RMA 2014 Cover

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RAND MUTUAL ASSURANCE | ANNUAL REPORT | 2014 01

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 of which 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 the principles of the RMA Group and offers a platform to provide clear and concise information to stakeholders.

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

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

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

The Board has reviewed and approved this report.

ABOUT OUR REPORT

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32 Operations Report

41 Medical Department Report

46 RMA People

50 CORPORATE RESPONSIBILITY

AND SUSTAINABILITY

51 Governance Report

61 Remuneration Report

67 Risk Management

78 Internal Audit And Ethics

81 RMA’s Corporate Footprint

03 OVERVIEW

04 2014 Highlights

05 Vision, Mission, Values

06 Organogram

07 Directorate

15 Executive Committee

18 Chairman’s Statement

20 CEO’s Statement

22 CFO’s Report

27 Strategic and Business Review

87 GRI Table

100 FINANCIAL STATEMENTS

101 Directors’ Report

(Including Statement of Responsibility)

106 Certificate By Company Secretary

107 Audit And Risk Committee Report

113 Independent Auditors’ Report

116 Financial Statements

125 Shareholder’s Information

129 ANNUAL GENERAL MEETING

CONTENTS ANNUAL REPORT 2014

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OVERVIEW

RAND MUTUAL ASSURANCE | ANNUAL REPORT | 201404

OVERVIEW: 2014 HIGHLIGHTS

2014 HIGHLIGHTS

RMA acquired the license to provide all Class XIII employers with COID benefits, effective 1 March 2015;

billion in 2014;

various strategic initiatives to ensure its sustainability in the long-term; and

Compensation Fund for the use of its claims management system.

Group at a glance

The Rand Mutual Assurance Company Limited (RMA) was founded in 1894 by three mining companies as a mutual assurance company with the purpose of administering workmen’s compensation benefits to employees injured in the scope of their employment. RMA was incorporated as a public company during 1899.

Upon implementation of legislation regulating work-men’s compensation benefits, RMA was issued with a license from the Minister of Labour in terms of section 30 of the Compensation for Occupational Injuries and Diseases Act (COIDA) to continue to provide and administer such benefits. The license has historically

been granted for Class IV employers (mining) and has now been extended to include Class XIII employers (iron, steel, artificial limbs, galvanizing, garages, metal and related industries), who were transferred from the Compensation Fund (the Fund) to RMA with effect from 1 March 2015.

The RMA Group also operates under both long- and short-term insurance licenses issued by the Financial Services Board (FSB). The core of RMA’s business is the receipt, adjudication and administration of workers’ compensation claims, including the payment of medical costs, one-off disability payments and the ongoing payment of pensions in the case of severe disability and fatalities.

In addition to providing COID benefits, RMA also offers several value-added, accident-related products to its clients namely: Riot and Strike Policy, providing cover in the event of death and permanent disability and related medical expenses; Commuting Journey Policy, providing cover in the event of death or injury of an employee as a result of an accident that occurs whilst the employee is journeying between home and the employees’ places of work; and Augmentation Policy, a top up cover which also includes hostel hazard and sports cover.

Additionally, the Stated Benefit (Funeral) Policy covers the insured employee and his spouse and one child in the event of death.


OVERVIEW: VISION, MISSION, VALUES

RMA Life Assurance Company Limited (RMA Life) was established in 1990 as a wholly-owned subsidiary of RMA. RMA Life is a registered long-term insurer in terms of the Long-term Insurance Act, 52 of 1998 (LTIA).

RMA is the only policyholder of RMA Life under a single annuity policy which has been issued to RMA by RMA Life. The purpose of RMA Life is to manage the pension benefits (as defined in COIDA) payable to claimants and their beneficiaries in accordance with an annuity policy issued to RMA.

Vision, Mission, Values

Vision

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 and other related industry sectors.

Mission

and health benefits;

through the maintenance of global best practice operational delivery mechanisms;

integrity and responsibility;

of the highest standard to our members and insured workforce;

corporate governance; To manage capital, reserves, provisions and other assets in a professional and effective manner; and

at their optimum output levels.

Values

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

others to be responsible for theirs;


OVERVIEW: ORGANOGRAM


OVERVIEW: DIRECTORATE

Dr. Vincent Maphai 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

Dr Maphai has, from March 2009 until retirement, 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 Master’s 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 he has completed an advanced management programme at Harvard University. He is widely published, both locally and internationally, and has held fellowships at the 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. Vincent also serves on a number of other boards and is currently the chairman of the Discovery Foundation, Taquanta Asset Managers (Pty) Ltd and Taquanta Treasury Solutions (Pty) Ltd.

Mr. Abre Van Vuuren B Comm, MDP: DPLR, Advanced Labour LawAppointed: 6 September 2007Deputy Chairman, Non-Executive Director and Chairman of the HR & Remunerations Committee

Abré is the Executive: Services of Harmony Gold Mining Co. Ltd. He has extensive experience in the area of human resources and change management and is currently responsible for the risk and health function at Harmony.



Mr. Bisnath (Jay) SinghAppointed: 23 April 2007Executive Director and Chief Executive Officer

Jay joined RMA on 23 April 2007. He has had an illustrious career in the medical schemes industry. His previous appointments include Chief Executive Officer of Sizwe Medical Services, 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 RMA’s Chief Executive Officer, Jay is the interface between corporate and operational management. Jay’s current focus is on strategic development and the positioning of Rand Mutual Assurance.

Mr. Adam LetsheleAppointed: 26 August 2009Non-Executive Director

Adam was appointed to the RMA Board as an alternate non-executive director on 26 August 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 11 September 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).



Mr. Koos Bezuidenhout, MBA (UNEM); Dip Bus Man; Certificate in Human Resources and Personnel ManagementAppointed: 22 April 1996Non-Executive Director

Koos joined the RMA Board on 1 April 1996. He is the Chief Executive Officer of UASA; the president of the Federation of Unions of South Africa (FEDUSA) and the president

of SACOTU, SA’s largest labour confederation. He is a trustee of the Sentinel Retirement Fund and a director of BATSETA Council of Retirement Funds in SA. He is the managing director of UASA Financial Services (Fincents) and UASA Marlicht Holiday Apartments. He also serves on the SA President’s Joint Presidential Advisory Group; NEDLAC’s executive committee; is the co-chairman of the Millennium Labour Council (MLC) and is a director of the NEDLAC Labour Trust. He serves as the director responsible for Africa on the AIST World Board situated in Brussels. He is the owner and Director of YASNY (You Ain’t Seen Nothing Yet) Investments. He is a Councillor on the Board of the University of the Western Cape (UWC). Mr. Eugene H Lufhugu,(CA) (SA), B Compt (Hons)Appointed: 23 October 2007 (resigned 28 February 2015)Chief Financial Officer and Executive Director

Eugene, who is a Chartered Accountant (SA), joined RMA on 23 October 2007 as Chief Financial Officer, and served in this capacity until his resignation in February 2015. He had overall responsibility for the Rand Mutual Group’s financial affairs and reporting. He previously worked in the banking, automotive, auditing and consulting sectors.



Ms. Meroonisha Pillay(CA) (SA), B Comm, H Dip AccAppointed: 27 August 2008Non-Executive Director

Meroonisha, Financial Controller at Anglo American Platinum Limited, was appointed as a non-executive director on 27 August 2008. Prior to joining Anglo American Platinum Limited, she was a senior manager at Deloittes

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

Reg Naidoo was appointed to the Rand Mutual Board on 27 August 2008. He is currently the Vice President: Finance at Sibanye Gold Limited and is responsible for risk management, internal controls, insurance programmes and financial shared services.

Mr. Henk Schalekamp BA Hons. (Industrial Psychology), MBA (PU for CHE)Appointed: 15 July 2010Non-Executive Director

Henk was appointed to the Board in 2010 as a non-executive director. He also serves on the Social and Ethics Committee.

He is chairman of Solidariteit Beleggings Maatskappy, Akademia and Solidariteit Eiendomme and non-executive director of Sol-Tech, Solidarity Financial Services and Solidariteit Helpende Hand. He is a member of the investment committee of the Engineering Industries Pension Fund (EIPF) and Metal Industries Provident Fund (MIPF) and serves as a trustee on the Virseker Trust.



Dr. Mel MentzMBChB, DOH, MBA (UP)Appointed: 31 January 2001 as an alternate director and as a non-executive director from 26 November 2014Non-Executive Director and Chairman of the Social and Ethics Committee Dr. Mentz was appointed as Chairman of the Social and Ethics Committee of Rand Mutual in 2011. Mel is the Executive Manager of Sustainability at Lonmin plc, responsible

for sustainability, health and environment. He is a member of the Institute of Directors of South Africa, a trustee of the Lonmin Development Trust and represents Lonmin as a member of the International Council for Mining and Metals (ICMM), International Platinum Association (IPA) and the South African Chamber of Mines.

Mr. Mark LynamBE (Mechanical), Insead AMPAppointed: 5 August 2005 as an alternate director and as a non-executive director effective 26 November 2014Non-Executive Director and Chairman of the Investment Committee

A mechanical engineer by training, through various roles at Anglo American Limited, AngloGold Limited and more recently at Rand Refinery Limited, Mark has some 30 years experience in treasury, investment, financial management and general management.



Ms. Daphne MotsepeBacculaureus Rationis (converted to a B Compt), MBA (De Montfort University: UK)Appointed: 22 November 2013Independent Non-Executive Director

Daphne is the former Chief Executive of the unsecured lending cluster at ABSA where she managed an extensive portfolio including ABSA card (issuing and acquiring), personal loans, Woolworths financial services, small business, entry-

level banking and ALLPAY. She additionally served as a member of the ABSA Group executive committee. She also spent a year at Barclays, London, where she was seconded by ABSA. Prior to joining ABSA, Daphne was managing director of the South African PostBank. She has a long track record in unsecured lending, mass market banking and SMME finance and has also served on several boards of microfinance and development finance institutions. Daphne continues to serve on the boards of several organisations.

Ms. Happy MasondoBA, LLB, LLM (Wits University), LLM (Duke University, North Carolina, USA)Appointed: 22 November 2012Independent Non-Executive Director Happy was appointed to the RMA Board on 22 November 2012. She is an admitted attorney and 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).



Dr. James Steele MBChB, MBA (Healthcare Management), H Dip Int MedAppointed: 22 November 2012Non-Executive Director

Dr. Steele was appointed to the RMA Board on 22 November 2012. He is the Head of Health, AngloGold Ashanti, SA Region.

Mr. John GardnerACIS, H Dip Tax Law, MBAFirst appointed: 8 August 2001 to 26 May 2009Re-appointed: 27 November 2013Independent Non-Executive Director and Chairman of the Audit and Risk Committee

John rejoined the RMA Board as an independent non-executive director after a four year break. He chairs the Audit & Risk Committee as well as the IT subcommittee. He was previously employed by Gold Fields Limited as Vice President: Risk. His responsibilities included the Gold Fields risk management function, its global insurance programme and its healthcare operations.

Dr. Jon AndrewsMB BChFirst appointed: 7 July 1998 - June 2013Re-appointed: 26 November 2014Non-Executive Director

Dr Andrews has over 30 years’ experience in the mining industry and previously served on the Board of RMA for 14 years. He was re-appointed to the Board on 26 November

2014 representing Impala Platinum Holdings Limited. He is the Health and Safety Executive of the Implats Group and serves on the Board of Impala Platinum Mines and Zimbabwe Platinum Mines (Private) Limited.



Mr. David O’BrienBSc (City University, London), FASSAAppointed: 28 February 2014Independent Non-Executive Director

David is a qualified actuary and started his career in the UK with Eagle Star, then worked for Old Mutual International in the Isle of Man, before immigrating to South Africa in 1998. He started his Old Mutual South Africa (OMSA) career with responsibility for

product development in Investment Frontiers. David has worked in OMSA product development, healthcare, group strategy and recently a stint as acting OMSA Marketing Director. In 2009 he joined the Retail Affluent Segment team to lead initiatives to re-engage with the customer and create client-centricity for that segment.


Details relating to the executive committee members are set out below:

Mr. Bisnath (Jay) SinghChief Executive Officer

Jay joined RMA on 23 April 2007. He had an illustrious career in the medical scheme/aid industry. His previous appointments include Chief Executive Officer of Sizwe Medical Services, 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 RMA’s Chief Executive Officer, Jay is the interface

between corporate and operational management. Jay’s current focus is on strategic development and the positioning of Rand Mutual Assurance.

Mr. Eugene Hangwani Lufhugu(CA) (SA), B Compt Hons(Former) Chief Financial Officer

Eugene, a Chartered Accountant (SA), joined RMA on 23 October 2007 as Chief Financial Officer, and remained in this capacity until his resignation in February 2015. He had overall responsibility for the RMA Group’s financial affairs and reporting. He previously worked in the banking, automotive and auditing sectors.

Mr. Khathutshelo Patrick MatshidzeMBA – Healthcare Man.MPH – Epidemiology and BiostatisticsChief Operating Officer

Patrick 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.

OVERVIEW: EXECUTIVE COMMITTEE



Dr. Deodat KritzingerMBChB, MPraxMed, DOH,MBAGeneral Manager Medical

Deodat joined RMA in 2002 and was promoted to the executive committee in 2008. He is responsible for the medical division. He is an extraordinary professor and lecturer at the School of Pharmacy, University of Northwest.

Ms. Neema Onsongo BBA, PDM, MBAGeneral Manager: Human Resources

Ms. Onsongo joined RMA as General Manager: Human Resources on 7 January 2013. Neema obtained her Bachelor of Business Administration in 1995; her postgraduate Diploma in Human Resources in 1998 and her Master’s in Business Administration in 2007.

Mr. Yunoos MohamedB.Sc (Computer Science), B.ComGeneral Manager Information and Communications Technology

Yunoos has been associated with RMA since 1994. He joined RMA 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.



Mr. Ernest L. HadzhiSTD, ICBS, PMD, MBAGeneral Manager: Claims

Ernest joined RMA in 1996 after completing his Senior Secondary Teachers Diploma and insurance studies. He has also completed various management programmes, including a Masters in Business Administration (MBA). Ernest has established himself within RMA and worked his way to executive level from Data Capturer, Claims

Assessor, Claims Consultant, Branch Manager, Branch Network Manager and now General Manager of Claims Management. His current focus is to improve efficiency and customer service.


The year in review has been one of exponential growth and transformation for the Rand Mutual Assurance Company (RMA) and I am pleased to report that we have made great strides in growing

RMA through the implementation of several strategic initiatives that have long been in the pipeline.

Most significantly, on 14 July 2014, the Minister of Labour published a Government Gazette amending RMA’s COIDA license, transferring all Class XIII employers (iron, steel, artificial limbs, galvanising, garages, metals and related industries) from the Compensation Fund (“the Fund”) to RMA with effect from 1 March 2015. This will significantly increase the number of lives insured by RMA by at least 400 000, positively positioning us in the compensation market and ensuring the long-term sustainability of RMA moving forward.

RMA management is also to be congratulated on securing a license agreement with the Fund for utilising RMA’s IT system as part of its turnaround strategy and promise of enhanced service levels to

its stakeholders. In order to ensure the successful execution and rollout of the Class XIII transfer, coupled with the effective accomplishment of other strategic initiatives detailed elsewhere in this report, RMA embarked on an aggressive recruitment drive towards the end of 2014 resulting in a considerable increase in the number of employees from 222 as at end December 2014 to 273 in April 2015.

I am pleased to note that in line with previous trends, the number of accidents per 1000 lives insured continued to decline in 2014. While it is anticipated that the Class XIII take on will increase the number of claims in relation to the number of lives insured, the claims are expected to be less serious in nature with comparatively fewer fatalities.

OVERVIEW: CHAIRMAN’S STATEMENT

...RMA management is also to be congratulated on securing a license agreement with the Fund for utilising RMA’s IT system as part of its turnaround strategy and promise of enhanced service levels to its stakeholders.

RAND MUTUAL ASSURANCE | ANNUAL REPORT | 2014 19RAND MUTUAL ASSURANCENCENCENCEC || | A AN AAA NUAL RRRRREPOEPOEPOEP RT | | | | 202020 20 20202 14141444 19

OVERVIEW: CHAIRMAN’S STATEMENT

Corporate Governance remains a key focus area of the Board of Directors which played an active role in overseeing not only the implementation of RMA’s strategic agenda in 2014, but also its compliance within the regulatory environment and application of sound governance principles.

