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REMGRO LIMITED - Unaudited results for the six months ended 31 December 2018 and cash dividend declaration

Release Date: 19/03/2019 17:01
Code(s): REM     PDF:  
 
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Unaudited results for the six months ended 31 December 2018 and cash dividend declaration

REMGRO LIMITED 
Registration number 1968/006415/06
ISIN ZAE000026480 Share code REM

INTERIM REPORT
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2018 AND CASH DIVIDEND DECLARATION

SALIENT FEATURES

Headline earnings per share, excluding option remeasurement     -2.7%

Headline earnings per share                                     -3.3%

Interim dividend per share                                      +5.4%

Intrinsic net asset value per share                           R230.23

SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                          31 December      31 December    30 June
R million                                                  2018(1, 2)             2017       2018
ASSETS
Non-current assets
Property, plant and equipment                                  14 648            6 741     13 626
Investment properties                                             119              130        119
Intangible assets                                              25 167            4 873     18 427
Investments - Equity accounted                                 74 878           80 184     73 722
              - Available-for-sale                                  -            2 937      3 067
              - Financial assets at fair value through
                other comprehensive income                      3 315                -          -
Financial assets at fair value through
  profit and loss                                                 151                -          -
Retirement benefits                                               578              204        737
Loans                                                             395              573        697
Deferred taxation                                                 190               22        158
                                                              119 441           95 664    110 553
Current assets                                                 43 710           23 179     40 375
Inventories                                                    11 453            3 645     10 967
Biological agricultural assets                                    697              619        807
Debtors and short-term loans                                   10 179            5 730      8 599
Financial assets at fair value through
  other comprehensive income                                      156                -          -
Financial assets at fair value through
  profit and loss                                                 144                -          -
Investment in money market funds                                5 494            5 849      3 996
Cash and cash equivalents                                      15 364            7 227     12 169
Other current assets                                               66               93         93
                                                               43 553           23 163     36 631
Assets held for sale                                              157               16      3 744
Total assets                                                  163 151          118 843    150 928
EQUITY AND LIABILITIES
Stated capital                                                 13 416           13 416     13 416
Reserves                                                       94 047           78 933     84 865
Treasury shares                                                 (577)            (189)      (183)
Shareholders' equity                                          106 886           92 160     98 098
Non-controlling interest                                       15 730            3 009     15 348
Total equity                                                  122 616           95 169    113 446
Non-current liabilities                                        25 888           18 161     25 891
Retirement benefits                                               204              183        195
Long-term loans                                                19 926           16 278     20 316
Deferred taxation                                               5 750            1 473      5 268
Derivative instruments                                              8              227        112
Current liabilities                                            14 647            5 513     11 591
Trade and other payables                                       12 116            4 625      9 904
Short-term loans                                                2 171              741      1 557
Other current liabilities                                         360              147        130
Total equity and liabilities                                  163 151          118 843    150 928

Net asset value per share (Rand)
- At book value                                               R189.21          R162.59    R173.04
- At intrinsic value                                          R230.23          R265.84    R256.97

(1.) Since 11 May 2018 and 2 July 2018, Remgro consolidates its investments in Distell and Siqalo Foods, respectively,
     and therefore, certain line items are not directly comparable with the prior periods. Refer to "Comparison with the prior
     periods" under "Comments" for further detail.
(2.) Refer to "Change in accounting policies" under "Comments" for the impact of the implementation of new accounting
     standards.

SUMMARY CONSOLIDATED INCOME STATEMENT

                                                                  Six months ended           Year ended
                                                              31 December     31 December       30 June
                                                                     2018            2017          2018
R million                                                                     Restated(1)
CONTINUING OPERATIONS
Sales                                                              30 316          14 046        31 115
Inventory expenses(1)                                            (17 368)         (8 102)      (17 814)
Staff costs                                                       (4 223)         (2 522)       (5 641)
Depreciation                                                        (639)           (362)         (810)
Other net operating expenses(1)                                   (5 386)         (2 319)       (5 590)
Trading profit                                                      2 700             741         1 260
Dividend income                                                        27              48           112
Interest received                                                     648             414           886
Fair value adjustment on exchangeable bonds' option                   106             134           261
Finance costs                                                       (795)           (614)       (1 266)
Net impairment of investments, assets and goodwill                  (773)             645         (201)
Net impairment of loans                                              (64)               -           (1)
Profit on sale and dilution of investments                             55             120         5 188
Consolidated profit before tax                                      1 904           1 488         6 239
Taxation                                                            (868)           (272)         (423)
Consolidated profit after tax                                       1 036           1 216         5 816
Share of after-tax profit of equity accounted investments           1 857           2 736         2 893
Net profit for the period from continuing operations                2 893           3 952         8 709
DISCONTINUED OPERATIONS(2)
Profit for the period from discontinued operations                  8 318             279           490
Net profit for the period                                          11 211           4 231         9 199

Attributable to:
Equity holders                                                     10 297           4 131         8 943
Continuing operations                                               1 979           3 852         8 453
Discontinued operations                                             8 318             279           490
Non-controlling interest                                              914             100           256
                                                                   11 211           4 231         9 199

EQUITY ACCOUNTED INVESTMENTS
Share of after-tax profit of equity accounted
investments
Profit before taking into account impairments and
  non-recurring items                                               4 231           5 380        10 035
Net impairment of investments, assets and goodwill                (2 032)         (1 170)       (5 935)
Profit on the sale of investments                                     453             108           505
Recycling of foreign currency translation reserves                      5               1           647
Other headline earnings adjustable items                               16              12            13
Profit before tax and non-controlling interest                      2 673           4 331         5 265
Taxation                                                            (659)         (1 096)       (1 499)
Non-controlling interest                                            (157)           (220)         (383)
                                                                    1 857           3 015         3 383

Continuing operations                                               1 857           2 736         2 893
Discontinued operations                                                 -             279           490

(1.) The amounts previously reported in the Income Statement for six months ended 31 December 2017 for "inventory
     expenses" and "other net operating expenses" were restated. Previously "inventory expenses" were incorrectly
     understated and "other net operating expenses" incorrectly overstated by R1 298 million. The restatement had no
     impact on trading profit, earnings or headline earnings.
(2.) On 30 June 2018 the investment in Unilever was transferred from "investments - equity accounted" to "assets held
     for sale" (refer to the section dealing with "Investment activities"). Profit from discontinued operations consists of the
     equity accounted earnings of Unilever as well as the profit on its subsequent disposal. The six months ended
     31 December 2017 has been represented accordingly.


HEADLINE EARNINGS RECONCILIATION

                                                                   Six months ended          Year ended
                                                               31 December    31 December       30 June
R million                                                             2018           2017          2018
CONTINUING OPERATIONS
Net profit for the period attributable to
equity holders (earnings)                                            1 979          3 852         8 453
Impairment of equity accounted investments                             773              -           580
Reversal of impairment of equity accounted investments                   -          (654)         (529)
Impairment of available-for-sale investments                             -              -            44
Impairment of property, plant and equipment                              -              8            71
Profit on sale and dilution of equity accounted investments           (58)            (6)       (5 156)
Loss on sale and dilution of equity accounted investments                3              2            52
Profit on sale of available-for-sale investments                         -          (116)         (116)
Profit on disposal of property, plant and equipment                  (126)           (45)         (114)
Recycling of foreign currency translation reserves                       -              -          (10)
Impairment of intangible assets                                          -              -            34
Loss on sale of subsidiary                                               -              -            42
Non-headline earnings items included in equity accounted
  earnings of equity accounted investments                           1 549          1 039         4 726
  - Profit on disposal of property, plant and equipment                (9)           (10)          (44)
  - Profit on the sale of investments                                (475)          (147)         (583)
  - Loss on the sale of investments                                     22             39            78
  - Impairment of investments, assets and goodwill(1)                2 032          1 170         5 935
  - Recycling of foreign currency translation reserves                 (5)            (1)         (647)
  - Other headline earnings adjustable items                          (16)           (12)          (13)
Taxation effect of adjustments                                         114             32            32
Non-controlling interest                                                25              6          (35)
Headline earnings from continuing operations                         4 259          4 118         8 074
DISCONTINUED OPERATIONS
Net profit for the period attributable to
equity holders (earnings)                                            8 318            279           490
Profit on sale of equity accounted investment(2)                   (8 318)              -             -
Non-headline earnings items included in equity accounted
  earnings of equity accounted investments
  - Loss on disposal of property, plant and equipment                    -              9            12
  - Taxation effect of adjustments                                       -              -           (3)
Headline earnings from discontinued operations                           -            288           499
Total headline earnings from continuing and
  discontinued operations                                            4 259          4 406         8 573
Option remeasurement                                                 (106)          (134)         (261)
Headline earnings, excluding option remeasurement                    4 153          4 272         8 312

(1.) "Impairment of investments, assets and goodwill" from equity accounted investments for the six months ended
     31 December 2018 includes Remgro's portion of the impairments of Mediclinic's properties and trade names in
     Switzerland and its investment in Spire of R1 954 million (2017: R830 million).
(2.) "Profit on sale of equity accounted investments" consists of the profit realised on the disposal of Unilever.

