2020 INTEGRATED REPORT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2020 14. INVESTMENT CONTRACT LIABILITIES Group 2020 2019 R’m R’m Level 2 fair value investment contract liabilities Linked investment contracts 3 194 2 589 Non-current 3 194 2 589 All investment contracts are designated on initial recognition as at fair value through profit or loss. The liabilities relating to linked contracts are measured with reference to the underlying assets linked to these contracts. PPS is contractually required to pay linked investment contract holders an amount equal to the fair value of the assets linked to these contracts. Linked contracts do not include any minimum guarantees and hence, there will be no difference between the carrying amount and the amount payable at the maturity date. Investment contract liabilities are classified as Level 2, as the assets backing up these liabilities are unit trust funds of which the fair values are derived from the unit prices published by the unit trust fund managers. Group 2020 2019 Movement table for investment contract liabilities R’m R’m Linked contracts Balance at beginning of the year 2 589 2 046 Contributions received during the year 707 586 Fair value of policyholder liabilities under investment contracts 166 170 Investment return credited to account balances 196 193 Net fees and charges deducted from account balances (30) (23) Benefit payments (268) (213) Balance at end of the year 3 194 2 589 162 | PPS INTEGRATED REPORT 2020