rma annual integrated report 2013

ANNUAL REPORT

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This is the fourth integrated report presented by the RMA Group which consists of The Rand Mutual Assurance Company Limited and its wholly owned subsidiaries, RMA Life Assurance Company Limited and RMA Financial Services (Pty) Ltd. The latter company is dormant. A separate and specific annual report is no longer published in respect of RMA Life Assurance Company Limited, as it is a wholly owned subsidiary.

While the publication of an integrated report is only a requirement for listed companies, we believe that integrated reporting supports who and what the RMA Group is and gives us a platform to provide clear and concise information to all our stakeholders.

The concepts of strategy, risk, performance and sustainability are inevitably linked and we thus strive to report across these areas so as to provide stakeholders with a true picture of the company.

The format of the integrated report remains a work in progress; however, we believe that our report goes a long way in meeting the requirements of integrated reporting, most importantly in providing both historic and anticipated information about the Group in a clear, accurate and transparent manner enabling all our stakeholders to gain insight into the business of the Group. This does not mean that we will not continue to look for ways to improve our reporting.

For the second consecutive year we have had elements of the sustainability report externally assured and these are indicated in the shaded areas of the GRI table.

The full financial statements of the Group have been independently audited by EY and are available on request to all our stakeholders.

The Board has reviewed and approved this report on the assurances received from management.

1.1 About our IntegrAted report

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The Rand Mutual Assurance Company Limited (Rand Mutual) was founded in 1894 as a non-profit mutual assurance company with the purpose of administering workers’ compensation for mining industry employees injured in the course and scope of their employment. With the implementation of legislation governing workers’ compensation, Rand Mutual was granted a right to continue to provide such compensation under license from the Minister of Labour. This license is currently granted in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA).

The RMA group also operates under both long and short-term insurance licenses issued by the Financial Services Board (FSB).

Rand Mutual remains a mutual association which means that the policy holders are also the shareholders. The employers are the policy holders and the beneficiaries are the employees and, in the case of fatalities, the dependants of the employees.

Rand Mutual provides insurance to employers in respect of their liability to employees in terms of COIDA. In addition to providing benefits similar to those offered by COIDA, Rand Mutual also offers its members a variety of accident-related insurance products, including the Augmentation Policy, Commuting Journeys Policy, Riot and Mines Auxiliary Forces Policy.

The business of Rand Mutual in essence, is the receipt, adjudication and administration of workers’ compensation claims and includes the payment of medical costs, once-off disability payments and the ongoing payment of pensions in the case of severe disability and death.

Vision

WhAt our busIness Is About

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To be the administrator of choice for occupational injuries and diseases as well as for non-work related health and insurance benefits for the mining sector and other related industry sectors.

Mission

• Provide, with empathy, workers, compensation and health benefits; • Deliver service excellence to all stakeholders through the maintenance of global best practice operational delivery

mechanisms;• Operate according to the highest standards of integrity and responsibility; • Provide cost-effective insurance services, of the highest standards, to our members and insured workforce; • Observe and uphold recognised standards of corporate governance; • Manage capital, reserves and provisions and other assets in a professional and effective manner; • Develop, nurture and empower staff to perform at their optimum output levels.

Values

At RMA we are about people. We cannot be successful without creating and maintaining trust with our stakeholders. We build that trust through:-

• Caring for the wellbeing of our people • Treating others with dignity and respect • Being honest in all we do• Delivering the right service, first time• Empowering our people to use their initiative • Taking responsibility for our actions and helping others to be responsible for theirs• Sharing knowledge • Working as a team

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sTRaTeGY anD DeliVeRY on oBJeCTiVes

The Board followed a structured and systematic process for the strategic review, which is summarised as follows:

• Review of the total organisational environment • Review and confirmation of the main focus of the business• Review of our values and organisational culture• Define management challenge• Strategic mapping• Review of the past strategic objectives from 2012/13• Definition of strategic objectives for 2014 and consider the risks which could prevent

RMA from achieving these objectives • Consider RMA Risk Register and Profile • Consideration of the long-term strategic position

The Board confirmed the overall strategy of RMA which addresses the identified key risk areas and prioritised the following as the 2014 strategic focus areas:

• oDMWa (oCCupaTional Diseases in Mines anD WoRks aCT) It was agreed that RMA would take the initiative to present a partial solution through the development of an intermediate administrative process to interface between the employer and the ODMWA Fund to streamline the claims submission process to the Fund.

• aDDiTional liCense Class 13 Management to commence with the implementation of internal processes and the new corporate structure to facilitate the introduction of the new Class 13 companies into RMA.

• liCense RMa sYsTeMs To The CoMpensaTion FunD It was agreed that RMA would continue engaging the Compensation Fund to pilot our Compcare IT system.

• RMa CaRe FaCiliTY It was agreed to start the project in line with the approved budget and timelines.

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We report on our 2013 performance against strategic objectives as follows:

Strategic Risk 2013 Strategic Objective Performance

Failure to diversify client base and income streams

• Class 13 license New licence approved by the Minister of Labour. Support of Seifsa, NUMSA, MEIBC, UASA and Solidarity obtained.

• Licensing of RMA’s IT system In principle decision to pilot the system obtained from the Compensation Fund.

• Contemporary Product Offering On-going process to evaluate options

• ODMWA assessment and admin capability The systems to administer ODMWA have been fully developed. Discussions are on-going with the Chamber of Mines about rollout.

Target investment returns not achieved • Investment strategy agreed by Board and documented in the Investment Policy.

• Diversification of assets strategy employed

• Thorough research and ongoing monitoring by company’s investment consultant and actuary

• Annual / regular review of investment policy

The average returns over the past five years exceeds the targeted returns. The return in 2013 was 10% and also exceeds the targeted returns. Investment policy development to ensure that meeting targeted returns remains a critical objective.


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Strategic Risk 2013 Strategic Objective Performance

Non-compliance with core regulatory requirements e.g. COIDA, Short-term and Long-term Insurance Act, provisional settlement powers etc.

• Close interaction with Compensation Commissioner and FSB maintained, which would provide early warning of non-compliance concerns

• Quarterly compliance report to Audit & Risk Committee and Board

• Directors’ Development include changes to legislation to familiarise themselves therewith to discharge their duties

• Formal compliance register maintained to ensure compliance with legislation and license conditions and standards.

Full compliance with identified legislation and significant compliance with other legislation remains a priority which has been achieved during 2013. Ongoing implementation of action plans is underway to ensure ability to comply with new legislation, when enacted, particularly new solvency requirements

Ineffective stakeholder engagement • Stakeholder Engagement Policy implemented

• On-going Stakeholder Engagement Assessment Process

• Information Circulars

• Direct member engagement when relevant

• Code of Ethics updated and approved

Stakeholder Engagement Policy implemented with on-going oversight exercised by the Board.

Not meeting SAM requirements • Attending workshops• EXCO agenda item• Engage with actuaries and external experts• Board training• Agenda item on all sub-committees

Detailed action plan to ensure readiness for full compliance when legislation enacted developed and being implemented. All submissions and deadlines met during 2013.


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The Rand Mutual Assurance Company Limited

RMA Financial Services (Pty) Ltd - Dormant RMA Life Assurance Company Limited

100%100%

Corporate Services

Human Resources & Training

Operations Medical Business Risk

Branches

Satellite Offices Xai-Xai

(Mozambique)

Satellite Offices Maseru

(Lesotho)

Satellite Offices Mthatha

(Eastern Cape)

Klerksdorp

Rustenburg

Kimberley

Johannesburg

eMalahleni

Carletonville

Welkom

our struCture

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FiVe YeaR ReVieW as aT 31 DeCeMBeR 2012

GROUP

2013 2012 2011 2010 2009

R000 R000 R000 R000 R000

Gross premium income 1 084 208 952 699 886 190 751 774 716 636

Less: Reinsurance 11 135 10 957 12 824 12 206 10 022

net premium income 1 073 072 941 742 873 366 739 568 706 614

Less: Net benefits and claims 1 013 726 1 011 775 836 317 821 388 691 842

Less: Operating expenses 135 751 122 656 113 103 104 645 97 387

Add: Other Income 3 031 1 346 4 764 227 11 334

Add: Net investment income 624 303 564 174 447 848 486 037 484 779

Add: Realised and net unrealised fair value gains / (losses) 814 016 634 657 479 311 473 362 399 442

operating surplus / (loss) before transfers to provision 1 364 944 1 007 488 885 869 773 161 812 940

Transfers to / (from) long-term provisions 1 012 599 920 237 668 330 703 070 553 066operating surplus / (loss) before taxation 352 345 87 251 197 539 70 091 259 874

Taxation (4 541) 6 134 52 418 (3 914) 36 462

operating surplus / (loss) before dividends 356 885 81 117 145 121 74 005 223 412

Dividends paid - - - - -

surplus / (deficit) after taxation & dividends 356 885 81 117 145 121 74 005 223 412

Shareholders’ equity 1 666 427 1 314 183 1 233 066 1 087 945 1 013 940

Shareholders’ equity as a % of total assets 11,6% 10,2% 10,4% 10,0% 10,1%

Total assets at market value 14 383 330 12 944 378 11 829 425 10 849 332 10 001 016

Policy benefits as a % of net premiums 94,5% 107,4% 95,8% 111.1% 97,9%

Operating expenses as a % of gross premium income 12,5% 12,9% 12,7% 13,9% 13,6%

% Growth / (reduction) on previous year of net investment income 10,7% 18,1% (1,7%) 0,3% (12,6%)

Solvency margin * 155,3% 139,5% 140,5% 147,1% 143,5%

Financial base ** 239,2% 378,0% 353,3% 379,2% 379,2%

* The solvency margin is the shareholders’ equity expressed as a percentage of the greater of the net premium income (gross premium income less reinsurance) for the current or previous financial year.** The financial base is the sum of the shareholders’ equity plus technical provisions (insurance contract liabilities) expressed as a percentage of the greater of the net premium (gross premium income less reinsurance) for the current or previous financial year.


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boArd of dIreCtors

3. Bisnath singh (Jay) (59)

Appointed: 3 April 2007Executive Director and Chief Executive Officer

Mr Jay Singh joined Rand Mutual on 22 April 2007. He had an illustrious career in the medical scheme industry. His previous appointments include Chief Executive Officer of Sizwe Medical Aid, Managing Director (Operations) of Medscheme and more

recently, Chief Operations Officer at Old Mutual HealthCare. He is a member of the Institute of Directors of South Africa. As Rand Mutual’s Chief Executive Officer, Jay is the interface between the Corporate and Operational Management. Jay’s current focus is on strategic development and positioning of Rand Mutual.

4. Mr a letshele, (38)

Appointed: 26 August 2009Non-Executive Director

Mr Adam Letshele was appointed to the RMA Board as an alternate Non-Executive Director on 26/08/2009. He is currently employed by the National Union of Mineworkers

as an advisor on Compensation for Occupational Injuries and Diseases. He was formally appointed to the Board as a Non-Executive Director on the 11/09/2011. He is a Board member of the Ex-Mineworkers Project Fund and serves on the Advisory and Adjudicating Committees to the Compensation Commissioner for Occupational Diseases. He is also a member of the Mine Occupational Health Advisory Committee (MOHAC) and the Technical Committee for Occupational Injuries and Diseases (TCOID).

1. Vincent Maphai (62)

(BA, BA (Hons), BPhil (Cum Laude), M Phil (Magna Cum Laude), D Phil, D. Phil (Honoris Causa)appointed: 1 January 2006Independent Non-Executive Chairman and Chairman of the Nominations Committee

Vincent has, since March 2009, been the Executive Director of Corporate Affairs and Transformation at SAB Limited. Previously he was Chairman of BHP Billiton Southern Africa. He holds a number of qualifications, including a Bachelor of Philosophy cum laude and a Masters Degree in Philosophy magna cum laude (Catholic University of Leuven in Belgium), a PhD from the University of Natal, an Honours Degree in international politics from UNISA and completed an advanced management programme at Harvard University. He is published widely, locally and internationally and has held fellowships at universities of Oxford, Harvard, Princeton and Stanford. From 1996 to 1998 he was professor extraordinaire in the Department of Political Science at the University of South Africa (UNISA). He has held a number of senior positions on various Boards, commissions and Universities and is currently Chairman of the National Responsible Gambling Programme (NRGP) and a commissioner on the National Planning Commission.

2. abre Van Vuuren (54)

(B Comm, MDP: DPLR, Advanced Labour Law)appointed: 6 September 2007Deputy Chairman, Shareholder appointed Non-Executive Director and Chairman of the HR & Remunerations Committee

Abré is the Executive: Services, of Harmony Gold Mining Co Ltd, and Chairman of Minemed Medical Aid Scheme. He has

extensive experience within the area of human resources.

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boArd of dIreCtors

5. Ms nF Ravele, (31)

(FASSA, B. Bus. SC (Actuarial Science), Post Graduate Diploma in Actuarial Science)Appointed: 26 May 2009Independent Non-Executive Director and Member of the Human Resources Committee and the Investment Committee

Ms Ndivhuwo Ravele was appointed to the Rand Mutual Board on 26 May 2009. She is the Deputy CEO of AonHewitt South Africa.Ms Ravele resigned from the Board of the Group on the 27 November 2013

6. Mr Jpl Bezuidenhout, (54)

(MBA (UNEM); Post Graduate Diploma in Business Management (DTMS); Post Graduate Certificate in Managing Social Security and Pensions (MMSP) from the Faculty of Commerce, Law & Management, Graduate School of Public and Development Management from the University of the Witwatersrand, National Certificate in Human Resources

Management and Personnel Management RAU), Government Mining Engineer Mining Certificate of Competency (Mine Overseer), Qualifications in Mining, Surveying and Environmental Studies (Ventilation); and General Staff courses (SANDF)Appointed: 22 April 1996Non-Executive Director

Mr Koos Bezuidenhout joined the Board of Rand Mutual on 1 April 1996. He is the Chief Executive Officer of the UASA - The Union (“UASA”), the President of the Federation of Unions of South Africa (“FEDUSA”), Chairman of the Engineering Industrial Workers Provident Fund, Trustee of Sentinel Mining Industry Retirement Fund, and Mine Employees’ Pension Fund. He is the Managing Director of UASA Financial Services “FINCENTS” and UASA Marlicht Investments. He also serves

on the Joint Presidential Advisory Group, NEDLAC EXCO and the Millennium Labour Council (“MLC”). He serves as the Director responsible for Africa on the AIST World Board situated in Brussels. He also serves, on invitation, on the World Diamond Council situated in Antwerp, Belgium. He is the owner and Director of YASNY (“You Ain’t Seen Nothing Yet”) Investments.

7. Mr eh lufhugu, (38)

(CA) (SA), B Compt (Hons)Appointed: 23 October 2007Chief Financial Officer

Mr Eugene Lufhugu, who is a Chartered Accountant (SA), joined Rand Mutual on 23 October 2007 as Chief Financial

Officer, and in this capacity has overall responsibility for the Rand Mutual Group’s financial affairs and reporting. He previously worked in the banking, automotive and auditing and consulting sectors.

8. Ms M pillay, (42)

(CA (SA), B Comm, H Dip Acc)Appointed: 27 August 2008Non-Executive Director.

Ms Meroonisha Pillay, Financial Controller at Anglo American Platinum Limited, was appointed as a Non-Execuitve Director

on 27 August 2008. Prior to joining Anglo American Platinum Limited, she was a Senior Manager at Deloitte & Touche.

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boArd of dIreCtors

9. Mr R naidoo, (57)

(CA (SA), B Comm (Accounting), Dipl Acc.)Appointed: 27 August 2008Non-Executive Director & Member of the Audit Committee

Mr Reg Naidoo was appointed to the Rand Mutual Board on 27 August 2008. He is the Head of Finance, at Sibanye Gold

10. Mr hJ schalekamp, (41)

(BA Honns, MBA) Appointed: 5 July 2010Non-Executive Director

Mr Henk Schalekamp was appointed to the Board in 2010 as a Non-Executive Director. He serves as a Trustee on the

Engineering Industries Pension Fund (EIPF) and the Metal Industries Provident Fund (MIPF).

11. Dr MJ Mentz, (51)

MBChB, DOH, MBA (UP)Appointed: 31 January 2001Non-Executive Director and Chairman of the Social and Ethics Committee

Dr Mel Mentz was appointed as Chairman of the Social and Ethics committee of Rand Mutual in 2011. Mel is the Executive Manager Sustainability at Lonmin Plc, responsible for Sustainability, Health and Environment. He is a member of the Institute of Directors of South Africa, Trustee on the Lonmin Development Trust and represents Lonmin as member on the International Council for Mining and Metals (ICMM), International Platinum Association (IPA) and the South African Chamber of Mines.

12. Mr M p lynam, (53)

BE (Mechanical), Insead AMPAppointed: 5 August 2005Non-Executive Alternate Director and Chairman of the Investment Committee

Mark Lynam is Chairman of the Investment Committee at The Rand Mutual Assurance Company Limited. Mark was previously SVP finance and commercial and SVP Group Treasury at Anglogold Ashanti Limited.

13. Ms. D Motsepe, (57)

BCompt, MBAAppointed: 22 November 2013Independent Non-Executive Director

Ms. Daphne Motsepe, has served as the Managing Director of Postbank. Ms. Motsepe also served as the Chief Executive of

Unsecured Lending at Absa Bank Ltd. and its holding company Absa Group Ltd. until June 2012. She was amongst others Deputy Managing Director and Business Loans Manager, Get Ahead Foundation; Regional Finance Executive, National Sorghum Breweries, General Manager, Emalahleni, National Sorghum Breweries; Group Compensation Benefits Manager, Engen and Executive Director, Womens Development Banking. Ms. Motsepe returned to South Africa from an assignment to Barclays in the United Kingdom, where she worked in the commercial and retail banking sectors. Prior to her UK assignment, she held senior positions in the Retail Bank. Ms. Motsepe served as a Non Executive Director at Ubank Ltd. Investec plc. Highveld Steel and Vanadium Corp. Ltd.

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boArd of dIreCtors

14. Ms h Masondo, (46)

(Ba,llB ,llM (Wits university), llM (Duke university, north Carolina,usa)

appointed: 22 november 2012

independent non-executive Director Ms Happy Masondo was appointed to the Rand Mutual Board on 22/01/2013. She is an admitted attorney, a partner and director at Werksmans. She was formerly employed as the Executive Vice President – Legal Services and General Counsel at SAA. Prior to joining the airline she was in the employ of White & Case LLP, an international law firm with its headquarters in New York (USA).

15. Dr. J steele, (45)

MBChB, Doh, MBa (up) appointed: 22 november 2012

non-executive Director Dr. James Steele was appointed to the Rand Mutual Board on

22/1/2013. He is the Head of Health, AngloGold Ashanti, SA Region.

16. Mr J Gardner, 62

aCis, h Dip Tax law, MBa

appointed: 27 november 2013

independent non-executive Director.John Gardner rejoined the RMA Board as an independent

Non-Executive Director after a four year break. He chairs the Audit & Risk Sub-Committee as well as the IT Sub-Committee. He was previously employed by Gold Fields Limited where his title was Vice President – Risk. His responsibilities included the Gold Fields risk management function, its global insurance programme and its healthcare operations.

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exeCutIve CommIttee

The details relating to the executive Committee members are set out below:

Mr Bisnath (Jay) singh (59)

Chief executive officerJay joined Rand Mutual on 3 April 2007. He had an illustrious career in the medical scheme industry. His previous appointments include Chief Executive Officer of Sizwe Medical Aid, Managing Director (Operations) of Medscheme and more recently, Chief Operations Officer at Old Mutual HealthCare. He is a member of the Institute of Directors of South Africa. As Rand Mutual’s Chief Executive Officer, Jay is the interface between the corporate and operational management. Jay’s current focus is on strategic development and positioning of Rand Mutual.

Mr eugene hangwani (eugene) lufhugu (38)

(Ca (sa), B Compt hons)

Chief Financial officerEugene, a Chartered Accountant (SA), joined Rand Mutual on 23 October 2007 as Chief Financial Officer, and in this capacity has overall responsibility for the Rand Mutual Group’s financial affairs and reporting. He has previously worked in the banking, automotive and auditing sectors.

Mr khathutshelo patrick (patrick) Matshidze (49)

(MBa – healthcare Man., Mph – epidemiology and Biostatistics)

Chief operations officerPatrick was appointed on 1 December 2009 as General Manager: Operations. He was previously with the Council for Medical Schemes. Before then, he worked in the medical research, public and private healthcare sectors

Dr Deodat kritzinger (53)

(MBChB, MpraxMed, Doh, MBa)

General Manager: Medical

Deodat joined Rand Mutual in 2001 and was promoted to the Executive Committee in 2008. He is responsible for the entire Medical Division. He is an Extra-ordinary Professor and Lecturer of the School of Pharmacy, University of Northwest.

neema onsongo (43)

(MBa, pDM human Resources, BBa)

General Manager: human Resources & TrainingNeema was appointed as General Manager: Human Resources & Training on 1 January 2014. She previously worked in the Financial Services, Management Consulting and Manufacturing Industries.

ernest hadzhi (41)

(sTD,(pMD,FMp),(iCBs, Cop)

General Manager: Claims Ernest joined Rand Mutual Assurance on 15 April 1996 after completing his Senior Secondary Teachers Diploma. After completing his teaching studies, he enrolled as a full time student at the Insurance Institute of South Africa and obtained his Certificate of Proficiency as well as on Intermediate Certificate in Business Studies. He has also completed management programmes through Gordon Institute of Business Studies. His current focus is on repositioning Claims and Pensions departments to ensure that RMA delivers excellent service to its customers.

Yunoos Mohamed (53)

B.sc (Computer science), B.Com

General Manager: information and Communications Technology Yunoos has been associated with Rand Mutual since 1994. He joined Rand Mutual Assurance on a permanent basis in 2007 and was promoted to the Executive Committee in 2014. He had previously worked in the banking and short term-insurance sectors.

