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Summarised, unaudited interim results and cash dividend declaration for the six months ended 31 December 2013
RAND MERCHANT INSURANCE HOLDINGS LIMITED
(RMI)
Registration number: 2010/005770/06
JSE ordinary share code: RMI
ISIN code: ZAE000153102
Summarised, unaudited interim results announcement and cash dividend declaration for the six months ended 31 December 2013
FINANCIAL HIGHLIGHTS
Normalised earnings +18% to 90.1 cents per share
Ordinary dividend +15% to 46.0 cents per share
Market value +33% to 2 745 cents per share
THE RMI GROUP AT A GLANCE
The interests of RMI comprise a portfolio of South Africa's premier insurance brands:
Discovery
Effective interest 25.8%
Discovery Limited (Discovery) services the healthcare funding and insurance markets in South Africa, the UK, the USA and Asia. As a pre-eminent developer of
integrated financial services products, it operates under a number of brand names, the more significant of which are Discovery Health, Discovery Life, Discovery
Invest, DiscoveryCard, Discovery Insure, Vitality, PruHealth, PruProtect and Ping An Health.
MMI Holdings
Effective interest 25.2%
The core businesses of MMI Holdings Limited (MMI) are life insurance, employee benefits, investment and savings, healthcare solutions and short-term insurance.
Product solutions are provided to all market segments in South Africa, the rest of Africa and selected international countries, principally under the Momentum
and Metropolitan brand names.
OUTsurance
Effective interest 84.8%
OUTsurance Holdings Limited (OUTsurance) is a direct personal lines and small business short-term insurer. Pioneers of the OUTbonus concept, it has grown rapidly
by applying a scientific approach to risk selection, product design and claims management. Its South African direct life insurance business has reached critical
mass and is fast gaining traction. The launch of Youi, its direct personal lines initiative in Australia has been successful and is exceeding expectations.
RMB Structured Insurance
Effective interest 79.1%
RMB Structured Insurance Limited (RMBSI) holds both short-term and life insurance licences. It creates bespoke insurance and financial risk solutions for South
Africa's large corporations by using sophisticated risk techniques and innovative financial structures. In addition, it partly owns a portfolio of underwriting
management agencies.
Basis of preparation
This report covers the unaudited financial results of RMI for the six months ended 31 December 2013. These summarised results have been prepared in
accordance with:
- International Financial Reporting Standards (IFRS), including IAS 34: Interim financial reporting;
- the requirements of the South African Companies Act, Act 71 of 2008, as amended; and
- the Listings Requirements of the JSE Limited.
The primary results and accompanying commentary are presented on a normalised basis. We believe this most accurately reflects underlying economic
performance. The normalised earnings have been derived from the unaudited IFRS financial results. A reconciliation of the adjustments made to derive normalised
earnings is presented in the accompanying schedules.
The accounting policies applied are consistent with those applied in the previous financial year, except for changes required by the mandatory adoption of new
and revised IFRS. The adoption of IFRS 10: Consolidated financial statements, had resulted in the consolidation and non-consolidation of certain entities by RMI's
associates without any impact on the profit or net asset value of these associates in previous accounting periods. As a result of this, the restatements made by
RMI's associates as required by IFRS 10 had no impact on RMI's results as previously reported.
Schalk Human, CA(SA), prepared these consolidated financial results under the supervision of Peter Cooper, CA(SA). The board of directors takes full responsibility
for the preparation of this announcement.
Operating environment
The South African macro-economic environment for the first six months of the financial year continued to be challenging. From a local economic perspective we
had to contend with a far less benign global financial environment. South Africa, with its current account deficit and large financing requirement, was particularly
vulnerable to slowing capital flows and the Rand weakened rapidly. This placed upward pressure on inflation and led to the South African Reserve Bank's decision
to increase the repo rate by 50 basis points in January 2014.
These external headwinds, combined with a slowdown in real income growth, resulted in continued pressure on South African households. GDP growth in South
Africa remains subdued. Capacity constraints and labour market unrest negatively impacted the supply side of the economy.
