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Notes to the annual financial statements
for the year ended 31 December 2008

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1. General information 2. Summary of significant accounting policies 3. Critical accounting judgements and estimates 4. Segment information - Group 5. Basic and diluted earnings and dividend per share 6. Property and equipment 7. Management of financial risks 8. Investments 9. Financial assets 10. Employee benefit obligations 11. Insurance risk management 12. Insurance liabilities and reinsurance assets 13. Intangible assets 14. Current taxation asset and current taxation liability 15. Cash and cash equivalents 16. Share capital 17. Share premium 18. Revaluation reserves (non-distributable reserves) 19. Share-based payment reserve 20. Deferred taxation 21. Accounts payable and accrued expenses 22. Provisions 23. Deferred reinsurance commission 24. Investment income 25. Net fair value losses on assets held at fair value through income 26. Net realised gains 27. Administrative and other operating expenses 28. Income tax expense 29. Cash generated from operations 30. Taxation paid 31. Related-party transactions 32. Directors' emoluments 33. Post balance sheet events 34. Contingency

9.	Financial assets
	The financial assets are summarised by measurement category in the table below:
				Group		Company
			Note	2008	2007	2008	2007
	Available-for-sale		9.1	1,382,173	1,150,279	1,204,521	1,009,245
	Fair value through income		9.2	349,102	437,811	349,102	437,666
	Loans and receivables		9.4	1,704,062	1,399,276	1,503,056	1,294,548
	Total financial assets			3,435,337	2,987,366	3,056,679	2,741,459
		Ordinary shares		Preference shares		Interest-bearing securities
		Quoted	Unquoted	Quoted	Unquoted	Unquoted	Total
		R’000	R’000	R’000	R’000	R’000	R’000
9.1	Available-for-sale financial assets
	Group
	At 31 December 2006	590,610	22,981	3,019	62,031	9	678,650
	Purchases	68,242	433	9,773	–	–	78,448
	Capital reductions	(960)	–	–	–	–	(960)
	Disposals
	– Cost	(8,706)	–	(1,014)	–	–	(9,720)
	– Revaluation relating to disposals	(80,107)	–	(2,007)	–	–	(82,114)
	Net fair value gains/(losses) excluding net realised gains	56,656	(345)	(702)	–	–	55,609
	Foreign exchange adjustment	(51,646)	–	–	–	–	(51,646)
	Reclassified from cash and cash equivalents	–	–	–	–	482,012	482,012
	At 31 December 2007	574,089	23,069	9,069	62,031	482,021	1,150,279
	Purchases	131,801	–	–	250	353,048	485,099
	Disposals
	– Cost	(12,108)	(917)	–	–	–	(13,025)
	– Revaluation relating to disposals	(98,342)	–	–	–	–	(98,342)
	Reclassified as investment in associates	–	(4,597)	–	–	–	(4,597)
	Arising from corporate transactions	(1,387)	–	–	–	(9)	(1,396)
	Net fair value (losses)/gains excluding net realised gains	(146,881)	(6,109)	(1,055)	–	18,145	(135,900)
	Foreign exchange adjustment	(161)	–	–	216	–	55
	At 31 December 2008	447,011	11,446	8,014	62,497	853,205	1,382,173
	2007
	At cost	144,255	16,960	9,773	61,804	482,048	714,840
	Cumulative fair value gains/(losses)	429,834	6,109	(704)	227	(27)	435,439
		574,089	23,069	9,069	62,031	482,021	1,150,279
	2008
	At cost	262,400	11,446	9,773	62,270	835,087	1,180,976
	Cumulative fair value gains/(losses)	184,611	–	(1,759)	227	18,118	201,197
		447,011	11,446	8,014	62,497	853,205	1,382,173
	Company
	At 31 December 2006	542,830	22,981	3,019	60,000	–	628,830
	Purchases	68,242	433	9,773	–	–	78,448
	Capital reductions	(960)	–	–	–	–	(960)
	Disposals
	– Cost	(8,706)	–	(1,014)	–	–	(9,720)
	– Revaluation relating to disposals	(83,527)	–	(2,007)	–	–	(85,534)
	Reclassified from cash and cash equivalents	–	–	–	–	343,179	343,179
	Net fair value gains/(losses) excluding net realised gains	56,049	(345)	(702)	–	–	55,002
	At 31 December 2007	573,928	23,069	9,069	60,000	343,179	1,009,245
	Purchases	131,801	–	–	–	316,726	448,527
	Disposals
	– Cost	(12,108)	(917)	–	–	–	(13,025)
	– Revaluation relating to disposals	(98,342)	–	–	–	–	(98,342)
	Reclassified as investment in associates	–	(4,597)	–	–	–	(4,597)
	Arising from corporate transactions	(1,387)	–	–	–	–	(1,387)
	Net fair value (losses)/gains excluding net realised gains	(146,881)	(6,109)	(1,055)	–	18,145	(135,900)
	At 31 December 2008	447,011	11,446	8,014	60,000	678,050	1,204,521
	2007
	At cost	142,223	16,960	9,773	60,000	343,179	572,135
	Cumulative fair value gains/(losses)	431,705	6,109	(704)	–	–	437,110
		573,928	23,069	9,069	60,000	343,179	1,009,245
	2008
	At cost	260,529	11,446	9,773	60,000	659,905	1,001,653
	Cumulative fair value gains/(losses)	186,482	–	(1,759)	–	18,145	202,868
		447,011	11,446	8,014	60,000	678,050	1,204,521
	The carrying value of financial assets measured at cost in the Company is:
	At 31 December 2007	–	–	–	60,000	–	60,000
	At 31 December 2008	–	11,446	–	60,000	–	71,446
	Management determines concentration of risk pertaining to financial assets available-for-sale by evaluating the maximum response in the fair value to a change in the economic or market conditions. In evaluating the concentration of risk, consideration is given to shared characteristic of the financial assets such as market segment and currency.