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ChAIrmAn’s report

1.2 Chairman’s Report

As the custodian of Corporate Governance, the Board’s focus on the application of sound Corporate Governance principles has been unwavering. The governance processes and structures are regularly reviewed to take into account the ever-changing regulatory environment, as well as best practice.

The Board is ultimately responsible for overall risk management, which is fundamental to our business

and underpins our strategic objectives and solvency considerations.

This year we have again conducted an annual risk review. The most important loss event in 2013 related to the industrial action in the mining industry. Given the need for effective risk management, the Board has approved the appointment of a key individual to head up the risk management function at RMA. The proposed legislation and requirements of SAM (Solvency and Assessment Management) are very demanding on the time of both the Board and management. It is also proving to be quite an expensive exercise – and will continue to consume significant resources until the proposed implementation in 2016. Progress is being managed against the requirements (timelines) of the FSB and we are able to report that all timelines have been met in this regard.

The outcome of the 2013 Group Strategy session is detailed in this report. The 2013 session included full representation from the major mining shareholders, as well as labour and our independent directors. The strategic objective of expanding the RMA licence to include the Iron, Steel and Metal Industry (Class 13) was finally achieved in 2013. This is an enormous opportunity for RMA, as it creates a new income stream, and reduces RMA’s dependence on the mining industry. In line with the altruistic culture of the organisation, we have worked closely with the Compensation Fund, assisting the Fund with systems and business processes. The 2014 focus will, no doubt, be on the take-on of the Iron, Steel and Metal business, whilst, at the same time ensuring that the high service and efficiency levels are at least maintained, and improved wherever possible.

The long-term sustainability of the Group remains a key long term objective. A sustainability report has been produced, and although not required, a limited external verification of the information contained in the sustainability report has been obtained and included in this report.

Special mention needs to be made of the fact that the number of accidents per 1 000 lives insured has decreased substantially over the past three years. The initiatives of the member companies are indeed paying off. The added benefit to member companies with a “low accident” rate over the past three years has been a reduction in the premium rate for 2014. The Group remains financially stable, and this ensured that the Board’s long stated commitment to pay annual pension increases linked to inflation was again possible in 2014.

I would like to thank the Minister of Labour, the Honourable Mildred Olifant, the Board of the Compensation Fund and the Compensation Commissioner (COIDA) for having the confidence in RMA to expand our licence to include the Iron, Steel and Metal Industries.

I would also like to thank the Board of Directors and committee members for their dedication and on-going contribution to the stability and success of the Group. I would also like to thank outgoing directors, Dr Jon Andrews, Mrs N. Manyonga and Mr S. Jagwanth. We wish them well and thank them for their valued contributions to the Group. To the Chief Executive Officer, Mr Singh, the Executive Team and all the staff at RMA, thank you for your commitment and dedication which reflects in the overall success and growth of the Group.

TV MaphaiChairman

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ChIef exeCutIve offICer’s report

1.3 Chief executive officer’s Report

In many ways 2013 has been a watershed year for RMA – having been finally granted an extension to our COIDA licence, enabling RMA to write COIDA business in the Iron, Steel and other Metal industries. The number of employees in this sector exceeds 600K, which would allow RMA to grow the number of lives insured to more than 1 million. In addition, the Compensation Fund made a decision to pilot the RMA system on the basis that it would be its system of choice, if successfully piloted. The 2013 strategy session endorsed both the

above developments. Management’s key focus in 2014 will be the acquiring of the Iron, Steel and Metal Industries as well as supporting the Compensation Fund to migrate to the RMA system, initially as a pilot, and then as the Fund’s system of choice.

The decisions taken in 2012 to de-risk the Investment Portfolio to meet the requirements of the new solvency regime of the insurance industry, together with the necessary drive to ensure that the Group can continue to provide inflation-linked increases to pensioners has largely been implemented under the guidance and supervision of the Investment Committee. The de-risking of the Investment Strategy is but one of the steps that will enable the Group to comply with the anticipated new Solvency requirements which form part of SAM (Solvency Assessment and Management). The SAM requirements will be complied with by management and management is adhering to the guidelines as well as the timelines set by the Regulator.

We have embraced all aspects of Governance, Compliance and Risk Management into our daily activities across management and staff, and work closely with the various Board Committees, thereby giving the Board sufficient comfort on these critically important issues.

We continue to live by our slogan of “Caring, Compassionate Compensation” and are extremely proud of the service levels offered to all our Stakeholders. The uniqueness of the RMA business model is again worth highlighting:

• The Mobile Prosthetic and Orthotic Unit which takes service delivery to our beneficiaries in South Africa as well as to very rural areas in 6 neighbouring countries;

• The tracing of beneficiaries of workmen injured or involved in fatal accidents in order to pay pensions and other benefits;

• Regular Clinics for pensioners.

The comprehensive details of our services and service levels are included in this report.

The high standards of service can be attributed to our recently implemented, fully integrated system. Most Stakeholders are able to reap benefits from our system. In 2014 we will continue to refine our processes and improve automation. The scanning and imaging of all documents is an example of this initiative. Scanning and imaging will be implemented across the organisation before the end of 2014. We are also conscious of the fact that the cost of administration has a direct bearing on the premiums payable by member companies, and hence every effort is made to improve productivity and performance, and thus keep administration cost increases to a minimum.

We continue to work closely with the management of our members in the mining industry and are cognisant of the unrest situation and its long term implications.

I take this opportunity to thank the management team and staff of RMA for their dedication and commitment, which has resulted in such high levels of service to our stakeholders. I would also like to express my appreciation to the Board of Directors for their commitment and support to the management team.

To our Shareholders in the mining industry, we acknowledge the difficult environment in which you continue to operate and assure you of RMA’s continued high levels of service. We also thank you for your ongoing support.

B singhChief executive officer

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As at 31 December 2013, 50% of the liabilities had been matched with Interest bearing instruments.

asseT Class CoMposiTion

Year 2013 2012 % changeR million R million

Government bonds 2327 343 578%

Public sector securities and semi-gilts

640 505 27%

Corporate bonds 2080 2111 -1%

Domestic equities 3803 4183 -9%

Preference shares 2602 3201 -19%

International equities 1849 1354 37%

13301 11697 14%

Rand Mutual Assurance achieved returns of 12.25% compared to the target of 8.18%. RMA Life achieved returns of 10.01% against the target of 8.71%.

The weakening of the rand during the financial year had a positive impact on the valuations of our foreign assets of R1,849 million (2012: R1,354 million).

Total assets increased by R1,439 million to R14,381 million from a balance of R12,944 million in 2012. The Group continues to source specialist investment advice from investment consultants who operate in terms of a written mandate which includes the measurement and monitoring of asset managers, including the management of the risk associated therewith. Asset Managers continue to operate within contracted mandates which are in line with the investment policy. The statutory actuary also advises both the Investment Committee and the Board, with regards to the liability of the Group as well as the recommended asset allocation, taking into account a balance between risk and return. Please refer to the Governance report (See Page 43) for the details pertaining to the Investment Committee.

Chief Financial officer’s Report

introduction

The economic environment in 2013 provided very challenging conditions for the general South African economy and in particular the mining industry. Real annual GDP slowed to 1.9% for the 2013 financial year. The low interest environment continued which resulted in reduced interest income. Despite these challenges, the Group remains in a stable financial position and we continue to meet solvency requirements. While we anticipate that the same challenges will continue within the economy and particularly the mining sector during 2014, we remain confident that the RMA Group

will attain its projected financial objectives.

investment strategy

The changes to the Investment Strategy of RMA Life Assurance Ltd that was approved by the Board late in 2011 are being successfully implemented in line with the projected timelines. In essence, the Board approved changes to the Investment Strategy include a reduction of the target return objective for RMA Life from 2.5% and 5% per annum real over 24- and 48-months to a single target return of a minimum of 2.5% long term. The Board and the statutory actuary believe these returns are relevant, realistic and achievable. The changes include the matching of the core liabilities and their cash-flows with an optimised portfolio of Government, quasi government and corporate bonds and money market instruments. The balance of the funds will be invested in a bonus pool portfolio targeting a 5% real return over the longer term. Offshore investments will be between 5% and 25% of the bonus pool. Equity investments will be between 42% and 85% of the offshore assets and be between 32%and 72% of the domestic assets.

Although expected returns will be reduced, this will also result in a reduction in theinvestment risk and a reduction in the capital adequacy requirement of the Company. The return and risk tolerance requirements for RMA Company remain unchanged and unaffected. The strategic asset allocation implications of the new return objective for RMA Life is that the maximum exposure to domestic equities declines to 25% (from the current 50%) and offshore asset allocation declines to 8% from the current 15%.

ChIef fInAnCIAl offICer’s report

18



14,00012,00010,000

8,0006,0004,0002,000

-07

Total Assets

Group Total assests and investments at Market Value - R Millions

Investments

08 09 10 11 12

insurance results

The 2013 year saw an increase in gross premium income of 14 % on the previous year. The increase in premiums was partly as a result of a number of existing members moving from the “2 Year rule” to Day 1 cover” (See medical department report for explanation of terms). Another contributing factor to the increase in premiums is the fact that our business is driven by salary increases granted by our member mines to their employees. In 2013 the average increase in salaries in the mining sector was 10%. We continue to see a reduction in the number of claims across all product lines and credit must be given for the work done by the mining industry to reduce the number of fatal and serious accidents. In anticipation of the more stringent capital requirements that will be introduced by the Regulator in the medium term, the Board took the decision to provide for our IBNR claims using the more conservative 75th percentile instead of the normal best estimate approach by the Group’s Actuary. This had led to an increase to the income statement charge in this financial year.The claims ratio of claims to premium for 2013 was 94.5% % (107.4% for 2012). The number of claims per 1000 employees decreased from 40.9 claims per 1000 in 2012 to 38.1 for 2013.

Ratio of claims to premiums across all product lines

94.5%13

12

11

10

09

08

107.4%

95.3%

111.%

90.3%

99.0%

Claims per 1000 employees insured.

420

400

380

36008

Insured Employees

Claims per 1000 employees insured

Claims/1000

Per 1000Employees - 1000

09 10 11 12 13

70605040302010-

administrative and asset Management expenses

These expenses relate to the running costs of the Group, the costs associated with the management of the assets and the administration of claims / payment of pensions. While management remains conscious of the need to curtail expenses, higher than inflation increases from service providers remain unavoidable and

19



administrative costs for the Group rose 11% (2012: 8%) in respect of the 2013 year. The main driver of costs increases were employee costs for new staff members, leasehold improvements to offices and branches and non-cash amortization costs on the new Compcare claims management system as the business is gearing up for the take-on of the new Class 13 group of business from the Compensation Commissioner,

Management remains cognisant of the fact that administrative expenses contribute to the increased insurance premium payable by shareholders and thus strive to keep these costs to a minimum and to maintain expenditure within the budget.

08

administration Fees per life insured

09 10 11 12 13

40035030025020015010050

The insurance liabilities of the Group can be divided into the short and long term liabilities. Short term are defined as once off lump sum payments for permanent disability, medical expenses (current and future), and Total Temporary Disablement (TTD’s) payments. The long term liabilities relate to the ongoing payment of pensions relating to permanent disability where the percentage of disablement is in excess of 30%. The total insurance liability for 2013 was R 12,601 million as compared to R 11,459 million for 2012).

Included in the annuity liabilities is an amount of R1,222 million (2012: R637 million) in the Bonus Stabilisation Reserve, this reserve is held to absorb fluctuations in the value of assets covering the Group liabilities.

16,00014,00012,00010,000

8,0006,0004,0002,000

-08

investments vs insurance liabilities - R Millions

Insurance LiabilitiesInvestments

09 10 11 12 13

The RMA Group continues to operate under license from the Minister of Labour in terms of the COID Act which has been renewed until 31 December 2014. In addition the Group also continues to holds both long and short term insurance licenses and, as such, has reporting obligations to the Financial Services Board (FSB). All reporting obligations in this regard are fully complied with. It should be mentioned that, included in the requirements of the FSB are the SAM obligations. In this regard I refer you to comments in the Governance Report. At the end of the 2012 year, RMA’s solvency had increased to 155.2% (2012 – 139.5% ), being well above the statutory requirement of 25%. For further information in this regard please refer to the financial statements and the notes thereto (See Page 3).

The Group also enjoys an exemption under section 7 (1) (f) of the Financial Intelligence Centre Act although the Life Company (Subsidiary) did register in terms of the Financial Intelligence Centre Act No. 38 of 2001.

Mr eh lufhuguChief Financial officer March 2014

20


operAtIons report

inTRoDuCTion

The Operations Department was divided into the following key functional focus areas during the year under review:• Underwriting and Client Liaison• Claims Services and Branch Network• Pensions, and • Information Technology The structure has since changed as a result of the addition of new departments and streamlining of

existing ones. The new structure is as follows:• Underwriting and Client Liaison• Claims Management• Contact Centre• Records Management• Information Technology

The primary focus of the Operations Department is the adjudication and payment of claims, assessment of rates and premium determination, Information Technology, records management and customer service.

unDeRWRiTinG

The Underwriting Department is responsible for the execution of the following functions: assessment of rates, premium determination and collection, recruitment of new business, policy review and reinsurance administration.

RMA is authorised to provide occupational accident insurance in terms of COIDA and personal accident insurance cover in terms of both the Short and Long Term Insurance acts. The Company offers four products in terms of the Financial Services Board (FSB) licenses, which are: the Commuting Journeys Policy (CJP)

for covering employees against accidents occurring whilst commuting between work and home; the Augmentation policy which enhances the COIDA earnings and benefits and extends the cover afforded by COIDA to include sports and hostel hazards; the RIOT policy which covers employees for injuries or death resulting from riot, strike or labour disturbance; and the Stated Benefits Policy which covers the death of an insured employee or spouse.

The COIDA policy is the Company’s core product and accounts for more than 70% of the total premium income. The premium revenue is a function of the application of the risk rate per employer to the earnings of the employees. The premium revenue derived from all four products exceeded R1 billion in 2013.

Until July 2013, the RMA COIDA license restricted the cover to employees falling under the Class 4 industries. The license was extended in July 2013 to include the Class 13 industries with an estimated labour force in excess of 600 000 employees and a potential annual premium revenue of approximately R1 billion. The successful recruitment of employers falling within the Class 13 industries will increase the RMA premium pool substantially and expand the Company’s footprint outside the mining industry.

number of members and employees

As at 31 December 2013, RMA provided cover to 308 employers who are also shareholders, which represented an increase of 4% from the 296 employers insured with the Company in December 2012. The number of insured lives increased marginally during the same period, from 401 182 in 2012 to 403 794 as at 31 December 2013.

21


operAtIons report

The graph below illustrates the membership trends, depicting both members and lives insured. Trends in Membership and Covered Lives

350

300

250

200

150

100

50

02004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Em

ploy

ees

Num

ber o

f Em

ploy

ers

450 000400 000350 000300 000250 000200 000150 000100 00050 0000

number of employees per product

The COIDA and Augmentation policy covers all insured employees under Class 4 and has full market penetration. The CJP on the other hand has a penetration of 61% while that of the RIOT policy is 40%. The trends in market penetration has remained fairly stable in the past three years across all products.

The graph below illustrates trends in the number of employees insured under each product.

Number of Employees per Product

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Mem

bers

450 000400 000350 000300 000250 000200 000150 000100 00050 0000

COIDA CJP RIOT AUG

number of employees per occupational category

The Company distinguishes members into six occupational categories, namely; deep underground gold, deep underground other, opencast, shallow underground, surface employees and offices and administration. This is designed to ensure appropriate risk rating and risk pooling. Deep underground mining with its inherent high risk, remains the biggest risk pool and employs 65% of the total insured lives. Offices and administration have the lowest number of employees at 4% of the total insured lives.

The COIDA policy is the company’s core product and accounts for more than 70% of the total premium income. The premium revenue is a function of the application of the risk rate per employer to the earnings of the employees.

22


operAtIons report

Number of Employees per occupational category

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Mem

bers

200 000180 000160 000140 000120 000100 000

80 00060 00040 00020 000

0

Deep Underground gold

Opencast

Deep Underground-Other

Shallow Underground

Surface Employees

Offices and Admin

RMA offers members the option to make arrangements for the provision of medical treatment of employees under what is termed the “2 year medical rule” which extends over a 2 year period before liability is borne by RMA. The other option is for RMA to assume liability for medical expenses from the moment the occupational injury or disease occurs under what is termed the “Day 1 medical rule” cover.

The “2 year medical rule” was previously the most preferred over the “Day 1 medical rule” option largely for employees. Recent economic trends have resulted in most employers opting for the “Day 1 medical rule”.

“2 Year Rule” vs “Day 1” Cover

The graphs below shows the shift by members over the years from “2 year medical rule” to “Day 1 medical rule” cover.

“2 Year Rule” vs “Day 1” Cover in 2004 and 2013

2004

Day 1

2 Year Rule

2013

Day 1

2 Year Rule

23


operAtIons report

The graph below shows an increase in COIDA contributions over time, unadjusted for inflation, and factoring the switch from 2 year rule to Day 1 medical cover by members.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Avar

age

Prem

ium

Per

Pro

duct

2 5002 0001 50010005000

COIDA AUG CJP RIOT

The premiums of the COIDA product have increased sharply over time and averaged at R2 069 in 2013.The average premium for AUG was R245, CJP was R462 and RIOT R202. All these products showed a steady increase in premiums over the years.

Reinsurance premiums

Class 4 industries

RMA has a reinsurance programme to protect its reserves against catastrophic losses. The reinsurance programme is on an excess of loss basis and RMA bears the first R10 million of a loss involving two or more employees and the excess of the loss is thus recoverable from the reinsurers participating in the programme. The programme is placed through the Lloyds of London market and all reinsurers participating in the programme have a security rating of A- or more.

Increased risk retention coupled with good claims record has seen a reduction in the cost of reinsurance cover over the years. The reinsurance premium remained relatively unchanged at R11 million from 2011 to 2013 and dropped by 12.4% to R10 million in 2014

online Declaration of earnings

In 2013, the Company launched the online earnings submission functionality as part of its ongoing service delivery to its members. The functionality enables members to submit the employees’ earnings on which the premium is determined online. There has been an overwhelming response to the functionality by the members resulting in 78% of them submitting their estimated earnings for 2014 online. The functionality has also made it possible for the members to download invoices, print them and pay the premium.

ClaiMs ManaGeMenT

The Branch Network, Claims Services and Pensions departments were integrated into a newly established Claims Management Department, as part of the streamlining of business process during the year under review. This new Department is responsible for claims registration, adjudication, payment of medical invoices and compensation. There are two additional departments that were added to the Claims Management portfolio and these are the Records Management Department and the Contact Centre. These departments will assist a great deal in improving the flow of information across the Company and customer service to all stakeholders.

The Welkom office has moved to new premises in the CBD. This has reduced travel time for claimants, particularly those without own transport as they now use one taxi instead of two. All other branches continue to render services to newly injured employees and existing claimants of RMA.

The extension of the RMA license to cover Class 13 has resulted in the need for the addition of two new branches in Durban and Pretoria, as well as the establishment

24


operAtIons report

of a Contact Centre in Parktown. The project to identify suitable locations and set up these offices commenced in the latter part of 2013.

In 2012, the total number of claims received at RMA branches was 16 556. This declined to 15 366 in 2013, a drop of 7.2%. Out of a total of 15 366 claims received, only 20 were repudiated.

The graph below illustrates the decline in the rate of claims after adjusting for the number of lives insured. The number of COIDA claims is declining but the cost per claim has increased. The number of claims received in terms of the CJP declined in 2012 but rose in 2013.

Claims per 1000 employees per product

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.02003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CJP

per

100

0 Em

ploy

ees

CO

ID p

er 1

000

Empl

oyee

s

COID per 1000 employees CJP per 1000 employees

The claims management process is supplemented by two other processes which includes the Claims Committee, which adjudicates on claims that require discretion due to its complexity and cannot be easily handled at the branch level; and the Technical Committee which is responsible for interpretation of the legislation,

drafting, updating and amending of instructions for internal use and circulars for external use by members and healthcare providers.

In 2013, 75 COIDA fatal claims were settled and 64% of these were settled within six weeks from date of accident or of being reported to RMA. During the same period, 18 CJP fatal claims were settled and only 33% of these were settled within six weeks from date of accident or of being reported to RMA. This was as a result of the more onerous requirements for settling these claims which includes police investigation reports.

pensions ManaGeMenT

In 2013, a total of 19 920 beneficiaries received monthly pension payments from RMA. This reflected a decline of 2.4% from the previous year.

The table below illustrates the number of new disability and fatal cases over time. In 2010, there were 229 new disability pensions implemented and 168 fatal cases. In 2013, this had dropped to 121 new disability cases and 93 new fatal cases.

Trends in disability and fatal cases

Year

Year on Year increase

Disability pensions (>30%) Fatality Total

2010 229 168 3972011 155 161 3162012 154 151 3052013 121 93 214

RMA has extended payment of pensions of children who reach the age of 18 whilst still studying in order that they can further their studies with additional financial support. The table below illustrates the number of children who received ongoing payments after the age of 18 years in 2012 and 2013.

25


operAtIons report

Number of children receiving ongoing pension

Year number of Recipients

2012 6482013 1 363Total 2 011

The fatality rates of RMA cases include deaths which occur after the date of accident but which are causally associated with the occupational accident or disease.

Trends in disability and fatal cases per year from 2003 to 2012.

The enhanced focus on safety within the mining sector has contributed to a downward trend in the number of occupational injuries, diseases and deaths.

Trends in disability and fatal cases per year

400

350

250

200

150

100

50

02003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Num

ber o

f Cas

es

Disability Pension Fatal Pensions

RMA expresses its motto of “caring, compassionate compensation” through all possible means in its adjudication of claims for occupational injuries and diseases. To this end, RMA ensures that all legitimate claims are paid timeously and where possible, beneficiaries are traced until they are found in order to compensate them.

RMA conducts an exercise to establish whether the claimants are still alive on an annual basis. This process allows the Company to continue to pay legitimate beneficiaries their monthly pensions. The process will be greatly enhanced through an arrangement that will now allow RMA to conduct its verification of identity through the Home Affairs database.

