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					Notes to the annual financial statements

for the year ended 30 June 2010

1       Accounting policies
        The principal accounting policies adopted in the preparation of the Group and Company (consolidated) annual financial sta



1.1     Basis of presentation
        The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Sta
        effective at the time of preparing these annual financial statements.


        The consolidated annual financial statements have been prepared on the historical cost basis, except for the revaluation of
        revaluation of investment financial assets at fair value through profit or loss and available-for-sale financial assets and own


        Use of estimates and judgements
        The preparation of annual financial statements in compliance with IFRS requires management to make judgements, estima
        income and expenses. The estimates and associated assumptions are based on historical experience and various other fact
        judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual resu

        The Group and Company’s estimates and underlying assumptions are reviewed for reasonability on an ongoing basis. Revis
        estimates are revised if the revision affects only that year, or in the year of the revision and future years if the revision affe
        Adoption of new and revised standards
        The Group and Company’s accounting policies are consistent with those of the previous financial year except for those inst
        the new and revised standards and interpretations issued by the International Accounting Standards Board (IASB) and the I
        January 2009. The adoption of these revised standards and interpretations did not have any effect on the Group and Comp
        changes to existing accounting policies.
        The new and amended IFRS and IFRIC interpretations that the Group and Company adopted during the year, together with


        IAS 1 (Revised): Presentation of the annual financial statements ;
        Amendments to IFRS 7 Financial Instruments: Disclosures; and
        IFRS 3 (Revised): Business Combinations and IAS 27 (Amended): Consolidated and Separate Annual Financial Statements .
        The principal effects of the above standards and interpretations on the Group and Company’s annual financial statements


        IAS 1 (Revised) Presentation of Annual Financial Statements
        The standard separates owner and non-owner changes in equity requiring all owners’ changes in equity to be presented in
        two separate statements which are an income statement and a statement of comprehensive income. The previous standar
        standard also requires that the income tax effect of each component of comprehensive income be disclosed. In addition, it
        comparative period when the entity has applied an accounting policy retrospectively, makes a retrospective restatement, o
The Group and Company elected to present comprehensive income in two separate statements, being the consolidated inc
components of comprehensive income as well as the tax effects have been disclosed in the notes to the annual financial st



The Group and Company has not presented three statements of financial position in these annual financial statements bec
financial statements, or reclassified items in its annual financial statements that affected the statement of financial positio



Amendments to IFRS 7 Financial Instruments: Disclosures

The amendment to the standard requires an entity to provide a quantitative and qualitative analysis of those instruments r
significant unobservable inputs (classified as level 3), the amendment requires disclosures of the transfer into and out of le
recognised in other comprehensive income, purchases, sales issues and settlements, and sensitivity analysis of reasonably
fair value hierarchy and the reason for those movements. Finally, the standard amends the previous liquidity risk disclosure




The amendment applies for financial years beginning on or after 1 January 2009. Comparatives disclosures are not required


IFRS 3 (Revised): Business Combinations and IAS 27 (Amended) Consolidated and Separate Annual Financial Statements
The revised standards were issued in January 2008 and are effective prospectively for financial years beginning on or after

IFRS 3 introduces a number of changes in the accounting for business combinations that will impact the amount of goodwi
that a change in the ownership interest of a subsidiary (without loss of control) to be accounted for as an entity transaction
the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsid
The Effects of Change in Foreign Exchange Rates , IAS 28: Investment in Associates and IAS 31: Interest in Joint Ventures .




Accounting standards and interpretations in issue but not yet effective
The following IASB standards and IFRIC interpretations have been published and are applicable to accounting periods begin
comply with them from the effective date. It is expected that the application of these standards will not have a significant i



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The principal effects of the above standards and interpretations on the Group and Company’s annual financial statements

IFRS 2: Share-based Payments
The amendment to IFRS 2 clarifies the accounting treatment of a share-based payment transaction involving an entity’s ow
equity instruments (treasury shares) to settle a share-based payment obligation, the transaction must always be accounted
conditions include only service conditions and performance conditions. Other features of a share-based payment are not v
same accounting treatment. This amendment is not expected to have any impact on the Group and Company.




IFRS 3 (revised): Business Combinations
The amendment to IFRS 3 requires all transaction costs arising from a business combination to be expensed as they are inc
share purchases, any gain or loss equal to the difference between the fair value and the carrying amount of the previously
term “minority interest” with “non-controlling interest”. The amendments are expected to affect the Group’s accounting fo




IFRS 5: Non-current Assets Held-for-Sale and discontinued operations
The amendments to IFRS 5 address the following three issues and are effective from the following dates:
– Plan to sell the controlling interest in a subsidiary (effective 1 July 2009);
– Amendments resulting from IFRIC 17 for assets held for distribution to owners (effective 1 July 2009); and
– Disclosures of non-current assets (or disposal groups) classified as held-for-sale or discontinued operations (effective 1 Ja
This amendment clarifies the fact that the disclosure requirements in standards other than IFRS 5 do not generally apply to
The abovementioned amendments are not expected to have a material impact on the Group and Company.
IFRS 7: Financial Instruments: Disclosures
The amendments to IFRS 7 increase the disclosure requirements about fair value measurement and reinforces existing prin
disclosure and requires some specific quantitative disclosures for financial instruments in the lowest level of the hierarchy.
requiring a separate liquidity risk analysis for derivative and non-derivative financial liabilities. The amendments to IFRS 7 a
its financial results.



IFRS 8: Operating Segments
IFRS 8, which will replace IAS 14: Segment Reporting , requires an entity whose debt or equity instruments are traded in a p
other regulatory organisation for the purposes of issuing any class of instruments in a public market, to report financial and
financial information should be reported on the same basis as is used internally for evaluating operating segment performa
disclosure of information about segment assets becomes effective for annual periods beginning on or after 1 January 2010
in a public market, nor does it intend to file its annual financial statements with a securities commission or other regulatory




IAS 1: Presentation of Annual Financial Statements (revised)
The latest amendment to IAS 1 requires an entity to present all non-owner changes in equity either in one statement of co
income. All owner changes in equity are, and will continue to be, recognised in a statement of changes in equity. These cha
disclosure provided in the Group and Company’s annual financial statements.



IAS 7: Statement of Cash Flows
The amendment to IAS 7 requires an entity to classify cash flows from assets held for rental as operating activities. In addit
7 are only expected to have an impact on the Group and Company’s disclosure and are not expected to have an impact on


IAS 10: Events After the Reporting Date (effective 1 July 2009)
The amendment to IAS 10 clarifies the fact that dividends declared (i.e. appropriately authorised and no longer at the discr
not be recognised as a liability at the reporting date as no obligation to pay the dividend exists at that date. Therefore, in th
amendment is not expected to have any impact on the Group and

Company’s results.
IAS 17: Leases (effective 1 January 2010)
The amendment to IAS 17 clarifies that leases of land must be classified as either “finance” or “operating” in accordance w
indefinite useful life to be classified as operating leases. This amendment is not expected to have any impact on the Group

IAS 23: Borrowing Costs (amended)
The amendment to IAS 23 requires the capitalisation of borrowing costs as part of the cost of a qualifying asset. Previously
amendment will have no impact on the Group and Company’s annual financial statements.


IAS 27 (revised): Consolidated and Separate Annual Financial Statements and Accounting for Investments in Subsidiaries (ef

The amendments to IAS 27 primarily relate to accounting for non-controlling interests and the loss of control of a subsidiar
there is no change in control. They will no longer result in goodwill or gains or losses. The standard also specifies the appro
and a gain or loss is recognised in profit or loss. The amendments to IAS 27 are not expected to have a significant impact on



IAS 28: Investments in Associates
The amendments to IAS 28 require certain disclosures to be made when investments in associates are accounted for at fair
changes to IFRS 3: Business Combinations . The amendments to IAS 28 are not expected to have a significant impact on the



IAS 31: Interest in Joint Ventures
The amendments to IAS 31 require certain disclosures to be made when interests in jointly controlled entities are accounte
result of changes to IFRS 3: Business Combinations . The amendments to IAS 31 are not expected to have a significant impa



IAS 32 and IAS 1 – Amendment to IAS 32 Financial Instruments: Presentation and IAS 1: Presentation of Annual Financial Sta

The amendments to IAS 32 and IAS 1 require entities to classify the following types of financial instruments as equity, prov


a) Puttable financial instruments (for example, some shares issued by co-operative entities); and
b) Instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rat
issued by limited life entities).
Additional disclosures are required about the instruments affected by the amendments. The amendments to IAS 32 and IA


IAS 36: Impairment of Assets (effective 1 January 2010)
The amendment to IAS 36 clarifies the unit of accounting that must be used for goodwill impairment testing. This amendm

IAS 38: Intangible Assets (effective 1 July 2009)
The amendments to IAS 38 outline the additional consequential amendments arising from the revisions to IFRS 3 and also m
business combination. These amendments are not expected to have a material impact on the Group and Company’s annua

IAS 39 (amendment): The Fair Value Option
This amendment to IAS 39 further clarifies when financial instruments can be designated at fair value through profit or loss
significantly reduces accounting mismatches in measurement or presentation, or where the financial instrument is manage



 This amendment is not expected to have a material impact on the Group and Company’s annual financial statements.


IAS 39 (amendment): Cash Flow Hedge Accounting of Forecast Intra-group Hedge Transactions
This amendment to IAS 39 allows for the designation as a hedged item in the consolidated annual financial statements of t
is not expected to have a material impact on the Group and Company’s annual financial statements.


IAS 39: Financial Instruments: Recognition and Measurement
This amendment to IAS 39 prohibits the classification of financial instruments into or out of the fair value through profit or
not considered to be a reclassification for this purpose and it has also removed references to the destination of hedging ins
Company’s annual financial statements.

IFRS/IAS Annual Improvements Project
As part of its first annual improvements project, the IASB has issued its edition of annual improvements to existing internat
clarify and improve existing accounting standards. The improvements include those involving terminology or editorial chan
are not expected to have a significant impact on the Group and Company’s results.



IFRIC 9 (amendment): Reassessment of Embedded Derivatives
      The amendment to IFRIC 9 stipulates that an entity shall assess whether an embedded derivative is required to be separate
      the purpose of this assessment, paragraph 11(c) of IAS 39 shall not be applied (i.e. the hybrid (combined) contract shall be
      unable to make this assessment, the hybrid (combined) contract shall remain classified at fair value through profit or loss in
      statements.



      IFRIC 14: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
      IFRIC 14 addresses the interaction between minimum funding requirements and the limits on the measurement of a define
      benefits available to them through refunds or reductions in future contributions. This interpretation is not expected to hav



      IFRIC 15: Agreements for the Construction of Real Estate
      IFRIC 15 addresses diversity in accounting for real estate sales. Some entities recognise revenue in accordance with IAS 18:
      Contracts . Specifically, IFRIC 15 clarifies whether sale agreements entered into before construction is completed should be
      applying IAS 18 to real estate sales. This interpretation is not expected to have any impact on the Group and the Company.



      IFRIC 16 (amendment): Hedges of a Net Investment in a Foreign Operation
      IFRIC 16 provides guidance on identifying the foreign currency risks that qualify as a hedged risk in the hedge of a net inves
      of a net investment in a foreign operation can be held to qualify for hedge accounting. Thirdly, it provides guidance on how
      instrument and the hedged item. This interpretation is not expected to have any impact on the Group and Company’s annu



      IFRIC 17 (amendment): Distributions of Non-cash Assets to Owners
      IFRIC 17 applies when the reporting entity distributes non-cash assets to owners or when owners are given a choice of taki
      annual financial statements.
      IFRIC 18: Transfers of Assets from Customers
      IFRIC 18 clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property
      customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). This interpreta



      The adoption of the standards and interpretations set out above will be implemented in accordance with their transitional

1.2   Basis of consolidation
      The consolidated annual financial statements incorporate the annual financial statements of the Company , its subsidiaries


      Investments in subsidiaries
      Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain
      rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when



      The results of subsidiaries are consolidated from the date on which the Group acquires effective control. Consolidation is d
      for in the statement of comprehensive income.
The Group uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition
date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and continge
terms of IFRS 3: Business Combinations , irrespective of the extent of any non-controlling interest.



The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is record
difference is recognised directly in the statement of comprehensive income.

The interest of minority shareholders in the acquiree is initially measured at their proportion of the net fair value of the ass
subsidiaries are identifiable separately from the Group’s equity therein. Non-controlling interest consists of the amount of
the combination. Losses attributable to non-controlling shareholders in excess of their interest in the subsidiary’s equity ar
make an additional investment to cover the losses.



All intra-group transactions, balances, income and expenses are eliminated on consolidation. Subsidiaries’ accounting polic


The Company classifies its investments in subsidiaries as at fair value through profit or loss financial instruments in accorda
evaluates these investments on a fair value basis.


Investments in associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareh
operating policy decisions of the investee but has no control or joint control over those policies.


The results and assets and liabilities of associates are incorporated in these annual financial statements using the equity m
accordance with IFRS 5: Non-current Assets Held-for-Sale and Discontinued Operations . Under the equity method, investm
acquisition changes in the Group’s share of the net assets of the associates, less any impairment in the value of individual i
long-term interest that, in substance, form part of the Group’s net investments in associates, are not recognised unless the
the income statement.




Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and co
included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any exces
acquisition, after reassessment, is immediately recognised in the statement of comprehensive income.



Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest
policies adopted by the Group.


The Company classifies its investments in associates at fair value through profit or loss financial instruments in accordance


Interest in joint ventures
Joint ventures are entities where control is shared equally with a third party. Under the terms of these arrangements, the s
the parties sharing control.
      The Group’s interest in joint ventures are accounted for on the proportionate consolidation method, except when the inve
      consolidation method, the Group’s attributable share of assets, liabilities, reserves, income, expenses and cash flows of the
      The results of the joint ventures are included from the effective date of acquisition to the effective date of disposal.



      Inter-group transactions are eliminated to reflect only the other joint venture partners’ share of amounts due to or from th
      The Company classifies its investments in joint ventures at fair value through profit or loss financial instruments in accorda
      Goodwill
      Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable a
      recognised at cost as a separate asset. Goodwill is tested annually for impairment and is carried at cost less any accumulate
      the entity sold.

      Goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combinati
      primary reporting segment.
      Cash-generating units to which the goodwill has been allocated are tested for impairment annually, or more frequently wh
      than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill a
      in the unit. An impairment loss for goodwill is not reversed in a subsequent period.



      The Group’s policy for goodwill arising on acquisition of an associate is described under “Investments in associates” above.




1.3   Foreign currencies
      General
      Foreign assets and liabilities are initially recorded at the spot rate and translated into South African Rand at the exchange r
      African Rand at the average exchange rate for the year. Gains or losses arising from the settlement of such transactions an
      statement of comprehensive income.


      Functional and presentation currency
      The individual annual financial statements of each Group entity are presented in the currency of the primary economic env
      presented in South African Rands, which is the Company’s functional currency and the Group’s presentation currency. All f
      indicated.

      Transactions and balances
      Transactions in foreign currencies are translated into the functional currency at the foreign exchange rate ruling at the date
      different to the functional currency are translated into the functional currency at the ruling rate at that date. Foreign excha
      monetary items are reported as part of the fair value gain or loss.

      Group companies
      For the purposes of presenting consolidated annual financial statements, the assets and liabilities of the Group’s foreign op
      exchange rates ruling at the statement of financial position date. Income and expense items are translated at the average e
      exchange rates ruling at the date of the various transactions are used. All translation differences arising from the translatio
      foreign currency translation reserve. Such translation differences are recognised in the income statement in the period in w
      Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of t
      the Group entities has the currency of a hyperinflationary economy.



1.4   Property and equipment
      Property and equipment is initially recorded at cost. Costs include all expenditure that is directly attributable to the acquisi
      refundable purchases taxes but excluding trade discounts and rebates. Maintenance and repairs expenditure, which neithe
      in the statement of comprehensive income.


      Each category of property and equipment is depreciated on the straight-line basis at rates considered appropriate to reduc
      and equipment are as follows:
      Motor vehicles
      Office equipment
      Computer equipment
      Leasehold improvements
      Owner-occupied properties
      Land is not depreciated.
      There have been no changes to useful lives from those applied in the previous financial year.
      Property
      Owner-occupied properties are carried at fair value less subsequent depreciation for buildings. The fair value is determined
      Decreases that offset previous increases of the same asset are charged against the non-distributable reserve. All other dec
      on the revalued carrying amount of the asset charged to the statement of comprehensive income and depreciation based
      earnings.


      If an owner-occupied property becomes an investment property because its use has changed, any difference arising betwe
      revaluation of property. If a fair value gain reverses a previous impairment loss, the gain is recognised in the statement of c
      comprehensive income is transferred to retained earnings.


      Equipment
      Equipment is reflected at cost less accumulated depreciation and impairment losses. Depreciation is provided on the straig
      estimated useful life.
      Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
      can be reliably measured. All other repairs and maintenance expenditure is charged to the statement of comprehensive inc



      The assets’ residual values and useful lives are reviewed at each statement of financial position date and adjusted if approp
      is greater than its estimated recoverable amount.


      Gains or losses on disposal are determined by comparing the asset’s proceeds to its carrying amount and are included in th
      surplus are transferred to retained earnings.



1.5   Investment property
      Property held either to earn rental income or for capital appreciation, or for both and which is not occupied by companies
      buildings.
      Investment property is treated as a long-term investment and is measured initially at cost, including transaction costs. Afte
      external, independent professional valuer every three years.


      If the open-market valuation information cannot be reliably determined, the Group uses alternative valuation method such
      credited or charged directly to the statement of comprehensive income in the year in which they are identified. On disposa
      statement of comprehensive income.


      If an investment property were to become owner occupied, it would be reclassified as property and equipment and would



1.6   Intangible assets
      Distribution rights
      Distribution rights represent the right to distribute products through an established distribution network. These rights are


      Computer software
      Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the spec



1.7   Non-derivative financial instruments
      Financial assets
      Investments
      The Group and Company classify its investments in debt and equity securities into the following categories: financial assets
      The classification is dependent on the purpose for which the investments were acquired. Management determines the clas



      i)




      ii)




      iii)




      iv)
v)



Recognition and measurement
Financial instrument purchases and disposals are initially measured at cost and are recognised using the trade date accoun
Subsequent to initial measurement, financial assets at fair value through profit or loss and available-for-sale financial asset
using the effective interest method, less any provision for impairment.



A provision for impairment of held-to-maturity investments and loans and receivables is established when there is objectiv


Financial instruments are derecognised when the rights to receive cash flows from the investments have expired or where
ownership.
Gains or losses
Realised and unrealised gains or losses arising from changes in the fair value of investments classified as fair value through
from changes in the fair value of available-for-sale investments are recognised in the statement of comprehensive income.
included in the income statement as net realised gains or losses on non-derivative financial instruments.



Fair value
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value throug
transaction costs are expensed in the statement of comprehensive income.

The fair value of investments is based on quoted bid prices for listed instruments and collective investment schemes are va
unlisted investments are estimated using applicable cash flow models or price/earnings ratios refined to reflect the specific
investment is carried at cost less any impairment.


Offsetting
Where a legally enforceable right to offset exists for recognised financial assets and financial liabilities and there is an inten
offset.
Financial liabilities
Financial liabilities, including borrowings, are initially measured at cost, net of transaction costs. These liabilities are subseq
an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the corre
cash payments through the expected life of the financial liability or where appropriate, a shorter period.

In accordance with the definition of a financial liability contained in IAS 32 Financial Instruments: Presentation , the Group

     Borrowings;
     Reinsurance liabilities;
     Trade and other payables;
     Insurance liabilities; and
       Provision for liabilities arising from a contractual relationship with existing Group and Company staff.

1.8    Derivative financial instruments
       Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subseque
       recent market transactions and valuation techniques. All derivatives are carried as assets when fair value is positive and as
       are recognised immediately in the statement of comprehensive income.




1.9    Impairment of tangible and intangible assets excluding goodwill
       The Group and the Company assesses at each statement of financial position date whether there is objective evidence that
       carried at fair value through profit or loss is impaired and impairment losses are incurred only if there is objective evidence
       event’) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial asse
       observable data that comes to the attention of the Group and the Company about the following events:




       Significant financial difficulty of the issuer or debtor;
       A breach of contract, such as default or delinquency in payments;
       Adverse changes in the payment status of issuers or debtors; and
       Economic conditions that correlate with defaults on assets in the Group and the Company.
       All impairment losses are recognised in the statement of comprehensive income as soon as they are identified.
       If there is objective evidence that an impairment loss has been incurred on loans and receivables carried at amortised cost
       amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest r
       comprehensive income.


       For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk cha
       The Group and the Company assess at each statement of financial position date whether there is objective evidence that a
       decline in the fair value of the security below its costs. If any such evidence exists, the cumulative loss, which is measured a
       comprehensive income and recognised in the statement of comprehensive income.



       If in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an e
       recognised in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which



       Non-financial assets that ar e subject to amortisation are reviewed for impairment whenever events or changes in circums
       which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair



1.1    Cash and cash equivalents
       For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand, deposits held on call wit
       amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are measured at fair




1.11   Share capital
       Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attrib



1.12   Insurance contracts
       Classification of insurance contracts
       The Group and Company issue contracts which transfer insurance risk or financial risk or, in some cases, both.
       Insurance contracts are those contracts under which the Group and Company (as insurer) accept significant insurance risk
       uncertain future event (the insured event) adversely affects them. Such contracts may also transfer financial risk. As a gene
       the occurrence of an insured event that are at least 10% more than the benefits payable if the insured event did not occur.



       Receipts and payments under insurance contracts are accounted for in the statement of comprehensive income in accorda


       Investment contracts are those contracts that transfer financial risk with no significant insurance risk. Financial risk is the ri
       foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided, in the case of a non



       Recognition and measurement of insurance contracts
       Receipts and payments under investment contracts are not classified as insurance transactions in the statement of compre
       deposit’s liability recognised in the statement of financial position represents the expected amounts payable to the holders



       The Group and Company classify financial guarantee business as insurance contracts.
       Management of insurance and financial risk
       As is stated above, the Group and Company issue contracts that transfer insurance risk or financial risk, or in some instance


       Premiums
       Gross premiums comprise the premiums on contracts entered into during the year, irrespective of whether they relate in w
       added tax. Premiums written include adjustments to premiums written in prior periods.

       Outward reinsurance premiums are recognised as an expense in accordance with the pattern of indemnity received. Reinsu


       Unearned premium provision
       Premiums are earned from the date the risk attaches, over the indemnity period, based on the pattern of the risk underwr
       risks that have not expired by the end of the financial year, are calculated on a time-proportionate basis for even risk contr



       Deferred acquisition costs
       Deferred acquisition costs consist of commissions and other variable costs directly connected with acquisition or renewal o
       the policies, from one to five years. Deferred acquisition costs are regularly tested for impairment using the liability adequa



       Claims incurred
       Claims incurred consist of claims and claims handling expenses paid during the financial year, together with the movement
       The provision for outstanding claims comprise the Group and Company’s estimate of the undiscounted ultimate cost of set
       anticipated reinsurance recoveries are disclosed separately as assets.

       Adjustments to the amounts of claims provisions established in prior years are reflected in the annual financial statements

       Unexpired risk provision and liabilities and related assets under liability adequacy tests
       Provision is made for unexpired risks where the expected value of claims and expenses attributable to the unexpired perio
       such policies.
       Liability adequacy tests are performed at statement of financial position date to ensure the adequacy of the liability raised
       performing these tests. Any deficiency is recognised in income for the year (unexpired risk provision).


       Contingency reserve
       A reserve is held for the full amount of the contingency reserve as required by the regulatory authorities in South Africa an
       Transfers to and from this reserve are treated as appropriations of retained income.
       Reinsurance
       The Group and Company cede reinsurance in the normal course of business for the purpose of limiting its net loss potentia
       and claims reimbursed are reflected in the statement of comprehensive income and statement of financial position separa


       Only those contracts which give rise to a significant transfer of insurance risk are accounted for as reinsurance. Amounts re
       transfer significant insurance risk are accounted for as financial assets. Amounts recoverable under reinsurance contracts a



       Such assets are deemed impaired if there is objective evidence, as a result of an event that occurred after its initial recogni
       the amounts that the Group and Company will receive from the reinsurer. Impairment losses are recognised in the stateme


       Salvage and subrogation reimbursements

       Some insurance contracts permit the Group and Company to sell property acquired in settling a claim. The Group and Com
       and subrogation reimbursements are considered as an allowance in the measurement of the liability for claims.



1.13   Revenue
       The accounting policy in relation to revenue from insurance contracts is disclosed in note 1.12.
       Interest income and expenditure
       Interest income and expenditure for all interest-bearing financial instruments, including financial instruments measured at
       comprehensive income using the effective-interest method. When a receivable is impaired, the Group and Company reduc
       interest rate of the instrument and continues unwinding the discount as interest income.



       Dividend income
       Dividend income for available-for -sale equities is recognised when the right to receive payment is established, which is the

       Rental income
       Rental income from investment properties is recognised in the statement of comprehensive income on a straight-line basis



1.14   Employee beneifts
       Pension and provident scheme arrangements

       The Group and Company operate defined contribution pension and provident funds. Contributions to the funds in respect
       salary increases and any other changing circumstances. The Group and Company have no further obligations once the cont


       Profit-sharing and bonus plans
       The Group and Company operate several bonus and profit share plans for the benefit of employees. A provision is recognis
       has created a constructive obligation to do so.

       Leave pay
       Employee entitlements to annual leave and long-service leave are recognised when they accrue to employees. Provision is
       financial position date.
       Termination benefits
       Termination benefits are payable when an employee’s employment is terminated before the normal retirement date or wh
       recognise termination benefits in the statement of comprehensive income when it is demonstratively committed to either
       withdrawal or where it is committed to providing termination benefits as a result of an offer made to encourage voluntary



       Equity compensation plan
       The Group and Company operate a cash-settled equity compensation plan for the benefit of black employees of the Group
       immediately or over the vesting period. The liability is measured annually until settled and any changes in value are recogn

       Other post-employment obligations
       The Group and Company have no obligation for post-retirement medical benefits in respect of pensioners, former employe



1.15   Taxation
       Income taxation on the profit or loss for the period comprises current and deferred taxation. Taxable profit differs from pro
       other years and it further excludes items that are never taxable or deductible. Income tax is recognised in the statement of
       recognised in equity.


       Income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of f
       income tax liability is settled.

       Current taxation
       Current taxation is the expected taxation payable using taxation rates enacted at statement of financial position date, inclu


       Deferred taxation
       Deferred taxation is provided at current tax rates, on the comprehensive basis, using the statement of financial position lia
       carrying amounts in the annual financial statements. Deferred tax liabilities are recognised for all taxable temporary timing
       against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the tempor
       and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.




       The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the ext
       recovered.
       Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against cu
       to settle its current tax assets and liabilities on a net basis.


       Dividend tax (formerly secondary tax on companies (STC))

       Dividend tax is charged to the statement of comprehensive income when the related dividend is declared. Unused STC cre



1.16   Provisions
       Provisions are recognised when the Group and Company have a present legal or constructive obligation of uncertain timing
       required to settle the obligation and a reliable estimate of the amount of the obligation can be made.


       Provisions are measured as the present value of management’s best estimate of the expenditure required to settle the obl
       discount rate that reflects the current market assessments of the time value of money and, where appropriate, the risks sp


       Provisions are not recognised for future operating losses. When there are a number of similar obligations, the likelihood th
       provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of oblig



1.17   Borrowings
       Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at am
       comprehensive income over the period of the borrowing using the effective interest rate method.



1.18   Operating leases
       Leases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified as operating
       line basis over the period of the lease. When an operating lease is terminated, any payment required by the lessor by way




2       Critical accounting estimates and judgements
       The Group and Company make certain estimates and assumptions that affect the reported amounts of assets and liabilities
       financial statements.

       Claims incurred
       The estimation of the ultimate liability arising from claims made under insurance contracts is the Group and Company’s mo
       accounting estimate. These estimates rely on the assumption that past experience adjusted for the effect of current develo
       trends is an appropriate basis for predicting future events. The Group and Company’s estimates and assumptions are revie
       and the tools with which it monitors and manages risk are refined as new information becomes available.

       The Group and Company’s processes for determining significant reserving assumptions are outlined in note 21.

       Valuation of unlisted investments
       The Group and Company determine the fair value of its unlisted investments using well established valuation techniques. T
       include discounted cash flow analysis and price earnings ratio and net asset value methodologies. Where the underlying in
       investment holding company are property or listed investments, the Company is valued on the net asset value basis which
       value of the underlying investments.
      Insurance companies are valued on a price earnings ratio method and underwriting managers are valued on a discounted c
      The capital asset pricing model was used to determine the discount rate, where the RSA R153 rate of 9% was used as a risk
      market risk rate of 6%. Appropriate discount rates or price earnings ratios are applied to cash flows or earnings for each co
      the relative investment risk and the following factors are considered:

      Risk class exposure of the underwriting manager;
      Established history;
      Dependency on management; and
      Impact of owner managed business.

      Price earnings ratios ranging from 3 to 10.5 were used, having adjusted for these factors.

      In using the price earnings valuation technique the current profit of the Company is multiplied by an earnings factor. The p
      earnings of the Company, current interest rate cycle, current business environment and management of the Company are
      determining the earnings factor.

      In using discounted cash flow analysis the best estimate of future cash flows of the company are used. The current interest
      rate and any other relevant economic or business factors are considered in determining the discount rate.

      The number and the diversity of investments makes the disclosure of a sensitivity analysis inappropriate.

      The year-end valuations are approved by the Treasury and Investment Committee.
3     Financial risk management
3.1   Introduction

      The Group and Company’s principal objectives are to ensure that it will be able to continue as a going concern and to provi
      shareholders and policyholders through a long-term sustainable real return on capital as a result of managing its business r
      appropriate risk framework.

      The Board of Directors has overall responsibility for establishing, monitoring and communicating the Group and Company’s
      framework, including defining what constitute “appropriate” risk and control policies, and for ensuring that sufficient capit
      the taking of risk. In order to discharge some of its responsibility, the Board has established the Audit, Risk and Compliance
      is responsible for developing and monitoring the Group and Company’s risk management policies. The committee reports r
      Board on its activities.

      The Group and Company’s risk management policies were established to identify and analyse the risks it faces, to set appro
      and controls and to monitor risk and adherence to limits. Risk management policies and systems are reviewed regularly to
      both market conditions and the Group and Company’s activities. The Group and Company, through its training and manage
      and procedures, aims to develop a disciplined and constructive control environment in which all employees, brokers and p
      their roles and obligations.

      The Group and Company’s Audit, Risk and Compliance Committee oversees how management monitors compliance with it
      management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
      and Company. The Audit, Risk and Compliance Committee is assisted in its oversight role by Internal Audit, which undertak
      ad hoc reviews of risk management controls and procedures, the results of which are reported to stakeholders in managem
      Group Audit, Risk and Compliance Committee.

3.2   Exposure to risk arising from financial instruments
      The Group and Company have exposure to the following risks from its use of financial instruments:
Credit risk;
Liquidity risk; and
Market risk.

This section presents information about the Group and Company’s exposure to each of the above risks, the Group and Com
policies and processes for measuring and managing risk, and the Group and Company’s management of capital. Further qu
disclosures are included throughout these consolidated annual financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group and Company’s risk man
The Board has established the Group Audit, Risk and Compliance Committee, which is responsible for developing and mon
and Company’s risk management policies. The committee reports regularly to the Board of Directors on its activities.

The Group and Company’s risk management policies are established to identify and analyse the risks it faces, to set approp
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly t
in market conditions and the Group and Company’s activities. The Group and Company, through its training and managem
procedures, aim to develop a disciplined and constructive control environment in which all employees, intermediaries and
their roles and obligations.

3.2.1 Credit risk
Credit risk is the risk of financial loss to the Group and Company if a customer or counterparty to a financial instrument fail
contractual obligations. Key areas where the Group and Company are exposed to credit risk are:

amounts due from insurance policyholders;
amounts due from underwriting agencies and partners;
amounts due from insurance contract intermediaries and third-party recoveries;
investments and cash equivalents;
reinsurers’ share of insurance liabilities; and
amounts due from reinsurers and third parties in respect of claims already paid.

The Group Audit, Risk and Compliance Committee oversees how management monitors compliance with the Group and Co
management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
and Company. The Group Audit, Risk and Compliance Committee is assisted in its oversight role by Internal Audit. Internal
both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Gro
Compliance Committee.

Insurance debtors, loans and other receivables
The Group and Company limit the levels of credit risk that it accepts by placing limits on its exposure to a single counterpar
counterparties, product, and as well as to geographical and industry segments. The levels are subject to annual or more fre
Internal Audit also makes regular reviews to assess the degree of compliance with the Group and Company’s procedures o

The Group and Company’s exposure to credit risk is influenced mainly by the individual characteristics of each intermediar
portfolios that they administer. A significant amount of the Group and Company’s insurance business is written through an
by intermediaries, the majority of which have been transacting with the Group and Company for most of their existence. T
function forms an integral part of the business relationship to the extent that the intermediaries are closely monitored on m
including product profitability and return on capital. The Group and Company is also protected by guarantees provided by t
guarantee facility for the non-payment of premiums collected by intermediaries.

The Group and Company provide for impairment in respect of its insurance debtors, loans and other receivables. The main
this allowance are a specific loss component that relates to individually significant exposures, and a collective loss compon
groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is d
        historical data of payment statistics for similar financial assets.

        Investments
        The Group and Company have a dedicated Treasury and Investment Committee that monitors and approves the investmen
        stipulated by the Board. The Group and Company, through the said mandates, limits its exposure to credit risk through dive
        mainly investing in liquid securities and various counterparties that have a minimum credit rating of A1 from Standard & Po
        Moody’s, or where such ratings are not available, by internal analysis according to strict criteria. Given these high credit rat
        management does not expect any counterparty to fail to meet its obligations.

        The Group and Company seek to avoid concentration of credit risk to groups of counterparties, asset management houses,
        product types, and geographical segments by diversifying the investment mandate to various asset management houses an
        application of mandates. Financial assets are graded and invested according to this framework and the Treasury and Invest
        regularly reviews compliance to that effect.
        The analysis of credit quality of the Group and Company’s assets is disclosed in note 4 on pages 37 to 48 of the annual fina

        Reinsurance
        Reinsurance is used to manage insurance risk. Under the terms of reinsurance agreements, reinsurers agree to reimburse t
        the insurer in the event that a gross claim is paid. However, the Group and Company remain liable to its policyholders rega
        the reinsurer meets the obligations it has assumed. Consequently the Group and Company are exposed to credit risk.

        The Group and Company has exposure to concentration risk with individual reinsurers due to the nature of the reinsurance
        the restricted range of reinsurers that have acceptable credit ratings. The creditworthiness of reinsurers is considered annu
        their financial strength prior to finalisation of any contract. The Group and Company’s largest reinsurance counterparty is H
        exposure is monitored on a regular basis for any shortfall in the claims history to verify that the contract is progressing as e
        further exposure for the Group and Company will arise.

        The Group and Company monitor the financial condition of reinsurers on an ongoing basis and review reinsurance arrange
        The Group and Company have a Reinsurance and Underwriting Committee that is responsible for setting the minimum sec
        acceptable reinsurance and monitoring the purchase of reinsurance against those criteria. When selecting a reinsurer the G
        considers its security. This is assessed from public rating information and from internal investigations.

3.2.2    Liquidity risk
        Liquidity risk is the risk that the Group and Company will not be able to meet its financial obligations as they fall due. The G
        Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to mee
        when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Gro
        Company’s reputation.

        The Group and Company are exposed to daily calls on its available cash resources mainly from claims arising from short-ter
        contracts. The Treasury and Investment Committee sets limits on the minimum proportion of maturing funds to be availab
        to cover claims at unexpected levels of demand.

        Based on actuarial modelling of historical and future expected trends, the Group and Company have estimated the probab
        associated with general insurance liabilities. The maturity analysis of the gross insurance liabilities is set out on note 4.2 on
        The maturity profile of the related insurance and investment assets is expected to be similar to the profile of the liabilities.
        Company have taken into account that the unearned premium provision, which will be recognised as earned premium in th
        not lead to claim cash outflows equal to this provision. This has been taken into account in estimating future cash outflows
        insurance liabilities.

3.2.3   Market risk
        Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will aff
      Company’s income or the value of its holdings of insurance assets and financial instruments. The objective of market risk m
      manage and control market risk exposures within acceptable parameters, while at the same time optimising the Group and
      on investment.

      Financial assets and liabilities that are utilised to support the Group and Company’s capital base are fully exposed to the re
      market risk. In summary, the key components of market risk are:

      a) Currency risk
      Currency risk is the risk arising from fair value and/or future cash flows of a financial instrument fluctuating from their expe
      result of changes in exchange rates. This can arise from either a mismatch between currencies of assets or liabilities or sup
      trading currency of the local entity being different to other Group and Company’s reporting currency.

      The Group is exposed to foreign currency risk for transactions that are denominated in a currency other than Rand. This ex
      to the operations of the Australian, Mozambique and Botswana foreign subsidiaries, transactions with foreign reinsurers, d
      and equity investments in foreign companies. These foreign investments were made for the purposes of obtaining favoura
      exposure to foreign currency and are monitored by the Treasury and Investment Committee. The Group and Company doe
      foreign currency transactions and balances as the net exposure is considered minimal.

      The table in note 4.3.1 on page 45 of these annual financial statements illustrates the Group split of assets and liabilities by

      b) Interest rate risk
      Interest rate risk is the risk arising from fair value and/or future cash flows of a financial instrument fluctuating from their e
      result of changes in market interest rates.

      Changes in market interest rates have a direct effect on the contractually determined cash flows associated with floating ra
      assets and liabilities and on the fair value of fixed interest rate instruments in the Group and Company’s investment portfo
      and Company’s fixed interest rate investments do not give rise to significant interest rate risk. Furthermore, the majority o
      investments are short-term, therefore the impact is minimal. The Group and Company do not use derivative instruments to
      other than an ongoing assessment by the Treasury and Investment Committee of market expectations within the South Afr
      determine an optimal asset allocation in interest sensitive investments.

      Insurance liabilities are not directly sensitive to the level of market interest rates, as they are not discounted and contractu
      The sensitivity analysis for interest rate illustrates how changes in the fair values or future cash flows of financial instrumen
      fluctuate because of changes in the market interest rates at the reporting date.

      c) Other market price (or equity) risk
      Equity price risk is the risk arising from the actual fair value and/or the future cash flows from equities fluctuating from the
      a result of changes in market prices and/or dividend amounts.

      Equity price risk arises from listed, fair value through profit or loss, equity securities held on behalf of the policyholders and
      The equity selection and investment analysis process is supported by a well developed research function utilising professio
      these parameters, investments are managed with the objective of maximising policyholders’ returns while limiting risks to
      within the framework of statutory requirements.

      The Group and Company are assisted by external asset managers in this regard. In accordance with this strategy certain inv
      designated at fair value through profit or loss because their performance is actively monitored and they are managed on a
      The Treasury and Investment Committee actively monitors equity assets, listed and unlisted, owned by the Group and Com
      some material shareholding in the Group and Company’s strategic partners. Concentrations of specific equity holdings are
3.3    Capital management
      The Group and Company recognise share capital and premium, contingency reserve, non-distributable reserves, retained e
      interest as capital. For internal management purposes the Group refers to the international basis of solvency (being the rat
      assets to net premiums) for short-term business.

      In addition to the international basis, management uses the statutory solvency requirements as prescribed by the legislatio
      which the Group and Company have operations, to monitor and manage the group’s capital resources.

      The Group and Company’s objectives when managing capital are to:

      comply with the insurance capital requirements required by the regulators of the insurance markets where the Group and
      operate. The Group and Company manage their capital so as to maintain an international solvency ratio of 40% to 50%;
      safeguard the Group and Company’s ability to continue as a going concern so that it can continue to provide returns for sh
      other stakeholders;
      provide an adequate return to shareholders by pricing insurance contracts commensurately with the level of risk;
       ensure strong capital ratios are maintained in order to support the business and maximise shareholder value; and
       manage capital structure and make adjustments to it, in light of changes in economic conditions.

