RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS

2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS

EXPANDING OUR PARTNER NETWORK

CONTENTS Directors Responsibility Statement and Company Secretary Statement 02 Directors Report 03 04 Audit Committee Report 05 Independent Auditor s Report 06 07 Consolidated Statement of Financial Position 09 Consolidated Income Statement 10 Consolidated Statement of Comprehensive Income 11 Consolidated Statement of Changes in Equity 12 Consolidated Statement of Cash Flows 13 Accounting Policies 15 24 Notes to the Consolidated Financial Statements 26 52 These financial statements have been prepared under the supervision of the finance & treasury executive: C de Wit Chartered Accountant (SA). These financial statements represent the financial information of the RCS Group and have been audited in compliance with section 30 of the Companies Act of South Africa. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 01

Directors Responsibility Statement The directors are responsible for the preparation and fair presentation of the consolidated financial statements of RCS Investment Holdings Limited, its subsidiaries and its associates (hereafter referred to as the RCS Group ), comprising the consolidated statement of financial position as at 31 December 2015, and the consolidated income statement, the consolidated statements of comprehensive income, changes in equity and cash flows for the period then ended, and the notes to the consolidated financial statements, which include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. In addition, the directors are responsible for preparing the directors report. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error, and for maintaining adequate accounting records and an effective system of risk management. The directors have made an assessment of the ability of the RCS Group to continue as a going concern and have no reason to believe that the businesses will not be a going concern in the year ahead. The auditor is responsible for reporting on whether the consolidated financial statements are fairly presented in accordance with the applicable financial reporting framework. Approval of the Financial Statements The consolidated financial statements of the RCS Group, as identified in the first paragraph, were approved by the board of directors on 22 April 2016 and were signed by: SW van der Merwe Chief executive officer Company Secretary Statement I hereby confirm, in my capacity as company secretary of RCS Investment Holdings Limited, that for the period ended 31 December 2015, the company has filed all required returns and notices in terms of the Companies Act, 2008 and that all such returns and notices are to the best of my knowledge and belief true, correct and up to date. GS Harker Company Secretary 02 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Directors Report The directors have pleasure in presenting their report : 1. Business Activities The RCS Group is an operationally independent consumer finance business that provides a broad range of financial services under its own brand and in association with a number of retail entities in South Africa, Namibia and Botswana. The RCS Group is structured into two main operating business units named Cards, which offers various utility card products through participating merchants outlets, and Loans which offers individuals unsecured loans and insurance products (for more detail on these segments refer to note 3 of the financial statements). 2. Subsidiary Companies The RCS Group constitutes RCS Investment Holdings Limited (registration number: 2000/017884/06) and its subsidiaries, RCS Botswana Proprietary Limited, RCS Cards Proprietary Limited, RCS Collections Proprietary Limited, RCS Home Loans Proprietary Limited, RCS Investment Holdings Namibia Proprietary Limited and RCS Personal Finance Proprietary Limited (for more detail on these subsidiaries refer to note 27 of the financial statements). The financial statements for RCS Investment Holdings Limited are presented in a separate set of financial statements. 3. General Review of Operations The results are described in the accompanying consolidated financial statements. 4. Compliance RCS Cards Proprietary Limited is a registered credit provider (NCR registration number NCRCP 38) and a registered service provider with the financial services board (FSB registration number 44481). 5. Corporate governance The directors endorse the Code of Corporate Practices and Conduct as suggested by King III. For the financial period ended 31 December 2015 the directors are satisfied that the group materially complies with King III, apart from the areas noted below. The main areas of departure are accepted due to the fact that RCS Investment Holdings Limited is a wholly owned subsidiary of the French listed bank, BNP Paribas Société Anonyme. King III Principle Non-Application The board should comprise a balance of power, with a majority of non-executive directors. The majority of nonexecutive directors should be independent. Recommended Practice Non-Application The majority of non-executive directors should be independent. At least one third of the nonexecutive directors should rotate every year. Comments As the Group only has one shareholder, BNP Paribas Société Anonyme, the only independent non-executive director is the audit committee chairman, and the other non-executive directors are senior executives of the shareholder. As the Group only has one shareholder, BNP Paribas Société Anonyme, the shareholder appoints the non-executive directors. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 03

DIRECTORS REPORT (continued) 6. Change in financial year end During the current financial period, the financial year has changed from 31 March to 31 December to align with the reporting requirements of the shareholder. The current period financial results are therefore only representative of a 9 month period and not comparative to the prior period. 7. Event after the reporting period The directors are not aware of any matters or circumstances arising since the end of the financial period that may materially affect the amounts and disclosure of these financial statements. 8. Distribution to shareholder A distribution to shareholder amounting to R250 million was declared after the date of the reporting period but before the financial statements were authorised for issue (31 March 2015: nil). 9. Directors The directors in office at the date of this report are: Executive Directors SW van der Merwe (Chief executive officer) South African JJ Snyman (Chief financial officer) South African RF Adams (Chief operating officer) South African OPM Renard French Non-executive directors ACPM van Groenendael French BPS Cavelier French VNA Kodjo Diop French I Perret-Noto (Appointed 1 December 2015) French E Oblowitz (Independent) South African 10. Company secretary The company secretary at the date of this report is GS Harker. 11. Business/registered address Business Address RCS Building Golf Park Raapenberg Road Mowbray 7700 Postal address PO Box 6523 Parow East Cape Town 7501 12. Holding company The RCS Group s immediate holding company is BNP Paribas Personal Finance Société Anonyme. The ultimate shareholder is BNP Paribas Société Anonyme, incorporated in France and listed on the Paris stock exchange. 13. Auditors The independent auditing firm, KPMG Inc., which was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the board of directors and committees of the board, has audited the financial statements. The directors believe that all representations made to the independent auditors during their audit were valid and appropriate. KPMG Inc. s audit report is presented on page 6 to 7. 04 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

AUDIT COMMITTEE REPORT The RCS audit committee is an independent statutory committee appointed by the board of directors in terms of the Companies Act (Act 71 of 2008) ( the Act ). The committee comprises of one independent non-executive director, which is also the chairman of the audit committee, and two non-executive directors. The audit committee met twice during the period ended 31 December 2015. In addition, the chairman of the audit committee held various meetings with representatives of the internal and external auditors during the period under review. The committee s responsibilities include statutory duties in terms of the Act. The committee s terms of reference are determined by a board-approved charter. The committee conducted its affairs in compliance with, and discharged its responsibilities in terms of, its charter. Ensured that the group s internal audit function is independent and had the necessary resources and authority to enable it to discharge its duties; Approved the internal audit plan; Met with the external and internal auditors without management being present; Satisfied itself that the group financial director and finance function has appropriate expertise and experience; Considered as part of the approval of the financial statements any accounting treatments, significant unusual transactions, or accounting judgements that could be contentious; and The committee performed the following, inter alia, duties during the period under review: Satisfied itself that the external auditor is independent of the group, as set out in section 94(9) of the Act; Reviewed management s assessment of going concern and sustainability and made a recommendation to the board that the going concern concept be adopted by the group. In consultation with executive management, agreed to the terms, audit plan and budgeted fees for the 31 December 2015 financial period; Approved the nature and extent of non-audit services that the external auditor may provide; E Oblowitz Audit Committee Chairman Satisfied itself, based on the information and explanations supplied by management and obtained through discussions with the independent external auditor and internal auditors, that the system of internal financials controls is effective and forms a basis for the preparation of reliable financial statements; Reviewed the accounting policies and the group financial statements and, based on the information provided to the committee, considers that the group complies, in all material respects, with the requirements of the Act and IFRS; 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 05

Independent Auditor s Report To the shareholder of RCS Investment Holdings Limited: Report on the Financial Statements We have audited the consolidated financial statements of RCS Investment Holdings Limited, which comprise the consolidated statement of financial position as at 31 December 2015, and the consolidated income statement, the consolidated statements of comprehensive income, changes in equity and cash flows for the period then ended, and the accounting policies and notes to the financial statements, as set out on pages 15 to 52. Directors Responsibility for the Financial Statements The company s directors are responsible for the preparation and fair presentation of these consolidated 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 financial statements that are free from material misstatements, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these consolidated 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of RCS Investment Holdings Limited as at 31 December 2015, and its consolidated financial performance and its consolidated cash flows for the period then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa. Other Reports Required by the Companies Act As part of our audit of the consolidated financial statements, we have read the Directors Report, Audit committee Report and Company Secretary Statement for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated financial statements. These reports are the responsibility of the respective preparers. Based on reading the reports we have not identified material inconsistencies between these reports and the audited consolidated financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports. 06 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Independent Auditor s Report (continued) Report on Other Legal and Regulatory Requirements In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that KPMG Inc. has been the auditor of RCS Investment Holdings Limited for 16 years. We are independent of the group in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors and other independence requirements applicable to performing audits of financial statements in South Africa. KPMG Inc. Per: Patrick Farrand Chartered Accountant (SA) Registered Auditor Director 22 April 2016 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 07

