313 350 70 796 Movement for the year:

At beginning of the year 70 796 101 945 Acquisition of controlling interest in an associate resulting

in it becoming a subsidiary - (19 305) Associate becoming a subsidiary in terms of IFRS 10 - (18 722) Acquisitions during the year 205 214 293 Disposals during the year (455) - Share of profits from equity accounted investees 70 568 40 727 Distributions (34 205) (39 943) Foreign exchange translation differences 1 204 2 136 Loan receivable advances 1 199 3 665 Loan receivable repayments (971) - 313 350 70 796 Details of the group’s investments in equity accounted investees are set out in Annexure B.

The group’s share of post-acquisition profit or loss in equity accounted investees for the year under review was R70.6 million (2014: R40.7 million).

2015 2014

R’000 R’000

15 Investment in equity accounted investees (continued)

Summarised financial information of equity accounted investees:

Assets 1 311 167 906 103 Liabilities (663 067) (580 089) Equity 648 100 326 014 Revenue 728 341 540 946 Profit and other comprehensive income for the year 405 494 286 391

15.1 Acquisition during the year

With effect from 1 July 2014, Peregrine SA Holdings subscribed for 50% of Java Capital Proprietary Limited ("Java Capital") for a total subscription price of R205 million, of which R120 million was settled in cash and the balance of R85 million in 3 835 000 Peregrine shares (note 34).

In terms of IFRS 11, joint control is the contractually agreed sharing of control of an arrangement. Joint control exists only when decisions about the relevant activities, i.e. those that significantly affect the returns of the arrangement, require the unanimous consent of the parties sharing the control of the arrangement. The shareholders agreement between the parties establishes joint control as defined by IFRS 11.

Java Capital is a joint venture as the parties have rights to the net assets and therefore the group's interest therein has been equity accounted.

15.2 Disposal during the year

With effect from 1 October 2014, Stenham Limited disposed of its 50% interest in Stenpark Management Limited, as part of the Stenham Property Holdings Limited disposal transaction (note 12.2.1).

15.3 Acquisition of controlling interest in an associate resulting in it becoming a subsidiary in the prior year

With effect from 1 October 2013 Citadel Holdings Proprietary Limited ("Citadel") acquired an additional 20% shareholding in The Wealth Corporation Proprietary Limited ("Wealthcorp"), thereby increasing its interest to 70%. Wealthcorp therefore ceased to be an associate and is now accounted for as a subsidiary of Citadel (notes 32.2).

15.4 Associate becoming a subsidiary in terms of IFRS 10 in the prior year

As a result of adopting IFRS 10 in the prior year the group changed its accounting policy with respect to determining whether it has control over and consequently whether it is required to consolidate an investee. IFRS 10 introduced a new set of criteria for assessing control by referring to the investor's exposure or rights to variable returns from its involvement with the investee and the ability to affect those returns through its power over the investee. The group reassessed the control conclusion for its investees at 1 April 2013. As a consequence, the group changed its control conclusion from significant influence to control in respect of its investment in Stenham Real Estate Equity Fund Limited ("SREEF"), which is not significant in relation to the group and has been consolidated from 1 April 2013 to 30 September 2014 (note 17).

15.5 Terms of loans

The loans to associates comprise:

• A shareholder loan of R4.9 million (2014: R4.9 million) to Main Street which is unsecured, interest free and repayable subject to a twelve month notice period or earlier by mutual agreement.

• A loan of R971 334 to Legae Staff Trust that bears interest at the bank call rates, 9% (2014: 8.50% from 1 April 2013 to 29 January 2014 and 9% thereafter) and was repaid in the current financial year.

• A subordinated loan of R3.5 million (2014: R3.5 million) to Legae Securities Proprietary Limited that bears interest at 3 month JIBAR rate plus 1% and is repayable on demand or within a period not exceeding 30 years.

• A loan of R1.2 million to Java Capital Proprietary Limited is unsecured, interest free and repayable on demand or within a period not exceeding 30 years. The group has interests of 20% or more in various investments which are not accounted for as associates. The investments form part of a portfolio of private equity investments held as part of the group’s investing activities. All of the investments held within the private equity portfolio are designated as at fair value through profit or loss.

45

Citadel Life investments 5 315 977 4 494 428 Collective investment schemes 3 833 122 3 111 560 Equities 246 069 167 849 Variable rate debentures – unlisted 1 236 786 1 215 019

Non-Citadel Life investments

Variable rate debentures – unlisted 616 828 630 513

Total investments linked to policyholder investment contracts 5 932 805 5 124 941

16.2 Policyholder investment contract liabilities

Citadel Life investments contract liabilities

Balance at the beginning of the year 4 483 155 3 928 805 Premium income 1 096 482 574 498 Investment income (note 3.1) 69 464 37 363 Interest 51 038 30 490 Dividends received - local 16 725 6 061 Dividends received - foreign 1 700 758

Other Income 1 54 Fund balance adjusted for gross fund inflows 5 649 101 4 540 666