The Board relies on subcommittee mandated by the Board to focus on specific areas within the business. These subcommittee regularly report on their activities and findings to the Board. The appointment of a dedicated Risk and Compliance Officer has improved the level of attention and detail applied to these key areas of the business and regular reports are submitted to the Board via the Audit and Risk Committee. To improve corporate governance and enhance the focus of the committee, the Board has split the Audit and Risk Committee into two separate committees. Likewise, the Board is satisfied that the implementation of the new Solvency and Asset Management (SAM) requirements is receiving the appropriate attention.

The Group continues to remain financially stable largely owing to its sound investment policies.

I would like to thank the Minister of Labour, the Honourable Mildred Olifant, the Board of the Compensation Fund and the Compensation Commi-

ssioner, Shadrack Mkhonto, for the confidence they have shown in RMA. RMA remains committed to assisting in the improvement and enhancement of service in the provision of COID benefits. I would also like to thank the Board of Directors and committee members for their dedication and contribution to the sustainability and success of RMA. A warm welcome is extended to three new members who joined the Board in 2014, namely Dr Jon Andrews, Mr Mark Lynam and Mr David O’Brien, all of whom bring a wealth of experience and expertise to the Board.

Once again, management and in particular the Chief Executive Officer, Mr Singh, and his team are to be congratulated on securing the sustainability and growth of RMA. Thank you for your commitment, determination and hard work which will no doubt unlock further potential and opportunities for RMA in the future.

Dr TV MaphaiChairman


OVERVIEW: CEO’S STATEMENT

The year 2014 was one of much growth and expansion within RMA in order to build the necessary capacity to take on Class XIII in the first quarter of 2015, among other initiatives .

The company made substantial investments in its people, system enhancements and infrastructure upgrades in order to meet the strategic objectives for the year as set out in 2013.

Despite these considerable outlays, RMA delivered a solid performance and maintained its strong financial position in 2014. RMA’s solvency ratio of 153%, compared with 141.8% at the end of 2013, remains exemplary and continues to be way above the statutory requirement of 25%. This translates into reserves of R1,6 billion, which ensures that RMA’s members and beneficiaries can continue to have peace of mind regarding their cover in their time of need.

As part of RMA’s risk management system, every insurance and reinsurance undertaking shall conduct its own risk and solvency assessment (ORSA). ORSA is defined as all the processes and procedures employed to identify, assess, monitor, manage and report the short- and long-term risks an insurance

undertaking faces or may face to ensure that the insurer’s needs are met at all time and are sufficient to achieve its business strategy. RMA has done all the necessary planning and preparation to implement SAM, effective 1 January 2016, as required by the Financial Services Board.

In 2014, net premiums were R 1,003 billion with net benefits and claims paid at R 1,045 billion, yielding a loss ratio in claims of 104%. This means that for every R1 received in premiums, R 1,04c was paid out in benefits e.g. medical claims and compensation benefits. RMA continues to provide a cost-effective workers’ compensation benefit while simultaneously providing a very high level of service to all of its stakeholders.

The strategic objectives set out for 2014, were implemented as follows:

1. Class XIII: In 2013, RMA’s licence was extended to administer COIDA claims for Class XIII employers (iron, steel, artificial limbs, galvanising, garage, metals and related industries). The transfer to RMA, which was initially scheduled for mid-2014, was moved to 1 March 2015. However, much of 2014 was focussed on preparing, upgrading and enhancing the necessary people, skills, infrastructure and systems in order to ensure that RMA had the required capacity to ensure a successful transfer in 2015.


OVERVIEW: CEO’S STATEMENT

2. RMA system at the Compensation Fund: The RMA claims management system was licensed to the Compensation Fund (CF) as its IT system of choice, renamed by the CF as Umehluko, in August 2014. The CF commenced with the adjudication of claims using the RMA IT system in the latter part of the year. The RMA system is currently exclusively responsible for the processing of claims that were incurred after 1 August. The company provided ongoing technical support and training to the CF to ensure a seamless implementation of the system.

3. Custodial Care: A dedicated care facility is being

established in Welkom, Free State, to meet the needs of RMA’s amputee and rehabilitation patients. This facility will enable RMA to ensure the ongoing delivery of exceptional care for patients. This project provides considerable support to its clients in meeting the proposed changes to the compensation legislation in the form of the introduction of “return to work” obligations on employers. This facility is covered in more detail in the Medical Department report on page 41.

While RMA has had a strategic growth focus during 2014, which will continue through 2015 and into 2016, we continue to ensure that our slogan of Caring,

Compassionate Compensation remains at the core of all that we do. From the staff who are focused on offering an

empathetic and caring approach, to our many corporate social responsibility and enterprise development projects, the well-being and care of our beneficiaries remains an immutable focus of the company. The year ahead will be dedicated to the successful transfer and bedding down of Class XIII, with the strategic agenda for 2016 focussed on taking both RMA’s systems and products into Africa through strategic partnerships.

I would like to take this opportunity to thank the management team and staff of RMA for their ongoing dedication and commitment to ensuring the success and enhanced service levels of RMA on which we continue to build our brand and reputation. I also thank the Board of Directors for their ongoing support of the executive and management teams.

To our clients and stakeholders, we would like to thank you for your ongoing loyalty to, and support of, RMA and we commit to ensuring that through the growth phase we will continue to offer the high levels of service that you have come to expect from RMA.

B SinghChief Executive Officer


OVERVIEW: CFO’S REPORT

Introduction

The economic environ-ment in 2014 provided very challenging con-ditions for the general South African econ-omy and in particular the mining industry. The prolonged strike

in the platinum sector led to major disruptions in the operations of some of our main members. Real an-nual GDP slowed to 1.5% for the 2014 financial year. Despite these challenges, the Group remains in a very stable financial position assisted by the posi-tive investment market and returns over a number of years, and we continue to meet solvency require-ments. While we anticipate that the same challenges will continue within the economy and particularly the mining sector during 2015, we remain confident that the RMA Group will attain its projected financial ob-jectives.

Investment Strategy

The current year was dominated by the continued transitioning of assets in the core portfolio of RMA Life towards an appropriate matching for the series of liability cash flows. In addition, 2014 saw either

the introduction, or bedding down, of the new asset managers in the bonus pool. The domestic balanced managers commenced managing assets in the bonus pool, effective 1 January 2014, which allowed for a 12-month performance review. Regarding the bonus pool’s offshore assets, early July 2014 saw the transition to a new blend of asset managers.

RMA achieved returns of 10.08% compared to the target of 8.19%. RMA Life achieved returns of 10.55% against the target of 8.72% over a two and three year rolling period respectively.

Total assets increased by R 1,399 million to R 15,782 million from a balance of R14,383 million in 2013. The Group continues to source specialist investment advice from investment consultants who operate in terms of a written mandate comprising 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.



The insurance liabilities of the Group can be divided into short- and long-term liabilities. Short-term liabilities are defined as one-off lump sum payments for permanent disability, medical expenses and total temporary disablement (TTDs) payments.

The long-term liabilities relate to the ongoing payment of pensions/annuities relating to permanent disability

where the percentage of disablement is in excess of 30%. The total insurance liability for 2014 was R 13,821 million as compared to R12,684 million for 2013.

Included in the annuity liabilities is an amount of R 1,566 million (2013: R 1,222 million) in the Bonus Stabilisation Reserve. This reserve is held to absorb fluctuations in the value of assets covering the Group’s long-term liabilities.

Group total assets and investments at market value – R million

Group total assests and investments at market value - R million

18,000

Total Assets Investments

16,00014,00012,00010,0008,0006,0004,0002,000

2008 2009 2010 2011 2012 2013 2014



Insurance results

The year 2014 was a very difficult year for the insurance business. Premium income across all products decreased by 6% overall due to lower earnings from members mainly in the platinum sector as a result of the prolonged strike during 2014. 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. Although the number of claims has reduced, the cost per claim has increased mainly due to the higher cost of medical treatment. Claims, other than medical expenses,

Investments vs insurance liabilities – R million

18,000

Insurance Liabilities

Investments

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

2008 2009 2010 2011 2012 2013 2014

Investments vs insurance liabilities – R million



are calculated on the salaries of employees, which have on average increased by 10%. In anticipation of the more stringent capital requirements that will be introduced by the regulator in the medium-term, we have provided for our incurred but not reported (IBNR)

claims using the more conservative 75th percentile instead of the normal best estimate approach by the Group’s actuary. This led to an increase to the income statement charge in this financial year.

Claims ratio

Claims ratio

2014 104,2%

94,5%

107,4%

95,3%

111,1%

90,3%

99,0%

(100%)

2013

2012

2 0 1 1

2010

2009

2008



The claims ratio of claims to premium for 2014 deteriorated to 103% compared to 94.5% in 2013.

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 pension payments. While management remains conscious of the need to curtail expenses, higher than inflation increases from service providers remain unavoidable.Administrative costs for the Group rose by 27% in the current year compared to the previous financial year. The main cost drivers were employee costs for new staff members, leasehold improvements to offices and branches and non-cash amortisation costs on the new CompCare claims management system as the business prepared for the take-on of the new Class XIII business.

Financial outlook for 2015

Although there is every expectation that the same onerous conditions will continue to prevail and the global market will face many of the same pressures, the RMA Group forecasts good growth in the 2015 financial year. This forecast is based on the new business to be transferred by the Compensation Fund (Class XIII employers) and the normalisation in the

mining sector. The RMA Group has spent a significant amount of resources in the current financial year to enable it to take advantage of the increased business from the Class XIII group of employers.

The outlook for the SA economy remains fragile due to conservative economic growth prospects, structurally high twin deficits (fiscal and current) and an inflation outlook that, while having improved marginally to date, remains uncomfortably high. Job generation in the private sector is expected to remain elusive.

The outlook for asset class pricing, both global and domestic, is likely to get tougher. Low real returns are to be expected in the next financial year.

I have reviewed the financial statements of the Group as well as the company review and am satisfied that the information is correct.

Mr EH LufhuguChief Financial Officer February 2015


STRATEGIC AND BUSINESS REVIEW



What our business is about

Rand Mutual Assurance (RMA) is the administrator of choice for occupational injuries and diseases for Class IV (Mining), Class XIII (Iron, Steel and Metal) and related industries.

The core of RMA’s business is the receipt, adjudication and administration of workers’ compensation claims, including the payment of medical costs, one-off disability payments and the ongoing payment of pensions in the case of severe disability and death. RMA’s high level of service and quick claims turnaround is underpinned by a market-leading integrated claims management IT system that allows for enhanced efficiencies and paperless adjudication of COID claims.

Over and above COID benefits, RMA also offers several value-added accident-related insurance products to its clients. Additionally, in the year under review, RMA’s IT solution expanded exponentially to offer a full claims management solution to clients.

RMA’s insurance products

Commuting Journey Policy

The Commuting Journey Policy (CJP) covers the death or injury of an employee while travelling to and from work on a reasonably direct route.

Benefits include medical treatment, disability and life cover.

Augmentation Policy

Augmentation is a top up cover of the COID benefit that RMA currently offers to clients.

The Augmentation policy also offers specific additional cover, including:



Riot & Strike Policy

Industrial action can sometimes be violent in nature and the possibility of injury or even death is a reality. The Riot and Strike Policy covers employees who are injured or die in a riot, strike or faction fight. In order to claim on this benefit, however, the employee may not be a participant in the event.

Cover for this benefit includes:

of R250 000)

Stated Benefit (Funeral) Policy

The funeral benefit covers the insured employee and his spouse and one child in the event of death. This benefit covers any cause of death.

Strategy and delivery on strategic objectives (including restructuring and outlook)

Since its inception 121 years ago, RMA has steadily evolved from being an administrator of claims for COID and related insurance products in the mining sector to being a company with vision and the potential to grow

exponentially, not only as an administrator of claims but also in other areas such as information technology solutions for claims management.

In line with its strategic objectives, RMA secured the following key opportunities in 2014:

In October 2014, the Minister of Labour announced that with effect from 1 March 2015, all employers in the Class XIII industry would transfer from the Compensation Fund to RMA. The take on of Class XIII has resulted in an increase in the number of lives insured by RMA from 390 542 to 890 542. It is envisaged that by the end of 2015, total premium collected will have almost doubled in value from the end of 2014.

The administration and compensation of occu-pational lung disease claims for mining employees has for some time been an area of concern for employers, claimants and organised labour. RMA has developed the competency and skills in-house to review and adjudicate these claims


Care facility


notwithstanding the fact that these claims are covered under the Occupational Diseases in Mines and Works Act (ODMWA) and submitted to the Medical Bureau for Occupational Diseases (MBOD). Payments are made by the Compensation Commissioner for Occupational Diseases (CCOD). In the latter half of 2014, the Board approved that RMA assist members with intermediary administration and review services in respect of the processing of ODMWA claims if so required. Since then, RMA has concluded a service level agreement with Impala Platinum through which RMA provides intermediary administrative and review services of occupational lung disease claims for a fixed fee per claim.

RMA intends to extend this service offering to other employers and continuous discussions are underway.

The Compensation Fund (CF) migrated to the RMA system on 4 August 2014. All CF claims are now processed on the RMA system. The system performs well in the CF environment and medical invoices totaling in excess of R800 million have been paid on the new system as at the date of writing this report. All other claims and benefits (e.g pensions, permanent disability lump sums) are also being successfully paid on the new system.

A strategic focus area is the provision of quality, holistic care to RMA’s patients, addressing a combination of medical, psychological and social needs.

The construction of a care facility in Welkom, which was approved in 2013, is on track and should be ready to open its doors in January 2016.

The facility will offer a higher standard of care and better access to services than is currently available at existing third party facilities. We believe that this will encourage injured persons to select our facility as a preferred facility, which will be of a world class standard.



Of the strategic opportunities identified during 2014, management will focus on the following in 2015:

- Licensing the RMA system to other organisations; and - Providing COIDA-type insurance to local authori-

ties and municipalities.

Looking forward, RMA hopes to have completed the restructuring of the RMA Group by mid-2015. This will allow for further expansion, better access to capital and positioning of RMA to acquire strategic partners to take it forward on its growth path. All new business opportunities will retain the value proposition of Caring, Compassionate Compensation at all times

Care facility


STRATEGIC AND BUSINESS REVIEW: OPERATIONS REPORT

Operations Overview

The Operations Division has experienced rapid growth and expansion over the period under review, mainly in preparation for the Class XIII transfer but also in terms of its system enhancements, product offerings and boosted service delivery.

The Operations Division’s activities were aligned to the company strategy of ensuring effective and efficient delivery of customer service, particularly with regards to the adjudication and payment of claims, premium determination and assessment of rates, maintenance of IT infrastructure, develop-ment of IT systems software, electronic data management, communication with internal and external stakeholders, management of enquiries and complaints, and management of legal matters.

Preparations have also been undertaken to accommodate the transfer of a new line of business, namely Class XIII. This has necessitated a review of the operational strategy, a restructuring of the business units and recruitment of additional staff. The development and review of policies, processes and procedures was also undertaken.

The structure of this division has evolved to accommodate the change in company strategy. The

revised structure, which aligns to the new mandate, includes the following expanded list of business units:

This structure is configured to deliver optimal customer service at all levels of the RMA business while ensuring compliance with all legislative and regulatory requirements. It also allows for increased customer interaction and thus a better determination of ongoing customer needs.

Performance overview

There was a decline in the number of lives covered on all products with the exception of the Riot and Strike Policy and Day 1 Medical Cover (i.e RMA covers all benefits from the date of injury), which increased substantially by 8,6% and 15,1% respectively. The decline in the number of lives was primarily due to economic conditions which have in some instances resulted in mine closures and ultimately in job losses.



In 2014, RMA adopted a new method of managing claims with the introduction of Maximum Medical Improvement (MMI). This now allows for a claimant to be treated for an extended period until he/she reaches a state beyond which no further medical treatment can improve his/her medical condition. This means that either an injured person has fully recovered from the injury or that the person’s medical condition has stabilised to the point that no major medical or emotional change can be expected in their condition. Compensation is then assessed once they have reached the point of MMI. It is yet too early to evaluate the full impact of this new method on medical costs and compensation levels.

