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Notes to the group financial statements Note 1 for the year ended 31 December 2009 1 Headline earnings and earnings per share 1 Reconciliation of total earnings to headline earning

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Notes to the group financial statements Note 1 for the year ended 31 December 2009 1 Headline earnings and earnings per share 1 Reconciliation of total earnings to headline earning Powered By Docstoc
					Notes to the group financial statements | Note 1
for the year ended 31 December 2009



1.   Headline earnings and earnings per share(1)
     Reconciliation of total earnings to headline earnings attributable to equity holders
     Total earnings attributable to equity holders
     Adjustments
      Preference share dividend
     Basic and headline earnings attributable to ordinary shareholders
      Net income earned on BEE preference shares
     BEE normalised headline earnings attributable to ordinary shareholders

     Earnings per share
     Total earnings attributable to ordinary equity holders
      Basic
      Headline
      BEE normalised headline
     Fully diluted
      Basic
      Headline

     Definitions
     Basic earnings per share is total earnings divided by the weighted average number of ordinary shares in issue during the year


     Headline earnings per share is calculated by dividing the headline earnings by the weighted average number of shares in issu



     The application of IFRS to the BEE transaction specifies that the full number of applicable ordinary shares will continue as a d
     deriving the weighted average number of shares in issue for earnings per share calculations. These shares will be considered
     the extent the preference shares are held by external parties at risk or if redeemed in full. This treatment distorts the economic
     BEE normalised headline earnings per share is provided which better reflects shareholder economic earnings.

     BEE normalised headline earnings is headline earnings adjusted for accrued dividends on BEE preference shares (not recogn
     financial asset) divided by the weighted average of ordinary shares assuming the BEE allocated shares are in issue.


     Fully diluted basic and headline earnings per share is calculated by adjusting the weighted average number of ordinary shares
     assume conversion of all dilutive potential ordinary shares. Both the BEE transaction and share options could potentially caus
     calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the ave
     market share price of the company’s shares) based on the monetary value of the subscription rights attached to outstanding s
     adjusted for any share-based payment expense recognised. The number of shares calculated as above is compared with the
     that would have been issued assuming the exercise of the share options.


     Weighted average number of shares in issue
     Weighted average shares before BEE transaction
     Effect of BEE transaction
     Fully diluted weighted average number of shares in issue
     Weighted average number of shares in issue
     Adjustments for:
Implementation of shares under option below fair value
Effect of BEE transaction

(1) Liberty applies the long-term insurance industry exemption contained in circular 3/2009 which allows for no headline earnings adjustment in respect of realised or unrealised remeasurement
                                           2009         2008
                                            Rm           Rm


ders
                                                44     1 112

                                            ( 2)            -
                                             42        1 110
                                             93           65
                                            135        1 175
                                          Cents        Cents



                                            16,4       709,3
                                            16,4       709,3
                                            47,2       740,8

                                            15,9       683,3
                                            15,9       683,3


 of ordinary shares in issue during the year.


weighted average number of shares in issue during the year.



icable ordinary shares will continue as a deduction in
culations. These shares will be considered in issue only to
n full. This treatment distorts the economic reality and a
holder economic earnings.

nds on BEE preference shares (not recognised as a
EE allocated shares are in issue.


eighted average number of ordinary shares outstanding to
 n and share options could potentially cause dilution. A
cquired at fair value (determined as the average annual
ubscription rights attached to outstanding share options
 calculated as above is compared with the number of shares


                                           000’s        000’s
                                        260 222      156 530
                                        286 018      158 644
                                        (25 796)      (2 114)
                                        267 378      162 505
                                        260 222      156 530
                                                                483                 276
                                                              6 673               5 699

s adjustment in respect of realised or unrealised remeasurements of investment properties.
Notes to the group financial statements | Note 2
for the year ended 31 December 2009

2.   Segment information
     Liberty is a matrix organisation with products and services managed by various business units along geographical lines and
     corporate markets.

     The segment information is therefore primarily presented by each distinct revenue generating service area. The group curre
     insurance, Asset Management and Health Services. Additional information on product classifications within the long-term in

     The group accounts for inter-segment revenues and transfers as if the transaction were with third parties. Given the nature

     The profit and loss information follows a similar format as the consolidated statement of comprehensive income. Total earn
     the group’s chief operating decision makers. The group utilises additional measures to assess the performance of each of
     such as indexed new business, new business margin, net cash flows, assets under management and embedded value.

     Definitions
     Long-term Insurance
     Products and services sold in terms of the long-term insurance acts in various territories. These products and services are

     Individual
     Products aimed at individuals that provide wealth creation, particularly through retirement savings, and wealth protection thr

     Product categories:
                                                                                                                 (a)
                                                                                                                 (b)


     Corporate
     Risk and retirement savings products under the umbrella of group schemes marketed to employers who provide those ben

     Product categories:
                                                                                                                 (a)
                                                                                                                 (b)

     Asset Management
     The provision of focused investment solutions for the customer base of the long-term insurance businesses as well as direc
     this segment.

     Health Services
     Healthcare administration, supply and development of related information technology systems, employee wellness program

     Other
     Other includes:
     Investment portfolios


     Central costs


     Reporting adjustments
The information in the segment report is presented on the same basis as reported to management. Reporting adjustments
these adjustments are included as footnotes.

The group’s revenue generating service areas during 2009 were managed by various business units as follows:
                                                                                                        1




                                                                                                       2



                                                                                                       3



                                                                                                       4



                                                                                                       5



                                                                                                       6
                                                                                                       7

                                                                                                       8

                                                                                                       9




Segment earnings for the year ended 31 December 2009:



Rm
Policyholder premiums
Service fee income from policyholder investment contracts
Investment returns
Fee revenue
Other
Total revenue
Net claims and policyholder benefits
Change in policyholders liabilities
Fair value adjustment to policyholders liabilities under investment contracts
Fair value adjustment on third party mutual fund interests
Acquisition costs
Marketing and administration expenses
Administration expenses
Provision for retirement fund administration (refer note 21)
Finance costs
Preference dividend
Equity accounted earnings from joint ventures
Profit/(loss) before taxation
Taxation
Total (loss)/earnings
Other comprehensive income
Owner-occupied properties
– fair value adjustment
Foreign currency translation
Income and capital gains tax relating to owner-occupied properties
Total comprehensive (loss)/income
Attributable to:
Minorities
Equity holders
Reconciliation of total (loss)/earnings to headline (loss)/earnings attributable to equity holders
Total (loss)/earnings
Attributable (to)/from minorities
Preference share dividend
Headline (loss)/earnings
Net income earned on BEE preference shares
BEE normalised headline (loss)/earnings
(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, providing additional deferred taxation o

transactions. The effect of the classification of long-term investment products as IFRS defined ‘investment’ contracts in the reporting adjustments column is to recognise premiums on inv




