RAF Annual Report 2011

2011
INTEGRATED ANNUAL REPORT
Caring for you
table of contents
Scope of the
Report
Board Statement
Section 1: RAF at a Glance

1.1 Organisational
Overview
1.2 Turnaround
Strategy
1.3 Principal
Risks and
Uncertainties
1.4 Value
Proposition
2.3 Leadership
2.4 Corporate
Governance
12
1.5 Historical
Review
15
14
Section 2: Leadership and Governance

2.1 Chairpersons
Statement
2.2 Overview by the

Acting CEO
46
41
37
53
Section 3: Organisational Performance

3.1 Operating
Environment
3.2 Review of
Operations
3.3 Support
Functions
85
71
114
3.4 Performance
against
Objectives
3.5 Governance of
Sustainability
Statement of
Responsibility by
the Board
Certicate by
the Corporate
Secretary
141
138
Section 4: Annual Financial Statements

Report of the
Auditor-General
Report of the Audit

Committee
156
154
Report of the
Board of Directors
160
Section 5: Additional Information

GRI Index
213
List of
Abbreviations/
Acronyms
List of Contacts
215
218
163
164
Annual Financial
Statements
165
scope of the report

Introduction
The Road Accident Fund (RAF) welcomes the opportunity to provide an Integrated Annual Report for the year ending 31 March 2011 in line
with the King Report on Governance for South Africa 2009, the King Code of Governance for South Africa 2009, the Protocol on Corporate
Governance in the Public Sector (2002) and the Global Reporting Initiative (GRI) guidelines. In essence, corporate governance embodies
processes and systems by which corporate enterprises are directed, controlled and held to account. 1 Oversight entails reviewing, monitoring
and overseeing the aairs, practices, activities, behaviour and conduct 2 of an administrative authority to ensure that it meets its objectives.
Reporting Cycle
Our objective with this report is to provide our stakeholders with an integrated view of the RAFs organisational, operational and nancial
performance for the nancial year 1 April 2010 to 31 March 2011. It furthermore demonstrates the Funds commitment to integrity,
transparency and accountability. It is the aim of the organisation to provide a complete and balanced view of its performance, including both
the challenges and the successes for the 2011 nancial year, as well as those likely to form part of its future.
The RAF is committed to being accountable to its stakeholders. The Fund denes its stakeholders as persons, groups or organisations that
have a direct stake in the business, since they can aect or be aected by its activities, objectives and policies. The way the organisation
engages with and responds to its stakeholders is described under the Stakeholder Engagement section of this report.
Reporting Boundary
The Integrated Annual Report covers the organisational, operational and nancial performance of the RAF, including the audited nancial
results for the period 1 April 2010 to 31 March 2011 in terms of section 55(1) of the Public Finance Management Act, 1999 (Act No. 1 of 1999)
(PFMA).
Reporting Principles
Reporting principles applied are in line with the PFMA, the International Financial Reporting Standards (IFRS), South African Standards of
Generally Recognised Accounting Practice (SA Standards of GRAP), in the manner required by the PFMA, the King Code of Governance
Principles and the GRI guidelines.
Nature and Scope of Assurance

