1 OPERATING EXPENSES      
    2008   2007
    Rm   Rm
  Audit fees – current year 5   1
  BEE transaction share-based payments expenses 5   12
  Directors’ fees 7   10
  Other 3   2
    20   25
         
2 DIRECT TAXATION      
  2.1 Charge for the year      
    South African normal taxation – current taxation 1   2
    Capital gains taxation     7
    Secondary taxation on companies 15   135
      16   144
  2.2 Taxation rate reconciliation %   %
    Standard rate of South African normal taxation 28   29
    Non-taxable income (28)   (29)
    Non-deductable expenses     1
    Secondary taxation on companies 1   5
    Effective taxation rate 1   6
         
3 SUNDRY DEBTORS      
         
  Sundry debtors and accrued interest 28   1
  These assets are repayable on demand or at short notice and are all within South Africa.      
         
4 SHARE CAPITAL      
  Ordinary share capital      
  Authorised      
  600 000 000 (2007: 600 000 000) ordinary shares of R1 each 600   600
  Issued ordinary share capital      
  468 939 397 (2007: 459 278 075) fully paid ordinary shares of R1 each 469   459
         
5 SUNDRY CREDITORS      
         
  Creditors and other accounts 14   19
         
6 IMPAIRMENT OF INTERGROUP LOANS AND ADVANCES      
   
  Specific impairment has been raised on intergroup loans and advances made by Nedbank Limited to fellow subsidiary companies. Nedbank Group Limited has guaranteed these intergroup advances, for which a provision against these guarantees has been recognised.
    2008   2007
    Rm   Rm
  Balance at the beginning of the year 183   207
  Income statement charge 2   (24)
  Balance at the end of the year 185   183
         
7 CASH GENERATED BY OPERATIONS      
  Reconciliation of profit before taxation to cash generated by operations      
  Profit before taxation 2 981   2 462
  Adjusted for:      
  BEE transaction share-based payments expenses 5   12
  Foreign currency translation profit     1
  Impairment of advances 2   (24)
  Impairment of investments 44   83
  Loss on waiver of loan to subsidiary     48
  Capital profit on sale of investment     (56)
  Cash generated by operations 3 032   2 526
         
8 TAXATION PAID      
         
  Amounts prepaid at the beginning of the year (5)   (3)
  Income statement charge – current taxation 1   2
  Realised deferred taxation     8
  Income statement charge – secondary taxation on companies 15   135
  Amounts prepaid at the end of the year 8   5
    19   147
9 SHARE-BASED PAYMENTS
   
  Equity instruments are granted to business partners and non-executive directors as an incentive to retain business and develop growth within the group. The share-based payment expenses and reserve balances in respect of the Black Business Partner Scheme and the Non-executive Directors’ Scheme, implemented in 2005, were accounted for in the Nedbank Group Limited consolidated financial statements and in the Nedbank Group Limited standalone financial statements. Both of these schemes will be equity-settled.
   
  As the company cannot estimate reliably the fair value of services received nor the value of additional business received, the company rebuts the presumption that such services and business can be measured reliably. The company therefore measures their fair value by reference to the fair value of the equity instruments granted, in line with the group’s accounting policy. The fair value of such equity instruments is measured at the grant date utilising the Black-Scholes valuation model.
  9.1 Description of arrangements
    Scheme Trust/SPV Description Vesting requirements Maximum term
    Nedbank Eyethu BEE schemes      
    Black Business Wiphold Financial Each trust was issued an No dealing in the shares 10 years
    Partner Scheme Services Number equal number of restricted during the 10-year notional  
      Two Trust and shares at R1,87 per share, funding period.  
      Brimstone-Mtha with notional funding over    
      Financial Services a period of 10 years. The    
      Trust beneficial ownership of the    
        shares resides with the    
        participants, including the    
        voting and dividend rights.    
             