As a result, consumer confidence remained uncertain, with the above-mentioned labour uncertainty and unemployment reducing disposable and/or investible
income. For our group companies this resulted in an environment where operating conditions remained challenging and highly competitive during the period
under review.
Overview of results
Notwithstanding such an uncertain backdrop, most of the businesses in which RMI is invested produced gratifying results for the half year, with strong positive
growth in normalised earnings being recorded by Discovery and OUTsurance:
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2013 2012 % 2013
R million Unaudited Unaudited change Audited
Discovery 1 650 1 349 22 2 787
MMI 1 690 1 501 13 3 241
OUTsurance 594 493 20 1 161
RMBSI 24 55 (56) 89
- Discovery's growth stemmed from strong performances by its core businesses in South Africa (Life, Health and Invest) while PruProtect in the UK also grew
strongly.
- OUTsurance's growth was driven by a significant improvement in Youi's loss position as well as a satisfactory performance by the SA short-term insurance
operations.
RMI's attributable share of this outcome for the six months ended 31 December 2013 was as follows:
Six months Six months
ended ended Year ended
31 December 31 December 30 June
2013 2012 % 2013
R million Unaudited Unaudited change Audited
Normalised earnings from:
- Discovery 413 337 23 699
- MMI 419 368 14 803
- OUTsurance 502 412 22 990
- RMBSI 20 42 (52) 70
1 354 1 159 17 2 562
Funding and holding company costs (16) (22) 27 (37)
Normalised earnings 1 338 1 137 18 2 525
Normalised earnings per share (cents) 90.1 76.5 18 169.9
The gross interim dividend of 46.0 cents per share represents a 15% increase and is covered 2.0 times by the normalised earnings (2012: 1.9 times).
Market value of investments
On the back of strong financial performance, Discovery benefited from a significant market re-rating during the period, with its JSE market capitalisation
increasing by 36% on a year-on-year basis. Over the year, RMI's market capitalisation increased by 33%.
On a "look-through" basis, the market value attributed to RMI's interest in OUTsurance (83.4% held) and RMBSI (76.4% held) increased by 44% to R18.4 billion,
reflecting market recognition of the progress made in building out OUTsurance's Australian initiative and the strength of its South African franchise.
As at As at As at
31 December 31 December 30 June
2013 2012 2013
R million Unaudited Unaudited % change Audited
Market value of interest in:
- Discovery 12 510 9 207 36 12 445
- MMI 9 929 8 701 14 8 701
Market value of listed investments 22 439 17 908 25 21 146
Implied market value of unlisted investments 18 377 12 757 44 16 337
Gross market value of portfolio 40 816 30 665 33 37 483
Net liabilities of the holding company (34) (90) (62) (44)
RMI market capitalisation 40 782 30 575 33 37 439
RMI closing share price (cents) 2 745 2 058 33 2 520
At 31 December 2013 the net borrowings carried at the corporate centre by RMI was insignificant.
Interim dividend payment
RMI follows a stated practice of returning to shareholders net dividends (after providing for funding and operational costs incurred at the centre) received by it in
the ordinary course of business.
Having due regard to the interim dividends receivable from our underlying investments and applying the dividend practice outlined above, the board of RMI has
resolved to declare a gross interim dividend of 46.0 cents per ordinary share (2012: 40.0 cents). Such dividend is covered 2.0 times by normalised earnings per
share (2012: 1.9 times).
Dividend Withholding Tax (DWT) at a rate of 15% is levied on dividends paid to shareholders who are not exempt from DWT. RMI has accumulated Secondary Tax
on Companies (STC) credits that have been used to reduce the DWT liability arising, which will result in a net dividend of 39.14671 cents per ordinary share for
those shareholders who are not exempt.
The board is of the opinion that RMI is adequately capitalised at this stage and that the company will be able to meet its obligations in the foreseeable future
after payment of the interim dividend.
