TA Holdings Annual Report 2013

TA HOLDINGS 2013 ANNUAL REPORT
1
TABLE OF CONTENTS
Group Profle, Directors and Senior Management 2
Group Investments and Principal Activities 3
Registered Offce and Corporate Information 4
Chairmans Statement 5
Review of Investments 7
Four Year Performance Highlights 14
Report of the Directors 16
Corporate Governance 17
Report of the Actuaries 18
Independent Auditors Report 19
Consolidated Income Statement 20
Consolidated Statement of Comprehensive Income 21
Consolidated Statement of Financial Position 22
Consolidated Statement of Changes in Equity 23
Consolidated Statement of Cash Flows 24
Notes to the Consolidated Financial Statements 25
Company Statement of Financial Position 89
Notes to the Company Statement of Financial Position 90
Shareholder Analysis 91
Notice to Shareholders 92
2
GROUP PROFILE, DIRECTORS AND SENIOR MANAGEMENT
TA Holdings Limited is an investment holding company. The Groups main interests consist of investments in
insurance, hotels and agrochemicals. The Company was founded in 1935 as Tobacco Auctions Limited (hence
TA). It was listed on the Zimbabwe Stock Exchange in 1964. The Company has a small corporate offce which is
responsible for making investment decisions and other capital allocation decisions for the Group. Managers of the
investee companies have operational decision-making autonomy and accountability. This gives them the authority
which should result in optimal performance of the investments they manage.
DIRECTORS
S S Mutasa (Non-executive Chairman)
G Sainsbury (Chief Executive Offcer)
Z Randeree (Non-executive Director)
F Daniels (Non-executive Director) +*
R N Gordon (Non-executive Director) *+
J Vezey (Non-executive Director) +*
B P Nyajeka (Executive Director)
Member of:
Remuneration Committee
+ Audit and Risk Committee
* Investments Committee
CURRENT HEADS INVESTEE COMPANIES
M Sachak Chief Executive Offcer - TA Insurance
J Murehwa Chief Executive Offcer - Sable Chemical Industries
G Stutchbury Chief Executive Offcer - Cresta Hospitality (Pvt) Ltd
M Javangwe Managing Director - Zimnat Life Assurance
O Matingo Managing Director - Grand Reinsurance
D A Nganunu Managing Director - Botswana Insurance Company
N Jazire Managing Director - Lion Assurance Company
Dr R Dafana Managing Director - Zimbabwe Fertiliser Company
L Tanyanyiwa Managing Director - Minerva Risk Advisors (Pvt) Ltd
T Makaya Managing Director - Cresta Marakanelo Botswana
T Fisher Managing Director - Zimnat Asset Managers
S Mazorodze Managing Director - Zimnat Lion Insurance
SENIOR MANAGEMENT CORPORATE OFFICE
G Sainsbury Chief Executive Offcer
B P Nyajeka Chief Finance Offcer
S Choto Head of Group Reporting
3
GROUP INVESTMENTS & PRINCIPAL ACTIVITIES
EFFECTIVE
NAME OF COMPANY SHAREHOLDING PRINCIPAL ACTIVITY
ZIMBABWE INVESTMENTS
Aon Zimbabwe 30% Insurance brokers
Cresta Hospitality (Pvt) Ltd 100% Hospitality and leisure
Grand Reinsurance (Pvt) Ltd (Grand Re) 100% Reinsurance
Sable Chemical Industries Ltd (Sable) 51% Manufacturer of nitrogenous fertiliser
Zimbabwe Fertiliser Company Ltd (ZFC) 22% Manufacturer & distributor of fertiliser and
pesticides
Zimnat Asset Management Co (Pvt) Ltd 100% Asset management company
Zimnat Life Assurance Company Ltd (Zimnat Life) 100% Life assurers
Zimnat Lion Insurance Company Ltd (Zimnat Lion) 100% Short-term insurers
Freecor Ltd 100% Investment holding company
Sovereign Health (Pvt) Ltd 49% Medical insurance
Zimnat Financial Services (Pvt) Ltd 100% Micro-fnance
OUTSIDE ZIMBABWE INVESTMENTS
Botswana Insurance Company (Pty) Ltd 62% Short-term insurers
Cresta Hospitality Holdings Ltd 100% Hotel management
Cresta Hotels (Pty) Ltd 100% Hotel management
Cresta Marakanelo (Pty) Ltd 35% Hospitality and leisure
Lion Assurance Company Ltd 54% Short-term insurers
Metonic Investments Ltd 100% Investment holding company
Neural (Pty) Ltd 100% Insurance management
TA Investments and Consultants Ltd 100% Investment holding company
Trans Industries (Pty) Ltd 100% Investment holding company
Quest Ventures (Pty) Ltd 100% Investment holding company
4
REGISTERED OFFICE & CORPORATE INFORMATION
REGISTERED OFFICE: 17th Floor, Joina City
Cnr Julius Nyerere / Jason Moyo Avenue
Harare
SECRETARIES: TA Management Services (Pvt) Ltd
17th Floor, Joina City
Harare
TRANSFER SECRETARIES: Corpserve (Pvt) Ltd
2nd Floor, ZB Centre
Cnr First Street/Kwame Nkrumah Avenue
Harare
AUDITORS: PricewaterhouseCoopers Chartered Accountants (Zimbabwe)
Building No. 4, Arundel Offce Park
Norfolk Road, Mt Pleasant
Harare
PRINCIPAL LAWYERS: Atherstone & Cook
7th Floor, Mercury House
24 George Silundika Avenue
Harare
BANKERS: Stanbic Bank
Park Lane Branch
77 Park Lane
Harare
5
CHAIRMANS STATEMENT
OVERVIEW
The TA Group had a good year, recording a growth
in headline earnings per share of 126% compared to
the year ended 31 December 2012. However, this was
offset by a US$13.7 million impairment charge against
the Groups investment in its associate company, Sable
Chemical Industries Limited (Sable).
In my report, I will talk about the performance of the
businesses frst and then share with you the Boards
views on Sable and the reason why an impairment
charge was recorded against the investment.
Zimbabwe investments
The Zimbabwe investments showed a mixed
performance during 2013, with the insurance cluster
performing well, agro chemicals posting a signifcantly
reduced operating loss when compared to last year
and the hotels cluster reporting a loss for the year.
a) Insurance
Despite the adverse macro-economic conditions,
the Zimbabwe insurance companies recorded
growth, with the exception of Grand Reinsurance.
This growth was on the back of good underwriting
performance and fair value gains achieved from
the Zimnat Plaza (formerly the AMC Building). The
strong underwriting performance was a result of
good cost control and initiatives that have been
undertaken in the areas of new product development
and expansion of the distribution channels.
Grand Reinsurance did not perform to expectations
during 2013. As such, the business model has been
adapted to realign the operations to changes that
took place in the reinsurance market during 2013.
We are fairly confdent that the company will post a
proft in 2014.
Subsequent to 31 December 2013, the Group
entered into an agreement for the purchase of an
additional 20.75% stake in Minerva Risk Advisors
(Private) Limited (formerly AON). The transaction
will increase the Groups interest in Minerva from
30.25% to 51%. According to the agreement, the
discounted present value of the 20.75% stake is
$747,000, to be paid over three annual instalments
commencing in 2014. With Minerva under the
Groups control, profts are expected to grow rapidly.

b) Hotels
On the hotels side, performance was negatively
affected by low business volumes due to the
decline in economic activity. As a result, most city
hotel operators engaged in a price war to attract
customers. In addition, the hotel business was also
affected by Governments inability to pay timeously.
However, I am glad that the hotel industry has
now reached an agreement with Government
which allows for a set-off of amounts due from
Government against amounts payable for Value
Added Tax (VAT) and Pay As You Earn (PAYE).
As TA we are committed to this industry and we are
confdent the business will improve and that we will
be able to make a return on the refurbishment work
that has been undertaken to date at Cresta Lodge
in Harare and Cresta Sprayview in Victoria Falls.
c) Agrochemicals
On agrochemicals, the loss incurred during the year
was lower than that for the year ended 31 December
2012. This was due to increased production and
lower fnance costs at Sable. At Zimbabwe Fertiliser
Company Limited (ZFC), the loss decreased as
a result of higher fertiliser sales and improved
cost and credit control. However, the key issue for
this cluster is the fnalisation of negotiations with
Government and the Zimbabwe Electricity Supply
Authority (ZESA) for a viable electricity tariff. TA
believes in this industry and I will cover our views
on this business later in my report.
d) Disposal of investments
The process to divest out of ZFC is still underway.
The Group was unable to dispose of its stake in PG
Industries Zimbabwe (PG) during 2013. During
the year under review, PG entered into a scheme
of arrangement with its bankers and creditors. The
resultant effect of this scheme was to reduce TAs
stake in PG from 13% to below 1%.
Outside Zimbabwe investments
a) Insurance
Increased competition in the insurance market
has seen Botswana Insurance Companys (BIC)
revenues dropping. However, BIC was able to
maintain underwriting proftability despite this drop
in revenues, primarily due to good underwriting
discipline and tight cost control. A number of
initiatives are being implemented which will see BIC
regaining its market share.

I am pleased to advise that we have now turned
a corner in Uganda. Lion Assurance Company
Uganda (LAC) posted a good set of results both in
underwriting proft and cash fows from operations.
I believe we now have a good team in place that
understands the market and is working hard to
ensure that the turnaround is sustained.
b) Hotels
Cresta Marakanelo performed well mainly on the
back of good results at Mowana Resort. Competition
in Gaborone has intensifed with the opening of new
hotels in this market. This has caused the Group to
look carefully at its offering in Gaborone with the
6
CHAIRMANS STATEMENT
intent of improving the product and service in every
area. Cresta Marakanelo has continued to grow by
opening new hotels outside Gaborone. During 2013
Cresta Marakanelo opened a new hotel in Jwaneng,
which is 100 kilometres west of Gaborone. Plans
are underway to lease a new hotel and conference
centre outside the capital.
Sable Chemical Industries
In my statement to shareholders for the year ended 31
December 2004 I said:
Sables intrinsic value arises from two attributes:
a) transporting urea into Zimbabwe - a land locked
country at the Southern most tip of the second largest
continent in the world is both very expensive and
more costly than importing ammonia into Zimbabwe,
and b) the owners of Sable, if its assets are prudently
maintained and proftably operated, have an option to
incur the lowest capital costs of expanding Zimbabwes
ammonium nitrate manufacturing capacity from its
current level of 240,000 metric tons per annum to a
capacity of 580,000 metric tons per annum through a
simple expansion of the ammonia plant. Sable is pivotal
to the mission of increasing fertiliser consumption at the
lowest possible foreign exchange cost to Zimbabwe---
---If Sable did not exist, Zimbabwe would have to
satisfy all its nitrogenous fertiliser needs by importing
urea. Zimbabwe will have to import 195,131 tons of
urea to replace 110,244 tons of ammonia necessary
to produce Sables annual capacity of 240,000 tons of
ammonium nitrate---
---Sables second advantage is that it provides its
owners and Zimbabwe with the cheapest possible
way of doubling Zimbabwes nitrogenous fertiliser
production capacity. Ideally, Sables profts would be
of a size to permit Sable to fnance expansion of its
annual capacity --- Realising that ideal depends on the
electrolysis plant possessing a long life---
Ten years from the time I wrote this statement, I still
believe in what I said, which is that Sable is a strategic
investment for Zimbabwe and a good business for
TA to be in. However, the issue now is for Sable to
have a viable electricity tariff for at least three years
whilst we are implementing alternative technology to
produce ammonia, the feedstock in the manufacture
of ammonium nitrate. Sable is currently engaging
Government and ZESA to achieve this.
As at 31 December 2013, the Groups fnancial year
end, and to date, the tariff negotiations had not been
completed and the future returns from Sable could
therefore not be estimated with reasonable certainty.
As a result we could not justify the value of Sable in
TAs books and consequently, in order to comply with
the requirements of International Accounting Standard
(IAS) 36: Impairment of Assets and IAS 39: Financial
Instruments: Recognition and Measurement, the
Group recorded an impairment charge of US$13.7
million against its investment in associate, Sable. This
did not have an impact on Group cash fows.
I wish to assure the shareholders that this impairment
will be reassessed once the tariff negotiations have
been fnalised and we are in a position to estimate the
future returns from Sable with reasonable certainty.
Corporate Governance
There were no changes to the Board during the year.
Acknowledgement
On behalf of the Board, I wish to thank management
and staff for their effort during the past year. I also wish
to thank the various stakeholders and all authorities for
their continued support.
Thank you.
Shingai Mutasa
Chairman
22 April 2014
7
REVIEW OF INVESTMENTS
1. HIGHLIGHTS
Financial performance 2013 2012 2011
US$000 US$000 US$000

Income 76,829 72,504 67,452

Cash generated from operations 7,093 7,020 5,409

Basic (loss)/earnings per share (cents) (4.71) 0.80 2.81

Headline earnings per share (cents) 2.15 0.95 0.45
2. OVERVIEW
The Group achieved a 126% increase in headline earnings per share, from 0.95 cents per share for the year ended
31 December 2012 to 2.15 cents per share for the year ended 31 December 2013.
The increase in earnings was driven by:
a) 731% increase in proft before tax achieved by Zimbabwe investments. This growth was a result of:
Good underwriting performance at Zimnat Lion which saw underwriting proft increase by 48% to US$1.2
million during the year under review from US$0.8 million for the year ended 31 December 2012.
US$1.7 million fair value adjustment on investment property at Zimnat Life arising from the revaluation of the
Zimnat Plaza (formerly the AMC building) in Harare following the change of use of the building from workshop
to retail.
Reduction in losses at fertilizer companies, mainly Sable Chemicals.
b) 5% increase in proft before tax by investments outside Zimbabwe. This was achieved despite a 13% depreciation
of the Botswana Pula against the United States Dollar (US$), and was driven by the following:
Improved underwriting performance at LAC, where underwriting proft grew by 153% during the year under
review from US$0.24 million to US$0.6 million.
53% growth in investment income at BIC to US$4.6 million.
In line with International Accounting Standard (IAS) 36: Impairment of Assets, and IAS 39: Financial Instruments:
Recognition and Measurement, the Group recorded an impairment charge of US$13.709 million against its
investment in Sable Chemicals. The impairment arose due to uncertainty over future returns to be realized by the
Group from this investment. This did not have any cash fow impact.
Cash generated from operations remained static at US$7 million when compared with prior year. The Group
continues to focus on aggressive working capital management in order to enhance its cash position.
8
3. PERFORMANCE BY SECTOR
3.1 Proft before tax analysis

2013 2012
Zimbabwe investments US$000 US$000
Insurance
Zimnat Life
(Shareholder funds) 4,184 1,335
Zimnat Lion 1,300 820
Grand Reinsurance (281) 432
Minerva Risk Advisors
(30.3% share of proft
after tax) 58 160
5,261 2,747

Hotels
Cresta Zimbabwe (440) 562

Agro Chemicals
(share of loss after tax)
Sable Chemicals
(TA share 51%) (111) (1,260)
ZFC (TA share 22.5%) (24) (1,485)
(135) (2,745)

Total - Zimbabwe investments 4,686 564

Outside Zimbabwe
investments
Insurance
Botswana Insurance
Company 6,488 6,088
Lion Assurance Company
(Uganda) 825 419
7,313 6,507

Hotels
Cresta Marakanelo
(35% share of profts after tax) 1,054 1,091
Cresta Holdings 634 961
1,688 2,052

Total - foreign investments 9,001 8,559

Zimnat Life
(Policyholder funds)
Proft before gross change
in policy holder liabilities 7,007 5,396
Gross change in policyholder
liabilities (6,946) (5,360)
61 36

Group total 13,748 9,159

Corporate costs (2,940) (2,327)
Impairment of associate (13,709) (1,267)

Group (loss)/proft before tax (2,901) 5,565
3.2 Gross Written premium
2013 2012
US$000 US$000
Zimbabwe investments
Zimnat Life (shareholder funds) 7,717 5,872
Zimnat Lion 17,143 12,464
Grand Reinsurance 2,944 7,494
Zimnat Life (policyholder funds) 6,522 6,198
34,326 32,028

Outside Zimbabwe investments
Botswana Insurance Company 29,538 36,440
(Uganda) 7,476 7,463
37,014 43,903

Group gross written premium 71,340 75,931
3.3 Hotel revenue
Cresta Zimbabwe 12,482 12,761
Cresta Holdings 2,822 2,024
Group hotel revenue 15,304 14,785
3.4 Investment income
Interest received 1,645 1,169
Dividends received 807 962
Realised gain/(loss)
on disposal of investments 590 (766)
Rental income 1,048 546
Fair value gains/(losses) on:
Investment property 1,814 592
Financial assets 2,642 1,140
8,546 3,643

Realised investment income 4,090 1,910
Unrealised investment income 4,456 1,732
8,546 3,642

9
3.5 COMMENTARY
3.5.1 Zimbabwe investments
(i) Insurance
This business sector comprises Zimnat Lion Insurance
Company, Zimnat Life Assurance Company, Grand
Reinsurance and Minerva Risk Advisors.

2013 2012
US$000 US$000

Underwriting proft 2,316 2,486
Zimnat Life (Shareholder funds) 1,342 1,217

Minerva Risk Advisors
(share of proft) 58 160

Investment income 3,055 293
Finance costs (168) (192)

Proft before tax 5,261 2,747

Cash generated from operations
Zimnat Life (Shareholder funds) 1,741 1,257
2,819 1,861

Combined ratio
Zimnat Life (Shareholder funds) 84% 77%
Zimnat Lion 85% 86%
Grand Reinsurance 107% 93%
a) Underwriting performance
Zimnat Lifes underwriting proft was 10% above
last years. This was attributable to a 31% growth
in gross written premium, despite an increase in the
claims ratio from 36% last year to 45% during the
year under review.
Zimnat Lions underwriting proft rose by 48% driven
mainly by a 37% growth in gross written premium
and a reduction in the reinsurance ratio from 58%
last year to 39% due to a change in business mix.
GrandRe incurred an underwriting loss of US$0.3
million during the year under review largely due to a
25% drop in gross written premium and a rise in the
reinsurance ratio from 29% last year to 42% during
the year under review. The reduction in premiums
and increase in reinsurance ratio was due to primary
insurance companies increasing their retention ratios
thereby reducing the need for reinsurance.

b) Investment income
The increase in investment income was due to fair
value gains on the Zimnat Plaza of US$1.7 million,
gains on equities listed on the Zimbabwe Stock
Exchange (ZSE), and an increase in rental income
due to a more proftable tenant mix.
(ii) Hotels
This business sector comprises of Cresta Zimbabwe
2013 2012
US$000 US$000

Earnings before interest, tax,
depreciation and amortization 867 1,316
Cresta Sprayview pre-opening
costs (222) -
Depreciation (604) (496)
De-recognition cost on
refurbishment - (117)
(Loss)/proft before tax (440) 562

Cash generated from operations 1,564 615
Cresta Zimbabwe incurred a loss before tax of US$0.4
million versus a proft of US$0.6 million last year due
to:
34% decline in earnings before interest, tax and
depreciation. This was a result of a 12% drop in
Revenue per Available Room from US$50 last year
to US$44, due to a decline in occupancy rates from
60% last year to 54% this year. Occupancy rates
were weighed down by the Cresta Sprayview Hotel
in Victoria Falls which started operations in August
2013.
US$0.2 million pre-opening costs for Cresta
Sprayview
Increase in depreciation charges as a result of
refurbishments which were completed at Cresta
Lodge Harare and Cresta Sprayview.
Rise in fnance costs as a result of additional
borrowings to fnance the refurbishment of Cresta
Lodge and Cresta Sprayview.

10
(iii) Agrochemicals
This business sector comprises Sable Chemicals, the
sole producer of Ammonium Nitrate in Zimbabwe, and
Zimbabwe Fertilizer Company (ZFC).
2013 2012
US$000 US$000
Loss after tax
ZFC (107) (6,601)
Sable Chemicals (217) (2,472)
(324) (9,073)
TA share of loss of associate
ZFC (24) (1,485)
Sable Chemicals (111) (1,260)
(135) (2,745)
ZFC 6,750 11,476
Sable Chemicals 7,871 6,890
14,621 18,366
a) ZFC
The company incurred a signifcantly lower loss than
last year due to a 32% increase in fertilizer sales,
reduction in costs and lower bad debts impairment
charges during the year under review.
b) Sable Chemicals
The company incurred a loss of US$0.2 million
versus US$2.5 million last year. This reduction in
losses was due to an 8% increase in fertilizer sales,
and a reduction in fnance costs as the company
changed its credit policy to major distributors.
(iv) Impairment charge on equity accounted
investments
At 31 December 2013, the future returns from
the Groups investment in Sable Chemicals
were uncertain. In accordance with International
Accounting Standard (IAS) 36: Impairment of Assets,
and IAS 39 Financial Instruments: Recognition
and Measurement, the Group fully impaired its
investment in Sable Chemicals. This resulted in a
US$ 13.709 million charge to the income statement
for the year under review.
3.5.2 Outside Zimbabwe investments
(i) Insurance
This business sector comprises Botswana Insurance
Company which is the largest underwriter of short-
term insurance in Botswana, and Lion Assurance
Company of Uganda.
2013 2012
US$000 US$000

Underwriting proft 2,535 3,392
Lion Assurance Company 605 239

Investment income 4,810 3,141
Proft before tax 7,313 6,507

Lion Assurance Company 1,273 13
3,780 1,920

Combined ratio
Botswana Insurance Company 86% 83%
Lion Assurance Company 87% 94%
a) Underwriting proft
Botswana Insurance Company
The drop in underwriting proft was due to a 19%
decline in gross written premium, the result of rate
cutting in an increasingly competitive insurance
market in Botswana.
Lion Assurance Company (Uganda)
The increase in the underwriting proft was mainly
due to a decrease in the claims ratio from 35% last
year to 29% during the year under review as a result
of more prudent underwriting.
b) Investment income
The increase in investment income was driven by fair
value gains of equities held by BIC.

(ii) Hotels
This business sector comprises Cresta Marakanelo
and Cresta Holdings which provide hotel management
services in Botswana and Zambia.
11
2013 2012
US$000 US$000
Cresta Marakanelo
Earnings before interest, tax,
depreciation and amortisation 7,124 6,890
Depreciation (2,669) (2,547)
Amortisation of future lease
costs (IAS 17) (764) (811)
Income tax expense (390) (144)
Proft after tax 3,011 3,118

Cresta Marakanelo share of
profts (35% effective interest) 1,054 1,091
Cresta Holdings
proft before tax 634 961
1,688 2,052

Cresta Marakanelo 7,840 7,906
Cresta Holdings 267 507
8,107 8,413
Cresta Marakanelo recorded a 3% decline in proft
after tax despite a 13% depreciation of the Botswana
Pula against the US$. This performance was driven
mainly by:
Good performance by Cresta Mowana Resort which
had occupancies of 57% and proft of US$1.2 million
during the year under review.
Revenue contribution by new hotels in Jwaneng
and Mahalpye, though the Group experienced a
reduction in profts at Cresta Lodge Gaborone and
Cresta President Hotel Gaborone due to increased
room stocks in the Gaborone market.
12
4.2 Cash and bank balances
2013 2012
US$000 US$000

Zimbabwe investments 4,029 3,863
Outside Zimbabwe investments 12,771 9,665
Group 16,800 13,528
Cash generated from operations by the Group
remained static at US$7 million compared to last year.
After accounting for cash utilised in investing activities,
the Groups cash balance increased from US$ 13.5
million at 31 December 2012 to US$16.8 million at 31
December 2013.
4.3 Borrowings
Group borrowings increased from US$6.4 million at
31 December 2012 to US$8 million at 31 December
2013 mainly due to an increase in borrowings by
Cresta Zimbabwe of US$1.5 million to fund the opening of
Cresta Sprayview (Victoria Falls) and the refurbishment
of Cresta Lodge Harare.
5 OUTLOOK
5.1 Zimbabwe
(i) Insurance
Despite tight liquidity conditions, all Zimbabwean
insurance companies are expected to record growth
in both premium and underwriting profts. This
will be achieved by continuing to target proftable
business channels, and an aggressive focus on cost
containment and reduction.
Growth in investment income will be linked to returns
prevailing in the Zimbabwe investment market as a
whole.
Results recorded so far for 2014 indicate growth of
premiums and profts for our insurance sector.
(ii) Hotels
Tight liquidity conditions have created a condition
where both occupancies and room rates are falling.
This is causing intense competition in an already
saturated market and consequently margins are
likely to continue to be under pressure.
The fnal phase of the Cresta Lodge refurbishment
has been suspended until trading conditions improve.
With no refurbishment activities planned for 2014,
occupancies at the effected hotels, Cresta Lodge and
4.1 Net Asset Value (NAV)
Insurance Hotels Total NAV Agro- IFRS Group
before Chemicals* Consolidation NAV
Agro- Adjustments
chemicals
US$000 US$000 US$000 US$000 US$000 US$000

2013
Zimbabwe investments 18,573 9,456 28,029 3,281 (7,324) 23,986
Outside Zimbabwe investments 26,618 10,478 37,096 - (180) 36,916
Group 45,191 19,934 65,125 3,281 (7,504) 60,902

2012
Zimbabwe investments 14,526 9,733 24,259 17,125 (6,789) 34,595
Outside Zimbabwe investments 24,696 10,500 35,196 - (487) 34,709
Group 39,222 20,233 59,455 17,125 (7,276) 69,304
* Note: The NAV attributable to the Agro Chemicals business sector represents TAs share of NAV of Agrochemicals
associates, ZFC and Sable Chemicals.
The reduction in the Groups NAV was due to the impairment of the investment in Sable Chemicals as at 31
December 2013.
The NAV attributable to insurance business sector increased by US$5.969 from 31 December 2012 to 31 December
2013. This was mainly driven by:
The growth in profts attributable to the performance of Zimnat Lion and Zimnat Life.
Profts earned by BIC and LAC during the year under review. These outweighed the US$2.5 million translation
loss incurred during the year.
13
Cresta Sprayview, are expected to drive revenues
and occupancies for the Group for the year ahead.
The Group has embarked on an aggressive cost
containment exercise in an effort to preserve margins.
(iii) Agro-chemicals
Finalization of a viable electricity tariff for Sable will
enable the company to complete refurbishment of
its plant so as to return the company to its installed
capacity
Strict credit control policies have enabled the
company to lower its level of debt and reduce
fnance costs. This trend should continue in the
forthcoming year.
5.2 Outside Zimbabwe investments
(i) Insurance
Whilst competition in Botswana is expected
to remain intense, management at BIC have
employed strategies that will enable the company
to regain market share and increase proftability.
At LAC the market share growth that has
characterized the previous year is expected to
continue.
(ii) Hotels
At Cresta Marakanelo, the company expects to
regain market share at its hotels in Gaborone,
which will in turn drive revenue and proftability
growth in 2014. In addition, the two hotels opened
in 2013 are expected to continue to grow their
contribution to overall proftability.
Discussions are at an advanced stage for the
company to lease a new hotel and conference
center in Botswana. Construction is expected to
start in the third quarter of 2014.
G. Sainsbury
Group Chief Executive Offcer
22 April 2014
14
FOUR YEAR PERFORMANCE HIGHLIGHTS For the year ended 31 December 2013
2013 2012 2011 2010
OUTSIDE ZIMBABWE INVESTMENTS US$ 000 US$ 000 US$ 000 US$ 000

Total income 28,211 29,938 31,323 30,549
Total expenses (22,168) (24,500) (26,590) (29,025)
Proft before interest, share of associates
proft/(loss) and tax 6,043 5,438 4,733 1,524
Net fnance costs (4) (27) (24) (2)
Share of associated companies proft/(loss) after tax 1,054 1,003 215 (262)
Proft before tax 7,093 6,414 4,924 1,260
Taxation (1,544) (1,941) (1,248) (1,248)
Proft after tax 5,549 4,473 3,676 12
Proft attributable to parent company 3,474 2,515 2,018 (1,234)
Proft attributable to non-controlling interests 2,075 1,958 1,658 1,246
5,549 4,473 3,676 12

