Notes

NOTE 1: Goodwill and Intangible assets

NOTE 2: BORROWINGS

NOTE 3: Cash and cash equivalents

NOTE 4: INSURANCE CONTRACT ASSET

AfroCentric Group has two cell captive arrangements: Medgap Cover, administered by Guardrisk Insurance Company Limited, and Sanlam Gap Cover, administered by Centriq Insurance Company Limited.

Effective 1 July 2025, the Medgap Cover cell, in which AfroCentric Integrated Solutions Proprietary Limited participated and which was underwritten by Guardrisk Insurance Company Limited, ceased underwriting insurance business. From this date, no further premiums were received and no claims were settled through the cell. In accordance with the policy terms, policyholders were granted a 31-day grace period to settle any outstanding premiums. Where premiums remained unpaid at the expiry of the grace period, the related insurance cover lapsed resulting in the cancellation of the underlying insurance contracts.

Following the cessation of underwriting activities and the subsequent expiry or cancellation of all remaining insurance contracts, the Group was no longer exposed to significant insurance risk in respect of the Medgap cell. On 30 June 2026, the Group received formal confirmation from Guardrisk Insurance Company Limited that the cell had been closed.

As a result of the cell closure, the remaining economic benefits associated with the arrangement no longer arose from insurance contract rights and obligations. Instead, they arose from the Group’s contractual entitlement as the cell shareholder, to participate in the residual net assets of the cell following settlement of all outstanding liabilities and obligations.

Accordingly, the Group derecognised the insurance contract asset relating to the Medgap cell upon expiry of the underlying contractual rights and obligations. The Group subsequently recognised a financial asset representing its contractual right to receive the residual value of the closed cell. This financial asset was measured in accordance with IFRS 9 Financial Instruments and classified within other financial assets as at 30 June 2026.

At 30 June 2026, the Group’s only remaining cell captive arrangement was the Sanlam Gap cell administered by Centriq Insurance Company Limited.

The carrying value of the Group’s cell captive arrangements was as follows:

The decrease in the Medgap balance reflects the derecognition of the insurance contract asset following the closure of the cell during the period.

Subsequent to 30 June 2026, on 13 July 2026, the Group received cell closure proceeds of R1.9 million and a dividend of R1.7 million from Guardrisk Insurance Company Limited, in full settlement of its entitlement arising from the closure of the Medgap cell. (Refer to Note 8).

NOTE 5: ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE

5.1 Activo Health Proprietary Limited Group (Activo Group)

During 2025, the Group undertook a strategic review of its operations and resolved to dispose of its pharmaceutical manufacturing and marketing division to a strategic investor with significant expertise in the pharmaceutical sector. The proposed disposal is intended to enhance the Group’s strategic focus on health administration, managed care and corporate solutions, strengthen the Group’s balance sheet, and unlock value from non-core assets.

As part of this strategic review, Activo Health Proprietary Limited (Activo), together with its wholly owned subsidiaries, Activo Healthcare Assets Proprietary Limited (AHA) and Forrester Pharma Proprietary Limited (Forrester) (collectively, the Activo Group), were identified as non-core operations. The Activo Group forms part of the Group’s Healthcare Retail segment.

On 29 January 2026, the Group announced, through SENS, the outcome of Bonitas Medical Fund’s Request for Proposal (RFP) process and the anticipated impact thereof on the Activo Group’s trading position. As a result, the parties agreed to revise the terms of the proposed disposal, and a revised Sale and Purchase Agreement was entered into on 23 April 2026.

In accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the disposal group was remeasured to fair value less costs to sell based on the revised transaction terms. At 30 June 2026, management concluded that the disposal group continued to meet the criteria for classification as Held for Sale, as the sale remained highly probable and active steps to complete the transaction were ongoing. Accordingly, the assets and liabilities of the Activo Group have been presented separately as a disposal group Held for Sale in the consolidated statement of financial position.

Subsequent to the reporting date, all suspensive conditions relating to the disposal were fulfilled on 31 July 2026, resulting in the transaction becoming unconditional. The disposal was subsequently implemented on 31 August 2026. These events further support management’s assessment that the disposal was highly probable as at 30 June 2026.

As at 30 June 2026, management calculated the recoverable amount to be the fair value less costs to sell.

As at 30 June 2026, the disposal group and individual assets classified as Held for Sale were stated at fair value less costs to sell and comprised the following:

Measurement of fair values

The fair value less costs to sell constitute the following, at net present value where appropriate:

	R’000
Cash payment	100 000
Deferred payment for working capital	196 447
Performance earnout	26
Costs to sell	(11 701)
	284 772

As at 30 June 2026, management reassessed the fair value less costs to sell the disposal group and determined its recoverable amount to be R285 million. At the reporting date, the disposal group had a carrying amount of R509 million, resulting in an excess of carrying value over recoverable amount of R224 million.