Segment earnings for the year ended 31 December 2008:



Rm
Policyholder premiums
Service fee income from policyholder investment contracts
Investment returns
Fee revenue
Other
Total revenue
Net claims and policyholder benefits
Change in policyholders liabilities
Fair value adjustment to policyholders liabilities under investment contracts
Fair value adjustment on third party mutual fund interests
Acquisition costs
Marketing and administration expenses
Finance costs
Preference dividend
Equity accounted earnings from joint ventures
Profit before taxation
Taxation
Total earnings
Other comprehensive income
Owner-occupied properties
– fair value adjustment
Foreign currency translation
Income tax relating to components of other comprehensive income
Total comprehensive income
Attributable to:
Minorities
Equity holders
Reconciliation of total earnings to headline earnings attributable to equity holders
Total earnings
Attributable to minorities
Preference share dividend
Headline earnings
Net income earned on BEE preference shares
BEE normalised headline earnings
(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, providing additional deferred taxation o

transactions. The effect of the classification of long-term investment products as IFRS defined ‘investment’ contracts in the reporting adjustments column is to recognise premiums on inv




Analysis of long-term insurance earnings by product classification



Rm
For year ended 31 December 2009
Policyholder premiums
Investment returns
Total revenue
Net claims and policyholder benefits
Change in policyholders liabilities
Acquisition costs
Marketing and administration expenses
Finance costs
Preference dividend
Equity accounted earnings from joint ventures
Profit before taxation and provision
Provision for retirement fund administration (refer note 21)
Total per operating segment
For year ended 31 December 2008
Policyholder premiums
Investment returns
Total revenue
Net claims and policyholder benefits
Change in policyholders liabilities
Acquisition costs
Marketing and administration expenses
Finance costs
Preference dividend
Equity accounted earnings from joint ventures
Profit before taxation
Total per operating segment


Other financial detail by operating segment



Rm
2009
Total assets
Additions to non-current assets
Interest in joint ventures
Interest income
Depreciation
Amortisation of PVIF
Impairment of PVIF
Derecognition and impairment of PVIF
Amortisation of computer software internally generated
Amortisation of customer relationships and contracts
Amortisation of deferred acquisition costs
Release of deferred revenue
2008
Total assets
Additions to non-current assets
Interest in joint ventures
Interest income
Depreciation
Amortisation of PVIF
Amortisation of computer software internally generated
Amortisation of customer relationships and contracts
Amortisation of deferred acquisition costs
Release of deferred revenue
(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, providing additional deferred taxation o

transactions. The effect of the classification of long-term investment products as IFRS defined ‘investment’ contracts in the reporting adjustments column is to recognise premiums on inv




Segment information from geographical areas

Rm
Revenue from external customers
Total earnings attributable to Liberty equity holders
Non-current assets
Total assets
Total liabilities
(1)
      Other Africa includes Nigeria, Namibia, Swaziland, Botswana, Kenya, Uganda, Lesotho.

Revenue is allocated based on the country in which the insurance or investment contract is issued or service fee income an

Non-current assets are allocated based on where the matching insurance or investment contract is issued or, if not matche
 ng geographical lines and risk components. Operations are structured to align the group’s services and related products to retail and


vice area. The group currently has four revenue generating service areas namely Individual Long-term Insurance, Corporate long-term
ons within the long-term insurance segment and geographical analysis is provided.

 parties. Given the nature of the operations there is no single external customer that provides 10% or more of the group’s revenues.

ensive income. Total earnings are reconciled to BEE normalised headline earnings, which is one of the key performance measures reported
 performance of each of the segments, which can be found in the chief executive report and business unit reviews and include measures
and embedded value.




 roducts and services are split between individual and corporate customers.


  and wealth protection through health, life and disability insurance.


              Pure risk      Contracts that only provide insurable risk benefits in the event of death, sickness or disability.
              Investment and Contracts that offer a combination of savings and risk benefits. These include products that offer
              risk           a prescribed monetary benefit over a contractually determined period.



rs who provide those benefits to their employees.



              Risk             Insurable risk benefits such as life and disability.
              Investment       Facilitation of employee savings for retirement.



usinesses as well as direct institutional business and individual customers. Management of the group’s property portfolios is also included in




mployee wellness programmes and medical risk management.




              Shareholder capital, not allocated to the other operating segments, specifically invested to maximise the investment yield within
              the group’s risk appetite and regulatory requirements.
              Costs associated with the group’s central administration and shareholder services including certain corporate social investment
              and black empowerment activities.
t. Reporting adjustments are those accounting reclassifications and entries required to produce IFRS compliant results. Specific details of


its as follows:
             Marketing and Distribution (MaD) manages the development, integrity and preservation of the group’s brands, image and
             communication as well as sales and distribution support to the individual, corporate insurance and asset management segments




            The revenues and costs related to this business unit are appropriately allocated to the benefiting service area and business unit
            Retail SA Insurance manages the direct customers’ and financial advisers’ needs with regard to risk and investment products
            sold to individuals under a long-term insurance licence in South Africa. The operations include developing specific products and
            servicing the existing policyholders’ benefits and requirements.
            Corporate develops and provides investment and risk products that meet the needs of employers in South Africa who provide
            these benefits centrally to their employees. Corporate scheme administration services, including actuarial compliance and advic
            are also provided.
            STANLIB is the group’s largest asset manager. It offers a local and international product mix which aims to meet the wealth
            needs of both institutional and individual investors. STANLIB also services the majority of the asset management requirements
            that support the products marketed by MaD.
            Liberty Properties is responsible for the development, management, administration and marketing of the extensive commercia
            retail and hotel property portfolio owned by the group across South Africa. The business unit also offers property development
            management and administration services to external customers.
            LibFin manages Liberty’s shareholder market, credit and liquidity risks.
            Liberty Africa aims to extend the group’s insurance, asset management and health services in African countries outside of Sou
            Africa.
            Liberty Health is focused on providing health-related services to institutional customers, including registered health funds, and
            individuals that work in countries that are less developed in terms of health solutions and services.
            Group Central Services includes business units that provide certain services to the group or parts of the group. These services
            include group professional services, group information technology services, people and stakeholder management, corporate
            finance and strategic ventures.



