Wrap Text
Financial Results for the years ended 31 December 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
Liberty Holdings Limited
Financial results
For the year ended 31 December 2013
Highlights
-BEE normalised operating earnings
up 28%
-SIP return substantially ahead of benchmark 15%
-BEE normalised headline earnings
up 11%
-BEE normalised return on equity 23%
-return on BEE normalised group equity value 16%
-value of long-term insurance new business
up 21%
-retail long-term insurance new business margin 2,4%
-long-term insurance indexed new business
up 15%
-customer net cash inflows R22 billion
-Full dividend
up 10%
-Liberty Group Limited CAR cover 2,56 times
Financial performance indicators
for the year ended 31 December 2013
Restated(1) %
2013 2012 change
Liberty Holdings Limited
Earnings (1)
Basic earnings per share (cents) 1 517,9 1 433,6 5,9
BEE normalised headline earnings per share (cents) 1 439,6 1 300,1 10,7
BEE normalised operating earnings (Rm) 2 198 1 723 27,6
BEE normalised return on equity (%) 23,3 24,0 (2,9)
Group equity value
BEE normalised group equity value per share (R) 126,08 115,43 9,2
BEE normalised return on group equity value (%) 16,1 20,8 (22,6)
Distributions per share (cents)
Normal dividend 581 528 10,0
Interim dividend 212 192 10,4
Final dividend 369 336 9,8
Special dividend n/a 130
Total assets under management (Rbn) 611 528 15,7
Long-term insurance operations
Indexed new business (excluding contractual increases) (Rm) 6 947 6 055 14,7
New business margin (%) 2,2 2,0 10,0
Net customer cash inflows (Rm) 6 316 4 572 38,1
Capital adequacy cover of Liberty Group Limited (times covered) 2,56 2,71 (5,5)
Asset management – STANLIB
Assets under management (Rbn) 545 473 15,2
Net cash inflows including money market (Rm) (2) 15 725 14 327 9,8
Retail and institutional net cash inflows excluding money market (Rm) (2) 13 527 11 744 15,2
Money market net cash inflows (Rm) (2) 2 198 2 583 (14,9)
(1)2012 earnings have been restated for the change in accounting policy relating to the adoption of the amendments to IAS 19 Employee Benefits.
(2)Excludes intergroup life funds; multi-manager insurance funds have been reclassified to Liberty intergroup effective 1 January 2013.
Preparation and supervision:
This announcement on Liberty Holdings Limited's interim results for the year ended 31 December 2013 has been
prepared and supervised by JC Hubbard (Group Chief Financial Officer) BCom CA(SA) and CG Troskie (Executive
Director – Finance and Risk) BCom (Hons) CA(SA).
The 2013 group financial results are one of the best in the
group's history, with a number of key indicators demonstrating
substantially improved performance. In particular, there has
been significant growth in the value of long-term insurance new
business, customer cash inflows, operating earnings and the group's
Shareholder Investment Portfolio (SIP) outperformance.
Return on equity at 23,3% and return on group equity value of
16,1% are well ahead of the group's medium term target levels.
We continued to produce positive experience variances in our
long-term insurance business and our balance sheet management
capability successfully managed the volatile interest rate and
currency markets experienced during 2013.
This performance has been supported by innovative new
products, solid insurance new business growth, good investment
performance, growth in assets under management and our
demonstrated ability to manage to model. BEE normalised
headline earnings of R4 076 million are 11% up, representing
a 28% growth in operating earnings and a gross investment
return on the SIP of 14,6% (2012: 16,0%). The SIP performance
was considerably higher than benchmark benefiting from tactical
allocations to developed market equities and other foreign assets.
The growth in operating earnings has been achieved without any
significant contribution from assumption or modelling changes.
This converts to a 11% increase in BEE normalised headline
earnings per ordinary share to R14,40 (2012: restated R13,00).
BEE normalised group equity value per share of R126,08 is 9% up
on 31 December 2012, and reflects R5 281 million of equity value
profits, or a 16,1% return on group equity value despite being
impacted by a higher interest rate environment. The return is
higher than the estimated cost of capital target of 12,1%.
Long-term indexed insurance sales of R6 947 million are up
15% on the prior year. This combined with improved pricing,
produced a 21% improvement in the group embedded value of
long-term insurance new business to R839 million at an overall
margin of 2,2% (2012: 2,0%). The new Evolve and Stable Growth
investment product ranges launched in 2012 have been very
successful.
Group asset management net cash inflows of R15,7 billion are 10%
up compared to the R14,3 billion cash inflows for 2012. STANLIB's
South African business had a good year attracting R21,7 billion
of net cash inflows of which R19,4 billion went into higher
margin non money market retail and institutional mandates.
Assets under management across the group grew by 16% from
31 December 2012 to R611 billion.
It is worth noting that in 2013 the group attracted a total net
customer cash inflow of R22,9 billion (asset management
R16,2 billion and insurance operations R6,7 billion) which is
R3,6 billion or 19% higher than 2012.
LibFin's management of the group's market risk within risk
appetite has supported the maintenance of the group's strong
capital position with the capital adequacy ratio in the group's main
long-term insurance licence being 2.56 times (2012: 2.71 times)
the regulatory minimum. The reported ratio reduced post the
successful rationalisation of South African life licences in the second
half of 2013. This is due to the technical nature of the formulae in
dealing with subsidiaries. On a like for like basis the 2012 ratio would
have been 2.11 times.
The 2013 result further demonstrates our ability to deliver against
the group's chosen strategic objectives which remain focussed on:
- 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 (SAM) and we believe
the group is appropriately positioned from a capital perspective.
Earnings by business unit
for the year ended 31 December 2013
Restated(1)
2013 2012 %
Unaudited Rm Rm change
Insurance
Retail segment (1) 1 467 1 179 24,4
Institutional segment 133 45 >100
Liberty Corporate (1) 121 66 83,3
Liberty Africa Insurance (2) (3) 52 21 >100
Liberty Health (40) (42) 4,8
Balance sheet management
LibFin Markets – credit portfolio 132 109 21,1
Libfin Markets – asset/liability matching 5 42 (88,0)
Asset management
STANLIB 633 537 17,9
South Africa 571 489 16,8
Other Africa (3) 62 48 29,2
Liberty Properties 44 48 (8,3)
Development and management 44 39 12,8
Fountainhead (sold 1 August 2012) 9
Central overheads and sundry income (1) (216) (237) 8,9
BEE normalised operating earnings 2 198 1 723 27,6
LibFin Investments 1 878 1 965 (4,4)
BEE normalised headline earnings 4 076 3 688 10,5
BEE preference share adjustment (62) (62)
Headline earnings 4 014 3 626 10,7
(1)2012 earnings have been restated for the change in accounting policy relating to the adoption of the amendments to IAS 19 Employee Benefits.
(2)Liberty Africa Insurance includes long-term and short-term insurance products sold to both the retail and institutional markets. The business unit has been classified under the
institutional segment as the majority of premiums are derived from institutional clients.
(3)With effect from 1 January 2013, STANLIB manages all the group's African asset management businesses that are located in South Africa as well as other African territories.
Prior year comparatives have been restated to reflect this change.
Business unit financial review
for the year ended 31 December 2013
Retail segment
(includes Retail SA and Direct Financial Services)
Headline earnings for the year of R1 467 million are 24% up
compared to the restated R1 179 million in 2012. This increase is
supported by on-going positive persistency and risk variances,
good annual contract increases and higher management fees
due to the 2012 growth in underlying investment portfolios.
Earnings have also absorbed the build costs of the transactional
joint venture with Standard Bank, investments in our emerging
consumer market (ECM) business during the year and various
regulatory compliance projects.
We continue to innovate and new investment products have
been recently launched, particularly supporting our strategy of
developing investment propositions that are low cost but provide
relevant options to consumers. In addition, a Linked Investment
Service Provider (LISP) capability was built and became functional
from mid July 2013. The LISP attracted almost R1 billion in new
investments. This offering makes direct investments into a range
of collective investment schemes available to retail customers
through a cost-efficient platform and complements the life
wrapper investment product range.
Indexed new business sales (excluding contractual increases) of
R6,0 billion have increased by 13% over 2012. The new Evolve
range of single premium investment products delivered very
encouraging new business sales totalling R3,6 billion for the year.
