Directors’ report


Nature of business
Having obtained the requisite shareholder and regulatory approval, RMB Holdings Limited ("RMBH") implemented a far reaching restructuring on 7 March 2011. In the context of Rand Merchant Insurance Holdings Limited ("RMI Holdings") this included, inter alia, the following steps:
  • the separation of RMBH's insurance and banking interests, through the transfer of RMBH's insurance interests to RMI Holdings (then a wholly-owned subsidiary); and
  • the unbundling of RMI Holdings to RMBH's ordinary shareholders on a one-for-one basis and the separate listing of RMI Holdings on the JSE as an insurance-focused investment entity.
After the restructuring and further subsequent acquisitions, the actual interests of RMI Holdings comprise an investment portfolio of South Africa's premier insurance brands:
  • 26%* of MMI Holdings;
  • 25%* of Discovery;
  • 90%* of OUTsurance; and
  • 76%* of RMBSI.

RMI Holdings was incorporated on 24 March 2010. The effective date of the transfer of the investments from RMBH was 1 March 2011. Thus, while this maiden financial report of RMI Holdings covers the fifteen month period to 30 June 2011, it was effectively dormant for the first eleven months of the period and its financial results only include income from the underlying investments for the four months ended on that date.

* Actual interest differs from the effective interest used for financial reporting due to the consolidation of treasury shares and "deemed" treasury shares held by group companies (click here to see note 40).

Further details regarding the investments are provided here.

Share capital

Ordinary shares
The total authorised number of ordinary shares is 2 000 000 000, with a par value of 0,0001 cent per share. During the period 1 485 688 346 shares were issued at a premium of R9,1926 per share. The unissued share capital is under the control of the board of directors until the forthcoming annual general meeting.
 
Preference shares
The total authorised number of redeemable cumulative preference shares is 100 000 000, with a par value of 0,0001 cent per share. The company issued
750 000 fixed rate cumulative redeemable preference shares, with a par value of 0,0001 cent, at an premium of R999,9999 per share on 15 June 2011. The preference shares are redeemable at the discretion of the company at any time and compulsorily redeemable on 15 June 2016. The preference shares pay dividends at a fixed rate of 8,31% six monthly. The company issued 700 001 variable rate cumulative redeemable preference shares, with a par value of 0,0001 cent, at a premium of R999,9999 per share on 15 June 2011. The preference shares are redeemable at the discretion of the company at any time and compulsorily redeemable on 15 June 2016. The preference shares pay dividends at a rate of 73,5% of the primen interest rate six monthly.
 
Shareholder analysis
Based on information disclosed by STRATE and investigations conducted on behalf of the company, the following shareholders have an interest of 5% or more in the issued ordinary share capital of the company:
 
  2011 Shares held (000’s) 2011 %
Financial Securities Limited (Remgro) 518 505 34,9%
Public Investment Corporation 179 174 12,0%
LL Dippenaar 85 179 5,7%
GT Ferreira 81 235 5,5%
 
Earnings
Headline earnings of the group for the period ended 30 June 2011 amounted to R525 million.
 
Dividends
The following ordinary dividends were declared by RMI Holdings during the period under review:
  • An interim dividend of 22,8 cents per ordinary share, declared on 9 March 2011 and paid on 4 April 2011; and
  • A final dividend for the period ended 30 June 2011 of 33,7 cents per ordinary share, declared on 14 September 2011, payable on 17 October 2011.

The last day to trade in RMI Holdings shares on a cum-dividend basis in respect of the final dividend will be Friday, 7 October 2011, while the first day to trade ex-dividend will be Monday, 10 October 2011. The record date will be Friday, 14 October 2011 and the payment date Monday, 17 October 2011.

No dematerialisation or rematerialisation of shares may be done during the period Monday, 10 October 2011 to Friday, 14 October 2011, both days inclusive.

 
Directorate
The directorate consists of:
   
GT Ferreira (Chairman) P Cooper (Chief executive officer)
LL Dippenaar JW Dreyer
JJ Durand PM Goss
PK Harris TV Mokgatlha
SEN Sebotsa KC Shubane
MH Visser  
 
All the directors were appointed on 8 December 2010 except for Mr TV Mokgatlha who was appointed to the board effective 25 May 2011.
 
Directors' interests in RMI Holdings
Details of individual director's interests in the company are disclosed here.
 
Interest of directors and officers
During the financial period, no contracts were entered into in which directors or officers of the company had an interest and which significantly affected the business of the group. The directors had no interest in any third party or company responsible for managing any of the business activities of the group except to the extent that they are shareholders in RMI Holdings as disclosed in this report. Arm's length banking and assurance transactions entered into by the company's directors with the group's associates are disclosed here.
 
Directors' emoluments
Directors' emoluments are disclosed here.
 
Directors' participation in group share incentive schemes
RMI Holdings does not operate an equity-settled share incentive scheme in its own right.
 
Insurance
RMI Holdings has appropriate insurance cover against crime risks as well as professional indemnity.
 
Company secretary and registered offices
Mr AL Maher is the company secretary. The address of the company secretary is that of the company's registered office. The company's registered office is at:
 
3rd Floor, 2 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196.
 
Management contract
RMBH renders management services to rmi holdings. Mr Cooper's executive remuneration is paid by rmbH. RMBH recovers a portion of his remuneration and other infrastructure costs from RMI holdings.
 
Events subsequent to reporting date
Subsequent to the period end, RMI Holdings reached agreement to sell an effective interest of 6,8% in the ordinary share capital of OUTsurance to the management team of OUTsurance for a purchase consideration of R552 million. RMI Holdings will facilitate the transaction by providing term funding to the management team for part of the purchase consideration. This transaction is in the process of being implemented.

Other than the above and for the final dividend declaration, there are no other material facts or circumstances that have occurred between the reporting date and the date of this report.


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