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ANNEXURE “A”

ANNUAL FINANCIAL STATEMENTS (Large/ Private Fund)

NAME OF RETIREMENT FUND: GERMISTON MUNICIPAL RETIREMENT FUND

FINANCIAL SERVICES BOARD

REGISTRATION NUMBER:

12/8/382

SOUTH AFRICAN REVENUE

SERVICES APPROVAL NUMBER:

12/20/4/999999

FOR THE PERIOD: 1 JULY 2014– 30 JUNE 2015

CONTENTS

SCHEDULE PAGE

A Regulatory Information* 2

B Statement of Responsibility by the Board of Fund* 10

C Statement of Responsibility by the Principal Officer* 11

D Report of the Independent Auditors 12

E Report of the Board of Fund* 14

F Statement of Net Assets and Funds 25

G Statement of Changes in Net Assets and Funds 26

HA Notes to the Financial Statements 28

HB Report of the Valuator – Statutory Valuation Report as at 30 June 2013* 47

- Interim Valuation Report as at 30 June 2015* 50

IA Investment Schedule pertaining to Annual Financial Statements* 53

IA Notes to the Investment Schedule IA 54

(* Not subject to Audit)

GERMISTON MUNICIPAL RETIREMENT FUND

2

SCHEDULE A

REGULATORY INFORMATION For the period ended 30 June 2015

1. REGISTERED OFFICE OF THE FUND

Address of Registered Office Postal Address

1st Floor Old Mutual Building

98 President Street

Germiston

1401

PO Box 15753

Lambton

1414

Telephone number: +27 (11) 873 – 0900

Fax number: +27 86 650 6381

2. FINANCIAL REPORTING PERIOD

Current: 1 July 2014 to 30 June 2015

Previous: 1 July 2013 to 30 June 2014

3. BOARD OF FUND

Full Name E-mail address Capacity* Date Appointed

or Re-appointed

Date Resigned

Mr. David A Renke [email protected] M/C November 1996 March 2015

Mr. Andre Muller [email protected] M November 2005

Mr. William Van

Reenen Valentin

[email protected] M May 1996

Mr. Coenraad PH

Mocke

none M November 2006

Mr. Carl L Buhr [email protected] M/C April 2008

Mr. Allan G Smith [email protected] M February 2014

Mrs. Marie du Plessis [email protected] M November 2007 16 July 2014

Mr. Josias N Maloka [email protected] M November 2012 November 2014

Mrs. Regina Heenop None M November 2014

Mrs. Mariana Botha [email protected] M November 2014

Mr. Burger Hoffman [email protected] M May 2015

Clr. Makgoba A Kgopa [email protected] E May 2004

Clr. Robert Mashego [email protected] E November 2014

Clr. Faith Mahloma [email protected] E November 2014

Clr. Mahlomola

Mabote

[email protected] E November 2014

Clr. Chris Swanepoel [email protected] E November 2014

Clr. Alco Ngobese [email protected] E November 2014

* M – Member Elected/E – Employer Appointed/C – Chairperson


3

SCHEDULE A

REGULATORY INFORMATION (CONTINUED) For the period ended 30 June 2015

GOVERNANCE NOTE: SCHEDULE OF MEETINGS HELD BY THE BOARD OF FUND IN TERMS

OF THE RULES OF THE FUND

Meeting Date Place of meeting Quorum (Yes/No)

23 July 2014 Germiston Yes

17 September 2014 Germiston Yes

22 October 2014 Germiston Yes

19 November 2014 Germiston Yes

4 February 2015 Germiston Yes

18 March 2015 Germiston Yes

30 March 2015 Germiston Yes

20 May 2015 Germiston Yes

4. FUND OFFICERS

Details Principal Officer Monitoring Person

Full Name: David Andries Renke David Andries Renke

Date of appointment 1 May 2015 1 May 2015

Postal Address: PO Box 15753

Lambton

1414

PO Box 15753

Lambton

1414

Physical Address: 1st Floor, Old Mutual Building

98 President Street

Germiston, 1401

1st Floor, Old Mutual Building

98 President Street

Germiston, 1401

Telephone Number: +27 (11) 873 - 0900 +27 (11) 873 - 0900

E- mail Address: [email protected] [email protected]

Details Principal Officer Monitoring Person

Full Name: Christoffel Francois Botha Christoffel Francois Botha

Date of Resignation: 30 April 2015 30 April 2015


Lambton

1414

PO Box 15753

Lambton

1414

Physical Address: 1st Floor, Old Mutual Building

98 President Street

Germiston, 1401

1st Floor, Old Mutual Building

98 President Street

Germiston, 1401

Telephone Number: +27 (11) 873 - 0900 +27 (11) 873 - 0900

E- mail Address: [email protected] [email protected]


4

SCHEDULE A


5. PROFESSIONAL SERVICE PROVIDERS

Details Actuary Investment Advisors

Full Name: Alexander Forbes Financial Services

Proprietary Limited

ACSIS Limited

Responsible Person: Ms. Denise Higgins Mr. Andrew J Davison


Pretoria

0001

PO Box 650140

Benmore Gardens

2010

Physical Address: Alexander Forbes Building 189 Clarke Street, cnr Clarke & Fehrsen

Streets

Brooklyn

Pretoria

2nd Floor Umnotho Building Old Mutual Square

93 Grayston Drive

Sandton

2196

Telephone Number: +27 (12) 452 7335 +27 (11) 217 1118

Registration no.

Or Qualification

Honours B.Com (Actuarial Science) Cum Laude

Fellow of the Actuarial Society of South Africa

Fellow of the Institute of Actuaries

FAIS 588

Details Benefit Administrator Auditors

Full Name: Germiston Municipal Retirement Fund Deloitte & Touche


Lambton

1414

Private Bag X6

Gallo Manor

Johannesburg, 2052

Physical Address: 1st Floor Room 12

Old Mutual Building

98 President Street

Germiston

1401

Building 8 Deloitte Place

20 Woodlands Drive

Woodmead

2052

Telephone Number: +27(11) 873 - 0900 +27(11) 806 2000

E – mail Address: [email protected] [email protected]

Registration no.: Self Administered Registered Auditors


5

SCHEDULE A


5. PROFESSIONAL SERVICES PROVIDER (CONTINUED)

Details Investment Administrator Investment Administrator

Full Name: Coronation Fund Managers Investec Asset Management Proprietary

Limited


Claremont

7735

PO Box 1655

Cape town

8000

Physical Address: 7th Floor, Montclare Place

Cnr Campground and Main Roads

Claremont

7708

36 Hans Strijdom Ave

Foreshore

Cape Town

8001

Telephone Number: +27(21) 680 2206 or +24(21) 680 2427 +27(21) 416 1933

E – mail Address: [email protected] or

[email protected]

[email protected]

FAIS Registration no.: 548 587


Full Name: Prescient Investment Management

Proprietary Limited

Momentum Asset Management

Proprietary Limited


Tokai

7966

Private Bag 9959

Sandton

2146

Physical Address: Prescient House, The Terraces

Steenberg Office Park

Steenberg Boulevard

Cape Town

7945

4 Merchant Place

1 Fredman Drive

Sandton

2146

Telephone Number: +27 (21) 700 5381 +27 (11) 505 1274




6

SCHEDULE A




Full Name: Allan Gray Limited Pimco Global Bond Fund


V & A Waterfront

Cape Town 8002

Block D, Iveagh Court,

Harcourt Road

Dublin 2 Ireland

Physical Address: Granger Bay Court

Beach Road

V & A Waterfront

Cape Town

8001

Block D, Iveagh Court,

Harcourt Road

Dublin 2

Ireland

Telephone Number: +27 (21) 415 2300 +35 3 1 407 3621




Full Name: Kagiso Asset Management Proprietary

Limited

Catalyst Fund Managers SA Proprietary

Limited


Cape Town

8000

PO Box 44845

CLAREMONT

7735

Physical Address: Fifth Floor MontClare Place

Cnr. Campground and Main Roads

Claremont

7708

4th Floor Protea Place

Protea Rd

Claremont

7708

Telephone Number: +27(21) 673 6307 +27(21) 657 5500




7

SCHEDULE A




Full Name: Liberty Corporate Old Mutual Life Assurance Company (SA)

Limited


Johannesburg 2000

PO Box 2444

Saxonwold 2132

Physical Address: Libridge Building, 9th Floor

25 Ameshoff Street

Braamfontein

2017

Mutual Square

93 Grayston Drive

Sandton

2196

Telephone Number: +27(11) 408 5518 +27(11) 217 1792


Registration no.: FAIS 2409 FSP 26/10/703

Details Investment Administrator

Full Name: Ginsglobal Index Funds (Mauritius)

Limited


Claremont

7735

Physical Address: 7 Noreen Ave

Newlands

7700

Telephone Number: +27(21) 671 5091

E – mail Address: [email protected]

Registration no.: Approved in terms of CISCA (Collective

Investment Scheme Control Act, 2002)


8

SCHEDULE A



Details Custodians Custodians

Full Name: Nedbank Investor Services Standard Bank Nominees (Tvl) Proprietary

Limited

Postal Address: PO Box 1144 Johannesburg

2000

PO Box 2453 Johannesburg

2001

Physical Address: Nedbank Investor Services

2nd Floor

Forum IV

33 Hoofd Street

Braampark

Braamfontein

2nd Floor

25 Sauer Street

Johannesburg

2001

Telephone Number: +27 (11) 667 1374

+27 (11) 667 1309

+27 (11) 636 8647


Registration no.: FSB 9363 FAIS 1949/033444/07

Details Risk Managers Risk Managers

Full Name: Camargue Underwriting Managers Proprietary

Limited

Santam Limited

Postal Address: Postnet Suite 250

Private Bag X4

Bedfordview

2008

PO Box 3881

Tyger Valley

7536

Physical Address: Camargue House

33 Glenhove Rd

Melrose East

Johannesburg

2196

1 Sportica Crescent

Tyger Valley

Bellville

7530

Telephone Number: +27 (11) 778 9140 +27(21) 915 7000


Registration no.: FSP 6344 FSP 3416


9

SCHEDULE A



Details Risk Managers

Full Name: Sanlam Life Insurance Limited


Sanlamhof 7532

Physical Address: Group Risk Administration

2 Strand Street

Bellville

7530

Telephone Number: +27 (21) 947 8464

E – mail Address: [email protected]

Registration no.: FSP 2759

6. PARTICIPATING EMPLOYERS

The list of participating employers is available for inspection at the Fund’s registered offices.