We continue to anticipate a decline in the number of claims from the mining industry as a consequence of improved safety and prevention methods, industrial action in the platinum belt (Rustenburg, Northwest Province) and a decline in the number of covered lives. This has in turn led to a reduction in the number of permanent disability (PD) and fatal pensions reported in 2014.

The number of suspended pensions has also dropped, however, more could be done to ensure that proof of life documents, a major cause of suspensions, are returned to RMA, particularly among claimants from neighbouring countries.

A new Records Management Department and a Contact Centre commenced operations in the year under review. All enquiries are now being channeled through the Contact Centre and to this end we have seen a marked increase in the number of calls in the Contact Centre and a substantial reduction in the number of calls to branches.

Our drive for a paperless claims adjudication process is well under way with the majority of claims and medical invoices being submitted electronically in 2014.

The Communications and Legal Services departments, which also commenced work in the year under review, focused on developing operational strategies, policies and procedures.

The performance of each of the operational depart-ments is outlined below:

Communications

As a company on the brink of substantive growth through the take on of Class XIII, coupled with additional identified opportunities, RMA understood the need for a formal communications structure to ensure that stakeholder information requirements were met at a raised level of professionalism.



Without a formal communication structure in place each department was communicating as per its own particular needs. In light of this, the need for a comprehensive and structured communications approach became apparent and a Communications Manager was appointed to:

through consistent, high quality and regular communications;

the compensation process;

differently (caring and compassionate) and better (leading IT system and good turnaround times) through key messages to identified stakeholders;

information through regular communications; and

confidence among stakeholders.

Legal Services

The Legal Services Department was established to provide legal support to the company and its various business units and to ensure compliance within the broader legislative environment.

During the period under review, the department facilitated the management of tribunal hearings for the adjudication of objections submitted by claimants in terms of section 91 of the COID Act. The department also focused primarily on developing operational strategies, policies and operating procedures.

Information and Communications Technology (ICT) Department

Traditionally the ICT department has been supporting various RMA business units in the administration, adjudication, processing and payment of workmen’s compensation claim benefits. To enable RMA to fulfil its mandate, however, RMA ICT developed an inte-grated, high-powered computer application system rich in functionality which serves RMA’s processing requirements effectively and efficiently.

Recognising the value of the system, management identified the possibility of licensing it with a view to offering it to other administrators of workmen’s compensation. In 2008, the RMA Board agreed to license the RMA system and offer it to other administrators.

The implication of this decision to offer our system as a stand-alone product meant the ICT Department needed to be transformed from an internal support department to an IT solutions



provider. This transformation commenced in 2013 and gained impetus during 2014, with the following highlights taking place in 2014:

Fund;

the system so that it may in future administer and process claims other than workmen’s compensation claims;

ctions were introduced including MMI, ICD10 code / CPT / tariff code linking and hospital benefit management etc.

Claims Management

The Claims Management Department is responsible for the following areas:

garages, metal and related industries) business

The receipt, adjudication and payment of compensation claims accounts for the bulk of the Claims Management

Department’s activities through its Class IV and Class XIII divisions. The management of quality, measurement of turnaround times for claims processing and customer service are the department’s main focus points.

Mining (Class IV) Business

The following branches (client service centres) are responsible for Class IV claims processing: Rustenburg, Welkom, Klerksdorp and eMalahleni. This department is responsible for 391 980 lives belonging to 316 employers in the mining industry. The Welkom and Klerksdorp branches are primarily responsible for servicing the gold mining industry while the eMalahleni branch covers mining companies that produce coal and other minerals from as far afield as Burgersfort and Phalaborwa. The Rustenburg branch services three major clients i.e. Anglo Platinum, Impala Platinum and Lonmin, as well as a number of smaller platinum mines in the area.

This division is responsible for the registration of claims, adjudication and payment of medical ex-penses, temporary total disablement as well as lump sum permanent disablement to injured employees. The table below depicts a 10 year trend of the num-ber of lives insured versus the number of claims in relation to the various products offered by RMA to the mining industry.



Pensions Department

This division is responsible for the payment of monthly pensions in the case of permanent disability above 30%. Less severe disabilities are compensated by means of a one-off lump sum payment. Should the employee die as a result of their injury/disease, the division pays monthly pensions to the deceased’s children under the age of 18 and to the surviving spouse/s.

In 2014, monthly pensions were paid to 19 249 pensioners and beneficiaries. We have witnessed a decline in the number of pensionable cases over the

past 10 years due to a number of factors including improved safety standards in the mining industry, improved medical care as most of the employers have converted to Day 1 cover for medical treatment, and the introduction of MMI. Since initiating MMI, RMA now assesses an injured person to establish the degree of permanent disablement only once MMI is reached, which has in turn reduced the number of pensions.

Year No. of lives COID Commuting Journey Policy

Augmentation Riot & Strike Total

2014 391 980 10 835 452 1326 9 12 622

2013 388 042 14 405 738 1411 2 16 556

2012 409 214 15 544 603 1485 100 17 732

2011 398 793 18 819 738 1572 0 21 129

2010 382 163 19 081 609 1717 0 21 407

2009 392 698 20 707 543 1709 7 22 966

2008 369 901 24 328 597 1710 0 26 635

2007 346 234 28 793 587 1718 0 31 098

2006 327 576 32 642 368 1502 1 34 513

2005 312 155 37 363 268 1691 0 39 322

Ten year trend of the number of lives insured vs claims per product



Contact Centre

In preparation for Class XIII and as part of a broader strategy to enhance RMA’s customer service experience, the Contact Centre was established in March 2014. The Contact Center manages all contact from stakeholders, analyses queries in order to identify bottlenecks, reduces the call answering time and minimises the abandoned call rate. Data from queries gathered through the Contact Center assists management with decision-making to further improve customer service.

It is clear from the table below that the Contact Center has begun to achieve the objectives for which it was established. The abandoned call rate reduced from 23% in April to 4% in December i.e. 1101 calls were abandoned in April compared to 108 calls in December 2014. The average speed of an answered call improved from 25 seconds in April to nine seconds in December.

Ten year trend of number of fatal claims for all products

Year Number of fatals

2014 80

2013 100

2012 162

2011 238

2010 232

2009 248

2008 274

2007 333

2006 348

2005 280

Ten year trend of number of disability pension cases for all products

Year Number of pensions

2014 12

2013 87

2012 142

2011 157

2010 224

2009 226

2008 276

2007 315

2006 333

2005 339


Records Management Department

The Records Management (RM) Department provides support to RMA’s business units with regards to the establishment, maintenance and implementation of an electronic document management system. The RM Department manages and guides staff and management regarding the treatment of organisational records in line with business and legislative requirements.

The department’s core focus is to facilitate the conver-sion of physical documentation into an electronic format to ensure document safety, ease of retrieval and secure physical and electronic document management.

RMA launched its ScanCare solution - a system that both scans and indexes, allowing active workflows to be

integrated into the CompCare environment for retrieval and viewing - in March 2014. This has improved the management of organisational records within the Medical, Claims and Pension departments. All records received after March 2014 were digitally converted from paper using the ScanCare system.

As at 31 December 2014, approximately 152 421 docu-ments had been scanned and indexed via the ScanCare system since implementation. This equates to an average of 16 935 scanned and indexed documents per month.

This development has resulted in improved claims processing turnaround times as management is now able to monitor the processing of incoming documents more efficiently.


Key indicators on calls received between April and December 2014

Year Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 YTD

Calls Received 4664 4699 4710 5424 4497 4734 4909 4613 2700 40950

Calls Handled 3563 4050 4163 5125 4336 4405 4718 4386 2592 37338

Calls Abandoned 1101 649 547 299 161 329 191 227 108 3612

% Abandoned 23,60% 13,80% 11,60% 5,50% 3,60% 6,90% 3,90% 4,90% 4,00% 8,64%

Service Level 76,39% 96,40% 96,40% 92,20% 99,40% 97,20% 98,70% 98,70% 98,80% 94,91%

Average Speed of Answer 00:25 00:21 00:17 00:12 00:09 00:13 00:09 00:10 00:09 00:13

Average Interaction 02:47 03:23 03:32 03:52 04:10 04:17 04:21 04:19 04:07 03:52


Branch Network (Client Service Centres)

In preparation for the Class XIII business, management reviewed the branch infrastructure resulting in the establishment of two new branches, in Pretoria and Durban, as well as the expansion of the Johannesburg branch. Due to a low number of members utilising the Kimberley branch it became economically unviable to maintain this office, resulting in its closure.

The branch network offered by RMA includes branches in:

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.

In addition to COIDA, RMA is authorised to provide occupational accident insurance in terms of both the short- and long-term insurance legislations. The company offers four products in terms of the Financial Services Board (FSB) licenses, including: the Commuting Journey Policy (CJP); the Augmentation Policy; the Riot & Strike Policy; and the Stated Benefits (Funeral) Policy.




Reinsurance

In order to ensure that there is adequate cover for employees in the event of any catastrophic losses, RMA has two excess of loss reinsurance programmes placed in the overseas reinsurance market through a locally based reinsurance broker company. The two programmes separately cover the Class IV and Class XIII business respectively.

The Class IV liability cover (R 800 million) includes both COID and other accident and health products offered by RMA. This includes an excess of loss programme with an inner deductible of R 10 million per event involving two or more persons.

Ten year membership and premium trends

Year Average applied rate Average annual premium per employee No. of employees per month No. of employers

2014 1.00773 R 2,190.33 391980 316

2013 1.05522 R 2,121.82 388042 309

2012 0.97870 R 1,715.07 409214 296

2011 1.10619 R 1,721.80 398793 300

2010 1.16724 R 1,511.29 382163 317

2009 1.08866 R 1,201.19 392698 310

2008 1.01087 R 1,108.77 369901 295

2007 1.06909 R 1,050.23 346234 293

2006 0.73940 R 666.43 327576 298

2005 1.12046 R 952.72 312155 294


STRATEGIC AND BUSINESS REVIEW: MEDICAL DEPARTMENT REPORT

Introduction

The Medical Department plays a key role in the daily operations of RMA. Its main objective for 2014 was to align the department with the company goals and balanced scorecard with a focus on:

Learning and growth

The General Medical Manager had the opportunity to visit Germany as part of a Department of Labour delegation to observe and study Germany’s framework and approach to the management of occupational injuries and diseases. Similarities between their systems and the current legislative framework in South Africa were observed. The main difference identified between the two countries was how this was being applied and enforced in South Africa.

This visit allowed us to analyse and review RMA’s current processes and benchmark these against best practice. A recommendation was submitted to the office and Board of the Compensation Commissioner for legislative reform.

Against this background, coupled with legislative changes and enhanced technologies, RMA embarked on a review of its medical policies and procedures in 2014 to ensure their relevance in support of the business’ needs.

Aligning internal processes

In 2014 RMA analysed its internal processes to maximise operational efficiencies and reduce any unnecessary administrative processes or duplications. To this end, the Medical Department supported claims staff with improving the classification and categorisation of injuries, namely ICD 10 coding.

This was critical in that correct classification better determines the intervention and management needed for optimal outcome and recovery.

Injuries identified as serious and requiring close monitoring are escalated to medical nursing staff or doctors for advice and support.

Efforts to collect injured employee details allowed us to better communicate with the injured employees and inform them of RMA’s processes and how to access benefits. A concerted effort was made to contact all new pensioners to introduce them to the Pensioner Medical Plan Programme (PMP) and the assistance offered by RMA.



The focus on operational efficiencies resulted in the restructuring of both the Operations and Medical departments. As a result, positions were reviewed, staff were upskilled and additional positions were created.

Robust systems

As technology advances within the insurance and medical industries, it necessitates ongoing review and enhance-ments of the RMA system to complement operational activities and improve operational efficiencies.

Enhancements to RMA’s CompCare (claims adjudi-cation) system were specifically designed to include the following functionalities:

Medical management and reporting on claims;

authorisations and case management;

invoices from service providers;

providers on invoices received directly and indirectly via the Medical Services Provider Portal;

of invoice payment;

Significant progress was made as a result of these enhancements, the automation of which has improved RMA’s interaction with its stakeholders and more specifically with healthcare providers. Around 80-85% of medical invoices are now received electronically via EDI from different switching houses. The balance consists of paper invoices, however, healthcare providers are encouraged to convert to EDI.

The system validation process captures invoices and validates these against a set of rules, giving electronic feedback to the healthcare provider if validation fails. In addition, a system workflow is communicated to the RMA user for further action and follow up.

Automated payment of pre-authorised treatment is effected when an invoice is successfully validated.

Medical invoices – EDI vs Paper

Electronic

Paper

15-20%

80-85%



Enhancements to extend this functionality to include all invoices are currently underway and will be available during the second quarter of 2015.

The Medical Services Provider Portal (MSP Portal) was launched during 2014. Healthcare providers can now register with RMA’s online services, view the progress of their invoices and submit medical reports or required documents online. Healthcare providers are encouraged to register online and to track their invoices in order to reduce the number of unnecessary calls made to the Contact Centre and to avoid an unnecessary burden being placed on claims processing services. . Customer service and satisfaction

The importance of customer service and customer satisfaction is always top of mind and therefore mechanisms to maintain and improve service levels are in place. For example, internal customer service delivery is monitored via the medical help desk to ensure that service delivery targets and agreed turnaround times are met.

Monthly reports are available for external stakeholders, specifically health service managers, and are followed up through individual discussions between RMA doctors and colleagues when required. Training

sessions for healthcare providers were co-ordinated with the assistance of the Training Department. In addition, presentations and lectures were given at the universities of Pretoria and Witwatersrand, MMPA, SASOM and Chamber of Mines.

During 2014, the Pensioner Medical Plan (PMP) operated in numerous areas performing home visits and urological reviews of pensioners with spinal cord injuries. With the assistance of the prosthetic mobile team they visited several areas to review amputee pensioners, assisting them to remain functional and integrated in society.

Financial and cost management

The overarching focus of the Medical Department remains the provision of quality care. However, RMA remains conscious of the need to deliver quality care in a cost-effective manner and to safeguard its financial reserves to ensure that it is able to continue providing care well into the future.

The main medical cost drivers are hospital costs and specialist services. This necessitated the introduction of in-house case management to continuously monitor and manage the utilisation of health services.



Overview of PMP visits during 2014

PMP Plan 2014

Home Visit URO Review DRG 2 DRG 3

Scheduled Seen Scheduled Seen Scheduled Seen Scheduled Seen

January 12 11 18 21 21 24 9 7

February 22 29 43 43 71 51 8 15

March 10 14 30 35 75 68 20 15

April 20 31 45 35 39 68 20 8

May 34 36 59 45 56 43 19 13

June 17 11 26 20 84 117 14 16

July 17 23 32 23 53 53 18 9

August 15 12 35 30 58 50 8 8

September 17 17 44 35 39 25 8 8

October 14 16 27 29 43 37 8 9

November 8 9 14 25 2 3 0 0

December 2 3 0 1 7 7 2 1

146 212 373 342 548 546 134 109

YTY 145,2% 91.8% 99,6% 81,3%

Timeous interaction and communication with relevant stakeholders on business processes and new developments remains a primary objective.



In 2013, and as one of its key strategic initiatives, the Board approved the construction of an RMA care facility in Welkom that promises to deliver a significant saving on hospital costs, particularly where subsequent care of pensioners with chronic medical conditions and those in need of medical treatment and care is required. Construction of this facility started in August 2014 and first admissions are expected in January 2016. The initial plan was for an 80 bed facility with the flexibility to increase

capacity to accommodate 120 beds, depending on demand. Controls to manage quality and cost of care have also been incorporated into the Medicare system functionality (part of the CompCare system). Enhancements to the pre-authorisation functionality advises on, and controls the use of, tariff codes in accordance with ICD 10 and CPT codes. Invoices captured on the CompCare system are validated against this set of rules and are pended for review if validation fails. A second line of review scrutinises the invoice for payment.

Other methods used to control and assist with cost management include the continued use of services by Medikredit, Medical Services Organisation (MSO) and a prosthetic joint venture for pharmaceuticals, hospital benefits and prosthetic devices respectively.

Summary of strategic initiatives

Strategic initiatives that will continue into 2015:

-tem for automation of medical invoice processing;

as at end 2014 was 30% complete;

claims on a larger scale; and

smooth take on and bedding down of Class XIII.

