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MMI HOLDINGS LIMITED - Summarised & Audited Group Results for the year ended 30 June 2014

Release Date: 10/09/2014 07:05
Code(s): MMI     PDF:  
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Summarised & Audited Group Results for the year ended 30 June 2014

MMI Holdings Limited
Incorporated in the Republic of South Africa
Registration Number: 2000/031756/06
JSE share code: MMI
NSX share code: MIM
ISIN: ZAE000149902
("MMI" or "the company")


MMI HOLDINGS

SUMMARISED AND AUDITED GROUP RESULTS
for the year ended 30 June 2014

New business PVP up 18% to R42 billion

Comparable VALUE OF NEW BUSINESS up 14% to R779 million

Annualised RETURN on EMBEDDED VALUE of 19% to R40 billion

Profit from OPERATING DIVISIONS up 22% to R3.0 billion

HEADLINE EARNINGS up 27% to R3.2 billion 

CORE HEADLINE EARNINGS up 12% to R3.6 billion

Total DIVIDEND (including special) up 51% to R3.0 billion

OVERVIEW OF OPERATIONS

GROUP RESULTS

MMI delivered strong financial results for the year under review.

-  Embedded value increased to R40 billion (2 474 cents per share), driven by an excellent 19% return on 
   embedded value.

-  Growth in diluted headline earnings of 27%

-  Diluted core headline earnings of R3.6 billion reflected a 12% increase on the prior year.

-  The contribution from operating divisions rose 22% to R3.0 billion.

-  Actual merger expense savings of R522 million achieved (target R500 million).

-  A total dividend of 192 cents per share was paid for the year, including the special dividend, 
   an increase of 51%.

-  MMI invested in excess of R2.5 billion in growth initiatives during the year.

OPERATING ENVIRONMENT

Local operating conditions were economically challenging and highly competitive. Equity markets increased 
strongly throughout the year, while interest rate volatility continued. Consumer confidence remained fragile 
with ongoing labour challenges, unemployment, indebtedness and inflation reducing disposable and investible 
income. GDP growth in many African countries, however, is proving to be resilient. Despite the tough environment, 
MMI has delivered very good financial results for the year, as the need for and provision of investment and 
protection products within MMI’s client base remains an important part of financial wellness and planning. 

CAPITAL STRENGTH

-  MMI actively manages its capital resources within a defined risk appetite and balances the interests 
   of all stakeholders.

-  The investment mandate for shareholder capital is restricted to lower-risk investments.

-  MMI successfully issued R1.5 billion subordinated debt during March 2014 on the back of an improved credit rating.

-  A strong capital buffer of R3.2 billion was reported at 30 June 2014, after allowing for capital requirements, growth 
   initiatives and dividends. This level is considered to be appropriate taking into account the expected impact of 
   Solvency Assessment and Management and other strategic initiatives.

OVERVIEW OF OPERATIONS 

MOMENTUM RETAIL

-  New insurance business, on a present value of premiums (PVP) basis, increased by 17% to R20.4 billion for the year.

-  The value of new business increased strongly by 18% to R240 million, boosted by excellent single premium sales.

-  Good risk experience continued, confirming the benefits of focusing on good quality new business.

-  Operating expenses were well contained during the year.

-  Asset-based fees boosted the profitability of the division.

-  Operating profit for the year increased by 18% to R1 372 million.

METROPOLITAN RETAIL

-  Single premium new business continued to perform very well, ending 22% higher, while recurring premiums 
   increased 9%.

-  The profit-sharing arrangement with FNB Life reduced from 10% to 4% from 1 July 2013.

-  The value of new business for the year increased 13% to R236 million, supported by well contained expenses.

-  Good risk experience and higher asset levels during the year, together with disciplined expense management, 
   all contributed to the increase in profits while a slight deterioration in grouped individual persistency 
   reduced profit growth.

-  Operating profit for the year increased by 15% to R587 million.

MOMENTUM EMPLOYEE BENEFITS

-  New business, on a PVP basis, increased by 25% to R14.5 billion for the year.

-  Good risk and investment recurring premium new business were secured, particularly in the small, medium and 
   micro enterprise (SMME) space, while increased retirement fund single premiums further boosted volumes.

-  Value of new business exceeded expectations, increasing 19% to R254 million. 

-  Client retention interventions resulted in better persistency, while stable risk profit performance jointly 
   contributed to positive operating experience variances.

-  The inclusion of Guardrisk, with effect from March 2014, further enhanced the results. As part of MMI’s 
   diversification strategy, Guardrisk is an important acquisition. This business is performing well and further 
   benefits are expected as the inherent synergies are unlocked.

-  Operating profit for the year increased by 51% to R516 million.

METROPOLITAN INTERNATIONAL

-  New business increased by 14% to R1.9 billion on a PVP basis, with improved contributions from most operations.

-  The value of new business came under pressure, decreasing 13% to R49 million as the mix of business favoured 
   lower-margin products.

-  Lives under administration in the health business increased by 5% to 415 000, while claims ratios remained 
   within acceptable limits.

-  Expanding internationally remains strategically important to MMI. The acquisition of Cannon Assurance in Kenya, 
   which became unconditional during August 2014, is a key part of that strategy.

-  Operating profit for the year increased by 13% to R122 million.

MOMENTUM INVESTMENTS

-  Focus on investment excellence is starting to pay off, with equity and balanced fund performance showing 
   satisfactory improvement.

-  The longer-term outlook for the investment management business remains positive as the alignment with the group 
   is strengthened.

-  Operating profit, including investment income, for the year increased by 13% to R197 million.

METROPOLITAN HEALTH

-  Total members under administration remain steady at 1.2 million principal members or three million lives.

-  As part of a revenue and capability diversification strategy, the group acquired Providence Healthcare 
   Risk Managers.

-  Operating profit, including investment income, for the year increased by 22% to R171 million.

SHAREHOLDER CAPITAL

-  Shareholder Capital includes investment income on shareholder assets, operating profit from the balance 
   sheet management operation, the investment in MMI Wellness and Rewards Programme, the results of Momentum 
   Short-Term Insurance businesses, shareholder expenses and investments in other new ventures.

-  The prior year results include a value added tax refund and the reversal of income tax provisions that 
   were no longer required.

TRANSFORMATION AND SUSTAINABILITY

-  MMI is currently rated a level two broad-based black economic empowerment (B-BBEE) contributor.

-  The group is a member of the JSE Sustainability Index, and remains committed to a strategy that promotes 
   sustainable businesses.

CLIENT-CENTRIC OPERATING MODEL

-  MMI is implementing a new client-centric operating model under a restructured group executive committee.

PROSPECTS

-  The strategic focus areas of the MMI group are firmly focused on growth, client-centricity and excellence.

-  Each segment is implementing plans and processes to identify and optimise structures, operations, target 
   markets, distribution channels and product offerings through innovation and collaboration, in order to grow 
   the group through client-centricity.

-  Growth in new business volumes will also be influenced by a tougher economic environment.

-  The board of MMI Holdings believes that the group has identified and is implementing innovative strategies 
   to continue unlocking value and generating the required return on capital for shareholders over time.

MMI HOLDINGS
SUMMARY OF FINANCIAL INFORMATION
AUDITED RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2014
                                         
DIRECTORS' STATEMENT

The directors take pleasure in presenting the audited results of MMI Holdings financial services group for the 
year ended 30 June 2014. The preparation of the group's results was supervised by the group finance director, 
Preston Speckmann, BCompt (Hons), CA(SA).

CORPORATE EVENTS

Acquisitions 

On 11 November 2013, the group acquired 100% of Providence Group (Providence), a healthcare administrator, for 
R108 million. 

On 3 March 2014, the group acquired 100% of Guardrisk Group (Pty) Ltd and its subsidiaries 
(collectively "Guardrisk") from Alexander Forbes for R1.6 billion. The group's earnings therefore include 
four months (March to June 2014) of Guardrisk's results. For embedded value purposes Guardrisk has been classified 
as non-covered business.

Metropolitan International announced the acquisition of a significant majority stake in Kenyan insurer Cannon 
Assurance Ltd (Cannon) for around R300 million. The acquisition was subject to regulatory and other required 
approvals. The shareholders of Cannon will in turn acquire a minority stake in Metropolitan Life Kenya.

Metropolitan Health announced that it has acquired, subject to relevant regulatory approval, the CareCross Health 
Group, including a majority share in Occupational Care South Africa (OCSA).

Listed debt

The JSE Limited has granted MMI Group Ltd the listing of new instruments to the total value of R1.5 billion. The 
instruments are unsecured subordinated callable notes and were issued on 17 March 2014.

Licence amalgamation

On 6 June 2014, the High Court of Namibia approved the transfer of Momentum Life Assurance Namibia Ltd's long 
term insurance business to MMI Holdings Namibia Ltd (previously Metropolitan Life Namibia Ltd) with effect from 
30 June 2014. This had no impact on the group results.

BASIS OF PREPARATION OF FINANCIAL INFORMATION

These condensed consolidated financial statements have been prepared in accordance with International Accounting 
Standard 34 (IAS 34) ­ Interim financial reporting; the SAICA Financial Reporting Guide as issued by the Accounting 
Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council; the JSE 
Listings Requirements and the South African Companies Act, 71 of 2008. The accounting policies applied in the 
preparation of these financial statements are in terms of International Financial Reporting Standards (IFRS) 
and are consistent with those adopted in the previous years except as described below. Critical judgements and 
accounting estimates are disclosed in detail in the group's integrated report for the year ended 30 June 2014, 
including changes in estimates that are an integral part of the insurance business. The group is exposed to 
financial and insurance risks, details of which are also provided in the group's integrated report.

New and revised standards effective for the year ended 30 June 2014 and relevant to the group

IFRS 10 ­ Consolidated financial statements, IFRS 11 ­ Joint arrangements, IFRS 12 - Disclosure of interests 
in other entities, IAS 28 (revised) ­ Investments in associates and joint ventures (consolidation project)

IFRS 10 builds on existing principles by identifying the concept of control as the determining factor in 
whether an entity should be included within the consolidated financial statements of the parent company. Under 
IFRS 10, subsidiaries are all entities (including structured entities) over which the group has control. The 
group controls an entity when it has power over an entity, is exposed to, or has rights to, variable returns 
from its involvement with the entity and has the ability to affect these returns through its power over the 
entity. If no single party controls the investee, IFRS 11 provides guidance on whether a joint arrangement exists. 
IAS 28 was revised to incorporate amendments from this consolidation project.

- Collective investment schemes: Previously the group consolidated collective investment schemes where the group's
  holding in a fund was greater than 50% and investments in a fund of between 20% and 50% were considered to be
  interests in associates. As a result of the adoption of IFRS 10 the group considers control over the fund manager 
  and no longer uses the percentage holdings referred to above as the defining parameter of control over the 
  schemes. This resulted in an increased number of collective investment schemes being reclassified to 
  subsidiaries (from associates) and to associates (from unit-linked investments).

- Cell captives: Before the adoption of IFRS 10, cells were regarded as special purpose entities under SIC 12 and 
  were not included in the consolidated group results as the risks and rewards of these cells were not transferred 
  to the group. As a result, these cells were included in the consolidated results of cell owners. Under IFRS 10, 
  a cell can only be consolidated by the cell owner if it first meets the definition of a deemed separate entity. 
  Cell captives in South Africa are not legally ring-fenced and are not seen as protected cells; therefore they do 
  not meet the definition of a deemed separate entity. Cells are therefore no longer considered to be special 
  purpose entities. This resulted in the group recognising the assets, liabilities, income and expenses relating 
  to its cell captive business in its consolidated results. Because the risks and rewards relating to cell 
  activities are for the benefit of cell owners, the inclusion of cell income and expenses does not impact the
  group's net results, as the result of cell activities are transferred back to the cell owner.

- Other financial instruments: There were no other material financial instruments that met the new consolidation 
  criteria.

The changes resulting from the above have been applied retrospectively as required by the transitional provisions 
of IFRS 10.

IFRS 12 was also issued as part of the consolidation project and includes the disclosure requirements for all forms 
of interests in other entities, including joint arrangements, associates, special purpose entities and other 
off-balance sheet vehicles. The group has incorporated these disclosures in the 2014 integrated report.

Refer to the appendix for details of the above required restatements to the previously reported statement of 
financial position, income statement and statement of cash flows. Total assets and liabilities increased by 
R17.2 billion for June 2013. Refer to the segment report for its restatements due to IFRS 10. There was no impact 
on the statement of other comprehensive income or statement of changes in equity. The restatements had no  
impact on the current or prior year earnings, diluted earnings or headline earnings per share, or on the net 
asset value of the group.

Amendments to IAS 19 - Employee benefits

The revised employee benefit standard introduces changes to the recognition, measurement, presentation and 
disclosure of post-employment benefits. The standard requires the immediate recognition of all past service 
costs in the income statement and replaces interest cost and expected return on plan assets with a net interest 
amount that is calculated by applying the discount rate to the net defined benefit liability (asset). 
Remeasurements as defined in the standard are now recorded in other comprehensive income. The application of this 
amendment did not have a significant impact on the group's financial position, group earnings and cash flows 
in the prior year and the impact in the current year resulted in R98 million of asset remeasurements being 
recorded in other comprehensive income and not the income statement.

IFRS 13 ­ Fair value measurements

IFRS 13 aims to improve consistency and reduce complexity by providing a precise definition of fair value and 
a single source of fair value measurement and disclosure requirements for use across IFRSs. This standard is 
required to be applied prospectively with no restatements. The impact of this change of fair value measurement 
has not been material on the current year earnings, diluted earnings or headline earnings per share, or on the 
net asset value of the group. IAS 34 ­ Interim reporting was revised for the introduction of IFRS 13 and 
requires additional disclosure on financial instruments carried at fair value. The group has complied with 
these additional disclosure requirements in these results.

Other

    - IFRS 7 (amendment) ­ Financial instruments: disclosures: offsetting financial assets and financial 
      liabilities became effective for the first time in the current year and had no impact on the group's 
      earnings or net asset value. The relevant information has been disclosed in the 2014 integrated report.

    - The International Accounting Standards Board (IASB) made amendments to various standards as part of 
      their annual improvements project. These amendments had no impact on the group's earnings.

Reclassifications

The group's June 2013 results have been restated for the following reclassifications:

- The comparative segmental information has been restated, where appropriate, to ensure alignment with the way 
  in which the chief operating decision-maker, being the MMI executive committee, monitors and evaluates the 
  performance of the various segments of the business.

    - MMI Rewards (including Momentum Multiply) has been reallocated from Momentum Retail to Shareholder 
      Capital as the Rewards programme is a group-wide initiative. As a result, the income, expenses, employees 
      and all related activities have moved from the Momentum Retail segment to the Shareholder Capital segment.

    - The Momentum Employee Benefits segment has taken over the management of the Momentum Health open scheme 
      administration business to better align this with the corporate business. As a result, the income, expenses, 
      employees and all related activities have moved from the Metropolitan Health segment to the Momentum 
      Employee Benefits segment. 