      In each country in which the Group operate, the local insurance regulator specifies the minimum amount and type of capit
      by each of the subsidiaries in addition to their insurance liabilities. The minimum required capital must be maintained at al
      The Group and Company submit quarterly and annual returns to the Financial Services Board in terms of the Short-term Ins
      1998 and is required at all times to maintain a statutory surplus asset ratio as defined in the Act. The returns submitted du
      showed that the Company met the minimum capital requirements throughout the year. The operating subsidiaries also me
      solvency requirements.

4     Risk management
4.1    Credit risk
      a) Exposure to credit risk
      The carrying amount of insurance and financial assets represents the maximum credit exposure. The maximum exposure to
      the reporting date was:
b) The Group and Company’s maximum exposure to credit risk by industry at the reporting date was as follows:
Held-to-maturity
Available-for-sale
financial assets
Other loans and
receivables
Cash and cash
equivalents
Insurance assets
Premium debtors
Deferred acquisition
costs
  Reinsurance assets
  Total
2009
Investments in
associates
Loans to associates
Listed investments
Bonds
Unlisted investments
Held-to-maturity
Available-for-sale
financial assets
Derivative financial
instrument
            Other loans and
            receivables
            Cash and cash
            equivalents
            Insurance assets
            Premium debtors
            Deferred acquisition
            costs
              Reinsurance assets
              Total
            Company
            2010
            Investments in
            subsidiaries
            Loans to subsidiaries
            Investments in associates
            Loans to associates
            Loan to joint venture
            Listed investments
            Unlisted investments
            Other loans and
            receivables
            Cash and cash
            equivalents
            Insurance assets
            Insurance debtors
            Deferred acquisition costs
              Reinsurance assets
              Total
            2009
            Investments in
            subsidiaries
            Loans to subsidiaries
            Investments in associates
            Loans to associates
            Listed investments
            Unlisted investments
            Derivative financial
            instrument




d) Financial assets that are neither past due nor impaired
The analysis of financial instruments that were neither past due nor impaired and individually impaired at the reporting da
as follows:




           2010
           Loans to subsidiaries
           Loans to associates
           Listed investments
           Unlisted investments
           Bonds at fair value
           Other loans and
           receivables
           Cash and cash
           equivalents
           Financial assets
           Premium debtors
           Reinsurance assets




e) Age analysis of other loans and receivables and premium debtors that are past due but not impaired
4.2 Liquidity risk
4.2.1 Maturity profile on financial assets
The following tables detail the Group and Company’s contractual maturities of financial assets, including interest payments




           Group
           2010
           Financial assets at fair value through profit or loss
           Available-for-sale financial assets
           Held-to-maturity financial assets
           Reinsurance assets
           Insurance, loans and other receivables
           Deferred acquisition costs
           Cash and cash equivalents

           2009
           Financial assets at fair value through profit or loss
           Available-for-sale financial assets
           Held-to-maturity financial assets
           Derivative financial instrument
           Reinsurance assets
           Insurance, loans and other receivables
           Deferred acquisition costs
           Cash and cash equivalents




           Company
             2010
             Financial assets at fair value through profit or loss
             Reinsurance assets




4.2.2 Maturity profile of financial liabilities




             Group
             2010
             Non-derivative financial liabilities
             Borrowings – non-interest-bearing
             Trade and other payables and employee benefits

             2009
             Non-derivative financial liabilities
             Borrowings – non-interest bearing
             Trade and other payables and employee benefits
             Shareholders for dividends

             Derivatives financial liabilities
             Derivatives

             Company
             2010
             Non-derivative financial liabilities
             Trade and other payables and employee benefits

             2009
             Non-derivative financial liabilities
             Trade and other payables and employee benefits
             Shareholders for dividends

             Derivatives financial liabilities
             Derivatives
4.2.3 Maturity profile of insurance laibilities
The following table details the Group and Company’s probable cash outflows associated with insurance liabilities:




           Unexpired risk reserve
           Life fund
           Policyholder liabilities
           Provision for claim fluctuations
           Experience account balance
           Reinsurance liabilities

           2009
           Claims reported and loss
           adjustment expenses
           Claims incurred but not yet
           reported
           Unearned premium provision
           Cash back reserve
           Unexpired risk reserve
           Provision for claim fluctuations




4.3 Market risk
4.3.1 Sensitivity analysis
The Group’s primary market exposure is to interest rate, equity price and currency risk.
Currency risk
The following significant exchange rates applied during the year:
Australian Dollar
Botswana Pula
Namibian Dollar
Mozambique Metical
A 10% increase/(decrease) in the ZAR against the relevant foreign
currencies at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2009.




2010
Australian Dollar
Botswana Pula
 Mozambique Metical

2009
Australian Dollar
Botswana Pula
 Mozambique Metical



There is no currency fluctuation effect on Company. The Company transacts the business in South African Rand
fluctuation effect on Namibian Dollar.

Interest rate risk
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:




Group
Variable rate instruments
Financial assets
Cash and cash equivalents
  Unit trusts

Company
Variable rate instruments
Financial assets
Cash and cash equivalents
  Unit trusts



The Group and Company’s fixed rate instruments are not exposed to interest rate risk. Therefore no sensitivity
Sensitivity analysis for variable rate instruments of the Group and Company.

The Group’s investments in long-term debt and fixed income securities are exposed to fluctuations in interest r
monitored through several measures that include scenario testing and stress testing using measures such as du

The Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge
A change of 200 basis points in interest rates at the reporting date would have increased/(decreased) equity an
shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constan
on 500 basis points for 2009.




Group
2010
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



2009
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



Company
2010
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



2009
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity

Equity price risk
Exposure to equity price risk

The Group and Company’s exposure to equity price risk at the reporting date was as follows:




Description of equity investments
Group
Ordinary shares
           Preference shares

           All of the Group’s listed equity investments are listed on the JSE Limited. For such investments classified a 5% in
           reporting date would increase equity and profit or loss by amounts as shown below. A 5% decrease in equity pr
           but opposite effect. The analysis is performed at the same basis for 2009.




           2010
           Ordinary shares – Listed
           Preference shares – Listed

           2009
           Ordinary shares – Listed
           Preference shares – Listed




           Description of equity investments
           Company
           Ordinary shares
           Preference shares



           All of the Company’s listed equity investments are listed on the JSE Limited. For such investments classified a 5
           reporting date would increase equity and profit or loss by amounts as shown below. A 5% decrease in equity pr
           but opposite effect. The analysis is performed at the same basis as 2009.




4.4 Income statement note
a) Financial income and expenditure
The Group and Company generated the following income and/or incurred the following expenditure in respect of financial
during the reporting period, all of which were recognised in profit or loss:
b) Impairment losses
The amount of the impairment loss for each class of financial asset during the reporting period was as follows:




5




           Office equipment
           Motor vehicles
           Leasehold improvements
    Properties – owner occupied

    Reconciliation of movement on net carrying value
    Net carrying amount at beginning of year
    New subsidiaries opening carrying value
     Properties – owner occupied (at fair value)
     Motor vehicles
     Office equipment
    Disposal of a subsidiary
    Additions
     Office equipment
     Motor vehicles
     Leasehold improvements
     Properties – owner occupied
    Disposals
     Office equipment
     Motor vehicles
     Properties – owner occupied
    Depreciation for the year
     Office equipment
     Motor vehicles
     Leasehold improvements
     Properties – owner occupied
    Net foreign currency translation differences
    Net carrying amount at end of year
    Capitalised instalment sale agreement assets
    Motor vehicles
     Carrying value at beginning of year
     Disposal




6




    Sub 66 and Sub 166 of the farm Springvale No. 2170, all situated in the
    development area of Rosetta, province of KwaZulu-Natal.

    The properties are carried at market value as last determined by an
    independent registered valuator, Mr. Tom Bate of Miles Fichet Valuation
    Surveyors, Valuers Property Consulting, Farming and Forestry Advisors in
    July 2009. The valuation was done with reference to the nature of the
    improvement and the condition of repair using the ’’Direct Comparable
    Method” of valuation. Investment properties also include a vacant piece
    of land situated on Farm Witfontein II, Registration division IR Transvaal
    measuring 11 451 hectares. The land was acquired in November 1991.
    The property is held under a title deed No. T 24235/1993.

    Investment properties are not mortgaged as security for any liabilities.

    Direct operating expenses incurred on the investment property amount to




7




    Net carrying value
    Goodwill
    Future profit commission
    Computer software

    Reconciliation of movement on net carrying value
    Net carrying value at beginning of year
    Reclassified
    Additions
     Goodwill
     Computer software
    Disposal of a subsidiary
    Acquisition of a subsidiary
    Disposals
     Computer software
8




9




The loans are unsecured, interest-free and have no fixed terms of repayment.

The financial position and performance of the Group’s material associates are categorised by nature of business as follows




           Analysis of associates for 2010
           Total assets
           Total liabilities
           Net assets
           Net profit before taxation
           Taxation
            Net profit after taxation
            Group share of post-acquisition profits
            Carrying amount of investment in associates
            Gross amount of loans to associates
            Fair valuation of associates
            Analysis of associates for 2009
            Total assets
            Total liabilities
            Net assets
            Net profit before taxation




10. Interests in joint ventures




11. Financial assets
11.1




11.2
11.3 Bonds (Financial assets carried at fair value through profit or loss):




11.4




12(a) Categories and classes of financial assets and liabilities




            Group
            2010
            Assets
            Interest in associates
            Loans to associates
Loans to joint ventures
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
other receivables
Deferred acquisition
costs

Liabilities
Borrowings
Insurance liabilities
Reinsurance liabilities
Employee benefits
Trade and other
payables

2009
Assets
Interest in associates
Loans to associates
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
  Call and short-term
  deposits
Reinsurance assets
Insurance, loans and
other receivables
Derivative financial
instrument
Deferred acquisition
costs

Group
2009
Liabilities
Borrowings
Insurance liabilities
Reinsurance liabilities
Derivative financial
instrument
Employee benefits
Trade and other
payables
Shareholders for
dividend

Company
2010
Assets
Interest in subsidiaries
Loans to subsidiaries
Interest in associates
Loans to associates
Loans to joint venture
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
other receivables
Deferred acquisition
costs

Liabilities
Insurance liabilities
Reinsurance liabilities
Employee benefits
Trade and other
payables




Company
2009
Assets
Interest in subsidiaries
Loans to subsidiaries
Interest in associates
Loans to associates
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
            other receivables
            Derivative financial
            instrument
            Deferred acquisition




12(b) Determination of fair value and fair values hierarchy
The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:




            Group – 2010
            Financial assets carried at fair value through profit or loss
            Listed ordinary shares
            Listed preference shares
            Listed debentures
            Unlisted ordinary shares
            Unlisted preference shares
            Linked life policies
            Units trusts
            Unlisted debentures
            Bonds
            Investment in associate
            Financial assets available-for-sale
            Listed ordinary shares
            Unlisted ordinary shares
            Unlisted preference shares
            Financial assets available-for-sale
              Debt securities

            Company – 2010
            Financial assets carried at fair value through profit or loss
            Listed ordinary shares
            Listed preference shares
            Listed debentures
            Unlisted ordinary shares
            Unlisted preference shares
Unlisted debentures
Linked life policies
Units trusts
Investment in associate
  Investment in subsidiary



Included in level 1 category are financial assets and liabilities that are measured in whole or in part by referenc
active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and
exchange, dealer, broker, industry group, pricing services or regulatory agency and those prices represent actu
transactions on an arm’s length basis.

Financial assets and liabilities measured using a valuation technique based on assumptions that are supported
market transactions are assets and liabilities for which pricing is obtained via pricing services, but where prices
active market, financial assets with fair values based on a broker quotes, investments in private equity funds w
managers and assets that are valued using the group’s own models whereby the majority of assumptions are m

Non-market observable inputs means that fair values are determined in whole or in part using a valuation tech
assumptions that are neither supported by prices from observable current market transactions in the same inst
available market data. The main asset classes in this category are unlisted equity investments and limited partn
are used to the extent that observable inputs are not available, thereby allowing for situations in which there is
for the assets or liability at the measurement date. However, the fair value measurement objective remains the
the perspective of the Group and Company. Therefore, unobservable inputs reflect the Group and Company’s o
assumptions that market participants would use in pricing the asset and liability. These inputs are developed ba
available, which might include the Group and Company’s own data.

Reconciliation of movements of financial instruments measured at fair value

The following table shows a reconciliation of the opening and closing recorded amount of financial assets and l
fair value:




Group
Financial assets at fair value
through profit or loss
Listed ordinary shares
Listed preference shares
Listed debentures
Unlisted ordinary shares
Unlisted preference shares
Units trusts
Linked life policies
Unlisted debentures
Bonds
Investment in associate

Financial assets available-for-sale
  Listed ordinary shares
  Unlisted ordinary shares
  Unlisted preference shares
Held-to-maturity
  Debt securities
Total financial instrument
Company
Financial assets carried at fair value
through profit or loss
Listed ordinary shares
Listed preference shares
Listed debentures
Unlisted ordinary shares
Unlisted preference shares
Units trusts
Linked life policies
Unlisted debentures
Investment in associates
Investment in subsidiaries
Investment in joint venture
Total financial instrument
There were no transfers between levels during the year under review.

Gains or losses (realised and unrealised) included in profit or loss for the period are presented in the consolidat
as follows:




Group
 Total gains or losses included in profit or loss for the period

Company
 Total gains or losses included in profit or loss for the period



There have been no other transfers between the levels of the fair value hierarchy.
The following table shows the sensitivity of the fair value of financial assets.
     Financial assets carried at fair value through profit or loss
     Listed ordinary shares
     Listed preference shares
     Listed debentures
     Unlisted ordinary shares
     Unlisted preference shares
     Units trusts
     Linked life policies
     Unlisted debentures




13

     At 30 June 2010, the Company has a short position on R201 government bonds, with a fair value exposure of R
     A certain Group company is a party to a derivative financial instrument. The instrument is held to reduce risk.
     Derivative financial instruments are either traded on a regulated exchange (South African Future Exchange, SAF
     the counter (OTC) as a direct arrangement between two counterparties. Instruments traded on SAFEX are marg
     counterparty to each and every trade. OTC instruments are only entered into with the appropriate accredited c
     into in terms of signed derivative agreements.




     Derivative financial instrument held for risk management
     Total derivative financial instrument
     Disclosed as:
     Assets included in financial instrument
     Financial liability
14




     Originated at amortised cost
     Loans bearing interest
     – Related parties in the Group
     – Loans to staff
     – Loans to other
     – Impairment provision
     Interest-free loans
     – Related parties in the Group
     – Loans to other
     – Impairment provision
     Total loans
     Receivable from Group companies
     – Impairment provision
     Total loans receivable from Group companies
     Non-current portion
     Total insurance, loans and other receivables




     The interest rates charged on the secured and unsecured loans comprise:
     Prime rate of interest
     Prime less 2%
     Prime less 2.75%
     Prime less 1.5%
     Prime less 3%
     80% of prime
     Interest at 7%
     R153 bond rate
     South African Revenue Service (SARS) rate
     Other
       Interest-free loans

     The loans have no fixed terms of repayment. Certain loans to related parties
       are secured by shareholders’ assets to the extent of R39 200 000
       (2009: R39 200 000) and the balance of the loans are unsecured and have
       no fixed terms of repayment.
       Loans are carried at amortised cost using the effective-interest method and
       are reviewed for impairment at the end of the financial year. Insurance,
       trade and other receivables are widespread and there were no indicators of
       impairment at 30 June 2010.
       Loans to subsidiaries and associates are deemed to be part of the
       investment and therefore included in notes 8 and 9 of these annual
       financial statements.




15
15.1




15.2




       Acquisition of subsidiary
       Unutilised tax losses
       Prepayments
     Provisions
     Reversing temporary difference due to sale of investments
     Balance at end of year
     Balance comprises:
     Capital allowances
     Unrealised gains on assets at fair value through profit or loss
     Unrealised gains on foreign exchange differences
     Unrealised gains on available-for-sale financial assets
     Unutilised tax losses
     Provisions
     Prepayments




16




17




     Share premium

     The class A and B preference shares receive dividends at the discretion of
     the Board of Directors. The A preference shares have voting rights equal to
     one vote for one share.
     The class A and B preference shares have no fixed date for redemption and
     are redeemable or convertible to ordinary shares at the election of either
     the preference shareholder or the Company.
     The directors are authorised, until the forthcoming annual general
     meeting, to issue the unissued shares for any purpose and upon terms and
     conditions as they deem fit.




18




19




20
21




     Gross
     Claims reported and loss adjustment expenses
     Claims incurred but not yet reported
     Unearned premium provision
     Cash back reserve
     Life fund
     Policyholder liabilities
     Unexpired risk reserve
     Provision for claim fluctuations
     Provision for premium refunds
     Expense provision
     Experience account balances
     Total gross insurance liabilities
     Recoverable from reinsurers
     Claims reported and loss adjustment expenses
     Claims incurred but not yet reported
     Unearned premium provision
     Deferred reinsurance expense
     Life fund reserves
     Reinsurance recoveries
     Total reinsurers’ share of insurance liabilities
     Net
     Claims reported and loss adjustment expenses
     Claims incurred but not yet reported
     Unearned premium provision
     Unexpired risk reserve
     Cash back reserve
     Life fund reserves
     Policyholder liabilities
     Provision for premium refunds
     Provision for claims fluctuations
     Deferred reinsurance expense
     Expense provision
     Reinsurance recoveries
     Experience account balances
     Total insurance liabilities – net
Group
Movement in insurance liabilities and
reinsurance assets
a) Outstanding claims
Balance at beginning of year
Reclassification
Claims paid
New acquisition of a subsidiary
Disposal of a subsidiary
Exchange rate movement
Claims raised
Balance at end of year
Company
Balance at beginning of year
Claims paid
Claims raised
Balance at end of year
b) Claims incurred but not yet reported
Group
Balance at beginning of year
Reclassification
Exchange rate movement
New acquisition
Disposal
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
c) Provision for unearned premium
Group
Balance at beginning of year
Reclassification
New acquisition of a subsidiary
Disposal of a subsidiary
Exchange rate movement
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
d) Experience account balances
Group
Balance at beginning of year
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
e) Unexpired risk reserve
Group
Balance at beginning of year
Reclassification
Exchange rate movement
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
f) Expense provision
Group
Balance at beginning of year
Movements for the year
Balance at end of year
g) Provision for claim fluctuations
Group
Balance at beginning of year
Reclassification
Exchange rate movement
Movements for the year
Balance at end of year
h) Deferred reinsurance expense
Group
Balance at beginning of year
Reclassification – prior year
Exchange rate movement
Movements for the year
Balance at end of year
i) Cash back reserve
Group
Balance at beginning of year
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
j) Provision for premium refunds
Group
Balance at beginning of year
Movements for the year
Balance at end of year
k) Life fund
Group
Balance at beginning of year
Movements for the year
Balance at end of year
l) Policyholder liabilities
Group
Balance at beginning of year
Movements for the year
Balance at end of year
m) Reinsurance recoveries
Group
Balance at beginning of year
Reclassification – prior year
Exchange rate movement
New acquisition of a subsidiary
Disposal of a subsidiary
Movements for the year
Balance at end of year




Company
Balance at beginning of year
Movements for the year
Balance at end of year
The reinsurance recoveries are subject to
a demand feature.
Group
Balance at beginning of year
Reclassification adjustment
Claims paid
Exchange rate movement
Movements for the year
New acquisition of a subsidiary
Disposal of a subsidiary
Claims raised
Reinsurance recoveries
Balance at end of year
Company
Balance at beginning of year
Claims paid
Changes in estimate to profit or loss
Claims raised
Reinsurance recoveries
Balance at end of year

Insurance risk
Exposure to insurance risk
The Group and Company underwrite risks that natural persons, corporate or other entities wish to transfer to a
to property, accident, personal accident, motor, liability, engineering, marine, credit and other perils which ma
As such the Group and Company are exposed to uncertainty surrounding the timing, frequency and severity of
contracts. The principal risk is that the frequency and/or severity of claims are greater than expected. Insuranc
and the actual size and number of events in any one year may vary from those estimated and experienced in pr

The Group and Company underwrite primarily short-tailed risks, that is, insurance under which claims are typic
the occurrence of the events giving rise to the claims. Risks that are long tail in nature represent an insignifican
Company’s insurance portfolio. Consequently, whilst the Group and Company may experience variations in its c
the next, the Group and Company’s exposure at any time to insurance contracts issued more than one year bef

The product features of insurance contracts that have a material effect on the amount, timing and uncertainty
from insurance contracts in the Group and Company are described below:

Property
Provide indemnity for loss or damage to immovable and movable property caused by perils such as fire, lighting
earthquake and malicious damage. These contracts may also include business interruption policies which insur
a business as a result of loss or damage to the insured property by these perils.

Accident
Provide indemnity for loss of or damage to mainly movable property for losses caused by crime, certain acciden
to goods in transit or accidental damage to glass. Included under the accidental classes are legal liabilities an in
accidental damage to third-party property or accidental death or injury to a third party by the insured.

Personal accident
Provide compensation arising out of the death, permanent or temporary total disability of the insured, the fam
business. This cover is restricted to certain accidents and does not provide the wider benefits available from th

Motor
Provides indemnity for loss of or damage to the insured motor vehicle. The cover is normally on an all-risks bas
however the insured may select restricted forms of cover such as fire and theft only. Legal liabilities arising out
vehicle following an accident for damage to third-party property or death or injury to a third party are also cove
maintenance cover on insured vehicles are incorporated in this class of business.

Engineering
Provide indemnity for losses sustained through the use of machinery and equipment or the erection of building
type of contract include machinery breakdown, business interruption and loss or damage to plant and equipme

Marine
Provide indemnity for both cargo and hull classes of business. Cargo covers physical loss of or damage to cargo
to commercial vessels.

Liability
Provide indemnity for actual or alleged breach of professional duty arising out of insured’s activities, indemnify
against court compensation and legal defense costs, provide indemnity for the insured against damages conseq
damage.
The Group and Company distribute these products across personal and commercial policyholders using traditio
intermediaries and direct sales, as well as through strategic partnerships with niche underwriting managers, re
non-traditional distribution arrangements include profit participation measures to promote good risk managem
of the business. The Group also provides primary risk policies, which are contracts structured to provide entry l
entities. These policies provide for payment of an experience bonus called an experience account balance, base
end of the policy period.

Limiting exposure to insurance risk
The Group and Company limit its exposure to insurance risk through setting clearly defined underwriting strate
risk assessment techniques, and centralised management of reinsurance.

The Group and Company’s underwriting strategy ensures diversification of insurance risk in terms of type and a
location and type of industry covered. The underwriting strategy also aims to develop a sufficiently large popul
the expected outcome. The underwriting strategy is detailed in underwriting authorities which set the limits fo
class of business, geograpical location and industry to enforce appropriate risk selection within the portfolio. Th
to both internal underwriters and partners. Management review and periodic internal audits ensure that under

Analysis of the Group and Company’s risk profiles shows that the Group and Company underwrite a well divers
Group and Company’s business has a low correlation factor between the types of insurance products and class
premium as an indicator, the table below illustrates the Group and Company’s distribution of risks underwritte




Gross written premium per class of business
Property
Transportation
Motor
Accident/Health
Guarantee
Liability
Contract/Engineer
Fire
Life
Marine
Compensations
Miscellaneous
Total
The Group and Company underwrite insurance contracts across South
Africa as well as Namibia, Botswana, Mozambique and Australia. Using
gross written premium as an indicator the table below illustrate the Group
and Company’s geographical diversification.
South Africa
Foreign
Total

Ongoing review and analysis of underwriting information enables the Group and Company to monitor its risks a
action. The ability to adjust premiums allows the Group and Company to mitigate the risk of underwriting losse
ratios in terms of different classes of business and different portfolios or clients. The risk of fraudulent claims is
embedded in claims handling processes and specific techniques developed to proactively detect fraudulent cla

Underwriting and reinsurance operating procedures
The Group and Company have implemented an integrated risk management framework to manage risk in acco
risk appetite. Group and Company reinsurance is managed by the Reinsurance and Underwriting Committee (R
responsibilities of the committee as set out and approved by the Board of Directors are outlined below. The ma
provide a policy framework that ensures that the risk assumption and risk retention practice is in line with prud
by the Group. Specifically RUCOM makes recommendations to the Board as to the risk retention policy of the c
and Company; communicates policy to the business units for adoption in line with their business operations; re
methodologies and processes employed by each company and each business unit for both facultative and treat
reviews the reinsurance programme for cost efficiency, compliance with risk assumption criteria and security.

Reinsurance strategy
The Group and Company obtain third-party reinsurance cover to reduce risks from single events or accumulatio

reinsurance market.

Dynamic financial analysis (DFA) is performed each year prior to renewal. DFA informs the decision-making reg
reinsurance purchase. Hollard’s insurance risk and return position is tested against a wide range of reinsurance
of proportional and non-proportional alternatives.

The Group and Company use state-of-the-art catastrophe modelling tools to assess its exposure to low-frequen
common of these risks relates to natural catastrophes such as earthquakes, floods and windstorm. The Group’s
exposure would arise from an earthquake. Where the Group and Company are at risk in case of the occurrence
threaten its solvency, catastrophe reinsurance is in place to reduce the threat associated with such an event.

Risk retention parameters
Hollard Insurance is in the business of assuming that level of risk, which is deemed prudent in relation to the ris
Company’s absolute capacity in terms of shareholders’ funds and free reserves. Predetermined criteria are obs
where specific written permission has been obtained from the chairman of the Underwriting Committee acting
of the members of such committee.

Counterparty risk
Currently only S&P A rated reinsurers are utilised unless express permission is sought from the Risk Manageme

Treaty placing process
The treaty placing process is the responsibility of the Risk Management Division, accountable to the Group Chie
Officer reports directly to the CEO and is accountable to the Board via the Risk and Underwriting Committee.

The development of claims liabilities provides an indicator of the Group and Company’s ability to estimate the
majority of the Group and Company’s insurance contracts are classified as short tailed. The shorter settlement
allows the Group and Company to achieve a higher degree of certainty about the estimated costs of claims. The
the emergence of a long tail claim makes the estimation process more uncertain for these type of claims. The G
exposure to long tailed business is in the personal accident, third-party motor liability and some engineering an
actuarial valuations are used to estimate the Group and Company’s potential liability for this type of exposure.

Process used to determine significant assumptions
Insurance risks are unpredictable and the Group and Company recognise that it is impossible to forecast with a
payable under existing insurance contracts. Over time the Group and Company have developed a methodology
insurance provisions that have a reasonable likelihood of being adequate to settle all its insurance obligations.
Claim provisions
The Group and Company’s outstanding claims provisions include notified claims as well as incurred but not yet
short tail nature of the business it is not considered necessary to discount any of the claims provisions.

Notified claims
Claim provisions are based on previous claims expenditure, knowledge of events, terms and conditions of the r
interpretation of circumstances.

Each notified claim is assessed on a separate, case-by-case basis with due regard to the specific circumstances,
insured and loss adjuster and past experience with similar claims. The Group and Company employ staff experi
rigorously applies standardised policies and procedures around claims assessment. In addition the Group and C
specialised administrators to perform the claims assessment process for some of its business. The ultimate cos
as a result of future developments or better information becoming available about the current circumstances.
and updated if new information becomes available.

Claims incurred but not yet reported (IBNR)
The majority of the Group and Company’s IBNR is calculated as a percentage of premiums written. This percen
which represents the expected value of the unreported claims liabilities. Different percentages are applicable f
and appropriateness is assessed against the Group and Company’s past claims experience.

The Company’s internal actuaries in conjunction with an independent external actuarial firm review the adequa
provisions. The chain ladder method which involves the analysis of historical claims development factors and th
development factors based on the historical pattern is used for the majority of the Company’s business to calcu
claims liability which is then compared to the outstanding claims liability raised by the operation. The selected
to cumulative claims data for each accident year that is not yet fully developed to produce an estimated ultima

The provision for notified claims and IBNR are initially estimated at a gross level. A separate calculation is then
estimated insurance recoveries.

There were no losses following the application of the liability adequacy test.

The Group and Company have experienced a substantial growth in net incurred claims and the majority of this
22




23




     2007
     2006
     2005
     2004
     Cumulative
     payments to date
     Net
     Actual claims costs
     2010
     2009
     2008
     2007
     2006
     2005
     2004
     Cumulative
24




     The loan bears interest at Nedbank prime lending rate less 2% and is repayable within 48 months.




     Secured
     Secured bank loan
     Instalment sale agreement liabilities – minimum payments
     Non-current portion
       Lease liability
       Payable within one year

     Total
     Current
     Non-current

     Instalment sale agreement liabilities – minimum payments
     Not later than one year
     Later than one year and not later than five years

     Future finance charges on instalment sale agreements
     Present value of instalment sale agreement liabilities
     Lease liabilities for the current year are paid over periods of 48 months
     and the average effective borrowing rate is 8.5% (2009: 0%).
     The instalment sale agreements are secured by motor vehicles with a
     carrying value of R3 080 051 (2009: Rnil).
     Lease liabilities relating to prior year are paid over periods of 36 months
     and the average effective borrowing rate is 0% (2009: 11.24%).
     The instalment sale agreements are secured by motor vehicles with a
     carrying value of Rnil (2009: R318 391).
25




     Charged to the income statement
     – additional provisions
     – used during the year
     Net foreign currency translation differences
     Balance at end of year
     Equity compensation scheme
     At beginning of year
     Charged to the income statement
     – additional provisions
     – used during the year

     Balance at end of year
     Analysis of employee benefits
     Current
     Non-current
     Total

     Leave pay
     In terms of the Group and Company policy, employees are entitled to accumulate a maximum of 25 days leave
     is calculated on that basis. Any leave accumulated over this number is forfeited by the employees concerned. W
     encouraged to take their full annual leave, they are entitled to encash a maximum of five days’ leave (taxed) in
     who have leave due to them cease their employment with the Company, all accumulated and accrued leave is
     total cost to company rate as part of their salary payment, limited to a maximum number of 25 days.
     The Group and Company’s provision for leave pay amounted to R23 624 000 and R6 212 000 respectively at the
     positon date (2009: R26 670 000 and R8 091 000).

     Incentive scheme
     In terms of the Group policy, selected employees at the discretion of the directors receive an incentive bonus.
     corporate and business unit performance and is subject to approval by the Remuneration Committee.
     The Group and Company’s provision for staff incentives amounted to R176 743 000 and R104 256 000 respecti
     financial positon date (2009: R89 826 000 and R27 020 000).

     Equity compensation scheme
     In terms of the group policy, selected black employees are entitled to participate in the Company’s BEE share s
     issue of both “A” and “B” options. The allocation of “A” options is based upon each black employee’s length of
     their total cost of compensation for services rendered as at 30 June 2006. “B” units are available for purchase b
at their prevailing market value.

The total number of options issued during the year, the cost thereof and the expense recognised in the income

a) Financial year ended 30 June 2010:




Units
A
B



The “B” unit value represents the difference between the value of the options at the statement of financial pos
(2009: R75.42).




●Grant date – “A” units: 1 July 2006;
●Market price of “A” units at grant date: R59.35;
●First grant date – “B” units: 1 July 2006;
●Market price of “B” units at first grant date: R59.35;
●Second grant date – “B” units: 1 July 2007;
●Market price of “B” units at second grant date: R68.06;
●Third grant date – “B” units: 1 July 2008;
●Market price of “B” units at third grant date: R72.50;
●Extra vesting (retirement, retrenchment or death) 1% per annum;
●Staff turnover: 14% per annum;

●Average age of unit holders: 35 years;
●Unit price volatility: 32%; and
●Dividend yield: 2.5%.

b) Financial year ended 30 June 2009




Units
A
B
     Assumptions – 30 June 2009



     ●Grant date – “A” units: 1 July 2006;
     ●Market price of “A” units at grant date: R59.35;
     ●First grant date – “B” units: 1 July 2006;
     ●Market price of “B” units at first grant date: R59.35;
     ●Second grant date –”B” units: 1 July 2007;
     ●Market price of “B” units at second grant date: R68.06;
     ●Third grant date –”B” units: 1 July 2008;
     ●Market price of “B” units at third grant date: R72.50;




26




27




     – Quoted shares
     – Unquoted shares
     Dividends from subsidiaries
     Total dividends received
     Total interest and dividend income
     Interest paid – collateral deposit
     Interest paid – instalment sale agreement
     Interest paid – treaty reserves
     Interest paid – general
     Interest paid
     Total net interest




28




29




30




     Auditors’ remuneration
     Audit fees
     Prior year under/(over) provision
     Other services

     Depreciation
     Office equipment
     Motor vehicles
     Leasehold improvements
     Properties – owner occupied

     Expenses for the acquisition of insurance contracts
     Commission
     Impairment losses on financial assets
     – Impairment loss on loans to associates, subsidiaries and other




31




     Deferred taxation:
     – current year
     – prior year
     Secondary tax on companies
     Foreign tax
     Capital gains tax

     All taxation is payable in respect of continuing operations.




     Tax rate reconciliation:
     Tax calculated at standard rate of South African tax on earnings
     Normal taxation – prior year
     Capital gains tax
32




     (Profit)/loss on disposal of property and equipment
     (Profit)/loss on disposal of investments
     Loss on disposal of investments property
     Loss/(profit) on foreign currency translation difference
     (Profit)/loss on disposal of subsidiaries
     Profit on disposal of associates
     Net interest and dividend income
     Unrealised (gain)/loss on revaluation of listed investments
     Unrealised loss on revaluation of unlisted investments
     Unrealised (gain)/loss on revaluation of associates
     Unrealised (gain)/loss on revaluation of subsidiaries
     Unrealised loss on revaluation of joint venture
     Unrealised loss on revaluation of loans
     Unrealised gain on investment property
     Share of profits in associates
     Operating cash flows before working capital changes




33
34




35




36
36.1




       R’000
       Property and equipment
       Interest in subsidiaries
       Intangible assets
       Investments
       Insurance, loans and other receivables
       Reinsurance assets
       Cash and cash equivalents
36.1.1




36.1.2




         R11 146 000 whereas the Group generated a profit on disposal of Rnil.
         The Group’s share of the net assets at the date of disposal was as follows:
         Property and equipment
         Intangible assets
         Investments
         Insurance, loans and other receivables
         Reinsurance assets
         Cash and cash equivalents
         Insurance liabilities
         Accounts payable
         Non-controlling interest
         Profit generated on disposal of subsidiary
         Proceeds on disposal of subsidiary

36.1.3
36.1.4




36.1.5
36.1.6




36.2




36.2.1
36.2.2




36.2.3




36.2.4
37
37.1

37.1.1




37.1.2




37.1.3




37.1.4
37.2




       The Group disposed of its investment in the following
       associates:
       Ashbrook Investments 133 (Proprietary) Limited
       Beqfin (Proprietary) Limited
       Biz Afrika 1932 (Proprietary) Limited (T/A PWV Insurance
       Brokers (Proprietary) Limited)
       BSG Corporate Assets (Proprietary) Limited
       BSG Distribution (Proprietary) Limited
       BSG Short Term (Proprietary) Limited
       BSG Short Term Assets (Proprietary) Limited
       Cedar Falls (Proprietary) Limited
       Centinel Investment Holdings (Proprietary) Limited
       Commrisk Insurance Brokers (Proprietary) Limited
       Compendium Investment Holdings (Proprietary) Limited
       Fire Ring Trading 50 (Proprietary) Limited
       Insurance Zone (Proprietary) Limited
       Interplay Trading 128 (Proprietary) Limited
       Katz Breskal Insurance Brokers (Proprietary) Limited
       Malcanter Holdings (Proprietary) Limited
       Mpumalanga Risk Acceptances (Proprietary) Limited
       Multifund Financial and Insurance Administrators
       (Proprietary) Limited
       Multi Risk Managers (Proprietary) Limited
       Risk Benefit Solutions (Proprietary) Limited
       Sky TIV Insurance Brokers (Proprietary) Limited
       Tuttle Admin services (Proprietary) Limited
         Utz Consulting (Proprietary) Limited



       Ashbrook Investments 133 (Proprietary) Limited
       Beqfin (Proprietary) Limited
       Biz Afrika 1932 (Proprietary) Limited (T/A PWV Insurance
       Brokers (Proprietary) Limited)
       BSG Corporate Assets (Proprietary) Limited
       BSG Distribution (Proprietary) Limited
       BSG Short Term (Proprietary) Limited
       BSG Short Term Assets (Proprietary) Limited
       Cedar Falls (Proprietary) Limited
       Centinel Investment Holdings (Proprietary) Limited
       Commrisk Insurance Brokers (Proprietary) Limited
       Compendium Investment Holdings (Proprietary) Limited
         Fire Ring Trading 50 (Proprietary) Limited
         Insurance Zone (Proprietary) Limited




37.2.1




37.2.2


37.2.3




38




39
40




41




42




43




44




45
46




     Transfer of loan from other staff loans
     Transfer of loan from Executive Directors

     Total loan to executive directors and Non-Executive Director
     Details of individual loans to directors:

     The following advances were made – TBT Mparutsa R6,000,000 (2009: Rnil).

     The following repayments were made – SI Mzimela R1 226 127 (2009: Rnil), RC Hallier R90 750 (2009: R1 059 4
     R1 000 000 (2009: Rnil).

     The loans are given on commercial terms and conditions. The related interest income in 2010 was R480 437 (20

     Interest on loans to NG Kohler, TBT Mparutsa and RC Hallier is charged at SARS rate and as at 30 June 2010 the
     Interest on the loan to SI Mzimela is charged at 80% of prime and as at 30 June 2010 the prime rate was 10%.

47




     BSG Short Term (Proprietary) Limited
     Cast Arena Trade and Invest 87 (Proprietary) Limited
     Cycle Lab (Proprietary) Limited
     De Zalze Development (Proprietary) Limited
     Eikos Risk Applications (Proprietary) Limited
     The Hollard Life Assurance Company Limited
     Hollard Life Properties (Proprietary) Limited
     Hollard Insurance Company of Namibia Limited
     Lombard Insurance Limited
     Spier Estate (Proprietary) Limited
     Multi Risk Managers (Proprietary) Limited
     Newshelf 702 (Proprietary) Limited
     Newshelf 685 (Proprietary) Limited
     Risk Benefit Solutions (Proprietary) Limited
     Smart Credit Administrators (Proprietary) Limited
     Tuttle Insurance Brokers (Proprietary) Limited
     Utz Consulting (Proprietary) Limited

     Management fees:
     Paid to Hollard Life Assurance Company Limited
     Due to Hollard Life Assurance Company Limited as at 30 June 2010
     Administration fees:
     Paid to underwriting managers in which the Group holds an investment

     Due to underwriting managers in which the Group holds an investment as at 30 June 2009
     Investment policy with:
     Hollard Life Assurance Company Limited
     Key management compensation:
     Salaries, bonuses and other short-term employee benefits


     Hollard Life Properties (Proprietary) Limited

48




     Limited
     Casa Luigi Properties (Proprietary) Limited
Wealth Associates SA (Proprietary) Limited
Electrical Plumbing Care Underwriting
Managers (Proprietary) Limited
Electronic Risk Underwriting Managers
(Proprietary) Limited
Louwfut Beleggings 1077 (Proprietary)
Limited
Equimed Underwriting Managers
(Proprietary) Limited
Firebush Investments (Proprietary) Limited
Ground Lily Investments (Proprietary) Limited
Haven Development Company (Proprietary)
Limited
Hollard and Connolly Investments
(Proprietary) Limited
Hollard Asset Management (Proprietary)
Limited
Etana Insurance Company Limited (formerly
Hollard Commercial & General Limited)
Factory and Industrial Risk Assessment
Services (Proprietary) Limited
The Hollard Insurance Company of Botswana
Limited (incorporated and operational in
Botswana)
Hollard Insurance Company of Namibia
Limited (incorporated and operational in
Namibia)
Hollard Investment Holdings (Proprietary)
Limited
Hollard Investment Managers (Proprietary)
Limited
Hollard Mozambique Companhia de
Seguros (incorporated and operational in
Mozambique)
Hollard Portfolio Management (Proprietary)
Limited
JJK Marketing Consultants (Proprietary)
Limited
Lomhold (Proprietary) Limited
Newshelf 33 (Proprietary) Limited
Precept Supply Chain Management
(Proprietary) Limited
River’s Edge Investment Holdings (Proprietary)
Limited
Small Area Repair Technology Underwriting
Managers (Proprietary) Limited

Impairment
Carrying value of interest in associates
Advantage Motor Plan (Proprietary) Limited
Astra Maritime (Proprietary) Limited
African Independent Brokers (Proprietary)
Limited
Awkward Investments (Proprietary) Limited
Caste Arena Trade & Invest 87 (Proprietary)
Limited
Clarendon Transport Underwriters
(Proprietary) Limited
Eikos Holdings SA (Proprietary) Limited
Flexible Accident And Sickness Acceptances
(Proprietary) Limited
Leungo Investments (Proprietary) Limited
Legal Expenses Group Africa Limited
Oakhurst Insurance Company Limited
Petsure (Proprietary) Limited
Product Warranty Solutions (Proprietary)
Limited
Shaheen Insurance Company Limited
South African Underwriting Managers
(Proprietary) Limited
Ubunye Holdings (Proprietary) Limited
(trading as Badger Insurance Holdings
(Proprietary) Limited)




Nature of business
A Property holding
B Underwriting managers
C Investment holding
D Short-term insurance brokers
E Venture capital
F Business process outsourcing services
G General insurance
H Insurance administrator
Notes to the annual financial statements

for the year ended 30 June 2010

        Accounting policies
        The principal accounting policies adopted in the preparation of the Group and Company (consolidated) annual financial statements are set out



        Basis of presentation
        The consolidated annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and In
        effective at the time of preparing these annual financial statements.