EARNINGS AND DIVIDENDS

                                                      Six months ended        Year ended
                                                31 December     31 December      30 June
Cents                                                   2018           2017         2018
Headline earnings per share
- Basic                                               752.1           777.5      1 512.6
  Continuing operations                               752.1           726.7      1 424.6
  Discontinued operations                                 -            50.8         88.0

- Diluted                                             744.2           772.8      1 504.5
  Continuing operations                               744.2           722.0      1 416.5
  Discontinued operations                                 -            50.8         88.0

Headline earnings per share, excluding option
remeasurement
- Basic                                               733.4           753.9      1 466.5
  Continuing operations                               733.4           703.1      1 378.5
  Discontinued operations                                 -            50.8         88.0

- Diluted                                             725.5           749.1      1 458.4
  Continuing operations                               725.5           698.3      1 370.4
  Discontinued operations                                 -            50.8         88.0

Earnings per share
- Basic                                              1 818.3          729.0      1 577.9
  Continuing operations                                349.5          679.7      1 491.4
  Discontinued operations                            1 468.8           49.3         86.5

- Diluted                                            1 814.8          725.2      1 567.5
  Continuing operations                                346.8          676.0      1 481.1
  Discontinued operations                            1 468.0           49.2         86.4

Dividends per share
Ordinary                                             215.00          204.00       532.00
- Interim                                            215.00          204.00       204.00
- Final                                                   -               -       328.00

SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                                   Six months ended           Year ended
                                                               31 December    31 December        30 June
R million                                                             2018           2017           2018
Net profit for the period                                           11 211          4 231          9 199
Other comprehensive income, net of tax                               1 687        (2 774)          (311)
Items that may be reclassified subsequently to the
income statement:
  Exchange rate adjustments                                            616        (1 182)          2 012
  Fair value adjustments on financial assets for the period              -            (2)          (149)
  Deferred taxation on fair value adjustments                            -             12             55
  Reclassification of other comprehensive income to the
   income statement                                                    (1)           (98)          (206)
  Other comprehensive income of equity accounted
   investments                                                       1 571        (1 694)        (2 127)
Items that will not be reclassified to the income
statement:
  Fair value adjustments on financial assets for the period          (259)              -              -
  Deferred taxation on fair value adjustments                           63              -              -
  Remeasurement of post-employment benefit obligations               (147)              -            189
  Deferred taxation on remeasurement of post-
   employment benefit obligations                                       22              -           (53)
  Change in reserves of equity accounted investments                 (178)            190           (32)

Total comprehensive income for the period                           12 898          1 457          8 888


Total comprehensive income attributable to:
Equity holders                                                      12 087          1 356          8 374
Non-controlling interest                                               811            101            514
                                                                    12 898          1 457          8 888

SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                 Six months ended           Year ended
                                                             31 December    31 December        30 June
R million                                                           2018           2017           2018
Balance at the beginning of the period                           113 446         95 302         95 302
Change in accounting policies(1)                                 (1 116)              -              -
Restated balance at the beginning of the period                  112 330         95 302         95 302
Total comprehensive income for the period                         12 898          1 457          8 888
Dividends paid                                                   (2 251)        (1 747)        (2 934)
Transactions with non-controlling shareholders                      (58)             63             40
Other movements                                                        9              7             18
Long-term share incentive scheme reserve                              84             87            182
Purchase of treasury shares by wholly owned
  subsidiary                                                       (396)              -              -
Non-controlling shareholders' interest in acquisition of
  subsidiary                                                           -              -         11 953
Non-controlling shareholders' interest in disposal of
  subsidiary                                                           -              -            (3)
Balance at the end of the period                                 122 616         95 169        113 446

(1.) Refer to "Change in accounting policies" under "Comments" for the impact of the implementation of new accounting
     standards.

SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                Six months ended            Year ended
                                                            31 December     31 December        30 June
R million                                                          2018            2017           2018
Cash generated from/(utilised by) operations                      3 678           (211)          2 096
Interest received                                                   648             414            879
Taxation paid                                                     (578)           (204)          (657)
Dividends received(1)                                             1 812           2 205          3 789
Finance costs                                                     (744)           (570)        (1 159)
Cash available from operating activities                          4 816           1 634          4 948
Dividends paid                                                  (2 251)         (1 747)        (2 934)
Net cash inflow/(outflow) from operating activities               2 565           (113)          2 014
Investing activities(1, 2)                                          845           (128)          2 208
Financing activities                                              (906)            (58)             78
Net increase/(decrease) in cash and cash equivalents              2 504           (299)          4 300
Exchange rate profit/(loss) on foreign cash                         206           (268)            213
Cash and cash equivalents at the beginning of the period         11 985           7 472          7 472
Cash and cash equivalents at the end of the period               14 695           6 905         11 985

Cash and cash equivalents - per statement of
 financial position                                              15 364           7 227         12 169
Bank overdraft                                                    (669)           (322)          (184)

(1.) The dividend received from RMI in respect of the reinvestment alternative (refer to the section dealing with "Investment
     activities"), amounting to R300 million (2017: R292 million), is not included in "Dividends received" and "Investing
     activities" for cash flow purposes.
(2.) "Investing activities" includes the R4 900 million cash received on the disposal of the investment in Unilever, an increase
     in money market funds of R1 498 million, as well as investments in the CIV group and Prescient (refer to the section
     dealing with "Investment activities").

ADDITIONAL INFORMATION

                                                               Six months ended              Year ended
                                                           31 December      31 December         30 June
                                                                  2018             2017            2018
Number of shares in issue
- Ordinary shares of no par value                          529 217 007      529 217 007     529 217 007
- Unlisted B ordinary shares of no par value                39 056 987       39 056 987      39 056 987
Total number of shares in issue                            568 273 994      568 273 994     568 273 994
Number of shares held in treasury
- Ordinary shares repurchased and held in treasury         (3 375 334)      (1 432 501)     (1 389 033)
                                                           564 898 660      566 841 493     566 884 961

Weighted number of shares                                  566 303 849      566 682 343     566 773 693

In determining earnings per share and headline earnings per share the weighted number of shares was taken
into account.

                                                                          
                                                                   31 December        31 December         30 June
R million                                                                 2018               2017            2018
Equity accounted investments
Associates                                                              71 074             74 451          70 735
Joint ventures                                                           3 804              5 733           2 987
                                                                        74 878             80 184          73 722

Equity accounted investment reconciliation
Carrying value at the beginning of the period                           73 722             80 883          80 883
Change in accounting policies(1)                                       (1 093)                  -               -
Restated balance at the beginning of the period                         72 629             80 883          80 883
Share of net attributable profit                                         1 857              3 015           3 383
Dividends received                                                     (1 824)            (2 304)         (4 259)
Exchange rate differences                                                  359              (940)           1 779
Investments made                                                         1 200                447             675
Derecognition of equity accounted investments in Distell
  and Capevin                                                                -                  -         (3 885)
Transfer of Unilever to non-current assets held for sale                     -                  -         (3 588)
Businesses acquired                                                          -                  -             968
Grindrod and Grindrod Shipping
  (impairment)/impairment reversal                                       (773)                654             487
Equity accounted movements on reserves                                   1 393            (1 504)         (2 145)
Other movements                                                             37               (67)           (576)
Carrying value at the end of the period                                 74 878             80 184          73 722

Long-term loans
20 000 Class A 7.7% cumulative redeemable
  preference shares                                                      3 510              3 513           3 512
10 000 Class B 8.3% cumulative redeemable
  preference shares                                                      4 380              4 383           4 382
Exchangeable bonds with an effective interest
  rate of 4.5%                                                           6 216              5 533           6 090
Various other loans                                                      7 108              3 084           7 533
                                                                        21 214             16 513          21 517
Short-term portion of long-term loans                                  (1 288)              (235)         (1 201)
                                                                        19 926             16 278          20 316

Additions to and replacement of property,
 plant and equipment                                                     1 122                336           1 153

Capital and investment commitments(2)                                    6 506              1 330           4 366
(Including amounts authorised, but not yet contracted for)

Guarantees and contingent liabilities                                        8                 25               9

Dividends received from equity accounted
  investments set off against investments                                1 824              2 304           4 259

Refer to the section dealing with "Investment
activities" for more detail on related party
transactions.

