, the exemption available in IAS
28 –
Investments in Associate and
Joint Ventures
for venture capital
organisations has been applied to
these investments and accounted for
in accordance with IAS 39 –
Financial
Instruments: Recognition and
Measurement
at fair value with
changes in fair value recognised in
profit or loss. The difference between
the carrying value of the investments
as previously determined using the
equity accounting method and their
fair value is reflected as a fair value
gain on a financial instrument through
profit and loss for the year ended
31 May 2017. In order to determine
the fair value, management used an
independent third party with the
requisite expertise in assisting it with
the determination of the fair value of
the investments.
These investments were initially of a
long-term nature as they were
expected to emulate the business
model of the South African
distribution operations. However, their
profile has changed from that of the
traditional Group business model to
one of generating growth in the
market value of the investments with
a view to unlocking the Group’s share
thereof. With the advent of the
change in focus to financial services
through wallet subscription, they are
no longer strategically aligned with
the other business units of the Group
and are unlikely to generate
profitability in the short to medium
term. This in turn creates the potential
to unlock the investment values in the
future and the Group is pursuing this
new strategy with respect to these
investments.
Integrated annual report
The Committee considered the
integrated annual report,
incorporating the annual financial
statements for the year ended 31 May
2017. The Committee considered the
sustainability information as disclosed
in the integrated annual report and
assessed its consistency with
operational and other information
known to its members. The
Committee recommended the
approval of the integrated annual
report to the Board.
The ARCC is satisfied that it has
complied with its legal, regulatory and
other responsibilities as per its terms
of reference and that it has executed
its responsibilities in terms of
paragraph 3.84(g)(iii) of the Listings
Requirements in its assessment of the
suitability of the auditor. The contents
of the ARCC report was discussed at
the Committee meeting and were
approved by the Committee members
on 23 November 2017.
On behalf of the Audit, Risk and
Compliance Committee
JS Mthimunye
Chairman
23 November 2017
BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
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