8.2 ASSOCIATE
All associates are accounted for by applying the equity method. The carrying value of the investment in associate is as follows:
GROUP
2020
R’m
2019
R’m
RealFin Collective Investment Scheme 31 28
A hedge fund was established on a 50%:50% basis with Absa Bank. 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 is responsible for
the CAT IIA licence and also provides access to potential investors. Senwes is responsible for research and trading advice as well as
generating returns on the investment. Both parties are responsible for governance and risk management. The fund’s principal place
of business is South Africa. The fund name changed from Nautilus Hedge Fund to RealFin Collective Investment Scheme (“RealFin”)
during the current financial year.
The following is the summarised information of Realfin:
Statement of financial position of RealFin:
Cash and cash equivalents 61 57
50% proportion of the group’s interest
Carrying amount of the investment 31 28
The revenue and profit of RealFin:
Revenue 5 5
Operating expenses
(1) (2)
Total profit from associate 4 3
Group’s share of profit from associate * 3 2
* Includes R0,5 million relating to prior year adjustments.
Initial investment in RealFin 25 25
Share of accumulated profit 6 3
Carrying amount of the investment 31 28
Notwithstanding the fact that Senwes does not hold any voting rights in the AAM RCIS Commodity QI Hedge Fund portfolio of
RealFin, 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.
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SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 Senwesbel Limited Reg no: 1996/017629/06