(1.) Refer to "Change in accounting policies" under "Comments" for the impact of the implementation of new accounting
     standards.
(2.) Capital and investment commitments at 31 December 2018 include an amount of R2 007 million (30 June 2018:
     R2 459 million) from Distell, as well as additional investment commitments to CIVH (R1 633 million) and Milestone
     China Opportunities Fund IV (R1 293 million).

Fair value remeasurements
The following methods and assumptions are used to determine the fair value of each class of financial instruments:
- Financial instruments available-for-sale, at fair value through other comprehensive income, at fair value through
  profit and loss and investment in money market funds: fair value is based on quoted market prices or, in the
  case of unlisted instruments, appropriate valuation methodologies, being discounted cash flow, liquidation
  valuation and actual net asset value of the investment.
- Derivative instruments: the fair value of derivative instruments is determined by using appropriate valuation
  methodologies and mark-to-market valuations.

Financial instruments measured at fair value, are disclosed by level of the following fair value hierarchy:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - Inputs (other than quoted prices included within level 1) that are observable for the asset or liability,
            either directly (as prices) or indirectly (derived from prices); and
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table illustrates the fair values of financial assets and liabilities that are measured at fair value,
by hierarchy level:

R million                                Level 1   Level 2   Level 3    Total
31 December 2018
ASSETS
Non-current assets
Financial assets at fair value through
  other comprehensive income               1 333        17     1 965    3 315
Financial assets at fair value through
  profit and loss                              -         -       151      151
Current assets
Financial assets at fair value through
  other comprehensive income                 156         -         -      156
Financial assets at fair value through
  profit and loss                              -         -       144      144
Derivative instruments                         -         5         -        5
Investment in money market funds           5 494         -         -    5 494
                                           6 983        22     2 260    9 265
LIABILITIES
Non-current derivative instruments             -         8         -        8
Current derivative instruments                 -        27        23       50
                                               -        35        23       58

31 December 2017
ASSETS
Available-for-sale                         1 093         -     1 844    2 937
Derivative instruments                         -         8         -        8
Investment in money market funds           5 849         -         -    5 849
                                           6 942         8     1 844    8 794
LIABILITIES
Non-current derivative instruments             -       227         -      227
Current derivative instruments                 -        14        49       63
                                               -       241        49      290
30 June 2018
ASSETS
Available-for-sale                           934        41     2 092    3 067
Derivative instruments                         -        12         -       12
Investment in money market funds           3 996         -         -    3 996
                                           4 930        53     2 092    7 075
LIABILITIES
Non-current derivative instruments             -       112         -      112
Current derivative instruments                 -        34        43       77
                                               -       146        43      189


The following table illustrates the reconciliation of the carrying value of level 3 assets at the beginning and end
of the period:

                                             Financial assets
                                                at fair value      Financial assets
                                                through other         at fair value
                                                comprehensive               through         Derivative
R million                                              income       profit and loss        instruments       Total
ASSETS
Balances on 1 July 2018                                 2 092                     -                  -       2 092
Transfer from level 2                                      40                     -                  -          40
Additions                                                  92                   295                  -         387
Disposals                                               (394)                     -                  -       (394)
Exchange rate adjustments                                  89                     -                  -          89
Fair value adjustments through other
 comprehensive income                                      46                     -                  -          46
Balances on 31 December 2018                            1 965                   295                  -       2 260

LIABILITIES
Balances on 1 July 2018                                     -                     -                 43          43
Put option exercised                                        -                     -               (20)        (20)
Balances on 31 December 2018                                -                     -                 23          23

Level 3 financial assets consist mainly of investments in the Milestone China entities (Milestone) and the Pembani
Remgro Infrastructure Fund (PRIF) amounting to R1 509 million and R241 million respectively. These investments
are all valued based on the fair value of each investment's underlying assets, which are valued using a variety of
valuation methodologies. Listed entities are valued at the last quoted share price on the reporting date, whereas
unlisted entities' valuation methods include discounted cash flow valuations, appropriate earnings and revenue
multiples.

Milestone's fair value consists of listed investments (21%), cash and cash equivalents (1%), and unlisted
investments (78%). Unlisted investments included at transaction prices in Milestone's fair value amounted to
R543 million, while its remaining six unlisted investments were valued at R634 million. PRIF's main assets are the
investments in ETG Group, Octotel, RSAWeb, Lumos Global and GPR Leasing. ETG Group was valued at its last
traded price used for the acquisition of an interest by a third party, while the other investments were valued using
the discounted cash flow method.

Changes in the valuation assumptions of the above unlisted investments will not have a significant impact on
Remgro's financial statements as the underlying assets of the funds in which Remgro made its investments are
widely spread.

Disaggregated revenue information
                                         Six months ended        Year ended
                                    31 December    31 December      30 June
R million                                  2018           2017         2018
Consumer products
Distell                                  14 424              -        4 219
RCL Foods                                13 265         12 765       24 426
Siqalo Foods                              1 405              -            -

Industrial
Wispeco                                   1 222          1 076        2 265

Media and sport
Other media and sport interests               -            205          205
Consolidated                             30 316         14 046       31 115


COMMENTS

1.        ACCOUNTING POLICIES

          The interim report is prepared in accordance with the recognition and measurement principles of
          International Financial Reporting Standards (IFRS), including IAS 34: Interim Financial Reporting, and the
          SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
          Pronouncements as issued by the Financial Reporting Standards Council, and in accordance with the
          requirements of the Companies Act (No. 71 of 2008), as amended, and the Listings Requirements of the
          JSE Limited. The financial statements have been prepared under the supervision of the Chief Financial
          Officer, Neville Williams CA(SA). The interim report has not been audited or reviewed.

          These financial statements incorporate accounting policies that are consistent with those of the previous
          financial periods, with the exception of the implementation of IFRS 9: Financial Instruments and IFRS 15:
          Revenue from Contracts with Customers. Refer to "Change in accounting policies" for further detail on the
          implementation of these standards and amendments.

          During the period under review various other interpretations and amendments became effective, but their
          implementation had no impact on the results of either the current or prior periods.

2.        CHANGE IN ACCOUNTING POLICIES

          This section explains the impact of the adoption of IFRS 9: Financial Instruments and IFRS 15: Revenue
          from Contracts with Customers on the Group's financial statements.

     A.   Impact of the adoption of IFRS 9: Financial Instruments
          IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of
          financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets
          and hedge accounting. IFRS 9 was adopted without restating comparative information in accordance with
          the transitional provisions (IFRS 9, paragraphs 7.2.15 and 7.2.26). The adjustments arising from the new
          standard are therefore not reflected in the statement of financial position as at 30 June 2018, but are
          recognised in the opening statement of financial position on 1 July 2018.

     1.   Classification and measurement
          -  Loans and receivables
             Loans and receivables are classified as financial assets at amortised cost. The implementation of IFRS 9
             had no impact on the classification of these assets. It is the Group's business model to hold these
             instruments for collection of cash flows, and the cash flows represent solely payments of principal and
             interest.

          - Equity investments previously classified as available-for-sale
            The Group elected to present changes in the fair value of all its equity investments previously classified
            as available-for-sale in other comprehensive income as these investments are held as long-term
            investments and are not expected to be sold in the short to medium term. As a result, assets with a fair
            value of R3 067 million were reclassified from available-for-sale financial assets to financial assets at
            fair value through other comprehensive income and the related fair value gains of R661 million remains
            in the fair value reserve on 1 July 2018. Any subsequent remeasurements of these instruments will be
            reflected in other comprehensive income and no portion will be transferred to the income statement.
            Dividends from these investments are accounted for in profit and loss.

          - Borrowings, derivatives and hedging activities
            The adoption of IFRS 9 had no impact on the Group's classification and measurement of borrowings,
            derivatives and the Group's hedging activities.

2.   Impairment of financial assets
     The impact on the Group's results from the adoption of IFRS 9 relate solely to the new impairment
     requirements. The Group's financial assets carried at amortised cost consist of:

     - Current trade and other receivables related to sales of goods;
     - Trade and other receivables - non-current;
     - Cash and cash equivalents; and
     - Loans receivable.