    Refer to the analysis of segmental restatements tables for more details.

- Interest relating to interest rate swaps was previously grossed up and disclosed as interest income and finance 
  costs. As interest rate swaps are subject to fair value risk associated with the fixed and floating interest 
  legs, the net amount has now been disclosed as net realised and fair value gains. Refer to the appendix for 
  further details.

- The assets under management and related fund flows tables have been refined. Refer to these tables for details.

These restatements had no impact on the current or prior year reported earnings, diluted earnings or headline 
earnings per share, or on the net asset value or net cash flow.

Embedded value ­ FNB Life

The contractual agreement between MMI and FirstRand Bank was changed with effect from 1 July 2013, reducing MMI's 
profit-sharing arrangement from 10% to 4%. As a result, the value of new business and value of in-force of the 
FNB Life business has been excluded from the published MMI embedded value with effect from 1 July 2013. The 
profits arising from this business will therefore only be recognised in the embedded value earnings as they 
emerge. The prior year figures have not been restated as the change occurred during the current reporting year.

Corporate governance

The board has satisfied itself that appropriate principles of corporate governance were applied throughout the year 
under review.

Changes to the directorate, secretary and directors' shareholding

On 27 November 2013, Blignault Gouws, a non-executive director, retired from the board and Wilhelm van Zyl, the 
deputy group chief executive officer, resigned as a director with effect from 30 June 2014. We thank them for 
their invaluable input over the years and wish them well in their future endeavours.

Mary Vilakazi resigned from the board as non-executive director to take up an executive position with the group as 
described below, we thank her for her significant contribution over the years and look forward to working with her 
as part of MMI's executive team.

The Nominations Committee of the MMI Holdings Board appointed Maliga Chetty as the group company secretary with 
effect from 3 September 2013 and Louis von Zeuner was appointed as a non-executive director of MMI, with effect 
from 1 January 2014.

All transactions in listed shares of the company involving directors were disclosed on SENS.

Changes to the group executive committee

In November 2013, Jan Lubbe, chief risk officer, and Vuyo Lee, group executive brand - stakeholder management and
sustainability, were appointed as members of the group executive committee. Nigel Dunkley, group executive - 
balance sheet management has been transferred to the group's asset management business in the UK and Mary Vilakazi 
has been appointed as group executive - balance sheet management from 1 May 2014. Herman Schoeman, managing director 
of Guardrisk, was appointed to the group executive committee from 1 July 2014. On the same day, Khanyi Nzukuma was
appointed chief executive officer of Metropolitan Retail. 

Contingent liabilities and capital commitments

As part of running a business, the group is party to legal proceedings and appropriate provisions are made when 
losses are expected to materialise. The group had no material capital commitments at 30 June 2014 that were not 
in the ordinary course of business other than those disclosed in the 2014 integrated report.

Events after year-end

Subsequent to year-end the market value of the African Bank equities and bonds decreased. Based on MMI's current
understanding, the direct impact on MMI's earnings (less than 2%), core headline earnings (less than 0.5%) and 
embedded value (less than 0.5%) is not expected to be material.

The Kenyan competition authorities approved the Cannon transaction on 25 August 2014.

No other material events occurred between the reporting date and the date of approval of these results.

Dividend declaration

Ordinary shares

The dividend policy for ordinary listed shares, approved by the directors, is to provide shareholders with stable 
dividend growth, reflecting the board's long-term view on the expected underlying basic core headline earnings 
growth. Exceptions will be made from time to time, in order to account for, inter alia, volatile investment markets, 
capital requirements and changes in legislation.

On 9 September 2014, a gross final dividend of 85 cents per ordinary share was declared, resulting in an annual 
dividend of 142 cents per share. In addition, a special dividend of 50 cents per share was also declared. The final 
and special dividends are payable out of income reserves to all holders of ordinary shares recorded in the register
of the company at the close of business on Friday, 3 October 2014, and will be paid on Monday, 6 October 2014. 
Both dividends will be subject to local dividend withholding tax at a rate of 15% unless the shareholder is exempt 
from paying dividend tax or is entitled to a reduced rate. The secondary tax on companies (STC) credits utilised 
per share amount to 0.03487 cents per ordinary share on the final dividend and 0.02051 cents per ordinary share on
the special dividend.  This will result in a net dividend, for those shareholders who are not exempt from paying 
dividend tax, of 72.25523 cents per ordinary share for the final dividend and 42.50308 cents per ordinary share 
for the special dividend. 

The number of ordinary shares in issue at the declaration date was 1 569 803 700, while the last day to trade cum 
dividend will be Friday, 26 September 2014. The shares will trade ex dividend from the start of business on Monday, 
29 September 2014. Share certificates may not be dematerialised or rematerialised between Monday, 29 September 2014, 
and Friday, 3 October 2014, both days inclusive. MMI's income tax number is 975 2050 147.

Where applicable, dividends in respect of certificated shareholders will be transferred electronically to 
shareholders’ bank accounts on payment date. In the absence of specific mandates, dividend cheques will be posted 
to certificated shareholders on or about payment date. Shareholders who hold dematerialised shares will have their
accounts with their CSDP or broker credited on the payment date.

Preference shares

Dividends of R22.8 million (132 cents per share p.a.) was declared on the unlisted A3 MMI Holdings Ltd preference 
shares. The declaration rate was determined as set out in the company's Memorandum of Incorporation and the total 
preference dividend utilised STC credits of R9 335.

Integrated information

The full integrated report for 2014 will be posted to shareholders by 30 September 2014, and can then be viewed 
online at www.mmiholdings.com.

Directors' responsibility

These results are the responsibility of the directors. A printed version of the SENS announcement may be requested 
from the group company secretary, Maliga Chetty tel: 012 684 4255.

External audit

The condensed results have been extracted from the group's 2014 annual financial statements, which have been 
audited by PricewaterhouseCoopers Inc. and their unqualified audit report is available for inspection at the 
company's registered office. In addition, the summarised group embedded value information has been extracted from 
the 2014 group embedded value report, which has been reviewed by PricewaterhouseCoopers Inc. in accordance with the 
embedded value basis of MMI, and the review report is available for inspection at the company's registered office.

Signed on behalf of the board



JJ Njeke                     Chairman

Nicolaas Kruger              Group chief executive officer



Centurion

9 September 2014


DIRECTORS: 
MJN Njeke (chairman), JP Burger (deputy chairman), NAS Kruger (group chief executive officer), 
PE Speckmann (group finance director), N Motsei (executive), L Crouse, F Jakoet, Prof JD Krige, 
PJ Moleketi, SA Muller, V Nkonyeni, SE Nxasana, KC Shubane, FJC Truter, BJ van der Ross, 
JC van Reenen, LL von Zeuner

GROUP COMPANY SECRETARY: 
Maliga Chetty www.mmiholdings.com

TRANSFER SECRETARIES: 
Link Market Services SA (Pty) Ltd (registration number 2000/007239/07) 
Rennie House, 13th Floor, 19 Ameshoff Street, Braamfontein 2001. 
PO Box 4844, Johannesburg 2000 
Telephone: +27 11 713 0800 
E-mail:info@linkmarketservices.co.za 

SPONSOR: 
Merrill Lynch (registration number: 2000/031756/06)

REGISTERED OFFICE:
268 West Avenue, Centurion 0157

JSE CODE: MMI 

NSX CODE: MIM 

ISIN NO: ZAE000149902


MMI HOLDINGS GROUP ­ IFRS FINANCIAL INFORMATION


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION                             Restated
                                                                30.06.2014       30.06.2013
                                                                        Rm               Rm
ASSETS

Intangible assets                                                   12 819           11 769
Owner-occupied properties                                            1 714            1 488
Property and equipment                                                 315              348
Investment properties                                                7 675            6 433
Investment in associates                                               179              121
Employee benefit assets                                                405              327
Financial instrument assets (1)                                    355 073          312 424
Reinsurance contracts                                                2 576            1 345
Deferred income tax                                                    263              124
Properties under development                                           252               98
Insurance and other receivables                                      3 813            2 828
Current income tax assets                                              330              108
Cash and cash equivalents                                           28 875           22 275
Non-current assets held for sale                                        17              680

Total assets                                                       414 306          360 368

EQUITY
Equity attributable to owners of the parent                         24 734           23 473
Non-controlling interests                                              480              391
Total equity                                                        25 214           23 864

LIABILITIES
Insurance contract liabilities
   Long-term insurance contracts                                   106 047           96 973
   Short-term insurance contracts                                    5 496                -
Financial instrument liabilities
   Investment contracts                                            227 056          184 713
   ­ with discretionary participation features                      25 405           24 937
   ­ designated at fair value through income                       201 651          159 776
   Other financial instrument liabilities (2)                       34 117           37 964
Deferred income tax                                                  4 281            3 917
Employee benefit obligations                                         1 246            1 328
Other payables                                                      10 437           11 162
Provisions                                                             157              180
Current income tax liabilities                                         255              267
Total liabilities                                                  389 092          336 504

Total equity and liabilities                                       414 306          360 368


1.  Financial instrument assets consist of the following:

    -  Securities designated at fair value through income: R334 996 million (30.06.2013: R289 501 million)
    -  Investments in associates designated at fair value through income: R11 900 million 
       (30.06.2013: R13 031 million)
    -  Derivative financial instruments: R2 362 million (30.06.2013: R3 173 million)
    -  Available-for-sale assets: R129 million (30.06.2013: R953 million)
    -  Held-to-maturity assets: R100 million (30.06.2013: R69 million)
    -  Loans and receivables: R5 586 million (30.06.2013: R5 697 million)

2.  Other financial instrument liabilities consist of the following:

    -  Liabilities designated at fair value through income: R30 801 million (30.06.2013: R34 171 million)
    -  Derivative financial instruments: R1 853 million (30.06.2013: R2 547 million)
    -  Liabilities at amortised cost: R1 463 million (30.06.2013: R1 246 million)


CONDENSED CONSOLIDATED INCOME STATEMENT                         
                                                                                   Restated
                                                                12 mths to       12 mths to
                                                                30.06.2014       30.06.2013
                                                                        Rm               Rm


Net insurance premiums received                                     23 138           23 304
Fee income (1)                                                       6 567            6 205
Investment income                                                   14 043           13 046
Net realised and fair value gains                                   43 906           30 859

Net income                                                          87 654           73 414

Net insurance benefits and claims                                   22 321           20 327
Change in liabilities                                                7 850            9 305
   Change in insurance contract liabilities                          7 786            8 087
   Change in short-term insurance contract liabilities                 (72)               -
   Change in investment contracts with DPF liabilities                 468            1 239
   Change in reinsurance provision                                    (332)             (21)
Fair value adjustments on investment contract liabilities           32 959           22 715
Fair value adjustments on collective investment scheme 
liabilities                                                          3 061            2 782
Depreciation, amortisation and impairment expenses                   1 159            1 144
Employee benefit expenses                                            5 132            4 494
Sales remuneration                                                   3 899            3 061
Other expenses                                                       5 035            4 476

Expenses                                                            81 416           68 304

Results of operations                                                6 238            5 110
Share of profit of associates                                            2               12
Finance costs (2)                                                     (482)            (667)

Profit before tax                                                    5 758            4 455
Income tax expenses                                                 (2 458)          (1 804)

Earnings                                                             3 300            2 651

Attributable to:

Owners of the parent                                                 3 197            2 587
Non-controlling interests                                              103               32
MMI Group Ltd preference shares                                          -               32

                                                                     3 300            2 651


Basic earnings per ordinary share (cents)                            205.5            166.0
Diluted earnings per ordinary share (cents)                          202.4            164.2

1.  Fee income consists of the following:

    -  Investment contracts: R1 772 million (30.06.2013: R1 901 million)
    -  Trust and fiduciary services: R2 014 million (30.06.2013: R1 837 million)
    -  Health administration services: R1 978 million (30.06.2013: R1 866 million)
    -  Other fee income: R803 million (30.06.2013: R601 million)

2.  Finance costs consist of the following:

    -  Preference shares issued by MMI: R46 million (30.06.2013: R46 million)
    -  Subordinated redeemable debt: R149 million (30.06.2013: R100 million)
    -  Cost of carry positions: R156 million (30.06.2013: R255 million)
    -  Other: R131 million (30.06.2013: R266 million)

                                                 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE     
INCOME  
                                                                12 mths to       12 mths to
                                                                30.06.2014       30.06.2013
                                                                        Rm               Rm

Earnings                                                             3 300            2 651
Other comprehensive income for the year, net of tax                    165               88
  Items that may subsequently be reclassified to income                 32               86
     Exchange differences on translating foreign operations             40               86
     Available-for-sale financial assets                                (8)               -

  Items that will not be reclassified to income                        133                2
     Land and buildings revaluation                                     41                9
     Adjustments to employee benefit funds
         Metropolitan Staff Pension Fund                               107                -
         Other                                                          (9)               -
     Change in non-distributable reserves                                6              (10)
     Income tax relating to items that will not be reclassified        (12)               3

Total comprehensive income for the year                              3 465            2 739

Total comprehensive income attributable to:
  Owners of the parent                                               3 363            2 654
  Non-controlling interests                                            102               53
  MMI Group Ltd preference shares                                        -               32
                                                                     3 465            2 739


                                                                Basic earnings                   Diluted earnings
                                                                                
RECONCILIATION OF HEADLINE EARNINGS                      12 mths to       12 mths to      12 mths to       12 mths to
attributable to owners of the parent                     30.06.2014       30.06.2013      30.06.2014       30.06.2013
                                                                 Rm               Rm              Rm               Rm

Earnings                                                      3 197            2 587           3 197            2 587
Finance costs ­ convertible preference shares                                                     45               46
Dilutory effect of subsidiaries (1)                                                              (22)             (19)

Diluted earnings                                                                               3 220            2 614
Realised gains on available-for-sale financial assets             -               (2)              -               (2)
Intangible asset and other impairments                           25                3              25                3
Profit on change from associate to subsidiary                     -              (67)              -              (67)
Loss on sale of business                                          -                3               -                3

Headline earnings (2)                                         3 222            2 524           3 245            2 551
Net realised and fair value gains on excess                    (544)            (340)           (544)            (340)
Basis and other changes and investment variances                160              367             160              367
Amortisation of intangible assets relating to business
 combinations                                                   575              587             575              587
Non-recurring items (3)                                         171               58             171               58
Investment income on treasury shares ­ contract holders                                           14               18

Core headline earnings (4)                                    3 584            3 196           3 621            3 241


1.  Metropolitan Health is consolidated at 100% and the MMI Holdings Namibian group and Metropolitan Kenya are 
    consolidated at 96% in the results. For purposes of diluted earnings, diluted non-controlling interests and 
    investment returns are reinstated.

2.  Headline earnings consist of operating profit, investment income, net realised and fair value gains, investment 
    variances and basis and other changes.