                 Long-term insurance                 Asset                                                          Reporting
                                                   manage-            Health                                          adjust-
                Individual    Corporate              ment           services            Other           Total        ments(1)
                     23 291           6 784                                                            30 075           (8 077)
                                                                                                                            823
                     13 152           4 459              137               2              787           18 537            1 463
                                                       1 526             330               19            1 875           ( 471)
                                                                                           13               13
                     36 443          11 243            1 663             332              819           50 500          (6 262)
                   (20 260)          (8 548)                                                          (28 808)            8 923
                    (9 834)          (1 700)                                                          (11 534)            4 288
                                                                                                                        (5 949)
                                                                                                                         ( 835)
                    (2 674)           ( 221)           ( 218)                              ( 1)        (3 114)
                    (3 078)           ( 814)           ( 721)          ( 444)           ( 398)         (5 455)               21
                                                          ( 654)
                                                          ( 160)
                                   ( 88)                                             ( 85)                     ( 50)                  ( 178)                   ( 401)                        58
                                 ( 366)                                                                                                                        ( 366)
                                      43                        5                     ( 3)                        1                        1                       47
                                    186                     ( 35)                     636                    ( 161)                      243                      869                      244
                                 ( 594)                         2                  ( 185)                        51                   ( 131)                   ( 857)                     ( 20)
                                 ( 408)                     ( 33)                     451                    ( 110)                      112                       12                      224



                                     22                           3                                                                                                 25
                                    ( 3)                                               ( 6)                     ( 2)                    ( 16)                    ( 27)
                                    ( 8)                      ( 1)                                                                                                 ( 9)
                                 ( 397)                     ( 31)                      445                   ( 112)                        96                         1                    224

                                    ( 3)                                               ( 7)                       46                                                36                  ( 224)
                                 ( 400)                     ( 31)                      438                     ( 66)                       96                       37


                                 ( 408)                     ( 33)                     451                    ( 110)                      112                       12                      224
                                    ( 4)                                             ( 10)                       46                                                32                   ( 224)
                                                                                                                                         ( 2)                     ( 2)
                                 ( 412)                     ( 33)                      441                     ( 64)                     110                       42
                                                                                                                                          93                       93
                                 ( 412)                     ( 33)                      441                     ( 64)                     203                      135
roviding additional deferred taxation on investment property revaluations, the classification of long-term insurance into defined IFRS ‘investment’ and ‘insurance’ products, and the elimination of inter-group

olumn is to recognise premiums on investment contracts as revenue in the long-term insurance segment.




                          Long-term insurance                                   Asset                     Health                                                                 Reporting
                                                                              manage-                   services                                                                   adjust-
                        Individual             Corporate                        ment                                                  Other                   Total               ments(1)
                                24 387                     6 959                                                                                             31 346                   (9 087)
                                                                                                                                                                                          799
                               (2 083)                  (1 031)                       173                          2                     601                 (2 338)                    1 128
                                                                                    1 526                         55                      24                   1 605                    (461)

                               22 304                    5 928                      1 699                         57                     625                 30 613                   (7 621)
                             (23 929)                 (10 278)                                                                                             (34 207)                   11 146
                                8 562                    5 488                                                                                               14 050                   (3 877)
                                                                                                                                                                                        1 025
                                                                                                                                                                                        (134)
                               (2 403)                     (223)                    (196)                                                                    (2 822)
                               (3 070)                     (702)                    (709)                     (122)                    (375)                 (4 978)                     (173)
                                  (42)                                              (151)                                              (163)                   (356)
                                 (308)                                                                                                                         (308)
                                     29                         4                       6                                                  1                      40
                                  1 143                      217                      649                       (65)                      88                   2 032                       366
                                  (399)                      (61)                   (198)                         46                      30                   (582)                       (25)
                                    744                      156                      451                       (19)                     118                   1 450                       341



                                      23                          3                                                                                                26
                                    (42)                                                                                                     2                   (40)
                                     (5)                       (1)                                                                                                (6)
                                    720                       158                      451                      (19)                     120                   1 430                       341

                                  (187)                      (38)                   (114)                         19                     (38)                  (358)                     (341)
                                    533                      120                      337                          –                       82                  1 072                         –


                                    744                      156                      451                       (19)                     118                   1 450                       341
                                  (178)                      (37)                   (114)                         19                     (28)                  (338)                     (341)
                                                                                                                                          (2)                     (2)
                                     566                      119                      337                          –                      88                  1 110                           –
                                                                                                                                           65                     65
                                     566                      119                      337                          –                    153                   1 175                           –
roviding additional deferred taxation on investment property revaluations, the classification of long-term insurance into defined IFRS ‘investment’ and ‘insurance’ products, and the elimination of inter-group

olumn is to recognise premiums on investment contracts as revenue in the long-term insurance segment.