Key cost drivers during 2014

Hospital

Others

Pharmacy

Prostheses

Radiology

Specialits

Unknown

Groupings Total Pay Amout

Hospital R 153,489,825.51Others R 20,172,525.53Pharmacy R 6,168,029.15Prostheses R 21,113,545.14Radiology R 8,309,406.79Specialists R 26,479,797.17Unknown R 5,916,954.48Total R241,650,083.77


STRATEGIC AND BUSINESS REVIEW: RMA PEOPLE

Introduction

RMA’s acquisition of the Class XIII license has resulted in superb opportunities for career progression for some of our existing employees, and has also created jobs for new employees with the requisite skills to join RMA. Our Training Department has ensured that new employees are fully inducted and prepared to enter the business with the required knowledge to be operationally effective. The core objective of the induction and training programme has been to ensure that RMA’s business model of Caring, Compassionate Compensation and quality of service are maintained at all times.

Caring for the well-being of our people, empowering them to use their initiative and working as a team is central to RMA’s values. Workshops to entrench these values are thus run on a continuous basis. Management embraces the idea that the empathy and commitment of our employees to deliver exceptional service to beneficiaries and members is dependent on the provision of a caring and supportive working environment.



Employee Satisfaction Survey

An employee satisfaction survey, internally known as “Voice of the Employee” (VOTE), was conducted in June 2014 and RMA achieved an excellent score of 3.75 with an incredible 94% response rate with 140 employees participating in the survey.

By achieving a score of 3.75, RMA is able to say with pride that it is comparable to the Deloitte Best Company to Work For. Qualifying companies in the Deloitte awards had attained an excellence benchmark score of 3.7 or above. While RMA as a company is not participating in the Deloitte survey, reaching the benchmark criteria score is a huge achievement for RMA and one we are extremely proud to have accomplished. Management was also gratified to note that approximately 75% of the respondents said that they would recommend working at RMA to their friends and family.

RMA Workplace Profile

RMA has a relatively small workforce and at the end of 2013 had 123 full-time employees and 11 contractors spread across head office and the branch network, including the satellite offices in Lesotho, Mozambique and the Eastern Cape. As a result of being granted the Class XIII license, approximately 180 new roles were created and budgeted for. As at the end of 2014, RMA had 167 full-time employees, nine fixed-term contract employees and 46 learners spread across the offices as shown in the table below. This amounts to a 179% increase in the number of employees from 2013 to 2014.

Workforce by province

Employment Type

Gauteng Mpumalanga North West

Free State

Eastern Cape

Northern Cape

KZN Lesotho Mozambique Total

Permanent 125 4 19 8 2 1 4 2 2 167

Fixed-term contract

8 0 1 0 0 0 46 0 0 55

Total 133 4 20 8 2 1 50 2 2 222



RMA employed 65 new permanent employees in 2014 as follows:

Breakdown of new employees

Age Group Gender Region

18-30 30-50 50>

= 23 = 39 = 3

Males Females

= 24 = 41

Gauteng Free State North West KwaZulu- Natal Mpumalanga

= 54= 2= 6= 1= 2

The staff turnover rate decreased from 15.47% in 2013 to 9% in 2014. The tables below indicate the reasons and turnover statistics for 2014.

RMA staff turnover statistics

Age Group Gender Region

18 - 30 30-50 50>

= 2 = 11 = 7

Males Females

= 6 = 14

Gauteng Free State North West Mpumalanga Northern Cape

= 12= 2= 3 = 2= 1

Reasons for staff turnover

Group Number

Resignations 13

Retrenchments 2

Retirement 3

Dismissals 1

Death 1

Other 0

Training & Development

A detailed training programme for employees as well as a stakeholder training plan was developed for 2014. This was approved by the Training Committee and implemented by the Training Department.

RMA employees spent just over 9 000 hours in training in 2014. Training was conducted for all employee levels, more information for which can be found in the GRI Table (Page 95 of the Corporate Citizenship and Sustainability Report). When taking into consideration actual training versus planned and unplanned training, it is clear that RMA is committed to developing its employees, which is affirmed by the results of the 2014 VOTE survey.



Further to its commitment to skills development, RMA enrolled 50 disabled black females in KwaZulu-Natal into a 12 month NQF Level 2 Financial Management qualification learnership.

Talent Management

The 2013 Successor Development Programme was considered a success with all 10 candidates completing the programme. A further 12 employees have been enrolled in the programme for 2014/15 to prepare them for key roles.

Reward & Recognition

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 depart-ment. The selection process is based on motivated nominations from fellow employees with a final determination made by executive management using a ballot system after applying the outcomes of the performance management process. This means that employees 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) and was awarded to Vincent Netshirungulu. The best manager award was won by Michael Hay from the

IT Department. The best departments were the Contact Centre and the IT Department.


CORPORATE RESPONSIBILITY AND SUSTAINABILITY: GOVERNANCE REPORT

CORPORATE RESPONSIBILITY AND SUSTAINABILITY



Introduction

RMA acknowledges the im-portance of the role it plays in the lives of its many stake-holders and the importance of remaining sustainable and embracing the principles of

governance best practice. There are many sources that inform the governance structures of RMA, most notably being the Companies Act (and specifically the provisions that apply to public companies), the King III report, the Long- and Short-Term Insurance acts, and more recently, Board Notice 158 of 2014 which stipulates the governance and risk management structures for insurers published by the Financial Services Board (FSB) at the beginning of 2014. At the time of preparing this report, RMA was in the process of reviewing its governance structures against the requirements specified in the aforementioned Board Notice to be implemented in April 2015.

Board

Composition RMA’s Memorandum of Incorporation (MOI) makes provision for the appointment of 20 directors. Currently, RMA’s Board of Directors comprises 17 members, 15 of whom are non-executive directors. The majority of the

non-executive directors, including the chairman and deputy chairman, are independent non-executive directors. An annual assessment is conducted to confirm the independence of the non-executive directors. The remaining two members comprise the Chief Executive Officer and Chief Financial Officer.

During 2014, three changes were made to the composition of the Board. David O’Brien joined the Board in January 2014 and both Mark Lynam and Dr Jonathan Andrews were appointed as non-executive directors in November 2014. Mark Lynam had previously been appointed as an alternate non-executive director and Dr Jonathan Andrews had previously served on the Board as a non-executive director before stepping off the Board for a short period.

In accordance with RMA’s remuneration policy, the remuneration of directors for 2014 was benchmarked 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, trans-formation, independence and qualifications – is also considered.



The requisite skills set of the Board and its committees, 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 achieve 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.

Role The primary role of the Board is to provide the management of RMA with strategic leadership and direction with the right to delegate any of its authority and powers to the Chief Executive Officer, to a committee of the Board or to any other person or entity as may be determined by the Board. In executing its role, the Board at all times takes into account the relevant provisions of the Companies Act, 2008, its MOI, corporate governance best practices and principles contained in the King III report and decisions and policies implemented by the Board from time to time.

During 2014, in addition to all the duties and responsibilities imposed on the Board in terms of its charter, the Board focused on the following key areas:

of the strategic objectives discussed in 2013, and providing management with the necessary support and guidance for these;

impacting on insurance companies such as Treating Customers Fairly, and Solvency and Asset Management; and

plan in place for the position of chief executive officer taking into account that the existing CEO was due to retire in June 2015.

RMA acknowledges the impor-tance of the role it plays in the lives of its many stakeholders and the importance of remain-ing sustainable and embracing the principles of governance best practice.



In accordance with the MOI, one third of all directors must resign annually. This excludes the chairperson and the executive directors.

Directors so retiring are eligible for re-election subject to an evaluation of attendance and participation at meetings.

Board attendance

28 Feb 14 18 Jun 14 6 Aug 14 19 Sep 14 26 Nov 14

Dr V Maphai*

Mr A van Vuuren**

Mr J P L Bezuidenhout

Mr J Gardner

Mr A Letshele

Mr M Lynam (alternate)

Ms H Masondo

Dr M Mentz

Ms D Motsepe

Mr R Naidoo

Mr D O’Brien

Ms M Pillay

Mr H Schalekamp

Dr J P Steele

Mr B Singh

Mr E Lufhugu

Dr J Andrews +

* Independent non-executive chairman** Deputy chairman+ Was appointed as a non-executive director on 26 November 2014



In terms of King III (Principle 2.18.8), the Board should review the position of members who have served on the Board for more than nine years to determine whether their continued membership is appropriate and whether they bring invaluable 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 roles of chairman and 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 conflict of interests, other than those disclosed, exist.

The Company Secretary

The company secretary is responsible for the com-pilation and distribution of the directors’ toolkit which

includes Group and industry-specific information, general guidance to directors on the fulfillment 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 FSB and be approved as the principal officer in terms of both the Long- and Short-Term Insurance acts. Mem-bers of the Board have unlimited access to the com-pany secretary who acts as an advisor to the Board and the committees with regards to process, proce-dure, compliance, governance and legislated obliga-tions and requirements.

The vacancy for the position of company secretary was filled by Ms Kirsten Linström, effective 1 May 2014.

Subcommittees

Audit and Risk Committee

Composition

The Audit and Risk Committee comprises three independent non-executive directors and is assisted by an independent advisor. The Nominations Committee ensures that the composition of the committee complies with all applicable legislation, including the Companies Act, 2008, King III and relevant insurance legislation.



Role

The Audit and Risk Committee is constituted as a statutory committee of the Board of Directors of RMA in respect of its statutory duties in terms of the Companies Act, 2008, applicable insurance legislation, the King III report and in respect of all other duties assigned to it by the Board. This includes overseeing and monitoring the risk function in RMA, which developed significantly during 2014.

As the risk committee of the company, the Audit and Risk Committee assists the Board in ensuring that RMA has implemented an effective policy and plan for risk management that will enhance the company’s ability to meet its strategic objectives and that the disclosure regarding risk is comprehensive, timely and relevant.

The committee has an independent role and is accountable to both the Board and shareholders. Members of the committee who meet the requirements imposed by the Companies Act, 2008, and applicable insurance legislation are appointed by the shareholders on an annual basis at RMA’s annual general meeting.

Going forward, in line with Board Notice 158, a separate Risk Committee will be established as a committee of the Board.

A full report from the chairman of the Audit Committee appears on page 107 of this report

Audit and Risk Committee attendance - (including confirmation of years of service on the committee)

Years of Service 15 Apr 14 29 May 14 5 Jun 14 21 Aug 14 11 Nov 14

Mr J Gardner (Chair) 7 years

Ms D Motsepe 1 year

Mr R Naidoo 5 years

Mr H Van Veen* 10 years

* Independent advisory member



IT Subcommittee

The Audit and Risk Committee has established an IT subcommittee to oversee the IT activities and processes of the company. The chairman of the Audit and Risk Committee chairs the IT subcommittee. The subcommittee ensures that sufficient organisational capability exists to enable the business units to perform and deliver expected outputs. The subcommittee executes the responsibilities and delegated authority of the Audit and Risk Committee for the effective and efficient management of IT resources to facilitate the objectives of good corporate governance..

Human Resources and Remuneration Committee

Composition

The committee comprises three independent non-executive directors and two external independent advisors.

Role

The role of this committee is primarily to assist the Board in ensuring that:

developing and implementing a policy on executive

remuneration, which includes the fixing of

remuneration packages of individual directors, and that RMA remunerates directors and executives fairly and responsibly;

human resource strategy to ensure that RMA is able to attract, retain and develop the best possible talent to support superior business performance. This will include the creation of an organisational culture, structures and processes that seek to support the development of people and the optimisation of their potential;

of Ethics of RMA as approved by the Board from time to time; and

remuneration is accurate, complete and transparent.

A full remuneration report approved by the Human Resources and Remuneration Committee appears on page 61 of this report.



Social and Ethics Committee

The Social and Ethics Committee is a committee of the Board constituted in terms of the Companies Act, 2008. The Social and Ethics Committee performs the functions prescribed in terms of the Companies Act, 2008, and any other functions prescribed by the Board.

Although the Social and Ethics Committee is only required to meet twice a year, in the context of RMA’s model of Caring, Compassionate Compensation it is deemed vital that the committee meets a minimum of four times per annum.

A key focus area of the Social and Ethics Committee during 2014 was RMA’s initiatives in terms of ente-rprise development and social investment, both generally and in respect of its beneficiaries. The committee also provides an oversight function in terms of ensuring that RMA adheres to its business model of Caring, Compassionate Compensation. A full description of RMA’s social interventions appears on page 82 of this report.

Human Resources and Remuneration Committee attendance

12 Mar 14 28 May 14 5 Jun 14 15 Jul 14 3 Sep 14 12 Nov 14 24 Nov

Mr A van Vuuren (Chair)

Ms D Motsepe

Ms H Masondo

Mr M Adan*

Mr A Geldenhuys*

*Independent advisory member

Social and Ethics Committee attendance13 Mar 14 16 April 14 22 Aug 14 6 Nov 14

Dr M Mentz (Chair)

Mr H Schalekamp

Mr P Matshidze*

* Executive member



The manager of Internal Audit and Fraud also keeps the committee appraised of any fraudulent or unethical incidents that arise directly or indirectly in relation to RMA.

Investment Committee

The Investment Committee comprises five members, two of whom are non-executive directors at RMA, while the remaining three are independent advisory members (note: one of the independent advisory members resigned in January 2015). The statutory actuary is also a standing invitee to the committee. David O’Brien, an actuary and senior executive of Old Mutual, joined the RMA Board and Investment Committee in January 2014, bringing with him a wealth of experience in the insurance and investments industries. The mandate of the Investment Committee is to oversee the management of RMA’s and RMA Life’s investment portfolios under the guidance of the statutory actuary and Ginsburg Asset Consulting (Pty) Ltd, a firm of investment consultants which has introduced sophisticated de-risking methodology to the investment strategy.

During 2014, the Investment Committee implemented a strategy to match the liabilities of the RMA Life fund with the requirements of the solvency assessment management (SAM) regulations, which apply to both long- and short-term insurers. The remaining assets

have been invested with a view to generating growth. As at 31 December 2014, 86.5% of the liabilities had been matched.

Towards the latter part of 2014, the Investment Committee identified its first targeted investment that complied with the socially responsible investing strategy - an area that the committee had been considering over the years, but where the performance criteria needed to match that of traditional investments. Given the underlying guarantee structure and the fact that it met all the required hurdles, the Board approved an investment in the Atlantic Jobs fund. In addition, asset manager mandates have been augmented to include a specific requirement to consider environmental, social and governance issues in the selection of holdings.

As a matter of best practice, the Investment Committee considered other strategies, such as the inclusion of passive investments and exchange traded funds, in order to ascertain if the current performance can be achieved at lower cost and reduced risk. A benchmarking specialist was brought in to compare the performance of the current strategy relative to a set of passive indices and the conclusion was that performance to date has been strong given the regulatory limitations. However, the Investment Committee is investigating ways to achieve the same performance at a reduced cost



and is in the early stages of considering alternative strategies to achieve this.

Going forward, the remainder of the matching strategy is due to be completed during 2015 and the committee intends to formalise its strategy on socially responsible investing.

The Investment Committee, under the guidance of the statutory actuary, will continue to monitor SAM requirements and will have input into RMA’s own risk and solvency assessment (ORSA).

Investment Committee Attendance

18 Mar 14 20 May 14 2 Sep 14 4 Nov 14

Mr M Lynam (Chair)

Mr D O’Brien

Mr H Perry

Ms M Seeiso

Ms R Stewart

Nominations Committee

The Nominations Committee reviews and makes recommendations to the Board on the composition and performance of the Board, its committees and individual directors and members of committees;

appointment and re-appointment of directors, members of committees and executives; and as succession planning of the chairman and chief executive officer.

The terms of reference of the committee state that it should comprise three non-executive directors. It is chaired by Dr. TV Maphai, who is also the chairman of the Board and is an independent non-executive director. The committee meets as and when required. Invitees who attend the meeting include the chief executive officer and the company secretary.

20 Feb 14 10 June 14 24 Oct 14

Dr V Maphai (Chair)

Mr A van Vuuren

Ms H Masondo*

* Appointed 28 February 2014

EthicsIt 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 meeting the standards of compliance but also on doing what is right, and not to compromise the environment or the future of generations to come. In executing its 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 acting with intellectual honesty and independence in the interest of all stakeholders. Using their knowledge and skills with the necessary courage to act with integrity, the Board members have devoted sufficient time and effort to the endeavours of the Group.