3.  Non-recurring items include one-off costs relating to the restructuring of the group. It also includes a one-off 
    enhancement of benefits relating to the outsourcing of the Metropolitan Staff Pension Fund liabilities, amounting 
    to R107 million. The previously unrecognised net surplus asset exceeding the employer surplus account was used to 
    fund the enhancement and released in other comprehensive income, resulting in an accounting mismatch. The net asset 
    value of the group has therefore not been impacted.

4.  Core headline earnings disclosed comprise operating profit and investment income on shareholder assets. It excludes 
    net realised and fair value gains on financial assets and liabilities, investment variances and basis and other 
    changes that can be volatile, certain non-recurring items, as well as the amortisation of intangible assets 
    relating to business combinations as this is part of the cost of acquiring the business. 


EARNINGS PER SHARE (cents)
attributable to owners of the parent         
                                                                12 mths to       12 mths to
                                                                30.06.2014       30.06.2013

Basic
Core headline earnings                                               230.3            205.1
Headline earnings                                                    207.1            162.0
Earnings                                                             205.5            166.0
Weighted average number of shares (million)                          1 556            1 558
Diluted
Core headline earnings                                               225.7            202.1
Weighted average number of shares (million) (1)                      1 604            1 604
Headline earnings                                                    204.0            160.2
Earnings                                                             202.4            164.2
Weighted average number of shares (million) (2)                      1 591            1 592


1.  For diluted core headline earnings per share, treasury shares held on behalf of contract holders are deemed
    to be issued.

2.  For diluted earnings and headline earnings per share, treasury shares held on behalf of contract holders 
    are deemed to be cancelled.


DIVIDENDS                                                             2014             2013

Ordinary listed MMI Holdings Ltd shares (cents per share)
Interim ­ March                                                         57               51
Final ­ September                                                       85               76

Total                                                                  142              127
Special dividend                                                        50                -

Total                                                                  192              127


MMI Holdings Ltd convertible redeemable preference shares (issued to Kagiso Tiso Holdings (Pty) Ltd (KTH))

The A3 MMI Holdings Ltd preference shares are redeemable in June 2017 at a redemption value of R9.18 per 
share unless converted into MMI Holdings Ltd ordinary shares on a one-for-one basis prior to that date. Dividends 
are payable at 132 cents per annum (payable March and September).

Significant related party transactions

R298 million (2013: R271 million) of the ordinary dividends declared by MMI Holdings Ltd in September 2013 
(2013: September 2012) and R223 million (2013: R200 million) of the ordinary dividends declared in March 2014 
(2013: March 2013) were attributable to RMI Holdings Ltd. In September 2012, R255 million of the special dividends 
declared by MMI Holdings Ltd were attributable to RMI Holdings Ltd.


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                                      
                                                                 12 mths to      12 mths to
                                                                 30.06.2014      30.06.2013
                                                                         Rm              Rm

Changes in share capital
Balance at beginning and end                                              9               9

Changes in share premium
Balance at beginning                                                 13 794          13 805
Treasury shares held on behalf of contract holders                      (12)             (4)
Share buy-back                                                            -              (7)

Balance at end                                                       13 782          13 794

Changes in other reserves
Balance at beginning                                                  1 631           1 572
Total comprehensive income                                              166              67
BEE cost                                                                  2               -
Transfer from/(to) retained earnings                                      3              (8)

Balance at end (1)                                                    1 802           1 631

Changes in retained earnings
Balance at beginning                                                  8 039           8 131
Total comprehensive income                                            3 197           2 587
Dividend paid                                                        (2 092)         (2 886)
Transactions with non-controlling interests                               -              87
Transfer (to)/from other reserves                                        (3)              8
Profit on preference share buy-back                                       -             112

Balance at end                                                        9 141           8 039

Equity attributable to owners of the parent                          24 734          23 473

MMI Group Ltd preference shares
Balance at beginning                                                      -             500
Total comprehensive income                                                -              32
Dividend paid                                                             -             (32)
Share buy-back                                                            -            (500)

Balance at end                                                            -               -

Changes in non-controlling interests
Balance at beginning                                                    391             281
Total comprehensive income                                              102              53
Dividends paid                                                          (18)            (97)
Transactions with owners                                                  -              39
Business combinations                                                     5             115

Balance at end                                                          480             391

Total equity                                                         25 214          23 864

1.  Other reserves consist of the following:

    -  Land and buildings revaluation reserve: R561 million (30.06.2013: R534 million)
    -  Foreign currency translation reserve: R179 million (30.06.2013: R139 million)
    -  Fair value adjustment for preference shares issued by MMI: R940 million (30.06.2013: R940 million)
    -  Fair value reserve: R3 million (30.06.2013: R11 million)
    -  Non-distributable reserve: R16 million (30.06.2013: R4 million)
    -  Equity-settled share-based payments reserve: R5 million (30.06.2013: R3 million)
    -  Employee benefit revaluation reserve: R98 million (30.06.2013: Rnil)


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                   Restated
                                                                12 mths to       12 mths to
                                                                30.06.2014       30.06.2013
                                                                        Rm               Rm

Net cash inflow from operating activities                            5 201            7 924
Net cash inflow from investing activities                              793             (753)
Net cash inflow from financing activities                              606           (3 169)

Net cash flow                                                        6 600            4 002
Cash resources and funds on deposit at beginning                    22 275           18 273

Cash resources and funds on deposit at end                          28 875           22 275




PRINCIPAL ASSUMPTIONS (South Africa) (1)                        30.06.2014       30.06.2013
                                                                         %                %
Pre-tax investment return
   Equities                                                           12.0             11.4
   Properties                                                          9.5              8.9
   Government stock                                                    8.5              7.9
   Other fixed-interest stocks                                         9.0              8.4
   Cash                                                                7.5              6.9
Risk-free return (2)                                                   8.5              7.9
Risk discount rate (RDR)                                              10.8             10.2
Investment return (before tax) ­ balanced portfolio (2)               10.7             10.1
Expense inflation base rate (3)                                        6.7              6.1


1.  The principal assumptions relate only to the South African life insurance business. Assumptions relating to 
    international life insurance businesses are based on local requirements and can differ from the South African 
    assumptions.

2.  The risk-free return was determined with reference to the market interest rate on South African government bonds 
    at the valuation date. The investment return on balanced portfolio business was calculated by applying the above 
    returns to an expected long-term asset distribution.

3.  An additional 1% expense inflation is allowed for in some divisions to reflect the impact of closed books that 
    are in run-off.


NON-CONTROLLING INTERESTS                                       30.06.2014        30.06.2013
                                                                         %                 %

Eris Property Group                                                   45.7              45.7
Metropolitan Botswana                                                 24.2              24.2
Metropolitan Ghana                                                     3.8               5.0
Metropolitan Health Botswana (previously 
 Momentum Health Botswana)                                            28.0              28.0
Metropolitan Health Ghana (previously 
 Momentum Health Ghana)                                                1.8               4.8
Metropolitan Health Group                                             17.6              17.6
Metropolitan Health Mauritius (previously 
 Momentum Health Mauritius)                                            5.0               5.0
Metropolitan Health Namibia Administrators                            49.0              49.0
Metropolitan Kenya                                                    33.7              33.7
Metropolitan Nigeria                                                  50.0              50.0
Metropolitan Swaziland                                                33.0              33.0
Metropolitan Tanzania (previously Momentum Tanzania)                  33.0              33.0
Metropolitan Zambia (previously Momentum Zambia)                      35.0              35.0
MMI Holdings Namibia (previously Metropolitan Namibia)                10.3              10.3
Momentum Mozambique                                                   33.0              33.0
Momentum Swaziland                                                    33.0              33.0


ANALYSIS OF ASSETS UNDER MANAGEMENT (1)  

                                                                                    Restated
                                                                30.06.2014        30.06.2013
                                                                        Rm                Rm

Managed and/or administered by Momentum Investments (net)
Financial assets                                                   370 073           330 809
  Momentum Manager of Managers                                      72 846            60 417
  Momentum Collective Investments                                   51 215            48 025
  Metropolitan Collective Investments (2)                           55 538            42 834
  Momentum Asset Management                                        141 874           140 005
  Momentum Global Investments                                       36 076            26 960
  Momentum Alternative Investments                                  12 524            12 568
Properties ­ Eris Property Group                                    24 448            24 922
  On-balance sheet                                                   7 406             7 615
  Off-balance sheet                                                 17 042            17 307

                                                                   394 521           355 731
Momentum Wealth linked product assets under administration         130 845           106 482
  On-balance sheet                                                  80 484            63 045
  Off-balance sheet                                                 50 361            43 437
Managed internally or by other managers within MMI                  26 712            21 553
  On-balance sheet                                                  21 600            17 010
  Off-balance sheet                                                  5 112             4 543
Managed by external managers (on-balance sheet)                     32 507            33 941
Properties managed internally or by other managers within 
 MMI or externally                                                   2 252             1 084
Momentum Employee Benefits ­ segregated assets                       1 380             1 232
Momentum Employee Benefits ­ cell captives on-balance sheet         12 058             1 582

Total assets under management                                      600 275           521 605

Managed and/or administered by Momentum Investments (net)

  On-balance sheet                                                 181 915           167 011
  Off-balance sheet                                                212 606           188 720

                                                                   394 521           355 731

1.  Assets under management are reported net of double counted assets except where one entity manages assets on 
    behalf of another in the division, and both entities earn a fee on the same assets. Non-financial assets 
    (except properties) have been excluded.

2.  Subsequent to year-end, approximately 60% of these assets have left the group. As this is low-margin business 
    the financial impact of this outflow is not expected to be material, after taking cost savings into account.

3.  The June 2013 restatement relates to refinements in presentation, as explained in note 1 above.


   
NET FUNDS RECEIVED FROM CLIENTS (1)                      
                                                      Gross         Gross
                                                     single     recurring         Gross          Gross     Net inflow/
                                                    inflows       inflows        inflow        outflow       (outflow)
12 mths to 30.06.2014                                    Rm            Rm            Rm             Rm             Rm

Momentum Retail                                      14 661         7 856        22 517        (21 215)         1 302
Metropolitan Retail                                   1 507         5 313         6 820         (5 523)         1 297
Momentum Employee Benefits                            7 060        10 283        17 343        (12 907)         4 436
Metropolitan International                              277         2 621         2 898         (1 602)         1 296
Momentum Investments                                  6 262             -         6 262        (10 823)        (4 561)
Metropolitan Health                                       -            47            47            (46)             1
Shareholder Capital                                      23           332           355           (313)            42

Long-term insurance business fund flows              29 790        26 452        56 242        (52 429)         3 813

Off-balance sheet fund flows
Managed and/or administered by Momentum
Investments (net)
   Financial assets                                                              70 048        (72 444)        (2 396)
   Properties ­ Eris Property Group                                               2 114         (2 379)          (265)
Momentum Wealth linked product assets 
 under administration                                                            11 332        (11 163)           169
Managed internally or by other managers 
 within MMI                                                                         842           (775)            67
Momentum Employee Benefits ­ segregated assets                                    2 571         (2 108)           463

Total net funds received from clients                                           143 149       (141 298)         1 851



NET FUNDS RECEIVED FROM CLIENTS (1)                     
                                                      Gross         Gross
                                                     single     recurring         Gross          Gross     Net inflow/
Restated                                            inflows       inflows        inflow        outflow       (outflow)
12 mths to 30.06.2013                                    Rm            Rm            Rm             Rm             Rm

Momentum Retail                                      10 964         7 611        18 575        (18 609)           (34)
Metropolitan Retail                                   1 233         5 013         6 246         (4 509)         1 737
Momentum Employee Benefits                            5 083         7 145        12 228         (9 385)         2 843
Metropolitan International                              291         2 244         2 535         (1 340)         1 195
Momentum Investments                                 16 819             -        16 819        (15 241)         1 578
Metropolitan Health                                       -            37            37            (37)             -
Shareholder Capital                                      12           287           299           (269)            30

Long-term insurance business fund flows              34 402        22 337        56 739        (49 390)         7 349

Off-balance sheet fund flows
Managed and/or administered by Momentum
Investments (net)
   Financial assets                                                              69 371        (68 392)           979
   Properties ­ Eris Property Group                                               1 353         (2 724)        (1 371)
   Properties ­ Eris Property Group acquisition                                  18 678              -         18 678
Momentum Wealth linked product assets under 
 administration                                                                  14 635        (11 213)         3 422
Managed internally or by other managers within MMI                                  936           (785)           151
Momentum Employee Benefits ­ segregated assets                                    2 598         (1 931)           667

Total net funds received from clients                                           164 310       (134 435)        29 875


1.  Assets under management and the related fund flows are reported net of double counted assets except where one 
    entity manages assets on behalf of another in the division, and both entities earn a fee on the same assets. 
    Non-financial assets (except properties) have been excluded.

2.  The June 2013 restatement relates to refinements in presentation, as explained in note 1 above.

   
ANALYSIS OF ASSETS BACKING SHAREHOLDER EXCESS

                                                                       30.06.2014                       30.06.2013
  
                                                                  Rm               %                Rm               %

Equity securities                                              1 228             5.0               973             4.1
Preference shares                                              1 354             5.5               538             2.3
Collective investment schemes                                    710             2.9               699             3.0
Debt securities                                                6 699            27.1             3 797            16.2
Properties                                                     2 459             9.9             2 324             9.9
Owner-occupied properties                                      1 270             5.1             1 175             5.0
Investment properties                                          1 189             4.8             1 149             4.9
Cash and cash equivalents and funds on deposit                 6 980            28.2             9 405            40.1
Intangible assets                                              8 129            32.9             7 109            30.3
Other net assets                                                 563             2.3               503             2.1

                                                              28 122           113.7            25 348           108.0
Redeemable preference shares                                    (313)           (1.3)             (313)           (1.3)
Subordinated redeemable debt                                  (3 075)          (12.4)           (1 562)           (6.7)

Shareholder excess per reporting basis                        24 734           100.0            23 473           100.0


BUSINESS COMBINATIONS ­ JUNE 2014


Guardrisk

On 3 March 2014, MMI Holdings Ltd acquired 100% of Guardrisk for R1.6 billion in cash. The transaction resulted in 
R567 million goodwill being recognised attributable to certain anticipated operating synergies.


Providence

On 11 November 2013, the group acquired 100% of Providence, a health administrator, for R51 million in cash with an 
additional R57 million contingent consideration. The transaction resulted in R19 million goodwill being recognised 
attributable to certain anticipated operating synergies.

Other

During the year the group also had a few smaller acquisitions, relating mostly to life books being acquired.