				Group		Company
				2008	2007	2008	2007
				R’000	R’000	R’000	R’000
9.2	Financial assets at fair value through income
	At beginning of the year			437,811	379,761	437,666	379,705
	Purchases			1,482,675	615,808	1,482,675	615,808
	Disposals (sales and redemptions)			(1,551,343)	(545,897)	(1,551,198)	(545,897)
	Fair value losses			(20,041)	(11,861)	(20,041)	(11,950)
	At end of the year			349,102	437,811	349,102	437,666
	At cost			349,102	440,306	349,102	440,250
	Revaluations			–	(2,495)	–	(2,584)
	Carrying amount in the balance sheet			349,102	437,811	349,102	437,666
		Quoted	Unquoted	Total	Quoted	Unquoted	Total
		2008	2008	2008	2007	2007	2007
		R’000	R’000	R’000	R’000	R’000	R’000
9.3	Concentration of financial assets
	Available-for-sale – equity securities
	Automobiles and parts	4,179	–	4,179	10,770	–	10,770
	Mining	91,118	–	91,118	138,671	–	138,671
	Oil and gas	32,422	–	32,422	39,251	–	39,251
	Construction	14,130	11,173	25,303	25,101	11,173	36,274
	Banks	71,140	–	71,140	81,386	–	81,386
	Insurance	58,056	163	58,219	35,129	6,726	41,855
	Retail and consumer	33,941	–	33,941	73,528	1	73,529
	Industrial	50,847	–	50,847	88,655	–	88,655
	Technology and telecommunications	22,745	–	22,745	44,926	–	44,926
	Healthcare	4,003	–	4,003	1,505	–	1,505
	Others, including preference shares	72,444	60,110	132,554	44,075	65,169	109,244
	Total Company	455,025	71,446	526,471	582,997	83,069	666,066
	Banks and insurance	–	2,497	2,497	161	2,031	2,192
	Total Group	455,025	73,943	528,968	583,158	85,100	668,258
	Interest-bearing securities and unit trusts
	Fixed-interest unit trusts	–	310,781	310,781	–	–	–
	Money market and other funds	–	367,269	367,269	–	343,179	343,179
	Total Company	–	678,050	678,050	–	343,179	343,179
	Money market and other funds	–	175,155	175,155	–	138,842	138,842
	Total Group	–	853,205	853,205	–	482,021	482,021
	At fair value through income – fixed-interest securities
	Government securities	–	–	–	345,331	–	345,331
	Corporate sector	–	–	–	24,558	–	24,558
	Parastatals and utilities	–	–	–	22,633	–	22,633
	Water authorities	–	–	–	23,657	–	23,657
	Banks and other fixed-interest investments	–	349,102	349,102	21,632	–	21,632
	Total Group and Company	–	349,102	349,102	437,811	–	437,811
				Group		Company
				2008	2007	2008	2007
				R’000	R’000	R’000	R’000
9.4	Loans and receivables
	Due from agents, brokers and other intermediaries:
	Gross (excluding balances with related parties)			1,047,622	917,129	993,489	866,036
	Due from reinsurers
	Gross (excluding balances with related parties)			398,184	103,268	288,360	103,268
	Other loans and receivables
	Value-added tax			51,853	6,906	49,592	7,860
	Mortgages and other advances			42,347	9,022	19,470	1,725
	Other loans and receivables			76,569	328,024	62,270	280,732
	Receivables from Zurich South Africa Group entities			–	–	2,388	–
	Receivables from related parties			6,442	34,927	6,442	34,927
	Salvage recoveries			77,404	–	77,404	–
	Deferred for share-based payments expenses			3,641	–	3,641	–
				1,704,062	1,399,276	1,503,056	1,294,548
	Fair value approximates carrying value.
	The holding company receivable is interest free and repayable on demand.
	Comprising:
	Non-current			9,194	17,430	1,240	1,725
	Current			1,694,868	1,381,846	1,501,816	1,292,823
				1,704,062	1,399,276	1,503,056	1,294,548