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LIBERTY HOLDINGS LIMITED - Financial Results for the year ended 31 December 2012

Release Date: 28/02/2013 07:49
Code(s): LBH LBHP     PDF:  
Wrap Text
Financial Results for the year ended 31 December 2012

Liberty Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1968/002095/06)
JSE code: LBH
ISIN code: ZAE000012714
                                 
Financial results
For the year ended 31 December 2012

Highlights

- BEE normalised headline earnings per share up 39%
- return on BEE normalised group equity value 21%
- value of long-term insurance new business up 69%
- long-term insurance new business margin 2,0%
- long-term insurance indexed new business up 18%
- customer net cash inflows R19,2 billion
- assets under management up 16%
- Normal dividends up 10%
- Liberty Group Limited CAR cover 2,7 times

Financial performance indicators                                                                        
for the year ended 31 December 2012                                                                     
                                                                           2012   % change       2011   
Liberty Holdings Limited                                                                                
Earnings(1)                                                                                             
Basic earnings per share (cents)                                        1 464,6       42,7    1 026,1   
BEE normalised headline earnings per share (cents)                      1 328,3       38,8      956,7   
BEE normalised operating earnings (Rm)                                    1 803        2,0      1 768   
BEE normalised return on equity (%)                                        24,5       21,3       20,2   
Group equity value                                                                                      
BEE normalised group equity value per share (R)                          115,43       15,3     100,15   
BEE normalised return on group equity value (%)                            20,8       35,9       15,3   
Distributions per share (cents)                                                                         
Normal dividend                                                             528       10,0        480   
Interim dividend/capital reduction                                          192        5,5        182   
Final dividend                                                              336       12,8        298   
Special dividend                                                            130                         
Total assets under management (Rbn)                                         528       16,0        455   
Long-term insurance operations                                                                          
Indexed new business (excluding contractual increases) (Rm)               6 055       17,5      5 152   
New business margin (%)                                                     2,0       42,9        1,4   
Net customer cash inflows (Rm)                                            4 572        8,1      4 230   
Capital adequacy cover of Liberty Group Limited (times covered)            2,71      (6,2)       2,89   
Asset management  STANLIB and Liberty Africa                                                           
Assets under management (Rbn)(2)                                            473       16,2        407   
Net cash inflows/(outflows) including money market (Rm)                  14 327       >100       (91)   
Retail and institutional net cash inflows excluding money market (Rm)    11 744     (13,6)     13 598   
Money market net cash outflows (Rm)                                       2 583       >100   (13 689)   

(1) 2011 earnings have been restated for the change in accounting policy relating to the adoption of shadow accounting.
(2) 2011 restated to reflect the transfer of the Liberty Properties asset management business to STANLIB from 1 January 2012.

Preparation and supervision:
This announcement on Liberty Holdings Limited's annual results for the year ended 31 December 2012 has been
prepared and supervised by JC Hubbard (Group Chief Financial Officer) BCom CA(SA) and CG Troskie (Group Financial
Director) BCom (Hons) CA(SA).

Commentary on results
for the year ended 31 December 2012

Overview
Liberty's 2012 financial performance was positive across all indicators. Particularly impressive was the new business obtained by all
business units and overall growth in earnings and equity value. BEE normalised headline earnings of R3 768 million were 38% up, positively
impacted by the investment performance on the group's shareholder capital. This converts to a 39% increase in BEE normalised headline
earnings per ordinary share to R13,28 (2011: restated R9,57). Return on equity of 25% compares to 20% achieved in 2011.

Equity value per share of R115 is 15% up on 2011 and reflects R5,9 billion of equity value profits, or a 21% return on group equity value. This
is considerably higher than the target of 12,6% and is not only a function of the positive investment markets, but reflects the growth in
value of new business, the strong operational business unit performances and LibFin's ability to add value through its credit origination
business.

The Shareholder Investment Portfolio (SIP) produced a gross return of 16% (2011: 8%), which was ahead of benchmark, translating into
earnings of R1 965 million. Growth in operating earnings (which excludes earnings from the SIP) appears low at 2%, however it should
be noted that the 2011 result included the once off positive impacts of Retail SA assumption changes arising from the resolution of the
persistency issue. Normalising for these as well as the Retail SA new business strain component of earnings, reflects a 2012 operating
earnings increase of 15%. This demonstrates the impact of the ongoing operational improvement particularly in the core insurance and
asset management businesses.

Strong growth in long-term indexed insurance sales (up 18%), was supported by the launch of a number of innovative products. This
combined with the lower risk discount rate, better product mix and good expense control produced a 69% improvement in group
embedded value of long-term insurance new business to R691 million at an overall margin of 2,0% (2011: 1,4%).

Group asset management net cash inflows of R14 billion are much improved compared to the break even flows in 2011. This was achieved
despite the drawdown of R6 billion of assets under a government mandate in East Africa. STANLIB's South African business had a
particularly good year attracting R20 billion of net cash flows of which R17 billion went into higher margin non money market retail and
institutional mandates. Assets under management across the group grew by 16% to R528 billion.

It is also encouraging to report various positive developments within our business development cluster, including the considerable
growth in value achieved from the revised bancassurance arrangements with Standard Bank, the Vodacom affinity in Direct Financial
Services and the significant improvement in the medical loss ratio in Liberty Health.

A disappointing feature of the past year was the inability to secure various targeted property development mandates by Liberty
Properties mainly due to socio-political factors in the various sub-Saharan African countries in which the group operates.

LibFin continues to demonstrate its ability to manage the group's market risk within risk appetite. The group's capital position is strong
with the capital adequacy ratio in the group's main licence being 2.7 times the regulatory minimum despite the funding of share buy
backs of R415 million at an average purchase price of R89 per share. The group successfully issued two R1 billion subordinated bond
tranches in August and October 2012 at fixed coupon rates of 7,67% and 7,64% respectively. The previous R2 billion callable bond was
called and repaid in September.

The 2012 performance further supports the appropriateness of our strategic plan and management's ability to execute to plan. Our
strategic focus can be summarised as:

- managing the core South African insurance operations within acceptable sustainable long-term assumption sets, whilst profitably
  capturing greater shares of both the existing and developing markets;
- developing innovative products to service targeted customer segments;
- optimising the balance sheet within board approved risk appetite limits;
- improving asset management capability, while leveraging off the strong property, fixed income, balanced and money market
  franchises and new alternative capability to capture a larger share of the retail and institutional fund flows;
- achieving the business cases of business development initiatives across the group;
- expanding the geographical footprint into expected high growth regions of sub-Saharan Africa; and
- maximising opportunities under the Standard Bank bancassurance agreement.

We continue to prepare for the implementation of the proposed new long-term insurance solvency regime and believe the group is
appropriately positioned from a capital perspective.

In summary, Liberty's 2012 financial performance had many highlights. BEE normalised headline earnings were up 38%, long-term
indexed insurance new business up 18%, long-term insurance value of new business up 69%, assets under management up 16% and
return on equity reached 25%. Our capital is well in excess of regulatory requirements and the board has been able to recommend not
only a normal dividend increase of 10% reflecting the core earnings growth, but also a special dividend of 130 cents per ordinary share which
further reflects the overall success achieved in 2012.