Without derogating from its responsibility, the oversight of ethics has been delegated to the Social and Ethics Committee.

Kirsten Maria LinströmCompany Secretary18 March 2015

ABILITY: GOVERNANCE REPORRT


CORPORATE RESPONSIBILITY AND SUSTAINABILITY: REMUNERATION REPORT

Human Resources and Remuneration Committee Report

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 and are included on pages 46 and 51 respectively.

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 for a non-binding advisory vote.

Remuneration Philosophy

RMA’s remuneration philosophy and policy have been designed to promote the attraction, motivation and retention of talent as well as create a high performance culture, particularly as RMA has entered into an exciting growth phase. The principles underpinning remuneration at RMA include fairness and consistency based on contribution, performance and market competitiveness within the parameters of affordability.

Governance

The oversight of the implementation of the Remunera-tion Philosophy and Policies is delegated to the Human Resources and Remuneration Committee which com-

prises three non-executive directors and two external expert advisors. All executive remuneration packages, as well as incentive payments, are considered by the Hu-man Resources and Remuneration Committee and ap-proved by the Board.

Decisions that affect employees’ reward are made by the executive management team while managers are required to provide input into decisions concerning their subordinates’ reward. This is achieved through the performance management system.

Increases and incentive payments are dependent on market benchmarking and performance. The practice of undertaking an annual salary bench-marking exercise was again followed in 2014 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 the pursuit of excellence, the assessment process was further refined during 2013 for implementation in the 2013/14 benefit period, specifically with regards to the outperformance measurement criteria. In this regard performance is measured on a scale of 0 - 5, with 0 being unacceptable performance and 5 being outperformance.

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, including 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 a 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 a short-term incentive scheme linked to performance. The performance measurement scheme is explained above and incentive bonus

payments are awarded based on the performance measurement results. In order for an employee to participate in the scheme, the employee must at a minimum achieve an overall score of 55, and the company and the relevant department 70. At the highest level, the maximum percentage of guaranteed annual pay that can be awarded is 55%.

Following a strategic review in 2008, the RMA Board authorised management to investigate the merits of expanding the operations of RMA beyond the traditional RMA business model. RMA is a mutual association and such entrepreneurial endeavours would inevitably require not only a different corporate and capital structure but also a significant upskilling of the company’s human resources who would need to be appropriately motivated in order to deliver the new requirements. For this reason, it was agreed that a long-term incentive scheme be designed to provide the necessary motivation for the staff transitioning to the new model.

After considering various types of long-term incentive schemes in the market, together with RMA’s strategy and vision, a long-term incentive scheme in the form of a simple one-off profit sharing scheme was developed for implementation in 2015. This shall continue for the 2015, 2016 and 2017 financial years. Management and the Board are confident that the introduction of this scheme will achieve the overarching objective of attracting and retaining talent to enable the continued success and expansion of RMA.



Directors and Executive Remuneration

Executive Directors and Management

RMA has two executive directors, the chief executive officer and the chief financial officer. In addition there are five further members on the executive committee (Exco), namely the chief operating officer and the general managers of claims management, information communications technology, medical and human resources. All Exco members are permanent employees who have formal contracts with a three month notice period in the case of termination. There are currently no restraints of trade applicable however this is in the process of being reviewed particularly in light of the significant developments that have, and are, taking place in RMA. 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 assess-ments of Exco are also overseen by the Human Resources and Remuneration Committee for reco-mmendation to the Board.

The remuneration and performance management of all heads of control functions (i.e. compliance, internal audit, actuarial and risk management) are overseen by the Audit and Risk Committee.

Non-Executive Directors and Committee Members

accordance with the MOI. The Board has recently reviewed the directors’ remuneration policy which will be recommended, to the shareholders in a general meeting at the annual general meeting to be held in June 2015. Only two major changes have been made to the policy which include making provision for the remuneration of the Audit Committee chairman and members at a higher level as per the relevant benchmarks and providing for the remuneration of the chairman of the Board and various committees based on relevant benchmarks

In other words, the provision in the policy that states that the chairman of a committee or the Board should be remunerated at a rate of 25% higher than the committee members, has been removed.

The annual directors’ fees benchmarking exercise was undertaken using the PwC non-executive directors’ practices and fees trends report for South Africa as well as an executive and NED benchmark report prepared by EOH. Considering the growth of the organisation, a decision was taken to compare RMA against medium cap financial sector companies, as opposed to using the small cap financial sector



companies, as the main benchmark. Trends in the market also indicated that Audit Committee chairmen and members are generally remunerated more than other committee members which informed a revision to the policy as detailed above.

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. Based on the benchmarking exercise, the following fees are recommended to be approved for the 2015/2016 year:

Position Current fee per meeting

Increase amount 2015 Revised fee per meeting (2015)

% increase

Board Chair 51 840 10 370 62 210 20%

Board member 28 840 2 310 31 147 8%

AC Chair 18 040 3 610 21 650 20%

AC member 14 420 2 165 16 585 15%

Other committee Chair 18 040 1 445 19 485 8%

Other committee member

14 420 1 155 15 575 8%



The remuneration of directors for the past three years has been as follows: 2012 2013 2014

Board Chairman R 45,335 R 48,000 R 51,840

Board Member R 25,185 R 26,700 R 28,840

Committee Chairman R 15,740 R 16,700 R 18,040

Committee Member R 12, 590 R 13,350 R 14,420

The Board has confirmed that non-Board members who serve on committees will still be remunerated as full committee members. Fees paid to non- executive directors (including alternate directors and committee members) for the 2014 period, are listed below. Please refer to the Governance Report for the meeting attendance per person as the fees are calculated per meeting:

Name 2014

‘R000

V, Maphai (Chairman)^* 359,980

D O’Brien^* 205,136

M, Pillay^ 188,204

J, Gardner^* 338,018

R, Naidoo^* 231,917

R Jordaan*# 3,337

M, Adan * 85,450

A, Geldenhuys * 74,635

A, van Vuuren ^* 337,294

A, Letshele ^ 170,900

J, Andrews ^ 28,840

H, van Veen* 60,215

M, Seeiso*# 54,447

R, Stewart* 65,262

K, Bezuidenhout^ 170,900

H, Schalekamp^* 241,930

H Masondo^* 291,679

D Motsepe^* 316,565

T Fowler* 56,610

J Steele^ 170,900

M, Mentz^* 238,130

H, Perry (alternate)* 65,262

M, Lynam^* 252,544

Total 4008,155

^ - Board Member *- Committee Member #- Resigned



Directors’ and officers’ liability insurance is in place to cover any potential liability of directors or officers of the company in the execution of their duties. All cover is in accordance with current legislation.

This report has been considered by the Human Resources and Remuneration Committee.

Mr A Van VuurenChairman – Human Resources and Remuneration CommitteeMarch 2015


CORPORATE RESPONSIBILITY AND SUSTAINABILITY: RISK MANAGEMENT

Introduction

Effective risk management is fundamental to the business activities of RMA. RMA seeks to achieve an appropriate balance between risk and reward in its business, and continues to build and enhance the risk management capabilities that assist in delivering its growth plans in a controlled environment.

Responsibility for risk management resides at all levels of RMA, from the Board and executive level committees down to each business unit manager and their staff. This contributes to instilling a strong risk culture in the Company, making risk everyone’s business. RMA believes that this is a core imperative of risk management. The delegation of risk management responsibilities is structured to ensure risk-reward decisions are enacted at the most appropriate level in line with business objectives, subject to robust and effective review as well as challenge processes. Strategic business decisions are taken in accordance with a Board-approved risk appetite with the executive and risk committees closely monitoring risk profiles against this appetite.

The RMA Board has approved and put in place the Risk Management Policy. The policy incorporates ongoing risk and internal control identification and assessment, and development of mitigating actions as appropriate.

The oversight of the risk management process and the systems of internal control are delegated by the Board to the Audit and Risk Committee, which is supported by the IT subcommittee. 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.

RMA seeks to achieve an appropriate balance between risk and reward in its business, and continues to build and enhance the risk management capabilities that assist in delivering its growth plans in a controlled 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 including market, credit and liquidity risk; human

resources; and operational, including 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 the risk management process.

RMA uses the three line of defense model, similar to other financial institutions in South Africa:

First line of defense

Business unit managers Primarily responsible for risk management. The process of assessing, evaluating and measuring risk is ongoing and is integrated into the day-to-day activities of the business. This process includes implementing RMA’s risk management framework, identifying issues and taking remedial action where required. Business unit management is also accountable for reporting to the governance bodies within RMA.

Second line of defense

Business risk manager The risk management function is primarily accountable for setting RMA’s risk management framework and policy, providing oversight and independent reporting to executive management through RMA’s risk oversight committee, and to the Board through the Audit and Risk Committee. The business risk management functions implement RMA’s risk management framework and policy in the business units, approve risk within specific mandates and provide an independent overview of the effectiveness of risk management by the first line of defence.

Third line of defense

Internal & external audit function Provides an independent assessment of the adequacy and effectiveness of the overall risk management framework and risk governance structures, and reports to the Board through the Audit and Risk Committee.



Our risk management approach can be illustrated as follows:



The principle risk areas identified within RMA include:

Strategic Risk - unintended risk that can result as a by-product of planning or executing the strategy. A strategy is a long-term plan of action designed to allow the Group to achieve its goals and aspirations.

Strategic risks can arise from:

strategic plans.

Market Risk - risk associated with RMA’s balance sheet positions where the value or cash flow depends on financial markets. Fluctuating risk drivers resulting in market risk include:

RMA manages the market risk of assets relative to liabilities on an economic total balance sheet basis. It strives to maximise the economic risk-adjusted excess return of assets relative to the liability benchmark, taking into account RMA’s risk tolerance as well as local regulatory constraints.

Liquidity risk - risk that RMA may not have sufficient liquid financial resources to meet its obligations when they fall due, or would have to incur excessive costs to do so. RMA’s policy is to maintain adequate liquidity and contingent liquidity to meet its liquidity needs under both normal and stressed conditions. To achieve this, RMA assesses, monitors and manages its liquidity needs on an ongoing basis.

Credit Risk – risk associated with a loss or potential loss from counterparties failing to fulfil their financial obligations. RMA manages individual exposures as well as credit risk concentrations and RMA’s objective in managing credit risk exposures is to maintain them within parameters that reflect RMA’s strategic objectives and risk tolerance.

Operations risk - risk associated with the people, processes and systems of RMA, and external events such as outsourcing, catastrophes, legislation or external fraud. This will also include regulatory risks. RMA has a comprehensive framework with a common approach to identify, assess, quantify, mitigate, monitor and report operational risk within RMA.

Reputational Risk – Risks to RMA’s reputation include the risk that an act or omission by RMA or any of its employees could result in damage to RMA’s reputation or loss of trust among its stakeholders. Every risk type



has potential consequences for RMA’s reputation, and therefore, effectively managing each type of risk helps RMA reduce threats to its reputation. Additionally, RMA endeavours to preserve its reputation by adhering to applicable laws and regulations and, by following the core values and principles of RMA, RMA’s code of conduct, which includes integrity and good business practice.

Key risks of RMA - 2014

Risks Controls and mitigating actions

Failure to diversify client base and income streams

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

RMA’s COIDA license has been extended to Class XIII (iron, steel, artificial limbs, garages, metals and related industries) and all members will be moved across to RMA in 2015.Dedicated staff pursuing meaningful new business.Competitive rates offered.Maintain good claims handling service.Contact Centre has been implemented to enhance client relations.A Caring, Compassionate Compensation philosophy.Offering additional products to existing clients.Licensing RMA’s IT systems to the Compensation Fund.Researching 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 to 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 RMA’s investment consultant and actuary ensures that RMA’s investment targets are met.The Bonus Stabilisation Reserve is healthy in terms of capital adequacy requirements.



Risks Controls and mitigating actions

Compliance with core regulatory requirements e.g. COIDA, Short-term and Long-term Insurance acts, provisional set-tlement powers etc.

RMA 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 in terms of, and has to comply with, the Short-term and Long-term Insurance acts, and meet all re-quirements of the Financial Services Board.

Compensation Commissioner on both a strategic and operational level ensure mutual understanding and transparency.

requirements.

COIDA.

and Risk Committee and Board.

Stakeholder engagement

Effective stakeholder engagement is critical to the sustain-ability of any organisation. engagement.

Meeting the FSB Solvency Asset Management (SAM) requirements

SAM requirements are in the process of being implemented by the FSB. RMA, like all other insurance companies in South Africa, needs to meet the obligations of these regulations.

Counter party risk of investments (risk of a party defaulting), including counter party concentration risk

Volatility in the investment environment requires this risk to be actively managed

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

by external ratings agencies and in terms of the approved investment mandate.

quarterly, therefore, any significant deviations in expected results are expected to come to light.



Risk Appetite

Each committee of the Board has considered and approved a risk appetite statement in respect of the business included in that committee’s 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:

Risk Appetite Statements

Strategic

declining numbers in the mining industry through diversifying its client base and income streams and by replicating its business model to ensure economies of scale.

not do or allow anything to be done which goes against the spirit and letter of the code of ethics.

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.

Investments

as set by the regulators from time to time.

Human Resources

processes as well as its recruitment and retention practices, ensure full compliance with all labour and employment legislation, while maintaining high levels of service and ensuring that staff are treated fairly.

Financial

RMA is willing to accept:

R50 000 000.

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

system downtime of more than one day.



failures which will impact on service delivery to its stakeholders.

underwriting processes in place to manage the underwriting risk and enable the Company to maintain adequate solvency margins.

other dishonest behaviour 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 oper-ating parameters (tolerance levels). The criteria and operating parameters have been documented in the form of key performance indicators (KPIs), key risk indi-cators (KRIs) and other relevant documentation.

Conclusion

Risk is inherent in our business and the identification and management of risk is central to delivering on the corporate objective.

Risk will manifest itself in many forms and has the po-tential to impact the health and safety, environment, community, reputation, regulatory, operational, mar-ket and financial performance of the Company and, thereby, the achievement of the corporate objective. By understanding and managing risk we provide greater certainty and confidence for our sharehold-ers, employees, customers and suppliers, and for the communities in which we operate.

Successful risk management can be a competitive advantage.


RMA Board

Audit & RiskCommittee

Manager - Internal Audit

InvestmentCommittee

HRCommittee

Manager - Business

Risk

Business Unit Heads/

Risk Champion

CEO & Executive Commitee

NominationsCommittee

Operational Risk

Committee(Part of Exco)

Financial Risk Committee

(Part of Exco)

Social & Ethics

Committee


RMA Risk Management Structure illustrating the levels of responsibility for risk management



COMPLIANCE

Introduction

The purpose of compliance is to ensure that compliance controls have been implemented and that they are effective and used to identify and improve weak or vulnerable areas in the business.

Whilst ultimate responsibility for understanding and overseeing the management of compliance with applicable laws, rules, codes and standards resides with management and the RMA Board, it is the role of the compliance officer to assist them in discharging these responsibilities by facilitating the development, establishment and maintenance of an efficient and effective compliance risk management process.The risks faced by RMA may, inter alia, consist of operational risk, market risk, credit risk, and also includes compliance risk which comprises regulatory and reputational risk.

Regulatory risk is the risk that a business does not comply with regulatory requirements or excludes provisions of relevant regulatory requirements from its operational procedures.

Reputational risk is the risk that the business might be exposed to negative comment and opinion due to the

contravention of applicable regulatory requirements. This can occur through negative publicity, public sanction by regulators or by word of mouth on the part of staff, competitors, customers and other stakeholders.

The financial services industry has regulated requirements for the establishment of an independent compliance function and/or the appointment of a compliance officer, and in 2014 RMA made such an appointment.

RMA key compliance areas - focus for 2014

Diseases Act: The aim of COIDA is to provide for compensation in the case of disablement caused by occupational injuries or diseases, sustained or contracted by employees in the course of their employment, or death resulting from such injuries or disease; and to provide for matters connected therewith.

King III applies to all companies and provides specific principles that, if applied by companies, will result in the entity practicing good governance.



holder Protection Rules): To provide for the registration and control of certain activities of long-term insurers and intermediaries. A risk rating of medium has been allocated to this Act.

holder Protection Rules): To provide for the registration and control of certain activities of short-term insurers and intermediaries. A risk rating of medium has been allocated to this Act.