Currently, there are circumstances where RMA is unable to verify the status of beneficiaries through its standard verification process. As a result, the payment of the monthly pension is temporarily suspended. The suspension is lifted upon receipt of confirmatory evidence of the existence of the claimants otherwise the suspensions would be made permanent. As at 31 December 2013 a total of 139 beneficiaries were suspended, which is slightly lower than in 2012 in which 145 pensions were suspended, and 2011 which had 262 pensions suspended. The target remains the achievement of a zero suspension rate.

The speed at which claims are adjudicated upon is also dependent upon the timeous reporting of the claim to RMA by either the member or the employee. We have reviewed the measure to monitor claims reporting delays from looking at the average number of accidents reported within seven days and diseases reported within 14 days. We now look at the actual number of accidents reported within seven days and diseases reported within 14 days and express this as a percentage. In 2013, we observed that 76% of accidents were reported within seven days whilst 24% were reported within 14 days. RMA will continue to encourage employers through member workshops and direct correspondence about the importance of reporting claims within the required time frames. It remains our conviction that an employee or his family should not be worse off as a result of an occupational injury or disease than he would have been had it not been for this unfortunate accident.

26


operAtIons report

RMa Contact Centre

RMA has established a Contact Centre in an effort to enhance customer service. The Contact Centre will serve as a central point from which all customer contact will be managed. The purpose of the Contact Centre is to centralise the receipt and processing of all telephonic, facsimile, electronic mail and social media enquiries, complaints and compliments. This will allow for a more speedy resolution of all matters pertaining to customer service that are referred to RMA daily.

inFoRMaTion anD CoMMuniCaTion TeChnoloGYThe Information and Communication Technology (ICT) department of RMA is responsible for the following:• The development, enhancement and maintenance of the application systems;• The procurement, maintenance and hosting of the server technology;• The procurement and maintenance of the desktop technology;• The procurement and provisioning of the data networks;• The procurement, maintenance and hosting of the telephone and

communications networks;• The procurement, maintenance and hosting of the back office systems; and• The procurement, maintenance and provisioning of failover facilities such as

data backups, power generators and uninterrupted power supply.

The in-house developed IT application system: CompCare® is fully integrated, and web-enabled.

In the year under review, the ICT department successfully completed two phases of the development and implementation of an enterprise-wide electronic document management system. This was a major development in moving RMA towards a paperless environment.

The department enhanced its claims adjudication systems to be able to manage and report on the Class 4 and Class 13 businesses separately. Amongst others, this will enable the company to report both financial and non-financial information appropriately for the two classes of business. The claims adjudication system was also enhanced to manage and process COIDA and non COIDA products.The Sharepoint system had been upgraded and customised and is now also utilised as the enterprise knowledge management system.

During the forthcoming 12 month period, we will be focusing on the following areas of operation:• Upgrading the existing application system to the latest version of the

development framework;• Automation of Certificates of Life (COLs) processing by collaborating with the

Department of Home Affairs systems for verification of pensioners status;• Further automation of the MediCare system which includes the incorporation

of the Maximum Medical Improvement (MMI) model and the incorporation of the inclusion and exclusion rules for medical treatments;

• Ongoing enhancement of our employee database, with the emphasis being on co-operation with policyholders to verify beneficiary information;

• The development of premium rating determination model;• Implementation of a business intelligence system to enable the user to

proactively monitor business performance, trends and assist with decision making; and

• The implementation of HR Premier to enable the electronic management of performance management;

sTRaTeGiC liaison

The Strategic Liaison function was established in 2013, for the purpose of improving Stakeholder engagement initiatives for members, beneficiaries and healthcare providers.

A review and destruction project of obsolete documentation and archived documents at Metrofile was undertaken in 2013 resulting in a 25% reduction in the number of documents stored off-site. This exercise will continue during the coming year as part of the Companies’ overall document management process.

Mr kp MatshidzeGeneral Manager: operations1 March 2013

27


medICAl depArtment report

Medical Department Report

introduction

The Medical department is one of four departments within the RMA Group responsible for:

• Medical support and assistance to the different branches on the medical management of claims and adjudication for permanent disability• Processing of medical invoices• Management of the ongoing medical needs of RMA pensioners• Medical cost containment and insuring the delivery

of quality service to all beneficiaries• Medical review of Section 90 requests and appearance in Section 91 tribunal

cases

During 2013 the department underwent restructuring as a result of an increase in workload due to the changes in cover of members from the 2 year rule to the day 1 rule. This change resulted in increased requests for medical support and assistance in the acute phase that impacted on service delivery and care to pensioners in urban regions.

Claims Department / Branch support

Claims for compensation are submitted to RMA through the branch network where they are adjudicated. One of the primary functions of the Medical Department remains assistance with interpretation of medical reports and confirmation of ICD 10 codes for a specific claim. Allocation of an ICD 10 code on RMA systems generate estimates for a specific claim that guide on medical management with regards to predicted days off, medical expenses and permanent disablement. This information is collected from the injury report submitted by the employer or the first medical report submitted by the treating doctor.

This is one of the most critical aspects of the administrative process and impacts on the further management and outcome of the claim. To ensure that the medical staff are able to deliver the required service it is imperative that accurate and complete reports are submitted timeously in the prescribed manner. Engagement with the employers and medical service providers is ongoing to explain the rationale behind the information requests so as to ensure that the reporting requirements are fully understood and supported. Both the medical staff and the branch network have hosted information sessions for employers and service providers in the different regions and give through regular communication and feedback to them on developments and enhancements to the RMA information system.

The problem of incomplete and/ or incorrect medical reports remains one of the major causes of delays and frustration for the injured person, the medical service providers, the employer and RMA. The design of reports for specific injuries are constructed in such a way that it guides and assists the treating service provider to report on the important information needed. This improves case management and claims adjudication. Service providers are encouraged to make use of these reports. It is imperative that all parties work together to reduce the problem and, to this end, the Medical Department remains committed to its ongoing programme of automation and education.

The Medical Department has also recognised the internal challenges and the need for enhanced communication and cooperation with the Claims Department. The introduction of a medical helpdesk to co-ordinate and improve the management of medical support to both internal and external stakeholders has enhanced the medical service delivery to Claims and Pensions departments with improved service levels and ongoing monitoring.

Medical invoices

The receipt and processing of medical invoices is the responsibility of the Claims Processing Services (CPS) team which is part of the Medical Department. Service providers are encouraged to make use of electronic data submission interfaces

28



(EDI) which allows for the electronic submission of medical invoices. The use of the electronic submission system allows for increased accuracy of claims processing, automation of information exchanges, and compilation of an accurate database and the speedy settlement of claims.

Postal strikes have again highlighted the benefit for service providers to use EDI for invoice submission and service providers still submitting paper invoices were encouraged to make use of available switches for electronic submission of invoices. The added benefit of this form of submission is real-time confirmation to the Medical Service Provider ( MSP ) of submission and delivery of the invoice to RMA. The objective is to make EDI the only form of invoice submission for medical services rendered.

75% of invoices submitted for services rendered during 2013 were received electronically. This has delivered enhanced administrative efficiencies as well as accommodating the early settlement of accounts. This benefits the patient, service provider and RMA, thus the Medical Department will continue to encourage service providers to utilise electronic submission.

A medical service provider portal is available for service providers to trace progress on invoices submitted and for confirmation of payment. Further system enhancements are directed to real-time feedback from RMA to switches and MSPs on the status of invoices received and processed.

The Company continues to adjudicate and pay claims based on the agreed COID benefit tariffs. These tariffs are determined by the Compensation Fund annually and are published in the Government Gazette. The 2013 tariff structure remained approximately 25% above the medical aid tariffs. Individual tariff and discount structures are negotiated with identified service providers based on volume and early settlement. 2014 will see the department focus further on improved turnaround times, electronic submission of invoices, automated payment and reduction of duplicate invoice submission by MSPs.

ongoing Medical needs of pensioners

At RMA we recognise the unique challenges faced by injured and ill ex-mine employees and remain committed to ensuring that they receive the care and treatment to which they are entitled. In this regard we specifically refer to Spinal Cord Injury (SCI), amputee, and head and back injury patients. The Pensioner Medical Plan (PMP) was designed as a means of ensuring proactive intervention with high risk patients through early interventions including home visits, urological, prosthetic reviews and supply of chronic medication of surgical sundries. The objective is to assist the injured through our PMP programme to preserve their general health, maximise functionality and identify their specific needs and offer support or funding through the social fund.

One of the major delivery mechanisms of services to pensioners is through the mobile medical clinic. In conjunction with Marissa Nel and Associates, with whom RMA has contracted, the clinics are scheduled across southern Africa and allow access to patients living in remote geographic locations and who have reduced mobility as a result of their injuries. The programme seeks to identify the relevant patients and to schedule appointments for them to attend the mobile clinic when it is in their area. At the clinic they are assessed and serviced by a full medical team, including the onsite repair and replacement of prosthetics.

In addition to the opportunity to access much needed medical services, the mobile clinic team is also able to deal with any administrative issues, specifically associated with pension payments.

Over the years the clinics have evolved into a twofold form of social intervention. The first is the opportunity for the development of a wider, local network for our pensioners which enables them to meet and interact socially with people in similar circumstances within their communities. As part of the outreach programme, pensioner medical case auditors have been equipped to undertake follow-up visits to the pensioners and have been trained to assist with basic needs, such as minor repairs to wheelchairs and prosthetics.

The mobile team is still involved with support of food security projects through the establishment of food gardens and the supply of basic gardening equipment and

29



The prosthetic team and pensioner medical case auditors perform monthly visits to pensioners in the Eastern Cape and Lesotho followed with seven clinic visits throughout Southern Africa.

2014 will see the continuation of the mobile clinics and the prosthetic program, which has also been contractually extended to the pensioners of the Compensation Fund living outside the borders of South Africa since 2013. The services are unfortunately not optimally utilized by the Compensation Fund, but are available and there to ensure the provision of quality care to non- RMA pensioners and at the same time generate additional income for RMA which is used to enhance the services provided through the clinic and PMP program.

As part of the ongoing commitment to the provision of care to our beneficiaries we have also continued to participate in a number of advocacy groups specifically with regards to the interpretation and review of the COID legislation, including proposed “Return to Work” (RTW) amendments and the structuring and administration of ODMWA (Occupational Diseases in Mines and Works Act).

Cost Containment / Quality

The overarching focus of the Medical Department remains the provision of quality care. However we remain conscious of the need to deliver such care in a cost effective way and to safeguard our financial reserves to ensure that we are able to continue to provide care into the future. The design and roll out of the Medicare system with functionalities specifically designed to assist with medical invoice submission and validation thereof, pre-authorisation, reporting and general management of medical related issues assists greatly and also promotes the transition to a paperless environment.

To this end we carefully monitor and manage our medical expenditure which can be broadly classified into costs associated with acute and ongoing treatment. Due to its nature, cost containment measures are more easily applied to ongoing treatment, whilst management of acute costs (defined as being as result of an emergency or immediate nature or relating to minor injuries) remains a challenge. A number of cost containment measures are incorporated into our processes, including pre-authorisation of treatment and re-opening of claims, however these measures are often not suitable to the management of the acute costs which are often not reported or reported late and which also open the system to both overuse and abuse.

seeds. This mentoring, training and support has extended a training and employment opportunity to members of the wider local community. The food security program has been well received and has been successful in providing additional sources of supplementary income as well as fresh produce for pensioners and their families.

In addition to providing significant savings, the program has most importantly delivered quality care and additional support to our pensioners. The table below illustrates the number of patients serviced through the PMP and Prosthetic clinics in 2013:

PMP Plan Home visit Uro review DRG 2 DRG 3 Scheduled Seen Scheduled Seen Scheduled Seen Scheduled Seen % of schedules completed 116.9% 90.9% 112.8% 106.7%

30


Enhancement of the Medicare system to assist with automated validation of multiple tariffs and modifiers is scheduled for 2014 and will add value with adjudication of such invoices. Prosthetic cost and expenditure is managed through a peer review system with all service requests referred for validation to the RMA network for approval and pre-authorisation.

Medicine and related costs are also managed with assistance of a 3rd party provider. The drug utilization review process includes the use of generic medicines, where appropriate, as well as the careful management of chronic medication programs. The electronic submission of pharmacy invoices in the acute phase was implemented and rolled out during 2013. Medikredit performs a validation of the invoice against the RMA card holder file and because these services were not all pre-authorised the invoice is interfaced to RMA systems where the system will perform the necessary internal validation and checks against ICD 10 codes, medical treatment and reports. Another development introduced with the help of Medikredit, was the establishment of a network arrangement with pharmacy groups, with agreement on set tariff structures for chronic medication.

One of the significant cost drivers of hospital costs remains the aftercare phase of treatment of pensioners which has been partially addressed through alternatives to hospitalization. In addition the Board has approved the establishment of such a facility that offers alternatives to conventional hospitalization. The facility is planned for Welkom with construction to commence in April 2014. Besides the potential for cost savings, the facility will be able to guarantee the provision of quality care to our pensioners and offers rehabilitation, skills development and training programs for beneficiaries.

The table below illustrates the total cost in the average medical cost per claim over a five year period. It will be noted that the acute medical costs have increased markedly compared to 2012, however this is a consequence of the drive by RMA to encourage members to move from the 2 Year Rule to Day 1 cover.


Provision has been made for medical service providers to report or inform medical helpdesk from the onset of treatment. The helpdesk will in turn inform branches or claims department of a potential claim and to chase up on reporting by the employer. Similar arrangements have been made with hospitals to immediately notify MSO or the RMA helpdesk of the hospital admission of a RMA beneficiary. The objective is to pre-authorise all known and planned therapy or interventions and to then accept or reject liability for treatment at inception. Treatment protocols that complement the system validation process of both authorised and non-authorised treatment were developed together with IT. Payment for authorised treatment, in terms of our protocols, are automated if the invoice submitted is in agreement with the generated authorization.

The table below indicates the breakdown of medical costs for 2013 in major categories. These are our major cost drivers and therefore the focus of our cost management initiatives.

Groupings sum of pay amount % of spend

Hospital 137 891 334 59%Specialists 27 683 848 12%Others 23 950 180 10%Prostheses 20 854 018 9%Radiology 9 890 638 4%Pharmacy 6 935 898 3%General Practitioners 6 875 964 3%Grand Total 234 081 880 100%

Analysis of medical expenditure showed that hospital costs are still the main driver accounting for almost 60 % of total medical cost. A fully implemented third party agreement in respect of case management / hospital utilisation and optimization of services as well as discounted tariffs with hospitals and groups linked to settlement of accounts is part of cost management and cost containment.

31



Medical management of section 90 reviews and section 91 tribunals

Renewal of the Section 30 license brought about new and challenging changes for RMA as settlement powers were given to RMA that allowed for adjudication and settlement on all claims. The license condition further extended the settlement powers to include Section 90 reviews and Section 91 tribunal hearings. These two sections of COIDA provide for a review and an appeal process on the decision made by RMA.

The Section 90 review allows for the submission of new medical evidence that may lead to a different outcome or decision. The Section 91 tribunal hearing is a legal process chaired by a presiding officer assisted by an employer, employee and medical assessor. The tribunal will consider evidence from both parties and the presiding officer in consultation with assessors, will then confirm the decision in respect of which the objection was lodged or give such other decision as he may deem equitable.

A procedure was put in place where all requests for a Section 90 review or Section 91 tribunal will first be reviewed internally by another RMA medical doctor unless new medical evidence was presented. If needed or where indicated and agreed, a referral to an external expert will take place with implementation of the recommendation. If consensus on the original decision is reached, the specific case will be discussed and explained to the applicant and/or his legal representative and then tabled for a Section 91 tribunal hearing if still unresolved.

strategic initiatives

strategic initiatives set for 2014 included:

• Further enhancements of RMA Medicare system for automation of medical invoice processing

• Establishment of the care facility

• Preparedness for administration of ODMWA claims

• Medical networks for new metal license

All these initiatives are ongoing with roll out and implementation expected during the course of 2014.

Dr D kritzinger MBChB, MpraxMed, Doh, MBaGeneral Manager: Medical services7 March 2014

Year No of claims No of pensioners Medical cost acute Medical cost pensioners Average cost per acute claim

Average cost per pension case

2009 22 292 7 353 83 081 378 57 331 014 3 727 7 797

2010 20 364 7 249 87 512 097 65 989 841 4 297 9 103

2011 21 689 7 140 99 917 531 63 436 507 4 607 8 885

2012 17 607 6 930 138 890 149 76 834 080 7 888 11 087

2013 16 558 6 808 138 569 227 72 879 760 8 368 10 705

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our stAff

ouR sTaFF

Report from General Manager human Resources and Training

introduction

The motto of RMA remains “Caring, Compassionate Compensation”. To enable us to deliver on this commitment, we have recognised and incorporated, as part of our values, caring for the wellbeing of our people, empowering them to use their initiative and working as a team. The empathy and commitment of staff to deliver exceptional service to our beneficiaries and members is dependent on us also being able to provide a caring and supportive working environment

employee Composition and Retention

RMA has a relatively small staff complement and as at the end of 2013 the Company employed 123 full time staff and 11 contractors spread across our head office and branch network, including satellite offices in Lesotho, Mozambique and the Eastern Cape.

As a result of the extension of our license to cover class 13 employers, approximately 50 new roles were created and budgeted for the 2014 financial year. Recruitment for these roles commenced in 2013 and included recruitment for two new branches in Durban and Pretoria that opened its doors to our beneficiaries and members in 2014. Other new business units that will commence business in 2014 include a Contact Centre and Records Management Department.

The total number of new recruits in 2013 was 34 as follows:

2013 Recruitment African African Total Coloured Coloured Total Indian Indian Total White White Total

Grand TotalContract Type Female Male Female Male Female Female FIXED 1 1 2 0 0 0 0 0 2 2 4PERM 16 6 22 2 1 3 2 2 3 3 30Grand Total 17 7 24 2 1 3 2 2 5 5 34

The Human Resources team is committed to sourcing the required talent to fill our remaining vacancies in 2014.

Externally assured information pertaining to the composition of our employee base by race, gender and age is set out in the GRI Table (Page 69 of the Sustainability Report) as are our statistics in respect of employment equity. The Group remains committed to providing equal opportunities to all.

The staff turnover rate increased from 10.43% in 2012 to 15.47% in 2013. The increase in turnover can be attributed to uncontrollable factors such as employees going on retirement. The table below indicates the turnover statistics for 2013.

Statistic Group

8 Resignations

1 Retrenchments

6 Retirement

4 Dismissals

0 Death

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our stAff

leave and absenteeism

Leave utilisation is being carefully managed to reduce the amount of accumulated leave and to ensure that all staff take their required leave.

Incidence of sick leave utilisation and absenteeism decreased year-on-year from 2012. Sick leave, maternity leave and family responsibility days taken for the last four years were as follows:

Year No of Sick Days Taken

No of Permanent Staff Members as

at Year End

Ratio

2013 609 123 4.952012 709 116 6.112011 346 118 2.93

2010 411.5 119 3.46

Management has undertaken to monitor absenteeism in 2014.

Talent Management

A Successor Development Programme was launched in 2013 and 10 successors were identified to attend this programme. The 10 successors were identified for six key roles namely Branch Manager, Branch Network Manager, IT Manager, Nursing Manager, GM Medical and Internal Audit roles.

Given the relatively large number of staff members who are 55 years and older, management created a replacement plan for each of the identified individuals. RMA is focusing on staff development and personal development plans so that some of these identified positions can be filled by internal candidates.

Personal development plans specifying areas for development and training have been implemented for all employees.

To enable the management of talent, HR Premier from Sage VIP was purchased and all administrative aspects of talent management can now be processed electronically.

employee satisfaction survey

A customised questionnaire survey was designed by Deloitte through a consultative and collaborative process with key representatives of RMA. All staff members were invited to participate in the survey and 89% of employees responded to the survey. Staff members accessed the questionnaire via a unique URL link directing them to a Deloitte hosted website, where they could complete the questionnaire and submit it directly to a password-protected database. The questionnaire was predominantly quantitative, consisting of closed-ended, forced choice scales to pre-determined questions. Open-ended questions were included in the questionnaire to supplement the quantitative results.

Results for the climate survey were deemed to be favourable with a mean score of 3.65 out of a maximum ranking of 5.

Training and Development A detailed training programme for employees as well as training for employer staff, service provider staff and union representatives for 2013 was developed, approved by the Training Committee and implemented by the Training Department.

RMA employees spent just under 6 000 hours in training in 2013. Training was conducted for all levels of staff as can be seen in our externally assured information pertaining to training as set out in the GRI Table (Page 73 of the Sustainability Report). When taking into consideration actual training versus planned training as well as unplanned training, it is clear that RMA is committed to developing its employees.

In 2013, R901 938 was spent on training employees, representing 1.29% of the payroll.

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Employee wellness continues to be addressed through the services of ICAS Employee and Organisation Enhancement Services Southern Africa (Pty) Ltd.

labour Relations

The Group complies with the Labour Relations Act and the principles of freedom of association contained therein. Currently no formal union recognition exists, but management remains committed to a process of constructive engagement and consultation with employees and their representatives. As such a Workplace Forum was constituted in 2013 and regular meetings are held with staff to address their concerns.

Ms n onsongoGeneral Manager: human Resources and Training7 March 2014

our stAff

In addition to employee training, workshops in response to feedback from the client satisfaction survey were conducted and a total of 484 individuals from member companies and 295 individuals from the various unions were trained. Two workshops were also held with healthcare providers as part of the corrective actions. A total score of 85% was recorded from assessment questionnaires of members.

Remuneration and Reward(Please refer to the Remuneration Report Page 48) performance Management

The Group operates a well-developed performance management system based on individually defined Key Performance Indicators (KPIs) and performance contracts, which are concluded annually, and are subjected to a mid-term, and year end, assessment process. 2012 also saw the Group develop a Company Balanced Score Card, linked to the overall strategic objectives, which were filtered down to departmental and individual KPI’s for 2013. The assessment process has also been further refined, specifically with regards to the outperformance measurement criteria.