A solid financial foundation for future growth

Consolidated Statement of Financial Position as at 31 December 2015 Assets 31 December 31 March 2015 2015 Note R 000 R 000 Cash and cash equivalents 4 551 918 446 787 Card and loan receivables 5 5 961 948 5 508 226 Other receivables 6 11 625 18 038 Amount receivable from insurer 7 94 850 94 919 Interest rate swaps 15 249 Taxation 5 935 4 504 Property and equipment 8 68 491 62 970 Intangible assets 9 24 122 25 434 Goodwill 10 56 855 56 855 Deferred taxation 11 172 629 91 019 Amount owing from group company 12 81 Investments in associates 13 2 386 Total assets 6 948 373 6 326 468 Equity Stated Capital 14 2 636 636 2 636 636 Accumulated loss (226 441 ) (424 281 ) Foreign currency translation reserve 15 9 298 1 673 Cash flow hedge reserve 16 10 960 Total equity 2 419 493 2 224 988 Liabilities Funding 17 4 082 400 3 770 300 Trade and other payables 18 446 480 331 153 Interest rate swaps 27 Total liabilities 4 528 880 4 101 480 Total equity and liabilities 6 948 373 6 326 468 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 09

Consolidated Income Statement 9 Months ended 12 Months ended Note R 000 R 000 Interest earned 20 1 060 127 1 261 080 Interest expense (235 420 ) (271 344 ) Net interest income 824 707 989 736 Other income 21 526 376 674 861 Transaction fee expense (63 075) (72 864 ) Net trading income 1 288 008 1 591 733 Operating costs (570 859) (677 385) Cost of risk 22 (439 335) (475 962 ) Income from operations 277 814 438 386 Profit from equity accounted associates 1 977 Profit before taxation 23 277 814 440 363 Taxation 24 (79 974 ) (141 224 ) Profit for the period 197 840 299 139 10 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Consolidated Statement of Comprehensive Income 9 Months ended 12 Months ended Note R 000 R 000 Profit for the period 197 840 299 139 Other comprehensive income, net of taxation Items that are or may be reclassified to profit or loss: Foreign currency translation differences for foreign operation 15 7 625 (36) Effective portion of changes in fair value of cash flow hedges 16 (712) (17 950 ) Cashflow hedges - reclassified to profit or loss (10 248 ) Other comprehensive income for the period (3 335 ) (17 986 ) Total comprehensive income for the period 194 505 281 153 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 11

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Foreign Retained currency Cash flow income / total equity Stated translation hedge (accumulated attributable capital reserve reserve loss) to parent R 000 R 000 R 000 R 000 R 000 Balance at 1 April 2014 696 798 1 709 28 910 1 202 861 1 930 278 Total comprehensive income for the period (36) (17 950 ) 299 139 281 153 Profit for the period 299 139 299 139 Other comprehensive income, net of taxation: Foreign currency translation differences for foreign operations (36) (36) Effective portion of changes in fair value of cash flow hedges (17 950 ) (17 950 ) Transactions with shareholders 1 939 838 (1 926 281 ) 13 557 Share issue 2 636 636 2 636 636 Share buy-back (696 798 ) (1 926 281 ) (2 623 079 ) Balance at 31 March 2015 2 636 636 1 673 10 960 (424 281 ) 2 224 988 Balance at 1 April 2015 2 636 636 1 673 10 960 (424 281 ) 2 224 988 Total comprehensive income for the period 7 625 (10 960 ) 197 840 194 505 Profit for the period 197 840 197 840 Other comprehensive income, net of taxation: Foreign currency translation differences for foreign operations 7 625 7 625 Effective portion of changes in fair value of cash flow hedges (712) (712) Disposal of cash flow hedge (10 248 ) (10 248 ) Balance at 31 December 2015 2 636 636 9 298 (226 441 ) 2 419 493 12 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

CONSOLIDATED STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES 9 Months ended 12 Months ended Note R 000 R 000 Cash utilised in operations 25 (38 117 ) (236 964 ) Taxation paid 26 (158 753 ) (211 220 ) Net cash outflow from operating activities (196 870 ) (448 184 ) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment (19 065 ) (53 051 ) Acquisition of intangible assets (7 352 ) (14 571 ) Proceeds from disposal of property and equipment 394 480 Proceeds from disposal of equity accounted investment 1 600 16 173 Net cash outflow from investing activities (24 423 ) (50 969 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from funding 3 699 977 1 399 500 Repayment of funding (3 387 877 ) (945 000 ) Funding provided to group companies (19 495 ) Funding repaid by group companies 10 74 943 Decrease in amounts owing from group companies 81 503 Proceeds on disposal of interest rate swaps 14 233 Proceeds from share issue 2 636 636 Share buy-back (2 623 079 ) Net cash inflow from financing activities 326 424 524 008 Net increase in cash and cash equivalents 105 131 24 855 Cash and cash equivalents at beginning of the period 446 787 421 932 Cash and cash equivalents at end of the period 4 551 918 446 787 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 13

Passionate about our customers & retail

Accounting Policies 1. Presentation of Financial Statements The holding company, RCS Investment Holdings Limited, is a company domiciled in South Africa. The consolidated financial statements as at and comprise the company, its subsidiaries and its associates (together referred to as the RCS Group ). The company has foreign subsidiaries operating in Namibia and Botswana. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa. The accounting policies have been consistently applied with those adopted in the prior financial period. During the current financial period, the financial year has changed from 31 March to 31 December to align with the reporting requirements of the shareholder. The current period financial results are therefore only representative of a 9 month period. The current and prior period results are therefore not comparable. 1.1 Basis of Preparation The consolidated financial statements have been prepared on the basis that the RCS Group is a going concern and on the historical cost basis. The consolidated financial statements were authorised for issue by the board of directors on 22 April 2016. 1.2 Functional and Presentation Currency These consolidated financial statements are presented in South African Rands which is RCS Investment Holdings Limited s functional and presentation currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. 1.3 Basis of Consolidation Subsidiaries The financial statements of subsidiaries are prepared for a consistent reporting period using consistent accounting policies. Business Combination Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the group. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are consolidated until the date that control ceases. The group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the recognised amount of any non-controlling interest in the acquiree; plus if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a gain on bargain purchase is recognised immediately in the income statement. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity it is not remeasured. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 15

Accounting Policies (continued) 1.3 Basis of Consolidation (continued) Loss of control On the loss of control, the RCS Group derecognises the assets and liabilities of the subsidiary, any non controlling interest and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the income statement. Investment in associates An associate is an entity over which the RCS Group has significant influence and which is neither a subsidiary nor a joint arrangement. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. An investment in associate is accounted for using the equity method, except when the investment is classified as held for sale in accordance with IFRS 5 Non-current assets held-forsale and discontinued operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the group s share of net assets of the associate, less any impairment losses. Losses in an associate in excess of the RCS Group s interest in that associate are recognised only to the extent that the RCS Group has incurred a legal or constructive obligation to make payments on behalf of the associate. Any goodwill on acquisition of an associate is included in the carrying amount of the investment, however, a gain on acquisition is recognised immediately in the income statement. Profits or losses on transactions between the RCS Group and an associate are eliminated against the investment to the extent of the RCS Group s interest therein. When the RCS Group reduces its level of significant influence or loses significant influence, the RCS Group proportionately reclassifies the related items which were previously accumulated in equity through other comprehensive income to profit or loss as a reclassification adjustment. In such cases, if an investment remains, that investment is measured to fair value, with the fair value adjustment being recognised in profit or loss as part of the gain or loss on disposal. Jointly controlled operations A jointly controlled operation is a joint arrangement carried on by each operator using its own assets in pursuit of the joint operations. The consolidated financial statements include the assets that the RCS Group controls and the liabilities that it incurs in the course of pursuing the joint operation, and the expenses that the RCS Group incurs and its share of the income that it earns from the joint operation. Jointly controlled ventures A joint venture is a joint arrangement whereby the joint venturers that have joint control of the arrangement, have rights to the net assets of the arrangement. A joint venturer shall recognise its interest in a joint venture as an investment and shall account for the investment by applying the equity method. 1.4 Use of Estimates and Judgements The preparation of consolidated financial statements in conformity with IFRS, requires management to make judgements, estimates and assumptions that may affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. 16 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Accounting Policies (continued) 1.4 Use of Estimates and Judgements (continued) The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods. Estimates and judgements made in applying the RCS Group s accounting policies, that potentially have a significant effect on the amounts recognised in the consolidated financial statements relate to the following: (a) Card and loan receivables are disclosed net of any accumulated impairment losses and future recoveries. The calculation of the impairment amount is performed using the internationally-recognised Markov model. The Markov model uses delinquency roll rates on customer balances to determine the inherent bad debt in a receivables book. The directors believe that the card and loan receivables balances are being measured fairly. 1.5 Segmental Reporting An operating segment is a component of the RCS Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. Operating segments operating results are reviewed regularly by the board, identified as the chief operating decision-maker, to make decisions about resources to be allocated to the segment and assess its performance and for which internal financial information is available. Segment results that are reported to the board include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire equipment and intangible assets. Amounts reported in the group segmental analysis are measured in accordance with International Financial Reporting Standards. (b) The RCS Group reviews the goodwill for impairment at least annually or when events or changes in economic circumstances indicate that impairment may have taken place. Impairment reviews are performed by projecting future cash flows, based upon budgets and plans and making appropriate assumptions about rates of growth and discounting these using a rate that takes into account prevailing market interest rates and the risks inherent in the business. If the present value of the projected cash flows is less than the carrying value of the underlying net assets and goodwill, an impairment charge is required to be recognised in the income statement. This calculation requires the exercise of significant judgment by management, if the estimates prove to be incorrect or performance does not meet expectations, which affects the amount and timing of future cash flows and goodwill may become impaired in future periods. Goodwill is disclosed in note 10. Inter-segment pricing is determined on an arm s length basis. 1.6 Financial Instruments A financial instrument is recognised when the RCS Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the RCS Group s contractual rights to the cash flows from the financial assets expire or if the RCS Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, being the date that the RCS Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the RCS Group s obligations specified in the contract expire or are discharged or cancelled. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 17