                               Individual                                            Corporate
                                       Investment
                           Pure risk      and risk                                   Risk          Investment                         Total

                                 4 698                  18 593                      1 798                    4 986                  30 075
                                    66                  13 086                           9                   4 450                  17 611
                                 4 764                  31 679                      1 807                    9 436                  47 686
                               (1 584)                (18 676)                    (1 481)                  (7 067)                (28 808)
                                 (160)                 (9 674)                          26                 (1 726)                (11 534)
                               (1 654)                 (1 020)                        (35)                   (186)                 (2 895)
                                 (962)                 (2 116)                      (167)                    (487)                 (3 732)
                                                           (88)                                                                        (88)
                                  (366)                                                                                              (366)
                                                               43                                                 5                      48
                                      38                      148                      150                     (25)                    311
                                                                                                              (160)                  (160)
                                                              186                                              (35)                    151


                                 4 052                  20 335                      1 823                    5 136                  31 346
                                  -662                 (1 421)                        314                  (1 345)                 (3 114)
                                 3 390                  18 914                      2 137                    3 791                  28 232
                               (1 343)                (22 586)                    (1 462)                  (8 816)                (34 207)
                                 1 028                    7 534                     (239)                    5 727                  14 050
                               (1 347)                  (1 056)                      (69)                    (154)                  (2 626)
                               (1 043)                  (2 027)                     (173)                    (529)                  (3 772)
                                                            (42)                                                                        (42)
                                  (308)                                                                                               (308)
                                                              29                                                  4                       33
                                     377                     766                       194                       23                   1 360
                                                           1 143                                                217                   1 360



                          Long-term insurance                                   Asset                     Health                                                                 Reporting
                                                                              manage-                   services                                                                   adjust-
                        Individual             Corporate                        ment                                                  Other                     Total             ments(1)


                              145 863                    37 681                   10 240                        108                 11 666                 205 558                     13 842
                                1 505                       225                      135                          30                   186                   2 081                        201
                                  307                        46                      190                          32                                           575
                                4 618                     1 566                      101                           2                     276                 6 563                         382
                                                                                     (19)                       (16)                   (180)                 (215)
                                  (108)                      (54)                                                                                            (162)
                                                             (14)                                                                                              (14)
                                                                                                                (31)                                           (31)
                                                                                                                 (1)                       (7)                  (8)
                                                                                                                (19)                                           (19)
                                    (55)                   (149)                                                                                             (204)
                                      11                                                                                                                         11


                              136 351                    35 718                   10 242                        349                 15 432                 198 092                     13 681
                                  187                        29                      198                        533                    563                   1 510                         69
                                  273                        42                      188                                                 2                     505
                                4 384                     1 194                        80                                              256                   5 914                         683
                                                                                     (17)                        (1)                 (149)                   (167)
                                  (108)                      (56)                                                                                            (164)
                                                                                                                                         (16)                  (16)
                                                                                                                 (1)                                            (1)
                                    (46)                   (176)                                                                                             (222)
                                       9                                                                                                                          9
roviding additional deferred taxation on investment property revaluations, the classification of long-term insurance into defined IFRS ‘investment’ and ‘insurance’ products, and the elimination of inter-group

olumn is to recognise premiums on investment contracts as revenue in the long-term insurance segment.




                                 South Africa                                     Other Africa(1)                                        Total
                                  2009                      2008                   2009                       2008                     2009                     2008
                                44 027                   22 854                        211                      138                 44 238                   22 992
                                    (3)                   1 113                         47                       (1)                    44                    1 112
                                25 474                   22 890                         41                       10                 25 515                   22 900
                    219 092         211 569              308             204    219 400   211 773
                    206 354         197 860              111              87    206 465   197 947



d or service fee income and investment returns are earned.

s issued or, if not matched, where the business owning the asset is situated.
 ducts to retail and


Corporate long-term


 roup’s revenues.

mance measures reported to
 and include measures




 sability.




 rtfolios is also included in




he investment yield within


 rporate social investment
sults. Specific details of



p’s brands, image and
 et management segments.




ce area and business unit.
and investment products
ping specific products and


South Africa who provide
 rial compliance and advice,


ms to meet the wealth
anagement requirements


 the extensive commercial,
 s property development



n countries outside of South

 istered health funds, and

 the group. These services
 anagement, corporate




                        IFRS
                     reported
                        21 998
                            823
                        20 000
                         1 404
                             13
                        44 238
                      (19 885)
                       (7 246)
                       (5 949)
                         ( 835)
                       (3 114)
                       (5 434)
                                    ( 343)
                                    ( 366)
                                        47
                                    1 113
                                    ( 877)
                                       236



                                        25
                                     ( 27)
                                       ( 9)
                                      225

                                    ( 188)
                                        37


                                       236
                                    ( 192)
                                       ( 2)
                                        42
                                        93
                                       135
nd the elimination of inter-group




                                IFRS
                             reported

                                22 259
                                    799
                                (1 210)
                                  1 144

                                22 992
                              (23 061)
                                10 173
                                 1 025
                                 (134)
                               (2 822)
                               (5 151)
                                 (356)
                                 (308)
                                       40
                                    2 398
                                    (607)
                                    1 791



                                        26
                                      (40)
                                       (6)
                                    1 771

                                    (699)
                                    1 072


                                    1 791
                                    (679)
                                       (2)
                                    1 110
                                       65
                                    1 175
nd the elimination of inter-group
                                IFRS
                             reported



                               219 400
                                 2 282
                                   575
                                 6 945
                                 (215)
                                 (162)
                                   (14)
                                   (31)
                                    (8)
                                   (19)
                                 (204)
                                     11


                               211 773
                                 1 579
                                   505
                                 6 597
                                 (167)
                                 (164)
                                   (16)
                                    (1)
                                 (222)
                                      9
nd the elimination of inter-group
Notes to the group financial statements | Note 3
for the year ended 31 December 2009

                                                                                     2009
                                                                                      Rm
3.   Equipment and owner-occupied properties under development
     Cost at the beginning of the year                                              2 121
     Total additions                                                                  579
     Additions through business acquisition
     Additions                                                                         320
     Additions – capitalised subsequent expenditure                                    259
     Disposals                                                                      ( 101)
     Total redesignations and transfers                                             ( 127)
     Redesignation as investment properties(1)                                      ( 136)
     Transfers from owner-occupied properties                                            9
     Cost at the end of the year                                                    2 472
     Accumulated depreciation and impairment at the beginning of the year          (1 175)
     Depreciation                                                                   ( 215)
     Disposals                                                                          94
     Accumulated depreciation and impairment at the end of the year                (1 296)
     Net carrying value at the end of the year                                       1 176
     Summary of net carrying value
     Properties under development                                                     347
     Computer equipment                                                               243
     Purchased computer software                                                       34
     Fixtures, furniture and fittings                                                 450
     Office equipment and office machines                                              66
     Motor vehicles                                                                    36