        The consolidated annual financial statements have been prepared on the historical cost basis, except for the revaluation of investment and ow
        revaluation of investment financial assets at fair value through profit or loss and available-for-sale financial assets and owner-occupied proper


        Use of estimates and judgements
        The preparation of annual financial statements in compliance with IFRS requires management to make judgements, estimates and assumption
        income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believe
        judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from t

        The Group and Company’s estimates and underlying assumptions are reviewed for reasonability on an ongoing basis. Revisions to accounting e
        estimates are revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and
        Adoption of new and revised standards
        The Group and Company’s accounting policies are consistent with those of the previous financial year except for those instances where it has a
        the new and revised standards and interpretations issued by the International Accounting Standards Board (IASB) and the IFRIC of the IASB rel
        January 2009. The adoption of these revised standards and interpretations did not have any effect on the Group and Company’s financial perfo
        changes to existing accounting policies.
        The new and amended IFRS and IFRIC interpretations that the Group and Company adopted during the year, together with the dates on or aft


        IAS 1 (Revised): Presentation of the annual financial statements ;
        Amendments to IFRS 7 Financial Instruments: Disclosures; and
        IFRS 3 (Revised): Business Combinations and IAS 27 (Amended): Consolidated and Separate Annual Financial Statements .
        The principal effects of the above standards and interpretations on the Group and Company’s annual financial statements was as follows:


        IAS 1 (Revised) Presentation of Annual Financial Statements
        The standard separates owner and non-owner changes in equity requiring all owners’ changes in equity to be presented in a statement of chan
        two separate statements which are an income statement and a statement of comprehensive income. The previous standards required compon
        standard also requires that the income tax effect of each component of comprehensive income be disclosed. In addition, it requires entities to
        comparative period when the entity has applied an accounting policy retrospectively, makes a retrospective restatement, or classifies items in
The Group and Company elected to present comprehensive income in two separate statements, being the consolidated income statement and
components of comprehensive income as well as the tax effects have been disclosed in the notes to the annual financial statements.



The Group and Company has not presented three statements of financial position in these annual financial statements because it has not appl
financial statements, or reclassified items in its annual financial statements that affected the statement of financial position at the beginning o



Amendments to IFRS 7 Financial Instruments: Disclosures

The amendment to the standard requires an entity to provide a quantitative and qualitative analysis of those instruments recognised at fair va
significant unobservable inputs (classified as level 3), the amendment requires disclosures of the transfer into and out of level 3, a reconciliatio
recognised in other comprehensive income, purchases, sales issues and settlements, and sensitivity analysis of reasonably possible change in a
fair value hierarchy and the reason for those movements. Finally, the standard amends the previous liquidity risk disclosure as required under




The amendment applies for financial years beginning on or after 1 January 2009. Comparatives disclosures are not required in the year of tran


IFRS 3 (Revised): Business Combinations and IAS 27 (Amended) Consolidated and Separate Annual Financial Statements
The revised standards were issued in January 2008 and are effective prospectively for financial years beginning on or after 1 July 2009.

IFRS 3 introduces a number of changes in the accounting for business combinations that will impact the amount of goodwill recognised, the re
that a change in the ownership interest of a subsidiary (without loss of control) to be accounted for as an entity transaction. Therefore, such a
the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. Other conseq
The Effects of Change in Foreign Exchange Rates , IAS 28: Investment in Associates and IAS 31: Interest in Joint Ventures .




Accounting standards and interpretations in issue but not yet effective
The following IASB standards and IFRIC interpretations have been published and are applicable to accounting periods beginning on or after 1 J
comply with them from the effective date. It is expected that the application of these standards will not have a significant impact on the Group



            IFRS 2:
            IFRS 3 (revised):
            IFRS 5:
            IFRS 7:
            IFRS 8:
            IAS 1:
            IAS 7:
            IAS 10:
            IAS 17:
            IAS 23:
            IAS 27 (Revised):
            IAS 28:
            IAS 31:
            IAS 32 and IAS 1:
            IAS 36:
            IAS 38:
            IAS 39 (amendment):
            IAS 39 (amendment):
            IAS 39:
            IFRS/IAS:
            IFRIC 9 (amendment):
            IFRIC 14:
            IFRIC 15:
            IFRIC 16 (amendment):
            IFRIC 17:
            IFRIC 18:
The principal effects of the above standards and interpretations on the Group and Company’s annual financial statements in future will be as f

IFRS 2: Share-based Payments
The amendment to IFRS 2 clarifies the accounting treatment of a share-based payment transaction involving an entity’s own equity instrumen
equity instruments (treasury shares) to settle a share-based payment obligation, the transaction must always be accounted for as an equity se
conditions include only service conditions and performance conditions. Other features of a share-based payment are not vesting conditions. It
same accounting treatment. This amendment is not expected to have any impact on the Group and Company.




IFRS 3 (revised): Business Combinations
The amendment to IFRS 3 requires all transaction costs arising from a business combination to be expensed as they are incurred and contingen
share purchases, any gain or loss equal to the difference between the fair value and the carrying amount of the previously held equity interest
term “minority interest” with “non-controlling interest”. The amendments are expected to affect the Group’s accounting for, and disclosure of




IFRS 5: Non-current Assets Held-for-Sale and discontinued operations
The amendments to IFRS 5 address the following three issues and are effective from the following dates:
– Plan to sell the controlling interest in a subsidiary (effective 1 July 2009);
– Amendments resulting from IFRIC 17 for assets held for distribution to owners (effective 1 July 2009); and
– Disclosures of non-current assets (or disposal groups) classified as held-for-sale or discontinued operations (effective 1 January 2010).
This amendment clarifies the fact that the disclosure requirements in standards other than IFRS 5 do not generally apply to non-current assets
The abovementioned amendments are not expected to have a material impact on the Group and Company.
IFRS 7: Financial Instruments: Disclosures
The amendments to IFRS 7 increase the disclosure requirements about fair value measurement and reinforces existing principles for disclosure
disclosure and requires some specific quantitative disclosures for financial instruments in the lowest level of the hierarchy. In addition the ame
requiring a separate liquidity risk analysis for derivative and non-derivative financial liabilities. The amendments to IFRS 7 are only expected to
its financial results.



IFRS 8: Operating Segments
IFRS 8, which will replace IAS 14: Segment Reporting , requires an entity whose debt or equity instruments are traded in a public market or tha
other regulatory organisation for the purposes of issuing any class of instruments in a public market, to report financial and other descriptive i
financial information should be reported on the same basis as is used internally for evaluating operating segment performance and deciding h
disclosure of information about segment assets becomes effective for annual periods beginning on or after 1 January 2010. IFRS 8 will have no
in a public market, nor does it intend to file its annual financial statements with a securities commission or other regulatory organisation for th




IAS 1: Presentation of Annual Financial Statements (revised)
The latest amendment to IAS 1 requires an entity to present all non-owner changes in equity either in one statement of comprehensive incom
income. All owner changes in equity are, and will continue to be, recognised in a statement of changes in equity. These changes are not expec
disclosure provided in the Group and Company’s annual financial statements.



IAS 7: Statement of Cash Flows
The amendment to IAS 7 requires an entity to classify cash flows from assets held for rental as operating activities. In addition, it outlines the r
7 are only expected to have an impact on the Group and Company’s disclosure and are not expected to have an impact on its financial results.


IAS 10: Events After the Reporting Date (effective 1 July 2009)
The amendment to IAS 10 clarifies the fact that dividends declared (i.e. appropriately authorised and no longer at the discretion of the entity)
not be recognised as a liability at the reporting date as no obligation to pay the dividend exists at that date. Therefore, in these circumstances,
amendment is not expected to have any impact on the Group and

Company’s results.
IAS 17: Leases (effective 1 January 2010)
The amendment to IAS 17 clarifies that leases of land must be classified as either “finance” or “operating” in accordance with the general princ
indefinite useful life to be classified as operating leases. This amendment is not expected to have any impact on the Group and Company’s res

IAS 23: Borrowing Costs (amended)
The amendment to IAS 23 requires the capitalisation of borrowing costs as part of the cost of a qualifying asset. Previously, a reporting entity h
amendment will have no impact on the Group and Company’s annual financial statements.


IAS 27 (revised): Consolidated and Separate Annual Financial Statements and Accounting for Investments in Subsidiaries (effective from 1 July 2

The amendments to IAS 27 primarily relate to accounting for non-controlling interests and the loss of control of a subsidiary. The revised stand
there is no change in control. They will no longer result in goodwill or gains or losses. The standard also specifies the appropriate accounting tr
and a gain or loss is recognised in profit or loss. The amendments to IAS 27 are not expected to have a significant impact on the Group and Com



IAS 28: Investments in Associates
The amendments to IAS 28 require certain disclosures to be made when investments in associates are accounted for at fair value through prof
changes to IFRS 3: Business Combinations . The amendments to IAS 28 are not expected to have a significant impact on the Group and Compan



IAS 31: Interest in Joint Ventures
The amendments to IAS 31 require certain disclosures to be made when interests in jointly controlled entities are accounted for at fair value th
result of changes to IFRS 3: Business Combinations . The amendments to IAS 31 are not expected to have a significant impact on the Group and



IAS 32 and IAS 1 – Amendment to IAS 32 Financial Instruments: Presentation and IAS 1: Presentation of Annual Financial Statements – Puttable

The amendments to IAS 32 and IAS 1 require entities to classify the following types of financial instruments as equity, provided they have part


a) Puttable financial instruments (for example, some shares issued by co-operative entities); and
b) Instruments, or components of instruments, that impose on the entity an obligation to deliver to another party a pro rata share of the net a
issued by limited life entities).
Additional disclosures are required about the instruments affected by the amendments. The amendments to IAS 32 and IAS 1 are not expected


IAS 36: Impairment of Assets (effective 1 January 2010)
The amendment to IAS 36 clarifies the unit of accounting that must be used for goodwill impairment testing. This amendment is not expected

IAS 38: Intangible Assets (effective 1 July 2009)
The amendments to IAS 38 outline the additional consequential amendments arising from the revisions to IFRS 3 and also more clearly define
business combination. These amendments are not expected to have a material impact on the Group and Company’s annual financial statemen

IAS 39 (amendment): The Fair Value Option
This amendment to IAS 39 further clarifies when financial instruments can be designated at fair value through profit or loss. The designation o
significantly reduces accounting mismatches in measurement or presentation, or where the financial instrument is managed and their perform



 This amendment is not expected to have a material impact on the Group and Company’s annual financial statements.


IAS 39 (amendment): Cash Flow Hedge Accounting of Forecast Intra-group Hedge Transactions
This amendment to IAS 39 allows for the designation as a hedged item in the consolidated annual financial statements of the foreign currency
is not expected to have a material impact on the Group and Company’s annual financial statements.


IAS 39: Financial Instruments: Recognition and Measurement
This amendment to IAS 39 prohibits the classification of financial instruments into or out of the fair value through profit or loss category after
not considered to be a reclassification for this purpose and it has also removed references to the destination of hedging instruments at the seg
Company’s annual financial statements.

IFRS/IAS Annual Improvements Project
As part of its first annual improvements project, the IASB has issued its edition of annual improvements to existing international financial repo
clarify and improve existing accounting standards. The improvements include those involving terminology or editorial changes with minimum e
are not expected to have a significant impact on the Group and Company’s results.



IFRIC 9 (amendment): Reassessment of Embedded Derivatives
The amendment to IFRIC 9 stipulates that an entity shall assess whether an embedded derivative is required to be separated from the host con
the purpose of this assessment, paragraph 11(c) of IAS 39 shall not be applied (i.e. the hybrid (combined) contract shall be treated as if it had n
unable to make this assessment, the hybrid (combined) contract shall remain classified at fair value through profit or loss in its entirety. This am
statements.



IFRIC 14: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
IFRIC 14 addresses the interaction between minimum funding requirements and the limits on the measurement of a defined benefit asset. Wh
benefits available to them through refunds or reductions in future contributions. This interpretation is not expected to have any impact on the



IFRIC 15: Agreements for the Construction of Real Estate
IFRIC 15 addresses diversity in accounting for real estate sales. Some entities recognise revenue in accordance with IAS 18: Revenue, and othe
Contracts . Specifically, IFRIC 15 clarifies whether sale agreements entered into before construction is completed should be regarded as constr
applying IAS 18 to real estate sales. This interpretation is not expected to have any impact on the Group and the Company.



IFRIC 16 (amendment): Hedges of a Net Investment in a Foreign Operation
IFRIC 16 provides guidance on identifying the foreign currency risks that qualify as a hedged risk in the hedge of a net investment in a foreign o
of a net investment in a foreign operation can be held to qualify for hedge accounting. Thirdly, it provides guidance on how an entity should de
instrument and the hedged item. This interpretation is not expected to have any impact on the Group and Company’s annual financial stateme



IFRIC 17 (amendment): Distributions of Non-cash Assets to Owners
IFRIC 17 applies when the reporting entity distributes non-cash assets to owners or when owners are given a choice of taking cash in lieu of no
annual financial statements.
IFRIC 18: Transfers of Assets from Customers
IFRIC 18 clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property, plant and equipme
customer with ongoing access to a supply of goods or services (such as a supply of electricity, gas or water). This interpretation is not expected



The adoption of the standards and interpretations set out above will be implemented in accordance with their transitional provisions.

Basis of consolidation
The consolidated annual financial statements incorporate the annual financial statements of the Company , its subsidiaries, associates and join


Investments in subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their
rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether



The results of subsidiaries are consolidated from the date on which the Group acquires effective control. Consolidation is discontinued from th
for in the statement of comprehensive income.
The Group uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the
date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assume
terms of IFRS 3: Business Combinations , irrespective of the extent of any non-controlling interest.



The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If th
difference is recognised directly in the statement of comprehensive income.

The interest of minority shareholders in the acquiree is initially measured at their proportion of the net fair value of the assets, liabilities and c
subsidiaries are identifiable separately from the Group’s equity therein. Non-controlling interest consists of the amount of those interests at th
the combination. Losses attributable to non-controlling shareholders in excess of their interest in the subsidiary’s equity are allocated against t
make an additional investment to cover the losses.



All intra-group transactions, balances, income and expenses are eliminated on consolidation. Subsidiaries’ accounting policies have been chan


The Company classifies its investments in subsidiaries as at fair value through profit or loss financial instruments in accordance with IAS 39 – Fi
evaluates these investments on a fair value basis.


Investments in associates
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 2
operating policy decisions of the investee but has no control or joint control over those policies.


The results and assets and liabilities of associates are incorporated in these annual financial statements using the equity method of accounting
accordance with IFRS 5: Non-current Assets Held-for-Sale and Discontinued Operations . Under the equity method, investments in associates a
acquisition changes in the Group’s share of the net assets of the associates, less any impairment in the value of individual investments. Post-ac
long-term interest that, in substance, form part of the Group’s net investments in associates, are not recognised unless the Group has incurred
the income statement.




Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities o
included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s sh
acquisition, after reassessment, is immediately recognised in the statement of comprehensive income.



Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. A
policies adopted by the Group.


The Company classifies its investments in associates at fair value through profit or loss financial instruments in accordance with IAS 39 due to t


Interest in joint ventures
Joint ventures are entities where control is shared equally with a third party. Under the terms of these arrangements, the strategic financial an
the parties sharing control.
The Group’s interest in joint ventures are accounted for on the proportionate consolidation method, except when the investment is classified
consolidation method, the Group’s attributable share of assets, liabilities, reserves, income, expenses and cash flows of the joint ventures are
The results of the joint ventures are included from the effective date of acquisition to the effective date of disposal.



Inter-group transactions are eliminated to reflect only the other joint venture partners’ share of amounts due to or from the Group.
The Company classifies its investments in joint ventures at fair value through profit or loss financial instruments in accordance with IAS 39 due
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquire
recognised at cost as a separate asset. Goodwill is tested annually for impairment and is carried at cost less any accumulated impairment losse
the entity sold.

Goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination for the purpose o
primary reporting segment.
Cash-generating units to which the goodwill has been allocated are tested for impairment annually, or more frequently when there is an indica
than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit
in the unit. An impairment loss for goodwill is not reversed in a subsequent period.



The Group’s policy for goodwill arising on acquisition of an associate is described under “Investments in associates” above.




Foreign currencies
General
Foreign assets and liabilities are initially recorded at the spot rate and translated into South African Rand at the exchange rates ruling at the sta
African Rand at the average exchange rate for the year. Gains or losses arising from the settlement of such transactions and from the translatio
statement of comprehensive income.


Functional and presentation currency
The individual annual financial statements of each Group entity are presented in the currency of the primary economic environment in which t
presented in South African Rands, which is the Company’s functional currency and the Group’s presentation currency. All financial information
indicated.

Transactions and balances
Transactions in foreign currencies are translated into the functional currency at the foreign exchange rate ruling at the date of the transaction.
different to the functional currency are translated into the functional currency at the ruling rate at that date. Foreign exchange gains or losses
monetary items are reported as part of the fair value gain or loss.

Group companies
For the purposes of presenting consolidated annual financial statements, the assets and liabilities of the Group’s foreign operations are transla
exchange rates ruling at the statement of financial position date. Income and expense items are translated at the average exchange rates for t
exchange rates ruling at the date of the various transactions are used. All translation differences arising from the translation and consolidation
foreign currency translation reserve. Such translation differences are recognised in the income statement in the period in which the foreign op
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operatio
the Group entities has the currency of a hyperinflationary economy.



Property and equipment
Property and equipment is initially recorded at cost. Costs include all expenditure that is directly attributable to the acquisition of an asset and
refundable purchases taxes but excluding trade discounts and rebates. Maintenance and repairs expenditure, which neither adds to the value
in the statement of comprehensive income.


Each category of property and equipment is depreciated on the straight-line basis at rates considered appropriate to reduce its cost to net rea
and equipment are as follows:
Motor vehicles
Office equipment
Computer equipment
Leasehold improvements
Owner-occupied properties
Land is not depreciated.
There have been no changes to useful lives from those applied in the previous financial year.
Property
Owner-occupied properties are carried at fair value less subsequent depreciation for buildings. The fair value is determined every three years b
Decreases that offset previous increases of the same asset are charged against the non-distributable reserve. All other decreases are charged
on the revalued carrying amount of the asset charged to the statement of comprehensive income and depreciation based on the asset’s origin
earnings.


If an owner-occupied property becomes an investment property because its use has changed, any difference arising between the carrying amo
revaluation of property. If a fair value gain reverses a previous impairment loss, the gain is recognised in the statement of comprehensive inco
comprehensive income is transferred to retained earnings.


Equipment
Equipment is reflected at cost less accumulated depreciation and impairment losses. Depreciation is provided on the straight-line basis at rate
estimated useful life.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that fu
can be reliably measured. All other repairs and maintenance expenditure is charged to the statement of comprehensive income during the fina



The assets’ residual values and useful lives are reviewed at each statement of financial position date and adjusted if appropriate. An asset’s ca
is greater than its estimated recoverable amount.


Gains or losses on disposal are determined by comparing the asset’s proceeds to its carrying amount and are included in the statement of com
surplus are transferred to retained earnings.



Investment property
Property held either to earn rental income or for capital appreciation, or for both and which is not occupied by companies in the Group is class
buildings.
Investment property is treated as a long-term investment and is measured initially at cost, including transaction costs. After initial recognition,
external, independent professional valuer every three years.


If the open-market valuation information cannot be reliably determined, the Group uses alternative valuation method such as recent prices on
credited or charged directly to the statement of comprehensive income in the year in which they are identified. On disposal of investment pro
statement of comprehensive income.


If an investment property were to become owner occupied, it would be reclassified as property and equipment and would be fair valued at the



Intangible assets
Distribution rights
Distribution rights represent the right to distribute products through an established distribution network. These rights are amortised over the


Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These



Non-derivative financial instruments
Financial assets
Investments
The Group and Company classify its investments in debt and equity securities into the following categories: financial assets at fair value throug
The classification is dependent on the purpose for which the investments were acquired. Management determines the classification of its inve



            Financial assets at fair value through profit or loss
            A financial asset is classified in this category at inception if acquired principally for the purpose of selling in the short term, if it form
            so designated by management in terms of the Group and Company’s long-term investment strategy.

            For the purpose of these annual financial statements, short term is defined as any period less than 12 months. Investments which
            investments held for long term. For the purpose of these annual financial statements, long term is defined as any period in excess


            Held-to-maturity investments
            Non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group and the Company have a po
            are included in non-current assets, except for maturities within 12 months from the statement of financial position date which are
            fair value through profit or loss or available-for-sale.



            Available-for-sale financial assets
            Financial assets that are intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity o
            unless management has the express intention of holding the investments for less than 12 months from the statement of financial p
            current assets. Available-for-sale investments include listed and unlisted shares, unit trusts, deposits and money market securities.



            Loans and receivables
            Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active ma
            directly to a debtor, other than those that are originated with the intention to sell immediately or in the short term or shares desig
            classified in this category and are reviewed for impairment as part of the overall impairment review of loans and receivables.



            Other
            Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairme

Recognition and measurement
Financial instrument purchases and disposals are initially measured at cost and are recognised using the trade date accounting. The trade date
Subsequent to initial measurement, financial assets at fair value through profit or loss and available-for-sale financial assets are carried at fair v
using the effective interest method, less any provision for impairment.



A provision for impairment of held-to-maturity investments and loans and receivables is established when there is objective evidence that the


Financial instruments are derecognised when the rights to receive cash flows from the investments have expired or where they have been tran
ownership.
Gains or losses
Realised and unrealised gains or losses arising from changes in the fair value of investments classified as fair value through profit or loss are inc
from changes in the fair value of available-for-sale investments are recognised in the statement of comprehensive income. When investments
included in the income statement as net realised gains or losses on non-derivative financial instruments.



Fair value
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Fin
transaction costs are expensed in the statement of comprehensive income.

The fair value of investments is based on quoted bid prices for listed instruments and collective investment schemes are valued using the repu
unlisted investments are estimated using applicable cash flow models or price/earnings ratios refined to reflect the specific circumstances of e
investment is carried at cost less any impairment.


Offsetting
Where a legally enforceable right to offset exists for recognised financial assets and financial liabilities and there is an intention to settle the lia
offset.
Financial liabilities
Financial liabilities, including borrowings, are initially measured at cost, net of transaction costs. These liabilities are subsequently measured at
an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the corresponding interest e
cash payments through the expected life of the financial liability or where appropriate, a shorter period.

In accordance with the definition of a financial liability contained in IAS 32 Financial Instruments: Presentation , the Group and Company classi

 Borrowings;
 Reinsurance liabilities;
 Trade and other payables;
 Insurance liabilities; and
Provision for liabilities arising from a contractual relationship with existing Group and Company staff.

Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at
recent market transactions and valuation techniques. All derivatives are carried as assets when fair value is positive and as liabilities when fair
are recognised immediately in the statement of comprehensive income.




Impairment of tangible and intangible assets excluding goodwill
The Group and the Company assesses at each statement of financial position date whether there is objective evidence that a financial asset or
carried at fair value through profit or loss is impaired and impairment losses are incurred only if there is objective evidence of impairment as a
event’) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be relia
observable data that comes to the attention of the Group and the Company about the following events:




Significant financial difficulty of the issuer or debtor;
A breach of contract, such as default or delinquency in payments;
Adverse changes in the payment status of issuers or debtors; and
Economic conditions that correlate with defaults on assets in the Group and the Company.
All impairment losses are recognised in the statement of comprehensive income as soon as they are identified.
If there is objective evidence that an impairment loss has been incurred on loans and receivables carried at amortised cost and available-for-sa
amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The carrying am
comprehensive income.


For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics.
The Group and the Company assess at each statement of financial position date whether there is objective evidence that an available-for-sale
decline in the fair value of the security below its costs. If any such evidence exists, the cumulative loss, which is measured as the difference be
comprehensive income and recognised in the statement of comprehensive income.



If in a subsequent period the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after
recognised in the statement of comprehensive income, unless the relevant asset is carried at a revalued amount, in which case the reversal of



Non-financial assets that ar e subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to s



Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash on hand, deposits held on call with banks and investm
amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are measured at fair value by reference t




Share capital
Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue o



Insurance contracts
Classification of insurance contracts
The Group and Company issue contracts which transfer insurance risk or financial risk or, in some cases, both.
Insurance contracts are those contracts under which the Group and Company (as insurer) accept significant insurance risk from another party
uncertain future event (the insured event) adversely affects them. Such contracts may also transfer financial risk. As a general guideline, the G
the occurrence of an insured event that are at least 10% more than the benefits payable if the insured event did not occur.



Receipts and payments under insurance contracts are accounted for in the statement of comprehensive income in accordance with the requir


Investment contracts are those contracts that transfer financial risk with no significant insurance risk. Financial risk is the risk of a possible futu
foreign exchange rate, index of prices or rates, credit rating or credit index or other variable, provided, in the case of a non-financial variable th



Recognition and measurement of insurance contracts
Receipts and payments under investment contracts are not classified as insurance transactions in the statement of comprehensive income but
deposit’s liability recognised in the statement of financial position represents the expected amounts payable to the holders of the investment



The Group and Company classify financial guarantee business as insurance contracts.
Management of insurance and financial risk
As is stated above, the Group and Company issue contracts that transfer insurance risk or financial risk, or in some instances both. This section


Premiums
Gross premiums comprise the premiums on contracts entered into during the year, irrespective of whether they relate in whole or in part to a
added tax. Premiums written include adjustments to premiums written in prior periods.

Outward reinsurance premiums are recognised as an expense in accordance with the pattern of indemnity received. Reinsurance commissions


Unearned premium provision
Premiums are earned from the date the risk attaches, over the indemnity period, based on the pattern of the risk underwritten. Unearned pre
risks that have not expired by the end of the financial year, are calculated on a time-proportionate basis for even risk contracts and other base



Deferred acquisition costs
Deferred acquisition costs consist of commissions and other variable costs directly connected with acquisition or renewal of insurance contrac
the policies, from one to five years. Deferred acquisition costs are regularly tested for impairment using the liability adequacy test as per IFRS



Claims incurred
Claims incurred consist of claims and claims handling expenses paid during the financial year, together with the movement in the provision for
The provision for outstanding claims comprise the Group and Company’s estimate of the undiscounted ultimate cost of settling all claims incur
anticipated reinsurance recoveries are disclosed separately as assets.

Adjustments to the amounts of claims provisions established in prior years are reflected in the annual financial statements for the period in wh

Unexpired risk provision and liabilities and related assets under liability adequacy tests
Provision is made for unexpired risks where the expected value of claims and expenses attributable to the unexpired periods of policies in forc
such policies.
Liability adequacy tests are performed at statement of financial position date to ensure the adequacy of the liability raised. Current best estim
performing these tests. Any deficiency is recognised in income for the year (unexpired risk provision).


Contingency reserve
A reserve is held for the full amount of the contingency reserve as required by the regulatory authorities in South Africa and Namibia.
Transfers to and from this reserve are treated as appropriations of retained income.
Reinsurance
The Group and Company cede reinsurance in the normal course of business for the purpose of limiting its net loss potential. Reinsurance arran
and claims reimbursed are reflected in the statement of comprehensive income and statement of financial position separately from the gross


Only those contracts which give rise to a significant transfer of insurance risk are accounted for as reinsurance. Amounts recoverable under su
transfer significant insurance risk are accounted for as financial assets. Amounts recoverable under reinsurance contracts are assessed for imp



Such assets are deemed impaired if there is objective evidence, as a result of an event that occurred after its initial recognition, that the Group
the amounts that the Group and Company will receive from the reinsurer. Impairment losses are recognised in the statement of comprehensiv


Salvage and subrogation reimbursements

Some insurance contracts permit the Group and Company to sell property acquired in settling a claim. The Group and Company may also have
and subrogation reimbursements are considered as an allowance in the measurement of the liability for claims.



Revenue
The accounting policy in relation to revenue from insurance contracts is disclosed in note 1.12.
Interest income and expenditure
Interest income and expenditure for all interest-bearing financial instruments, including financial instruments measured at fair value through p
comprehensive income using the effective-interest method. When a receivable is impaired, the Group and Company reduce the carrying amou
interest rate of the instrument and continues unwinding the discount as interest income.



Dividend income
Dividend income for available-for -sale equities is recognised when the right to receive payment is established, which is the last day of registra

Rental income
Rental income from investment properties is recognised in the statement of comprehensive income on a straight-line basis over the term of ea



Employee beneifts
Pension and provident scheme arrangements

The Group and Company operate defined contribution pension and provident funds. Contributions to the funds in respect of present service a
salary increases and any other changing circumstances. The Group and Company have no further obligations once the contributions have been


Profit-sharing and bonus plans
The Group and Company operate several bonus and profit share plans for the benefit of employees. A provision is recognised when the Group
has created a constructive obligation to do so.

Leave pay
Employee entitlements to annual leave and long-service leave are recognised when they accrue to employees. Provision is made for the estim
financial position date.
Termination benefits
Termination benefits are payable when an employee’s employment is terminated before the normal retirement date or whenever an employe
recognise termination benefits in the statement of comprehensive income when it is demonstratively committed to either terminating the em
withdrawal or where it is committed to providing termination benefits as a result of an offer made to encourage voluntary redundancy.



Equity compensation plan
The Group and Company operate a cash-settled equity compensation plan for the benefit of black employees of the Group and Company. The
immediately or over the vesting period. The liability is measured annually until settled and any changes in value are recognised in profit or loss

Other post-employment obligations
The Group and Company have no obligation for post-retirement medical benefits in respect of pensioners, former employees or current emplo



Taxation
Income taxation on the profit or loss for the period comprises current and deferred taxation. Taxable profit differs from profit as reported in th
other years and it further excludes items that are never taxable or deductible. Income tax is recognised in the statement of comprehensive inc
recognised in equity.


Income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position da
income tax liability is settled.

Current taxation
Current taxation is the expected taxation payable using taxation rates enacted at statement of financial position date, including any prior year


Deferred taxation
Deferred taxation is provided at current tax rates, on the comprehensive basis, using the statement of financial position liability method in res
carrying amounts in the annual financial statements. Deferred tax liabilities are recognised for all taxable temporary timing differences and de
against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.




The carrying amount of deferred tax assets is reviewed at each statement of financial position date and reduced to the extent that it is no long
recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities a
to settle its current tax assets and liabilities on a net basis.


Dividend tax (formerly secondary tax on companies (STC))

Dividend tax is charged to the statement of comprehensive income when the related dividend is declared. Unused STC credits are recognised a



Provisions
Provisions are recognised when the Group and Company have a present legal or constructive obligation of uncertain timing or amount as a res
required to settle the obligation and a reliable estimate of the amount of the obligation can be made.


Provisions are measured as the present value of management’s best estimate of the expenditure required to settle the obligation at the repor
discount rate that reflects the current market assessments of the time value of money and, where appropriate, the risks specific to the liability


Provisions are not recognised for future operating losses. When there are a number of similar obligations, the likelihood that an outflow will be
provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small



Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any d
comprehensive income over the period of the borrowing using the effective interest rate method.



Operating leases
Leases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified as operating leases. Payments m
line basis over the period of the lease. When an operating lease is terminated, any payment required by the lessor by way of a penalty is recog




 Critical accounting estimates and judgements
The Group and Company make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the annual
financial statements.

Claims incurred
The estimation of the ultimate liability arising from claims made under insurance contracts is the Group and Company’s most critical
accounting estimate. These estimates rely on the assumption that past experience adjusted for the effect of current developments and likely
trends is an appropriate basis for predicting future events. The Group and Company’s estimates and assumptions are reviewed and updated
and the tools with which it monitors and manages risk are refined as new information becomes available.

The Group and Company’s processes for determining significant reserving assumptions are outlined in note 21.

Valuation of unlisted investments
The Group and Company determine the fair value of its unlisted investments using well established valuation techniques. These techniques
include discounted cash flow analysis and price earnings ratio and net asset value methodologies. Where the underlying investments of an
investment holding company are property or listed investments, the Company is valued on the net asset value basis which reflects the fair
value of the underlying investments.
Insurance companies are valued on a price earnings ratio method and underwriting managers are valued on a discounted cash flow basis.
The capital asset pricing model was used to determine the discount rate, where the RSA R153 rate of 9% was used as a risk-free rate with a
market risk rate of 6%. Appropriate discount rates or price earnings ratios are applied to cash flows or earnings for each company to reflect
the relative investment risk and the following factors are considered:

Risk class exposure of the underwriting manager;
Established history;
Dependency on management; and
Impact of owner managed business.

Price earnings ratios ranging from 3 to 10.5 were used, having adjusted for these factors.

In using the price earnings valuation technique the current profit of the Company is multiplied by an earnings factor. The potential future
earnings of the Company, current interest rate cycle, current business environment and management of the Company are considered in
determining the earnings factor.

In using discounted cash flow analysis the best estimate of future cash flows of the company are used. The current interest rate cycle, risk-free
rate and any other relevant economic or business factors are considered in determining the discount rate.

The number and the diversity of investments makes the disclosure of a sensitivity analysis inappropriate.

The year-end valuations are approved by the Treasury and Investment Committee.
Financial risk management
Introduction

The Group and Company’s principal objectives are to ensure that it will be able to continue as a going concern and to provide value to its
shareholders and policyholders through a long-term sustainable real return on capital as a result of managing its business risks within an
appropriate risk framework.

The Board of Directors has overall responsibility for establishing, monitoring and communicating the Group and Company’s risk management
framework, including defining what constitute “appropriate” risk and control policies, and for ensuring that sufficient capital is held to support
the taking of risk. In order to discharge some of its responsibility, the Board has established the Audit, Risk and Compliance Committee, which
is responsible for developing and monitoring the Group and Company’s risk management policies. The committee reports regularly to the
Board on its activities.

The Group and Company’s risk management policies were established to identify and analyse the risks it faces, to set appropriate risk limits
and controls and to monitor risk and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
both market conditions and the Group and Company’s activities. The Group and Company, through its training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all employees, brokers and partners understand
their roles and obligations.

The Group and Company’s Audit, Risk and Compliance Committee oversees how management monitors compliance with its established risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group
and Company. The Audit, Risk and Compliance Committee is assisted in its oversight role by Internal Audit, which undertakes both regular and
ad hoc reviews of risk management controls and procedures, the results of which are reported to stakeholders in management and to the
Group Audit, Risk and Compliance Committee.

Exposure to risk arising from financial instruments
The Group and Company have exposure to the following risks from its use of financial instruments:
Credit risk;
Liquidity risk; and
Market risk.

This section presents information about the Group and Company’s exposure to each of the above risks, the Group and Company’s objectives,
policies and processes for measuring and managing risk, and the Group and Company’s management of capital. Further quantitative
disclosures are included throughout these consolidated annual financial statements.

The Board of Directors has overall responsibility for the establishment and oversight of the Group and Company’s risk management framework
The Board has established the Group Audit, Risk and Compliance Committee, which is responsible for developing and monitoring the Group
and Company’s risk management policies. The committee reports regularly to the Board of Directors on its activities.

The Group and Company’s risk management policies are established to identify and analyse the risks it faces, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group and Company’s activities. The Group and Company, through its training and management standards and
procedures, aim to develop a disciplined and constructive control environment in which all employees, intermediaries and partners understan
their roles and obligations.

3.2.1 Credit risk
Credit risk is the risk of financial loss to the Group and Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Key areas where the Group and Company are exposed to credit risk are:

amounts due from insurance policyholders;
amounts due from underwriting agencies and partners;
amounts due from insurance contract intermediaries and third-party recoveries;
investments and cash equivalents;
reinsurers’ share of insurance liabilities; and
amounts due from reinsurers and third parties in respect of claims already paid.

The Group Audit, Risk and Compliance Committee oversees how management monitors compliance with the Group and Company’s risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group
and Company. The Group Audit, Risk and Compliance Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes
both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group Audit, Risk and
Compliance Committee.

Insurance debtors, loans and other receivables
The Group and Company limit the levels of credit risk that it accepts by placing limits on its exposure to a single counterparty or groups of
counterparties, product, and as well as to geographical and industry segments. The levels are subject to annual or more frequent reviews.
Internal Audit also makes regular reviews to assess the degree of compliance with the Group and Company’s procedures on credit.

The Group and Company’s exposure to credit risk is influenced mainly by the individual characteristics of each intermediary and the
portfolios that they administer. A significant amount of the Group and Company’s insurance business is written through and administered
by intermediaries, the majority of which have been transacting with the Group and Company for most of their existence. The credit control
function forms an integral part of the business relationship to the extent that the intermediaries are closely monitored on many levels,
including product profitability and return on capital. The Group and Company is also protected by guarantees provided by the intermediary
guarantee facility for the non-payment of premiums collected by intermediaries.

The Group and Company provide for impairment in respect of its insurance debtors, loans and other receivables. The main components of
this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for
groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based o
historical data of payment statistics for similar financial assets.

Investments
The Group and Company have a dedicated Treasury and Investment Committee that monitors and approves the investment mandates
stipulated by the Board. The Group and Company, through the said mandates, limits its exposure to credit risk through diversification and by
mainly investing in liquid securities and various counterparties that have a minimum credit rating of A1 from Standard & Poor’s and A from
Moody’s, or where such ratings are not available, by internal analysis according to strict criteria. Given these high credit rating requirements,
management does not expect any counterparty to fail to meet its obligations.

The Group and Company seek to avoid concentration of credit risk to groups of counterparties, asset management houses, to business sectors
product types, and geographical segments by diversifying the investment mandate to various asset management houses and enforcing a strict
application of mandates. Financial assets are graded and invested according to this framework and the Treasury and Investment Committee
regularly reviews compliance to that effect.
The analysis of credit quality of the Group and Company’s assets is disclosed in note 4 on pages 37 to 48 of the annual financial statements.

Reinsurance
Reinsurance is used to manage insurance risk. Under the terms of reinsurance agreements, reinsurers agree to reimburse the ceded amount t
the insurer in the event that a gross claim is paid. However, the Group and Company remain liable to its policyholders regardless of whether
the reinsurer meets the obligations it has assumed. Consequently the Group and Company are exposed to credit risk.

The Group and Company has exposure to concentration risk with individual reinsurers due to the nature of the reinsurance market and
the restricted range of reinsurers that have acceptable credit ratings. The creditworthiness of reinsurers is considered annually by reviewing
their financial strength prior to finalisation of any contract. The Group and Company’s largest reinsurance counterparty is Hannover Re. This
exposure is monitored on a regular basis for any shortfall in the claims history to verify that the contract is progressing as expected and that no
further exposure for the Group and Company will arise.