Accounting Policies (continued) 1.6 Financial Instruments (continued) Non-derivative financial instruments Non-derivative financial instruments recognised on the statement of financial position include cash and cash equivalents, card, loan and other receivables, funding, amounts owing from and to group companies and trade and other payables. Derivative financial instruments The RCS Group uses derivative financial instruments to hedge its exposure to interest rate risks arising from operational, financing and investment activities. In accordance with its treasury policy, the RCS Group does not hold or issue derivative financial instruments for trading purposes. Initial measurement Financial instruments are initially recognised at fair value. For those instruments not measured at fair value through profit or loss, directly attributable transaction costs are included on initial measurement. Subsequent to initial recognition, these instruments are measured as set out below: Cash and cash equivalents Cash and cash equivalents comprises cash on hand and amounts held on deposit at financial institutions. Cash is measured at amortised cost less impairment losses by using the effective interest method. Card and loan receivables Card and loan receivables are classified as loans and other receivables and are measured at amortised cost using the effective interest method, less accumulated impairment losses. An impairment allowance is made for card and loan receivables which are estimated to be impaired at the reporting date. This impairment allowance is estimated as discussed in note 1.4. Other receivables Other receivables are carried at amortised cost using the effective interest rate method less accumulated impairment losses. Financial liabilities measured at amortised cost Non-derivative financial liabilities including interest-bearing funding and trade and other payables are recognised at amortised cost comprising original debt less principal repayments and amortisation. Derivative financial instruments are subsequently measured at fair value, with the gain or loss on remeasurement being recognised immediately in the income statement. However, where derivatives qualify for hedge accounting, recognition of any gain or loss depends on the nature of the hedge (refer to hedge accounting policy note). The fair value of interest rate swaps is the estimated amount that the RCS Group would receive or pay to terminate the swap at the reporting date, taking into account current interest rates and the current creditworthiness of the swap counterparties. Cashflow hedge accounting Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognised in the income statement. The hedged item is adjusted to reflect changes in its fair value in respect of the risk being hedged; the gain or loss attributable to the hedged risk is recognised in the income statement with an adjustment to the carrying amount of the hedged item. To the extent that they are effective, gains and losses from remeasuring the hedging instruments relating to a cash flow hedge to fair value are initially recognised directly in other comprehensive income and presented in the hedging reserve in equity. If the hedged firm commitment or forecast transaction results in the recognition of a non-financial asset or liability, the cumulative amount recognised in other comprehensive income up to the transaction date is adjusted against the initial measurement of the asset or liability. For other cash flow hedges, the cumulative amount recognised 18 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Accounting Policies (continued) 1.6 Financial Instruments (continued) Cashflow hedge accounting (continued) in other comprehensive income is included in the income statement in the period when the hedged item affects the income statement. The ineffective portion of any gain or loss is recognised immediately in the income statement. Where the hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to occur, the cumulative unrealised gain or loss at that point remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the hedged transaction is no longer expected to occur, the cumulative unrealised gain or loss is recognised in the income statement immediately. Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from disposal with the carrying amount of property and equipment and are recognised net within operating costs in the income statement. Subsequent costs The cost of replacing part of an item of property and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the RCS Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property and equipment are recognised in the income statement as incurred. Offset Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when the RCS Group has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. 1.7 Property and Equipment Recognition and measurement Items of property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment. Depreciation Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property and equipment. The estimated depreciation rates for the current and comparative periods are as follows: Computer hardware 33% Furniture and fittings 16% - 20% Leasehold property 10% Motor vehicles 20% Depreciation methods, useful lives and residual values are reviewed at each reporting date. Depreciation of an item of property and equipment commences when the item is available for use. 1.8 Reinsurance Contract issued in Cell Captive Arrangement In-substance reinsurance contracts issued are those contracts that transfer significant insurance risk from the insurer to the respective company in a cell captive arrangement. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 19

Accounting Policies (continued) Insurance premiums Insurance premiums received or receivable from the insurer are recognised in the income statement when incurred. Claims Claims incurred and reported are recognised in the income statement when the loss events occur. Claims incurred but not yet reported are estimated for compensation payable to the insured and are recognised in the income statement. Amount receivable from insurer The amount receivable from the insurer is initially recognised at the amount paid for the ordinary shares issued by the insurer. The amount receivable from the insurer represents the right to the residual interest in the cell captive and is after initial recognition measured based on the net asset position of the cell captive at the end of the reporting period. This amount is reduced by dividends declared by the insurer. The amount receivable from the insurer is assessed for impairment at each reporting period. If there is objective evidence that the amount receivable is impaired, the carrying amount of the reinsurance asset is reduced to its recoverable amount. The impairment loss is recognised in the income statement. 1.9 Goodwill Goodwill is measured at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised, but tested annually for impairment and when there is an indication of impairment. 1.10 Intangible Assets Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in the income statement as incurred. Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internallygenerated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated: the intention to complete the intangible asset and use or sell it; the ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; the ability to measure reliably the expenditure attributable to the intangible asset during its development; and the technical feasibility of completing the intangible asset. The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internallygenerated intangible asset can be recognised, development expenditure is recognised in the income statement in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately. Client lists Client lists acquired by the RCS Group are stated at historical cost less accumulated amortisation and impairment losses. 20 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Accounting Policies (continued) 1.10 Intangible Assets (continued) Client lists (continued) Amortisation is recognised in the income statement on a straight-line basis over the estimated useful lives of the client lists. The annual rate for the amortisation is 20%. Computer software Computer software acquired by the RCS Group is stated at historical cost less accumulated amortisation and impairment losses. Amortisation is recognised in the income statement on a straight-line basis over the estimated useful lives of intangible assets. The annual rate for the amortisation is 33%. The above amortisation rates are consistent with the comparative period. Amortisation methods, useful lives and residual values are reassessed at each reporting date. All impairment losses are recognised in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost the reversal is recognised in the income statement. Non-financial assets The carrying values of the RCS Group s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated at each reporting date. 1.11 Impairment Non-derivative financial assets A financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset, that can be reliably measured. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. Individually significant financial assets are tested for impairment on an individual basis. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are collectively assessed for impairment by grouping together assets with similar credit risk characteristics. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to goodwill and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 21