                                                                               Balance at
                                                                            the beginning
                                                                               of the year
                                                                                       Rm
     2009
     Cost – movement
     Properties under development(2)                                                  215
     Computer equipment                                                               935
     Purchased computer software                                                      107
     Fixtures, furniture and fittings                                                 673
     Office equipment                                                                 123
     Motor vehicles                                                                    68
                                                                                    2 121
     Accumulated depreciationand impairments – movement
     Computer equipment                                                             ( 654)
     Purchased computer software                                                      ( 75)
Fixtures, furniture and fittings                                                                                                                   ( 355)
Office equipment                                                                                                                                     ( 59)
Motor vehicles                                                                                                                                       ( 32)
                                                                                                                                                  (1 175)
2008
Cost – movement
Properties under development(2)
Computer equipment                                                                                                                                     731
Purchased computer software                                                                                                                             90
Fixtures, furniture and fittings                                                                                                                       566
Office equipment                                                                                                                                        97
Motor vehicles                                                                                                                                          62
                                                                                                                                                     1 546
Accumulated depreciation and impairments – movement
Computer equipment                                                                                                                                 ( 588)
Purchased computer software                                                                                                                          ( 61)
Fixtures, furniture and fittings                                                                                                                   ( 297)
Office equipment                                                                                                                                     ( 52)
Motor vehicles                                                                                                                                       ( 29)
                                                                                                                                                  (1 027)
(1) Amendments to IFRS effective prospectively from 1 January 2009 necessitated that investment properties under development be redesignated to investment properties. Owner-occu

(2) No depreciation is provided for on properties under development
      2008
       Rm


     1 546
       584
         21
       361
       202
      ( 22)
         13

        13
     2 121
    (1 027)
     ( 167)
         19
    (1 175)
        946


       215
       281
        32
       318
        64
        36




  Business                                               Redesignation
acquisition   Additions   Disposals      Depreciation     and transfers
        Rm          Rm          Rm                Rm                Rm



                   259                                          (127)(1)
                    74          ( 67)
                    18            ( 6)
                   190          ( 12)
                    22            ( 4)
                    16          ( 12)
                   579        ( 101)                             ( 127)


                                  64           ( 109)
                                   6             ( 16)
                                                                                                  12            ( 58)
                                                                                                   3            ( 19)
                                                                                                   9            ( 13)
                                                                                                  94          ( 215)



                                                                    202                                                  13
                                         18                         193                          ( 7)
                                                                     17
                                           3                        107                          ( 3)
                                                                     27                          ( 1)
                                                                     17                        ( 11)
                                         21                         563                        ( 22)                     13


                                                                                                    7           ( 73)
                                                                                                                ( 14)
                                                                                                   2            ( 60)
                                                                                                   1              ( 8)
                                                                                                   9            ( 12)
                                                                                                  19          ( 167)
to investment properties. Owner-occupied properties under development are not affected by these amendments.
 Balance at the
end of the year
            Rm



           347
           942
           119
           851
           141
            72
         2 472


         ( 699)
           ( 85)
 ( 401)
   ( 75)
   ( 36)
(1 296)



   215
   935
   107
   673
   123
    68
 2 121


 ( 654)
   ( 75)
 ( 355)
   ( 59)
   ( 32)
(1 175)
Notes to the group financial statements | Note 4
for the year ended 31 December 2009



4.
Notes to the group financial statements | Note 4
for the year ended 31 December 2009



   Owner-occupied properties are recorded in registers, which may be inspected by members or their duly authorised agents,
   Details of property investments
   at the company’s registered office.
   Fair value at the beginning of the year
   Additions
   Disposals
   Revaluations
   Transfers to properties under development
   Reclassifications from/(to) investment properties
   Fair value at the end of the year

   The cost less accumulated depreciation of the owner-occupied properties is provided below. The allowed alternative method as de
   value, which has been adopted by the group.




   Cost at the beginning of the year
   Additions
   Disposals
   Reclassifications to investment properties
   Transfer to properties under development
   Cost at the end of the year
   Accumulated depreciation at the beginning and end of the year(1)
   Cost less accumulated depreciation
   (1) No depreciation was provided in 2009 or 2008 as the residual value of the building is equal or greater than the cost less accumulated depreciation.



   The valuation of owner-occupied properties and investment properties has been carried out by Ian Mitchell Investment Property Co
   Valuation Surveyor – Professional Valuer) and Asset Valuation Services CC (Professional Associate Valuer).

   The valuation is prepared in accordance with the guidelines of the South African Institute of Valuers for valuation reports and in acc
   appraisal and valuation manual of the Royal Institution of Chartered Surveyors, adapted for South African law and conditions. The
   there will be no change in the social, economic or political circumstances between the date of the valuation and the financial year e

   The basis of value is “market value” which is defined as an opinion of the best price at which the sale of an interest in property, taki
   tenant lease terms, would have been completed unconditionally for a cash consideration on the date of valuation assuming:
   • a willing seller;
   • that the state of the market, level of values and other circumstances were, on any earlier assumed date of exchange of contracts,
   of valuation;
   • that no account is taken of any additional bid by a prospective purchaser with a special interest; and
   • that both parties to the transaction had acted knowledgeably, prudently and without compulsion.
   The properties have been valued on a discounted cash flow basis. In the majority of cases, discounted cash flows have been used
   with the capitalised and discounted value of the projected income to give present value as at 31 December 2009. In order to determ
   rental income on lease expiry, renewal or review a market gross rental income (basic rental plus operating cost rental) has been ap
   related rental value for each property as at 31 December 2009. Market rental growth has been determined based on the individual
   trends and economic forecasts. Vacancies have been considered based on historic and current vacancy factors as well as the natu
   popularity of each building.
Appropriate discount rates have been applied to cash flows for each property to reflect the relative investment risk associated with
tenant, covenant and the projected income flow. Extensive market research has been conducted to ascertain the most appropriate
rate to apply, regard to the current long-term bond yield (R153 risk free rate) and the relative attractiveness that an investor may pl
asset class.

