2020 INTEGRATED REPORT

130 | PPS INTEGRATED REPORT 2020 GROUP ACCOUNTING POLICIES (CONTINUED) 2. CONSOLIDATION The financial statements include the assets, liabilities and results of the operations of PPS Holdings Trust (‘Parent’) and its subsidiaries (together ‘the Group’). SUBSIDIARIES Subsidiaries are entities over which the Group directly or indirectly has control. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investees and has the ability to affect those returns through its power over the investee. Subsidiaries are consolidated from the date on which the Group obtains control. Subsidiaries are deconsolidated when control ceases. All the Group subsidiaries were created by the Group. There are no acquired subsidiaries and there is no goodwill arising on consolidation. All unit trusts which are managed by a controlled subsidiary of the Group are consolidated, irrespective of the Group’s economic interest. Third Party unit trust holders’ interests in unit trusts are liabilities of the unit trust and are classified as such in the Group. Intra-group transactions, balances and unrealised gains on transactions are eliminated on consolidation. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. In the Parent’s separate annual financial statements, the interests in subsidiaries are accounted for at cost. A provision for impairment is created if there is evidence of impairment. NON-CONTROLLING INTEREST This is the minority shareholders’ interest in the surplus/deficit after tax since acquisition, and the net assets of entities controlled by the Group. In the Statement of Financial Position, the non-controlling interest is disclosed as part of equity in terms of IFRS. 3. FINANCIAL INSTRUMENTS 3.1 General The Group initially recognises financial assets and liabilities (including assets and liabilities designated at fair value through profit or loss), when the Group becomes a party to the contractual provisions of the instrument. Financial instruments recognised in the Statement of Financial Position include investments, other receivables, cash and cash equivalents, investment contract liabilities, borrowings, accruals, third party liabilities arising on consolidation of unit trusts, and other payables. 3.2 Financial assets The Group has the following financial asset categories: financial assets at fair value through profit or loss, as well as financial assets at amortised cost. All financial assets are initially measured at fair value including, for financial assets not at fair value through profit or loss, any directly attributable transaction costs. All financial asset purchases and sales are initially recognised using trade date accounting. Financial instruments at fair value through profit or loss A financial asset is placed into this category if so designated by management upon initial recognition. Financial assets designated at fair value through profit or loss, consist of local and foreign equities, money market instruments, government bonds, corporate bonds and unit trusts. Subsequent to initial recognition, these financial assets are accounted for at fair value. Fair value gains and losses arising from changes in fair value are included in the Statement of Profit or Loss and other Comprehensive Income as net fair value gains on financial assets in the period in which they arise.