The Act legislates corporate governance and expands the responsibilities and accountabilities of directors. It incorporates many of the duties which were previously considered to be common law fiduciary duties. The Act also regulates fundamental transactions by which mergers and takeovers are effected, the increased powers and responsibilities directors have in relation thereto, and the shareholder approval process. A high risk rating has been allocated to this Act.

: To provide for the facilitation and regulation of electronic communications and transactions, to promote universal access to e-transactions and to prevent abuse of the system. The business has

the necessary policies and procedures in place to ensure compliance with the Act. A risk rating of high has been allocated to this Act.


CORPORATE RESPONSIBILITY AND SUSTAINABILITY: INTERNAL AUDIT AND ETHICS

Internal Audit and Ethics Report

The Internal Audit Department is staffed with two internal auditors and a manager: internal audit, who is also the Company’s ethics officer. The department has received a generally compliant “GC” rating from the Institute of Internal Auditors at the last verification conducted in 2010 and ensures that it remains compliant to the standards for the professional practice of internal auditing by conducting internal assessments on an annual basis.

Another review by the institute is scheduled for 2015. Regulatory (FSB-SAM) workshops are attended as well as the Annual Conference for Internal Auditors to ensure that the department remains informed of requirements and best practice.

An audit plan, taking into account RMA’s risk profile, is presented to, 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 2014 were completed. Where shortcomings were identified, management actions were agreed to. 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.

Out of a possible 25 auditable areas, 20 have been covered. The manager: internal audit, through attendance of the Executive Committee, Investment Committee and IT subcommittee, ensures adequate coverage of the remaining areas albeit that dedicated audits were not performed. The manager: internal audit reports administratively to the CEO and reports functionally to the Audit and Risk Committee of the Board.



Audit Testing – 2014

Audit Activity Area Covered 2014

Branch audits (including employer assessments), corporate risk profile, pensions and claims services, medical

Johannesburg

Rustenburg Claims Pensions

eMalahleni

Carletonville

Klerksdorp

Welkom

Kimberley

Pretoria

Durban

Pensioner Medical Plan Xai - Xai

Underwriting

Internal financial controls

IT including continuous IT auditing activities Application & general controls

Medical

Human resources

Business continuity (IT)

Claims processing services

Fingerprinting process

CAATS

Claims, pensions, CPS audit assurance (EY Support)

Payroll audit

Administration Department

IAA quality assurance review

The internal control environment provides sufficient assurance that risks are mitigated.

The internal control environment provides limited assurance that risks are mitigated.

The internal control environment provides insufficient assurance that risks are mitigated.



A total of 169 management actions have been presented by internal audit to management, of which 86% have already been implemented.

Appropriate computer assisted auditing techniques (CAATS) are 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 2014.

Internal Audit visited 15 employers during 2014 as part of the claims and pensions audit activities to assess RMA’s level of service as well as employers’ understanding of RMA’s products, services and regulatory requirements in terms of COIDA.

Reliance is placed on combined assurance activities when deemed appropriate. Mazars has conducted an IT security, maturity and vulnerability assessment during 2014. Management were presented with, and accepted, 52 management actions. Implementation of these actions will be monitored by internal audit.

The manager: internal audit is also the ethics officer at RMA and has been certified through EthicsSA. During 2014, an Operational Ethics Forum was introduced with membership consisting of staff representatives by region, the general manager HR and the ethics officer, and meets on a quarterly basis. The code of ethics is reviewed annually and signed by all new RMA staff members joining the Company. RMA subscribes to the Tip-offs Anonymous whistle-blower hotline, a Deloitte company, to facilitate anonymous reporting of any ethical, fraudulent or other untoward occurrences.

During 2014 no ethical or fraudulent activities involving RMA or its staff have been reported through the hotline. A report has been received involving other parties and was managed appropriately. Reported fraudulent cases are monitored by the department and a report is issued to the Audit and Risk and Social and Ethics committees.

An ethics training programme was developed during 2014. Operational Ethics Forum members have been trained and this programme will be further rolled out in 2015.

Completed Oustanding

23

146

Agreed Management Actions - 2014

CORPORATE RESPONSIBILITY AND SUSTAINABILITY: RMA’s CORPORATE FOOTPRINT




Introduction

RMA recognises that as a corporate citizen it touches the lives of the communities in which it operates and strives to do so in a socially responsible manner. During 2014, RMA embarked on a number of initiatives to improve the lives of its staff, beneficiaries and communities in general.

RMA’s value proposition

Key to RMA’s business model is Caring,

Compassionate Compensation. To this end RMA has implemented a number of efficiency measures, including a dedicated, fully functional Contact Centre to ensure that benefits are accessible quickly and efficiently to those who are entitled to them. RMA has also implemented processes and procedures to ensure compliance with the Treating Customers Fairly legislation. Pensioners are educated on a continuous basis about preventable health conditions related to workplace injuries in order to reduce the frequency of secondary complications. The establishment of the care facility in Welkom referred to earlier in this report will provide world-class care to employees who have been placed on permanent disability as a result of having suffered serious, long-term debilitating injuries such as spinal cord injuries, amputation and back and head injuries. The care facility will have a strong focus on rehabilitation and is on track to open in early 2016.

RMA’s commitment to its people

RMA remains committed to maintaining its reputation as an excellent employer, thereby ensuring that its employees are naturally driven towards providing its customers with excellent service. Further details of RMA’s initiatives to develop its people are set out earlier in this report, in the section dealing with “RMA’s people”.

RMA Social Fund and Corporate Social Investments

RMA has both a social fund and a corporate social investment policy which governs the social investment programmes undertaken by RMA. Support from the social fund is mainly directed at assisting RMA pensioners and beneficiaries identified as having specific social needs, including assistance in the form of educational grants. During 2014 an amount of R532 039,88 has been spent on social investment projects, which included home renovations, bursaries, agricultural projects, donations of shoes and support for small businesses.

Corporate social investment initiatives are focused mainly on education, health and social upliftment and are dependent on the submission of a detailed business plan supported by financial projections of the proposed venture.



In addition, during 2014 RMA paid non-statutory allowances to beneficiaries in the form of family allowances and special allowances to pensioners who were injured prior to 1997 and are not necessarily covered in terms of COIDA, to the amount of R3 210 330,08.

A total of 596 children of employees who died at work received an extended children’s pension. This is based on an internal process identifying children who will be turning 18 years of age and will therefore no longer qualify for a pension, but are still at school or studying at a tertiary institution. This is done to encourage these children to complete their education.

Mobile prosthetic unit

RMA, together with prosthetic partner, Marissa Nel & Associates, has for approximately 10 years offered continuous care to its disabled pensioners and completed 10 000 prosthetic reviews through its mobile clinic. The mobile clinic travels into rural areas across the breadth of southern Africa, taking prosthetics to often remotely based beneficiaries who otherwise would not have access to their required level of care.



The mobile prosthetic clinic also supplies and maintains artificial limbs, orthopaedic devices and repairs or replaces wheelchairs as the need arises. The mobile clinic allows people with limited mobility to access medical services close to where they live. The services offered by the mobile clinic have been expanded to include social assistance to injured employees and widows of employees who have died at work by providing support for income-generating and food security projects. This includes the provision of seeds and gardening implements as well as house renovations.

Enterprise Development

The year was successful in terms of RMA’s enterprise development initiatives. During the year RMA’s contribution was used to generate meaningful impact to small and medium-sized enterprises (SMEs) which have benefited from funding and mentorship in building sustainable businesses.

With the assistance of Edge Growth, RMA’s enter-prise development partner, growth funding totalling R 5 million has been provided to three businesses to date, namely Klip Valley Recycling, Mpilenhle and Opti Baby. All three have achieved great success since re-ceiving these investments, as detailed below.

Klip Valley

Klip Valley is a recycling business that was started by Pinky Modisang. The investment by RMA in the Klip Valley business resulted in profits tripling and the creation of three full-time jobs and nine part-time jobs.


Mpilenhle

Mpilenhle was started by the Makhoba brothers and two other minority stake owners to cater for a recycling need in the Hammanskraal and Newcastle areas. Funding was provided to Mpilenhle to purchase a four-tonne truck to meet the growing demand for their services. Mpilenhle is now ready for follow-on funding to increase their capacity and collection capability

Opti-Baby




Opti-Baby is a subsidiary of Opti-Co, an early child-hood development business. Opti-Baby focuses on nursery centres catering to parents with children aged 0-5 years. Its most profitable centre, in Bedfordview, was looking to expand before their January intake. Edge Growth sourced this business as a potentially strong investment. Since receiving funding, Opti-Baby’s profits have more than doubled and seven full-time jobs have been created.

Reduction of energy use by carbon footprint

RMA reached a significant milestone in its efforts to reduce its carbon footprint by establishing a dedicated

records and scanning department. This department has embarked on a back scanning project which aims to capture over 14 million images electronically during the course of 2015, thereby significantly reducing the amount of paper usage.

Likewise, employers and service providers are encouraged, where possible, to submit claims electronically and not in hard copy.

Overall, RMA remains committed to the promotion of greater environmental awareness and responsibility.

BBBEE

RMA is committed to compliance with the black economic empowerment requirements of the Department of Trade and Industry and has achieved a BBBEE level 3 score in its last rating. RMA is, however, conscious of the fact that it will be difficult to achieve the same level in terms of the new codes which impose more onerous requirements. In this regard, RMA’s status as a mutual association places constraints upon it in sourcing strategic BEE partners. There are also constraints imposed by its license conditions regarding RMA’s trading partners. RMA will however focus on those areas where it can achieve maximum BEE points.


CORPORATE RESPONSIBILITY AND SUSTAINABILITY: GRI TABLE

RMA has opted to use the Global Reporting Initiative (GRI) list applicable to the financial services industry as the guiding document for reporting and has thus drafted a reporting template using the GRI indicators and disclosures as a reference point.

The report provides a summary of RMA’s performance against the GRI performance indicators.

Economic Performance IndicatorsEconomic Performance

17 Core EC1 Direct economic value generated and distributed, including

Group figures for the year ended 31 December 2014.

2014 2013

Premium income R 1013 million R 1 084 million

Investment income R 829 million R 679 million

Net realised fair value gains R 694 million R 572 million

Net unrealised fair value gains/loss (R 83 million) R 242 million

Reinsurance claims R 27 million R 22 million

R 2463 million R 2 599 million

2014 2013

Operating costs R 172 million R 136 million

Reinsurance premiums R 10 million R 11 million

R 182 million R 147 million

compensationEmployee compensation year ended 31 December 2014: R 98 million (2013: R 74 million)



Economic Performance Indicators

Economic Performance

and other community investments (break down by programme and theme).

2014 Projects Theme Amount

Salary - Pensioner medical case auditors

Healthcare R 1 613 707

PMP - shoes Clothing R 177 140

Bursaries and sponsorships

Education R 24 240

Allowances non-statutory

Pensioner care R 3 210 330

Seed project Foreign ED R 101 473

Assistance community

Pensioner R 38 074

Training of pensioners Lesotho

Pensioner care R 62 719

Other donations Community R 68 413

Mobile clinics Pensioner care R 364 964

Children beneficiaries assistance


Car controls pensioner


CJP and Augmentation bursaries

Education R 8 622 832

Edgegrowth ED specialists

Local ED R 1 015 000

R 15 339 660



to capital providers

The 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.

earningsGroup retained earnings amounted to R 721 million at 31 December 2014 (R 662 million in 2013) and the revaluation reserve increased to R 921 million (2013: R 859 million) which translated into a solvency ratio of 159,5% as at end of 2014 (2013: 147,7%).

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 twice the annual salary, limited to R4 000 000; family funeral cover; and critical incidence cover of twice the annual salary, limited to R100 000. In addition employees receive cover for accidental death and accidental disability from AON.



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 together 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.



Society Performance Indicators

Community

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

Approximately 4,7% of NPAT has been spent on various projects with implemented local and foreign community engagement, impact assessments, and development programmes.

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 2014, Internal Audit performed audits on 20 business areas out of a possible 25 representing 80% 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 2014. 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

68 Core LA1 Total workforce by employment type, employment contract and region, broken down by gender.

Workforce by Province

Employment Type

Gau MP NW FS EC NC LES MOZ KZN TOTAL

Permanent 125 4 19 8 2 1 2 2 4 167

Fixed-Term Contract

8 0 1 0 0 0 0 0 46 55

Total 133 4 20 8 2 1 2 2 50 222

Workforce by Gender

Employment Type

Gau MP NW FS EC NC LES MOZ KZN TOTAL

Permanent Male

54 0 5 2 1 0 2 1 0 65

Permanent Female

71 4 14 6 1 1 0 1 4 102

FTC Male 3 0 0 0 0 0 0 0 0 3

FTC Female 5 0 1 0 0 0 0 0 46 52

Total 133 4 20 8 2 1 2 2 50 222



69 Core LA2 Number of terminations

of permanent employees

Rate of terminations

Age group Gender Region

Total number and rate of new employee hires and employment turnover by age group, gender and region, years service lost and reasons for termination.

20 9,00% 18 - 30 30-50 50>

= 2 = 11 = 7

Males Females

- 6 - 14

Gauteng Free State North West Mpumalanga Northern Cape

- 12- 2-3 - 2- 1

Number of permanent

new employees

Rate of new employees

Age group Gender Region

65 29,3 18-30 30-50 50>

= 23 = 39 = 3

Males Females

- 24 - 41

Gauteng Free State North West KwaZulu-Natal Mpumalanga

- 54- 2 - 6 - 1 - 2

70 ADD LA3 Benefits provided to full-time employees that are not 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 pension fund, Group life benefits, Group accident cover 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 regulating contracted employees to a minimum and converting the positions to a permanent position where warranted. However, in 2014 additional capacity was required to assist with the anticipated volumes of work resulting from Class XIII business; therefore some temporary positions were created. Once business stabilises, a decision will be taken as to whether or not some or all of the temporary positions will be converted to permanent positions. The Group also aquired a total of 50 disabled female learners of which four have resigned. These learners reflect as temporary employees. This learnership will end in May 2015.



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 programmes.

The Health and Safety Committee includes three staff members and four management appointees. This translates into 2.6% of the total workforce. 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 2014: 1,3% (2013: 1,2%) 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 2014 with no occupational diseases or fatalities reported during 2014. The process for reporting accidents has been formalised and falls under the Human Resources department.



Training and Education

78 Core LA10 Average hours of training per year per employee by gender and employee category.

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

0 Male Female

- 0 - 0

0 Male Female

- 0- 0

Senior management

56,25 Male Female

- 37.5 - 18.75

7,03 Male Female

- 7.5- 6.25

Middle management

1852,5 Male Female

- 885-967.5

10,96 Male Female

- 11.35 - 10.63

Supervisory / Junior management

5610 Male Female

- 1140 - 4470

11,2 Male Female

- 12.13- 10.98

General employees

1818,75 Male Female

- 750 - 1068.75

27,09 Male Female

- 13.89 - 26.05

80 ADD LA12 Percentage of employees receiving regular performance and career development reviews, by gender.

All permanent employees have detailed KPAs which have been mutually agreed upon and each employee's performance is evaluated bi-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 employees’ figures have been used to calculate these tables.

Employee category

Gender Age Race Disabled

Top management

MaleFemale

: l: 0

<30:031-50:0>50:1

BlackColouredWhiteIndian

: 0: 0: 0: 1

0

Senior management

MaleFemale

: 5: 1

<30:031-50: 4>50: 2


: 4: 0: 1: 1

0

Middle management

MaleFemale

: 19: 18

<30: 231-50: 28>50: 7


: 21: 1: 13: 2

0

Supervisory and junior management

MaleFemale

: 23: 63

<30: 1231-50: 59>50: 4


: 55: 9: 17: 5

0

General employees

MaleFemale

: 20: 72

<30: 7031-50: 18>50: 4


: 86: 3: 2: 1

46



82 Core LA14 Ratio of basic salary of ladies to men by employee category, by significant locations of operations.

Ratio of package earned by ladies to men by employee category

The statistics have not been categorised 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 0,65

Middle Management

19 18 1,56:1 0,96

Supervisory/JrManagement

23 63 0,37:1 0,85

Paterson Grade CU

10 28 0,36:1 0,87

Paterson Grade CL

13 35 0,37:1 0,81

General Employees

20 72 0,28:1 0,44

Paterson Grade BU

13 8 1,63: 1 0,94

Paterson Grade BL

7 16 0,44: 1 1,08

Paterson Grade A 0 2 - -

Learners 0 46 - -



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

Maternity Leave Taken in 2014

Leave Taken

Employee 1 62 days - has returned to work

Employee 2 46 days - has returned to work in 2015

Total days leave taken: 108 days

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 ADD PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

A stakeholder satisfaction survey was commissioned in 2014. The report concluded that 87% of customers were satisfied. Most of the recommendations raised in the survey are in the process of being implemented. The Contact Centre, which also handles customer complaints, went live in March 2014. The Contact Centre is in the process of finalising its portion of the Treating Customers Fairly (TCF) through the development of an in-house CRM. Currently customer queries and complaints are managed through an internationally developed generic system called TTP. Monthly reports are generated in order to enhance management decision-making regarding customer service.



