It is the policy of Remgro not to apply a control premium to the valuation of investments where it holds a majority interest. Where Remgro holds a minority interest a 10% tradeability discount is applied.

Remgro’s unlisted investments were valued as follows:

Air Products South Africa

The discounted cash flow method was used to value this investment. No tradeability discount is applied to the valuation due to the 50% shareholding.

Business Partners

The net asset value was used.

CIV group

The discounted cash flow method was used.

Kagiso Tiso Holdings

The annual external valuation was used.

PGSI

The discounted cash flow method was used.

PRIF

The annual external valuation was used.

Sabido

A comparable market price was used.

Seacom

The discounted cash flow method was used.

Total South Africa

The discounted cash flow method was used.

Unilever South Africa

The discounted cash flow method was used.

Wispeco

The discounted cash flow method was used.

Refer to the table below for a detailed analysis of Remgro’s intrinsic net asset value.

INVESTment ACTIVITIES

During June 2015 Remgro acquired a 29.9% interest in Spire Healthcare Group Plc (Spire) for a total consideration of GBP431.7 million. The transaction was concluded early in July 2015 and Remgro financed the transaction through a combination of its own cash and external funding. Simul­taneously, an agreement was concluded with Mediclinic whereby it would acquire Remgro’s interest in Spire, subject to it raising the appropriate funds in order to conclude such a transaction. During August 2015 Mediclinic raised R10.0 billion through a rights issue in terms of which 111.1 million new Mediclinic shares were issued at a price of R90.00 per share. By following its rights and by also underwriting the balance of the rights issue, Remgro invested an additional R4.6 billion into Mediclinic, increasing its equity interest to 42.5%. Following the successful conclusion of the rights issue, Mediclinic acquired Remgro’s interest in Spire during August 2015 for an amount of R8.6 billion, equalling the purchase price, transaction and funding costs.

During April 2015 Remgro acquired a further 2.99 million RMBH shares for a total amount of R215 million, thereby increasing its interest in RMBH from 27.9% to 28.2%.

During May 2015 the Pembani Remgro Infrastructure Fund (PRIF) announced that it has achieved a successful first closing of $245 million. In addition, PRIF has also received a further commitment equal to 20% of the fund size, capped at $100 million from an offshore investor. Remgro provided seed capital to the amount of R500 million to PRIF during November 2012. The strategy of the fund is to invest in equity and quasi-equity in the full spectrum of infrastructure opportunities on the African continent, with a focus on sub-Saharan Africa.

On the international front, we also invested a further R371 million in the Milestone Capital Funds, increasing Remgro’s total investment in China to R1.5 billion. Despite the current problems in the Chinese economy, Remgro believes that its partnership with the Milestone Funds will produce value over the long term.

The adjacent table represents the cash effects of Remgro’s investing activities for the year to 30 June 2015. These activities exclude the investing activities of Remgro’s operating subsidiaries, i.e. RCL Foods Limited and Wispeco Holdings Limited.

Investments made and loans granted	R million
Existing investee companies
Milestone Capital Funds (offshore)	371
Unilever South Africa (loan)	258
RMBH	215
Sabido (loan)	157
Grindrod	58
CIV group	57
Premier Team Holdings	49
Invenfin	29
KTH	22
Other	27
	1 243

Investments sold and loans repaid	R million
PRIF	317
Milestone Capital Funds (offshore)	110
Longkloof	83
GEMS	54
Other	19
	583

INVESTment commitments

The table below summarises the investment commitments of Remgro as at 30 June 2015.

Investment commitments	R million
Mediclinic	4135
PRIF	317
Milestone China Funds (offshore)	275
Kagiso Infrastructure Empowerment Fund	65
Other	38
	4830