As part of the recognition and reward strategy of the Group, awards were again presented to the best employee, best manager and the best overall department. The selection process is based on motivated nominations from fellow staff members with a final determination made by executive management using a ballot system after applying the outcomes of the performance management process. This means that staff members are assessed on their overall performance by both their fellow employees and management. The prize for the best employee was once again an all-expenses paid trip for two to London (or equivalent).

health and safety

The Health and Safety, Training and Employment Equity committees were fully operational during 2013 and have agreed to a Terms of Reference. A Health and Safety Policy was finalised in 2013.

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governAnCe report

Governance Report

inTRoDuCTion

The Board is ultimately responsible and is the custodian of the Group’s governance framework which is formalised in its charters, policies and operating procedures. These governance processes are regularly reviewed to take into account both the changing regulatory environment and best practice.

Governance structure

Board of DirectorsAudit & Risk Committee

(IT Sub-Committee)

Investment Committee

Human Resources &

Remuneration Committee

Social & Ethics

Committee

Nominations Committee

Executive CommitteeSenior Management

StaffStrategy, Performance Management, Systems (Processes & Procedures)

Values

Compliance

Compliance remains a core focus of the Group and is an imperative for the continuation of our various licenses (Short and Long term Insurance Acts and COID) which grant us the authority to operate. We remain committed to meeting all compliance requirements in terms of major legislation as well as standards, codes and rules associated with our industry.

The Group operates in terms of our Compliance Policy which includes a detailed monthly compliance report which is considered every quarter by the Audit and Risk, and Social and Ethics committees, as well as the Board.

During the year under review there were no significant instances of non-compliance.

solvency (insurance legislation)

The Board and management remain conscious of our responsibility to ensure the financial ability of the organisation to pay benefits to those who have suffered injury or disease in the work place and to their beneficiaries, in the case of a fatality. The ongoing financial soundness and stability of the Group is highly dependent on the quality of its leadership, including management, governance, risk management and internal system of controls.

The responsibility for financial stability is underpinned by a complex and onerous regulatory regime that governs the insurance industry and we have continued to place particular emphasis on preparations to comply with the Solvency Assessment and Management regime (SAM). SAM(now deferred to 2016) is set to introduce new governance standards and supervision requirements and in anticipation of these, a detailed action plan, to measure readiness for SAM implementation, has been developed and implemented by management. The Readiness Questionnaire of 2012 indicated some areas for review, enhancement and / or development of processes, procedures and reporting.

As part of the SAM implementation plan we have approved a Head of Control Functions Policy and the risk and internal audit functions have been separated. The Data Governance Policy has been considered by management and was finalised and approved by the Board in the first half of 2013.

The implementation of SAM will have a significant impact on the management of the Group’s investments and in preparation for the changes the Board, together with the Investment Committee and management, has devoted a significant amount of effort to the review of the Investment Strategy and Policy.

The Disclosure Policy (Pillar 3) will be developed during 2014 once the final reporting requirements have been received from the FSB. As part of our preparations we have convened a project team to address the proposed Protection of Personal Information Bill (POPI) and have commenced a review of all archived documentation.

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governAnCe report

BOARD OF DIRECTORS

RMA has a Unitary Board. The Board has overall responsibility for governance within the Group and operates in terms of a Charter which clearly defines its primary functions including the determination and direction of strategy, monitoring of investments and consideration of major financial matters, review of performance against the business plan, determining and monitoring compliance with policies and procedures and the management of risk. The Board retains effective control of the Group and any delegation of authority to committees, management and individuals, takes place in accordance with the approved policy and various terms of reference. The relationship between the Board, committees and management remains effective and both Board and committee members have unrestricted access to management, staff as well as all records and information of the Company. An approved process determines the access to external expertise, as and when required.

The Memorandum of Incorporation (MOI) makes provision for a maximum of 20 Board positions, of which 14 non – executive positions are currently considered appropriate by the Board. Five positions are filled by shareholder appointed directors, three by union appointed directors, two by executive directors (CEO and CFO), one by an independent chairperson and three by independent directors.

In accordance with the Remuneration Policy, the remuneration of directors is benchmarked annually using the small cap financial sector companies as the standard against which RMA is measured. In addition to remuneration, Board composition including executive to non-executive ratio, age, gender, transformation, independence and qualifications are also considered. The RMA Board and committee member remuneration fell within the median to upper quartile of small cap financial sector companies.

The requisite skills set of the Board and committees, as a collective, are detailed in the Board Charter and it is the view of the Board that collectively it has the necessary skills and expertise to effectively discharge its mandate. The detailed information relating to each Board and committee member is set out below. In accordance with FSB directives, and so as to ensure that the Board remains fully informed and understands the solvency status of the Company, Mr Colin Van der Meulen, the statutory actuary, continues to attend all Board meetings in an advisory capacity.

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governAnCe report

The table below indicates the attendance of members at board meetings.

Name DesignationMeeting dates 2013

3 Apr 22 May 20 Sept 27 NovDr TV Maphai (Chairman) Independent Director x x x xMr J Gardner Independent Director (as from 27/11/2013) - - - xMr R Naidoo Independent Director - x x xMr S Jagwanth Alternate Director x - - -Mr A van Vuuren Independent Director - x x xMr H Perry Alternate Director x - - -Mr A Letshele Independent Director x x - xMr M Lynam Alternate Director - x x xDr J Andrews Independent Director x - - -Ms M Pillay Independent Director x x - xMr J Bezuidenhout Independent Director x x x xMr H Schalekamp Independent Director x x x xDr M Mentz Independent Director x x x xMs N Ravele Independent Director x x x xDr J Steele Independent Director - x x xMs H Masondo Independent Director x x x xMs D Motsepe Independent Director x x - x

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(General Manager: Information Technology). It has been confirmed that executive management remains well established and no concerns have been raised in connection with the possible requirement of new management supervision by the Board or the need for the retention of board experience to meet any supervisory requirements.

The CoMpanY seCReTaRY

The Company Secretary is responsible for the compilation and distribution of the directors’ toolkit which includes Group and industry specific information as well as general guidance as to the discharge by the directors of their responsibilities and the process to be followed by members to access external expert opinion. The Company Secretary is also responsible for director training and induction as well as the annual Board evaluation process. The Company Secretary must also be subjected to a fit and proper test by the Financial Services Board and be approved as the principal officer in terms of both the Long and Short Term Insurance Acts. Members of the Board have unlimited access to the Company Secretary who acts as an advisor to the Board and the committees with regards to process, procedure, compliance, governance and legislated obligations and requirements.

There is currently a vacancy in the office of the Company Secretary, effective from 31 October 2013. This vacancy will be filled effective 1 May 2014.

BoaRD CoMMiTTees

For purposes of assisting it in the discharge of certain responsibilities, the Board has established five committees all of which have defined mandates and operate under approved Terms of Reference which were reviewed and updated during 2013 to ensure compliance with best practices. All Committees report to the Board quarterly and the chair of the Investment committee (Mr Lynam), who is an alternate director, attends all Board meetings in his capacity as Chairman of the Investment Committee. Committees are subject to the same assessment processes as the Board.

governAnCe report

In accordance with the Memorandum of Incorporation, one third of all directors must resign annually, as must those directors who have held office for three years. This excludes the chairperson and the executive directors. Directors so retiring are eligible for re-election subject to an evaluation as to attendance and participation at meetings.

During the 2013 year vacancies occurred amongst the independent director positions, with the resignation of Ms Ravele due to time constraints and Dr Jon Andrews. In terms of King III (Principle 2.18.8) the Board should review the position of members who have served on the board in excess of nine years to determine whether their continued membership is appropriate and further, whether they bring valuable experience and insight to the deliberations and discussions of the Board. In this regard the Board confirmed the position of Mr Bezuidenhout (1 April 1996) who has served on the Board for periods in excess of nine years.

The role of the Chairman and the Chief Executive Officer are separate with clear lines of responsibility determined, with the Chairman having no executive functions. The Chief Executive Officer and the Chief Financial Officer both have permanent employment contracts with the company.

Non-executive directors receive no benefit other than director’s fees and they are required to disclose all other directorships, as well as any potential conflict of interests. Where a conflict does arise, directors are required to excuse themselves from the meeting at which such matters are addressed. Directors’ declarations are reviewed annually. The Board and the Audit & Risk Committee is satisfied that no conflicts of interest, other than as disclosed, exist.

eXeCuTiVe CoMMiTTee.

During 2013 the Executive Committee of the Group was expanded. The General Manager: Operations was promoted to the title of Chief Operations Officer of the Group. Two new members of the Executive Committee were also appointed namely Mr E Hadzhi (General Manager: Claim Services) and Mr Y Mohamed

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governAnCe report

Committees include advisory, non-voting members who, together with full members, are required to meet all the disclosure requirements and are indemnified, insured and remunerated as if they were full members of the Committee.

The Committees are as follows:

audit and Risk Committee It is the position of the Board that the interests of the Group are best served by incorporating both the risk and audit functions into the combined Audit and Risk Committee. The continuation of this structure will be reviewed during 2014, specifically having regard to the requirements of SAM. The Committee reports on its activities and makes recommendations to the Board, while also playing an integral role in the risk management process. The Committee has complied with, and discharged its duties in accordance with the approved Terms of Reference and Section 94 (7) of the Companies Act 71 of 2008 (The Act) which stipulates the duties of the committee, more specifically:

external audit:

• Considered the effectiveness and nomination of EY (external auditors) and the audit partner, for re-appointment and confirmed their independence from the Company;

• Determined the fees to be paid to the auditor and the auditor’s terms of engagement;

• Determined, subject to the provisions of the Act, the nature and extent of any non-audit services that the auditor may provide to the Company, or that the auditor must not provide to the Company, or a related Company;

• Pre-approved, in accordance with the approved policy, any proposed agreement with the auditor for the provision of non-audit services to the Company;

• Received reports from the external auditors on the annual financial statements, approval of the audit plan and the fee proposal for the 2013

financial year end audit;• Considered the 2013 annual financial statements.

internal audit and systems / Controls:

• Prepared a report, to be included in the annual financial statements for that financial year;

• Received and dealt with any concerns or complaints, whether from within or outside the company, or on its own initiative, relating to—i) the accounting practices and internal audit of the company;ii) the content or auditing of the company’s financial statements;iii) the internal financial controls of the company; oriv) any related matter;

• Considered the effectiveness and independence of the internal audit function and the progress of the internal audit programme and matters arising;

• Considered and confirmed the soundness of the internal control environment and confirmed that the internal control environment was sound and effective.

Compliance and Governance:

• Overseen the compliance with all relevant legislation, rules and standards with specific reference to the requirements of both the long- and short-term insurance legislation, the licensing conditions applicable to the business and the latest accounting standards;

• Overseen any material legal developments;• Reviewed and recommended to the Board the Terms of Reference of the

Committee and the Audit Charter;• Considered the appropriateness and expertise of the Chief Financial

Officer, who was found to have the necessary skills for the position and further confirmed that the expertise, resources and experience of the financial function are adequate;

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• Considered the declarations made by members of the Board and the disclosure of any potential conflict of interests. The Committee has satisfied itself that such matters were dealt with in such a way as to ensure no conflict of interests in the decisions made by the Group.

Risk:

• Considered the internal controls and risk management systems and the statement thereon prior to endorsement by the Board including a consideration of the integrity of the risk management process;

• Ensured that all significant risks facing the company are considered and adequately addressed in the assurances provided. The relationship with external service providers is also monitored by the Committee.

The Committee is also mandated to:

• Make submissions to the Board on any matter concerning the Company’s accounting policies, financial control, records and reporting;

• Perform such other oversight functions as determined by the Board;

The Committee met seven times during the year. As regards the composition of the Committee, and the independence of members, reference is made to the earlier part of this report which explained that the Committee has comprised of only three members (plus two advisory members) for much of 2013. In the fourth quarter of the year the Board appointed Mr John Gardner as the independent Chairman and member of the Audit Committee subject to shareholder approval at the next annual general meeting. Ms Pillay recused herself from the Audit and Risk Committee meeting effective from 12 of November 2013.

All Members of the Committee are suitably qualified and have suitable skills and experience. All members of the Audit and Risk Committee are required to pass a fit and proper test in terms of the Financial Services Board (FSB) requirements attaching to both the long- and short-term licenses.

It is our view that all the members are independent non-executive directors. The Committee is chaired by Mr Gardner and is attended by invitees, including the Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, internal auditor, risk manager, external auditor, GM: Operations and the Company Secretary.


30 Jan 14 Mar

11 April 27 Jun 21 Aug 3 Sept 12 Nov

Ms M Pillay (Chairman) until Sept 2013 Independent Director - x x x xMr J Gardner (Chairman) effective November 2013

Independent Advisory Member and independent Director effective Novemeber 2013 x x x x x x x

Mr H van Veen Independent Advisor x x x x x x xMr R Naidoo Independent Director x x x x x - xMs D Motsepe Independent Director - - x x x x x

governAnCe report

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Management, external and internal auditors meet in closed sessions with the Committee to provide an opportunity for the respective groups/ persons to make any representations they feel are necessary.

An independent Audit and Risk Committee Report from the chair of the Committee is included in this integrated report on Page 78 hereof.

investment Committee

During 2013 the Investment Committee has played a significant role in advising the Board as to the approach to be taken with regards to both the overall investment strategy, as well as the best manner to ensure compliance with the proposed solvency legislation. The Committee is mandated to oversee the investments of the Group to ensure that the current and future liabilities, in terms of the policies, can be met and that the Group complies with the legislated solvency margins. As part of the implementation of the mandate, the Committee has reviewed, and made recommendations to the Board, on the changes to the investment strategy

especially as it pertains to RMA Life . The Committee also has oversight of Socially Responsible Investments (SRI) and the specific mandates given to the selected investment managers and ensured that they performed within the given mandates. The Committee reports to the Board quarterly through a detailed Investment Report and the chair of the Committee, who is an alternate director, has a standing invitation to attend all Board meetings.

The Statutory Actuary has confirmed that the reserves of the Group are sufficient to meet the projected liabilities.

The Committee is comprised of up to three members who are non-executive directors or their alternates. In addition the Committee is assisted by three advisors who have been selected and appointed for their skills and expertise and are approved by the Board of Directors. The chairman is a non-executive alternate director. Meetings are attended by invitees, including the Chief Executive Officer, Chief Financial Officer, Statutory Actuary, investment advisors (Ginsburg Asset Consultants (Pty) Ltd), Manager Internal Audit and the Company Secretary.


12 Mar 9 Apr 8 May 14 May 16 May 12 Aug 30 Aug 8 NovMr MP Lynam (Chairman) Alternate Director x x x x x xMr R Jordaan Independent Advisory Member x x x x x x x xMs N Ravele Independent Member x x x x x x x -Mr HM Perry Alternate Director x x x x x - x xMs M Seeiso Independent Advisory Member x - x x x x x xMs R Stewart Independent Advisory Member x x x x x x x x

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Name Designation

Meeting dates 20135 Mar 3 May 15 May 12 Sept 7 Nov

Mr AJ van Vuuren (Chairman) Deputy Chairman of the Board x x x - XMr A Geldenhuys Independent Advisory Member x x x x XMr A Adan Independent Advisory Member x x x x XMs N Ravele Independent Director x x - x XMs H Masondo Independent Director - x x x X

A separate Remuneration Report from the Committee is included in this report.

human Resources and Remuneration Committee

During the year under review the Committee discharged its responsibilities as defined in the Terms of Reference and more specifically has:

• Reviewed the Remuneration Philosophy and Policy to ensure the existence of a formal and transparent procedure in relation to remuneration, including that relating to non-executive directors and staff. In addition the Policy conforms to the recommendations of SAM;

• Overseen the ongoing implementation and monitoring of a competitive human resource strategy to ensure that the Company remains able to attract, retain and develop the best possible talent to support the business performance;

• Overseen the application of the performance management system to ensure that performance supports the strategy of the Group and accurately rewards the desired performance;

• Considered and approved various related policies to ensure the necessary formal structures to provide the requisite guidance and direction to employee benefits and behaviour.

The Committee consists of three members, who are non-executive directors. In addition the Committee is assisted by two advisors who are suitably qualified persons approved by the Board of Directors. The Terms of Reference follow the practice guidelines of King III as regards composition, in so far as the Committee consists of three non-executive directors, the majority of whom should be independent non-executive directors.

The Committee is chaired by Mr Abré Van Vuuren and is attended by invitees, including the Chief Executive Officer, General Manager: Human Resources and the Company Secretary. The Chief Executive Officer and any other executive managers are requested to excuse themselves from the meeting when decisions relating to them are involved.

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social and ethics Committee

The Committee functions in terms of a detailed Terms of Reference. The Committee is required to report to shareholders at the annual general meeting on the matters within its mandate. The Sustainability and Social and Ethical Committee Report, which includes the detailed manner in which the Committee has fulfilled its mandate, should be read in conjunction with this report. (See Page 50).

The Committee comprises three directors or prescribed officers of which at least one must be a non-executive director. The Group Committee is made up of two non-executive directors and one prescribed officer, who is the clues operations officer. The chair of the Committee is Dr Melchior Mentz who is a non-executive director, while the other non-executive member is Mr Schalekamp.

The Committee has met four times during the year and the Ethics Manager and Company Secretary have attended the meetings as invitees.


27 Mar 7 May 3 Sept 13 NovDr M Mentz (Chairman)

Independent Director x x x x

Mr H Schalekamp

Independent Director x x x x

Mr P Matshidze Prescribed Officer x x x x

nominations Committee

The functions of the Committee include the reviewing and making of recommendations to the Board on the composition and performance of the Board, committees and individual directors and members of the committees, the appointment and re-appointment of directors, members of committees and executives and the succession planning of the Chairman and Chief Executive.

The Terms of Reference of the Committee state that it should comprise of three non-executive directors, the majority of whom should be independent non-executive directors. The Committee meets as and when required. The Committee is chaired by Dr Maphai, who is also the Chairman of the Board and is a non-executive independent director. Invitees attending the meeting include the Chief Executive Officer and the Company Secretary.

Name Designation

Meeting dates

20134 Mar 11 July

Dr TV Maphai (Chairman) Independent

Director x x

Mr A Van VuurenIndependent Director x x

Ms N RaveleIndependent Director x x

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aCCounTaBiliTY anD ConTRol

The Board is responsible for the preparation and presentation of the information contained in the financial statements in accordance with applicable laws and regulations. The Board is satisfied that the statements give a true and accurate view of the results and state of affairs of the Company. An independent examination of the financial statements has been carried out by the external auditors in accordance with International Auditing Standards and as far as the Board is aware no relevant audit information which may have had a bearing on the outcome of these statements was withheld from the auditors. The financial statements were prepared in accordance with the Companies Act, No 71 of 2008 and International Financial Reporting Standards (IFRS). The Board has also considered the correctness of the information contained in the full integrated report and is satisfied that this provides a true and correct reflection of the business and activities of the Group. Limited external verification of the information contained in the Sustainability Report has been obtained and the external report is included after the Sustainability and Social & Ethics Committee Report (See Page 50).

The annual financial statements included in this integrated report have been prepared on the ‘going concern’ basis as the directors believe that the company has adequate resources to continue to operate for the foreseeable future.

The system of internal control is the responsibility of the directors and enables them to provide a reasonable assurance against material misstatement and loss and of the maintenance of proper accounting records and reliable financial information. The Board is also responsible for the safeguarding of the Group assets and ensuring the adequate prevention and detection of fraud and irregularities. In addition to the extensive system of controls, RMA also has an independent whistle blowing facility hotline which provides all stakeholders with a mechanism for the reporting of irregularities.

The internal control system provides the necessary assurances through a division of responsibility, organisational structure, policies and procedures and self monitoring mechanisms, with corrective action where necessary.

The internal audit department assists the Board, Audit and Risk Committee and executive management to maintain an effective internal control environment through the independent evaluation of the internal controls and systems.

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The internal audit department reviews the controls relating to:• Financial reporting and the reliability and integrity of both operational and financial

information;• Strategy and operations;• Compliance;• Information Management;• Effective and efficient use of the company’s resources and the safeguarding of assets.

Internal auditing services have been performed in accordance with the Standards for the Professional Practice of Internal Auditing.

eThiCs

It remains the responsibility of the Board to provide effective leadership based on a sound ethical foundation which includes an ingrained system of corporate governance, a commitment to, not only meet standards of compliance, but to do what is right and not to compromise the environment or future of generations to come. In executing on the commitment to leadership the Board has defined the Group’s strategic direction and has maintained responsibility for the overall control of the Group. The concepts of responsibility, accountability, fairness and transparency underpin the ethical behaviour of the Group and as stewards of the Group the Board members have committed themselves to act with intellectual honesty and independence in the interests of all stakeholders, using all their knowledge and skills, with the necessary courage to act with integrity, devoting sufficient time and effort to his / her endeavours on behalf of the Group.

Without derogating from its responsibility, the oversight of ethics has been delegated to the Social and Ethics Committee. In this regard a full and detailed report on ethics is included in the Sustainability and Social and Ethics Committee Report (see Page 50) which should be read in conjunction with this report.

Mr e h lufhugu (Ca) saacting Company secretary21 March 2014

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report from remunerAtIon CommIttee

Report from Remuneration Committee

The Remuneration Report is presented in conjunction with the Human Resources Report and the Governance Report, both of which form part of the Integrated Annual Report.

The Remuneration Philosophy and Policy (Employee and Non-Executive Director Policies in respect of remuneration) will be put to Shareholders at the Annual General Meeting.

Remuneration philosophy

During 2012 the Remuneration Philosophy and Policy was reviewed to ensure compliance with the SAM (Solvency Assessment and Management) requirements, specifically as regards the linking of reward to risk taking activities. In 2013 the policy was reviewed in its entirety to ensure that RMA Remuneration remains a prime driver in the attraction, motivation and retention of the best employees and through our Incentive Bonus Scheme, high performance is rewarded. The principles underpinning remuneration at RMA include fairness and consistency based on contribution and performance and market competitiveness within the parameters of affordability.