Primary discount rates range from 7,50% to 12,50% (2008: 7,75% to 12,50%) on a property by property basis. Exit capitalisation ra
7,50% to 12,50% (2008: 7,75% to 12,50%).
On the basis that turnover or profit rental income has a greater degree of uncertainty and risk than the contractual base rental, a ris
1% and 6% has been added to the discount rate and to the exit capitalisation rate, to reflect the greater investment risk associated
element on a property by property basis.
                                          2009           2008
                                           Rm             Rm
their duly authorised agents,

                                         1 282          1 276
                                            45              18
                                                         ( 23)
                                            25              26
                                           ( 9)          ( 13)
                                              2            ( 2)
                                         1 345          1 282

allowed alternative method as described in IAS 16 is fair


                                          2009           2008
                                           Rm             Rm
                                           540            544
                                            45             18
                                                          ( 9)

                                            ( 9)         ( 13)
                                           576            540
                                          ( 57)          ( 57)
                                           519            483



  Mitchell Investment Property Consultants CC (Chartered
 te Valuer).

 s for valuation reports and in accordance with the
 African law and conditions. The valuation assumes that
valuation and the financial year end of the company.

ale of an interest in property, taking into account existing
 te of valuation assuming:

d date of exchange of contracts, the same as at the date
nd

nted cash flows have been used and summed together
ecember 2009. In order to determine the reversionary
perating cost rental) has been applied to give a market-
ermined based on the individual property, property market
 cancy factors as well as the nature, location, size and
 investment risk associated with the particular building,
o ascertain the most appropriate market related discount
 tiveness that an investor may place on property as an


perty basis. Exit capitalisation rates generally range from

 the contractual base rental, a risk premium of between
eater investment risk associated with the variable rental
Notes to the group financial statements | Note 5
for the year ended 31 December 2009



5.
Notes to the group financial statements | Note 5
for the year ended 31 December 2009



   Investment properties
   Details of property investments are recorded in registers, which may be inspected by members or their duly
   authorised agents, at the company’s registered office.
   Fair value at the beginning of the year
   Redesignation from equipment and owner-occupied properties under development
   Revaluations net of lease straight-lining
   Revaluations
   Net movement on straight-lining operating leases
   Additions – property acquired
   Additions – capitalised subsequent expenditure
   Disposals
   Reclassifications (to)/from owner-occupied properties
   Fair value at the end of the year
   At the end of the year investment properties comprised the following property types:
   Office buildings
   Shopping malls
   Hotels
   Other
   Total investment properties
   Investment properties at fair value
   Operating leases – accrued income
   Operating leases – accrued expense
   The investment properties were independently valued as at 31 December 2009 by registered professional valuers with the South
   Council for the Property Valuers Profession as well as members of the Institute of Valuers of South Africa. The method of valuat
   fully described in note 4, owner-occupied properties.

   At 31 December 2009 and 2008 there was no significant unlet space in the investment properties held by the group.

   The property rental income earned by the group from its investment property, all of which is leased out under operating leases, a
   R1 662 million (2008: R1 305 million) including IFRS straight-lining or R1 493 million (2008: R1 347 million) excluding IFRS strai
   Direct operating expenses arising on the investment property amounted to R303 million (2008: R235 million).

   Critical accounting estimates and judgements
   A key input to the models that derive the fair value of properties is the capitalisation rate. The combined fair value at 31 Decemb
   owner-occupied properties (R1 345 million) and investment properties (R20 029 million) is R21 374 million. A 1% absolute chan
   capitalisation rate assumption would increase the total fair value by R3,2 billion if the assumption decreased, and decrease the t
   by R2,5 billion if the assumption increased.
                     2009         2008
                      Rm           Rm



                   16 771       14 937
                       136
                       711        1 634
                       830        1 544
                    ( 119)           90
                                      8
                    1 628           190
                    ( 186)
                       ( 2)          2
                   19 058       16 771


                    1 408        1 010
                   15 962       14 257
                    2 091        1 778
                      568          578
                   20 029       17 623
                   19 058       16 771
                    1 156        1 067
                    ( 185)       ( 215)
al valuers with the South African
a. The method of valuation is more


y the group.

nder operating leases, amounted to
on) excluding IFRS straight-lining.
lion).


fair value at 31 December 2009 of
on. A 1% absolute change to the
sed, and decrease the total fair value
Notes to the group financial statements | Note 6
for the year ended 31 December 2009



6.   Intangible assets
     Cost at the beginning of the year
     Additions through business acquisition
     Derecognition
     Cost at the end of the year
     Accumulated amortisation and impairment at the beginning of the year
     Amortisation
     Derecognition and impairment
     Accumulated amortisation and impairment at the end of the year
     Net carrying amount at the end of the year
     Summary of net carrying value
     Goodwill(1)
     Computer software – internally generated
     Customer relationships and contracts
     Present value of in-force policyholder insurance contracts(2)




     2009
     Goodwill
     Computer software – internally generated
     Customer relationships and contracts
     Present value of in-force policyholder contracts

     Accumulated amortisation and impairment – movement
     Goodwill
     Computer software – internally generated
     Customer relationships and contracts
     Present value of in-force policyholder contracts




     Goodwill comprises
     Capital Alliance Holdings Limited
     Liberty Health Holdings (Proprietary) Limited
Goodwill relating to Liberty Health Holdings (Proprietary) Limited includes value attributable to acquired workforce and the e
contracts.
(2) Represents the present value (at acquisition date) of future profits before taxation, on policyholder contracts acquired from business combinations, less amortisations. No internally ge




                                                                                                                                   Balance at
                                                                                                                                the beginning
                                                                                                                                   of the year
                                                                                                                                           Rm
2008
Cost – movement
Goodwill                                                                                                                                       397
Computer software – internally generated                                                                                                       236
Customer relationships and contracts
Present value of in-force policyholder contracts                                                                                            1 624
                                                                                                                                            2 257
Accumulated amortisation and impairment – movement
Goodwill                                                                                                                                    ( 397)
Computer software – internally generated                                                                                                    ( 209)
Customer relationships and contracts
Present value of in-force policyholder contracts                                                                                           ( 514)
                                                                                                                                          (1 120)

Goodwill impairment testing
The group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired



For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiab
As at 31 December 2009, the carrying amount of goodwill of R114 million held within the group relates to the acquisition of

The health business follows an integrated model servicing health risk products with administration support, information tech
been identified at the Liberty Health Holdings consolidated group level.