10

SCHEDULE B

STATEMENT OF RESPONSIBILITY BY THE BOARD OF FUND For the period ended 30 June 2015

Responsibilities

The Board of Fund hereby confirm to the best of their knowledge and belief that, during the period under review, in the execution of their

duties they have complied with the duties imposed by the Pension Funds Act Legislation and the Rules of the Fund, including the following:

• Ensured that proper registers, books and records of the operations of the Fund were kept, inclusive of proper minutes of all

resolutions passed by the Board; and

• Ensured that proper internal control systems were employed by or on behalf of the Fund, and

• Ensured that adequate and appropriate information was communicated to the members of the Fund, informing them of their

rights, benefits and duties in terms of the Rules of the Fund; and

• Took all reasonable steps to ensure that contributions were paid timeously to the Fund or reported where necessary in

accordance with Section 13A and Regulation 33 of the Pension Funds Act, 1956; and

• Obtained expert advice on matters where they lack sufficient expertise; and

• Ensured that the Rules and the operation and administration of the Fund complied with the Pension Funds Act, 1956, the

Financial Institutions (Protection of Funds) Act, 2000, and all other applicable legislation, and

• The Fund’s Board of Management confirms that, during the period under review, fidelity cover of R20 million was maintained. The

cover was deemed adequate and in compliance with the Rules of the Fund.

• Investments of the Fund are in accordance with the investment strategy and investment decisions in respect of individual

investment choice.

Approval of the Annual Financial Statements

The Annual Financial Statements of the Germiston Municipal Retirement Fund are the responsibility of the Board of Fund. The Board fulfills

this responsibility by ensuring the implementation and maintenance of accounting systems and practices adequately supported by internal

financial controls. These controls, which are implemented and executed by the Fund and/or its administrators, provide reasonable assurance

that:

• The Fund’s assets are safeguarded, and

• Transactions are properly authorized and executed; and

• The financial records are reliable.

The financial statements set out on pages 25 to 46 have been prepared in accordance with:

• The basis of accounting applicable to retirement funds in South Africa as indicated in the original accounting policies contained

in the notes to the financial statements; and

• The Rules of the Fund; and

• The provisions of the Pension Funds Act in South Africa.

These financial statements have been reported on by the independent auditing firm, Deloitte & Touche, which were given unrestricted

access to all financial records and related data, including minutes of all relevant meetings. The Board of Fund believes that all

representations made to the independent auditors during the audit were valid and appropriate. Deloitte & Touche’s audit report is

presented on page 12.

Instances of Non-Compliance

We are not aware of instances of non-compliance with laws and regulations, including the provisions of laws and regulations that determine

the reported amounts and disclosures in the financial statements.

These financial statements:

• Were approved by the Board of Fund on 21 October 2015 and

• Are certified by them to the best of their knowledge to be true; and to

• Fairly represent the net assets of the Fund at 30 June 2015 as well as the results of its activities for the period then ended;

and

• Are signed on behalf of the Board by:


11

SCHEDULE C

STATEMENT OF RESPONSIBILITY BY THE PRINCIPAL OFFICER For the period ended 30 June 2015

I confirm that for the period under review the Germiston Municipal Retirement Fund has timeously submitted all

regulatory and other returns, statements, documents and any other information as required in terms of the Pension Funds

Act, 1956 and to the best of my knowledge all applicable legislation where adhered to.


14

SCHEDULE E

REPORT OF THE BOARD OF FUND For the period 1 July 2014 to 30 June 2015

The Board hereby presents its report for the period ended 30 June 2015.

1. DESCRIPTION OF FUND

1.1 Type of fund

In terms of section 1 of the Income Tax Act, 1962, the Fund is classified as a pension fund. The Fund was

established as a defined benefit pension fund. Since conversion of the Fund in May 1994 the Fund is now a hybrid

that has both defined benefit and defined contribution features.

In terms of regulation 30(2)(t)(ii) of the Regulations to the Pension Funds Act, the Fund operates as a Type B

umbrella fund with effect from 11 January 2012.

1.2 Benefits

1.2.1 Summary in terms of the Rules of the Fund

(a) Normal retirement

- Age 55 – 65 years.

- Full member share as a gratuity payment, or

- Cash portion according to Member discretion, the balance transferred to an annuity

product of the Member’s choice.

- Retain Member share/Retirement benefit in the Fund until income from retirement

funds is required. Stay on as a Deferred Retiree.

(b) Resignation benefits

- Members’ share in cash or a deferred annuity with the Fund or insurer.

(c) Death benefits

Members that entered service before 1 July 2012:

- Annuity: 50% of monthly remuneration as monthly pension to a qualifying spouse.

- Qualifying children: 15 – 25% of member’s monthly remuneration. - Gratuity: 2 x annual remuneration, plus 1 x annual remuneration for every six years

continuous service after 12 years plus if the cost of the pensions purchased to the

qualifying spouse and children is less than the value of the Fund Credit at the date

of death, the balance shall become payable as a lump sum.

Members that entered service after 1 July 2012:

- Gratuity: 2 x annual remuneration, plus 1 x annual remuneration for every six years

continuous service after 12 years.

- Plus the Member’s Fund Credit paid as part of the gratuity amount.

(d) Medical disability

- Due to ill health: Member’s Fund Credit in cash.

- Total and permanently disabled: Monthly pension equal to 75% of monthly salary,

until the member reach the age of 65. At the age of 65, the member will retire

from the Fund, at which time the member’s retirement benefits will be calculated

on the basis of the Member’s Fund Credit in the Fund.


15

SCHEDULE E

REPORT OF THE BOARD OF FUND (CONTINUED) For the period 1 July 2014 to 30 June 2015

1.2 Benefits (continued)

(e) Resignation as a result of re-organization

A lump sum benefit equal to:

(a) The Member’s Fund Credit at the date of leaving Service; plus

(b) An additional amount to be paid by the Employer, which is equal to the lesser of

(i) The value as calculated by the Actuary of the difference between the

Member’s Normal Retirement Date and the member’s age on the

member’s next birthday, multiplied by 8%, multiplied by the Member’s

Fund Credit; and

(ii) 100% of the Member’s Fund Credit.

(f) Death of pensioners

- Annuity: Full pension for the unexpired period of 60 months from the date of

retirement to the eligible spouse. After 60 months 75% of that pension.

- Qualifying children: A pension 15 – 25% of the pensioner’s pension.

(g) Death of pensioner (defined benefit section)

- In terms of the previous rules 25(2)(a), 25 (2)(b) and 16 (12) an annuity and a

gratuity are payable to the eligible spouse under certain specific conditions.

- A qualifying child/children will receive a pension in accordance with Rule 25(2)(b)

and 16(12).

1.2.1 Unclaimed benefits:

1.2.1.1 The Fund maintains a separate record in respect of any benefit due under the Fund which is

not claimed within 24 months as per the Pension Funds Act. If a potential Beneficiary

approaches the Fund at any stage the Fund shall pay to the Beneficiary his benefit, increased by call interest, that as at the date of payment to the Beneficiary is in excess of any costs

incurred by the Fund in the administration of such benefit and any amount referred to in Rule

18.9. If a person to whom an amount is payable cannot be traced, any such amount shall be

dealt with in terms of Rule 11.1.4.

1.2.2 Beneficiary benefits:

On 25 November 2009 the Board of Fund approved an administration agreement with Standard

Executors and Trustees Limited (SET) and the Fund.

Section 37C of the Pension Funds Act confers discretion to the Trustees of a pension fund as to how

and to whom a death benefit may be paid, which discretion includes payment to a pension beneficiary

fund for the benefit of a dependant. SET has registered the Standard Umbrella Beneficiary Fund in

terms of the Pension Funds Act.


16

SCHEDULE E


1.3 Contributions

1.3.1 Members’ contributions in terms of Rule 4.1

Members have an option to select a contribution rate of 7,5% or the default rate of minimum

9,8833% of pensionable salary depending on the age of the member on date of joining the

Fund. Maximum contribution is 12,3833%

Members from the Germiston Provident Fund who joined the Fund on 1 July 1995 as a result

of a merger were allowed a choice to retain their contribution rate that varied between 5%

and 10% before 1 July 1995 or to contribute according to the Fund’s standardized

contribution rate.

Members may also make additional voluntary contributions as per the Rules of the Fund.

1.3.2. Participating employers’ contribution in terms of Rule 4.2

Members that entered service before 1 July 2012:

Participating employers contribute at a rate of 26,7833%.

- 20.0% Retirement benefits

- 5,5833% Risk benefits

- 1,2% Bonus service

Members that entered service after 1 July 2012:

Participating employer contribute at a rate of 18%

- 14.2% Retirement benefits

- 3.8% Risk benefits

1.4 Rules/ Amendments

1.4.1 Rule Amendments

Rule

Amendment

No

Motivation and description of rule

amendment

Date of Board

of Fund’s

resolution

Effective date Date registered

by the Financial

Services Board

Amendment

No 3

(1) To clarify the practice of the Fund with regard to when late payment interest becomes payable and the rate at which late payment interest is paid, (2) To provide that the Chairman and Vice Chairman of the Trustees are elected annually and that accordingly they have a term of office of one year;

1 August 2014 29 September

2014

29 September

2014

* All rule amendments are available for inspection at the Fund’s registered office.


