GROUP ACCOUNTING POLICIES The principal accounting policies applied are set out below. 1. Basis of preparation These financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). The preparation of financial 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 Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 38. All monetary information and figures presented in these financial statements are stated in millions of Rand (R’m), unless otherwise indicated. The following amendments to standards have application of 1 January 2022: • Definition of Accounting estimates: Amendments to IAS 8 and • Classification of Liabilities as Current and Non-current – Amendments to IAS 1. These do not have a material impact on the Group’s overall results and financial position. Additionally, the Group will not early adopt any of these standards. Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group, none of which will have a material impact on the Group’s financial statements (except for IFRS 17): • IFRS 17, ‘Insurance contracts’ (effective for annual periods beginning on or after 1 January 2023): IFRS 17 'Insurance contracts' is effective for annual reporting periods beginning on or after 1 January 2023. The Standard has not been early adopted applied in the 2022 Annual Financial Statements. The Standard will bring significant changes to the accounting for insurance and reinsurance contracts and is expected to have a material impact on the financial statements in the period of initial application. This includes the manner in which insurance assets and liabilities and the insurance results are measured, the classifications and disclosures, which will materially affect the Statement of Financial Position (balance sheet) and the Statement of Comprehensive Income. No material changes are currently envisaged to the PPS Profit-Share account, or the profit allocation methodology as the result of the implementation of the Standard. As a result of the PPS mutual operating model, accumulated profits/losses belong to qualifying policyholders of the Group. The ‘Equity’ will therefore be reported as a component of the total Profit- Share account and Policyholder liabilities under IFRS 17. IFRS 17 requires extensive new disclosures about amounts recognised in the financial statements, including detailed reconciliations of contracts. As described above, qualifying policyholders share in the fair value of the remaining interest of the Group. As a result of this requirement, in the separate financial statements of subsidiaries, accounting for Investments in subsidiaries will be changed from Cost less impairment to Fair value through profit or loss. This will be reported as an accounting policy change as in terms of IAS 8. 105 Group Accounting Policies
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