Recurring premium investment and risk business was up 10%
and single premium business up 21%. Initiatives targeting sales
growth in the emerging consumer segment off the direct financial
services platform were not as successful as originally hoped. This
has led to the decision to consolidate the various group direct
capabilities from the beginning of 2014 in order to develop a
more comprehensive focussed retail multi-channel distribution
capability. The Retail SA new business margin of 2,4% is above that
achieved in 2012 despite higher interest rates and is at the upper
end of the medium-term targeted range of between 2,0% and
2,5%. Significant increases in the South African bond yields have
had the effect of reducing the value of new business margin by
0,3% from December 2012.
Net cash inflows in 2013 were strong at R6,1 billion and were
supported by higher contributions from our sales of single
premium investment products and good persistency experience
leading to lower than anticipated withdrawals, despite the increase
in policy values due to positive investment returns. Expenses were
managed within assumption and the in-force file has increased
over 2013.
The recently launched comprehensive loyalty programme,
"Own your life REWARDS", continues to successfully attract
membership with over twenty thousand principal members at
31 December 2013.
Institutional segment
Liberty Corporate
Following last year's launch of the new flagship investment
product, the Liberty Stable Growth Fund, as well as a unique index
tracking investment range, Liberty Corporate was recognised
by the Financial Intermediary Association as the best employee
benefits product supplier. This is indicative of the recent focus
on enhancing service levels and establishing a distribution and
product capability for larger corporates and retirement funds
through the Intelligent Insurance division. The business has
been successful in winning several large mandates in the latter
half of the year supporting the indexed new business growth
of 29% to R789 million. Value of new business for the year is
up R34 million to R64 million at a significantly improved margin
of 0,9% (2012: 0,5%).
Improved headline earnings of R121 million (up 83%) are mainly a
function of improved risk claims experience, higher asset based
management fees and cost efficiency. Net customer cash flows
were marginally negative at R83 million compared to the over
R2 billion net outflows last year.
Liberty Africa Insurance
East and Southern Africa (outside of South Africa) contributed
R52 million (2012: R21 million) to Liberty's headline earnings for
the year. The result has been supported by higher investment
markets and consistent claims loss ratios in the short-term
insurance business. Long-term insurance new business margins
at 9,2% (2012: 9,6 %) remain pleasing.
The positive sub-Saharan Africa growth outlook is gaining in
credibility and consequently the group has reserved capital
resources to take advantage of investment opportunities as
they arise.
Liberty Health
Liberty's share of Liberty Health's headline loss for the year is
R40 million (2012: R42 million loss). Whilst recent operational
efficiencies are producing better cost ratios, the business does
not, as yet, have sufficient scale to leverage the investment
in systems and processes. Assisting the medical scheme
administration clients to grow their membership therefore
remains management's top priority.
Our health risk products targeted at employees in African
countries, excluding South Africa, provides cover for over seventy
eight thousand lives. The slight increase in claims loss ratio at
68% (2012: 64%) is due to the capitation book in Nigeria.
Balance sheet management
Market risk exposures and credit portfolio
(LibFin Markets)
LibFin Markets continued to manage market risk exposures
within a narrow range despite considerable volatility in interest
rate markets and emerging market currencies. The credit portfolio
assets backing guaranteed investment products contributed
R132 million to headline earnings while the net result of asset
liability matching activities was virtually break even for the year
at R5 million. This is in line with its mandated objective. LibFin
directly managed R36 billion of assets at 31 December 2013
(2012: R27 billion).
Shareholder Investment Portfolio (SIP) (LibFin Investments)
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 14,6% (2012: 16,0%) which was well ahead of
benchmark. This return benefited from a weaker rand, positive
equity markets and portfolio construction partially offset by lower
domestic bond returns.
Asset management
With effect from 1 January 2013, STANLIB manages all the
group's African asset management businesses that are located
in South Africa as well as other African territories. Prior year
comparatives have been restated to reflect this change.
STANLIB South Africa
STANLIB experienced substantial net inflows of R21,7 billion during
2013 of which the majority (R19,4 billion) are into higher margin non
money market institutional and retail mandates. Total assets under
management increased to R507 billion at 31 December 2013 (2012:
R437 billion).
The majority of funds under management continue to produce
satisfactory performance and STANLIB's unit trusts recently
received four Raging Bull awards.
STANLIB's headline earnings at R571 million are 17% higher
compared to the equivalent period in 2012 despite the increased
costs associated with additional investment capabilities developed
in late 2012. Earnings have benefited from gross fee income growth
of 16% driven by a higher opening asset base and a better fund mix
reflecting the higher proportion of retail flows in recent periods.
STANLIB Other Africa
Assets under management at 31 December 2013 remained high
at R38 billion (2012: R36 billion) despite the further drawdown of
R7,0 billion of assets under a government mandate in East Africa.
Headline earnings for the year were 29% higher at R62 million
(2012: R48 million) benefiting from improved cost efficacy and
rand weakness.
Liberty Properties
Liberty Properties, which comprises property management and
development, has benefited from growth in property management
fees supported by increases in rentals at the flagship shopping
centres. Development fee income, however, remains low reflecting
little development activity for the year. Headline earnings are
R44 million for the year (2012: R39 million, excluding Fountainhead
sold in 2012).
Bancassurance
The commercial bancassurance joint venture relationship with
Standard Bank, which is applicable across the group's asset
management and insurance operations, is continuing to make
a considerable contribution to new business volumes and
earnings. Indexed sales of insurance products for the year from
bancassurance channels are 17% higher than 2012 and STANLIB
received a 14% growth in net asset management fees related to
assets acquired through the Standard Bank distribution channel.
The total SA covered business embedded value of in-force
contracts sold under the agreement attributable to Liberty at
31 December 2013 increased to R1,3 billion (2012: R1,2 billion)
despite the higher required discount rates.
Tax legislation
The Taxation Laws Amendment Act, 2013 was promulgated
on 12 December 2013. The Act includes additional changes to
the expense relief formulae to those which became applicable
to long-term insurers in the 2012 Amendment Act. The recent
changes have not allowed for the inclusion of the aggregate annual
taxable unrealised capital gains in respect of assets allocated to the
policyholder funds which is contrary to the stated intention. Whilst
we anticipate that National Treasury will amend the Act in 2014 to
a more equitable outcome with retrospective effect, full provision
has been made for the impacts resulting from the application of
the current Act.
Capital adequacy cover and life licence rationalisation
The capital adequacy cover of Liberty Group Limited remains
strong at 2,56 times the statutory requirement (2012: 2,71 times).
All the other group subsidiary life licences are well capitalised.
The rationalisation of transferring three of the South African long-
term insurance licenced entities (Capital Alliance Life Limited,
Liberty Growth Limited and Liberty Active Limited) into the main
licence entity, Liberty Group Limited, was successfully completed
with effect from 1 September 2013. The rationalisation will result
in improved capital efficiency under the SAM framework and
simplification of operational requirements.
The Liberty Group Limited's post-rationalisation capital adequacy
cover ratio (CAR) reflects the combined statutory capital and the
combined capital requirements of the four entities. This has led
to a lower cover ratio than previously reported for Liberty Group
Limited but a higher capital surplus.
The pro-forma CAR ratio of Liberty Group Limited at
31 December 2012 assuming rationalisation had been
implemented at that date is 2,11 times the statutory requirement.
Dividends
2013 final dividend
In line with the group's dividend policy, the board has approved and
declared a gross final dividend of 369 cents per ordinary share. The
final 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 Friday, 28 March 2014.
There are no STC credits to be utilised for this final dividend. The
dividend of 369 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 313.65 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 dividend is as follows:
Last date to trade Thursday, 20 March 2014
cum dividend on the JSE
First trading day Monday, 24 March 2014
ex dividend on the JSE
Record date Friday, 28 March 2014
Payment date Monday, 31 March 2014
Share certificates may not be dematerialised or rematerialised
between Monday, 24 March 2014 and Friday, 28 March 2014, 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 dematerialised their shares
will have their accounts with their CSDP or broker credited on
Monday, 31 March 2014.
Prospects
Our continued improvement in performance in 2013 further
supports our belief that the group can continue to produce
sustainable growth. Our core insurance and asset management
businesses are performing better than assumptions and we
anticipate that they will continue to attract higher levels of new
business within our targeted margin ranges.
We are confident that our balance sheet management capability
will continue to manage our investment market risk exposures
within risk appetite and competently deal with any protracted
period of volatility in investment markets and the higher interest
rate environment in South Africa.