     The impact of the change in impairment methodology on the Group's total equity is disclosed below. The
     adjustment arose from changes in the impairment provisions for the Group's current trade and other
     receivables.

     The Group's subsidiaries apply the IFRS 9 simplified approach to measuring expected credit losses on its
     current trade receivables, which calculates the loss allowance on a lifetime basis. The Group has credit
     guarantee insurance in place where management of each business unit deems it necessary. The Group's
     credit policies requires each new customer to be analysed individually for creditworthiness before delivery
     and payment terms are offered.

     To measure the expected credit loss, trade receivables have been grouped based on shared characteristics
     and days past due. The calculation of the expected credit loss takes into account any insurance cover in
     place.

     Reconciliation of the loss allowance for trade receivables as at 30 June 2018 to 1 July 2018:

                                                                                                          Trade
                                                                                                    receivables
                                                                                                     impairment
     R million                                                                                        provision
     Closing impairment provision (as calculated under IAS 39) - 30 June 2018                               135
     Amount restated in opening equity                                                                       25
     Opening impairment provision (as calculated under IFRS 9) - 1 July 2018                                160


     Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there
     is no reasonable expectation of recovery include, amongst others:
     -    the failure of a debtor to engage in a repayment plan with Group;
     -    the failure to make contractual payments for a period of greater than the number of days past due as
          set by each business unit; and/or
     -    a legal process has not enabled recovery.

3.   Debt instruments
     The debt instruments classified as measured at amortised cost at 30 June 2018 are considered to have a
     low credit risk. The loss allowance calculated for these were therefore limited to 12 months' expected losses
     and was immaterial. The debt instruments are considered to have a low credit risk when they have a low
     risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near
     term.

     The loss allowances for financial assets are based on assumptions pertaining to risk of default and expected
     loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the
     impairment calculation, based on past experience, existing market conditions as well as forward looking
     estimates at the end of each reporting period.

B.   Impact of the adoption of IFRS 15: Revenue from Contracts with Customers
     In accordance with the transition provisions in IFRS 15, the Group has applied the modified retrospective
     application option, and certain adjustments are therefore recognised in the opening statement of financial
     position on 1 July 2018.

1.   Accounting for payments to customers for non-distinct goods and services
     The adoption of IFRS 15 has required the Group to identify separate performance obligations in contracts
     with customers. The Group makes payments or provides products to customers linked to a loyalty program
     and distribution of sales and marketing related functions carried out by them. These costs have previously
     been included in expenditure items in the income statement, but is now accounted for against revenue.
     This change had no impact on net profit.

2.   Accounting for refunds
     When the customer has a right to return the product within a given period, the Group is obliged to refund
     the purchase price. The Group recognises revenue when the goods have been formally accepted by the
     customer or the goods have been delivered and the time period for rejection had expired as there is
     uncertainty about the possibility of return. When goods are returned, revenue is derecognised and the
     customer credited with value of the goods originally delivered.

     In terms of IFRS 15, a refund liability for the estimated expected refunds of R19 million outstanding to
     customers was recognised as an adjustment to trade and other payables on 1 July 2018. Simultaneously,
     the Group has a right to recover the product from the customer where the customer exercises his right of
     return, which right is included in trade and other receivables amounting to R12 million at 1 July 2018. The
     asset is measured by reference to the former carrying value of the product. The costs to recover the
     products are not material as the products are usually returned during the normal distribution process.

C.   Impact of the adoption of IFRS 9 and IFRS 15 on equity accounted investments
     Remgro's equity accounted investments followed the same transitional arrangements as described above.

     The impact of the implementation of IFRS 9 from equity accounted investments on Remgro's statement of
     financial position was a decrease amounting to R795 million in both equity accounted investments and
     reserves. The amendment that had the largest impact was applying the expected credit losses on FirstRand
     Limited's (FirstRand) results, which in turn affected RMB Holdings Limited's (RMH) statement of financial
     position on 1 July 2018. The implementation of IFRS 9 by these two companies reduced Remgro's carrying
     value of equity accounted investments and reserves by R735 million.

     The impact of the implementation of IFRS 15 amounted to a reduction in the carrying value of equity
     accounted investments and reserves of R298 million, of which R289 million is attributable to SEACOM
     Capital Limited (SEACOM). SEACOM adjusted the accounting of its indefeasible right of use contracts
     which included the obligation to provide services at various capacities across two networks and with
     different pricing structures for which cash is received in advanced.

D.   Impact of the adoption of IFRS 9 and IFRS 15 on the consolidated statement of financial position
     The following table shows the adjustments recognised for each individual line item. Line items that were
     not affected by the changes have not been included. As a result, the sub-totals and totals disclosed cannot
     be recalculated from the numbers provided.

                                                30 June 2018                        1 July 2018
Consolidated statement of financial            As previously
 position (extract)                                presented     IFRS 9    IFRS 15     Restated
 ASSETS
 Non-current assets
Investments - Equity accounted                        73 722      (795)      (298)       72 629
             - Available-for-sale                      3 067    (3 067)          -            -
             - Financial assets at fair value
               through other comprehensive
               income                                      -      3 067          -        3 067
 Current assets
 Debtors and short-term loans                          8 599       (25)         12        8 586
 Total assets                                        150 928      (820)      (286)      149 822

EQUITY AND LIABILITIES
Reserves                                              84 865      (805)      (298)       83 762
Shareholders' equity                                  98 098      (805)      (298)       96 995
Non-controlling interest                              15 348        (9)        (4)       15 335
Total equity                                         113 446      (814)      (302)      112 330
Deferred taxation                                      5 268        (6)        (3)        5 259
Trade and other payables                               9 904          -         19        9 923
Total equity and liabilities                         150 928      (820)      (286)      149 822

3.   COMPARISON WITH THE PRIOR PERIODS

     On 2 July 2018 the Unilever Spreads business, Siqalo Foods Proprietary Limited (Siqalo Foods), became
     a wholly owned subsidiary of Remgro (refer to "Investment activities" for further detail). Furthermore and
     as previously reported, Remgro holds the majority of voting rights in Distell Group Holdings Limited (Distell)
     since 11 May 2018, which resulted in the investment in Distell being consolidated from that date.

     As a result of the above transactions, certain line items in the statement of financial position and income
     statement are not directly comparable with the prior periods. The initial accounting for these business
     combinations has not yet been completed and the provisional fair values at the acquisition dates were as
     follows:

                                                                                      At acquisition date
                                                                                         Siqalo
                                                                                          Foods         Distell
     R million                                                                     02 July 2018     11 May 2018
     Property, plant and equipment                                                          495           6 608
     Intangible assets                                                                    1 710          10 169
     Inventories                                                                            124           7 765
     Debtors and short-term loans                                                             -           2 149
     Cash and cash equivalents less bank overdraft                                            -           1 306
     Other net assets                                                                         -           1 229
     Long-term loans                                                                          -         (4 378)
     Deferred taxation (assets and liabilities)                                           (506)         (3 693)
     Trade and other payables                                                              (14)         (3 857)
     Non-controlling interest                                                                 -        (11 893)
     Fair value of net assets acquired                                                    1 809           5 405
     Goodwill                                                                             5 191           3 535
     Total purchase consideration                                                         7 000           8 940


     Siqalo Foods and Distell's revenue contributions for the period under review are R1 405 million and
     R14 424 million (30 June 2018: R4 219 million), respectively.

4.   RESULTS
     Headline earnings
     For the period under review, headline earnings decreased by 3.3% from R4 406 million to R4 259 million,
     while headline earnings per share (HEPS) also decreased by 3.3% from 777.5 cents to 752.1 cents.

     Included in headline earnings for the period under review is a positive fair value adjustment amounting to
     R106 million (2017: R134 million), relating to the decrease in value of the bondholders' exchange option
     of the exchangeable bonds (option remeasurement). Excluding the option remeasurement, headline
     earnings decreased by 2.8% from R4 272 million to R4 153 million, whereas HEPS decreased by 2.7%
     from 753.9 cents to 733.4 cents. The decrease in headline earnings, excluding option remeasurement, is
     mainly due to lower earnings from Total South Africa Proprietary Limited (Total), Community Investment
     Ventures Holdings Proprietary Limited (the CIV group), RCL Foods Limited (RCL Foods) and the exclusion
     of Unilever South Africa Holdings Proprietary Limited (Unilever) due to its disposal. The decrease is partly
     offset by the inclusion of Siqalo Foods and higher contributions from Mediclinic International plc
     (Mediclinic), Grindrod Limited (Grindrod) and the banking platform, as well as higher interest income.