Accounting Policies (continued) amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 1.16 Other income Club income Club income is recognised in the income statement when due. 1.12 Stated Capital and Reserves Stated capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any taxation effects. Foreign currency translation reserve Gains and losses arising on translation of the assets, liabilities, income and expenses of foreign operations are recognised directly in equity as a foreign currency translation reserve. Cash flow hedge reserve A non-distributable reserve arises as a result of the application of hedge accounting gains or losses on interest rate swaps. 1.13 Dividends Dividends and the related withholdings tax are accounted for in the period when the dividend is declared. Dividends declared on equity instruments after the reporting date, and the related withholding taxation thereon, are accordingly not recognised as liabilities at the reporting date. 1.14 Interest earned Revenue comprises interest income. Interest is recognised on a time-proportion basis taking account of the principal outstanding and the effective interest rate over the period to maturity, when it is probable that such income will accrue to the RCS Group. 1.15 Interest expense Interest expense comprises interest which has been incurred on borrowings. All borrowing costs are recognised in the income statement. Collection income Collection income is recognised in the income statement when due. Net insurance premiums Insurance premiums are recognised, net of claims, in the income statement when due. Merchant commission income Merchant commission income is recognised when the related transaction on which the commission is earned has been concluded. Service and initiation fee income Service and initiation fee income are recognised in the income statement when due. 1.17 Operating lease Leases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. 1.18 Taxation Income taxation expense comprises current and deferred taxation. Income taxation expense is recognised in the income statement except to the extent that it relates to a transaction that is recognised directly in other comprehensive income or in equity, in which case it is recognised in other comprehensive income or equity as appropriate. 22 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Accounting Policies (continued) 1.18 Taxation (continued) Current taxation is the expected taxation payable/receivable, calculated on the basis of taxable income for the period, using the taxation rates enacted or substantively enacted at the reporting date, and any adjustment of taxation payable/ receivable for previous periods. Deferred taxation is recognised in respect of temporary differences between the taxation base of an asset or liability and its carrying amount. Deferred taxation is not recognised for the following temporary differences: the initial recognition of goodwill; the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and temporary differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred taxation is measured at the taxation rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred taxation assets are recognised for all deductible temporary differences and assessed losses to the extent that it is probable that taxable profit will be available against which such deductible temporary differences and assessed losses can be utilised. Deferred taxation assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxation benefit will be realised. Deferred taxation assets and liabilities are off-set if there is a legally enforceable right to off-set current taxation liabilities and assets, and they relate to income taxes levied by the same taxation authority on the same taxable entity, or on different tax entities, but they intend to settle current taxation liabilities and assets on a net basis, or their taxation assets and liabilities will be realised simultaneously. 1.19 Employee benefits Short-term employee benefits The cost of all short-term employee benefits are recognised in the income statement during the period in which the employee renders the related service. The accruals for employee entitlements to wages, salaries, annual and sick leave represent the amount which the RCS Group has a present obligation to pay as a result of employees services provided to the reporting date. The shortterm benefits have been calculated at undiscounted amounts based on current wage and salary rates. Defined contribution plans The holding company and its subsidiaries contribute to several defined contribution plans. Post-employment benefits A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension, provident and retirement funds are recognised as an employee benefit expense in the income statement as the related service is provided. Prepaid contributions are recognised as an asset to the extent that cash refund or a reduction in future payments is available. Medical aid schemes The RCS Group contributes to medical aid schemes for the benefit of permanent employees and their dependants. The contributions to the schemes are recognised in the consolidated income statement as the related service is provided. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 23

Accounting Policies (continued) 1.20 Foreign Currencies Foreign currency transactions Transactions in currencies other than the entity s functional currency are translated at the rates of exchange ruling on the transaction date. Monetary assets and liabilities denominated in such currencies are translated at the rates ruling at the reporting date. Non-monetary assets and liabilities denominated in such currencies are translated using the exchange rate at the date of the transaction. Foreign currency gains and losses arising on translation are recognised in the income statement. Foreign operations As at the reporting date, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency of the group at the rate of exchange ruling at the reporting date and the income and expenses are translated at the exchange rates at the dates of the transactions or the average rates if it approximates the actual rates. Gains and losses arising on translation of the assets, liabilities, income and expenses of foreign operations are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. 24 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Delivering innovative, uncomplicated solutions for our customers

Notes to the Consolidated Financial Statements 2. New Standards and Interpretations 2.1 Standards and Interpretations not yet effective There are standards and interpretations in issue that are not yet effective. These include the following standards and interpretations that are applicable to the company and may have an impact on future financial statements: Disclosure Initiative (Amendments to IAS 1) The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements. The amendments apply for annual periods beginning on or after 1 January 2016 and early application is permitted. This amendment is not expected to impact the RCS Group. IFRS 9 Financial Instruments IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2009), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. IFRS 9 (2010) introduces additions relating to financial liabilities. In addition, the IFRS 9 impairment model has been changed from an incurred loss model in IAS 39 to an expected loss model. The final version of IFRS 9 was issued in July 2014 and applies to an annual reporting period beginning on or after 1 January 2018 with retrospective application. The RCS Group, with the assistance of the ultimate shareholder, is currently doing an impact analysis for the group. IFRS 15 Revenue from Contracts with Customers IFRS 15 specifies how and when an entity will recognise revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The standard is effective for annual periods beginning on or after 1 January 2017. The impact on the financial statements for the RCS Group is not considered to be material. IFRS 16 Leases IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, ie the customer ( lessee ) and the supplier ( lessor ). IFRS 16 replaces the previous leases Standard, IAS 17 Leases, and related Interpretations. IFRS 16 has one model for lessees which will result in almost all leases being included on the Statement of Financial position. The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted only if the entity also adopts IFRS 15. The RCS Group is assessing the potential impact on the financial statements resulting from the application of IFRS 16. 26 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 3. Operating Segments The RCS Group has two reportable segments, as described below, which are the RCS Group s strategic business units. The strategic business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each strategic business unit, the RCS Group s board reviews internal management reports on a monthly basis. The following summary describes the operations in each of the RCS Group s reportable segments: Cards segment - a general utility and private label card product offered to consumers, delivered via participating merchant outlets in South Africa, Namibia and Botswana and their related insurance products. Loans segment - short and medium-term loans offered to consumers and related insurance products provided to individuals. All other segments includes RCS Investment Holdings Limited, RCS Home Loans Proprietary Limited, RCS Collections Proprietary Limited and once-off corporate costs. RCS Investment Holdings Limited acts as the external funding vehicle for the RCS Group. Commercial paper and bonds are issued via this entity (see note 17). RCS Home Loans Proprietary Limited operations include the servicing of current home loans. RCS Collections Proprietary Limited is a registered debt collector. None of these segments meets any of the quantitative thresholds for determining reportable segments in the current or previous financial periods. The RCS Group s external customers and assets are predominantly situated in South Africa, and no single customer comprises 10% or more of revenue for the RCS Group. The accounting policies of the reportable segments are the same as described in note 1. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 27

Notes to the Consolidated Financial Statements (continued) 3. Operating Segments (continued) Information regarding the results of each reportable segment is included below. Certain costs including back office services have not been allocated between the divisions for internal reporting purposes. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the RCS Group s board. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Cards L loans O other T total 31 December 2015 R 000 R 000 R 000 R 000 Interest earned 837 217 222 910 1 060 127 Interest expense (197 487 ) (42 352 ) 4 419 (235 420 ) Net interest income 639 730 180 558 4 419 824 707 Inter-segmental credit income 17 370 17 370 Other income 438 335 87 177 864 526 376 Profit / (loss) before taxation 283 339 103 191 (108 716 ) 277 814 Depreciation and amortisation (16 761 ) (5 081 ) (21 842 ) Capital expenditure 23 133 4 304 27 437 Segment assets 5 802 950 1 079 749 65 674 6 948 373 Segment liabilities (3 779 136 ) (703 180 ) (46 564 ) (4 528 880 ) 31 March 2015 Interest earned 948 692 312 388 1 261 080 Interest expense (217 389 ) (55 705 ) 1 750 (271 344 ) Net interest income 731 303 256 683 1 750 989 736 Inter-segmental credit income 22 011 22 011 Other income 537 916 123 060 13 885 674 861 Share of profit from equity accounted investments 1 977 1 977 Profit / (loss) before taxation 324 234 186 459 (70 330 ) 440 363 Depreciation and amortisation (13 042 ) (6 016 ) (19 058 ) Capital expenditure 55 286 12 336 67 622 Segment assets 5 133 251 1 145 417 47 800 6 326 468 Segment liabilities (3 312 641 ) (739 165 ) (49 674 ) (4 101 480 ) 28 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 4. Cash and Cash Equivalents R 000 R 000 Bank balances 551 915 446 786 Cash on hand 3 1 5. Card and Loan Receivables 551 918 446 787 Demand to one month 593 487 505 062 One to three months 988 647 879 874 Three months to one year 2 787 832 2 437 701 More than one year 2 196 677 2 213 697 Gross card and loan receivables 6 566 643 6 036 334 Less: allowance for impaired card and loan receivables (604 695 ) (528 108 ) Net card and loan receivables 5 961 948 5 508 226 Analysis of card and loan receivables by type Card and private label receivables 5 066 143 4 544 436 Personal loans receivables 895 805 963 790 5 961 948 5 508 226 General card and private label receivables consist of a number of individual unsecured revolving card accounts as well as amounts due for services delivered on credit. The accounts attract variable and fixed interest rates and terms vary from revolving to 36 months. The average effective interest rate for the period under review is 21.24% (31 March 2015: 20.86%). Personal loan receivables are comprised of a number of individual unsecured loans. The personal loans are charged at fixed interest rates and terms vary from 12 to 60 months. The interest rate on each loan is determined when the loan is initially advanced on the basis of the risk profile of the customer. The average effective interest rate for the period under review is 28.52% (31 March 2015: 29.07%). The RCS Group s management of, and exposure to, market and credit risk is disclosed in note 30. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 29