2013 2012 2011 2010
ZIMBABWE INVESTMENTS US$ 000 US$ 000 US$ 000 US$ 000

Total income 48,618 42,566 36,129 21,601
Total expenses (44,142) (40,278) (33,457) (22,874)
proft/(loss) and tax 4,476 2,288 2,672 (1,273)
Net fnance costs (793) (614) (577) (450)
Share of associated companies proft/(loss) after tax 32 (2,523) 232 (4,170)
Impairment of investment in associate (13,709) - - -
(Loss)/proft before tax (9,994) (849) 2,327 (5,893)
Taxation (1,242) (346) 290 761
(Loss)/proft after tax (11,236) (1,195) 2,617 (5,132)
(Loss)/proft attributable to parent company (11,236) (1,195) 2,617 (5,132)

2013 2012 2011 2010
CONSOLIDATED US$ 000 US$ 000 US$ 000 US$ 000

Total income 76,829 72,504 67,452 52,150
Total expenses (66,310) (64,778) (60,047) (51,899)
proft/(loss) and tax 10,519 7,726 7,405 251
Net fnance costs (797) (641) (601) (452)
Share of associated companies proft/(loss) after tax 1,086 (1,520) 447 (4,432)
Impairment of investment in associate (13,709) - - -
(Loss)/proft before tax (2,901) 5,565 7,251 (4,633)
Taxation (2,786) (2,287) (958) (487)
(Loss)/proft after tax (5,687) 3,278 6,293 (5,120)
(Loss)/proft attributable to parent company (7,762) 1,320 4,635 (6,366)
Proft attributable to non-controlling interests 2,075 1,958 1,658 1,246
(5,687) 3,278 6,293 (5,120)
15
FOUR YEAR PERFORMANCE HIGHLIGHTS For the year ended 31 December 2013
RATIO ANALYSIS

Share Performance 2013 2012 2011 2010
Basic (loss)/earnings per share (US cents) (4.71) 0.80 2.81 (3.11)
Earnings yield (77.19) 8.01 23.41 (14.79)
Dividend per share (US$) - - - -
Price/Earnings Ratio (PER) (1.30) 12.5 4.27 (6.76)
Market price at year end (US$) 0.06 0.10 0.12 0.21
Market capitalisation ($000) 10,056 16,485 19,782 34,618
Number of shares in issue at 31 December 164,845,910 164,845,910 164,845,910 164,845,910

Financial Performance 2013 2012 2011 2010
Return on shareholders equity (%) (9.34) 4.73 9.59 (13.25)
(Loss)/proft before tax margin (%) (3.78) 8.52 11.59 (8.88)
Effective tax rate (%) (96.02) 41.09 12.49 (10.50)
Net asset value per share (US$) 0.37 0.42 0.40 0.37
Gearing Ratio (%) 13.19 9.21 4.42 4.01

DEFINITIONS
Basic Earnings per share Proft after tax attributable to parent company/number of ordinary shares

Earnings yield Basic Earnings per share/market price per share

Price earnings ratio Market price at year end/basic earnings per share

Market capitalisation Market price at year end x number of ordinary shares in issue

Return on shareholders equity Proft attributable to parent company/shareholders equity

Proft before tax margin Proft before tax/total revenues
Net asset value per share Shareholders equity/number of ordinary shares

Gearing ratio Total borrowing/shareholders equity

16
REPORT OF THE DIRECTORS
The directors have pleasure in presenting to
shareholders for their consideration and adoption the
audited fnancial statements of the Group for the year
ended 31 December 2013.
Principal Activities
T A Holdings Limited is an investment holding company
whose principal investments are in insurance, hotels
and agro-chemicals.
Directors Responsibility Relating To Annual
Financial Statements
The directors are responsible for the preparation and
fair presentation of the fnancial statements of the
Company and Group in accordance with International
Financial Reporting Standards and in the manner
required by the Zimbabwe Companies Act (Chapter
24:03) and the relevant Statutory Instruments (SI)
SI 33/99 and SI 62/96 and for such internal control as
management determines is necessary to enable the
preparation of fnancial statements that are free from
material misstatement, whether due to fraud or error.
These fnancial statements which have been prepared
under the historical cost convention, (except for
investment properties, land and buildings and fnancial
instruments that have been measured at fair value) are
in agreement with the underlying books and records
and have been properly prepared in accordance with
the Groups Accounting Policies and comply with the
requirements of the Companies Act (Chapter 24:03)
and the relevant Statutory Instruments (SI) SI 33/99
and SI 62/96.
Share Capital
Authorised:
The authorised share capital of the Company during the
year ended 31 December 2013 remained unchanged,
and stood as follows:
223 071 861 ordinary shares of US$0.01 each;
27 005 771 non-redeemable, non-cumulative,
participating, convertible preference shares of
US$0.01 each; and
194 716 convertible redeemable preference
shares of US$0.01 each.
Issued:
The issued ordinary share capital remained the same
at 164 845 910 ordinary shares of US$0.01 each. The
preference share capital also remained unchanged
at 27 005 771 non redeemable, non-cumulative,
US$0.01 each.
Results
The results for the year are set out in the fnancial
statements on Pages 20 to 90.
Dividends
No dividend was declared in the year ended 31
December 2013.
Corporate Governance
The Groups code on corporate practices and conduct
is set out in the Statement on Corporate Governance
and the directors have complied with it.
Directors and their interests in securities
There were no changes in directors during the year.
Names of the current directors of the Company appear
on Page 2. Messrs Francis Daniels and Julian Vezey
retire from the Board, by rotation, in terms of the
Articles, and have offered themselves for re-election.
At 31 December 2013 the directors held the following
direct and indirect benefcial interests in the shares of
the Company:
2013 2013 2012 2012
Direct Indirect Direct Indirect
SS Mutasa Nil 69,632,935 Nil 59,000,876
F Daniels 46,800 2,029,391 46,800 3,105,309
RN Gordon Nil Nil Nil Nil
BP Nyajeka 31,046 Nil 31,046 5,005
Z Randeree Nil Nil Nil Nil
G Sainsbury Nil Nil Nil Nil
J Vezey Nil Nil Nil Nil
The indirect benefcial interests of Messrs SS Mutasa
and F Daniels are held through Masawara Plc and its
subsidiaries.

TA Holdings Limited 1979 Share Purchase Trust
Number of ordinary shares held by the
Trust on 1 January 2013 349 826
Number of ordinary shares transferred
into the Trust during the year Nil
Number of ordinary shares held by the
Trust at 31 December 2013 349 826
Litigation
The Directors are not aware of any pending litigation
which might have a material impact on the Companys
fnancial position.
Auditors
At the forthcoming Annual General Meeting,
shareholders will be asked to approve the remuneration
of the auditors and to appoint auditors for the ensuing
year.
By Order of the Board
T A Management Services
Harare
22 April 2014

17
CORPORATE GOVERNANCE
Good corporate governance is at the heart of the way
in which the Directors of the Company discharge their
duties. The Board subscribes to, and observes the
highest norms of corporate governance as dictated
by internationally recognised codes such as the
King Reports. These standards are expressed in the
values that the Directors subscribe to, the governance
structures that they have put in place and the
governance processes that they observe in conducting
the affairs of the Company and Group.
Values
The Board is always guided by the following core
values:
integrity;
transparency;
promoting the best interests of the shareholders,
employees and other stakeholders of the Company
and Group; and
compliance with the requirements of the legal
and regulatory environment in which the Company
and Group operate.
Governance Structures
Board of Directors
The Board is the primary governance organ. One of
its key functions is to develop, review and monitor
the overall strategy and policies of the Company and
Group. It, therefore, considers and approves, among
other things, all major investment decisions, the key
risks to which the business is exposed, and measures
to eliminate or minimize the impact of such risks,
capital expenditure and the appointment of certain key
executives.
The Board currently comprises seven (7) Directors -
two (2) executives and fve (5) non-executives. The
non-executive Directors are drawn from different
spheres of economic life, bringing to the Board
extensive and diverse expertise and experience which
enrich the quality of the deliberations of the Board. All
non-executive directors are subject to retirement by
rotation and re-election by shareholders at least once
every three (3) years in terms of the Companys Articles
of Association. The appointment of new directors in
between Annual General Meetings is initially approved
by the Board, and subsequently confrmed by
shareholders at the next Annual General Meeting. In
order to more fully discharge its duties, the Board has
constituted standing committees to deal with specifc
areas.
Audit and Risk Committee
The Audit & Risk Committee is made up of three
non-executive Directors, namely Messrs F Daniels
(Chairman), RN Gordon and J Vezey, with the Group
Chief Executive Offcer and the Group Chief Finance
Offcer attending ex-offcio. The Committee essentially
oversees integrity of the Companys and Groups
fnancial reporting and the internal controls and risk
management systems and processes. It reviews and
approves all interim reports and the annual fnancial
statements of the Company and Group. It monitors and
approves internal control policies and procedures. It
also deliberates on the reports and fndings of internal
and external auditors. The external auditors have
unfettered access to the Committee, as well as to the
entire Board.
Investment Committee
The Committee consists of three (3) non-executive
directors, namely Messrs RN Gordon (Chairman),
F Daniels, J Vezey with the Group Chief Executive
Offcer and the Group Chief Finance Offcer attending
ex-offcio.
The Investment Committees primary functions are to:
consider, review, and where necessary, approve
strategic investments or recommend them for
approval to the Board; and
review and recommend strategies in respect of the
Companys portfolio investments.
Remuneration Committee
The Committee is made up of two (2) non-executive
directors, Messrs SS Mutasa and RN Gordon. The
Group Chief Executive Offcer attends ex offcio.
The Committee determines the remuneration policy
for executive directors and senior executives. The
Committee seeks to ensure that the Company and
Group are competitive at the highest levels by attracting
the best skills available to undertake particular roles
in the management of the Company and Group. The
remuneration packages of senior executives include
share-based schemes, to ensure that the interests of
management are aligned with those of the Company
and Group, and to guarantee long term commitment
and performance.

Governance Processes
The Board of Directors meets at least once every
quarter or as often as the circumstances may determine.
The Committees also meet at the same intervals (or
more frequently, if necessary) with meetings of all
the three committees usually preceding each regular
board meeting. The Companys shareholders meet at
least once every year, at the Annual General Meeting.
The external auditors of the Company have unlimited
access to the Audit & Risk Committee and the Board,
and deliver their report at each Annual General
Meeting. In appropriate circumstances, the Directors
seek advice from relevant professionals on particular
matters.
TA Management Services
Harare
22 April 2014
18
REPORT OF THE ACTUARIES
22 APRIL 2014
19
INDEPENDENT AUDITORS REPORT
PricewaterhouseCoopers, Building No. 4, Arundel Ofce Park, Norfolk Road, Mount Pleasant
P O Box 453, Harare, Zimbabwe
T: +263 (4) 338362-8, F: +263 (4) 338395, www.pwc.com
T I Rwodzi Senior Partner
The Partnerships principal place of business is at Arundel Offce Park, Norfolk Road, Mount Pleasant, Harare, Zimbabwe where a list of the Partners names is available for inspection.

Independent auditors report
to the shareholders of
TA Holdings Limited
We have audited the consolidated fnancial statements of TA Holdings Limited and its subsidiaries (the Group), and the
statement of fnancial position of TA Holdings Limited (the Company) standing alone, together the fnancial statements,
which comprise the consolidated and separate statements of fnancial position as at 31 December 2013, and the
consolidated statements of income, comprehensive income, changes in equity and cash fows for the year then ended,
and notes, comprising a summary of signifcant accounting policies and other explanatory information, set out on pages
20 to 90.
Directors responsibility for the fnancial statements
The directors are responsible for the preparation and fair presentation of these fnancial statements in accordance with
International Financial Reporting Standards and the requirements of the Zimbabwe Companies Act (Chapter 24:03) and
the relevant Statutory Instruments (SI) SI 33/99 and SI 62/96, and for such internal control as the directors determine
is necessary to enable the preparation of fnancial statements that are free from material misstatement, whether due to
fraud or error.
Auditors responsibility
Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial
statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material
misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the fnancial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the fnancial statements.
We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the fnancial statements present fairly, in all material respects, the fnancial position of the Group and the
Company as at 31 December 2013, and the Groups consolidated fnancial performance and its consolidated cash fows
for the year then ended, in accordance with International Financial Reporting Standards and the requirements of the
Zimbabwe Companies Act (Chapter 24:03) and the relevant Statutory Instruments SI 33/99 and SI 62/96.
PricewaterhouseCoopers
Chartered Accountants (Zimbabwe)
Harare 9 June 2014
20
CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2013
2013 2012
Note US$ 000 US$ 000
INCOME

Gross insurance premium revenue 3.1 71,340 75,931
Insurance premiums ceded to reinsurers on insurance contracts 3.2 (27,885) (30,863)
Net insurance premium revenue 43,455 45,068

Fees and commission income 4 8,230 8,262
Realised investment income 5 3,500 2,676
Net realised gains/ (losses) on disposal of investments 6 590 (766)
Net fair value gains 7 4,456 1,732
Hotel revenue 8 15,304 14,785
Other operating income 9 1,294 747

Total income 76,829 72,504

EXPENSES

Insurance claims and loss adjustment expenses 10 (31,149) (28,590)
Insurance claims and loss adjustment expenses recovered
from reinsurers 10 7,095 6,104

Net insurance claims (24,054) (22,486)

Expenses for the acquisition of insurance contracts 11 (9,647) (10,476)
Finance costs 12 (797) (641)
Hotel cost of sales 15 (4,443) (4,554)
Operating and administrative expenses 13 (28,166) (27,262)

Total expenses (67,107) (65,419)

Proft before share of proft of associates 9,722 7,085
Share of profts/ (losses) of associates 23.1 1,086 (1,520)
Impairment of investment in associate 23.1 (13,709) -

(Loss)/proft before income tax (2,901) 5,565
Income tax expense 16.1 (2,786) (2,287)

(Loss)/proft for the year (5,687) 3,278

(Loss)/proft attributable to:
Owners of the parent (7,762) 1,320
Non-controlling interests 2,075 1,958
(5,687) 3,278

(Loss)/earnings per share for profts attributable to
owners of the Company
Basic (cents) 17 (4.71) 0.80
Diluted (cents) 17 (4.05) 0.69

Note:
Included in the Groups gross insurance premium revenue for the year ended 31 December 2013 is gross insur-
ance premium revenue attributable to policyholders of US$6.522 million (2012: US$6.198 million). Refer to note 42
for detail on the fnancial performance of the Group attributable to shareholder business and policyholder business.
21
2013 2012

(Loss)/proft for the year (5,687) 3,278

Other comprehensive (loss)/income

Items that will not be reclassifed to proft or loss:
Exchange differences on translating outside Zimbabwe operations 18 (3,224) (1,375)
Gains on revaluation of property, plant and equipment 18 467 2,241
Shadow accounting for insurance contracts (259) (200)
Share of associated companies other comprehensive income 18 - 493
Income tax relating to components of other comprehensive income 18 (24) (98)

Items that may be subsequently reclassifed to proft or loss:
Net (loss)/gain on available-for-sale fnancial assets 18 (4) 121
Other comprehensive (loss)/income for the year (3,044) 1,182

Total comprehensive (loss)/income for the year (8,731) 4,460

Total comprehensive (loss)/income attributable to:
Owners of the parent (10,114) 2,882
(8,731) 4,460
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2013
22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2013

2013 2012
ASSETS Note US$ 000 US$ 000

Property, plant and equipment 19 28,543 26,279
Intangible assets 20 1,750 1,917
Investment properties 21 16,218 14,302
Investment in associates 23 13,490 27,581
Financial assets 25 36,375 30,612
Deferred tax asset 33 - 3
Inventory 27 186 264
Reinsurance assets 34.2 19,320 18,012
Deferred acquisition costs 28 2,376 3,262
Insurance receivables 29 10,658 11,263
Trade and other receivables 30 10,461 6,256
Taxation receivable 39 36 618
Cash and cash equivalents 41 16,800 13,528
Total assets 156,213 153,897

EQUITY AND LIABILITIES

Equity
Issued share capital 31 1,919 1,919
Non distributable reserves 22,122 22,861
Available for-sale fnancial assets reserve - 17
Foreign currency translation reserve (5,989) (3,469)
Revaluation reserve 33,613 30,737
Treasury shares (18) (18)
Retained earnings (3,879) 4,959
Equity attributable to equity holders of the parent 47,768 57,006
Total equity 60,902 69,304

Liabilities
Borrowings 32 8,031 6,380
Deferred tax liabilities 33 4,282 4,008
Deferred income 35 1,233 1,603
Investment contracts with Discretionary Participation Features 34.4 16,850 13,550
Investment contracts without Discretionary Participation Features 34.5 10,651 7,750
Insurance contract liabilities 34.1 41,832 41,879
Insurance payables 36 3,959 1,575
Provisions 37 1,303 1,293
Trade and other payables 38 7,170 6,555
Total liabilities 95,311 84,593

Total equity and liabilities 156,213 153,897

Note:
Included in the Groups assets and liabilities at 31 December 2013 are policyholder assets with a carrying amount
of US$31.325 million (2012: US$24.626 million) and policyholder liabilities with a carrying amount of US$31.325
million (2012: US$24.626 million). Refer to note 43 for the split between assets and liabilities attributable to share-
holders and assets and liabilities attributable to policyholders.

Shingai Mutasa Gavin Sainsbury
Chairman Chief Executive Offcer
22 April 2014 22 April 2014
23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2013

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24
CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2013
2013 2012

Cash generated from operating activities 40 7,094 7,020

Tax paid 39 (823) (1,230)

Net cash generated from operating activities 6,271 5,790

Investing activities
Rental income on investment properties 5 1,048 546
Dividends received 5 807 962
Interest income from investments 5 1,645 1,168
Purchase of property, plant and equipment 19 (3,578) (4,550)
Proceeds from sale of property, plant and equipment 191 704
Purchase of intangible assets 20 (251) (58)
Purchase of fnancial instruments 25.4 (28,033) (28,707)
Proceeds from the disposal of fnancial instruments 26,066 22,216
Purchase of investment properties 21 (451) (105)
Proceeds from sale of investment properties 295 30
Net cash used in investing activities (2,261) (7,794)

Financing activities
Repayment of borrowings 32.2 (1,363) (2,110)
Proceeds from borrowings 32.2 3,014 5,591
Finance costs paid 12 (797) (641)
Dividends paid to non-controlling interests (547) (727)
Net cash generated from fnancing activities 307 2,113
Net increase in cash and cash equivalents 4,317 109
Cash and cash equivalents at 1 January 13,528 14,328
Net effect of exchange rate movements on cash and cash equivalents (1,045) (909)

Cash and cash equivalents at 31 December 41 16,800 13,528

Note:
Included in the Groups cash and cash equivalents balance at 31 December 2013 is a cash and bank balance
attributable to policyholders of US$0.705 million (2012: US$0.001 million).
25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 December 2013
2.2 Changes in accounting policy and disclosures
a. New standards, amendments and interpretations,
effective on or after 1 January 2013
The following new standards, amendments and
interpretations are effective for accounting periods
beginning on or after 1 January 2013 and are relevant to
the Group.
Standard Content Applicable for
/Interpretation fnancial years
beginning on/
after
IAS 1 (amendment) Presentation of 1 July 2012
fnancial
statements
IAS 16 (amendment) Property, plant 1 January 2013
and equipment
IAS 19 (amendment) Employee benefts 1 January 2013
IAS 27 (revised) Separate fnancial 1 January 2013
statements
IAS 28 (revised) Investments in 1 January 2013
associates and
joint ventures
IAS 32 Financial 1 January 2013
(amendment) instruments:
presentation
IFRS 7 Financial 1 January 2013
(amendments) instruments:
disclosures
IFRS 10 (new) Consolidated 1 January 2013
fnancial
statements
IFRS 12 (new) Disclosures of 1 January 2013
interests in other
entities
IFRS 13 (new) Fair value 1 January 2013
measurement

IAS 1 (amendment) Financial statements presentation
regarding other comprehensive income. The amendment
requires entities to group items presented in other
comprehensive income on the basis of whether those
gains or losses can be reclassifed to proft or loss at a
later date.
IAS 16 (amendment) Property, plant and equipment.
The amendment clarifes that spare parts and servicing
equipment are classifed as property, plant and equipment
rather than inventory when they meet the defnition of
property, plant and equipment.
IAS 19 (amendments) Employee benefts. These
amendments provide additional guidance in order to
distinguish between benefts payable in exchange
for termination of employment and those payable in
exchange for service, and make signifcant changes to
the disclosures for all employee benefts.
1 Corporate information
TA Holdings Limited (the Company) is a limited liability
company incorporated and domiciled in Zimbabwe
whose shares are publicly traded on the Zimbabwe Stock
Exchange (ZSE). TA Holdings Limited (the Company)
and its subsidiaries (together the Group) have main
operations in the hospitality and insurance industry
sectors. The Groups insurance subsidiaries underwrite
life and non-life insurance risks, such as those associated
with death, disability, health, property and liability. The
Group does business in Zimbabwe, Uganda, Botswana,
South Africa and Zambia. The address of its registered
offce and principal place of business is disclosed on page
4 of this Annual Report. The detailed principal activities of
the Company and its investee companies are described
on page 3.
The consolidated fnancial statements of the Group for
the year ended 31 December 2013 were approved for
issue by the board of directors on 22 April 2014.
2 Signifcant accounting policies
The principal accounting policies applied in the preparation
of these consolidated fnancial statements are set out
below. These policies have been consistently applied to
all the years presented, unless otherwise stated.
2.1 Basis of preparation
The consolidated fnancial statements of the Group have
been prepared in accordance with International Financial
Reporting Standards (IFRS) and the IFRS Interpretations
Committee (IFRS IC) interpretations as issued by the
International Accounting Standards Board (IASB) and
in the manner required by the Zimbabwe Companies Act
(Chapter 24:03) and the relevant Statutory Instruments
(SI) SI 33/99 and SI 62/96.
The consolidated fnancial statements have been
prepared on a historical cost basis, as modifed by the
revaluation of land and buildings, investment property,
available-for-sale fnancial assets, fnancial assets at fair
value through proft or loss and long-term policyholder
insurance contract liabilities that are measured based on
actuarial valuations performed at the reporting date.

The preparation of fnancial statements in conformity
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise
its judgement in the process of applying the Groups
accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions
and estimates are signifcant to the consolidated fnancial
statements are disclosed in note 2.30.
The consolidated fnancial statements are presented in
United States Dollars (US$), which is the Companys
functional and presentation currency.
26
IAS 27 (revised) Separate fnancial statements. This
standard includes the provisions on separate fnancial
statements that are left after the control provisions of IAS
27 have been included in the new IFRS 10.
IAS 28 (revised) Associates and Joint Ventures. The
revised standard includes the requirements for joint
ventures, as well as associates, to be equity accounted
following the issue of IFRS 11.
IAS 32 (amendment) Financial instruments: presentation.
The amendment clarifes the tax effect of distributions
to holders of equity by stating that income tax relating
to distributions to holders of an equity instrument and
to transaction costs of an equity transaction should be
accounted for in accordance with IAS 12 Income Taxes.
IFRS 7 (amendment) Financial instruments: disclosures.
The amendments enhance current offsetting disclosures.
These new disclosures are intended to facilitate
comparison between those entities that prepare IFRS
fnancial statements to those that prepare fnancial
statements in accordance with US GAAP.
IFRS 10 (new) Consolidated fnancial statements. This
standard builds on existing principles by identifying the
concept of control as the determining factor in whether
an entity should be included within the consolidated
fnancial statements. The Standard introduces a single
consolidation model for all entities based on control,
irrespective of the nature of the investee (i.e. whether an
entity is controlled through voting rights of investors or
through other contractual arrangements).
IFRS 12 (new) Disclosures of interests in other entities.
IFRS 12 includes the disclosure requirements for all forms
of interest in other entities, including joint arrangements,
associates, special purpose vehicles and other off balance
sheet vehicles.
IFRS 13 (new) Fair value measurement. IFRS 13 aims to
improve consistency and reduce complexity by providing
a precise defnition of fair value and a single source of
fair value measurement and disclosure requirements for
use across IFRSs. The requirements do not extend the
use of fair value accounting but provide guidance on how
it should be applied where its use is already required or
permitted by other standards within IFRSs.
b. New standards, amendments and interpretations,
effective for accounting periods beginning after
1 January 2013 and the Group has not early
adopted them
The following new standards, amendments and
interpretations have been issued but are not yet effective
and are relevant to the Groups operations:
Standard Content Applicable for
/Interpretation fnancial years
beginning on/
after
presentation
IAS 36 Impairment of 1 January 2014
(amendments) assets
recognition and
measurement
IFRS 9 (new) Financial 1 January 2015
instruments
Amendments to Consolidated 1 January 2014
IFRS 10, IFRS 12 fnancial
and IAS 27 statements,
Disclosure of
interests in
other entities and
Separate
fnancial
statements
respectively.
IFRIC 21 (new) Levies 1 January 2014
The Group is considering the implications of these new
standards, amendments and interpretations, and the
impact on the Group and timing of their adoption.
IAS 32 (amendment) Financial instruments: presentation.
This amendment clarifes some requirements for offsetting
fnancial assets and fnancial liabilities on the balance
sheet.
IAS 36 (amendments) Impairment of assets. The
amendments reduce the circumstances in which the
recoverable amount of assets or cash-generating units is
required to be disclosed, clarify the disclosures required,
and introduce an explicit requirement to disclose the
discount rate used in determining impairment (or
reversals) where the recoverable amount (based on
fair value less costs of disposal) is determined using a
present value technique.
IAS 39 (amendment) Financial instruments: recognition
and measurement. The amendment makes it clear that
there is no need to discontinue hedge accounting if a
hedging derivative is novated, provided certain criteria
are met.
IFRS 9 (new) Financial instruments. This standard is
the frst step in the process to replace IAS 39, Financial
instruments: recognition and measurement. IFRS 9
retains but simplifes the mixed measurement model and
establishes two primary measurement categories for
fnancial assets: at amortised cost and fair value.
27
Any contingent consideration to be transferred by the
Group is recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability
is recognised in accordance with IAS 39 either in proft
or loss or as a change to other comprehensive income.
Contingent consideration that is classifed as equity is not
re-measured, and its subsequent settlement is accounted
for within equity.
Goodwill is initially measured as the excess of the
aggregate of the consideration transferred and the
fair value of non-controlling interest over the net
identifable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets
of the subsidiary acquired, the difference is recognised
in the income statement as a gain on bargain purchase.
Inter-company transactions, balances, income and
expenses on transactions between group companies
are eliminated. Profts and losses resulting from inter-
company transactions that are recognised in assets are
also eliminated. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency
with the policies adopted by the Group.
2.3.2 Changes in ownership interests in subsidiaries
without change of control
Transactions with non-controlling interests that do not
result in loss of control are accounted for as equity
transactions that is, as transactions with the owners in
their capacity as owners. The difference between fair value
of any consideration paid and the relevant share acquired
of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-
controlling interests are also recorded in equity.
2.3.3 Disposal of subsidiaries
When the Group ceases to have control, any retained
interest in the entity is re-measured to its fair value at
the date when control is lost, with the change in carrying
amount recognised in the income statement. The fair
value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as
an associate, joint arrangement or fnancial asset. In
addition, any amounts previously recognised in other
comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the
related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income
are reclassifed to the income statement.
2.3.4 Associates
Associates are all entities over which the Group
has signifcant infuence but not control, generally
accompanying a shareholding of between 20% and 50%
of the voting rights and are neither subsidiaries nor joint
arrangements. Investments in associates are accounted
for using the equity method of accounting. Under the
IFRS 10, IFRS 12 and IAS 27 (amendments) regarding
the preparation of consolidated fnancial statements.
The amendments provide investment entities (as
defned) an exemption from the consolidation of particular
subsidiaries and instead require that an investment entity
measure the investment in each eligible subsidiary at fair
value through proft or loss in accordance with IFRS 9
Financial Instruments or IAS 39 Financial Instruments:
Recognition and Measurement. Changes have also
been made in IFRS 12 to introduce disclosures that an
investment entity needs to make.
IFRIC 21 (new) Levies. This interpretation provides
guidance on when to recognise a liability for a levy imposed
by a government, both for levies that are accounted for in
accordance with IAS 37 Provisions, contingent liabilities
and contingent assets and those where the timing and
amount of the levy is certain.
2.3 Basis of consolidation
The Group fnancial statements include those of the
Company, its subsidiaries, discretionary trust investments
and the Groups interest in associates (together referred
to as the Group).
2.3.1 Subsidiaries
Subsidiaries are all entities over which the Group has
control. The Group controls an entity when it is exposed
to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns
through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred
to the group. They are deconsolidated from the date that
control ceases.
The Group applies the acquisition method to account for
business combinations. The consideration transferred
for the acquisition of a subsidiary is the fair values of the
assets transferred, the liabilities incurred to the former
owners of the acquiree and the equity interests issued by
the Group. The consideration transferred includes the fair
value of any asset or liability resulting from a contingent
consideration arrangement. Identifable assets acquired
and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair
values at the acquisition date.
The Group recognises any non-controlling interest in the
acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interests proportionate
share of the recognised amounts of acquirees identifable
net assets. Acquisition-related costs are expensed as
incurred.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirers previously held
equity interest in the acquiree is re-measured to fair value
at the acquisition date. Any gains or losses arising from
such re-measurement are recognised in proft or loss.
28
equity method, the investment is initially recognised at
cost, and the carrying amount is increased or decreased
to recognise the investors share of the proft or loss of
the investee after the date of acquisition. The Groups
investment in associates includes goodwill identifed
on acquisition where appropriate. Goodwill relating to
an associate is included in the carrying amount of the
investment and is neither amortised nor individually tested
for impairment.
If the ownership interest in an associate is reduced but
signifcant infuence is retained, only a proportionate
share of the amounts previously recognised in other
comprehensive income is reclassifed to the income
statement where appropriate.
The Groups share of post-acquisition proft or loss is
recognised in the income statement; its share of post-
acquisition movements in other comprehensive income
is recognised in other comprehensive income, with a
corresponding adjustment to the carrying amount of the
investment. When the Groups share of losses in an
associate equals or exceeds its interest in the associate,
including any other unsecured receivables, the Group
does not recognise further losses, unless it has incurred
legal or constructive obligations or made payments on
behalf of the associate.
The Group determines at each reporting date whether
there is any objective evidence that the investment in
the associate is impaired. If this is the case, the Group
calculates the amount of impairment as the difference
between the recoverable amount of the associate and
its carrying value, and recognises the amount adjacent
to share of proft/ (loss) of an associate in the income
statement.
Profts and losses resulting from upstream and downstream
transactions between the Group and its associate are
recognised in the Groups fnancial statements only to the
extent of unrelated investors interests in the associates.
Unrealised losses are eliminated unless the transaction
provides evidence of an impairment of the asset
transferred. Accounting policies of associates have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
Dilution gains and losses arising in investments in
associates are recognised in the income statement.
2.4 Foreign currency translation
2.4.1 Functional and presentation currency
Items included in the fnancial statements of each of
the Groups entities are measured using the currency
of the primary economic environment in which the entity
operates (the functional currency). The consolidated
fnancial statements are presented in United States of
America dollars (US$), which is the functional currency
of the Company and the Groups presentation currency.