Business unit financial review                                                        
                                                                           Restated   
                                                         31 Dec              31 Dec   
                                                           2012        %       2011   
Contributions to earnings by business unit                   Rm   change         Rm   
South African long-term insurance                                                     
Retail SA(1)                                              1 299    (6,0)      1 382   
Corporate(1)                                                 75     78,6         42   
LibFin Markets                                              151    (2,6)        155   
Asset management                                                                      
STANLIB(2)                                                  489     12,4        435   
Liberty Properties(2)                                        48   (36,0)         75   
Business development                                                                  
Liberty Africa                                               69     >100         21   
Asset management operations                                  48     33,3         36   
Insurance operations                                         21     >100       (15)   
Liberty Health                                             (42)     35,4       (65)   
Direct Financial Services                                  (38)     19,1       (47)   
Central overheads, development costs and sundry income    (248)    (7,8)      (230)   
BEE normalised operating earnings                         1 803      2,0      1 768   
LibFin Investments                                        1 965     >100        969   
BEE normalised headline earnings                          3 768     37,7      2 737   
BEE preference share adjustment                            (62)      6,1       (66)   
Headline earnings                                         3 706     38,7      2 671   

(1) 2011 earnings have been restated for the change in accounting policy relating to the adoption of shadow accounting.
(2) 2011 restated to reflect the transfer of the Liberty Properties asset management business to STANLIB from 1 January 2012.

South African long-term insurance
Retail SA

Headline earnings for the year were R1 299 million compared to the restated R1 382 million in 2011 which included significant positive
assumption changes. Adjusting for these in both periods, headline earnings are 8% higher despite higher new business strain. This
increase is supported by ongoing positive persistency and mortality experience variances. Earnings have also absorbed the build cost of
the transactional joint venture with Standard Bank and investments in our emerging consumer market (ECM) business during the period.

The value proposition for financial advisers, which recognises the important balance between persistency, book size and quality of new
business, is producing the required outcome of selling quality new business and enhancing the value of the existing customer base.
Various significant developments in the product and distribution area continued, including the May launch of an innovative annuity
product incorporating a longevity bonus feature and the October launch of the single premium Evolve investment product which
provides low costs and introduces a unique component of investment return risk sharing. Initial take up of the Evolve product has
exceeded expectations.

Indexed new business sales (excluding contractual increases) of R5,3 billion have increased by 21% over 2011. Increases in our flagship
Lifestyle Protector and ECM risk products (up 23%) and the credit life sales under the bancassurance agreement with Standard Bank
(up 33%) was particularly pleasing. The investment business has also performed well and indexed new business was 12% higher. The new
business margin of 2,3% is a significant improvement on the 1,6% achieved for the 2011 year, and is within the medium term targeted
range of between 2,0% and 2,5%. The increased volume of quality sales combined with the focus in recent years on retention has resulted
in the in-force administered policy book size increasing by more than 1%. This has meant that better maintenance and acquisition cost
efficiency was evidenced. Management continues to focus on margin improvement and cost efficiency.

Net cash inflows were also very strong at R6,0 billion (26% up on 2011) and were supported by strong contributions from our sales of
single premium investment products and good persistency experience.

In October 2012 a comprehensive loyalty programme, "Own your life REWARDS", was successfully launched and will initially support
both the Retail SA and Liberty Health businesses with a future likely roll out across the group. The costs of the programme are included
in central overheads, development costs and sundry income.

Corporate
Liberty Corporate is in the process of transitioning its business by reducing risk in the operating environment whilst migrating a large
portion of its client base to more cost efficient umbrella funds. In addition there is a focus on enhancing service levels and establishing a
distribution and product capability for larger corporate and retirement funds.

Improved corporate headline earnings of R75 million are a function of better risk claims experience and premium income which has
grown by 14,9% supported by good increases in recurring premiums. Indexed new business was 4% lower than 2011, largely due to lower
risk sales following repricing to improve profitability. Value of new business at R30 million was however higher due to an improvement
in the quality and product mix. The business unit lost a substantial single investment mandate of R1,4 billion contributing to net cash
outflows of R2,0 billion for the year. A new flagship investment product, the Liberty Stable Growth Fund, as well a unique index tracking
investment range were launched.

The retirement fund administration backlog project has been completed well ahead of schedule enabling the business to utilise additional
capacity to focus on executing future business strategy.

LibFin Markets
LibFin Markets continued to manage market risk exposures within a narrow range. Headline earnings of R151 million flowed
mainly from increased profits on the credit portfolio assets backing annuities and guaranteed capital bonds as well as lower implied
volatilities which remain unhedged. The sustainable earnings base has been recognised in the group equity value for the first time at
31 December 2012, contributing R500 million of additional value. LibFin directly managed R32 billion of asset portfolios at 31 December 2012
(31 December 2011: R25 billion).

LibFin Investments
Within risk appetite, LibFin Investments manages the SIP which comprises the group's investment market exposure to the 90:10 book of
business and the assets backing capital in the insurance operations. The portfolio which is managed under a low risk balanced mandate
produced a gross return of 16,0% (2011: 8,1%) which was ahead of benchmark. This return benefited from favourable investment market
conditions and portfolio construction. Portfolio diversification was increased further during 2012.

Asset management
The Liberty Properties' asset management business was transferred to STANLIB with effect from 1 January 2012. Prior year comparatives
have been restated to reflect this change.

STANLIB
STANLIB experienced substantial net inflows of R20,3 billion during 2012. Inflows into institutional money market collective investments
of R5,6 billion, retail collective investments of R12,9 billion and linked investments and structured products of R5,4 billion were particularly
good. Total assets under management increased to R437 billion at 31 December 2012 (31 December 2011: restated R368 billion).

Following the implementation of the multi-specialist franchise operating model, the majority of funds under management are now
reflecting significantly improved investment performance across several investment horizons. STANLIB's performance in the Alexander
Forbes Global Best Investment View Survey for global balanced funds placed STANLIB in the 1st quartile over one and three years, and
STANLIB's unit trusts recently received five Raging Bull awards.

STANLIB's headline earnings at R489 million are 12% higher compared to 2011 despite once-off costs associated with further enhancing
investment processes and disciplines and establishing further investment capabilities.

Liberty Properties
Liberty Properties, which comprises property management and development, has benefited from growth in property management
fees supported by increases in rental areas at the flagship shopping centres. However, delays in securing development mandates have
resulted in reduced development fee income. Headline earnings reduced to R48 million compared to restated R75 million in 2011.

Fountainhead
Liberty Holdings sold its 50% joint venture in Fountainhead Property Trust Management Limited and Evening Star Trading 768 (Pty)
Limited to Redefine Properties Limited for R335 million resulting in a profit on sale of R117 million.

Business development
Significant progress has been made in effecting operational improvements to the various businesses under development. We remain
committed to these initiatives and is pleasing to note earnings improvements in the second half of 2012.

Liberty Africa
East and Southern Africa (outside of South Africa) generated profit of R69 million (2011: R21 million) for the reporting period. Investment
markets in the East Africa region contributed a high proportion of the increase in earnings.

Assets under management remained high at R36 billion.

Liberty Health
Liberty's share of Liberty Health's headline loss for 2012 was R42 million. Whilst operational efficiencies have been implemented, the
business does not, as yet, have sufficient scale to leverage the investment in systems and processes. The acquisition of client mandates
as well as assisting the medical scheme administration clients to grow their membership remains management's top priority.

Sales of health risk products in African countries, excluding South Africa, continue to grow and our in-force book increased to 83 774 lives
(2011: 67 901). Actions taken on pricing and risk management have improved the medical claims loss ratio to 89% (2011: 114%).