The purchase price consideration, the net assets acquired and any relevant goodwill relating to the above transactions 
are as follows:

                                                               Total       Guardrisk       Providence          Other
                                                                  Rm              Rm               Rm             Rm

Purchase consideration in total                                1 760           1 607              108             45

Fair value of net assets

Intangible assets                                              1 095             940              112             43
Tangible assets                                                    5               1                2              2
Financial instrument assets                                   10 837          10 630               11            196
Reinsurance contracts                                            762             762                -              -
Insurance and other receivables                                  686             686                -              -
Other assets                                                     176             176                -              -
Cash and cash equivalents                                      2 330           2 284                4             42
Insurance contract liabilities                                (6 061)         (5 836)               -           (225)
Financial instrument liabilities                              (7 305)         (7 298)               -             (7)
Other liabilities                                             (1 346)         (1 305)             (40)            (1)

Net identifiable assets acquired                               1 179           1 040               89             50
Non-controlling interests                                         (5)              -                -             (5)
Goodwill recognised                                              586             567               19              -
Contingent liability payments                                    (57)              -              (57)             -

Purchase consideration in cash                                 1 703           1 607               51             45


The goodwill relating to the above transactions is not deductible for tax purposes. The above transactions contributed 
net income of R2 255 million and earnings of R83 million to the group results for the current year.


BUSINESS COMBINATIONS ­ JUNE 2013


Momentum Short-Term Insurance

As at 30 June 2012 MMI Group Ltd (MGL) and OUTsurance Holdings Ltd (OUTsurance) each owned 50% of the ordinary share
capital of Momentum Short-Term Insurance Company Ltd (MSTI). As OUTsurance controlled MSTI, MGL accounted for the
investment as an associate. On 13 July 2012, MGL acquired the remaining 50% shareholding for R125 million in cash, 
which was based on the embedded value of MSTI. No goodwill was recognised on the transaction.

Eris Property Group

On 29 October 2012, MMI Holdings Ltd acquired 55% in Eris Property Group (Eris) for R329 million in cash. The 
group's property portfolio is currently managed by Eris and Momentum Properties. The transaction resulted in 
R191 million goodwill being recognised attributable to certain anticipated operating synergies. The goodwill 
is not deductible for tax purposes. Eris management and Kagiso Tiso Holdings (Pty) Ltd (KTH), who were existing 
shareholders in Eris, also acquired further shares from MMI Holdings Ltd, resulting in an effective controlling 
interest for MMI Holdings Ltd of 54%.


The purchase price consideration, the net assets acquired and any relevant goodwill relating to the above 
two transactions are as follows:

                                                               Total          MSTI             Eris
                                                                  Rm            Rm               Rm

Purchase consideration in total                                  454           125              329

Fair value of net assets
Intangible assets                                                276           158              118
Tangible assets                                                  332             -              332
Financial instrument assets                                      353           201              152
Cash and cash equivalents                                         43             7               36
Other assets                                                      17             3               14
Financial instrument liabilities                                 (85)            -              (85)

Other liabilities                                               (418)         (104)            (314)
Net identifiable assets acquired                                 518           265              253
Fair value step-up of associate - MSTI 
(recognised in net realised and fair value
 gains)                                                          (67)          (67)               -
Derecognise investment in associate - MSTI 
(carrying value at acquisition date)                             (73)          (73)               -
Non-controlling interests                                       (115)            -             (115)
Goodwill recognised                                              191             -              191

Purchase consideration in cash                                   454           125              329

The above two transactions contributed net income of R603 million and earnings of R33 million to the group 
results for the current year.


Common control transactions

After consultation with the Financial Services Board (FSB), the group applied to the High Court of South Africa 
for the approval of the amalgamation of the two main long-term insurance licences. As a preparatory step for this 
legal amalgamation of the life insurance licences, Momentum Group Ltd changed its name to MMI Group Ltd. The court 
approval for the amalgamation was granted on 20 May 2013 and the assets and liabilities of Metropolitan Life Ltd 
were sold to MMI Group Ltd on this date. The transaction was recorded in accordance with the group's accounting 
policy for common control transactions. It had no impact on the group results or net asset value.



RECONCILIATION OF GOODWILL                            30.06.2014      30.06.2013
                                                              Rm              Rm

Carrying amount at beginning                                 502             311
Business combinations                                        586             191

Carrying amount at end                                     1 088             502


MMI GROUP SEGMENTAL INFORMATION
12 mths to 30.06.2014   
                                                                          Metro-         Momentum
                                                       Momentum          politan         Employee
                                                         Retail           Retail         Benefits
                                                             Rm               Rm               Rm
Revenue
Net insurance premiums                                   22 517            6 820           17 343
  Recurring premiums                                      7 856            5 313           10 283
  Single premiums                                        14 661            1 507            7 060

Fee income                                                2 034              112            1 479
  Fee income                                              2 034              112            1 479
  Inter-segmental fee income                                  -                -                -

Expenses
Net payments to contract holders                         
  External payments                                      21 215            5 523           12 907

Other expenses                                            3 474            2 100            2 316
  Sales remuneration                                      1 892              937              519
  Administration expenses                                 1 582            1 163            1 338
  Amortisation due to business combinations 
  and impairments                                             -                -                -
  Cell captive business                                       -                -              459
  Direct property expenses                                    -                -                -
  Asset management and other fee expenses                     -                -                -
  Holding company expenses                                    -                -                -
  Inter-segmental expenses                                    -                -                -
      
Diluted core headline earnings                            1 372              587              516
Operating profit                                          1 908              814              704
Tax on operating profit                                    (536)            (227)            (188)
Investment income                                             -                -                -
Tax on investment income                                      -                -                -

Actuarial liabilities                                   175 869           32 296           82 902


12 mths to 30.06.2014  

                                                         Metro-                           Metro-
                                                        politan         Momentum         politan
                                                  International      Investments       Health(2)                            
                                                             Rm               Rm              Rm

Revenue
Net insurance premiums                                    2 898            6 262              47
  Recurring premiums                                      2 621                -              47
  Single premiums                                           277            6 262               -

Fee income                                                  184            1 442           1 513
  Fee income                                                184            1 442           1 513
  Inter-segmental fee income                                  -                -               -

Expenses
Net payments to contract holders 
  External payments                                       1 602           10 823              46

Other expenses                                            1 168            1 195           1 311
  Sales remuneration                                        424                -               -
  Administration expenses                                   729              954           1 288
  Amortisation due to business combinations 
   and impairments                                           15                9              14
  Cell captive business                                       -                -               -
  Direct property expenses                                    -                -               -
  Asset management and other fee expenses                     -              232               9
  Holding company expenses                                    -                -               -
  Inter-segmental expenses                                    -                -               -

Diluted core headline earnings                              122              197             171
Operating profit                                            155              219             205
Tax on operating profit                                     (33)             (59)            (44)
Investment income                                             -               51              14
Tax on investment income                                      -              (14)             (4)

Actuarial liabilities                                     9 152           34 942               8


12 mths to 30.06.2014   
                                                                                 
                                                    Shareholder        Segmental     Reconciling
                                                        Capital            total        items(1)       IFRS total
                                                             Rm               Rm              Rm               Rm           

Revenue
Net insurance premiums                                      355           56 242         (33 104)          23 138
  Recurring premiums                                        332           26 452          (6 713)          19 739
  Single premiums                                            23           29 790         (26 391)           3 399

Fee income                                                  502            7 266            (699)           6 567
  Fee income                                                502            7 266             110            7 376
  Inter-segmental fee income                                  -                -            (809)            (809)

Expenses
Net payments to contract holders
    External payments                                       313           52 429         (30 108)          22 321

Other expenses                                            1 164           12 728           2 497           15 225
  Sales remuneration                                         71            3 843              56            3 899
  Administration expenses                                   531            7 585             518            8 103
  Amortisation due to business 
    combinations and impairments                             39               77             776              853
  Cell captive business                                       -              459               -              459
  Direct property expenses                                    -                -             159              159
  Asset management and other fee expenses                   270              511           1 819            2 330
  Holding company expenses                                  253              253               -              253
  Inter-segmental expenses                                    -                -            (831)            (831)

Diluted core headline earnings                              656            3 621               -            3 621
Operating profit                                            (38)           3 967               -            3 967
Tax on operating profit                                      12           (1 075)              -           (1 075)
Investment income                                           864              929               -              929
Tax on investment income                                   (182)            (200)              -             (200)

Actuarial liabilities                                     3 528          338 697             (98)         338 599


1.  The 'Reconciling items' column includes an adjustment to reverse investment contract premiums (R33 305 million) 
    and claims (R30 108 million); FNB Life excluded from Metropolitan Retail (premiums R201 million, fee income 
    R20 million, sales remuneration R64 million and expenses R159 million); non-recurring items of R192 million; 
    direct property and asset management fees for all segments, except non-life segments, that are set off against 
    investment income for management reporting purposes but shown as an expense for accounting purposes; the 
    amortisation of intangibles relating to business combinations; expenses relating to consolidated collective 
    investment schemes (R6 million); other minor adjustments to expenses (R161 million), sales remuneration (R8 million) 
    and fee income (R90 million); and adjustments to actuarial liabilities representing inter-segmental liabilities.

2.  Metropolitan Health’s administration expenses for the current year include R33 million relating to the acquisition 
    of Providence.

3.  Momentum Employee Benefits includes net insurance premiums (R1 699 million), fee income (R187 million), net payments 
    to contract holders (R1 509 million), sales remuneration (R376 million), cell captive business expenses 
    (R382 million) and actuarial liabilities (R13 944 million) relating to Guardrisk.


                                                                           Metro-       Momentum
Restated                                               Momentum           politan       Employee   
12 mths to 30.06.2013                                    Retail            Retail       Benefits
                                                             Rm                Rm             Rm

Revenue
Net insurance premiums                                   18 575             6 246         12 228
  Recurring premiums                                      7 611             5 013          7 145
  Single premiums (2)                                    10 964             1 233          5 083
 
Fee income                                                2 089               134          1 182
  Fee income                                              2 089               134          1 182
  Inter-segmental fee income                                  -                 -              -

Expenses
Net payments to contract holders                         18 609             4 509          9 385
  External payments                                      18 609             4 509          9 385
  Inter-segmental payments                                    -                 -              -

Other expenses                                            3 173             2 029          1 380
  Sales remuneration                                      1 645               871            128
  Administration expenses                                 1 528             1 158          1 202
  Amortisation due to business combinations 
   and impairments                                            -                 -              -
  Cell captive business                                       -                 -             50
  Direct property expenses                                    -                 -              -
  Asset management and other fee expenses                     -                 -              -
  Holding company expenses                                    -                 -              -
  Inter-segmental expenses                                    -                 -              -

Diluted core headline earnings                            1 158                509           341
Operating profit                                          1 619                707           456
Tax on operating profit                                    (461)              (198)         (115)
Investment income                                             -                  -             -
Tax on investment income                                      -                  -             -

Actuarial liabilities                                   153 463             29 070        55 977



                                                   Metropolitan                           Metro-                 
Restated                                                 Inter-           Momentum       politan
12 mths to 30.06.2013                                  national        Investments        Health
                                                             Rm                 Rm            Rm
Revenue
Net insurance premiums                                    2 535             16 819            37
  Recurring premiums                                      2 244                  -            37
  Single premiums (2)                                       291             16 819             -

Fee income                                                  145              1 467         1 452
  Fee income                                                145              1 467         1 452
  Inter-segmental fee income                                  -                  -             -

Expenses
Net payments to contract holders                          1 340             15 241            37
  External payments                                       1 340             15 241            37
  Inter-segmental payments                                    -                  -             -

Other expenses                                            1 052              1 215         1 294
  Sales remuneration                                        335                  -             -
  Administration expenses                                   715                948         1 279
  Amortisation due to business combinations 
   and impairments                                            2                  1            15
  Cell captive business                                       -                  -             -
  Direct property expenses                                    -                  -             -
  Asset management and other fee expenses                     -                266             -
  Holding company expenses                                    -                  -             -
  Inter-segmental expenses                                    -                  -             -

Diluted core headline earnings                              108                175           140
Operating profit                                            145                198           163
Tax on operating profit                                     (37)               (54)          (33)
Investment income                                             -                 43            14
Tax on investment income                                      -                (12)           (4)

Actuarial liabilities                                     7 656             32 703            11


Restated                                            Shareholder          Segmental    Reconciling
12 mths to 30.06.2013                                   Capital              total      items (1)       IFRS total
                                                             Rm                 Rm             Rm               Rm
Revenue
Net insurance premiums                                      299             56 739        (33 435)          23 304
  Recurring premiums                                        287             22 337         (4 889)          17 448
  Single premiums (2)                                        12             34 402        (28 546)           5 856
 
Fee income                                                  470              6 939           (734)           6 205
  Fee income                                                470              6 939            193            7 132
  Inter-segmental fee income                                  -                  -           (927)            (927)

Expenses
Net payments to contract holders                            269             49 390        (29 063)          20 327
  External payments                                         269             49 390        (29 031)          20 359
  Inter-segmental payments                                    -                  -            (32)             (32)

Other expenses                                              974             11 117          2 058           13 175
  Sales remuneration                                         34              3 013             48            3 061
  Administration expenses                                   364              7 194            424            7 618
  Amortisation due to business combinations 
    and impairments                                          39                 57            795              852
  Cell captive business                                       -                 50              -               50
  Direct property expenses                                    -                  -            220              220
  Asset management and other fee expenses                   313                579          1 521            2 100
  Holding company expenses                                  224                224              -              224
  Inter-segmental expenses                                    -                  -           (950)            (950)

Diluted core headline earnings                              810              3 241              -            3 241
Operating profit                                            211              3 499              -            3 499
Tax on operating profit                                     (52)              (950)             -             (950)
Investment income                                           860                917              -              917
Tax on investment income                                   (209)              (225)             -             (225)

Actuarial liabilities                                     3 250            282 130           (444)         281 686



1. The 'Reconciling items' column includes: an adjustment to reverse investment contract premiums (R33 609 million) and 
   claims (R29 034 million); FNB Life adjustments reconciling the 10% of FNB Life included in each of the relevant lines
   to the accounting treatment of the reinsurance arrangement (premiums R174 million, fee income R11 million, claims 
   R3 million, sales remuneration R65 million and expenses R130 million); grossing up of fee income and expenses 
   relating to properties under development (R121 million); non-recurring items of R67 million; direct property and 
   asset management fees for all segments, except non-life segments, that are set off against investment income for 
   management reporting purposes but shown as an expense for accounting purposes; the amortisation of intangibles 
   relating to business combinations; expenses relating to consolidated collective investment schemes (R18 million); 
   other minor adjustments to expenses (R88 million), sales remuneration (R17 million) and fee income (R61 million); 
   and adjustments to actuarial liabilities representing inter-segmental liabilities.