2.4.2 Transactions and balances
Foreign currency transactions are translated into the
Groups functional currency at exchange rates prevailing at
the date of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation of monetary assets and liabilities
denominated in foreign currencies at year-end exchange
rates are recognised in the income statement (except
when recognised in other comprehensive income as
qualifying cash fow hedges and qualifying net investment
hedges).
Foreign exchange gains and losses that relate to
borrowings and cash and cash equivalents are presented
in the income statement within other operating income.
All other foreign exchange gains and losses are presented
in the income statement within other operating income or
other operating expenses.
Changes in the fair value of monetary securities
denominated in foreign currency classifed as available
for sale are analysed between translation differences
resulting from changes in the amortised cost of the
security, and other changes in the carrying amount of
the security. Translation differences related to changes in
amortised cost are recognised in the income statement;
other changes in carrying amount are recognised in other
comprehensive income.
Translation differences on fnancial assets and liabilities
held at fair value through proft or loss are reported as part
of the fair value gain or loss. Translation differences on
non-monetary fnancial assets such as equities classifed
as available-for-sale fnancial assets are included in other
comprehensive income
2.4.3 Group companies
The results and fnancial position of all the group entities
(none of which have the currency of a hyperinfationary
economy) that have a functional currency different
from the presentation currency are translated into the
presentation currency as follows:
Assets and liabilities for each statement of fnancial
position presented are translated at the closing rate at
the date of that statement of fnancial position ;
Income and expenses for each income statement
are translated at average exchange rates (unless
this average is not a reasonable approximation of
the cumulative effect of the rates prevailing on the
transaction dates, in which case, income and expenses
are translated at the dates of the transactions); and
All resulting exchange differences are recognised in
Other comprehensive income.
On consolidation, exchange differences arising from the
translation of the net investment in foreign entities, and of
borrowings and other currency instruments designated as
hedges of such investments, are taken to shareholders
equity.
29
amount of the asset and the net amount is restated to
the revalued amount of the asset. Upon disposal, any
revaluation reserve relating to the particular asset being
sold is transferred to retained earnings.
Land is not depreciated. Depreciation is provided for on
a straight line basis over the useful lives of the following
classes of assets:
Buildings: over 40 - 50 years
Machinery and vehicles: 3 - 10 years
Furniture, fttings and other: 3 - 10 years
The assets residual values, and useful lives and method
of depreciation are reviewed and adjusted if appropriate
at each fnancial year end and adjusted prospectively, if
appropriate.
Impairment reviews are performed when there are
indicators that the carrying value may not be recoverable.
Impairment losses are recognised in the income statement
as an expense.
An item of property and equipment is derecognised upon
disposal or when no further future economic benefts are
expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement
in the year the asset is derecognised.
2.6 Investment properties
Property held for long-term rental yields that is not
occupied by the companies in the Group is classifed as
investment property.
Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at fair value,
which refects market conditions at the reporting date.
Gains or losses arising from changes in the fair values
of investment properties are included in the income
statement in the year in which they arise.
Fair values are evaluated annually by an accredited
external, independent valuer, applying a valuation model
recommended by the International Valuation Standards
Committee.
Investment properties are derecognised either when
they have been disposed of, or when the investment
property is permanently withdrawn from use and no future
economic beneft is expected from its disposal. Any gains
or losses on the retirement or disposal of an investment
property is recognised in the income statement in the year
of retirement or disposal.
Transfers are made to or from investment property only
when there is a change in use evidenced by the end of
owner-occupation or commencement of an operating
On the partial disposal that does not result in the Group
losing control over a subsidiary that includes a foreign
operation, the proportionate share of cumulative amount of
exchange differences are re-attributed to non-controlling
interests in that foreign operation and are not recognised
in the income statement. In any other partial disposals,
the proportionate share of the cumulative amount of the
exchange differences is reclassifed to the consolidated
income statement.
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as the foreign
entitys assets and liabilities and are translated at the
closing rate
2.5 Property, plant and equipment
Property, plant and equipment, including owner-occupied
property, is initially stated at cost. Costs include all
expenditure that is directly attributable to the acquisition
of an asset and bringing it to a working condition for its
intended use, including import duties and non-refundable
purchases taxes, but excluding trade discounts and
rebates. Maintenance and repairs expenditure, which
neither adds to the value of property and equipment nor
signifcantly prolongs its expected useful life, is recognised
directly in the income statement.
Subsequent costs are included in the assets carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefts
associated with the item will fow to the Group and the
cost of the item can be measured reliably. All other repairs
and maintenance are charged to the income statement
during the fnancial.
For subsequent measurement the Group uses
the revaluation model i.e. fair value at the date of
revaluation less subsequent accumulated depreciation
and subsequent accumulated impairment losses in the
valuation of freehold land and buildings. All other classes
of property, plant and equipment are measured using the
cost model.
Valuations of freehold land and buildings are performed
annually by external independent appraisers to ensure
that the fair value of a revalued asset does not differ
materially from its carrying amount.
Any revaluation surplus is recognised in other
comprehensive income and accumulated in the asset
revaluation reserve in equity, except to the extent that
it reverses a revaluation decrease on the same asset
previously recognised in the income statement, in which
case the increase is recognised in the income statement. A
revaluation defcit is recognised in the income statement,
except to the extent that it offsets an existing surplus on
the same asset recognised in the revaluation reserve.
Additionally, accumulated depreciation as at the
revaluation date is eliminated against the gross carrying
30
lease to another party or completion. For a transfer from
investment property to owner-occupied property, the
deemed cost for subsequent accounting is the fair value
at the date of change in use.
Properties that are being constructed or developed for
future use as investment property shall be classifed as
such when construction commences.
If owner-occupied property becomes an investment
property, the Group accounts for such property in
accordance with the policy stated under property, plant
and equipment up to the date of the change in use.
2.7 Revaluation of property, plant and equipment
and fair value of investment property
In assessing the carrying amounts of property, plant
and equipment and investment property management
considers the condition of the assets and their life span
on an item by item basis and by placing fair market values
that are obtainable from the sale of assets in a similar
condition.
Valuations are performed with suffcient regularity to
ensure that the fair value of a revalued asset does not
differ materially from its carrying amount.
Increases in the carrying amount arising on revaluation of
land and buildings are credited to other comprehensive
income and shown as other reserves in shareholders
equity. Decreases that offset previous increases of the
same asset are charged in other comprehensive income
and debited against revaluation surplus directly in equity;
all other decreases are charged to the income statement.
When revalued assets are sold, the amounts included in
revaluation surplus are transferred to retained earnings.
Gains or losses arising from changes in the fair values
of investment properties are included in the income
statement in the year in which they arise.
The fair value of property, plant and equipment and
investment property as at 31 December 2013 was
determined by professional valuers. The following
methods and assumptions were adopted in the valuation
process:
2.7.1 Land
Active market by reference to recent property transactions
of similar properties, complemented by periodic property
valuations done by Local Authorities for rating purposes.
2.7.2 Residential property
Active market by reference to recent property transactions
of similar properties.
2.7.3 Commercial, offce space and industrial property
By reference to observable prices in active markets or
recent market transactions on arms length terms. In the
absence of market-based evidence of fair value because
of the specialised nature of an item, lack of recent
transactions, items rarely sold, or an inactive market, fair
value was estimated using the depreciated replacement
cost approach.
2.8 Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value as
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
Internally generated intangible assets, excluding
capitalised development costs, are not capitalised and
expenditure is refected in the income statement in the
year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be
either fnite or indefnite.
Intangible assets with fnite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset
may be impaired. The amortisation period and the
amortisation method for an intangible asset with a fnite
useful life are reviewed at least at each fnancial year
end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefts
embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with fnite
lives is recognised in the income statement in operating
expenses.
Intangible assets with indefnite useful lives are tested
for impairment annually either individually or at the cash
generating unit level. Such intangibles are not amortised.
The useful life of an intangible asset with an indefnite
life is reviewed annually to determine whether indefnite
life assessment continues to be supportable. If not, the
change in the useful life assessment from indefnite to
fnite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset
and are recognised in the income statement when the
asset is derecognised.
Subsequent to initial recognition, the intangible asset
is carried at cost less accumulated amortisation and
accumulated impairment losses.
Changes in the expected useful life or the expected pattern
31
2.8.2 Computer software
Costs associated with maintaining computer software
programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the
design and testing of identifable and unique software
products controlled by the Group are recognised as
intangible assets when the following criteria are met:
It is technically feasible to complete the software
product so that it will be available for use;
Management intends to complete the software product
and use or sell it;
There is an ability to use or sell the software product;
It can be demonstrated how the software product will
generate probable future economic benefts;
Adequate technical, fnancial and other resources
to complete the development and to use or sell the
software product are available; and
The expenditure attributable to the software product
during its development can be reliably measured.
Directly attributable costs that are capitalised as part of
the software product include the software development
employee costs and an appropriate portion of directly
attributable overheads.
Computer software costs recognised as assets are
amortised over their useful lives, which do not exceed fve
years.
2.8.3 Deferred acquisition costs (DAC)
Those direct and indirect costs incurred during the
fnancial period arising from the writing or renewing
of short-term insurance contracts, are deferred to the
extent that these costs are recoverable out of unearned
premiums. All other acquisition costs are recognised as
an expense when incurred.
Subsequent to initial recognition, DAC for short-term
insurance contracts are amortised over the terms of
the insurance policies as premiums are earned. The
reinsurers share of deferred acquisition costs is amortised
in the same manner as the underlying asset amortisation
is recorded in the income statement.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefts
embodied in the asset are accounted for by changing the
amortisation period and are treated as a change in an
accounting estimate.
An impairment review is performed at each reporting
date or more frequently when an indication of impairment
arises. When the recoverable amount is less than the
carrying value, an impairment loss is recognised in the
income statement. DAC are also considered in the liability
adequacy test for each reporting period.
DAC are derecognised when the related contracts are
either settled or disposed of.
of consumption of future economic benefts embodied in
the asset are accounted for by changing the amortisation
period and they are treated as a change in an accounting
estimate.
An impairment review is performed whenever there is an
indication of impairment. When the recoverable amount
is less than the carrying value, an impairment loss is
recognised in the income statement.
2.8.1 Goodwill
Goodwill arises on the acquisition of subsidiaries,
associates and joint arrangements; it represents the
excess of the consideration transferred over Groups
interest in the net fair value of the net identifable assets,
liabilities and contingent liabilities of the acquiree and the
fair value of the non-controlling interest in the acquiree.
After initial recognition, goodwill is measured at cost less
any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is allocated to each of the CGUs, or groups
of CGUs, that is expected to beneft from the synergies
of the combination. Each unit or group of units to which
the goodwill is allocated represents the lowest level within
the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the
operating segment level.
Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of
goodwill is compared to the recoverable amount, which
is the higher of value in use and the fair value less costs
to sell. Any impairment is recognised immediately as an
expense and is not subsequently reversed.
The recoverable amount of the non-life insurance cash
generating unit and investment management services
cash generating unit have been determined based on
a valuein-use calculation. The calculation requires the
Group to make an estimate of the expected future cash
fows from each of the cash-generating units and discount
these amounts using a suitable rate which refects the risk
of those cash fows in order to calculate the present value
of those cash fows.

When goodwill forms part of a cash-generating unit (or
group of cash generating units) and part of the operations
within that unit are disposed of, the goodwill associated
with the operation disposed of is included in the carrying
amount of the operation to determine the gain or loss on
disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values
of the operations disposed of and the portion of the cash-
generating unit retained.
32
2.8.4 Reinsurance commissions
Commissions receivable on outwards reinsurance
contracts are deferred and amortised on a straight line
basis over the term of the reinsurance contract.
2.9 Financial assets
The Group classifes its fnancial assets into the following
categories: at fair value through proft or loss, loans and
receivables, held to maturity and available for sale. The
classifcation is determined by management at initial
recognition and depends on the purpose for which the
investments were acquired or originated.
2.9.1 Initial recognition
Financial assets are recognised initially at fair value plus,
in the case of investments not at fair value through proft
or loss, directly attributable transaction costs. Financial
assets carried at fair value through proft or loss are
initially recognised at fair value, and transaction costs are
expensed in the income statement.
Purchases or sales of fnancial assets that require delivery
of assets within a time frame established by regulation or
convention in the marketplace (regular way trades) are
recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
2.9.2 Classifcation and measurement
(a) Financial assets at fair value through proft or loss
This category has two sub-categories: fnancial assets
held for trading and those designated at fair value through
proft or loss at inception.
A fnancial asset is classifed into the fnancial assets at
fair value through proft or loss category at inception if
acquired principally for the purpose of selling in the short
term, if it forms part of a portfolio of fnancial assets in
which there is evidence of short-term proft-taking, or if so
designated by management.
This category includes derivative fnancial instruments
entered into by the Group that are not designated as
hedging instruments in hedge relationships as defned
by IAS 39. Derivatives, including separated embedded
derivatives, are also classifed as held for trading unless
they are designated as effective hedging instruments. For
investments designated as at fair value through proft or
loss, either of the two following criteria must be met:
The designation eliminates or signifcantly reduces the
inconsistent treatment that would otherwise arise from
measuring the assets or liabilities or recognising gains
or losses on a different basis
The assets and liabilities are part of a group of fnancial
assets, fnancial liabilities, or both, which are managed
and their performance evaluated on a fair value basis,
in accordance with a documented risk management or
investment strategy.
These investments are initially recorded at fair value.
Subsequent to initial recognition, they are remeasured at
fair value. Changes in fair value are recorded in net fair
value gains and losses, determined based on the change
in quoted market prices in active markets for identical
fnancial assets.
Interest is accrued and presented in Investment income
or Finance cost, respectively, using the effective interest
rate (EIR). Dividend income is recorded in Investment
income when the right to the payment has been
established.
The Group evaluates its fnancial assets at fair value
through proft and loss (held for trading) whether the
intent to sell them in the near term is still appropriate.
When the Group is unable to trade these fnancial assets
due to inactive markets and managements intent to sell
them in the foreseeable future signifcantly changes,
the Group may elect to reclassify these fnancial assets
in rare circumstances. The reclassifcation to loans and
receivables, available-for-sale or held to maturity depends
on the nature of the asset. This evaluation does not affect
any fnancial assets designated at fair value through proft
or loss using the fair value option at designation.
(b) Loans and receivables (including insurance
receivables)
Loans and receivables are non-derivative fnancial assets
with fxed or determinable payments that are not quoted
in an active market other than those that the Group
intends to sell in the short term or that it has designated
as at fair value through proft or loss or available for
sale. Receivables arising from insurance contracts are
classifed in this category and are reviewed for impairment
as part of the impairment review of loans and receivables.
After initial measurement, loans and receivables are
measured at amortised cost, using the EIR, less allowance
for impairment. Amortised cost is calculated by taking
into account any discount or premium on acquisition and
fee or costs that are an integral part of the EIR. The EIR
amortisation is included in fnance income in the income
statement. Gains and losses are recognised in the income
statement when the investments are derecognised or
impaired, as well as through the amortisation process.
(c) Held-to-maturity fnancial assets
Held-to-maturity investments are non-derivative fnancial
assets with fxed or determinable payments and fxed
maturities that the Groups management has the positive
intention and ability to hold to maturity, other than:
those that the Group upon initial recognition designates
as at fair value through proft or loss;
those that the Group designates as available for sale;
and
those that meet the defnition of loans and receivables.
After initial measurement, held to maturity fnancial
assets are measured at amortised cost, using the EIR,
less impairment. The EIR amortisation is included in
33
2.9.3 De-recognition of fnancial assets
A fnancial asset (or, when applicable, a part of a fnancial
asset or part of a group of similar fnancial assets) is
derecognised when:
The rights to receive cash fows from the asset have
expired, or;
The Group retains the right to receive cash fows
from the asset or has assumed an obligation to pay
the received cash fows in full without material delay
to a third party under a pass-through arrangement;
and either:
The Group has transferred substantially all the risks
and rewards of the asset, or;
The Group has neither transferred nor retained
substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its right to receive cash
fows from an asset or has entered into a pass through
arrangement, and has neither transferred nor retained
substantially all the risks and rewards of the asset nor
transferred control of the asset, the asset is recognised
to the extent of the Groups continuing involvement in the
asset.
Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration that the Group could be required
to repay.
In that case, the Group also recognises an associated
liability. The transferred asset and the associated liability
are measured on a basis that refects the rights and
obligations that the Group has retained.
2.9.4 Impairment of fnancial assets
The Group assesses at each reporting date whether there
is any objective evidence that a fnancial asset or group
of fnancial assets is impaired. A fnancial asset or a group
of fnancial assets is deemed to be impaired if, and only
if, there is objective evidence of impairment as a result
of one or more events that has occurred after the initial
recognition of the asset (an incurred loss event) and that
loss event has an impact on the estimated future cash
fows of the fnancial asset or the group of fnancial assets
that can be reliably estimated.
Objective evidence of impairment may include indications
that the debtors or a group of debtors is experiencing
signifcant fnancial diffculty, default or delinquency in
interest or principal payments, the probability that they
will enter bankruptcy or other fnancial reorganisation and
where observable data indicate that there is a measurable
decrease in the estimated future cash fows, such as
changes in arrears or economic conditions that correlate
with defaults.
investment income in the consolidated income statement.
Gains and losses are recognised in the income statement
when the investments are derecognised or impaired, as
well as through the amortisation process.
(d) Available-for-sale fnancial assets
Available-for-sale fnancial assets are fnancial assets
that are either designated in this category because they
are intended to be held for an indefnite period of time,
which may be sold in response to needs for liquidity or
changes in interest rates, exchange rates or equity prices;
or that are not classifed as loans and receivables, held
to maturity investments or fnancial assets at fair value
through proft or loss.
After initial measurement, available-for-sale fnancial
assets are subsequently measured at fair value,
with unrealised gains or losses recognised in other
comprehensive income in the available-for-sale reserve
(equity). The unrealised gains or losses are determined
based on the change in inputs other than quoted prices
that are observable for the fnancial assets either directly
or indirectly.
Where the insurer holds more than one investment in the
same security that they are deemed to be disposed of
on a frst-in frst-out basis. Interest earned whilst holding
available-for-sale investments is reported as interest
income using the EIR.
Dividends earned whilst holding available-for-sale
investments are recognised in the income statement as
Investment income when the right of the payment has
been established.
When the asset is derecognised the cumulative gain or
loss is reclassifed to other operating income from the
mark-to-market reserve.
Reclassifcation to loans and receivables is permitted
when the fnancial asset meets the defnition of loans
and receivables and management has the intention and
ability to hold these assets for the foreseeable future or
until maturity. The reclassifcation to held-to-maturity is
permitted only when the entity has the ability and intention
to hold the fnancial asset until maturity.
For a fnancial asset reclassifed out of the available-for-
sale category, any previous gain or loss on that asset that
has been recognised in equity is amortised to proft or
loss over the remaining life of the investment using the
EIR. Any difference between the new amortised cost
and the expected cash fows is also amortised over the
remaining life of the asset using the EIR. If the asset is
subsequently determined to be impaired then the amount
recorded in equity is reclassifed to the consolidated
income statement.
34
2.9.4.1 Financial assets carried at amortised cost
For fnancial assets carried at amortised cost, the Group
frst assesses individually whether objective evidence of
impairment exists for fnancial assets that are individually
signifcant, or collectively for fnancial assets that are
not individually signifcant. If the Group determines
that no objective evidence of impairment exists for an
individually assessed fnancial asset, whether signifcant
or not, it includes the asset in a group of fnancial assets
with similar credit risk characteristics and collectively
assesses them for impairment. Assets that are individually
assessed for impairment and for which an impairment
loss is, or continues to be, recognised are not included in
a collective assessment of impairment.
If there is objective evidence that an impairment loss on
assets carried at amortised cost has been incurred, the
amount of the loss is measured as the difference between
the carrying amount of the asset and the present value
of estimated future cash fows (excluding future expected
credit losses that have not been incurred) discounted
at the fnancial assets original effective interest rate. If
a loan has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective
interest rate.
The carrying amount of the asset is reduced through the
use of an allowance account and the amount of the loss is
recognised in the consolidated income statement. Interest
income continues to be accrued on the reduced carrying
amount and is accrued using the rate of interest used to
discount the future cash fows for the purpose of measuring
the impairment loss. The interest income is recorded as
part of investment income in the consolidated income
statement. Loans together with the associated allowance
are written off when there is no realistic prospect of future
recovery and all collateral has been realised or has
been transferred to the Group. If, in a subsequent year,
the amount of the estimated impairment loss increases
or decreases because of an event occurring after the
impairment was recognised, the previously recognised
impairment loss is increased or reduced by adjusting the
allowance account. If a future write-off is later recovered,
the recovery is credited to the other operating revenue in
the income statement.
Future cash fows on a group of fnancial assets that are
collectively evaluated for impairment are estimated on the
basis of historical loss experience for assets with credit risk
characteristics similar to those in the group. Historical loss
experience is adjusted on the basis of current observable
data to refect the effects of current conditions on which
the historical loss experience is based and to remove the
effects of conditions in the historical period that do not
exist currently. The methodology and assumptions used
for estimating future cash fows are reviewed regularly
to reduce any differences between loss estimates and
actual loss experience.
2.9.4.2 Available-for-sale fnancial investments
For available-for-sale fnancial investments, the Group
assesses at each reporting date whether there is objective
evidence that an investment or a group of investments is
impaired.
In the case of equity investments classifed as available-
for-sale, objective evidence would include a signifcant
or prolonged decline in the fair value of the investment
below its cost. Signifcant is to be evaluated against the
original cost of the investment and prolonged against the
period in which the fair value has been below its original
cost.
Where there is evidence of impairment, the cumulative
loss measured as the difference between the acquisition
cost and the current fair value, less any impairment loss
on that investment previously recognised in the income
statement is removed from other comprehensive income
and recognised in the income statement. Impairment
losses on equity investments are not reversed through
the income statement; increases in their fair value after
impairment are recognised directly in other comprehensive
income.
In the case of debt instruments classifed as available-for-
sale, impairment is assessed based on the same criteria
as fnancial assets carried at amortised cost. However,
the amount recorded for impairment is the cumulative loss
measured as the difference between the amortised cost
and the current fair value, less any impairment loss on
that investment previously recognised in the consolidated
income statement.
Future interest income continues to be accrued based on
the reduced carrying amount of the asset and is accrued
using the rate of interest used to discount the future cash
fows for the purpose of measuring the impairment loss.
The interest income is recorded as part of investment
income. If, in a subsequent year, the fair value of a debt
instrument increases and the increase can be objectively
related to an event occurring after the impairment loss
was recognised in the consolidated income statement,
the impairment loss is reversed through the consolidated
income statement.
2.9.5 Offsetting of fnancial instruments
Financial assets and fnancial liabilities are offset and
the net amount is reported in the consolidated statement
of fnancial position if, and only if, there is a currently
enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, or to
realise the assets and settle the liabilities simultaneously.
Income and expense will not be offset in the consolidated
income statement unless required or permitted by any
accounting standard or interpretation, as specifcally
disclosed in the accounting policies of the Group.
35
2.10 Financial liabilities
The Group classifes its fnancial liabilities into the
following categories: at fair value through proft or loss
and fnancial liabilities at amortised cost. The classifcation
is determined by management at initial recognition and
depends on the purpose for which the liabilities were
acquired or originated.
A fnancial instrument is classifed as debt if it has a
contractual obligation to:
deliver cash or another fnancial asset to another entity,
or;
exchange fnancial assets or fnancial liabilities with
another entity under conditions that are potentially
unfavourable to the Group.
If the Group does not have an unconditional right to avoid
delivering cash or another fnancial asset to settle its
contractual obligation, the obligation meets the defnition
of a fnancial liability.
2.10.1 Initial recognition
All fnancial liabilities are recognised initially at fair value
and, in the case of loans and borrowings, less directly
attributable transaction costs.
The Groups fnancial liabilities include investment
contracts, trade and other payables, borrowings and
insurance payables.
2.10.2 Classifcation and subsequent measurement
The subsequent measurement of fnancial liabilities
depends on their classifcation, as follows:
(a) Financial liabilities at fair value through proft or
loss
Financial liabilities at fair value through proft or loss
includes fnancial liabilities held for trading and fnancial
liabilities designated upon initial recognition as at fair
value through proft or loss.
Financial liabilities are classifed as held for trading if they
are acquired for the purpose of selling in the near term.
This category includes derivative fnancial instruments
entered into by the Group that are not designated as
hedging instruments in hedge relationships as defned
by IAS 39. Separated embedded derivatives are also
classifed as held for trading unless they are designated
as effective hedging instruments.
Gains or losses on designated or held for trading liabilities
are recognised in fair value gains and losses in the
consolidated income statement.