Direct Financial Services
The direct IT platform capability has created the base for a broader direct strategy including supporting the recently launched joint
ventures with Vodacom and Standard Bank. Whilst these initiatives have only recently been launched, both are performing to plan.

FRANK.NET, which currently provides simple life cover products through an alternative direct distribution channel, has achieved good
brand presence; however, the conversion of leads and the persistency of the business need to be improved.

Bancassurance
The revised terms of the commercial bancassurance joint venture relationship with Standard Bank, which broaden the available
distribution channels, product sets and geographies are making an increased contribution to new business volumes and earnings. Sales
on an indexed basis of insurance products from bancassurance channels were 21% higher than 2011. Attributable Liberty earnings from
credit life were R135 million, up 41% from last year, and STANLIB received a 11% growth in net asset management fees related to assets
acquired through the Standard Bank distribution channel. The total embedded value of in-force contracts sold under the agreement
attributable to Liberty at 31 December 2012 is R1,2 billion (2011: R1,1 billion).

Tax legislation
The Taxation Laws Amendment Bill, 2012 was promulgated on 1 February 2013 which confirmed the announced increases to the inclusion
rates and therefore effective capital gains tax rates for taxpayers, with effect from 1 March 2012. The Bill also enacted the long-term
insurance industry negotiated deemed disposal and re-acquisition of investment assets that was applied to all policyholder funds on
29 February 2012 with the resulting capital gains being spread in equal amounts over four tax years commencing from the 2012 tax year.
In addition, new expense relief formulae are now applicable to the policyholder funds for life companies.

The group has applied the new legislation in preparing the 31 December 2012 results. The impact on earnings has not been significant.

No adjustments have been made for any tax proposals announced by the Minister of Finance in his budget on 27 February 2013.

Capital adequacy cover
The capital adequacy cover of Liberty Group Limited remains strong at 2,71 times the statutory requirement (2011: 2,89 times).
All the other group subsidiary life licences are well capitalised.

Dividends
2012 final dividend
In line with the group's dividend policy, the board has approved and declared a gross final dividend of 336 cents per ordinary share.
The dividend will be payable out of income reserves and payable to all ordinary shareholders recorded in the books of Liberty Holdings
Limited at the close of business on Thursday, 28 March 2013.

2012 special dividend
Given the substantial increase in earnings in the current year after taking into account additional capital required by the strong new
business flows, the directors have proposed a gross special dividend of 130 cents per ordinary share. The dividend will be payable out of
income reserves and payable to all ordinary shareholders recorded in the books of Liberty Holdings Limited at the close of business on
Thursday, 28 March 2013.

There are no STC credits to be utilised for the final or special dividends. The dividends totalling 466 cents per ordinary share will be subject
to a local dividend tax rate of 15% which will result in a net final dividend, to those shareholders who are not exempt from paying dividend
tax, of 285,6 cents per ordinary share and a net special dividend, to those shareholders who are not exempt from paying dividends tax, of
110,5 cents per ordinary share. Liberty Holdings Limited's income tax number is 9050/191/71/8. The number of ordinary shares in issue in
the company's share capital at the date of declaration is 286 202 373.

The important dates pertaining to the dividends are as follows:
Last date to trade cum dividend on the JSE                                                              Wednesday, 20 March 2013
First trading day ex dividend on the JSE                                                                   Friday, 22 March 2013
Record date                                                                                              Thursday, 28 March 2013
Payment date                                                                                               Tuesday, 2 April 2013

Share certificates may not be de-materialised or re-materialised between Friday, 22 March 2013 and Thursday, 28 March 2013, both
days inclusive. Where applicable, in terms of instructions received by the company from certificated shareholders, the payment of the
dividend will be made electronically to shareholders' bank accounts on payment date.

In the absence of specific mandates, cheques will be posted to shareholders. Shareholders who have de-materialised their shares will
have their accounts with their CSDP or broker credited on Tuesday, 2 April 2013.

Prospects
We trust that shareholders are pleased with the group's 2012 performance and we believe that the group is now well positioned to
achieve sustainable growth in the future. Our core insurance and asset management businesses are performing well and we anticipate
that they will continue to attract higher levels of new business at improved margin despite the expected ongoing pressure on consumer
disposable income. We believe our balance sheet management capability will enable us to continue managing our investment market
risk exposures within risk appetite and competently deal with the probable protracted period of volatility in investment markets and low
interest rates.

Bruce Hemphill                                                                           Saki Macozoma
Chief Executive                                                                               Chairman

27 February 2013

Liberty Holdings Limited
Incorporated in the Republic of South Africa
(Registration number: 1968/002095/06)
JSE code: LBH
ISIN code: ZAE0000127148
Telephone +27 11 408 3911

Transfer Secretaries
Computershare Investor Services (Pty) Limited
(Registration number: 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Telephone +27 11 370 5000

Sponsor
Merrill Lynch
A Subsidiary of Bank of America

These results are available at www.liberty.co.za

Accounting policies

The 2012 consolidated financial statements have been prepared in accordance with and containing information required by International
Financial Reporting Standards (IFRS) including full compliance with IAS 34 Interim Financial Reporting as well as the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council. They are also in compliance with the Listings Requirements of the JSE Limited and the South African
Companies Act No. 71 of 2008.

The accounting policies adopted in the preparation of the consolidated financial statements are in terms of IFRS and are consistent with
those adopted in the previous year except for the following:

The group has adopted for the first time, effective 1 January 2012, an accounting policy for shadow accounting as permitted under
IFRS 4 Insurance Contracts. The shadow accounting will be applied to the allocation of changes to policyholder liabilities arising from fair
value re-measurement of owner-occupied properties held to match obligations under insurance contacts. Previously a mismatch was
created as the change to the insurance policyholder liability was reflected in profit or loss whilst the matching asset re-measurement is
reflected in other comprehensive income as required by IAS 16 Property, Plant and Equipment. The adoption of shadow accounting will
allow the relevant change in the insurance liability to also be reflected in other comprehensive income thereby eliminating the mismatch
in presentation.

The adoption of the shadow accounting policy has been applied retrospectively with the impact being that total earnings for the year
ended 31 December 2012 have decreased by R131 million (2011: increase of R74 million) with other comprehensive income adjusting by
the same amount. There is no impact to total comprehensive income, the financial position or shareholders' funds of the group.

Several other amendments to IFRS standards were made by the International Accounting Standards Board, which are effective for the
period under review. These amendments are not applicable to the 2012 results of the group.

Audit opinion
The company's auditors, PricewaterhouseCoopers Inc., have issued their opinion on the consolidated financial statements and the group
equity value report for the year ended 31 December 2012. They have issued unmodified audit opinions. Copies of their audit reports are
available for inspection at the company's registered office.

Definitions

BEE normalised: headline earnings per share, return on equity, group equity value per share and return on
group equity value
These measures reflect the economic reality of the Black Economic Empowerment (BEE) transaction as opposed to the required
technical accounting treatment that reflects the BEE transaction as a share buy-back. Dividends received on the group's BEE preference
shares (which are recognised as an asset for this purpose) are included in income. Shares in issue relating to the transaction are reinstated.

Capital adequacy requirement (CAR)
The capital adequacy requirement is the minimum amount by which the Financial Services Board requires an insurer's assets to exceed
its liabilities. The assets, liabilities and CAR must be calculated using a method which meets the Financial Services Board's requirements.
Capital adequacy cover refers to the amount of capital the insurer has as a multiple of the minimum requirement.

