maiden full year financial results presentation49.9% of financial services portfolio companies arc...

MAIDEN FULL YEARFINANCIAL RESULTS PRESENTATION

September 2018

2

PRESENTERS

JOHAN VAN DER MERWE

CO-CEO, AFRICAN RAINBOW CAPITAL

• Member of ARC Board

• Member of UBI Board

• Member of UBI General Partner Board

• Member of Investment Advisory Committee

of the General Partner

• Member of FinHoldCo Board

BRIDGET RADEBE

CHIEF FINANCIAL OFFICER, UBI

• Member of ARC Investments Board

• Member of Investment Advisory

Committee of the General Partner

• Member of FinHoldCo Board

3

OUTLINE

STRATEGY

FINANCIAL REVIEW

PORTFOLIO OVERVIEW

OUTLOOK

ARC INVESTMENTS STRATEGYJohan van der Merweco-CEO, ARC

01

5

BACKGROUND & TIMELINEARC INVESTMENTS

Ubuntu-Botho Investments (UBI)

2004

Empowerment Partner

to Sanlam 2004

Deal matured in 2013 –

new 10 year partnership signed

African Rainbow Capital

Investments listed September 2017

(51.7% owned by ARC)

African Rainbow Capital

formed in 2015

(UBI funds & owns ARC)

Shareholding in Sanlam

valued at

R15 billion in 2013

(R20.5bn at 30 June 2018)

6

STRATEGIC POSITIONINGARC INVESTMENTS

Permanent capital black-

owned

and black-controlled entity

Underlying

high quality

listed & unlisted

portfolio companies

Diversified portfolio

of investments –

sector specific focused

building blocks

ARC leadership

and partners

have a solid track record

and access to

a strong balance sheet

ARC facilitates access

to investments

that would otherwise

be difficult to access

Investments into portfolio

companies are made

at appropriate

BEE discounts

Listed platform

provides liquidity

to investors

Black economic

empowerment

is a suitable framework

for redistributing wealth

in SA

7

STRATEGIC FOCUSARC INVESTMENTS

ARC INVESTMENTS

FINANCIAL SERVICES

ARC has extensive experience in financial services

to evaluate investment opportunities

Investments are made with stand-alone and synergistic potential

in mind across all businesses in FS portfolio

Significant synergistic opportunities exist

to unlock shareholder value over time

DIVERSIFIED INVESTMENTS

ARC team evaluates opportunities with partners

who are leading sector experts (i.e. Mining, Agri)

Investments are made with stand-alone and synergistic potential

in mind within sub-category (i.e. Telecoms or Property)

Businesses in Diversified Investments offer

significant client pool value to Financial Services businesses

8

INVESTMENT SELECTION CRITERIAARC INVESTMENTS

Experienced,

qualified and

aligned management

A demonstrable

track record

Commercial prospects

which can be enhanced

by having strong

BEE credentials

Established market position,

either existing or disruptive

Robust growth prospects

target return of >16%

Opportunities for

consolidation and synergies among

portfolio companies

within the ARC Fund

9

OPERATING ENVIRONMENTKEY POINTS

Economic transformation

an imperative for SA

Significant

political uncertainty

remains, which impacts level of

consumer, investor and overall

business confidence in economy

Weak equity markets

for most of the period

under review

Some businesses in our portfolio

experienced unfavourable

trading conditions

10

FUND STRUCTUREOVERVIEW

ARC Investments

is incorporated

in Mauritius

ARC Investments

ordinary shares

listed on the JSE

ARC Fund established

in SA as a

BEE investment vehicle

ARC Investments owns

49.9% of financial services

portfolio companies

ARC Investments owns

100% of the non-financial

services portfolio companies

ARC Fund, an

en commandite partnership,

houses investments

UBI Sanlam

ARC

ARC

Investments

ARC FundFinancial

Services

Diversified

Investments

Outside

investors

13.1%

100%

51.7%

50.1%

49.9%100%

48.3%

99.5%Limited partner

11

Our investment selection criteria

are supported by

our empowerment status

We boast

significant empowerment status

with broad base of black individuals

and groups since 2004

Currently about 550 individuals

who each became millionaires

(gross income)