In evaluating the likely rate of growth in future dividends from RMI, shareholders should take cognisance of the fact that OUTsurance, which currently contributes
some 49% of RMI's dividend flow, has embarked on an accelerated growth plan in Australia and will be entering the New Zealand market on an incremental
basis. This will require greater re-investment of earnings in the initiatives. In the medium term the rate of growth in dividends that RMI receives from OUTsurance
may lag behind the rate of growth in earnings accruing from that source.
Outlook for the coming year
South Africa's dependence on foreign capital flows to fund the wide current account deficit continues to introduce uncertainty and vulnerability to the macro-
economic outlook. The recent increase in the repo rate is likely to be the first in an interest rate hiking cycle. This will place further pressure on the South African
consumer and growth in new insurance business volumes will continue to be dependent on a recovery in employment and improved disposable income levels.
- Discovery sees the progress made over the last six months as positioning it strongly for continued growth and profitability into the future.
- MMI believes that it has identified and is implementing innovative strategies to unlock value over time.
- OUTsurance believes that conditions in its South African business will remain largely unchanged. It expects to continue to penetrate the Australian market giving
rise to strong topline growth together with enhanced economies of scale.
From a shareholder perspective, we believe that all the strategic imperatives required to enable the group to continue to deliver real growth in earnings are in
place.
The information provided above is not an earnings forecast and has not been reviewed and reported on by the company's external auditors.
For and on behalf of the board.
GT Ferreira P Cooper
Chairman Chief executive officer
Sandton
6 March 2014
DIVIDEND DECLARATION
Interim cash dividend declaration
Notice is hereby given that a gross interim dividend of 46.0 cents per ordinary share payable out of income reserves was declared on 6 March 2014 in respect of
the six months ended 31 December 2013.
The company has utilised STC credits amounting to 0.31140 cents per ordinary share. The balance of the dividend will be subject to DWT at a rate of 15%, which
will result in a net dividend of 39.14671 cents per ordinary share for those shareholders who are not exempt. The company's tax reference number is
9469/826/16/9. Its issued share capital at the declaration date is 1 485 688 346 ordinary shares and 648 001 redeemable preference shares.
Shareholders' attention is drawn to the following important dates:
- Last day to trade in order to participate in this dividend Thursday, 20 March 2014
- Shares commence trading "ex dividend" on Monday, 24 March 2014
- The record date for the dividend payment will be Friday, 28 March 2014
- Dividend payment date Monday, 31 March 2014
No de-materialisation or re-materialisation of share certificates may be done between Monday, 24 March 2014 and Friday, 28 March 2014 (both days inclusive).
By order of the board.
JS Human
Company secretary
6 March 2014
REVIEW OF INVESTMENT PERFORMANCE
For a comprehensive review of the investment performance of RMI's investee companies, shareholders are referred to www.rminsurance.co.za.
Summarised consolidated income statement
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Earned premiums net of reinsurance 4 741 3 670 29 7 869
Fee income 82 67 22 146
Investment income 218 234 (7) 631
Profit on sale of subsidiary - 42 (100) 38
Net fair value gains on financial assets 454 479 (5) 560
Income 5 495 4 492 22 9 244
Net claims paid (2 671) (2 157) 24 (3 873)
Fair value adjustment to investment contracts and insurance contract provisions (342) (259) 32 (1 027)
Fair value adjustment to financial liabilities (85) (85) - (201)
Acquisition, marketing and administration expenses (1 473) (1 151) 28 (2 418)
Profit before finance costs, share of after tax results of associates and taxation 924 840 10 1 725