Contribution to headline earnings by reporting platform

                                                                                    Year
                                                                                   ended
                                             31 Dec              %     31 Dec    30 June
R million                                      2018         Change       2017       2018
Banking                                       1 775            5.8      1 678      3 525
Healthcare                                      623           27.9        487      1 556
Consumer products                               932         (18.2)      1 140      1 605
Insurance                                       582          (7.0)        626      1 228
Industrial                                      412         (25.2)        551        971
Infrastructure                                 (20)        (162.5)         32         57
Media and sport                                   8          144.4       (18)       (47)
Other investments                                15         (48.3)         29         66
Central treasury
  - finance income                              397           53.3        259        524
  - finance costs                             (459)          (1.5)      (452)      (891)
  - option remeasurement                        106         (20.9)        134        261
Other net corporate costs                     (112)         (86.7)       (60)      (282)
Headline earnings                             4 259          (3.3)      4 406      8 573
Option remeasurement                          (106)                     (134)      (261)
Headline earnings, excluding option
remeasurement                                 4 153          (2.8)      4 272      8 312

Refer to Annexures A and B for the segmental information.

Commentary on reporting platforms' performance

Banking
The headline earnings contribution from the banking platform amounted to R1 775 million (2017:
R1 678 million), representing an increase of 5.8%. FirstRand and RMH reported headline earnings growth
of 6.1% and 5.7% respectively. RMH reported lower growth due to higher funding costs.

On a normalised basis, which excludes certain non-operational and accounting anomalies, and is a better
reflection of underlying performance, FirstRand and RMH reported earnings growth of 7.1% and 6.7%
respectively. These increases are mainly due to growth in both net interest income, underpinned by solid
growth in advances and deposits, and non-interest revenue due to strong fee and commission income
growth. This growth in earnings was partly offset by an increase of 16% in non-performing loans, in part
reflecting strong book growth, as well as reflecting the IFRS 9 impairment provisioning methodology
resulting in an increase in credit impairment charges.

Healthcare
Mediclinic's contribution to Remgro's headline earnings amounted to R623 million (2017: R487 million),
representing an increase of 27.9%. As previously reported, Mediclinic's contribution for the comparative
period included an accelerated amortisation charge of R171 million relating to the rebranding of all the Al
Noor facilities to Mediclinic. Excluding the impact of the accelerated amortisation in the comparative period,
Mediclinic's contribution to Remgro's headline earnings would have decreased by 5.3% from R658 million
to R623 million. In British pound terms Mediclinic's contribution, excluding the accelerated amortisation,
decreased by 8.6% mainly due to a lower contribution from the Switzerland division, partly offset by a
stronger performance by the Southern Africa and Middle East operating divisions.

Switzerland's underperformance was a direct result of recent regulatory changes in the Swiss healthcare
market which impacted all providers. These changes included the implementation of national outpatient
tariff (TARMED) reductions and the outmigration of identified clinical treatments, transferring from an
inpatient to an outpatient tariff across many cantons. Steps have been taken to improve the current
financial performance through securing revenue growth, reducing costs and driving efficiency savings in
different areas of the business. Additional medium term actions include improving service differentiation
across insurance categories, doctor recruitment initiatives and advancing the outpatient delivery model.

Consumer products
The contribution from consumer products to Remgro's headline earnings amounted to R932 million (2017:
R1 140 million), representing a decrease of 18.2%.

RCL Foods' contribution to Remgro's headline earnings decreased by 26.5% to R366 million (2017:
R498 million). This decrease is mainly due to significant challenges within the Sugar and Chicken business
units resulting from lower prices realised, mainly due to oversupply, and higher commodity and transport
costs. Profitability in the Chicken business unit was hampered by dumped imports entering the market
leading to lower pricing and an increase in feed costs. The Sugar business unit was impacted by reduced
domestic sugar consumption, brought about by, inter alia, the implementation of the Health Promotion Levy
(sugar tax), and the continued volumes of dumped imports, resulting in a shift in sales mix towards raw
(unrefined) exports. Export prices were significantly lower than local prices due to suppressed worldwide
sugar prices. The Groceries cluster however, delivered solid growth, benefiting from volume and margin
increases in the Grocery and Pies portfolios and market share gains in several categories.

Distell's contribution to headline earnings amounted to R399 million (2017: R354 million), representing an
increase of 12.7%. Note that the comparative period included the contribution from Capevin Holdings
Limited. Distell reported headline earnings growth, adjusted for retrenchment and restructuring costs, the
Tanzania Distilleries Limited once-off losses in the comparative period and foreign exchange movements,
of 6.6%, mainly due to solid revenue growth in the South African and other African markets. In addition to
Distell's contribution, Remgro also accounted for amortisation and depreciation charges of R24 million
relating to the additional assets identified when Remgro obtained control over Distell on 11 May 2018.

On 2 July 2018 Unilever acquired Remgro's 25.75% shareholding in Unilever in exchange for Unilever's
Spreads business in Southern Africa, namely Siqalo Foods, as well as a cash consideration of
R4 900 million. As a result, no headline earnings contribution was accounted for Unilever (2017:
R288 million), however, Siqalo Foods' contribution to Remgro's headline earnings for the period under
review amounted to R231 million. In addition to Siqalo Foods' contribution, Remgro also accounted for
amortisation and depreciation charges of R40 million relating to the additional assets identified when
Remgro obtained control over Siqalo Foods.

Insurance
Rand Merchant Investment Holdings Limited's (RMI) contribution to Remgro's headline earnings decreased
by 7.0% to R582 million (2017: R626 million). On a normalised basis, RMI reported a decrease of 8.2% in
earnings mainly due to lower contributions from Discovery Holdings Limited (Discovery) and OUTsurance
Holdings Limited (OUTsurance). Discovery's contribution to RMI decreased by 16.6% due to significant
spend on new initiatives, a spike in large mortality claims at Discovery Life and the negative impact of the
transition from IAS 39 to IFRS 9. OUTsurance's contribution decreased by 5.8% due to exceptionally low
claims in the comparative period, higher natural peril claims in Australia, corrective pricing measures to
recognise lower accident frequencies and significant investments in new business growth activities. The
contribution of MMI Holdings Limited increased by 5.7% and that of Hastings Group Holdings plc decreased
by 8.9%.

Industrial
Air Products South Africa Proprietary Limited's (Air Products) contribution to Remgro's headline earnings
increased by 22.5% to R174 million (2017: R142 million). This increase is mainly due to an improvement
in gas volumes and successful cost containment initiatives.

Total's contribution to Remgro's headline earnings amounted to R101 million (2017: R258 million). Included
in the contribution to headline earnings for the period under review are unfavourable stock revaluations
amounting to R75 million (2017: favourable stock revaluations of R135 million). These revaluations are the
result of the volatility in the Brent Crude price and the rand exchange rate. Excluding these revaluations,
the contribution increased by 43.1% from R123 million to R176 million. This increase is mainly due to an
increase in turnover resulting from higher sales volumes in the mining and reseller sector.

Kagiso Tiso Holdings Proprietary Limited's (KTH) and Wispeco Holdings Proprietary Limited's (Wispeco)
contributions to headline earnings amounted to R77 million and R52 million (2017: R73 million and
R62 million), while PGSI Limited (PGSI) contributed R8 million to Remgro's headline earnings (2017:
R16 million).

    Infrastructure
    The CIV group's contribution to Remgro's headline earnings amounted to a loss of R104 million (2017:
    profit of R32 million). The results were negatively impacted by the acquisition of a 34.9% stake in Vumatel
    Proprietary Limited (Vumatel), which was implemented during June 2018. Included in the CIV group's
    results were finance costs amounting to R136 million, relating to the financing of the Vumatel acquisition,
    as well as Vumatel's equity accounted losses amounting to R41 million. Excluding the aforesaid Vumatel
    impact, the contribution to headline earnings decreased from a profit of R32 million to a loss of R11 million
    mainly due to Dark Fibre Africa Proprietary Limited's (DFA) higher depreciation and finance costs as a
    result of the expanding network. Despite the decrease in earnings, DFA's revenue increased by 18.2% to
    R1 067 million (2017: R903 million) mainly due to strong growth in annuity revenue.

    Grindrod's contribution to Remgro's headline earnings amounted to R101 million (2017: a loss of
    R52 million). The increase is mainly due to improved results across core businesses, resulting from
    increased commodity demand, whereas the comparative period included stock impairments in the rail
    assembly business, due to the closure of this business unit, and losses from the shipping division.