(b) Financial liabilities at amortised cost
After initial recognition, insurance payables, interest
bearing loans and borrowings are subsequently measured
at amortised cost using the effective interest rate method.
2.9.6 Fair value of fnancial instruments
The fair value of fnancial instruments that are actively
traded in organised fnancial markets is determined by
reference to quoted market bid prices for assets and
offer prices for liabilities, at the close of business on the
reporting date, without any deduction for transaction
costs.
For units in unit trusts and shares in open ended
investment companies, fair value is determined by
reference to published bid values in an active market.
For all other fnancial instruments not traded in an active
market, the fair value is determined by using appropriate
valuation techniques. Valuation techniques include the
discounted cash fow method, comparison to similar
instruments for which market observable prices exist,
options pricing models, credit models and other relevant
valuation models.
Certain fnancial instruments are recorded at fair value
using valuation techniques because current market
transactions or observable market data are not available.
Their fair value is determined using a valuation model
that has been tested against prices or inputs to actual
market transactions and using the Groups best estimate
of the most appropriate model assumptions. Models are
adjusted to refect the spread for bid and ask prices to
refect costs to close out positions, counterparty credit
and liquidity spread and limitations in the models. Also,
proft or loss calculated when such fnancial instruments
are frst recorded (Day 1 gain or loss) is deferred and
recognised only when the inputs become observable or
on derecognition of the instrument.
For discounted cash fow techniques, estimated future
cash fows are based on managements best estimates
and the discount rate used is a market-related rate for a
similar instrument. The use of different pricing models and
assumptions could produce materially different estimates
of fair values.
The fair value of foating rate and overnight deposits with
credit institutions is their carrying value. The carrying
value is the cost of the deposit and accrued interest. The
fair value of fxed interest bearing deposits is estimated
using discounted cash fow techniques. Expected cash
fows are discounted at current market rates for similar
instruments at the reporting date.
If the fair value cannot be measured reliably, these
fnancial instruments are measured at cost, being the fair
value of the consideration paid for the acquisition of the
investment or the amount received on issuing the fnancial
liability. All transaction costs directly attributable to the
acquisition are also included in the cost of the investment.
36
Gains and losses are recognised in the income statement
when the liabilities are derecognised as well as through
the effective interest rate method (EIR) amortisation
process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fee or costs that
are an integral part of the EIR. The EIR amortisation
is included in fnance cost in the consolidated income
statement.
Fees paid on the establishment of loan facilities are
recognised as transaction cost of the loan to the extent
that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the
draw-down occurs. To the extent there is no evidence that
it is probable that some or all of the facility will be drawn
down, the fee is capitalised as a pre-payment for liquidity
services and amortised over the period of the facility to
which it relates.
Preference shares, which are mandatorily redeemable on
a specifc date, are classifed as liabilities. The dividends
on these preference shares are recognised in the
consolidated income statement as fnance costs.
Borrowings are classifed as current liabilities unless the
Group has an unconditional right to defer settlement of
the liability for at least twelve months after the reporting
date.
2.10.3 Derecognition of fnancial liabilities
A fnancial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing fnancial liability is replaced by another
from the same lender on substantially different terms,
or the terms of an existing liability are substantially
modifed, such an exchange or modifcation is treated as
a derecognition of the original liability and the recognition
of a new liability, and the difference in the respective
carrying amounts is recognised in the income statement.
2.11 Insurance contracts and investment contracts
2.11.1 Classifcation
Insurance and investment contracts are classifed into
four categories, depending on the duration of or type of
insurance risks or investment benefts and whether or
not the terms and conditions are fxed, namely, short-
term insurance contracts, long- term insurance contracts,
investment contracts with discretionary participation
features (DPF) and investment contracts without DPF.
A discretionary participation feature is a contractual
right to receive additional benefts, as a supplement to
the guaranteed benefts of the insurance or investment
contract. The amount and timing of these benefts are
contractually at the discretion of the issuer. The benefts
are contractually dependent on the performance of a
specifed pool of contracts or investment returns on a
specifed pool of assets or the proft or loss of the company.
The Group issues contracts that transfer insurance risk
or fnancial risk or both. Insurance contracts are when the
Group (the insurer) has accepted signifcant insurance
risk from another party (the policyholder) by agreeing
to compensate the policyholder if a specifed uncertain
future event (the insured event) adversely affects the
policyholder. As a general guideline, the Group determines
whether it has signifcant insurance risk, by comparing
benefts paid with benefts payable if the insured event
did not occur.
Investment contracts are those contracts that transfer
fnancial risk and no signifcant insurance risk. Financial
risk is the risk of a possible future change in one or more
of a specifed interest rate, fnancial instrument price,
commodity price, foreign exchange rate, index of price
or rates, credit rating or credit index or other variable,
provided in the case of a non-fnancial variable that the
variable is not specifc to a party to the contract.
Once a contract has been classifed as an insurance
contract, it remains an insurance contract for the
remainder of its lifetime, even if the insurance risk
reduces signifcantly during this period, unless all rights
and obligations are extinguished or expire. Investment
contracts can, however, be reclassifed as insurance
contracts after inception if the terms are amended to
include signifcant insurance risk.
2.11.2 Short-term insurance contracts
The insurance products offered by the Group include
motor, household, commercial and business interruption
insurance.
For all these contracts, premiums are recognised as
revenue (earned premiums) proportionally over the period
of coverage. The portion of premium received on in-force
contracts that relates to unexpired risks at the statement
of fnancial position date is reported as the unearned
premium liability. Premiums are shown before deduction
of commission and are gross of any taxes or duties levied
on premiums.
Claims and loss adjustment expenses are charged to
income as incurred based on the estimated liability for
compensation owed to contract holders or third parties
damages by the contract holders. They include direct and
indirect claims settlement costs and arise from events that
have occurred up to the end of the reporting period even if
they have not yet been reported to the Group.
The Group does not discount its liabilities for unpaid
claims other than for disability claims. Liabilities for unpaid
claims are estimated using the input of assessments for
individual cases reported to the Group and statistical
analyses for the claims incurred but not reported, and
to estimate the expected ultimate cost of more complex
claims that may be affected by external factors (such as
court decisions).
37
the extent that it is insuffcient to meet future benefts and
expenses (refer to note 2.11.6 for liability adequacy tests).
In performing the adequacy test, current best estimates
of future contractual cash fows, including related cash
fows such as claims handling and policy administration
expenses, policyholder options and guarantees, as well
as investment income from assets backing such liabilities,
are used. A number of valuation methods are applied,
including discounted cash fows, option pricing models
and stochastic modelling.
2.11.4 Investment contracts with Discretionary
Participation Feature
The liability for these contracts is established in the
same way as for the long-term insurance contracts with
fxed and guaranteed terms (see above). Revenue is
also recognised in the same way. Where the resulting
liability is lower than the sum of the amortised cost of the
guaranteed element of the contract and the intrinsic value
of the surrender option embedded in the contract, it is
adjusted and any shortfall is recognised immediately in
the income statement. The group does not recognise the
guaranteed element of the investment contract separately
from the discretionary participation feature and therefore
classifes an entire investment contract as a liability.
2.11.5 Investment contracts without Discretionary
Participation Feature
The Group issues investment contracts without fxed
terms (unit-linked) and investment contracts with fxed
and guaranteed terms (fxed interest rate).
Investment contracts without fxed terms are fnancial
liabilities whose fair value is dependent on the fair value of
underlying fnancial assets, derivatives and/or investment
property (these contracts are also known as unit-linked
investment contracts) and are designated at inception as
at fair value through proft or loss. The Group designates
these investment contracts to be measured at fair value
through proft or loss because it eliminates or signifcantly
reduces a measurement or recognition inconsistency
(sometimes referred to as an accounting mismatch) that
would otherwise arise from measuring assets or liabilities
or recognising the gains and losses on them on different
bases.
The best evidence of the fair value of these fnancial
liabilities at initial recognition is the transaction price
(that is, the fair value received) unless the fair value of
that instrument is evidenced by comparison with other
observable current market transactions in the same
instrument or based on a valuation technique whose
variables include only data from observable markets.
When such evidence exists, the Group recognises proft
on day 1. The Group has not recognised any proft on
initial measurement of these investment contracts
because the difference is attributed to the pre-payment
liability recognised for the future investment management
services that the Group will render to each contract holder.
2.11.3 Long-term insurance contracts with fxed and
guaranteed terms
These contracts insure events associated with human
life (for example, death or survival) over a long duration.
Premiums are recognised as revenue when they become
payable by the contract holder. Premiums are shown
before deduction of commission.
Benefts are recorded as an expense when they are
incurred.
Life insurance liabilities are recognised when contracts
are entered into and premiums are charged. These
liabilities are measured by using the net premium method.
The liability is determined as the sum of the discounted
value of the expected future benefts, claims handling and
policy administration expenses, policyholder options and
guarantees and investment income from assets backing
such liabilities, which are directly related to the contract,
less the discounted value of the expected theoretical
premiums that would be required to meet the future
cash outfows based on the valuation assumptions used
(valuation premiums). The liability is based on current
assumptions that may include a margin for risk and
adverse deviation. A separate reserve for longevity may
be established and included in the measurement of the
liability.
Furthermore, the liability for life insurance contracts
comprises the provision for unearned premiums and
premium defciency, as well as for claims outstanding,
which includes an estimate of the incurred claims that
have not yet been reported to the Group. Adjustments
to the liabilities at each reporting date are recorded in
the income statement. Profts originated from margins of
adverse deviations on run-off contracts are recognised
in the income statement over the life of the contract,
whereas losses are fully recognised in the consolidated
income statement during the frst year of run-off.
Where insurance contracts have a single premium or
a limited number of premium payments due over a
signifcantly shorter period than the period during which
benefts are provided, the excess of the premiums payable
over the valuation premiums is deferred and recognised
as income in line with the decrease of unexpired insurance
risk of the contracts in force or, for annuities in force, in
line with the decrease of the amount of future benefts
expected to be paid.
The liabilities are recalculated at each end of the reporting
period using the assumptions established at inception of
the contracts.
The liability is derecognised when the contract expires,
is discharged or is cancelled. At each reporting date,
an assessment is made of whether the recognised life
insurance liabilities are adequate, net of related PVIF
(Present value of in-force business) by using an existing
liability adequacy test. The liability value is adjusted to
38
The Groups main valuation techniques incorporate
all factors that market participants would consider and
make maximum use of observable market data. The
fair value of fnancial liabilities for investment contracts
without fxed terms is determined using the current unit
values in which the contractual benefts are denominated.
These unit values refect the fair values of the fnancial
assets contained within the Groups unitised investment
funds linked to the fnancial liability. The fair value of the
fnancial liabilities is obtained by multiplying the number of
units attributed to each contract holder at the end of the
reporting period by the unit value for the same date.
For investment contracts with fxed and guaranteed terms,
the amortised cost basis is used. In this case, the liability
is initially measured at its fair value less transaction
costs that are incremental and directly attributable to
the acquisition or issue of the contract. Subsequent
measurement of investment contracts at amortised cost
uses the effective interest method.
The Group re-estimates at each reporting date the
expected future cash fows and recalculates the carrying
amount of the fnancial liability by calculating the present
value of estimated future cash fows using the fnancial
liabilitys original effective interest rate. Any adjustment
is immediately recognised as income or expense in the
consolidated income statement.
2.11.6 Liability adequacy test
At the end of the reporting period, liability adequacy tests
are performed to ensure the adequacy of the contract
liabilities net of related DAC assets. In performing these
tests, current best estimates of future contractual cash
fows and claims handling and administration expenses,
as well as investment income from the assets backing
such liabilities, are used. Any defciency is immediately
charged to proft or loss initially by writing off DAC and by
subsequently establishing a provision for losses arising
from liability adequacy tests (the unexpired risk provision).
As set out in note 2.11.3 long-term insurance contracts
with fxed terms are measured based on assumptions
set out at the inception of the contract. When the liability
adequacy test requires the adoption of new best estimate
assumptions, such assumptions (without margins
for adverse deviation) are used for the subsequent
measurement of these liabilities.

2.11.7 Reinsurance contracts held
Contracts entered into by the Group with reinsurers
under which the Group is compensated for losses on
one or more contracts issued by the Group and that
meet the classifcation requirements for insurance
contracts in note 2.11.1 are classifed as reinsurance
contracts held. Contracts that do not meet these
classifcation requirements are classifed as fnancial
assets. Reinsurance assets represent balances due
from reinsurance companies. Amounts recoverable from
reinsurers are estimated in a manner consistent with the
outstanding claims provision or settled claims associated
with the reinsurers policies and are in accordance with
the related reinsurance contract.
Reinsurance assets are reviewed for impairment at each
reporting date, or more frequently, when an indication of
impairment arises during the reporting year. Impairment
occurs when there is objective evidence as a result
of an event that occurred after initial recognition of the
reinsurance asset that the Group may not receive all
outstanding amounts due under the terms of the contract
and the event has a reliably measurable impact on the
amounts that the Group will receive from the reinsurer.
The impairment loss is recorded in the consolidated
income statement.
Gains or losses on buying reinsurance are recognised
in the consolidated income statement immediately at the
date of purchase and are not amortised.
Ceded reinsurance arrangements do not relieve the
Group from its obligations to policyholders.
The Group also assumes reinsurance risk in the normal
course of business for life insurance and non-life insurance
contracts where applicable. Premiums and claims on
assumed reinsurance are recognised as revenue or
expenses in the same manner as they would be if the
reinsurance were considered direct business, taking
into account the product classifcation of the reinsured
business.
Reinsurance liabilities represent balances due to
reinsurance companies. Amounts payable are estimated
in a manner consistent with the related reinsurance
contract.
Premiums and claims are presented on a gross basis for
both ceded and assumed reinsurance.
Reinsurance assets or liabilities are derecognised when
the contractual rights are extinguished or expire or when
the contract is transferred to another party.
Reinsurance contracts that do not transfer signifcant
insurance risk are accounted for directly through the
statement of fnancial position. These are deposit assets
or fnancial liabilities that are recognised based on the
consideration paid or received less any explicit identifed
premiums or fees to be retained by the reinsured.
Investment income on these contracts is accounted for
using the effective interest rate method when accrued.
39
into and premiums are charged, and is brought to account
as premium income over the term of the contract in
accordance with the pattern of insurance service provided
under the contract.
At each reporting date the Group reviews its unexpired
risk and a liability adequacy test is performed to determine
whether there is any overall excess of expected claims and
deferred acquisition costs over unearned premiums. This
calculation uses current estimates of future contractual
cash fows after taking account of the investment return
expected to arise on assets relating to the relevant nonlife
insurance technical provisions. If these estimates show
that the carrying amount of the unearned premiums
(less related deferred acquisition costs) is inadequate,
the defciency is recognised in the income statement by
setting up a provision for premium defciency.
2.11.11 Shadow accounting
The Group applies shadow accounting in order to
ensure that unrealised gains or losses on policyholder
insurance assets affect the measurement of policyholder
insurance liabilities in the same way that realised gains or
losses do (i.e. elimination of the accounting mismatch).
Changes to policyholder liabilities arising from revaluation
gains or losses on owner-occupied properties held
are reclassifed from equity to proft or loss in-order to
match the corresponding gross increase or decrease
in policyholder insurance liabilities. Note that the gross
change in policyholder insurance liabilities is recorded in
proft or loss.
2.12 Financial guarantee contracts
Financial guarantee contracts issued by the Group are
those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the
specifed debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a liability at
fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of
the best estimate of the expenditure required to settle the
present obligation at the reporting date and the amount
recognised less cumulative amortisation.
2.13 Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually
defned terms of payment and excluding taxes or duty for
sale of goods and services in the ordinary course of the
Groups activities.
The Group recognises revenue when the amount of
revenue can be reliably measured; it is probable that
future economic benefts will fow to the Group and when
specifc criteria have been met for each of the Groups
revenue streams described below. The Group assesses
2.11.8 Receivables and payables related to insurance
contracts
Receivables and payables are recognised when due.
These include amounts due to and from agents, brokers
and insurance contract holders. If there is objective
evidence that the insurance receivable is impaired, the
Group reduces the carrying amount of the insurance
receivable accordingly and recognises that impairment
loss in the consolidated income statement. The Group
gathers the objective evidence that an insurance
receivable is impaired using the same process adopted for
loans and receivables. The impairment loss is calculated
under the same method used for these fnancial assets.
These processes are described in note 2.9.4.
2.11.9 Salvage and subrogation reimbursements
Some insurance contracts permit the Group to sell (usually
damaged) property acquired in settling a claim (for
example, salvage). The Group may also have the right to
pursue third parties for payment of some or all costs (for
example, subrogation). Estimates of salvage recoveries
are included as an allowance in the measurement of
the insurance liability for claims, and salvage property
is recognised in other assets when the liability is settled.
The allowance is the amount that can reasonably be
recovered from the disposal of the property. Subrogation
reimbursements are also considered as an allowance in
the measurement of the insurance liability for claims and
are recognised in other assets when the liability is settled.
The allowance is the assessment of the amount that can
be recovered from the action against the liable third party.
2.11.10 Non-life insurance (general insurance)
contract liabilities
Non-life insurance contract liabilities include the
outstanding claims provision, the provision for unearned
premium and the provision for premium defciency
incurred but not reported (IBNR). The outstanding
claims provision is based on the estimated ultimate cost
of all claims incurred but not settled at the reporting date,
whether reported or not, together with related claims
handling costs and reduction for the expected value of
salvage and other recoveries. Delays can be experienced
in the notifcation and settlement of certain types of
claims, therefore the ultimate cost of these cannot be
known with certainty at the reporting date. The liability is
calculated at the reporting date using a range of standard
actuarial claim projection techniques, based on empirical
data and current assumptions that may include a margin
for adverse deviation. The liability is not discounted for
the time value of money. No provision for equalisation
or catastrophe reserves is recognised. The liabilities are
derecognised when the obligation to pay a claim expires,
is discharged or is cancelled.
The provision for unearned premiums represents that
portion of premiums received or receivable that relates
to risks that have not yet expired at the reporting date.
The provision is recognised when contracts are entered
40
its revenue arrangements against specifc criteria in order
to determine if it is acting as principal or agent. The Group
has concluded that it is acting as a principal in all of its
revenue arrangements.
2.13.1 Gross premiums
Gross recurring premiums are recognised as revenue
when payable by the policyholder. For single premium
business, revenue is recognised on the date on which
the policy is effective. Gross general insurance written
premiums comprise the total premiums receivable for
the whole period of cover provided by contracts entered
into during the accounting period and are recognised
on the date on which the policy commences. Premiums
include any adjustments arising in the accounting period
for premiums receivable in respect of business written
in prior accounting periods. Premiums collected by
intermediaries, but not yet received, are assessed based
on estimates from underwriting or past experience and
are included in premiums written.
Unearned premiums are those proportions of premiums
written in a year that relate to periods of risk after the
reporting date. Unearned premiums are calculated
on a daily pro rata basis. The proportion attributable
to subsequent periods is deferred as a provision for
unearned premiums.
2.13.2 Reinsurance premiums
Gross reinsurance premiums on life are recognised as
an expense when payable or on the date on which the
policy is effective. Gross general reinsurance premiums
written comprise the total premiums payable for the
whole cover provided by contracts entered into the period
and are recognised on the date on which the policy
incepts. Premiums include any adjustments arising in
the accounting period in respect of reinsurance contracts
incepting in prior accounting periods.
Unearned reinsurance premiums are those proportions of
premiums written in a year that relate to periods of risk
after the reporting date. Unearned reinsurance premiums
are deferred over the term of the underlying direct
insurance policies for risks-attaching contracts and over
the term of the reinsurance contract for losses occurring
contracts.

2.13.3 Fees and commission income
The Group earns fees and commission income from its
provision of insurance, asset management and hoteling
services. These fees are recognised as revenue over
the period in which the related services are performed or
rendered. If the fees are for services provided in future
periods then they are deferred and recognised over those
future periods.
2.13.4 Sale of goods
The Group operates hotels and earns revenue through
the sale of food and beverages. Revenue from the sale
of goods is recognised when all the following conditions
are satisfed:
the Group has transferred to the buyer the signifcant
risks and rewards of ownership of the goods;
the Group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably; it is
probable that the economic benefts associated with
the transaction will fow to the entity; and
the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
2.13.5 Investment income
Interest income earned from the Groups interest bearing
fnancial assets in recognised within investment income.
Interest income is recognised in the consolidated income
statement as it accrues and is calculated by using the
effective interest rate method. Fees and commissions that
are an integral part of the effective yield of the fnancial
asset or liability are recognised as an adjustment to the
effective interest rate of the instrument. When a receivable
is impaired, the Group reduces the carrying amount to
its recoverable amount, being the estimated future cash
fow discounted at the original effective interest rate of
the instrument, and continues unwinding the discount as
interest income.
Investment income also includes dividend income
earned from the Groups equity investments. Dividend
income is recognised when the right to receive payment
is established. For listed securities, this is the date the
security is listed as ex dividend.

2.13.6 Rendering of services
Group earns revenue from the provision of accommodation
at its hotels. Revenue arising from the rendering of services
is recognised by reference to the stage of completion of
the transaction at the statement of fnancial position date
(the percentage-of-completion method), provided that all
of the following criteria are met:
the amount of revenue can be measured reliably;
it is probable that the economic benefts will fow to the
seller;
the stage of completion at the statement of fnancial
position date can be measured reliably; and
the costs incurred, or to be incurred, in respect of the
transaction can be measured reliably.
When the above criteria are not met, revenue arising from
the rendering of services is recognised only to the extent
of the expenses recognised that are recoverable (a cost-
recovery approach).
41
income. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation and
establishes provisions where appropriate.
2.17 Deferred income tax
Deferred income tax is recognised using the liability
method in respect of temporary differences at the reporting
date between the tax bases of assets and liabilities and
their carrying amounts for fnancial reporting purposes.
Deferred income tax liabilities are recognised for all
taxable temporary differences, except:
When the deferred income tax liability arises from the
initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination
and, at the time of the transaction, affects neither the
accounting proft nor taxable proft or loss.
In respect of taxable temporary differences associated
with investments in subsidiaries, associates and
interests in joint arrangements, where the timing of the
reversal of the temporary differences can be controlled
and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all
deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it
is probable that taxable proft will be available against
which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can
be utilised except:
Where the deferred income tax asset relating to the
deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting proft nor
taxable proft or loss.
In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, deferred
income tax assets are recognised only to the extent
that it is probable that the temporary differences will
reverse in the foreseeable future and taxable proft will
be available against which the temporary differences
can be utilised.
The carrying amount of deferred income tax assets is
reviewed at each reporting date and reduced to the extent
that it is no longer probable that suffcient taxable proft will
be available to allow all or part of the deferred income tax
asset to be utilised. Unrecognised deferred tax assets are
reassessed at each reporting date and are recognised to
the extent that it has become probable that future taxable
proft will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
2.13.7 Rental income
Rental income receivable under operating leases is
recognised on a straight-line basis over the term of
the lease, except for contingent rental income which is
recognised when it arises.
Incentives for lessees to enter into lease agreements are
spread evenly over the lease term, even if the payments
are not made on such a basis. The lease term is the non-
cancellable period of the lease together with any further
term for which the tenant has the option to continue the
lease, where, at the inception of the lease, the directors
are reasonably certain that the tenant will exercise that
option.
Premiums received to terminate leases are recognised in
the consolidated income statement when they arise.
2.13.8 Net realised gains and losses
Net realised gains and losses recorded in the consolidated
income statement on investments include gains and
losses on fnancial assets and investment properties.
Gains and losses also include the ineffective portion
of hedge transactions. Gains and losses on the sale of
investments are calculated as the difference between net
sales proceeds and the original or amortised cost and are
recorded on occurrence of the sale transaction.

2.14 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the respective assets. All other borrowing costs are
expensed in the period in which they occur. Borrowing
costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
2.15 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in
hand and short-term deposits with an original maturity of
three months or less in the statement of fnancial position.
For the purpose of the consolidated cash fow, cash and
cash equivalents consist of cash and cash equivalents as
defned above, net of outstanding bank overdrafts.
2.16 Current income tax
The income tax expense for the period comprises current
and deferred tax. Tax is recognised in the consolidated
income statement, except to the extent that it relates
to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity,
respectively.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the companys
subsidiaries and associates operate and generate taxable
42
substantively enacted at the reporting date.
Deferred income tax relating to items recognised outside
proft or loss is recognised outside proft or loss. Deferred
income tax items are recognised in correlation to the
underlying transaction either in other comprehensive
income or directly in equity.
Deferred income tax assets and liabilities are offset, if a
legally enforceable right exists to set off deferred income
tax assets against deferred income tax liabilities and the
income taxes relate to the same taxable entity and the
same taxation authority.
2.18 Leasing
The determination of whether an arrangement is a lease,
or contains a lease, is based on the substance of the
arrangement at the inception date.
2.18.1 Group as a lessee
Leases that transfer to the Group substantially all of the
risks and benefts incidental to ownership of the leased
item, are classifed as fnance leases and capitalised
at the commencement of the lease at the fair value of
the leased property or, if lower, at the present value of
the minimum lease payments. Lease payments are
apportioned between fnance charges and reduction of the
lease liability so as to achieve a constant rate of interest
on the remaining balance of the liability. Finance charges
are recognised in fnance cost in the income statement.
Leased assets are depreciated over the useful life of the
asset. However, if there is no reasonable certainty that the
Group will obtain ownership by the end of the lease term,
the asset is depreciated over the shorter of the estimated
useful life of the asset and the lease term.
Leases that do not transfer to the Group substantially all
the risks and benefts incidental to ownership of the leased
items are operating leases. Operating lease payments are
recognised as an expense in the income statement on a
straight line basis over the lease term. Contingent rentals
are recognised as an expense in the period in which they
are incurred.
2.18.2 Group as a lessor
Leases in which the Group does not transfer substantially
all of the risks and benefts of ownership of the asset
are classifed as operating leases. Initial direct costs
incurred in negotiating an operating lease are added to
the carrying amount of the leased asset and recognised
over the lease term on the same bases as rental income.
Contingent rents are recognised as revenue in the period
in which they are earned.
2.19 Provisions
2.19.1 General
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events,
and it is probable that an outfow of resources embodying
economic benefts will be required to settle the obligation
and a reliable estimate can be made of the amount of
the obligation. Provisions are not recognised for future
operating losses.
Where the Group expects some or all of a provision to
be reimbursed, the reimbursement is recognised as a
separate asset, but only when the reimbursement is
virtually certain. The expense relating to any provision
is presented in the income statement net of any
reimbursement.
Provisions are measured at the present value of the
expenditures expected to be required to settle the
obligation discounted using a current pre-tax rate that
refects, where appropriate, the risks specifc to the
liability and current market assessments of the time value
of money. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a
fnance cost.
2.19.2 Onerous contracts
A provision is recognised for onerous contracts in which
the unavoidable costs of meeting the obligations under
the contract exceed the expected economic benefts
expected to be received under it. The unavoidable costs
refect the least net cost of exiting the contract, which is
the lower of the cost of fulflling it and any compensation
or penalties arising from failure to fulfl it.
2.20 Share capital
2.20.1 Ordinary share capital
The Group has issued ordinary shares that are classifed
as equity instruments. Incremental external costs that
are directly attributable to the issue of these shares are
recognised in equity, net of tax.
2.20.2 Treasury shares and contracts on own shares
Own equity instruments which are acquired (treasury
shares) are deducted from equity attributable to owners
of the parent using weighted average cost including any
directly attributable incremental costs (net of income
taxes). No gain or loss is recognised in the consolidated
income statement on the purchase, sale, issue or
cancellation of the Groups own equity instruments.
Any difference between the carrying amount and the
consideration is recognised in other capital reserves.
Voting rights related to treasury shares are nullifed for
the Group and no dividends are allocated to them. When
such shares are subsequently reissued any consideration
received, net of any directly attributable incremental
transaction costs and the related income tax effects is
included in equity attributable to the owners of the parent.
Contracts on own shares that require physical settlement
of a fxed number of own shares for a fxed consideration
are classifed as equity and added to or deducted from
equity. Contracts on own shares that require net cash
settlement or provide a choice of settlement are classifed
43
as trading instruments. Changes in the fair value are
reported in the income statement.