Net finance costs (46) (66) (30) (125)
Share of after tax results of associates 1 026 685 50 1 179
Profit before taxation 1 904 1 459 31 2 779
Taxation (255) (224) 14 (371)
Profit for the period 1 649 1 235 34 2 408
Attributable to:
Equity holders of RMI 1 553 1 146 36 2 214
Non-controlling interests 96 89 8 194
Profit for the period 1 649 1 235 34 2 408
Computation of headline earnings
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Earnings attributable to equity holders 1 553 1 146 36 2 214
Adjustment for:
(Profit)/loss on dilution of shareholding (145) 4 11
Realised profit on sale of available-for-sale financial assets (9) (1) (1)
Goodwill and other impairments 4 - 1
Loss on disposal of property and equipment 3 - -
Profit on sale of subsidiary - (26) (24)
Headline earnings attributable to equity holders 1 406 1 123 25 2 201
Sources of headline earnings
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Headline earnings from:
- Discovery 446 330 35 551
- MMI 449 350 28 628
- OUTsurance 505 421 20 990
- RMBSI 22 44 (50) 69
1 422 1 145 24 2 238
Funding and holding company costs (16) (22) 27 (37)
Headline earnings 1 406 1 123 25 2 201
Computation of earnings per share
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Earnings attributable to equity holders 1 553 1 146 36 2 214
Headline earnings attributable to equity holders 1 406 1 123 25 2 201
Number of shares in issue (millions) 1 486 1 486 - 1 486
Weighted average number of shares in issue (millions) 1 483 1 483 - 1 483
Earnings per share (cents) 104.7 77.3 35 149.2
Diluted earnings per share (cents) 103.7 77.0 35 148.2
Headline earnings per share (cents) 94.8 75.7 25 148.4
Diluted headline earnings per share (cents) 93.7 75.4 24 147.4
Dividend per share (cents)
Interim dividend 46.0 40.0 15 40.0
Final dividend - - - 55.0
Total dividend 46.0 40.0 15 95.0
Summarised consolidated statement of comprehensive income
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Profit for the period 1 649 1 235 34 2 408
Other comprehensive income for the period
Items that may subsequently be reclassified to income, before and after taxation
Currency translation differences 30 42 (29) 62
Fair value movement on available-for-sale financial assets 42 26 62 19
Share of other comprehensive income of associates 98 77 27 173
Items that may subsequently be reclassified to income, after taxation 84 64 31 173
Items that will not be reclassified to income, after taxation 14 13 8 -
Other comprehensive income for the period 170 145 17 254
Total comprehensive income for the period 1 819 1 380 32 2 662
Total comprehensive income attributable to:
Equity holders of RMI 1 712 1 281 34 2 457
Non-controlling interests 107 99 8 205
Total comprehensive income for the period 1 819 1 380 32 2 662
Summarised consolidated statement of financial position
As at As at As at
31 December 31 December 30 June
2013 2012 2013
R million Unaudited Unaudited Audited
Assets
Property and equipment 525 442 460
Goodwill and other intangible assets 28 55 43
Investments in associates 11 145 10 061 10 442
Financial assets 7 917 7 244 7 781
Loans and receivables including insurance receivables 1 719 1 208 1 668
Taxation 16 7 -
Deferred acquisition cost 30 30 38
Reinsurance contracts 425 335 275
Deferred taxation 431 444 414
Cash and cash equivalents 3 256 2 457 2 664
Total assets 25 492 22 283 23 785
Equity
Share capital and premium 13 590 13 615 13 632
Reserves 826 (693) (67)
Capital and reserves attributable to equity holders of the company 14 416 12 922 13 565
Non-controlling interests 750 545 586
Total equity 15 166 13 467 14 151
Liabilities
Insurance contracts 5 798 4 532 4 855
Share-based payment liability 44 29 50
Financial liabilities 3 308 3 246 3 601
Payables and provisions 993 681 913
Deferred taxation 174 311 176
Taxation 9 17 39
Total liabilities 10 326 8 816 9 634
Total equity and liabilities 25 492 22 283 23 785
Statement of changes in equity
Share Transactions
capital Equity with non- Non-