Health lives
This reflects the number of natural persons covered for medical risk insurance (either through medical aids or directly) for which Liberty
Health provides administration services and/or IT system support.

Long-term insurance operations  Indexed new business
This is a measure of new business which is calculated as the sum of twelve months' premiums on new recurring premium policies and
one tenth of single premium sales.

Long-term insurance operations  New business margin
This is the value of new business as defined below, expressed as a percentage of the present value of future expected premiums at the
point of sale.

Long-term insurance operations  Value of new business and margin
The present value, at point of sale, of the projected stream of after tax profits for new business issued, net of the cost of required capital.
The present value is calculated using a risk adjusted discount rate. Margin is calculated using the value of new business divided by the
present value of future modelled premiums.

Short-term insurance operations  Claims loss ratio
This is a measure of underwriting risk and is measured as a ratio of claims incurred divided by the net premiums earned.

FCTR
Foreign Currency Translation Reserve.

Development costs
Represents project costs incurred on developing or enhancing future revenue opportunities.

Negative rand reserves
A portion of expected future management and administration fees are present valued at and recognised at point of sale. Prospective
measurement takes place at each valuation date until received.

Statement of financial position
as at 31 December 2012                                                                          
                                                                                2012      2011   
Audited                                                                           Rm        Rm   
Assets                                                                                           
Equipment and owner-occupied properties under development                        952       897   
Owner-occupied properties                                                      1 378     1 598   
Investment properties                                                         24 133    23 470   
Intangible assets                                                                759       933   
Defined benefit pension fund employer surplus                                    186       199   
Deferred acquisition costs                                                       449       403   
Interests in joint ventures                                                      378       626   
Reinsurance assets                                                             1 170     1 104   
 long-term insurance                                                            978       902   
 short-term insurance                                                           192       202   
Operating leases  accrued income                                              1 277     1 085   
Derivative assets                                                              6 910     3 790   
Interests in associates                                                           72             
Interests in associates  mutual funds                                        13 837    11 697   
Financial investments                                                        231 187   197 959   
Deferred taxation                                                                253       183   
Prepayments, insurance and other receivables                                   3 489     2 620   
Cash and cash equivalents                                                      6 327     6 664   
Total assets                                                                 292 757   253 228   
Liabilities                                                                                      
Long-term policyholder liabilities                                           236 684   208 565   
Insurance contracts                                                          164 666   145 558   
Investment contracts with discretionary participation features                 3 855     3 447   
Financial liabilities under investment contracts                              68 163    59 560   
Short-term insurance liabilities                                                 525       466   
Financial liabilities at amortised cost                                        2 177     2 195   
Third party financial liabilities arising on consolidation of mutual funds    14 465    11 164   
Employee benefits                                                              1 198     1 082   
Deferred revenue                                                                 174       159   
Deferred taxation                                                              2 715     2 819   
Deemed disposal taxation liability                                               918             
Provisions                                                                       338       371   
Operating leases  accrued expense                                                30        93   
Derivative liabilities                                                         6 098     3 113   
Insurance and other payables                                                   8 200     6 304   
Current taxation                                                                 724       614   
Total liabilities                                                            274 246   236 945   
Equity                                                                                           
Ordinary shareholders' interests                                              15 410    13 211   
Share capital                                                                     26        26   
Share premium                                                                  6 078     6 133   
Retained surplus                                                              10 332     7 683   
Other reserves                                                               (1 026)     (631)   
Non-controlling interests                                                      3 101     3 072   
Total equity                                                                  18 511    16 283   
Total equity and liabilities                                                 292 757   253 228   

Statement of comprehensive income                                                                                                         
for the year ended 31 December 2012                                                                                                       
                                                                                                                2012      Restated 2011   
Audited                                                                                                           Rm                 Rm   
Revenue                                                                                                                                   
Insurance premiums                                                                                            30 720             27 302   
Reinsurance premiums                                                                                         (1 089)              (909)   
Net insurance premiums                                                                                        29 631             26 393   
Service fee income from investment contracts                                                                     881                863   
Investment income                                                                                             12 688             11 079   
Hotel operations sales                                                                                           720                679   
Investment gains                                                                                              30 209              8 148   
Fee revenue and reinsurance commission                                                                         1 877              1 560     
Adjustment to defined benefit pension fund employer surplus                                                     (45)                (4)
Total revenue                                                                                                 75 961             48 718   
Claims and policyholder benefits under insurance contracts                                                  (25 004)           (22 897)   
Insurance claims recovered from reinsurers                                                                       672                627   
Change in long-term policyholder liabilities                                                                (19 532)            (6 136)   
Insurance contracts                                                                                         (19 228)            (6 262)   
Investment contracts with discretionary participation features                                                 (380)                 73   
Applicable to reinsurers                                                                                          76                 53   
Fair value adjustment to policyholder liabilities under investment contracts                                (10 035)            (4 089)   
Fair value adjustment on third party mutual fund interests                                                   (2 979)            (1 230)   
Acquisition costs                                                                                            (3 818)            (3 268)   
General marketing and administration expenses                                                                (7 445)            (6 498)   
Finance costs                                                                                                  (243)              (271)   
Profit share allocations under bancassurance and other agreements                                              (800)              (628)   
Profit on sale of joint venture                                                                                  135                      
Equity accounted earnings from joint ventures                                                                      3                  9   
Profit before taxation                                                                                         6 915              4 337   
Taxation                                                                                                     (2 717)            (1 383)   
Total earnings                                                                                                 4 198              2 954   
Other comprehensive income                                                                                        10                 84   
Owner-occupied properties  fair value adjustment                                                              (192)                115   
Income and capital gains tax relating to owner-occupied properties fair value adjustment                          66               (41)   
Change in long-term policyholder insurance liabilities (application of shadow accounting)                        131               (74)   
Net change in fair value on cash flow hedges                                                                    (29)                 14   
Income and capital gains tax relating to net change in fair value on cash flow hedges                              8                (4)   
Foreign currency translation                                                                                      26                 74   
Total comprehensive income                                                                                     4 208              3 038   
Total earnings attributable to:                                                                                                           
Liberty shareholders' interests                                                                                3 779              2 673   
Non-controlling interests                                                                                        419                281   
                                                                                                               4 198              2 954   
Total comprehensive income attributable to:
Liberty shareholders' interests                                                                                3 780              2 736
Non-controlling interests                                                                                        428                302   
                                                                                                               4 208              3 038   
                                                                                                               Cents              Cents   
Basic earnings per share                                                                                     1 464,6            1 026,1   
Fully diluted basic earnings per share                                                                       1 370,8              981,6   