Compliance

93 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 (2013: 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% of the Group's investments (equity and debt) 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. In addition, the holding company has an investment of R 65 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.


FINANCIAL STATEMENTS


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 2014.

Nature of the Business and Financial Position

The Rand Mutual Assurance Company Limited (RMA) continues to operate in line with the license granted by the Minister of Labour in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA), 130 of 1993, as amended. This licence expired on 31 December 2014 but was renewed for a further three year period, commencing 1 January 2015. In terms of this license, RMA continues to indemnify policyholders against their liability in terms of COIDA and to provide compensation to the policyholder employees and, in the case of a fatality, their dependants. As part of the COID legislated benefits, the Group pays compensation in respect of medical costs, lump sum payments and ongoing pension payments.

In addition to the COID benefits, elective benefits are also offered to members, including the Augmentation, Riot and Strike 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

As at 31 December 2014, the ordinary share capital of the Company was 100 000 000 ordinary shares of R0,20 cents each, of which 151 shares were in issue.

The list of major shareholders for 2014 is listed on page 128.

Dividends and ReservesNo dividends were declared for 2014 and the reserves of the Company are detailed in the financial statements (See page 117).

Changes to the composition of the Board of Directors

During 2014, Mr David O’Brien, Dr Jon Andrews and Mr Mark Lynam were appointed as non-executive directors to the Board. All three appointments have been confirmed by the Financial Services Board (FSB). In addition, a new Company Secretary, Ms Kirsten Linström, was appointed on 1 May 2014 and her appointment was likewise approved by the FSB.



The composition of the Board of Directors is as follows:

Name Appointment date

Dr T V Maphai (Chairman) 1 January 2006

Mr A van Vuuren (Deputy Chair) (Alternate: Mr H M Perry) 6 September 2007

Mr O’Brien 28 February 2014

Mr J S Gardner 27 November 2013

Dr M Mentz 22 May 2013

Mr R Naidoo 27 August 2008

Ms M Pillay 27 August 2008

Ms H Masondo 22 November 2012

Ms D Motsepe 22 November 2012

Mr JPL Bezuidenhout (Alternate: Shadrack Motloung) 22 April 1996

Mr HJ Schalekamp (Alternate: Mr PJW Buys) 15 July 2010

Mr A Letshele 25 May 2011

Dr J P Steele 22 November 2012

Dr J Andrews 26 November 2014

Mr M P Lynam 26 November 2014

Mr B Singh (CEO) 23 April 2007

Mr E Lufhugu (former CFO) 23 October 2007



Directors’ responsibilities in respect of the annual financial statements

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

operating information;

procedures, laws and regulations;

use or dispossession;

utilisation of resources;

and irregularities; 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 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, 71 of 2008, and international financial reporting standards, together with appropriate accounting policies, supported by reasonable and prudent judgements 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 2014.

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.

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 a ‘going concern’ basis. The directors have reviewed the Company’s forecasts and projections and are confident that the Company has sufficient resources to continue operating 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 RMA’s stakeholders.

Events after reporting date

On 25 February 2015 the shareholders passed a special resolution, the effect of which was to increase the authorised share capital of the Company consisting of 100 000 000 ordinary shares with no par value by the creation of 1 000 000 B shares with no par value, which was allocated to existing shareholders.

The reason for the creation of the B shares was to ensure that the existing shareholders’ interest and their capital contribution to RMA would be protected ahead of the Class XIII take-on, effective 1 March 2015, which would potentially have a diluted effect on existing shareholders’ interest in RMA.

Notice must also be taken of the fact that Eugene Lufhugu resigned as chief financial officer in February 2015. At the time of submitting this report, a replace-ment CFO was in the process of being recruited.

Corporate Information

Maria Linström

22 Wellington Road, Parktown, Johannesburg



The designated audit partner is Ms. R de Lange. Subject to the approval of shareholders at the annual general meeting scheduled for 24 June 2015, it is proposed that EY and Ms. R de Lange be approved as the auditors for the 2015 financial year.

Dr TV MaphaiChairman18 March 2015

Mr B SinghChief Executive Officer18 March 2015


CERTIFICATE BY COMPANY SECRETARY

I, Kirsten Maria Linström, being the Company Secretary of The Rand Mutual Assurance Company Limited, hereby certify that, to the best of my knowledge, in accordance with the Companies Act, 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.

Ms KM LinströmCompany SecretaryJohannesburg18 March 2015


AUDIT AND RISK COMMITTEE REPORT

This report is provided by the Audit and Risk Committee (“the committee”) appointed in respect of the 2014 financial year of RMA in compliance with the approved terms of reference and section 94(7)(f) of the Companies Act, 71 of 2008 (“the Act”), 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 by giving advice and submissions on financial reporting; oversight of the risk-management process and internal controls; the fulfilment of its external and internal audit functions; IT governance; and management of the statutory and regulatory compliance of the Company.

Terms of reference

During the year the committee reviewed its terms of reference in order to ensure that the roles and responsibilities described therein remain fully aligned with the recommended practice and the role and responsibilities of the other Board committees. The committee did not deem it necessary to amend the terms of reference at this stage.

Membership

The committee was appointed by the shareholders at the annual general meeting held on 18 June 2014. Shareholders will be requested to approve the appointment of the members of the committee for the 2015 financial year at the annual general meeting scheduled for 24 June 2015.

The committee comprises four members who are independent non-executive directors as well as one independent advisory member.

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 and compliance manager, external auditor, and the company secretary.

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



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; and perform the functions set out in section 94 of the Act.

Execution of Functions

During the year under review the committee fulfilled all the functions and discharged its responsibilities as prescribed in the Companies Act, 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:

designated auditor to the shareholders for appointment as auditor for the financial year ended 31 December 2014 and ensured the

Meetings

The committee held five meetings during the year.

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

15 Apr 14 29 May 2014 5 Jun 14 21 Aug 14 11 Nov 14

Mr J Gardner (Chair)

Ms D Motsepe

Mr H Masondo

Mr R Naidoo

Mr H Van Veen*

* Independent advisory member



appointment was in compliance with all legal and regulatory requirements;

and the budgeted audit fees payable to the external auditor;

the auditor and their independence and evaluated the external auditor’s internal quality control procedures;

that their independence was not impaired;

audit services provided by the external auditor;

that no member of the external audit team had been employed by the Company or its subsidiaries during the year;

that adequate accounting records were being maintained; and

were identified and reported by the external auditors in terms of the Auditing Profession Act, 2005, and determined that there were none.

In respect of the financial statements the committee, among other matters:

basis for the preparation of the annual financial

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

information upon which the statements were prepared and the correctness thereof prior to submission and approval by the Board;

present the financial position of the Company and of the Group as at the end of the financial year;

unusual transactions and accounting judgements and conclusions;

policies adopted and any changes thereto;

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,

including any significant legal and tax matters that could have a material impact on the financial statements;

and internal auditors to ensure all parties had an opportunity to raise any concerns with the committee; and

of controls and procedures, including meeting



separately with management, external audit and internal audit.

In respect of internal control and internal audit, the committee:

audit charter and audit plan and evaluated the independence, effectiveness and performance of the Internal Audit Department and compliance with its charter;

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

accounting records were maintained, including the safeguarding of assets and the prevention of corruption and fraud;

audit processes and the adequacy of corrective action in response to significant internal audit findings;

between management and the internal audit function and noted that there were none; and

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 made 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.

In respect of risk management, the committee:

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

the Company’s system of internal controls and risk management.

The Board has officially delegated the responsibility of IT governance to the Audit and Risk Committee who in turn has established an IT subcommittee, which, in accordance with its mandate:

ments and the delivery and management of IT services; and

with the Company’s IT environment.



In respect of legal and regulatory requirements to the extent that it may have an impact on the financial statements, the committee:

could have a material impact on the Group;

whistleblowing reporting line; and

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 regarding 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, the committee:

external and internal auditors and concluded that these were adequate to address all significant risks facing the business;

experience of the finance function, including that of the chief financial officer, and concluded that these were appropriate; and

heads of control functions within the context of the FSB 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:

as external auditors or in rendering of permitted non-audit services, receives no remuneration or other benefits from the Company;

not impaired by any consultancy or other work undertaken for the Group nor through the previous appointment as auditor; and

Lange and confirmed her eligibility for appointment as the audit partner.

Annual Financial Statements and Integrated Report

Based on the review of RMA’s annual financial statements for the year ended 31 December 2014, the committee is of the view that, in all material respects, the statements comply with the relevant provisions



of the Companies Act, 71 of 2008, the international financial reporting standards, and fairly present the consolidated and separate financial position at that date as well as 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 2014 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 Committee18 March 2015


INDEPENDENT AUDITORS’ REPORT

Independent Auditor’s Report

To the Shareholders of The Rand Mutual Assurance Company Limited

Report on the Consolidated Financial Statements

We have audited the consolidated and separate financial statements of the Rand Mutual Assurance Company Limited set out on pages 116 to 124, which comprise the statements of financial position as at 31 December 2014, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Consolidated Financial Statements

The company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

EY 102 Rivonia Road Sandton Private Bag X14 Sandton 2146

Ernst & Young Incorporated Co. Reg. No. 2005/002308/21 Tel: +27 (0) 11 772 3000 Fax: +27 (0) 11 772 4000 Docex 123 Randburg ey.com


Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated and separate financial statements based on our audit. We conducted our audit in accordance with international standards on auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.



INDEPENDENT AUDITORS’ REPORT (continnued)


Opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of the Rand Mutual Assurance Company Limited as at 31 December 2014, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with international financial reporting standards, and the requirements of the Companies Act of South Africa.

Ernst & Young Inc.Director – Rosanne de LangeRegistered AuditorChartered Accountant (SA)JohannesburgSouth Africa

Date: 18 March 2015



INDEPENDENT AUDITORS’ REPORT (continnued)


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2014

GROUP COMPANY

2014 2013 2014 2013

R '000 R '000 R '000 R '000

ASSETS

Non-current assets 14 957 674 13 318 419 15 209 673 13 931 798

Intangible assets 6 922 6 751 6 922 6 751

Property, plant and equipment 37 544 7 961 37 544 7 961

Investments at fair value through profit or loss 14 910 836 13 301 144 4 576 427 4 020 274

Investment in subsidiary - - 10 000 10 000

Reinsurance assets 2 372 2 563 10 578 780 9 886 811

Current assets 824 732 1 064 913 509 173 402 357

Trade and other receivables 37 513 43 935 36 774 42 600

Interest and dividends receivable 151 649 121 247 34 393 25 252

Income tax receivable - 20 052 - 20 052

Investment receivables 18 040 725 3 605 347

Cash and cash equivalents 617 530 878 954 434 401 314 106

TOTAL ASSETS 15 782 406 14 383 332 15 718 846 14 334 155


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2014 (continued)

GROUP COMPANY

2014 2013 2014 2013

R '000 R '000 R '000 R '000

EQUITY AND LIABILITIES

EQUITY

ORDINARY SHAREHOLDERS’ EQUITY

Total equity 1 643 148 1 521 335 1 588 151 1 466 338

Issued capital - - - -

Revaluation reserves 921 756 859 656 880 700 819 424

Retained earnings 721 392 661 679 707 451 646 914

Non-current liabilities 13 986 754 12 826 287 13 986 754 12 826 287

Lifelong medical fund 2 220 800 1 874 635 2 220 800 1 874 635

Policy holder liability 10 576 408 9 884 248 10 576 408 9 884 248

Insurance contract liabilities

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

Provision for outstanding claims and IBNR 900 997 801 690 900 997 801 690

Deferred tax 165 443 142 608 165 443 142 608

Current liabilities 152 504 35 710 143 941 41 530

Subsidiary liability - - 13 11 400

Trade and other payables 142 728 31 207 138 585 27 882

Investment liabilities 9 776 4 503 5 343 2 248

TOTAL LIABILITIES 14 139 258 12 861 997 14 130 696 12 867 817

TOTAL EQUITY AND LIABILITIES 15 782 406 14 383 332 15 718 846 14 334 155


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2014

GROUP COMPANY

2014 2013 2014 2013

R '000 R '000 R '000 R '000

Gross premium income 1 012 942 1 084 208 1 012 942 1 084 208

Less: Reinsurance 10 116 11 135 265 706 342 949

Net premium income 1 002 826 1 073 073 747 236 741 259

Investment income 828 970 679 169 246 176 192 057

Other income 5 124 3 030 4 907 2 947

Revenue 1 836 920 1 755 272 998 319 936 263

Total fair value gains 610 684 814 016 112 637 330 938

Net realised fair value gains 694 025 571 670 51 362 117 492

Net unrealised fair value gains (losses) (83 341) 242 346 61 275 213 446

Total income after fair value gains 2 447 604 2 569 288 1 110 956 1 267 201

Less: Net benefits and claims 1 044 602 1 013 726 441 024 430 517

Gross benefits and claims 972 605 904 913 972 605 904 913

Reinsurers' share of gross benefits and claims paid (27 310) (21 766) (630 888) (604 975)

Gross change in provision for outstanding claims and IBNR 99 307 130 579 99 307 130 579

Less: Investment related expenditure 47 598 54 866 21 035 17 284

Less: Operating expenses 172 432 135 752 158 085 123 404

- Employee benefits and expenses 97 896 73 571 97 896 73 571

- Operating leases 8 518 6 074 8 518 6 074

- Depreciation & amortisation 6 541 4 837 6 541 4 837

- Other operating expenses 59 477 51 270 45 130 38 922

Operating surplus before transfers to provisions 1 182 972 1 364 944 490 812 695 997


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2014 (continued)

GROUP COMPANY

2014 2013 2014 2013

R '000 R '000 R '000 R '000

Less : Transfers to long-term provisions 1 038 325 1 094 283 346 165 425 335

Decrease in lifelong medical fund 346 165 425 335 346 165 425 335

Increase in policy holder liability 692 160 668 948 - -

Profit before tax from operations 144 647 270 662 144 647 270 662

Taxation 22 834 62 990 22 834 62 990

Profit after tax from operations 121 813 207 672 121 813 207 672

Total comprehensive income for the year attributable to owners

121 813 207 672 121 813 207 672


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014

REVALUATION RESERVES

ISSUEDSHARE

CAPITAL

CLAIMSCONTINGENCY

RESERVE

INVESTMENTREVALUATION

RESERVE

SOLVENCYMARGIN

RESERVE

RETAINED EARNINGS

TOTAL

GROUP R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000

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


- - - - 207 672 207 672

Net movement in revaluation reserve

- - 217 194 - (217 194) -

Share buy-back (500) (500)

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

- 15 913 - - (15 913) -

Balance at 31 December 2013 107 166 652 490 100 000 661 679 1 521 335


- - - - 121 813 121 813


- 62 099 - (62 099)

Deferred taxation

Fair value gains and losses 62 099 (62 099)


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014 (continued)


ISSUEDSHARE

CAPITAL

CLAIMSCONTINGENCY

RESERVE


RESERVE

SOLVENCYMARGIN

RESERVE

RETAINED EARNINGS

TOTAL

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

1 - - (1) -

- -

BALANCE AS AT 31 DECEMBER 2014

107 167 714 589 100 000 721 392 1 643 148

COMPANY

Balance at 31 December 2012 500 91 253 398 812 100 000 668 601 1 259 166


- - - - 207 672 207 672

Prior period adustment


- - 213 446 (213 446) -

Share buy-back (500) (500)

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

- 15 913 - - (15 913) -


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2014 (continued)