and accounted controlling Other Retained controlling Total
Unaudited premium reserves interests reserves earnings interests equity
Balance as at 1 July 2012 13 614 420 (2 071) 88 1 133 626 13 810
Total comprehensive income for the period - 77 - 57 1 146 99 1 379
Dividends paid - - - - (1 560) (123) (1 683)
Income of associates retained - 79 - - (79) - -
Movement in treasury shares 1 6 - - - - 7
Transactions with non-controlling interests - 23 - - - - 23
Sale of subsidiary - - - (1) (1) (76) (78)
Share-based payment reserve - - - 1 - - 1
Change from equity-settled to cash-settled scheme - - - (9) (2) (2) (13)
Change in reserves due to a change in holding - - - 14 (14) 21 21
Balance as at 31 December 2012 13 615 605 (2 071) 150 623 545 13 467
Balance as at 1 July 2013 13 632 935 (2 071) 162 907 586 14 151
Total comprehensive income for the period - 98 - 61 1 553 107 1 819
Dividends paid - - - - (817) (86) (903)
Income of associates retained - 625 - - (625) - -
Movement in treasury shares (42) 3 - - - - (39)
Transactions with non-controlling interests - - (5) - - (2) (7)
Issue of share capital by a subsidiary - - - - - 112 112
Change in reserves due to a change in holding - - - 43 (43) 33 33
Balance as at 31 December 2013 13 590 1 661 (2 076) 266 975 750 15 166
Summarised consolidated statement of cash flows
Six months ended Year ended
31 December 30 June 2013
2013 2012
R million Unaudited Unaudited Audited
Cash available from operating activities 1 346 2 056 3 076
Dividends paid (817) (1 560) (2 154)
Investment activities 195 261 351
Financing activities (174) (789) (1 164)
Net increase/(decrease) in cash and cash equivalents 550 (32) 109
Unrealised foreign currency translation adjustments 42 27 93
Cash and cash equivalents at the beginning of the period 2 664 2 462 2 462
Cash and cash equivalents at the end of the period 3 256 2 457 2 664
Computation of normalised earnings
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
R million Unaudited Unaudited change Audited
Headline earnings attributable to equity holders 1 406 1 123 25 2 201
RMI's share of normalised adjustments made by associates: (46) 38 341
Amortisation of intangible assets relating to business combinations 80 87 171
Basis and other changes and investment variances (16) (3) 92
Finance costs raised on puttable non-controlling interest financial liability 19 20 41
Fair value adjustment to puttable non-controlling interest financial liability (26) - 33
Non-controlling interest allocation if no put options (10) (8) (10)
Net realised and fair value gains on shareholders' assets (100) (58) (85)
Once-off costs 7 - 15
Recapture of reinsurance - - 84
Group treasury shares (22) (24) (17)
Normalised earnings attributable to equity holders 1 338 1 137 18 2 525
Computation of normalised earnings per share
Six months ended Year ended
31 December 30 June 2013
2013 2012 %
Unaudited Unaudited change Audited
Weighted average number of shares in issue (millions) 1 486 1 486 1 486
Normalised earnings per share (cents) 90.1 76.5 18 169.9
Diluted normalised earnings per share (cents) 89.1 76.3 17 168.6
Dividend cover (dividend relative to normalised earnings) 2.0 1.9 1.8
Effective interest
RMI's effective interest in the group entities is different from the actual holdings as a result of the following consolidation adjustments:
- treasury shares held by the group entities;
- shares held by consolidated share incentive trusts;
- "deemed" treasury shares arising from BEE transactions entered into; and
- "deemed" treasury shares held by policyholders and mutual funds managed by them.
At 31 December 2013 the effective interest held by RMI can be compared to the actual interest in the statutory issued share capital of the companies as follows:
31 December 2013 31 December 2012
Effective Actual Effective Actual
Unaudited Unaudited Unaudited Unaudited
Discovery 25.8% 25.0% 26.7% 25.0%
MMI 25.2% 25.0% 25.2% 25.0%
OUTsurance 84.8% 83.4% 85.3% 83.4%
RMBSI 79.1% 76.4% 79.1% 76.4%
Segment report
The segmental analysis is based on the management accounts prepared for the group.