    Non-executive Nedbank Eyethu Certain non-executive Six years’ service and no 6 years
    Directors’ Scheme Non-executive directors acquired restricted dealing in the shares during  
      Directors’Trust shares at par value, with this notional funding period.  
        notional funding over a So as not to compromise the  
        period of six years.The non-executive directors’  
        beneficial ownership of the independence, no specific  
        shares resides with the performance conditions will  
        participants, including the apply to the directors’  
        voting and dividend rights. participation.  
  9.2
Effect on profit and financial position      
    Share-based   Share-based
    payments expense   payments reserve
    2008   2007   2008   2007
    Rm   Rm   Rm   Rm
Black Business Partner Scheme         215   215
Non-executive Directors’ Scheme 5   12   20   15
    5   12   235   230
 
 
 
 
 
 
 
  9.3  Movements in number of instruments            
      2008   2007
        Weighted        
        average       Weighted
        exercise       average
      Number of price   Number of   exercise price
      instruments Rm   instruments   Rm
    Black Business Partner Scheme            
    Outstanding at the beginning of the year 7 891 300 171,82   7 891 300   171,82
    Outstanding at the end of the year 7 891 300 171,82   7 891 300   171,82
    Exercisable at the end of the year – –   –   –
    Non-executive Directors’ Scheme            
    Outstanding at the beginning of the year 493 206     344 351   108,04
    Other movements       148 855    
    Granted 81 815 78,81        
    Outstanding at the end of the year 575 021 103,88   493 206   108,04
    Exercisable at the end of the year – –   –   –
  9.4 Instruments outstanding at the end of the year by exercise price    
        2008       2007
        Weighted       Weighted
        average       average
        remaining       remaining
      Number of contractual   Number of   contractual
      instruments life (years)   instruments   life (years)
    Black Business Partners Scheme            
    171,82 7 891 300 6,6   7 891 300   7,6
      7 891 300 6,6   7 891 300   7,6
    Non-executive Directors’ Scheme            
    78,81 81 815 2,6        
    108,04 493 206 2,6   493 206   3,6
      575 021 2,6   493 206   3,6
  9.5 Instruments granted during the year            
    The weighted average fair value of instruments granted during the year has been calculated using the Black-Scholes option pricing model, using the following inputs and assumptions.
            Non-executive   Non-executive
            Director’s   Director’s
            Scheme   Scheme
            2008   2007
    Number of instruments granted       81 815    
    Weighted average fair value per instrument granted (R)       48,52    
    Weighted average share price (R)       112,00    
    Weighted average exercise price (R)       78,81    
    Weighted average expected volatility (%)       27,0    
    Weighted average life (years)       1,9    
    Weighted average expected dividends (%)       0,0    
    Weighted average risk-free interest rate (%)       10,9    
    Number of participants       1    
    Weighted average vesting period (years)       0,5    
    Possibility of not vesting (%)       0,0    
    Expectation of meeting performance criteria (%)       100    
                 
10 RELATED PARTIES            
             
  10.1 Relationship with parent, ultimate controlling party and investees        
   

The company's parent company is Old Mutual (South Africa) Limited (OMSA), which, through its subsidiaries, holds 54,30% (2007: 53,20%) of Nedbank Group Limited's ordinary shares. The ultimate controlling party is Old Mutual plc, incorporated in the United Kingdom.

Material subsidiaries of the company are identified here and associates and joint ventures of the company are identified here.

  10.2 Key management personnel compensation            
    Key management personnel are those persons who have authority and responsibility for planning, directing and controlling the activities of the company, directly or indirectly, including all directors of the company and its parent, as well as members of the Executive Committee who are not directors, as well as close members of the family of any of these individuals.

Details of the compensation paid to the board of directors are disclosed in the Remuneration Report here and details of their shareholdings in the company are disclosed here. Compensation paid to the board of directors is aggregated below, together with the aggregate compensation paid to the executive directors, as well as the number of share options and instruments held.
   
