MTN Group Limited – Annual report – 31 December 2022
Industry: telecoms
1.5 Critical accounting judgements, estimates and assumptions (extract)
1.5.2 IHS Group fair value through other comprehensive income (FVOCI)
Significant judgement – investment classification
The Group has an economic interest in IHS Group of 25.66% (2021: 25.98%) comprising of ordinary shares. An investor is presumed to have significant influence over an investee when it owns 20% of the investee, unless it can be clearly demonstrated that this is not the case. According to IHS Group’s articles of association, while the Group owns more than 20% of the issued shares, the Group’s voting rights are limited to 20%. The Group is not entitled to appoint a Board member. The Group does not have any special information rights or access to strategic, financial or operational information beyond that available to other public shareholders.
As a result of these restrictions, the Group’s rights do not constitute significant influence to participate in the financial and operating policy decisions of IHS Group. Consequently, the Group accounts for its investment in IHS Group as an equity instrument held at FVOCI (refer to note 7.2).
7 FINANCIAL RISK (extract)
7.2 Investments
Investments consist of equity investments at FVOCI and financial assets at amortised cost, that are accounted for in accordance with the accounting policy disclosed in note 7.1.
7.1.3 Fair value estimation (extract)
The following table presents the fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value:
Valuation methods and assumptions (extract)
The following methods and assumptions were used to estimate the respective fair values:
IHS Group listed equity investment – the fair value of the investment is determined by reference to published price quotations on the New York Stock Exchange. The share price of IHS Group was US$6.15 (2021: US$14.10) on the last trading day of the year.
A fair value decrease of R10 908 million (2021: R10 336 million). On 9 March 2023, the IHS Group share price was US$7.44, equating to an increase in the fair value of R2 771 million subsequent to 31 December 2022.
Accounts examples 