The recoverable amount of the goodwill has been determined on a value-in-use calculation supported by the price paid for
in-use calculation utilised a five year projected cash flow forecast with an expected terminal value. An expected average gro
risk adjusted rate of 17%. No impairment was required for this reporting period.
                                                         2009               2008
                                                          Rm                 Rm


                                                        2 738              2 257
                                                                             488
                                                         ( 15)               ( 7)
                                                        2 723              2 738
                                                       (1 294)            (1 120)
                                                        ( 189)             ( 181)
                                                          ( 30)                 7
                                                       (1 513)            (1 294)
                                                         1 210              1 444


                                                          114                114
                                                          231                239
                                                           95                145
                                                          770                946



   Balance at                                      Balance at
the beginning    Impairment and                    the end of        Amortisation
   of the year     derecognition   Amortisation      the year              period
           Rm                Rm             Rm            Rm


          511                                             511
          457               (15)                          442
          146                                             146
         1624                                            1624
         2738               (15)                         2723


         (397)                                           (397)    No amortisation
         (218)                15            (8)          (211)      Up to 7 years
           (1)              (31)           (19)           (51)      Up to 7 years
         (678)              (14)          (162)          (854)     Up to 12 years
        -1294               (30)          (189)         -1513



                                                                     Net carrying
                                          Cost    Accumulated            amount
                                           Rm      impairment                 Rm
                                           397          ( 397)                 –
                                           114                               114
                                           511          ( 397)               114
utable to acquired workforce and the effect of double accounting of deferred tax on customer relationships and


 iness combinations, less amortisations. No internally generated value of in-force has been recognised, since it does not meet the recognition criteria in IAS 38.




                                                                                                                             Balance at
                                Business               Impairment and                                                        the end of                  Amortisation
                              acquisitions               derecognition                     Amortisation                        the year                        period
                                       Rm                         Rm                               Rm                               Rm



                                           114                                                                                         511
                                           228                            ( 7)                                                         457
                                           146                                                                                         146
                                                                                                                                     1 624
                                           488                            ( 7)                                                       2 738


                                                                                                                                   ( 397)           No amortisation
                                                                              7                        ( 16)                       ( 218)             Up to 7 years
                                                                                                         ( 1)                         ( 1)            Up to 7 years
                                                                                                     ( 164)                        ( 678)            Up to 12 years
                                                                              7                      ( 181)                       (1 294)



ations that goodwill might be impaired.



 which there are separately identifiable cash flows from continuing use defined as cash-generating units (CGU).
he group relates to the acquisition of the various health service related entities on 19 November 2008.

 ministration support, information technology solutions and managed care services. Consequently the CGU has



ation supported by the price paid for the additional 24,8% ownership acquired by Liberty during 2009. The value-
minal value. An expected average growth rate of 8% was modelled and the cash flows were discounted at the
Notes to the group financial statements | Note 7
for the year ended 31 December 2009

                                                                                                      2009
                                                                                                       Rm
7.   Deferred acquisition costs
     Balance at the beginning of the year                                                               344
     Cost of new business acquired                                                                      197
     Amortisation realised through profit and loss                                                   ( 204)
     Balance at the end of the year                                                                     337
     Current                                                                                           114
     Non-current                                                                                       223

     Deferred acquisition costs are amounts incurred on acquiring policyholder investment contracts. They are amortised
     to income over the contract period.
                   2008
                    Rm


                     325
                     241
                  ( 222)
                     344
                    138
                    206

cts. They are amortised
Notes to the group financial statements | Note 8
for the year ended 31 December 2009



8.   Interests in joint ventures
     8.1 Summary
          Equity loans and ordinary shares at cost
          Held-to-maturity financial instruments(1)
          Share of post-acquisition reserves
          – recognised in profit and loss
          – foreign currency translation
         Total interests in joint ventures
     8.2 Movement analysis
         Equity loans and ordinary shares at cost
         Balance at the beginning of the year
         Acquisition of equity loan in Evening Star(3)
         Equity loans redesignated as to held-to-maturity financial instruments
         Acquisition of Total Health Trust Limited ordinary shares(2)
         Held-to-maturity financial instrument converted to ordinary shares (1)
         Acquisition of Fountainhead and Evening Star ordinary shares (3)
         Balance at the end of the year
         Held-to-maturity financial instruments (1)
         Balance at the beginning of the year
         Equity loans redesignated to held-to-maturity financial instruments
         Advances
         Held-to-maturity financial instrument converted to ordinary shares
         Balance at the end of the year
         Share of post-acquisition reserves
         Balance at the beginning of the year
         Earnings recognised in profit and loss
         Ordinary dividends received
         Foreign currency translation reserve movement recognised in other comprehensive income
         Balance at the end of the year

     Held-to-maturity financial instruments comprise:
     (1) R4 million (2008: R4 million) on demand interest free loan receivable extended to The Financial Services Exchange (Propr
        R145 million variable interest bearing (2009: 10,08%) loan receivable extended to Evening Star 768 (Proprietary) Limited w
        On 13 February 2008 a convertible debenture valued at R47 million, issued by The Cullinan Hotel (Proprietary) Limited, was
        The combined fair value of these loan receivables is R140 million (2008: R2 million) and are long-term in nature.
     (2) With effect from 1 February 2009, Liberty acquired a 35,3% equity stake in Total Health Trust Limited which is registered a
     (3) With effect from 1 April 2008, 50% of equity loans and ordinary shares in Fountainhead Property Trust Management Limite




                                                                                  Percentage
                                                                                  ownership
                                                                                  2009       2008
                                                                                     %         %
         Principal joint ventures – unlisted
Fountainhead Property Trust Management Limited (5)                        50,0    50,0
(property trust management)
Evening Star 768 (Proprietary) Limited                                    50,0    50,0
(property trust management)
The Financial Services Exchange (Proprietary) Limited                     33,3    33,3
(financial verification and technology service provider)
The Cullinan Hotel (Proprietary Limited)(4)                               50,0    50,0
(hotel developer and manager)
Total Health Trust Limited (2) (6)                                        35,3
(health risk services organisation)
Total

 (4) This entity has a 31 March year end and therefore management accounts as at 31 December are used to equity acco
 (5) This entity has a 30 September year end and therefore management accounts as at 31 December are used to equity
(6) This entity has a 30 June year end and therefore management accounts as at 31 December are used to equity accoun




Statement of financial position extracts(7)
 Non-current assets
 Current assets
 Long-term liabilities – interest bearing
 Current liabilities
Statement of comprehensive income extracts(7)
 Income
 Expenses
Commitments(7)
 Capital commitments – authorised by directors but not contracted
(7)
      Represents the group’s proportionate share in the joint ventures.
mprehensive income




ended to The Financial Services Exchange (Proprietary) Limited.
ended to Evening Star 768 (Proprietary) Limited with no set terms of repayment. Accrued interest is paid at least annually.
 d by The Cullinan Hotel (Proprietary) Limited, was converted into ordinary shares.
R2 million) and are long-term in nature.
 n Total Health Trust Limited which is registered and conducts health risk related services in Nigeria.
 Fountainhead Property Trust Management Limited and Evening Star 768 (Proprietary) Limited were acquired from Standard Bank Group Limited.