2. Momentum Investments includes two significant client single premium inflows.


                                                                                         Momentum
                                                       Momentum       Metropolitan       Employee
Analysis of reclassifications                            Retail             Retail       Benefits
                                                             Rm                 Rm             Rm

June 2013
Net insurance premiums
     Published June 2013                                 18 575              6 246         12 072
     Reclassifications                                        -                  -            156
     Restated June 2013                                  18 575              6 246         12 228

Fee income
     Published June 2013                                  2 369                134            862
     Reclassifications                                     (280)                 -            320
     Restated June 2013                                   2 089                134          1 182

Net payments to contract holders
     Published June 2013                                 18 609              4 509          9 240
     Reclassifications                                        -                  -            145
     Restated June 2013                                  18 609              4 509          9 385

Other expenses
     Published June 2013                                  3 215              2 029            983
     Reclassifications                                      (42)                 -            397
     Restated June 2013                                   3 173              2 029          1 380

Diluted core headline earnings      
    Published June 2013                                   1 179                509            330 
    Reclassifications                                       (21)                 -             11 
    Restated June 2013                                    1 158                509            341 

Actuarial liabilities
     Published June 2013                                153 463             29 070         54 614
     Reclassifications                                        -                  -          1 363
     Restated June 2013                                 153 463             29 070         55 977


                                                   Metropolitan           Momentum   Metropolitan
Analysis of reclassifications                     International        Investments         Health
                                                             Rm                 Rm             Rm

June 2013
Net insurance premiums
     Published June 2013                                  2 535             16 819            193
     Reclassifications                                        -                  -           (156)
     Restated June 2013                                   2 535             16 819             37

Fee income
     Published June 2013                                    145              1 467          1 772
     Reclassifications                                        -                 -            (320)
     Restated June 2013                                     145              1 467          1 452

Net payments to contract holders
     Published June 2013                                  1 340             15 241            182
     Reclassifications                                        -                  -           (145)
     Restated June 2013                                   1 340             15 241             37
                
Other expenses
     Published June 2013                                  1 052              1 215          1 619
     Reclassifications                                        -                  -           (325)
     Restated June 2013                                   1 052              1 215          1 294

Diluted core headline earnings
     Published June 2013                                    108                175            151
     Reclassifications                                        -                  -            (11)
     Restated June 2013                                     108                175            140

Actuarial liabilities
     Published June 2013                                  7 656             32 703             11
     Reclassifications                                        -                  -              -
     Restated June 2013                                   7 656             32 703             11

                                                                
                                                     Shareholder         Segmental    Reconciling
Analysis of reclassifications                            Capital             total          items       IFRS total
                                                              Rm                Rm             Rm               Rm

The comparative segmental information has been restated for the effect of IFRS 10 and, where appropriate, to ensure
alignment with the way in which the chief operating decision-maker, being the MMI executive committee, monitors and
evaluates the performance of the various segments of the business. Refer to the directors’ statement for 
explanations on restatements below. These restatements had no impact on total core headline earnings.

June 2013
Net insurance premiums
     Published June 2013                                     299            56 739        (33 435)          23 304
     Reclassifications                                         -                 -              -                -
     Restated June 2013                                      299            56 739        (33 435)          23 304

Fee income
     Published June 2013                                     190             6 939           (705)           6 234
     Reclassifications                                       280                 -            (29)             (29)
     Restated June 2013                                      470             6 939           (734)           6 205


Net payments to contract holders
     Published June 2013                                     269            49 390        (29 063)          20 327
     Reclassifications                                         -                 -              -                -
     Restated June 2013                                      269            49 390        (29 063)          20 327

Other expenses
     Published June 2013                                     700            10 813          2 089           12 902
     Reclassifications                                       274               304            (31)             273
     Restated June 2013                                      974            11 117          2 058           13 175

Diluted core headline earnings
     Published June 2013                                     789             3 241              -            3 241
     Reclassifications                                        21                 -              -                -
     Restated June 2013                                      810             3 241              -            3 241

Actuarial liabilities
     Published June 2013                                   3 250           280 767           (444)         280 323
     Reclassifications                                         -             1 363              -            1 363
     Restated June 2013                                    3 250           282 130           (444)         281 686


                                                                          Restated
CHANGE IN DILUTED CORE HEADLINE EARNINGS               12 mths to       12 mths to
                                                       30.06.2014       30.06.2013         Change
                                                              Rm                Rm              %

Momentum Retail                                             1 372            1 158             18
Metropolitan Retail                                           587              509             15
Momentum Employee Benefits                                    516              341             51
Metropolitan International                                    122              108             13
Momentum Investments                                          197              175             13
Metropolitan Health                                           171              140             22

Operating divisions                                         2 965            2 431             22
Shareholder Capital                                           656              810            (19)

Total diluted core headline earnings                        3 621            3 241             12



RECONCILIATION OF MOMENTUM INVESTMENTS                                  12 mths to     12 mths to
                                                                        30.06.2014     30.06.2013
                                                                                Rm             Rm

Revenue                                                                      1 463          1 467
Fee income                                                                   1 442          1 467
Other income                                                                    21              -
Expenses and finance costs                                                  (1 239)        (1 234)
Other expenses                                                              (1 195)        (1 215)
Finance costs                                                                  (44)           (19)
Share of profit of associates                                                    9              5
Non-controlling interests                                                      (23)           (42)

                                                                               210            196
Core adjustments                                                                 9              2
Impairments                                                                      9              1
Other                                                                            -              1

Operating profit before tax                                                    219            198
Tax on operating profit                                                        (59)           (54)
Investment income                                                               51             43
Tax on investment income                                                       (14)           (12)

Diluted core headline earnings                                                 197            175


                                                                                         Restated
RECONCILIATION OF METROPOLITAN HEALTH                                   12 mths to     12 mths to
                                                                        30.06.2014     30.06.2013
                                                                                Rm             Rm

Revenue                                                                      1 560          1 489
Net insurance premiums                                                          47             37
Fee income                                                                   1 513          1 452
Expenses and finance costs                                                  (1 357)        (1 331)
Net payments to contract holders                                               (46)           (37)
Other expenses                                                              (1 311)        (1 294)
                                                                               203            158

Core adjustments                                                                 2              5
Impairments and amortisation of intangibles relating
  to business combinations                                                      14             15
Adjustments for dilution                                                       (13)           (10)
Other                                                                            1              -

Operating profit before tax                                                    205            163
Tax on operating profit                                                        (44)           (33)
Investment income                                                               14             14
Tax on investment income                                                        (4)            (4)

Diluted core headline earnings                                                 171            140


Additional off-balance sheet information
Assets under administration at reporting date                               10 686          9 540
Gross recurring inflow of funds                                             41 137         38 730
Gross outflow of funds                                                     (36 791)       (33 806)



RECONCILIATION OF GUARDRISK (PROMOTER CELL (1))                                         4 mths to
                                                                                       30.06.2014
                                                                                               Rm
Income
Net insurance premiums (excluding investment business)                                        913
Fee income                                                                                    179
Other income                                                                                   12

Total income                                                                                1 104
Expenses and finance costs
Net payments to contract holders 
  (excluding investment business)                                                            (812)
Change in liabilities                                                                          36
Other expenses                                                                               (243)
Finance costs                                                                                  (1)

Total expenses and finance costs                                                           (1 020)

Operating profit before tax                                                                    84
Tax on operating profit                                                                       (10)

Diluted core headline earnings                                                                 74


1. An insurer that enters into contractual arrangements with cell shareholders whereby the risk and rewards 
   associated with certain insurance activities accruing to the cell shareholder, in relation to the insurer, 
   are specified. The promoter cell will exclude all assets and liabilities and related income and expenses of 
   the cell arrangements.


                                                                                         Restated
RECONCILIATION OF SHAREHOLDER CAPITAL                                    12 mths to    12 mths to
                                                                         30.06.2014    30.06.2013
                                                                                Rm             Rm
Revenue
Net insurance premiums (excluding investment business)                          332           287
Balance Sheet Management income including fee income                            607           711
 Guaranteed portfolios earnings                                                 299           174
 Returns in excess of benchmark                                                 160           138
 Returns on working capital and other                                           148           399
Other income                                                                    352           306

Total income                                                                  1 291         1 304

Expenses
Net payments to contract holders (excluding investment business)               (204)         (158)
Other expenses                                                               (1 125)         (935)
  Balance Sheet Management                                                     (196)         (173)
  Strategic initiatives and other (1)                                          (676)         (538)
  Holding company                                                              (253)         (224)

Total expenses                                                               (1 329)       (1 093)


Operating (loss)/profit before tax                                              (38)          211
Tax on operating profit                                                          12           (52)
Investment income                                                               864           860
Tax on investment income                                                       (182)         (209)

Diluted core headline earnings                                                  656           810

1.  Includes Momentum Short-Term Insurance, Solvency Assessment and Management (SAM) costs, redeployment 
    centre costs (in prior year), MMI Rewards and India project costs.            


                                                                                         Restated
PAYMENTS TO CONTRACT HOLDERS                                             12 mths to    12 mths to
                                                                         30.06.2014    30.06.2013
                                                                                 Rm            Rm

Momentum Retail                                                              21 215        18 609
Death and disability claims                                                   3 412         3 018
Maturity claims                                                               6 444         5 726
Annuities                                                                     4 505         3 849
Withdrawal benefits                                                              46           140
Surrenders                                                                    7 569         6 655
Re-insurance recoveries                                                        (761)         (779)
Metropolitan Retail                                                           5 523         4 509
Death and disability claims                                                   1 049           991
Maturity claims                                                               2 373         1 688
Annuities                                                                       558           540
Withdrawal benefits                                                              97            61
Surrenders                                                                    1 542         1 324
Re-insurance recoveries                                                         (96)         (95)
Momentum Employee Benefits (1)                                               12 907         9 385
Death and disability claims                                                   3 635         3 241
Maturity claims                                                                 667           491
Annuities                                                                       765         1 321
Withdrawals and surrenders                                                    3 358         2 550
Terminations and disinvestments                                               3 802         2 454
Short-term insurance                                                          1 880             -
Re-insurance recoveries                                                      (1 200)         (672)
Metropolitan International                                                    1 602         1 340
Death and disability claims                                                     701           556
Maturity claims                                                                 284           234
Annuities                                                                        97            84
Withdrawal benefits                                                              90            70
Surrenders                                                                      395           362
Terminations and disinvestments                                                  80            64
Re-insurance recoveries                                                         (45)          (30)
Momentum Investments
Withdrawals                                                                  10 823        15 241
Metropolitan Health
Claims                                                                           46            37
Shareholder Capital
Claims                                                                          313           269
Total payments to contract holders                                           52 429        49 390
Reconciling items (2)                                                       (30 108)      (29 063)
Net insurance benefits and claims per income statement                       22 321        20 327

1.  Included in Momentum Employee Benefits above is R2 023 million claims and R514 million re-insurance 
    recoveries relating to Guardrisk.

2.  Relates mainly to payments to investment contract holders.


NUMBER OF EMPLOYEES                                                                      Restated
                                                                         30.06.2014    30.06.2013

Indoor staff                                                                  9 877         9 597
  Momentum Retail                                                             1 711         1 573
  Metropolitan Retail                                                         1 174         1 452
  Momentum Employee Benefits (1)                                              1 650         1 361
  Metropolitan International                                                  1 037           852
  Momentum Investments                                                          667           693
  Metropolitan Health (2)                                                     2 553         2 638
  Shareholder Capital
     Balance Sheet Management                                                    68            66
     Group services                                                             781           806
     Short-term insurance                                                       236           156
Field staff                                                                   6 815         6 798
  Momentum Retail                                                             1 041           993
  Metropolitan Retail                                                         4 424         4 369
  Metropolitan International                                                  1 350         1 436

Total                                                                        16 692        16 395

1.  Momentum Employee Benefits in the current year includes 218 employees relating to Guardrisk.

2.  Metropolitan Health in the current year includes 116 employees relating to Providence.

3.  Employee numbers were restated to align with segmental disclosures.


MMI HOLDINGS GROUP ­ FINANCIAL INSTRUMENTS

FINANCIAL ASSETS SUMMARISED BY MEASUREMENT CATEGORY                      30.06.2014
                                                                                 Rm


Financial assets designated at fair value through income                    349 387
   Securities designated at fair value through income                       334 996
   Investments in associates designated at fair value through income         11 900
   Derivative financial instruments                                           2 362
   Available-for-sale                                                           129
Financial assets carried at amortised cost                                   34 561
   Held-to-maturity                                                             100
   Loans and receivables                                                      5 586
   Cash and cash equivalents                                                 28 875

Total financial assets                                                      383 948

The fair value of loans and receivables is R5 636 million and the carrying value of held-to-maturity 
financial assets and cash and cash equivalents approximates fair value.



FINANCIAL LIABILITIES SUMMARISED BY MEASUREMENT CATEGORY                  30.06.2014
                                                                                  Rm


Investment contracts with DPF                                                 25 405
Financial liabilities designated at fair value through income                234 305
   Investment contracts designated at fair value through income              201 651
   Liabilities designated at fair value through income                        30 801
   Derivative financial instruments                                            1 853
Financial liabilities carried at amortised cost                               10 011
   Financial liabilities                                                       1 463
   Other payables                                                              8 548

Total financial liabilities                                                  269 721


The fair value of financial liabilities at amortised cost is R2 053 million and the carrying value 
of other payables approximates fair value due to their short-term nature.


MMI HOLDINGS GROUP ­ FINANCIAL INSTRUMENTS

The different valuation method levels have been defined as follows:

-  Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

-  Level 2: Input other than quoted prices included within level 1 that is observable for the asset 
   or liability, either directly (that is, prices) or indirectly (that is, derived from prices)

-  Level 3: Input for the asset or liability that is not based on observable market data (that is, 
   unobservable input)


FINANCIAL ASSETS
                                                        Level 1         Level 2         Level 3           Total
30.06.2014                                                   Rm              Rm              Rm              Rm
Securities designated at fair value 
 through income                                         221 835         106 619           6 542         334 996
  Equity securities
    Local listed                                         78 237              24               -          78 261
    Foreign listed                                       20 878             792               2          21 672
    Unlisted                                                  -             129             728             857
  Debt securities
    Stock and loans to government and 
     other public bodies
      Local listed (1)                                   23 466           7 048                -         30 514
      Foreign listed                                        424           1 258               24          1 706
      Unlisted                                                6           3 156               70          3 232
   Other debt instruments
      Local listed                                           20          23 590               74         23 684
      Foreign listed                                         47             440                4            491
      Unlisted                                                5          21 420            2 799         24 224
  Funds on deposit and other money 
   market instruments                                         -          29 878                -         29 878
  Unit-linked investments
    Collective investment schemes
      Local unlisted or listed quoted                    70 588             136                -         70 724
      Foreign unlisted or listed quoted                  25 583             358                1         25 942
      Foreign unlisted unquoted                               -             550              675          1 225
    Other unit-linked investments
        Local unlisted or listed quoted                   2 565           6 374                2          8 941
        Local unlisted unquoted                               -          10 174            2 159         12 333
        Foreign unlisted unquoted                             -           1 292                4          1 296
        Foreign unlisted or listed quoted                    16               -                -             16

Investments in associates designated 
 at fair value through income                            11 900               -                -         11 900
Derivative financial instruments                             71           2 291                -          2 362
   Held for trading                                          71           2 276                -          2 347
   Held for hedging purposes                                  -              15                -             15
Available-for-sale                                          121               4                4            129
   Equity securities
    Local listed                                              3               -                -              3
    Foreign listed                                           87               -                -             87
    Unlisted                                                  -               -                4              4
   Debt securities ­ foreign listed                          31               -                -             31
   Local unlisted/listed quoted 
    unit-linked investments                                   -               4                -              4

                                                        233 927         108 914            6 546        349 387


1.  R626 million of listed government stock was transferred from level 2 to level 1 assets during the year in line 
    with classification policy. The timing of the transfers are deemed to have occurred at the beginning of the year. 
    There were no significant transfers between level 1 and level 2 assets in the previous year.