Large number of groups

(trade unions, churches, youth, women)

Development trusts doing significant

investments in social infrastructure

OUR EMPOWERMENT STATUSKEY POINTS

12

PORTFOLIO OVERVIEWAS AT 30 JUNE 2018

FINANCIAL SERVICES

Asset

ManagementInsurance Specialist Banking

Alexander Forbes

Lima Mbeu

Colourfield

A2X

Alternative

Prosperity

Bravura

EdgeGrowth

Sinayo

Constellation

Capital

Ooba

TymeDigital

Anglo African

Finance

InFund Solutions

Acorn Agri & Food

BKB

RSA

Subtropico

ARC Properties

Majik

Val de Vie

ARC Real Estate

RAIN

Metrofibre

Afrimat

GAMGemCap

Payprop

Infoslips

Consumer

Friend

CSG

Agriculture


Property Telecoms BPO

Humanstate

Bluespec

Autoboys

Mining, Construction,

Energy

Last Mile Fund

Elandsfontein

Other

Fledge Capital

ARC Investments

EBS International

LifeCheq

Santam

Indwe

Afrocentric

ARC Health

Life Short term Health

EOH

Capital

Appreciation

13

FINANCIAL REVIEWRETURN ON INTRINSIC PORTFOLIO VALUE (IPV)

R million

Fair value adjustments 708

Dividend income and directors’ fees 87

Interest income on shareholder loans 18

Return before fees 813

Fund management fee (88)

Net IPV returns for the year 725

Weighted Average IPV 6 413

Period under

reviewAnnualised

Return on IPV:

Before dilution

After dilution

INAV increase:

Before dilution

After dilution

11.3%

9.5%

9.1%

7.8%

13.9%

11.7%

11.2%

9.6%

4 473

2 735

231

708

0

3 000

6 000

9 000

Intrinsic Portfolio Value

Opening IPV

Additions - cash

Additions - non-cash

Fair value adjustments

FINANCIAL REVIEW

Bridget Radebe Chief Financial Officer, UBI

02

15

FINANCIAL REVIEWKEY HIGHLIGHTS

INTRINSIC NET ASSET VALUE

(INAV)

▲9.1%TO R9 528 million

(7 September 2017: R8 734 million)

INAV PER SHARE

(after fees)

▲R9.23(R9.12 on a diluted basis)

(7 September 2017: R8.46)

296 DAYS SINCE LISTING

INTRINSIC PORTFOLIO VALUE

▲R8 147 m(7 September 2017: R4 473 million)

CASH CONVERSION –

NET INVESTMENTS OF

▲R2 735 m

ARC INVESTMENTS LISTED ON

THE JSE ON

7 September 2017

CASH IN THE ARC FUND

AT YEAR END OF

R1 576 m

16

FINANCIAL REVIEWSTATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR TO 30 JUNE 2018

R million 30 June 2018

Income 888.9

Fair value movements on Diversified Investments 619.2

Fair value movements on Diversified Financial Services 23.3

Income from Diversified Investments 89.9

Income from Diversified Financial Services 25.2

Interest income on cash and cash equivalents 131.3

Expenses (94.2)

Fees paid to the Fund Manager (94.2)

Net foreign exchange gains/(losses) on mark-to-market of

foreign denominated loans and receivables in the portfolio(12.9)

Other expenses 12.9

Total 794.7

A VIEW INTO THE ARC FUND

R million

From

7 Sept 2017 to

30 June 2018

Fair value movement on the Investment

in the ARC Fund at FVTPL*794.7

Other income 2.1

Other expenses (7.2)

Performance participation expense (115.1)