      Key    
      management    
  Directors   personnel   Total
Compensation (Rm)          
2008          
Directors’ fees – Paid by subsidiaries 12       12
Remuneration – Paid by subsidiaries 25   80   105
           
  Short-term employee benefits 16   68   84
  Gain on exercise of options 9   12   21
           
  37   80   117
2007          
Directors’ fees* – Paid by subsidiaries 11       11
Remuneration – Paid by subsidiaries 33   68   101
           
  Short-term employee benefits 19   43   62
  Gain on exercise of options 14   25   39
           
  44   68   112
Number of share options and instruments          
2008          
Outstanding at the beginning of the year 1 412 503   1 380 971   2 793 474
Granted 209 250   315 507   524 757
Forfeited     (107 645)   (107 645)
Exercised (166 744)   (276 521)   (443 265)
Expired (199 000)       (199 000)
Transferred     177 500   177 500
Outstanding at the end of the year 1 256 009   1 489 812   2 745 821
2007          
Outstanding at the beginning of the year 1 333 738   1 716 265   3 050 003
Granted 121 643   300 430   422 073
Forfeited (26 926)   (68 708)   (95 634)
Exercised (160 292)   (393 693)   (553 985)
Transferred 144 340   (173 323)   (28 983)
Outstanding at the end of the year 1 412 503   1 380 971   2 793 474
* Where necessary, comparative information has been enhanced to provide a more detailed analysis.
  10.3 Related-party transactions
    The following significant transactions were entered into between Nedbank Group Limited and the following related parties.All of these transactions were entered into in the normal course of business.
   
  Due from/(Owing to)
  2008   2007
Outstanding balances (Rm) Rm   Rm
Subsidiaries      
Loan from BoE Management Limited – interest-free (3 687)   (3 687)
Loan from BoE Limited – interest-free (1 070)   (1 171)
Loan from Cape of Good Hope Financial Services Limited – interest-free* (6)   (5)
Loan from Nedbank Nominees (Pty) Ltd* (5)   (5)
Loan from The Board of Executors 1838 (45)   (45)
Bank accounts with Nedbank Limited – interest-free (305)   (1 723)
Advance to NEST 16   325
Loan to FTNIB Manco     10
Tando AG – dividend 71    
Due from Nedbank Limited on exercise of share options during the year      
interest-free     325
Impairment provision in respect of amounts due to Nedbank Limited by its      
subsidiaries (163)   (161)
Impairment provision in respect of amounts due to Nedgroup Investments      
Limited by its subsidiaries (2)   (2)
Impairment provision in respect of amounts due by BoE Limited (18)   (19)
       
Key management personnel      
The Wiphold and Brimstone consortia are related parties since certain key      
management personnel of the company have significant influence over      
these entities. These consortia are participants in the Nedbank Eyethu BEE      
schemes and the share-based payments reserve recognised in respect of      
these consortia and key management personnel is detailed below:      
       
Wiphold consortium (108)   (108)
Brimstone consortium (107)   (107)
Non-executive directors (20)   (15)
Share-based payments reserve (235)   (230)
   
  Income/(Expense)
  2008   2007
Transactions (Rm) Rm   Rm
Parent      
Dividend declared to OMSA via its subsidiaries* 1 577   1 382
Subsidiaries      
MN Holdings Limited     3
Interest income –   3
MN Holdings Limited     (1)
Foreign currency translation gains/(losses) on loans to or from subsidiaries –   (1)
Nedbank Limited 2 294   1 947
Nedgroup Investment Holdings 101 Limited 286   498
Syfrets Securities Limited 32   10
Nedgroup Insurance Company Limited 60    
NedEurope Limited 163    
Tando AG 143    
FTNIB Management Company Limited *     10
Nedbank International Limited *     22
Alliance Investments Limited 16    
BoE Limited 53   49
Dividends declared by subsidiaries 3 047   2 536
Key management personnel      
The share-based payments charge in respect of the entities that are      
participants in the Nedbank Eyethu BEE schemes and key management      
personnel is detailed below:      
       
Non-executive directors (5)   (12)
Share-based payments expense (5)   (12)
* Where necessary, comparative information has been enhanced to provide a more detailed analysis.
     

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