Governance

The oversight of the implementation of the Remuneration Philosophy and Policies is delegated to the Human Resources and Remuneration Committee which is comprised of three Non-executive board members and two external expert advisors. All Executive remuneration packages, as well as incentive payments, are considered by the Human Resources and Remuneration Committee and approved by the Board. Decisions that affect employees’ rewards are made by the Executive Management team and managers are required to provide input in respect of decisions concerning their subordinates’ reward. This is achieved through the performance management system.

Increases and incentive payments are dependent on both market benchmarking as well as performance. The practice of undertaking an annual salary benchmarking exercise was again followed in 2013 through the services of the external service provider, PwC RemChannel. The comparative exercise took into consideration the job role and grade as well as the general industry, financial and insurance sector

norms. All discrepancies, being employees who were remunerated either above or below the determined salary scales, were individually reviewed by both Executive Management and the Human Resources and Remuneration Committee.

The RMA performance management system is aligned with the overall company strategy. A clearly defined Company Balanced Score Card linked to Key Performance Indicators (KPIs) for the company, departments and individuals ensure a clear line of accountability and responsibility throughout the organisation. The overall targets are considered and approved by the Board, annually in advance. In pursuance of the drive towards excellence, the assessment process was further refined during 2012, for implementation in the 2012/13 benefit period, specifically with regards to the outperformance measurement criteria.

No ex gratia payments were made to directors or staff. Study assistance is made available to staff in accordance with the study policy.

Components of Remuneration

RMA uses a cost-to-company package structure which comprises a fixed guaranteed package, which includes retirement contributions, as well as variable structuring applicable to elective benefits. This structuring allows for a degree of flexibility to take into account employees’ personal requirements. The elective structuring options extend to choice of medical cover, elective death and disability top up cover and the level of retirement fund contributions.

In addition to the guaranteed package, the Group also operates an incentive scheme linked to performance. The performance measurement scheme is explained above and incentive bonus payments are awarded based on the performance measurement results. The Company is a mutual organisation, which means that the policyholders are the shareholders. As a result there is little scope within the current corporate structure for the establishment of any share incentive / profit share scheme.

Directors and executive Remuneration

executive Directors and Management

RMA has two executive directors, being the Chief Executive Officer and the Chief Financial Officer. In addition there are five further members of the Executive

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report from remunerAtIon CommIttee

Committee (Exco), being the Chief Operations Officer and the Claims Management, Information Communications Technology, Medical and Human Resources General Managers. All Exco members are permanent employees who have formal contracts with a three month notice period in the case of termination. There are no restraints of trade applicable. All senior staff are required to sign a confidentiality agreement. The remuneration of Exco (including executive directors) is recommended by the Human Resources and Remuneration Committee for approval by the Board. The performance assessments of Exco are also overseen by the Human Resources and Remuneration Committee for recommendation to the Board.

non-executive Directors and Committee Members

Non-executive directors are appointed in accordance with the Memorandum of Incorporation (MOI) (See Governance Report Page 46). During 2013 the Board reviewed the Directors’ Remuneration Policy which will again be recommended, unchanged, to the Shareholders at the Annual General Meeting to be held in June 2014. An annual directors fees’ benchmarking exercise is also undertaken using the PwC Non-executive directors’ practices and fees trends report – South Africa, using the small cap financial sector companies as the main benchmark. Remuneration remains within the norm.

The non-executive directors’ remuneration is structured on the basis of a base fee (25%) and meeting attendance fee (75%) with additional remuneration being paid to the chairpersons of the board and committees. Directors and committee members are also compensated for additional work which they undertake on behalf of, and at the behest of, the company over and above attendance at, and preparation for, formal meetings.

The Board has confirmed that non-Board members who serve on committees will still be remunerated as full committee members.

The annual increase in respect of directors’ fees will be considered by Shareholders, on the basis of a special resolution, at the Annual General Meeting. The proposed increase of 8% is proposed to be effective from June 2014.

The proposed increase in fees on a per meeting basis for the 2014/5 period is as follows:

2012 2013 2014Board Chairman R 45,335 R 48,000 R 51,840Board member R 25,185 R 26,700 R 28,840Committee Chairman R 15,740 R 16,700 R 18,040Committee Member R 12, 590 R 13,350 R 14,420

Directors and Officers Liability insurance cover is in place in respect of potential liability attaching to the execution of duties as directors or officers of the company. All cover is in accordance with that available in terms of current legislation. This report has been considered by the Human Resources and Remuneration Committee

Mr a Van VuurenChairman – human Resources and Remuneration Committee24 March 2014

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Background

The Social and Ethics Committee is the youngest Committee within RMA and has now been in operation for three years. It is constituted as a statutory committee of the Board. The Committee is responsible for all matters pertaining to sustainability and stakeholder engagement. This Committee plays a critical role in ensuring that RMA contributes positively to human capital, communities, natural environment and the marketplace in which it operates.

The Committee is represented by two non-executive directors and one prescribed director. It meets four times per annum and reports directly to the Board.

Mandate of the Committee

The Committee executes its mandate in terms of the Terms of Reference, the Companies Act, 71 of 2008, King III Report and all other duties assigned to it by the Board. It has monitoring and oversight responsibilities of the Company’s activities with regards to its social impact in the following key areas:

• Customer Relations• Compliance• Social and Economic Development• Good Corporate Citizenship• Labour and employment• Environment, health and public safety and• Ethics

Method of Reporting and external assurance

The Company has opted to use the Global Reporting Initiative (GRI) List applicable to the financial services industry as the guiding document to reporting and drafted a reporting template using the GRI indicators and disclosures as a reference point. A governance and compliance section was added to the reporting template. The committee submits a quarterly report to the Board using this reporting template.

The report provides a summary of the Company’s performance against the GRI performance indicators. This is considered by each of the Board committees and is updated monthly by management.

RMA continues to have a number of specific indicators in the Sustainability report externally assured.

In 2013 RMA opted to have a limited number of specific items in the Sustainability Report assured by Inqcazi, our external service provider. These included the following performance indicators namely: economic performance, society performance, labour practices and decent work, training and education, product responsibility and human rights. These indicators are considered to be material to the business.

The report by the external assurers is attached at the end of this report.

Community Customer Employees• Enterprise Development• SRI• Environment• BB-BEE• Fraud and Corruption

• Turnaround times• Mobile Prosthetic Clinic• Social Fund and

Accessibility• Care Facility• Contact Centre• Treating Customers

Fairly

• Excellent Health and Safety

• Excellent Employer

• Access to health services by the disabled in rural areas

• Increase education• Income generating projects• Food security projects• Return to Work for injured employees

report from the soCIAl And ethICs CommIttee of sustAInAbIlIty And stAkeholder engAgement

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The 3 year priority list of our Corporate Citizenship Policy was pursued earnestly in 2013. This list not only primarily focuses on the needs and expectations of our stakeholders regarding delivery of benefits, but also caters for staff and communities.

Our value proposition to our customers is geared to ensure that we continue to improve our service to them and exceed their expectations. This entails appropriate product design, efficient claims processing and compliance with the new legislation on Treating Customers Fairly.

To measure our effectiveness to our customers we assess turnaround times to ensure payments reach our customers within an acceptable time frame. In 2013, the turnaround time for payment of disability pensions was under 30 days from date of medical stabilisation. During the same period, 74% of all COIDA fatal claims were settled within 6 weeks from the date of an occupational death.

In the year under review, a total of 119 new permanent disability pensions (pensions over 30% permanent disability) were implemented, 50% of which constituted Spinal Cord Injuries (SCI), amputee and back and head injury cases. These are monitored on an ongoing basis through our Pensioner Medical Programme (PMP). The Mobile Prosthetic Clinic remains one of the main initiatives of RMA’s medical interventions and is actively involved in the care and management of the health of our injured beneficiaries living primarily in major labour sending areas of South Africa (Eastern Cape, Kwazulu/Natal and Limpopo), Swaziland, Lesotho, Mozambique and Malawi. The mobile prosthetic clinic also supplies and maintains artificial limbs, orthopaedic devices and repair or replace wheelchairs. It allows people with limited mobility, to access medical services close to where they live. It has been observed that the longevity of the prosthesis was being extended through the programme.

The mobile prosthetic clinic also assist injured employees and widows of employees who died at work with support for income generating and food security projects, over and above the monthly pension they receive. This includes provision of seeds

and gardening implements from the social fund as well as house renovations. As part of RMAs holistic approach to customer service, the mobile prosthetic clinic personnel performs a needs assessment of the injured beneficiaries with a view to determining enhancements that are required to improve the quality of life particularly with regards to enhanced mobility. Once the needs assessment of an injured employee has been determined, RMA’s social fund is used for funding enhancements to the household of injured employees.

Case study: Mobile Clinic

The mobile clinic visit held in Xai-Xai, Mozambique in August 2013, that was attended by Ms Manyonga (Non-Executive Director), Marissa Nel, Dr Dzingwa and Mr Vergilio Castello, the RMA Manager in Mozambique.

RMA delegation with pensioners attending the mobile prosthetic clinic in Mozambique

In the year under review, RMA spent a total of R 12 842 769 on various projects intended to benefit injured employees, their beneficiaries and communities. These projects included home renovations, bursaries, agricultural projects, donations of shoes and support for small business.

In 2013 RMA financially supported, a total of 658 children of employees who died at work. There is an internal process that identifies all children who will be turning 18 years of age and will no longer qualify for monthly pension. These children will continue to be supported if they are still at school or if they are studying at a tertiary institution.


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RMA has identified a need amongst its injured employees for custodial care due to medical circumstances and the lack of ongoing support at home. To this end, RMA has commissioned a project which would provide a custodial facility to address the specific healthcare needs of these injured employees. This facility will have family units to enhance the recuperative process of the injured while at the same time allowing for the training of the family on home based care, for ongoing care and support for the injured family member.

RMA has commenced with the implementation of its business plan by securing land for the construction of the custodial care facility. The site is well positioned within Welkom, as it is equidistant for beneficiaries in the Eastern Cape, Lesotho, Swaziland and Limpopo.

The custodial care facility is also close to medical facilities and this has alleviated the need for specialised hospital facilities within the care facility.

After a challenging start in the implementation of Enterprise Development (ED) in 2012, RMA has now signed a contract with our new service provider, Edgegrowth to manage our ED project. A capital investment of R 5 million was transferred to Edgegrowth. They identified and funded two recycling businesses based in Newcastle, Kwazulu/Natal and De Deur, in Gauteng. This initiative is important in the development of small businesses.

Case study: enterprise Development projects

Mpilenhle Recycling, Newcastle, Kwazulu Natal Klip Valley Recycling, De Deur, Gauteng

Gcina Makhoba Mpilenhle, founder of a waste recycling business located in Newcastle, Kwazulu/Natal.

Pinky Modisang, founder of a waste recycling business located in De Deur, Johannesburg, Gauteng.

“Mpilenhle Recycling would like to extend its sincere gratitude to RMA for the

RMA is continuously seeking ways to improve customer service. During 2013, a project to set up a Contact Centre was commissioned. This would be RMA’s central point from which all customer contact will be managed. The purpose of the RMA Contact Centre is to centralise the receipt and processing of all telephonic, facsimile, electronic mail and social media enquiries, complaints and compliments. The Contact Centre became fully operational in the first quarter of 2014.

Our staff members are fundamental and important to our business and as part of our Corporate Citizenship priorities, we are committed to the maintenance of excellent health and safety within our office environment. The Health and Safety Committee of RMA is fully functional and operates within the terms of reference as set out. It meets regularly to deliberate on all health and safety matters pertaining to RMA and its employees. In addition to this, RMA has contracted with ICAS (ICAS Employee and Organisation Enhancement Services Southern Africa (Pty) Ltd), to provide employee wellness services to all our employees. This service promotes the health and wellbeing of our employees whilst at the same time improving productivity and reducing absenteeism. It enables staff to refer all their health related matters to them and in confidence. In 2013, a voluntary health screening and wellness programme was introduced to all staff within the company.

RMA is committed to maintaining its reputation as an excellent employer. To this end, we conduct an employee satisfaction survey annually in order to assess the perception of staff about the company. In 2013, RMA contracted with Deloitte to conduct a staff satisfaction survey called the VOTE, the “Voice of the People survey”. All staff members were invited to participate in the survey which measured perceptions against 10 key dimensions. A total of 109 (89%) staff members responded to the survey. The overall RMA Dimensions results yielded a mean of 3.65 out of a range of between 0 and 5 which reflected a very positive perception of the company by staff.

RMA established a Mentorship and Successor Development Programme with an initial intake of 10 staff members in 2013. The staff members were identified for 6 keys roles within the company. This process is ongoing and has thus far proven


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successful as measured by regular assessments. There is also a Staff development programme and a personal development programme to assist staff to enhance their performance and to develop themselves professionally.

In 2013, RMA staff spent just under 6 000 hours in training. The training was conducted for all levels of staff.

RMA remains committed to the promotion of greater environmental responsibility, the reduction of its energy use and carbon footprint.

In 2013, the Board commissioned PWC to conduct an evaluation on the performance of the Board and its Committees. The Social and Ethics Committee was among the Committees that were evaluated.

The report was presented to the Committee for discussion. The Committee noted the recommendations and undertook to implement them. One such recommendation was the development of a Workplan for the Social and Ethics Committee for 2014. The Committee developed a Workplan which was duly discussed and adopted for implementation in 2014.

In 2013, the Customer Relations Management system, that was intended to record all complaints received by RMA, was proposed and subsequently implemented in 2014 in line with the requirement of the Treating customer fairly regulations.

CSI policy was drafted and presented to EXCO and the Board. The policy proposed expenditure equal to 1% of net profit on the following key focus areas: Health, Education and Social development projects.

RMA is committed to compliance with the Black Economic Empowerment (BEE) requirements of the Department of Trade and Industry (DTI). In 2013, RMA continued with its implementation of approved procurement process. RMA is a mutual association and this has presented certain challenges regarding compliance with the ownership elements of BEE. There are also constraints imposed by license conditions regarding parties with whom RMA can trade. RMA continues to implement policies and practices geared to compliance with BEE requirements. There are also ongoing discussions with RMA shareholding regarding BEE compliance.

In the year under review, a new priority list that was developed in terms of the Corporate Citizenship Policy was approved by the Board for the next 18 month commencing in April 2013. This list is monitored by the Social Ethics Committee on a quarterly basis. Thus far good progress has been made regarding the following:

• Accessibility of benefits by claimants• Assistance of pensioners requiring custodial care• Education of pensioners • Support of small businesses• Maintenance of health and safety standards• Building RMAs reputation as an employer of choice• Assisting stakeholders in improving education and employability and• Reduction of energy use and carbon footprint


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Internal External Associated government and regulatory

bodies• Healthcare providers• Other service providers• Indirect (Chamber of Mines, NGOs

neighbouring countries, FEMA)

In the previous financial year, RMA implemented a comprehensive Stakeholder Engagement Policy which encompassed a detailed external communication strategy and these continued into 2013. This responsibility falls within the mandate of the Social and Ethics Committee which provides quarterly reports to the Board. We have continued to maintain a strategic relationship with our stakeholders.

In the previous period, the following stakeholder engagement activities were embarked upon:

• Update of the website to include frequently asked questions, information zone for members, vacancies, and information on the extension of license to cater for Class 13 industries.

• Production of brochures for employers and employees of Class 4 (mining) and 13 industries (iron, steel, metal and other related industries).

• Production of a newsletter for members• Registration of the RMA motto of “caring, compassionate compensation”

with Companies and Intellectual Property Commission (CIPC).• Establishment of the Contact Centre• Commencement of training of employees, employers and trade unions in line

with the training plan for 2014. • Online earnings declaration for ease of submission of earnings by employers• Ongoing rebranding of the Company, including satellite offices• Development of a facility for electronic submissions of all claims related

documents including medical reports.

Sewing Machines

Two of our pensioners who have benefited from the social fund, Mr Maope a SCI patient and Elia Mpeqa an amputee who both got sewing machines and over lockers to be able to sew and sell their goods to supplement their monthly pension income.

Seed and garden project Chicken Farm

This is a chicken project that was started by five pensioners in Inhambane, Mozambique, financed by RMA. The project will provide fresh chicken to local communities.

Internal External• Board• Management• Staff

• Shareholders• Policyholders• Compensation Fund• Beneficiaries (injured employees and

their dependants)• Potential beneficiaries (employees and

dependants)• Organised Labour


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supported by the Board, its committees, management and staff. There is an approved Code of Ethics supported by leadership to promote ethical behaviour. In addition, structures, systems and processes are in place and are regularly reviewed to ensure that all stakeholders are familiar with them and that they are kept up to date with developments.

The RMA code of ethics includes provisions relating to conflicts of interest, handling of confidential information, entertainment, use of company services and property and the receipt of gifts. A gift register is maintained and all staff members are required to disclose all the gifts regardless of amount. All Board, committee and executive committee meetings commence with the signing of declarations of interests in line with the requirements of the Companies Act. The declarations by directors are reviewed annually. All breaches of the Code of Ethics, as well as other matters of impropriety may be reported through our whistle blower hotline by all stakeholders.

The Committee continues to monitor ethics and fraud related matters among all stakeholders. RMA has a zero tolerance approach towards fraud and corruption. Our externally managed whistle blower facility is used regularly by those who want to report any matter related to fraud or corruption. In the current financial year only two matters were reported through the hotline. One matter had to do with an alleged fraudulent activity which was later found to be untrue and the second matter had to do with a perceived under compensation which was clarified to the aggrieved party. statutory obligations

RMA operates in an environment with multiple legislative regimes to comply with. Below are the key legislation and regulations that would impact on RMA business: • Protection of Personal Information Act, 4 of 2013. The legislation was signed

into law late last year and seeks to protect the right to privacy of personal information. The legislation will impact on our claims adjudication process and the way we protect information of our stakeholders. RMA has put measures in place for full compliance.

• Implementation of a revised customer focused training programme• Ongoing participation in activities of the Compensation Fund, Department

of Health, Financial Services Board, Chamber of Mines and South African Society of Occupational Medicine (SASOM)

• Internally, the workplace forum meets every month, customised training programmes have been designed to meet business needs and improve our staff skills sets and focus group discussions were held to develop action plans following the results of the Voice of the People Survey.

In the current year, we trained 505 delegates from employers at 10 regional workshops and the topics covered at these workshops included COIDA, claims submission and adjudication and earnings declarations, among others. The purpose of the training was to empower employees of our members to be able to submit claims for occupational injuries and diseases to RMA correctly, and to ensure compliance with reporting requirements of COIDA and the Short and Long Term Insurance Acts.

RMA now has a formal process for injured employees to lodge their objections regarding their dissatisfaction with their compensation for occupational injuries. This process is administered by RMA but all matters are adjudicated upon by external and independent Presiding Officers and assessors. In 2013, RMA received a total of 29 Section 91 objections from employees on the grounds of perceived low compensation and Section 56 cases which considers all matters pertaining to claims of alleged employer negligence.

ethics

The Social and Ethics Committee is also responsible for all company matters pertaining to ethics. In the year under review, the Ethics Officer Charter was considered and approved by the Committee. The Terms of Reference for the Operational Ethics Forum were also considered and approved during the year under review. Ethics are now embedded in the culture of the Company and are


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• Treating Customers Fairly (TCF) is an outcomes based regulatory and supervisory approach that seeks to entrench fairness in all aspects of customer service with the company. There are 6 specific areas in the framework. RMA is in the process of implementing the regulatory and supervisory approach even before the legislation is promulgated.

• Financial Services Laws General Amendment Act, 45 of 2013. The legislation seeks to align financial sector legislation, strengthen the regulator’s powers and eliminate legislative overlaps. RMA continues to analyse the full impact of the new bill. We are monitoring this bill closely in an effort to evaluate the impact on products.

• Solvency Assessment and Management (SAM). This framework is currently under development to establish risk based supervisory regime for prudential regulation of both long and short tern insurers. RMA is preparing for the implementation of SAM.

RMA maintains a strong compliance culture within prevailing legislations and regulations. RMA prepares a monthly compliance report indicating the level of compliance with all major legislation which impact on the company. The report is considered by the Audit and Risk Committee and the Social and Ethics Committee.

Dr M Mentzsocial and ethics Committe

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economic performance indicators

economic performance

17 Core EC1 Direct economic value generated and distributed, including

Group figures for the year ended 31 December 2013.

• revenues 2013 2012

Premium income R 1 084 million R 953 million

Investment income R 679 million R 614 million

Net realised fair value gains R 572 million R 208 million

Net unrealised fair value gains R 242 million R 426 million

Reinsurance claims R 22 million R 16 millionR 2 599 million R 2 217 million

• operating costs, Operating costs year ended 31 December 2013 R 136 million (2012: R 123 million)

• employee compensation

Employee compensation year ended 31 December 2013 R 74 million (2012: R 66 million)

• donations and other community investments (break down by programme and theme)

2013 projects Theme amount

PMP - shoes Clothing R 199 500

Bursaries and sponsorships Education R 440 000

Chicken farm Foreign ED R 125 000

Seed project Foreign ED R 22 000

Labour Department Pensioner care R 20 000

Other donations Pensioner care R 5 850 713

CJP and Augmentation bursaries Education R 1 185 556

Edgegrowth ED specialists Local ED R 5 000 000R12 842 769

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• payments to capital providers

RMA Group has a non-profit motive so all funds are retained on behalf of beneficiaries. The Group does not raise any long-term debt as its operations are self-funding.

• payments to governments

Total amounts due to Government for 2013: R45, 3 million (2012: R27, 0 million). This figure includes income tax, PAYE, VAT, SDL, UIF, FSB levies and payments to the Compensation Fund.

• retained earnings Group retained earnings amounted to R725 million at 31 December 2013 (R687 million in 2012) and the revaluation reserve increased to R859 million (2012: R627 million) which translated into a solvency ratio of 147,7% as at end of 2013 (2012: 139.5%).

