28. |
RELATED PARTIES
Subsidiary companies – refer to Annexure B
During the year, certain companies in the Group entered into transactions with other companies in the Group. These
intra-group transactions have been eliminated on consolidation. The net loan receivable balance with subsidiary
companies is R391 million (2019: R391 million). The complete list of outstanding balances is available at the Company’s
registered office.
Related-party transactions
| Management
fees |
|
A management fee is charged to subsidiaries and is charged to cover costs associated with
services carried out on their behalf, for example: tariff negotiations, treasury, tax compliance,
human resource, payroll, marketing, nursing management, engineering, credit control,
insurance claim management, etc. The fees are based on a percentage of revenue for most
southern Africa subsidiaries. The percentage varies between 1% and 4% depending on the
types of service Life Healthcare Group Proprietary Limited (LHC) carries out on behalf of the
southern Africa subsidiary. The fees to international businesses are based on a cost plus
margin basis. |
| Information
management
fees (IM fees) |
|
In southern Africa, an IM fee is charged to subsidiaries to recover the cost incurred to run
the IM infrastructure and services. The fee is based on a net cost recovery basis. |
| Guarantee fees |
|
The Group charges a fee to the relevant subsidiaries where the Group is used as guarantor
for debt. |
| Pharmacy fees |
|
LHC charges all units that utilise the central purchasing and pharmacy management services a
1% fee on the monthly purchases. |
| Other cost
recharges |
|
The Group recharges all other costs it incurs on a cost recovery basis without any margin. |
| Interest |
|
Interest is charged or paid on all inter-group balances at market-related rates. |
| Rentals |
|
LHC and Scanmed S.A. (Scanmed) are lessors for a number of properties that are occupied by
subsidiary companies. Rent is charged at market-related rates.
Alliance Medical leases mobile scanners between certain Group companies at market-related
rates. |
| Royalties |
|
Alliance Medical charges a 3% fee of the relevant revenue where countries use the Alliance
Medical brand.
Scanmed charges a 1.5% fee of revenue where Group companies use the Scanmed
trademark. |
Associate companies and joint ventures – refer to Annexure C
The Group has investments in a number of associate companies and joint ventures. Details are disclosed in note 12 and Annexure C to the financial statements. No provision has been required in 2020 and 2019 for the loans made to
associates and joint ventures.
| |
2020
R’m |
|
2019
R’m |
|
|
|
|
|
|
| Loans to associates and joint ventures |
|
|
|
|
| Balance at 1 October |
10 |
|
10 |
|
| Net movements in amounts owned |
(5) |
|
(4) |
|
| Balance at 30 September |
5 |
|
10 |
|
Directors and director-related entities
Details of directors are disclosed in the administration to the financial statements on page 2. No direct loans were made
to or received from any director and no other transactions were entered into with any director. Refer to note 27 for
details on directors’ emoluments.
Key management
Key management is defined as all executive management, functional heads, hospital managers, pharmacy managers,
nursing managers, administration managers and patient service managers.
Key management disclosure excludes non-executive directors’ fees – refer note 27
| |
2020
R’m |
|
2019
R’m |
|
|
|
|
|
|
| Remuneration |
|
|
|
|
| Salaries |
546 |
|
444 |
|
| Medical aid contributions |
5 |
|
6 |
|
| Pension fund costs – defined benefit and contribution plans |
6 |
|
3 |
|
| Provident fund costs – defined contribution plans |
15 |
|
15 |
|
| |
572 |
|
468 |
|
|