Headline earnings and earnings per share                                                                    
for the year ended 31 December 2012                                                                         
                                                                                                 Restated   
                                                                                          2012       2011   
Audited                                                                                     Rm         Rm   
Reconciliation of total earnings to headline earnings attributable to equity holders                        
Total earnings attributable to equity holders                                            3 779      2 673   
Preference share dividend                                                                  (2)        (2)   
Basic earnings attributable to ordinary shareholders                                     3 777      2 671   
Profit on sale of joint venture                                                          (117)              
Derecognition and impairment of intangible asset                                            44              
FCTR recycled through profit or loss                                                         2              
Headline earnings attributable to ordinary shareholders                                  3 706      2 671   
Net income earned on BEE preference shares                                                  62         66   
BEE normalised headline earnings attributable to ordinary shareholders                   3 768      2 737   
Weighted average number of shares in issue ('000)                                      257 885    260 306   
BEE normalised weighted average number of shares in issue ('000)                       283 681    286 102   
Fully diluted weighted average number of shares in issue ('000)                        275 534    272 113   
                                                                                         Cents      Cents   
Earnings per share attributable to ordinary shareholders                                                    
Basic                                                                                  1 464,6    1 026,1   
Headline                                                                               1 437,1    1 026,1   
BEE normalised headline                                                                1 328,3      956,7   
Fully diluted earnings per share attributable to ordinary shareholders                                      
Basic                                                                                  1 370,8      981,6   
Headline                                                                               1 345,0      981,6  

Condensed statement of changes in shareholders funds
for the year ended 31 December 2012

                                                                                        2012                   2011
Audited                                                                                   Rm                     Rm

Balance of ordinary shareholders interests at 1 January                              13 211                 11 716
Dividend/capital reduction(1)                                                         (1 396)                (1 353)
Total comprehensive income                                                             3 780                  2 736
Share buy-back                                                                          (415)                   (40)
Subscription for shares                                                                   26                     21
Black Economic Empowerment transaction                                                   126                    112
Share-based payments                                                                      78                     55
Payment on settlement of share options/rights                                                                    (2)
Acquisition of additional interests in subsidiaries                                                              (3)
Preference dividend                                                                       (2)                    (2)
FCTR recycled through profit or loss                                                       2
Profit on partial disposal of a subsidiary                                                                        8
Acquisition of Liberty Holdings Kenya Limited(2)                                                                (37)

Ordinary shareholders interests                                                      15 410                 13 211

Balance on non-controlling interests at 1 January                                      3 072                  2 663
Total comprehensive income                                                               428                    302
Unincorporated property partnerships                                                    (182)                     4
Non-controlling share of subsidiary dividend                                             (16)                   (13)
Acquisition of interest in Total Health Trust Limited                                     33
Disposal of Alberton City unincorporated property partnership                           (234)
Acquisition of additional interests in subsidiaries                                                             (24)
Profit on partial disposal of a subsidiary                                                                       10
Acquisition of Liberty Holdings Kenya Limited(2)                                                                130

Non-controlling interests                                                              3 101                  3 072

Total equity                                                                          18 511                 16 283

(1) 31 December 2012: 2011 final dividend of 298 cents per share and 2012 interim dividend of 192 cents per share. 31 December 2011: 2010 final dividend of 291 cents per share and
    2011 interim capital reduction of 182 cents per share.
(2) Formerly CfC Insurance Holdings Limited.

Condensed statement of cash flows
for the year ended 31 December 2012

                                                                                       2012                   2011
Audited                                                                                  Rm                     Rm

Operating activities                                                                  6 218                  5 469
Investing activities                                                                 (6 187)                (5 008)
Financing activities                                                                   (407)                   148

Net (decrease)/increase in cash and cash equivalents                                   (376)                   609
Cash and cash equivalents at the beginning of the year                                6 664                  5 858
Foreign currency translation                                                             10                     29
Cash and cash equivalents acquired through business acquisition                          29                    168
Cash and cash equivalents at the end of the period                                    6 327                  6 664

Condensed segment information
for the year ended 31 December 2012

The audited segment results for the year ended 31 December 2012 are as follows:

                            Long-term insurance      Short-      Asset                                 Reporting
                                                       term    manage-     Health                        adjust-        IFRS
Rm                          Retail   Corporate    insurance       ment   services    Other     Total    ments(1)    reported

Total revenue               62 096      16 395          904      2 419        289    1 619   83 722      (7 761)      75 961
Profit/(loss) before
taxation                     4 667         126          128        785      (132)      895     6 469         446       6 915
Taxation                   (2 424)        (24)         (15)      (216)         38     (10)   (2 651)        (66)     (2 717)
Total earnings/(loss)        2 243         102          113        569       (94)      885     3 818         380       4 198
Other comprehensive
income                        (11)           1            7         2                   11        10                      10
Total comprehensive
income/(loss)                2 232         103          120        571       (94)      896     3 828         380       4 208
Attributable to:
Non-controlling interests     (22)           1         (59)        (7)         23       16       (48)      (380)       (428)
Equity holders               2 210         104           61        564       (71)      912     3 780                  3 780
Reconciliation of total
earnings/(loss) to
headline earnings/(loss)
attributable
to equity holders
Total earnings/(loss)        2 243         102          113        569       (94)      885     3 818         380       4 198
Attributable (to)/from
non-controlling
interests                     (17)           1         (55)        (7)         23       16      (39)       (380)       (419)
Preference dividend                                                                    (2)       (2)                     (2)
Intangible assets
derecognition and
impairment                     44                                                                44                       44
Profit on sale of joint
venture                                                                              (117)     (117)                   (117)
FCTR recycled through
profit or loss                                                                  2                 2                        2
Headline
earnings/(loss)              2 270         103          58        562        (69)      782    3 706                   3 706
Net income earned
on BEE preference shares                                                                62       62                       62
BEE normalised
headline earnings/(loss)     2 270         103          58        562        (69)      844    3 768                   3 768

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
    insurance into defined IFRS investment' and insurance' products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the
    elimination of inter-group transactions.

The audited segment results for the year ended 31 December 2011 are as follows:

                                                      Short-     Asset                                 Reporting
                            Long-term insurance
Restated                                               term    manage-     Health                        adjust-        IFRS
Rm                          Retail   Corporate    insurance       ment   services   Other      Total    ments(1)    reported

Total revenue               41 754      10 846          319      2 064        279   1 174    56 436      (7 718)      48 718
Profit/(loss) before
taxation                     3 155          87         (88)        751      (117)     292      4 080         257       4 337
Taxation                    (1 306)         15          (7)      (209)         7       76    (1 424)          41     (1 383)
Total earnings/(loss)        1 849         102         (95)        542      (110)     368      2 656         298       2 954
Other comprehensive
income                          38                       15          8          1      22         84                      84
Total comprehensive
income/(loss)                1 887         102         (80)        550      (109)     390      2 740         298       3 038
Attributable to:
Non-controlling interests      (31)       (19)          26        (16)         36                (4)       (298)       (302)
Equity holders               1 856          83         (54)        534       (73)     390      2 736                  2 736
Reconciliation of total
earnings/(loss) to
headline earnings/(loss)
attributable
to equity holders
Total earnings/(loss)        1 849         102         (95)        542      (110)     368     2 656          298       2 954
Attributable (to)/from
non-controlling
interests                      (23)       (14)          33        (15)        36                 17        (298)       (281)
Preference dividend                                                                   (2)       (2)                      (2)
Headline
earnings/(loss)              1 826          88         (62)        527       (74)     366     2 671                   2 671
Net income earned
on BEE preference shares                                                               66        66                       66
BEE normalised
headline earnings/
(loss)                       1 826          88         (62)        527       (74)     432      2 737                  2 737

(1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
    insurance into defined IFRS investment' and insurance' products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the
    elimination of inter-group transactions.

Group equity value report

1. Introduction
   Liberty presents a "group equity value" report to reflect the combined value of the various components of Liberty's businesses.
   Sections 2 and 3 below describe the valuation bases used for each reported component. It should be noted the group equity value
   is presented to provide additional information to shareholders to assess performance of the group. The total equity value is not
   intended to be a fair value calculation of the group but should provide indicative information of the inherent value of the component
   parts.