Profit/(loss) before taxation 674.5

Taxation -

Profit/(loss) for the period 674.5

Other comprehensive income/(loss)

Total comprehensive income/(loss) 674.5

* FVTPL: Fair value through profit or loss

Earnings per share

Basic earnings per share (cents) 81

Diluted earnings per share (cents) 79

17

FINANCIAL REVIEWSTATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018

R million

Reviewed as at

30 June 2018

Unaudited at listing

incorporation

7 Sept 2017

ASSETS 794.7

Non-current assets 2.1

Investment in the ARC Fund at FVTPL* 9 581.7 8 787.0

Current assets

Trade and other receivables 0.9 1.3

Cash and cash equivalents 28.5 45.1

Total assets 9 611.1 8 833.4

EQUITY

Stated capital 8 831.8 8 831.8

Retained income/(Accumulated loss) (131.4) (12.4)

Performance participation reserve 115.1 -

Fair value reserve 794.7 -

LIABILITIES

Current liabilities

Trade and other payables 0.9 14.0

Total equity and liabilities 9 611.1 8 833.4

Number of ordinary shares in issue (million) 1 032.0 1 032.0

Diluted number of ordinary shares (million) 1 045.0 -

Net asset value per share (cents) 931 849

Diluted net asset value per share (cents) 920 849

INAV per share (cents) 923 846

Diluted INAV per share (cents) 912 846

R million

Reviewed as

at 30 June

2018

Unaudited at

listing

incorporation

7 Sept 2017

Investment in the ARC Fund at FVTPL*

The segmental analysis of the Investment

is as follows:

Diversified Investments 6 649.9 3 565.7

Diversified Financial Services 1 555.0 992.8

IFRS Portfolio Value 8 204.9 4 558.5

Cash and cash equivalents in the ARC Fund 1 576.3 4 221.9

Other net assets in the ARC Fund (199.5) 6.6

Total Investment in the ARC Fund at FVTPL 9 581.7 8 787.0

A VIEW INTO THE ARC FUND

* FVTPL: Fair value through profit or loss

1. FVTPL: The net asset value per shares was derived from the (R11.2 million) net asset

value divided by 100 shares at incorporation

Number of ordinary shares in issue (million) 1032.0

Diluted number of ordinary shares (million) 1 045.0

1 045.0 million

NAV per share (cents) 931

INAV per share (cents) 923

Diluted NAV per share (cents) 920

Diluted INAV per share (cents) 912

18

1. The adjustments for Non-IFRS measures include (inter alia): listed investments valued on a 30day VWAP basis (compared to closing spot price), net of deferred taxation

on listed investments valued after recognising B-BBEE discounts (compared to closing spot price), net of deferred taxation

2. Liabilities in the ARC Fund include the R134 million loan facility drawn down in ARC Financial Services Proprietary Limited pertaining to the TymeDigital equity investment,

R84 million for deferred consideration payable mainly to RSA (R45 million) and Subtropico (R24 million) and R30.7 million Fund Manager fees unpaid at year-end

FINANCIAL REVIEWSEGMENTAL REVIEW – IFRS NAV RECON TO INTRINSIC PORTFOLIO VALUE

R million 30 June 2018 7 Sept 2017 Change Comment

Reported IFRS Portfolio Value 8 204.9 4 558.5 3 702.5 Excludes cash and other net assets

Adjust for non-IFRS measures included in Intrinsic Portfolio

Value¹(57.5) (85.2) (28.5)

30 day VWAP difference to spot price on listed portfolio assets 67.3 88.5 (21.3) Spot rate is required under IFRS 13

Deferred taxation on: (5.5) 7.1 (12.6) Deferred taxation only applicable on financial services assets

B-BBEE lock in discount on listed assets (119.3) (115.7) (3.6) Lock in discounts not recognised on listed shares under IFRS

IFRS day one gains reported in equity- (56.1) (56.1)