    During June 2018 Grindrod completed the separate listing of its shipping division and Remgro received
    Grindrod Shipping Holdings Limited (Grindrod Shipping) shares as a dividend in specie. Grindrod
    Shipping's contribution to Remgro's headline earnings amounted to a loss of R18 million (included in the
    2017 contribution of Grindrod: R62 million).

    Remgro's share of SEACOM's loss amounted to R1 million (2017: a profit of R32 million). This decrease is
    mainly due to a once-off realisation of deferred revenue relating to the early termination of long-term
    contracts in the comparative period, as well as the negative impact of the implementation of IFRS 15 in the
    period under review.

    Media and sport
    Media and sport primarily consist of the interests in eMedia Investments Proprietary Limited (eMedia
    Investments) and various sport interests, including an interest in the Blue Bulls rugby franchise and
    Stellenbosch Academy of Sport Properties Proprietary Limited.

    eMedia Investments' contribution to Remgro's headline earnings increased to R11 million (2017:
    R3 million). This increase is mainly due to an increase in revenue, as well as a lower investment into the
    multi-channel business (Openview and e.tv multichannel).

    Other investments
    The contribution from other investments to headline earnings amounted to R15 million (2017: R29 million),
    of which Business Partners Limited's contribution was R29 million (2017: R29 million).

    Central treasury and other net corporate costs
    Finance income amounted to R397 million (2017: R259 million). This increase is mainly due to higher
    average cash balances as a result of the Unilever disposal. Finance costs amounted to R459 million (2017:
    R452 million). The positive fair value adjustment of R106 million (2017: R134 million) relates to the
    decrease in the value of the exchange option of the exchangeable bonds. Other net corporate costs
    amounted to R112 million (2017: R60 million). The increase in other net corporate costs is mainly due to
    the utilisation of corporate taxation credits in the comparative period.

    Earnings
    Earnings increased by 149.3% to R10 297 million (2017: R4 131 million). This increase is mainly due to
    the profit realised on the Unilever disposal of R8 318 million. This increase is partly offset by Remgro's
    portion of the impairments of Mediclinic's properties and trade names in Switzerland and its investment in
    Spire Healthcare Group plc of R1 954 million (2017: R830 million).


5.   INTRINSIC NET ASSET VALUE

    Remgro's intrinsic net asset value per share decreased by 10.4% from R256.97 at 30 June 2018 to
    R230.23 at 31 December 2018. The closing share price at 31 December 2018 was R194.74
    (30 June 2018: R204.29) representing a discount of 15.4% (30 June 2018: 20.5%) to the intrinsic net asset
    value. Refer to Annexure B for full details.

6.   INVESTMENT ACTIVITIES
     The most important investment activities during the period under review were as follows:

     Unilever
     On 2 July 2018 Unilever acquired Remgro's 25.75% shareholding in Unilever in exchange for Unilever's
     Spreads business in Southern Africa, as well as a cash consideration of R4 900 million, representing a total
     transaction value of R11 900 million. This transaction valued the Unilever Spreads business at
     R7 000 million. The Unilever Spreads business was transferred to Siqalo Foods, which became a wholly
     owned subsidiary of Remgro on 2 July 2018.

     Remgro's investment in Unilever was previously classified as an associate and accounted for using the
     equity method. With effect from 2 July 2018, Remgro consolidated Siqalo Foods at 100.0%, while the
     investment in Unilever, with a carrying value of R3 582 million, was disposed of for a consideration of
     R11 900 million, realising an accounting profit on the disposal of investment of R8 318 million.

     In terms of IFRS 3: Business Combinations the purchase price of Siqalo Foods was R7 000 million. The
     preliminary fair value of the underlying assets acquired and liabilities assumed at the effective date were:
     intangible assets of R1 710 million, property, plant and equipment of R495 million, and other net liabilities
     of R396 million. The balance of R5 191 million, being the difference between the purchase price and Siqalo
     Foods' identifiable net assets, was allocated to goodwill.

     The fair value adjustment to Siqalo Foods' statement of financial position relates mainly to the recognition
     of brands (inter alia Rama, Stork and Flora) and non-contractual customer relationships. The amortisation
     of these additional assets will result in an annual after-tax expense of R80 million included in headline
     earnings. The impact on headline earnings for the six months ended 31 December 2018 amounted to
     R40 million.

     Community Investment Ventures Holdings Proprietary Limited (CIVH)
     During July 2018, CIVH repurchased 6.3% of its shares from a shareholder, which increased Remgro's
     interest in CIVH to 54.5% (30 June 2018: 51.0%). On 29 August 2018 and 27 September 2018 Remgro
     subscribed for 10 834 CIVH shares amounting to R324 million and 16 596 CIVH shares amounting to
     R490 million, respectively, in terms of two CIVH rights issues. These share subscriptions did not alter
     Remgro's interest in CIVH.

     Prescient China Equity Fund (Prescient)
     During October 2018, Remgro invested $50 million in Prescient. Prescient was launched during
     October 2018 and Remgro and Reinet Investments S.C.A. provided the seed capital. Prescient, which uses
     a systematic, quantitative approach to seek long term capital growth, invests in listed stocks in the Chinese
     market and is benchmarked to the Shanghai Shenzhen CSI 300 index.

     Milestone Capital Strategic Holdings Limited (MCSH)
     Remgro previously invested $43 million in MCSH, consisting of an interest bearing loan of $38 million and
     an investment of $5 million. During August 2018 MCSH repaid the loan and interest amounting to
     $42 million and Remgro disposed of its investment in MCSH for a total purchase consideration of
     $28 million. The purchase consideration was settled with cash amounting to $6 million, 10 714 310 Li Ning
     Company Limited (Li Ning) shares valued at $12 million and JHL Biotech, Inc. bonds (JHL bonds) valued
     at $10 million.

     During December 2018 and January 2019, Remgro disposed of 607 500 Li Ning shares for $1 million and
     10 106 810 Li Ning shares for $11 million, respectively. The JHL bonds are held in escrow and will be
     utilised as Remgro's first contribution towards Milestone China Opportunities Fund IV (the Fund). Remgro
     committed up to a maximum amount of $100 million to the Fund during the period under review.

     RMI
     On 11 September 2018 RMI declared its final dividend for the year ended 30 June 2018, which included an
     alternative to the cash dividend of either receiving a scrip distribution or reinvesting the cash dividend by
     subscribing for new RMI ordinary shares. Remgro elected to reinvest its cash dividend amounting to
     R300 million, and received 7 894 998 new RMI ordinary shares at R38.00 per share.

     RCL Foods
     During December 2018 Remgro acquired a further 7 042 924 RCL Foods shares for a total amount of
     R115 million. This transaction marginally increased Remgro's effective interest in RCL Foods to 77.5%
     (30 June 2018: 77.0%).

     Premier Team Holdings (PTH) and Saracens Copthall LLP (Copthall)
     On 24 October 2018, Remgro entered into an agreement in terms of which it disposed of its 50.0% interest
     in PTH (the entity that owns the Saracens rugby club) for a nominal amount with the right to sell its 49.5%
     interest in Copthall (the entity that houses the Saracens club's stadium, Allianz Park) after three years for
     GBP8 million. The combined transaction gave Remgro the ability to completely exit the Saracens Group.

     Remgro's investments in PTH and Copthall were previously classified as associates and accounted for
     using the equity method. With effect from 24 October 2018, Remgro disposed of its investment in PTH and
     derecognised its associated investment in Copthall. The right to sell Copthall is classified as a financial
     instrument with fair value movements accounted for through profit and loss.

     Other
     Other smaller investments amounted to R145 million.

     Events after 31 December 2018

     There were no significant transactions subsequent to 31 December 2018.


7.   INFORMATION REGARDING UNLISTED INVESTMENTS

     Siqalo Foods
     Siqalo Foods owns the trademarks for Rama, Flora, Stork, Rondo and other spreads related brands in the
     Southern African Customs Union (SACU) countries, as well as a production facility. The business was
     acquired on 2 July 2018 as part of the consideration received on the disposal of Remgro's 25.75%
     shareholding in Unilever.

     During the period under review, Unilever continued to act as principal as part of its obligation under the
     transition agreement. Siqalo Foods will assume full operational accountability by the end of March 2019.

     Siqalo Foods' contribution to Remgro's headline earnings for the six months under review amounted to
     R231 million. The spreads business generated higher headline earnings mainly due to lower overhead
     charges by Unilever during the transition agreement period, a better gross margin realisation from lower
     cost inputs, as well as strong underlying volume growth during the period.