                          Equity loans                Held-to-                 Share of
                          and shares                  maturity                   post-
                            held at                   financial               acquisition                  Total
                             cost                  instruments(1)              reserves                  interest
                           2009        2008          2009         2008        2009        2008          2009         2008
                            Rm          Rm             Rm          Rm           Rm         Rm            Rm           Rm
                              47           47                              2      1     49    48

                                          140          145               ( 4)          141   140

                                                         4           4   ( 2)   ( 2)     2     2

                              64           64                            289    251    353   315

                              31                                         ( 1)           30

                            142           251          149           4   284    250    575   505

 ounts as at 31 December are used to equity account earnings.
 t accounts as at 31 December are used to equity account earnings.
unts as at 31 December are used to equity account earnings.
                          2009        2008
                           Rm          Rm



                           142         251
                           149           4
                           284         250
                           286         250
                           ( 2)
                           575         505



                           251          17
                                       140
                         ( 140)
                             31
                                        47
                                        47
                           142         251


                             4          50
                           140
                             5            1
                                      ( 47)
                           149            4


                           250         228
                             47          40
                          ( 11)       ( 18)
                            ( 2)          –
                           284         250




ast annually.




 from Standard Bank Group Limited.



                            Equity
                          accounted
                           earnings
                          2009        2008
                            Rm         Rm
     2       1

  ( 4)       5

             1

    48      33

     1

    47      40




 2009     2008
  Rm       Rm


   493     458
     58     41
( 148)
  ( 44)   ( 39)

   194     139
( 132)    ( 99)

    11      18
Notes to the group financial statements | Note 9
for the year ended 31 December 2009

                                                                                           2009          2008
                                                                                            Rm            Rm
9   Pledged assets held at fair value through profit or loss
    Financial assets that may be repledged by counterparties
    Listed equities on the JSE                                                              684         1 622
    South African Government Bonds listed on the BESA                                       875
    Refer to Risk management section contained in this report.
    Maturity profile of the return of pledged assets
    Due in 4 – 12 months                                                                  1 559         1 622
    It should be noted however, that the borrower of the pledged assets has the right to contractually return
    the assets at any time and in addition Liberty has the right to call for the assets within five business
    days.
Notes to the group financial statements | Note 10
for the year ended 31 December 2009

                                                                                                                                                                2009
                                                                                                                                                                 Rm
10. Interest in associates – mutual funds
    Fair value of associates held at fair value through profit or loss                                                                                         4 979
    Summarised financial information of associates:
    Total investments                                                                                                                                        14 200
    Current assets                                                                                                                                               475
    Current liabilities                                                                                                                                       ( 296)
    Total revenue(1) (2)                                                                                                                                         564
    (1) Total revenue is defined as interest, dividend and sundry income.

    (2) Units or shares held in mutual funds are by their nature demand deposits and are held at fair value. The net income or loss is capitalised to unit values within each fund and

    consequently there is no net profit or loss. Increase in net assets as a result of operations represents total income less expenses before any distributions or capitalisation.




    As at 31 December, the group’s associates and percentages held were as follows:
                                                                        Percentage of
                                                                     participation rights
    Name                                                            in total issued units                                                                       Fair value
                                                                          2009         2008                                                                     2009
                                                                             %            %                                                                      Rm
    STANLIB Multi-Manager Equity Fund                                                                                    40                   47                  649
    STANLIB Value Fund                                                                                                   45                   42                  631
    Ermitage Global Wealth Management Services(1)                                                                        34                                       536
    STANLIB Multi-Manager Low Equity Fund of Funds                                                                       39                   38                  414
    STANLIB Stability Fund                                                                                               30                   31                  389
    STANLIB Managed Flexible Fund                                                                                        30                   29                  358
    STANLIB International Balanced Fund of Funds                                                                         48                   26                  259
    STANLIB Multi-Manager Real Return Feeder Fund                                                                        43                   48                  229
    STANLIB Multi-Manager Medium Equity Fund of Funds                                                                    33                   33                  220
    STANLIB International Equity Fund of Funds                                                                           28                   39                  215
    STANLIB Resources Fund                                                                                               24                   24                  174
    STANLIB Aggressive Income Fund                                                                                       30                   30                  168
    STANLIB Moderately Conservative Fund of Funds                                                                        39                   36                  161
    STANLIB ALSI 40 Fund                                                                                                 24                   34                  147
    STANLIB Moderate Fund of Funds                                                                                       28                   25                  114
    STANLIB Conservative Fund of Funds                                                                                   28                   27                  112
    Ermitage Global Multi Strategy Fund                                                                                  34                   25                  111
    STANLIB Quants Fund(2)                                                                                               48                   53                   92
    STANLIB Institutional Property Fund(3)                                                                                                    42
    Associates at a group level                                                                                                                                4 979
    (1) Defined as a subsidiary in the prior year due to percentage of participation rights exceeding 50%.

    (2) This interest is disclosed as an associate as the percentage ownership during the year fluctuated at or below what is considered to be a controlling interest.

    (3) Defined as a subsidiary in the current year due to percentage of participation rights exceeding 50%.
                                   2008
                                    Rm

                                   4 726


                               13 268
                                   434
                                ( 425)
                                   912


o unit values within each fund and

 istributions or capitalisation.




           Fair value
                                   2008
                                    Rm
                                    569
                                    511

                                     364
                                     382
                                     355
                                     115
                                     167
                                     190
                                     362
                                     162
                                     166
                                     144
                                     116
                                      92
                                      96
                                     219
                                     100
                                     616
                                   4 726


ntrolling interest.

				
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