18 Core EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

RMA’s business is not impacted materially by climate change however its clients and the companies in which it invests, are impacted upon. There is a renewed focus by the group to invest in environmentally responsible companies. These companies in which the Group invests will ultimately carry a premium above the market value since their operations will be sustainable. It is anticipated that there will be no short-term impact on RMA’s sustainability, regardless of the environmental practices of its clients.

19 Core EC3 Coverage of the organisation’s defined benefit plan obligations

Employees of the Group enjoy a defined contribution plan only. The Group offers risk benefits through a Group policy with Old Mutual. Such benefits include life cover of twice annual salary, family cover, critical incidents cover and temporary income protection of up to 75% of salary for 100% disability and a percentage thereof linked to percentage of disability subject to an overall upper limit of R45 000 (2012: R 24 336) per month effective until end October 2014 . In addition hereto, the enhancement products would extend the compensation payable to commuting accidents to and from work and also to the value of the last salary and not the legislated upper limit.

22 ADD EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation, by gender

All staff are salaried employees. Salaries are benchmarked annually to ensure they are market related. Where individual staff members do not fall within the policy indicated parameters (low to high median of benchmark) each case is reviewed by the Remunerations Committee with management motivation for the salary scale.

25 Core EC8 Developments and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement

RMA is involved with one infrastructural investment project - the development of the care facility along with the Association of Persons with Disabilities. This development is taking place in Welkom. RMA’s investment through Edgegrowth, who are enterprise development specialists, provides for commercial public benefit, whereas their satellite clinics and medical practitioner home visits, counselling and health services, as well as bursary and mentorship programmes benefit the public by using in-kind or pro bono engagements.

26 ADD EC9 Understanding and describing significant indirect economic impacts, including extent of impacts

The on-going seed project in Malawi and a new chicken farming project in Mozambique both contribute to the financial and food security of the beneficiaries involved as well as the communities. It is difficult to accurately quantify the economic impact of these projects, however, it is safe to say that these projects have a significant impact for both the beneficiaries and the communities in which they operate.

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Society Performance Indicators

Community

economic performance indicators

economic performance

Direct economic value generated and distributed, including

Group figures for the year ended 31 December 2013.

58 Core S01 Percentage of operations with implemented local community engagement, impact assessments, and development programs.

Approximately 4.7% of NPAT has been spent on various projects with implemented local and foreign community engagement, impact assessments, and development programs.

Corruption

59 Core S02 Percentage and total number of business units analysed for risks relating to corruption

The Audit and Risk Committee is responsible for the prevention and eradication of fraud and corruption. This Committee delegates its responsibility to the Risk Management function and line management who are required to identify and report on potential fraud and corruption risks within the Group. Client policies generally contain anti-fraud and corruption clauses. The risk of fraud is included in Internal Audit assignments and assessed as part of the Internal Audit plan. Departments and branches, as well as business processes, are assessed with regards to the risk of corruption in accordance with the approved audit plan. During 2013, Internal Audit performed audits on 19 business units out of a possible 22 representing 86% of the company.

60 Core S03 Percentage of employees trained in organisation’s anti-corruption policies and procedures

Key staff received training in anti-corruption policies and procedures during 2013. Tip-Offs Anonymous posters with contact details prompting staff to report fraud, theft, corruption and unethical behaviour are displayed in all business units throughout the Head Office and branches. All staff are also required to sign the Code of Ethics which also reinforces the requirement to report any offences.

Labour Practices and Decent Work

Employment

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Total workforce by employment type, employmentcontract and region, broken down by gender

Workforce by province

employment Type Gau Mp nW Fs eC nC les MoZ kZn ToTal

Permanent 90 4 16 7 2 2 2 2 2 127

Fixed Term Contract 4 1 2 1 8

Total 94 5 18 8 2 2 2 2 2 135

Workforce by Gender

employment Type Gau Mp nW Fs eC nC les MoZ kZn ToTal

Permanent Male 37 2 2 2 1 2 1 47

Permanent Female 53 2 14 5 1 2 2 79

FTC Male 1 1 2

FTC Female 3 1 1 1 1 7

Total 94 5 18 8 2 2 2 2 2 135

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69 Core LA2 Total number and rate of new employee hiresand employment turnover by age group, gender and region, years’ service lost and reasons for termination

number of terminations of permanent employees

Rate of terminations age Group Gender Region

19 14.1% 18 - 30 = 1 30-50 = 9 50>= 9

Males - 3 Females - 16

Gauteng - 13 Free State - 1 North West

- 5number of permanent new employees Rate of new

employeesage Group Gender Region

26 19.3% 18 - 30 = 4 30 - 50 = 21 50> = 1

Males - 6 Females - 20

Gauteng - 20 Free State - 1 North West -

3 Kwa Zulu Natal - 2

70 ADD LA3 Benefits provided to full-time employees that arenot provided to temporary or part-time Employees, by significant locations of operations.

In comparison to contract employees, full time employees have additional contractual leave, membership of the Provident Fund and access to Medical Aid cover. No specific conditions apply to any particular region or type of permanent employee. The Group has continued with its policy of keeping contracted employees to a minimum and converting the positions to a permanent position where warranted.

74 ADD LA6 Percentage of total workforce represented in formal joint management - worker health and safety committees that help monitor and advise on occupational health and safety programs

Health and Safety Committee includes three (3) staff members and four (4) management appointees. This translates into 5.2% of the total work force. Each member has a single vote and the chairman does not have a casting vote. All staff have the opportunity to nominate one of their members to the Committee.

75 Core LA7 Rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities by region and by gender

Rates of injury, occupational diseases and lost days are not applicable. Rate of absenteeism 2013: 1, 2% (2012: 2%) The following definitions apply: Absentee An employee absent from work because of incapacity of any kind, not just as the result of work-related injury or disease. Permitted leave absences such as holidays, study, maternity/paternity, and compassionate leave are excluded. Absentee rate refers to a measure of actual absentee days lost as defined above, expressed as a percentage of total days scheduled to be worked by the workforce for the same period. There was one minor incident reported during 2013 with no occupational diseases or fatalities reported during 2013. The process for reporting accidents has been formalised and falls under the Human Resources department.

Training and education

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employee category Total hours trained per employee category (permanent)

Total hours trained per gender (permanent)

average hours of training per employee (permanent)

average hours of training per gender (permanent)

Top management 3 Male - 3 Female - 0 3 Male - 3 Female - 0

Senior management 92 Male - 43 Female - 49 8 Male - 7 Female - 8

Middle management 765 Male - 213 Female - 552 17 Male - 10 Female - 24

Supervisory / Junior management 1595 Male - 152 Female - 1443 29 Male - 39 Female - 23

General employees 2055 Male - 572 Female - 1483 18 Male - 19 Female - 18

80 ADD LA12 Percentage of employees receiving regularperformance and career development reviews, bygender

All permanent employees have detailed KPAs which have been mutually agreed to and each employee’s performance is evaluated annually.

81 Core LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity

Only permanent employee’s figures have been used to calculate these tables.

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employee category Gender age Race Disabled

Top management Male: lFemale: 0

<30:031-50:0

>50:1

Black: 0Coloured: 0

White: 0Indian: 1

0

Senior management Male: 5Female: 1

<30:031-50:4

>50:2

Black: 4Coloured: 0

White: 1lndian:1

0

Middle management Male: 16Female: 14

<30: 131-50: 19

> 50: 10

Black: 12Coloured: 1

White: 14Indian: 3

0

Supervisory andJunior management

Male: 29Female: 14

<30: 431-50: 27

>50: 12


White: 9Indian: 4

0

General employees Male: 11Female: 35

<30: 931-50: 30

>50: 7


White: 9Indian: 0

0

82 Core LA14 Ratio of basic salary of ladies to men by employeecategory, by significant locations of operations

Ratio of package earned by ladies to men by employee category

The statistics have not been categorized by location as the only significant location is the head office.Only permanent employee salary figures were used.

position Male Female Ratio Ratio of earnings Female : Male

Top Management 1 0 - -

Senior Management 5 1 5:1 0.66

Middle Management 16 14 1,14:1 0.92

Supervisory/Jr Management 14 29 0,48:1 0.97

General Employees 11 35 0,31:1 1.13

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83 Core LA15 Return to work and retention rates after parental leave by gender

product Responsibility

product and services labelling

86 Core PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such

All COIDA products and services offered by the Group are fully explained in posters placed in employers’ premises. Brochures created by staff with appropriate legal skills (to ensure accuracy of disclosures and simplicity of language) for both pensioners and employees are distributed to clients or they are made available at branches. In addition staff in satellite branches are all conversant with products offered and training in this regard is compulsory. Branches air short programmes that explain benefits over TVs to customers. Branch managers are required to be qualified for FAIS. Furthermore, staff in mobile clinics are also required to assist customers in understanding the Group’s products and services.

88 Core PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

No significant fines were imposed on the Group by any regulatory authority for non-compliance with laws and regulations concerning the provision and use of products and services (2012: no fines either).

human Rights

investment and procurement practices

95 Core HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights

A total of 36% (2012: 53%) of the Group’s investments are in companies incorporated in the JSE’s Social Responsibility Index. The JSE screens companies included in this index to ensure that they uphold human rights. The Company has an investment of R65 million in its subsidiary Rand Mutual Assurance Life Limited which is subject to the Group’s core values including; caring for the well being of our people and treating others with dignity and respect.

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External Audit Assurance

INDEPENDENT ASSURANCE REPORT TO THE DIRECTORS OF RAND MUTUAL ASSURANCE COMPANY LIMITED FOR THE YEAR ENDED 31 DECEMBER 2013

We have completed our independent assurance engagement to enable us to express our limited assurance conclusions on whether specified Key Performance Indicators (“KPIs”) contained in the Rand Mutual Assurance Company Limited Annual Integrated Report (“the Report”) for the year ended 1 December 2013, has been prepared, in all material respects, in accordance with the basis of preparation as per the Global Reporting Initiative indicators (GRI) described in the GRI Table of the Report:

1. Economic Performance Indicators - Economic performance, market presence and indirect economic impacts:

a. EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

b. EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change.

c. EC3 Coverage of the organisation’s defined benefit plan obligations.d. EC5: Range of ratios of standard entry level wage compared to local minimum

wage at significant locations of operation, by gender.e. EC8: Developments and impact of infrastructure investments and services

provided primarily for public benefit through commercial, in kind or pro bono engagement.

f. EC9: Understanding and describing significant indirect economic impacts, including extent of impacts.

2. Society Performance Indicators - Community and corruption:

sustAInAbIlIty AudIt report

a. SOI: Percentage of operations with implemented local community engagement, impact assessments, and development programmes.

b. S02: Percentage and total number of business units analysed for risks relating to corruption.

c. S03: Percentage of employees trained in organisation’s anti-corruption policies and procedures

3. Labour practices and Decent Work - Employment, occupational health and safety, training and education, diversity and equal opportunity:

a. LAI: Total workforce by employment type, employment contract and region, broken down by gender.

b. LA2: Total number and rate of new employee hires and employment turnover by age group, gender and region.

c. LA3: Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operations.

d. LA6: Percentage of total workforce represented in formal joint management - worker health and safety committees that help monitor and advise on occupational health and safety programmes.

e. LA7: Rates of injury, occupational diseases, lost days and absenteeism, and total number of work-related fatalities by region and by gender.

f. LAI 0: Average hours of training per year per employee by gender and employee category.

g. LAI 2: Percentage of employees receiving regular performance and career development reviews, by gender.

h. LAI 3: Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity.

i. LAM 14: Ratio of basic salary of men to women by employee category, by significant locations of operations.

j. LAI 5: Return to work and retention rates after parental leave, by gender.

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4. Product Responsibility - Product and services labelling and compliance:

a. PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements.

b. PR5: Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

c. PR9: Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

5. Human Rights - Investment and procurement practices:

a. HR1: Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening.

The specified KPIs noted above have been highlighted for identification purposes in the GRI table.

Our responsibility in performing our independent limited assurance engagement is to Rand Mutual Assurance Company Limited only and in accordance with our letter of engagement as agreed with them. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Rand Mutual Assurance Company Limited, for our work, for this report, or for the conclusions we have reached.

Directors’ Responsibility

The directors are responsible for implementing a stakeholder engagement process to identify all relevant stakeholders, to identify key issues, to respond appropriately to key issues identified, to determine those key performance indicators which may be relevant and material to the identified stakeholders, and to design and apply appropriate sustainability reporting policies. The directors are also responsible for the preparation and presentation of the Report and the information and assessments contained in the Report in accordance with the relevant criteria. This responsibility includes: designing, implementing and maintaining appropriate

performance management processes and systems to record, monitor and improve the accuracy, completeness and reliability of the sustainability data and to ensure that the information and data reported meet the requirements of the relevant criteria, and contains all relevant disclosures that could materially affect any of the conclusions drawn.

assurance provider’s Responsibility

Our responsibility is to express our limited assurance conclusions on the specified KPIs in the Report based on our independent limited assurance engagement. Our independent limited assurance engagement was performed in accordance with the International Federation of Accountants’ (IFACs) International Standard on Assurance Engagements (ISAE) 3000 (Assurance Engagements Other Than Audits or Reviews of Historical Financial Information). This standard requires us to comply with ethical requirements and to plan and perform our engagements to obtain limited assurance regarding the specified KPIs contained in the Report.

Basis of Work and limitations

We have complied with the International Federation of Accountants (IFAC) Code of Ethics for Professional Accountants, which includes comprehensive independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Our engagement was conducted by a multi-disciplinary team of specialists with extensive experience.

The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the subject matter and the purpose of our engagement. In making these assessments, we have considered internal control relevant to the entity’s preparation and presentation of the Report and the information contained therein, in order to design procedures appropriate for gathering sufficient appropriate assurance evidence to determine that the information in the Report is not materially misstated or misleading as set out in the summary of work performed below. Our assessment of relevant internal control is not for the purpose of expressing a conclusion on the effectiveness of the entity’s internal controls.


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Non-financial performance information is subject to greater inherent limitations than financial information, given the characteristics of the subject matter and the methods adopted for the definition and gathering of information. Qualitative interpretations of relevance, materiality and the accuracy of data are subject to individual assumptions and judgments.

We planned and performed our work to obtain all the information and explanations that we considered necessary to provide a basis for our limited assurance conclusions pertaining to the Report and the specified KPIs, expressed below.

Where a limited assurance conclusion is expressed, our evidence gathering procedures are more limited than for a reasonable assurance engagement, and therefore less assurance is obtained than in a reasonable assurance engagement.

summary of Work performed

Set out below is a summary of the procedures performed pertaining to the specified KPIs which were included in the scope of our limited assurance engagement.

• We obtained an understanding of:• The entity and its environment;• Entity-level controls;• The selection and application of sustainability reporting policies; and• The significant reporting processes including how information is initiated, recorded, processed, reported and incorrect information is corrected, as well as the policies and procedures within the reporting processes.

• We made such enquiries of management, employees and those responsible for the preparation of the Report and the specified KPIs, as we considered necessary.

• We inspected relevant supporting documentation and obtained such external confirmations and management representations as we considered necessary for the purposes of our engagement.

• We performed limited tests of detail responsive to our risk assessment and the level of assurance required, including comparison of judgmentally selected

information to the underlying source documentation from whichthe information has been derived.

We believe that the evidence obtained as part of our limited assurance engagement, is sufficient and appropriate to provide a basis for our limited assurance conclusions expressed below.

Conclusion

Based on the work performed and subject to the limitations described above, nothing has come to our attention that causes us to believe that:

• The specified KPIs have not been prepared, in all material respects, in accordance with management’s sustainability criteria as described in the GRI Table in the Report for the year ending 31 December 2013.

other matter

The maintenance and integrity of the Rand Mutual Assurance website is the responsibility of Rand Mutual Assurance management. Our procedures did not involve consideration of these matters and accordingly we accept no responsibility for any electronic information and our opinion is only limited to the physical report attached to it.

wgccra RatingsDirector: Jaroslav CernyRegistered auditorChartered accountant (sa)18 Bedfordview Boulevard17 River Road, MorninghillBedfordview, 200819 March 2014


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Risk Management Report

introduction

A comprehensive Board approved Risk Management Policy is in place. The policy incorporates ongoing risk and internal control identification and assessment, and development of mitigating actions as appropriate.

The Board is ultimately responsible for overall risk management which is fundamental to our business and underpins our strategic objectives and solvency considerations.

The oversight of the risk management process and the systems of internal control is delegated by the Board to the Audit and Risk Committee, which is supported by the IT sub-committee. Through the structure of management and both internal and external auditors, reliance is also placed on combined assurance. The functioning of an effective ethical environment balancing entrepreneurial spirit and governance / compliance forms part of the risk management environment.

Risk Management process

Risk-taking, in an appropriate manner, is an integral part of any organisation. Success relies on optimising the trade-off between risk and reward. In the course of conducting its business, RMA is exposed to a variety of risks, including but not limited to strategic, financial which include market, credit and liquidity risk, human resources, operational which include underwriting and insurance risk, compliance and reputational risk. The long-term sustained growth, continued success and reputation of RMA are critically dependent on the effectiveness of risk management. Risk management is one of RMA’s core focus areas and management is committed to applying international best practice and standards. RMA’s risk management framework fully supports the definition by the Committee of Sponsoring Organisations of the Treadway Commission (COSO), which reads: “enterprise risk management is a process, effected by an entity’s board of

directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risks to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.” RMA’s risk philosophy is underpinned by its objective of member value creation through sustainable growth, in a manner that is consistent with members’ expectations of the Organisation’s risk-bearing capacity and its risk appetite. RMA’s risk and ethical culture are attuned to the risk philosophy. RMA’s objective in this regard is to ensure that a world-class risk management culture is sustained throughout its operations. The culture is built on the following main elements:

• Adherence to the value system of RMA; • An integrated holistic risk management approach to achieve optimal business

decision-making; • Proactive risk management with equal attention to traditionally quantifiable

and currently unquantifiable risks; • A risk awareness culture; • Disciplined and effective risk management processes and controls, and

adherence to risk management standards and limits; • Compliance with the relevant statutory, regulatory and supervisory

requirements. The management of risk is fundamental to RMA’s business and is a crucial enabler for management to operate more effectively in an environment characterised by uncertainty and risk; and

• Staff is motivated not only to identify risks (threats and hazards), but also to identify opportunities.

our risk management approach is that: • All risks must be identified and managed, and that the returns must be

commensurate with the risks taken, relative to RMA’s risk appetite; and • It is the responsibility of each individual, relative to their position, to identify

themselves with RMA’s declared priority of risk management, to recognise real or anticipated risks and to take appropriate action.

rIsk mAnAgement report

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The risk management structure and enterprise risk management framework are diagrammatically depicted at the bottom of this report.

RMA has again in 2013 conducted an annual risk review. This process is supported by monthly key risk indicator and loss event reporting. The most important loss events during 2013 related to the industrial action in the mining industry. The impact of which has been considered by all levels in the organisation, from Board level to executive management and line managers.

This remains an area of key focus to ensure timeous response to the relevant risks.

The current key risks facing the Company are as follows:

key Risks

Risks Controls and Mitigating ActionsFailure to diversify client base and income streams

Due to the limited life expectancy of certain mines RMA need to consider alternative sources of income going into the future.

Dedicated staff pursuing meaningful new businessCompetitive rates offeredMaintain good claims handling serviceMaintain good client relationsCaring, Compassionate, Compensation philosophyOffering additional products to existing clientsCOIDA license extended to include Class 13 (Iron, Steel, Artificial limbs, Garages, Metals etc.) Leasing RMA IT SystemsResearching and developing additional products


achieving Target investment returns

RMA pays long-term medical benefits to injured employees and has more than 23,000 pension beneficiaries. Ensuring that investment returns meet targets is essential to ensure that RMA will meet its obligations and objectives.

An investment strategy has been agreed by the Board and is documented in the Investment Policy.

The Investment Committee meets quarterly to assess investment performance and to take appropriate remedial actions.

A diversification of assets strategy is employed.

Thorough research and ongoing monitoring by the Company’s investment consultant and actuary ensures that investment targets are met.

The Bonus Stabilisation Reserve is healthy in terms of Capital Adequacy Requirements.

Compliance with core regulatory requirements e.g. CoiDa, short-term and long-term insurance act, provisional settlement powers etc.

AÁRMA has been granted provisional settlement powers in terms of the license issued by the Minister of Labour.

RMA has to ensure that all awards and decisions are strictly in accordance with the provisional settlement powers.

RMA is also licensed and has to comply with the Short-term and Long-term insurance Acts

Regular and ongoing meetings with the Office of the Compensation Commissioner on both a strategic and operational level ensure mutual understanding and trans-parency.

Ongoing staff training includes provisional settlement requirements.

Member training which focuses on ensur-ing compliance with COIDA.

Quarterly compliance report is present-ed to the Audit and Risk Committee and Board.

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Risks Controls and Mitigating Actionsstakeholder engagement

Effective stakeholder engagement is critical to the sustainability of any organisation.

Ongoing Stakeholder Engagement Assessment Process

Direct member engagement when relevant

Code of Ethics which has strong focus on stakeholder engagement.

Meeting the FsB solvency asset Management (saM) requirements

SAM requirements are in the process of being implemented by the FSB and RMA like all other insurance companies in South Africa

Engage with actuaries and external experts

Board training

Agenda item on all sub-committeesCounter party risk of investments (Risk of a party defaulting) including counter party concentration risk

Volatility in the investment environment require that this risk is actively managed

The Investment consultant monitors all transactions to ensure compliance with investment mandates with no open risks.

Investments are only allowed in assets as per ratings done by external ratings agencies and in terms of the approved investment mandate

Investment Committee reviews investment results quarterly, therefore, any significant deviations in expected results are expected to come to light.

Management reviews investment results monthly

RMA Care suite contract not extended beyond pilot phase, or extended for a shorter than preferred period (proposed period is three years

Work closely with the management of the Compensation Fund to demonstrate the value add and controls offered by the RMA Care Suite

We continue to mitigate insurance and underwriting risks through the placement of insurance and reinsurance. Based on the claims experience, changes within the environment, overall risk assessment and the expert advice of insurance brokers, cover is purchased within the insurance market. The Group has in place a functional and tested disaster recovery plan which specifically addresses the safeguarding of the information technology services and data.