     Air Products
     Air Products has a September year-end and its results for the six months ended 30 September 2018 have
     been included in Remgro's results for the period under review. Air Products' contribution to Remgro's
     headline earnings for the period under review increased by 22.5% to R174 million (2017: R142 million).

     Turnover for Air Products' six months ended 30 September 2018 increased by 7.8% to R1 609 million
     (2017: R1 492 million), while the company's operating profit for the same period increased by 12.4% to
     R490 million (2017: R436 million).

     The period under review saw some improvement in gas volumes, particularly in the On-sites and large
     tonnage gases businesses, as well as some successful cost containment initiatives.

     KTH
     KTH is a leading black-owned investment company with a strong and diversified asset portfolio covering
     the industrial, services, media, financial services and healthcare sectors.

     KTH's contribution to Remgro's headline earnings for the period under review amounted to R77 million
     (2017: R73 million). The increase in earnings was mainly due to positive equity accounting results from
     investments, reduced operating costs for the group and a decrease in the net finance cost paid during the
     period to R73 million (2017: R117 million).

KTH's profit attributable to ordinary shareholders amounted to R101 million (2017: R138 million loss). The
increase in attributable profit was driven by positive equity accounted results from investments and a
decrease in impairments recognised compared to the comparative period. The increase was partly offset
by the loss recognised on the disposal of XK Platinum Partnership and lower group revenue for the period.
The comparative period included an impairment of the investment in Actom Investment Holdings
Proprietary Limited of R412 million which was partly offset by the reversal of impairment of XK Platinum
Partnership (R146 million).

Income from equity accounted investments increased to R220 million (2017: R50 million), partly due to
significant losses recognised in the comparative period on certain equity accounted investments which
yielded positive returns during the period. The major contributors to equity accounted earnings during the
reporting period were the investments in MMI Holdings Limited, Fidelity Bank (Ghana) Limited, Eris
Property Fund and XK Platinum Partnership.

Total
Total has a December year-end and its results for the six months to 31 December 2018 have been included
in Remgro's results for the period under review. Total's contribution to Remgro's headline earnings for the
six months to 31 December 2018 amounted to R101 million (2017: R258 million).

Total's turnover for the six months ended 31 December 2018 increased by 30.8% to R39 505 million (2017:
R30 196 million), mainly due to the increase in the basic fuel price and increased sales volumes in the
mining and reseller sector during the period under review.

The results were negatively impacted by stock revaluation losses of R420 million (2017: gains of
R753 million) due to the sharp decrease in the average basic fuel price and in crude prices during the last
two months of the period under review.

Total experienced lower refining margins in comparison to 2017, due to the impact of the unfavourable
market environment. Natref's average refining margin indicator for the period under review decreased from
$54 per ton to $40 per ton mainly due to the significant increase in average Brent crude price of $71 per
barrel from $56 per barrel.

PGSI
PGSI's contribution to Remgro's headline earnings for the six months to 31 December 2018 amounted to
R8 million (2017: R16 million). PGSI's turnover for the period under review increased from R2 171 million
to R2 238 million. The group's normalised operating profit, which excludes the impact of asset impairments
and charges for the early adoption of new IFRS standards, decreased from R114 million to R93 million.

The group's main operating subsidiary in South Africa, PG Group, manufactures and supplies glass for the
building and automotive industries. The building glass businesses reported a decline in profits due to weak
domestic demand and growing pressure on selling prices in a competitive and oversupplied market. The
automotive businesses fared better despite economic pressures on consumers, lower claims from the
insurance sector and variable demand in export markets. Supplies to local automotive assembly operations
have been challenged by very competitive pricing, especially out of China. The Rest of Africa businesses
reported a decline in profitability with many regions impacted by weaker economic activity, as well as
political instability in some regions.

While the economic climate remains challenging, the group has made good progress in the areas of cost
reduction, manufacturing quality and performance efficiencies. Initiatives to focus on market requirements
and improve the service offering to its customers are progressing well.

Wispeco
Wispeco's turnover for the six months ended 31 December 2018 increased by 16.4% to R1 253 million
(2017: R1 076 million). This resulted mainly from higher selling prices linked to the combined effect of the
global price of aluminium and the rand-dollar exchange rate. Sales volumes for the period were slightly
higher in a subdued Southern African market. Despite higher import duties, price competition against
imports remains intense and margins are tight. Headline earnings for the period under review decreased
to R52 million (2017: R62 million).

Wispeco drives improvement of internal efficiencies and invests in state-of-the-art manufacturing processes
to remain cost effective and competitive against low cost imports. Opportunities to expand its distribution
footprint in Southern Africa are also pursued on an ongoing basis. Wispeco continues to lead the market
with product innovation and software solutions to support the sale of its products. The Crealco brand is
gaining prominence and is firmly positioned as the local benchmark for architectural aluminium products.

CIV group
Remgro has an effective interest of 54.5% in the CIV group, which is active in the telecommunications and
information technology (ICT) sector. The key operating company of the group is Dark Fibre Africa
Proprietary Limited (DFA), which constructs and owns fibre-optic networks. The CIV group also acquired a
34.9% interest in Vumatel Proprietary Limited (Vumatel) during June 2018. Vumatel is a leader in the Fibre-
to-the-Home (FTTH) market. Vumatel's FTTH network spans over 8 000 km over a residential area footprint
which it leases to Internet Services Providers (ISPs), who in turn sell internet products to the consumer.
DFA also has a 90.0% investment in an FTTH operator, South African Digital Villages (SADV), and a 100%
share in Sqwidnet, an Internet-of-Things (IOT) network provider.

The CIV group has a March year-end and therefore its results for the six months ended 30 September 2018
have been included in Remgro's results for the period under review. The CIV group's contribution to
Remgro's headline earnings for the period under review amounted to a loss of R104 million (2017:
R32 million profit). Included in the CIV group's results are finance costs amounting to R136 million, relating
to the financing of the Vumatel acquisition, as well as Vumatel's equity accounted losses amounting to
R41 million. Excluding the aforesaid Vumatel impact, the contribution to headline earnings decreased from
a profit of R32 million to a loss of R11 million mainly due to higher finance costs and depreciation as a
result of the expanding network.

DFA's revenue for the six months ended 30 September 2018 increased by 18.2% to R1 067 million (2017:
R903 million) mainly as a result of solid growth of 24.1% in annuity revenue. DFA's EBITDA for the period
under review increased by 9.5% to R597 million. The current book value of the fibre-optic network is in
excess of R9 billion (30 June 2018: R8 billion). DFA has thus far secured a healthy annuity income of
R152 million per month, with the majority thereof being on long-term contracts with customers.

DFA owns fibre network in all major metropolitan areas, as well as a number of smaller metropolitan areas,
including East London, Polokwane, Tlokwe, Emalahleni, George and Pietermaritzburg. At
30 September 2018, a total distance of 11 190 km (September 2017: 10 138 km) of fibre network had been
completed in the major metropolitan areas, small towns and on long-haul routes. The SADV network adds
another 2 500 km of fibre network.

The DFA revenue model is flexible to adapt to customers' needs and DFA either sells an indefeasible right
of use agreement, which is a lump sum in advance, or on an annuity basis with multi-year contracts of
mostly up to 15 years.

SEACOM
Remgro has an effective interest of 30.0% in SEACOM, which operates Africa's largest international data
network connecting Southern and Eastern Africa with Europe and Asia.

SEACOM has a December year-end and its results for the six months to 31 December 2018 have been
included in Remgro's results for the period under review. SEACOM contributed a loss of R1 million (2017:
headline profit of R32 million) to Remgro's headline earnings for the period under review.

SEACOM's core sales and revenue streams are generated from its established base of Service Provider
(wholesale) customers that also provide the basis for network scale, cost reductions and service innovation.
The Service Provider segment continues to see strong demand for international capacity from large Over
The Top providers and from the growth of Internet Protocol Transit traffic from local ISPs. The SEACOM
international and terrestrial networks are continuously upgraded to keep pace with this demand.

SEACOM Business provides the platform for future growth and improved profitability as the number and
size of corporate customers increases. Revenue for the period under review grew by 35.0%. SEACOM
Business has a healthy pipeline to continue to grow sales and revenue in 2019. In addition to organic
growth, SEACOM Business continues to make acquisitions of ISPs focused largely on the enterprise
market. The acquisitions have had a significantly positive contribution in the reporting period. SEACOM
Business continues to focus its investments on in-building fibre reticulation and terrestrial fibre to unlock
previously unserved areas. The acquisition of FibreCo Holdings Proprietary Limited will enable SEACOM
to grow its customer base, delivering large capacity services between key cities and towns in South Africa.


