Integrated Reports Senwesbel Consolidated Financial Statements 2018 - Page 32

5.2 ASSOCIATE All associates are accounted for by applying the equity method. The carrying value of the investment in associate is as follows: GROUP Nautilus Hedge Fund 2018 R’m 2017 R’m 27 25 54 51 27 25 Statement of financial position of Nautilus Hedge Fund: Cash and cash equivalents 50% proportion of the group’s interest Carrying amount of the investment GROUP The revenue and profit of Nautilus Hedge Fund are as follows: Revenue 2018 R’m 2017 R’m 3 2 (1) (1) Total profit from associate 2 1 Group’s share of profit from associate 1 -* Operating expenses *Less than R0,5million. A hedge fund was established on a 50/50 basis with Absa Bank during the period under review. 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 2018 R’m 2017 R’m 25 25 2 - 27 25 Notwithstanding the fact that Senwes does not hold any voting rights in the NAUTILUS AAM Commodity QHF portfolio of the Nautilus Quali- fied Investor Hedge Fund Scheme, Senwes has significant influence over the portfolio due to of the fact that it provides essential technical services to the portfolio. The investment will therefore be classified as an associate. 31 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2018 Senwesbel Limited Reg no: 1996/017629/06