2.21 Dividend distribution
Dividends on ordinary shares are recognised as a liability
and deducted from equity when they are approved by the
Companys shareholders. Interim dividends are deducted
from equity when they are paid.
Dividends for the year that are approved after the reporting
date are dealt with as an event after the reporting date.
2.22 Interest expense
Interest expense paid is recognised in the income
statement as it accrues and is calculated by using the
effective interest rate method. Accrued interest is included
within the carrying value of the interest bearing fnancial
liability. Interest expense accrued during the year is
included under fnance costs in the consolidated income
statement.
2.23 Inventories
Inventories which consist of foodstuffs, beverages and
consumable stores are stated at the lower of cost and
net realisable value. Cost is determined using the frst-
in, frst-out (FIFO) method. The cost of fnished goods
and work in progress comprises direct raw materials,
direct labour, other directs costs and related production
overheads (based on normal operating capacity). It
excludes borrowing costs. Net realisable value is the
estimated selling price in the ordinary course of business,
less estimated costs to completion and applicable variable
selling expenses necessary to make the sale.
2.24 Trade receivables
Trade receivables are amounts due from customers for
food, beverages and rooms sold in the ordinary course of
business and other unsettled amounts not classifed as
insurance receivables. If collection is expected in one year
or less (or in the normal operating cycle of the business
if longer), they are classifed as current assets, if not they
are presented as non-current assets. Trade receivables
are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest
rate method, less provision for impairment.
2.25 Trade payables
Trade payables are obligations to pay for goods or
services that have been acquired in the ordinary course
of business from suppliers and service providers. Trade
payables are classifed as current liabilities if payment is
due within one year or less (or in the normal operating
cycle of the business if longer). If not, they are presented
as non-current liabilities. Trade payables are recognised
initially at fair value and subsequently measured at
amortised cost using the effective interest method.
2.26 Impairment of non-fnancial assets
The Group assesses at each reporting date whether there
is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for
an asset is required, the Group estimates the assets
recoverable amount. An assets recoverable amount is
the higher of an assets or cash-generating units (CGU)
fair value less costs to sell and its value in use. The
recoverable amount is determined for an individual asset,
unless the asset does not generate cash infows that are
largely independent of those from other assets or groups
of assets. Where the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash fows
are discounted to their present value using a pre-tax
discount rate that refects current market assessments of
the time value of money and the risks specifc to the asset.
In determining fair value less costs to sell, recent market
transactions are taken into account, if available. If no such
transactions can be identifed, an appropriate valuation
model is used. These calculations are corroborated
by valuation multiples, quoted share prices for publicly
traded subsidiaries or other available fair value indicators.
Impairment losses of continuing operations are recognised
in the income statement in those expense categories
consistent with the function of the impaired asset.
For assets excluding goodwill, an assessment is made at
each reporting date as to whether there is any indication
that previously recognised impairment losses may no
longer exist or may have decreased. If such indication
exists, the Group makes an estimate of the assets or
CGUs recoverable amount. A previously recognised
impairment loss is reversed only if there has been a
change in the estimates used to determine the assets
recoverable amount since the last impairment loss was
recognised. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount
that would have been determined, net of amortisation, had
no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the consolidated
income statement unless the asset is carried at revalued
amount, in which case, the reversal is treated as a
revaluation increase.

2.27 Employee benefts
2.27.1 Pension obligations
The Group has a defned contribution plan. A defned
contribution plan is a pension plan under which the Group
pays fxed contributions into a separate entity. The Group
has no legal or constructive obligations to pay further
contributions if the fund does not hold suffcient assets
to pay all employees the benefts relating to employee
service in the current period and prior periods.
The Group pays contributions to publicly or privately
administered pension insurance plans on a mandatory,
contractual or voluntary basis. The Group has no further
44
payment obligations once the contributions have been
paid. The contributions are recognised as an employee
beneft expense when they are due. Pre-paid contributions
are recognised as an asset to the extent that a cash refund
or reduction in the future payment is available.
2.27.2 Termination benefts
Termination benefts are payable when employment is
terminated by the Group before the normal retirement
date, or whenever an employee accepts voluntary
redundancy in exchange for these benefts. The Group
recognises termination benefts when it is demonstrably
committed to a termination when the entity has a detailed
formal plan to terminate the employment of current
employees without possibility of withdrawal. In the case
of an offer made to encourage voluntary redundancy, the
termination benefts are measured based on the number
of employees expected to accept the offer. Benefts falling
due more than 12 months after the end of the reporting
period are discounted to their present value.
2.27.3 Bonus plans
The Group recognises a liability and an expense for
bonuses based on a formula that takes into consideration
operational performance. Executive employees can
purchase TA Holdings Limited shares from the pool of
shares held for treasury (treasury pool). The shares are
sold at the ruling market share price as quoted on the
Zimbabwe Stock Exchange on the date of purchase,
utilising up to a maximum of 50% of the after tax net
bonus. There were no shares sold by the Group during
the years ended 31 December 2013 and 2012.

2.28 Benefts, claims and expenses recognition
2.28.1 Gross benefts and claims
Gross benefts and claims for life insurance contracts
include the cost of all claims arising during the year
including internal and external claims handling costs
that are directly related to the processing and settlement
of claims, as well as changes in the gross valuation of
insurance contract liabilities. Death claims and surrenders
are recorded on the basis of notifcations received.
Maturities and annuity payments are recorded when due.
General insurance claims include all claims occurring
during the year, whether reported or not, related internal
and external claims handling costs that are directly related
to the processing and settlement of claims, a reduction
for the value of salvage and other recoveries, and any
adjustments to claims outstanding from previous years.
2.28.2 Reinsurance claims
Reinsurance claims are recognised when the related
gross insurance claim is recognised according to the
terms of the relevant contract.
2.28.3 Outstanding claims
Provision is made for the estimated cost of claims net of
anticipated recoveries under reinsurance arrangements
notifed but not settled at period end using the best
information available at the time. Provision is also made
for the cost of claims Incurred But Not Reported (IBNR)
until after the statement of fnancial position date and
for the estimated administrative expenses that will be
incurred after the statement of fnancial position date in
settling claims outstanding at that date.
Outstanding claims do not include any provision for
possible future claims where claims arise under contracts
not in existence at statement of fnancial position date.
2.29 Segment information
The group is an investment company, with interests
in Zimbabwe and outside Zimbabwe. This is the way
that management considers information when making
investment decisions and is the basis on which resources
are allocated and performance is assessed by both
management and Board of Directors.
The Group Executive Committee (comprising of the Group
Chief Executive Offcer, Group Chief Finance Offcer and
Head of Group Finance) is the groups chief operating
decision-maker.
Management has determined the operating segments
based on the information reviewed by the Executive
Committee for the purposes of allocating resources and
assessing performance.
The Executive Committee considers the business
from a geographic perspective (Zimbabwe and outside
Zimbabwe) when making decisions.
2.30 Critical accounting estimates and judgements
The preparation of the Groups consolidated fnancial
statements requires management to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities,
and the disclosure of contingent liabilities, at the end of
the reporting period. However, uncertainty about these
assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of
the asset or liability affected in future periods.
2.30.1 Critical accounting judgements and
assumptions
In the process of applying the Groups accounting policies,
management has made the following judgements, which
have the most signifcant effect on the amounts recognised
in the consolidated fnancial statements:
(a) Going concern
The Directors have assessed the ability of the Group to
continue operating as a going concern and believe that
the preparation of these fnancial statements on a going
concern basis is still appropriate.
b) Assessment of control over investees
The Group follows the guidance of IFRS 10 Consolidated
Financial Statements to determine when control exists
45
addressed, either by being reserved at the face value of
loss adjuster estimates or separately projected in order to
refect their future development. In most cases, no explicit
assumptions are made regarding future rates of claims
infation or loss ratios. Instead, the assumptions used are
those implicit in the historical claims development data on
which the projections are based.
Additional qualitative judgement is used to assess the
extent to which past trends may not apply in future,
(for example to refect one-off occurrences, changes
in external or market factors such as public attitudes to
claiming, economic conditions, levels of claims infation,
judicial decisions and legislation, as well as internal
factors such as portfolio mix, policy features and claims
handling procedures) in order to arrive at the estimated
ultimate cost of claims that present the likely outcome
from the range of possible outcomes, taking account of all
the uncertainties involved.
Similar judgements, estimates and assumptions are
employed in the assessment of adequacy of provisions
for unearned premium. Judgement is also required in
determining whether the pattern of insurance service
provided by a contract requires amortisation of unearned
premium on a basis other than time apportionment.
(ii) Life insurance contract liabilities
The liability for life insurance contracts is either based
on current assumptions or on assumptions established
at inception of the contract, refecting the best estimate
at the time increased with a margin for risk and adverse
deviation. All contracts are subject to a liability adequacy
test, which refect managements best current estimate of
future cash fows.
The main assumptions used relate to mortality, morbidity,
longevity, investment returns, expenses, lapse and
surrender rates and discount rates. The Group bases
mortality and morbidity on standard industry mortality
tables which refect historical experiences, adjusted when
appropriate to refect the Groups unique risk exposure,
product characteristics, target markets and own claims
severity and frequency experiences. For those contracts
that insure risk related to longevity, prudent allowance
is made for expected future mortality improvements as
well as wide ranging changes to life style, could result
in signifcant changes to the expected future mortality
exposure.
Estimates are also made as to future investment income
arising from the assets backing life insurance contracts.
These estimates are based on current market returns as
well as expectations about future economic and fnancial
developments.
Assumptions on future expense are based on current
expense levels, adjusted for expected expense infation
if appropriate.
over an investee. This determination requires signifcant
judgement. In making this judgement, the Group evaluates,
whether it has power over the investee, exposure or rights
to variable returns from its involvement with the investee
and the ability to use its power over the investee to affect
the amount of the Groups returns.
Although the Group holds 51% of the equity shares of
Sable Chemical Industries Limited (Sable), it has no
control over the relevant activities of the entity. The Group
exercises signifcant infuence by virtue of its contractual
right to appoint two directors to the board of directors
of that company. The Sable board of directors has 9
directors. The investment in Sable is therefore accounted
for as an associate using the equity method.
2.30.2 Critical accounting estimates and assumptions
The group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by
defnition, seldom equal the related actual results. The
estimates and assumptions that have a signifcant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next fnancial year, are
described below.
(a) Valuation of insurance contract liabilities
(i) Non-life insurance (which comprises general
insurance) contract liabilities
For non-life insurance contracts, estimates have to
be made both for the expected ultimate cost of claims
reported at the reporting date and for the expected
ultimate cost of claims incurred but not yet reported at the
reporting date (IBNR).
Insurance risks are unpredictable and the group recognises
that it is not always possible to forecast with absolute
precision, future claims payable under existing insurance
contracts. The ultimate cost of outstanding claims is
estimated by using a range of standard actuarial claims
projection techniques with the most common being the
chain ladder method. Overtime, the group has developed
a methodology that is aimed at establishing insurance
provisions that have an above-average likelihood of being
adequate to settle its insurance obligations.
The main assumption underlying these techniques is
that a companys past claims development experience
can be used to project future claims development and
hence ultimate claims costs. As such, these methods
extrapolate the development of paid and incurred losses,
average costs per claim and claim numbers based on the
observed development of earlier years and expected loss
ratios.
Historical claims development is mainly analysed by
accident years, but can also be further analysed by
geographical area, as well as by signifcant business
lines and claim types. Large claims are usually separately
46
Lapse and surrender rates are based on the Groups
historical experience of lapses and surrenders.
Discount rates are based on current industry risk rates,
adjusted for the Groups own risk exposure.
The assumptions used for the actuarial valuation of the
insurance contracts disclosed in this note are as follows:
Economic Rates
The economic rates were set as follows:
Variable Rate
Infation 5%
Expense 8%
Valuation interest rate 10%
Discount rate 12%
Discount rate annuitants 5%
Mortality the tables used for mortality were:
A24/29 table of Assured Lives experience in the UK in
the years 1924 to 1929. This has been found to match
reasonably closely to the experience of assured lives
in Zimbabwe.
HIV/AIDS as the HIV/AIDS pandemic develops in
Zimbabwe, the assumption concerning deaths from
the pandemic is of increasing importance. As such, a
standard AIDS loading was allowed on the mortality
rates. However the HIV/AIDS transmission rate has
been decreasing due to the increased awareness, use
of protection methods and the use of Anti-retroviral
drugs, ARVs. This means that the mortality may reach
a stable state system.
A(55), a table of annuitant experience in the UK thought
to be appropriate for annuities purchased in 1955. For
female policyholders, spouses were assumed to be
3 years older, whilst for male policyholders, spouses
were assumed to be 3 years younger.
Expenses
The allowance for expenses in the valuation should be
suffcient to ensure that expenses can be covered not only
in the next year but also in all future years. The following
were the assumptions used to project the present value
of future expenses and these were based on expense
analysis fgures for the year 2013.
For New Cashpal policies, the base year (2013)
expense per policy was set at US$ 12 per annum.
For Whole Life policies, the base year (2013) expense
per policy was set at US$ 65 per annum.
For Individual Life Funeral, the base year (2013)
expense per member was set at US$ 10 per annum
for all of the future years.
For New Individual Life Funeral, expense per member
was set at US$ 38 per annum for all of the future years.
Expense per policy assumption needs to be reviewed
continuously in line with expense infation.
Commission was allowed for as per pricing basis.
Unit growth rate This was assumed to be 10% p.a.
after the valuation date.
Bonuses Bonuses were awarded to Investment
Contracts with DPF, Conventional Annuities, Individual
Life Old Conventional Fund and Whole Life as at 31
December 2013.
Transfer to Shareholders There was no transfer of
profts from the Policyholder Fund to Shareholders as at
31 December 2013.
Planned Margins
The intention of the compulsory margins (to be added to
the best estimate assumptions) is to introduce a degree
of prudence to allow for possible adverse deviations in
experience during the expected future lifetime of the
business. These compulsory margins will at the same
time serve to an extent to defer profts and thus reduce the
risk that profts are recognised prematurely. The margins
added to the best estimate assumptions were as follows:
Assumption Margin
Mortality 7.5%
Lapse 25%
Surrender 10%
Expense infation 10%
Renewal expense 10%
Lapse Rates We have set expected future lapse rates
and these are given below:
Duration Funeral Whole Life Cashpal
Within Year 1 25% 20% 20%
Year 1 to 2 22% 12% 12%
Year 2 5% 5% 5%
The expected funeral lapse rates have been based on the
lapse experience investigation done as at 30 September
2013.
(c) Deferred tax assets and liabilities
Uncertainties exist with respect to the interpretation of
complex tax regulations and the amount and timing of
future taxable income. Given the wide range of regional
business relationships and the long-term nature and
complexity of existing contractual agreements, differences
arising between the actual results and the assumptions
made, or future changes to such assumptions, could
necessitate future adjustments to tax income and expense
already recorded.
The Group establishes provisions, based on reasonable
estimates, for possible consequences of audits by the tax
authorities of the respective countries in which it operates.
The amount of such provisions is based on various
factors, such as experience of previous tax audits and
47
differing interpretations of tax regulations by the taxable
entity and the responsible tax authority. Such differences
of interpretation may arise on a wide variety of issues,
depending on the conditions prevailing in the respective
subsidiarys domicile.
Deferred tax assets are recognised for all unused
tax losses to the extent that it is probable that taxable
proft will be available against which the losses can be
utilised. Signifcant management judgement is required
to determine the amount of deferred tax assets that can
be recognised, based on the likely timing and the level
of future taxable profts together with future tax planning
strategies.
(c) Estimated impairment of goodwill
The Group tests annually whether goodwill has suffered
any impairment, in accordance with an accounting policy
stated in note 2.8.1. The recoverable amount of Botswana
Insurance Company has been determined based on
value-in-use calculations. These calculations require the
use of estimates (refer to note 20).
d) Fair value of investment property and property,
plant and equipment
Investment property and freehold land and buildings were
valued by independent professional valuers, based on:
comparable market evidence;
complete transactions as well as transactions where
offers had been made but the transactions had not
been fnalized; and/or
returns on potential rentals in respect of properties.
In light of the above, the professional valuers used
professional judgment to adjust the market evidence
to take cognizance of the fact that properties in the
transactions may not have been comparable in size,
quality and location to properties owned by the Group.
e) Impairment of investments in associates
The Group follows the guidance of IAS 39 Financial
Instruments to determine when an associate is impaired.
This determination requires signifcant judgement. In
making this judgement, the group evaluates, among other
factors, the future cash fows expected to be generated
by the associate, expected proceeds from ultimate
disposal, expected future dividends, fnancial health of
the associate and industry and sector performance. See
note 23.2 for the impairment of the investment in Sable
Chemical Industries Limited.

2.31 Proft allocation in the Life Assurance subsidiary
company
The Board of Zimnat Life Assurance Company Limited
(Life Assurance Company), the Groups life assurance
subsidiary, in consultation with an independent actuary,
have set the proft participation rules between shareholders
and policyholders in that company. In terms of these rules
shareholder assets and life assurance noncurrent assets
(policyholder assets) in the Life Assurance Company
are managed separately, and net investment returns
from such assets are credited to shareholder funds and
policyholder funds respectively.
Shareholder funds are also credited with administration,
investment and service charges for managing policyholder
funds at rates set out in the Proft Participation Rules.
These rates are reviewed annually by the Life Assurance
Company Board, in consultation with the independent
actuary.
At statement of fnancial position date, an independent
valuation of policy holder liabilities is carried out. The
value of policy holder liabilities is then deducted from the
total value of policy holder assets. Any actuarial surplus
(i.e. excess of assets over liabilities) is split between
policy holders and shareholders as per recommendations
from the independent actuary. The surplus allocated to
shareholders is debited from the life assurance fund and
credited to the shareholders funds. If there is a defcit
(policyholder liabilities in excess of policyholder assets)
the total amount is debited against the shareholders
funds.
48
2013 2012
US$ 000 US$ 000
3 Net insurance premium revenue

3.1 Gross insurance premium revenue
Life insurance 14,239 12,070
Non-life insurance 56,768 61,389
Change in unearned premium reserve 333 2,472
Total gross premiums 71,340 75,931

3.2 Premiums ceded to reinsurers on insurance contracts
Life insurance (845) (605)
Non-life insurance (26,876) (28,605)
Change in unearned premium reserve (164) (1,653)
Total premiums ceded to reinsurers (27,885) (30,863)

Total net premiums 43,455 45,068

4 Fees and commission income
Policyholder administration and investment management services 2,553 1,127
Re-insurance commission received 5,677 7,135
Total fees and commission income 8,230 8,262
5 Realised investment income
Rental income from investment properties 1,048 546
Financial assets at fair value through proft or loss 2,230 1,826
- Interest income 1,423 864
- Dividend income 807 962
Held to maturity fnancial assets interest income 219 255
Available-for-sale fnancial assets
- Interest income - 48
Loans and receivables interest income 3 1
Total investment income 3,500 2,676

6 Net realised gains/(losses) on disposal of investments
Financial assets at fair value through proft and loss
- Equities 568 (792)
Proft on sale of property, plant and equipment 22 36
Loss on disposal of investment properties - (10)
Net realised gains/ (losses) 590 (766)

7 Net fair value gains
Fair value gains on fnancial assets 2,642 1,140
Fair value gains of investment properties 1,814 592
Net fair value gains 4,456 1,732

8 Hotel revenues
Accommodation 7,133 7,600
Food and beverages 5,349 5,161
Hotel management fees 2,822 2,024
Total hotel revenues 15,304 14,785
9 Other operating income
Share of life fund actuarial valuation surplus - 151
Motor pool income 339 364
Exchange gains 516 122
Sundry income 439 110
Total other operating income 1,294 747

49
2013 2012
US$ 000 US$ 000
10 Net insurance claims

10.1 Gross benefts and claims paid

Life insurance contracts 4,990 2,812
Non-life insurance contracts 20,802 22,019
Total gross benefts and claims paid 25,792 24,831

10.2 Gross change in insurance contract liabilities
Change in life insurance contract liabilities 6,947 5,160
Change in non-life insurance contract liabilities (1,590) (1,401)
Total gross change in insurance contract liabilities 5,357 3,759

Insurance claims and loss adjustment expenses 31,149 28,590

10.3 Claims recovered from reinsurers

Life insurance contracts (493) (43)
Non-life insurance contracts (6,257) (5,948)

Total claims recovered from reinsurers (6,750) (5,991)

10.4 Change in insurance contract liabilities ceded to reinsurers

Change in non-life insurance contract liabilities (345) (113)
Total change in contract liabilities ceded to reinsurers (345) (113)

Insurance claims and loss adjustment expenses recovered
from reinsurers (7,095) (6,104)

Net insurance claims 24,054 22,486

11 Expenses for the acquisition of insurance contracts
Commission paid 10,226 11,425
Change in deferred expenses (579) (949)
Total 9,647 10,476

12 Finance costs
Current borrowings:
Interest expense on bank loans 606 231
Interest expense on bankers acceptances 123 361

Non-current borrowings:
Interest expense on bank loans 68 49
Total fnance costs 797 641
50
2013 2012

13 Expenses by nature:
Amortisation of intangible assets 20 180 163
Impairment loss on loans and receivables 30 56 95
Impairment allowance on insurance receivables 29 18 31
Depreciation on property, plant and equipment 19 1,127 1,061
Employee benefts expense 14 12,801 12,487
Auditors remuneration 537 577
Directors remuneration 577 465
- for service as directors 202 122
- for managerial services 375 343
Other expenses 12,870 12,383
Operating and administrative expenses 28,166 27,262

14 Employee benefts expense
Salaries and wages 12,161 11,892
Social security costs 140 148
Pension costs 500 447
Total employee benefts expense 12,801 12,487
15 Hotel cost of sales
Employee benefts expense 2,559 1,815
Consumption of inventories 1,884 2,739
Total hotel cost of sales 4,443 4,554

16 Income tax expense

Current income tax:
Current income tax charge for the year 1,404 1,611
Total current income tax 1,404 1,611

Deferred income tax:
Origination of temporary differences 1,011 805
Utilisation / (carry forward) of assessed loss 371 (129)

Total deferred income tax 1,382 676

Total income tax expense 2,786 2,287

16.1 Tax recorded in other comprehensive income
Deferred income tax (note 18) (24) (98)
Total tax charge to other comprehensive income (24) (98)

51
16.2 Reconciliation of income tax expense

The tax on the Groups proft before income tax differs from the theoretical amount that would arise using the
Zimbabwean principal tax rate of 25.75% (2012: 25.75%) as follows:
2013 2012
US$ 000 US$ 000

(Loss)/proft before income tax (2,901) 5,565
Tax at Zimbabwe statutory rate of 25.75% (747) 1,433

Effects of:
Withholding tax on dividend income (76) (16)
Impact of varying tax rates 339 235
Inclusion of after tax (proft)/loss from associates in proft before tax (280) 392
Impairment charge on investment in associate 3,530 -
Expenses not deductible for income tax purposes 379 396
Income not subject to income tax (216) (1,183)
Differences arising from movements in unrealised (gains)/losses (34) 35
Differences arising from 8th schedule tax for life assurance (896) 826
Utilisation of previously unrecognised tax losses 861 41
Income tax saving as a result of solvency reserve transfer (143) 128
Adjustment in respect of prior years 69 -
Total tax charge for the year 2,786 2,287
17 Earnings per share

17.1 Basic (loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the proft attributable to the owners of the parent
by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares
purchased by the company and held as treasury shares.
2013 2012
(Loss)/proft attributable to the owners of the parent (US$000) (7,762) 1,320
Weighted average number of ordinary shares in issue 164,845,910 164,845,910

Basic (loss)/earnings per share (US cents) (4.71) 0.80

17.2 Diluted (loss)/earnings per share
Diluted (loss)/earnings per share is calculated by dividing the proft attributable to the owners of the parent
(after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary
shares outstanding during the year plus the weighted average number of ordinary shares that would be
issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The company has
non-redeemable, non-cumulative, participating, convertible preference shares. The convertible shares are
assumed to have been converted into ordinary shares. The following refects the income and share data
used in the diluted earnings per share computations:
2013 2012
(Loss)/proft attributable to the owners of the parent for
basic earnings (US$000) (7,762) 1,320
Interest on convertible preference shares - -
(Loss)/proft used to determine diluted earnings per share (7,762) 1,320

Weighted average number of ordinary shares for basic earnings per share 164,845,910 164,845,910
Effect of dilution:

Non-redeemable, non-cumulative, participating, convertible
preference shares 27,005,771 27,005,771
Weighted average number of ordinary shares adjusted
for the effect of dilution 191,851,681 191,851,681

Diluted (loss)/earnings per share (US cents) (4.05) 0.69

There have been no other transactions involving ordinary shares or potential ordinary shares between the
reporting date and the date of completion of these fnancial statements.
52
18 Income tax relating to other comprehensive income
2013
US$ 000 US$ 000 US$ 000
Before tax Tax Net of tax
amount expense amount
Exchange difference on translating outside Zimbabwe operations (3,224) - (3,224)
Net gain on available-for-sale fnancial assets (4) - (4)
Gain on revaluation of property, plant and equipment 467 (24) 443
Shadow accounting for insurance contracts (259) - (259)
Total (3,020) (24) (3,044)

2012
US$ 000 US$ 000 US$ 000
Before tax Tax Net of tax
amount expense amount
Exchange difference on translating outside Zimbabwe operations (1,375) - (1,375)
Net loss on available-for-sale fnancial assets 121 - 121
Gain on revaluation of property, plant and equipment 2,241 (98) 2,143
Shadow accounting for insurance contracts (200) - (200)
Share of associated companies other comprehensive income 493 - 493
Total 1,280 (98) 1,182
19 Property, plant and equipment
Freehold Capital
land and Machinery Furniture, work in
buildings and vehicles and fttings progress Total
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
At 31 December 2013
Opening net book amount 21,428 1,853 1,245 1,753 26,279
Gain on revaluation 467 - - - 467
Additions 824 1,008 1,746 - 3,578
Transfers 1,396 - - (1,396) -
Disposals - (161) (8) - (169)
Depreciation (316) (465) (346) - (1,127)
Exchange rate movement (463) (4) (18) - (485)
Closing net book amount 23,336 2,231 2,619 357 28,543

At 31 December 2013
Cost or valuation 23,336 3,925 4,281 357 31,899
Accumulated depreciation
and impairment - (1,694) (1,662) - (3,356)
Net book amount 23,336 2,231 2,619 357 28,543

At 31 December 2012
Opening net book amount 19,002 1,441 1,164 - 21,607
Gain on revaluation 2,241 - - - 2,241
Additions 1,356 962 479 1,753 4,550
Disposals (560) (80) (28) - (668)
Impairment loss - (75) - - (75)
Depreciation (339) (391) (331) - (1,061)
Exchange rate movement (272) (4) (39) - (315)
Closing net book amount 21,428 1,853 1,245 1,753 26,279

At 31 December 2012
Cost or valuation 21,428 3,082 2,561 1,753 28,824
Accumulated depreciation
and impairment - (1,229) (1,316) - (2,545)
Net book amount 21,428 1,853 1,245 1,753 26,279
53
19 Property, plant and equipment (continued)
During the year, the group capitalised borrowing costs amounting to US$0.188 million (2012: US$0.176 million) on
qualifying assets. The borrowing costs were capitalised at the specifc rate of borrowing of 10%.

Depreciation of US$1.127 million (2012: US$1.061 million) has been charged in other operating and administration
expenses.

If land and buildings were stated on a historical cost basis, the carrying amounts would be as follows:

2013 2012
US$ 000 US$ 000
At 31 December
Cost 7,173 6,349
Accumulated depreciation (778) (635)
Net book amount 6,395 5,714
Fair values of freehold land and buildings

The revaluation of freehold land and buildings was carried out by independent professional valuers (Bard Real
Estate and CB Richard Ellis) for the year ended 31 December 2013. The gain on revaluation net of applicable
deferred income taxes was credited to other comprehensive income and is shown in the revaluation reserve in
shareholders equity.