2. Component parts of the group equity value and valuation techniques used
   Group equity value has been calculated as the sum of the various component parts:

	 2.1 South African covered business:
	    The wholly owned subsidiary, Liberty Group Limited, comprises the cluster of South African long-term insurance entities and
            related asset holding entities. The embedded value methodology in terms of Actuarial Practice Note 107 issued by the Actuarial
            Society of South Africa continues to be used to derive the value of this business cluster described as "South African covered
            business". The embedded value report of the South African covered business has been reviewed by the group's statutory
            actuary. The full embedded value report is included in the supplementary information section.

	 2.2 Other businesses:

STANLIB               Valued using a 10 times (2011: 10 times) multiple of estimated sustainable earnings.                  
Liberty Properties    Valued using a 10 times (2011: 10 times) multiple of estimated sustainable earnings.                  
Fountainhead          Fountainhead has been valued at Liberty's share of the contracted sale price.                         
Liberty Health        As Liberty Health has yet to establish a history to support a sustainable earnings calculation,       
                      IFRS net asset value is applied.                                                                      
Liberty Africa        Liberty Africa is an emerging cluster of wealth businesses located outside South Africa.              
                      A combination of valuation techniques including embedded value, discounted cash flow and              
                      earnings multiples have been applied to value these businesses. The combined value of this cluster    
                      is not material relative to the other components of group equity value and therefore a detailed       
                      analysis of this valuation has not been presented.                                                    
LibFin Credit         LibFin originates appropriate illiquid assets that provide acceptable illiquidibility premiums.       
                      The value of this origination is reflected at a 10 times multiple of estimated sustainable earnings   
                      adjusting for related expenses and prudential margin.                                                 


 2.3  Other adjustments:
      These comprise the net market value of assets and liabilities held by the Liberty Holdings Limited company excluding
      investments in subsidiaries valued separately, the fair value of share options/rights allocated to staff not employed by the
      South African covered businesses and allowance for certain shareholder recurring costs incurred in Liberty Holdings Limited
      capitalised at a multiple of 9 times (December 2011: 9 times).

3. 	 BEE normalised group equity value
	 3.1	   Analysis of BEE normalised group equity value

                                                                                                                    Value of
                                                                                                                   in-force:
Audited                                                         SA       Other      Group                                 SA
31 December 2012                                            covered      busi-      funds    Adjust-        Net      covered
Rm                                                         business     nesses   invested      ments   worth(1)     business     Total
SA insurance operations
(excluding Direct Financial Services)                         9 424                 9 424    (4 796)      4 628       20 204    24 832
      Retail SA                                                                                                       18 525
      Corporate                                                                                                        1 679
Direct Financial Services                                        75                    75                    75           64       139
Value of in-force acquired                                      230                   230      (230)
Working capital                                               3 460                 3 460      (416)      3 044                  3 044
South African insurance operations                           13 189                13 189    (5 442)      7 747       20 268    28 015
Other group businesses:
STANLIB                                                                    262        262      4 438      4 700                  4 700
Properties                                                                  45         45        355        400                    400
Liberty Health (including Total Health Trust)                    41        186        227                   227                    227
Liberty Africa                                                   40        433        473        150        623           33       656
LibFin Credit                                                                                    500        500                    500
Liberty Holdings                                                         1 214      1 214         37      1 251                  1 251
Cost of capital                                                                                                       (1 477)  (1 477)
Net equity as reported under IFRS                            13 270      2 140     15 410         38     15 448        18 824   34 272
BEE preference funding                                        1 012                 1 012                 1 012                  1 012
Allowance for future shareholders costs                                  (236)      (236)                 (236)       (1 785)  (2 021)
Allowance for employee share
options/rights                                                (305)      (218)      (523)                 (523)                  (523)
BEE normalised equity value                                  13 977      1 686    15 663         38     15 701        17 039    32 740
Summary of adjustments:
   Negative rand reserves                                   (4 796)               (4 796)
   Deferred acquisition costs                                 (439)                 (439) 
   Deferred revenue liability                                   165                   165
   Internally generated software                               (37)        37
   Carrying value of in-force business
   acquired                                                   (230)                 (230)
  Fair value adjustment of
  non SA covered business                                     (100)     5 443       5 343
 Impact of discounting on deferred tax asset                    (5)                   (5)
                                                            (5 442)     5 480          38
(1) Reconciliation to SA covered business
    net worth.
Net equity of SA covered business as reported under IFRS    13 270
Adjustments as above                                        (5 442)
Allowance for employee share options/rights                   (305)
BEE preference share funding                                  1 012
Net worth as reported in supplementary information            8 535

3. 	 BEE normalised group equity value
	 3.1	   Analysis of BEE normalised group equity value

                                                                                                                  Value of
                                                                                                                 in-force:
Audited                                                         SA       Other      Group                               SA
31 December 2011                                           covered        busi-     funds    Adjust-      Net      covered
Rm                                                         business     nesses   invested      ments  worth(1)    business      Total
SA insurance operations
(excluding Direct Financial Services)                        7 227                  7 227     (3 857)    3 370      17 789     21 159
      Retail SA                                                                                                     16 175
      Corporate                                                                                                      1 614
Direct Financial Services                                      116                    116        (14)      102          38        140
Value of in-force acquired                                     325                    325       (325)
Working capital                                              3 994                  3 994       (291)    3 703                  3 703
South African insurance operations                          11 662                 11 662     (4 487)    7 175      17 827     25 002
Other group businesses:
STANLIB                                                                    234        234      3 566     3 800                  3 800
Properties (including Fountainhead)                                        270        270        684       954                    954
Liberty Health (including Total Health Trust)                   81          97        178                  178                    178
Liberty Africa                                                  31         354        385                  385          33        418
Liberty Holdings                                                           482        482         54       536                    536
Cost of capital                                                                                                    (1 167)    (1 167)
Net equity as reported under IFRS                           11 774       1 437     13 211       (183)   13 028      16 693     29 721
BEE preference funding                                       1 075                  1 075                1 075                  1 075
Allowance for future shareholders costs                                  (145)      (145)                (145)      (1 690)   (1 835)
Allowance for employee share
options/rights                                               (180)       (142)      (322)                (322)                  (322)
BEE normalised equity value                                 12 669       1 150     13 819       (183)   13 636      15 003     28 639
Summary of adjustments:
  Negative rand reserves                                   (3 857)                (3 857)
  Deferred acquisition costs                                 (389)                  (389)
  Deferred revenue liability                                   152                    152
  Internally generated software                               (54)         54
  Direct Financial Services allowance for
  future expenses                                             (14)                   (14)
  Carrying value of in-force business
  acquired                                                   (325)                  (325)
 Fair value adjustment of
 non SA covered business                                                4 250       4 250
                                                           (4 487)      4 304       (183)
(1) Reconciliation to SA covered business
    net worth.
Net equity of SA covered business as reported under IFRS    11 774
Adjustments as above                                       (4 487)
Allowance for employee share options/rights                  (180)
BEE preference share funding                                 1 075
Net worth as reported in supplementary information           8 182

3. 	 BEE normalised group equity value (continued)
	 3.2 	   BEE normalised group equity value earnings and value per share		