Notes to the Consolidated Financial Statements (continued) 5. Card and Loan Receivables (continued) The RCS Group monitors the ageing of its card and loan receivables on a contractual basis. The ageing of net card and loan receivables at the reporting date was as follows: R 000 R 000 Not past due 5 002 089 4 525 127 Past due demand to one month 644 194 653 584 Past due one to two months 177 255 197 534 Past due two to three months 78 015 77 386 Past due more than three months 60 395 54 595 5 961 948 5 508 226 The movement in the allowance for impairment in respect of card and loan receivables during the period was as follows: Balance at beginning of period 528 108 465 523 Allowance for impairment raised 427 163 506 265 Impairment loss recognised (350 576 ) (443 680 ) Balance at end of period 604 695 528 108 As percentage of gross card and loan receivable book 9.21% 8.75% Customers that are not past due and have a good track record with the RCS Group make up 76.23% of gross card and loan receivables (31 March 2015: 74.33%). Geographical concentration of customers The RCS Group s operating activities are situated in the South Africa, Namibia and Botswana. The geographical concentration of gross card and loan receivables at the reporting date was as follows: Botswana 1.18% 1.30% Eastern Cape 5.58% 5.54% Free State 4.22% 4.23% Gauteng 35.08% 35.22% KwaZulu-Natal 13.67% 13.48% Limpopo 4.37% 4.37% Mpumalanga 12.35% 12.01% Namibia 1.12% 1.57% North West 2.82% 2.74% Northern Cape 2.49% 2.41% Western Cape 17.12% 17.13% 100.00% 100.00% 30 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 6. Other Receivables R 000 R 000 Other receivables 3 117 12 266 Prepayments 8 508 5 772 7. Amount Receivable from Insurer 11 625 18 038 The Group retails insurance products to customers. The principal risk that the insurance cells face is that the actual claims and benefit payments, or the timing thereof, differ from expectations. This is influenced by the frequency of claims, severity of claims, actual benefits paid and subsequent development of long-term claims. Therefore, the objective of the cells is to ensure that sufficient reserves are available to cover these potential liabilities. The Group acts as intermediary between the Cell Insurer and the RCS customers. The risk structure per product is as follows: Guardrisk Insurance Company Limited (RCS Cards Proprietary Limited Cell no. 160) The RCS Group sells short-term income protection insurance on behalf of Guardrisk to its customers. The RCS Group bears 100% of the re-insurance risk for all products. Guardrisk Life (RCS Cards Proprietary Limited Cell no. 78) The RCS Group sells long-term insurance policies with death benefits on behalf of Guardrisk to its customers. The RCS Group bears 100% of the re-insurance risk for all products. The re-insurance asset consists of the following components: Reconciliation of amount receivable from insurer R 000 R 000 Balance at beginning of period 94 919 88 552 Increase based on the shareholders funds of the cell captive 83 930 104 705 Dividend received from the insurer (83 999 ) (98 338 ) Balance at end of period 94 850 94 919 The balance at the end of the period comprises: Cash and cash equivalents 120 446 134 762 Other receivables 14 769 13 375 Trade and other payables (18 889 ) (23 771 ) Taxation payable (21 476 ) (29 447 ) 94 850 94 919 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 31

Notes to the Consolidated Financial Statements (continued) 8. Property and Equipment Accumulated Carrying Accumulated Carrying Cost depreciation value Cost depreciation value R 000 R 000 R 000 R 000 R 000 R 000 Computer hardware 31 788 (19 099 ) 12 689 22 283 (15 025 ) 7 258 Furniture and fittings 60 795 (22 106 ) 38 689 64 803 (16 721 ) 48 082 Leasehold property 14 830 (1 609 ) 13 221 1 872 (534 ) 1 338 Motor vehicles 8 540 (4 648 ) 3 892 8 426 (2 134 ) 6 292 115 953 (47 462 ) 68 491 97 384 (34 414 ) 62 970 Reconciliation of carrying amounts: Carrying amount at Disposals/ Carrying amount beginning of period Additions transfers Depreciation at end of period 31 December 2015 R 000 R 000 R 000 R 000 R 000 Computer hardware 7 258 9 505 (4 074 ) 12 689 Furniture and fittings 48 082 4 605 (8 457 ) (5 541 ) 38 689 Leasehold property 1 338 4 345 8 457 (919 ) 13 221 Motor vehicles 6 292 610 (366 ) (2 644 ) 3 892 62 970 19 065 (366 ) (13 178 ) 68 491 31 March 2015 Computer hardware 8 957 3 565 (1) (5 263 ) 7 258 Furniture and fittings 1 002 47 795 (715) 48 082 Leasehold property 1 591 (253) 1 338 Motor vehicles 6 080 1 691 (613) (866) 6 292 17 630 53 051 (614) (7 097 ) 62 970 9. Intangible Assets Accumulated Carrying Accumulated Carrying Cost amortisation value Cost amortisation value R 000 R 000 R 000 R 000 R 000 R 000 Client lists 1 980 (1 980 ) 1 980 (1 980 ) Computer software 62 227 (38 105 ) 24 122 54 875 (29 441 ) 25 434 64 207 (40 085 ) 24 122 56 855 (31 421 ) 25 434 32 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 9. Intangible Assets (continued) Reconciliation of carrying amounts: Carrying amount at Additions/ Carrying amount beginning of period transfers Disposals Amortisation at end of period 31 December 2015 R 000 R 000 R 000 R 000 R 000 Computer software 25 434 7 352 (8 664 ) 24 122 25 434 7 352 (8 664 ) 24 122 31 March 2015 Client lists 5 (5) Computer software 22 819 14 571 (11 956 ) 25 434 22 824 14 571 (11 961 ) 25 434 10. Goodwill R 000 R 000 Goodwill 56 855 56 855 Goodwill acquired through business combinations has been allocated to three individual cash-generating units: Cash-generating unit R 000 R 000 General Purpose Card Division 12 917 12 917 Personal Loan Division 36 481 36 481 MDD Private Label Card Division 7 457 7 457 56 855 56 855 Goodwill is tested annually for impairment and once there is an indication of impairment. The recoverable amount of the cashgenerating units are based on the higher of the value in use, determined by a calculation which covers a five-year period, or the fair value less costs to sell. The cash flows have been discounted at a rate of 11% (31 March 2015: 11%). Significant assumptions applied when reviewing the goodwill impairment are that future profits were estimated using historical information and approved budgets, anticipated growth in advances or turnover and expectations of future interest rates. Based on this assessment management is of the opinion that for all of the cash-generating units the value in use exceeds the carrying amount and therefore no impairment is recognised. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 33

Notes to the Consolidated Financial Statements (continued) 11. Deferred Taxation R 000 R 000 Deferred tax asset 172 629 91 019 172 629 91 019 Reconciliation of deferred tax asset: At beginning of the period 91 019 15 137 Income statement expense: - Provisions 15 338 16 509 - Assessed loss 10 (109) - Capital allowances 750 71 - Allowance for impaired card and loan receivables 58 366 61 271 - Provision for recoveries 3 880 (8 735 ) - Unrealised gain (996) (105) Other comprehensive income - Cash flow hedges 4 262 6 980 Balance at end of period 172 629 91 019 The balance at the end of period comprises temporary differences relating to: - Provisions 66 445 51 107 - Assessed loss 10 - Capital allowances 1 013 263 - Allowance for impaired card and loan receivables 141 137 82 771 - Provision for recoveries (34 529 ) (38 409 ) - Unrealised gains (1 447 ) (451) - Cash flow hedges transferred to profit or loss (4 262 ) 172 629 91 019 12. Related Parties Ultimate shareholder BNP Paribas Société Anonyme 100% 100% Amounts owing from group company R 000 R 000 Redwood Third Party Processing Proprietary Limited 81 81 Amounts owing from group company was unsecured, interest free and payable within 30 days of the invoice. 34 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 12. Related Parties (continued) Funding owing from group company R 000 R 000 Other receivables as disclosed in note 6 includes funding owing from the following group companies: Redwood Third Party Processing Proprietary Limited 10 10 The loan was denominated in Rands, bore interest at prime plus 1% and maturity was after three months to one year. Related party transactions Transactions with BNP Paribas Société Anonyme Commitment fees (6 781 ) (5 893 ) Transactions with Redwood Third Party Processing Proprietary Limited Interest income 201 Interest of directors in contracts No directors directly or indirectly hold any shares in RCS Investment Holdings Limited. No directors have any interest in contracts that are in contravention of section 75 of the Companies Act of South Africa. Loans to directors No loans have been made to directors. Directors and key management compensation Director emoluments Executive fees 24 185 23 750 Key management compensation 9 Months ended 12 Months ended R 000 R 000 Key management personnel are those having authority and responsibility for planning, directing and controlling activities, directly or indirectly, including any director of the RCS Group. Directors and executives of the RCS Group have been classified as key management personnel. No key management personnel had a material interest in any contract of significance with any group company during the period under review. 9 Months ended 12 Months ended R 000 R 000 Remuneration paid to key management personnel are as follows: Short-term benefits 40 112 42 035 Post-retirement benefits 1 623 2 001 Total remuneration 41 735 44 036 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 35