17

SCHEDULE E


1.5 Reserves and specified accounts established in terms of the Rules of the Fund

1.5.1 The reserve accounts comprises of the following accounts:

i. Risk and Expenses Reserve: To provide death and disability benefits to members and to

finance the administration costs of the Fund.

ii. Bonus Service Reserves: To provide for the payment of a bonus to members for both twenty

and twenty five years continuous service, excluding Members who enter the service after 1

July 2012.

iii. Solvency Reserve – Members: To provide a cushion between the total level of assets allocated

to back the liability of bonus service and disability and death.

iv. Processing Error Reserve: To provide protection against mismatches that occur between the

actual investment or disinvestment of monies and when they are deemed to have occurred in

the calculation of benefits

1.5.2 The Fund accounts comprises of the following:

i. Pensions Account: used to meet the liability of the fund in respect of Pensions in payment

from the Fund and Pensions that have been purchased from a Registered Insurer.

ii. Fund Credit Account: comprises each Members actuarial liability in the Fund and includes

contributions made by the Employer and Member as well as any additional voluntary

contributions made by the Member.

iii. Employer Surplus Account: any amounts allocated in terms of Section 15C(1) of the Act

iv. Member Surplus Account: any amounts allocated in terms of Section 15C(1) of the Act

2. INVESTMENT REPORT

2.1 Investment strategy

The Board of Fund has adopted a medium to long-term horizon in formulating the Fund’s Investment

strategy that complies with the requirements of Regulation 28 of the Pension Funds Act.

2.1.1 General

The investment philosophy of the Fund focuses on providing inflation-beating returns over

the medium to long term, as this is key to providing reasonable benefits to members at

retirement.

2.1.2 Individual Member Choice

The Fund’s investment strategy provides Members with a choice between the following

portfolios:

• Market Portfolio (CPI + 5%) – this is a balanced portfolio with a composite

benchmark as well as an inflationary target of CPI + 5% over rolling 5 year periods.

This portfolio is suitable for the majority of members who have a long term

investment horizon and whose primary concern is beating inflation by a reasonable

margin. The portfolio invests predominantly in growth assets, which may be volatile

so losses of capital are possible.


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SCHEDULE E


2.1 Investment strategy (continued)

2.1.2 Individual Member Choice (continued)

• Stable Portfolio CPI + 3%) – this is an absolute return portfolio that targets CPI +

3% over rolling 3 year periods. It focuses primarily on capital preservation with

reasonable growth and is suitable for investors with a medium term investment

horizon who aim to limit the volatility of their capital.

• Money Market Portfolio – this portfolio is invested in cash and near cash

instruments. The portfolio is benchmarked against STeFI composite and it has an

inflationary target of CPI + 1% over any 12 month period. This portfolio is suitable

for those members with a very short time horizon who are looking for a high degree

of capital security. It is not suitable for younger members.

The Members of the Fund can select a combination of the Market, Stable and Money Market

Portfolios. For those members that do not make a choice, their assets will be invested in the

default investment strategy.

The default investment strategy is a Life Stage Model. This Model aims to balance the risk

and return objectives of Members as they progress toward the normal retirement age of the

Fund. The Life Stage Model migrates the Member from the Market Portfolio at younger ages

to the Stable Portfolio as they approach retirement, ending up in the Money Market Portfolio

just before retirement. This is illustrated in the graph below.

The Fund’s default Life Stage Model is designed for Members who plan to retire at age 65.

Members who plan to retire at a different age are encouraged to make their own investment

choice to coincide with their planned retirement date.

The Market and Stable portfolios are managed by different asset managers and consists of

different types of investments. This ensures that members’ assets are not all invested in one

place, which could be risky. Spreading risk in this way ensures a more consistent level of

return over time.

Members are allowed to make changes to their investment strategy once per annum on the 1st of June. Members who make their own selection will not be subject to the automatic switches

as per the Life Stage Model.

Members are encouraged to carefully consider their own circumstances and retirement goals

so as to make an investment choice that best suits their needs. The trustees encourage

members to take a long term view when saving for retirement and to remain invested through

the ups and downs, accepting that some volatility is to be expected.


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SCHEDULE E



It is important to also keep in mind that a member’s investment time horizon measures beyond

their retirement date. In order to provide for retirement income, members’ monies still need

to be invested in the markets during retirement. This therefore means that a member’s

investment time horizon is relatively long even as they approach retirement and it is important

to allow for the 15 – 25 years that a member might spend in retirement when determining a

member’s time horizon.

The benchmarks and inflationary objectives stated above are targets for each portfolio over

different time periods and performance is not guaranteed.

2.1.3 Unclaimed Benefits

Unclaimed benefits are invested in the call account of the Fund.

2.1.4 Surplus Apportionment Allocations

Surplus payable to Former Members and Employer Surplus are invested in the money market

with Investec.

2.1.5 Reserve Accounts

Reserve accounts are invested in the Market Portfolio of the Fund.

2.1.6 Settlement Income

Settlement income is invested in line with the Investment Strategy.

2.1.7 Derivative Instruments

The Board of Fund utilizes derivative instruments as part of their investment strategy. The

Board of Fund ensures that the following have been complied with:

- The exposure of the asset class does not exceed the maximum percentages as

prescribed to the underlying asset as set out in Regulation 28.

- The investment mandate is in place and reviewed by the Board of Trustees on a

regular basis to ensure compliance with the requirements as prescribed by

Regulation 28 and the relevant Notice.

- The investments are monitored for compliance with the provisions of Regulation 28

and adherence to the Investment mandate.

2.1.8 Hedge Funds

The Board of Fund utilises hedge funds as part of their investment strategy. The Board of

Fund ensures that the following have been complied with:

- The exposure of the asset class does not exceed the maximum percentages as

prescribed to the underlying asset as set out in Regulation 28.

- The investment mandate is in place and reviewed by the Board of Fund on a regular

basis to ensure compliance with the requirements as prescribed by Regulation 28

and the relevant Notice.

- The investments are monitored for compliance with the provisions of Regulation 28

and adherence to the investment mandate.


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SCHEDULE E



2.1.9 Private Equity Funds

The Board of Fund does not utilize private equity funds as part of their investment strategy.

2.1.10 Securities Lending Transactions

The Board of Fund does not utilize securities lending transactions as part of their investment

strategy.

2.2 Management of investments

As at 30 June 2015, the investments under management of the Fund totalled over R2,5 billion as

summarized in the table below:

Market Value

R

Allocation

Market Portfolio 1,922,397,556 75%

Stable Portfolio 267,384,596 10%

Money Market Portfolio 66,078,592 3%

Money Market Portfolio 2 28,086,806 1%

Pensioner Policies 271,108,140 11%

2,555,055,690 100%

The Market Portfolio:

The Market Portfolio has a strategic asset allocation across various asset classes, both local and

international. Within those asset classes, there is diversification across asset managers, each with a

specialist mandate. The pie chart below illustrates the composite benchmark of the Market Portfolio, which

mirrors the strategic allocation.

• SWIX is the Shareholder Weighted Index, and is an index for local equity

• ALBI is the All Bond index, and is an index for local bonds

• CPI is Consumer Price Inflation, where CPI + 3% is the target return for the absolute return

mandates • SAPY is the index for South African Listed Property

• STeFI Composite is the local cash index

• MSCI is the global index for developed market equity

• BCGA is the Barclays Capital Global Aggregate Index for international bonds.


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SCHEDULE E


2.2 Management of investments (continued)

The table below shows the performance of the portfolio (net of fees) against the composite benchmark as

well as the inflationary target as at 30 June 2015:

Market Portfolio Composite Benchmark CPI + 5%

3 months 0.4% 0.1% 3.9%

1 year 5.5% 11.5% 9.8%

3 year annualised 18.6% 19.6% 10.8%


The performance in the 12 months to 30 June 2015 was challenging. None of the domestic equity managers outperformed the target of SWIX +2.5%, with Kagiso delivering a negative return during this period.

This trend continued into the global equity space, with Orbis underperforming its benchmark significantly

and GinsGlobal coming in 0.6% behind its benchmark.

Out of the two domestic absolute return managers, Coronation outperformed the CPI +3% target, while

Prescient detracted from performance during the year.

Amongst the asset classes listed, property was a star performer for the year and Catalyst outperformed

the listed property benchmark by a handsome margin for the 12 months ending 30 June 2015.

The Market Portfolio is the most aggressive of the member investment options and has the highest allocation to growth assets like listed property and equity. Although these asset classes have provided

strong returns in the medium to long run, it might be prudent for members to revise their performance

expectations downwards going forward.

The Stable Portfolio:

This portfolio consists of two managers, Coronation and Prescient. Both of these managers have absolute

return mandates, which mean they aim to deliver positive returns in all market conditions. It is important to

note that this is an aim and there may be times where the portfolio could sustain losses.

The two managers each construct and manage their portfolios differently. Coronation has a low risk global

balanced portfolio that targets positive real returns consistently over time with an overriding focus on

limiting losses. Prescient actively manages the asset allocation and uses derivatives to actively protect

against severe market falls in order to benefit from upside performance while also protecting against severe downside risk.

Although there is underperformance of the inflationary benchmark in the 12 months to 30 June 2015, the

Stable Portfolio has delivered solid performance in the medium to long term. The table below illustrates

the performance of the Stable Portfolio for various periods to 30 June 2015:

Stable Portfolio CPI + 3%

3 moths 0.1% 3.4%

1 year 6.1% 7.7%

3 year annualized 10.2% 8.7%

5 year annualized 8.9% 8.7%

The Money Market Portfolio:

The assets are invested in the Investec Money Market Fund, with performance benchmarked against the

STeFI Composite as well as an inflationary objective of CPI + 1%. The table below shows the performance

of the portfolio against its benchmark as well as the inflationary target as at 30 June 2015.


22

SCHEDULE E


2.2 Management of investments (continued)

Money Market

Portfolio

STeFI Composite CPI + 1%

3 months 1.7% 1.6% 2.9%

1 year 6.4% 6.3% 5.6%



The portfolio is conservatively managed to provide the high degree of liquidity that is required. While

performance against the benchmark has been good, the portfolio has underperformed against the

inflationary objective in the short to medium term.

2.3 Management and performance of investments

The Board of Fund receives Quarterly Performance Reports on the performance of all the

investment managers from the Fund’s Investments Advisors Acsis, which are discussed with

the Investment Advisors in the Board of Fund meetings. Investment managers are called to

present to the Board of Fund on their performance, their current strategy and their

positioning in the market to achieve outperformance of the benchmark in the short to

medium term.