Bruce Hemphill Saki Macozoma
Chief Executive Chairman
26 February 2014
www.libertyholdings.co.za
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
Merril Lynch
A subsidiary of Bank of America Corporation
These results are available at www.libertyholdings.co.za
Accounting policies
The 2013 summary consolidated annual financial statements of
Liberty Holdings Limited have been prepared in accordance with
and containing information required by International Financial
Reporting Standards (IFRS) including IAS 34 Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council, the Listings Requirements of the JSE Limited and comply
with the South African Companies Act No. 71 of 2008.
The financial statements have been prepared in compliance with
IFRS and interpretations for year ends commencing on or after
1 January 2013. The accounting policies are consistent with those
adopted in the previous year except for significant changes as
detailed below.
Mandatory changes in accounting policies resulting from
the adoption of new and revised IFRS with retrospective
application
Refer to the appendix for details of the required restatements
to the previously reported statements of financial position at
1 January 2012 and 31 December 2012 and the statement of
comprehensive income for the year ended 31 December 2012.
The group's summary statement of cash flows have been restated
for the increase in cash and cash equivalents resulting from the
consolidation of additional mutual funds and the corresponding
flows from investing activities. The summary segment information
has been restated in line with the changes to the statements of
comprehensive income.
IFRS 10 Consolidated Financial Statements, IFRS 11 Joint
Arrangements, IAS 27 (Revised) Separate Financial Statements,
IAS 28 (Revised) Investments in Associates and Joint Ventures and
IFRS 12 Disclosures of Interests in Other Entities
The group has compulsorily adopted the control suite of standards
and revisions which deal with the accounting treatment for the
group's involvement in investments in entities for which the group
is assessed to have more than an insignificant influence as well
as IFRS 12 Disclosures of Interests in Other Entities. These have
resulted in changes in accounting policies effective for the year
commencing 1 January 2013 and have been applied retrospectively
in line with the transitional requirements. The group consequently
re-examined the combined impact of these standards on all of its
investments and certain reclassifications of investments in mutual
funds were required. There have been no reclassifications of
investments in other types of entities.
Previously, investments in mutual funds that amounted to
between 20% and 50% of the total fund value or voting rights
were considered to be interests in associates – measured at fair
value (mutual funds), and those greater than 50% were considered
to be subsidiaries. As a result of the adoption of IFRS 10, which has
redefined the definition of control, the group has removed the
reference to specific percentage holdings in the group's accounting
policy as the defining parameter. This has led to an increased
number of mutual funds being classified as subsidiaries or associates
at a consolidated level, as well as reclassifications between these
categories and financial instruments. No investments in mutual
funds have met the new definition of joint arrangements.
The group continues to account for its interests in associates –
mutual funds, as at fair value through profit or loss by applying the
measurement exemption for investment-linked insurance funds in
IAS 28.
The revised IAS 28 Investments in Associates and Joint Ventures
allows entities to apply the measurement exemption for interests
in joint ventures which are held indirectly by investment-linked
insurance funds to be designated on initial recognition as at fair
value through profit or loss.
Liberty elected to apply this exemption to the measurement of its
interest in the joint venture, The Cullinan Hotel (Pty) Limited, on
adoption of the revised standard, which resulted in a change in
accounting policy. As the fair value equated to the carrying value
of the investment in the joint venture including equity accounted
earnings, there was no resultant change to the group's total
earnings, comprehensive income, shareholders' funds or net asset
value.
IFRS 12 Disclosures of Interests in Other Entities mandates the
disclosure requirements related to subsidiaries, associates, joint
arrangements and unconsolidated structured entities and is
applicable retrospectively. There was no impact on net earnings or
earnings per share as a result of the adoption of IFRS 12.
Amendments to IAS 19 Employee Benefits
The group has adopted the amendments to IAS 19 Employee
Benefits, which has resulted in a change in accounting policy
effective for the year commencing 1 January 2013, with
retrospective application. The amendments have changed the
basis for recognition of movements in post-retirement employee
benefits liabilities or assets, with certain remeasurements of
the relevant liability or asset now being mandatorily recognised
in other comprehensive income. In prior periods the group
recognised all remeasurements in post-retirement employee
benefit plan liabilities or assets in profit or loss as previously allowed
or mandated in IAS 19.
Mandatory changes in accounting policy resulting from the
adoption of new IFRS with prospective application
IFRS 13 Fair Value Measurement
The group has adopted IFRS 13 Fair Value Measurement which is
effective for years commencing 1 January 2013. IFRS 13 defines
fair value and describes in a single standard a framework for
measuring fair value. IFRS 13 defines fair value on the basis of
an exit price notion which results in a market-based, rather
than entity-specific measurement. The standard introduces
enhanced disclosure requirements, amongst others the inclusion
of all assets and liabilities measured at fair value in a fair value
hierarchy table (previously this was limited to financial assets and
liabilities). There were no significant measurement changes to
the valuations of any assets or liabilities as a consequence of the
adoption of IFRS 13.
Voluntary adoption of new accounting policy
During the year under review, the group has entered into certain
agreements of sale and repurchase of financial instruments as part
of the group's asset/liability matching processes. This necessitated
the adoption of a new accounting policy as follows:
Securities sold subject to linked repurchase agreements are
reclassified in the statement of financial position as pledged assets
when the transferee has the right by contract or custom to sell or
repledge the collateral. Such securities are measured in accordance
with the measurement policy for financial assets. The liability to
the counterparty is included under investment creditors within
insurance and other payables on the statement of financial position.
The difference between the repurchase and sales price is treated
as interest and amortised over the life of the reverse repurchase
agreement using the effective interest method and disclosed as
finance costs in the statement of comprehensive income. The
transactions entered into during 2013 have been accounted for in
compliance with this new accounting policy.
Directors' responsibility
The summary group financial statements included in this
announcement are the full responsibility of the directors. The
directors confirm that the financial information has been correctly
extracted from the underlying audited consolidated group annual
financial statements which are available for inspection at the
company’s registered office on request.
Audit opinion
These summary consolidated financial statements for
the year ended 31 December 2013 have been audited by
PricewaterhouseCoopers Inc., who expressed an unmodified
opinion thereon. The auditor also expressed an unmodified
opinion on the annual financial statements and group equity
value report for the year ended 31 December 2013, from which
these summary consolidated financial statements were derived.
A copy of the auditor's report on the summary consolidated
financial statements and of the auditor's report on the annual
consolidated financial statements are available for inspection
at the company's registered office, together with the financial
statements identified in the respective auditor's reports.
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.
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 – 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 and recognised at point of sale. Prospective
measurement takes place at each valuation date until received.