The Group and Company monitor the financial condition of reinsurers on an ongoing basis and review reinsurance arrangements periodically.
The Group and Company have a Reinsurance and Underwriting Committee that is responsible for setting the minimum security criteria for
acceptable reinsurance and monitoring the purchase of reinsurance against those criteria. When selecting a reinsurer the Group and Company
considers its security. This is assessed from public rating information and from internal investigations.

 Liquidity risk
Liquidity risk is the risk that the Group and Company will not be able to meet its financial obligations as they fall due. The Group and
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group and
Company’s reputation.

The Group and Company are exposed to daily calls on its available cash resources mainly from claims arising from short-term insurance
contracts. The Treasury and Investment Committee sets limits on the minimum proportion of maturing funds to be available to meet such call
to cover claims at unexpected levels of demand.

Based on actuarial modelling of historical and future expected trends, the Group and Company have estimated the probable cash outflows
associated with general insurance liabilities. The maturity analysis of the gross insurance liabilities is set out on note 4.2 on pages 42 to 44.
The maturity profile of the related insurance and investment assets is expected to be similar to the profile of the liabilities. The Group and
Company have taken into account that the unearned premium provision, which will be recognised as earned premium in the future, will
not lead to claim cash outflows equal to this provision. This has been taken into account in estimating future cash outflows associated with
insurance liabilities.

Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group and
Company’s income or the value of its holdings of insurance assets and financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while at the same time optimising the Group and Company’s return
on investment.

Financial assets and liabilities that are utilised to support the Group and Company’s capital base are fully exposed to the relevant elements of
market risk. In summary, the key components of market risk are:

a) Currency risk
Currency risk is the risk arising from fair value and/or future cash flows of a financial instrument fluctuating from their expected values as a
result of changes in exchange rates. This can arise from either a mismatch between currencies of assets or liabilities or supporting capital or th
trading currency of the local entity being different to other Group and Company’s reporting currency.

The Group is exposed to foreign currency risk for transactions that are denominated in a currency other than Rand. This exposure is limited
to the operations of the Australian, Mozambique and Botswana foreign subsidiaries, transactions with foreign reinsurers, debt securities
and equity investments in foreign companies. These foreign investments were made for the purposes of obtaining favourable international
exposure to foreign currency and are monitored by the Treasury and Investment Committee. The Group and Company does not take cover on
foreign currency transactions and balances as the net exposure is considered minimal.

The table in note 4.3.1 on page 45 of these annual financial statements illustrates the Group split of assets and liabilities by major currency.

b) Interest rate risk
Interest rate risk is the risk arising from fair value and/or future cash flows of a financial instrument fluctuating from their expected values as a
result of changes in market interest rates.

Changes in market interest rates have a direct effect on the contractually determined cash flows associated with floating rate financial
assets and liabilities and on the fair value of fixed interest rate instruments in the Group and Company’s investment portfolios. The Group
and Company’s fixed interest rate investments do not give rise to significant interest rate risk. Furthermore, the majority of interest sensitive
investments are short-term, therefore the impact is minimal. The Group and Company do not use derivative instruments to manage this risk
other than an ongoing assessment by the Treasury and Investment Committee of market expectations within the South African market to
determine an optimal asset allocation in interest sensitive investments.

Insurance liabilities are not directly sensitive to the level of market interest rates, as they are not discounted and contractually non-interestbea
The sensitivity analysis for interest rate illustrates how changes in the fair values or future cash flows of financial instruments will
fluctuate because of changes in the market interest rates at the reporting date.

c) Other market price (or equity) risk
Equity price risk is the risk arising from the actual fair value and/or the future cash flows from equities fluctuating from their expected values a
a result of changes in market prices and/or dividend amounts.

Equity price risk arises from listed, fair value through profit or loss, equity securities held on behalf of the policyholders and the shareholders.
The equity selection and investment analysis process is supported by a well developed research function utilising professional advisors. Within
these parameters, investments are managed with the objective of maximising policyholders’ returns while limiting risks to acceptable levels
within the framework of statutory requirements.

The Group and Company are assisted by external asset managers in this regard. In accordance with this strategy certain investments are
designated at fair value through profit or loss because their performance is actively monitored and they are managed on a fair value basis.
The Treasury and Investment Committee actively monitors equity assets, listed and unlisted, owned by the Group and Company, which include
some material shareholding in the Group and Company’s strategic partners. Concentrations of specific equity holdings are also monitored.
 Capital management
The Group and Company recognise share capital and premium, contingency reserve, non-distributable reserves, retained earnings and noncon
interest as capital. For internal management purposes the Group refers to the international basis of solvency (being the ratio of net
assets to net premiums) for short-term business.

In addition to the international basis, management uses the statutory solvency requirements as prescribed by the legislation in the territories i
which the Group and Company have operations, to monitor and manage the group’s capital resources.

The Group and Company’s objectives when managing capital are to:

comply with the insurance capital requirements required by the regulators of the insurance markets where the Group and Company
operate. The Group and Company manage their capital so as to maintain an international solvency ratio of 40% to 50%;
safeguard the Group and Company’s ability to continue as a going concern so that it can continue to provide returns for shareholders and
other stakeholders;
provide an adequate return to shareholders by pricing insurance contracts commensurately with the level of risk;
 ensure strong capital ratios are maintained in order to support the business and maximise shareholder value; and
 manage capital structure and make adjustments to it, in light of changes in economic conditions.

In each country in which the Group operate, the local insurance regulator specifies the minimum amount and type of capital that must be held
by each of the subsidiaries in addition to their insurance liabilities. The minimum required capital must be maintained at all times.
The Group and Company submit quarterly and annual returns to the Financial Services Board in terms of the Short-term Insurance Act,
1998 and is required at all times to maintain a statutory surplus asset ratio as defined in the Act. The returns submitted during the year
showed that the Company met the minimum capital requirements throughout the year. The operating subsidiaries also met their respective
solvency requirements.

Risk management

a) Exposure to credit risk
The carrying amount of insurance and financial assets represents the maximum credit exposure. The maximum exposure to credit risk at
the reporting date was:




            Group
            Financial assets
            Investments in associates
            Loans to associates
            Financial assets at fair value through profit or loss
            Financial assets held to maturity
            Investments in joint venture
            Derivative financial instrument
            Loans – interest-bearing
            Loans – non-interest-bearing
            Available-for-sale financial assets
            Other loans and receivables
            Cash and cash equivalents
            Insurance assets
            Insurance debtors
            Deferred acquisition costs
           Reinsurance assets
           Total
           Company
           Financial assets
           Investments in subsidiaries
           Loans to subsidiaries
           Investments in associates
           Loans to associates
           Investment in joint venture
           Financial assets at fair value through profit or loss
           Derivative financial instrument
           Loans – interest-bearing
           Loans – non-interest-bearing
           Other loans and receivables
           Cash and cash equivalents
           Insurance assets
           Insurance debtors
           Deferred acquisition costs
           Reinsurance assets
           Total

b) The Group and Company’s maximum exposure to credit risk by industry at the reporting date was as follows:




           Industry
           i) Listed investments
           Banks
           Basic resources
           Chemicals
           Construction and materials
           Financial services
           Food and beverages
           Healthcare
           Industrial goods and services
           Insurance
           International
           Mining
           Oil and gas
           Personal and household goods
           Real estate
           Retail
           Technology
           Telecommunications
           Unit trust
           Corporate debenture
              Other
ii) Bonds
Financial services
Telecommunications
Banks
   Government

There are no bonds held at Company level.

c) Credit rating
The following table provides information regarding the Group and Company’s aggregated credit quality of financial and insurance a
are neither past due nor impaired at the reporting date.




Group
2010
Investments in
associates
Loans to associates
Loans to joint venture
Listed investments
Bonds
Unlisted investments
Held-to-maturity
Available-for-sale
financial assets
Other loans and
receivables
Cash and cash
equivalents
Insurance assets
Premium debtors
Deferred acquisition
costs
  Reinsurance assets
  Total
2009
Investments in
associates
Loans to associates
Listed investments
Bonds
Unlisted investments
Held-to-maturity
Available-for-sale
financial assets
Derivative financial
instrument
            Other loans and
            receivables
            Cash and cash
            equivalents
            Insurance assets
            Premium debtors
            Deferred acquisition
            costs
              Reinsurance assets
              Total
            Company
            2010
            Investments in
            subsidiaries
            Loans to subsidiaries
            Investments in associates
            Loans to associates
            Loan to joint venture
            Listed investments
            Unlisted investments
            Other loans and
            receivables
            Cash and cash
            equivalents
            Insurance assets
            Insurance debtors
            Deferred acquisition costs
              Reinsurance assets
              Total
            2009
            Investments in
            subsidiaries
            Loans to subsidiaries
            Investments in associates
            Loans to associates
            Listed investments
            Unlisted investments
            Derivative financial
            instrument
            Other loans and
            receivables
            Cash and cash
            equivalents
            Insurance assets
            Insurance debtors
            Deferred acquisition costs
              Reinsurance assets
              Total

d) Financial assets that are neither past due nor impaired
The analysis of financial instruments that were neither past due nor impaired and individually impaired at the reporting date was




           2010
           Loans to subsidiaries
           Loans to associates
           Listed investments
           Unlisted investments
           Bonds at fair value
           Other loans and
           receivables
           Cash and cash
           equivalents
           Financial assets
           Premium debtors
           Reinsurance assets
           Insurance assets
           2009
           Loans to subsidiaries
           Loans to associates
           Listed investments
           Unlisted investments
           Other loans and
           receivables
           Cash and cash
           equivalents
           Financial assets
           Premium debtors
           Reinsurance assets
           Insurance assets

e) Age analysis of other loans and receivables and premium debtors that are past due but not impaired




           2010
           Other loans and
           receivables
           Premium debtors
           The Group and Company record impairment allowances for loans and receivables in a separate impairment allowance account.
           A reconciliation of the allowance for impairment losses for loans and receivables is as follows:

           The movement in the allowance for impairment in respect of loans and receivables and premium debtors for the Group and Comp
           during the year was as follows:




           Balance at beginning of year
           Collective impairment loss recognised
           Collective impairment loss recovered
           Balance at end of the year

4.2 Liquidity risk
4.2.1 Maturity profile on financial assets
The following tables detail the Group and Company’s contractual maturities of financial assets, including interest payments:




           Group
           2010
           Financial assets at fair value through profit or loss
           Available-for-sale financial assets
           Held-to-maturity financial assets
           Reinsurance assets
           Insurance, loans and other receivables
           Deferred acquisition costs
           Cash and cash equivalents

           2009
           Financial assets at fair value through profit or loss
           Available-for-sale financial assets
           Held-to-maturity financial assets
           Derivative financial instrument
           Reinsurance assets
           Insurance, loans and other receivables
           Deferred acquisition costs
           Cash and cash equivalents




           Company
             2010
             Financial assets at fair value through profit or loss
             Reinsurance assets
             Insurance, loans and other receivables
             Deferred acquisition costs
               Cash and cash equivalents

             2009
             Financial assets at fair value through profit or loss
             Derivative financial instrument
             Reinsurance assets
             Insurance, loans and other receivables
             Deferred acquisition costs
               Cash and cash equivalents



4.2.2 Maturity profile of financial liabilities




             Group
             2010
             Non-derivative financial liabilities
             Borrowings – non-interest-bearing
             Trade and other payables and employee benefits

             2009
             Non-derivative financial liabilities
             Borrowings – non-interest bearing
             Trade and other payables and employee benefits
             Shareholders for dividends

             Derivatives financial liabilities
             Derivatives

             Company
             2010
             Non-derivative financial liabilities
             Trade and other payables and employee benefits

             2009
             Non-derivative financial liabilities
             Trade and other payables and employee benefits
             Shareholders for dividends

             Derivatives financial liabilities
             Derivatives
4.2.3 Maturity profile of insurance laibilities
The following table details the Group and Company’s probable cash outflows associated with insurance liabilities:




           2010
           Claims reported and loss
           adjustment expenses
           Claims incurred but not yet
           reported
           Unearned premium provision
           Cash back reserve
           Unexpired risk reserve
           Life fund
           Policyholder liabilities
           Provision for claim fluctuations
           Experience account balance
           Reinsurance liabilities

           2009
           Claims reported and loss
           adjustment expenses
           Claims incurred but not yet
           reported
           Unearned premium provision
           Cash back reserve
           Unexpired risk reserve
           Provision for claim fluctuations
           Provision for premium refunds
           Expense provision
           Experience account balance
           Reinsurance liabilities



4.3 Market risk
4.3.1 Sensitivity analysis
The Group’s primary market exposure is to interest rate, equity price and currency risk.
Currency risk
The following significant exchange rates applied during the year:
Australian Dollar
Botswana Pula
Namibian Dollar
Mozambique Metical
A 10% increase/(decrease) in the ZAR against the relevant foreign
currencies at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2009.




2010
Australian Dollar
Botswana Pula
 Mozambique Metical

2009
Australian Dollar
Botswana Pula
 Mozambique Metical



There is no currency fluctuation effect on Company. The Company transacts the business in South African Rand. There is no curren
fluctuation effect on Namibian Dollar.

Interest rate risk
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:




Group
Variable rate instruments
Financial assets
Cash and cash equivalents
  Unit trusts

Company
Variable rate instruments
Financial assets
Cash and cash equivalents
  Unit trusts



The Group and Company’s fixed rate instruments are not exposed to interest rate risk. Therefore no sensitivity analysis is necessar
Sensitivity analysis for variable rate instruments of the Group and Company.

The Group’s investments in long-term debt and fixed income securities are exposed to fluctuations in interest rates. Exposure to in
monitored through several measures that include scenario testing and stress testing using measures such as duration.

The Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model
A change of 200 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by t
shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is pe
on 500 basis points for 2009.




Group
2010
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



2009
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



Company
2010
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity



2009
Cash and cash equivalents
Unit trusts
Net cash flow sensitivity

Equity price risk
Exposure to equity price risk

The Group and Company’s exposure to equity price risk at the reporting date was as follows:




Description of equity investments
Group
Ordinary shares
           Preference shares

           All of the Group’s listed equity investments are listed on the JSE Limited. For such investments classified a 5% increase in equity pr
           reporting date would increase equity and profit or loss by amounts as shown below. A 5% decrease in equity price should have had
           but opposite effect. The analysis is performed at the same basis for 2009.




           2010
           Ordinary shares – Listed
           Preference shares – Listed

           2009
           Ordinary shares – Listed
           Preference shares – Listed




           Description of equity investments
           Company
           Ordinary shares
           Preference shares



           All of the Company’s listed equity investments are listed on the JSE Limited. For such investments classified a 5% increase in equity
           reporting date would increase equity and profit or loss by amounts as shown below. A 5% decrease in equity price would have had
           but opposite effect. The analysis is performed at the same basis as 2009.




           2010
           Ordinary shares – Listed
           Preference shares – Listed

           2009
           Ordinary shares – Listed
           Preference shares – Listed



4.4 Income statement note
a) Financial income and expenditure
The Group and Company generated the following income and/or incurred the following expenditure in respect of financial instruments
during the reporting period, all of which were recognised in profit or loss:
           Interest income on financial assets measured at amortised cost
           Financial income
           Interest expense on financial liabilities measured at amortised cost
           Financial expense
           Net financial income
           The above financial income and expense items include the following in
           respect of financial assets/liabilities not at fair value through profit or loss:
           Total interest income
           Total interest expense



b) Impairment losses
The amount of the impairment loss for each class of financial asset during the reporting period was as follows:




           Impairment of other loans
           – Impairment recognised
           Impairment of loans to subsidiaries
           – Impairment recognised
           Impairment of loans to associates
           – Impairment recognised
           Impairment of premium debtors
           – Impairment recognised
           Total




           Property and equipment
           Cost
           Office equipment
           Motor vehicles
           Leasehold improvements
           Properties – owner occupied (at fair value)

           Accumulated depreciation
           Office equipment
           Motor vehicles
           Leasehold improvements
           Properties – owner occupied

           Net carrying amount
           Office equipment
           Motor vehicles
           Leasehold improvements
Properties – owner occupied

Reconciliation of movement on net carrying value
Net carrying amount at beginning of year
New subsidiaries opening carrying value
 Properties – owner occupied (at fair value)
 Motor vehicles
 Office equipment
Disposal of a subsidiary
Additions
 Office equipment
 Motor vehicles
 Leasehold improvements
 Properties – owner occupied
Disposals
 Office equipment
 Motor vehicles
 Properties – owner occupied
Depreciation for the year
 Office equipment
 Motor vehicles
 Leasehold improvements
 Properties – owner occupied
Net foreign currency translation differences
Net carrying amount at end of year
Capitalised instalment sale agreement assets
Motor vehicles
 Carrying value at beginning of year
 Disposal
Carrying value at year-end
Properties – Owner occupied
Land and buildings are described as SS 14-18 Frosterely in extent 10,000 square metres. Date of acquisition was 29 November 199
purchase price of R2 655 570. Additional land described as portion 11 (of 5) of Erf 2406 Umhlanga Rocks in extension 1,416 square
was acquired on 18 June 2009 at a purchase price of R3 995 681.

Investment property




Fair value at beginning of year
Revaluations
Additions
Disposal
Fair value at end of year
Investment properties consists of four adjacent stands, Sub 59, Sub 62,
Sub 66 and Sub 166 of the farm Springvale No. 2170, all situated in the
development area of Rosetta, province of KwaZulu-Natal.

The properties are carried at market value as last determined by an
independent registered valuator, Mr. Tom Bate of Miles Fichet Valuation
Surveyors, Valuers Property Consulting, Farming and Forestry Advisors in
July 2009. The valuation was done with reference to the nature of the
improvement and the condition of repair using the ’’Direct Comparable
Method” of valuation. Investment properties also include a vacant piece
of land situated on Farm Witfontein II, Registration division IR Transvaal
measuring 11 451 hectares. The land was acquired in November 1991.
The property is held under a title deed No. T 24235/1993.

Investment properties are not mortgaged as security for any liabilities.

Direct operating expenses incurred on the investment property amount to
R62 332 (2009: R62 882), repairs and maintenance incurred amounts to
  R48 174 (2009: R66 615).

Intangible assets




Cost
Goodwill
Future profit commission
Computer software

Accumulated amortisation and impairment
Goodwill
Future profit commission
Computer software

Net carrying value
Goodwill
Future profit commission
Computer software

Reconciliation of movement on net carrying value
Net carrying value at beginning of year
Reclassified
Additions
  Goodwill
  Computer software
Disposal of a subsidiary
Acquisition of a subsidiary
Disposals
  Computer software
Impairment and amortisation charge
  Goodwill
  Future profit commission
  Computer software
Net foreign currency translation differences
           Net carrying value at end of year
           The Group tests goodwill annually for impairment, or more frequently if
           there are indicators that goodwill might be impaired. As at 30 June 2010,
           no indicators of impairment existed.




           Interest in subsidiaries
           Interests in subsidiaries comprise:
           Shares at fair value through profit or loss
           Loans to subsidiaries

           Impairment of loans

           Non-current
           Loans are secured, interest-free and have no fixed terms of repayment.
           Details of subsidiaries are provided in note 48 on pages 90 to 91 of these
           annual financial statements.




           Interests in associates
           Interests in associates comprise:
           Shares at fair value through profit or loss
           Goodwill
           Group share of post-acquisition profits
           Carrying value of associates
           Loans to associates

           The Group’s share of post-acquisition profits and reserves
           reflected in the income statement is comprised as follows:
           Share of post-acquisition profits
           Revaluation adjustments

The loans are unsecured, interest-free and have no fixed terms of repayment.

The financial position and performance of the Group’s material associates are categorised by nature of business as follows:




           Analysis of associates for 2010
           Total assets
           Total liabilities
           Net assets
           Net profit before taxation
           Taxation
            Net profit after taxation
            Group share of post-acquisition profits
            Carrying amount of investment in associates
            Gross amount of loans to associates
            Fair valuation of associates
            Analysis of associates for 2009
            Total assets
            Total liabilities
            Net assets
            Net profit before taxation
            Taxation
            Net profit after taxation
            Group share of post-acquisition profits
            Carrying amount of interest in associates
            Gross amount of loans to associates
            Fair valuation of associates
            Details of associates are provided in note 48 of these annual financial statements.

10. Interests in joint ventures




            Interests in joint ventures comprise:
            Loans to joint venture

            The Company has an intercompany balance due to the value of
            R7 231 000 (2009: Rnil) to Exiliti Services (Proprietary) Limited at the
            reporting date. This loan bears no interest and has no fixed terms of
            repayment.

            The following amounts are included in the annual financial statements as a
            result of the proportionate consolidation of the Group’s joint ventures:
            Current assets
            Non-current assets
            Current liabilities
            Net loss for the year
            Total income
            Expenses



11. Financial assets




            Financial assets available-for-sale
            Financial assets held-to-maturity
            Financial assets at fair value through profit or loss
Current
Non-current

Financial assets available-for-sale
Listed investments at fair value
Unlisted investments at fair value

Financial assets held-to-maturity
Call deposits
Debt securities

Financial assets at fair value through profit or loss
Listed shares at fair value
Unlisted investments at fair value
Bonds at fair value

An analysis of the Group and Company’s financial assets by market sector
and maturity spread is provided below.
Listed investments
Shares at market value
Analysis of spread of listed investments by market sector
Banks
Basic resources
Chemicals
Construction and materials
Financial services
Food and beverage
Healthcare
Industrial goods and services
Insurance
International
Mining
Oil and Gas
Personal and household goods
Real estate
Retail
Technology
Telecommunications
Unit trusts
Corporate debentures
Other

Unlisted investments
Shares at fair value

Life investment policy
Private equity investments
Debentures
Call deposits
            Unit trust

            Total listed and unlisted investments at fair value

11.3 Bonds (Financial assets carried at fair value through profit or loss):

                                                                              Group



            Analysis of bonds by maturity spread for 2010
            1 – 2 years
            2 – 5 years
              Later than 5 years

            Analysis of bonds by maturity spread for 2009
            1 – 2 years
            2 – 5 years
              Later than 5 years

            All bonds reported above are South African in origin.
            Assets held-to-maturity
            Analysis of assets held-to-maturity by maturity spread for 2010
              Within a year

            Analysis of assets held-to-maturity by maturity spread for 2009
            Within a year
             1 – 2 years



            A schedule of all financial assets is available for inspection at the Group’s registered offices.
            The fair value of the financial assets were determined as follows:
            – The fair value of listed or quoted investments are based on the quoted market price; and
            – The fair value of investments not listed or quoted are estimated using the discounted cash flow analysis, P/E ratio or net asset va
            Fair values are determined annually at the statement of financial position date.
            The Company has not reclassified any financial assets from cost or amortised cost to fair value, or from fair value to cost or amortis
            during the current or prior year.

12(a) Categories and classes of financial assets and liabilities




            Group
            2010
            Assets
            Interest in associates
            Loans to associates
Loans to joint ventures
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
other receivables
Deferred acquisition
costs

Liabilities
Borrowings
Insurance liabilities
Reinsurance liabilities
Employee benefits
Trade and other
payables

2009
Assets
Interest in associates
Loans to associates
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
  Call and short-term
  deposits
Reinsurance assets
Insurance, loans and
other receivables
Derivative financial
instrument
Deferred acquisition
costs

Group
2009
Liabilities
Borrowings
Insurance liabilities
Reinsurance liabilities
Derivative financial
instrument
Employee benefits
Trade and other
payables
Shareholders for
dividend

Company
2010
Assets
Interest in subsidiaries
Loans to subsidiaries
Interest in associates
Loans to associates
Loans to joint venture
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
other receivables
Deferred acquisition
costs

Liabilities
Insurance liabilities
Reinsurance liabilities
Employee benefits
Trade and other
payables




Company
2009
Assets
Interest in subsidiaries
Loans to subsidiaries
Interest in associates
Loans to associates
Financial assets
  Debt
  Equities
  Unit trusts and
  pooled funds
Reinsurance assets
Insurance, loans and
            other receivables
            Derivative financial
            instrument
            Deferred acquisition
              costs

              Liabilities
            Insurance liabilities
            Reinsurance liabilities
            Derivative financial
            instrument
            Employee benefits
            Trade and other
            payables
            Shareholder for
              dividend



12(b) Determination of fair value and fair values hierarchy
The following table shows an analysis of financial instruments recorded at fair value by level of the fair value hierarchy:




            Group – 2010
            Financial assets carried at fair value through profit or loss
            Listed ordinary shares
            Listed preference shares
            Listed debentures
            Unlisted ordinary shares
            Unlisted preference shares
            Linked life policies
            Units trusts
            Unlisted debentures
            Bonds
            Investment in associate
            Financial assets available-for-sale
            Listed ordinary shares
            Unlisted ordinary shares
            Unlisted preference shares
            Financial assets available-for-sale
              Debt securities

            Company – 2010
            Financial assets carried at fair value through profit or loss
            Listed ordinary shares
            Listed preference shares
            Listed debentures
            Unlisted ordinary shares
            Unlisted preference shares
Unlisted debentures
Linked life policies
Units trusts
Investment in associate
  Investment in subsidiary



Included in level 1 category are financial assets and liabilities that are measured in whole or in part by reference to published quot
active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available f
exchange, dealer, broker, industry group, pricing services or regulatory agency and those prices represent actual and regularly occu
transactions on an arm’s length basis.

Financial assets and liabilities measured using a valuation technique based on assumptions that are supported by prices for observ
market transactions are assets and liabilities for which pricing is obtained via pricing services, but where prices have not been dete
active market, financial assets with fair values based on a broker quotes, investments in private equity funds with fair values obtain
managers and assets that are valued using the group’s own models whereby the majority of assumptions are market observable.

Non-market observable inputs means that fair values are determined in whole or in part using a valuation technique (model) based
assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are bas
available market data. The main asset classes in this category are unlisted equity investments and limited partnerships. Valuation t
are used to the extent that observable inputs are not available, thereby allowing for situations in which there is a little, if any, mark
for the assets or liability at the measurement date. However, the fair value measurement objective remains the same, that is, an e
the perspective of the Group and Company. Therefore, unobservable inputs reflect the Group and Company’s own assumptions ab
assumptions that market participants would use in pricing the asset and liability. These inputs are developed based on the best inf
available, which might include the Group and Company’s own data.

Reconciliation of movements of financial instruments measured at fair value

The following table shows a reconciliation of the opening and closing recorded amount of financial assets and liabilities which are r
fair value:




Group
Financial assets at fair value
through profit or loss
Listed ordinary shares
Listed preference shares
Listed debentures
Unlisted ordinary shares
Unlisted preference shares
Units trusts
Linked life policies
Unlisted debentures
Bonds
Investment in associate

Financial assets available-for-sale
  Listed ordinary shares
  Unlisted ordinary shares
  Unlisted preference shares
Held-to-maturity
  Debt securities
Total financial instrument
Company
Financial assets carried at fair value
through profit or loss
Listed ordinary shares
Listed preference shares
Listed debentures
Unlisted ordinary shares
Unlisted preference shares
Units trusts
Linked life policies
Unlisted debentures
Investment in associates
Investment in subsidiaries
Investment in joint venture
Total financial instrument
There were no transfers between levels during the year under review.

Gains or losses (realised and unrealised) included in profit or loss for the period are presented in the consolidated income stateme
as follows:




Group
 Total gains or losses included in profit or loss for the period

Company
 Total gains or losses included in profit or loss for the period



There have been no other transfers between the levels of the fair value hierarchy.
The following table shows the sensitivity of the fair value of financial assets.
Financial assets carried at fair value through profit or loss
Listed ordinary shares
Listed preference shares
Listed debentures
Unlisted ordinary shares
Unlisted preference shares
Units trusts
Linked life policies
Unlisted debentures
Bonds
Investment in associates
Investment in subsidiaries

Financial assets available-for-sale
Listed ordinary shares
Unlisted ordinary shares
Unlisted preference shares

Financial assets held-to-maturity
Debt securities

Total financial instruments

 Derivative financial instrument
Non-hedge derivatives
At 30 June 2010, the Company has a short position on R201 government bonds, with a fair value exposure of Rnil (2009: R20 185 0
A certain Group company is a party to a derivative financial instrument. The instrument is held to reduce risk.
Derivative financial instruments are either traded on a regulated exchange (South African Future Exchange, SAFEX ) or negotiated o
the counter (OTC) as a direct arrangement between two counterparties. Instruments traded on SAFEX are margined and SAFEX is t
counterparty to each and every trade. OTC instruments are only entered into with the appropriate accredited counterparties and a
into in terms of signed derivative agreements.




Derivative financial instrument held for risk management
Total derivative financial instrument
Disclosed as:
Assets included in financial instrument
Financial liability

The derivative is valued at market value of shares that is requiredto settle
the short position.
Maximum credit risk
Open derivative position as June:
Principal amount by term of maturity:
1 to 5 years
Fair value

Insurance, loans and other receivables




Insurance receivables
Other receivables
Total insurance and other receivables
Originated at amortised cost
Loans bearing interest
– Related parties in the Group
– Loans to staff
– Loans to other
– Impairment provision
Interest-free loans
– Related parties in the Group
– Loans to other
– Impairment provision
Total loans
Receivable from Group companies
– Impairment provision
Total loans receivable from Group companies
Non-current portion
Total insurance, loans and other receivables




The interest rates charged on the secured and unsecured loans comprise:
Prime rate of interest
Prime less 2%
Prime less 2.75%
Prime less 1.5%
Prime less 3%
80% of prime
Interest at 7%
R153 bond rate
South African Revenue Service (SARS) rate
Other
  Interest-free loans

The loans have no fixed terms of repayment. Certain loans to related parties
are secured by shareholders’ assets to the extent of R39 200 000
(2009: R39 200 000) and the balance of the loans are unsecured and have
no fixed terms of repayment.
Loans are carried at amortised cost using the effective-interest method and
are reviewed for impairment at the end of the financial year. Insurance,
trade and other receivables are widespread and there were no indicators of
impairment at 30 June 2010.
Loans to subsidiaries and associates are deemed to be part of the
investment and therefore included in notes 8 and 9 of these annual
financial statements.




Deferred taxation
Deferred income tax assets
– Deferred income tax to be recovered after 12 months
– Deferred income tax to be recovered within 12 months
Balance at end of year
Balance at beginning of year
Movements during the year attributable to:
  STC credits
  Capital allowances
  Acquisition of a subsidiary
  Unutilised tax loss
  Prepayment
  Change in tax rate
  Provisions
Balance at end of year
Balance comprises:
  STC credits
  Capital allowances
  Provisions

Deferred income tax liabilities
– Deferred income tax to be recovered after 12 months
– Deferred income tax to be recovered within 12 months
Balance at end of year
Deferred income tax liability
Balance at beginning of year
Movements during the year attributable to:
Capital allowances
Unrealised (loss)/gain on assets at fair value through profit or loss
Unrealised gains on available-for-sale financial assets
Unrealised gains on foreign exchange differences
Acquisition of subsidiary
Unutilised tax losses
Prepayments
Provisions
Reversing temporary difference due to sale of investments
Balance at end of year
Balance comprises:
Capital allowances
Unrealised gains on assets at fair value through profit or loss
Unrealised gains on foreign exchange differences
Unrealised gains on available-for-sale financial assets
Unutilised tax losses
Provisions
Prepayments




Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, current accounts and
short-term deposits with maturity of less than three months. The effective
rate on short-term bank deposits with a duration of three months is between
6.10% and 9.16% (2009: 7.1% and 10.6%).
The effective interest rate on current accounts at the statement of financial
position date was 5.85% (2009: 5.85%).
Cash on call
Cash at bank
Cash on deposit
Cash on hand

Bank overdrafts

Share capital and premium




Authorised
6,000,000 ordinary shares of R2 each
3,000,000 class A redeemable convertible preference shares of R1 each
2,999,999 class B redeemable convertible preference shares of R1 each
1 Class C redeemable non-cumulative preference share of R1

Issued and fully paid
5,100,000 ordinary shares of R2 each
3,000,000 class A redeemable convertible preference shares of R1 each
2,999,999 class B redeemable convertible preference shares of R1 each
1 Class C redeemable non-cumulative preference share of R1

Share premium

The class A and B preference shares receive dividends at the discretion of
the Board of Directors. The A preference shares have voting rights equal to
one vote for one share.
The class A and B preference shares have no fixed date for redemption and
are redeemable or convertible to ordinary shares at the election of either
the preference shareholder or the Company.
The directors are authorised, until the forthcoming annual general
meeting, to issue the unissued shares for any purpose and upon terms and
conditions as they deem fit.




Non-distributable reserves
Non-distributable reserves consist of:
Revaluation reserve
Movements for the year were as follows:
Balance at beginning of year
Revaluation of available-for-sale investments
Realised gains on disposal of available-for-sale investments
Revaluation of property, plant and equipment
Deferred tax on available-for-sale investments
Sale of a subsidiary
Balance at end of year




Foreign currency translation reserve
At beginning of year
Exchange differences on translation of foreign operations
Balance at end of year




Components of other comprehensive income
Exchange differences on translating foreign
operations
Revaluation of property and equipment
Loss on change in shareholding
Share-based equity payment
Foreign currency translation difference
attributable to non-controlling interest
Impairment of investment
Transfer from legal reserve
Realised gains on disposal of available-for-sale
investments
Unrealised gain on available-for-sale
investment



Insurance liabilities and reinsurance assets




Gross
Claims reported and loss adjustment expenses
Claims incurred but not yet reported
Unearned premium provision
Cash back reserve
Life fund
Policyholder liabilities
Unexpired risk reserve
Provision for claim fluctuations
Provision for premium refunds
Expense provision
Experience account balances
Total gross insurance liabilities
Recoverable from reinsurers
Claims reported and loss adjustment expenses
Claims incurred but not yet reported
Unearned premium provision
Deferred reinsurance expense
Life fund reserves
Reinsurance recoveries
Total reinsurers’ share of insurance liabilities
Net
Claims reported and loss adjustment expenses
Claims incurred but not yet reported
Unearned premium provision
Unexpired risk reserve
Cash back reserve
Life fund reserves
Policyholder liabilities
Provision for premium refunds
Provision for claims fluctuations
Deferred reinsurance expense
Expense provision
Reinsurance recoveries
Experience account balances
Total insurance liabilities – net
Group
Movement in insurance liabilities and
reinsurance assets
a) Outstanding claims
Balance at beginning of year
Reclassification
Claims paid
New acquisition of a subsidiary
Disposal of a subsidiary
Exchange rate movement
Claims raised
Balance at end of year
Company
Balance at beginning of year
Claims paid
Claims raised
Balance at end of year
b) Claims incurred but not yet reported
Group
Balance at beginning of year
Reclassification
Exchange rate movement
New acquisition
Disposal
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
c) Provision for unearned premium
Group
Balance at beginning of year
Reclassification
New acquisition of a subsidiary
Disposal of a subsidiary
Exchange rate movement
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
d) Experience account balances
Group
Balance at beginning of year
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
e) Unexpired risk reserve
Group
Balance at beginning of year
Reclassification
Exchange rate movement
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
f) Expense provision
Group
Balance at beginning of year
Movements for the year
Balance at end of year
g) Provision for claim fluctuations
Group
Balance at beginning of year
Reclassification
Exchange rate movement
Movements for the year
Balance at end of year
h) Deferred reinsurance expense
Group
Balance at beginning of year
Reclassification – prior year
Exchange rate movement
Movements for the year
Balance at end of year
i) Cash back reserve
Group
Balance at beginning of year
Movements for the year
Balance at end of year
Company
Balance at beginning of year
Movements for the year
Balance at end of year
j) Provision for premium refunds
Group
Balance at beginning of year
Movements for the year
Balance at end of year
k) Life fund
Group
Balance at beginning of year
Movements for the year
Balance at end of year
l) Policyholder liabilities
Group
Balance at beginning of year
Movements for the year
Balance at end of year
m) Reinsurance recoveries
Group
Balance at beginning of year
Reclassification – prior year
Exchange rate movement
New acquisition of a subsidiary
Disposal of a subsidiary
Movements for the year
Balance at end of year




Company
Balance at beginning of year
Movements for the year
Balance at end of year
The reinsurance recoveries are subject to
a demand feature.
Group
Balance at beginning of year
Reclassification adjustment
Claims paid
Exchange rate movement
Movements for the year
New acquisition of a subsidiary
Disposal of a subsidiary
Claims raised
Reinsurance recoveries
Balance at end of year
Company
Balance at beginning of year
Claims paid
Changes in estimate to profit or loss
Claims raised
Reinsurance recoveries
Balance at end of year

Insurance risk
Exposure to insurance risk
The Group and Company underwrite risks that natural persons, corporate or other entities wish to transfer to an insurer. Such risks
to property, accident, personal accident, motor, liability, engineering, marine, credit and other perils which may rise from an insure
As such the Group and Company are exposed to uncertainty surrounding the timing, frequency and severity of claims under insura
contracts. The principal risk is that the frequency and/or severity of claims are greater than expected. Insurance events are by natu
and the actual size and number of events in any one year may vary from those estimated and experienced in prior periods.

The Group and Company underwrite primarily short-tailed risks, that is, insurance under which claims are typically settled within o
the occurrence of the events giving rise to the claims. Risks that are long tail in nature represent an insignificant portion of the Gro
Company’s insurance portfolio. Consequently, whilst the Group and Company may experience variations in its claim patterns from
the next, the Group and Company’s exposure at any time to insurance contracts issued more than one year before is limited.

The product features of insurance contracts that have a material effect on the amount, timing and uncertainty of future cash flows
from insurance contracts in the Group and Company are described below:

Property
Provide indemnity for loss or damage to immovable and movable property caused by perils such as fire, lighting, explosion, weathe
earthquake and malicious damage. These contracts may also include business interruption policies which insure the loss of profits
a business as a result of loss or damage to the insured property by these perils.

Accident
Provide indemnity for loss of or damage to mainly movable property for losses caused by crime, certain accidental damage such as
to goods in transit or accidental damage to glass. Included under the accidental classes are legal liabilities an insured may incur as a
accidental damage to third-party property or accidental death or injury to a third party by the insured.

Personal accident
Provide compensation arising out of the death, permanent or temporary total disability of the insured, the family of the insured or
business. This cover is restricted to certain accidents and does not provide the wider benefits available from the life insurance indu

Motor
Provides indemnity for loss of or damage to the insured motor vehicle. The cover is normally on an all-risks basis providing a wide s
however the insured may select restricted forms of cover such as fire and theft only. Legal liabilities arising out of the use or owne
vehicle following an accident for damage to third-party property or death or injury to a third party are also covered in this class. W
maintenance cover on insured vehicles are incorporated in this class of business.

Engineering
Provide indemnity for losses sustained through the use of machinery and equipment or the erection of buildings and structures. Ri
type of contract include machinery breakdown, business interruption and loss or damage to plant and equipment.

Marine
Provide indemnity for both cargo and hull classes of business. Cargo covers physical loss of or damage to cargo. Hull covers acciden
to commercial vessels.

Liability
Provide indemnity for actual or alleged breach of professional duty arising out of insured’s activities, indemnify directors and office
against court compensation and legal defense costs, provide indemnity for the insured against damages consequent to a personal
damage.
The Group and Company distribute these products across personal and commercial policyholders using traditional methods of dist
intermediaries and direct sales, as well as through strategic partnerships with niche underwriting managers, retailers, banks and m
non-traditional distribution arrangements include profit participation measures to promote good risk management amongst the in
of the business. The Group also provides primary risk policies, which are contracts structured to provide entry level insurance cove
entities. These policies provide for payment of an experience bonus called an experience account balance, based on claims and rel
end of the policy period.

Limiting exposure to insurance risk
The Group and Company limit its exposure to insurance risk through setting clearly defined underwriting strategy and limits, applic
risk assessment techniques, and centralised management of reinsurance.