8.   TREASURY SHARES
     At 30 June 2018, 1 389 033 Remgro ordinary shares (0.3%) were held as treasury shares by a wholly
     owned subsidiary of Remgro. As previously reported, these shares were acquired for the purpose of
     hedging Remgro's share incentive scheme.

     During the period under review Remgro repurchased a further 2 000 000 Remgro ordinary shares at an
     average price of R198.07 per share for a total amount of R396 million, while 13 699 Remgro ordinary
     shares were utilised to settle Remgro's obligation towards scheme participants who exercised the rights
     granted to them.

     At 31 December 2018, 3 375 334 (0.6%) Remgro ordinary shares were held as treasury shares.

CHANGES TO DIRECTORATE

Mr Anthony Edward Rupert has been appointed as a non-executive director of Remgro with effect from the close
of business on 29 November 2018.

DECLARATION OF CASH DIVIDEND

Declaration of Dividend No. 37
Notice is hereby given that an interim gross dividend of 215 cents (2017: 204 cents) per share has been declared
out of income reserves in respect of both the ordinary shares of no par value and the unlisted B ordinary shares
of no par value, for the half-year ended 31 December 2018.

A dividend withholding tax of 20% or 43 cents per share will be applicable, resulting in a net dividend of 172 cents
per share, unless the shareholder concerned is exempt from paying dividend withholding tax or is entitled to a
reduced rate in terms of an applicable double-tax agreement.

The issued share capital at the declaration date is 529 217 007 ordinary shares and 39 056 987 B ordinary shares.
The income tax number of the Company is 9500-124-71-5.

Dates of importance:
Last day to trade in order to participate in the dividend                                    Tuesday, 9 April 2019
Shares trade ex dividend                                                                  Wednesday, 10 April 2019
Record date                                                                                  Friday, 12 April 2019
Payment date                                                                                 Monday, 15 April 2019

Share certificates may not be dematerialised or rematerialised between Wednesday, 10 April 2019, and Friday,
12 April 2019, both days inclusive.

In terms of the Company's Memorandum of Incorporation, dividends will only be transferred electronically to the
bank accounts of shareholders, while dividend cheques are no longer issued. In the instance where shareholders
do not provide the Transfer Secretaries with their banking details, the dividend will not be forfeited, but will be
marked as "unclaimed" in the share register until the shareholder provides the Transfer Secretaries with the
relevant banking details for payout.

Signed on behalf of the Board of Directors.

Johann Rupert                                            Jannie Durand
Chairman                                                 Chief Executive Officer

Stellenbosch
19 March 2019

DIRECTORATE

Non-executive directors
Johann Rupert (Chairman), E de la H Hertzog (Deputy Chairman),
J Malherbe (Deputy Chairman), S E N De Bruyn*, G T Ferreira*,
P K Harris*, N P Mageza*, P J Moleketi*, M Morobe*, F Robertson*,
A E Rupert
(* Independent)

Executive directors
J J Durand (Chief Executive Officer),
M Lubbe, N J Williams

CORPORATE INFORMATION

Secretary
D I Heynes

Listing
JSE Limited
Sector: Industrial - Diversified Industrial

Business address and registered office
Millennia Park, 16 Stellentia Avenue, Stellenbosch 7600
(PO Box 456, Stellenbosch 7599)

Transfer Secretaries
Computershare Investor Services Proprietary Limited,
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
(PO Box 61051, Marshalltown 2107)

Auditors
PricewaterhouseCoopers Inc.
Stellenbosch



Website
www.remgro.com

ANNEXURE A
COMPOSITION OF HEADLINE EARNINGS

                                                                   Six months ended
R million                                                  31 December 2018  31 December 2017
Banking
RMH                                                                   1 252             1 185
FirstRand                                                               523               493

Healthcare
Mediclinic                                                              623               487

Consumer products
Unilever                                                                  -               288
RCL Foods                                                               366               498
Distell(1)   - entity contribution                                      399               354
             - IFRS 3 charge(2)                                        (24)                 -
Siqalo Foods - entity contribution                                      231                 -
             - IFRS 3 charge(2)                                        (40)                 -

Insurance
RMI                                                                     582               626

Industrial
Air Products                                                            174               142
Total                                                                   101               258
KTH                                                                      77                73
Wispeco                                                                  52                62
PGSI                                                                      8                16

Infrastructure
CIV group                                                             (104)                32
Grindrod                                                                101              (52)
Grindrod Shipping                                                      (18)                 -
SEACOM                                                                  (1)                32
Other infrastructure interests                                            2                20

Media and sport
eMedia Investments                                                       11                 3
Other media and sport interests                                         (3)              (21)

Other investments                                                        15                29

Central treasury
Finance income                                                          397               259
Finance costs                                                         (459)             (452)
Option remeasurement                                                    106               134

Other net corporate costs                                             (112)              (60)
Headline earnings                                                     4 259             4 406

Weighted number of shares (million)                                   566.3             566.7

Headline earnings per share (cents)                                   752.1             777.5

Note
(1.) The comparative period includes the investment in Capevin Holdings Limited.
(2.) IFRS 3 charge represents the amortisation and depreciation expenses, net of tax, relating to the additional assets identified when Remgro
     obtained control over these entities.

ANNEXURE B
COMPOSITION OF INTRINSIC NET ASSET VALUE

                                                  31 December 2018              30 June 2018
R million                                  Book value    Intrinsic value    Book value    Intrinsic value
Banking 
RMH                                            15 736             31 359        15 385             30 123
FirstRand                                       5 586             14 412         5 486             14 045
Healthcare
Mediclinic(1)                                  29 758             19 676        29 373             31 329
Consumer products
Unilever                                            -                  -         3 588             11 900
RCL Foods                                       8 541              9 444         8 128             11 534
Distell(1, 2)                                   9 280              7 502         9 110              9 674
Siqalo Foods(3)                                 7 191              5 959             -                  -
Insurance
RMI                                             8 930             17 107         8 479             17 285
Industrial
Air Products                                    1 053              3 831         1 026              4 158
Total                                           2 048              2 679         2 007              2 382
KTH                                             1 989              2 095         1 964              2 218
Wispeco                                           927                941           874                984
PGSI                                              695                759           692                692
Infrastructure
CIV group                                       3 122              5 563         2 301              4 940
Grindrod                                        1 065              1 065         1 624              1 624
Grindrod Shipping                                 326                326           623                623
SEACOM                                             45                858           353                870
Other infrastructure interests                    265                265           256                256
Media and sport
eMedia Investments                                877                802           866                866
Other media and sport interests                   277                272           223                268
Other investments                               4 353              4 460         4 060              4 196
Central treasury
Cash at the centre(4)                          17 212             17 212        13 704             13 704
Debt at the centre                           (14 114)           (14 114)      (14 097)           (14 097)
Other net corporate assets                      1 724              2 191         2 073              2 536
Intrinsic net asset value (INAV)              106 886            134 664        98 098            152 110
Potential CGT liability(5)                                       (4 606)                          (6 438)
INAV after tax                                106 886            130 058        98 098            145 672
Issued shares after deduction of shares
  repurchased (million)                         564.9              564.9         566.9              566.9
INAV after tax per share (Rand)                189.21             230.23        173.04             256.97
Remgro share price (Rand)                                         194.74                           204.29
Percentage discount to INAV                                         15.4                             20.5

Notes
(1.)   Remgro determined recoverable amounts for Mediclinic and Distell which are in excess of the investments' carrying values.
(2.)   The prior year includes the investment in Capevin Holdings Limited.
(3.)   The initial accounting for the Siqalo Foods business combination, including the allocation of goodwill, has not yet been completed. The impairment
       assessment of goodwill will be performed at 30 June 2019 when the accounting for the acquisition has been finalised.
(4.)   Cash at the centre excludes cash held by subsidiaries that are separately valued above (mainly RCL Foods, Distell, Siqalo Foods and Wispeco).
(5.)   The potential capital gains tax (CGT) liability is calculated on the specific identification method using the most favourable calculation for investments
       acquired before 1 October 2001 and also taking into account the corporate relief provisions. Deferred CGT on investments at fair value through
       other comprehensive income is included in "other net corporate assets" above.
(6.)   For purposes of determining the intrinsic net asset value, the unlisted investments are shown at directors' valuation and the listed investments are
       shown at stock exchange prices.


Sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 19/03/2019 05:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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