                                                             31 December 2012                 31 December 2011
                                                            SA       Other                    SA     Other
Audited                                                 covered      busi-               covered     busi-
Rm                                                     business     nesses      Total   business    nesses      Total
BEE normalised equity value at end of the year           25 574      7 166     32 740     23 185     5 454     28 639
BEE preference shares                                     1 012                 1 012      1 075                1 075
Equity value at the end of the year                      24 562      7 166     31 728     22 110     5 454     27 564
Adjustments from group restructure                                                            15      (15)
Capital transactions                                                   389        389                   19         19
Funding of restricted share plan                             87       (87)
Intergroup dividends                                      1 701    (1 701)                 1 283   (1 283)
Dividends paid                                                       1 396      1 396                1 353      1 353
BEE normalised equity value at beginning of the year    (23 185)   (5 454)   (28 639)   (21 504)   (4 526)   (26 030)
Equity value at beginning of the year                   (22 110)   (5 454)   (27 564)   (20 385)   (4 526)   (24 911)
BEE preference shares                                    (1 075)              (1 075)    (1 119)              (1 119)

BEE normalised equity value earnings                      4 177      1 709      5 886      2 979     1 002      3 981
BEE normalised return on group equity value               18,0%      33,7%      20,8%      13,9%     22,1%      15,3%
BEE normalised number of shares (000's)                                       283 635                         285 961
Number of shares in issue (000's)                                             256 440                         260 165
Shares held for the employee restricted
share scheme (000's)                                                            1 399
Adjustment for BEE ordinary shares (000's)                                     25 796                          25 796
BEE normalised group equity value per share
(Rand)                                                                         115,43                          100,15

3.3 	   Sources of BEE normalised group equity value earnings	

                                                             31 December 2012                 31 December 2011
                                                            SA      Other                     SA     Other
Audited                                                covered       busi-               covered     busi-
Rm                                                     business    nesses       Total    business   nesses      Total
Value of new business                                      660         31         691        389        21        410
Expected return on value of in-force                     1 763                  1 763      1 640                1 640
Operating assumptions                                       37       (149)      (112)        949       (55)       894
Operating experience variances                             131        (42)         89        286       (11)       275
Operating assumption changes                               272       (107)        165        273       (44)       229
Changes in modelling methodology                         (366)                  (366)        390                  390
Headline earnings of other businesses                     (45)        547         502      (108)       527        419
Operational equity value profits                         2 415        429       2 844      2 870       493      3 363
Non headline earnings adjustment                           (2)         73          71
Development costs                                         (78)                   (78)       (61)                 (61)
Investment return on net worth                             760        120         880        458       174        632
Investment variances                                       700                    700      (279)                (279)
Changes in economic assumptions                            507                    507       (12)                 (12)
Increase in fair value adjustments on value of other
businesses                                                          1 163       1 163                  145        145
Change in allowance for share options/rights              (125)       (76)       (201)         3       (67)      (64)
Change in STC allowance                                                                                257        257
Group equity value earnings                              4 177      1 709       5 886      2 979     1 002      3 981

3.4	   Analysis of value of long-term insurance, new business and margin

           Audited                                                             31 Dec    31 Dec
           Rm                                                                    2012      2011

           South African covered business:
           Retail SA
            Traditional Life                                                   1 052       793
            Emerging Consumer Markets                                            185       111
            Credit Life                                                          128        86
           Liberty Corporate                                                      110        95
           Direct Financial Services                                               55        51
  
           Gross value of new business                                          1 530     1 136
           Overhead acquisition costs impact on value of new business            (782)     (687)
           Cost of required capital                                               (88)      (60)

           Net value of South African covered new business                        660       389

           South African life licences                                            655       381
           Liberty Africa subsidiaries                                              5         8
 
           Present value of future expected premiums                           33 510    28 329
           Margin                                                                 2,0%      1,4%

           Liberty Africa:
           Net value of new business                                               31        21
           Present value of future expected premiums                              311       229
           Margin                                                                10,0%      9,2%

           Total group net value of new business                                  691       410
           Total group margin                                                     2,0%      1,4%

Long-term insurance new business
for the year ended 31 December 2012

                                                                                                                                  2012                       2011
Unaudited                                                                                                                           Rm                         Rm

Retail SA                                                                                                                       18 848                     16 229
 Single                                                                                                                         15 069                     13 171
 Recurring                                                                                                                       3 779                      3 058

Corporate                                                                                                                        1 415                     1 586
 Single                                                                                                                            892                     1 053
 Recurring                                                                                                                         523                       533

Liberty Africa(1)                                                                                                                  196                       140
 Single                                                                                                                             65                        32
 Recurring                                                                                                                         131                       108

Direct Financial Services                                                                                                           31                        28
 Single                                                                                                                             13
 Recurring                                                                                                                          18                        28

Total new business                                                                                                              20 490                    17 983
 Single                                                                                                                         16 039                    14 256
 Recurring                                                                                                                       4 451                     3 727

Sources of insurance operations total new business by customer segment:

Retail                                                                                                                          18 990                    16 367
 Single                                                                                                                         15 105                    13 198
 Recurring                                                                                                                       3 885                     3 169

Corporate                                                                                                                        1 500                     1 616
 Single                                                                                                                            934                     1 058
 Recurring                                                                                                                         566                       558

Total new business                                                                                                              20 490                    17 983

Indexed new business                                                                                                             6 055                     5 152

Sources of insurance indexed new business by business unit:
Retail SA                                                                                                                        5 286                     4 375
Corporate                                                                                                                          612                       638
Liberty Africa(1)                                                                                                                  138                      111
Direct Financial Services                                                                                                           19                        28

(1) Liberty owns less than 100% of the various that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional legal ownership.

Assets under management(1)
as at 31 December 2012

                                                                                                                                  2012                 2011
Unaudited                                                                                                                          Rbn                  Rbn

Managed by group business units                                                                                                    505                  432
 STANLIB                                                                                                                           437                  368
  Transferred from Properties(2)                                                                                                    35                   27
  Other core assets under management                                                                                               402                  341
 Liberty Africa(3)                                                                                                                  36                   39
 LibFin                                                                                                                             32                   25
Externally managed                                                                                                                  23                   23

Total assets under management                                                                                                      528                  455
(1) Includes funds under administration.
(2) Properties asset management business was transferred to STANLIB on 1 January 2012.
(3) Liberty owns less than 100% of the various entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional
    legal ownership.

Long-term insurance net cash flows
for the year ended 31 December 2012
                                                                                                                                2012                2011
Audited                                                                                                                           Rm                  Rm
Premiums
Recurring                                                                                                                     23 627              20 853
  Retail                                                                                                                      16 498              14 817
  Corporate                                                                                                                    7 129               6 036
Single                                                                                                                        16 972              14 858
  Retail                                                                                                                       9 519               8 561
  Corporate                                                                                                                    2 035               1 629
  Immediate annuities                                                                                                          5 418               4 668
Net premium income from insurance contracts and inflows from investment contracts                                             40 599              35 711
Claims and policyholders benefits
Retail                                                                                                                       (25 149)            (23 086)
  Death and disability claims                                                                                                 (4 557)             (4 199)
  Policy surrender and maturity claims                                                                                       (16 783)            (15 471)
  Annuity payments                                                                                                            (3 809)             (3 416)
Corporate                                                                                                                    (10 878)             (8 395)
  Death and disability claims                                                                                                 (1 714)             (1 745)
  Scheme terminations and member withdrawals                                                                                  (8 882)             (6 349)
  Annuity payments                                                                                                              (282)               (301)
Net claims and policyholders benefits                                                                                        (36 027)            (31 481)
Long-term insurance net cash flows                                                                                             4 572               4 230
Sources of insurance operations cash flows by business unit:
 Retail SA                                                                                                                     6 030               4 767
Corporate                                                                                                                     (2 048)               (661)
 STANLIB Multi-manager                                                                                                           253                (109)
 Direct Financial Services                                                                                                        28                  17
 Liberty Africa(1)                                                                                                               309                 216

(1) Liberty owns less than 100% of the various entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional
    legal ownership.