Consolidated statement of financial position
as at 31 December 2013
Restated Restated
31 December 31 December 1 January
2013 2012 2012
Audited Rm Rm Rm
Assets
Equipment and owner-occupied properties under development 1 114 952 897
Owner-occupied properties 1 410 1 378 1 598
Investment properties 27 299 24 133 23 470
Intangible assets 475 759 933
Defined benefit pension fund employer surplus 210 186 199
Deferred acquisition costs 527 449 403
Interests in joint ventures 404 378 626
Reinsurance assets 1 609 1 170 1 104
Long-term insurance 1 161 978 902
Short-term insurance 448 192 202
Operating leases – accrued income 1 315 1 277 1 085
Pledged assets held at fair value through profit or loss 1 348
Assets held for trading 6 387 6 910 3 790
Interests in associates – equity accounted 72 72
Interests in associates – measured at fair value 15 361 14 359 11 717
Financial investments 279 043 242 015 208 696
Deferred taxation 354 253 183
Prepayments, insurance and other receivables 3 841 3 628 2 656
Cash and cash equivalents 9 870 10 418 12 432
Total assets 350 639 308 337 269 789
Liabilities
Long-term policyholder liabilities 263 944 236 684 208 565
Insurance contracts 180 742 164 666 145 558
Investment contracts with discretionary participation features 9 056 3 855 3 447
Financial liabilities under investment contracts 74 146 68 163 59 560
Short-term insurance liabilities 846 525 466
Financial liabilities at amortised cost 3 167 2 177 2 195
Third party financial liabilities arising on consolidation of mutual funds 39 983 30 015 27 717
Employee benefits 1 344 1 198 1 082
Deferred revenue 194 174 159
Deferred taxation 3 586 2 715 2 819
Deemed disposal taxation liability 544 918
Provisions 195 338 371
Operating leases – accrued expense 30 93
Derivative liabilities 4 860 6 098 3 113
Insurance and other payables 9 716 8 230 6 312
Current taxation 904 724 614
Total liabilities 329 283 289 826 253 506
Equity
Ordinary shareholders' interests 17 654 15 410 13 211
Share capital 26 26 26
Share premium 5 985 6 078 6 133
Retained surplus 12 454 10 332 7 683
Other reserves (811) (1 026) (631)
Non-controlling interests 3 702 3 101 3 072
Total equity 21 356 18 511 16 283
Total equity and liabilities 350 639 308 337 269 789
Consolidated statement of comprehensive income
for the year ended 31 December 2013
Restated
2013 2012
Audited Rm Rm
Revenue
Insurance premiums 35 782 30 720
Reinsurance premiums (1 316) (1 089)
Net insurance premiums 34 466 29 631
Service fee income from investment contracts 900 881
Investment income 13 220 13 606
Hotel operations sales 809 720
Investment gains 33 554 31 108
Fee revenue and reinsurance commission 2 324 1 800
Total revenue 85 273 77 746
Claims and policyholder benefits under insurance contracts (25 904) (25 004)
Insurance claims recovered from reinsurers 1 357 672
Change in long-term policyholder liabilities (20 698) (19 532)
Insurance contracts (15 937) (19 228)
Investment contracts with discretionary participation features (4 941) (380)
Applicable to reinsurers 180 76
Fair value adjustment to policyholder liabilities under investment contracts (10 135) (10 035)
Fair value adjustment on third party mutual fund interests (7 832) (4 748)
Acquisition costs (4 233) (3 818)
General marketing and administration expenses (9 079) (7 573)
Finance costs (327) (243)
Profit share allocations under bancassurance and other agreements (984) (800)
Profit on sale of joint venture 135
Equity accounted earnings from joint ventures 3
Profit before taxation 7 438 6 803
Taxation (2 968) (2 685)
Total earnings 4 470 4 118
Other comprehensive income 88 90
Items that may be reclassified subsequently to profit or loss 56 5
Net change in fair value on cash flow hedges (183) (29)
Income and capital gains tax relating to net change in fair value on cash flow hedges 53 8
Foreign currency translation 186 26
Items that may not be reclassified to profit or loss 32 85
Owner-occupied properties – fair value adjustment 28 (192)
Income and capital gains tax relating to owner-occupied properties fair value adjustment (10) 66
Change in long-term policyholder insurance liabilities (application of shadow accounting) (22) 131
Actuarial gains on post-retirement medical aid liability 24 127
Income tax relating to post-retirement medical aid liability (7) (36)
Net adjustments to defined benefit pension fund(1) 26 (15)
Income tax relating to defined benefit pension fund (7) 4
Total comprehensive income 4 558 4 208
Total earnings attributable to:
Ordinary shareholders' interests 3 908 3 699
Non-controlling interests 562 419
4 470 4 118
Total comprehensive income attributable to:
Ordinary shareholders' interests 3 936 3 780
Non-controlling interests 622 428
4 558 4 208
Basic and fully diluted earnings per share Cents Cents
Basic earnings per share 1 517,9 1 433,6
Fully diluted basic earnings per share 1 393,4 1 341,7
(1)Net adjustments to defined benefit pension fund include actuarial gains or losses, return on plan assets, reduced by the interest on the net defined benefit asset, and the effect
of the application of the asset ceiling.
Headline earnings and earnings per share
for the year ended 31 December 2013
Restated
2013 2012
Audited Rm Rm
Reconciliation of total earnings to headline earnings attributable to equity holders
Total earnings attributable to equity holders 3 908 3 699
Preference share dividend (2) (2)
Basic earnings attributable to ordinary shareholders 3 906 3 697
Profit on sale of joint venture (117)
Derecognition and impairment of intangible assets 126 44
FCTR recycled through profit or loss (18) 2
Headline earnings attributable to ordinary shareholders 4 014 3 626
Net income earned on BEE preference shares 62 62
BEE normalised headline earnings attributable to ordinary shareholders 4 076 3 688
Earnings per share Cents Cents
Total earnings attributable to ordinary shareholders
Basic 1 517,9 1 433,6
Headline 1 559,8 1 406,0
BEE normalised headline 1 439,6 1 300,1
Fully diluted earnings attributable to ordinary shareholders
Basic 1 393,4 1 341,7
Headline 1 431,9 1 316,0
Summary statement of changes in shareholders' funds
for the year ended 31 December 2013
2013 2012
Audited Rm Rm
Balance of ordinary shareholders' interests at 1 January 15 410 13 211
Ordinary dividends (1 566) (1 396)
Special dividend (371)
Total comprehensive income 3 936 3 780
Share buy-backs net of share subscriptions (15) (389)
Black Economic Empowerment transaction 171 126
Share-based payments 109 78
Preference dividends (2) (2)
FCTR recycled through profit or loss (18) 2
Ordinary shareholders' interests 17 654 15 410
Balance of non-controlling interests at 1 January 3 101 3 072
Total comprehensive income 622 428
Unincorporated property partnerships net distributions (6) (182)
Non-controlling share of subsidiary dividend (17) (16)
FCTR recycled through profit or loss 2
Acquisition of interest in Total Health Trust Limited 33
Disposal of Alberton City unincorporated property partnership (234)
Non-controlling interests 3 702 3 101
Total equity 21 356 18 511
Summary statement of cash flows
for the year ended 31 December 2013
Restated
2013 2012
Audited Rm Rm
Operating activities 8 196 4 557
Investing activities (10 014) (6 203)
Financing activities 1 157 (407)
Net decrease in cash and cash equivalents (661) (2 053)
Cash and cash equivalents at the beginning of the year 10 418 12 432
Foreign currency translation 113 10
Cash and cash equivalents acquired through business acquisition 29
Cash and cash equivalents at the end of the period 9 870 10 418
Summary segment information
for the year ended 31 December 2013
The audited segment results for the year ended 31 December 2013 are as follows:
2013 Short- Asset Reporting
Long-term insurance term manage- Health adjust- IFRS
Rm Retail Corporate insurance ment services Other Total ments(1) reported
Total revenue 66 124 17 319 1 076 3 064 288 1 817 89 688 (4 415) 85 273
Profit/(loss) before taxation 5 161 298 116 926 (274) 653 6 880 558 7 438
Taxation (2 585) (78) (51) (258) 46 (42) (2 968) (2 968)
Total earnings/(loss) 2 576 220 65 668 (228) 611 3 912 558 4 470
Other comprehensive
(loss)/income (44) 2 57 28 45 88 88
Total comprehensive
income/(loss) 2 532 222 122 696 (228) 656 4 000 558 4 558
Attributable to:
Non-controlling interests (46) (17) (52) (9) 57 3 (64) (558) (622)
Equity holders 2 486 205 70 687 (171) 659 3 936 3 936
Reconciliation of total
earnings/(loss) to headline
earnings/(loss) attributable
to equity holders
Total earnings/(loss) 2 576 220 65 668 (228) 611 3 912 558 4 470
Attributable (to)/from
non-controlling interests (14) (17) (25) (8) 57 3 (4) (558) (562)
Preference share dividend (2) (2) (2)
Intangible assets
impairment 27 99 126 126
FCTR recycled through
profit or loss 6 (24) (18) (18)
Headline earnings/(loss) 2 589 203 40 660 (66) 588 4 014 4 014
Net income earned
on BEE preference shares 62 62 62
BEE normalised headline
earnings/(loss) 2 589 203 40 660 (66) 650 4 076 4 076
(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 intergroup transactions.
The audited segment results for the year ended 31 December 2012 are as follows:
Short- Asset Reporting
Restated Long-term insurance 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 1 634 83 737 (5 991) 77 746
Profit/(loss) before taxation 4 553 113 128 785 (132) 910 6 357 446 6 803
Taxation (2 392) (20) (15) (216) 38 (14) (2 619) (66) (2 685)
Total earnings/(loss) 2 161 93 113 569 (94) 896 3 738 380 4 118
Other comprehensive
income 71 10 7 2 90 90
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) 2 161 93 113 569 (94) 896 3 738 380 4 118
Attributable (to)/from
non-controlling interests (17) 1 (55) (7) 23 16 (39) (380) (419)
Preference share 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) 2 188 94 58 562 (69) 793 3 626 3 626
Net income earned
on BEE preference shares 62 62 62
BEE normalised headline
earnings/(loss) 2 188 94 58 562 (69) 855 3 688 3 688
(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 intergroup 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.
Section 2 below describes 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 following 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 (2012: 10 times) multiple of estimated sustainable earnings.
Liberty Properties Valued using a 10 times (2012: 10 times) multiple of estimated sustainable earnings.
Liberty Health As Liberty Health has yet to establish a history to support a sustainable earnings calculation, adjusted
IFRS net asset value is applied.