Notes to the Consolidated Financial Statements (continued) 13. Investments in Associates The RCS Group has the following equity investments, over which it exercised significant influence: Portion of Place of ownership incorporation interest and Principal Carrying Carrying and operation voting power held activity value value R 000 R 000 Name of associates Redwood Third Party Consumer finance Processing Proprietary Limited South Africa 25% outsourcing 2 386 2 386 The carrying amounts of associates were shown net of impairment losses and reversals. During the current financial period the investment in Redwood was impaired with R786 thousand. The impairment is included in note 23. Subsequent to the impairment, the investment in Redwood was sold for R1.6 million. No profit or loss was realised on the sale. The RCS Group s share of the profit and loss was as follows: Profit 9 Months ending 31 December 2015 R 000 Redwood Third Party Processing Proprietary Limited 12 Months ending 31 March 2015 Redwood Third Party Processing Proprietary Limited 170 Retail Capital Proprietary Limited 1 807 1977 14. Stated capital R 000 R 000 Authorised 80 000 (31 March 2015: 80 000) Ordinary shares of no par value Issued 40 000 (31 March 2015: 40 000) Ordinary shares of no par value 2 636 636 2 636 636 36 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 14. Stated capital (continued) Reconciliation of number of shares Number of shares 9 Months ended 12 Months ended Opening balance 40 000 40 000 Share issue 40 000 Share buy-back (40 000 ) Closing balance 40 000 40 000 A distribution to shareholder amounting to R250 million was declared after the date of the reporting period but before the financial statements were authorised for issue (31 March 2015: nil). 15. Foreign currency translation reserve The foreign currency reserve comprises gains and losses arising on translation of the assets, liabilities, income and expenses of foreign operations in Botswana. R 000 R 000 Balance at beginning of period 1 673 1 709 Foreign currency translation differences for foreign operation 7 625 (36) Balance at end of period 9 298 1 673 16. Cash flow hedge reserve The cash flow hedge reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instrument related to hedged transactions that have not yet occurred. Balance at beginning of period 10 960 28 910 Effective portion of changes in fair value, net of taxation (712) (17 950 ) Disposal of cash flow hedge reserve, net of taxation (10 248 ) Balance at end of period 10 960 Comprises as follows: Interest rate swaps (assets) - fair value 15 249 Interest rate swaps (liabilities) - fair value (27) Total fair value of interest rate swaps 15 222 Deferred taxation on interest rate swaps (4 262 ) Total deferred taxation on interest rate swaps (4 262 ) 10 960 Interest rate swaps were disposed of during the year for R14,2 million. The reclassification of other comprehensive income to profit or loss has been included in note 23. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 37

Notes to the Consolidated Financial Statements (continued) 17. Funding By maturity R 000 R 000 Demand to one month 2 700 109 000 One to three months 385 000 445 000 Three months to one year 1 150 000 775 000 More than a year 2 544 700 2 441 300 4 082 400 3 770 300 By nature Domestic medium-term note programme (a) 1 925 000 2 370 000 Term funding (b) 2 157 400 1 400 300 4 082 400 3 770 300 (a) The domestic medium-term notes are denominated in Rands, have a nominal value of R1,925 million (31 March 2015: R2,370 million), are unsecured and bear interest at variable interest rates linked to 3 month JIBAR. Maturity as at the reporting date is as follows: R500 million between three months and one year and R1,425 million after more than one year (31 March 2015: R245 million within one to three months, and R500 million between three months and one year and R1,625 million after more than one year). (b) Term funding is denominated in Rands, unsecured and bears interest at variable interest rates. Maturity as at the reporting date is R2.7 million demand to one month, R385 million within one to three months, R650 million within three months to one year and R1,119.7 million after more than one year (31 March 2015: R109 million demand to one month, R200 million within one to three months, R275 million within three months to one year and R816.3 million after more than one year). 18. Trade and other payables Trade and other payables 438 739 324 137 Leave pay accrual 4 585 4 374 VAT 3 156 2 642 19. Operating leases, commitments and contingent liabilities Operating leases The RCS Group occupies the following properties: 446 480 331 153 Liberty Grande This is a property leased from Precious Prospect Trading 50 Proprietary Limited effective 1 July 2014. Mowbray Business Park This is a property leased from Acucap Investments Proprietary Limited effective 1 November 2014. 38 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) R 000 R 000 19. Operating leases, commitments and contingent liabilities (continued) Operating leases (continued) The total future minimum lease payments under non-cancellable operating leases are as follows: No later than 1 year 21 811 20 663 Between 1 and 5 years 53 456 53 654 Later than 5 years 16 284 75 267 90 601 Capital commitments Authorised 21 950 51 520 Committed 5 488 16 364 The group has sufficient funding to finance the authorised and committed capital commitments. Contingent liabilities Performance guarantee - SA Post Office 4 000 4 000 20. Interest earned 9 Months ended 12 Months ended R 000 R 000 Card receivables 837 217 948 692 Loan receivables 222 910 312 388 1 060 127 1 261 080 21. Other income Club income 2 410 3 267 Collection income 39 874 50 275 Net insurance premiums 138 792 185 118 Merchant commission 53 015 62 605 Service and initiation fee income 287 707 354 406 Other income 4 578 19 190 526 376 674 861 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 39

Notes to the Consolidated Financial Statements (continued) 22. Cost of risk 9 Months ended 12 Months ended R 000 R 000 Movement in allowance for impaired card and loan receivables 74 795 63 469 Bad debts recovered (161 017 ) (182 326 ) Bad debts write-off 511 593 626 006 Movement in provision for future recoveries 13 964 (31 187 ) 23. Profit before taxation 439 335 475 962 Included within profit before taxation are the following items: Amortisation of intangible assets 8 664 11 961 Auditor s remuneration - External 1 105 1 043 Consultancy fees 20 815 33 776 Depreciation of property and equipment 13 178 7 097 Donations 1 165 984 Foreign exchange loss 48 115 Legal fees 708 680 Impairment of investment in associate 786 (Profit) / loss on disposal of property and equipment (28) 134 Manpower costs - Salaries 193 748 239 337 - Directors emoluments 24 185 23 750 Premises costs 35 292 28 860 Reclassification of cash flow hedge to profit 14 233 Profit on sale of investment in associate 12 634 24. taxation Income taxation recognised in the income statement South African current taxation: - Current period 155 402 197 659 - Prior period under provision 1 460 Non-South African current taxation: - Current period 1 613 3 327 - Prior period under provision 776 - Withholdings taxation 307 346 Security transfer taxation - Current period 6 558 157 322 210 126 40 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 24. taxation (continued) Income taxation recognised in the income statement (continued) 9 Months ended 12 Months ended R 000 R 000 Deferred taxation: - Current period (77 348 ) (68 902 ) (77 348 ) (68 902 ) 79 974 141 224 Reconciliation of the taxation expense Standard taxation rate 28.00% 28.00% Non-South African taxation rate (0.22%) (0.24%) Non-deductible expenditure 0.90% 1.89% Withholdings taxation 0.11% 0.08% Prior period normal taxation under provision 0.51% Capital gains taxation 0.34% Securities transfer taxation 1.49% Current period s charge as a percentage of profit before taxation 28.79% 32.07% 25. Cash utilised in operations Profit before taxation 277 814 440 363 Adjustments for: - Amortisation of intangible assets 8 664 11 961 - Depreciation of property and equipment 13 178 7 097 - (Profit) / loss on disposal of equipment (28) (134) - Share of profit from equity accounted investments (1 977 ) - Foreign currency exchange differences 7 625 (36) - Impairment of investment in associate 786 - Profit on sale of investment (12 634 ) - Profit on sale of interest rate swaps (14 233 ) Changes in working capital: - Increase in card and loan receivables (453 722 ) (763 222 ) - Decrease in other receivables 6 403 11 182 - Decrease / (increase) in amount receivable from cell insurer 69 (6 367 ) - Increase in trade and other payables 115 327 76 535 (38 117 ) (236 964 ) 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 41

