Notes to the annual financial statements

for the year ended 30 September

 
 
                 
    Group     Company  
    2010  
Rm  
  2009  
Rm  
  2010  
Rm  
  2009  
Rm  

14.  

OTHER INVESTMENTS AND LOANS INCLUDING NSN INVESTMENT  

             
  Reunert 1988 Share Purchase Trust loans – at cost   12,0     17,4     12,0     17,4  
  Other loans – at cost   30,8     34,7     30,5     34,3  
  Financial instrument – investment in NSN – at fair value1   494,3     494,3     494,3     494,3  
  Financial instrument – NSN option – at fair value1   299,2     299,2     299,2     299,2  
  Other unlisted investments – at cost   1,5     8,3     1,5     1,6  
  Total investments and loans   837,8     853,9     837,5     846,8  
  Non-current investments and loans   44,3     853,9     44,0     846,8  
  Current investments2   793,5     —     793,5     —  
  Directors' valuation – unlisted investments                
  NSN option and investment   793,5     793,5     793,5     793,5  
  Other unlisted investments   1,5     8,3     1,5     1,6  
  Loans granted by Reunert in respect of the share option schemes (the schemes) 
  Option holders are obliged to pay 1 cent per share for shares purchased under the schemes. Thereafter, Reunert may lend the shareholder the remainder of the funds required to purchase the shares at the option price. The loan is granted for a maximum of seven years. The interest rate applicable to the loan is determined in March and September each year for the following six months, based on a formula which takes the last dividend declared prior to granting the option divided by the option price, subject to a maximum of the official interest rate as set by the South African Revenue Services from time to time.  
         Company  
            2010  
Rm  
  2009  
Rm  
  Value of loans granted during the year to scheme participants           0,8     5,2  
  Loans to the scheme include loans to Reunert executive directors:                
  Balance at the beginning of the year           1,2     2,1  
  Advances and interest during the year           0,1     0,1  
  Repaid during the year           (0,7)    (1,0) 
  Balance at the end of the year           0,6     1,2  
 
1 An option exists whereby Reunert may put its investment in NSN to the other shareholders of NSN, similarly, the other shareholders of NSN may call on Reunert to sell its shares in NSN.
During the prior year R12,5 million of compensation, as defined in the agreement with NSN group, was received in respect of a country, sales to whom ceased qualifying for commission. In terms of the agreement any compensation received reduces the minimum and maximum  prices of the options.
The minimum price of the put option is R793,5 million (2009: R793,5 million) and the maximum price of the call option is R947,5 million (2009: R947,5 million).
The first time the options may be exercised is on 31 December 2010, and if not exercised then, another opportunity exists for either party to exercise its option on 31 December 2012.
Based on the growth rate discussed above the option value at 30 September 2010 is R299,2 million (2009: R299,2 million) and the value of the investment is R494,3 million (2009: R494,3 million).
The option and the investment were valued by professional actuaries as at 30 September 2010 and no adjustment to carrying values was necessary.
2 Reunert intends to put its shares to NSN on 31 December 2010 which should result in R793,5 million being received during February 2011. For information regarding the maturity profile relating to other investments refer to note 28.