Liberty Africa Liberty Africa Insurance is an emerging cluster of both long and short-term insurance businesses
Insurance located in various African countries outside of 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. At 31 December 2013 the combined valuations approximated the group's IFRS net asset
value. Therefore the IFRS net asset value was used.
LibFin Credit LibFin originates appropriate illiquid assets that provide acceptable illiquidity premiums. The value
of this origination is reflected at a 10 times multiple of estimated sustainable earnings adjusting for
related expenses and prudential margin.
Liberty Holdings The net market value of assets and liabilities held by the Liberty Holdings Limited company excluding
investments in any subsidiaries which are valued separately.
2.3 Other adjustments:
These comprise 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 2012: 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
2013 covered busi- funds Adjust- Net covered
Rm business nesses invested ments worth business Total
SA insurance operations 10 775 10 775 (5 350) 5 425 21 637 27 062
Retail segment 19 830
Corporate 1 807
Value of in-force acquired 150 150 (150)
Working capital and other assets 4 145 4 145 (381) 3 764 3 764
South African insurance operations 15 070 15 070 (5 881) 9 189 21 637 30 826
Other group businesses:
STANLIB 570 570 5 080 5 650 5 650
South Africa 396 396 4 854 5 250 5 250
Other Africa 174 174 226 400 400
Liberty Properties 50 50 350 400 400
Liberty Health (including Total Health Trust) 87 87 (87)
Liberty Africa Insurance 488 488 488 488
LibFin Credit 650 650 650
Liberty Holdings 1 389 1 389 (47) 1 342 1 342
Cost of required capital (1 566) (1 566)
Net equity as reported under IFRS 15 070(1) 2 584 17 654 65 17 719 20 071 37 790
BEE preference funding 905 905 905 905
Allowance for future shareholders costs (247) (247) (247) (1 970) (2 217)
Allowance for employee share
options/rights (236) (175) (411) (411) (411)
BEE normalised equity value 15 739 2 162 17 901 65 17 966 18 101 36 067
Summary of adjustments:
Negative rand reserves (5 350) (5 350)
Deferred acquisition costs (513) (513)
Deferred revenue liability 185 185
Internally generated software (53) 53
Carrying value of in-force business acquired (150) (150)
Fair value adjustment of
non SA covered business 5 993 5 993
Liberty Health loan impairment (100) (100)
(5 881) 5 946 65
(1)Reconciliation to SA covered business net worth
as per analysis in supplementary information
Net equity of SA covered business as reported under IFRS 15 070
Adjustments as above (5 881)
Allowance for employee share options/rights (236)
BEE preference share funding 905
Net worth as reported in supplementary information 9 858
Value of
in-force:
Audited SA Other Group SA
2012 covered busi- funds Adjust- Net covered
Rm business nesses invested ments worth business Total
SA insurance operations 9 424 9 424 (4 796) 4 628 20 268 24 896
Retail segment 18 589
Corporate 1 679
Value of in-force acquired 230 230 (230)
Working capital and other assets 3 535 3 535 (416) 3 119 3 119
South African insurance operations 13 189 13 189 (5 442) 7 747 20 268 28 015
Other group businesses:
STANLIB 359 359 4 588 4 947 4 947
South Africa 262 262 4 438 4 700 4 700
Other Africa 97 97 150 247 247
Liberty Properties 45 45 355 400 400
Liberty Health (including Total Health Trust) 41 186 227 227 227
Liberty Africa Insurance 40 336 376 376 33 409
LibFin Credit 500 500 500
Liberty Holdings 1 214 1 214 37 1 251 1 251
Cost of required capital (1 477) (1 477)
Net equity as reported under IFRS 13 270(1) 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
as per analysis in supplementary information.
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
3.2 BEE normalised group equity value earnings and value per share
2013 2012
SA Other SA Other
Audited covered busi- covered busi-
Rm business nesses Total business nesses Total
BEE normalised equity value at the end of the year 27 959 8 108 36 067 25 574 7 166 32 740
Equity value at the end of the year 27 054 8 108 35 162 24 562 7 166 31 728
BEE preference shares 905 905 1 012 1 012
Adjustments from group restructure (6) 6
Capital transactions 15 15 389 389
Funding of restricted share plan 87 (87) 87 (87)
Intergroup dividends 1 653 (1 653) 1 701 (1 701)
Dividends paid 1 939 1 939 1 396 1 396
BEE normalised equity value at the beginning
of the year (25 574) (7 166) (32 740) (23 185) (5 454) (28 639)
Equity value at the beginning of the year (24 562) (7 166) (31 728) (22 110) (5 454) (27 564)
BEE preference shares (1 012) (1 012) (1 075) (1 075)
BEE normalised equity value earnings 4 119 1 162 5 281 4 177 1 709 5 886
BEE normalised return on group equity value 16,2% 16,1% 16,1% 18,1% 33,7% 20,8%
BEE normalised number of shares (000's) 286 057 283 635
Number of shares in issue (000's) 257 801 256 440
Shares held for the employee restricted share
scheme (000's) 2 460 1 399
Adjustment for BEE shares (000's) 25 796 25 796
BEE normalised group equity value per
share (rand) 126,08 115,43
3.3 Sources of BEE normalised group equity value earnings
2013 2012
SA Other SA Other
Audited covered busi- covered busi-
Rm business nesses Total business nesses Total
Value of new business written in the year 806 33 839 660 31 691
Expected return on value of in-force business 1 843 1 843 1 763 1 763
Variances/changes in operating assumptions (14) (53) (67) 37 (149) (112)
Operating experience variances (including incentive
outperformance) 249 (15) 234 131 (42) 89
Operating assumption changes (59) (38) (97) 272 (107) 165
Changes in modelling methodology (204) (204) (366) (366)
Headline earnings of other businesses (48) 664 616 (45) 547 502
Operational equity value profits 2 587 644 3 231 2 415 429 2 844
Non headline earnings adjustments (126) (126) (2) 73 71
Development costs (53) (29) (82) (78) (78)
Investment return on net worth 1 089 182 1 271 760 120 880
Investment variances 1 030 1 030 700 700
Change in economic assumptions (603) (603) 507 507
Increase in fair value adjustments on value of other
businesses 484 484 1 163 1 163
Change in allowance for share options/rights 69 7 76 (125) (76) (201)
Group equity value earnings 4 119 1 162 5 281 4 177 1 709 5 886
3.4 Analysis of value of long-term insurance, new business and margins
Audited
Rm 2013 2012
South African covered business:
Retail segment 1 580 1 420
Traditional Life 1 387 1 208
Direct channel 91 84
Credit Life 102 128
Corporate 141 110
Gross value of new business 1 721 1 530
Overhead acquisition costs impact on value of new business (833) (782)
Cost of required capital (82) (88)
Net value of South African covered new business 806 660
South African life licences 806 655
Liberty Africa Insurance subsidiaries 5
Present value of future expected premiums 37 753 33 510
Margin 2,1% 2,0%
Liberty Africa Insurance:
Net value of new business 33 31
Present value of future expected premiums 362 311
Margin 9,1% 10,0%
Total group net value of new business 839 691
Total group margin 2,2% 2,0%
Long-term insurance new business
for the year ended 31 December 2013
2013 2012
Unaudited Rm Rm
Sources of insurance operations total new business by customer segment
Retail segment 22 505 18 990
Single 18 270 15 105
Recurring 4 235 3 885
Institutional segment 2 816 1 500
Single 2 144 934
Recurring 672 566
Total new business 25 321 20 490
Single 20 414 16 039
Recurring 4 907 4 451
Sources of insurance indexed new business 6 947 6 055
Retail 6 000 5 305
Corporate 789 612
Liberty Africa Insurance (1) 158 138
(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.
Long-term insurance net cash flows
for the year ended 31 December 2013
2013 2012
Audited Rm Rm
Premiums
Recurring 24 936 23 627
Retail 17 544 16 498
Corporate 7 392 7 129
Single 21 979 16 972
Retail 11 463 9 519
Corporate 3 798 2 035
Immediate annuities 6 718 5 418
Net premium income from insurance contracts and inflows from investment contracts 46 915 40 599
Claims and policyholders benefits
Retail (29 378) (25 149)
Death and disability claims (4 879) (4 557)
Policy surrender and maturity claims (20 374) (16 783)
Annuity payments (4 125) (3 809)
Corporate (11 221) (10 878)
Death and disability claims (1 859) (1 714)
Scheme terminations and member withdrawals (9 007) (8 882)
Annuity payments (355) (282)
Net claims and policyholders benefits (40 599) (36 027)
Long-term insurance net cash flows 6 316 4 572
Sources of insurance operations cash flows by business unit:
Retail 6 111 6 058
Corporate (83) (2 048)
STANLIB Multi-Manager (37) 253
Liberty Africa Insurance(1) 325 309
(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.