Based on this reassessment, an additional impairment loss would ordinarily have been required to reduce the carrying amount of the disposal group to its recoverable amount. However, during the current reporting period, only R4.7 million of impairment losses could be recognised against qualifying assets within the disposal group. This limitation arose because the carrying amounts of the qualifying non-current assets had already been reduced to the minimum amounts permitted under IFRS 5 Non-current Assets Held for Sale and Discontinued Operations and IAS 36 Impairment of Assets.

Accordingly, although the carrying amount of the disposal group continued to exceed its recoverable amount by R220 million at 30 June 2026, no further impairment losses could be recognised under the applicable accounting standards. The carrying amount of R505 million therefore reflects the cumulative impairment losses recognised in the current and prior reporting periods to the extent permitted by IFRS 5 and IAS 36.

(i) Fair value hierarchy

The fair value measurement for the disposal group has been categorised as a Level 3 fair value based on the nature of the inputs used.

(ii) Valuation parameters and assumptions

The following parameters and assumptions were considered in arriving at the valuation:

• The Activo Group’s net debt and working capital amounts as at closing date are assumed to approximate the amounts as at 30 June 2026.
• The performance earnout is calculated at probability-weighted expected value of the possible outcomes of the future performance of specific customer contracts.
• The discount rate applied represents the AfroCentric Investment Corporation Limited Group’s weighted average cost of capital.

Note 6: DISCONTINUED OPERATIONS

6.1 Activo Health Proprietary Limited Group

During 2025, the Group undertook a strategic review of its operations, which resulted in a decision to dispose of its pharmaceutical manufacturing and marketing division to a strategic investor with significant expertise in the pharmaceutical sector. The disposal is intended to support the Group’s strategic focus on health administration, managed care and corporate solutions, strengthen the Group’s balance sheet, and unlock value from non-core assets.

As part of this strategic review, the Group identified the Activo Group, as non-core operations. The Activo Group forms part of the Healthcare Retail segment. Following the SENS announcement on 29 January 2026 regarding the outcome of Bonitas Medical Fund’s Request for Proposal (RFP) process and its impact on the Activo Group’s anticipated future trading performance, the parties agreed to revise the terms of the proposed disposal. Consequently, a revised Sale and Purchase Agreement was concluded on 23 April 2026.

As at 30 June 2026, management remained committed to the disposal of the Activo Group and concluded that the disposal group met the criteria for classification as Held for Sale in terms of IFRS 5. The disposal group was available for immediate sale in its present condition, subject only to terms that are usual and customary for such transactions, and the sale was considered highly probable. Management expected the transaction to be completed within twelve months of the reporting date.

Subsequent to the reporting date, all suspensive conditions relating to the disposal were fulfilled on 31 July 2026. Accordingly, the transaction became unconditional and the disposal was implemented on 31 August 2026. The fulfillment of the conditions subsequent to period end provides further support for management’s assessment that the disposal was highly probable as at 30 June 2026.

The completion of the transaction remains subject only to the implementation of the sale agreement and is expected to occur in accordance with its terms.

Accordingly, management concluded that the Activo Group continued to meet the criteria for classification as a disposal group Held for Sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. As a result of the revised Sale and Purchase Agreement, the disposal group’s assets and liabilities were remeasured to fair value less costs to sell in accordance with IFRS 5. The Activo Group represents a separate major line of business and has therefore been presented as a discontinued operation for the period ended 30 June 2026.

6.2 AfroCentric Distribution Services Proprietary Limited Group (ADS Group) and Wellworx Proprietary Limited (Wellworx)

As part of the Group’s refreshed strategic focus, AfroCentric Distribution Services Proprietary Limited (ADS), together with its wholly owned subsidiaries Tendahealth Proprietary Limited and AfroCentric Financial Services Proprietary Limited (collectively, the ADS Group), and Wellworx Proprietary Limited (Wellworx), were identified as non-core operations.

During the prior financial period, the Group entered into agreements with Sanlam Life Insurance Limited for the disposal of its entire shareholding in the ADS Group and Wellworx, both of which formed part of the Healthcare SA segment. Accordingly, the ADS Group and Wellworx were classified as disposal groups Held for Sale and presented as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

On 24 July 2025, all conditions precedent relating to the disposal were fulfilled, resulting in the sale and purchase agreements becoming unconditional and the disposal transactions being successfully completed. Consequently, the Group derecognised the assets and liabilities of ADS Group and Wellworx. No gain or loss was recognised on disposal in profit or loss, as the businesses were sold at their respective net asset values (NAV).

The results of the ADS Group and Wellworx have been presented as discontinued operations up to the date of disposal. These businesses formed a separate major line of business within the Healthcare SA segment and their disposal is consistent with the Group’s strategy of focusing on its core health administration, managed care and corporate solutions operations.

6.3 Disclosure

The loss for the period ended 30 June 2026 from discontinued operations relates to the Activo Group, which forms part of the Healthcare Retail segment. As the Activo Group was classified as a discontinued operation during the current period, the Group has re-presented the comparative statement of profit or loss to reflect the results of the Activo Group as discontinued operations for all periods presented, in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

The impact of the re-presentation on the comparative loss for the prior period is set out below:

The (loss)/profit from discontinued operations for the period is attributable to the following disposal groups and is analysed as follows:

*	The profit from discontinued operations has been re-presented and includes the profit from Activo Group which was previously included in the continuing operations of the Group for the comparative periods presented.