FINANCIAL LIABILITIES
                                                        Level 1         Level 2          Level 3          Total
30.06.2014                                                   Rm              Rm               Rm             Rm


Investment contracts
   Designated at fair value 
    through income                                        1 658         199 840              153        201 651
Financial liabilities designated at fair 
  value through income                                   21 747           8 956               98         30 801
   Collective investment scheme liabilities              21 747             526               40         22 313
   Subordinated call notes                                    -           2 573                -          2 573
   Carry positions                                            -           4 851                -          4 851
   Preference shares                                          -           1 001                -          1 001
   Other borrowings                                           -               5               58             63
Derivative financial instruments
   Held for trading                                         176           1 677                -          1 853

                                                         23 581         210 473              251        234 305


                                                    Financial assets
RECONCILIATION OF THE FAIR
VALUE OF LEVEL 3 FINANCIAL
ASSETS                                  Designated at fair value through income

                                          Equity           Debt     Unit-linked            Other
                                      securities     securities     investments   investments(1)          Total
30.06.2014                                    Rm             Rm              Rm               Rm             Rm

Opening balance                              820          4 846           2 571              439          8 676

   Transfer from/(to) other 
     asset classes                             -              -              41              (41)             -
   Total realised gains/(losses) 
    in net realised and fair value 
    gains in the income statement              2             (5)            (51)               -            (54)
   Total unrealised gains in net 
    realised and fair value gains 
    in the income statement                  177            552             259                -            988
   Accrued interest in investment
    income in the income statement             -             62              14                -             76
   Purchases                                 254            426             264                -            944
   Sales                                    (523)          (377)           (188)            (394)        (1 482)
   Settlements                                 -         (1 667)            (53)               -         (1 720)
   Transfers into level 3                      -            311               1                -            312
   Transfers out of level 3 (2)                -         (1 177)            (17)               -         (1 194)
Closing balance                              730          2 971           2 841                4          6 546


1.  Includes investments in associates' unit-linked investments as well as available-for-sale instruments.

2.  The reason for the transfer out of level 3 in the current year is mainly as a result of obtaining access 
    to more observable data and refining the valuation technique. The timing of the transfers are deemed to have 
    occurred at the beginning of the year.



Sensitivity of level 3 financial instrument assets measured at fair value to changes in key assumptions:

                                                      Financial assets
                                      Designated at fair value through income

                                          Equity            Debt    Unit-linked            Other
                                      securities      securities    investments   investments(1)          Total
30.06.2014                                    Rm             Rm              Rm               Rm             Rm

Carrying value                               730           2 971          2 841                4          6 546
                                    10% increase/   10% increase/  10% increase/
Assumption change                  (decrease) in   (decrease) in  (decrease) in
                                         markets  interest rates     unit price    Not sensitive
   Effect of increase 
    in assumption                             73            (130)           284              N/A
   Effect of decrease 
    in assumption                            (73)            123           (284)             N/A


1.  Includes investments in associates' unit-linked investments as well as available-for-sale instruments.


RECONCILIATION OF THE FAIR VALUE OF LEVEL 3           Investment             Financial liabilities
FINANCIAL LIABILITIES                                  contracts          designated at fair value
                                                      designated              through income
                                                         at fair     Collective
                                                           value     investment
                                                         through         scheme            Other
                                                          income    liabilities       borrowings          Total
30.06.2014                                                    Rm             Rm               Rm             Rm

Opening balance                                              663              -                -            663

   Business combinations                                       -              -                4              4
   Total realised losses in net 
    realised and fair value gains in the
    income statement                                           5              -                -              5
   Total unrealised losses in net realised 
   and fair value gains in the income statement                1              7               (3)             5
   Issues                                                      -             33                57            90
   Settlements                                              (498)             -                 -          (498)
   Contract holder movements
     Benefits paid                                           (28)             -                 -           (28)
      Investment return                                       10              -                 -            10

Closing balance                                              153             40                58           251

Sensitivity: Increasing/decreasing the investment return by 10% would decrease/increase the carrying value of level 3 
financial instrument liabilities by R30 million and R30 million, respectively.


VALUATION TECHNIQUES USED IN DETERMINING THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES


Group's valuation processes

The group's in-house valuation experts perform the valuations of financial assets required for financial reporting
purposes. Discussions of valuation processes and results are held at least bi-annually, in line with the group's 
bi-annual reporting dates.


Instrument                        Valuation basis                                  Main assumptions

Equities and similar
securities

- Listed, local and foreign       External valuations/quoted prices                Management applies judgement if
                                  (level 2)                                        an adjustment of quoted prices 
                                                                                   is required due to an inactive 
                                                                                   market.

- Unlisted                        External valuations/price-earnings               Management applies judgement if
                                  ratios  (level 3)                                an adjustment of the relevant 
                                                                                   price-earnings ratio is required.

Stock and loans to other
public bodies

- Listed, local                   Yield of benchmark (listed government)           Market input
                                  bond (level 2)                                         
 
- Listed, foreign                 Discounted cash flow (DCF), benchmarked          Market input 
                                  against similar instrument with the same                                              
                                  issuer (level 2)
     
- Unlisted                        DCF, real interest rates or six-month            Market input and appropriate spread
                                  JIBAR plus fixedspread (level 2)
                                 
                                  DCF, risk-free yield curve plus fixed 
                                  spread (level 3)                                 Market input and appropriate spread

Other debt securities

- Listed, local                   DCF (BESA and ASSA bond perfect fit zero         Market input, uplifted with inflation
                                  curve and other published real or nominal 
                                  yields, uplifted with inflation), external 
                                  valuations (linked notes), or published price 
                                  quotations on JSE equity (preference shares) 
                                  and interest rate market (level 2)

- Listed, foreign                 External valuations that are based on            Market input
                                  published market input (level 2)

- Unlisted                        DCF (market-related nominal and real discount    Market input, appropriate spread
                                  rates, zero coupon bond curve plus issuer        for level 3 assets, rates ranged
                                  spread, non-observable nominal rates, bank       between 5.8% and 14.0% (2013: 5.2%
                                  and credit default swap curves, government       and 11.0%)
                                  bond yield curve plus a spread), external 
                                  valuations, or NAV of a hedge fund
                                  (debenture) (level 2 and 3)

Funds on deposit and other
money market instruments

- Listed                          DCF (market-related yields), issue price         Market input (based on quotes 
                                  issue price, or external valuations              received from market participants
                                  (level 2)                                        and valuation agents)
- Unlisted                        Deposit rates, or DCF (market-related yields) 
                                  (level 2)

Unit-linked investments           External valuations (level 2 and 3)              Net asset value (assets and
                                                                                   liabilities are carried at fair
                                                                                   value)

Derivative assets and             Black-Scholes model/net present value of         Market input, credit spreads, 
liabilities                       estimated floating costs less the performance    contract inputs
                                  of the underlying index over the contract 
                                  term/DCF (using fixed contract rates and 
                                  market-related variable rates adjusted for 
                                  credit risk, credit default swap premiums, 
                                  offset between strike price and market
                                  projected forward value, yield curve of 
                                  similarmarket-traded instruments) (level 2)

                             
Subordinated call notes           Price quotations on JSE interest rate market     Market input
(Liability)                       (based on yield of benchmark bond) (level 2)

Carry positions (Liability)       DCF (in accordance with JSE interest rate        Market input, contract input
                                  market repo pricing methodology) (level 2)
                           
Preference shares (Liability)     Preference shares issued on 26 June 2014,        Transaction price approximates
                                  therefore valued at transaction price            fair value
                                  (level 2)

There were no significant changes in the valuation methods applied since 30 June 2013.


MMI HOLDINGS GROUP ­ STATEMENT OF ASSETS AND LIABILITIES
                                                           

                                                                                                Restated
STATEMENT OF ASSETS AND LIABILITIES ON REPORTING BASIS                   30.06.2014           30.06.2013
                                                                                 Rm                   Rm

Total assets                                                                414 306              360 368
Actuarial value of policy liabilities                                      (338 599)            (281 686)
Other liabilities                                                           (50 493)             (54 818)
Non-controlling interests                                                      (480)                (391)
Group excess per reporting basis                                             24 734               23 473
Net assets ­ other businesses                                                (2 999)              (1 547)
Fair value adjustments on Metropolitan                   
 business acquisition and other consolidation
 adjustments                                                                 (4 343)              (5 001)

Excess ­ long-term insurance business,
net of non-controlling interests(1)                                          17 392               16 925



RECONCILIATION OF CHANGE IN LONG-TERM INSURANCE EXCESS 
TO THE INCOME STATEMENT

Change in excess of long-term insurance business (1)                            467                  143
Increase in share capital                                                       (27)                 (29)
Change in other reserves (2)                                                   (271)                 (62)
Dividend paid ­ ordinary shares                                               3 282                3 140
Change in non-controlling interests                                               9                    -
Other                                                                           (21)                 (22)
Total surplus arising, net of non-controlling interests                       3 439                3 170
   Operating profit                                                           2 677                2 530
   Investment income on excess                                                  748                  683
   Net realised and fair value gains on excess                                  301                  221
   Investment variances                                                         170                  117
   Basis and other changes                                                     (457)                (381)
Net consolidation adjustments                                                    20                  (43)
Earnings after non-controlling interests of 
  long-term insurance business                                                3 459                3 127
Earnings after non-controlling interests of 
  other group businesses and consolidation
  adjustments                                                                   184                  (94)
Amortisation of intangibles relating to the merger                             (446)                (446)

Earnings attributable to owners of the parent 
as per income statement                                                       3 197                2 587


1.  The long-term insurance business includes both insurance and investment contract business and is the simple 
    aggregate of all the life insurance companies in the group, including life insurance companies in Africa. It 
    is after non-controlling interests but excludes certain items that are eliminated on consolidation. It 
    also excludes non-insurance business.

2.  Includes a one-off enhancement of benefits relating to the outsourcing of the Metropolitan Staff Pension 
    Fund liabilities (R107 million), that is not included in the surplus arising from long-term insurance business.

3.  The June 2013 restatement was to align to the restated statement of financial position.


                                                                                                Restated
RECONCILIATION OF REPORTING EXCESS TO STATUTORY EXCESS                    30.06.2014          30.06.2013
                                                                                  Rm                  Rm


Reporting excess ­ long-term insurance business (1)                           17 392              16 925
Disregarded assets (2)                                                          (966)               (977)
Difference between statutory and published valuation methods                    (571)               (551)
Write down of subsidiaries, associates for statutory purposes                 (1 387)               (936)

Unsecured subordinated debt                                                    3 075               1 553
Consolidation adjustments                                                        (23)               (119)
Statutory excess ­ long-term insurance business                               17 520              15 895

Capital adequacy requirement (CAR) (Rm) (3)                                    6 221               6 167
Ratio of long-term insurance business excess to CAR (times)                      2.8                 2.6
Discretionary margins (4)                                                     14 161              12 508


1.  The long-term insurance business includes both insurance and investment contract business and 
    is the simple aggregate of all the life insurance companies in the group, including life insurance 
    companies in Africa. It is after non-controlling interests but excludes certain items which are 
    eliminated on consolidation. It also excludes non-insurance business.

2.  Disregarded assets are those as defined in the South African Long-term Insurance Act, 52 of 1998, and are 
    only applicable to South African long-term insurance companies. Adjustments are also made for the 
    international insurance companies from reporting excess to statutory excess as required by their 
    regulators. It includes Sage intangible assets of R546 million (30.06.2013: R562 million).

3.  Aggregation of separate company's capital adequacy requirements (CARs), with no assumption of 
    diversification benefits.

4.  Discretionary margins are shown gross of tax. The prior year number has been restated.


                                                                                                                                              
MMI HOLDINGS GROUP ­ EMBEDDED VALUE INFORMATION

EMBEDDED VALUE RESULTS AS AT                                              30.06.2014          30.06.2013
                                                                                  Rm                  Rm

Covered business
Reporting excess ­ long-term insurance business                               17 392              16 925
Reclassification to non-covered business                                      (1 459)             (1 482)

                                                                              15 933              15 443
Disregarded assets (1)                                                          (682)               (693)
Difference between statutory and published valuation methods                    (571)               (551)
Dilutory effect of subsidiaries (2)                                              (34)                (26)
Consolidation adjustments (3)                                                    (77)                (36)
Value of MMI Group Ltd preference shares issued                                 (500)               (500)

Diluted adjusted net worth ­ covered business                                 14 069              13 637
Net value of in-force business (4)                                            20 324              17 870

Diluted embedded value ­ covered business                                     34 393              31 507

Non-covered business
Net assets ­ non-covered business within life insurance companies              1 459               1 482
Net assets ­ non-covered business outside life insurance companies             2 999               1 547
Consolidation adjustments and transfers (to)/from covered business (3)        (2 291)             (1 011)
Adjustments for dilution (5)                                                     720                 698

Diluted adjusted net worth ­ non-covered business                              2 887               2 716
Write-up to directors' value                                                   2 395                 925
   Non-covered business (6)                                                    4 188               2 543
   Holding company expenses (7)                                               (1 383)             (1 208)
   International holding company expenses (7)                                   (410)               (410)

Diluted embedded value ­ non-covered business                                  5 282               3 641

Diluted adjusted net worth                                                    16 956              16 353
Net value of in-force business                                                20 324              17 870
Write-up to directors' value                                                   2 395                 925

Diluted embedded value                                                        39 675              35 148

Required capital ­ covered business (adjusted for qualifying 
 debt and preference shares) (8)                                               7 039               8 620
Surplus capital ­ covered business                                             7 030               5 017
Diluted embedded value per share (cents)                                       2 474               2 191
Diluted adjusted net worth per share (cents)                                   1 057               1 020
Diluted number of shares in issue (million) (9)                                1 604               1 604


    
1.  Disregarded assets include Sage intangible assets of R546 million (30.06.2013: R562 million), goodwill 
    and various other items.

2.  For accounting purposes, Metropolitan Health has been consolidated at 100%, while MMI Holdings Namibia 
    and Metropolitan Kenya have been consolidated at 96% in the statement of financial position, for the current 
    year. For embedded value purposes, disclosed on a diluted basis, the non-controlling interests and related 
    funding have been reinstated.

3.  Consolidation adjustments include mainly goodwill and intangibles in subsidiaries that are eliminated.

4.  The FNB Life value of in-force is excluded from the embedded value from 1 July 2013. The FNB Life net 
    value of in-force amounted to R91 million at 30 June 2013.