Other - (9.0) 9.0

Segment reported Intrinsic Portfolio Value 8 147.4 4 473.3 3 674.1

Liabilities in the ARC Fund² (261.6) - (261.6)

Cash and other net assets in the ARC Fund 1 613.5 4 228.5 (2 615.0)

Cash and other net assets in the ARC Investments 28.5 32.4 (3.9)

INAV 9 527.8 8 734.2 793.6

NAV 9 610.2 8 763.3 846.9

19

FINANCIAL REVIEWSEGMENTAL REVIEW – INTRINSIC PORTFOLIO VALUE

R million 30 June 2018 7 September 2017

Diversified Investments6 580.9 3 506.2

Telecommunications 2 279.9 772.6

Business process outsourcing 1 245.0 866.6

Mining, Construction and Energy 1 284.7 1 121.4

Agriculture 877.0 431.8

Property 523.0 313.8

Other 371.3 -

Diversified Financial Services1 566.5 967.1

Insurance and Asset Management 1 147.0 755.1

Specialist Financial Services 261.5 212.0

Banking 158.0 -

Total 8 147.4 4 473.3

Telecommunications 28% 17%

Business Process Outsourcing 15% 19%

Mining, Construction and Energy 16% 25%

Agriculture 11% 10%

Property 6% 7%

Other 5% 0%

Insurance and Asset Management 14% 17%

Specialist Financial Services 3% 5%

Banking 2% 0%

AT YEAR END AT LISTING

20


FINANCIAL REVIEWSEGMENTAL REVIEW – ANALYSIS


R8 147.4 m(30 June 2018)

(September 2017: R4 473m)

AT YEAR END

Listed shares R1 410.7 million

Listed notes R101.4 million

Unlisted shares R5 900.0 million

AT LISTING

Listed shares R1 333.8 million

Listed notes R92.9 million

Unlisted shares R2 463.6 million

Preference shares R17.7 million

Shareholder loans R717.6 million

Preference shares R2.5 million

Shareholder loans R580.5 million

21

INVESTED NET ASSET VALUE

FINANCIAL REVIEWSEGMENTAL REVIEW – ANALYSIS

AT YEAR END

Diversified Investments R6 581 million

Financial Services R1 566 million

AT LISTING

Diversified Investments R3 506.2 million

Financial Services R967 million

Cash and other net assets R1 380 million Cash and other net assets R4 261 million

22

FINANCIAL REVIEWSEGMENTAL REVIEW – DIVERSIFIED INVESTMENTS IPV MOVEMENTS

0

5 000

10 000

15 000

DIVERSIFIED INVESTMENTS PORTFOLIO MOVEMENTS

Major investments at Listing

included:

• Rain R656m

• Afrimat R656m

• Elandsfontein R422m

• Gemcap R324m

• EOH R314m

• EKB R220m

• Acorn Agri & Foods R212m

Fair value adjustments

• Rain R366m

• BKB R196m

• ARC Real Estate R90m

• EOH (R236m)

• Gemcap R69m

• Acorn Agri & Foods R66m

Major acquisitions

• Rain R1 122m

• Bluespec R510m

• Fledge R314m

• Last Mile Fund R133m

• RSA R106m*

• Subtropico R78m*

Significant Portfolio assets

at 30 June 2018:

• Rain R2 144m

• Afrimat R641m

• Bluespec R509m

• Elandsfontein R454m

• Gemcap R429m

• BKB R416m

• Fledge Capital R342m

• Acorn Agri and Foods R277m

• Majik Property Holdings R238m

23

MOVEMENT IN THE PORTFOLIO VALUESfor the period ended 30 June 2018

0

1 000

2 000

3 000

4 000

DIVERSIFIED FINANCIAL SERVICES PORTFOLIO MOVEMENT

Major investments

at Listing included:

• AFGH R127m

• AF Limited R288m

• Ooba R97m

• ARC Health R90m

• Afrocentric R83m

• Colourfield R66m

Fair value adjustments:

• AFGH (R21m)