Discovery MMI OUTsurance RMBSI Other(1) RMI group
R million Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Six months ended 31 December 2013
Operating profit - - 843 37 44 924
Finance costs - - - (7) (39) (46)
Share of after tax results of associates 455 453 4 (1) 115 1 026
Profit before taxation 455 453 847 29 120 1 904
Taxation - - (248) (5) (2) (255)
Profit for the period 455 453 599 24 118 1 649
Normalised earnings 413 419 594 24 (112) 1 338
Assets - - 8 383 5 286 650 14 319
Associates 5 013 6 066 19 47 - 11 145
Intangible assets - - 25 1 2 28
Total assets 5 013 6 066 8 427 5 334 652 25 492
Total liabilities - - 4 706 4 930 690 10 326
Six months ended 31 December 2012
Operating profit - - 776 67 (3) 840
Finance costs - - - (11) (55) (66)
Share of after tax results of associates 331 369 6 - (21) 685
Profit before taxation 331 369 782 56 (79) 1 459
Taxation - - (220) (1) (3) (224)
Profit for the period 331 369 562 55 (82) 1 235
Normalised earnings 337 368 493 55 (116) 1 137
Assets - - 6 975 4 618 574 12 167
Associates 4 235 5 798 18 10 - 10 061
Intangible assets - - 51 1 3 55
Total assets 4 235 5 798 7 044 4 629 577 22 283
Total liabilities - - 3 518 4 226 1 072 8 816
(1) "Other" includes RMI Holdings Limited, consolidation of treasury shares and other consolidation entries.
Geographical segments
South
Africa Australia Total
R million Unaudited Unaudited Unaudited
Six months ended 31 December 2013
Profit/(loss) before taxation 1 907 (3) 1 904
Taxation (256) 1 (255)
Profit/(loss) for the period 1 651 (2) 1 649
Total assets 21 931 3 561 25 492
Total liabilities 7 734 2 592 10 326
Six months ended 31 December 2012
Profit/(loss) before taxation 1 529 (70) 1 459
Taxation (245) 21 (224)
Profit/(loss) for the period 1 284 (49) 1 235
Total assets 19 956 2 327 22 283
Total liabilities 7 282 1 534 8 816
Financial instruments measured at fair value
The group's activities expose it to a variety of financial risks. The interim results announcement does not include all financial risk management
information and disclosures required in the annual financial statements and should be read in conjunction with the group's annual integrated report
for the year ended 30 June 2013.
The table below analyses financial instruments carried at fair value by level in the fair value hierarchy. The different levels are based on the extent
that quoted prices are used in the calculation of the fair value of the financial instruments. These levels are defined as follows:
Level 1 - fair value is based on quoted market prices (unadjusted) in active markets for identical instruments as measured at the reporting date.
Level 2 - fair value is determined through valuation techniques based on observable market inputs. These valuation techniques maximise the use
of observable market data where it is available and rely as little as possible at entity specific estimates.
Level 3 - fair value is determined through valuation techniques which use significant unobservable inputs.