Financial risk is discussed in the Chief Financial Officer’s review.

internal Control environment and effectiveness of Risk Management process and system of internal Control

An audit plan, taking into account the annually reviewed risk register and risk profile of RMA is presented and agreed with the Audit and Risk Committee on an annual basis. This audit plan is revised and updated as the risk control environment dictates.

All audits as per the audit plan for 2013 have been completed. Where shortcomings were identified management actions were agreed. These are monitored and followed up to completion. Proof of completion is provided and/or follow-up audits conducted to ensure that the recommended corrective action has been taken. A quarterly report is presented to the Audit and Risk Committee in this regard. Appropriate CAATS (Computer Assisted Auditing Techniques) audit work is performed based on a variety of reports through which the internal systems and processes are interrogated to identify potentially fraudulent activities. No significant fraudulent activities have been identified during 2013.

Risk appetite

Each committee of the Board has considered and approved a risk appetite statement in respect of the business included in the committee mandate. The risk appetite statements have been incorporated into an overall Group statement which has been considered and approved by the Board. The current risk appetite statements are as follows:


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Risk appetite statements investments

• RMA will meet and exceed solvency requirements as set by the regulators from time to time.

human Resources

• RMA will, through its performance management processes as well as recruitment and retention practices, ensure full compliance with all labour and employment legislation, whilst maintaining high levels of service and ensuring that staff is treated fairly.

strategic

• RMA will expand its income stream due to declining numbers in the mining industry through, diversifying its client base and income streams, by replicating its business model to ensure economies of scale.

• RMA will not treat stakeholders unfairly and will not do or allow anything to be done which goes against the spirit and letter of the Code of Ethics.

• RMA will through its internal control and stakeholder engagement processes avoid, and in the unlikely event manage, adverse publicity and or perceptions of stakeholders and will ensure that information is accurately communicated.

Financial

• RMA is willing to accept:• Single life limit for claims (non-statutory policies): R50,000,000• That catastrophe cover of R800,000,000 is considered to be sufficient.

Indemnity limits will be based on the actual earnings of the injured employee/s and the reasonable medical expenses incurred.

operational

• RMA is not willing to accept critical operational system down time of more than one day.

• RMA will not accept operational service delivery failures which will impact on service delivery to its stakeholders.

• RMA will ensure that it has sufficiently robust underwriting processes in place to manage the underwriting risk and enable the company to maintain adequate solvency margins.

• RMA has a zero tolerance for any form of fraud and will prosecute any person involved in fraud.

Compliance

• RMA is not prepared to accept any negative publicity, significant fines, litigation or jail term as a result of non-compliance to regulatory requirements.

Risk appetite statements are supported by risk operating parameters (tolerance levels). The criteria and operating parameters have been documented in the form of Key Performance Indicators (KPAs), Key Risk Indicators (KRIs) and other relevant documentation.

information Technology

During 2013 an IT governance review and overall governance maturity assessment was conducted and most of the recommendations have already been implemented. The RMA IT Systems forms an integral part of the risk control environment and as such contains a vast number of business rules governing the capturing of information and processing of transactions. This environment is subjected to continuous auditing and a number of recommendations have been made and implemented during the 2013 period. IT risks and control remain the focus of a dedicated IT Sub-Committee which reports to the Audit and Risk Committee.

Mr JC de KlerkManager: Internal Audit and Business Risk


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RMa Risk Management structure

Audit & Risk Committee

Manager – Internal Audit

Manager – Business Risk

Business Units Heads / Risk

Champion

Operational Risk Committee (Part of

EXCO)

Financial Risk Committee (Part

of EXCO)

Investment Committee

HR Committee

RMA Board

CEO & Executive Committee

Nominations Committee

Social & Ethics Committee


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2. ERM Governance

Board

Audit & Risk Committee

strategic Change* Planning

Communications and stakeholder relations

Major Initiatives Pricing

Macro- market dynamics Reputational *

Ethics*

Financial Accounting + Reporting

Capital Adequacy Tax

Market Risk Investments

Capital & Liquidity Interest Rate Risk

Credit Risk

human Resources Recruiting, retention,

development Performance

Motivation + Cost

operational Service delivery

Sales, marketing, products Business Interruption

Information technology Fraud risk

Underwriting & Insurance

Compliance Regulatory

Governance Legal

*Applicable to all risk categories

Step 1: Objective setting

Step 2: Risk identification

Step 3: Risk Assessment

Step 4: Risk Response

Step 5: Control activities

Risk Management Philosophy

Business Units & Committees

Loss Event Database

Key Risk Indicators

Sensitivity Analysis, &VaR

& FaR

Risk & Control Self

-Assessment

Roles & Responsibilities

(including reporting lines)

Regulatory & Statutory Compliance

Performance Measures (KPI’s)

Risk Reporting – Risk Profile (Quarterly)

Risk Register (Quarterly)

Corrective Action Plan

KRI Report

Funds at Risk (FaR)

Risk Appetite & Tolerance

Risk Culture

Integrity & Values

Risk Management Structure

Authority & Responsibility

3. Risk Categories 4. ERM Processes

RMA STRATEGY

1. ERM Strategy

INFRASTRUCTURE (POLICIES, PEOPLE, PROCESS, TECHNOLOGY)

ERM INFORMATION SYSTEMS

5. People & Organisation

6. ERM Methodologies (Tools and Techniques)

7. Risk Reporting

Step

6: C

omm

unic

atio

n &

Repo

rting

Step

7: M

onito

ring


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Directors’ Report (including statement of responsibility)

We, the Directors, have pleasure in presenting our report on the activities of the Company and the Group, for the period ending 31 December 2013.

nature of the Business and Financial position

The Rand Mutual Assurance Company Limited (RMA) continues to operate in terms of a license granted by the Minister of Labour in terms of the Compensation for Occupational Injuries and Diseases Act, 130 of 1993 (COIDA), which expires on 31 December 2014. In terms of the said license, RMA continues to indemnify policy holders against their liability in terms of COIDA and to provide compensation to the policyholder employees and, in the case of fatality, their dependants. As part of the COIDA legislated benefits, the Group pays compensation in respect of medical costs, lump sum payments and on-going pension payments.

In addition to the COID benefits, elective benefits which supplement the legislated benefits are also offered to members, including the Augmentation, Riot and Commuting Journey policies. These additional products are offered under the short-term insurance license issued by the Financial Services Board (FSB). To facilitate the range of benefits, RMA operates a wholly-owned subsidiary, RMA Life Assurance Company Limited (RMA Life) through which the long-term pension benefits are managed and in respect of which a long-term insurance license has been issued.

The financial position of the Group is reflected in the annual financial statements.

share capital and reserves

In accordance with the special resolution passed by Shareholders at the Annual General Meeting held on the 23rd May 2012, the Company underwent a restructuring process. Shareholders approved the conversion of the Company shares, the variation of the rights attaching to shares and the adoption of the

new Memorandum of Incorporation. The result of the aforementioned actions is that the rights previously enjoyed by shareholders through their proportionate shareholding are now enjoyed through the allocation of proportionate rights (as opposed to shares) attaching to one share. The rights, as opposed to shares, are now allocated according to the premium paid in the preceding 12 month period.

As a result of the variation of rights, the shares in excess of one share, held by the shareholders were required to be bought back through a share buy-back process resulting in the reduction of the share capital.

The share buy-back required the preparation of a report in terms of Section 114 of the Companies Act 2008, being the expressing of an independent opinion as to any affect that the share buy-back and reduction of share capital may have on shareholders. This report became available in January 2013 and the share buy-back and reduction of share capital was the subject of a shareholders’ special resolution passed in February 2013. The effect of this resolution was to complete the restructuring process.

• Prior to the decision, RMA had 100 000 000 (one hundred million) shares of R0,20c (twenty cents) each giving a share capital of R20 000 000,00 (twenty Million Rand).

• After the decision, the nominal or stated share capital of the Company has been reduced in aggregate by R499 936.80 from R500 000 to R63.20), as permitted in terms of, and subject to, compliance with Section 48 read with Section 46, 114 and 115 of the Companies Act 2008. The authorised shares of the Company comprise 100 000 000 (one hundred million) ordinary shares having no par or nominal value. The share register has been dematerialised.

The issued share capital of RMA Life is R10 000 000 (ten million Rand) with the book value of RMA’s interest in RMA Life being R10 000 000,00 (ten million Rand). RMA Financial Services (Pty) Ltd is a wholly-owned subsidiary which is dormant. The 100 issued shares in RMA Financial Services (Pty) Ltd of R1, 00 each are held by RMA.

dIreCtors’ report (InCludIng stAtement of responsIbIlIty)

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In terms of the Memorandum of Incorporation the shareholders of RMA remain the policyholders with each policyholder being issued with one share. In accordance with the provisions of the Companies Act 2008 different rights (externally ascertainable) may be attached to ordinary shares. The rights previously enjoyed by shareholders through their proportionate shareholding are now enjoyed through the allocation of proportionate rights (as opposed to shares) attaching to one share. The rights, as opposed to shares, are now allocated according to premium paid in the preceding 12 month period.

The list of shareholders for the 2013 year is listed on Page 93 of the report.

Dividends and Reserves

No dividends were declared for the year 2013 and the reserves of the Company are detailed in the financial statements (See Page 84). The review of the financial position of the Group is contained in the Chief Financial Officer’s Report (Page 19) and the Operations Review is contained on Page 22.

Changes to the composition of the Board of Directors

During the year, Dr Andrews and Ms Ravele resigned. As a result only two further directors are required to resign by rotation, being Ms Pillay (and her alternate Dr Le Grange) and Mr Naidoo. Ms Pillay and Mr Naidoo, being eligible, will offer themselves for re-election, Dr Le Grange has not offered herself for re-election.

as at 31 December 2013 the composition of the Board of Directors is as follows:

Prof Maphai Chairman Appointed 01/01/06Mr Van Vuuren (alternate Mr Perry)

Deputy Chairman Appointed 6/09/07

Dr Andrews Appointed 07/07/98 Resigned 2013

Dr Mentz Appointed 22/05/13Mr Naidoo (alternate Mr Jagwanth)

Appointed 26/05/09

Ms Ravele Appointed 26/05/09 Resigned 2013

Mr Gardner Appointed 27/11/13Dr Steele (alternate Mr Lynam)

Appointed 23/05/13

Ms Pillay (alternate Dr La Grange)

Appointed 27/08/08

Mr Bezuidenhout (alternate Mr Motloung)

Appointed 01/04/96

Mr Schalekamp Appointed 15/07/10Mr Letshele Appointed 26/08/09Mr Singh Appointed 03/04/07Mr Lufhugu Appointed 23/10/07

Directors’ responsibilities in respect of the annual financial statements

The directors of RMA are responsible for the preparation of the annual financial statements of the Company and the Group and for the correctness of the information provided in the report. The system of internal control, together with information and explanations provided by management and the internal auditors

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as well as on the comments of the external auditors based on the results of their audit, enables the Board to provide a reasonable assurance:

• as to the reliability and integrity of financial and operating information• of the compliance of systems with policies, plans, procedures, laws and

regulations• that assets are safeguarded against unauthorised use or dispossession• as to the economic, effective and efficient utilisation of resources• of the adequate prevention and detection of fraud and irregularities, and• of the achievement of established objectives and goals for operations

An independent examination of the financial statements is carried out by the external auditors in accordance with International Auditing Standards and, as far as the Board is aware, no relevant audit information, which may have a bearing on the outcome of these statements, has been withheld from the auditors. Nothing has come to the attention of the directors to indicate that any material breakdown in the functioning of the controls, procedures or systems during the year under review. The external auditors have concurred with the opinion of the Board in this regard and further confirm that they did not identify any material internal control weaknesses during their audit.

The financial statements were prepared in accordance with the Companies Act, No 71 of 2008 and International Financial Reporting Standards (IFRS), together with appropriate accounting policies, supported by reasonable and prudent judgments and estimates. The directors are of the opinion that the financial statements fairly present the financial performance and cash flows of the company as at 31 December 2013.

Particulars relating to the Group’s internal controls and audit approach, and to the role and function of the Audit and Risk Committee, are set out in the Governance Report and the Audit and Risk Committee Report. The audit approach ensures a thorough understanding of the Group’s financial and business objectives, and also provides an analysis of the underlying systems and procedures.

The focus of risk management entails identifying, assessing, managing and monitoring all known forms of risk. While operating risk cannot be fully eliminated, we endeavour to minimise it by ensuring that the appropriate infrastructure, controls, systems and ethics are applied across all aspects of our business and are managed within approved procedures and constraints.

The details of the Company’s corporate governance structures and practices have been set out in the governance section of this report as well as the Sustainability and Social & Ethics Committee Report.

Going Concern

As the directors believe that the Company has adequate resources to continue to operate for the foreseeable future, the annual financial statements have been prepared on the ‘going concern’ basis. The directors have reviewed the Company’s forecasts and projections and are confident that the Company has sufficient resources to continue in operating existence for the next financial year. The Board has considered whether interim financial information should be provided and has concluded that the issue of annual information meets the needs of all our Stakeholders.

events after reporting date

There have been no material changes in the affairs or financial position of the Company or Group since the reporting date.

Corporate information

• Company registration number: 1899/000876/06• Company Secretary: Kirsten Maria Linström• Registered Office: 1st Floor, BDO Building, 22 Wellington Road, Parktown,

Johannesburg• Auditors: EY Inc.

The designated audit partner is Mrs De Lange. Subject to the approval of shareholders at the annual general meeting scheduled for the 18 June 2014,


75


it is proposed that EY and Mrs De Lange be approved as the auditors for the 2014 financial year.

The Board of Directors acknowledges its responsibility to ensure the integrity of the integrated report. The Board has accordingly applied its mind to the integrated report and, in the opinion of the Board, the integrated report addresses all material issues, and presents fairly the integrated performance of the organisation and its impacts. The integrated report has been prepared taking into account the recommendations of the King III Code.

___________________Chairman

___________________Chief Executive Officer

___________________Chief Financial Officer


Certificate by Company secretary

I, Kirsten Maria Linström, being the Company Secretary of Rand Mutual Assurance Company Limited, hereby certify that, to the best of my knowledge, in accordance with the Companies Act No 71 of 2008, as amended, of South Africa, the Company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Act and that such returns are true, correct and up to date.

k. linströmCompany secretaryJohannesburg12 May 2014

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audit Committee Report

This report is provided by the Audit and Risk Committee (the Committee) appointed in respect of the 2013 financial year of RMA in compliance with the approved Terms of Reference and Section 94(7)(f) of the Companies Act, No 71 of 2008, as amended.

The Committee is a committee of the Board of Directors. In addition to having specific statutory responsibilities to the shareholders in terms of the Act, it assists the Board through advice and submissions on financial reporting; oversight of the risk-management process and internal controls; the fulfilment of its external and internal audit functions; information technology (IT) governance; and management of the statutory and regulatory compliance of the Company.

TeRMs oF ReFeRenCe

During the year, the Committee reviewed and revised its terms of reference in order to align its role and responsibilities to achieve full alignment with recommended practice and the role and responsibilities of the other Board committees. The new terms of reference were approved by the Board in May 2013.

MeMBeRship

The Committee was appointed by the shareholders at the Annual General Meeting held on 23 May 2013. Shareholders will be requested to approve the appointment of the members of the Committee for the 2014 financial year at the annual general meeting scheduled for 18 June 2014.

As regards the composition of the Committee, and the independence of members, your attention is drawn to the fact that the Committee has comprised of three members (assisted by two independent advisors) for 2013. In the fourth quarter of the year the chairman of the Committee recused herself from the Committee and the Board recommended to the shareholders the appointment of Mr John Gardner

AudIt CommIttee report

as the independent Chairman and member of the Audit Committee at the next annual general meeting.

It is our view that all the members are Independent Non-Executive Directors. The Committee is chaired by Mr Gardner and is attended by invitees, including the Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, internal audit manager, risk manager, external auditor, and the Company Secretary.

Both the internal and the external auditors have an opportunity to meet with theCommittee’s members without management being present.

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MeeTinGs

The Committee held seven meetings during the year.

Details of members’ attendance at the meetings are set out below



30 Jan 14 Mar

11 April 27 Jun 21 Aug 3 Sept 12 Nov

Ms M Pillay (Chairman) until Sept 2013 Independent Director - x x x xMr J Gardner (Chairman) effective November 2013

Independent Advisory Member and independent Director effective Novemeber 2013 x x x x x x x

Mr H van Veen Independent Advisor x x x x x x xMr R Naidoo Independent Director x x x x x - xMs D Motsepe Independent Director - - x x x x x

Ms M Pillay recused herself from the Special Audit Committee meetings when the committee discussed the litigation matter between the Group and Anglo American Platinum.

puRpose

The purpose of the Committee is to:• assist the Board in discharging its duties in relation to the Group and make

recommendations to the Board regarding the safeguarding of assets, the operation of adequate systems, controls and reporting processes and the preparation of accurate reporting and financial statements in compliance with all applicable legal and regulatory requirements and accounting standards;

• perform the functions set out in Section 94 of the Act;and

• provide the Social, Ethics Committee with a written report after each Committee meeting on matters relating to internal financial controls, internal audit, and corruption and fraud risks that fall within the Committee’s terms of reference for inclusion in their Committee’s report.

eXeCuTion oF FunCTions

During the year under review the Committee fulfilled all the functions and discharged its responsibilities as prescribed in the Companies Act, No. 71 of 2008, King III and the Terms of Reference. Integral to the discharge of its duties and obligations, the Committee has considered the following:

In respect of the external audit:• Nominated EY and Mrs Rosanne De Lange as the designated auditor to

the shareholders for appointment as auditor for the financial year ended 31

78


December 2013 and ensured the appointment was in compliance with all legal and regulatory requirements;

• Approved the engagement letter, the audit plan and the budgeted audit fees payable to the external auditor;

• Reviewed the audit, evaluated the effectiveness of the auditor and their independence and evaluated the external auditor’s internal quality control procedures;

• Obtained a written assurance from the auditor that their independence was not impaired;

• Considered and approved, in line with the Policy, all permissible non-audit services provided by the external auditor;

• Obtained assurances from the external auditor that no member of the external audit team had been employed by the Company or its subsidiaries during the year;

• Obtained assurances from the external auditor that adequate accounting records were being maintained;

• Considered whether any reportable irregularities were identified and reported by the external auditors in terms of the Auditing Profession Act, 2005, and determined that there were none; and

In respect of the financial statements the Committee, among other matters:• Confirmed the going concern principle as the basis of the preparation of the

annual financial statements and considered the basis upon which the Group was determined to be a going concern;

• Considered the annual financial statements, the information upon which the statements were prepared and the correctness thereof prior to submission and approval by the Board;

• Ensured that the annual financial statements fairly present the financial position of the Company and of the Group as at the end of the financial year;

• Considered accounting treatments, significant unusual transactions and accounting judgements and conclusions;

• Considered the appropriateness of the accounting policies adopted and any changes thereto;

• Ensured that the annual financial statements fairly present the financial position of the Company and the Group as at the end of the financial year and also the results of operations and cash flows for the financial year,

• Reviewed the external auditor’s audit report, including any significant legal and tax matters that could have a material impact on the financial statements;

• Met with management and both the external and internal auditors to ensure all parties had an opportunity to raise any concerns with the Committee;

• Considered the adequacy and effectiveness of controls and procedures, including meeting separately with management, external audit and internal audit.

In respect of internal control and internal audit:• Reviewed and approved the annual internal audit charter and audit plan and

evaluated the independence, effectiveness and performance of the internal audit department and compliance with its charter;

• Considered the reports of the internal auditor regarding the systems of internal control including financial controls, business risk management and maintenance of effective internal control systems;

• Received assurance that proper and adequate accounting records were maintained, including the safeguarding of assets and the prevention of corruption and fraud;

• Reviewed significant issues raised by the internal audit processes and the adequacy of corrective action in response to significant internal audit findings;

• Reviewed significant differences in opinion between management and the internal audit function and noted that there were none;

• Assessed the adequacy of the performance of the internal audit function, and specifically assessed the performance of the head of the internal audit function and the adequacy of the available internal audit resources and make recommendations to correct shortcomings.

Based on the above, the Committee formed the opinion that there were no material breakdowns in internal control, including financial controls, business risk management and the maintenance of effective material control systems.


79


In respect of risk management:• Reviewed the group’s policies on risk assessment and risk management,

including fraud risks as they pertain to financial reporting and the going concern assessment, and found them to be appropriate;

• Received an assessment of the effectiveness of the Company’s system of internal controls and risk management from the Risk and Audit department.

The Board has officially delegated the responsibility of IT governance to the Audit and Risk Committee.

The Committee has performed the following:• Reviewed IT risk and IT governance;• Considered and evaluated significant IT investments and the delivery and

management of IT services;• Conducted workshops to familiarise members with the Company’s IT

environment.

In respect of sustainability issues contained in the Sustainable Development report:• Overseen the process of sustainability reporting; and • Reviewed the external assurance process with regards to selected

sustainability criteria, evaluated the effectiveness of the external assurer and their independence and evaluated the external assurer’s quality control procedures;

• Received the necessary assurances from management that material disclosures are reliable and do not conflict with the financial information.

In respect of legal and regulatory requirements to the extent that it may have an impact on the financial statements:• Reviewed with management, legal matters that could have a material impact

on the Group;• Reviewed with the Company’s internal legal advisor the adequacy and

effectiveness of the Group’s procedures to ensure compliance with legal and regulatory responsibilities;

• Monitored complaints received via the group’s Whistleblowers reporting line; and

• Considered reports provided by management, the internal auditor and the external auditors regarding compliance with legal and regulatory requirements.

The Committee has also considered the application of Sections 45 and 46 of the Companies Act, specifically as regards the authorisation by the Board of direct or indirect financial assistance to related or inter-related companies. The shareholders have approved any financial assistance to inter-related companies, which is provided to companies within the RMA Group.