• AF Limited R33m

• Ooba R12m

• Indwe R14m

Major acquisitions

• AFGH R266m

• TymeDigital R158m


Significant Portfolio assets

at 30 June 2018:

• Alexander Forbes Group

Holdings Limited R371m

• Alexander Forbes Limited R321m

• TymeDigital R158m


• Ooba R110m

Deferred Tax:

A deferred taxation

liability of R17.4 million

resulted from the fair

valuation of the

financial services

assets

24

FINANCIAL REVIEWVALUATION REVIEW – DIVERSIFIED INVESTMENTS KEY INPUTS

Company

Intrinsic Portfolio

Value (IPV)

IPV before minority

and marketability

discounts

Valuation

approach

Minority

discount Marketability discount

Discount rate /

PE Multiple applied

Diversified Investments

Rain 2 144 2 801 DCF 12.5% 12.5% 18.7%

Afrimat 641 755 VWAP adjusted n/a 15.0% n/a

Bluespec 509 509 Acquisition price n/a n/a n/a

Elandsfontein* 454 512 DCF 12.50% 30% 18.0%

Gemcap 429 429 DCF / VWAP n/a n/a 17% - 18.5%

BKB 385 385 Floor price n/a n/a n/a

Fledge 342 423 Sum of the parts 5.0% 15.0% n/a

Acorn Agri and Food 277 277 OTC price n/a n/a n/a

Majik Property Holdings* 238 253 NAV 15.0% 15.0% n/a

Balance of portfolio 1 161 Various Various Various Various

Total Diversified Investments 6 580

*Amounts include both equity and shareholder loans

25

FINANCIAL REVIEWVALUATION REVIEW – DIVERSIFIED FINANCIAL SERVICES KEY INPUTS

Company

Intrinsic

Portfolio Value

(IPV)

IPV before minority

and marketability

discounts

Valuation

approach

Control

premium

Minority

discount

Marketability

discount

Discount rate

/PE Multiple

applied

Financial Services

Alexander Forbes Group Holdings Limited 371 371 VWAP n/a n/a n/a

Alexander Forbes Limited 321 405 Proxy to listed price 20.0% 15.0% 15.0% n/a

TymeDigital 158 158 Acquisition cost n/a n/a n/a n/a

Afrocentric 131 131 VWAP n/a n/a n/a n/a

Ooba 110 136 DCF n/a 7.5% 10.0% 14.9%

Balance of portfolio 476 Various Various Various Various Various

Total Financial Services 1 567

Total Portfolio 8 147 9 366

PORTFOLIO OVERVIEWJohan van der Merweco-CEO, ARC

03

27

ARC INVESTMENTSOUR BUILDING BLOCK APPROACH

ARC INVESTMENTS

FINANCIAL SERVICES

Insurance

Asset Management

Banking

Specialist Financial Services


Telecoms

BPO

Mining, Construction, Energy

Property

Other

Agriculture

28

ARC INVESTMENTSDIVERSIFIED INVESTMENTS

UBI Sanlam

ARC

ARC

Investments

ARC FundFinancial

Services

Diversified

Investments

Outside

investors

13.1%

100%

51.7%

50.1%

49.9%100%

48.3%


29

ARC INVESTMENTSDIVERSIFIED INVESTMENTS

TELECOMS

BUSINESS

PROCESS

OUTSOURCING

MINING,

CONSTRUCTION

& ENERGY

AGRICULTURE PROPERTY OTHER


30

DIVERSIFIED INVESTMENTS TELECOMS

Portfolio company % Holding % of Fund Value

Rain 20.0 26.3

Metrofibre 15.0 1.7

31

TELECOMSRAIN

Major assets are spectrum licenses,

including allocations in the

1800 and 2600 MHz band

The networks business

is responsible for the expansion

of the network and roaming

agreements with other major

telecommunications companies

(Vodacom contract)