The freehold land and buildings valuations were based on market values which are defned as the estimated
amount for which, a property would be exchanged between knowledgeable, willing parties in an arms length
transaction. In determining the open market value estimates, comparable market evidence was considered. Refer
to note 22 for detail on the fair value of non-fnancial assets.
2013 2012
US$ 000 US$ 000

19.1 Breakdown freehold of land and buildings
Hotels properties:
Cresta Lodge - Mutare Road, Harare* 10,029 10,632
Cresta Oasis - Nelson Mandela Avenue (CBD), Harare 5,740 4,400
Residential properties:
Burnside suburb, Bulawayo 115 115
Belmont fat, Harare 29 29
Commercial properties - Offces:
Gaborone Business Park, Botswana 3,580 4,005
Zimnat House - Nelson Mandela Avenue (CBD), Harare 4,200 4,000
Total 23,693 23,181

* Includes work in progress of US$0.357 million (2012: US$1.753 million) on the Cresta Lodge refurbishment
project.

The Cresta Lodge was used a security for bank borrowings amounting to US$5.617 million (2012: US$3.985
million) (note 32).

54
20 Intangible assets

Software Goodwill Total
Cost US$ 000 US$ 000 US$ 000
At 1 January 2012 2,010 976 2,986
Additions 58 - 58
Exchange rate movements (201) (132) (333)
At 31 December 2012 1,867 844 2,711
Additions 251 - 251
Exchange rate movements (110) (68) (178)
At 31 December 2013 2,008 776 2,784

Accumulated amortisation and impairment
At 1 January 2012 (948) - (948)
Amortisation (163) - (163)
Exchange rate movements 317 - 317
At 31 December 2012 (794) - (794)
Amortisation (180) - (180)
Exchange rate movements (60) - (60)
At 31 December 2013 (1,034) - (1,034)

Net book value
At 31 December 2012 1,073 844 1,917

At 31 December 2013 974 776 1,750

Goodwill
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances
indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which
is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as
an expense and is not subsequently reversed.

Goodwill is monitored by the management at the operating segment level. The goodwill at group level arose
from the purchase of Botswana Insurance Company (BIC).
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation
of the recoverable amount of the cash-generating unit to which goodwill is allocated. Details of the key
assumptions used in the estimation of the recoverable amounts are shown below.

The recoverable amount of BIC has been determined based on value in use calculations. These calculations
use pre-tax cash fow projections based on fnancial budgets approved by BIC management and board
of directors covering a fve year period. Cash fows beyond the fve-year period are extrapolated using an
estimated growth rate of 3% (2012: 3%). The growth rate has been determined based on the long-term average
growth rate for the Botswana insurance industry in which BIC operates. The pre-tax discount rate used in the
calculations was 15%, which was consistent with prior year and based on the Botswana long-term average
interest rate. The recoverable amount was calculated as US$44 million therefore no impairment charge arose
on goodwill.

55
21 Investment properties
2013 2012
US$ 000 US$ 000

At 1 January 14,302 13,665
Additions - acquisition of property 350 -
Additions - subsequent expenditure on existing property 101 105
Disposals (295) (40)
Fair value gain 1,814 592
Exchange rate movements (54) (20)
At 31 December 16,218 14,302

21.1 Breakdown of investment properties

Commercial - Offces:
Commercial building - Zimnat Plaza, Kwame Nkrumah , Harare 8,200 6,500
Commercial building - Gweru 400 400
Commercial building - Elsworth 350 -
Commercial property - 72 Birmingham Road, Harare 2,900 2,900
Supermarket - 99 Harare Street, Harare 850 850
Residential:
Makuti House, Nyanga 250 250
Northern suburbs, Harare 2,250 2,350
Phakalane, Gaborone, Botswana 488 542
Industrial:
Warehouses - Msasa, Harare 530 510
Total 16,218 14,302

Valuation of investment properties
Revaluations have been carried out by an independent professional valuers, CB Richard Ellis and Bard Real
Estate. The valuers are registered with the Real Estate Institute of Zimbabwe and have recent experience in
the location and category of investment property held by the Group. The property valuations were carried out
on the following basis:

The implicit investment approach was applied on the commercial properties which is based on the principle
that rentals and capital values are inter-related. Hence given income produced by a property, its capital value
can be estimated. Comparable rentals inferred from other commercial properties within the locality of the
properties based on use, location, size and quality of fnishes were also used.

The residential property valuations were based on market values which were defned as the estimated
amount for which a property could be exchanged between knowledgeable, willing parties in an arms length
transaction. In determining the open market value estimates of the properties, comparable market evidence
was considered. This comprised of transactions where offers had been made but the transaction had not been
fnalised. Professional judgment was used to adjust the market evidence.

The property market is highly segmented into different sectors i.e. industrial, residential and commercial
property markets. There is further segregation on a geographical basis with some locations attracting a
higher demand than others. Property may also be acquired for speculative, investment or owner occupation
purposes. Although the different property markets may be diffcult to distinguish, each market tends to have
characteristics peculiar to it. This results in sharp differences in the values of the different properties based on
type, location and demand for the particular property.
56
22 Non-fnancial assets carried at fair value

The following table analyses the non-fnancial assets carried at fair value, by valuation method. The different
levels have been defned as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
(Level 3).

Fair value measurements
at 31 December 2013 using
Level 1 Level 2 Level 3
US$ 000 US$ 000 US$ 000
Freehold land and buildings
Hotels properties - 15,769 -
Residential properties - 144 -
Commercial properties - offces - 7,780 -
Total freehold land and buildings - 23,693 -

Investment property
Commercial properties - offces - 12,700 -
Residential properties - 2,988 -
Industrial properties - 530 -
Total investment property - 16,218 -

Total - non fnancial assets at fair value - 39,911 -

Valuation techniques used to derive fair values

Freehold land and buildings and residential investment properties:
Level 2 fair values of freehold land and buildings and residential investment properties have been derived using
the market value approach. The market values of comparable land and buildings are adjusted for differences in
key attributes such as property size. The most signifcant input into this valuation approach is the market price
per square meter.

Commercial and industrial investment properties:
Level 2 fair values of commercial and industrial investment properties have been derived using the implicit
investment approach. The rentals for the actual properties and comparable properties based on location, size
and quality of fnishes were used and adjusted for key attributes such as property size. The most signifcant
input into this valuation approach is rental per square meter.
23 Investment in associates

23.1 Movement in investment in associates
2013 2012
US$ 000 US$ 000

At 1 January 27,581 29,197
Transfer from trade investments - 121
Share of profts/(losses) 1,086 (1,520)
Share of other comprehensive income - 493
Dividends received (348) (365)
Exchange rate adjustment (1,120) (345)
Impairment charge (13,709) -
At 31 December 13,490 27,581
57
23 Investment in associates (continued)
23.2 Impairment of investment in associate

During the year the Group recorded an impairment charge of $13,709 million for its investment in Sable
Chemical Industries Limited (Sable) due to uncertainty over its future returns. Sable is currently in negotiations
with the Government of Zimbabwe with regard to the continuation of a viable electricity tariff for 2013 and
beyond. At 31 December 2013 the results of these negotiations were uncertain. In the absence of a viable
electricity tariff, doubt is cast over the going concern status of Sable. The investment has therefore been fully
impaired. The investment in Sable is part of the Zimbabwe Investments reportable segment. The impairment
loss has been included in proft or loss. The carrying value of the investment in Sable will be reassessed
once the tariff negotiations have been fnalised. A favourable outcome on the electricity tariff could result in a
reversal of the impairment, in part or in full.

The key assumption used in determining the future returns from Sable was the electricity tariff 9 cents/Kwh,
excluding Government support. The Sable summary fnancial information for the year ended 31 December
2013 as shown in note 23.3 was prepared based on a viable tariff of 3 cents/Kwh. The sensitivity analysis on
Sable and Group results of the electricity tariff is shown below:

9 cents/Kwh
Details US$ 000

Increase in Sable loss for the year ended 31 December 2013 26,520
Increase in Group loss for the year ended 31 December 2013 -

23.3 Nature of investments and summarised fnancial information for associates

Set out below are the associates of the Group as at 31 December 2013, which, in the opinion of the directors, are
material to the Group. The associates as listed below have share capital consisting solely of ordinary shares,
which are held directly by the Group. The country of incorporation is also their principal place of business. The
associates are measured using the equity method.

Nature of investment in associates 2013 and 2012:

% interest Country of Line of
Name of entity held incorporation business

Sable Chemical Industries Limited 51% Zimbabwe Note 1
Zimbabwe Fertiliser Company Limited 22.5% Zimbabwe Note 2
Minerva Risk Advisors (Private) Limited 30.25% Zimbabwe Note 3
Cresta Marakanelo Limited 35% Botswana Note 4

Note 1: Sable Chemical Industries Limited is the sole producer of Ammonium Nitrate fertiliser in Zimbabwe.

Note 2: Zimbabwe Fertiliser Company Limited is a distributer of agrochemicals.

Note 3: Minerva Risk Advisors is a provider of risk management services, insurance and reinsurance brokerage
and human resources benefts consulting in Zimbabwe.

Note 4: Cresta Marakanelo Limited provides hoteling services in Botswana and Zambia. Cresta Marakanelo
is listed. The Groupss share of the market capitalisation of Cresta Marakanelo as at 31 December 2013 was
US$7 million (2012: US$7.7 million). All the other investments in associates are unlisted and there are no
quoted market prices available for their shares.
The Group has no investments in associates in which it owns less than 20% of the ordinary share capital.
Although the Group holds 51% of the equity shares of Sable Chemical Industries Limited (Sable), it has
no control over the relevant activities of the entity. The Group exercises signifcant infuence by virtue of its
contractual right to appoint two directors to the board of directors of that company. The Sable board of directors
has nine directors. The Group does not exercise control and therefore does not consolidate Sable.

The reporting date of all material associates is 31 December. There are no contingent liabilities relating to the
Groups interest in the associates.
58
Summarised statement of fnancial position
Minerva
Sable Zimbabwe Risk
Chemical Fertiliser Advisors Cresta
Industries Company (Private) Marakanelo
Limited Limited Limited Limited
US$ 000 US$ 000 US$ 000 US$ 000
2013

Current assets
Cash and cash equivalents 1,700 6,713 3,983 2,478
Other current assets 22,732 19,115 7,371 2,849
Total current assets 24,432 25,828 11,354 5,327

Current liabilities
Financial liabilities (2,233) (8,839) - (927)
Other current liabilities (19,762) (12,247) (9,415) (3,375)
Total current liabilities (21,995) (21,086) (9,415) (4,302)

Non-current
Assets 29,848 14,645 723 19,543

Non-current liabilities
Financial liabilities - (1,640) - (2,446)
Other liabilities (5,405) (3,164) (116) (3,075)
Total non-current liabilities (5,405) (4,804) (116) (5,521)
Net assets 26,880 14,583 2,546 15,047

2012

Current assets
Cash and cash equivalents 322 3,828 3,331 1,235
Other current assets 27,324 30,946 5,476 2,215
Total current assets 27,646 34,774 8,807 3,450

Current liabilities
Financial liabilities (7,871) (14,720) - (921)
Other current liabilities (19,227) (16,358) (6,993) (2,563)
Total current liabilities (27,098) (31,078) (6,993) (3,484)

Non-current
Assets 31,857 16,116 664 20,562

Non-current liabilities
Financial liabilities - (2,356) - (2,750)
Other liabilities (5,306) (2,766) (124) (2,658)
Total non-current liabilities (5,306) (5,122) (124) (5,408)

Net assets 27,099 14,690 2,354 15,120
59
Summarised statement of comprehensive income
Minerva
Sable Zimbabwe Risk
US$ 000 US$ 000 US$ 000 US$ 000
2013

Revenue 38,795 69,175 7,380 33,956
Interest income 1,135 237 95 98
Other income 621 247 1 78
Depreciation and amortisation (2,728) (1,634) (180) (2,669)
Operating and administrative expenses (36,483) (65,659) (6,938) (27,772)
Finance costs (1,459) (2,074) - (290)
(Loss)/proft before tax from
continuing operations (119) 292 358 (3,401)
Income tax expense (98) (399) (166) (390)
(Loss)/proft after tax from
continuing operations (217) (107) 192 3,011
Other comprehensive loss - - - (14)
Total comprehensive (loss)/income (217) (107) 192 2,977

Dividends received from associate - - - 348

2012

Revenue 34,485 52,246 6,893 32,334
Interest income 1,078 50 72 93
Other income 254 147 3 -
Depreciation and amortisation (2,702) (1,335) (207) (2,547)
Operating and administrative expenses (33,635) (55,445) (5,886) (26,348)
Finance costs (3,200) (3,006) - (270)
Proft/(loss) before tax from
continuing operations (3,720) (7,343) 875 3,262
Income tax credit/ (expense) 1,248 742 (345) (144)
Proft/(loss) after tax from
continuing operations (2,472) (6,601) 530 3,118
Other comprehensive income - 2,165 - 14
Total comprehensive (loss)/income (2,472) (4,436) 530 3,132

Dividends received from associate - - - 365

60
23.4 Reconciliation of summarised fnancial information to carrying value of associates

The reconciliation of the summarised fnancial information presented to the carrying amount of the Groups
interest in associates is shown below:

Minerva
Sable Zimbabwe Risk
US$ 000 US$ 000 US$ 000 US$ 000
2013
Net assets at 31 December 26,880 14,583 2,546 15,047
Interest in associate 51% 22.5% 30.25% 35%

Share of net assets at 31 December 13,709 3,281 770 5,266
Goodwill - - - 3,878
Provision for impairment (13,709) - - -
Carrying amount at 31 December - 3,281 770 9,144
2012
Net assets at 31 December 27,099 14,690 2,354 15,120
Interest in associate 51% 22.5% 30.25% 35%

Share of net assets at 31 December 13,820 3,305 712 5,292
Goodwill - - - 4,267
Carrying amount at 31 December 13,820 3,305 712 9,559
61
24 Principal Subsidiaries

The Group had the following subsidiaries at 31 December 2013:

Proportion of Proportion of
Country of ordinary shares ordinary shares
incorporation directly held directly held by
and place of by the non-controlling
Name business Nature of business Group (%) interests (%)

Zimbabwe Investments
Zimnat Life Assurance
Company Limited Zimbabwe Life assurance 100 -
Zimnat Lion Insurance
Company Limited Zimbabwe Short-term insurance 100 -
Grand Reinsurance
(Private) Limited Zimbabwe Reinsurance 100 -
Zimnat Asset Management
Company (Private) Limited Zimbabwe Asset management 100 -
Cresta Hospitality
(Private) Limited Zimbabwe Hospitality and leisure 100 -
Freecor Holdings Limited Zimbabwe Investment holding company 100 -
Zimnat Financial Services
(Private) Limited Zimbabwe Micro-fnance 100 -

Outside Zimbabwe Investments
Botswana Insurance Company
(Proprietary) Limited Botswana Short-term insurance 62 38
Limited Uganda Short-term insurance 54 46
Neural (Proprietary) Limited Botswana Insurance Management 100 -
Cresta
Holdings Limited Botswana Hotel management 100 -
Cresta Hotels
(Proprietary) Limited South Africa Hotel management 100 -
Metonic Investments Limited Jersey Investment holding company 100 -
Trans Industries
(Proprietary) Limited Botswana Investment holding company 100 -
Teledimo (Proprietary) Limited Botswana Investment holding company 100 -
TA Investments and
Consultants Limited Jersey Investment holding company 100 -

All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary
undertakings held directly by the parent company do not differ from the proportion of ordinary shares held. The
parent company further does not have any shareholdings in the preference shares of subsidiary undertakings
included in the Group.

The total non-controlling interest at 31 December 2013 is US$13.134 million (2012: US$12.298 million), of
which US$12.662 million (2012: US$11.917 million) is for BIC and US$0.472 million (2012: US$0.381 million) is
attributed to LAC.

Cash and cash equivalents of US$0.466 million (2012: US$0.511 million) are held in Uganda and are subject to
local exchange control regulations. These local exchange control regulations provide for restrictions on exporting
capital from the country, other than through normal dividends.

62
24 Principal Subsidiaries (continued)

Summarised fnancial information on subsidiaries with material non-controlling interests

Set out below is the summarised fnancial information for each subsidiary that has non-controlling interests that
are material to the group. The information below are the amounts before inter-company eliminations.

Summarised statement of fnancial position
Botswana
Insurance Company Lion Assurance
(Proprietary) Limited Company Limited
2013 2012 2013 2012
US$ 000 US$ 000 US$ 000 US$ 000
Current
Assets 34,854 34,209 5,077 5,149
Liabilities (26,634) (29,196) (6,554) (5,773)
Total net current assets/ (liabilities) 8,220 5,013 (1,477) (624)

Non-current
Assets 15,977 18,151 5,152 3,696
Liabilities (1,131) (880) (92) (124)
Total net non-current assets 14,846 17,271 5,060 3,572

Net assets 23,066 22,284 3,583 2,948

Summarised statement of
comprehensive income

Income 19,986 18,534 5,480 5,439

Proft before income tax 6,488 6,088 825 419
Income tax expense (1,076) (1,223) (271) (259)
Proft from continuing operations 5,412 4,865 554 160
Other comprehensive income 22 505 (61) 114
Total comprehensive income 5,434 5,370 493 274

Total comprehensive income allocated to
Non-controlling interest 1,157 1,565 226 13
Dividends paid to Non-controlling interest 727 547 - -

Summarised cash fows
Cash fows from operating activities
Cash generated from operations 2,507 1,907 1,273 13
Income tax paid (207) (610) (39) (43)
Net cash generated from/(used in)
operating activities 2,300 1,297 1,234 (30)
Net cash generated from/(used in)
investing activities 1,700 (617) (1,117) (535)
Net cash used in fnancing activities (1,357) (1,602) (122) (180)
Net increase/(decrease) in cash and
cash equivalents 2,643 (922) (5) (745)
Cash and cash equivalents at the
beginning of the year 6,168 7,340 511 827
Effect of foreign currency translation (821) (250) (40) 429
Cash and cash equivalents at the
end of the year 7,990 6,168 466 511

63
2013 2012
US$ 000 US$ 000
25 Financial assets

Financial assets by measurement category
Held-to-maturity fnancial assets 3,429 6,674
Available-for-sale fnancial assets 1,081 469
Financial assets at fair value through proft or loss 31,865 23,469
Total fnancial assets 36,375 30,612

25.1 Held-to-maturity fnancial assets
Debt securities - fxed interest rate
- Listed 3,429 6,674
Total held-to-maturity fnancial assets 3,429 6,674

At the reporting date there were no held to maturity fnancial assets that were neither overdue nor
impaired. The carrying amount of held-to-maturity fnancial assets approximates the fair value.

2013 2012
US$ 000 US$ 000
25.2 Available for sale fnancial assets
Debt securities
- Unlisted 1,081 469
Total available for sale fnancial assets 1,081 469

2013 2012
US$ 000 US$ 000
25.3 Financial assets at fair value through proft or loss
Equity securities
- Listed 27,202 19,132
- Unlisted 4,663 4,337
Total fnancial assets at fair value through proft or loss 31,865 23,469

25.4 Financial assets movement
The movement of the Groups fnancial assets (excluding loans and receivables) are summarised in the table
below by measurement category:
Fair value
Held to Available through
maturity for sale proft or loss Total
US$ 000 US$ 000 US$ 000 US$ 000

At 1 January 2012 2,203 538 21,640 24,381
Additions 15,954 148 12,605 28,707
Disposals (maturities and sales) (11,476) (328) (11,204) (23,008)
Fair value gains - 121 1,140 1,261
Effects of foreign currency translation (7) (10) (712) (729)
At 31 December 2012 6,674 469 23,469 30,612
Additions 9,236 1,116 17,681 28,033
Disposals (maturities and sales) (12,726) (610) (12,162) (25,498)
Fair value gains/(losses) - (14) 2,642 2,628
Effects of foreign currency translation 245 120 235 600
At 31 December 2013 3,429 1,081 31,865 36,375
64
25.5 Fair value hierarchy
The following table presents the Groups assets that are measured at fair value at 31 December:

Total
Level 1 Level 2 Level 3 balance
2013 US$ 000 US$ 000 US$ 000 US$ 000
Assets
- Debt securities - 1,081 - 1,081
Financial assets at fair value through proft or loss
- Equity securities 27,202 594 4,069 31,865
Total assets 27,202 1,675 4,069 32,946

2012
Assets
- Debt securities - 469 - 469
Financial assets at fair value through proft or loss
- Equity securities 19,132 487 3,850 23,469
Total assets 19,132 956 3,850 23,938

The fair value hierarchy level at which a fair value measurement is categorised is determined on the basis of
the lowest level input that is signifcant to the fair value measurement in its entirety.

Classifcations are accumulated for each class of instruments and the totals for each class are presented. The
fair value hierarchy levels are explained below:

Financial instruments in level 1
The fair value of fnancial instruments traded in active markets is based on quoted market prices at the
reporting date. A market is regarded as active if quoted prices are readily and regularly available from an
exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent
actual and regularly occurring market transactions on an arms length basis. The quoted market price used
for fnancial assets held by the Group is the current bid price. These instruments are included in Level 1.
Instruments included in Level 1 comprise primarily Zimbabwe Stock Exchange, Botswana Stock Exchange
and Uganda Stock Exchange equity investments classifed as trading securities.

The fair value of fnancial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of
observable market data where it is available and rely as little as possible on entity specifc estimates. If all
signifcant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the signifcant inputs is not based on observable market data, the instrument is included in
Level 3.

Specifc valuation techniques used to value fnancial instruments include quoted market prices or dealer
quotes for similar instruments and discounted cash fow analysis.

The following table presents the changes in Level 3 equity instruments:

2013 2012
US$ 000 US$ 000
Balance at 1 January 3,850 3,218
Fair value gains 219 632
Balance at 31 December 4,069 3,850

The fair value gains on Level 3 equity instruments are reported under net fair value gains for fnancial assets
at fair value through proft or loss.

65
26 Credit quality of fnancial assets

The credit quality of fnancial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about counterparty default rates.

The maximum exposure to credit risk at the reporting date is the fair value of the fnancial assets in the
statement of fnancial position. Refer to note 48.3 for the Groups policy on credit risk.

Cash and cash equivalents
Counterparties with external rating (Global Credit Rating Company)

2013 2012
US$ 000 US$ 000
AA+ 1,649 67
AA- 8,645 2,744
A+ 1,218 1,100
BBB+ 5,288 9,617
16,800 13,528

There has been no history of default with the counterparties that the cash and cash equivalents are held
with.

Available for sale debt securities and held to maturity investments

The Group holds available for sale debt securities and held to maturity money market investments. The
counterparties which these investments are held with have a minimum credit rating of BBB. None of these
assets were past due or impaired at the reporting date. There has been no history of default with the
counterparties that these investments are held with.

Trade and other receivables

There are no external credit ratings for trade and other receivables. All counterparties are assessed before
transacting with them. There have been some defaults in the past. Most of the defaults were fully recovered
and the group has stopped transacting with counter parties with history of defaults (see note 30 for the age
analysis of trade and other receivables).

Reinsurance assets

Reinsurance is used to manage insurance risk and consequently, in the liability valuation process, reinsurance
assets are raised for expected recoveries on projected claims. This does not, however, discharge the Groups
liability as primary insurer. In addition, reinsurance debtors are raised for specifc recoveries on claims
recognised.
A detailed credit analysis is conducted for all counterparties prior to their appointment as reinsurers of the
Group. The credit analysis includes an evaluation of each counterpartys fnancial position strength, fnancial
performance, track record, and relative size and ranking within the reinsurance industry. Where available,
credit ratings of reinsurers are also taken into account. The results of these analyses form the basis for
allocating business to the appointed reinsurers. Credit exposure to reinsurers is also limited through the use
of several reinsurers. A review of these reinsurers is done at least annually.
66
2013 2012
US$ 000 US$ 000
27 Inventories
Consumables 186 264

The cost of inventories recognised as an expense and included in cost of
sales amounted to US$1.884 million (2012: US$2.739 million) (note 15).

28 Deferred acquisition costs
At 1 January 3,262 3,509
Net movement in DAC (666) (141)
Effects of exchange rate movements (220) (106)
At 31 December 2,376 3,262

29 Insurance receivables
Due from agents, brokers and intermediaries 10,858 11,445
Less: impairment allowance (200) (182)
Total insurance receivables - net 10,658 11,263

Movements in the allowance for impairment were as follows:

At 1 January 182 151
Charge for the year 18 31
At 31 December 200 182

The group does not hold any collateral as security against potential
default by all counterparties. As at 31 December 2013 insurance
receivables of US$8.882 million (2012: US$8.763 million) were fully
performing.

As of 31 December 2013, insurance receivables of US$0.563 million
(2012: US$2.237 million) were past due but not impaired. The ageing
analysis of these receivables is as follows:

3 - 6 months 332 1,263
over 6 months 231 974
563 2,237

As of 31 December 2013, insurance receivables of US$1.413 million
(2012: US$0.445 million) were impaired. The impairment allowance on
these recievables amounted to US$0.2 million (2012: US$0.18 million).
It was assessed that a portion of the recievables is expected to be
recovered. The ageing of these receivables is as follows:

3 - 6 months 167 377
over 6 months 1,246 68
1,413 445

There are no credit ratings for insurance receivables. All counter parties are assessed before transacting with
them. There have been some defaults in the past. Most of the defaults were fully recovered and the group has
stopped transacting with counter parties with history of defaults.
67
2013 2012
US$ 000 US$ 000
30 Trade and other receivables
Trade receivables 4,649 4,164
Less: allowance for impairment of trade receivables (234) (178)
Trade receivables - net 4,415 3,986
Prepayments 2,004 453
Staff loans 609 403
VAT 38 194
Sundry debtors 3,395 1,220
10,461 6,256

Trade receivables are non-interest bearing and are generally on
30 90 day terms. The fair values of trade and other receivable
approximate their carrying amounts.

Movements in the allowance for impairment were as follows:

At 1 January 178 83
Charge for the year 56 95
At 31 December 234 178

As at 31 December 2013 trade receivables of US$4.148 million
(2012: US$3.779 million) were fully performing.

As of 31 December 2013, trade receivables of US$0.210 million
(2012: US$0.113 million) were past due but not impaired.
The ageing analysis of these receivables is as follows:

3 - 6 months 210 113
over 6 months - -
210 113

As of 31 December 2013, trade receivables of US$0.291 million
(2012: US$0.272 million) were impaired. The impairment allowance on
these recievables amounted to US$0.234 million (2012: US$0.178 million).
It was assessed that a portion of the recievables is expected to be
recovered. The ageing of these receivables is as follows:

3 - 6 months - -
over 6 months 291 272
291 272

The maximum exposure to credit risk at the reporting date is the gross carrying amount of each class of
receivables. The group does not hold any collateral as security. There are no credit ratings for trade and other
receivables. All counter parties are assessed before transacting with them. There have been some defaults in
the past. Most of the defaults were fully recovered and the Group has stopped transacting with counter parties
with history of defaults.

68
2013 2013 2012 2012
Number Number
of Shares US$ 000 of Shares US$ 000
31 Issued share capital
Authorised
Ordinary shares of US$0.01 each 223,071,861 2,231 223,071,861 2,231
Non-redeemable, non-cumulative,
US$0.01 each 27,005,771 270 27,005,771 270
Cumulative convertible redeemable
preference shares of US$0.01 each 194,716 2 194,716 2
250,272,348 2,503 250,272,348 2,503

Issued and fully paid
Ordinary shares of US$0.01 as at 31 December 164,845,910 1,649 164,845,910 1,649
Non-redeemable, non-cumulative,
participating, convertible preference shares
of US$0.01 each as at 31 December 27,005,771 270 27,005,771 270
Total issued and fully paid 191,851,681 1,919 191,851,681 1,919
Unissued 58,420,667 584 58,420,667 584
Authorised 250,272,348 2,503 250,272,348 2,503

31.1 27 005 771 non-redeemable, non-cumulative, participating, convertible preference shares of $0.01 were
issued to American International Underwriters Overseas Limited (AIUO) on acquisition of AIG Zimbabwe
(Private) Limited on 28 June 2005. The preference shares have the following rights:

- to convert to ordinary shares, at any time on written notice to the Company, on an agreed basis;
- voting rights on a one to one basis with the ordinary shares;
- entitlement to non-cumulative dividends equal to the dividends that would be payable on ordinary shares
adjusted for any dividend received from Sable Chemicals Industries Limited;
- to appoint at least one director to the board of directors;
- to veto any amendment to the articles and memorandum of association of the company if such amendment
would negatively affect the rights, privileges and conditions of the preference shares.