Notes to the Consolidated Financial Statements (continued) 26. Taxation paid R 000 R 000 Taxation receivable at beginning of period 4 504 3 410 Current taxation charge (157 322 ) (210 126 ) Taxation receivable at end of period (5 935 ) (4 504 ) 27. Subsidiaries (158 753 ) (211 220 ) Details of the RCS Group s subsidiaries at 31 December 2015 are as follows: Portion of Place of ownership incorporation Registration interest and Principal and operation number voting power held activity Name of subsidiary RCS Botswana Proprietary Limited Botswana 2008/3191 100% Retail credit RCS Cards Proprietary Limited South Africa 2000/017891/07 100% Retail credit RCS Collections Proprietary Limited South Africa 2008/002800/07 100% Collections RCS Home Loans Proprietary Limited South Africa 2005/020504/07 100% Home Loans RCS Investment Holdings Namibia Proprietary Limited Namibia 2008/0136 100% Retail credit RCS Personal Finance Proprietary Limited South Africa 1968/008240/07 100% Dormant 28. Interest in joint operations RCS Home Loans Proprietary Limited, a 100% held subsidiary of RCS Investment Holdings Limited, has entered into a joint operation partnership with SA Home Loans Proprietary Limited. A summary of the results of the joint operation for the current and prior financial periods are as follows: Proportion of ownership interest and voting power held 50% 50% R 000 R 000 Current assets 21 732 28 893 Current liabilities 18 094 23 459 Income 1 774 4 784 Expenditure 4 204 4 449 29. Employee benefits Retirement funds Alexander Forbes Retirement Annuity: Defined contribution plan All permanent employees of RCS Botswana Proprietary Limited under normal retirement age are required to be members of the Alexander Forbes Retirement Annuity. The employees and the employers make equivalent contributions in respect of the retirement annuity benefits. In addition, the employers contribute to death and disability benefits, reinsurance, and administration and management costs. 42 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 29. Employee benefits (continued) Retirement funds (continued) Liberty Life Pension Fund: Defined contribution plan All employees of the Massdiscounters credit business were transferred to the Liberty Life Pension Fund. The employees and the employers make equivalent contributions in respect of pension fund benefits. In addition, the employers contribute to death and disability benefits, reinsurance, and administration and management costs. Liberty Life Provident Fund: Defined contribution plan The Liberty Life Provident Fund, which is governed by the provisions of the Pension Funds Act No. 24 of 1956, is a defined contribution plan. It provides comprehensive retirement and associated benefits for members and their dependants. All permanent employees of RCS Group, excluding those that are employed by RCS Botswana Proprietary Limited and RCS Namibia Proprietary Limited, are members of the provident fund. The employer pays 14% contributions in respect of provident fund benefits. In addition, the employers contribute to death and disability benefits, reinsurance, and administration and management costs. Sanlam Retirement Annuity: Defined contribution plan All permanent employees of RCS Investment Holdings Namibia Proprietary Limited under normal retirement age are required to be members of retirement annuities managed by Sanlam. The employees and the employers make equivalent contributions in respect of retirement annuity benefits. In addition, the employers contribute to death and disability benefits, reinsurance, and administration and management costs. Number of members Contributions 9 Months ended 12 Months ended 9 Months ended 12 Months ended Summary per fund R 000 R 000 Alexander Forbes Retirement Annuity 6 6 14 37 Sanlam Retirement Annuity 4 3 7 18 Liberty Life Provident Funds 1 070 901 16 111 18 411 Liberty Life Pension Fund 8 8 54 70 1 088 918 16 186 18 536 medical aid schemes BOMaid: Defined contribution plan All permanent staff of the RCS Botswana Proprietary Limited are required to become members of the medical plans of their choice offered by BOMaid. Total membership currently stands at 2 (31 March 2015: 3) principal members. The total payments amounted to R11 561 (31 March 2015: R18 580). The RCS Group has no obligation to fund medical aid contributions for current or retired employees. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 43

Notes to the Consolidated Financial Statements (continued) 29. Employee benefits (continued) medical aid schemes (continued) Discovery Health: Defined contribution plan All permanent staff of RCS Cards Proprietary Limited and RCS Home Loans Proprietary Limited are required to become members of the medical plans of their choice offered by Discovery Health. Total membership currently stands at 602 (31 March 2015: 462) principal members. The total payments amounted to R6 million (31 March 2015: R6.7 million). The RCS Group has no obligation to fund medical aid contributions for current or retired employees. All permanent staff of the RCS Collections Proprietary Limited are required to become members of the medical plans of their choice offered by Discovery Health. Total membership currently stands at 47 (31 March 2015: 44) principal members. The total payments amounted to R437 629 (31 March 2015: R434 439). The RCS Group has no obligation to fund medical aid contributions for current or retired employees. Nexus Medical Aid: Defined contribution plan All permanent staff of the RCS Investment Holdings Namibia Proprietary Limited are required to become members of the medical plans of their choice offered by Nexus Medical Aid. Total membership currently stands at 0 (31 March 2015: 0) principal member. The total payments amounted to R0 (31 March 2015: R6 188). The RCS Group has no obligation to fund medical aid contributions for current or retired employees. 44 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 30. Risk management overview The RCS Group has exposure to risks from its use of financial instruments. This note presents information about the group s exposure to these risks and the RCS Group s objectives, policies and processes for measuring and managing risk. Further quantitative disclosures are included throughout the financial statements. The RCS Group business model focuses primarily on providing unsecured credit risk whilst trying to minimise or avoid all other risk types. The RCS Group views risks as an inherent part of running a successful business. Risks are not only mitigated but are also analysed and investigated for opportunities. Successful risk management therefore entails understanding which risks can enhance shareholder value and which risks are incidental and potentially value destroying. RCS Group s risk management policies are established to identify and analyse the risks faced by the group to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the group s activities. The RCS Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The RCS Group board of directors has overall responsibility for the establishment and oversight of the RCS Group s risk management framework. The board has established the Board Audit Committee (BAC), the Asset and Liability Committee (ALCO), the RCS Internal Risk and Audit Forum, the Credit Risk Committee and the Social and Ethics Committee. The BAC is responsible for monitoring the internal and external audit functions and regulatory compliance for the RCS Group. The ALCO Committee is responsible for developing and monitoring all affairs pertaining to liquidity risk, interest rate risk, foreign currency risk and capital adequacy risk. The RCS Internal Risk and Audit Forum is responsible for developing and monitoring the company s risk management policies, as well as the audit, accounting, internal control and financial reporting practices. The Credit Risk Committee is responsible for developing and monitoring credit risk within the group. The Social and Ethics Committee is responsible for monitoring the RCS Group s social and economic development. These committees report quarterly to the board of directors on its activities. The risk management process established by the RCS Group continues and feeds into the risk management process established by its holding company. The holding company s risk management process is in turn managed by the RCS Board Audit Committee. The following subcommittees comprising executives and senior management have been established to deal with the following risks facing the company: (a) Assets and Liability Committee (ALCO) - liquidity, interest rate, foreign currency, and capital adequacy risk (b) RCS Internal Risk and Audit Forum - technology, operational and reputational risk (c) Compliance Forum - legal and compliance risk (d) Credit Risk Committee - credit risk (e) Social and Ethics Committee 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 45

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) Credit risk Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations on card, loan and other receivables, amounts owing from group companies and cash and cash equivalents. The risk on cash and cash equivalents is managed through dealing with well-established financial institutions with high credit standing. The risk arising on card, loan and other receivables is managed through a stringent policy on the granting of credit limits, continual review and monitoring of these limits. The risk on amounts owing from group companies are managed through monitoring the value of the amounts due and ensuring regular settlement thereof. The RCS Group does not consider there to be any significant concentration of credit risk in respect of which adequate impairment has not been raised for the financial assets detailed below, in the credit risk exposure. The RCS Group does not require collateral in respect of card and loan receivables. The RCS Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of card and loan receivables. The allowance is calculated using the internationally-recognised Markov model and other statistical indicators. Management aims to maintain a certain level of non-performing loan coverage, which can be influenced by the delinquency and underlying performance of the card and loan receivables. The Markov model uses delinquency roll rates on customer balances to determine the inherent bad debt in a card and loan book. The board of directors believe that card and loan receivables balances are being measured fairly. Credit risk exposure The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. The maximum exposure to credit risk at the reporting date was: R 000 R 000 Cash and cash equivalents 551 918 446 787 Card and loan receivables 5 961 948 5 508 226 Other receivables 3 117 12 266 Amount receivable from insurer 94 850 94 919 Interest rate swaps 15 249 Amounts owing from group company 81 6 611 833 6 077 528 Liquidity risk Liquidity risk is the risk that the RCS Group will not be able to meet its financial obligations as they fall due. The RCS Group s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the RCS Group s reputation. 46 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) liquidity risk (continued) This risk is managed through cash flow forecasts, stress testing scenarios on cash flow, the optimisation of daily cash management and by ensuring that adequate borrowing facilities are maintained. The objective is to have positive liability to asset term matching with liabilities carrying longer terms than the underlying book assets. The RCS Group has shareholder facilities in place to mitigate the roll over risk of funding in issue. The RCS Group monitors and evaluates all financial covenants on a monthly basis to ensure that the RCS Group can oblige to its commitments made to borrowers. In terms of the articles of association, the group s borrowing powers are unlimited. The RCS Group has available unutilised bank facilities to the value of R427.6 million (31 March 2015: R684.7 million) and has a shareholder facility of R1.5 billion (31 March 2015: R1.5 billion) at the end of the financial period. Liability cash flows are presented on an undiscounted basis. Contractual maturities The table below analyses liabilities of the RCS Group into relevant maturity groupings based on the remaining period at reporting date to the contractual maturity date, including interest: Carrying Demand to one to three Three months more than amount one month months to one year one year total R 000 R 000 R 000 R 000 R 000 R 000 31 December 2015 Liabilities Non-derivative financial liabilities Funding (4 082 400 ) (32 728 ) (441 643 ) (1 385 938 ) (2 676 683 ) (4 536 992 ) Trade and other payables (438 739 ) (189 114 ) (100 731 ) (148 894 ) (438 739) (4 521 139 ) (221 842 ) (441 643 ) (1 486 669 ) (2 825 577 ) (4 975 731 ) 31 March 2015 Liabilities Non-derivative financial liabilities Funding (3 770 300 ) (135 415 ) (493 789 ) (958 394 ) (2 611 065 ) (4 198 663 ) Trade and other payables (328 511 ) (133 870 ) (72 026 ) (21 914 ) (100 701 ) (328 511) (4 098 811 ) (269 285 ) (565 815 ) (980 308 ) (2 711 766 ) (4 527 174 ) Derivative financial liabilities Interest rate swaps (27) (27) (27) (27) (27) (27) (4 098 838 ) (269 285 ) (565 842 ) (980 308 ) (2 711 766 ) (4 527 201 ) 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 47