5.  Adjustments for dilution are made up as follows:

    -  Dilutory effect of subsidiaries (note 2): R102 million (30.06.2013: R119 million)
 
    -  Treasury shares held on behalf of contract holders: R305 million (30.06.2013: R266 million)

    -  Liability ­ MMI Holdings Ltd convertible preference shares issued to KTH: R313 million 
      (30.06.2013: R313 million)

6.  Guardrisk is included as part of non-covered business at 30 June 2014.

7.  The holding company expenses reflect the present value of projected recurring head office expenses. 
    The international holding company expenses reflect the allowance for support services to the international 
    life assurance and health businesses.

8.  The required capital for covered business amounts to R10 114 million (30.06.2013: R10 182 million) and is 
    adjusted for qualifying debt of R3 075 million (30.06.2013: R1 562 million).

9.  The diluted number of shares in issue takes into account all issued shares, assuming conversion of the 
    convertible redeemable preference shares, and includes the treasury shares held on behalf of contract holders.
           

ANALYSIS OF NET VALUE OF IN-FORCE BUSINESS
PER DIVISION                                                              30.06.2014          30.06.2013
                                                                                  Rm                  Rm


Momentum Retail                                                                9 674               8 967
   Gross value of in-force business                                           11 212              10 490
   Less cost of required capital                                              (1 538)             (1 523)

Metropolitan Retail (1)                                                        3 738               3 555
   Gross value of in-force business                                            4 445               4 312
   Less cost of required capital                                                (707)               (757)

Momentum Employee Benefits                                                     4 242               3 106
   Gross value of in-force business                                            4 892               3 776
   Less cost of required capital                                                (650)               (670)

Metropolitan International                                                     1 832               1 659
   Gross value of in-force business                                            2 006               1 772
   Less cost of required capital                                                (174)               (113)

Shareholder Capital                                                              838                 583
   Gross value of in-force business (2)                                          838                 583
   Less cost of required capital                                                   -                   -

Net value of in-force business                                                20 324              17 870


Notes

1.  The FNB Life value of in-force is excluded from the embedded value from 1 July 2013. The FNB Life net value 
    of in-force amounted to R91 million at 30 June 2013.

2.  The value of in-force in the Shareholder Capital represents discretionary margins managed centrally by 
    Balance Sheet Management.

                                                       Adjusted     Net value of
EMBEDDED VALUE PER DIVISION                           net worth         in-force   30.06.2014        30.06.2013
                                                             Rm               Rm           Rm                Rm

Covered business
MMI Group Ltd (1)                                        12 503           18 491       30 994            28 652
Metropolitan Odyssey Ltd                                     59                -           59                49
Metropolitan International                                1 507            1 833        3 340             2 806
   MMI Holdings Namibia Ltd                                 551            1 242        1 793             1 523
   Metropolitan Life of Botswana Ltd                        202              139          341               266
   Metropolitan Lesotho Ltd                                 349              434          783               655
   Other international businesses                           405               18          423               362

Total covered business                                   14 069           20 324       34 393            31 507


                                                                     Write-up to
                                                       Adjusted       directors'
                                                      net worth            value   30.06.2014        30.06.2013
                                                             Rm               Rm           Rm                Rm

Non-covered business
Momentum Investments (2)                                    839            1 089        1 928             1 746
Health businesses (3)                                       329            1 432        1 761             1 662
Momentum Retail (Wealth) (4)                                355              300          655               379
Guardrisk business (5)                                      431            1 176        1 607                 -
Momentum Short-term Insurance (MSTI)                        150              169          319               300
Metropolitan International Holdings (6)                       2             (388)        (386)             (285)
MMI Holdings (after consolidation 
 adjustments) (6)                                           781           (1 383)        (602)             (161)

Total non-covered business                                2 887            2 395        5 282             3 641

Total embedded value                                     16 956           22 719       39 675            35 148
Diluted adjusted net worth ­ non-covered 
 business                                                (2 887)

Adjustments to covered business 
 ­ adjusted net worth                                     3 323

Reporting excess ­ long-term insurance 
 business                                                17 392


1. The FNB Life value of in-force is excluded from the embedded value from 1 July 2013. The FNB Life net value 
   of in-force amounted to R91 million at 30 June 2013.

2. Momentum Investments subsidiaries are valued using forward price-earnings multiples applied to the relevant 
   sustainable earnings bases.

3. All Health businesses have been valued using embedded value methodology.

4. Momentum Retail (Wealth) has been valued using embedded value methodology.

5. Guardrisk has been valued using embedded value methodology.

6. The holding company expenses reflect the present value of projected recurring head office expenses. The 
   international holding company expenses reflect the allowance for support services to the international life
   assurance and health businesses.


ANALYSIS OF CHANGES IN GROUP EMBEDDED VALUE                                                                                    
                                                                                        12 mths to     12 mths to
                                                               Covered business         30.06.2014     30.06.2013

                                             Notes   Adjusted         Gross
                                                    net worth  value of in-    Cost of      
                                                        (ANW)   force (VIF)        CAR    Total EV       Total EV  
                                                           Rm            Rm         Rm          Rm             Rm

Profit from new business                               (1 273)        2 316       (168)        875            799
  Embedded value from new business               A     (1 273)        2 221       (169)        779            711
  Expected return to end of period               B          -            95          1          96             88
Profit from existing business                           3 690          (715)       253       3 228          3 336
  Expected return ­ unwinding of RDR             B          -         2 078       (292)      1 786          1 487
  Release from the cost of required capital      C          -             -        407         407            417
  Expected (or actual) net of tax profit
    transfer to net worth                        D      3 523        (3 523)         -           -             -
  Operating experience variances                 E        396           139          9         544            912
  Operating assumption changes                   F       (229)          591        129         491            520

Embedded value profit from operations                   2 417         1 601         85       4 103          4 135

Investment return on adjusted net worth          G      1 063             -          -       1 063            919
Investment variances                             H        213         1 130        (65)      1 278          1 011
Economic assumption changes                      I        (15)         (279)       (27)       (321)          (221)
Acquisition of covered business                             -             -          -           -             89
Exchange rate movements                                    (7)            4          1          (2)            39

Embedded value profit ­ covered
business                                                3 671         2 456         (6)      6 121          5 972
Transfer of business (to)/from non-covered       J
  business                                                (10)            4          -          (6)           267 
Changes in share capital                                   42             -          -          42             37
Dividend paid                                          (3 271)            -          -      (3 271)        (3 140)
Change in reserves                                          -             -          -            -           (22)

Change in embedded value ­ covered
  business                                                432         2 460         (6)      2 886          3 114

Non-covered business
Change in directors' valuation and other
  items                                                                                        718            131
Holding company expenses                                                                      (175)          (455)

Embedded value profit ­ non-covered
  business                                                                                     543           (324)
Changes in share capital                                                                       (42)           (37)
Dividend paid                                                                                1 179            236
Finance costs ­ preference shares                                                              (45)           (46)
Transfer of business from/(to) covered           J
  business                                                                                       6           (267)

Change in embedded value ­ non-
  covered business                                                                           1 641           (438)

Total change in group embedded value                                                         4 527          2 676

Total embedded value profit                                                                  6 664          5 648

Return on embedded value (%) - internal 
  rate of return                                                                             19.0%          17.4%


A.  VALUE OF NEW BUSINESS
                                                                  Metropoli-              Metropoli-     Compara-
                                                                         tan                     tan         tive
VALUE OF NEW BUSINESS                      Metropoli-   Momentum      Inter-                  Retail    Segmental
                                Momentum   tan Retail   Employee      natio-              (excl. FNB total (excl.
                                  Retail          (1)   Benefits         nal       Total    Life)(1)    FNB Life)
                                      Rm           Rm         Rm          Rm          Rm          Rm          Rm

12 mths to 30.06.2014

Value of new business                240          236        254          49         779
   Gross                             312          276        299          61         948
   Less cost of required 
    capital                          (72)         (40)       (45)        (12)       (169)

New business premiums             15 948        2 584      6 384         541      25 457
   Recurring premiums              1 022        1 083      1 033         327       3 465
   Single premiums                14 926        1 501      5 351         214      21 992

New business premiums (APE)        2 515        1 233      1 568         348       5 664
New business premiums (PVP)       20 434        5 372     14 491       1 866      42 163
Profitability of new 
 business as a percentage 
 of APE                              9.5         19.1       16.2        14.1        13.8
Profitability of new 
 business as a percentage 
 of PVP                              1.2          4.4        1.8         2.6         1.8

12 mths to 30.06.2013

Value of new business                203          239        213          56         711         209          681
   Gross                             268          268        275          63         874         238          844
   Less cost of required 
    capital                          (65)         (29)       (62)         (7)       (163)        (29)        (163)

New business premiums             12 433        2 305      5 836         473      21 047       2 220       20 962
   Recurring premiums              1 057        1 075        769         298       3 199         990        3 114
   Single premiums                11 376        1 230      5 067         175      17 848       1 230       17 848

New business premiums (APE)        2 195        1 198      1 276         316       4 985       1 113        4 900
New business premiums (PVP)       17 421        5 126     11 627       1 635      35 809       5 042       35 725
Profitability of new business 
 as a percentage of APE              9.2         19.9       16.7        17.7        14.3        18.8         13.9
Profitability of new business 
 as a percentage of PVP              1.2          4.7        1.8         3.4         2.0         4.2          1.9


1.  The FNB Life business was excluded in the Metropolitan Retail VNB at 30 June 2014 and included in the Metropolitan 
    Retail VNB at 30 June 2013. Comparative figures, excluding FNB Life, have been provided.

2.  Value of new business and new business premiums are net of non-controlling interests.

3.  The value of new business has been calculated on closing assumptions. Investment yields at the point of sale 
    have been used for fixed annuity and guaranteed endowment business, for other business the investment yields at 
    the end of the year have been used.


ANALYSIS OF NEW BUSINESS
PREMIUMS

                                                                  Metropoli-              Metropoli-      Compara-
                                                                         tan                     tan          tive
                                           Metropoli-   Momentum      Inter-                  Retail     Segmental
                                Momentum   tan Retail   Employee      natio-              (excl. FNB  total (excl.
                                  Retail         (1)    Benefits         nal       Total    Life)(1)     FNB Life)
                                      Rm          Rm          Rm          Rm          Rm          Rm            Rm
12 mths to 30.06.2014

New business premiums             15 948        2 584      6 384         541      25 457
   Recurring premiums              1 022        1 083      1 033         327       3 465
      Risk                           501          713        408           -       1 622
      Savings/Investments            521          370        625           -       1 516
      International                    -            -          -         327         327
   Single premiums                14 926        1 501      5 351         214      21 992
      Savings/Investments         14 130          625      4 198           -      18 953
      Annuities                      796          876      1 153           -       2 825
      International                    -            -          -         214         214

New business premiums (APE)        2 515        1 233      1 568         348       5 664
   Risk                              501          713        408           -       1 622
   Savings/Investments             1 934          432      1 045           -       3 411
   Annuities                          80           88        115           -         283
   International                       -            -          -         348         348

                                                                                                                                                        
ANALYSIS OF NEW BUSINESS
PREMIUMS
                                                                  Metropoli-              Metropoli-      Compara-
                                                                         tan                     tan          tive
                                           Metropoli-   Momentum      Inter-                  Retail     Segmental
                                Momentum   tan Retail   Employee      natio-              (excl. FNB  total (excl.
                                  Retail          (1)   Benefits         nal       Total    Life)(1)     FNB Life)
                                      Rm           Rm         Rm          Rm          Rm          Rm            Rm

12 mths to 30.06.2013
 
New business premiums             12 433        2 305      5 836         473      21 047       2 220        20 962
   Recurring premiums              1 057        1 075        769         298       3 199         990         3 114
      Risk                           508          748        369           -       1 625         663         1 540
      Savings/Investments            549          327        400           -       1 276         327         1 276
      International                    -            -          -         298         298           -           298
   Single premiums                11 376        1 230      5 067         175      17 848       1 230        17 848
      Savings/Investments         10 921          589      2 267           -      13 777         589        13 777
      Annuities                      455          641      2 800           -       3 896         641         3 896
      International                    -            -          -         175         175           -           175

New business premiums (APE)        2 195        1 198      1 276         316       4 985       1 113         4 900
   Risk                              508          748        369           -       1 625         663         1 540
   Savings/Investments             1 641          386        627           -       2 654         386         2 654
   Annuities                          46           64        280           -         390          64           390
   International                       -            -          -         316         316           -           316


1.  The FNB Life business was excluded in the Metropolitan Retail VNB at 30 June 2014 and included in the Metropolitan 
    Retail VNB at 30 June 2013. Comparative figures, excluding FNB Life, have been provided.


                                                                                             Restated
RECONCILIATION OF LUMP SUM INFLOWS                                    12 mths to           12 mths to
                                                                      30.06.2014           30.06.2013
                                                                              Rm                   Rm

Total lump sum inflows                                                    29 790               34 402
Inflows not included in value of new business                             (8 246)             (17 219)
Momentum Retail                                                             (200)                (181)
Momentum Employee Benefits                                                (1 715)                (170)
Metropolitan International                                                   (46)                 (37)
Momentum Investments                                                      (6 262)             (16 819)
Balance Sheet Management                                                     (23)                 (12)
Term extensions on maturing policies                                         465                  610
Non-controlling interests and other adjustments                              (17)                  55

Single premiums included in value of new business                         21 992               17 848


1.  June 2013 has been restated to reconcile from on-balance sheet single lump sum inflows instead of total lump 
    sum inflows.


B.  EXPECTED RETURN

    The expected return is determined by applying the risk discount rate applicable at the beginning of the 
    reporting year to the present value of in-force covered business at the beginning of the reporting year and 
    adding the expected return on new business, which is determined by applying the current risk discount rate to 
    the value of new business from the point of sale to the end of the year.


C.  RELEASE FROM THE COST OF REQUIRED CAPITAL

    The release from the cost of required capital represents the difference between the risk discount rate and the 
    expected after tax investment return on the assets backing the required capital over the year.


D.  EXPECTED (OR ACTUAL) NET OF TAX PROFIT TRANSFER TO NET WORTH

    The expected profit transfer for covered business from the present value of in-force to the adjusted net worth 
    is calculated on the statutory valuation method.