The Group and Company’s underwriting strategy ensures diversification of insurance risk in terms of type and amount of risk cover
location and type of industry covered. The underwriting strategy also aims to develop a sufficiently large population of risks to red
the expected outcome. The underwriting strategy is detailed in underwriting authorities which set the limits for underwriters in ter
class of business, geograpical location and industry to enforce appropriate risk selection within the portfolio. The underwriting man
to both internal underwriters and partners. Management review and periodic internal audits ensure that underwriters operate wit

Analysis of the Group and Company’s risk profiles shows that the Group and Company underwrite a well diversified portfolio of risk
Group and Company’s business has a low correlation factor between the types of insurance products and classes it underwrites. U
premium as an indicator, the table below illustrates the Group and Company’s distribution of risks underwritten across classes of b




Gross written premium per class of business
Property
Transportation
Motor
Accident/Health
Guarantee
Liability
Contract/Engineer
Fire
Life
Marine
Compensations
Miscellaneous
Total
The Group and Company underwrite insurance contracts across South
Africa as well as Namibia, Botswana, Mozambique and Australia. Using
gross written premium as an indicator the table below illustrate the Group
and Company’s geographical diversification.
South Africa
Foreign
Total

Ongoing review and analysis of underwriting information enables the Group and Company to monitor its risks and take timely corr
action. The ability to adjust premiums allows the Group and Company to mitigate the risk of underwriting losses by addressing adv
ratios in terms of different classes of business and different portfolios or clients. The risk of fraudulent claims is reduced by interna
embedded in claims handling processes and specific techniques developed to proactively detect fraudulent claims.

Underwriting and reinsurance operating procedures
The Group and Company have implemented an integrated risk management framework to manage risk in accordance with the Gro
risk appetite. Group and Company reinsurance is managed by the Reinsurance and Underwriting Committee (RUCOM). The objecti
responsibilities of the committee as set out and approved by the Board of Directors are outlined below. The main objective of RUC
provide a policy framework that ensures that the risk assumption and risk retention practice is in line with prudent risk/reward par
by the Group. Specifically RUCOM makes recommendations to the Board as to the risk retention policy of the companies within th
and Company; communicates policy to the business units for adoption in line with their business operations; reviews underwriting
methodologies and processes employed by each company and each business unit for both facultative and treaty reinsurance arran
reviews the reinsurance programme for cost efficiency, compliance with risk assumption criteria and security.

Reinsurance strategy
The Group and Company obtain third-party reinsurance cover to reduce risks from single events or accumulation of risk which cou
have a significant impact on earnings for the current year or the Company’s capital. This cover is placed on the local and internatio
reinsurance market.

Dynamic financial analysis (DFA) is performed each year prior to renewal. DFA informs the decision-making regarding risk retention
reinsurance purchase. Hollard’s insurance risk and return position is tested against a wide range of reinsurance alternatives includi
of proportional and non-proportional alternatives.

The Group and Company use state-of-the-art catastrophe modelling tools to assess its exposure to low-frequency high-severity risk
common of these risks relates to natural catastrophes such as earthquakes, floods and windstorm. The Group’s most significant ag
exposure would arise from an earthquake. Where the Group and Company are at risk in case of the occurrence of an event that co
threaten its solvency, catastrophe reinsurance is in place to reduce the threat associated with such an event.

Risk retention parameters
Hollard Insurance is in the business of assuming that level of risk, which is deemed prudent in relation to the risk/reward and the G
Company’s absolute capacity in terms of shareholders’ funds and free reserves. Predetermined criteria are observed at all times ot
where specific written permission has been obtained from the chairman of the Underwriting Committee acting on the authority of
of the members of such committee.

Counterparty risk
Currently only S&P A rated reinsurers are utilised unless express permission is sought from the Risk Management Committee.

Treaty placing process
The treaty placing process is the responsibility of the Risk Management Division, accountable to the Group Chief Risk Officer. The C
Officer reports directly to the CEO and is accountable to the Board via the Risk and Underwriting Committee.

The development of claims liabilities provides an indicator of the Group and Company’s ability to estimate the ultimate value of cla
majority of the Group and Company’s insurance contracts are classified as short tailed. The shorter settlement period for this type
allows the Group and Company to achieve a higher degree of certainty about the estimated costs of claims. The longer time requir
the emergence of a long tail claim makes the estimation process more uncertain for these type of claims. The Group and Company
exposure to long tailed business is in the personal accident, third-party motor liability and some engineering and marine classes. In
actuarial valuations are used to estimate the Group and Company’s potential liability for this type of exposure.

Process used to determine significant assumptions
Insurance risks are unpredictable and the Group and Company recognise that it is impossible to forecast with absolute certainty, fu
payable under existing insurance contracts. Over time the Group and Company have developed a methodology that is aimed at est
insurance provisions that have a reasonable likelihood of being adequate to settle all its insurance obligations.
Claim provisions
The Group and Company’s outstanding claims provisions include notified claims as well as incurred but not yet reported claims and
short tail nature of the business it is not considered necessary to discount any of the claims provisions.

Notified claims
Claim provisions are based on previous claims expenditure, knowledge of events, terms and conditions of the relevant policies and
interpretation of circumstances.

Each notified claim is assessed on a separate, case-by-case basis with due regard to the specific circumstances, information availab
insured and loss adjuster and past experience with similar claims. The Group and Company employ staff experienced in claims han
rigorously applies standardised policies and procedures around claims assessment. In addition the Group and Company utilise the
specialised administrators to perform the claims assessment process for some of its business. The ultimate cost of the reported cla
as a result of future developments or better information becoming available about the current circumstances. Estimates are review
and updated if new information becomes available.

Claims incurred but not yet reported (IBNR)
The majority of the Group and Company’s IBNR is calculated as a percentage of premiums written. This percentage is a best estima
which represents the expected value of the unreported claims liabilities. Different percentages are applicable for different classes
and appropriateness is assessed against the Group and Company’s past claims experience.

The Company’s internal actuaries in conjunction with an independent external actuarial firm review the adequacy of the Company
provisions. The chain ladder method which involves the analysis of historical claims development factors and the selection of the e
development factors based on the historical pattern is used for the majority of the Company’s business to calculate a best estimate
claims liability which is then compared to the outstanding claims liability raised by the operation. The selected development factor
to cumulative claims data for each accident year that is not yet fully developed to produce an estimated ultimate claims cost for ea

The provision for notified claims and IBNR are initially estimated at a gross level. A separate calculation is then carried out to deter
estimated insurance recoveries.

There were no losses following the application of the liability adequacy test.

The Group and Company have experienced a substantial growth in net incurred claims and the majority of this growth stems from
book. This class of business experienced both an increase in the frequency and severity of claims. The increase in inflation is one of
factors contributing to the higher average claims cost. There are various initiatives to ensure that:
 the rates are in line with the increased cost; and
costs are contained to the extent possible

Premium provisions
The Group and Company raise provisions for unearned premiums on a basis which reflects the underlying risk profile of the insuran
contracts. The majority of the Group and Company’s insurance contracts have an even risk profile and the unearned premium prov
raised at the commencement of the contract are released evenly over the period of insurance using a time-proportionate basis. Th
premium is released on a basis consistent with the increasing, decreasing or uneven profile of the contracts for the remainder of th
The provisions for unearned premiums are initially determined on a gross level and thereafter the reinsurance impact is recognised

Assumptions
The assumption which has the greatest effect on the measurement of insurance contract provisions is the percentage applied to th
premium to determine the IBNR provision. The larger the IBNR percentages applied the longer the expected period between the d
and the claims reporting date and/or the estimated claims.
Deferred acquisition costs (DAC)




 Deferred commission and acquisition costs net of reinsurance
 Current
Reconciliation of changes in acquisition costs
Balance at beginning of financial year
Acquisition costs deferred during the year
Acquisition costs expensed during the year
Additional acquisition cost written off
Disposal of a subsidiary
  Exchange rate differences
  Balance at end of financial year

Claims development tables
The presentation of the claims development tables for the Company, is based on the actual date of the event that caused the claim
year basis).

The claims development tables represent the development of actual claims paid.




Company
Reporting year
Gross
Actual claims costs
2010
2009
2008
2007
2006
2005
2004
Cumulative
payments to date
Net
Actual claims costs
2010
2009
2008
2007
2006
2005
2004
Cumulative
payments to date
Borrowings




Unsecured
Non-interest-bearing borrowings
These loans have no fixed terms of repayment.
Interest-bearing loan
The loan bears interest at prime less 1% and is repayable over 48 months.
Non-interest-bearing borrowings
These loans are at call, however lenders have undertaken not to call for
repayment unless refinancing is arranged.
Interest-bearing loan

The loan bears interest at Nedbank prime lending rate less 2% and is repayable within 48 months.




Secured
Secured bank loan
Instalment sale agreement liabilities – minimum payments
Non-current portion
  Lease liability
  Payable within one year

Total
Current
Non-current

Instalment sale agreement liabilities – minimum payments
Not later than one year
Later than one year and not later than five years

Future finance charges on instalment sale agreements
Present value of instalment sale agreement liabilities
Lease liabilities for the current year are paid over periods of 48 months
and the average effective borrowing rate is 8.5% (2009: 0%).
The instalment sale agreements are secured by motor vehicles with a
carrying value of R3 080 051 (2009: Rnil).
Lease liabilities relating to prior year are paid over periods of 36 months
and the average effective borrowing rate is 0% (2009: 11.24%).
The instalment sale agreements are secured by motor vehicles with a
carrying value of Rnil (2009: R318 391).
Employee benefits
Leave pay
At beginning of year
Reclassification
Charged to the income statement
– additional provisions
– used during the year
Net foreign currency translation differences
Balance at end of year
Incentive provision
At beginning of year
Reclassification
Charged to the income statement
– additional provisions
– used during the year
Net foreign currency translation differences
Balance at end of year
Equity compensation scheme
At beginning of year
Charged to the income statement
– additional provisions
– used during the year

Balance at end of year
Analysis of employee benefits
Current
Non-current
Total

Leave pay
In terms of the Group and Company policy, employees are entitled to accumulate a maximum of 25 days leave and the leave pay li
is calculated on that basis. Any leave accumulated over this number is forfeited by the employees concerned. Whilst all employees
encouraged to take their full annual leave, they are entitled to encash a maximum of five days’ leave (taxed) in a leave cycle. When
who have leave due to them cease their employment with the Company, all accumulated and accrued leave is paid to them at the
total cost to company rate as part of their salary payment, limited to a maximum number of 25 days.
The Group and Company’s provision for leave pay amounted to R23 624 000 and R6 212 000 respectively at the statement of finan
positon date (2009: R26 670 000 and R8 091 000).

Incentive scheme
In terms of the Group policy, selected employees at the discretion of the directors receive an incentive bonus. This bonus relates to
corporate and business unit performance and is subject to approval by the Remuneration Committee.
The Group and Company’s provision for staff incentives amounted to R176 743 000 and R104 256 000 respectively at the statemen
financial positon date (2009: R89 826 000 and R27 020 000).

Equity compensation scheme
In terms of the group policy, selected black employees are entitled to participate in the Company’s BEE share scheme. The scheme
issue of both “A” and “B” options. The allocation of “A” options is based upon each black employee’s length of service to the Comp
their total cost of compensation for services rendered as at 30 June 2006. “B” units are available for purchase by qualifying black e
at their prevailing market value.

The total number of options issued during the year, the cost thereof and the expense recognised in the income statement is summ

a) Financial year ended 30 June 2010:




Units
A
B



The “B” unit value represents the difference between the value of the options at the statement of financial position date R89.74
(2009: R75.42).

The fair value of the options for the financial year was measured using a Monte Carlo
simulation of a stochastic process. The model required the use of the following
assumptions:
●Grant date – “A” units: 1 July 2006;
●Market price of “A” units at grant date: R59.35;
●First grant date – “B” units: 1 July 2006;
●Market price of “B” units at first grant date: R59.35;
●Second grant date – “B” units: 1 July 2007;
●Market price of “B” units at second grant date: R68.06;
●Third grant date – “B” units: 1 July 2008;
●Market price of “B” units at third grant date: R72.50;
●Extra vesting (retirement, retrenchment or death) 1% per annum;
●Staff turnover: 14% per annum;
●Early exercise: 10% per annum (“A” units) and 0% to 15% per annum (“B” units);
●Average age of unit holders: 35 years;
●Unit price volatility: 32%; and
●Dividend yield: 2.5%.

b) Financial year ended 30 June 2009




Units
A
B
The “B” unit value represents the difference between the value of the options at the statement of financial position date R75.42 (2
(R59.35).
Assumptions – 30 June 2009
The fair value of the options for the financial year was measured using a Monte Carlo simulation of a stochastic process. The mode
assumptions:
●Grant date – “A” units: 1 July 2006;
●Market price of “A” units at grant date: R59.35;
●First grant date – “B” units: 1 July 2006;
●Market price of “B” units at first grant date: R59.35;
●Second grant date –”B” units: 1 July 2007;
●Market price of “B” units at second grant date: R68.06;
●Third grant date –”B” units: 1 July 2008;
●Market price of “B” units at third grant date: R72.50;
●Extra vesting (retirement, retrenchment or death): 1% per annum;
●Staff turnover: 14% per annum;

●Early exercise: 10% per annum (“A” units) and 0% to 15% per annum (“B” units);
●Average age of unit holders: 38 years;
●Unit price volatility: 32%; and
●Dividend yield: 2.5%.




Trade and other payables
Trade and other creditors
Value added tax payable
Group companies payables
Other liabilities
All balances are current




Interest and dividend income
Financial assets measured at amortised costs
Interest on call and term deposits
Interest on investments
Interest on secured loans
Sundry interest income
Total interest received
Financial assets at fair value through profit or loss
Ordinary shares – dividends received
– Quoted shares
– Unquoted shares
Preference shares – dividends received
– Quoted shares
– Unquoted shares
Dividends from subsidiaries
Total dividends received
Total interest and dividend income
Interest paid – collateral deposit
Interest paid – instalment sale agreement
Interest paid – treaty reserves
Interest paid – general
Interest paid
Total net interest




Realised profit/(loss) on disposal of investments
Listed investments
Unlisted investments

Net realised (loss)/profit on available-for-sale financial assets
Net realised profit/(loss) on fair value through profit or loss financial assets




Unrealised profit/(loss) on revaluation of investments
Listed investments
Unlisted investments

Net unrealised profit/(loss) on fair value through profit or loss
financial assets




Profit before taxation
Profit before taxation is determined after charging:
Directors’ emoluments
Executive directors
Basic salary
Bonus and performance related payments
Estimated monetary value of other benefits
Pension/provident fund contributions
Non-executive directors
Directors’ fees

Auditors’ remuneration
Audit fees
Prior year under/(over) provision
Other services

Depreciation
Office equipment
Motor vehicles
Leasehold improvements
Properties – owner occupied

Expenses for the acquisition of insurance contracts
Commission
Impairment losses on financial assets
– Impairment loss on loans to associates, subsidiaries and other
Other expenditure
Amortisation of intangible assets
Profit/(loss) on disposal of property and equipment
Administration fees paid
Movement in provision for outstanding claims
Professional fees
Operating lease rentals
Research and development




Taxation
South African normal taxation:
– current year
– prior year
Deferred taxation:
– current year
– prior year
Secondary tax on companies
Foreign tax
Capital gains tax

All taxation is payable in respect of continuing operations.




Tax rate reconciliation:
Tax calculated at standard rate of South African tax on earnings
Normal taxation – prior year
Capital gains tax
Deferred taxation – prior year
Permanent differences
Foreign tax
Secondary tax on companies
Effective rate




Reconciliation of net profit attributable to shareholders
to cash generated from/(utilised in) operations:
Profit before tax
Adjustments for:
Depreciation
Impairment of loans
Intangible asset amortisation
(Profit)/loss on disposal of property and equipment
(Profit)/loss on disposal of investments
Loss on disposal of investments property
Loss/(profit) on foreign currency translation difference
(Profit)/loss on disposal of subsidiaries
Profit on disposal of associates
Net interest and dividend income
Unrealised (gain)/loss on revaluation of listed investments
Unrealised loss on revaluation of unlisted investments
Unrealised (gain)/loss on revaluation of associates
Unrealised (gain)/loss on revaluation of subsidiaries
Unrealised loss on revaluation of joint venture
Unrealised loss on revaluation of loans
Unrealised gain on investment property
Share of profits in associates
Operating cash flows before working capital changes
Working capital changes
(Increase)/decrease in insurance receivables, loans and other receivables
Increase in insurance liabilities
Increase/(decrease) in reinsurance assets
Decrease in deferred acquisition costs
Increase/(decrease) in reinsurance liabilities
Increase/(decrease) in trade and other accounts payables and
employee benefits

Cash generated from/(utilised in) operations




Dividends paid
Amounts due at beginning of year
Amounts declared for the year
Amounts paid to minorities
Amounts due at end of year
Cash amounts paid
Dividends received
Amounts due at beginning of year
Dividends received per income statement
Impairment per income statement
Amounts due at end of year
Cash amounts received




Taxation paid
Amounts due at beginning of year
Amounts charged to income statement
Foreign currency translation difference
Amounts due at end of year
Cash amounts paid
Amounts due at end of year comprised as follows:
Deferred income tax asset
Deferred income tax liability
Current taxation



Business combinations
Summary of business combinations – 30 June 2010




R’000
Property and equipment
Interest in subsidiaries
Intangible assets
Investments
Insurance, loans and other receivables
Reinsurance assets
Cash and cash equivalents
Insurance liabilities
Accounts payable
Non-controlling interest
Fair value at date of disposal
Profit/(loss) arising on disposal
Proceeds on disposal
Net cash outflow arising on disposal:
– Cash and cash equivalents
  Cash and cash equivalents disposed of

Disposal of 60% shareholding in Hollard & Connolly Investments (Proprietary) Limited
 On 1 April 2010, the Group disposed of 60% of its investment in Hollard & Connolly Investments (Proprietary)




The Group’s share of the net assets at the date of disposal was as follows:
Interest in subsidiaries
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary


Disposal of 35.4% shareholding in Hollard Mozambique Companhia de Seguros (incorporated and operational in Mozambique)




On 1 April 2010, the Group disposed of 35.4% of its investment in Hollard Mozambique
Companhia de Seguros
(incorporated and operational in Mozambique). At the date of disposal, the fair value of
the investment in the company
was R47 077 000 and the net asset value was R58 134 000. The Company generated a
profit on disposal of
R11 146 000 whereas the Group generated a profit on disposal of Rnil.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Intangible assets
Investments
Insurance, loans and other receivables
Reinsurance assets
Cash and cash equivalents
Insurance liabilities
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary

Disposal of 50% shareholding in Small Area Repair Technology Underwriting Managers (Proprietary) Limited
On 1 April 2010, the Group disposed of 50% of its investment in Small Area Repair
Technology Underwriting Managers
(Proprietary) Limited. At the date of disposal, the fair value of the investment in the
company was R40 699 528 and the
net asset value was R41 088 000. The Company generated a profit on disposal of Rnil
whereas the Group generated a
profit on disposal of R20 992 000.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary

Disposal of 100% shareholding in River’s Edge Holdings (Proprietary) Limited




On 1 April 2010, the Group disposed of 100% of its investment in River’s Edge Investment
Holding (Proprietary) Limited.
At the date of disposal, the fair value of the investment in the Company was R11 784 898
and the net asset value was
R11 274 000. The Company generated a profit on disposal of Rnil whereas the Group
generated a profit on disposal of
R 2,001,000.00
The Group’s share of the net assets at the date of disposal was as follows:
Interest in subsidiaries
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary

Investment in Exiliti Services (Proprietary) Limited joint venture

On 1 November 2009, Hollard Insurance Company Limited entered into a joint venture agreement with Exigen Services
Europe Limited. Hollard Insurance Company Limited purchased additional 100 shares in Hollard Investment Holdings
(Proprietary) Limited for a cash consideration of R3 500 000. Exigen Services Europe Limited acquired 200 shares in
Hollard Investment Holdings (Proprietary) Limited effectively reducing the shareholding of Hollard Insurance Company
Limited in Hollard Investment Holdings (Proprietary) Limited to 50%. Hollard Investment Holdings (Proprietary) was a
wholly-owned subsidiary of Hollard Insurance Company Limited.
Hollard Investment Holdings (Proprietary) Limited later changed its name to Exiliti Services (Proprietary) Limited.

Acquisition of additional 40% shareholding in JJK Marketing Consultants (Proprietary) Limited

On 1 July 2009, the Company acquired additional 40% shareholding in JJK Marketing Consultants (Proprietary) Limited
for the cash consideration of R400 000. This has increased the Company’s shareholding from 60% to 100%.




The net assets acquired in the transaction were as follows:
Fair value at date of acquisition
Total consideration
Net cash outflow arising on acquisition:
– Cash and cash equivalents acquired



Summary of business combinations – 30 June 2009




Property and equipment
Interest in subsidiaries
Intangible assets
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
  Non-controlling interest
Fair value at date of disposal
  Profit arising on disposal
  Proceeds on disposal
Net cash outflow arising on disposal:
 – Cash and cash equivalents
 Cash and cash equivalents disposed of

Disposal of 60% shareholding in HCV Underwriting Managers (Proprietary) Limited

On 31 December 2008, the Group disposed of 60% of its investment in HCV Underwriting Managers (Proprietary) Limited. At the d
of disposal, the fair value of the investment in the company was R20 108 000 and the net asset value was R5 225 307. The Compan
generated a profit on disposal of R20 108 000 whereas the Group generated a profit on disposal of R16 972 816.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary
Disposal of 52.95% shareholding in Scintilla ERU Managers (Proprietary) Limited
On 30 June 2009, the Group disposed of 52.95% of its investment in Scintilla ERU Managers (Proprietary) Limited.
At the date of disposal, the fair value of the investment in the company was R47 782 000 and the net asset value was
R2 664 000. The Company generated a profit on disposal of R26 856 000 whereas the Group generated a profit on
disposal of R39 103 000.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary
Disposal of 100% shareholding in Syringa Tree Investments (Proprietary) Limited
On 30 June 2009, the Group disposed of 100% of its investment in Syringa Tree
Investments (Proprietary) Limited.
At the date of disposal, the fair value of the investment in the Company was R12 000 000
and the net asset value was
(R19 830). The Company generated a profit on disposal of R12 522 386 whereas the Group
generated a profit
on disposal of R10 964 000.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Interest in subsidiaries
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Non-controlling interest
Profit generated on disposal of subsidiary
Proceeds on disposal of subsidiary
Disposal of 60% shareholding in Zenith Product Design (Proprietary) Limited
On 30 June 2009, the Group disposed of 60% of its investment in Zenith Product Design
(Proprietary) Limited. At the
date of disposal, the fair value of the investment in the company was R903 000 and the
net asset value was
(R2 713 639).
The Company generated a profit on disposal of R903 000 and the Group generated a profit
of R1 631 000.
The Group’s share of the net assets at the date of disposal was as follows:
Property and equipment
Intangible assets
Insurance, loans and other receivables
Cash and cash equivalents
Accounts payable
Profit generated on disposal of subsidiary
Non-controlling interest
Proceeds on disposal of subsidiary

 Investments in associates
Summary of the movement in the fair value of the Group’s investments in associates
The Group disposed of its investment in the following associates:
 Disposal of investments in associates as at 30 June 2010




Astra Maritime (Proprietary) Limited
Flexible Accident & Sickness Acceptances
(Proprietary) Limited
  Petsure (Proprietary) Limited



Astra Maritime (Proprietary) Limited
Flexible Accident & Sickness Acceptances
(Proprietary) Limited
  Petsure (Proprietary) Limited



The Company acquired 30% investment in Oakhurst Insurance Company Limited on 1 March 2010 for R38 081 000.




Purchase consideration
Profit since acquisition
Share of 30% of profit since acquisition
Carrying value of associate

The Company acquired 30% investment in Ubunye Holdings (Proprietary) Limited on 1 March 2010 for R22 481 000.
Purchase consideration
Profit since acquisition
Share of 30% of profit since acquisition
Carrying value of associate
The Company acquired 30% investment in African Independent Brokers (Proprietary) Limited on 1 July 2009 for R35 619 000.
Purchase consideration
Profit since acquisition
Share of 30% of profit since acquisition
Carrying value of associate

Disposal of investments in associates as at 30 June 2009




The Group disposed of its investment in the following
associates:
Ashbrook Investments 133 (Proprietary) Limited
Beqfin (Proprietary) Limited
Biz Afrika 1932 (Proprietary) Limited (T/A PWV Insurance
Brokers (Proprietary) Limited)
BSG Corporate Assets (Proprietary) Limited
BSG Distribution (Proprietary) Limited
BSG Short Term (Proprietary) Limited
BSG Short Term Assets (Proprietary) Limited
Cedar Falls (Proprietary) Limited
Centinel Investment Holdings (Proprietary) Limited
Commrisk Insurance Brokers (Proprietary) Limited
Compendium Investment Holdings (Proprietary) Limited
Fire Ring Trading 50 (Proprietary) Limited
Insurance Zone (Proprietary) Limited
Interplay Trading 128 (Proprietary) Limited
Katz Breskal Insurance Brokers (Proprietary) Limited
Malcanter Holdings (Proprietary) Limited
Mpumalanga Risk Acceptances (Proprietary) Limited
Multifund Financial and Insurance Administrators
(Proprietary) Limited
Multi Risk Managers (Proprietary) Limited
Risk Benefit Solutions (Proprietary) Limited
Sky TIV Insurance Brokers (Proprietary) Limited
Tuttle Admin services (Proprietary) Limited
  Utz Consulting (Proprietary) Limited



Ashbrook Investments 133 (Proprietary) Limited
Beqfin (Proprietary) Limited
Biz Afrika 1932 (Proprietary) Limited (T/A PWV Insurance
Brokers (Proprietary) Limited)
BSG Corporate Assets (Proprietary) Limited
BSG Distribution (Proprietary) Limited
BSG Short Term (Proprietary) Limited
BSG Short Term Assets (Proprietary) Limited
Cedar Falls (Proprietary) Limited
Centinel Investment Holdings (Proprietary) Limited
Commrisk Insurance Brokers (Proprietary) Limited
Compendium Investment Holdings (Proprietary) Limited
Fire Ring Trading 50 (Proprietary) Limited
Insurance Zone (Proprietary) Limited
Interplay Trading 128 (Proprietary) Limited
Katz Breskal Insurance Brokers (Proprietary) Limited
Malcanter Holdings (Proprietary) Limited
Mpumalanga Risk Acceptances (Proprietary) Limited
Multifund Financial and Insurance Administrators
(Proprietary) Limited
Multi Risk Managers (Proprietary) Limited
Risk Benefit Solutions (Proprietary) Limited
Sky TIV Insurance Brokers (Proprietary) Limited
Tuttle Insurance Brokers (Proprietary) Limited
  Utz Consulting (Proprietary) Limited



Summary of the movement in the fair value of the Group’s investments in associates – 30 June 2009
Purchase consideration
The Company acquired a 42.3% investment in Ashbrook Investment 133 (Proprietary) Limited on 1 December 2008 for R9 852 000
Ashbrook Investments is an insurance administator specialising in motor insurance. As part of the restructuring of equity investme
Company, Ashbrook Investments was sold to Syndicate Investment Limited as at end of June 2009 at a fair value of R12 479 000, re
profit of R2 627 000.
 The Company acquired a 40% investment in Cedar Falls (Proprietary) Limited on 31 October 2008 for R9 500 000. Cedar Falls (Prop
Limited is an underwriting company. As part of the restructuring of equity investment for the Company, Cedar Falls (Proprietary) Li
sold to Syringa Investment Proprietary Limited as at end of June 2009 at a fair value of R9 367 000, realising a loss of R133 000.
The Company acquired a 25% investment in Insurance Zone (Proprietary) Limited on 1 December 2008 for R7 875 000. Insurance
Zone (Proprietary) Limited is a short-term intermediary management company. As part of the restructuring of equity investment fo
Company, Insurance Zone (Proprietary) Limited was sold to Syndicate Investment Limited as at end of June 2009 at a fair value of
R7 889 000, realising a profit of R27 000.




  Proceeds on disposal of property and equipment
Book value of assets sold
Disposal of subsidiary
  Profit/(loss) on disposal




 Proceeds on disposal of intangible assets
Book value of assets sold
 Disposal of subsidiary
Proceeds on disposal of investments
Proceeds on disposal of listed investments
Proceeds on disposal of unlisted investments




Capital expenditure
The following capital expenditure budget has been approved by the board
for the financial year ending 30 June 2010
Furniture, office equipment and computer hardware and software

None of this expenditure has been contracted for, and it will be funded from internal sources.

Contingency reserve
A contingency reserve is maintained at 10% of the net written premium, as required by the provisions of the Short-term Insurance
of 1998.

Transfers to this reserve are reflected in the statement of changes in equity, and are indicated in the statement of financial positio
reserves under “Equity”.

Commitments and contingencies
Operating lease commitment
The Hollard Life Assurance Company Limited entered into a ten-year lease agreement with Hollard Life Properties (Proprietary) Lim
to sublease the Arcadia premises with effect from 1 July 2005. The lease runs to 30 June 2015. With effect from 1 July 2009 the lea
agreement between The Hollard Life Assuarance Company Limited and Hollard Life Properties (Proprietary) Limited to sublease the
(Phase 1) premises was restructured. Part of the restructuring resulted in a sublease agreement between The Hollard Life Assuranc
Limited and The Hollard Insurance Company Limited for the same period.




 Payments recognised as an expense for the year



Contingent liability
There is a pending litigation court case with Electrical Plumbing Care Underwriting Managers (Proprietary) Limited due to an allege
of contract. The Company’s estimated financial exposure (inclusive of costs and disbursement) is R23 000 000.

Staff pension and provident fund
The Company has a defined contribution pension fund, the Hollard Employees Pension Fund with 35 (2009: 62) employees of the
Company being members of the fund. The Company and employees’ contributions to the fund charged against income for the yea
R1 611 025 (2009: R2 158 173).

The Company has a defined contribution provident fund, the Hollard Employees Provident Fund with 122 (2009: 350) employees o
Company being members of the fund. The Company and employees’ contributions to the fund charged against income for the yea
R9 598 632 (2009: R14 445 172).

Both of these funds are controlled by a board of trustees and are governed by the Pension Funds Act of 1965.
Loans to directors




Balance at beginning of year
Loans advanced and interest charged during the year
Loan repayments received during the year
Loan transferred to Non-Executive Directors
Transfer of loan to related party



Balance at beginning of year
Loans advanced and interest charged during the year
Loan repayments received during the year
Transfer of loan from other staff loans
Transfer of loan from Executive Directors

Total loan to executive directors and Non-Executive Director
Details of individual loans to directors:

The following advances were made – TBT Mparutsa R6,000,000 (2009: Rnil).

The following repayments were made – SI Mzimela R1 226 127 (2009: Rnil), RC Hallier R90 750 (2009: R1 059 484), and NG Kohler
R1 000 000 (2009: Rnil).

The loans are given on commercial terms and conditions. The related interest income in 2010 was R480 437 (2009: R2 241 312).

Interest on loans to NG Kohler, TBT Mparutsa and RC Hallier is charged at SARS rate and as at 30 June 2010 the rate was 10.5%.
Interest on the loan to SI Mzimela is charged at 80% of prime and as at 30 June 2010 the prime rate was 10%.

Related party transactions

Related party relationships exist between the Group, fellow subsidiaries, associated companies and the holding company. All mate
transactions are at arm’s length.

The immediate holding company is Hollard Holdings (Proprietary) Limited and the ultimate holding company is R Enthoven and Son
(Proprietary) Limited. Both of these companies are incorporated in the Republic of South Africa.




The following transactions were carried out with related parties during the year:
Guarantee policies issued:
Affiliated companies:
Adampol (Proprietary) Limited
Altrisk (Proprietary) Limited
Colin Cooper & Associates (Proprietary) Limited
BSG Short Term (Proprietary) Limited
Cast Arena Trade and Invest 87 (Proprietary) Limited
Cycle Lab (Proprietary) Limited
De Zalze Development (Proprietary) Limited
Eikos Risk Applications (Proprietary) Limited
The Hollard Life Assurance Company Limited
Hollard Life Properties (Proprietary) Limited
Hollard Insurance Company of Namibia Limited
Lombard Insurance Limited
Spier Estate (Proprietary) Limited
Multi Risk Managers (Proprietary) Limited
Newshelf 702 (Proprietary) Limited
Newshelf 685 (Proprietary) Limited
Risk Benefit Solutions (Proprietary) Limited
Smart Credit Administrators (Proprietary) Limited
Tuttle Insurance Brokers (Proprietary) Limited
Utz Consulting (Proprietary) Limited
The guarantee policies were issued on commercial terms and conditions at market related rates.
Management fees:
Paid to Hollard Life Assurance Company Limited
Due to Hollard Life Assurance Company Limited as at 30 June 2010
Administration fees:
Paid to underwriting managers in which the Group holds an investment

Due to underwriting managers in which the Group holds an investment as at 30 June 2009
Investment policy with:
Hollard Life Assurance Company Limited
Key management compensation:
Salaries, bonuses and other short-term employee benefits
(Key management refers to Executive Committee members excluding Executive Directors)

Hollard Life Properties (Proprietary) Limited

Subsidiaries, associates and joint venture




Directly held subsidiaries
Artinsure Underwriting Managers
(Proprietary) Limited
Hollard Arcadia Investments (Proprietary)
Limited
AFS (Proprietary) Limited (incorporated and
operational in Australia)
Apex Underwriting Managers (Proprietary)
Limited
Broker Select Consulting Services (Proprietary)
Limited
Casa Luigi Properties (Proprietary) Limited
Wealth Associates SA (Proprietary) Limited
Electrical Plumbing Care Underwriting
Managers (Proprietary) Limited
Electronic Risk Underwriting Managers
(Proprietary) Limited
Louwfut Beleggings 1077 (Proprietary)
Limited
Equimed Underwriting Managers
(Proprietary) Limited
Firebush Investments (Proprietary) Limited
Ground Lily Investments (Proprietary) Limited
Haven Development Company (Proprietary)
Limited
Hollard and Connolly Investments
(Proprietary) Limited
Hollard Asset Management (Proprietary)
Limited
Etana Insurance Company Limited (formerly
Hollard Commercial & General Limited)
Factory and Industrial Risk Assessment
Services (Proprietary) Limited
The Hollard Insurance Company of Botswana
Limited (incorporated and operational in
Botswana)
Hollard Insurance Company of Namibia
Limited (incorporated and operational in
Namibia)
Hollard Investment Holdings (Proprietary)
Limited
Hollard Investment Managers (Proprietary)
Limited
Hollard Mozambique Companhia de
Seguros (incorporated and operational in
Mozambique)
Hollard Portfolio Management (Proprietary)
Limited
JJK Marketing Consultants (Proprietary)
Limited
Lomhold (Proprietary) Limited
Newshelf 33 (Proprietary) Limited
Precept Supply Chain Management
(Proprietary) Limited
River’s Edge Investment Holdings (Proprietary)
Limited
Small Area Repair Technology Underwriting
Managers (Proprietary) Limited

Impairment
Carrying value of interest in associates
Advantage Motor Plan (Proprietary) Limited
Astra Maritime (Proprietary) Limited
African Independent Brokers (Proprietary)
Limited
Awkward Investments (Proprietary) Limited
Caste Arena Trade & Invest 87 (Proprietary)
Limited
Clarendon Transport Underwriters
(Proprietary) Limited
Eikos Holdings SA (Proprietary) Limited
Flexible Accident And Sickness Acceptances
(Proprietary) Limited
Leungo Investments (Proprietary) Limited
Legal Expenses Group Africa Limited
Oakhurst Insurance Company Limited
Petsure (Proprietary) Limited
Product Warranty Solutions (Proprietary)
Limited
Shaheen Insurance Company Limited
South African Underwriting Managers
(Proprietary) Limited
Ubunye Holdings (Proprietary) Limited
(trading as Badger Insurance Holdings
(Proprietary) Limited)




Nature of business
A Property holding
B Underwriting managers
C Investment holding
D Short-term insurance brokers
E Venture capital
F Business process outsourcing services
G General insurance
H Insurance administrator
 any (consolidated) annual financial statements are set out below and have been consistently applied to all years presented unless otherwise stated.




h International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations issued and



 ost basis, except for the revaluation of investment and owner-occupied property, interest in subsidiaries and associates, derivative financial instrumen
ilable-for-sale financial assets and owner-occupied properties and certain financial assets both of which are carried at fair value.



nagement to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabil
 rical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making
parent from other sources. Actual results may differ from these estimates.

easonability on an ongoing basis. Revisions to accounting estimates are recognised in the statement of comprehensive income in the year in which the
on and future years if the revision affects both current and future years.


 ous financial year except for those instances where it has adopted new or revised standards and/or interpretations. The Group and Company adopted
unting Standards Board (IASB) and the IFRIC of the IASB relevant to its operations that are effective for annual reporting periods beginning on or after 1
 ave any effect on the Group and Company’s financial performance or position, although they did give rise to additional disclosures including, in some c


adopted during the year, together with the dates on or after which they became effective, are as follows:




eparate Annual Financial Statements .
ompany’s annual financial statements was as follows:



s’ changes in equity to be presented in a statement of changes in equity, and all non-owner changes either in one statement of comprehensive income
ehensive income. The previous standards required components of comprehensive income to be presented in the statement of changes in equity. The r
sive income be disclosed. In addition, it requires entities to present a comparative statement of financial position as at the beginning of the earliest
y, makes a retrospective restatement, or classifies items in the annual financial statements.
 statements, being the consolidated income statement and the consolidated statement of comprehensive income. Information about the individual
d in the notes to the annual financial statements.



 these annual financial statements because it has not applied an accounting policy retrospectively, made a retrospective restatement of items in its ann
cted the statement of financial position at the beginning of the earliest comparative period.




alitative analysis of those instruments recognised at fair value based on a three-level measurement hierarchy. Furthermore, for those instruments whic
osures of the transfer into and out of level 3, a reconciliation of the opening and closing balances, total gain or losses for the period split between those
 , and sensitivity analysis of reasonably possible change in assumptions. In addition disclosure is required of the movements between different levels of
nds the previous liquidity risk disclosure as required under IFRS 7 for non-derivative financial liabilities.




mparatives disclosures are not required in the year of transition.


 arate Annual Financial Statements
or financial years beginning on or after 1 July 2009.

that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. IAS 27 re
e accounted for as an entity transaction. Therefore, such a transaction will no longer give rise to goodwill, nor will it give rise to a gain or loss. Furtherm
 as well as the loss of control of a subsidiary. Other consequential amendments were made to IAS 7: Statement of Cash Flows , IAS 12: Income Taxes , IA
 nd IAS 31: Interest in Joint Ventures .




applicable to accounting periods beginning on or after 1 January 2009. The Group and Company has not opted to early adopt any of these standards a
e standards will not have a significant impact on the Group and Company’s reported results, financial position or cash flows:



                     Share-based Payments (effective 1 July 2009)
                     Business Combinations (effective 1 July 2009)
                     Non-current Assets Held-for-Sale and discontinued operations (effective 1 July 2009 and 1 January 2010 respectively)
                     Financial Instruments: Disclosures (effective 1 January 2009)
                     Operating Segments (effective 1 January 2009)
                     Presentation of Annual Financial Statements (revised 2007) (effective 1 January 2009)
                     Statement of Cash Flows (effective 1 January 2010)
                     Events After the Reporting Date (effective 1 July 2009)
                     Leases (effective 1 January 2010)
                     Borrowing Costs (effective 1 January 2009)
                     Consolidated and Separate Annual Financial Statements and Accounting for Investments in Subsidiaries (effective 1 July 2009)
                     Investments in Associates (effective 1 July 2009)
                   Interest in Joint Ventures (effective 1 July 2009)
                   Amendments to IAS 32 Financial Instruments: Presentation and IAS 1: Presentation of Annual Financial Statements (effective)
                   Impairment of Assets (effective 1 January 2010)
                   Intangible Assets (effective 1 July 2009)
                   The Fair Value Option (effective 1 January 2009)
                   Cash Flow Hedge Accounting of Forecast Intra-group Hedge Transactions (effective 1 January 2009)
                   Financial Instruments: Recognition and Measurement (effective 1 July 2009, 1 January 2010)
                   Annual Improvements Project (effective 1 January 2009)
                   Reassessment of Embedded Derivatives (effective 1 July 2009)
                   The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective 1 January 2009)
                   Agreements for the Construction of Real Estate (effective 1 January 2009)
                   Hedges of a Net Investment in a Foreign Operation (effective 1 July 2009)
                   Distributions of Non-cash Assets to Owners (effective 1 July 2009)
                   Transfers of Assets from Customers (effective 1 July 2009)
ompany’s annual financial statements in future will be as follows:



ent transaction involving an entity’s own equity instruments, requiring that in those circumstances where an entity chooses or is required to buy its ow
 transaction must always be accounted for as an equity settled share-based payment transaction. Furthermore, the amendment clarifies that vesting
es of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive
 the Group and Company.




bination to be expensed as they are incurred and contingent purchase consideration to be recognised at fair value at the date of acquisition. For succes
 the carrying amount of the previously held equity interest in the acquiree must be recognised in profit or loss. Furthermore, the revised standard repla
cted to affect the Group’s accounting for, and disclosure of, business combinations that arise after the effective date.




 the following dates:

 ective 1 July 2009); and
 discontinued operations (effective 1 January 2010).
er than IFRS 5 do not generally apply to non-current assets classified as held-for-sale and discontinued operations.
he Group and Company.

easurement and reinforces existing principles for disclosure about liquidity risk. The amendment introduces a three-level hierarchy for fair value measu
nts in the lowest level of the hierarchy. In addition the amendment clarifies and enhances existing requirements for the disclosure of liquidity risk prima
 liabilities. The amendments to IFRS 7 are only expected to have an impact on the Group and Company’s disclosure and are not expected to have an im
 or equity instruments are traded in a public market or that files or is in the process of filing its annual financial statements with a securities commissio
 a public market, to report financial and other descriptive information about its reportable segments based on information provided to key managemen
evaluating operating segment performance and deciding how to allocate resources to operating segments. An amendment to IFRS 8 prescribing additio
 s beginning on or after 1 January 2010. IFRS 8 will have no impact on the Group and Company as it does not have debt or equity instruments that are t
curities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market.




in equity either in one statement of comprehensive income or in two statements, namely a separate income statement and a statement of comprehen
tement of changes in equity. These changes are not expected to impact on the Group and Company’s results but are expected to have an impact on th




 r rental as operating activities. In addition, it outlines the requirements for the classification of expenditures on unrecognised assets. The amendments
are not expected to have an impact on its financial results.



y authorised and no longer at the discretion of the entity) after the reporting period, but before the annual financial statements are authorised for issu
end exists at that date. Therefore, in these circumstances, a liability cannot be raised even if there is a constructive obligation to pay the dividend. This




nance” or “operating” in accordance with the general principles of the standard. Prior to this amendment, IAS 17 generally required leases of land with
ected to have any impact on the Group and Company’s results.



he cost of a qualifying asset. Previously, a reporting entity had the option of expensing borrowing costs or capitalising these to the qualifying asset cost.
 ments.


nting for Investments in Subsidiaries (effective from 1 July 2009)

ts and the loss of control of a subsidiary. The revised standard requires the effects of all transactions with non-controlling interests to be recorded in e
. The standard also specifies the appropriate accounting treatment when control is lost. Any remaining interest in the equity is remeasured to the fair v
xpected to have a significant impact on the Group and Company’s annual financial statements.




s in associates are accounted for at fair value through profit or loss. Furthermore, there have been some consequential amendments to IAS 28 as a res
ted to have a significant impact on the Group and Company’s annual financial statements.
 jointly controlled entities are accounted for at fair value through profit or loss. Furthermore, there have been some consequential amendments to IAS
not expected to have a significant impact on the Group and Company’s annual financial statements.