ISSUEDSHARE

CAPITAL

CLAIMSCONTINGENCY

RESERVE


RESERVE

SOLVENCYMARGIN

RESERVE

RETAINED EARNINGS

TOTAL

Balance at 31 December 2013 107 166 612 258 100 000 646 914 1 466 338


- - - - 121 813 121 813


- 61 275 - (61 275)

Deferred taxation

Fair value gains and losses 61 275 (61 275)

Share buy-back

-

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

1 - - (1) -

BALANCE AS AT 31 DECEMBER 2014

107 167 673 533 100 000 707 452 1 588 151


CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014

GROUP COMPANY

2014 2013 2014 2013

R' 000 R' 000 R' 000 R' 000

OPERATING ACTIVITIES (17 304) (19 207) 405 321 293 035

Operating surplus before transfers to provisions 1 182 972 1 364 944 490 812 695 997

Non-cash adjustments

- Depreciation and amortisation 6 541 4 837 6 541 4 837

- Net unrealised fair value (gains) 83 341 (242 346) (61 275) (213 446)

- Lease straight lining adjustment 441 273 441 273

- Interest amortisation adjustment (10 252) 25 690 7 144 11 841

Investment income (828 970) (679 169) (246 176) (192 057)

Investment related expenditure 47 598 54 866 21 035 17 284

Net realised fair value gains (694 025) (571 670) (51 362) (117 492)

Taxation received 20 052 - 20 052 -

Working capital adjustments:

- Change in trade and other receivables 6 422 (15 900) 5 825 (16 547)

- Change in interest and dividends receivable (30 402) (54 294) (9 141) (8 595)

- Change in investment receivables (17 315) 18 644 (3 258) 5 077

- Change in subsidiary liability - - 11 387 11 961

- Change in trade and other payables 111 521 (32 253) 110 704 (31 393)

- Change in investment liabilities 5 273 (23 470) 3 095 (5 347)

Change in net reinsurance assets 191 63 191 63

Change in provision for claims and IBNR 99 307 130 579 99 307 130 579


CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2014 (continued)

GROUP COMPANY

2014 2013 2014 2013

R' 000 R' 000 R' 000 R' 000

INVESTING ACTIVITIES (244 120) (164 817) (285 026) (264 913)

Additions to fixed assets (33 127) (2 845) (33 127) (2 845)

Purchases of investments (3 823 915) (2 908 854) (3 308 374) (2 559 449)

Proceeds from disposal of investments 2 826 426 2 119 748 2 826 426 2 119 748

Interest received 666 717 541 974 187 537 149 862

Dividends received 162 025 136 996 58 413 42 109

Other income 5 352 3 030 5 134 2 947

Investment related expenditure (47 598) (54 866) (21 035) (17 284)

FINANCING ACTIVITIES

- Change in share capital - (80) - (80)

Net change in cash and cash equivalents (261 424) (184 104) 120 295 28 042

Cash and cash equivalents, beginning of year 878 954 1 063 058 314 106 286 065

Cash and cash equivalents, end of year 617 530 878 954 434 401 314 106


SHAREHOLDERS’ INFORMATION

REGISTERED OFFICE AND HEAD OFFICE

Physical Address: 1st floor, BDO Building, 22 Wellington Road, Parktown, 2193

Postal Address: PO Box 61413, Marshalltown, 2107

Telephone: +27 860 222 132

Facsimile: +27 860 222 203

E-mail: [email protected]

Company Registration: 1899/000876/06

VAT Registration: 4720118027

Company Secretary & Public Officer (FSB): Ms. Kirsten Maria Linström

Public Officer (SARS): Mr. Eugene Lufhugu


SHAREHOLDERS’ INFORMATION

1. SHAREHOLDERS

Shareholding (participation rights)

effective for 2015 based on 31 December

2014 premiums


effective for 2014 based on 31 December 2013 premiums

Shareholding %(participation rights)

Shareholding %

ANGLO AMERICAN CORPORATION OF SOUTH AFRICA LIMITED 13,36% 16,19%

SIBANYE GOLD LIMITED 11,13% 8,27%

ANGLOGOLD ASHANTI LIMITED 9,93% 8,28%

HARMONY GOLD MINING COMPANY LIMITED 9,46% 8,65%

IMPALA PLATINUM LIMITED 8,37% 9,85%

LONMIN PUBLIC LIMITED COMPANY 7,30% 9,08%

GLENCORE OPERATIONS SOUTH AFRICA (PTY) LTD 2,68% -

MURRAY AND ROBERTS LIMITED 2,21% 2,38%

AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LIMITED 1,94% -

GOLD ONE INTERNATIONAL 1,78% 2,12%

KUMBA RESOURCES 1,53% 0,95%

EXXARO RESOURCES (PTY) LTD 1,51% 1,37%

VILLAGE MAIN REEF LTD 1,49% 2,11%

SASOL MYNBOU (PTY) LIMITED 1,45% 1,46%

BHP BILLITON SA HOLDINGS LIMITED 1,41% 0,68%

GOLD FIELDS LIMITED 1,36% 1,46%

NORTHAM PLATINUM LTD 1,26% 1,59%

BOKONI PLATINUM MINES (PTY) LIMITED 1,16% -

TWO RIVERS PLATINUM (PTY) LTD 1,15% -

SHAFT SINKERS (PTY) LIMITED 1,02% 1,54%

PETRA DIAMONDS SOUTHERN AFRICA (PTY) LIMITED 0,97% 0,88%

PALABORA COPPER (PTY) LTD 0,85% -


SHAREHOLDERS’ INFORMATION (Continued)

1. SHAREHOLDERS


effective for 2015 based on 31 December

2014 premiums


effective for 2014 based on 31 December 2013 premiums

Shareholding %(participation rights)

Shareholding %

BAFOKENG RASIMONE MANAGEMENT SERVICES (PTY) LTD 0,76% -

JIC MINING SERVICES AFRICA (PTY) LTD 0,70% 0,67%

S A N CONTRACTING SERVICES CC 0,58% 0,48%

SAPPI MANUFACTURING (PTY) LTD 0,56% 0,34%

DURBAN ROODEPOORT DEEP GROUP 0,28% 1,27%

DE BEERS CONSOLIDATED MINES LIMITED 0,32% 0,27%

SIMMER AND JACK INVESTMENTS LIMITED 0,05% 0,06%

AFRICAN RAINBOW MINERALS LIMITED - 2,38%

XSTRATA SOUTH AFRICA (PTY) LTD - 2,37%

MISCELLANEOUS 13,45% 15,30%

100% 100%

A member’s proportional interest in the Group 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 the financial statements are signed by the external auditors.


SHAREHOLDERS’ INFORMATION (Continued)

2. MAJOR SHAREHOLDERS

Shareholding (participation

rights) effective for 2015 based on 31 December 2014

premiums

Shareholding (participation

rights) effective for 2014 based on 31 December 2013

premiums% %

ANGLO AMERICAN SOUTH AFRICA LIMITED GROUP 13,36% 16,19%

SIBANYE GOLD LIMITED 11,13% 8,27%

ANGLOGOLD ASHANTI GROUP 9,93% 8,28%

HARMONY GOLD MINING GROUP 9,46% 8,65%

IMPALA PLATINUM LIMITED GROUP 8,37% 9,85%

LONMIN PUBLIC LIMITED COMPANY 7,30% 9,08%

GLENCORE OPERATIONS SOUTH AFRICA PTY LTD 2,68% -

MURRAY AND ROBERTS LIMITED 2,21% 2,38%


ANNUAL GENERAL MEETING




Notice of Annual General Meeting and Shareholder Information

The Rand Mutual Assurance Company Limited’s (“the Company”), registration number 1899/000876/06, 2014 Integrated Report has been published on the Company’s website, www.randmutual.co.za.

Notice is hereby given that the 121st annual general meeting (“AGM”) of RMA’s shareholders will be held on the 1st floor, BDO Building, 22 Wellington Road, Parktown at 09h00 on 24 June 2015 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 3 June 2015 shall be entitled to receive this notice.

The shareholders registered as shareholders of the Company as at 22 June 2015 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 the person thereat to the exclusion of any such proxy. A proxy form 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 Computershare Investor Services (Proprietary) Limited at 70 Marshall Street, Johannesburg, (or PO Box 61051, Marshalltown), or for convenience it may be scanned and emailed to [email protected] by no later than 48 hours before the scheduled time of commencement of the AGM.

Representatives of Shareholders

A shareholder (which is a legal entity) wishing to personally attend 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 Computershare Investor Services (Proprietary) Limited at 70 Marshall Street, Johannesburg, (or PO Box 61051, Marshalltown), or for convenience it may be scanned and emailed to [email protected], to be received by Computershare before the scheduled time for the commencement of the AGM.


ANNUAL GENERAL MEETING (Continued)

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 integrated report on the Company’s website.

Shareholders may participate telephonically in the AGM, at their own expense, by means of telephoning the company secretary on +27 10 214 3014 during normal office hours three days before the AGM to obtain the AGM telephone conference facility telephone number.

Resolutions

Please note that:

the support of more than 50% of the voting rights exercised on the resolution; and

the support of at least 75% of the voting rights exercised on the resolution.

General Business

The following general business shall be conducted at the AGM. Shareholders are requested to consider and, if deemed fit, to adopt with or without modification, the following resolutions:

Ordinary Resolutions

Ordinary Resolution No.1RMA’s annual integrated report

Resolved that the Company’s annual integrated report, including the consolidated financial state-ments, directors’ report and Audit Committee report for the financial year ending 31 December 2014, be and is hereby noted.



Ordinary Resolution No.2Re-appointment of Auditors

Resolved that the re appointment of the retiring auditors, EY Inc., for the ensuing financial year, hold office until the conclusion of the next AGM of the Company. It is to be noted that Ms. R de Lange is the individual and designated auditor who will undertake the Company’s audit for the financial year ending 31 December 2015.

Ordinary Resolution No. 3Approval of Auditor’s Fees

Resolved that the payment of the auditors’ fees for the financial year of the Company, ending 31 December 2014 (as determined and approved by the statutory audit committee in terms of section 94(7)(b) of the Companies Act, 71 of 2008) be and is hereby noted and approved.

Ordinary Resolution No. 4Appointment of Audit Committee member

Mr. John Gardner be and is hereby appointed as the chairman of the statutory Audit Committee of the Company.


Ms. Daphne Motsepe be and is hereby appointed as a member of the statutory Audit Committee of the Company.


Mr. Ramachandra Naidoo be and is hereby appointed as a member of the statutory Audit Committee of the Company.

Ordinary Resolution No. 7 Appointment of Audit Committee member

Mr Henk van Veen be and is hereby appointed as an independent advisory member of the statutory Audit Committee of the Company.

Ordinary Resolution No. 8Re-election of Dr. TV Maphai

Dr. TV Maphai, (who retires as a director at this meeting, but is eligible for re-election) be and is hereby re-elected as a director of the Company.



Ordinary Resolution No. 9Re-election of Mr. H Schalekamp

Mr. H Schalekamp (who retires as a director at this meeting but is eligible for re-election) be and is hereby re-elected as a director of the Company.

Ordinary Resolution No. 10Re-election of Mr. JPL Bezuidenhout

Mr. JPL Bezuidenhout (who retires as a director at this meeting but is eligible for re-election) be and is hereby re-elected as a director of the Company.

Ordinary Resolution No. 11 Re-election of Mr. A Letshele

Mr. A Letshele, (who retires as a director at this meeting but is eligible for re-election) be and is hereby re-elected as a director 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 en-able shareholders to take an informed decision as to their re-election. The Board confirms that all the directors have performed effectively, demonstrate commitment to the role and have met the require-ments of the Financial Services Board.

Ordinary Resolution No. 12Re-appointment of Dr. TV Maphai as Chairman

Dr. TV Maphai, an independent director of the Company, be and is hereby reappointed as chairman of the Board for a period of one year from the date of this resolution or until the date on which he ceases to be an independent director of the Company.

Ordinary Resolution No. 13Appointment of Deputy Chairman

Ms. D Motsepe, an independent director of the company, be appointed as deputy chairman of the Board for a period of one year or until the date on which she ceases to be an independent director of the company.



SPECIAL RESOLUTIONS

Special Resolution No.1Remuneration of Directors

The remuneration of the directors of RMA for their services commencing 1 May 2015 be approved as follows:

Position Current feeper meeting

Increase amount 2015

Revised fee per meeting (2015)

% increase

Board chairman 51 840 10 370 62 210 20%

Board member 28 840 2 310 31 147 8%

Audit and Risk Committee/s chairman 18 040 3 610 21 650 20%

Audit and Risk Committee/s member 14 420 2 165 16 585 15%

Other committee chairman 18 040 1 445 19 485 8%

Other committee member 14 420 1 155 15 575 8%

Non-binding advisory vote

Remuneration policy

Resolved that the remuneration policy of the Company as set out on pages 65 to 66 of the attached integrated report be and is hereby approved.



Special Resolution No.2Amendment to the Company’s MOII

It is resolved that the Memorandum of Incorporation of the Company (MOI) be and is hereby amended, with effect from the date of filing this resolution with the Companies and Intellectual Property Commission, as follows:

2.1 by amending article 1.5 by inserting the phrase “or the holding companies of employers who are

policyholders” after the word “policyholders”;

2.2 by amending article 1.6.1 by inserting the phrase “or its holding company” after the word “employer”;

2.3 by amending article 1.6.3 by inserting the phrase “or its holding company, as the case may be,”

after the word “question”;

2.4 by amending article 1.6.4 by inserting the phrase “or its holding company” after the word “employer” in the third line;

2.5 by amending article 1.7 by:

2.5.1 inserting the phrase “policyholder or, if the

policyholder’s holding company is the share-

holder in the Company and has no other sub-

sidiaries who are policyholders who continue

to pay premiums, to such holding company” after the word “that” in the third line; and

2.5.2 replacing the word “an” with the word “a” at the end of the third last line;

2.6 by deleting article 9.3.5 in its entirety and replacing it with the following new article:

“9.3.5 The Board may issue shares to any

person who is an employer, or a

holding company of an employer,

approved by the Board in terms

of article 1.6, provided that such

employer is a policyholder.”;

2.7 by amending article 9.10.2 by inserting the phrase “, or as the holding company of such

an employer and policyholder” after the word “COIDA”;

2.8 by amending article 12.2.3 by inserting the phrase “or one or more of its subsidiaries” after the word “holder”;

2.9 by amending article 12.3.1 by replacing the word “employer” with “shareholder”;



2.10 by deleting article 12.4.3.2 in its entirety and replacing it with the following new article:

“12.4.3.2 transfer any such securities to

any other person who is an employer,

or the holding company of a person

who is an employer, approved in

writing by the Board (subject to the

legal representative complying with

article 14.5 and 14.6 and subject to

the restrictions on transfer set out in

Annexe B (Authorised shares of

the Company)),”;

2.11 by amending article 14.5 by inserting the phrase “or the holding company of an employer” after the word “employer” in the fifth line;

2.12 by amending paragraph 6 of Annexe A to the MOI by inserting the phrase “, or whose holding

companies,” after the word “who”;

2.13 by amending paragraph 1.2 of Annexe B to the MOI by inserting the phrase “or holding company

of an employer” after the word “employer”;

2.14 by amending paragraph 2.2.1.3 of Annexe B to the MOI by inserting the phrase “, or whose

holding companies,” after the word “who”, and the phrase “or its subsidiaries” after the words “Ordinary Shareholder” in the fourth line;

2.15 by amending paragraph 2.2.1.4 of Annexe B to the MOI by inserting the phrase “Ordinary

Shareholder or by its subsidiaries as” after the word “that” in the fifth line, and adding “/s” after the word “policyholder” in both the sixth and tenth lines; and

2.16 by amending paragraph 2.2.1.5 of Annexe B to the MOI by inserting the phrase “Ordinary

Shareholder or by its subsidiaries as” after the word “that” in the fourth line, and the phrase “and their subsidiaries” after the phrase “Business Done by all Ordinary Shareholders”.

The reason and effect for Special Resolution No. 2 is to ensure that RMA’s MOI allows for the issuing of shares to a parent company of multiple policyholders as opposed to the individual policyholders themselves.

By order of the Board 3 June 2015.

Kirsten Maria LinströmCompany Secretary3 June 2015

RMA 2014 Cover

Documents

Transcript of RMA 2014 Cover