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the RCS Group s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Currency risk The RCS Group transacts in the local currency, Namibian Dollar and Botswana Pula. No foreign currency risk management exists relating to transactions in Namibian Dollar as the exchange rate is one to one to the South African Rand. The RCS Group does not use forward exchange contracts to hedge its currency risk as assets held in a foreign currency, such as Botswana Pula, comprise less than 3% of the total assets of the group. Interest rate risk Interest rate risk is the sensitivity of the financial performance and/or the financial position of the RCS Group due to movements in the interest rate. The RCS Group is exposed to interest rate risk as it both borrows and lends funds. The RCS Group occasionally enters into interest rate swap contracts for the purposes of cash flow hedging. These interest rate swaps require the RCS Group to pay interest at various fixed rates applied to notional amounts and entitle the RCS Group to receive various variable rates applied to the same notional amounts. The swaps are used to hedge the risk that the RCS Group is exposed to as a result of the fact that a significant portion of the RCS Group s receivables bear interest at fixed rates (refer to note 5 for detail) whilst its borrowings bear interest at variable rates. Profile At the reporting date the interest rate profile of the company s interest-bearing financial instruments was: Interest rate Carrying value 9 Months ended 12 Months ended 31 December 31 March 2015 2015 % % R 000 R 000 Fixed rate instruments Card and loan receivables 25.5 25.8 1 524 984 1 585 708 Financial assets 1 524 984 1 585 708 Variable rate instruments Card receivables 21.3 20.9 4 436 964 3 922 518 Bank balances 6.6 6.9 5.0 6.7 551 918 446 787 Other receivables (see note 12) 8.3 13.3 10 Financial assets 4 988 882 4 369 315 Funding 7.2 11.3 6.9 11.1 4 082 400 3 770 300 Financial liabilities 4 082 400 3 770 300 Fair value sensitivity analysis for fixed rate instruments The RCS Group does not account for any fixed rate financial assets and liabilities at fair value through the income statement, and the RCS Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss. 48 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates for the duration of the financial period would have increased/(decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables remain constant. The sensitivity analysis reflects the impact of a rate change immediately following the reporting date for all assets and liabilities accounted for at the reporting date. The analysis is performed on the same basis as for the comparative period. Profit or (loss) 100 bp increase R 000 31 December 2015 Variable rate financial assets 46 791 Variable rate financial liabilities (39 264 ) Cash flow sensitivity net 7 527 31 March 2015 Variable rate financial assets 39 778 Variable rate financial liabilities (35 431 ) Interest rate swaps (1 018 ) Cash flow sensitivity net 3 329 A decrease of 100 basis points in interest rates for the duration of the financial period would have the equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant. Capital management Capital management is performed at a group level for RCS Group and its subsidiaries. The objective is to maintain sufficient levels of capital to support the ongoing sustainability and viability of the business. Capital is retained in the business for the following main objectives: (a) to provide a certain amount of cover or buffer should unexpected losses take place either due to market or operational risks, (b) to provide a certain amount of cover or buffer should unexpected losses take place due to credit risks, (c) to support the level of debt in the business as a first loss position and thereby to achieve a particular credit rating on the debt in the business, (d) as a tool that could be increased or decreased to ensure maintenance of an appropriate credit rating level in the future, and (e) to facilitate the necessary asset growth objectives in the business. It is the responsibility of the ALCO and the board to determine the appropriate level of capital taking into account the risks within the various lines of business and the types of assets held within these business areas. The board considers, amongst others, the following factors when determining the level of capital required to be held within a division and against a particular class of assets: (a) the historical losses that have taken place on the disposal of assets, bad debt write off and other operational losses, (b) a view on factors going forward that could cause an asset or category of assets to be obsolete or have a reduction in value, 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 49

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) Capital management (continued) (c) concentration risks on asset classes, market sectors or particular customers should be considered and certain maximum exposure levels from a line of business and group perspective will be determined, (d) review the strategic portfolio of businesses and ensure that capital is allocated to achieve required returns whilst maintaining a balanced portfolio with no line of business attracting an inappropriate amount of the capital, (e) the length of track record that the business has in terms of using and managing a particular asset class and portfolios within that asset class, and (f) review and benchmarking against local and international peers in the financial services, non banking and banking sectors where applicable. The ALCO reviews capital adequacy on a quarterly basis. The board will review the capital policy on an annual basis and make any amendments to the requirements prior to making a final dividend declaration. The shareholder is made aware that the dividend policy is subject to sufficient capital being maintained to achieve an adequate capital maintenance policy. Any proposed reduction of the overall capital adequacy levels will be discussed and motivated with the rating agencies and certain of the main banking relationships to ensure that a reduction in minimum capital would not have adverse consequences on the funding profile of the business. Fair values of financial instruments The fair values together with the carrying amounts, net gains and losses recognised in the statement of comprehensive income, total interest income and total interest expense of each class of financial instrument are as follows: Net (expense) / gains recognised in statement of Total interest Carrying comprehensive income / value Fair value income (expense) Impairment R 000 R 000 R 000 R 000 R 000 31 December 2015 Assets Cash and cash equivalents 551 918 551 918 Card and loan receivables 5 961 948 5 961 948 1 060 127 (350 576 ) Other receivables 3 117 3 117 6 516 983 6 516 983 1 060 127 (350 576 ) Liabilities Funding (4 082 400 ) (4 082 400 ) (235 420 ) Trade and other payables (438 739 ) (438 739 ) (4 521 139 ) (4 521 139 ) (235 420 ) 50 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) Fair values of financial instruments (continued) Net (expense) / gains recognised in statement of Total interest Carrying comprehensive income / value Fair value income (expense) Impairment R 000 R 000 R 000 R 000 R 000 31 March 2015 Assets Cash and cash equivalents 446 787 446 787 Card and loan receivables 5 508 226 5 508 226 1 261 080 (443 680 ) Other receivables 12 266 12 266 4 Interest rate swaps 15 249 15 249 (25 186 ) 26 053 Amounts owing from group company 81 81 5 982 609 5 982 609 (25 186 ) 1 287 137 (443 680 ) Liabilities Funding (3 770 300 ) (3 770 300 ) (281 984 ) Trade and other payables (328 511 ) (328 511 ) Interest rate swaps (27) (27) 255 (15 412 ) (4 098 838 ) (4 098 838 ) 255 (297 396 ) Fair value hierarchy The RCS Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements: Level 1 Quoted prices (unadjusted) in an active market for an identical instrument. Level 2 Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Level 3 Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation techniques includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument s valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between instruments. 2015 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 51

Notes to the Consolidated Financial Statements (continued) 30. Risk management (continued) Fair value hierarchy (continued) The fair values of financial instruments, measured at fair value at the end of the reporting period, analysed by the level in the fair value hierarchy into which the fair value measurement is categorised are as follows: Level 1 level 2 L level 3 total R 000 R 000 R 000 R 000 31 March 2015 Interest rate swaps asset 15 249 15 249 Interest rate swaps liability (27) (27) 15 222 15 222 52 RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS 2015

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