Total Value of Investments Held

2015 2014

Standard Bank R 22,4 million R 19,5 million

Coronation (Equity) R 305,0 million R 334,0 million

Kagiso Asset Managers R 308,1 million R 319,2 million

Momentum Asset Management Propriety Limited R 102,2 million R 102,8 million

Prescient Management Company (Equity) R 104,2 million R 103,0 million

Allan Gray (Equity) R 309,0 million R 309,1 million

Coronation Inflation Plus R 133,9 million R 152,1 million

Investec Money Market R 198,4 million R 192,5 million

Orbis Global Equity Fund R 284,8 million R 298,2 million

PIMCO Global Bond Fund R 82,1 million R 76,5 million

Catalyst R 98,9 million R 93,3 million

Coronation Absolute Returns R 108,6 million R 111,2 million

Prescient Positive Return R 133,5 million R 74,6 million

Ginsglobal R 92,9 million R 80,4 million

Old Mutual (Pensioners Policy) R 9,9 million R 9,8 million

Liberty (Pensioner’s group policy) R 261,1 million R 268,3 million

R 2,555,0 million R 2,544,5 million


23


2.3 Management and performance of investments (continued)

The nature of investments is dynamic. This coupled with the uncertain economic environment globally

means that there is no guarantee that the markets will continue with the stellar performance that

we have experienced in the past two years.

During periods of uncertainty, it is common for investors to try and time the market in an attempt

to avoid losses or to make super-normal profits. We would like to remind members that investing for

retirement is a long term exercise and we encourage members to remain focused on their long term

goals.

3. MEMBERSHIP Active

Members

Deferred

Pensioners/

Retirees

Pensioners

Beneficiaries

Unclaimed

Benefits

At 30 June 2014 1,661 10 56 224 43 Adjustments * (8)

Adjustments ** 5 ***15

Additions 119 3 26 1

Transfers in

Transfers out (1)

Withdrawals (86)

Retirements (33) N/A N/A

Retrenchments N/A N/A

Deaths (14) (9) (5) N/A

Transfers (from)/to pensioners (21) Deferred pensioners/retirees (2) 2

Unclaimed Benefits paid (2)

At 30 June 2015 1,644 12 55 216 57

Number at end of period

(South African citizen)

1,644 12 55 216 57

* Adjustments: Pensions ceased/suspended due to outstanding proof of existence/letters of school

** Adjustments: Pensions reinstated on receipt of proof of study or certificate existence

*** Adjustments: Benefits that were transferred to unclaimed in 2014/2015 which were not included in the

previous year Membership data

4. ACTUARIAL VALUATION

The financial statements summarize the transactions and net assets of the Fund. They do not take account of

liabilities to pay pensions and other benefits in the future. In accordance with the Rules of the Fund, the

actuarial position of the Fund, which does take account of such liabilities, is examined and reported on by the

actuary at intervals not exceeding three years. The last statutory valuation was performed on 30 June 2013 and

the Fund was found to be in a sound financial position. The summary of the actuarial report is contained on page

47 to 49. Subsequent to the statutory valuation above, an interim valuation of the Fund as at 30 June 2014 was

done by the Fund Actuary. The summary of the interim actuarial valuation report as at 30 June 2014 is attached

on page 50 to 52.

5. SURPLUS APPORTIONMENT

A Surplus Apportionment exercise was performed at 30 June 2004. A Nil Scheme was noted by the Financial

Services Board on 27 June 2006.


24


6. HOUSING FACILITIES

The Fund’s Rules provide for the granting of housing loan guarantees.

Guarantees to members were granted in terms of Rule 14.3.2 and the provisions of Section 19(5) of the Pension

Funds Act, 1956, and are secured by Members’ withdrawal benefits. The loan is limited to 33.33% of the

respective member’s fund credit.

7. INVESTMENT IN PARTICIPATING EMPLOYERS

The Fund holds no direct investments in the participating employers.

8. SIGNIFICANT MATTERS

Included in receivables is an amount of R127,894,322.00 (R70,681,753 Capital, R55,438,700.14 Interest and

R1,773,869.34 legal fees) awarded to the Fund by the North Gauteng High Court in the case 36600/2011

pertaining to the claims in terms of Rule 10.8.1 against the Employer for the 2008/2009 financial years. The

capital amount of the original claim of R78,138,124.00 has been reduced with an amount of R7,456,371.00 by the

Court in respect of that portion of the claim pertaining to the pensioners outsourced to Liberty Life and Old

Mutual in the name of the Fund.

9. ADDITIONAL DISCLOSURE

David Andries Renke was appointed as the Principal Officer with effect of 1 May 2015 after the retirement of

Mr. CF Botha as Principal Officer with effect of 30 April 2014. The appointment of Mr. DA Renke as Principal

Officer was recorded by the Registrar of Pension Funds.

10. SUBSEQUENT EVENTS

The Employer (Ekurhuleni Metropolitan Municipality) applied for leave to appeal against the judgement in terms of Rule 10.8.1 against it in the North Gauteng High Court, Case 36600/2011, which application was dismissed by

the Court with costs on 30 July 2015. The Employer however, filed a plea for leave to appeal directly at the

Master of the Supreme Court in Bloemfontein on 24 August 2015. The outcome of this plea is not yet known.


25

SCHEDULE F

STATEMENT OF NET ASSETS AND FUNDS As at 30 June 2015

Notes Current period Previous period

2015 2014

R R

ASSETS

Non-Current Assets 2,555,433,671 2,544,531,685

Furniture and Equipment H1 377,981 50,677

Investments H2 2,555,055,690 2,544,481,008

Current Assets 130,294,885 78,422,307

Accounts Receivable H4 129,216,508 78,370,168

Cash at Bank 1,075,338 45,187

Contributions Receivable H12 3,039 6,952

Total Assets 2,685,728,556 2,622,953,992

Members and Pensioners 2,443,279,863 2,403,510,217

Members Individual Accounts 2,046,058,881 1,986,200,404

Pensioners Accumulated Funds 279,800,560 287,530,812

Members Surplus Account - 54,672,916

Amounts to be allocated H23 117,420,422 75,106,085

Reserves H21 202,153,073 176,528,349

Risk reserve 62,589,362 48,006,612

Solvency Reserve 5,924,556 5,583,743Bonus Service Reserve 129,839,584 123,660,315

Processing Error Reserve 3,799,571 (722,321)

Total Reserves 2,645,432,936 2,580,038,566

Non-Current Liabilities 9,694,155 9,865,608

Employer Surplus Account H21 8,822,750 8,299,616

Unclaimed Benefits H9 871,405 1,565,992

Current Liabilities 30,601,465 33,049,818

Transfers Payable H7 - 599,121

Benefits Payable H8 29,989,541 31,918,899

Accounts Payable H10 611,924 531,798

2,685,728,556 2,622,953,992


26

SCHEDULE G

STATEMENT OF CHANGES IN NET ASSETS AND FUNDS For the period ended 30 June 2015

A B A + B

Notes

Member’s Individual

Accounts & Amounts

to be allocated/

Reserves

Refer Notes 6 and 21

Total

Current period

2015

Total

Previous period

2014

R R R R

Contributions Received and Accrued H12 100,137,484 21,966,512 122,103,996 116,225,202

Net Investment Income H13 56,699,694 131,644,799 188,344,493 486,870,735

Less: Allocated to Unclaimed Benefits H9 - (55,989) (55,989) (118,559)

Other Income H13.1 - 1,938,206 1,938,206 59,408

Plus: Insurance Proceeds - 5,656,512 5,656,512 2,467,176

Less: Administration Expenses H14 (146,385) (4,917,953) (5,064,338) (3,795,013)

Less: Insurance Premiums - (3,789,598) (3,789,598) (3,821,941)

Net Income Before Transfers and Benefits 156,690,793 152,442,489 309,133,282 597,887,008

Transfers and Benefits (219,253,332) (23,962,445) (243,215,777) (191,264,230)

Transfers to Other Funds H7 - (63,050) (63,050) (124,702)

Benefits H8 (219,253,332) (23,899,395) (243,152,727) (191,139,528)

Net Income After Transfers and Benefits (62,562,539) 128,480,044 65,917,505 406,622,778

Funds and Reserves 2,403,510,185 176,528,380 2,580,038,565 2,181,715,403

Balance at Beginning of Period 2,403,510,216 176,528,349 2,580,038,565 2,181,715,403

Prior period adjustments H15 (31) 31

Transfers Between Accounts H21 (12,986,827) 12,986,827 - -


27

SCHEDULE G

STATEMENT OF CHANGES IN NET ASSETS AND FUNDS (continued) For the period ended 30 June 2015

A B A + B

Notes

Member’s Individual

Accounts & Amounts

to be allocated/

Reserves

Refer Notes 6 and 21

Total

Current period

2015

Total

Previous period

2014

R R R R

Investment Return Allocated 115,319,044 (115,842,178) (523,134) -

Current Members 112,321,623 (112,321,623) - -

Former Members 2,516,452 (2,516,452) - -

Employer Surplus - (523,134) (523,134) -

Member Surplus H21 480,969 (480,969) - -

Transfer between Reserve Accounts

Employer Surplus Account - - (8,299,616)

Balance at End of Period 2,443,279,863 202,153,073 2,645,432,936 2,580,038,565


28

SCHEDULE HA

NOTES TO THE FINANCIAL STATEMENTS For the period ended 30 June 2015 PRINCIPAL ACCOUNTING POLICIES

The following are the principal accounting policies used by the Fund. These policies have been applied consistently to all years

presented except for the revised prescribed format for annual financial statements published in the Government Gazette

No 37844 dated 18 July 2014.

Purpose and basis of preparation of financial statements The financial statements are prepared in accordance with the Regulatory Reporting Requirements for Retirement Funds in

South Africa, the Rules of the Fund and the provisions of the Pension Funds Act.

The financial statements are prepared on the historical cost and going concern bases, except where specifically indicated

otherwise in the accounting policies below:

Office equipment

• All equipment is stated at historical cost less depreciation.

• Decreases that offset previous increases of the same asset are charged against the revaluation reserve; all other decreases are charged to the income statement. Each period the difference between depreciation based on the

revalued carrying amount of the assets (the depreciation charged to the Statement of Changes in Net Assets and

Fund) and depreciation based on the asset’s original cost is transferred from the revaluation reserve to

accumulated funds.

