Companies Act Companies Act, Act 61 of 1973 as amended
Dividend cover Normalised earnings per share divided by dividend per share.
Diluted normalised earnings per share Normalised earnings attributable to ordinary shareholders divided by the weighted average number of shares including treasury shares adjusted for potential dilution effect of Outperformance scheme.
King Code 2002/the Code King Report on Corporate Governance for South Africa 2002.
National Credit Act (“NCA”) National Credit Act, No 34 of 2005.
Net asset value (R million) Equity attributable to ordinary shareholders.
Net asset value per share Equity attributable to ordinary shareholders divided by number of issued ordinary shares.
Net income after capital charge (“NIACC”) Normalised earnings less the cost of equity times the average ordinary shareholders’ equity and reserves.
Normalised earnings The Group believes normalised earnings more accurately reflect operational performance. Headline earnings are adjusted to take into account non operational and accounting anomalies. Refer here for a detailed description of normalised earnings.
Normalised earnings per share Normalised earnings attributable to ordinary shareholders divided by the weighted average number of shares including treasury shares.
Price earnings ratio (times) Closing price on 30 June divided by basic normalised earnings per share.
Price to book (times) Market capitalisation divided by normalised net asset value.
Profit attributable to
ordinary shareholders (R million) 		Profit for the year less dividend paid on non cumulative non redeemable
preference shares and minorities.
Return on equity (“ROE”) Normalised earnings divided by average normalised ordinary equity.
Shares in issue (number) Number of ordinary shares listed on the JSE.
Weighted average number of ordinary shares (number) The weighted average number of ordinary shares in issue during the year
as listed on the JSE.
   
BANKING GROUP  
Bank’s Act Banks Act, No 94 of 1990 as amended.
Capital adequacy ratio (“CAR”) Capital divided by risk weighted assets.
Cost to income ratio (%) Operating expenses excluding indirect taxes expressed as a percentage of total income including share of profit from associates and joint ventures.
Exposure at default (“EAD”) Exposure at default is defined as the gross exposure of a facility upon default of a counterparty.
Loss given default (“LGD”) The loss given default is defined as the economic loss that will be suffered on an exposure following default of the counterparty, expressed as a percentage of the amount outstanding at the time of default.
Probability of default (“PD”) The probability of default is the probability that a counterparty will default within the next year and considers the ability and willingness of the counterparty to repay.
Risk weighted assets (R million) Prescribed risk weightings relative to the credit risk of counterparty, operational risk, market risk, equity investment risk and other risk multiplied by on and off balance sheet assets.
   
MOMENTUM GROUP  
Capital adequacy ratio (“CAR”) The amount by which the Financial Services Board requires an insurer’s assets to exceed it liabilities. The assets, liabilities and capital adequacy requirement must be calculated using a method which meets the Financial Services Board’s requirements. For the current period Momentum’s CAR was calculated using the statutory basis. A revised CAR formula has been issued by the Actuarial Society of South Africa and will come into effect on 31 December 2008.
Deferred revenue liability (“DRL”) A DRL is recognised in respect of fees paid at the inception of a contract by a policyholder which are directly attributable to a contract. The DRL is then released to revenue as the investment management services are provided, over the expected duration of the contract, as a constant percentage of the expected gross profit margin (including investment income) arising from the contract.
Discretionary participation features (“DPF”) A DPF entitles the policyholder to receive, as a supplement to guaranteed benefits, additional benefits or bonuses.
Embedded value

The embedded value is defined as:

  • the shareholders’ net worth, which includes subsidiaries and associates at the directors’ valuations; plus
  • the present value of future profits less the opportunity cost of capital in respect of the in-force insurance business.
The value of the in-force insurance business is calculated as the present value of the projected stream of future after tax profits at the calculation date. The opportunity cost of capital reflects the fact that the expected long term investment return on the assets backing the capital adequacy requirements is less than the return assumed to be required by the shareholders, as reflected by the risk discount rate.
Present value of in-force (“PVIF”) PVIF is determined by estimating the net present value of future cash flows from contracts in force at the date of acquisition.