Assets under management(1)
as at 31 December 2013
2013 2012
Unaudited Rbn Rbn
Managed by group business units 586 505
STANLIB South Africa 507 437
STANLIB Other Africa(2) 38 36
LibFin 36 27
Other internal managers 5 5
Externally managed 25 23
Total assets under management 611 528
(1) Includes funds under administration.
(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.
Asset management net cash flows – STANLIB
for the year ended 31 December 2013
2013 2012
Unaudited Rm Rm
South Africa
Non-money market 19 433 16 520
Retail 17 584 17 511
Institutional 1 849 (991)
Money market 2 229 3 792
Retail (1 689) (1 778)
Institutional 3 918 5 570
Net South Africa cash inflows(1) 21 662 20 312
Other Africa
Non-money market (5 906) (4 776)
Retail 1 539 990
Institutional (7 445) (5 766)
Money market (31) (1 209)
Net other Africa cash outflows(1)(2) (5 937) (5 985)
Net cash inflows from asset management 15 725 14 327
(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.
Short-term insurance net cash flows
for the year ended 31 December 2013
2013 2012
Audited Rm Rm
Premiums 930 756
Liberty Health – medical risk 640 496
Liberty Africa Insurance – motor, property, medical and other 290 260
Claims (559) (427)
Liberty Health – medical risk (438) (318)
Liberty Africa Insurance – motor, property, medical and other (121) (109)
Net cash inflows from short-term insurance 371 329
Claims loss ratio (%)
Liberty Health 68 64
Liberty Africa Insurance 42 42
Combined loss ratio (%)
Liberty Health 100 101
Liberty Africa Insurance 98 94
Capital commitments
as at 31 December 2013
2013 2012
Audited Rm Rm
Equipment 563 551
Investment and owner-occupied property 3 544 1 937
Total capital commitments 4 107 2 488
Under contracts 435 838
Authorised by the directors but not contracted 3 672 1 650
The group's share of commitments of joint ventures amounts to R9 million (31 December 2012: R4 million) and is to be financed by the
existing facilities in the joint venture operations.
The above 2013 capital commitments will be financed by available bank facilities, existing cash resources, internally generated funds and
R218 million (31 December 2012: R198 million) from non-controlling interests in unincorporated property partnerships.
Retirement benefit obligations
as at 31 December 2013
Audited
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 2013, the Liberty post-retirement medical aid benefit liability was R375 million (31 December 2012: R371 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 2013
Audited
Standard Bank Group Limited and any subsidiary (excluding Liberty) is referred to as Standard Bank in the context of this section.
The following selected significant related party transactions have occurred in the 2013 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 2013 7 749 922 0,49
Purchases 3 202 380
Sales (3 889) (460)
Fair value adjustments 72
Balance at 31 December 2013 7 062 914 0,44
2) Bancassurance
The Liberty group has extended the joint venture bancassurance agreements with the Standard Bank group for the manufacture, sale
and promotion of insurance, investment and health products through the Standard Bank's African distribution capability. New business
premium income in respect of this business in 2013 amounted to R7 630 million (2012: R5 984 million). In terms of the agreements,
Liberty's group 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 combined net profit share amounts
accrued as payable to the Standard Bank group for the year to 31 December 2013 is R868 million (2012: R775 million).
The bancassurance agreements are evergreen agreements with a 24-month notice period for termination, but neither party could
have given notice of termination until February 2014. As at the date of the approval of the integrated annual report, neither party had
given notice.
A binder agreement has been entered into with Standard Bank effective from 31 December 2012. The binder agreement is associated
with the administration of policies sold under the bancassurance agreement, and shall remain in force for an indefinite period with a 90
day notice period for termination. Fees accrued for the year to 31 December 2013 is R94 million.
In December 2013 Liberty Group Limited, a 100% held subsidiary of Liberty, issued 5 000 cumulative, participating, non-controlling
redeemable preference shares for a total value of R5 million to The Standard Bank of South Africa Limited in order to facilitate the
payment of profit shares under the bancassurance agreement. This followed the discontinuance of business in Liberty Active Limited,
which previously was contracted to make payment.
3) Sale and repurchase agreements
As described in the accounting policies section of this announcement, the group has entered into certain agreements of sale and
repurchase of financial instruments as part of the group's asset/liability matching processes.
A total of R7,5 billion in assets have been traded with Standard Bank under a repurchase agreement with various repurchase dates to
13 January 2014 (at 31 December 2013 open contracts totalled R1,1 billion). Finance costs recognised in respect of these agreements as
at 31 December 2013 was R52 million, with total finance costs over the term of the various agreements totalling R54 million.
4) Purchases and sales of other financial instruments
In the normal course of conducting Liberty's insurance business, Liberty deposits cash with Standard Bank, purchases and sells financial
instruments issued by Standard Bank and enters into derivative transactions with Standard Bank. These transactions are at arm's length
and are primarily used to support investment portfolios for policyholders and shareholders' capital.
Financial instruments measurement
Financial instruments measurement analysis and fair value hierarchy
as at 31 December 2013
Measurement basis Fair value hierarchy
Audited Financial
Designation per Financial Position Amortised soundness Provided Not
Statement cost(1) value(2) Fair value Total below provided(3)
Rm Rm Rm Rm Rm Rm
Assets
Pledged assets 1 348 1 348 1 348
Derivative assets 6 387 6 387 4 956 1 431
Interest in joint ventures – measured at fair value 400 400 400
Interest in associates – measured at fair value 15 361 15 361 15 361
Financial instruments 1 214 277 829 279 043 277 829
Prepayments, insurance and other receivables 3 841 3 841 3 841
Cash and cash equivalents 9 870 9 870 9 870
Properties (investment and owner-occupied) 30 024 30 024 30 024
Total financial instrument assets 1 214 345 060 346 274 329 918 15 142
Fair value of amortised cost assets 1 091
Liabilities
Investment contracts with discretionary
participation features 9 056 9 056
Financial liabilities under investment contracts 74 146 74 146 74 146
Financial liabilities at amortised cost 3 167 3 167
Third party financial liabilities arising on
consolidation of mutual funds 39 983 39 983 39 983
Derivative liabilities 4 860 4 860 4 860
Insurance and other payables 9 716 9 716 9 716
Total financial instrument liabilities 3 167 9 056 128 705 140 928 118 989 9 716
Fair value of amortised cost liabilities 3 110
(1) Amortised cost
The R1 214 million financial instrument asset relates to policyholder loans. The fair value has been determined by utilising a discounted cash flow model utilising discount
rates ranging between 11,0% and 18,9%. The financial liabilities comprise subordinated bonds of R3 069 million, non-controlling interests loan of R93 million and redeemable
preference shares of R5 million. The fair value of these liabilities is R3 013 million, R92 million and R5 million respectively, using discount rates ranging between 7,2% and 8,3%.
(2) Financial soundness value
The financial soundness valuation methodology is described in SAP 104 issued by the Actuarial Society of South Africa. With regards to investment contracts with discretionary
participation features, the group cannot reliably measure the fair value of the investment contracts with discretionary participation features (DPF). The DPF is a contractual
right that gives investors in these contracts the rights to receive supplementary discretionary returns through participation in the surplus arising from the assets held in the
investment DPF fund. These supplementary returns are subject to the discretion of the group. Given the discretionary nature of these investments returns and the absence
of an exchange market in these contracts, there is no generally recognised methodology available to determine fair value. These instruments are issued by the group and the
intention is to hold the instruments to full contract term.
(3) Fair value hierarchy not provided
The fair value of prepayments, insurance and other receivables, cash and cash equivalents and insurance and other payables approximate their carrying value and are not
included in the hierarchy table as their settlement terms are short-term and therefore, from a materiality perspective, fair values are not required to be modelled.
Fair value hierarchy of instruments measured at fair value
as at 31 December 2013
The information below analyses assets and liabilities which are carried at fair value at each reporting period, by level of hierarchy as
required by IFRS 7 and IFRS 13. The different levels in the hierarchy are defined below:
Level 1 – Values are determined using readily and regularly available quoted prices in an active market for identical assets or liabilities.
These prices would primarily originate from the Johannesburg Stock Exchange, the Bond Exchange of South Africa or an international
stock or bond exchange.