Total
Unaudited carrying
R million Level 1 Level 2 Level 3 amount
31 December 2013
Financial assets
Equity securities
- available-for-sale 719 - - 719
- at fair value through profit or loss 2 388 26 - 2 414
Debt securities
- available-for-sale - 538 - 538
- at fair value through profit or loss 905 2 828 423 4 156
Derivative asset - 11 - 11
Total financial assets recognised at fair value 4 012 3 403 423 7 838
Financial liabilities
Convertible debentures - 15 - 15
Financial liabilities at fair value through profit or loss - - 85 85
Derivative liability - 17 - 17
Investment contracts 863 419 - 1 282
Total financial liabilities recognised at fair value 863 451 85 1 399
Six months ended
31 December
Unaudited
R million 2013 2012
Reconciliation of movement in level 3 assets
Balance at the beginning of the period 441 477
Amount received in the current period (5) -
Investment income accrued 17 18
Dividends received from the OUTsurance Investment Trust (30) (45)
Balance at the end of the period 423 450
Reconciliation of movement in level 3 liabilities
Balance at the beginning of the period 110 115
Preference dividends charged to the income statement in respect of cell captive arrangements and profit shares 85 85
Preference dividends paid (110) (114)
Balance at the end of the period 85 86
Total
Unaudited carrying
R million Level 1 Level 2 Level 3 amount
31 December 2012
Financial assets
Equity securities
- available-for-sale 683 - - 683
- at fair value through profit or loss 1 711 29 - 1 740
Debt securities
- available-for-sale - 663 - 663
- at fair value through profit or loss 959 2 670 450 4 079
Total financial assets recognised at fair value 3 353 3 362 450 7 165
Financial liabilities
Convertible debentures - 15 - 15
Financial liabilities at fair value through profit or loss - - 86 86
Investment contracts 826 420 - 1 246
Total financial liabilities recognised at fair value 826 435 86 1 347
The fair values of the above instruments were determined as follows:
Level 1
The level 1 equity securities comprise listed preference share and ordinary share investments which are listed on a securities exchange. The fair values of these
investments are calculated based on the closing bid prices on the last business day of the reporting period. The ordinary share investments include an investment
in a listed exchange traded fund which tracks the performance of the top forty companies listed on the JSE. Debt securities represent South African government
issued interest securities and other listed interest securities on the Bond Exchange of South Africa. The carrying amount represents the closing bid prices on the
last business day of the reporting period. Investment contract liabilities are valued with reference to the fair value of the underlying assets.
Level 2
The level 2 fair value instruments include unlisted preference shares that are redeemable with a notice period ranging from thirty days to three years. Dividend
yields range from 50.8% to 70% of the prime overdraft rate. The fair value of the preference shares which are redeemable within one year from the reporting
date is deemed to equal the redemption value. The fair value of the preference shares with a maturity date of longer than one year is calculated on a discounted
cash flow basis with the discount rate adjusted for changes in credit risk of the ultimate counterparty, being one of the large South African banks. Due to the
redeemable nature, the preference shares are deemed to be debt securities. The fair values of collective investment schemes investments are determined by the
closing unit price as quoted by the collective investment schemes. The collective investment schemes are not listed. The fair value of money market instruments
and other interest securities are determined based on observable market inputs. The derivative asset and liability are valued with reference to the closing bid prices
of the underlying listed equities they relate to. Investment contract liabilities are valued with reference to the fair value of the underlying assets.
Level 3
The level 3 financial asset at fair value through profit or loss represents an investment in the OUTsurance Investment Trust, the value of which is not significantly
sensitive to an increase or decrease in the counterparty credit rating due to the collateralised nature of the transaction.The financial liabilities at fair value through
profit or loss represent profits arising out of the cell captives and profit sharing arrangements that accrue on a monthly basis and which are distributed as
preference dividends on a six monthly basis.
ADMINISTRATION
Directors
GT Ferreira (Chairman), P Cooper (CEO), L Crouse, LL Dippenaar, JW Dreyer, JJ Durand, PM Goss, PK Harris, TV Mokgatlha, O Phetwe, (Ms) SEN Sebotsa and KC Shubane
Alternate: (Ms) A Kekana
Secretary and registered office
JS Human
Physical address: 3rd Floor, 2 Merchant Place, corner of Fredman Drive and Rivonia Road, Sandton 2196
Postal address: PO Box 786273, Sandton 2146
Telephone: +27 11 282 8166
Telefax: +27 11 282 4210
Web address: www.rminsurance.co.za
Sponsor
(in terms of the JSE Limited Listings Requirements)
Rand Merchant Bank
(a division of FirstRand Bank Limited)
Physical address: 1 Merchant Place, corner of Fredman Drive and Rivonia Road, Sandton 2196
Transfer secretaries
Computershare Investor Services Proprietary Limited
Physical address: Ground Floor, 70 Marshall Street, Johannesburg 2001
Postal address: PO Box 61051, Marshalltown 2107
Telephone: +27 11 370 5000
Telefax: +27 11 688 5221
Date: 06/03/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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