 1: Presentation of Annual Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation

of financial instruments as equity, provided they have particular features and meet specific conditions:


ntities); and
on to deliver to another party a pro rata share of the net assets of the entity only on liquidation (for example, some partnership interests and some sha

 nts. The amendments to IAS 32 and IAS 1 are not expected to have a significant impact on the Group and Company’s annual financial statements.



dwill impairment testing. This amendment is not expected to have any impact on the Group and Company’s annual financial statements.



g from the revisions to IFRS 3 and also more clearly define the methods to be used to measure the fair value of an intangible asset that is acquired as pa
act on the Group and Company’s annual financial statements.



 ated at fair value through profit or loss. The designation of an instrument to be at fair value through profit or loss is now possible when it removes or
here the financial instrument is managed and their performance is evaluated on a fair value basis.



pany’s annual financial statements.


ansactions
 dated annual financial statements of the foreign currency risk of a highly probable forecast intra-group transaction under certain conditions. This amen
cial statements.



r out of the fair value through profit or loss category after initial recognition. The amendment further sets out a number of changes in circumstances th
 ences to the destination of hedging instruments at the segment level. This amendment is not expected to have a material impact on the Group and




nual improvements to existing international financial reporting standards and international accounting standards. The annual improvement project aim
involving terminology or editorial changes with minimum effect on recognition and measurement. The changes required by the annual improvements
ed derivative is required to be separated from the host contract and accounted for as a derivative when the entity first becomes a party to the contrac
he hybrid (combined) contract shall be treated as if it had not been measured at fair value with changes in fair value recognised in profit or loss). If an e
 ed at fair value through profit or loss in its entirety. This amendment is not expected to have a material impact on the Group and Company’s annual fin




their Interaction
  limits on the measurement of a defined benefit asset. When determining the limit, IFRIC 14 requires the Group and Company to measure any econom
 s interpretation is not expected to have any impact on the Group and the Company’s annual financial statements.




ise revenue in accordance with IAS 18: Revenue, and others recognise revenue as the real estate is developed in accordance with IAS 11: Construction
re construction is completed should be regarded as construction contracts (IAS 11) or agreements for the sale of goods (IAS 18) and it revises guidance
mpact on the Group and the Company.




 hedged risk in the hedge of a net investment in a foreign operation. It also provides guidance on where, within a group, hedging instruments that are h
ng. Thirdly, it provides guidance on how an entity should determine the amounts to be reclassified from equity to profit or loss for both the hedging
pact on the Group and Company’s annual financial statements.




when owners are given a choice of taking cash in lieu of non-cash assets. This interpretation is not expected to have any impact on the Group and Com


s from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide t
ectricity, gas or water). This interpretation is not expected to have any impact on the Group and Company’s annual financial statements.



d in accordance with their transitional provisions.


ments of the Company , its subsidiaries, associates and joint ventures.



 and operating policies so as to obtain benefits from their activities. Control generally accompanies a shareholding of more than 50% of a subsidiary’s v
ble or convertible are considered when assessing whether the Group controls another entity.



res effective control. Consolidation is discontinued from the effective date on which control ceases. Gains or losses on disposal of subsidiaries are acco
f subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed a
 ts acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date
olling interest.



dentifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, th



oportion of the net fair value of the assets, liabilities and contingent liabilities recognised. Non-controlling interest in the net assets of consolidated
ling interest consists of the amount of those interests at the date of the original business combination and their share of changes in equity since the da
eir interest in the subsidiary’s equity are allocated against the interest of the Group except to the extent that they have a binding obligation and are abl




olidation. Subsidiaries’ accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.


or loss financial instruments in accordance with IAS 39 – Financial instruments: Recognition and Measurement due to the fact that it continually manag




 trol, generally accompanying a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the finan
ose policies.


 nancial statements using the equity method of accounting, except when the investments is classified as held-for-sale, in which case it is accounted for
ons . Under the equity method, investments in associates are carried in the consolidated statement of financial position’s reserves at cost as adjusted fo
 impairment in the value of individual investments. Post-acquisition losses of associates in excess of the Group’s interest in that associate, which includ
 sociates, are not recognised unless the Group has incurred obligations or made payments on behalf of the associate. Post-acquisition profits are recog




he identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is
nt as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the
rehensive income.



 d to the extent of the Group’s interest in the associates. Associates’ accounting policies have been changed where necessary to ensure consistency wit



ss financial instruments in accordance with IAS 39 due to the fact that it continually manages and evaluates these investments on a fair value basis.



the terms of these arrangements, the strategic financial and operating policy decisions relating to joint venture activities require the unanimous consen
lidation method, except when the investment is classified as held-for-sale, in which case it is accounted for under IFRS 5. Under the proportionate
ncome, expenses and cash flows of the joint ventures are combined on a line-by-line basis with similar items in the consolidated annual financial statem
o the effective date of disposal.



ers’ share of amounts due to or from the Group.
or loss financial instruments in accordance with IAS 39 due to the fact that it continually manages and evaluates these investments on a fair value basis

e Group’s share of the net identifiable assets of the acquired subsidiary at the acquisition date. Goodwill arising on the acquisition of subsidiaries is initi
nd is carried at cost less any accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of goodwill relatin



fit from the synergies of the combination for the purpose of impairment testing. Each of these cash-generating units represents the Group’s investmen


rment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is
 the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each




der “Investments in associates” above.




o South African Rand at the exchange rates ruling at the statement of financial position date. Foreign investment income or loss is translated into South
the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the




 currency of the primary economic environment in which the entity operates (its functional currency). The consolidated annual financial statements ar
he Group’s presentation currency. All financial information presented in Rands has been rounded to the nearest thousand (R’000) except when otherw




foreign exchange rate ruling at the date of the transaction. At each statement of financial position date, assets and liabilities denominated in currencies
e ruling rate at that date. Foreign exchange gains or losses are recognised in the statement of comprehensive income. Translation differences on non-




 and liabilities of the Group’s foreign operations are translated from their respective functional currency into the Group’s presentation currency at the c
se items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the
  differences arising from the translation and consolidation of foreign operations are recognised directly in the statement of comprehensive income as
he income statement in the period in which the foreign operation is disposed of.
 are treated as assets and liabilities of the foreign operation and translated at the closing exchange rate at the statement of financial position date. Non




at is directly attributable to the acquisition of an asset and to bringing it to a working condition for its intended use, including import duties and non-
 and repairs expenditure, which neither adds to the value of property and equipment nor significantly prolongs its expected useful life, is recognised d



 rates considered appropriate to reduce its cost to net realisable value over its estimated useful life. The rates used to depreciate each category of pro


                                                          20%
                                                          10%
                                                          33%
                                                          33%
                                                           4%

cial year.

r buildings. The fair value is determined every three years by external, independent, professional valuers. Any accumulated depreciation at the date of
non-distributable reserve. All other decreases are charged to the statement of comprehensive income. Each year, the difference between depreciation
ensive income and depreciation based on the asset’s original cost, net of any related deferred tax is transferred from the revaluation surplus to retained



 changed, any difference arising between the carrying amount and the fair value at the date of transfer is recognised in other comprehensive income a
gain is recognised in the statement of comprehensive income. On disposal of such investment property, any surplus previously recorded in other




. Depreciation is provided on the straight-line basis at rates considered appropriate to reduce the cost or revalued amounts to net realisable value over


arate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the i
to the statement of comprehensive income during the financial period in which it is incurred.



ial position date and adjusted if appropriate. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying a



carrying amount and are included in the statement of comprehensive income. When revalued assets are sold, the amounts included in the revaluation




d which is not occupied by companies in the Group is classified as investment property. The Group’s investment property comprises freehold land and
t cost, including transaction costs. After initial recognition, investment property is measured at open-market fair value and is subject to a valuation by a



uses alternative valuation method such as recent prices on active markets. Gains or losses arising from changes in the fair value of investment property
n which they are identified. On disposal of investment property, the difference between the net disposal proceeds and the carrying value is recognised



as property and equipment and would be fair valued at the date of reclassification.




distribution network. These rights are amortised over the period in which benefits are expected to be obtained, not exceeding 20 years.



ed to acquire and bring to use the specific software. These costs are amortised on the basis of the expected useful life (three to five years).




he following categories: financial assets at fair value through profit or loss, available-for-sale, held-to-maturity financial assets and loans and other recei
 ired. Management determines the classification of its investments at the time of purchase according to the following accounting policies:




cipally for the purpose of selling in the short term, if it forms part of a portfolio of financial assets in which there is evidence of short-term profit taking
g-term investment strategy.

 ed as any period less than 12 months. Investments which the Group and Company have elected to designate at fair value through profit or loss are
 l statements, long term is defined as any period in excess of 12 months.



 fixed maturity that the Group and the Company have a positive intention and ability to hold to maturity are classified as held-to-maturity investments
hs from the statement of financial position date which are classified as current assets. This category also includes all assets that are not designated eith




 me, which may be sold in response to needs for liquidity or changes in interest rates, are classified as available-for-sale and are included in non-curren
 s for less than 12 months from the statement of financial position date or unless they will be sold to raise operating capital, in which case they are inclu
 shares, unit trusts, deposits and money market securities.
eterminable payments that are not quoted in an active market that are created by the Group or Company in exchange for providing money, goods or se
 on to sell immediately or in the short term or shares designated at fair value through profit or loss. Receivables arising from insurance contracts are als
e overall impairment review of loans and receivables.




ost using the effective interest method, less any impairment losses.



ecognised using the trade date accounting. The trade date is the date on which the Group and the Company commits to purchase or sell the asset.
ss and available-for-sale financial assets are carried at fair value, while held-to-maturity investments and loans and receivables are carried at amortised




es is established when there is objective evidence that the Company or Group will not be able to collect all amounts due according to their original term


he investments have expired or where they have been transferred and the Group and the Company has also transferred substantially all risks and rewa



stments classified as fair value through profit or loss are included in the income statement in the period in which they arise. Unrealised gains or losses a
e statement of comprehensive income. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments
nancial instruments.




al assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value an



d collective investment schemes are valued using the repurchase price. The use of cash flow models are for non-active market instruments. Fair values
ngs ratios refined to reflect the specific circumstances of each investment. Where the fair value of an investment cannot be measured reliably, the




financial liabilities and there is an intention to settle the liability and realise the asset simultaneously or to settle on a net basis, all related financial effe



 ction costs. These liabilities are subsequently measured at amortised cost using the effective interest method, with the interest expense being recogni


ncial liability and of allocating the corresponding interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
te, a shorter period.

Instruments: Presentation , the Group and Company classify the following statement of financial position items as financial liabilities:
d Company staff.


ntract is entered into and are subsequently remeasured at their fair value. Fair values are obtained from quoted market prices in active markets, includ
ssets when fair value is positive and as liabilities when fair value is negative. The changes in fair value of derivatives that do not qualify for hedge accou




 hether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets other than
urred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a ‘l
 inancial asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset or group of assets is impaired include
he following events:




mpany.
soon as they are identified.
d receivables carried at amortised cost and available-for-sale assets, the amount of the loss is measured as the difference between the asset’s carrying
ncial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of



 d on the basis of similar credit risk characteristics.
ether there is objective evidence that an available-for-sale financial asset is impaired, including, in the case of equity investments, a significant or prolon
he cumulative loss, which is measured as the difference between the acquisition cost and the current fair value of the investment, is removed from oth




 ease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and
 arried at a revalued amount, in which case the reversal of the impairment losses is treated as a revaluation increase.



whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised as the amou
 amount is the higher of an asset’s fair value less costs to sell and value in use.




 cash on hand, deposits held on call with banks and investments of three months or less in money market instruments that are readily convertible to a
 cash equivalents are measured at fair value by reference to expected cash flows and current market interest rates.
 ssets. Incremental costs directly attributable to the issue of equity instruments are shown in equity as a deduction from the proceeds, net of tax.




 k or, in some cases, both.
surer) accept significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder or other beneficiary if a specif
 ay also transfer financial risk. As a general guideline, the Group and Company define as significant insurance risk the possibility of having to pay benefit
 able if the insured event did not occur.



nt of comprehensive income in accordance with the requirements of IFRS 4.


nt insurance risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, financial instrument price, commodity
variable, provided, in the case of a non-financial variable that the variable is not specific to a party to the contract.




ansactions in the statement of comprehensive income but instead are deposit accounted in the statement of financial position in accordance with IAS
pected amounts payable to the holders of the investment contracts inclusive of allocated investment income.



 .

isk or financial risk, or in some instances both. This section summarises these risks and the way in which the Group and Company manage them.



 rrespective of whether they relate in whole or in part to a later accounting period and are disclosed gross of commission to intermediaries and exclude
ods.

e pattern of indemnity received. Reinsurance commissions received are deferred and recognised as income over the term of the reinsurance contract.



sed on the pattern of the risk underwritten. Unearned premiums, which represent the proportion of premiums written in the current year which relate
proportionate basis for even risk contracts and other bases that best represent the unearned risk profile for uneven risk contracts.




onnected with acquisition or renewal of insurance contracts. The deferred acquisition costs are amortised on a straight-line basis over the average term
or impairment using the liability adequacy test as per IFRS 4. The deferred acquisition cost is not reinstated once written off.




cial year, together with the movement in the provision for outstanding claims and are charged to income as incurred.
f the undiscounted ultimate cost of settling all claims incurred but unpaid at the statement of financial position date, whether reported or not. Related



cted in the annual financial statements for the period in which the adjustments are made and disclosed separately.

ts
ses attributable to the unexpired periods of policies in force at the statement of financial position date exceeds the unearned premium provision in rela


ure the adequacy of the liability raised. Current best estimates of future contractual cash flows, claims handling and administration expenses are used
ed risk provision).



egulatory authorities in South Africa and Namibia.


purpose of limiting its net loss potential. Reinsurance arrangements do not relieve the Group from its direct obligations to its policyholders. Premium ce
 statement of financial position separately from the gross amounts.


ounted for as reinsurance. Amounts recoverable under such contracts are recognised in the same year as the related claim. Reinsurance contracts tha
overable under reinsurance contracts are assessed for impairment at each statement of financial position date.



nt that occurred after its initial recognition, that the Group and Company may not recover all amounts due and that there is a reliably measurable impa
nt losses are recognised in the statement of comprehensive income.




in settling a claim. The Group and Company may also have the right to pursue third parties for payment of some or all costs. Estimates of salvage recov
nt of the liability for claims.




 note 1.12.

ding financial instruments measured at fair value through profit or loss, are recognised within investment income and finance costs in the statement of
 paired, the Group and Company reduce the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the origina
ome.




ve payment is established, which is the last day of registration in respect of quoted shares and when declared in respect of unquoted shares.



hensive income on a straight-line basis over the term of each lease.
 . Contributions to the funds in respect of present service are charged against income as incurred. Contributions are adjusted periodically to take accoun
 ve no further obligations once the contributions have been paid.



 it of employees. A provision is recognised when the Group is contractually obliged to pay the profit share or bonus to its employees or where a past pra




 they accrue to employees. Provision is made for the estimated liability of this leave as a result of services rendered by employees up to the statement



efore the normal retirement date or whenever an employee accepts a voluntary redundancy in exchange for these benefits. The Group and Company
s demonstratively committed to either terminating the employment of current employees according to a detailed, formal plan without possibility of
 an offer made to encourage voluntary redundancy.




enefit of black employees of the Group and Company. The options issued or granted to employees are raised as a liability and recognised in profit or los
ed and any changes in value are recognised in profit or loss.



 respect of pensioners, former employees or current employees.




 taxation. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that
me tax is recognised in the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in which case



 antively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the de




 tement of financial position date, including any prior year adjustments.



g the statement of financial position liability method in respect of all temporary differences arising between the tax bases of assets and liabilities and th
gnised for all taxable temporary timing differences and deferred tax assets are recognised to the extent that its probable future taxable profit will be av
ilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other
ng profit.




al position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
 to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group int




d dividend is declared. Unused STC credits are recognised as a deferred tax asset where it is probable that these credits will be utilised.




 structive obligation of uncertain timing or amount as a result of past events, it is probable that an outflow of resources embodying economic benefits w
 ion can be made.


 expenditure required to settle the obligation at the reporting date. When the effect of discounting is material, provisions are discounted using a pre-ta
ey and, where appropriate, the risks specific to the liability.


 of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A
tem included in the same class of obligations may be small.




 rrowings are subsequently stated at amortised cost. Any difference between the proceeds and the redemption value is recognised in the statement of
  rate method.




 f ownership are classified as operating leases. Payments made under operating leases are charged to the statement of comprehensive income on a str
 ayment required by the lessor by way of a penalty is recognised as an expense in the period in which termination takes place.




ported amounts of assets and liabilities in the annual




ntracts is the Group and Company’s most critical
djusted for the effect of current developments and likely
 s estimates and assumptions are reviewed and updated
 n becomes available.

ons are outlined in note 21.


well established valuation techniques. These techniques
 ethodologies. Where the underlying investments of an
ued on the net asset value basis which reflects the fair
managers are valued on a discounted cash flow basis.
RSA R153 rate of 9% was used as a risk-free rate with a
d to cash flows or earnings for each company to reflect




multiplied by an earnings factor. The potential future
and management of the Company are considered in


 ompany are used. The current interest rate cycle, risk-free
ning the discount rate.

nalysis inappropriate.




ntinue as a going concern and to provide value to its
al as a result of managing its business risks within an


mmunicating the Group and Company’s risk management
s, and for ensuring that sufficient capital is held to support
blished the Audit, Risk and Compliance Committee, which
ment policies. The committee reports regularly to the


d analyse the risks it faces, to set appropriate risk limits
and systems are reviewed regularly to reflect changes in
mpany, through its training and management standards
 in which all employees, brokers and partners understand


nagement monitors compliance with its established risk
ment framework in relation to the risks faced by the Group
 role by Internal Audit, which undertakes both regular and
e reported to stakeholders in management and to the
 of the above risks, the Group and Company’s objectives,
 y’s management of capital. Further quantitative


  of the Group and Company’s risk management framework.
 is responsible for developing and monitoring the Group
oard of Directors on its activities.

analyse the risks it faces, to set appropriate risk limits
 s and systems are reviewed regularly to reflect changes
any, through its training and management standards and
hich all employees, intermediaries and partners understand




unterparty to a financial instrument fails to meet its




tors compliance with the Group and Company’s risk
ment framework in relation to the risks faced by the Group
ersight role by Internal Audit. Internal Audit undertakes
esults of which are reported to the Group Audit, Risk and




s on its exposure to a single counterparty or groups of
 evels are subject to annual or more frequent reviews.
he Group and Company’s procedures on credit.

ual characteristics of each intermediary and the
surance business is written through and administered
Company for most of their existence. The credit control
 ermediaries are closely monitored on many levels,
 protected by guarantees provided by the intermediary


 loans and other receivables. The main components of
xposures, and a collective loss component established for
 tified. The collective loss allowance is determined based on
t monitors and approves the investment mandates
  its exposure to credit risk through diversification and by
  credit rating of A1 from Standard & Poor’s and A from
 rict criteria. Given these high credit rating requirements,


nterparties, asset management houses, to business sectors,
 o various asset management houses and enforcing a strict
 ramework and the Treasury and Investment Committee

 4 on pages 37 to 48 of the annual financial statements.


 ments, reinsurers agree to reimburse the ceded amount to
y remain liable to its policyholders regardless of whether
mpany are exposed to credit risk.

rs due to the nature of the reinsurance market and
 hiness of reinsurers is considered annually by reviewing
’s largest reinsurance counterparty is Hannover Re. This
ify that the contract is progressing as expected and that no


g basis and review reinsurance arrangements periodically.
 sponsible for setting the minimum security criteria for
 iteria. When selecting a reinsurer the Group and Company




ncial obligations as they fall due. The Group and
 always have sufficient liquidity to meet its liabilities
ble losses or risking damage to the Group and


ainly from claims arising from short-term insurance
portion of maturing funds to be available to meet such calls


d Company have estimated the probable cash outflows
ance liabilities is set out on note 4.2 on pages 42 to 44.
e similar to the profile of the liabilities. The Group and
 be recognised as earned premium in the future, will
ount in estimating future cash outflows associated with




 interest rates and equity prices will affect the Group and
uments. The objective of market risk management is to
he same time optimising the Group and Company’s return


capital base are fully exposed to the relevant elements of




 instrument fluctuating from their expected values as a
currencies of assets or liabilities or supporting capital or the


 in a currency other than Rand. This exposure is limited
  transactions with foreign reinsurers, debt securities
e for the purposes of obtaining favourable international
mmittee. The Group and Company does not take cover on


e Group split of assets and liabilities by major currency.


cial instrument fluctuating from their expected values as a


d cash flows associated with floating rate financial
oup and Company’s investment portfolios. The Group
 rate risk. Furthermore, the majority of interest sensitive
ny do not use derivative instruments to manage this risk
arket expectations within the South African market to


they are not discounted and contractually non-interestbearing.
uture cash flows of financial instruments will




ows from equities fluctuating from their expected values as


held on behalf of the policyholders and the shareholders.
ed research function utilising professional advisors. Within
holders’ returns while limiting risks to acceptable levels


ccordance with this strategy certain investments are
monitored and they are managed on a fair value basis.
unlisted, owned by the Group and Company, which include
trations of specific equity holdings are also monitored.

, non-distributable reserves, retained earnings and noncontrolling
national basis of solvency (being the ratio of net


irements as prescribed by the legislation in the territories in




surance markets where the Group and Company
 ional solvency ratio of 40% to 50%;
 can continue to provide returns for shareholders and

surately with the level of risk;
ximise shareholder value; and


he minimum amount and type of capital that must be held
uired capital must be maintained at all times.
es Board in terms of the Short-term Insurance Act,
d in the Act. The returns submitted during the year
ear. The operating subsidiaries also met their respective




 it exposure. The maximum exposure to credit risk at


                                  Carrying value in
                               statement of financial
                                      position                     Net credit exposure
                                     2010                  2009       2010                  2009
                                    R’000                 R’000      R’000                 R’000



                                 321,997               215,368      321,997            215,368
                                  40,176                37,757       40,176             37,757
                               1,923,332             1,694,842    1,923,332          1,694,842
                                  13,736                33,026       13,736             33,026
                                   3,616                     –        3,616                  –
                                       –                34,760            –             34,760
                                 148,395               137,078      148,395            137,078
                                  60,782                 2,960       60,782              2,960
                                 229,903               159,580      229,903            159,580
                                 482,376             1,375,511      482,376          1,375,511
                               3,158,921             2,533,244    3,158,921          2,533,244

                               1,616,664                362,167   1,616,664              362,167
                                 396,690                296,210     396,690              296,210
                               2,216,420     1,780,480           2,216,420      1,780,480
                              10,613,008     8,662,983          10,613,008      8,662,983



                                 586,488       511,926             586,488        511,926
                                 367,207       206,358             367,207        206,358
                                 448,825       368,274             448,825        368,274
                                  29,549        27,149              29,549         27,149
                                   7,231             –               7,231              –
                               1,501,285     1,356,614           1,501,285      1,356,614
                                       –        34,760                   –         34,760
                                  87,082       137,078              87,082        137,078
                                  58,716         2,079              58,716          2,079
                                 250,378       382,071             250,378        382,071
                               1,359,714     1,322,210           1,359,714      1,322,210

                                 313,957       296,283             313,957        296,283
                                 251,722       147,387             251,722        147,387
                                 749,715       698,562             749,715        698,562
                               6,011,869     5,490,751           6,011,869      5,490,751

orting date was as follows:

                                               Carrying value
                                     Group                            Company
                                   2010          2009                2010           2009
                                  R’000         R’000               R’000          R’000



                                139,454        84,771              77,001         84,771
                                  2,389         9,174                   –          6,957
                                  1,428         5,014               1,428          5,014
                                  5,130         9,437               2,625          9,437
                                130,254       138,440              93,244        104,261
                                  6,933         1,768                   –          1,768
                                  5,582           209                   –              –
                                 29,969        24,647              28,796         23,916
                                297,555       209,506             277,590        195,199
                                      –        22,797                   –         22,797
                                 16,956             –               4,443              –
                                  6,642         2,776               3,461          2,149
                                 23,534        18,855              20,655         16,626
                                 13,163             –               6,455              –
                                 11,648         6,922               7,532          6,394
                                  7,174         2,275               2,582          1,546
                                  6,601         2,638                 754            454
                                 81,171        57,706              18,445              –
                                 12,298             –              12,298              –
                                 32,932        52,479                   –              –
                                830,813              649,414              557,309    481,289

                                  4,047                     –
                                  1,597                 2,717
                                      –                 5,344
                                 10,813                 7,534
                                 16,457                15,595




any’s aggregated credit quality of financial and insurance assets that


                                   AAA                   AA+                   AA        AA-      A+
                                  R’000                 R’000               R’000      R’000   R’000




                                      –                     –                   –         –         –
                                      –                     –                   –         –         –
                                      –                     –                   –         –         –
                                  5,564                     –              21,522         –     1,128
                                      –                     –                   –         –         –
                                      –                 5,034              17,056       443         –
                                      –                     –                   –         –         –

                                       –                    –                   –         –        –

                                       –                    –                   –         –        –

                                169,676                50,397            1,643,071   871,634   37,481

                                       –                    –             679,591         –        –

                                      –                     –                    –         –        –
                                 19,113                     –              153,856       831   20,821
                                194,353                55,431            2,515,096   872,908   59,430



                                      –                     –                   –          –       –
                                      –                     –                   –          –       –
                                  6,310                     –              20,921     32,679       –
                                      –                     –                   –          –       –
                                      –                     –                   –          –       –
                                      –                 6,931               6,769          –       –
                                      –                     –              10,000          –       –


                                       –                    –                   –         –        –
     –         –     51,393        –        –

339,314   425,843   747,908   679,354       –

     –         –         –         –        –

      –         –         –         –       –
    171         –    34,628    16,131       –
345,795   432,774   871,619   728,164       –




     –         –          –        –         –
     –         –          –        –         –
     –         –          –        –         –
     –         –          –        –         –
     –         –          –        –         –
     –         –      5,368        –     1,128
     –         –          –        –         –

     –         –         –         –        –

169,676        –    339,957   768,924   36,890

      –        –          –         –        –
      –        –          –         –        –
     16        –      2,643       831   20,821
169,692        –    347,968   769,755   58,839



     –         –          –         –       –
     –         –          –         –       –
     –         –          –         –       –
     –         –          –         –       –
     –         –      1,241    32,679       –
     –         –          –         –       –

     –         –         –         –        –

     –         –         –         –        –

226,377   370,529        –    653,054       –

      –         –         –         –       –
      –         –         –         –       –
      –         –         –         –       –
226,377   370,529     1,241   685,733       –
dividually impaired at the reporting date was

                                                       Group                                               Company
                             Neither                                                            Neither
                                past             Past due                            Gross         past
                             due nor              but not       Individually       carrying     due nor
                            impaired            impaired           impaired        amount      impaired
                               R’000               R’000              R’000          R’000        R’000

                                     –                      –                –             –     367,207
                                40,176                      –                –        40,176      29,549
                               689,700                      –           24,454       714,154     557,309
                             1,217,175                      –                –     1,217,175     943,976
                                16,457                      –                –        16,457           –

                               681,695               9,858                     –    691,553      384,224

                             3,158,921                   –                   –     3,158,921   1,359,714
                             5,804,124               9,858              24,454     5,838,436   3,641,979
                             1,298,884            317,780                6,009     1,622,673     264,831
                             2,216,420                  –                    –     2,216,420     749,715
                             3,515,304            317,780                6,009     3,839,093   1,014,546

                                     –                      –                –             –     206,358
                                37,757                      –                –        37,757      27,149
                               634,450                      –           14,964       649,414     481,289
                             1,189,413                      –                –     1,189,413     875,324

                             1,516,071                      –             -522     1,515,549     521,228

                             2,533,244                      –                –     2,533,244   1,322,210
                             5,910,935                      –           14,442     5,925,377   3,433,558
                               359,055                      –            3,112       362,167     296,283
                             1,780,480                      –                –     1,780,480     698,562
                             2,139,535                      –            3,112     2,142,647     994,845




                                                                Group
                                                                                                   Total
                                                                                     More       past due
                                                    31 –               61 –           than       but not
                             <30 days            60 days            90 days        90 days     impaired
                                R’000              R’000              R’000          R’000        R’000



                               2,314                  –               5,944          1,600       9,858
                             119,828            164,391              13,977         19,584     317,780
                             122,142            164,391              19,921         21,184     327,638
ceivables in a separate impairment allowance account.
eivables is as follows:

eceivables and premium debtors for the Group and Company


                                      Group                           Company
                                    2010                 2009        2010          2009
                                   R’000                R’000       R’000         R’000
                                  3,112                 1,803            –           –
                                  9,078                 1,916        3,069           –
                                      –                  -607            –           –
                                 12,190                 3,112        3,069           –




cial assets, including interest payments:

                                                     Total
                                Carrying       contractual          0 – 12         1–2     2–5
                                amount          cash flows         months         years   years
                                  R’000              R’000          R’000         R’000   R’000



                              1,923,332         1,923,332        1,923,332            –        –
                                229,903           229,903          229,903            –        –
                                 13,736            13,736           13,736            –        –
                              2,216,420         2,216,420        2,058,157      156,102    2,162
                              2,308,217         2,308,217        2,308,217            –        –
                                396,690           396,690          396,690            –        –
                              3,158,921         3,158,921        3,158,921            –        –
                             10,247,219        10,247,219       10,088,956      156,102    2,162

                              1,694,842          1,694,842       1,694,842            –        –
                                159,580            159,580         159,580            –        –
                                 33,026             33,026          33,026            –        –
                                 34,760             34,760               –            –   34,760
                              1,780,480          1,780,480       1,681,568       96,948    1,964
                              1,877,716          1,877,716       1,877,716            –        –
                                296,210            296,210         296,210            –        –
                              2,533,244          2,533,244       2,533,244            –        –
                              8,409,858          8,409,858       8,276,186       96,948   36,724

                                                     Total
                                Carrying       contractual          0 – 12         1–2     2–5
                                amount          cash flows         months         years   years
                                  R’000              R’000          R’000         R’000   R’000
1,501,285    1,501,285    1,501,285         –         –
  749,715      749,715      591,452   156,102     2,161
  710,133      710,133      710,133         –         –
  251,722      251,722      251,722         –         –
1,359,714    1,359,714    1,359,714         –         –
4,572,569    4,572,569    4,414,306   156,102     2,161

1,356,614    1,356,614    1,356,614         –         –
   34,760       34,760            –         –    34,760
  698,562      698,562      599,650    96,948     1,964
  817,511      817,511      817,511         –         –
  147,387      147,387      147,387         –         –
1,322,210    1,322,210    1,322,210         –         –
4,377,044    4,377,044    4,243,372    96,948    36,724




                  Total
 Carrying   contractual      0 – 12      1–2       2–5
 amount      cash flows     months      years     years
   R’000          R’000      R’000      R’000     R’000




  715,422      715,422       -1,109     5,915   308,244
1,564,605    1,564,605    1,564,605         –         –
2,280,027    2,280,027    1,563,496     5,915   308,244



  448,203      448,203            –     1,226        –
1,432,097    1,432,097    1,293,501    43,842        –
   15,516       15,516       15,516         –        –
1,895,816    1,895,816    1,309,017    45,068        –

  20,185        20,185           –         –     20,185
  20,185        20,185           –         –     20,185




 643,200       643,200     643,200         –         –
 643,200       643,200     643,200         –         –



 619,568       619,568     542,601         –         –
  12,092        12,092      12,092         –         –
 631,660       631,660     554,693         –         –

  20,185        20,185           –         –     20,185
                                     20,185             20,185           –                  –      20,185



ated with insurance liabilities:

                                                           Group                                             Company
                                                                   Maturity
                                   Probable           Maturity     between          Maturity     Probable
                                       cash           within a      2 and 5        more than         cash
                                   outflows              year         years          5 years     outflows
                                      R’000             R’000         R’000            R’000        R’000



                                   2,086,133         1,630,916     452,556              2,661     911,784

                                     611,068           561,100      49,387                580      431,671
                                   2,124,242         1,809,702     314,541                  –      754,461
                                      48,049            32,193      15,856                  –       48,049
                                      35,374            26,464       8,911                  –       27,003
                                      10,512            10,512           –                  –            –
                                         623               623           –                  –            –
                                         523               523           –                  –            –
                                     588,957                 –           –            588,957      587,202
                                     950,524           950,524           –                  –      258,628
                                   6,456,005         5,022,557     841,251            592,198    3,018,798



                                   1,803,626         1,501,096     293,671              8,859     888,806

                                     582,423           461,902     120,296                225      445,821
                                   1,715,591         1,597,897     117,694                  –      686,779
                                      36,053            14,421      21,632                  –       36,053
                                      72,819            46,794      26,025                  –       59,148
                                         494               494           –                  –            –
                                      10,386            10,386           –                  –            –
                                       1,563             1,563           –                  –            –
                                     496,812                 –           –            496,812      495,058
                                     496,168           496,168           –                  –      204,740
                                   5,215,935         4,130,721     579,318            505,896    2,816,405




                                                           Group
                                          2010                           2009
                                                 Reporting date                 Reporting date
                            Average rate                   R’000       Average rate           R’000
                                   6.70744               6.5559             6.6725           6.3433
                                    1.1371               1.1039                1.24          1.1754
                                         1                    1                   1               1
                                    0.2666               0.2251             0.3608           0.2972




                                                             Group
                           Profit/(loss)                                   Equity
                          10% increase          10% decrease         10% increase     10% decrease
                                  R’000                R’000                R’000            R’000

                                   -17,007               17,007            -51,291           51,291
                                       900                 -900              9,415           -9,415
                                     1,846               -1,846             16,262          -16,262
                                   -14,261               14,261            -25,614           25,614

                                    22,970               -22,970            42,032          -42,032
                                       126                  -126             1,693           -1,693
                                       996                  -996             7,056           -7,056
                                    24,092               -24,092            50,781          -50,781

acts the business in South African Rand. There is no currency




aring financial instruments was:

                                    2010                   2009
                                 Carrying               Carrying
                                 amount                 amount
                                   R’000                  R’000




                                3,158,921             2,533,244
                                   69,341                72,129
                                3,228,262             2,605,373




                                1,359,714             1,322,210
                                    6,615                 5,586
                                1,366,329             1,327,796

erest rate risk. Therefore no sensitivity analysis is necessary.
are exposed to fluctuations in interest rates. Exposure to interest rate risk is
tress testing using measures such as duration.

ng instruments under a fair value hedge accounting model.
d have increased/(decreased) equity and profit or loss by the amounts
 foreign currency rates, remain constant. The analysis is performed based


                                    Profit/(loss)                                Equity
                               % increase         2% decrease           2% increase       2% decrease
                                    R’000               R’000                 R’000             R’000



                                   63,178                 -63,178             63,178          -63,178
                                    1,387                  -1,387              1,387           -1,387
                                   64,565                 -64,565             64,565          -64,565
                             5% increase           5% decrease          5% increase       5% decrease
                                   R’000                 R’000                R’000             R’000

                                  126,662              -126,662             126,662          -126,662
                                    3,327                -3,327               3,327            -3,327
                                  129,989              -129,989             129,989          -129,989
                             2% increase           2% decrease          2% increase       2% decrease
                                   R’000                 R’000                R’000             R’000



                                   21,554                 -21,554             21,554          -21,554
                                     -132                     132               -132              132
                                   21,422                 -21,422             21,422          -21,422
                             5% increase           5% decrease          5% increase       5% decrease
                                   R’000                 R’000                R’000             R’000

                                   45,274                 -45,274             45,274          -45,274
                                       48                     -48                 48              -48
                                   45,322                 -45,322             45,322          -45,322




date was as follows:
                                                   2010                                                 2009
                                 Carrying                                   Relevant         Carrying
                                 amount              Listed/not                stock         amount     Listed/not
                                   R’000                  listed           exchange            R’000         listed

                                  617,110                  Listed                  JSE       312,847        Listed
                                201,405                 Listed                JSE         204,716        Listed
                                818,515                                                   517,563
 For such investments classified a 5% increase in equity price at
 own below. A 5% decrease in equity price should have had the equal


                                   Profit/(loss)                              Equity
                           5% increase          5% decrease        5% increase       5% decrease
                                 R’000                R’000              R’000             R’000

                                  25,892               -25,892            25,892           -25,892
                                   9,767                -9,767             9,767            -9,767
                                  35,659               -35,659            35,659           -35,659

                                   2,449                -2,449             2,449            -2,449
                                  10,838               -10,838            10,838           -10,838
                                  13,287               -13,287            13,287           -13,287

                                                2010                                                 2009
                                Carrying                                 Relevant         Carrying
                                amount             Listed/not               stock         amount     Listed/not
                                  R’000                 listed          exchange            R’000         listed