E.  OPERATING EXPERIENCE VARIANCES

                                                                                  12 mths to
                                                       12 mths to 30.06.2014      30.06.2013

OPERATING EXPERIENCE VARIANCES       Notes          ANW      Net VIF           EV         EV
                                                     Rm           Rm           Rm         Rm


Momentum Retail                                      93           77          170        128
Mortality and morbidity                  1          223           12          235        259
Terminations, premium cessations 
 and policy alterations                  2          (86)          91            5         17
Expense variance                                     43            -           43          -
Other                                    3          (87)         (26)        (113)      (148)

Metropolitan Retail                                  57          (18)          39         62
Mortality and morbidity                  1          105            3          108         97
Terminations, premium cessations 
 and policy alterations                  4          (37)         (23)         (60)       (97)
Expense variance                                     45            -           45         59
FNB Life ­ share of profits                          30            -           30          -
Other                                    5          (86)           2          (84)         3

Momentum Employee Benefits                          111          107          218        306
Mortality and morbidity                  1           59            1           60         17
Terminations                             6           23          115          138        233
Expense variance                                     21            -           21          9
Other                                                 8           (9)          (1)        47

Metropolitan International                           73           29          102        152
Mortality and morbidity                  1           78            8           86         81
Terminations, premium cessations 
 and policy alterations                              12            5           17         65
Expense variance                                     (8)          14            6         16
Other                                                (9)           2           (7)       (10)

Shareholder Capital                      7           62           24           86        242
Opportunity cost of 
 required capital                                     -          (71)         (71)        22

Total operating experience 
 variances                                          396          148          544        912


Notes

1.  Overall, mortality and morbidity experience for the 12 months were better compared to what was allowed for 
    in the valuation basis.

2.  Mainly due to good persistency on risk business and closed books where the impact of increased revenues in 
    the value of in-force offset lower termination profits.

3.  Various items including fee reductions on Wealth business, costs related to strategic initiatives and under-
    recovery of intergroup distribution costs.

4.  Mainly due to negative experience on selected products with cashback features.

5.  Mainly expenses relating to the Ukukhula business process enhancement project.

6.  Favourable persistency impacted fee income positively.

7.  The income recorded in respect of Shareholder Capital relates mostly to earnings from holding company 
    activities and the management of MMI's capital and shareholder balance sheet risks.  Other sources of 
    earnings such as variations in actual tax payments and corporate expenses not allocated to underlying
    business units are also included here.


F.  OPERATING ASSUMPTION CHANGES
                                                                                    12 mths to
                                                         12 mths to 30.06.2014      30.06.2013

OPERATING ASSUMPTION CHANGES         Notes          ANW      Net VIF           EV           EV
                                                     Rm           Rm           Rm           Rm

Momentum Retail                                    (212)         224           12           78
Mortality and morbidity 
 assumptions                                         (2)          82           80           66
Renewal expense assumptions              1          (19)         (11)         (30)         104
Termination assumptions                  2          (33)         (18)         (51)         104
Modelling, methodology and  
 other changes                           3         (158)         171           13         (196)

Metropolitan Retail                                 125         (254)        (129)         149
Mortality and morbidity 
 assumptions                             4          100            1          101          205
Renewal expense assumptions              5          113          (26)          87           90
Termination assumptions                  4          (54)         (31)         (85)        (178)
FNB Life                                 6            -          (91)         (91)           -
Modelling, methodology and 
 other changes                           3          (34)        (107)        (141)          32

Momentum Employee Benefits                         (170)         631          461          387
Assumed mortality and 
 morbidity profit margin                 7          (76)          53          (23)         (29)
Termination assumptions                  8            -          144          144          201
Renewal expense assumptions              9          (35)         401          366           81
Modelling, methodology and 
 other changes                          10          (59)          33          (26)         134

Metropolitan International                           (3)          18           15          (18)
Mortality and morbidity 
 assumptions                                        (12)           5           (7)           4
Renewal expense assumptions                           -           17           17           24
Termination assumptions                              (4)          14           10          (21)
Modelling, methodology and 
 other changes                                       13          (18)          (5)         (25)

Shareholder Capital                                  31          (38)          (7)          20

Methodology change: cost of 
 required capital                       11            -          139          139          (96)

Total operating assumption changes                 (229)         720          491          520

Notes

1.  Mainly allowance for the costs of strategic initiatives.

2.  Mainly allowance for the impact of better persistency on risk business claims experience.

3.  Various changes were made to models and methodology, including refinements to the calculation of tax relief 
    on expenses. Provision was also made for policyholder benefit reviews.

4.  Offsetting mortality and termination assumption changes were made to mainly Grouped Individual lines of 
    business, in line with recent experience investigations.

5.  Allowances for better expense experience, in line with business budgets.

6.  Future profits no longer recognised in the value of in-force for FNB Life business.

7.  Strengthening of longevity assumptions on annuity business (ANW), offset by improvements on risk business.

8.  Allowance made for improved persistency experience on FundsAtWork and Corporate Investment business.

9.  Allowances for better expense experience, in line with business budgets, including allowance for clients 
    moving to lower fee options on certain investment business.

10. Various changes to models and methodology.

11. Refinements to the modelling of the cost of required capital, including better allowance for diversification 
    benefits.


G.  INVESTMENT RETURN ON ADJUSTED NET WORTH

                                                                 12 mths to        12 mths to
INVESTMENT RETURN ON ADJUSTED NET WORTH                          30.06.2014        30.06.2013
                                                                         Rm                Rm


Investment income                                                       722               681
Capital appreciation                                                    368               267
Preference share dividends paid and change in 
 fair value of preference shares                                        (27)              (29)

Investment return on adjusted net worth                               1 063               919


H.  INVESTMENT VARIANCES

    Investment variances represent the impact of higher/lower than assumed investment returns on current and 
    expected future after tax profits from in-force business.


I.  ECONOMIC ASSUMPTION CHANGES

    The economic assumption changes include the effect of the change in assumed rate of investment return, 
    expense inflation rate and risk discount rate in respect of local and offshore business.


J.  TRANSFER OF BUSINESS (TO)/FROM NON-COVERED BUSINESS

    This transfer represents the alignment of net assets and value of in-force of mainly international subsidiaries 
    between covered and non-covered business.
                                                                                                                  

                                              Adjusted         In-force business              New business written
COVERED BUSINESS: SENSITIVITIES                    net
­ 30.06.2014                                     worth      Net      Gross     Cost of       Net     Gross   Cost of
                                                          value      value     CAR (3)     value     value   CAR (3)
                                                    Rm       Rm         Rm          Rm        Rm        Rm        Rm


Base value                                      14 069   20 324     23 393      (3 069)      779       948      (169)

1%    increase in risk discount rate                     18 640     22 094      (3 454)      650       836      (186)
      % change                                               (8)        (6)         13       (17)      (12)       10

1%    reduction in risk discount rate                    22 220     24 857      (2 637)      925     1 074      (149)
      % change                                                9          6         (14)       19        13       (12)

10%   decrease in future expenses                        21 456     24 516      (3 060)      875     1 044      (169)
      % change (1)                                            6          5           -        12        10         -
10%   decrease in lapse, paid-up and
      surrender rates                                    21 105     24 189      (3 084)      937     1 115      (178)
      % change                                                4          3           -        20        18         5

5%    decrease in mortality and
      morbidity for assurance                            21 803     24 849      (3 046)      919     1 088      (169)
      business
      % change                                                7          6          (1)       18        15         -

5%    decrease in mortality for  
      annuity business                                   20 007     23 101      (3 094)      771       941      (170)
      % change                                              (2)         (1)          1        (1)      (1)         1

1%    reduction in gross investment
      return, inflation rate and risk           14 039   20 885     23 930      (3 045)      863     1 032      (169)
      discount rate
      % change (2)                                   -        3          2          (1)       11         9         -

1%    reduction in inflation rate                        21 034     24 103      (3 069)      849     1 018      (169)
      % change                                                3          3           -         9         7         -

10%   fall in market value of equities 
      and properties                            13 858   18 854     21 975      (3 121)
      % change                                      (1)      (7)        (6)          2

10%   reduction in premium indexation
      take-up rate                                       20 069     23 099      (3 030)      748       918      (170)
      % change                                               (1)        (1)         (1)       (4)      (3)         1

10%   decrease in non-commission
      related acquisition expenses                                                           880     1 049      (169)
      % change                                                                                13        11         -

1%    increase in equity/property risk
      premium                                            20 876     23 905      (3 029)      806       976      (170)
      % change                                                3          2          (1)        3         3         1

1. No corresponding changes in variable policy charges are assumed, although in practice it is likely that these will 
   be modified according to circumstances.

2. Bonus rates are assumed to change commensurately.

3. The change in the value of cost of required capital is disclosed as nil where the sensitivity test results in an 
   insignificant change in the value.


MMI HOLDINGS GROUP ­ STOCK EXCHANGE PERFORMANCE

STOCK EXCHANGE PERFORMANCE                                             30.06.2014        30.06.2013

12 months

Value of listed shares traded (rand million)                               15 362            16 060
Volume of listed shares traded (million)                                      637               733
Shares traded (% of average listed shares in issue)                            41                47
Value of shares traded ­ life insurance (J857 ­ Rbn)                          165               155
Value of shares traded ­ top 40 index (J200 ­ Rbn)                          3 069             3 059

Trade prices
  Highest (cents per share)                                                 2 783             2 700
  Lowest (cents per share)                                                  2 039             1 792
  Last sale of year (cents per share)                                       2 625             2 217
Annualised percentage (%) change during year                                   18                23
Annualised percentage (%) change ­ life insurance sector (J857)                28                37
Annualised percentage (%) change ­ top 40 index (J200)                         31                18

30 June

Price/diluted core headline earnings (segmental) ratio                       11.6              11.0
Dividend yield % (dividend on listed shares)                                  5.4               5.7
Dividend yield % ­ top 40 index (J200)                                        2.6               2.9

Total shares issued (million)
  Ordinary shares listed on JSE                                             1 570             1 570
  Treasury shares held on behalf of contract holders                          (14)              (14)

  Basic number of shares in issue                                           1 556             1 556
  Treasury shares held on behalf of contract holders                           14                14
  Convertible redeemable preference shares                                     34                34

  Diluted number of shares in issue (1)                                     1 604             1 604

Market capitalisation at end (Rbn) (2)                                         42                36
Percentage (%) of life insurance sector                                        12                13

1. The diluted number of shares in issue takes into account all issued shares, assuming conversion of the convertible 
   redeemable preference shares, and includes the treasury shares held on behalf of contract holders.

2. The market capitalisation is calculated on the fully diluted number of shares in issue.


Appendix ­ Restatement of prior year financial statements

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL  POSITION 


                                                            Audited                   Reclassifi-
                                                                 As    Reclassifi-      cation of 
                                                         previously      cation of           cell       Restated
                                                           reported           CIS        captives     30.06.2013
                                                                 Rm            Rm              Rm             Rm
ASSETS
Intangible assets                                            11 769             -               -         11 769
Owner-occupied properties                                     1 488             -               -          1 488
Property and equipment                                          348             -               -            348
Investment properties                                         6 433             -               -          6 433
Investment in associates                                        121             -               -            121
Employee benefit assets                                         327             -               -            327
Financial instrument assets                                 297 847        13 534           1 043        312 424
Reinsurance contracts                                         1 519             -            (174)         1 345
Deferred income tax                                             124             -               -            124
Properties under development                                     98             -               -             98
Insurance and other receivables                               2 857             -             (29)         2 828
Current income tax assets                                       108             -               -            108
Cash and cash equivalents                                    19 424         2 430             421         22 275
Non-current assets held for sale                                680             -               -            680
Total assets                                                343 143        15 964           1 261        360 368

EQUITY
Equity attributable to owners of the parent                  23 473             -               -         23 473
Non-controlling interests                                       391             -               -            391
Total equity                                                 23 864             -               -         23 864

LIABILITIES
Insurance contract liabilities
   Long-term insurance contracts                             96 817             -             156         96 973
Financial instrument liabilities
   Investment contracts                                     183 506             -           1 207        184 713
   ­ with discretionary participation features               24 937             -               -         24 937
   ­ designated at fair value through income                158 569             -           1 207        159 776
   Other financial instrument liabilities                    22 152        15 812               -         37 964
Deferred income tax                                           3 917             -               -          3 917
Employee benefit obligations                                  1 328             -               -          1 328
Other payables                                               11 112           152            (102)        11 162
Provisions                                                      180             -               -            180
Current income tax liabilities                                  267             -               -            267
Total liabilities                                           319 279        15 964           1 261        336 504

Total equity and liabilities                                343 143        15 964           1 261        360 368



CONDENSED CONSOLIDATED INCOME STATEMENT                   


                                                        Audited                    Reclassifi-
                                                             As    Reclassifi-       cation of                  Restated
                                                     previously      cation of            cell     Interest   12 mths to
                                                       reported            CIS        captives  rates swaps   30.06.2013
                                                             Rm             Rm              Rm           Rm           Rm

Net insurance premiums received                          23 304              -               -            -       23 304
Fee income                                                6 234            (29)              -            -        6 205
Investment income                                        13 537            788              50       (1 329)      13 046
Net realised and fair value gains                        29 152          1 322              74          311       30 859
Net income                                               72 227          2 081             124       (1 018)      73 414
Net insurance benefits and claims                        20 327              -               -            -       20 327
Change in liabilities                                     9 677              -            (372)           -        9 305
   Change in insurance contract liabilities               8 525              -            (438)           -        8 087
   Change in investment contracts 
    with DPF liabilities                                  1 237              -               2            -        1 239
   Change in reinsurance provision                          (85)             -              64            -          (21)
Fair value adjustments on investment contract
liabilities                                              22 614              -             101            -       22 715
Fair value adjustments on collective investment
scheme liabilities                                          882          1 900               -            -        2 782
Depreciation, amortisation and impairment expenses        1 144              -               -            -        1 144
Employee benefit expenses                                 4 494              -               -            -        4 494
Sales remuneration                                        3 015              -              46            -        3 061
Other expenses                                            4 249            180              47            -        4 476
Expenses                                                 66 402          2 080            (178)           -       68 304

Results of operations                                     5 825              1             302       (1 018)       5 110
Share of profit of associates                                12              -               -            -           12
Finance costs                                            (1 684)            (1)              -        1 018         (667)

Profit before tax                                         4 153              -             302            -        4 455
Income tax expenses                                      (1 502)             -            (302)           -       (1 804)
  
Earnings                                                  2 651              -               -            -        2 651

Attributable to:
Owners of the parent                                      2 587              -               -            -        2 587
Non-controlling interests                                    32              -               -            -           32
MMI Group Ltd preference shares                              32              -               -            -           32

                                                          2 651              -               -            -        2 651

Basic earnings per ordinary share (cents)                 166.0              -               -            -        166.0
Diluted earnings per ordinary share (cents)               164.2              -               -            -        164.2



CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS      

                                                           Audited                    Reclassifi-
                                                                As    Reclassifi-       cation of       Restated
                                                        previously      cation of            cell   12 months to
                                                          reported            CIS        captives     30.06.2013
                                                                Rm             Rm              Rm             Rm

Net cash inflow from operating activities                    6 321          1 446             157          7 924
Net cash outflow from investing activities                    (753)             -               -           (753)
Net cash outflow from financing activities                  (3 101)             -             (68)        (3 169)
Net cash flow                                                2 467          1 446              89          4 002
Cash resources and funds on deposit at beginning            16 957            984             332         18 273
Cash resources and funds on deposit at end                  19 424          2 430             421         22 275
 


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