31.2 33.8 million of the unissued ordinary shares are under the control of the directors for an indefnite period
but subject to the limitations of the Companies Act of Zimbabwe and the Zimbabwe Stock Exchange. The
balance of the unissued ordinary shares is under the control of the shareholders.

31.3 Treasury shares comprise of shares acquired on the Zimbabwe Stock Exchange by the Company. The
Company has to date paid $18,198 net of taxes for the purchase of its own shares and this has been deducted
from shareholders equity. The shares are held as treasury shares. All shares issued by the Company were
fully paid.
69
2013 2012
US$ 000 US$ 000
32 Borrowings

32.1 Borrowings per category were as follows:
Non-current
Long term bank loans 5,064 3,675

Current
Bank overdraft 1,515 1,308
Short-term bank loans 33 711
Current portion of long term bank loans 1,419 686
Total borrowings 8,031 6,380

32.2 Movements in borrowings per category were as follows:

Long term bank loans
At 1 January 4,361 516
Additions 2,808 4,954
Repayments (686) (1,109)
Long term bank loans at 31 December 6,483 4,361

Short term bank loans
At 1 January 2,019 2,383
Additions 206 637
Repayments (677) (1,001)
Short term bank loans at 31 December 1,548 2,019

The Bank borrowings comprise the following:

(i) Overdraft facility of US$1.52 million (2012: US$1.31 million) with an interest rate of 16% plus LIBOR
rate.
(ii) Long term loan of US$0.16 million (2012: US$0.34 million) with an interest rate of 17%, maturing in
2015.
(iii) Long term loan of US$5.62 million (2012: US$3.99 million) with an interest rate of 11%, maturing in June
2018.
(iii) Long term loan of US$0.70 million (2012: Nil) with an interest rate of 15%, maturing in September 2015.
(iv) Short term bank loan of US$0.03 million (2012: US$0.71 million) with an interest rate of 15% maturing
September 2014.

All borrowings are stated at amortised cost. The carrying amount of borrowings approximates fair value.

Long term borrowing of US$5.62 million (2012: US$3.99 million) is securitised by a hotel property (Cresta
Lodge). All other borrowings are unsecured.

The fnance costs incurred on borrowings during the year amounted to US$0.797 million (2012: US$0.641
million).

The Group had undrawn borrowing facilities of US$0.38 million at the reporting date (2012: Nil).

Borrowing powers
In terms of the articles of association, the Company may, at its discretion, borrow or raise any sum or
sums of money for the purpose of the Company and may secure the payment of any sum or sums of
money so borrowed or raised, but so that the aggregate amount at any time owing by the company and
its subsidiary companies( exclusive of inter-company borrowings) shall not, except with the consent of an
Ordinary Resolution of the Company in General Meeting, be equal to or greater than ffty per cent (50%) of
the net asset value of the Company and its subsidiaries from time to time. The Board shall procure that the
aggregate amount at any time owing in respect of monies borrowed shall not exceed such afore said limit.
No lender or other person dealing with the Company shall be concerned to see or enquire whether these
limits are observed.
70
2013 2012
US$ 000 US$ 000
33 Deferred income tax

Deferred income tax asset
- Deferred tax asset to be recovered within 12 months - (3)
- (3)
Deferred income tax liabilities
- Deferred tax liability to be recovered after more than 12 months 3,612 1,648
- Deferred tax liability to be recovered within 12 months 670 2,360
4,282 4,008

The net movement on the deferred income tax amount is as follows:

Deferred income tax liability:
At 1 January 4,005 3,110
Effect of restructuring (876) -
Income statement charge (note 16) 1,382 676
Amounts recorded in other comprehensive income 24 98
Effects of foreign currency translation (253) 121
At 31 December 4,282 4,005

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis. The offset amounts are as follows:

2013 2012
US$ 000 US$ 000
Losses carried forward (748) (2,012)
Provisions and other temporary differences 4,821 5,089
Insurance related items 198 524
Unrealised gains on investment securities 11 407
Total deferred income tax liability 4,282 4,008

Unrealised losses on investment securities - (3)
Total deferred income tax asset - (3)

71
2013 2012
US$ 000 US$ 000
34 Insurance and investment contract liabilities

34.1 Gross insurance contract liabilities
Short-term insurance contracts
- Claims reported and loss adjustment expenses 16,210 12,706
- Claims incurred but not reported 3,166 3,501
- Unearned premium 18,276 22,068
Long-term insurance contracts
- With fxed and guaranteed terms 4,180 3,604
Total insurance liabilities, gross 41,832 41,879

34.2 Reinsurance assets
- Claims reported and loss adjustment expenses (10,757) (7,924)
- Claims incurred but not reported (1,079) (1,232)
- Unearned premium (7,484) (8,856)
Total reinsurers share of insurance liabilities (19,320) (18,012)

34.3 Net insurance liabilities
Short-term insurance contracts:
- Claims reported and loss adjustment expenses 5,453 4,782
- Claims incurred but not reported 2,087 2,269
- Unearned premium 10,792 13,212
Long-term insurance :
- With fxed and guaranteed terms 4,180 3,604
Total insurance liabilities, net 22,512 23,867

34.4 Investment contracts with Discretionary Participation Features
At 1 January 13,550 10,214
Movement for the year 3,300 3,336
At 31 December 16,850 13,550

34.5 Investment contracts without Discretionary Participation Features
At 1 January 7,750 5,912
Movement for the year 2,901 1,838
At 31 December 10,651 7,750

34.6 Insurance contract liabilities
At 1 January 41,879 43,729
Movement for the year (47) (1,850)
At 31 December 41,832 41,879
35 Deferred income
At 1 January 1,603 1,834
Net movement (212) (167)
Foreign exchange adjustment (158) (64)
At 31 December 1,233 1,603

72
2013 2012
US$ 000 US$ 000
36 Insurance payables
Amounts payable on direct insurance business
At 1 January 1,575 3,171
Net movement for the year 2,529 (1,488)
Foreign exchange adjustment (145) (108)
At 31 December 3,959 1,575

37 Provisions
At 1 January 1,293 1,799
Charge to income statement 490 471
Used during the year (425) (940)
Exchange difference (55) (37)
At 31 December 1,303 1,293

Provisions comprise:
- Leave pay of US$0.470 million (2012: US$0.312 million). This relates to an obligation of the group to
compensate employees for future absences attributable to employees services already rendered.

- Bonus provision of US$0.833 million (2012: US$0.896 million). This is a performance bonus which is usually
paid within 3 months of the fnalisation of audited fnancial statements, subject to cash fow availability.

- Other general provisions of US$ Nil (2012: US$0.085 million).
2013 2012
US$ 000 US$ 000
38 Trade and other payables
Trade payables 2,030 2,039
Accrued expenses 3,076 2,567
Actuary fees 141 158
Value Added Tax 680 435
Guest deposits 263 260
Sundry payables 980 1,096
7,170 6,555

39 Taxation
At 1 January (618) (930)
Income statement charge (note 16) 1,404 1,611
Payments made on account during the year (823) (1,230)
Foreign exchange adjustment 1 (69)
At 31 December (36) (618)
73
2013 2012
40 Cash generated from operating activities
(Loss)/proft before income tax from continuing operations (2,901) 5,565

Non-cash items and separately disclosed items
Rental income 5 (1,048) (546)
Interest income 5 (1,645) (1,168)
Dividends received 5 (807) (962)
Finance cost 12 797 641
Realised (gains)/ losses on disposal of investments 6 (568) 766
Impairment of property, plant and equipment 19 - 75
Fair value gains recorded in the income statement 7 (4,456) (1,732)
Share of associated companies (profts)/losses before income tax 23 (1,086) 1,520
Impairment of trade and insurance receivables 73 126
Increase in provisions 37 490 471
Depreciation of property, plant and equipment 19 1,127 1,061
Share of life fund actuarial valuation - (151)
Proft on disposal of property, plant and equipment 6 (22) (36)
Proft on disposal of investment property - 10
Amortisation of intangible asset 20 180 163
Gross change in life fund liabilities 5,122 4,000
Impairment charge on investment in associate 23 13,709 -

Changes in working capital
Decrease/(increase) in inventories 79 (6)
(Increase)/decrease in reinsurance receivables (1,307) 481
Decrease in deferred acquisition costs 886 278
Decrease/(increase) in insurance receivables 587 (1,009)
Increase in trade and other receivables (4,260) (796)
Decrease in insurance contract liabilities (792) (1,625)
Decrease in deferred revenue (211) (260)
Increase/(decrease) in insurance payables 2,529 (1,897)
Increase in trade and other payables 618 2,051

Cash generated from operating activities 7,094 7,020

41 Cash and cash equivalents
Cash and bank balances 16,800 13,528
16,800 13,528

The carrying amounts disclosed above reasonably approximate fair value at statement of fnancial position
date.

74
42 Analysis of fnancial performance attributable to shareholders and policyholders

Included in the Groups income statement for the year ended 31 December 2013 is the fnancial performance
of Zimnat Life Fund. The fnancial performance of Zimnat Life Fund is attributable to policyholders. In terms of
the Insurance and Pensions Commissions Act (Chapter 24:21), separate accounting records are maintained
for shareholders and policyholders with regards to life assurance. The analysis of the fnancial performance
attributable to shareholders and policyholders is shown below:
Shareholder Policyholder Group Shareholder Policyholder Group
2013 2013 2013 2012 2012 2012
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
INCOME
Gross insurance
premium revenue 64,818 6,522 71,340 69,733 6,198 75,931
Insurance premiums ceded
to reinsurers on
insurance contracts (27,821) (64) (27,885) (30,832) (31) (30,863)

Net insurance
premium revenue 36,997 6,458 43,455 38,901 6,167 45,068

Fees and commission income 8,211 19 8,230 8,251 11 8,262
Realised investment income 2,154 1,346 3,500 1,652 1,024 2,676
Net realised losses on
disposal of investments 328 262 590 (20) (746) (766)
Net fair value gains 2,632 1,824 4,456 573 1,159 1,732
Hotel revenues 15,304 - 15,304 14,785 - 14,785
Other operating income 1,210 84 1,294 700 47 747

Total income 66,836 9,993 76,829 64,842 7,662 72,504

EXPENSES
Insurance claims and loss
adjustment expenses (22,361) (8,788) (31,149) (22,014) (6,576) (28,590)
Insurance claims and loss
adjustment expenses
recovered from reinsurers 7,095 - 7,095 6,104 - 6,104

Net insurance claims (15,266) (8,788) (24,054) (15,910) (6,576) (22,486)

Expenses on acquisition of
insurance contracts (9,639) (8) (9,647) (10,464) (12) (10,476)
Finance costs (797) - (797) (641) - (641)
Hotel cost of sales (4,443) - (4,443) (4,554) - (4,554)
Operating and
administrative expenses (27,030) (1,136) (28,166) (26,224) (1,038) (27,262)

Total expenses (57,175) (9,932) (67,107) (57,793) (7,626) (65,419)

Proft before share of
proft of associates 9,661 61 9,722 7,049 36 7,085
Share of profts/ (losses)
of associates 1,086 - 1,086 (1,520) - (1,520)
Impairment charge (13,709) - (13,709) - - -

Loss/(proft) before tax (2,962) 61 (2,901) 5,529 36 5,565
Income tax expense (2,725) (61) (2,786) (2,251) (36) (2,287)

(Loss)/proft for the year (5,687) - (5,687) 3,278 - 3,278
75
43 Analysis of shareholder and policyholder assets and liabilities

Included in the Groups consolidated statement of fnancial position at 31 December 2013 are the assets
and liabilities of Zimnat Life Fund. The assets and liabilities of Zimnat Life Fund comprise life assurance
policyholder assets and liabilities. In terms of the Insurance and Pensions Commissions Act (Chapter 24:21),
separate accounting records are maintained for shareholders and policyholders with regards to life assurance.
The analysis of assets and liabilities attributable to shareholders and assets and liabilities attributable to
policyholders is shown below:

Shareholder Policyholder Group Shareholder Policyholder Group
2013 2013 2013 2012 2012 2012
ASSETS US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000

Property, plant and equipment 24,343 4,200 28,543 22,279 4,000 26,279
Intangible assets 1,750 - 1,750 1,917 - 1,917
Investment properties 11,278 4,940 16,218 9,362 4,940 14,302
Investment in associates 13,490 - 13,490 27,581 - 27,581
Financial assets 15,220 21,155 36,375 15,713 14,899 30,612
Deferred tax asset - - - 3 - 3
Inventory 186 - 186 264 - 264
Reinsurance assets 19,320 - 19,320 18,012 - 18,012
Deferred acquisition costs 2,376 - 2,376 3,262 - 3,262
Insurance receivables 10,658 - 10,658 11,263 - 11,263
Trade and other receivables 10,123 338 10,461 5,488 768 6,256
Taxation receivable/(payable) 49 (13) 36 618 - 618
Cash and cash equivalents 16,095 705 16,800 13,509 19 13,528
Total assets 124,888 31,325 156,213 129,271 24,626 153,897

Equity
Issued share capital 1,919 - 1,919 1,919 - 1,919
Non distributable reserves 22,122 - 22,122 22,861 - 22,861
Available for-sale fnancial
assets reserve - - - 17 - 17
Foreign currency
translation reserve (5,989) - (5,989) (3,469) - (3,469)
Revaluation reserve 33,613 - 33,613 30,737 - 30,737
Treasury shares (18) - (18) (18) - (18)
Retained earnings (3,879) - (3,879) 4,959 - 4,959
Equity attributable to equity
holders of the parent 47,768 - 47,768 57,006 - 57,006
Non-controlling interests 13,134 - 13,134 12,298 - 12,298
Total equity 60,902 - 60,902 69,304 - 69,304

Liabilities
Borrowings 8,031 - 8,031 6,380 - 6,380
Deferred tax liability 4,282 - 4,282 4,008 - 4,008
Deferred income 1,233 - 1,233 1,603 - 1,603
Investment contracts with DPF - 16,850 16,850 - 13,550 13,550
Investment contracts - 10,651 10,651 - 7,750 7,750
Insurance contract liabilities 38,108 3,724 41,832 38,900 2,979 41,879
Insurance payables 3,959 - 3,959 1,575 - 1,575
Provisions 1,303 - 1,303 1,293 - 1,293
Trade and other payables 7,070 100 7,170 6,208 347 6,555
Total liabilities 63,986 31,325 95,311 59,967 24,626 84,593

Total equity and liabilities 124,888 31,325 156,213 129,271 24,626 153,897

76
44 Segment information

As per note 2.29, the Group Executive Committee considers the business from a geographic perspective
(Zimbabwe and Outside Zimbabwe), when making decisions. No revenues derived from a single customer
exceeded 10% of revenues in both 2013 and 2012.

Zimbabwe Investments earn income from the provision of short-term insurance, long-term insurance and
hotel services. Outside Zimbabwe Investments earn income from the provision of short-term insurance and
hotel services.

Zimbabwe Outside Zimbabwe
investments investments Group
2013 2013 2013
US$ 000 US$ 000 US$ 000
REPORTABLE SEGMENT
INFORMATION

Income
Total segment income 49,567 28,676 78,243
Intersegmental income (949) (465) (1,414)
Income from external customers 48,618 28,211 76,829

Expenses
Net Insurance claims incurred (16,033) (8,021) (24,054)
Hotel cost of sales (4,443) - (4,443)
Operating and administrative expenses (23,666) (14,147) (37,813)
Total expenses (44,142) (22,168) (66,310)

Reportable segment proft before
interest and share of associates proft 4,476 6,043 10,519
Finance costs (793) (4) (797)
Share of associated companies
proft after tax 32 1,054 1,086
Impairment of associate (13,709) - (13,709)
Reportable segment
(loss)/proft before tax (9,994) 7,093 (2,901)

Income tax expense (1,242) (1,544) (2,786)
Reportable segment
(loss)/proft after tax (11,236) 5,549 (5,687)

Attributable to:
Owners of the parent (11,236) 3,474 (7,762)
Non -controlling interests - 2,075 2,075
(Loss)/proft for the year (11,236) 5,549 (5,687)

Segment assets 82,591 73,622 156,213
Investment in associates included
in segment assets 4,346 9,144 13,490

Segment liabilities 59,622 35,689 95,311

Additions to non-current assets 4,138 142 4,280

Depreciation and amortisation (1,223) (84) (1,307)

Interest income 1,219 426 1,645
77
44 Segment information (continued)

Information about services:
Life Short-term
Hotels Insurance Insurance Group
2013 2013 2013 2013
US$ 000 US$ 000 US$ 000 US$ 000
Income 15,304 21,775 39,750 76,829

Information about geographical areas:

Zimbabwe Uganda Botswana South Africa Group
2013 2013 2013 2013 2013
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000
Income 48,618 5,480 21,984 747 76,829

Capital expenditure 3,449 - 129 - 3,578

Non-current assets 71,290 5,152 19,923 10 96,375

78
Zimbabwe Outside Zimbabwe
Investments investments Group
2012 2012 2012
US$ 000 US$ 000 US$ 000
REPORTABLE SEGMENT
INFORMATION

Income
Total segment income 43,313 30,343 73,656
Intersegmental income (747) (405) (1,152)
Income from external customers 42,566 29,938 72,504

Expenses
Net insurance claims incurred (12,617) (9,869) (22,486)
Hotel cost of sales (4,554) - (4,554)
Operating and administrative expenses (23,107) (14,631) (37,738)
Total expenses (40,278) (24,500) (64,778)

Reportable segment
proft before interest
and share of associates proft 2,288 5,438 7,726
Finance costs (614) (27) (641)
Share of associated companies (loss)/proft after tax (2,523) 1,003 (1,520)
Reportable segment (loss)/proft before tax (849) 6,414 5,565

Income tax expense (346) (1,941) (2,287)
Reportable segment (loss)/proft after tax (1,195) 4,473 3,278

Attributable to:
Owners of the parent (1,195) 2,515 1,320
Non-controlling interests - 1,958 1,958
(Loss)/proft for the year (1,195) 4,473 3,278

Segment assets 79,943 73,954 153,897
Investment in associates included
in segment assets 18,030 9,551 27,581

Segment liabilities 46,616 37,977 84,593

Additions to non-current assets 4,517 33 4,550

Depreciation and amortisation (1,129) (95) (1,224)

Interest income 945 223 1,168

79
Information about products and services:
Life Short-term
Hotels Insurance Insurance Group
2012 2012 2012 2012
US$ 000 US$ 000 US$ 000 US$ 000

Income 14,785 14,951 42,768 72,504

Information about geographical areas:

Zimbabwe Uganda Botswana South Africa Group
2012 2012 2012 2012 2012
US$ 000 US$ 000 US$ 000 US$ 000 US$ 000

Income 42,566 5,022 22,892 2,024 72,504

Capital expenditure 4,517 - 33 - 4,550

Non current assets 73,062 2,984 24,533 113 100,692
45 Commitments and contingencies

During 2007, the owners of Cresta Royale (Catwall Limited), Ghana, terminated the management contract
with Cresta Hospitality Holdings (CHH). CHH sued the owners for loss of revenue on the basis that the
termination of the contract was not procedural per the terms of the agreement. Trans Industries (TI) gave a
US$50,000 guarantee for the payment of legal fees, in the case between CHH and Catwall. It is expected that
the case will go in CHHs favour and therefore there is no expected outfow of resources. It is not possible to
determine the amount receivable by CHH should the case be ruled in CHHs favour.

Operating lease commitments - Group as lessee

The Group has entered into commercial leases on three hotel properties and offces. These leases have an
average life of between one and four years with a renewal option included in the contracts. There are no
restrictions placed upon the Group by entering into these leases. Future minimum rentals payable under non-
cancellable operating leases as at 31 December are as follows:

2013 2012
US$ 000 US$ 000

Within one year 456 400
After one year but not more than fve years 1,559 897
2,015 1,297

Operating lease commitments - Group as lessor
The Group has entered into commercial property leases on its investment property portfolio, consisting of
commercial, residential and industrial properties. These non-cancellable leases have remaining terms of
between one to three years. Future minimum rentals receivable under non-cancellable operating leases as
at 31 December are as follows:
2013 2012
US$ 000 US$ 000

Within one year 660 655
After one year but not more than fve years 184 25
844 680

80
46 Related party disclosures

The Group has related party relationships with its shareholders who own, directly or indirectly, 10% or more
of its share capital or those shareholders who control in any manner, the election of the majority of the
directors of the Group or have the power to exercise controlling infuence over the management or fnancial
and operating policies of the Group. The related parties to the Group which include subsidiaries, associates
and key management personnel are listed on pages 2 and 3 of the annual report. The list of the top ten
shareholders is on page 91 of the annual report. Balances and transactions between TA and its subsidiaries,
which are related parties of the Company, have been eliminated on consolidation and are not disclosed in
this note.

(a) Transactions with related parties
The Group enters into transactions with its associates and key management personnel in the normal course
of business. The transactions with related parties are made at normal market prices. Details of signifcant
transactions carried out during the year with related parties are as follows:

2013 2012
US$ 000 US$ 000

Sale of insurance contracts
- to associates 1,188 2,105
- through an associate 5,037 6,646
6,225 8,751
(b) Balances with related parties

Receivables from related parties
- Associates (insurance contracts) 71 255
Payables to related parties
- Associates (insurance contracts) - 71

(c) Key management remuneration
Short-term employee benefts 354 326
Post employment benefts 21 17
375 343
The following translation rates to the
US$ were used in the compilation
of these fnancial statements:

2013 2013 2012 2012
Closing Average Closing Average
47 US$ Translation rates
GBP/US$ 1.649 1.564 1.615 1.585
US$/BWP 8.646 8.279 7.652 7.493
US$/UGX 2527.000 2555.090 2643.670 2469.550
BWP/UGX 280.890 300.625 334.897 319.129
US$/ZAR 10.488 9.635 8.473 8.197
BWP/ZAR 1.181 1.131 1.073 1.059
EUR/US$ 1.377 1.328 1.322 1.286

BWP Botswana Pula
GBP British Pound Sterling
UGX Uganda Schillings
US$ United States Dollar
ZAR South African Rand
81
48.2.1 Foreign currency risk
As a result of signifcant investment operations in
Botswana, Uganda and South Africa, the Groups
statement of fnancial position can be affected signifcantly
by movements in the US$ to the other currencies
exchange rate. The Group also has transactional currency
exposures. Such exposure arises from normal trading
activities as well as investments by an operational unit in
currencies other than the units functional currency.
The Group mitigates foreign currency risk by ensuring
fnancial assets are primarily denominated in the same
currencies as its insurance contract liabilities. And
ensuring that there is a balance between total assets
attributable to group companies whose functional
currency is the same as the holding companys and group
companies whose functional currency is different from the
holding companys. Approximately 47% (2012: 56%) of
the Groups total assets are denominated in currencies
other than the functional currency of the holding company.
A strengthening or weakening in foreign exchange
rates against the US$ of 10%, with all other variables
held constant would result in the following changes in
shareholders equity at 31 December 2013 and proft after
tax for the year then ended:
10 % strengthening:
2013 2013 2013 2012 2012 2012
Currency BWP UGX ZAR BWP UGX ZAR
US$
Equivalent US$000 US$000 US$000 US$000 US$000 US$000
Increase in 1,735 398 91 7,360 327 78
shareholders
equity
Increase/ 536 61 30 391 17 (17)
(decrease)
in proft
after tax
10 % weakening:
2013 2013 2013 2012 2012 2012
US$
Equivalent US$000 US$000 US$000 US$000 US$000 US$000
Decrease in 1,419 718 74 6,022 643 64
shareholders
equity
Decrease/ 438 50 24 321 12 (14)
(increase)
in proft
after tax
48 Financial risk management
48.1 Risk management objectives and policies
The primary objective of the Groups risk management
framework is to protect the Groups shareholders from
events that hinder the sustainable achievement of
fnancial performance objectives, including failing to
exploit opportunities. Key management recognises the
critical importance of having effcient and effective risk
management systems in place.
The Group is exposed to fnancial risk through its fnancial
assets and fnancial liabilities. The Groups principal
fnancial liabilities comprise bank loans and overdrafts,
trade payable, other loans and insurance contract
liabilities. The main purpose of these fnancial liabilities
is to raise fnance for the Groups operations. The Group
has various fnancial assets such as shares in listed and
unlisted entities, trade receivables and cash and short-
term deposits, which arise directly from its operations.
The Groups policy is to manage fnancial risk separately
through its operations subject to monitoring by the
Board Investment Committee. The risks arising from
policyholder and shareholder fnancial instruments are
similar in nature, as such no distinction has been made
in assessing the quantitative effects of the fnancial risks
emanating from these fnancial instruments.
The policies for managing each of these risks are
summarised below:
48.2 Market risk
Market risk is the risk that the fair value or future cash
fows of a fnancial instrument will fuctuate because of
changes in market prices. Market risk comprises three
types of risk: foreign exchange rates (currency risk),
market interest rates (interest rate risk) and market prices
(price risk).
Group market risk policy sets out the assessment and
determination of what constitutes market risk for the
Group. Compliance with the policy is monitored and
exposures and breaches are reported to the Group risk
committee. The policy is reviewed regularly for pertinence
and for changes in the risk environment.
The Group has set an asset allocation and portfolio limit
structure, to ensure that assets back specifc policyholders
liabilities and that assets are held to deliver income and
gains for policyholders which are in line with expectations
of the policyholders.
The objective of market risk management is to manage
and control market risk exposures within acceptable
parameters, whilst optimising the Groups proftability.
82
The table below summarises the groups monetary assets
and liabilities, which are denominated in a currency other
than the United States Dollar:
2013 2012
US$ US$000 US$000 US$000 US$000 US$000 US$000
equivalent
Monetary 38,855 10,569 923 32,251 5,066 695
assets
Monetary 26,995 6,711 126 1,093 1,215 16
liabilities
The maximum exposure to foreign currency risk at the
reporting date is limited to the net asset value of Outside
Zimbabwe Investments of US$37.933 million (2012:
US$35.977 million).
48.2.2 Interest rate risk
Interest rate risk is the risk that the value or future cash
changes in market interest rates. This risk arises from the
Groups investment in debt securities and its borrowings
which comprise overdraft facilities and short-term and
long-term bank loans
Floating rate instruments expose the Group to cash fow
interest risk, whereas fxed interest rate instruments
expose the Group to fair value interest risk.
The Groups interest risk policy requires it to manage
interest rate risk by maintaining an appropriate mix of fxed
and variable rate instruments. The policy also requires it to
manage the maturities of interest bearing fnancial assets
and interest bearing fnancial liabilities. Interest on foating
rate instruments is re-priced at intervals of less than one
year. Interest on fxed interest rate instruments is priced
at inception of the fnancial instrument and is fxed until
maturity.
The Group has no signifcant concentration of interest rate
risk.