Level 2 – Values are determined using valuation techniques or models, based on assumptions supported by observable market prices
or rates either directly (that is, as prices) or indirectly (that is, derived from prices) prevailing at the financial position date. The valuation
techniques or models are periodically reviewed and the outputs validated.
Level 3 – Values are estimated indirectly using valuation techniques or models for which one or more of the significant inputs are
reasonable assumptions (that is unobservable inputs), based on market conditions.
The table below analyses the fair value measurement of applicable assets by level:
Audited
Rm Level 1 Level 2 Level 3 Total
2013
Equity instruments 111 639 6 728 112 373
Listed ordinary shares on the JSE 78 702 78 702
Foreign equities listed on an exchange other than the JSE 32 937 32 937
Unlisted equities 6 328 334
Interest in joint ventures –measured at fair value 400 400
Debt instruments 65 527 21 218 238 86 983
Preference shares listed on the JSE or foreign exchanges 1 928 1 928
Unlisted preference shares 1 012 238 1 250
Listed term deposits(1) on BESA, JSE or foreign exchanges 63 599 2 830 66 429
Unlisted term deposits(1) 17 376 17 376
Mutual funds(2) 249 68 731 246 69 226
Active market 249 66 555 66 804
Property 1 747 1 747
Equity 249 20 257 20 506
Interest-bearing instruments 14 551 14 551
Mixed 30 000 30 000
Non-active market 2 176 246 2 422
Equity 2 176 90 2 266
Mixed 156 156
Investment policies 26 356 26 356
Derivatives 4 956 4 956
Equity 1 227 1 227
Foreign exchange 17 17
Interest rate 3 712 3 712
Properties (investment and owner-occupied) 30 024 30 024
Assets subject to fair value hierarchy analysis 177 415 121 267 31 236 329 918
Comprising:
Held-for-trading 4 956 4 956
Designated as at fair value through profit or loss 177 415 116 311 1 212 294 938
Properties measured at fair value 30 024 30 024
Total assets carried at fair value 177 415 121 267 31 236 329 918
(1) Term deposits include instruments which have a defined maturity date and capital repayment. These instruments are by nature interest bearing at a predetermined rate, which
is either fixed or referenced to quoted floating indices.
(2) Mutual funds are categorised into property, equity or interest-bearing instruments based on a minimum of 80% of the underlying asset composition of the fund by value being
of a like category. In the event of “no one category meeting this threshold” it is classified as mixed assets class.
There have been no transfers between Level 1, 2 or 3 during the period.
The table below analyses the fair value measurement of applicable financial instrument liabilities which are all categorised as level 2:
2013
Audited Rm
Liabilities
Long-term investment contract liabilities 74 146
Third party financial liabilities arising on consolidation of mutual funds 39 983
Derivatives 4 860
Total financial instrument liabilities carried at fair value 118 989
Comprising:
Held-for-trading 4 860
Fair value through profit or loss 114 129
Total financial instrument liabilities carried at fair value 118 989
There were no transfers between levels 1, 2 and 3 during the period.
Reconciliation of level 3 assets
The table below analyses the movement of level 3 assets (investment and owner-occupied property and financial instruments)
for the year under review:
2013
Audited Rm
Balance at 1 January 2013 29 791
Fair value adjustment recognised in profit or loss as part of investment gains/(losses) (1) 2 518
Fair value adjustment recognised in other comprehensive income 28
Foreign currency translation 37
Additions 1 752
Disposals (2 890)
Balance at 31 December 2013 31 236
Investment and owner-occupied properties 30 024
Financial instruments – equity and mutual funds 974
– debt 238
(1) Included in the fair value adjustment is a R2 409 million unrealised gain.
Investment and owner-occupied property
Investment properties (including owner-occupied properties) fair values were derived by determining sustainable net rental income,
to which an appropriate capitalisation rate is applied. Capitalisation rates are adjusted for occupancy levels, age of the building,
location and expected future benefit of recent alterations.
The capitalisation rates applied at 31 December 2013 range between 7,0% to 11,0%. This compares to the ten year government yield
of 8,14%. The non observable adjustments included in the valuation can therefore be referenced to the variance to the ten year
government rate.
The table below indicates the sensitivity of the aggregate market values for a 0,5% change in the capitalisation rate. It should be
noted that as both the investment and the owner-occupied properties are entirely linked to policyholder benefits and consortium
non-controlling interests there is no impact to group ordinary shareholder comprehensive income or equity for any changes in the
fair value measurement.
Change in capitalisation rate
Audited 0,5% 0,5%
2013 Rm increase decrease
Properties between 7,0 – 9,0% capitalisation rate 22 550 21 083 24 237
Properties between 9,1 – 11,0% capitalisation rate 7 474 7 072 7 919
Total 30 024 28 155 32 156
Level 3 – significant fair value model assumptions and sensitivities
Financial instrument assets
Equities and mutual funds R974 million – earnings multiples applied between 7 and 10 times.
Debt instruments R238 million – discount rates applied between 7% and 11%.
Approximately 57% of these assets are allocated to policyholder unit linked portfolios and therefore changes in estimates would be
offset by equal changes in liability values.
The net shareholder exposure is approximately R519 million. Changes to discount rates and implied earnings multiples applied of 50bps
would result in between positive R22 million to negative R20 million after taxation net impact to profit or loss and shareholder funds.
Group's valuation process
The group's appointed asset managers have qualified valuators that perform the valuations of financial assets and properties
required for financial reporting purposes, including level 3 fair values. These valuations are reviewed and approved every reporting
period by the group balance sheet committee. The committee is chaired by the group's Executive Director – Finance and Risk.
The fair value of level 3 instruments are determined using valuation techniques that incorporate certain assumptions that are
not supported by prices from observable current market transactions in the same instruments and are not based on available
observable market data. Such assumptions include the assumed risk adjusted discount rate applied to estimate future cash flows
and the liquidity and credit spreads applied to debt instruments. Changes in these assumptions could affect the reported fair value
of these financial instruments.
Valuation techniques used in determining the fair value of financial assets and liabilities classified within level 2
Instrument Valuation basis/techniques Main assumptions
Unlisted preference shares Discounted cash flow model (DCF) Bond and interbank swap interest
rate curves
Agreement interest rate curves
Issuer credit ratings
Liquidity spreads
Unlisted term deposits and DCF Bond and interbank swap interest
illiquid listed term deposits rate curves
Issuer credit ratings
Liquidity spreads
Mutual funds Quoted put (exit) price provided by the fund Price – not applicable
manager Notice period – bond interest rate curves
Investment policies Quoted put/surrender price provided by the issuer, Price – not applicable
adjusting for any applicable notice periods (DCF) Bond interest rate curves
Derivative assets and liabilities Option pricing models Volatility and correlation factors
DCF Bond and interbank swap interest
rate curves
Forward equity and currency rates
Policyholder investment
contracts liabilities
– unit-linked policies Current unit price of underlying unitised financial Not applicable
asset that is linked to the liability, multiplied by the
number of units held
– annuity certains DCF Bond and interbank swap interest
rate curves
Own credit/liquidity
Third party financial liabilities Quoted put (exit) price provided by the fund Not applicable
arising on the consolidation of manager
mutual funds
Valuation techniques used in determining the fair value of assets and liabilities classified within level 3
Instrument Valuation basis/techniques Main assumptions
Investment and owner-occupied DCF Capitalisation discount rate
properties Price per square meter
Long-term net operating income margin
Vacancies
Market rental trends (average net rental
growth of between 2,3% – 2,5%)
Economic outlook
Location
Hotel income trends/inflation based
Hotel occupancy (range between
50% – 75%)
Sale price (if held for sale) Not applicable
Unlisted equities, including DCF/earnings multiple Cost of capital
joint ventures – measured at Bond and interbank swap interest
fair value rate curves
Consumer price index
Gross domestic product
If a property investment entity, then
assumptions applied are as above
under investment and owner-occupied
properties
Recent arm's length transactions Not applicable
Unlisted preference shares DCF Bond and interbank swap interest
rate curves
Agreement interest rate curves
Issuer credit ratings
Liquidity spreads
Recent arm's length transactions Not applicable
Offsetting
Audited
The group does not have any financial assets or financial liabilities that are currently subject to offsetting in accordance with IAS 32 Financial
Instruments: Presentation.