• Depreciation is calculated on the straight line method to write off the cost of each asset, or the re-valued

amounts, to their residual values over their estimated useful life as follows:

Computer equipment and software 2 – 5 years

Office equipment 3 – 8 years Furniture and fittings 10 years

• Gains and losses on disposal of office equipment are determined by reference to their carrying amount and are

taken into account in determining the net surplus or deficit.

• Maintenance and repairs, which neither materially add to the value of assets nor appreciably prolong their useful

lives, are charged against income.

Financial instruments

� Measurement

� Financial instruments include cash and bank balances, investments, receivables, accounts payable, leases

and borrowings.

� Financial instruments are initially measured at cost as of trade date, which includes transaction costs.

Subsequent to initial recognition, these instruments are measured as set out below.

� Investments

Investments are classified as investments at fair value through Statement of Changes in Net Assets and Funds and

are measured at fair value. Gains or losses arising from changes in the fair value are presented in the Statement of

Changes in Net Assets and Funds in the period in which they arise.


29

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED For the period ended 30 June 2015 PRINCIPAL ACCOUNTING POLICIES - CONTINUED

� Collective investment schemes

Investments in collective investment schemes are subsequently measured at fair value, which is the quoted net

asset value price, as derived by the collective investment scheme administrator, multiplied by the number of units

held.

� Insurance policies

Linked policies Insurance policies linked to listed investments are valued at fair value and are therefore equivalent to market value

of the underlying assets as certified by the Investment Insurers concerned.

Pensioner annuity policies Pensioner annuity policies purchased in the name of the Fund are disclosed as an asset of the Fund and included

under investments. The corresponding pensioner liability is included under funds and reserves. These policies are

valued, equivalent to the financial soundness valuation as certified by the insurer.

� Derivatives

Derivative contracts are entered into mainly to hedge exposure to equities. The parameters are defined in terms

of the investment policy statement approved by the Board of Fund.

� Commodities

Commodities are valued at fair value and includes food, metal, or other fixed physical investments that investors

buy or sell.

� Debt Instruments

Debt instruments are valued at fair value and is a financial instrument requiring fixed rand payments, such as a

government or corporate bond.

� Equities

Listed equities

Equity instruments are subsequently measured at fair value and the fair value adjustments are recognized in the

Statement of Changes in Net Assets and Funds. The fair value of equity instruments with standard terms and

conditions and traded on active liquid markets is based on regulated exchange quoted ruling closing prices at the close of business on the last trading day on or before the date of the Statement of Net Assets and Fund.

Preference Shares: Listed

The fair value of listed preference shares traded on active liquid markets is based on regulated exchange quoted

ruling closing prices at the close of business on the last trading day on or before the date of the Statement of Net

Assets and Funds.

Bills and Bonds

Bills and bonds comprise investments in government or provincial administration, local authorities, participating employers, subsidiaries or holding companies and corporate bonds.


30

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED For the period ended 30 June 2015

PRINCIPAL ACCOUNTING POLICIES - CONTINUED

� Equities (continued)

Listed bills and bonds

The fair value of listed bills and bonds traded on active liquid markets is based on regulated exchange quoted ruling

closing prices at the close of business on the last trading day on or before the date of the Statement of Net

Assets and Funds.

� Hedge Funds

Hedge funds are valued at fair value.

Accounts receivable and payable

� Accounts receivable are stated at amortized cost less provision for doubtful debts.

� Accounts payable are recognized at amortized cost, namely original debt less principal payments and amortizations.

Cash and cash equivalents

Cash and cash equivalents are measured at fair value.

Provisions

Provisions are recognized when the fund has a present legal or constructive obligation as a result of past events, for which it

is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be

made of the amount of the obligation. Where the effect of discounting to present value is material, provisions are adjusted

to reflect the time value of money.

Reserves

Reserve accounts are accounted for in terms of the Rules of the Fund.

Contributions

Contributions received and accrued

Contributions are measured at the fair value of the consideration received or receivable and are accrued and recognized as

income in accordance with the Rules of the Fund. Contributions received are apportioned between retirement funding and

funding for risk expenses. The apportionment is governed by the Rules of the Fund. Any contributions outstanding at the end

of the reporting period are recognized as a current asset – contributions receivable. Any contributions received in advance

at the end of the reporting period are recognized as a current liability – contributions payable.

Contributions received and accrued only include cash payments from the member and employer.

Voluntary contributions

Voluntary contributions are recognized when they are received for annual payments or accrued where monthly recurring

payments are made. Any contributions outstanding at the end of the reporting period are recognized as a current asset –

contributions receivable. Any contributions received in advance at the end of the reporting period are recognized as a

current liability – contributions payable.


31

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED For the period ended 30 June 2015

PRINCIPAL ACCOUNTING POLICIES - CONTINUED

Contingent assets

The Fund discloses a contingent asset where, as a result of past event, it is virtually certain that economic benefits will flow

to it, but this will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events which are

not wholly within the Fund’s control.

Dividend income, insurance policy income and interest

• Interest is recognized on a time proportion basis, taking account of the principal outstanding and the effective

rate over the period to maturity, when it is determined that such income will accrue to the fund.

• Insurance policy income are recognized when entitlement to revenue is established.

• Gains and losses on subsequent measurement to fair value of investments and of all other financial instruments are

recognized in the net investment income (after investment expenses) during the period in which the change arises.

Transfers to and from the Fund

Section 14 and 15B transfers to and from the fund are recognized on approval being granted by the Financial Services Board.

Individual transfers are recognized when the individual member’s transfer is received or paid.

Comparatives

Where necessary, the comparative figures have been reclassified to conform to changes in presentation in the current

period.

Benefits

Benefits payable are measured in terms of the Rules of the Fund. Benefit payments are recognized as an expense when they

are due and payable in terms of the Rules of the Fund. Any benefits not paid at the end of the reporting period are

recognized as a current liability – Benefits payable.

Pensioner annuities in the name of the Fund (the asset is addressed as part of investments)

The payment of pensions constitutes the payment of a benefit under benefits awarded. The note disclosure for benefits

awarded requires the payment of pensions to be shown under pensions paid.

The Pensioner Liabilities have been insured with Liberty Life and Old Mutual.

Reserves and Fund Accounts

Reserves and fund accounts are accounted for in terms of the Rules of the Fund and the Pension Funds Act.

Administration Expenses

Expenses incurred in the administration of the Fund are recognized in the Statement of Changes in Net Assets and Funds in

the reporting period in which it occurred. An expense is recognized if it is probable that any future economic benefit

associated with the item will flow from the Fund and the cost can be reliably measured. In the event that an expense has not

yet been paid at the end of the reporting period the liability will be reflected in the accounts payable note. If an expense

has been paid in advance or has been overpaid, the asset will be disclosed in the accounts receivable note.


32

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED

For the period ended 30 June 2015

H1 FURNITURE AND EQUIPMENT

Current Period Previous Period

2015 2014

Computer Equipment

and Furniture

Computer Equipment

and Furniture

Gross Carrying Amount

At Beginning of Period 98,665 128,236

Additions 403,213 21,390

Assets Written Off (24,487) (50,961)

At End of Period 477,391 98,665

Accumulated Depreciation and Impairment

At Beginning of Period (47,988) (73,207)

Depreciation Charges (75,909) (25,742)

Accumulated Depreciation on Disposals 24,487 50,961

Net Carrying Amount at End of Period 377,981 50,677


33



H2 INVESTMENTS

2.1 INVESTMENT SUMMARY

A B A+B

Notes

Local Foreign Total

Current period

Total

Previous period

Fair value Current

period

R R R R R

Cash and Deposits 43,541,478 - 43,541,478 40,232,727 43,541,478

Commodities 24,288,390 - 24,288,390 30,393,450 24,288,390

Debt Instruments including Islamic debt instruments 157,660,286 792,958 158,453,244 145,542,376 158,453,244

Property Equities 159,436,378 - 159,436,378 122,513,116 159,436,378

Equities (including demutualization shares) 584,229,777 584,229,777 633,163,216 584,229,777

Insurance policies 269,126,817 1,981,323 271,108,140 1,415,771,178 271,108,140

Collective investment schemes 807,613,853 506,384,430 1,313,998,283 156,864,945 1,313,998,283

Total investments 2,045,896,979 509,158,711 2,555,055,690 2,544,481,008 2,555,055,690


34



H3 HOUSING LOAN GUARANTEES

• The Fund has granted guarantees to Standard Bank for loans granted to members of the Fund. The Fund

utilized R38,462,101

• The amount of the guarantee may not exceed 33.33% of the cash benefit that a member would receive in

terms of the Rules of the Fund and Section 19(5) of the Pension funds Act if he or she terminates

membership to the Fund voluntarily. (Includes amount currently utilized on guarantees)

• The total housing loan guarantee facility available to the Fund is R50 000 000 and is reviewed annually during February or when fully utilized.