Policy surrenders paid (426 701) (434 142) Policy transfers out (18 423) (1 559) Annuities paid (181 397) (137 745) Death claims paid (37 728) (37 683) Commissions paid (45 193) (53 971) Management and operating expenses (18 435) (18 523) Movement in policyholder tax withheld (note 16.3) 11 273 37 903 Capital gains tax recovered from policyholders 33 982 (8 252) Switches in transfer (2 559) (9 688) Net realised and unrealised changes in fair value of investments 352 057 606 149 Balance at the end of the year 5 315 977 4 483 155

Non-Citadel Life investment contract liabilities

Variable rate debentures 616 828 630 513

5 932 805 5 113 668

16.3 Policyholder tax withheld

Balance at the beginning of the year 11 273 49 176 Movement for the year (11 273) (37 903) Taxation paid (47 519) (75 355) Current tax expense 36 246 37 452 Balance at the end of the year - 11 273

16.4 Total policyholder investment contract liabilities 5 932 805 5 124 941

The amounts due to policyholders under these contracts are based on the fair value of the financial asset held within the appropriate unit-linked funds. The contractual maturity amount of this liability is therefore the same as its carrying amount. No changes in the fair value of this liability are considered to be attributable to changes in the group's credit risk, as fair value is determined based on the fair value of the financial assets supporting the policies.

16 Policyholder investment contract investments and liabilities (continued)

The investments linked to the policyholder investment contracts designated as at fair value through profit or loss are equity securities that otherwise would have been classified as available–for–sale.

The group’s exposure to credit, currency and interest rate risks is disclosed in note 43.

2015 2014

R’000 R’000

17 Financial investments

17.1 Non-current investments

Property fund investments - listed 425 627 191 186 Property fund investments - unlisted 203 740 118 258 Private equity investments (note 17.3) 14 157 37 136 Listed 13 157 21 751 Unlisted 1 000 15 385 Unit trusts 5 038 4 209 Share portfolio investments - unlisted 278 278

648 840 351 067

17.2 Current investments

Financial assets at fair value through profit or loss 1 308 812 939 013 Property fund investments - unlisted 129 206 885 Hedge funds - unlisted 133 332 56 862 Unit trusts 21 032 20 962 Private equity investments - unlisted (note 17.3) 200 10 000 Variable rate debentures - unlisted 7 494 5 273

1 470 999 1 238 995

17.3 Private equity investments

Comprise:

Proprietary investments 13 357 46 136 Investment held by private equity fund 1 000 1 000

14 357 47 136

A register of investments is available for inspection at the registered office of the company in terms of Section 26 of the Companies Act of South Africa. In terms of current International Financial Reporting Standards certain of the group's proprietary hedge fund investments are required to be consolidated due to the fact that the group has effective control both in terms of kick-out rights and with direct and indirect holdings being close to 100%. The Hedge Funds measure all debt and equity investments at fair value through profit or loss upon initial recognition as it manages these securities on a fair value basis in accordance with its documented investment strategy. Financial instruments are designated as at fair value through profit or loss if they do not meet the requirements in terms of IAS 39 to be classified as held-for-trading. Internal reporting and performance measurement of these securities are on a fair value basis.

The unlisted hedge fund investments pertain to Hedge Funds that do not meet the requirements of IFRS 10 and therefore have not been consolidated but rather accounted for in terms of IAS 39. Disinvestment is at the discretion of the group and is allowed on a monthly basis.

Following on the disposal of Stenham Property Holdings Limited (note 12.2.1), the group assessed its interest in Stenham Real Estate Equity Fund Limited ("The Fund") in terms of IFRS 10. As The Fund is now managed and controlled outside the group and has no common directors with the group as a consequence of the disposal of the Property division, control no longer exists and therefore The Fund was deconsolidated with effect from 1 October 2014 and treated as a financial investment. The group's investment in The Fund as at 31 March 2015 amounted to R35 million (£1.9 million).

47

control did not exist at reporting date. The group's investment in SEMF as at 31 March 2015 amounted to R67 million (£3.7 million) (2014: R57 million (£3.2 million)).

The group has an investment in Stenham Macro UCITS Fund ("SMUF"). The directors of the group assessed whether or not the group had control, under IFRS 10, over SMUF based on whether the group had the practical ability to direct the relevant activities of SMUF unilaterally. Following assessment the directors concluded that control did not exist as a result of the limited voting power of the participating shares, and of the Board composition. The Board is made up of 50% external directors, one of whom is the chairman with the casting vote. These factors were deemed to apply to the assessment of significant influence in terms of IFRS 11 and the directors therefore concluded that significant influence did not exist. The group's investment in SMUF as at 31 March 2015 amounted to R61 million (£3.4 million).

The valuation techniques applied and inputs to the valuation techniques in respect of the unlisted private equity investments are described in note 43.4.1. Refer to note 43.1 for full assessment of market risk.

2015 2014

R’000 R’000

18 Loans and receivables

Peregrine Tower En Commandite Partnership shareholder loans 108 365 32 782 G3 Market Neutral En Commandite Partnership shareholder loans 10 291 9 734 All Weather Natural Selection En Commandite Partnership shareholder loans 23 813 - Nala Empowerment Investment Company Proprietary Limited 3 080 610 Generation of Leader Discovered Consulting Proprietary Limited (”GOLD Consulting”) 600 600 Elite Group Proprietary Limited 150 -

146 299 43 726