The Business to Business division

provides fixed wireless connectivity

to end users

The direct business

(Rain Mobile) was launched on 6 June

– by 30 June some 4860 sim cards

were activated without any marketing

A network of over 2 000 sites

has been established with a target of

3000 sites by Feb 2019

Revenue growth is encouraging and

significant progress being made to

further improve network performance

32

DIVERSIFIED INVESTMENTS BUSINESS PROCESS OUTSOURCING


Gemcap (see next table) 100 5.3

Bluespec 25.0 6.2

Autoboys 51.0 0.5

Humanstate (Payprop Int) 10.0 1.7

EOH (Speculative) 1.7 1.0

Capital Appreciation (Speculative) 3.3 0.6

Gemcap portfolio % Holding

Payprop SA 43.2

Consumer Friend 25.0

CSG 8.0

Infoslips 33.2

33

BUSINESS PROCESS OUTSOURCING BLUESPEC | GEMCAP

BlueSpec is a holding company with

many different specialist businesses

aiming to transform the repair and

recovery industry

Business performance impacted by

lower insurance claims; year on year

vehicle sales also down; competitive

environment created downward

pressure on margins

BlueSpec is 51% black-owned

(WIPHOLD Investment Trust

together with ARC Fund)

The investments

through the Gemcap partnership

are all highly profitable

and cash generative

Gemcap’s largest investment,

Payprop SA, is an established,

market leading residential property

portal that offers a unique end-to-end

rental property management and

compliance software platform

34

DIVERSIFIED INVESTMENTSAGRICULTURE


Acorn Agri & Food 7.4 3.4

BKB Limited 20.0 5.1

RSA 40.0 1.3

Subtropico 25.0 1.0

35

AGRICULTURE ACORN AGRI | BKB

Acorn Agri & Overberg Agri entered into

an Amalgamation Agreement whereby

they amalgamated their respective

businesses into one combined entity

This has created a national agriculture

and food investment company called

Acorn Agri & Food with an attractive

and more diverse portfolio of underlying

businesses

BKB investment in process of being

disposed of

36

DIVERSIFIED INVESTMENTSPROPERTY

Portfolio company % Holding % of Fund value

ARC Real Estate 51.5 1.5

Majik Property Holdings (Squarestone Growth) 16.4 2.9

Val de Vie 20.0 2.0

37

PROPERTYARC REAL ESTATE | MAJIK

ARC Real Estate is a joint venture

between ARC & Buffet KLT

Investments; fund is majority black-

owned with commercial and retail

assets

Majik is a private equity structure which

invest in secondary commercial real

estate in the UK focusing on well-

located high yielding properties

38

DIVERSIFIED INVESTMENTSMINING, CONSTRUCTION AND ENERGY


Last Mile Fund (Bernard Swanepoel / Sipho Nkosi) 71.0 1.6

Elandsfontein 26.3 5.6

Afrimat 19.0 7.9

Global Asset Management (GAM) 26.0 0.7

39

MINING, CONSTRUCTION AND ENERGYELANDSFONTEIN

Elandsfontein

is a phosphate mine

with 2nd largest deposits

known in SA;