H4 ACCOUNTS RECEIVABLE

Current Period Previous Period

2015 2014

Investment Income Accrued 115,054 74,055

Debtors: Pensions 22,565 32,730

Debtors: Members 5,323 154

Debtors: Other 1,042 -

Expenses Paid in Advance 110,000 120,295

Deposit Rent: Penta Place 4,810 4,810

Ekurhuleni Metropolitan Municipality: 2007/2008 and 2008/2009 127,894,322 78,138,124

Insurance Proceeds: Sanlam 1,063,392 -

129,216,508 78,370,168


35

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period ended 30 June 2015

H7 TRANSFERS TO OTHER FUNDS/ TRANSFERS PAYABLE

A B C D A+B+C-D

Effective

Date

No. of

Members

Applied for

Not yet

Approved

(contingency)

At

Beginning

Of

Period

Transfers

Approved

Return

On

Transfers

Total

Assets

Transferred

At end

Of

Period

R R R R R R

Total transfers in terms of Section 14 599,121 599,121 - 63,050 662,171 -

SALA Provident Fund 1 Jun 98 3 599,121 599,121 63,050 662,171 -

Total 599,121 599,121 - 63,050 662,171 -

Transfer Approved -

Return on Transfers 63,050

Statement of Changes in Net Assets 63,050


36


H8 BENEFITS

8.1 BENEFITS – CURRENT MEMBERS AND PENSIONERS

A B C D E A+B+C-D-E

At Beginning Benefits Returns Payments Transferred At end

Of For Allocated To unclaimed Of

Period Current Period Benefits Period

R R R R R R

Monthly Pensions 2,053,701 23,505,686 79,569 24,633,298 - 1,005,658

Lump Sums on Retirement 5,972,975 82,952,661 336,481 85,994,760 9,053 3,258,304

- Full Benefit 5,972,975 82,952,661 336,481 85,994,760 9,053 3,258,304

Lump Sum Before Retirement 23,417,136 118,009,486 1,697,568 123,067,967 - 20,056,223

- Death Benefits 1,170,695 22,362,902 373,152 14,707,509 - 9,199,240

- Withdrawal Benefits 22,246,441 95,646,584 1,324,416 108,360,458 - 10,856,983

Divorce payments - 7,012,355 - 7,012,355 - -

Total 8.1 31,443,812 231,480,188 2,113,618 240,708,380 9,053 24,320,185

Benefits for Current Period (B) 231,480,188

Return Allocated (C) 2,113,618

Statement of Changes in Net Assets and

Funds 233,593,806

8.2 BENEFITS IN TERMS OF FUTURE SURPLUS

A B C D E A+B+C-D-E

At Beginning Surplus Returns Payments Transferred At end

Of Allocated Allocated To unclaimed Of

Period Benefits Period

R R R R R R

Enhancement to Members 475,087 9,156,087 402,834 4,364,652 - 5,669,356

Total 8.2 475,087 9,156,087 402,834 4,364,652 - 5,669,356

Surplus Allocated (B) 9,156,087

Return Allocated (C) 402,834

Statement of Changes in Net Assets and

Funds 9,558,921

Total Benefits (8.1 + 8.2) 31,918,899 243,152,727 2,516,452 245,073,032 9,053 29,989,541


37


H9 UNCLAIMED BENEFITS

H10 ACCOUNTS PAYABLE

Current period Previous period

2015 2014

Attorneys: Len Dekker & Associates - 17,999

Ekurhuleni Metropolitan Contributions 8,346 4,454

Unclaimed Monies 6,345 6,345

Acsis Investment Advisors 56,886 34,200

Alexander Forbes: Actuary 266,307 153,733

Sanlam 266,927 313,669

Other* 7,113 1,398

611,924 531,798

*Other

Lexis Nexis 620

Sharp 406

Telkom ADSL 847

Telmark 5,240

7,113

H11 RETIREMENT FUND TAXATION – NOT APPLICABLE


2015 2014

R R

At Beginning of Period 1,565,992 83,052

Transferred from benefits payable 9,053 1,364,381

Investment income allocated 55,989 118,559

Less: Benefits paid (759,629) -

Balance at end of period 871,405 1,565,992


38


H12 CONTRIBUTIONS

A B C D A+B+C-D

At Beginning Towards Towards Contributions At end

Of Period

Retirement

Re-Insurance

and expenses

Received

Of Period

R R R R R

Member Contributions – Received and Accrued 2,056 65,995,377 - 34,028,440 -

Employer Contributions – Received and Accrued 4,896 34,026,384 18,359,857 84,357,091 3,039

Additional Voluntary Contributions Members - 115,723 - 115,723 -

Other* - 3,606,655 - 3,606,655 -

Total Contributions Received 6,952 103,744,139 18,359,857 122,107,909 3,039

Towards Retirement 103,744,139

Towards Risk 18,359,857

Statement of Changes In Net Assets and Funds 122,103,996

* Employer contributions for Bonus Service

H13 NET INCOME FROM INVESTMENTS

Investment Income


2015 2014

R R

Income from Investments 126,600,835 95,154,379

Dividends 23,539,321 22,689,311

Interest * 71,009,484 15,626,625

Collective Investment Scheme Distribution 18,229,579 15,544,518

Income From Insurance Policies 13,822,451 41,293,925

Adjustment To Fair Value (246,987,735) 246,944,210

Profits Realized On Assets 336,884,193 168,849,629

Losses Realized On Assets (16,422,408) (14,599,637)

Income Before Investment Expenses 200,074,885 496,348,581

Less: Expenses Incurred In Managing Investments 13.1 (11,730,392) (9,477,846)

Net Investment Income 188,344,493 486,870,735

* INTEREST

Reduction of Claim 2007/2008 and 2008/2009 As Per Judgement (7,456,371)

Interest Awarded on Claim 2007/2008 and 2008/2009 55,438,700

Interest Earned on Investments 23,027,155

71,009,484


39


H13 NET INCOME FROM INVESTMENTS (CONTINUED)

13.1 INVESTMENT EXPENSES


2015 2014

Dividend Withholding Tax - 25,508

Asset Managers Fees 11,261,852 9,026,548

Investment Consultants 468,540 425,790

Total Investment Expenses 11,730,392 9,477,846

13.2 OTHER INCOME


2015 2014

SDL Grants Received 3,926 5,454

Investment Switches 500 500

Administration Fees: Former Members 1,731 -

Refund Old Mutual: Upgrade Sishi 158,180 -

Legal Fees: Ekurhuleni 1,773,869 -

Recovery Cost Death Investigations - 53,454

1,938,206 59,408

H14 ADMINISTRATION EXPENSES


2015 2014

Actuarial Fees 260,101 305,080

Administration Fees 146,386 148,166

Audit Fees

Audit Service 254,220 241,680

Audit Expenses 6,840 5,700

Depreciation: At Cost 75,910 25,741

Fidelity Insurance 120,000 120,000

Penalties - 989

Levies and Membership Fees 53,873 40,247

Other 14.1 1,015,417 199,023

Office Expenses 350,034 385,712

Principal Officer Expenses 14.4 814,796 712,572

Staff Expenses 14.3 1,803,060 1,469,338

Trustees Expenses 14.2 163,701 140,765

5,064,338 3,795,013


40


H14 ADMINISTRATION EXPENSES (CONTINUED)

14.1 OTHER

Current period

2015

Previous period

2014

Medical Examination: Ill Health 11,637 -

Special Meetings 3,883 3,360

General Expenses 16,643 14,156

Incity Security 4,171 3,891

Inseta Claims 1,653 1,368

Refreshments 23,741 16,444

Tracing of Dependants 2,309 53,453

Legal Fees: Court Case Against Employer 951,380 106,351

1,015,417 199,023

14.2 PRINCIPAL OFFICER EXPENSES

Current period

2015

Previous period

2014

Remuneration 775,106 680,120

Allowances 19,956 18,516 Subsistence Allowance 850 950

Conference Travel 10,737 4,523

Conference Fees 5,130 5,472

Accommodation 3,017 2,991

814,796 712,572

14.3 STAFF EXPENSES Current period

2015

Previous period

2014

Remuneration 1,787,843 1,465,220

Training 15,217 4,118

1,803,060 1,469,338

14.4 TRUSTEE EXPENSES Current period

2015

Previous period

2014

Meeting allowances 79,741 26,400

Expenses 13,536 37,790

Training 4,104 6,216

Conference Expenses 50,972 43,776

Accommodation 8,026 18,983

Subsistence Allowance 7,322 7,600

163,701 140,765


41


H15 PRIOR PERIOD ADJUSTMENTS

Opening Balance

Current Period

2015

Transfer

2015

Closing Balance

Previous Period

2014

Risk Reserve 45,718,108 (2,288,504) 48,006,612

Bonus Service Reserve 121,732,778 (1,927,537) 123,660,315

Processing Error Reserve 3,585,269 4,307,590 (722,321) Solvency Reserve 5,492,225 (91,518) 5,583,743

31 Pensions Account 9,433,583 (31) 9,433,614

185,961,963 - 185,961,963

During the 2012,2013 and 2014 Financial Years’ Investment Returns Allocation were incorrectly calculated and allocated on the

balances for these Reserves and Pensions Account. These balances included Debtor (Amounts not invested) which should have been

excluded from investment returns.

H16 CONTINGENT ASSET: CONTRIBUTION CLAIM INSTITUTED AGAINST EKURHULENI METROPOLITAN

MUNICIPALITY

A claim has been instituted against the Ekurhuleni Metropolitan Municipality for the contribution required to achieve the required

investment return of 5,5% as stipulated in Rule 14.2.1 of the Fund’s Rules, for the years ended 30 June 2008 and 30 June 2009.

The outcome of these claims is uncertain at this stage. The interest is estimated at R49,607,005.

H17 RISK MANAGEMENT POLICIES

The Board of Fund has overall responsibility for the establishment and oversight of the Fund’s risk management policies. The

Fund’s risk management policies are established to identify and analyze the risks faced by the Fund, to set appropriate risk limits

and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect

changes in market conditions and the Fund’s activities.

Solvency risk

Solvency risk is the risk that the investment returns on asset will not be sufficient to meet the fund’s contractual obligations to

members.

Continuous monitoring by the Board of Fund and the Fund’s actuary takes place to ensure that appropriate assets are held where

the Fund’s obligation to members are dependent upon the performance of specific portfolio assets and that a suitable match of

assets exists for all other liabilities.

Legal risk

Legal risk is the risk that the Fund will be exposed to a contractual obligation for which provision has not been made. Legal

representatives of the fund monitor the drafting of contracts to ensure that rights and obligations of all parties are clearly set

out.

Currency risk

Currency risk is the risk that the value of an instrument will fluctuate in Rands owing to changes in foreign exchange rates. The Fund’s exposure to currency risk is mainly in respect of foreign investments made on behalf of members of the Fund for the

purpose of seeking desirable international diversification of investments.

The Board of Trustees monitors this aspect of the Fund’s investments and limits it to SARB limits of total assets.


42


H17 RISK MANAGEMENT POLICIES (CONTINUED)

Liquidity risk

Liquidity risk is the risk that the Fund will encounter difficulty in raising funds to meet commitments associated with financial

instruments. The Fund’s liabilities are backed by appropriate assets and it has sufficient liquid resources.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation, and cause the Fund to incur

a financial loss.