However of the gross derivatives assets recognised of R6 387 million (2012: R6 910 million) and gross derivative liabilities
R4 860 million (2012: R6 098 million), derivative assets of R6 265 million (2012: R6 910 million) and derivative liabilities of R4 671 million
(2012: R6 098 million) are subject to master netting arrangements, with a net exposure of R1 594 million (2012: R812 million).
Appendix – Restatement of prior period financial statements
Statement of financial position
as at 1 January 2012
Reclassifi-
As cation Restated
previously of mutual 1 January
reported funds(1) 2012
Audited Rm Rm Rm
Assets
Equipment and owner-occupied properties under development 897 897
Owner-occupied properties 1 598 1 598
Investment properties 23 470 23 470
Intangible assets 933 933
Defined benefit pension fund employer surplus 199 199
Deferred acquisition costs 403 403
Interests in joint ventures 626 626
Reinsurance assets 1 104 1 104
Long-term 902 902
Short-term 202 202
Operating leases – accrued income 1 085 1 085
Assets held for trading 3 790 3 790
Interest in associates – measured at fair value 11 697 20 11 717
Financial investments 197 959 10 737 208 696
Deferred taxation 183 183
Prepayments, insurance and other receivables 2 620 36 2 656
Cash and cash equivalents 6 664 5 768 12 432
Total assets 253 228 16 561 269 789
Liabilities
Long-term policyholder liabilities 208 565 208 565
Insurance contracts 145 558 145 558
Investment contracts with discretionary participation features 3 447 3 447
Financial liabilities under investment contracts 59 560 59 560
Short-term insurance liabilities 466 466
Financial liabilities at amortised cost 2 195 2 195
Third party liabilities arising on consolidation of mutual funds 11 164 16 553 27 717
Employee benefits 1 082 1 082
Deferred revenue 159 159
Deferred taxation 2 819 2 819
Provisions 371 371
Operating leases – accrued expense 93 93
Derivative liabilities 3 113 3 113
Insurance and other payables 6 304 8 6 312
Current taxation 614 614
Total liabilities 236 945 16 561 253 506
Equity
Ordinary shareholders' interests 13 211 13 211
Share capital 26 26
Share premium 6 133 6 133
Retained surplus 7 683 7 683
Other reserves (631) (631)
Non-controlling interests 3 072 3 072
Total equity 16 283 16 283
Total equity and liabilities 253 228 16 561 269 789
(1) Applying IFRS 10 and the revised IAS 28 has led to certain investments in mutual funds being reclassified between subsidiaries, associates and financial instruments. For further
detailed explanation, refer to the accounting policies section.
Statement of financial position (continued)
Reclassifi-
As cation Restated
previously of mutual 31 December
reported funds(1) 2012
Audited Rm Rm Rm
Assets
Equipment and owner-occupied properties under development 952 952
Owner-occupied properties 1 378 1 378
Investment properties 24 133 24 133
Intangible assets 759 759
Defined benefit pension fund employer surplus 186 186
Deferred acquisition costs 449 449
Interests in joint ventures 378 378
Reinsurance assets 1 170 1 170
Long-term insurance 978 978
Short-term insurance 192 192
Operating leases – accrued income 1 277 1 277
Assets held for trading 6 910 6 910
Interest in associates – equity accounted 72 72
Interest in associates – measured at fair value 13 837 522 14 359
Financial investments 231 187 10 828 242 015
Deferred taxation 253 253
Prepayments, insurance and other receivables 3 489 139 3 628
Cash and cash equivalents 6 327 4 091 10 418
Total assets 292 757 15 580 308 337
Liabilities
Long-term policyholder liabilities 236 684 236 684
Insurance contracts 164 666 164 666
Investment contracts with discretionary participation features 3 855 3 855
Financial liabilities under investment contracts 68 163 68 163
Short-term insurance liabilities 525 525
Financial liabilities at amortised cost 2 177 2 177
Third party financial liabilities arising on consolidation of mutual funds 14 465 15 550 30 015
Employee benefits 1 198 1 198
Deferred revenue 174 174
Deferred taxation 2 715 2 715
Deemed disposal taxation liability 918 918
Provisions 338 338
Operating leases – accrued expense 30 30
Derivative liabilities 6 098 6 098
Insurance and other payables 8 200 30 8 230
Current taxation 724 724
Total liabilities 274 246 15 580 289 826
Equity
Ordinary shareholders' interests 15 410 15 410
Share capital 26 26
Share premium 6 078 6 078
Retained surplus 10 332 10 332
Other reserves (1 026) (1 026)
Non-controlling interests 3 101 3 101
Total equity 18 511 18 511
Total equity and liabilities 292 757 15 580 308 337
(1) Applying IFRS 10 and the revised IAS 28 has led to certain investments in mutual funds being reclassified between subsidiaries, associates and financial instruments. For further
detailed explanation, refer to the accounting policies section.
Statement of Comprehensive income
for the year ended 31 December 2012
Reclassifi-
As cation IAS 19 Restated
previously of mutual Amend- 31 December
reported funds(1) ments 2012
Audited Rm Rm Rm Rm
Revenue
Insurance premiums 30 720 30 720
Reinsurance premiums (1 089) (1 089)
Net insurance premiums 29 631 29 631
Service fee income from investment contracts 881 881
Investment income 12 688 948 (30) 13 606
Hotel operation sales 720 720
Investment gains 30 209 899 31 108
Fee revenue and reinsurance commission 1 877 (77) 1 800
Adjustment to defined benefit pension fund employer surplus (45) 45 –
Total revenue 75 961 1 770 15 77 746
Claims and policyholder benefits under insurance contracts (25 004) (25 004)
Insurance claims recovered from reinsurers 672 672
Change in long-term policyholder liabilities (19 532) (19 532)
Insurance contracts (19 228) (19 228)
Investment contracts with discretionary participation features (380) (380)
Applicable to reinsurers 76 76
Fair value adjustment to policyholder liabilities under investment
contracts (10 035) (10 035)
Fair value adjustment on third party mutual fund interests (2 979) (1 769) (4 748)
Acquisition costs (3 818) (3 818)
General marketing and administration expenses (7 445) (1) (127) (7 573)
Finance costs (243) (243)
Profit share allocations under bancassurance and other agreements (800) (800)
Profit on sale of joint venture 135 135
Equity accounted earnings from joint ventures 3 3
Profit before taxation 6 915 – (112) 6 803
Taxation (2 717) 32 (2 685)
Total earnings (carried forward) 4 198 – (80) 4 118
Appendix – Restatement of prior period financial statements (continued)
Statement of comprehensive income
for the year ended 31 December 2012
Reclassifi-
As cation IAS 19 Restated
previously of mutual Amend- 31 December
reported funds(1) ments 2012
Audited Rm Rm Rm Rm
Total earnings (brought forward) 4 198 (80) 4 118
Other comprehensive income 10 80 90
Items that may be reclassified subsequently to profit or loss 5 5
Net change in fair value on cash flow hedges (29) (29)
Income and capital gains tax relating to net change in fair value
on cash flow hedges 8 8
Foreign currency translation 26 26
Items that may not be reclassified subsequently to profit or loss 5 80 85
Owner-occupied properties – fair value adjustment (192) (192)
Income and capital gains tax relating to owner-occupied properties
fair value adjustment 66 66
Change in long-term policyholder insurance liabilities (application of
shadow accounting) 131 131
Actuarial gains on post-retirement medical aid liability 127 127
Income tax relating to post-retirement medical aid liability (36) (36)
Net adjustments to defined benefit pension fund (2)
(15) (15)
Income tax relating to defined benefit pension fund 4 4
Total comprehensive income 4 208 – 4 208
Attribution of total earnings and comprehensive income
Total earnings attributable to:
Ordinary shareholders' interests 3 779 3 699
Non-controlling interests 419 419
4 198 4 118
Total comprehensive income attributable to:
Ordinary shareholders' interests 3 780 3 780
Non-controlling interests 428 428
4 208 4 208
Basic and fully diluted earnings per share Cents Cents Cents
Basic earnings per share 1 464,6 (31,0) 1 433,6
Fully diluted basic earnings per share 1 370,8 (29,1) 1 341,7
(1) Applying IFRS 10 and the revised IAS 28 has led to certain investments in mutual funds being reclassified between subsidiaries, associates and financial instruments. For further
detailed explanation, refer to the accounting policies section.
(2) Net adjustments to defined benefit pension fund include actuarial gains or losses, return on plan assets, reduced by the interest on the net defined benefit asset, and the
effect of the application of the asset ceiling.
Sponsor:
Merrill Lynch South Africa (Pty) Limited
Date: 27/02/2014 08:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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