                                343,606                 Listed                JSE         282,503        Listed
                                201,405                 Listed                JSE         179,381        Listed
                                545,011                                                   461,884

 ed. For such investments classified a 5% increase in equity price at
 own below. A 5% decrease in equity price would have had the equal


                                  Profit/(loss)                              Equity
                            5% increase         5% decrease         5% increase        5% decrease
                                  R’000               R’000               R’000              R’000

                                  16,170               -16,170            16,170           -16,170
                                   9,767                -9,767             9,767            -9,767
                                  25,937               -25,937            25,937           -25,937

                                  18,411               -18,411            18,411           -18,411
                                  10,196               -10,196            10,196           -10,196
                                  28,607               -28,607            28,607           -28,607




wing expenditure in respect of financial instruments


                                      Group                                  Company
                                 2010         2009      2010          2009
                                R’000        R’000     R’000         R’000
                              212,280      221,344   112,382       130,420
                              212,280      221,344   112,382       130,420
                               30,757       17,100       623         3,874
                               30,757       17,100       623         3,874
                              181,523      204,244   111,759       126,546



                              212,280      221,344   112,382       130,420
                              -30,757      -17,100      -623        -3,874
                              181,523      204,244   111,759       126,546



ting period was as follows:

                                  Group                  Company
                               2010          2009     2010           2009
                              R’000        R’000     R’000         R’000

                                4,176         -522     4,408          -522

                                   –       -10,230   -77,862        13,959

                                   –         4,578        8             –

                                    –        3,112         –             –
                                4,176       -3,062   -73,446        13,437

                                   Group                 Company
                                 2010         2009      2010          2009
                                R’000        R’000     R’000         R’000



                              229,121      199,267    91,973        92,816
                               12,529       13,242     2,877         2,877
                                2,537        1,180     1,010             –
                                4,210       26,490         –             –
                              248,397      240,179    95,860        95,693

                              122,072       98,087    67,740        61,281
                                6,070        6,493     2,426         2,123
                                  682          396         –             –
                                  538          480         –             –
                              129,362      105,456    70,166        63,404

                              107,049      101,180    24,233        31,535
                                6,459        6,749       451           754
                                1,855          784     1,010             –
                                3,672               26,010              –            –
                              119,035              134,723         25,694       32,289

                              134,723              103,824         32,289       36,844
                                6,346               20,078              –            –
                                     –              18,285              –            –
                                   252                 366              –            –
                                 6,094               1,427              –            –
                               -7,422               -2,277              –            –
                               44,325               54,659          9,354        9,975
                                40,654              46,450           8,344        9,945
                                 2,315               4,136               –           30
                                 1,356                  77           1,010            –
                                     –               3,996               –            –
                               -30,383              -2,351          -4,572       -1,778
                                -6,506              -1,643          -4,572       -1,309
                                  -248                -708               –         -469
                               -23,629                   –               –            –
                               -30,088             -31,193         -11,377      -12,752
                              -28,719              -28,950         -11,075      -12,364
                               -1,014               -1,960            -302         -388
                                 -297                 -225               –            –
                                  -58                  -58               –            –
                                1,534               -8,017               –            –
                              119,035              134,723          25,694       32,289



                                     –                 321
                                     –                -321
                                     –                   –

 square metres. Date of acquisition was 29 November 1999 at a
f 5) of Erf 2406 Umhlanga Rocks in extension 1,416 square meters




                                    Group                             Company
                                  2010                2009           2010         2009
                                 R’000               R’000          R’000        R’000
                                 3,761               4,536              –            –
                                     –                 350              –            –
                                    85                   –              –            –
                                     –              -1,125              –            –
                                 3,846               3,761              –            –
      Group                  Company
   2010          2009     2010            2009
  R’000        R’000     R’000          R’000

 53,217        34,513         –                 –
  7,677          7,677        –                 –
 56,194       43,011     26,381        26,714
117,088       85,201     26,381        26,714

  4,066          4,066        –                 –
  3,071          1,535        –                 –
 32,558       24,380     22,424        20,672
 39,695       29,981     22,424        20,672

 49,151        30,447         –                 –
  4,606          6,142        –                 –
 23,636       18,631      3,957         6,042
 77,393       55,220      3,957         6,042

 55,220         52,735    6,042           1,891
      –        -13,427        –                –
 15,245         28,602      667           5,508
    399        6,377          –              –
 14,846       22,225        667         5,508
-14,247           -451        –                –
 32,165              –        –                –
   -446          -58       -330           -58
   -446            -58     -330             -58
-10,578        -11,967   -2,422          -1,299
      –       -5,006          –              –
 -1,535         -1,535        –                –
 -9,043       -5,426     -2,422        -1,299
     34         -214          –              –
                               77,393           55,220         3,957            6,042




                                      Group                        Company
                                    2010            2009          2010             2009
                                   R’000           R’000         R’000            R’000



                                                               586,488          511,926
                                                               367,215          294,422
                                                               953,703          806,348
                                                                    -8          -88,064
                                                               953,695          718,284
                                                               953,695          718,284




                                      Group                        Company
                                    2010            2009          2010             2009
                                   R’000           R’000         R’000            R’000



                                142,945           53,681       448,825          368,274
                                      –           -1,216             –                –
                                179,052          162,903             –                –
                                321,997          215,368       448,825          368,274
                                 40,176           37,757        29,549           27,149
                                362,173          253,125       478,374          395,423



                                196,551          132,806
                                -17,499           30,097
                                179,052          162,903



orised by nature of business as follows:

                         Underwriting          Property    Short-term
                          Investments         managers       holdings        insurance    Total
                                R’000             R’000         R’000            R’000    R’000
                                        –        851,330        38,086           79,251   968,667
                                        –        368,298        42,951           42,432   453,681
                                        –        483,032        -4,865           36,819   514,986
                                        –        234,972         5,214            4,963   245,149
                                        –         69,497             –            3,693    73,190
           –    165,475         5,214           1,270      171,959
        –       174,733         2,439           1,880      179,052
    3,375       239,995         3,439          75,188      321,997
        –         2,807        37,369               –       40,176
   15,462       352,687         1,050          79,626      448,825

   69,692       751,516        41,970                  –   863,178
   53,204       334,371        41,621                  –   429,196
   16,488       417,145           349                  –   433,982
    9,933       297,831         9,538                  –   317,302
    3,135        99,035         1,704                  –   103,874
    6,798       198,796         7,834                  –   213,428
    7,397       150,512         4,994                  –   162,903
   11,012       198,362         5,994                  –   215,368
    1,438        -1,292        37,611                  –    37,757
    8,042       359,182         1,050                  –   368,274




      Group                        Company
   2010            2009         2010             2009
  R’000          R’000         R’000           R’000

  3,616              –         7,231               –
  3,616              –         7,231               –




  10,857                 –
     706                 –
 -17,164                 –
 -12,621                 –
  91,922             –
-104,543             –




     2010          2009          2010            2009
    R’000         R’000         R’000           R’000
  229,903        159,580             –               –
   13,736         33,026             –               –
1,923,332      1,694,842     1,501,285       1,356,614
2,166,971      1,887,448     1,501,285       1,356,614
  229,903     159,580           –           –
1,937,068   1,727,868   1,501,285   1,356,614
2,166,971   1,887,448   1,501,285   1,356,614

 141,113      45,902
  88,790     113,678
 229,903     159,580

       –      18,480
  13,736      14,546
  13,736      33,026

  689,700     603,512     557,309     481,289
1,217,175   1,075,735     943,976     875,325
   16,457      15,595           –           –
1,923,332   1,694,842   1,501,285   1,356,614




 830,813     649,414     557,309     481,289
       %           %           %           %
      17          13          14          18
       –           1           –           1
       –           1           –           1
       1           1           –           2
      16          22          17          23
       1           –           –           –
       1           –           –           –
       4           4           5           5
      34          32          51          41
       –           5           –           5
       2           –           –           –
       1           –           1           –
       3           3           4           3
       2           –           1           –
       1           1           1           1
       1           –           1           –
       1           –           –           –
      10           9           3           –
       1           –           2           –
       4           8           –           –
     100         100         100         100

1,305,965   1,189,413    943,976     875,325
        %           %          %           %
      20          36          32,         39
      51          42           55         49
       8          10           12         11
      16          11            –          –
                                       5                      1                   1            1
                                     100                    100                 100          100
                               2,136,778              1,838,827           1,501,285    1,356,614




                                                  % maturity
                                  R’000              spread

                                    7,093                    43
                                    4,073                    25
                                    5,291                    32
                                   16,457                   100

                                    3,364                    22
                                    4,203                    27
                                    8,028                    51
                                   15,595                   100




                                   13,736                   100
                                   13,736                   100

                                   14,546                    44
                                   18,480                    56
                                   33,026                   100




the discounted cash flow analysis, P/E ratio or net asset value.

tised cost to fair value, or from fair value to cost or amortised cost




                                                                                       Available-
                                Fair value             Held-to-                          for-sale           Total
                                  through             maturity            Loans and     financial       financial
                                 profit or         investments           receivables       assets   instruments
                               loss R’000                R’000                 R’000       R’000           R’000




                                 321,997                       –                  –            –        321,997
                                       –                       –             40,176            –         40,176
        –        –     3,616         –       3,616
1,923,332   13,736         –   229,903   2,166,971
  846,051   13,736         –         –     859,787
1,007,940        –         –   229,903   1,237,843

  69,341        –         –         –      69,341
       –        –         –         –           –

       –        –    383,980        –     383,980

        –        –         –         –           –
2,245,329   13,736   427,772   229,903   2,916,740

                –    715,422        –     715,422
       –        –          –        –           –
       –        –          –        –           –
       –        –          –        –           –

       –        –          –        –           –
       –        –    715,422        –     715,422



  215,368        –         –         –     215,368
        –        –    37,757         –      37,757
1,694,842   33,026         –   159,580   1,887,448
  561,377   14,546         –         –     575,923
1,061,336        –         –   159,580   1,220,916

  72,129        –         –         –      72,129

       –    18,480        –         –      18,480
       –         –        –         –           –

       –        –    398,525        –     398,525

  34,760        –         –         –      34,760

        –        –         –         –           –
1,944,970   33,026   436,282   159,580   2,573,858




       –        –    448,203        –     448,203
       –        –          –        –           –
       –        –          –        –           –

  20,185        –         –         –      20,185
       –        –         –         –           –

       –        –         –         –           –
        –               –             –            –                –
   20,185               –       448,203            –          468,388




  586,488               –            –             –          586,488
        –               –      367,208             –          367,208
  448,825               –            –             –          448,825
        –               –       29,549             –           29,549
        –               –        7,231             –            7,231
1,501,285               –            –             –        1,501,285
  805,263               –            –             –          805,263
  689,407               –            –             –          689,407

    6,615               –             –            –            6,615
        –               –             –            –                –

         –              –      320,601                        320,601

        –               –            –             –                –
2,536,597               –      724,589             –        3,261,186

         –              –             –            –                 –
         –              –             –            –                 –
         –              –             –            –                 –

         –              –             –            –                 –
         –              –             –            –                 –

Fair value                                 Available-
 through          Held-to-                   for-sale
     profit       maturity    Loans and     financial   Total financial
   or loss    investments    receivables       assets     instruments
  R’000            R’000        R’000        R’000             R’000




 511,926                –             –            –          511,926
                        –       206,358            –          206,358
 368,274                –             –            –          368,274
                        –        27,149            –           27,149
1,356,614               –             –            –        1,356,614
  508,059               –             –            –          508,059
  842,969               –             –            –          842,969

    5,586               –             –            –            5,586
        –               –             –            –                –
                                            –             –      123,584                         –    123,584

                                  34,760                                  –                      –     34,760

                                       –                  –            –                         –           –
                               2,271,574                  –      357,091                         –   2,628,665

                                            –             –               –                      –          –
                                            –             –               –                      –          –

                                  20,185                  –               –                      –     20,185
                                       –                  –               –                      –          –

                                            –             –               –                      –          –

                                       –                  –               –                      –          –
                                  20,185                  –               –                      –     20,185



by level of the fair value hierarchy:

                                Level 1         Level 2         Level 3       Total fair value
                                 R'000           R'000           R'000                   R'000



                               475,997               –               –               475,997
                               201,405               –               –               201,405
                                12,298               –               –                12,298
                                     –               –         310,363               310,363
                                     –               –         481,494               481,494
                                     –               –         297,855               297,855
                                     –          10,783           6,614                17,397
                                     –               –         110,066               110,066
                                     –               –          16,457                16,457
                                     –               –         321,997               321,997

                               141,113               –               –               141,113
                                                59,534           3,256                62,790
                                        –       10,000          16,000                26,000

                                     –               –           13,736               13,736
                               830,813          80,317        1,577,838            2,488,968



                               343,606               –               –               343,606
                               201,405               –               –               201,405
                                12,298               –               –                12,298
                                     –               –          47,947                47,947
                                     –               –         481,494               481,494
                                     –                       –           110,066          110,066
                                     –                       –           297,855          297,855
                                     –                       –             6,614            6,614
                                     –                       –           448,825          448,825
                                     –                       –           586,488          586,488
                               557,309                       –         1,979,289        2,536,598

easured in whole or in part by reference to published quotes in an
market if quoted prices are readily and regularly available from an
 gency and those prices represent actual and regularly occurring market


ed on assumptions that are supported by prices for observable current
d via pricing services, but where prices have not been determined in an
 investments in private equity funds with fair values obtained via fund
reby the majority of assumptions are market observable.

 whole or in part using a valuation technique (model) based on
nt market transactions in the same instrument nor are based on
 d equity investments and limited partnerships. Valuation techniques
allowing for situations in which there is a little, if any, market activity
ue measurement objective remains the same, that is, an exit price from
puts reflect the Group and Company’s own assumptions about the
 liability. These inputs are developed based on the best information




 orded amount of financial assets and liabilities which are recorded at




                                                           Total                          Interest,
                                                          gains/                         dividends
                                                        (loss) in                              and
                                 At 1 July               income                           manage-        Sales/
                                     2009            statement            Purchases       ment fee    Transfers
                                    R’000                  R’000              R’000          R’000       R’000




                                 404,726               120,509                 40,996            –     -90,234
                                 179,382                22,023                      –            –           –
                                  17,699                     –                  1,353            –      -6,754
                                 232,838                31,816                 72,039            –      -6,065
                                 401,366               -39,830                141,000       22,958     -44,000
                                5,586                147         881           –          –
                              337,700            -39,845           –           –          –
                               99,950                413           –       9,703          –
                               15,595                  –       5,179                   -533
                              215,368             20,690      89,264      29,805    -33,130
                            1,910,210            115,923     350,712      62,466   -180,716

                               45,208                   –    118,379          –     -22,474
                               88,372                   –          –          –     -25,582
                               26,000                   –          –          –           –

                               33,026                  –           –           –    -19,290
                            2,102,815            115,923     469,090      62,467   -248,061




                              282,502            101,959      39,364           –    -80,219
                              179,382             22,023           –           –          –
                               17,699                  –       1,353           –     -6,754
                               32,428             15,519                       –
                              401,366            -39,830     141,000      22,958    -44,000
                                5,586                147         881           –
                              337,700            -39,845           –           –          –
                               99,950                413           –       9,703          –
                              368,274             17,499      96,182           –    -33,130
                              511,926            133,275      10,140           –    -66,938
                                    –             -3,522       3,522           –          –
                            2,236,813            207,638     292,441      32,662   -231,041



period are presented in the consolidated income statement


                                             2010
                                                Fair value
                             Realised             gains or
                                gains               losses     Total
                               R’000                 R’000     R’000

                              69,293               69,305    138,598
                              69,293               69,305    138,598

                              22,284             185,354     207,638
                              22,284             185,354     207,638




                                   Group                        Company
                                                   Effect of                                 Effect of
                                               reasonably                                reasonably
                                                   possible                                  possible
                                                alternative                               alternative
                             Carrying         assumptions               Carrying        assumptions
                             amount                    (+/-)            amount                   (+/-)
                               R’000                  R’000               R’000                 R’000

                             475,997                 9,520            343,606                  6,872
                             201,405                 4,028            201,405                  4,028
                              12,298                   246             12,298                    246
                             310,363                 6,207             47,947                    959
                             481,494                 9,630            481,494                  9,630
                              17,397                   343              6,614                    132
                             297,855                 5,957            297,855                  5,957
                             110,066                 2,201            110,066                  2,201
                              16,457                   329                  –                      –
                             321,997                 6,440            448,825                  8,976
                                   –                     –            586,488                 11,730
                           2,245,329                                2,536,600

                             141,113                 2,822                    –                     –
                              62,790                 1,256                    –                     –
                              26,000                   520                    –                     –
                             229,903                                          –

                              13,736                   275                  –                       –
                              13,736                                        –
                           2,488,968                                2,536,600




 bonds, with a fair value exposure of Rnil (2009: R20 185 000).
The instrument is held to reduce risk.
ge (South African Future Exchange, SAFEX ) or negotiated over
 Instruments traded on SAFEX are margined and SAFEX is the
  into with the appropriate accredited counterparties and are entered


                                     Group                                    Company
                                   2010                 2009                 2010                 2009
                                  R’000                R’000                R’000                R’000
                                      –               14,575                    –               14,575
                                      –               14,575                    –               14,575

                                        –             34,760                       –            34,760
                                        –            -20,185                       –           -20,185
                                        –             14,575                       –            14,575
            –       14,575             –       14,575
            –       14,575             –       14,575




        Group                      Company
    2010             2009       2010             2009
   R’000           R’000       R’000           R’000
1,616,664          362,167   313,957          296,283
  307,573       1,117,024     75,575         123,584
1,924,237       1,479,191    389,532         419,867



  54,927           126,495     9,271          126,495
  11,742            10,583     6,733           10,583
  91,272                 –    80,624                –
  -9,546                 –    -9,546                –

  49,470             2,811    47,404             1,930
  12,633               149    12,633               149
  -1,321                –     -1,321                –
 209,177         140,038     145,798         139,157
 174,803          258,487    174,803          258,487
       –               –           –               –
 174,803         258,487     174,803         258,487

2,308,217       1,877,716    710,133         817,511

        Group                     Company
      2010            2009       2010            2009
     R’000           R’000      R’000           R’000



    20,211           4,101     20,211           4,101
     6,911           9,762      6,911           9,762
         –          10,103          –          10,103
     3,288           3,067      3,288           3,067
    22,797          28,929     22,797          28,929
       936             873        936             873
     5,970           5,559      5,970           5,559
    13,087          19,715     13,087          19,715
    84,750          29,745     23,437          29,745
    51,227          28,184     49,161          27,303
   209,177         140,038    145,798         139,157
     Group                Company
   2010        2009      2010         2009
  R'000        R'000    R'000         R'000



    238          782       –             –
 18,870       18,942       –             –
 19,108       19,724       –             –
 19,724       13,882       –             –

    -234         551       –             –
     240           –       –             –
  12,389           –       –             –
       –         -51       –             –
       –          22       –             –
       –          -4       –             –
 -13,011       5,324       –             –
  19,108      19,724       –             –

    869        1,941       –             –
    619          206
 17,620       17,577       –             –
 19,108       19,724       –             –

115,420       72,516   59,156        68,353
  4,687        3,012        –             –
120,107       75,528   59,156        68,353

 75,528      174,200   68,353       141,256

   5,496       1,008        –             –
   7,249     -67,130    7,606       -65,669
  -3,263      -3,670        –             –
   5,450      -3,431    5,450        -3,431
   3,807           –        –             –
-140,165           –        –             –
     336           –        –             –
   165,590          -3,803      -22,253           -3,803
        79         -21,646            –                –
   120,107          75,528       59,156           68,353

     5,599           1,355            –                –
    84,928          77,600       83,193           75,587
     2,019          -3,431        2,019           -3,431
     4,351           3,807            –                –
  -140,165               –            –                –
   163,039          -3,803      -26,056           -3,803
       336               –            –                –
   120,107          75,528       59,156           68,353

       Group                        Company
    2010             2009        2010              2009
   R'000           R'000        R'000            R'000




  915,658          690,050     366,674           385,164
1,304,210          928,260     502,383           317,172
  938,893          914,899     490,652           619,868
      160              35            5                6
3,158,921       2,533,244    1,359,714        1,322,210
   82,740          34,517            –                –



        Group                       Company
      2010            2009         2010             2009
     R’000           R’000        R’000            R’000

    12,000          12,000       12,000           12,000
     3,000           3,000        3,000            3,000
     3,000           3,000        3,000            3,000
         –               –            –                –
    18,000          18,000       18,000           18,000

    10,200          10,200       10,200           10,200
     3,000           3,000        3,000            3,000
     3,000           3,000        3,000            3,000
         –               –            –                –
    16,200          16,200       16,200           16,200
    69,650          69,650       69,650           69,650
    85,850          85,850       85,850           85,850
         Group
       2010              2009
      R'000              R'000



     19,744             11,286

     11,286              31,886
     18,269             -24,375
     -7,859                   –
          –                 105
     -2,235               3,670
        283                   –
     19,744              11,286



         Group
       2010              2009
      R'000              R'000

     -8,294             -17,428
     -6,737               9,134
    -15,031              -8,294



                                          Group
                 2010                                          2009
                        Tax                                           Tax
Before tax       (expense)/                       Before tax   (expense)/
  amount            benefit       Net of tax        amount        benefit
    R'000             R'000           R'000         R'000         R'000



   -6,737                   –        -6,737           9,134            –
        –                   –             –             105            –
   11,029                   –        11,029               –            –
    2,645                   –         2,645               –            –

        –                   –             –          -2,617            –
       60                   –            60               –            –
   622              –        622                   –           –

 -7,859             –      -7,859                  –           –

 18,269          -545      17,724        -24,250       3,670
 18,029          -545      17,484        -17,268       3,670




      Group                    Company
    2010          2009        2010           2009
   R’000         R’000       R’000          R’000

2,086,133     1,803,626     911,784        888,806
  611,068       582,423     431,671        445,821
2,124,242     1,715,591     754,461        686,779
   48,049        36,053      48,049         36,053
   10,512             –           –              –
      623             –           –              –
   35,374        72,819      27,003         59,148
      523           494           –              –
        –        10,386           –              –
        –         1,563           –              –
  588,957       496,812     587,202        495,058
5,505,481     4,719,767   2,760,170      2,611,665

  722,449       628,450    229,819        285,768
  143,519       137,958     60,552         70,942
  557,653       402,280    109,619        117,780
  112,329       131,966          –              –
    2,482             –          –              –
  677,988       479,826    349,725        224,072
2,216,420     1,780,480    749,715        698,562

1,363,684     1,175,176     681,965        603,038
  467,549       444,465     371,119        374,879
1,566,589     1,313,311     644,842        568,999
   35,374        72,819      27,003         59,148
   48,049        36,053      48,049         36,053
    8,030             –           –              –
      623             –           –              –
        –        10,386           –              –
      523           494           –              –
 -112,329      -131,966           –              –
        –         1,563           –              –
 -677,988      -479,826    -349,725       -224,072
  588,957       496,812     587,202        495,058
3,289,061     2,939,287   2,010,455      1,913,103
                2010                                        2009
             Reinsurance                                 Reinsurance
    Gross              asset         Net        Gross            asset
    R’000              R’000       R’000        R’000            R’000




 1,803,626           628,450    1,175,176    1,301,050        622,213
    13,661            16,589       -2,928      -43,270       -353,062
-3,796,267          -565,301   -3,230,966   -3,130,469       -417,441
   176,763            70,279      106,484            –              –
  -175,823           -70,484     -105,339            –              –
    -8,845            -9,396          551      -74,810         -8,369
 4,073,018           652,312    3,420,706    3,751,125        785,109
 2,086,133           722,449    1,363,684    1,803,626        628,450

   888,806           285,768      603,038      606,875        126,483
-2,912,102          -421,182   -2,490,920   -2,490,266       -383,841
 2,935,080           365,233    2,569,847    2,772,197        543,126
   911,784           229,819      681,965      888,806        285,768



  582,423           137,958      444,465      376,225          88,740
        –                 –            –       55,517          24,540
     -245                 –         -245         -180               –
   79,623            32,714       46,909            –               –
  -62,911           -26,829      -36,082            –               –
   12,178              -324       12,502      150,861          24,678
  611,068           143,519      467,549      582,423         137,958

  445,821             70,942     374,879      343,552          76,771
  -14,150            -10,390      -3,760      102,269          -5,829
  431,671             60,552     371,119      445,821          70,942



1,715,591           402,280    1,313,311    1,349,652         262,708
   12,678            12,678            –       53,458         -13,444
  181,737            84,767       96,970            –               –
 -163,759           -53,103     -110,656            –               –
    3,116            -3,427        6,543      -88,771          -1,052
  374,879           114,458      260,421      401,252         154,068
2,124,242           557,653    1,566,589    1,715,591         402,280

  686,779           117,780      568,999      568,645          99,069
   67,682            -8,161       75,843      118,134          18,711
  754,461           109,619      644,842      686,779         117,780
496,812        –    496,812    473,293        –
 92,145        –     92,145     23,519        –
588,957        –    588,957    496,812        –

495,058        –    495,058    471,770        –
 92,144        –     92,144     23,288        –
587,202        –    587,202    495,058        –



 72,819        –      72,819         –        –
      –        –           –     7,845        –
     89        –          89    -1,661        –
-37,534        –     -37,534    66,635        –
 35,374        –      35,374    72,819        –

 59,148        –      59,148         –        –
-32,145        –     -32,145    59,148        –
 27,003        –      27,003    59,148        –



  1,563        –       1,563         –        –
 -1,563        –      -1,563     1,563        –
      –        –           –     1,563        –



    494        –        494          –        –
      –        –          –      2,216        –
   -147        –       -147         71        –
    176        –        176     -1,793        –
    523        –        523        494        –



     –    131,966   -131,966        –          –
     –          –          –        –    134,878
     –      4,979     -4,979        –    -24,204
     –    -24,616     24,616        –     21,292
     –    112,329   -112,329        –    131,966



 36,053        –     36,053          –        –
 11,996        –     11,996     36,053        –
 48,049        –     48,049     36,053        –

 36,053        –     36,053          –        –
 11,996        –     11,996     36,053        –
 48,049        –     48,049     36,053        –



 10,386        –     10,386         –         –
  -10,386               –      -10,386       10,386              –
        –               –            –       10,386              –



        –               –            –            –              –
   10,512           2,482        8,030            –              –
   10,512           2,482        8,030            –              –



        –               –            –            –              –
      623               –          623            –              –
      623               –          623            –              –



        –         479,825     -479,825            –        200,808
        –               –            –            –        221,294
        –           6,741       -6,741            –        -44,981
        –          90,797      -90,797            –              –
        –         -41,576       41,576            –              –
        –         142,201     -142,201            –        102,705
        –         677,988     -677,988            –        479,826

              2010                                      2009
             Reinsurance                               Reinsurance
    Gross            asset         Net        Gross           asset
    R’000            R’000       R’000        R’000          R’000

        –         224,073     -224,073            –        120,994
        –         125,652     -125,652            –        103,078
        –         349,725     -349,725            –        224,072




 4,719,767      1,780,480     2,939,287    3,500,220     1,174,469
    26,339         29,267        -2,928       75,766        14,206
-3,796,267       -565,301    -3,230,966   -3,130,469      -417,441
    -6,032         -1,103        -4,929     -165,351       -78,606
   453,026         92,000       361,026      688,476       200,038
   438,123        278,556       159,567            –             –
  -402,493       -191,992      -210,501            –             –
 4,073,018        652,312     3,420,706    3,751,125       785,109
         –        142,201      -142,201            –       102,705
 5,505,481      2,216,420     3,289,061    4,719,767     1,780,480

 2,611,665        698,562     1,913,103    1,990,842       423,317
-2,912,102       -421,182    -2,490,920   -2,490,266      -383,841
   125,527        -18,550       144,077      338,892        12,882
 2,935,080        365,233     2,569,847    2,772,197       543,126
         –        125,652      -125,652            –       103,078
                                2,760,170                749,715             2,010,455   2,611,665   698,562




 e or other entities wish to transfer to an insurer. Such risks may relate
arine, credit and other perils which may rise from an insured event.
g the timing, frequency and severity of claims under insurance
ms are greater than expected. Insurance events are by nature random
 those estimated and experienced in prior periods.

 nsurance under which claims are typically settled within one year of
 tail in nature represent an insignificant portion of the Group and
mpany may experience variations in its claim patterns from one year to
ontracts issued more than one year before is limited.

on the amount, timing and uncertainty of future cash flows arising




rty caused by perils such as fire, lighting, explosion, weather, water,
siness interruption policies which insure the loss of profits incurred by




 losses caused by crime, certain accidental damage such as damage
 idental classes are legal liabilities an insured may incur as a result of
 o a third party by the insured.


 total disability of the insured, the family of the insured or the employees of a
de the wider benefits available from the life insurance industry.


 he cover is normally on an all-risks basis providing a wide scope of cover,
 d theft only. Legal liabilities arising out of the use or ownership of the motor
 h or injury to a third party are also covered in this class. Warranty and




d equipment or the erection of buildings and structures. Risks covered by this
d loss or damage to plant and equipment.


 ers physical loss of or damage to cargo. Hull covers accidental loss or damage




ng out of insured’s activities, indemnify directors and officers of a company
 or the insured against damages consequent to a personal injury or property
commercial policyholders using traditional methods of distribution through
 with niche underwriting managers, retailers, banks and motor dealers. These
easures to promote good risk management amongst the insurers and originators
 contracts structured to provide entry level insurance cover for corporate
ed an experience account balance, based on claims and related expenses at the




 ing clearly defined underwriting strategy and limits, application of appropriate


of insurance risk in terms of type and amount of risk covered, geographical
ms to develop a sufficiently large population of risks to reduce the variability of
iting authorities which set the limits for underwriters in terms of the line size,
te risk selection within the portfolio. The underwriting mandates are applicable
riodic internal audits ensure that underwriters operate within these limits.

and Company underwrite a well diversified portfolio of risks and that the
 types of insurance products and classes it underwrites. Using gross written
pany’s distribution of risks underwritten across classes of business:

                                      Group                                      Company
                                   2010                   2009                2010              2009
                                  R’000                 R’000                R’000            R’000

                             2,089,832               1,384,556            1,110,774            974,014
                               325,844                 279,315              244,513            265,921
                             4,464,768               3,979,409            3,250,636          2,983,065
                               392,723                 327,699              225,366            181,879
                               444,225                 359,064               13,897             57,400
                               251,741                 215,101               59,153             43,953
                               457,820                 385,257              193,840            169,395
                               184,373                 423,175                    –                  –
                                70,560                      91                    –                  –
                                 8,614                  55,182                    –                  –
                                22,919                  17,762                    –                  –
                               314,435               243,709                 97,530           59,430
                             9,027,854             7,670,320              5,195,709        4,735,057




                             7,242,440               6,253,586
                             1,785,414             1,416,734
                             9,027,854             7,670,320

oup and Company to monitor its risks and take timely corrective
 mitigate the risk of underwriting losses by addressing adverse loss
 clients. The risk of fraudulent claims is reduced by internal controls
 ed to proactively detect fraudulent claims.


ment framework to manage risk in accordance with the Group’s
urance and Underwriting Committee (RUCOM). The objectives and
of Directors are outlined below. The main objective of RUCOM is to
 k retention practice is in line with prudent risk/reward parameters set
d as to the risk retention policy of the companies within the Group
n line with their business operations; reviews underwriting standards,
 ness unit for both facultative and treaty reinsurance arrangements and
 risk assumption criteria and security.


 risks from single events or accumulation of risk which could
ny’s capital. This cover is placed on the local and international


 . DFA informs the decision-making regarding risk retention and
 ed against a wide range of reinsurance alternatives including viability


 s to assess its exposure to low-frequency high-severity risks, the most
 es, floods and windstorm. The Group’s most significant aggregate
 ny are at risk in case of the occurrence of an event that could
 hreat associated with such an event.


 s deemed prudent in relation to the risk/reward and the Group and
 serves. Predetermined criteria are observed at all times other than
 of the Underwriting Committee acting on the authority of the majority




 ion is sought from the Risk Management Committee.


Division, accountable to the Group Chief Risk Officer. The Chief Risk
e Risk and Underwriting Committee.

and Company’s ability to estimate the ultimate value of claims. The
as short tailed. The shorter settlement period for this type of business
 bout the estimated costs of claims. The longer time required to asses
ncertain for these type of claims. The Group and Company’s limited
motor liability and some engineering and marine classes. Independent
 ntial liability for this type of exposure.


e that it is impossible to forecast with absolute certainty, future claims
 mpany have developed a methodology that is aimed at establishing
e to settle all its insurance obligations.
d claims as well as incurred but not yet reported claims and due to the
nt any of the claims provisions.


 f events, terms and conditions of the relevant policies and


 e regard to the specific circumstances, information available from the
 oup and Company employ staff experienced in claims handling and
ssessment. In addition the Group and Company utilise the services of
 some of its business. The ultimate cost of the reported claims may vary
able about the current circumstances. Estimates are reviewed regularly




tage of premiums written. This percentage is a best estimate reserve,
 Different percentages are applicable for different classes of business


ternal actuarial firm review the adequacy of the Company’s claim
rical claims development factors and the selection of the estimated
 rity of the Company’s business to calculate a best estimate outstanding
 raised by the operation. The selected development factors are applied
eloped to produce an estimated ultimate claims cost for each year.

ss level. A separate calculation is then carried out to determine the




ncurred claims and the majority of this growth stems from the motor
cy and severity of claims. The increase in inflation is one of the major
 initiatives to ensure that:




 asis which reflects the underlying risk profile of the insurance
  have an even risk profile and the unearned premium provisions,
he period of insurance using a time-proportionate basis. The unearned
 g or uneven profile of the contracts for the remainder of the portfolio.
 s level and thereafter the reinsurance impact is recognised.


surance contract provisions is the percentage applied to the written
ges applied the longer the expected period between the date of loss
                                     Group                                   Company
                                   2010                 2009                2010           2009
                                  R’000                R’000               R’000          R’000
                                396,690              296,210             251,722        147,387
                                396,690              296,210             251,722        147,387

                                296,210              265,746             147,387         76,746
                                349,962              272,846             104,335         70,641
                               -230,139             -186,242                   –              –
                                -14,200              -29,205                   –              –
                                 -8,121                    –                   –              –
                                  2,978              -26,935                   –              –
                                396,690              296,210             251,722        147,387



based on the actual date of the event that caused the claim (accident




                                  Total                 2010                2009           2008        2007
                                  R’000                R’000               R’000          R’000       R’000




                              2,912,077            2,103,702              690,980         68,060      25,277
                              2,585,923                    –            1,932,217        587,023      63,358
                              2,797,429                    –                    –      2,090,452     644,273
                              2,430,577                    –                    –              –   1,913,549
                              1,986,456                    –                    –              –           –
                              1,719,610                    –                    –              –           –
                              1,560,082                    –                    –              –           –

                            15,992,154             2,103,702            2,623,197      2,745,535   2,646,457



                              2,490,920            1,830,357              571,546         44,845      30,046
                              2,198,160                    –            1,668,466        479,547      41,829
                              2,154,311                    –                    –      1,679,346     449,291
                              1,507,690                    –                    –              –   1,204,718
                              1,325,147                    –                    –              –           –
                              1,200,486                    –                    –              –           –
                              1,035,703                    –                    –              –           –

                            11,912,417             1,830,357            2,240,012      2,203,738   1,725,884
                                Group
                              2010         2009
                             R’000        R’000

                            60,377      446,977

                              354          361

                           341,995           –



                             1,201         759

ayable within 48 months.

