Integrated Reports Senwes Financial Review 2018 - Page 33

FINANCIAL REVIEW 5.2 Associate 5.1.6 SILO CERTS (PTY) LTD The group has a 50% interest in Silo Certs (Pty) Ltd (“Silo Certs”). Silo Certs deals with the electronic issuing and trading of silo certificates. The financial year-end is the same as the Senwes group finan- cial year-end. The principal place of business of Silo Certs is in Johannesburg, Gauteng. The associate is accounted for by applying the equity method. The carrying value of the investment in the associate is as follows: GROUP The following is the summarised information of Silo Certs: 2018 R’m 2017 R’m Current assets, excluding cash and cash equivalents 1 1 Cash and cash equivalents 6 4 (4) (3) 3 2 2 1 Statement of financial position of Silo Certs: Non-current liabilities Equity 50% proportion of the group’s ownership: Carrying amount of the investment Nautilus Hedge Fund The revenue and profit of Silo Certs are as follows: 5 4 Cost of sales (1) (1) Operating expenses, excluding depreciation (2) (2) Profit before taxation 2 1 Taxation - - Profit after taxation 2 1 Group’s share of profit for the year 1 -* * Less than R0,5 million. Summarised cash flows of Silo Certs are as follows: 1 - Generated from/(used in) financing activities 1 (2) Net increase/(decrease) in cash flows 2 (2) 2018 R’m 2017 R’m 2018 R’m 2017 R’m 27 25 25 25 Statement of financial position of Nautilus Hedge Fund: Cash and cash equivalents Carrying amount of the investment 2018 R’m 2017 R’m 54 51 27 25 GROUP The revenue and profit of Nautilus Hedge Fund are as follows: Revenue Operating expenses Total profit from associates Group’s share of profit from associate *Less than R0,5million. 2018 R’m 2017 R’m 2 3 (1) (1) 2 1 1 - * A hedge fund was established on a 50/50 basis with Absa Bank during the 2017 financial year. Both parties contributed R25 million to the hedge fund upon the establishment of the fund. The plan is to grow the fund with external investors. In this partnership Absa Bank will be responsible for the CAT IIA licence and will also provide access to potential investors. Senwes will be responsible for research and trading advice as well as generating returns on the investment. Both parties will be responsible for governance and risk management. The fund's principal place of business is South Africa. GROUP Initial investment in Nautilus Hedge Fund Share of accumulated profit Carrying amount of the investment COMPANY 2018 R’m 2017 R’m 2018 R’m 2017 R’m 25 25 25 25 2 27 - 25 - 25 - 25 Notwithstanding the fact that Senwes does not hold any voting rights in the NAUTILUS AAM Commodity QHF portfolio of th e Nautilus Qualified Investor Hedge Fund Scheme, Senwes has significant influence over the portfolio as a result of the fact that it provides essential technical services to the portfolio. The investment is therefore classified as an associate. FINANCIAL REVIEW Generated from operating activities COMPANY GROUP 50% proportion of the group’s interest: Included in the carrying amount is R0,5 million paid during September 2014 to previous shareholder to increase Senwes’ shareholding from 42,5% to 50%. Revenue 33