The Board of Fund monitors receivable balances on an ongoing basis with the result that the Fund’s exposure to bad debts is not

significant. An appropriate level of provision is maintained.

Cash flow risk

Cash flow risk is the risk that future cash flows associated with monetary financial instruments will fluctuate in amount. The Fund

is exposed to cash flow risk in respect of variable rate debt instruments into which it is invested.

The Board of Fund monitors cash flows by using monthly cash flow projections.

Market risk

The key components of market risk are: price risk, interest rate risk and undiversifiable (systematic) risk.

Price risk

Price risk is the risk that the value and/or future cash flows of a financial instrument will fluctuate as a result of changes in

market prices.

Interest rate risk

Interest rate risk is the risk that the value and/or future cash flows of financial instruments will fluctuate as a result of changes

in interest rates.

Investments

Investments in equities are valued at fair value and therefore susceptible to market fluctuations. Investments are managed with

the aim of maximizing the Fund’s returns while limiting risk to acceptable levels within the framework of statutory requirements.

Continuous monitoring takes place to ensure that appropriate assets are held where the liabilities are dependent upon the

performance of specific portfolios of assets, and that a suitable match of assets exists for all non-market related liabilities.

H18 PROMISED RETIREMENT BENEFITS

The actuarial present value of promised retirement benefits, distinguishing between vested benefits and non-vested benefits is

set out in the report of the valuator.


43


H19 RELATED PARTY TRANSACTIONS

Related Party Relationship Description Amount

CF Botha Principal Officer Salary and Expenses 814,796

Board of Fund Trustees Allowances and Expenses 163,701

Ekurhuleni Metropolitan Municipality Participating Employer Risk Contributions 18,196,469

Ekurhuleni Metropolitan Municipality Participating Employer Contributions Bonus Service 3,571,538 Ekurhuleni Metropolitan Municipality Participating Employer Contributions Towards Retirement 65,410,101

Lesedi Municipality Participating Employer Risk Contributions 10,086

Lesedi Municipality Participating Employer Contributions Bonus Service 2,168

Lesedi Municipality Participating Employer Contributions Towards Retirement 36,130

Midvaal Municipality Participating Employer Risk Contributions 86,790

Midvaal Municipality Participating Employer Contributions Bonus Service 18,654

Midvaal Municipality Participating Employer Contributions Towards Retirement 310,891

Tshwane Metropolitan Municipality Participating Employer Risk Contributions 66,512

Tshwane Metropolitan Municipality Participating Employer Contributions Bonus Service 14,295

Tshwane Metropolitan Municipality Participating Employer Contributions Towards Retirement 238,255

88,940,386

H20 OPERATION LEASE COMMITMENTS

Not applicable


44


H21 RESERVE ACCOUNTS

A C D E

Member/

Pensioner

Surplus

Account

Employer

Surplus

Account

Reserve

Accounts Processing

Error

Reserve

Risk

Reserve

Solvency

Reserve

Members

Bonus

Service

Reserve

R R R R R R R

At Beginning of Period 54,672,916 8,299,616 176,528,349 (722,321) 48,006,612 5,583,743 123,660,315

Member Surplus Apportionment - - - - - - -

Employer Surplus Apportionment - - - - - - -

Benefit Enhancement Current Members (45,997,798) - - - - - -

Contributions Received and Accrued - - 21,966,512 - 18,359,857 - 3,606,655

Contributions Transferred From Reserve Accounts - - - - - - -Surplus Improperly Utilized - - - - - - -

Reinsurance Proceeds - - 5,656,512 - 5,656,512 - -

Net Investment Income - - 131,644,799 116,175,519 5,672,098 432,331 9,364,851

Less: Allocated to Unclaimed Benefits - - (55,989) (55,989) - - -

Other Income - - 1,938,206 - 1,938,206 - -

Less: - - (8,707,551) - (8,707,551) - -

Administration Expenses - - (4,917,953) - (4,917,953) - -

Insurance Premiums - - (3,789,598) - (3,789,598) - -

Net Income Before Transfers and Benefits 8,675,118 8,299,616 328,970,838 115,397,209 70,925,734 6,016,074 136,631,821

Transfers and Benefits (9,156,087) - (23,962,445) (63,050) (23,899,395) - -

Benefits (9,156,087) - (23,962,445) (63,050) (23,899,395) - -

Net Income After Transfers and Benefits (480,969) 8,299,616 305,008,393 115,334,159 47,026,339 6,016,074 136,631,821

PRIOR PERIOD ADJUSTMENT H15 31 4,307,590 (2,288,504) (91,518) (1,927,537)

Investment Return Allocated 480,969 523,134 (115,842,178) (115,842,178) - - -

Current Members (112,321,623) (112,321,623)

Former Members (2,516,452) (2,516,452)

Employer Surplus 523,134 (523,134) (523,134)

Member Surplus 480,969 (480,969) (480,969)


45


H21 RESERVE ACCOUNTS

Transfer Between Accounts - - 12,986,827 - 17,851,527 - (4,864,700)

Long Service Bonus Active Members - - (4,864,700) - - - (4,864,700)

Member Share To Risk: Deceased Members - - 17,851,527 - 17,851,527 - -

At End Of Period - 8,822,750 202,153,073 3,799,571 62,589,362 5,924,556 129,839,584


46

NOTES TO THE FINANCIAL STATEMENTS For the period ended 30 June 2015 H23 AMOUNTS TO BE ALLOCATED

Current Period Previous

2015 2014

Opening Balance 75,106,085 74,928,518

Investments returns 190,125 177,567

Less reduction as per judgement (8,113,619) -

Interest as per judgement 50,237,831

Closing Balance 117,420,422 75,106,085

Details of amounts not allocated to Members and Pensioners individual accounts

Rule 14.2.1 stipulates that:

“If the rate of interest earned on the total moneys (including any uninvested moneys) of the Fund during any

financial year should be lower than five and one-half per cent (5,5%) the Council shall contribute to the fund such a

sum as would increase, on being added to the interest actually earned, the rate of interest to five and one-half per

cent (5,5%) during such financial year.”


53

SCHEDULE IA – INVESTMENT SCHEDULE

For the period ended 30 June 2015 Investments1

A+B+C+D+E Y

W+X

Note Note

M1 M2

R R R R R R R R R R % R R R

Cash (including cash at bank) A 44 616 816 16 519 748 7 185 820 68 322 384 51 647 408 16 674 976 16 674 976 0.65% 193 695 737 262 018 121

Commodities B 24 288 390 24 288 390 24 288 390 - - 0.00% 9 645 467 33 933 857

Housing Loans - - 0.00% -

Debt instruments including Islamic debt

InstrumentsC 158 453 244 68 422 108 162 987 451 389 862 803 320 603 543 69 259 260 69 259 260 2.71% 18 513 707 408 376 510

Investment and owner occupied properties D 159 436 378 2 327 281 4 137 320 165 900 979 163 554 688 2 346 291 2 346 291 0.09% 31 450 770 197 351 749

Equities E 584 229 777 371 691 858 95 640 274 1 051 561 909 678 107 160 373 454 749 373 454 749 14.61% 330 893 351 1 382 455 260

Investments in participating employer(s) H - - 0.00% -

Other assets I 887 391 1 157 275 2 044 666 1 157 275 887 391 887 391 0.03% -1 157 275 887 391

Hedge Funds J - - - 0.00% -

Private Equity Funds K - - 0.00% -

Derivative Market instruments G - - 0.00% -

Insurance Policies - - - 0.00% -

- Linked Policies - - 0.00% -

- Non-Linked Policies - - - 0.00% 271 108 140 271 108 140

- Insurance Policies ito Reg 28(3)(c)3 - - 0.00% -

Entities regulated to Reg 28 (8 ) b (iv) - - - 0.00% -

Investments - no information available/ provided

by entityN - - - - 0.00% -

Collective Investments 854 149 897 854 149 897 806 707 360 47 442 537 -854 149 897 -

TOTAL INVESTMENTS 971 024 605 459 848 386 271 108 140 - 854 149 897 2 556 131 028 2 046 065 824 510 065 204 - 462 622 667.00 18.10% - 854 149 897 2 556 131 028

Tot

al

Note

G2

TOTAL

as p

er

Reg

ulat

ion

28

(sch

edule

IB)

Tot

al p

erce

ntag

e

fore

ign

expo

sure

Der

ivat

ive

pos

itions

with

Rec

oncilin

g ite

ms

bet

wee

n Sch

edule

IB a

nd

Sch

edule

IA

Note G1

For

eign

(ex

clud

ing

Afr

ica)

For

eign

Afr

ica

Tot

al F

oreign

Z V+W+X+Y+Z

Not

es2

Direc

t

Inve

stmen

ts

Non

-co

mpliant

Collect

ive

inve

stmen

t

sche

mes

Non

- c

ompliant

Insu

ranc

e po

lices

Der

ivative

position

s witho

ut

residu

al r

isk

Com

pliant

Inve

stmen

ts

Loca

l

E V W X W+XDA B C


54

NOTES TO THE INVESTMENT SCHEDULE For the period ended 30 June 2015

A CASH

Fair value

R

Local 44 616 816.00

Notes, deposits, money market instruments issued by a South

African Bank, margin accounts, settlement accounts with an

exchange and Islamic liquidity management financial instruments

Notes and coins, any balance or deposit in an account held with a

South African bank

Issuers/entities which exceeds 5% of total assets -

Total of Issuers entities with assets less than 5% of total assets 18 790 932.00

A money market instrument issued by a South African bank

including an Islamic liquidity management financial instrument



Any positive net balance in a margin account with an exchange



Any positive net balance in a settlement account with an

exchange, operated for the buying and selling of assets

Issuers/entities which exceeds 5% of total assets

Total of Issuers entities with assets less than 5% of total assets -6 780 761.00

Foreign -

Balances or deposits, money market instruments issued by a

foreign bank including Islamic liquidity management financial

instruments

Any balance or deposit held with a foreign bank


Total of Issuers entities with assets less than 5% of total assets

Any balance or deposit held with an African bank



A money market instrument issued by a foreign bank including an

Islamic liquidity management financial instrument



-

Total Cash 44 616 816.00

Instrument


55

NOTES TO THE INVESTMENT SCHEDULE For the period ended 30 June 2015

B COMMODITIES

Fair value

R

Gold (including Kruger Rands)