                                Group               Company
                              2010         2009    2010        2009
                             R’000        R’000   R’000       R’000

                           308,244           –

                             3,251         106
                             4,360         200
                           (1,109)         -94

                           715,422      448,203
                            45,610      448,097
                           669,812          106
                           715,422      448,203

                               693          94
                             3,251         106
                             3,944         200
                               416           –
                             4,360         200




                               Group               Company
                             2010         2009    2010        2009
                                   R’000                R’000               R’000    R’000



                                  26,671                9,904               8,091     5,861
                                       –               13,840                   –         –
                                  -3,223                4,107              -1,879     2,230
                                  14,435               27,850               6,212     8,091
                                 -17,658              -23,743              -8,091    -5,861
                                     176               -1,180                   –         –
                                  23,624               26,671               6,212     8,091

                                 89,826               85,613               27,020    50,224
                                      –               21,753                    –         –
                                 89,739              -10,518               77,236   -23,204
                                136,262              103,656              108,319    33,828
                                -46,523             -114,174              -31,083   -57,032
                                      –               -7,023                    –         –
                                179,565               89,825              104,256    27,020

                                   5,334                9,842               5,334     9,842
                                  -1,322               -4,508              -1,322    -4,508
                                  -7,542               -4,508              -7,542    -4,508
                                   6,220                    –               6,220         –

                                   4,012                5,334               4,012    5,334

                                207,201               79,311              114,480   40,445
                                      –               42,519                    –        –
                                207,201              121,830              114,480   40,445



 cumulate a maximum of 25 days leave and the leave pay liability
 rfeited by the employees concerned. Whilst all employees are
 maximum of five days’ leave (taxed) in a leave cycle. When employees
 , all accumulated and accrued leave is paid to them at the current
maximum number of 25 days.
  000 and R6 212 000 respectively at the statement of financial




  directors receive an incentive bonus. This bonus relates to employee,
 he Remuneration Committee.
 76 743 000 and R104 256 000 respectively at the statement of




rticipate in the Company’s BEE share scheme. The scheme entails the
 upon each black employee’s length of service to the Company and
6. “B” units are available for purchase by qualifying black employees
 the expense recognised in the income statement is summarised below:




                                                                                    Balance
                                Balance                                          of units at         Unit
                              of units at                                            30-Jun         value
                                1-Jul-09            Forfeited    Redeemed              2010             R
                                 77,368                1,004            65,222      11,142          87.83
                                346,025               29,492           117,522     199,012          89.74
                                423,393               30,496           182,744     210,154

ptions at the statement of financial position date R89.74




B” units);




                                Balance
                              of units at                New                                   Transferred
                                1-Jul-08            allocation     Forfeited     Redeemed      From Etana
                                 47,893                  883        -10,794          -1,484        40,870
                                338,363              102,525        -93,835          -1,028             –
                                386,256              103,408       -104,629          -2,512        40,870
ptions at the statement of financial position date R75.42 (2008: R79.48) and their issue price



Monte Carlo simulation of a stochastic process. The model required the use of the following




                                     Group                                    Company
                                   2010                  2009                2010                   2009
                                  R’000                 R’000               R’000                  R’000

                              1,248,336             1,111,798            502,096                 482,821
                                 96,826                17,805             26,624                       –
                                  5,997               131,832                  –                  96,302
                                  6,245                48,832                  –                       –
                              1,357,404             1,310,267            528,720                 579,123

                                     Group                                    Company
                                  2010                  2009               2010                    2009
                                 R’000                R’000               R’000                  R’000



                                 96,704              183,229              60,622                  98,551
                                  7,804                    –                   –                       –
                                      –               12,654                   –                   9,228
                                107,772               25,461              51,760                  22,641
                                212,280              221,344             112,382                 130,420



                                 19,936                46,197             15,321                  18,290
                                 24,881                 6,540             70,938                   2,413

                                 15,872                24,178             13,673                  21,228
                                 44,983                39,319             40,037                  34,586
105,672      116,234    139,969        76,517
  3,334       25,549     13,792       327,007
109,006      141,783    153,761       403,524
321,286      363,127    266,143       533,944
  1,132        1,194          –             –
    166            –          –             –
  7,020        1,769        561             –
 22,439       14,137         62         3,874
 30,757       17,100        623         3,874
181,523      204,244    111,759       126,546

     Group                  Company
   2010         2009       2010          2009
  R’000        R’000      R’000         R’000

 11,542       -4,519     11,646         -4,966
 14,387       11,525       -508          2,615
 25,929        7,006     11,138         -2,351
   -105         8,910         –              –
 26,034        -1,904    11,138         -2,351
 25,929         7,006    11,138         -2,351

     Group                  Company
   2010         2009       2010          2009
  R’000        R’000      R’000         R’000

130,990      -144,254   112,335       -140,710
-61,685       -84,335    73,019       -331,915
 69,305      -228,589   185,354       -472,625

 69,305      -228,589   185,354       -472,625
 69,305      -228,589   185,354       -472,625

     Group                  Company
   2010         2009       2010          2009
  R’000        R’000      R’000         R’000




                          3,144         1,731
                          4,012         2,733
                            222           283
                            467           259

                            673           574
                          8,518         5,580
  8,453        6,229     4,077         2,403
    244         -112       278           395
    867          284       196             –
  9,564        6,401     4,551         2,798

 28,719       28,950    11,075        12,364
  1,014        1,960       302           388
    297          225         –             –
     58           58         –             –
 30,088       31,193    11,377        12,752

848,336      782,690   422,475       365,830

  4,176       -3,062   -73,447        13,437

 10,578       11,967     2,422         1,299
     11         -912         9          -289
647,040      320,855   639,931       320,855
191,436      186,546    78,927       122,647
 31,311       21,046    21,490        21,046
 42,516       29,022    25,581        13,386
  1,048          866     1,048           866

     Group                 Company
   2010         2009      2010          2009
  R’000        R’000     R’000         R’000



 65,892      119,252    25,554        67,270
 40,209         -317    40,209             –

 31,084      -91,661   -10,892       -67,739
  1,695       -5,165     1,695        -5,165
  8,907       11,385     8,243         5,185
 21,616       14,436         –             –
  3,097        2,285     3,097         2,285
172,500       50,215    67,906         1,836



    Group                 Company
  2010         2009      2010           2009
     %            %         %          R’000

     28          28         28           28
      6                      7
      5          -13        -2           -11
      –           -1         –            -1
    -18            6       -23           -16
      3            4         –             –
      1            3          1             1
     25           27         11             1

     Group                  Company
   2010         2009       2010          2009
  R’000        R’000      R’000         R’000



684,990      188,514    607,014       267,698

  30,088       31,193     11,377        12,752
   4,176       10,897    -73,447        13,959
  10,578       11,967      2,422         1,299
     -11          912         -9           289
 -25,929       -7,006    -11,138         2,351
       –        2,392          –             –
     564       14,636    -17,230        12,255
 -22,674      -68,671    -11,146       -33,533
 -20,690      -23,627          –       -93,722
-290,529     -346,027   -265,520      -530,070
-130,990      144,254   -112,335       140,710
  61,685       84,335     63,088        81,127
       –            –    -17,499        32,652
       –            –   -122,129       208,624
       –            –      3,522             –
       –            –          –         9,512
       –         -350          –             –
 -24,534      -44,225          –             –
 276,724         -806     56,970       125,903
 541,568      216,274    173,188      -157,018
-434,677     -641,897    102,970      -287,979
  17,981      296,876    148,505       620,823
 331,793      316,661    -51,153      -275,246
-100,480      -30,464   -104,335       -70,641
 454,356      101,709     53,887       -44,489

272,595      173,389     23,314        -99,486

818,292      215,468    230,158        -31,115

     Group                  Company
   2010         2009       2010          2009
  R’000        R’000      R’000         R’000

 -15,516      -17,230    -12,092       -17,230
-202,673     -235,996   -202,665      -234,844
 -15,251      -51,803          –             –
       –       15,516          –        12,092
-233,440     -289,513   -214,757      -239,982
          Group                             Company
        2010              2009             2010               2009
       R’000             R’000            R’000              R’000

     63,073                  –          63,073             36,429
    109,006            141,783         153,761            403,524
    -29,993                  –         -29,993                  –
    -55,805                  –         -55,805            -63,073
     86,281            141,783         131,036            376,880

          Group                             Company
        2010              2009             2010               2009
       R’000             R’000            R’000              R’000

     -44,570          -179,166          -56,269           -148,778
    -172,500           -50,215          -67,906             -1,837
      -2,434            -1,071                –                  –
      68,013            44,570           38,516             56,269
    -151,491          -185,882          -85,659            -94,346

    -19,108            -19,724                –                  –
    120,107             75,528           59,156             68,353
    -32,986            -11,234          -20,640            -12,084
     68,013             44,570           38,516             56,269




                                         Hollard
                     Small Area    Mozambique
                        Repair       Companhia
 River’s Edge       Technology       de Seguros           Hollard &
  Investment      Underwriting    (incorporated            Connolly
     Holdings         Managers              and        Investments
(Proprietary)     (Proprietary)   operational in      (Proprietary)
      Limited          Limited    Mozambique)               Limited     Total
           –             1,061              955                  –      2,016
      10,463                 –                –              1,973     12,436
           –                 –              177                  –        177
           –                 –           13,457                  –     13,457
         839            40,387           16,610                  –     57,836
           –                 –           20,080                  –     20,080
           2               441           11,468              1,063     12,974
           –                 –          -38,782                  –    -38,782
         -30              -801           -3,386             -1,917     -6,134
      -1,490           -21,380           -8,743              1,793    -29,820
       9,784            19,708           11,836              2,912    44,240
       2,001            20,992                –               -319    22,674
                               11,785                 40,700   11,836    2,593    66,914

                                   -2                   -441   -11,468   -1,063   -12,974
                               11,783                 40,259       368    1,530    53,940



 & Connolly Investments (Proprietary)

                           Disposal of
                       investments in:
                          subsidiaries
                                R’000

                                 1,973
                                 1,063
                                -1,917
                                 1,793
                                  -319
                                 2,593


eguros (incorporated and operational in Mozambique)

                           Disposal of
                       investments in:
                          subsidiaries
                                R’000




                                   955
                                   177
                                13,457
                                16,610
                                20,080
                                11,468
                               -38,782
                                -3,386
                                -8,743
                                     –
                                11,836

ing Managers (Proprietary) Limited

                           Disposal of
                        investments in:
                           subsidiaries
                                 R’000




                                 1,061
                                40,387
                                   441
                                  -801
                               -21,380
                                20,992
                                40,700




                            Disposal of
                        investments in:
                           subsidiaries
                                 R’000




                                10,463
                                   839
                                     2
                                   -30
                                -1,490
                                 2,001
                                17,785




a joint venture agreement with Exigen Services
al 100 shares in Hollard Investment Holdings
 ices Europe Limited acquired 200 shares in
he shareholding of Hollard Insurance Company
 lard Investment Holdings (Proprietary) was a
e to Exiliti Services (Proprietary) Limited.

(Proprietary) Limited

K Marketing Consultants (Proprietary) Limited
’s shareholding from 60% to 100%.

                            Acquisition of
                          investments in:
                              subsidiaries
                                    R’000

                                       400
                                       400

                                       400
                                       400




                                                         HCV
                             Scintilla ERU      Underwriting    Zenith Product     Syringa Tree
                                Managers           Managers             Design     Investments
                             (Proprietary)      (Proprietary)     (Proprietary)   (Proprietary)
                                  Limited            Limited           Limited          Limited     Total
                                     R’000             R’000             R’000            R’000    R’000
                                       243             1,192               273             553      2,261
                                         –                 –                 –          10,472     10,472
                                         –                 –             2,245               –      2,245
                                     1,533             2,142               253              47      3,975
                                     1,458             6,395                61           2,463     10,377
                                      -570            -4,504            -5,546         -13,555    -24,175
                                     6,015            -2,090             1,986           1,056      6,967
                                     8,679             3,135              -728          1,036     12,122
                                    39,103            16,973             1,631         10,964     68,671
                                    47,782            20,108               903         12,000     80,793

                                    -1,458            -6,395               -61          -2,463    -10,377
                                    46,324            13,713               842           9,537     70,416




HCV Underwriting Managers (Proprietary) Limited. At the date
8 000 and the net asset value was R5 225 307. The Company
ated a profit on disposal of R16 972 816.

                              Disposal of
                          investments in:
                           subsidiaries
                                 R’000

                                1,192
                                2,142
                                6,395
                               -4,504
                               -2,090
                               16,973
                               20,108
Limited
tilla ERU Managers (Proprietary) Limited.
was R47 782 000 and the net asset value was
 whereas the Group generated a profit on


                                  243
                                1,533
                                1,458
                                 -570
                                6,015
                               39,103
                               47,782




                                   553
                                10,472
                                    47
                                 2,463
                               -13,555
                                 1,056
                                10,964
                                12,000




                                   273
                                  2,245
                                    253
                                     61
                                 -5,546
                                  1,631
                                  1,986
                                    903




                                                                  Group
                                                       % of                                   Profit/(loss)
                                Date of        shareholding                        Carrying      on sale of
                               disposal            disposed          Fair value       value   investments
                               1-Apr-10                     40            23,455     6,975         16,480

                               1-Apr-10                     40             8,672     3,860          4,812
                               1-Apr-10                     40             1,002     1,604           -602
                                                                          33,129    12,439         20,690
                                                                 Company
                               1-Apr-10                     40         23,455       23,455               –

                               1-Apr-10                     40             8,672     8,672               –
                               1-Apr-10                     40             1,002     1,002               –
                                                                          33,129    33,129               –

Limited on 1 March 2010 for R38 081 000.

                                                 Disposal of
                                             investments in:
                                                subsidiaries
                                                      R’000
                                                        38,081
                                                         1,064
                                                           319
                                                        38,400

 Limited on 1 March 2010 for R22 481 000.
                                                       22,481
                                                        2,816
                                                          845
                                                       23,326
Proprietary) Limited on 1 July 2009 for R35 619 000.
                                                       35,619
                                                        3,897
                                                        1,169
                 36,788




                              Group
                                                                 Profit/(loss)
                      % of                                         on sale of
    Date of   shareholding       Fair value    Carrying value   investments
 disposal       disposed           R’000              R’000          R’000



 30-Jun-09           42.3             12,479           9,952           2,527
 28-Feb-09            30               2,293           3,025            -732

 30-Jun-09             30              1,133           1,248            -115
 30-Jun-09             50                180              26             154
 30-Jun-09             50                417             689            -272
 30-Jun-09             50              3,101           2,567             534
 30-Jun-09             50                  –             416            -416
 30-Jun-09             40              9,367           9,500            -133
 30-Jun-09             30              6,183           5,410             773
 30-Jun-09          32.09              9,570           1,798           7,772
 30-Jun-09             30             11,914           3,702           8,212
 30-Jun-09             50                  –              17             -17
 30-Jun-09             25              7,889           8,478            -589
 30-Jun-09             50                447           1,246            -799
 30-Jun-09             40              9,803           7,237           2,566
 30-Jun-09             36              5,859           4,945             914
 30-Jun-09             25              2,682           4,030          -1,348

 30-Jun-09            31            20,756           18,919            1,837
 30-Jun-09            39            17,542           15,655            1,887
 30-Jun-09           57.5           22,000           20,602            1,398
 30-Jun-09            30             7,267            5,403            1,864
 30-Jun-09            40             3,312            5,127           -1,815
30-Jun-09            50                387              962             -575
                                   154,581          130,954           23,627
                             Company
 30-Jun-09           42.3          12,479              9,852           2,627
 28-Feb-09            30             2,293                 –           2,293

 30-Jun-09             30              1,133           1,080              53
 30-Jun-09             50                180             236             -56
 30-Jun-09             50                417             966            -549
 30-Jun-09             50              3,101           4,192          -1,091
 30-Jun-09             50                  –               –               –
 30-Jun-09             40              9,367           9,500            -133
 30-Jun-09             30              6,183           5,783             400
 30-Jun-09          32.09              9,570             489           9,081
 30-Jun-09             30             11,914           3,742           8,172
                               30-Jun-09                    50                 –            –        –
                               30-Jun-09                    25             7,889        7,862       27
                               30-Jun-09                    50               447        1,106     -659
                               30-Jun-09                    40             9,803        7,662    2,141
                               30-Jun-09                    36             5,859        3,840    2,019
                               30-Jun-09                    25             2,682        4,085   -1,403

                              30-Jun-09                    31             20,756        3,325   17,431
                              30-Jun-09                    39             17,542        1,862   15,680
                              30-Jun-09                   57.5            22,000       15,049    6,951
                              30-Jun-09                    30              7,267        4,906    2,361
                              30-Jun-09                    40              3,312          900    2,412
                             30-Jun-09                    50                 387        1,277     -890
                                                                         154,581       87,714   66,867

s in associates – 30 June 2009

 (Proprietary) Limited on 1 December 2008 for R9 852 000.
 insurance. As part of the restructuring of equity investment for the
 ed as at end of June 2009 at a fair value of R12 479 000, realising a

mited on 31 October 2008 for R9 500 000. Cedar Falls (Proprietary)
ty investment for the Company, Cedar Falls (Proprietary) Limited was
 a fair value of R9 367 000, realising a loss of R133 000.
 ) Limited on 1 December 2008 for R7 875 000. Insurance
mpany. As part of the restructuring of equity investment for the
vestment Limited as at end of June 2009 at a fair value of


                                      Group                                  Company
                                    2010                  2009              2010         2009
                                   R’000                 R’000             R’000        R’000

                                  30,383                 2,351             4,572        1,778
                                   7,422                     –                 –            –
                                      11                  -912                 9         -289
                                  37,816                 1,439             4,581        1,489

                                      Group                                  Company
                                    2010                  2009              2010         2009
                                   R’000                 R’000             R’000        R’000

                                     446                    58              330           58
                                  14,247                     –                –            –
                                  14,693                    58              330           58

                                      Group                                  Company
                                    2010                  2009              2010         2009
                                   R’000                 R’000             R’000        R’000
                                 116,276               604,197               86,973       229,356
                                  50,066               308,590               44,000       301,122
                                 166,342               912,787              130,973       530,478

                                       Group                                    Company
                                     2010                  2009                2010          2009
                                    R’000                 R’000               R’000         R’000




                                                                             18,064        16,766
                                                                             18,064        16,766
rom internal sources.



 as required by the provisions of the Short-term Insurance Act


uity, and are indicated in the statement of financial position as part of




se agreement with Hollard Life Properties (Proprietary) Limited,
 runs to 30 June 2015. With effect from 1 July 2009 the lease
Hollard Life Properties (Proprietary) Limited to sublease the Arcadia
n a sublease agreement between The Hollard Life Assurance Company


                                     2010                  2009
                                    R’000                 R’000
                                  25,581                13,386
                                  25,581                13,386



derwriting Managers (Proprietary) Limited due to an alleged breach
sts and disbursement) is R23 000 000.


 oyees Pension Fund with 35 (2009: 62) employees of the
ntributions to the fund charged against income for the year were


 ployees Provident Fund with 122 (2009: 350) employees of the
ntributions to the fund charged against income for the year were


ed by the Pension Funds Act of 1965.
                                    Executive
                                   2010                 2009
                                  R’000                R’000
                                  3,792               15,771
                                  6,480                2,020
                                (1,000)                   80
                                       –                -123
                                     –              (13,956)
                                  9,272                3,792
                                 Non-executive
                                  1,316                     –
                                       –                1,161
                                (1,316)               (1,159)
                                       –                1,191
                                     –                    123
                                       –                1,316
                                  9,272                 5,108




nil), RC Hallier R90 750 (2009: R1 059 484), and NG Kohler


erest income in 2010 was R480 437 (2009: R2 241 312).

t SARS rate and as at 30 June 2010 the rate was 10.5%.
0 June 2010 the prime rate was 10%.




 associated companies and the holding company. All material


d and the ultimate holding company is R Enthoven and Sons
epublic of South Africa.

                                                        2010      2009    2010    2009
                                                       R’000     R’000   R’000   R’000




                                                           140     140      –       1
                                                           100       –      –       –
                                                         8,500   8,500     11      11
                                                           550     550      –       –
                                          43,000             –          –          –
                                               –         3,500          1          1
                                          50,000        50,000          4          4
                                           8,150         5,000         12         28
                                               –           374          –          –
                                          65,000        65,000          –          –
                                          10,000             –          –          –
                                          50,000        50,000         66         66
                                          14,000         4,807          –          –
                                           1,584         3,238          2          2
                                         135,000       135,000          –          –
                                         130,000       130,000          –          –
                                          34,156        15,939          –          –
                                             240           240          –          –
                                               –           250          –          –
                                             480           100          –          –
at market related rates.

                                                                       –      109,565
                                                                 131,563       15,027

                                                                 119,083       88,785

                                                                      –        59,346

                                                                 297,855      337,700

                                                                   9,687       10,729
cutive Directors)

                                                                  25,581       13,386




                                                                     2010        2010
                                          Issued                            Indebted-
                           Nature of       share    Proportion    Shares        ness
                            business      capital       held %     R’000       R’000



                                  B           100           60       770        1,857

                                  A           100           –          –           –

                                  G    17,316,880           50     16,158     293,175

                                  B          100           70          –           –

                                  H          100          100          –           –
                                  A          100          100        504        5,592
C        100       –           –          –

B       100      100           –          –

B       100      100           –          –

A       100      100           –      32,289

A       100      100           –          –
C         1      100          25          –
C         1      100           –      30,008

A        100      100       1,164      2,057

C     10,000       –           –          –

C      1,999    50 03      54,074       25

B     50,000     49.9     195,452    -13,218

B      1,000       60        849          –


G        100       70      25,232         –


G   5,000,000     100     182,989         –

C        100      100          –          –

C        100      100        588          –


G   9,114,600    50.1      29,461         –

C          1      100      17,267         –

B         100    100          400         –
G   2,605,026   55.84      61,555         –
C           1    100           –      15,430

E      1,010    74.95          –          –

B        100       –           –          –

B        100       –            –         –
                           586,488   367,215
                        – 586 488         -8
                        – 586 488    367,207
B   3,000,000    42.4    14,378       –
B     100,280      –         –        –

        100        30    31,342       –
A       100        33     1,050      59

C      1,000     25.1    15,462       –

B     10,000    42.67    77,387       –
C       260     49.23     4,749    2,799

B     100,000      –         –        –
A        100      49         –    37,310
B   1,702,747    39.8   240,091       –
D        200      30     48,284       –
B        100       –         –        –

B          –       15        –        –
B   8,968,000   31.73        –        8

B       100       30         –        –


B       100        30    16,082        –
                        448,825    40,176
                             –    -10,627
                        448,825    29,549
d to all years presented unless otherwise stated.




ations Committee (IFRIC) interpretations issued and



 aries and associates, derivative financial instrument, the
hich are carried at fair value.



g policies and the reported amounts of assets, liabilities,
 es, the results of which form the basis of making


 of comprehensive income in the year in which the



 interpretations. The Group and Company adopted all of
 or annual reporting periods beginning on or after 1
ve rise to additional disclosures including, in some cases,


lows:




 either in one statement of comprehensive income or in
sented in the statement of changes in equity. The revised
ncial position as at the beginning of the earliest
ensive income. Information about the individual




made a retrospective restatement of items in its annual




hierarchy. Furthermore, for those instruments which have
tal gain or losses for the period split between those
 ired of the movements between different levels of the
es.




sition occurs, and future reported results. IAS 27 requires
dwill, nor will it give rise to a gain or loss. Furthermore,
 Statement of Cash Flows , IAS 12: Income Taxes , IAS 21:




s not opted to early adopt any of these standards and will
al position or cash flows:




009 and 1 January 2010 respectively)


2009)




estments in Subsidiaries (effective 1 July 2009)
 on of Annual Financial Statements (effective)




 ive 1 January 2009)
anuary 2010)


 Interaction (effective 1 January 2009)




where an entity chooses or is required to buy its own
urthermore, the amendment clarifies that vesting
her by the entity or by other parties, should receive the




 d at fair value at the date of acquisition. For successive
ofit or loss. Furthermore, the revised standard replaces the
he effective date.




ed operations.


 oduces a three-level hierarchy for fair value measurement
equirements for the disclosure of liquidity risk primarily
 ny’s disclosure and are not expected to have an impact on
al financial statements with a securities commission or
 based on information provided to key management. The
ments. An amendment to IFRS 8 prescribing additional
does not have debt or equity instruments that are traded
 nts in a public market.




e income statement and a statement of comprehensive
’s results but are expected to have an impact on the




nditures on unrecognised assets. The amendments to IAS




 annual financial statements are authorised for issue, may
s a constructive obligation to pay the dividend. This




ment, IAS 17 generally required leases of land with an




sts or capitalising these to the qualifying asset cost. This




s with non-controlling interests to be recorded in equity if
ing interest in the equity is remeasured to the fair value




ome consequential amendments to IAS 28 as a result of
have been some consequential amendments to IAS 31 as a




 sing on Liquidation

ns:



 example, some partnership interests and some shares

p and Company’s annual financial statements.



mpany’s annual financial statements.



air value of an intangible asset that is acquired as part of a




h profit or loss is now possible when it removes or




oup transaction under certain conditions. This amendment




r sets out a number of changes in circumstances that are
ted to have a material impact on the Group and




 ng standards. The annual improvement project aims to
The changes required by the annual improvements project
 hen the entity first becomes a party to the contract. For
 ges in fair value recognised in profit or loss). If an entity is
erial impact on the Group and Company’s annual financial




es the Group and Company to measure any economic
 al statements.




developed in accordance with IAS 11: Construction
or the sale of goods (IAS 18) and it revises guidance on




 ere, within a group, hedging instruments that are hedges
 om equity to profit or loss for both the hedging




xpected to have any impact on the Group and Company’s


connect the customer to a network or to provide the
mpany’s annual financial statements.




a shareholding of more than 50% of a subsidiary’s voting




 Gains or losses on disposal of subsidiaries are accounted
ruments issued and liabilities incurred or assumed at the
d initially at their fair values at the acquisition date in




alue of the net assets of the subsidiary acquired, the



rolling interest in the net assets of consolidated
on and their share of changes in equity since the date of
tent that they have a binding obligation and are able to




cy with the policies adopted by the Group.


asurement due to the fact that it continually manages and




nt influence is the power to participate in the financial and



d as held-for-sale, in which case it is accounted for in
of financial position’s reserves at cost as adjusted for post-
 the Group’s interest in that associate, which includes any
 of the associate. Post-acquisition profits are recognised in




cquisition is recognised as goodwill. The goodwill is
assets, liabilities and contingent liabilities over the cost of




changed where necessary to ensure consistency with the



valuates these investments on a fair value basis.



int venture activities require the unanimous consent of
ted for under IFRS 5. Under the proportionate
lar items in the consolidated annual financial statements.




d evaluates these investments on a fair value basis.

dwill arising on the acquisition of subsidiaries is initially
 tity include the carrying amount of goodwill relating to



generating units represents the Group’s investment by


 recoverable amount of the cash-generating unit is less
ro rata on the basis of the carrying amount of each asset




n investment income or loss is translated into South
minated in foreign currencies are recognised in the




y). The consolidated annual financial statements are
 the nearest thousand (R’000) except when otherwise




ate, assets and liabilities denominated in currencies
ehensive income. Translation differences on non-




ency into the Group’s presentation currency at the closing
ed significantly during that period, in which case the
 ctly in the statement of comprehensive income as a
 ate at the statement of financial position date. None of




  s intended use, including import duties and non-
 tly prolongs its expected useful life, is recognised directly



  The rates used to depreciate each category of property




  uers. Any accumulated depreciation at the date of
me. Each year, the difference between depreciation based
 transferred from the revaluation surplus to retained



sfer is recognised in other comprehensive income as a
erty, any surplus previously recorded in other




ost or revalued amounts to net realisable value over the


 he item will flow to the Group and the cost of the item




 ly to its recoverable amount if the asset’s carrying amount



 s are sold, the amounts included in the revaluation




  investment property comprises freehold land and
n-market fair value and is subject to a valuation by an



om changes in the fair value of investment property are
posal proceeds and the carrying value is recognised in the




be obtained, not exceeding 20 years.



xpected useful life (three to five years).




-maturity financial assets and loans and other receivables.
g to the following accounting policies:




which there is evidence of short-term profit taking, or if



designate at fair value through profit or loss are




urity are classified as held-to-maturity investments and
also includes all assets that are not designated either at




as available-for-sale and are included in non-current assets
 raise operating capital, in which case they are included in
mpany in exchange for providing money, goods or services
 Receivables arising from insurance contracts are also




 ompany commits to purchase or sell the asset.
 and loans and receivables are carried at amortised cost




 lect all amounts due according to their original terms.


 has also transferred substantially all risks and rewards of



 iod in which they arise. Unrealised gains or losses arising
 impaired, the accumulated fair value adjustments are




 profit or loss are initially recognised at fair value and



 are for non-active market instruments. Fair values for
 n investment cannot be measured reliably, the




y or to settle on a net basis, all related financial effects are



 st method, with the interest expense being recognised on


 ctive interest rate is the rate that exactly discounts future


sition items as financial liabilities:
rom quoted market prices in active markets, including
e of derivatives that do not qualify for hedge accounting




nancial asset or group of financial assets other than those
ccurred after the initial recognition of the asset (a ‘loss
inancial asset or group of assets is impaired includes




ured as the difference between the asset’s carrying
ount of the loss is recognised in the statement of




e case of equity investments, a significant or prolonged
t fair value of the investment, is removed from other




viously recognised impairment loss is reversed and
aluation increase.



able. An impairment loss is recognised as the amount by




 arket instruments that are readily convertible to a known
t interest rates.
 as a deduction from the proceeds, net of tax.




 sate the policyholder or other beneficiary if a specified
nsurance risk the possibility of having to pay benefits on




 terest rate, financial instrument price, commodity price,
o the contract.




 ement of financial position in accordance with IAS 39. The
 t income.




hich the Group and Company manage them.



 gross of commission to intermediaries and exclude value



 income over the term of the reinsurance contract.



f premiums written in the current year which relate to
 ofile for uneven risk contracts.




ortised on a straight-line basis over the average term of
 stated once written off.




come as incurred.
ial position date, whether reported or not. Related



sed separately.



te exceeds the unearned premium provision in relation to


ms handling and administration expenses are used in




s direct obligations to its policyholders. Premium ceded



ear as the related claim. Reinsurance contracts that do not
sition date.



nts due and that there is a reliably measurable impact on




ent of some or all costs. Estimates of salvage recoveries




ment income and finance costs in the statement of
stimated future cash flow discounted at the original




n declared in respect of unquoted shares.
ntributions are adjusted periodically to take account of




share or bonus to its employees or where a past practice




vices rendered by employees up to the statement of



 ange for these benefits. The Group and Company
g to a detailed, formal plan without possibility of




re raised as a liability and recognised in profit or loss




ecause it excludes items of income or expense that are taxable or deductible in
o items recognised directly in equity, in which case the related income tax is also



ated deferred income tax asset is realised or the deferred




etween the tax bases of assets and liabilities and their
ent that its probable future taxable profit will be available
ion (other than in a business combination) of other assets




 will be available to allow all or part of the asset to be
ed by the same taxation authority and the Group intends




e that these credits will be utilised.




utflow of resources embodying economic benefits will be



is material, provisions are discounted using a pre-tax



 considering the class of obligations as a whole. A




redemption value is recognised in the statement of




o the statement of comprehensive income on a straight-
h termination takes place.
      A      A-        BBB+           BBB          BB+        Not rated
  R’000   R’000        R’000         R’000       R’000           R’000




      –        –          –              –            –         321,997
      –        –          –              –            –          40,176
      –        –          –              –            –           3,616
  3,951   18,816          –        125,469       20,609         492,641
      –        –          –              –            –          16,457
    892        –          –              –            –       1,193,750
      –        –          –              –            –          13,736

     –        –           –             –            –         229,903

     –        –           –             –            –         691,553

 52,023       –           –             –            –         334,638

120,556       –           –             –            –         816,517

      –        –          –              –            –         396,690
591,142   14,828          –              –            –       1,415,829
768,564   33,644          –        125,469       20,609       5,967,503



      –            –        –                –            –      215,368
      –            –        –                –            –       37,757
 16,882            –   47,718                –            –      479,002
      –            –        –                –            –       15,595
      –            –        –                –            –    1,075,735
      –            –        –                –            –       19,326
      –            –        –                –            –      149,580


     –             –           –             –            –       34,760
 51,990            –            –             –            –    1,412,166

     –     38,702               –             –            –      302,123

     –             –            –             –            –      362,167

      –         –            –                –            –      296,210
104,784    23,189            –                –            –    1,601,577
173,656    61,891       47,718                –            –    6,001,366




     –         –            –             –            –        586,488
     –         –            –             –            –        367,208
     –         –            –             –            –        448,825
     –         –            –             –            –         29,549
     –         –            –             –            –          7,231
     –    18,816       27,204       125,469       20,609        358,715
     –         –            –             –            –        943,976

     –        –            –             –            –         396,176

     –        –            –             –            –          44,266

      –        –            –             –            –         313,957
      –        –            –             –            –         251,722
 90,355   14,828            –             –            –         620,221
 90,355   33,644       27,204       125,469       20,609       4,368,334



      –            –         –                –            –      511,926
      –            –         –                –            –      206,358
      –            –         –                –            –      368,274
      –            –         –                –            –       27,149
 16,882            –    47,718                –            –      382,769
      –            –         –                –            –      875,325

     –             –            –             –            –       34,760

     –             –            –             –            –      521,228

     –     38,702               –             –            –       33,548

      –         –            –                –            –      296,283
      –         –            –                –            –      147,387
      –         –            –                –            –      698,562
 16,882    38,702       47,718                –            –    4,103,569
      Company

 Past due                                  Gross
  but not       Individually             carrying
impaired           impaired              amount
   R’000              R’000                R’000

            –              8                 367,216
            –         10,627                  40,176
            –              –                 557,309
            –              –                 943,976
            –              –                       –

     7,544              4,408                396,176

         –                 –             1,359,714
     7,544            15,043             3,664,566
   49,126                      –           313,957
        –                      –           749,715
   49,126                      –         1,063,672

            –         88,064                 294,423
            –         10,986                  38,135
            –              –                 481,289
            –              –                 875,324

            –            -522                520,706

            –              –             1,322,210
            –         98,528             3,532,087
            –                  –             296,283
            –                  –             698,562
            –                  –             994,845




                                   Company
                                                                     Total
                                                         More     past due
                       31 –                 61 –          than     but not
<30 days            60 days              90 days       90 days   impaired
   R’000              R’000                R’000         R’000      R’000



       –                  –                   5,944     1,600       7,544
       –             28,811                   8,566    11,749      49,126
       –             28,811                  14,510    13,349      56,670
  More
   than
5 years
 R’000



     –
     –
     –
     –
     –
     –
     –
     –

     –
     –
     –
     –
     –
     –
     –
     –
     –

  More
   than
5 years
 R’000
     –
     –
     –
     –
     –
     –

     –
     –
     –
     –
     –
     –
     –




  More
   than
5 years
 R’000




402,372
      –
402,372



446,977
 94,754
      –
541,731

     –
     –




     –
     –



 76,967
      –
 76,967

     –
       –




     Company
               Maturity   Maturity
Maturity       between      more
within a        2 and 5    than 5
   year           years     years
  R’000           R’000     R’000



 548,035       361,088      2,661

  388,504       43,167          –
  439,920      314,541          –
   32,193       15,856          –
   18,092        8,911          –
        –            –          –
        –            –          –
        –            –          –
        –            –    587,202
  258,628            –          –
1,685,372      743,563    589,863



 688,436       194,373      5,997

  325,300      120,296        225
  597,498       89,281          –
   14,421       21,632          –
   33,123       26,025          –
        –            –          –
        –            –          –
        –            –          –
        –            –    495,058
  204,740            –          –
1,863,518      451,607    501,280
2009
        Relevant
           stock
       exchange

             JSE
             JSE




2009
        Relevant
           stock
       exchange

             JSE
             JSE
 Insurance       Total per                             Fair
   contract          Other      statement          value of
assets and      assets and     of financial       financial
  liabilities    liabilities      position    instruments
      R’000          R’000           R’000           R’000




           –              –       321,997         321,997
           –              –        40,176          40,176
       –           –        3,616       3,616
       –           –    2,166,971   2,166,971
       –           –      859,787     859,787
       –           –    1,237,843   1,237,843

        –          –       69,341      69,341
2,216,420          –    2,216,420   2,216,420

1,616,664    307,573    2,308,217   2,308,217

  396,690          –      396,690     396,690
4,229,774    307,573    7,454,087   7,454,087

        –          –      715,422     715,422
5,505,481          –    5,505,481   5,505,481
  950,524          –      950,524     950,524
        –    207,201      207,201     207,201

        –   1,357,404   1,357,404   1,357,404
6,456,005   1,564,605   8,736,032   8,736,032



       –           –      215,368     215,368
       –           –       37,757      37,757
       –           –    1,887,448   1,887,448
       –           –      575,923     575,923
       –           –    1,220,916   1,220,916

       –           –      72,129      72,129

        –          –       18,480      18,480
1,780,480          –    1,780,480   1,780,480

 362,167    1,117,024   1,877,716   1,877,716

       –           –      34,760      34,760

  296,210           –     296,210     296,210
2,438,857   1,117,024   6,129,739   6,129,739




        –          –      448,203     448,203
4,719,767          –    4,719,767   4,719,767
  496,168          –      496,168     496,168

       –           –      20,185      20,185
       –     121,830     121,830     121,830

       –    1,310,267   1,310,267   1,310,267
        –          15,516          15,516          15,516
5,215,935       1,447,613       7,131,936       7,131,936




           –              –      586,488          586,488
           –              –      367,208          367,208
           –              –      448,825          448,825
           –              –       29,549           29,549
           –              –        7,231            7,231
           –              –    1,501,285        1,501,285
           –              –      805,263          805,263
           –              –      689,407          689,407

        –                 –         6,615           6,615
  749,715                         749,715         749,715

  313,957           75,575        710,133         710,133

  251,722                –       251,722          251,722
1,315,394           75,575     4,652,156        4,652,156

2,760,170               –      2,760,170        2,760,170
  258,629               –        258,629          258,629
        –         114,480        114,480          114,480

        –         528,720        528,720          528,720
3,018,799         643,200      3,661,999        3,661,999

 Insurance                       Total per
   contract          Other      statement        Fair value
assets and      assets and     of financial    of financial
  liabilities    liabilities      position    instruments
    R’000          R’000           R’000           R’000




           –              –       511,926         511,926
           –              –       206,358         206,358
           –              –       368,274         368,274
           –              –        27,149          27,149
           –              –     1,356,614       1,356,614
           –              –       508,059         508,059
           –              –       842,969         842,969

        –                 –         5,586           5,586
  698,562                 –       698,562         698,562
 296,283    397,644    817,511     817,511

       –         –      34,760      34,760

  147,387         –     147,387     147,387
1,142,232   397,644   4,168,541   4,168,541

2,611,665        –    2,611,665   2,611,665
  204,740        –      204,740     204,740

       –          –     20,185      20,185
       –     40,445     40,445      40,445

       –    579,123    579,123     579,123

        –    12,091      12,091      12,091
2,816,405   631,659   3,468,249   3,468,249
                      Total gains
                        or losses
                           for the
                           period
                        included
                         in profit
                       or loss for
                 At   assets held
  Foreign    30-Jun    at 30 June
exchange       2010          2010
    R’000     R’000         R’000




       –    475,997      108,967
       –    201,405       22,023
       –     12,298            –
  -9,482    321,146       15,519
       –    481,494      -38,428
      –       6,614       819
      –     297,855   -39,845
      –     110,067       250
 -3,784      16,457         –
      –     321,997         –
-13,266   2,245,329    69,305

     –      141,113        –
     –       62,790        –
     –       26,000        –
                  –
      –      13,736         –
-13,266   2,488,968    69,305




      –     343,606    90,312
      –     201,405    22,023
      –      12,298         –
      –      47,947    15,519
      –     481,494   -39,830
      –       6,614       819
      –     297,855   -39,845
      –     110,066       250
      –     448,825    17,499
 -1,915     586,488   122,129
      –           –    -3,522
 -1,915   2,536,598   185,354
2009


       Net of tax
         R'000



           9,134
             105
               –
               –

          -2,617
               –
          –

          –

-20,580
-13,958
   2009
Reinsurance
                    Net
                  R’000




                 678,837
                 309,792
              -2,713,028
                       –
                       –
                 -66,441
               2,966,016
               1,175,176

                 480,392
              -2,106,425
               2,229,071
                 603,038



                287,485
                 30,977
                   -180
                      –
                      –
                126,183
                444,465

                266,781
                108,098
                374,879



              1,086,944
                 66,902
                      –
                      –
                -87,719
                247,184
              1,313,311

                469,576
                 99,423
                568,999
473,293
 23,519
496,812

471,770
 23,288
495,058



      –
  7,845
 -1,661
 66,635
 72,819

      –
 59,148
 59,148



      –
  1,563
  1,563



       –
   2,216
      71
  -1,793
     494



       –
-134,878
  24,204
 -21,292
-131,966



      –
 36,053
 36,053

      –
 36,053
 36,053



      –
          10,386
          10,386



               –
               –
               –



               –
               –
               –



        -200,808
        -221,294
          44,981
               –
               –
        -102,705
        -479,826

2009

             Net
           R’000

        -120,994
        -103,078
        -224,072




        2,325,751
           61,560
       -2,713,028
          -86,745
          488,438
                –
                –
        2,966,016
         -102,705
        2,939,287

        1,567,525
       -2,106,425
          326,010
        2,229,071
         -103,078
1,913,103
                        2004 and
    2006        2005      earlier
   R’000       R’000       R’000




   20,688       3,370           –
    5,688       1,952      -4,315
   39,342      20,065       3,297
  461,580      24,087      31,361
1,406,060     401,629     178,767
        –   1,207,594     512,016
        –           –   1,560,082

1,933,358   1,658,697   2,281,208



  13,718         407            –
   6,157       3,931       -1,770
  18,592       6,961          121
 290,220      10,510        2,242
 949,172     138,029      237,946
       –     893,561      306,925
       –           –    1,035,703

1,277,859   1,053,399   1,581,167
                  Expense
                 raised for         Total
    Gross     the financial      liability
  value at     year ended       raised at
   30-Jun           30-Jun        30-Jun
     2010             2010          2010
    R’000            R’000         R’000
      979            1,694         3,095
   17,860              352           917
   18,839            2,046         4,012




                                              Expense
                                             raised for
                                              the year    Total liability
  Balance                     Gross value        ended        raised at
of units at                    at 30 June       30-Jun           30-Jun
    30-Jun      Unit value           2009         2009             2009
     2009                R          R’000        R’000            R’000
   77,368            68.17         5,274         2,293            4,769
  346,025            75.42        26,098        -6,801              565
  423,393                         31,372        -4,508            5,334
  2009        2009
         Indebted-
Shares       ness
 R’000      R’000



    –          –

    –          68

    –     187,003

    –          –

    –           –
    –        5,592
    3          –

     –         –

     –         –

  6,825    25,400

    –          –
    23         –
    –      30,008

  1,008     1,757

  2,593     608

 42,638      25

181,965    13,774

  1,691        –


 12,396     5,416


101,660    (490)

   22          –

     –         –


 47,078    -1,471

 14,337        –

     –         –
 56,942        –
     –     26,732

     –         –

  2,045        –

 40,700        –
511,926   294,422
     –    -88,064
511,926   206,358
 25,619       –
 23,455       –

     –        –
  1,050      24

  3,375       –

 74,769       –
  4,667    1,438

  8,672       –
     –    37,964
213,559       –
     –        –
  1,002       1

  5,700       –
  6,406       8

     –     -1,300


     –         –
368,274    38,135
     –    (10 986
368,274    27,149
    Total
    R’000




   321,997
    40,176
     3,616
   689,700
    16,457
 1,217,175
    13,736

  229,903

  691,553

 3,158,920

 1,616,664

   396,690
 2,216,420
10,613,008



    215,368
     37,757
    603,512
     15,595
  1,075,735
     33,026
    159,580


     34,760
 1,515,549

 2,533,244

   362,167

   296,210
 1,780,480
 8,662,983




 586,488
 367,208
 448,825
  29,549
   7,231
 557,309
 943,976

 396,176

1,359,714

  313,957
  251,722
  749,715
6,011,870



   511,926
   206,358
   368,274
    27,149
   481,289
   875,325

    34,760

   521,228

 1,322,210

   296,283
   147,387
   698,562
 5,490,751

				
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posted:10/15/2011
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