NOTE 7: GOING CONCERN

The Condensed Consolidated interim financial statements have been prepared on the going concern basis in accordance with IAS 1 Presentation of Financial Statements. In assessing the Group’s ability to continue as a going concern, the directors considered the Group’s financial position, cash flow forecasts, liquidity resources, funding facilities and contractual obligations for a period of at least twelve months from the date of approval of these interim financial statements.

Loss of Bonitas Medical Fund administration and managed care contracts

On 29 January 2026, the Group’s subsidiaries, Medscheme Holdings Proprietary Limited, Aid for Aids Proprietary Limited and Scriptpharm Risk Management Proprietary Limited, were notified that they were unsuccessful in the Bonitas Medical Fund Request for Proposal (RFP) process.

Consequently, the administration and managed care agreements terminated effective 31 May 2026. In terms of the administration services agreement, Medscheme commenced the provision of contractual wind-down services from 1 June 2026 for a period of four months, with the associated revenue recognised over the wind-down period.

As Bonitas Medical Fund historically represented a significant component of the Group’s administration and managed care revenue, the termination of these contracts is expected to result in a material reduction in future revenue and earnings. The expected impact has been incorporated into management’s cash flow forecasts and financial projections.

Financial performance and liquidity

The Group reported profit after taxation of R70.8 million for the six months ended 30 June 2026 and remained cash generative.

As at 30 June 2026, the Group reported net current assets of R321.5 million and cash and cash equivalents of R710.9 million from continuing operations. In addition, the Group had access to an undrawn committed revolving credit facility of R300 million.

Management believes that the Group’s cash resources, positive working capital position and available funding facilities provide sufficient liquidity to meet its operational and financial obligations as they fall due.

Management’s mitigating actions

In response to the loss of the Bonitas contracts, management implemented a restructuring and optimisation programme aimed at mitigating the anticipated reduction in revenue and preserving profitability and cash flows. Key initiatives include:

• Aligning the Group’s cost base with the anticipated post-contract revenue profile;
• Consolidating and optimising operational processes to improve efficiencies;
• Reviewing non-core operations to optimise capital allocation and strategic focus;
• Pursuing business development opportunities to diversify the client base; and
• Redeploying resources towards growth initiatives and strategic priorities.

The anticipated benefits of these initiatives have been incorporated into management’s forecasts.

Cash flow forecasts

Management prepared detailed cash flow forecasts covering the assessment period, taking into account:

• The expected reduction in revenue following the termination of the Bonitas contracts;
• The anticipated benefits of restructuring and cost optimisation initiatives;
• Forecast positive cash balances throughout the assessment period; and
• The availability of the undrawn R300 million revolving credit facility, should additional liquidity be required.

Based on these forecasts, management expects the Group to maintain adequate liquidity and comply with its obligations throughout the assessment period.

Conclusion

The loss of the Bonitas administration and managed care contracts represents a significant event and creates uncertainty regarding the Group’s future earnings profile. However, after considering the Group’s profitability, strong cash position, positive working capital, available funding facilities, forecast cash flows and mitigating actions implemented by management, the directors concluded that the Group has sufficient resources to continue operating for the foreseeable future.

Accordingly, the directors consider the use of the going concern basis of accounting to be appropriate in the preparation of these Condensed Consolidated interim financial statements, and have concluded that no material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.

NOTE 8: SUBSEQUENT EVENTS

The directors are not aware of any material events or circumstances arising subsequent to the reporting date and up to the date of approval of these Condensed Consolidated interim financial statements that would require adjustment to or disclosure in the financial statements, other than those disclosed below:

• On 13 July 2026, the Group received R1.9 million in cell closure proceeds and a dividend of R1.7 million from Guardrisk Insurance Company Limited, arising from the closure of the insurance cell previously administered by Guardrisk.
• On 16 July 2026, Medscheme Holdings Proprietary Limited withdrew its application before the High Court for an interdict against Bonitas concerning the awarding and implementation of the administration and managed care services contracts. The withdrawal followed Medscheme’s decision to rely on the investigation being conducted by the Council for Medical Schemes (CMS).
• All suspensive conditions relating to the disposal of the Activo Group were fulfilled on 31 July 2026, resulting in the transaction becoming unconditional. The disposal was subsequently implemented on 31 August 2026 in accordance with the terms of the sale agreement.
• On 24 August 2026, the court dismissed the review application brought by Neil Harvey and Associates (NHA) against Medscheme Holdings Proprietary Limited (Medscheme) and awarded costs in favour of Medscheme. The review application related to an arbitration award and subsequent appeal decision, both of which had been decided in Medscheme’s favour.
  The court found no reviewable irregularity in the Appeal Tribunal’s decision and upheld the previous rulings in favour of Medscheme. Accordingly, the litigation has been resolved favourably for Medscheme, with costs awarded in its favour. The Group does not expect any material financial impact arising from this matter.