In respect of the co-ordination of assurance activities:• Reviewed the plans and work outputs of the external and internal auditors and

concluded that these were adequate to address all significant risks facing the business;

• Considered the expertise, resources and experience of the finance function, including that of the Chief Financial Officer, and concluded that these were appropriate; and

• Considered the expertise and appointment of Heads of Control Functions within the context of the Financial Services Board directive and in line with the approved Group Policy.

inDepenDenCe oF eXTeRnal auDiToRs

The Audit and Risk Committee is satisfied that EY Inc. is independent, having based this conclusion on the following factors: • The necessary representations made by EY; • The Auditor, other than in the instance of acting as external auditors or in

rendering of permitted non-audit services receive no remuneration or other benefit from the Company;

• The independence of the external auditors was not impaired by any consultancy or other work undertaken for the Group nor through the previous appointment as auditor;

• The Committee considered the position of Mrs Rosanne De Lange, the audit partner and confirmed her eligibility for appointment as the audit partner.


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AnnuAl fInAnCIAl stAtements And IntegrAted report

Based on the review of the annual financial statements of RMA, for the year ended 31 December 2013, the Committee is of the view that, in all material respects, the statements comply with the relevant provisions of the Companies Act, No. 71 of 2008, and the International Financial Reporting Standards, and fairly present the consolidated and separate financial position at that date and the results of operations and cash flows for the year then ended.

The Committee has also satisfied itself of the integrity of the remainder of the integrated annual report. Having achieved its objectives, the Committee has recommended the financial statements and integrated annual report for the year ended 31 December 2013 for approval to the Board.

The Board has subsequently approved the financial statements, which will be open for discussion at the forthcoming Annual General Meeting.

On behalf of the Committee

Mr. J GardnerChairman of the audit & Risk Committee

81

fInAnCIAls

82


summArIsed ConsolIdAted AnnuAl fInAnCIAl stAtements

summarised consolidated annual Financial statements

These summarised consolidated annual financial statements comprise a summary of the audited consolidated annual financial statements of the Group for the year ended 31 December 2013 that were approved by the Board on 26 May 2014. The preparation of the consolidated annual financial statements was supervised by the Chief Financial Officer, Mr Eugene Hangwani Lufhugu.

The summarised consolidated annual financial statements are not the Group’s statutory accounts and do not contain all the disclosures required by International Financial Reporting Standards (IFRS).

The audited consolidated annual financial statements are available on request from the Company Secretary.

These summarised consolidated annual financial statements for the year ended 31 December 2013 have been extracted from the complete set of consolidated annual financial statements on which the auditors, EY, have expressed an unqualified audit opinion. The auditor’s report is available for inspection at the registered office of the Company.

83


ConsolIdAted stAtements of fInAnCIAl posItIon As At 31 deCember 2013

GROUP COMPANY2013 2012 2013 2012R ‘000 R ‘000 R ‘000 R ‘000

asseTs

non-current assets 13 318 420 11 715 111 13 931 798 12 476 909

Intangible assets 6 751 7 362 6 751 7 362

Investments at fair value through profit or loss 13 301 144 11 697 281 4 020 274 3 233 780

Investment in subsidiary - - 10 000 10 000

Property, plant and equipment 7 961 7 843 7 961 7 843

Reinsurance assets 2 563 2 625 9 886 811 9 217 924

Current assets 1 064 913 1 229 267 402 357 387 906

Cash and cash equivalents 880 712 1 063 058 315 865 286 065

Income tax receivable 20 052 20 052 20 052 20 052

Investment receivables 725 19 369 347 5 424

Interest and dividends receivable 121 247 66 953 25 252 16 657

Subsidiary asset - - - 561

Trade and other debtors 42 177 59 835 40 842 59 147

ToTal asseTs 14 383 333 12 944 378 14 334 155 12 864 815

84


ConsolIdAted stAtements of fInAnCIAl posItIon As At 31 deCember 2013 Cont...


eQuiTY anD liaBiliTies

eQuiTY

oRDinaRY shaReholDeRs’ eQuiTY

Total equity 1 518 391 1 314 183 1 463 394 1 259 183

Issued capital 500 500

Revaluation reserves 859 656 626 549 819 424 590 065

Retained earnings 658 735 687 134 643 970 668 618

non-current liabilities 12 829 232 11 538 762 12 829 232 11 538 762

Deferred tax 145 552 79 618 145 552 79 618

Insurance contract liabilities

Latent claims exposure fund 123 106 123 434 123 106 123 434

Provision for outstanding claims and IBNR 801 690 671 111 801 690 671 111

Policy holder liability 9 884 248 9 215 299 9 884 248 9 215 299

Post two-year lifelong medical fund 1 874 635 1 449 300 1 874 635 1 449 300

Current liabilities 35 710 91 433 41 530 66 870

Income tax payable - - - -

Investment liabilities 4 503 27 973 2 248 7 595

Trade and other payables 31 207 63 460 27 882 59 275

Subsidiary liability - - 11 400 -

ToTal liaBiliTies 12 864 942 11 630 195 12 870 761 11 605 632ToTal eQuiTY anD liaBiliTies 14 383 333 12 944 378 14 334 155 12 864 815

85


ConsolIdAted stAtements of ComprehensIve InCome for the yeAr ended 31 deCember 2013


operating surplus before transfers to provisions 1 364 944 1 007 488 695 997 315 884Gross premium income 1 084 208 952 699 1 084 208 952 699

Less: Reinsurance 11 135 10 957 342 949 437 253net premium income 1 073 072 941 742 741 258 515 446

Investment income 679 169 614 369 192 057 169 147

Other income 3 030 1 346 2 947 366Revenue 1 755 271 1 557 457 936 263 684 959

Total fair value gains 814 016 634 657 330 938 219 307

Net realised fair value gains 571 670 208 203 117 492 69 374

Net unrealised fair value gains 242 346 426 454 213 446 149 933

Total income after fair value gains 2 569 287 2 192 114 1 267 201 904 266less: net benefits and claims 1 013 726 1 011 775 430 517 467 473

Gross benefits and claims 904 913 905 297 904 913 905 297

Reinsurers' share of gross benefits and claims paid (21 766) (15 903) (604 975) (560 205)

Gross change in provision for outstanding claims and IBNR 130 579 122 381 130 579 122 381

Less: Investment related expenditure 54 866 50 195 17 284 15 264

Less: Operating expenses 135 751 122 656 123 403 105 645

Employee benefits and expenses 73 571 65 907 73 571 65 238

Operating leases 6 074 4 837 6 074 4 837

Depreciation & amortisation 4 837 4 047 4 837 4 047

Other operating expenses 51 270 47 866 38 922 31 523

86


ConsolIdAted stAtements of ComprehensIve InCome for the yeAr ended 31 deCember 2013 Cont...


less : Transfers to long-term provisions 1 094 282 920 237 425 335 228 633

Increase in post two-year lifelong medical fund 425 335 228 633 425 335 228 633

Increase in policy holder liability 668 948 691 604 - -

profit before tax from continuing operations 270 662 87 251 270 662 87 251

Taxation 65 934 6 135 65 934 6 135

Profit after tax from continuing operations 204 728 81 116 204 728 81 116

Total comprehensive income for the year attributable to owners 204 728 81 116 204 728 81 116

87


ConsolIdAted stAtements of ChAnges In eQuIty for the yeAr ended 31 deCember 2013

REVALUATION RESERVESISSUEDSHARECAPITAL

CLAIMSCONTINGENCYRESERVE

INVESTMENTREVALUATIONRESERVE

SOLVENCYMARGINRESERVE

RETAINED EARNINGS

TOTAL

GRoup R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000Balance at 31 December 2011 500 87 757 280 685 100 000 764 124 1 233 066

Total comprehensive income for the year attributable to owners - - - - 81 117 81 117

Net movement in revaluation reserve - - 154 611 - (154 611) -

Transfer in terms of the Short Term Insurance Act 1998, to adjust reserve to equal of 10% of the greater of net premium income for the current or previous financial year.

- 3 496 - - (3 496) -

Balance at 31 December 2012 500 91 253 435 296 100 000 687 114 1 314 163


Net movement in revaluation reserve - 217 194 - (217 194)

Deferred taxation

Fair value gains and losses 217 194 (217 194)

Share buy-back (500) (500)


15 913 - - (15 913) -

BalanCe as aT 31 DeCeMBeR 2013 107 166 652 490 100 000 658 735 1 518 391

88


ConsolIdAted stAtements of ChAnges In eQuIty for the yeAr ended 31 deCember 2013 Cont...

REVALUATION RESERVESISSUEDSHARECAPITAL

CLAIMSCONTINGENCYRESERVE

INVESTMENTREVALUATIONRESERVE

SOLVENCYMARGINRESERVE

RETAINED EARNINGS

TOTAL

R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000CoMpanY



Net movement in revaluation reserve - - 149 933 (149 933) -


- 3 496 - - (3 496) -



Net movement in revaluation reserve - 213 446 - (213 446)

Deferred taxation

Fair value gains and losses 213 446 (213 446)

Share buy-back (500) (500)


15 913 - - (15 913) -

BalanCe as aT 31 DeCeMBeR 2013 107 166 612 258 100 000 643 970 1 463 394

89


ConsolIdAted stAtements of CAsh floWs for the yeAr ended 31 deCember 2013


opeRaTinG aCTiViTies 14 351 110 436 327 887 60 785

Operating surplus before transfers to provisions 1 364 944 1 007 488 695 997 315 884

Non-cash adjustments - Depreciation and amortisation 4 837 4 047 4 837 4 047

- Net realised fair value gains (571 670) (208 203) (117 492) (69 374)

- Net unrealised fair value (gains) (242 346) (426 454) (213 446) (149 933)

- Lease straightlining adjustment 273 (34) 273 (34)

- interest amortisation adjustment 25 690 15 013 11 841 4 019 - latent claims exposure reclassification - - - -

Investment income (679 169) (614 369) (192 057) (169 147)

Investment related expenditure 54 866 50 195 17 284 15 264

Taxation paid - (42 767) - (42 767)

Working capital adjustments:

- Change in trade and other receivables 17 658 51 337 18 305 51 906

- Change in interest and dividends receivable (54 294) 379 (8 595) 1 277

- Change in investment receivables 18 644 146 013 5 077 (2 687)

- Change in subsidiary liability - - 11 961 (22 093)

- Change in trade and other payables (32 253) 5 150 (31 393) 5 118

- Change in investment liabilities (23 470) 2 649 (5 347) (687)

Change in net reinsurance assets 63 (2 389) 63 (2 389)

Change in provision for claims and IBNR 130 579 122 381 130 579 122 381

90


ConsolIdAted stAtements of CAsh floWs for the yeAr ended 31 deCember 2013 Cont...


inVesTinG aCTiViTies (196 616) 26 549 (298 007) 39 446

Additions to fixed assets (2 845) (6 693) (2 845) (6 693)

Purchases of investments (2 940 722) (3 018 534) (2 592 543) (2 594 595)

Proceeds from disposal of investments 2 119 748 2 486 586 2 119 748 2 486 586interest received 541 974 467 103 149 863 126 899

Dividends received 136 996 146 936 42 109 42 147

Other income 3 099 1 346 2 947 366

Investment related expenditure (54 866) (50 195) (17 284) (15 264)

FinanCinG aCTiViTies

- Change in share capital (80) (80)

Net change in cash and cash equivalents (182 345) 136 985 29 800 179 275

Cash and cash equivalents, beginning of year 1 063 058 926 073 286 065 106 790

Cash and cash equivalents, end of year 880 712 1 063 058 315 865 286 065

91


shAreholder’s InformAtIon

1. SHAREHOLDERS

Shareholding effective for 2013 based on 31

December 2013 premiums

Shareholding effective for 2012 based on 31 December 2011

premiums% %

ANGLO AMERICAN SOUTH AFRICA LIMITED GROUP

16.19% 16.88%

IMPALA PLATINUM LIMITED GROUP 9.85% 8.12%

LONMIN PLC 9.08% 7.92%HARMONY GOLD MINING GROUP 8.65% 11.01%ANGLOGOLD ASHANTI GROUP 8.28% 7.96%SIBANYE GOLD LIMITED 8.27% 0.00%AFRICAN RAINBOW MINERALS LIMITED 2.38% 1.44%MURRAY AND ROBERTS 2.38% 5.74%XSTRATA SOUTH AFRICA PTY LTD 2.37% 1.98%GOLD ONE INTERNATIONAL 2.12% 0.00%VILLAGE MAIN REEF LTD 2.11% 0.00%GOLD FIELDS LIMITED GROUP 1.59% 9.17%SHAFT SINKERS (PTY) LIMITED 1.54% 2.75%SASOL MINING (PTY) LTD 1.46% 1.08%EXXARO RESOURCES (PTY) LTD 1.37% 1.39%DURBAN ROODEPOORT DEEP GROUP 1.27% 1.50%NORTHAM PLATINUM LTD 0.97% KUMBA RESOURCES 0.95% PETRA DIAMONDS (PTY) LTD 0.88% 0.67%J I C MINING SERVICES GROUP 0.67% 1.29%S A N CONCTRACTING SERVICES CC 0.48% 0.78%SAPPI MANUFACTURING (PTY) LTD 0.34% 0.50%DE BEERS CONSOLIDATED MINES LIMITED

0.27% 0.69%

SIMMER AND JACK INVESTMENTS LIMITED

0.06% 4.40%

MISCELLANEOUS 16.47% 14.73%100% 100%

92


shAreholder’s InformAtIon

A member’s proportional interest in the Company is determined annually based on a members’ premium due and payable (whether or not paid) as a percentage of the total premiums due and payable for a specific year. The interest is adjusted annually on the date financial statements are signed by the external auditors. Following on from the Annual General Meeting held May 2012, Shareholders approved the conversion of the Company shares, the variation of the rights attaching to shares and the adoption of the new Memorandum of Incorporation. As a result of the Company restructuring and anticipated share buy back, the rights previously realised by Shareholders through their proportionate shareholding will now be realised through the allocation of proportionate rights (as opposed to shares) attaching to one share. The rights, as opposed to shares, are now allocated according to premium paid in the preceding twelve month period. As a result of the variation rights, the shares in excess of one share, held by the shareholders are required to be bought back through a share buy-back process. This has resulted in a reduction of share capital by (R499 936.80 from R500 000 to R63.20).

2. MAJOR SHAREHOLDERS

Shareholding effective for 2013

based on 31 December 2013

premiums

Shareholding effective for 2012

based on 31 December 2011

premiums% %

ANGLO AMERICAN SOUTH AFRICA LIMITED GROUP

16,19% 16,88%

IMPALA PLATINUM LIMITED GROUP 9,85% 8,12%LONMIN PLC 9,08% 7,92%HARMONY GOLD MINING GROUP 8,65% 9,25%ANGLOGOLD ASHANTI GROUP 8,28% 7,96%SIBANYE GOLD LIMITED 8,27%MURRAY AND ROBERTS 2,38% 5,74%GOLD FIELDS LIMITED GROUP 2,38% 1,44%

ReGisTeReD oFFiCe anD heaD oFFiCe Physical Address: 1st floor, BDO Building, 22 Wellington Road,

Parktown, 2193Postal Address: PO Box 61413, Marshalltown, 2107Telephone: +27 860 222 132Facsimile: +27 860 222 203E-mail: [email protected] Registration: 1899/000876/06VAT Registration: 4720118027Company Secretary & Public Officer (FSB):

Kirsten Maria Linström

Public Officer (SARS): Mr. EH Lufhugu

93


AnnuAl generAl meetIng

annual General Meeting

notice of annual General Meeting and shareholder information

The Rand Mutual Assurance Company Limited, registration number 1899/000876/06 (“Company” or “Rand Mutual”) Annual Report 2013 has been published on the Company’s website, www.randmutual.co.za.

Notice is hereby given that the 120th Annual General Meeting (“AGM”) of Shareholders of Rand Mutual will be held on the 1st floor, BDO Building, 22 Wellington Road, Parktown on Wednesday, 18 June 2014 at 09:00, for purposes of conducting the General Business and Special Business, and considering and if deemed fit adopting with or without modification the resolutions, set out herein.

Record Dates

The shareholders registered as shareholders of the Company as at 26 May 2014 shall be entitled to receive this Notice.

The shareholders registered as shareholders of the Company as at 09h00 on 17 June 2014 shall be entitled to attend, participate in and vote at the AGM.

proxies and proxy Forms

A shareholder entitled to attend and vote at the AGM may appoint one or more proxies to attend, participate and vote in its stead. A proxy does not have to be a shareholder of the Company. The appointment of a proxy will not preclude the shareholder who appointed that proxy from attending the AGM and participating and voting in person thereat to the exclusion of any such proxy. A form of proxy for use with respect to the AGM is attached to this Notice.

A shareholder wishing to use a proxy must complete and sign the Proxy Form and lodge it with the Company Secretary (Kirsten Linström) at 1st floor, BDO Building, 22 Wellington Road, Parktown to be received by the Company by no later than 48 (forty eight) hours before the scheduled time of commencement of the AGM.

Representatives of shareholders

A Shareholder (which is a legal entity) wishing to personally attend at the AGM, must appoint a natural person to represent it at the meeting. Such appointment must be in writing and signed by the shareholder concerned and delivered to the Company Secretary at 1st floor, BDO Building, 22 Wellington Road, Parktown, to be received by the Company before the scheduled time for the commencement of the AGM.

identification of attendees before the meeting

Before any person may attend or participate at the AGM, that person must present reasonably satisfactory identification, and the person presiding at the AGM must be reasonably satisfied that the right of that person to participate and vote (either as a shareholder or as a proxy), has been reasonably verified. The identification and verification process will be conducted by and under the supervision of the Company Secretary.

electronic participation at the aGM

The Companies Act (71 of 2008) allows for notices to be given to shareholders electronically. Shareholders have been contacted and have confirmed that they are satisfied with this provision. Shareholders in respect of whom such confirmation could not be secured have been sent notification via registered mail. Notice of the meeting refers shareholders to the publication of the Annual Report on the Company’s website.

Shareholders may participate in the AGM, at their own expense, by means of electronic participation by telephoning the Company Secretary on +27 10 214 3014 during normal office hours during the 3 days before the AGM, to obtain the AGM Telephone Conference Facility telephone number.

Resolutions

Please note that:• an ordinary resolution is a resolution adopted with the support of more than

50% of the voting rights exercised on the resolution; and• a special resolution is a resolution adopted with the support of at least 75% of

the voting rights exercised on the resolution.

94


6 Ordinary Resolution No.6 appointment of audit Committee Member and

Chairperson

Mr. John Gardner be and is hereby appointed as a member and Chairman of the statutory audit committee of the Company.

7 Ordinary Resolution No. 7 appointment of audit Committee Member

Mr Reg Naidoo be and is hereby appointed as a member of the statutory audit committee of the Company.

8 Ordinary Resolution No.8 appointment of audit Committee Member

Ms. Daphne Motsepe be and is hereby appointed as a member of the statutory audit committee of the Company.

The biographical details pertaining to the directors who are eligible for re-election are set out in the OVERVIEW section of the Integrated Report to enable shareholders to take an informed deci-sion as to their re-election. The Board confirms that all the directors have performed effectively, demonstrate commitment to the role and have met the requirements of the Financial Services Board

9 Ordinary Resolution No.9 Re-election of Director

Mr Naidoo (who retires as a director at this meeting but is eligible for re election at this meeting) be and is here-by re elected as a director of the Company

10 Ordinary Resolution No.10 Re-election of Director

Ms Pillay (who retires as a director at this meeting but is eligible for re election at this meeting) be and is hereby re elected as a director of the Company.

11 Ordinary Resolution No.11 Confirmation of Director

Mr. Gardner be and is hereby confirmed as a director of the Company.

12 Ordinary Resolution No.12 Confirmation of Director

Mr. O’Brian be and is hereby confirmed as a director of the Company.

AnnuAl generAl meetIng

1. General Business

The following General Business shall be conducted at the AGM: Shareholders are requested to consider and if deemed fit adopt, with or without modification, the following resolutions:

1 Ordinary Resolution No.1 Director's Report

Resolved, that the Directors’ Report (included in the Annual Financial Statements of the Company attached to this Notice) for the financial year ending 31 December 2013, be and is hereby noted.

2 Ordinary Resolution No.2 annual Financial statements

Resolved, that the Annual Financial Statements of the Company for the year ended 31 December 2013 attached to this Notice, be and are hereby noted and adopted.

3 Ordinary Resolution No.3 audit Committee Report

Resolved, that the Audit Committee Report (included in the Annual Financial Statements of the Company attached to this Notice) for the financial year ending 31 December 2013, be and is hereby noted.

4 Ordinary Resolution No.4 Re-appointment of auditors

Resolved, that the re appointment of the retiring Auditors of the Company, EY Inc, for the ensuing financial year, be and is hereby noted and approved.

5 Ordinary Resolution No.5 approval of auditor’s Fees

Resolved, that the payment of the Auditors’ fees for the financial year of the Company ending 31 December 2013 (as determined and approved by the statutory audit committee in terms of section 94(7)(b) of the Companies Act 2008) be and is hereby noted and approved.

95


13 Special Resolution No.1 approval of Directors’ remuneration

Resolved, that the remuneration of the directors of the Company for their services as directors of the Company as per the Company’s remuneration policy (including the 8% per annum increase) approved at the previous AGM be and is hereby approved for April 2014 till May 2015 respectively.

14 Special Resolution No.2 amendment of the article 23 of the Company’s Moi

Resolved that the Company’s MOI be and is hereby amended by: including a new Article 23.8 as follows:“23.8 Nothing in this Memorandum of Incorporation shall preclude the Board from establishing any Committee other than a Committee of Directors and appointing members to such a Committee who need not necessarily be a Director of the Company. Members of such Committees shall all have equal rights to vote on any matter to be decided by that Committee in accordance with the Committee’s Terms of Reference.”

By order of the Board 26 May 2014.

kirsten Maria linströmCompany secretary26 May 2014

96


notes

First Floor, BDO Building22 Wellington RdParktown2193JohannesburgT. +27 860 222 132F. +27 860 222 203

www.randmutual.co.za

rma annual integrated report 2013

Documents