Total of Issuers entities with assets less than 5% of total

assets -

Other (provide details)

Issuers/entities which exceeds 5% of total assets - -

Issuers entities with assets less than 5% of total assets

New Palladium ETF 3 883 659 47 846 0.05% 3 883 659

Africa Palladium DEBEN 4 824 006 59 314 0.12% 4 824 006

New Gold Platinum EFT 15 580 725 119 732 0.13% 15 580 725

Total Commodities 24 288 390 - 24 288 390

Instrument Local Holding number % HoldingForeign


56

NOTES TO THE INVESTMENT SCHEDULE - CONTINUED For the period ended 30 June 2015

C DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT INSTRUMENTS

Fair value

Foreign

R

Government debt:

Debt instruments issued by an loans to the government of the

Republic and any debt or loan guaranteed by the Republic

Issuers/entities which exceeds 5% of total assets - - -

Total of issuers/entities with assets less than 5% of total assets 83 153 571 83 153 571

Debt instruments issued or guaranteed by the government

of a foreign country:


Total of issuers/entities with assets less than 5% of total assets -

Bank debt :

Debt instruments issued or guaranteed by a South African Bank

against its balance sheet:- -

Listed on an exchange with an issuer market capitalisation of R20

billion or more, or an amount or conditions as prescribed


Total of issuers/entities with assets less than 5% of total assets 37 430 667 792 958 38 223 625

Listed on an exchange with an issuer market capitalisation of

between R2 billion and R20 billion, or an amount or conditions as

prescribed



Not listed on an exchange

ABSA Bank Ltd 1 461 637 - Unsecured NA 1 461 637 1 461 637

Deutshce Bank RSA Branch -76 656 - Unsecured NA -76 656 -76 656

First Rand Bank Ltd -87 190 - Unsecured NA -87 190 -87 190

Nedbank Ltd 15 334 - Unsecured NA 15 334 15 334

Public debt:

Debt instruments issued or guaranteed by a public entity under the

Public Finance Management Act, 1999 (Act No. 1 of 1999) as

prescribed:-

Airports Company of South Africa Limited (ACSA) 1 747 649 1 747 649

City of Cape town 116 347 116 347

City of Johannesburg Metropolitan 738 309 738 309

Development Bank of South Africa 3 667 206 3 667 206

Ekurhuleni Metropolitan Municipality 125 797 125 797

ESKOM 17 102 17 102

Industrial Development Corporation of South Africa 1 082 098 1 082 098

Thekwini 964 159 964 159

Transnet Limited 4 825 948 4 825 948

The South African National Roads Agency Limited 504 171 504 171

Umgeni Water 247 238 247 238

Redemption

valueInstrument Local

Secured/

Unsecured

Issued/

Guaran

teed


57


C DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT INSTRUMENTS - CONTINUED

Corporate debt (excluding debentures):

Debt instruments issued or guaranteed by an entity that has equity

listed on an exchange -

Listed on an exchange




Land and agricultural Development Bank of SA 699 619 - NA 699 619

The South African National Roads Agency Limited -61 569 NA -61 569

Debentures:



Total of issuers/entities with assets less than 5% of total assets - -


- -

Other





-

TOTAL DEBT INSTRUMENTS INCLUDING ISLAMIC DEBT

INSTRUMENTS 157 660 286 792 958 158 453 244


58


D INVESTMENT AND OWNER OCCUPIED PROPERTIES

Ordinary/ Fair value

ForeignPreference

shares

R

Shares and linked units in property companies, or units

in a collective investment scheme in property, listed on

an exchange:

Issuer market capitalisation of R10 billion or more, or an

amount or conditions as prescribed


Total of issuers/entities with assets less than 5% of total

assets 139 521 898 - 139 521 898

Issuer market capitalisation of between R3 billion and R10

billion, or an amount or conditions as prescribed



assets 14 651 692 - 14 651 692

Issuer market capitalisation of less than R3 billion, or an




assets 5 262 788 - 5 262 788

Shares in property companies and linked units in

property companies, not listed on an exchange:

Provide details

TOTAL 159 436 378 - 159 436 378

Fair value

R

Participating mortgage bonds

Issuers/entities which exceeds 5% of total assets 0 0 0


assets0 0 0

TOTAL 0 0 0

Fair value

R

TOTAL OF INVESTMENT AND OWNER OCCUPIED

PROPERTY 159 436 378 - 159 436 378

% Holding

Instrument Local Secured by Interest rateForeign

Instrument Local Issued sharesHolding

number


59


E EQUITIES

Holding in issuer/

entityFair value

%

R

Listed equities

Issuer market capitalisation of R20 billion or more, or an




Issuer market capitalisation of between R2 billion and R20

billion, or an amount or conditions as prescribed



Issuer market capitalisation of less than R2 billion, or an




Unlisted equities

Bryant Technologies 159 159

TOTAL EQUITIES 584 229 777 - 584 229 777

FOREIGNInstrument LOCAL Issued

shares

Ordinary/

Preference

shares

Holding

number

H INVESTMENTS IN PARTICIPATING EMPLOYER/S

Issued/ Fair valve

Guaranteed

R

Cash -

Commodities -

Housing Loans -

Debt instruments

Total of issuers/entities with assets less than 5% of total 125 797.00

SUBTOTAL - 125 797.00

Secured byListed/not

listedHolding number % Holding Interest rateInstrument Note 1 Local

L CERTIFIED REGULATION 28 COMPLIANT INVESTMENTS

Collective Investments

Investec 190 080 936 8 355 807 198 436 743

Coronation 203 486 894 39 075 494 242 562 388

Allan Gray 308 980 776 - 308 980 776

Prescient 104 158 754 11 236 104 169 990

Total certified Regulation 28 compliant investments 806 707 360 47 442 537 854 149 897

Fair valueInstrument Local Foreign


60


M REGULATION 28 NON COMPLIANT INVESTMENTS

M1 NON COMPLIANT COLLECTIVE INVESTMENT SCHEMES

Allan Gray Orbis 284 798 063 284 798 063

Pimco 82 159 174 82 159 174

Ginsglobal 92 891 149 92 891 149

Total Non 28 compliant Collective investments - 459 848 386 459 848 386

Instrument Local Foreign Fair value

M2 NON-COMPLIANT INSURANCE POLICIES

Linked Policies -

Old Mutual Annuity Policy 8 020 847 1 964 547 9 985 394

Liberty Annuity Policy 261 105 970 16 776 261 122 746

Total non-compliant Insurance Policies 269 126 817 1 981 323 271 108 140

Instrument Local Foreign Fair value

MARKET RISK

EQUITY HOLDINGS

Fair value at end

of period

Open financial

instruments

marked to market

value

Total fair value

equity holdings

and open

instruments

Market movement

by

R R 5%

R

Orbis INSt Global Equtiy Fund 276 634 209 276 634 209 10.82%

Ginsglobal Equity Fund 92 474 935 92 474 935 3.62%

Naspers LTD 72 376 790 72 376 790 2.83%

Standard Bank Group ltd 54 522 602 54 522 602 2.13%

Sasol ltd 52 758 610 52 758 610 2.06%

British American Tobacco PLC (BTI) 35 642 597 35 642 597 1.39%

MTN group 35 297 470 35 297 470 1.38%

Anglo American PLC 32 575 009 32 575 009 1.27%

SAB Miller PLC 32 544 233 32 544 233 1.27%

British American Tobacco PLC (BTIU) 30 064 194 30 064 194 1.18%

714 890 649 714 890 649

Total movement as % of non-current assets plus bank 27.96%

Investment


61


OTHER FINANCIAL INSTRUMENTS

List the 10 largest Rand-values other financial instruments

Fair value at end

of period

Market movement

by 5%

R R

South African Republic 77 035 791 0.03

Pimco Global Bonds 66 548 931 0.03

Standard Bank of SA ltd 63 063 846 0.02

Firstrand 46 037 988 0.02

Nedbank Group LTD 37 612 106 0.01

Growthpoint properties ltd 31 150 549 0.01

Standard Bank Group ltd 27 749 670 0.01

Firstrand 27 726 516 0.01

Standard Bank of SA ltd 24 035 798 0.01

Nedbank Group LTD 23 537 034 0.01

Total value of 10 largest other instruments 424 498 229.00

Total movement as % of non-current assets plus bank 16.60%

Instrument Holding


62


P RECONCILIATION BETWEEN THE INVESTMENTS IN SCHEDULE H2 AND SCHEDULE IA

Fair v

alue c

urr

ent

period (as

per

Sche

dule

H2.1

)

Amort

ised c

ost

curr

ent

period

Cas

h a

t ban

k

Pro

pert

y s

plit

(Schedule I

AD)

Non-compliant

CIS

Non-complian

t Insu

rance P

olicies

Compliant

inve

stments

Deriva

tive

s with r

esidual risk

Inve

stments

no inf

orm

ation (Schedu

le I

AN)

Oth

er

Note

1

Tota

l

Cash 43 541 478 1 075 338 16 519 748 7 185 820 68 322 384

Commodities 24 288 390 24 288 390

Housing Loans - Debt instruments including Islamic debt

instruments 158 453 244 68 422 108 162 987 451 389 862 803

Investment properties and owner occupied

properties 159 436 378 2 327 281 4 137 320 165 900 979

Equities 584 229 777 371 691 858 95 640 274 1 051 561 909

Investments in participating employers -

Hedge Funds -

Private Equity Funds -

Derivative market instruments -

Collective Investment Schemes 1 313 998 283 -459 848 386 854 149 897

Insurance Policies 271 108 140 -271 108 140 -

Entities regulated ito Reg 28(8)(b)(iv) - Investments not disclosed /data not available

for disclosure by entities -

Other assets 887 391 1 157 275 2 044 666 TOTAL INVESTMENTS 2 555 055 690 - 1 075 338 - - - - - - - 2 556 131 028


63

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