An increase or decrease by 5 basis points (5%) in the
respective interest rates would result in the following
changes in fair values of the interest bearing borrowings:

2013 2012
5% 5% 5% 5%
increase decrease increase decrease
US$000 US$000 US$000 US$000
Increase /
(decrease)
in long-term
bank loans (481) 880 (338) 618
As at 31 December 2013, an increase or decrease of 5%
in the interest rates relating to interest bearing borrowings
and debt securities, with all other variables held constant,
would result in an increase/ decrease in proft after tax by
US$ 29,606 (2012: US$21,191).
48.2.3 Price risk
Equity price risk is the risk that the fair value of future cash
changes in market prices (other than those arising from
interest rate risk or currency risk), whether those changes
are caused by factors specifc to the individual fnancial
instrument or its issuer, or factors affecting all similar
fnancial instruments traded in the market.
The Groups equity price risk arises as a result of fnancial
assets (i.e. listed, fair value through proft, equity securities)
whose values will fuctuate as a result of changes in
market prices, principally investment securities not held
for the account of unit-linked business.
The Groups price risk policy requires it to manage such
risks by setting and monitoring objectives and constraints
on investments, diversifcation plans and limits on
investments in each country, sector and market. The
Group has no signifcant concentration of price risk.
At 31 December 2013, the fair value of equities exposed
to price risk was US$31.865 million (2012: US$23.469
million). A 5% increase/decrease in each individual unit
price would result in an increase or decrease in proft after
tax by US$1.593 million (2012: US$1.174 million).
The Group has no signifcant concentration of price risk.
48.3 Credit risk
Credit risk is the risk of fnancial loss to the Group if a
customer or counter party to a fnancial instrument fails
to meet its contractual obligations. The Groups exposure
to credit risk arises mainly from amounts due from
customers and insurance policyholders, amounts due
from underwriting agencies and brokers, reinsurance
assets and investments in debt securities and cash and
cash equivalents.
The Group trades only with recognised creditworthy
third parties. It is the Groups policy that all third parties
who wish to trade on credit terms are subject to credit
verifcation procedures. In addition, receivable balances
are monitored on an on-going basis. With respect to
credit risk arising from other fnancial assets of the Group,
which comprise cash and cash equivalents, loans and
receivables and debt securities, the Groups exposure to
credit risk arises from default of the counterparty, with a
maximum exposure equal to the carrying amount of these
instruments at the reporting date, of US$47.140 million
(2012: US$43.844 million).
The Group has no signifcant concentration of credit risk.
48.4 Liquidity risk
Liquidity risk is the risk that the Group will not be able to

83
meet its fnancial obligations as they fall due. The Groups
exposure to liquidity risk relates mainly to borrowings,
investment contracts and their liabilities, insurance
contracts and their liabilities and trade and other payables.
The Groups approach to managing liquidity is to ensure,
as far as possible, that it will always have suffcient
liquidity to meet its liabilities as they fall due, without
incurring unacceptable losses or risking damage to the
Groups reputation. The Group manages liquidity risk
by maintaining adequate cash resources and banking
facilities and by continuously monitoring forecast and
actual cash fows.
The maximum exposure to liquidity risk at the reporting date
is limited to the carrying amount of the Groups monetary
liabilities of US$46.661 million (2012: US$35.810 million).
The table below summarises the maturity profle of the
Groups fnancial liabilities at 31 December 2013:
Maturity profle for liabilities
Year ended 31 December 2013
3 months 3-12 1-5 Beyond
months years 5 years
US$000 US$000 US$000 US$000
Borrowings 389 2,985 5,540 -
Investment 232 425 10,132 6,061
contracts
with DPF
Investment 132 406 7,534 2,579
contracts
Insurance 990 2,969 - -
payables
Trade and 8,795 - - -
other payables
Year ended 31 December 2012
3 months 3-12 1-5 Beyond
months years 5 years
US$000 US$000 US$000 US$000
Borrowings 2,019 - 5,451 -
Investment 355 1,064 11,908 223
contracts
with DPF
Investment 304 936 6,510 -
contracts
Insurance 394 1,181 - -
payables
Trade and 6,555 - - -
other payables
The maturity analysis for investment contracts with
discretionary participation features have been determined
by the Groups actuaries based on an assessment of the
history of bonus declarations made to policyholders.

48.5 Operational risks
Operational risk is the risk of loss arising from system
failure, human error, fraud or external events. The
Groups objective in managing operational risks is to
ensure that controls are operating effectively so as to
avoid damage to reputation, adverse legal or regulatory
implications or fnancial loss. The Group cannot expect to
eliminate all operational risks, but by initiating a rigorous
control framework and by monitoring and responding to
potential risks, the Group is able to manage the risks.
Controls include effective segregation of duties, access
controls, authorisation and reconciliation procedures,
staff education and assessment processes, including the
use of internal audit. Business risks such as changes in
environment, technology and the industry are monitored
through the Groups strategic planning and budgeting
process.
48.6 Insurance risk
The Group issues contracts that transfer insurance risk or
fnancial risk or both. This section summarises these risks
and the way the Group manages them.
Motor - Provides indemnity for losses in relation to all
types of motor vehicles. The risks covered by this type of
contract include fre, theft, impact, and third party liability
cover, excluding liability that is covered in terms of the
Road Traffc Act.
Fire - Provides indemnity for damages to immovable
property, for the value of the property as well as
consequential loss, sustained through fre, storm, wind,
water or earthquakes, including mining tremors. The
properties insured are residential (for personal use) and
commercial.
Engineering - Provides indemnity for losses sustained as
a result of structural damages to construction work.
Marine - This cover protects the insured against
accidental damage to or loss of the vessel and machinery
and any third party liabilities arising from the use of such
equipment. It also includes goods in transit which covers
the goods moving inland.
Financial lines - Includes commercial crime insurance,
fdelity guarantees and professional indemnity insurance
which covers the fnancial losses caused by the insureds
(contracting party and its employees) wrongful acts to
third parties and fraud.
Long term insurance contracts
Individual life assurance - provides affordable funeral
assurance products for individuals to a specifed maximum
limit insured.
Group life assurance - provides employees of a defned
group cover in the event of death in service.
84
48.6 Insurance risk (continued)
Long term insurance contracts (continued)
Group pension plans - are investment vehicles for a defned group of employees, where contributions by both the
employer and the employee are invested to provide a monthly pension at retirement. This includes defned beneft and
contribution plans.
The life insurance business is only written in Zimbabwe through the Groups subsidiary, Zimnat Life Assurance Company
Limited.
Risks under insurance contracts
The principal risks the Group faces under insurance contracts are as follows:
fuctuations in the timing, frequency and severity of claims and claim settlements relative to expectations;
inadequate reinsurance protection or other risk transfer techniques;
inaccurate pricing of risks when underwritten; and
inadequate reserving.
The risks under any one insurance contract are the frequency with which the insured event occurs and the uncertainty
of the amount of the resulting claims. For a portfolio of insurance contracts where the theory of probability is applied to
pricing and reserving, the principal risks the Group faces are that the actual claims and beneft payments exceed the
premiums charged for the risks assumed and that the reserves set aside for policyholders liabilities, whether they are
known or still to be reported, prove to be insuffcient.
By the very nature of an insurance contract, this risk is random and therefore unpredictable. Changing risk parameters
and unforeseen factors, such as patterns of crime, economic and geographical circumstances, may result in unexpectedly
large claims. Insurance events are random and the actual number of claims and benefts will vary from year to year.
The Groups underwriting strategy is designed to ensure that risks are well diversifed in terms of type of risk and level of
insured benefts. This is largely achieved through diversifcation across industry sectors and geography, regular review of
actual claims experience and product pricing, as well as detailed claims handling procedures. Underwriting limits are in
place to enforce appropriate risk selection criteria. For example, the Group has the right not to renew individual policies, it
can impose deductibles and it has the right to reject the payment of fraudulent claims. Insurance contracts also entitle the
Group to pursue third parties for payment of some or all costs. The Group further enforces a policy of actively managing
and promptly pursuing claims, in order to reduce its exposure to unpredictable future developments that can negatively
impact the Group.

Concentration of insurance liabilities
The concentration of the Groups short term insurance liabilities and life insurance liabilities is shown below.
2013 2012
Group pension 50% 52%
Motor 12% 21%
Individual life 6% 8%
Fire 6% 4%
Engineering 4% 1%
Marine 1% 0%
Financial lines 2% 1%
Group life 1% 1%
Other 18% 12%
100% 100%
Refer to note 43 for further analysis of the liabilities between policyholder and shareholder insurance liabilities.
Claims
The principal risk the Group faces under insurance contracts is that the actual claims and beneft payments or the timing
thereof, differ from expectations. This is infuenced by the frequency of claims, severity of claims, actual benefts paid and
subsequent development of longterm claims. Therefore, the objective of the Group is to ensure that suffcient reserves
are available to cover these liabilities.
The risk exposure is mitigated by diversifcation across a large portfolio of insurance contracts and geographical areas.
The variability of risks is also improved by careful selection and implementation of underwriting strategy guidelines, as
well as the use of reinsurance arrangements.
85
Reinsurance
The Group purchases reinsurance as part of its risks mitigation programme. Reinsurance ceded is placed on both a
proportional and nonproportional basis. The majority of proportional reinsurance is quotashare reinsurance which is
taken out to reduce the overall exposure of the Group to certain classes of business. Nonproportional reinsurance is
primarily excess-of-loss reinsurance designed to mitigate the groups net exposure to catastrophe losses. Retention
limits for the excessofloss reinsurance vary by product line and territory. Amounts recoverable from reinsurers are
estimated in a manner consistent with the outstanding claims provision and are in accordance with the reinsurance
contracts. Although the Group has reinsurance arrangements, it is not relieved of its direct obligations to its policyholders
and thus a credit exposure exists with respect to ceded insurance, to the extent that any reinsurer is unable to meet its
obligations assumed under such reinsurance agreements. The Groups placement of reinsurance is diversifed such that
it is neither dependent on a single reinsurer nor are the operations of the Group substantially dependent upon any single
reinsurance contract.

Pricing
The Group bases its pricing policy on the theory of probability. Underwriting limits are set for underwriting managers and
intermediaries to ensure that this policy is consistently applied. The Group also has the right to re-price and change the
conditions for accepting risks on renewal. It also has the ability to impose deductibles and reject fraudulent claims.
Through the use of extensive industry knowledge, selective underwriting practices and pricing techniques, the Group is
able to produce appropriate and competitive premium rates.
The average claims ratio for the Group derived by expressing claims as a percentage of gross written premium, which is
important in monitoring insurance risk, is closely monitored and is disclosed below:
2013 2012 2011
% % %
Short-term insurance contracts 36 40 39
Long-term insurance contracts 35 36 36
Factors that aggravate insurance risk include a lack of risk diversifcation in terms of type and amount of risk, geographical
location and the industries covered. Experience shows that the larger the portfolio of similar insurance contracts, the
smaller the relative variability about the expected outcome will be.
The Group has developed its insurance underwriting strategy to diversify the type of insurance risks accepted, to achieve,
within each of these categories, a suffciently large population of risks to reduce the variability of the expected outcome.
The group underwrites insurance contracts in Zimbabwe, Botswana and Uganda.
Reserving
Short term insurance contracts
The Group primarily deals with short-tail claims since the uncertainty regarding the amounts and timing of the payments
of the claims and benefts is usually resolved within one year. Short-tail claims can be estimated with greater reliability,
and the group estimation processes refect all the factors that infuence the amount and timing of cash fows from these
contracts. The shorter settlement period for these claims allow the group to achieve a higher degree of certainty about
the estimated cost of claims, and relatively lower levels of IBNR are held at year-end.
A 5% upward/downward adjustment in the level of expected claims would result in an additional charge/ release of
approximately US$158,000 (2012: US$185,000) before reinsurance and US$104,000 (2012: US$119,000) after
reinsurance.
Estimation of the IBNR uses historical claims development information; it assumes that the historical claims development
pattern will occur again in future. There are reasons why this may not be the case. Such reasons include:
change in processes that affect the development/ recording of claims paid and incurred;
economic, legal, political and social trends;
changes in mix of business; and
random fuctuations, including the impact of large losses.
86
Reserving (continued)
Long term insurance contracts
The Groups earnings and available capital are exposed to insurance and market risks amongst others through its
insurance and asset management operations. Assumptions are made in respect of the market and insurance risks in the
measurement of policyholder liabilities. This section provides sensitivity analyses to changes in some of these variables.
The sensitivities provided cannot simply be extrapolated to determine prospective earnings forecasts and caution is
advised to any user doing this. They do, however, provide insight into the impact that changes in these risks can have
on policyholder liabilities and attributable proft after income tax.
The sensitivities affecting long term insurance risk relate to the following:
Mortality risk risk of loss arising due to policyholder death experience being different than expected
Morbidity risk risk of loss arising due to policyholder health experience being different than expected
Longevity risk risk of loss arising due to the annuitant living longer than expected
Investment return risk risk of loss arising from actual returns being different than expected
Expense risk risk of loss arising from expense experience being different than expected
Policyholder decision risk risk of loss arising due to policyholder experiences (lapses and surrenders) being
different than expected.
The upper and lower sensitivities chosen refect managements best judgement of a reasonably likely possible change in
the respective variable (i.e. managements view is that the actual experience has a 50/50 chance of falling in/out of the
range) within a twelve month period from the fnancial position date. Each range used is broadly based on applying 25%
and 75% confdence levels to the relevant historical experience. These ranges are adjusted for managements views from
time to time. The sensitivity analysis does not cover extreme or irregular events that may occur, but extreme sensitivities
are considered by the Group Risk Committee and are used in the calculation of economic capital requirements.
The table below provides a description of the sensitivities that are provided on insurance risk assumptions.
Insurance risk variable Description of sensitivity
Assurance mortality A level percentage change in the expected future mortality rates on
assurance contracts
Withdrawal A level percentage change in the policyholder withdrawal rates
Expense per policy A level percentage change in the expected maintenance expenses
Sensitivities on expected taxation have not been provided.
Insurance risk sensitivities are applied as a proportional percentage change to the assumptions made in the measurement
of policyholder liabilities.
The table below provides a description of the sensitivities provided on market risk assumptions.
Market risk variable Description of sensitivity
Interest rate yield curve A parallel shift in the interest rate yield curve
Each sensitivity is applied in isolation with all other assumptions left unchanged.
The table below summarises the impact of the change in the above risk variables on policyholder liabilities and on
ordinary shareholders equity and attributable proft after taxation. The market risk sensitivities are net of risk mitigation
activities as described in the market risk section.
Consequently the comparability to the previous year is impacted by the level of risk mitigation at the respective fnancial
position dates.
87
Reserving (continued)
Long term insurance contracts (continued)
31 December 2013
Assumption description Impact on
Change Policyholder Shareholder
in variable liabilities proft after
taxation
% US$000 US$000
Insurance assumptions
Mortality
- Assured lives +10 - (24)
-10 - 24
- Annuitant longevity* +10 21 -
-10 (19) -
Withdrawals +10 - 4
-10 - (14)
Expense per policy +10 - 32
-10 - (32)
Market assumptions
- Discount rate +10 8 -
-10 (22) -
- Equity prices +10 463 2
-10 (463) (2)
31 December 2012
Impact on
Change Policyholder Shareholder
in variable liabilities proft after
taxation
% US$000 US$000
Insurance assumptions
Mortality
- Assured lives +10 - 56
-10 - 53
- Annuitant longevity* +10 (15)
-10 16
Withdrawals +10 - -
-10 - -
Expense per policy +10 - 36
-10 - (34)
Market assumptions
- Discount rate +10 (29) -
-10 32 -
- Equity prices +10 342 48
-10 (342) (45)
* An increase in the longevity assumption is equivalent to worsening of mortality. A decrease in longevity assumption is
equivalent to an improvement of mortality.
The Group does not have any reinsurance assets related to life insurance contracts as at reporting date.
The Groups maximum exposure to insurance risk at the reporting date is limited to the carrying amount of insurance
liabilities net of reinsurance assets of US$22.512 million (2012: US$23.867 million). The exposure to long-term insurance
risk is US$4.180 million (2012: US$3.585 million). The exposure to short-term insurance risk is US$18.332 million (2012:
US$20.282).
88
49 Capital Management
The Group defnes capital as shareholders equity. The primary objective of the Groups capital management is to ensure
that all the hoteling companies, insurance companies, the asset management company and the fnancial services company
maintain a strong credit rating and healthy capital ratios in order to support the business and maximise shareholder
value. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital
to shareholders, or issue new shares. No changes were made in the objectives, policies or processes during the year
ended 31 December 2013 and 31 December 2012. The Group monitors capital for its non-life insurance companies by
using solvency ratio which is average shareholders funds divided by net written premium. Average shareholders funds
is arrived at by dividing the sum of the opening and closing shareholders fund balance by two. The Group monitors the
capital of Zimnat Life Assurance, Zimnat Asset Management (ZAM) and Zimnat Financial Services by using the minimum
capital requirements. The Group policy is to keep the capital requirements above the statutory limit. The comparison of
actual capital levels against the statutory limit is shown below:
Actual capital level
Company Statutory limit 2013 2012
Zimnat Lion > 25% 384% 55%
Grand Reinsurance > 25% 450% 63%
Lion Assurance, Uganda > 25% 76% 75%
Botswana Insurance > 20% 159% 129%
Zimnat Life Assurance (US$000) US$500 US$12,852 US$9,447
Zimnat Financial Services (US$000) US$25 US$356 -
Zimnat Asset Management (US$000) US$500 US$621 US$582

50 Transfer of reserves
This relates to:
Transfer of funds to statutory reserves by Lion Assurance Company of Uganda and Botswana Insurance Company
(outside Zimbabwe insurance companies) as per Ugandan Insurance Act and the Insurance Industry Act of
Botswana. The transfer is 5% and 15% of net profts after tax each year, respectively.
Transfer of reserves from non-distributable reserves to the revaluation reserve due to restructuring of a property
company that took place during the year ended 31 December 2013. The restructuring resulted in a change in
deferred tax of US$0.876 million.
51 Subsequent events
There were no events after year end that would have any adjusting effect on the Groups fnancial statements. Subsequent
to 31 December 2013, the Group entered into an agreement for the purchase of an additional 20.75% stake in Minerva
Risk Advisors (Private) Limited (formerly AON). The transaction will increase the Groups interest in Minerva from 30.25%
to 51%. The discounted present value of the 20.75% stake is US$747,000, to be paid over three annual installments
commencing in 2014.
89
COMPANY STATEMENT OF FINANCIAL POSITION as at 31 December 2013
2013 2012
ASSETS
Property, plant and equipment 166 198
Intangible asset 12 -
Investments in subsidiaries 1 10,456 10,456
Investments in associates 2 327 4,931
Deferred tax asset - 627
Inventories 4 -
Trade and other receivables 3 1,080 1,295
Bank and cash 1 30
Total assets 12,046 17,537

Equity
Issued share capital 1,919 1,919
Non-distributable reserve 13,810 13,810
Revaluation reserve 10 10
Treasury shares (18) (18)
Accumulated losses (7,778) (2,648)
Total equity 7,943 13,073

Liabilities
Borrowings 4 839 1,544
Trade and other payables 5 3,264 2,920
Total liabilities 4,103 4,464

Total equity and liabilities 12,046 17,537

Shingai Mutasa Gavin Sainsbury
Chairman Chief Executive Offcer
22 April 2014 22 April 2014
90
NOTES TO THE COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 December 2013
2013 2012
1 Investment in subsidiaries US$ 000 US$ 000
Grand Reinsurance (Private) Limited 4,710 4,710
Zimnat Lion Insurance Company Limited 2,447 2,447
Zimnat Life Assurance Company Limited 3,123 3,123
Freecor Holdings Limited 176 176
10,456 10,456
2 Investment in associates
Sable Chemical Industries Limited - 4,604
Zimbabwe Fertiliser Company Limited 172 172
Minerva Risk Advisors (Private) Limited 155 155
327 4,931

During the year the Company recorded an impairment charge of US$4.604 million for its investment in
Sable Chemical Industries Limited (Sable) due to uncertainty over its future returns. Sable is currently under
negotiations with the Government of Zimbabwe with regard to a special electricity tariff. At 31 December 2013
the results of these negotiations were uncertain. In the absence of a viable electricity tariff, doubt is cast over
the going concern status of Sable. The investment has therefore been fully impaired.
2013 2012
US$ 000 US$ 000
3 Trade and other receivables
Amounts due from group companies 1,030 1,224
Other receivables 50 71
1,080 1,295

4 Borrowings
Bank overdraft 806 799
Short term loans 33 745
839 1,544

The overdraft facility of US$0.806 million (2012: US$0.799 million)
has an interest rate of 16% plus LIBOR.

The short-term loan of US$ 0.03 million (US$ 0.75 million) has
an interest rate of 15% and is payable in September 2014.

5 Trade and other payables
Amounts due to group companies 2,868 2,571
Other payables 396 349
3,264 2,920

6 Non-distributable reserve
The non-distributable reserve arose from the Groups conversion of the functional currency from Z$ to US$
on 1 January 2009.
91
CLASSIFICATION BREAKDOWN

ORDINARY
INDUSTRY SHARES % HOLDERS %
LOCAL COMPANIES 68,295,122 41.43% 397 3.23%
FOREIGN COMPANIES 29,419,780 17.85% 13 0.11%
INSURANCE COMPANIES 23,870,328 14.48% 20 0.16%
NEW NON RESIDENT 17,233,195 10.45% 252 2.05%
LOCAL INDIVIDUAL RESIDENT 11,185,715 6.79% 11,146 90.66%
PENSION FUNDS 6,936,454 4.21% 68 0.55%
LOCAL NOMINEE 4,644,369 2.82% 102 0.83%
CHARITABLE AND TRUSTS 1,283,165 0.78% 135 1.10%
FOREIGN NOMINEE 746,447 0.45% 13 0.11%
FUND MANAGERS 629,812 0.38% 29 0.24%
INVESTMENTS 549,253 0.33% 83 0.66%
DECEASED ESTATES 33,059 0.02% 29 0.24%
BANKS 12,325 0.01% 3 0.02%
GOVERNMENT/QUASI-GOVERNMENT 4,432 0.00% 1 0.01%
DIRECTOR 1,469 0.00% 1 0.01%
EMPLOYEES 800 0.00% 1 0.01%
FOREIGN INDIVIDUAL RESIDENT 185 0.00% 1 0.01%
TOTAL 164,845,910 100.00% 12,294 100%

SIZE OF SHAREHOLDING

ORDINARY
VOLUME SHARES % HOLDERS %
1-5000 4,183,384 2.54% 11,883 96.66%
5001-10000 1,013,355 0.61% 140 1.14%
10001-25000 1,835,171 1.11% 115 0.94%
25001-50000 2,191,502 1.33% 60 0.49%
50001-100001 2,571,800 1.56% 36 0.29%
100001-200000 3,877,449 2.35% 28 0.23%
200001-500000 2,519,716 1.53% 8 0.07%
500001-1000000 4,796,359 2.91% 6 0.05%
1000001 and Above 141,857,174 86.06% 18 0.13%
TOTAL 164,845,910 100% 12,294 100%

TOP TEN SHAREHOLDERS

Rank Name Total Shares %
1 FMI INVESTMENTS (PRIVATE) LIMITED 52,453,773 31.84%
2 OLD MUTUAL LIFE ASSURANCE COMPANY ZIMBABWE LIMITED 23,693,918 14.38%
3 CAPITAL VENTURES HOLDINGS LIMITED - NNR 18,915,553 11.48%
4 MASAWARA (MAURITIUS) LIMITED - NNR 15,195,487 9.22%
5 OLD MUTUAL ZIMBABWE LIMITED 6,380,809 3.87%
6 LOCAL AUTHORITIES PENSION FUND 3,520,998 2.14%
7 FIELER SEAN MICHAEL - NNR 3,494,045 2.12%
8 EASTERN ALLIANCE DEVELPOMENT - NNR 3,175,000 1.93%
9 STEIER ARTHUR A - NNR 2,881,049 1.75%
10 TRIEDWARD INVESTMENTS (PRIVATE) LIMITED 2,160,763 1.31%
TOTAL 131,871,395 80.04%
KEY:
NNR - Non Resident
SHAREHOLDER ANALYSIS
92
NOTICE TO SHAREHOLDERS
Notice is hereby given that the 79th Annual General
Meeting of the ordinary members of TA Holdings Limited
will be held at the Miti Room, Sango Conference Centre,
Cresta Lodge, Harare at 1400 hours on Monday, 30th
June 2014 to consider the following business:
1. ORDINARY BUSINESS
1.1 To receive, consider, and if deemed ft; adopt the
audited annual fnancial statements of the Company,
and the respective Reports of the Directors and of the
Auditors, for the year ended 31 December 2013.
1.2 Directorate:

i. To approve the re-election, by a single resolution,
of Messrs Francis Daniels and Julian Vezey as
Directors of the Company, who retire by rotation in
terms of Article 100 of the Articles, and who being
eligible, offer themselves for re-election;
ii. To approve the remuneration of the directors for
the past fnancial year in the sum of thirty three
thousand one hundred and twenty six United
States Dollars (US$33,126.00).
1.3 To approve the remuneration for the auditors for
the past audit in the amount of eighty four thousand
United States Dollars (US$84,000.00).
1.4 To approve the appointment of Messrs
PricewaterhouseCoopers as auditors of the Company
for the year ending 31 December 2014.
2. SPECIAL BUSINESS
2.1 Purchase of Own shares
To consider and, if deemed ft, to resolve, by way of
special resolution, with or without modifcation the
following matter:
That the Directors be and are hereby authorized, in
terms of section 52(i) of the Companys Articles of
Association, to purchase the Companys own shares,
subject to the following terms and conditions:
i. the purchase price shall not be lower than the
nominal value of the Companys shares and not
greater than fve percent (5%) above the weighted
average trading price for such ordinary shares
traded over fve (5) business days immediately
preceding the date of purchase of such shares by
the Company;
ii. the shares to be purchased under this resolution
shall not exceed ten percent (10%) of the ordinary
shares of the Company in issue prior to the date of
this resolution;
iii. this authority shall expire on the date of the
Companys next annual general meeting.
In relation the aforesaid proposed resolution, the
Directors of the Company state that:
(a) all shares purchased pursuant to the aforesaid
authority shall be utilized for treasury purposes;
(b) if the maximum number of shares that can be
purchased pursuant to the authority is purchased,
the Directors believe that:
(i) the Company will be able, in the ordinary course
of business, to pay its debts for a period of 12
months after the date of this notice;
(ii) the assets of the Company will be in excess of
the liabilities of the Company and the Group;
(iii)there will be adequate ordinary capital and
reserves in the Company for a period of 12
months after the date of this notice; and
(iv) there will be adequate working capital in the
Company for a period of 12 months after the date
of this notice.
3. GENERAL BUSINESS
To transact such other business as may be transacted
at an Annual General Meeting.
Important Note
In terms of the Companies Act, a member entitled to
vote at the above meeting, may appoint one or more
proxies to attend the meeting, speak and vote in the
members stead. A proxy need not be a member of the
Company.
Proxy forms will be included in the Annual Report and
must be lodged with the Secretaries at least forty eight
(48) hours before the commencement of the meeting.
The Annual Report incorporating the Companys
Annual Financial Statements, Directors and Auditors
reports as well as the Proxy Form will be sent to
members shortly. It will also be available on the
Companys website www.ta-holdings.com

By Order of the Board
TA Management Services (Private) Limited
for the Secretaries
Harare
3 June 2014
93
NOTES
94
NOTES
95
NOTES
96
NOTES
97
PROXY FORM
I/We________________________________________________________________________________________________
of__________________________________________________________________________________________________
Being a member/members of the above company, hereby appoint:
Mr./Mrs./Ms._________________________________________________________________________________________
Or failing him ________________________________________________________________________________________
of__________________________________________________________________________________________________
or failing him_________________________________________________________________________________________
of__________________________________________________________________________________________________
As my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on the 30th of
June 2014 at 1400 hours and at any adjournment thereof
Signature_____________________________________Signed this _________________________ Day_____________2014
Note
1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend, speak and vote in his stead.
The person appointed need not be a member.
2. Proxy forms should be lodged at the registered offce of the Company by not later than 48 hours before the time of holding
the meeting.
3. Any alterations or corrections made to this form of proxy (including the deletion of alternatives) must be initiated by the
signatory/ signatures.
4. Shareholders are requested to submit key questions in writing at least fve days before the date of the meeting to enable
comprehensive answers to be prepared. This will not preclude them from raising questions from the foor.
CHANGE OF ADDRESS ADVICE
Shareholders should of necessity keep the Transfer Secretaries advised of any change in name or address:
Shareholders name in full (Block Letters)
_________________________________________________________________________________________
New Address (Block Letters)
_________________________________________________________________________________________
_________________________________________________________________________________________
_________________________________________________________________________________________
Email Address _____________________________________________________________________________
Shareholders Signature ______________________________________________________________________
CORPSERVE (PVT) LTD
SHARE TRANSFER SECRETARIES
4th Floor, ZB Centre
Corner First Street / Kwame Nkrumah Avenue
P.O. Box 2208
Harare
Zimbabwe
TA HOLDING LIMITED
17th Floor, Joina City
P.O. Box 3546
Harare
Zimbabwe

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