phosphate a key ingredient

in fertilizer manufacturing

Project was completed on time, but

various elements simultaneously turned

against the project

During

pre-commissioning phase reverse

flotation process was unable to

consistently yield required phosphate

concentration of 32%

Currently considering listing the

business on the Alternative Investment

Market (AIM) of the LSE

Minor additional capital investment is

required in order to commission the

plant which is planned for early 2019

40

DIVERSIFIED INVESTMENTSOTHER


Fledge Capital 51.0 4.2

41

FUND STRUCTUREARC FINANCIAL SERVICES

UBI Sanlam

ARC

ARC

Investments

ARC FundFinancial

Services

Diversified

Investments

Outside

investors

13.1%

100%

51.7%

50.1%

49.9%100%

48.3%


42

INVESTMENT CLUSTERSFINANCIAL SERVICES

ASSET MANAGEMENT INSURANCE SPECIALIST BANKING

LIFE GENERAL HEALTH

FINANCIAL SERVICES

43

FINANCIAL SERVICESASSET MANAGEMENT AND INSURANCE


LIFE GENERAL HEALTH

FINANCIAL SERVICES

44

FINANCIAL SERVICESASSET MANAGEMENT AND INSURANCE


Alexander Forbes 16.9 8.4

Afrocentric Limited 7.1 1.6

ARC Health 100.0 1.2

Colourfield Liability Solutions 28.3 1.0

Santam Limited 0.4 0.7

Indwe 51.0 0.7

EBS International (Global ASP) 25.0 0.2

LifeCheq 25.0 0.1

Lima Mbeu 60.0 0.1

InFund Solutions 51.0 0.1

45

INSURANCE & ASSET MANAGEMENTALEXANDER FORBES

Strategic focus on this grouping of

portfolio companies is to develop longer

term synergy potential, with AF being

an important cog in this wheel

AF is regarded as a market leader in its

core business in SA

We have a good working relationship

with Mercer to ensure cooperation on

key matters

As a shareholder we are engaging

management and the Board on AF’s

performance

AF has introduced new strategic focus

areas which have not translated to

improved financial performance yet

46

FINANCIAL SERVICESSPECIALIST


LIFE GENERAL HEALTH

FINANCIAL SERVICES

47

FINANCIAL SERVICESSPECIALIST


A2X 20.0 0.2

Bravura 30.0 0.5

Edge Growth 31.0 0.1

Sinayo Securities 49.0 0.5

Constellation Capital 30.3 0.2

Ooba 29.6 1.3

Alternative Prosperity 25.0 0.1

Anglo African Finance 41.4 0.4

48

FINANCIAL SERVICESBANKING


LIFE GENERAL HEALTH

FINANCIAL SERVICES

49

FINANCIAL SERVICESBANKING


TymeDigital (CBSA) 10.0 1.9

MAJOR DEVELOPMENTSSINCE YEAR-ENDJohan van der Merwe

co-CEO, ARC

04

51

MAJOR DEVELOPMENTSSINCE YEAR-END

Rand Mutual Assurance New Sanlam BEE deal

52

RAND MUTUAL HOLDINGSMAJOR DEVELOPMENTS SINCE YEAR-END

THE BUSINESS

• Core business is receipt, adjudication and administration of workers’ compensation claims, including payment of medical claims

• ARC acquired 30% of RMH; obtained regulatory approval

• RMH is growing their Life offering within existing book

• Licensing its custom developed technology to other companies, including RAF and municipalities

THE FINANCES

• RMH is well capitalised and no further capital required for growth

GOING FORWARD

• ARC and RMH setting up a JV to enable RMH to administer Workmen's Compensation obo Compensation Fund

• Aim to convert the RMH COID opportunity with the relevant stakeholders

• Grow the RMH current product offering and membership base both within SA and in rest of Africa

53

NEW SANLAM BEE DEALMAJOR DEVELOPMENTS SINCE YEAR-END

THE BUSINESS

• Sanlam intends to increase empowerment shareholding with 5% to 19%

• ARC will help facilitate transaction to the benefit of Sanlam

• Objective is to broaden the base of empowerment beneficiaries

• Focus will be on women

THE FINANCES

• Various funding options considered, including some vendor financing

• Detail to be shared in further announcements

GOING FORWARD

• Detailed communication to Sanlam shareholders over next few months to obtain shareholder approval

• Confident that transaction will enhance Sanlam’s competitiveness in institutional clients space

OUTLOOK

05

55

OUTLOOK

Political sentiment will continue to drive

confidence and investment climate over

next 18 months

We remain reasonably optimistic about

operating environment and believe that

some more lucrative investments may

come our way which will be fully

assessed

QUESTIONS

06

maiden full year financial results presentation49.9% of financial services portfolio companies arc...

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