Short-term insurance net cash flows                                                    
for the year ended 31 December 2012                                                    
                                                                      2012       2011   
Audited                                                                 Rm         Rm   
Premiums                                                               756        343   
 Liberty Health     medical risk(1)                                   496        162   
 Liberty Africa     motor, property and other                         256        179   
                    medical risk                                        4          2   
Claims                                                                (427)      (235)   
 Liberty Health     medical risk(1)                                  (318)      (144)   
 Liberty Africa     motor, property and other                        (107)       (85)   
                    medical risk                                       (2)        (6)   
Net cash inflows from short-term insurance                             329        108   

(1) Includes Total Health Trust Limited for 2012.
      
Asset management net cash flows  Stanlib and Liberty Africa   
for the year ended 31 December 2012                                                    

Unaudited                                                              2012        2011
                                                                         Rm          Rm  
   
STANLIB before money market                                          16 520       7 919   
 Retail                                                              17 511      10 004   
 Institutional                                                         (991)     (2 085)   

Money market                                                          3 792     (13 407)   
 Retail                                                              (1 778)      1 027   
 Institutional                                                        5 570     (14 434)   

Net STANLIB cash inflows/(outflows)(1)                               20 312      (5 488)   

Liberty Africa before money market                                   (4 776)      5 679   
 Retail                                                                 990         295   
 Institutional                                                       (5 766)      5 384   

Money market                                                         (1 209)       (282)   

Net Liberty Africa cash (outflows)/inflows(1)(2)                     (5 985)      5 397   
  
Net cash inflows/(outflows) from asset management                    14 327         (91)   

(1) STANLIB and Liberty Africa cash flows exclude intergroup life funds.
(2) Liberty owns less than 100% of the various entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional
    legal ownership.

Capital commitments
as at 31 December 2012

                                                                                                               2012              2011
Audited                                                                                                          Rm                Rm

Business acquisitions                                                                                                              57
Equipment                                                                                                       551               300
Investment and owner-occupied property                                                                        1 937             1 486
Total capital commitments                                                                                     2 488             1 843
 Under contracts                                                                                                838               646
 Authorised by the directors but not contracted                                                               1 650             1 182
 Under agreement with material conditions outstanding                                                                              15

The group's share of commitments of joint ventures amounts to R4 million (31 December 2011: R12 million) and is to be financed by the
existing facilities in the joint venture operations.

The above 2012 capital commitments will be financed by available bank facilities, existing cash resources, internally generated funds and
R198 million (31 December 2011: R122 million) from non-controlling interests in unincorporated property partnerships.

Retirement benefit obligations
as at 31 December 2012

Post-retirement medical benefit
The group operates an unfunded post-retirement medical aid benefit for permanent employees who joined the group prior to
1 February 1999 and agency staff who joined prior to 1 March 2005.

As at 31 December 2012, the Liberty post-retirement medical aid benefit liability was R371 million (31 December 2011: R459 million).

Defined benefit retirement funds
The group operates a number of defined benefit pension schemes on behalf of employees. All these funds are closed to new membership
and are well funded with no deficits reported.

Related parties
for the year ended 31 December 2012

The following selected significant related party transactions have occurred in the 31 December 2012 financial period:

1)  Summary of movement in investment in ordinary shares held by the group in the group's holding company is as follows:

                                                                                                              Fair
                                                                                          Number             value     Ownership
                                                                                            '000                Rm             %
    Standard Bank Group Limited
    Balance at 1 January 2012                                                             12 156             1 201          0,77
    Purchases                                                                              7 151               799
    Sales                                                                                (11 558)           (1 245)
    Fair value adjustments                                                                                     167
    Balance at 31 December 2012                                                            7 749               922          0,49

2)  Bancassurance
    Liberty has entered into joint venture bancassurance agreements with the Standard Bank group for the manufacture, sale and
    promotion of insurance, investment and health products through Standard Bank's African distribution capability. New business
    insurance premium income in respect of this business in 2012 amounted to R5 984 million (2011 full year: R5 404 million). In terms
    of the agreements, Liberty's subsidiaries pay joint venture profit shares to various Standard Bank operations. The amounts to be
    paid are in most cases dependent on source and type of business and are paid along geographical lines. The total net profit share
    calculated as payable to the Standard Bank group for 2012 is R775 million (2011 full year: R608 million).
 
    During 2010 Liberty and Standard Bank conducted a detailed review of the existing bancassurance agreement and agreed with
    effect from 1 January 2011, to expand the scope thereof to include asset management, investment and health products in addition
    to the insurance products. The agreements are evergreen agreements with a 24-month notice period for termination, but neither
    party may give notice of termination until February 2014. As the joint venture bancassurance relationship provides commercial
    benefits to both Liberty and Standard Bank, a governance framework is in place to protect the interests of minority shareholders.
    In order to provide enhanced transparency and further detail in respect of Liberty's joint venture bancassurance arrangements with
    Standard Bank, a summary document has been published on the investor relations page of Liberty's website (www.liberty.co.za).

Business acquisition
for the year ended 31 December 2012

Acquisition of Total Health Trust Limited (THT)	
To continue the execution of the group's strategy to extend its market share of the wealth management business in African countries
outside of South Africa, Liberty has acquired a 51,2% controlling stake in THT. The effective date of the transaction was 1 January 2012.

THT is a Nigerian health expenses insurance group servicing both government employees and corporate customers.

THT previously was accounted for as a joint venture of the group and the transaction to acquire control was in terms of a staggered
purchase agreement, with the final tranche of 5% to increase the shareholding to 51,2% being completed on 1 January 2012 at a cost
of R4 million.

The assets and liabilities arising from the acquisition are as follows:
                                                                                                                                   2012
                                                                                                                                     Rm
Equipment and owner-occupied properties under development                                                                             7
Investment properties                                                                                                                11
Intangible assets                                                                                                                    40
Prepayments, insurance and other receivables                                                                                         17
Short-term insurance liabilities                                                                                                    (16)
Insurance and other payables                                                                                                        (16)
Deferred taxation                                                                                                                    (1)
Current taxation                                                                                                                     (4)
Net assets and liabilities assumed                                                                                                   38
Cash acquired                                                                                                                        29
Non-controlling interests(1)                                                                                                        (33)
Net asset value attributable to ordinary shareholders                                                                                34
Acquisition cost (measured at fair value on 1 January 2012)                                                                          34
Previously held as a joint venture                                                                                                   30
Additional cash paid                                                                                                                  4
Excess purchase price                                                                                                                 

(1) Non controlling interests represent their proportionate share of the assets and liabilities assumed.
 
Since acquisition date, THT has contributed R14 million to the group's total revenue and R6 million to the group's total earnings for the
year ended 31 December 2012 of which R3 million is attributable to non-controlling interests.
Date: 28/02/2013 07:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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