RAND MERCHANT INVESTMENT HOLDINGS LIMITED - Restatement of comparative normalised earnings

Restatement of comparative normalised earnings

RAND MERCHANT INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2010/005770/06
ISIN: ZAE000210688
Share code: RMI
("RMI")

RESTATEMENT OF COMPARATIVE NORMALISED EARNINGS

RMI shareholders are referred to the Stock Exchange News Service
announcement released by MMI Holdings Limited (MMI) on 27 February
2019 regarding changes to MMI’s primary earnings metric. MMI
indicated that its primary earnings metric, being normalised
headline earnings, would in future include the impact of
investment variances, actuarial basis changes and other non-
recurring items, which were previously excluded from its primary
earnings metric.

RMI treats its investment in MMI as an investment in associate and
equity accounts the results of MMI. This change in MMI’s primary
earnings metric flows directly through to RMI’s primary earnings
metric, being normalised earnings. The tables below provide the
original and restated normalised earnings reconciliation of RMI
for the six months ended 31 December 2017 and for the year ended
30 June 2018. Earnings and headline earnings are not impacted by
this change.

Calculation of normalised earnings for the six months ended 31
December 2017:

                                  Reported    Restated
                                    31 Dec      31 Dec
                                      2017        2017   Difference
                                 R million   R million    R million
 Headline earnings
 attributable to equity
 holders                             2 087       2 087            -
 RMI’s share or normalised
 adjustments made by investee
 companies                             167         177           10
- Amortisation of intangible
  assets relating to business
  combinations                         170         170            -
- Non-recurring and
  restructuring expenses                35           7         (28)
- Net realised and fair value
  gains on shareholders’              (28)           -           28
  assets
- Basis and other changes and
  investment variances                (10)           -           10
 Group treasury shares                  17          17            -
 Normalised earnings
 attributable to equity
 holders                             2 271       2 281           10
 Normalised earnings per share
 (cents)                             150.2       150.9          0.7

Calculation of normalised earnings for the year ended 30 June
2018:

                                  Reported    Restated
                                   30 June     30 June
                                      2018        2018   Difference
                                 R million   R million    R million
 Headline earnings
 attributable to equity
 holders                             4 081       4 081            -
 RMI’s share or normalised
 adjustments made by investee
 companies                             416         209        (207)
- Amortisation of intangible
  assets relating to business
  combinations                         332         332            -
- Basis and other changes and
  investment variances                 167           -        (167)
- Non-recurring and
  restructuring expenses                38           8         (30)
- Deferred tax timing
  difference related to new
  adjusted IFRS basis                 (30)        (30)            -
- Unrealised gains on foreign
  exchange contracts not
  designated as a hedge               (19)        (19)            -
- Net realised and fair value
  losses on shareholders’
  assets                                10           -         (10)
- Deferred tax on assessed
  losses                              (88)        (88)            -
- B-BBEE cost                            6           6            -
 Group treasury shares                (24)        (24)            -
 Normalised earnings
 attributable to equity
 holders                             4 473       4 266        (207)
 Normalised earnings per share
 (cents)                             295.1       281.5         13.6

Normalised earnings presented in the tables above represent pro
forma financial information, which is the responsibility of RMI’s
board of directors and is presented for illustrative purposes
only. RMI regards normalised earnings as the appropriate basis to
evaluate business performance as it eliminates the impact of non-
recurring items and accounting anomalies. Because of its nature,
the pro forma financial information may not fairly present RMI’s
financial position, changes in equity, results of operations or
cash flows. An assurance report on the normalised earnings for the
year ended 30 June 2018 as presented above will be obtained in due
course. This information has not been reviewed and reported on by
the external auditors of RMI.

Sandton
6 March 2019

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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