The Accounting Authority is responsible for the preparation and fair presentation of the Financial Statements in accordance with South
African Standards of GRAP, in the manner required by the PFMA.
As required by section 188 of the Constitution of South Africa, and section 4 of the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004),
presented in this report.
Significant Restatements
A prior-year error relating to the reclassication of certain comparative gures in the Cash Flow Statement has been reported under note 36
in the Notes to the Financial Statements.
1
2
Department of Public Enterprises. 2002. Protocol on Corporate Governance in the Public Sector, p.3.
National Treasury. 2005. Governance Oversight Role Over State Owned Entities, pp.5-6
1- RAF - Integrated Annual Report 2011
an independent Report of the Auditor-General to Parliament on the Financial Statements of the RAF for the Year ended 31 March 2011 is
Supporting Documentation
The Integrated Annual Report 2011 includes the following information:
Scope of the Report and Board Statement;
RAF at a Glance;
Leadership and Governance;
Organisational Performance;
Annual Financial Statements; and
Additional Information.
Audience
The stakeholders addressed by this report include, among other, the Parliament of the Republic of South Africa, the Executive Authority,
national, provincial and local government, industry-related organisations, trade unions, employees, suppliers, existing and prospective
customers (local and foreign), the South African public and the media.
Board Statement
The Board of Directors acknowledges its responsibility to ensure the integrity of the Integrated Annual Report 2011. The Board has accordingly
applied its mind to the Integrated Report and in the opinion of the Directors, the Integrated Annual Report addresses all material issues, and
presents fairly the integrated performance of the RAF and its impacts. The Integrated Annual Report 2011 has been prepared in line with best
practice pursuant to the recommendations of the King III Report on Governance 2009. The Board authorised the Integrated Annual Report
2011 for release on 28 July 2011.
Signed on behalf of the Board of Directors of the RAF:
DR NTUTHUKO BHENGU
Chairperson of the Board
Date: 28 July 2011
RAF at a Glance
SECTION 1
Section 1
raf at a glance
1.1 Organisational Overview
1.1.1
Mandate
The RAF is a juristic person established by an Act of Parliament, namely, the Road Accident Fund Act, 1996 (Act No. 56 of 1996) as amended
(RAF Act). It commenced operations on 1 May 1997, assuming at the time, all the rights, obligations, assets and liabilities of the Multilateral
Motor Vehicle Accidents Fund.
The RAF is responsible for providing appropriate cover to all road users within the borders of South Africa; rehabilitating and compensating
persons injured as a result of motor vehicles in a timely and caring manner; and actively promoting the safe use of all South African roads.
Section 3 of the RAF Act stipulates that the object of the Fund shall be the payment of compensation in accordance with this Act for loss
or damage wrongfully caused by the driving of a motor vehicle. The client base of the RAF, therefore, comprises not only the South African
public, but all foreigners within the borders of the country. The RAF provides two types of cover, namely personal insurance cover to accident
victims or their families, and indemnity cover to wrongdoers.
1.1.2
Predecessors
Prior to 1997, the system of compulsory motor vehicle accident insurance was governed by the following legislation:
Motor Vehicle Insurance Act, 1942 (Act No. 29 of 1942);
Compulsory Motor Vehicle Insurance Act, 1972 (Act No. 56 of 1972);
Motor Vehicle Accident Act, 1986 (Act No. 84 of 1986); and
Multilateral Motor Vehicle Accidents Fund Act, 1989 (Act No. 93 of 1989).
1.1.3
Governing Structure
The RAF, as established by the RAF Act, does not have share capital. It is owned by the South African public. It is listed as a national public
entity in accordance with schedule 3A of the PFMA.
Governments governance oversight over the RAF includes:
Parliament (National Assembly) through the relevant Portfolio Committee and the Standing Committee on Public Accounts (SCOPA);
The Executive Authority, the Honourable Minister of Transport; and
The Board of the RAF.
The National Assembly has legislative powers and maintains oversight of the National Executive Authority and the RAF as an organ of State. In
addition, Parliament oversees the Executive Authority who is required to provide Parliament with full and regular reports concerning matters
under its control.
Parliament exercises oversight of the RAF through the Transport Portfolio Committee and through SCOPA. The Portfolio Committee oversees
service delivery and performance in accordance with the mandate of the RAF and its corporate strategy. It reviews nancial and non-nancial
information such as eciency and eectiveness measures in delivering services against corporate goals.
Honourable Minister
and Deputy Minister of Transport:
Messrs Sibusiso Ndebele
and Jeremy Cronin
The Minister of Transport acts as the Executive Authority of the RAF and is concerned with the nancial viability and risks of the organisation,
as well as policy-making and monitoring of policy implementation to ensure that the RAF eectively delivers on its mandate.
The Board of Directors acts as the Accounting Authority of the RAF and is accountable to the Executive Authority for the performance and
aairs of the entity. The RAFs Board is responsible for determining the overall direction of the RAF, formulating and implementing policies that
are necessary to achieve the RAFs strategic goals, and maintaining good corporate governance.
Management of daily operations vest in the Chief Executive Ocer (CEO) and the Executive Management, who are responsible for the
ecient and eective running of the organisation in accordance with the strategic direction of the Board and written delegations of authority.
1.1.4
Principal Activities
The RAF provides compulsory cover to all users of South African roads, citizens and foreigners, against injuries sustained or death arising from
accidents involving motor vehicles within the borders of South Africa. This cover is in the form of indemnity insurance to persons who cause
the accident, as well as personal injury and death insurance to victims of motor vehicle accidents and their families.
1.1.5
Economic Role
Road transportation is a critical element supporting and directly contributing to growth in any economy. Road accidents are, unfortunately, a
negative consequence of this economic growth, aecting both economically active members of our society and other citizens. Free markets,
and in particular the private sector, do not fully address the impact of road accidents on society and the economy. The RAF provides a social
security safety net to the country and economy by making available compulsory social insurance cover to all users of South African roads.
Contributions to the RAF are done by way of a levy on fuel used for road transportation. The cover extends to all members of society including,
but not limited to, the poor, children, legal and illegal immigrants, foreigners, owners and drivers of motor vehicles, as well as their passengers.
The social insurance cover, however, does not extend to drivers of motor vehicles that are found to be negligent.
1.1.6 Social Role

The socio-economic role of the RAF is to re-integrate victims of road accidents into society, from a health and economic perspective, and
protect wrongdoers and their families from nancial ruin. This is done by the RAF paying the medical and related services costs required
to restore accident victims to health, compensating the victims or their families for income or support lost as a result of the accident and
indemnifying the wrongdoer from liability. In addition, the RAF pays general damages to accident victims, which represent compensation for
pain and suering, loss of amenities of life, disability and disgurement, as well as funeral costs to families in circumstances where the victim
of the accident sustains fatal injuries.
1.1.7
Vision
The vision of the RAF is to be a sustainable, world-class provider of cover for personal injury or death arising from the use of motor vehicles
in South Africa.
1.1.8
Mission
The mission of the RAF is to provide appropriate cover to all road users within the borders of South Africa; to rehabilitate persons injured,
compensate for injuries or death and indemnify wrongdoers as a result of motor vehicle accidents in a timely and caring manner; and to
actively promote the safe use of our roads.
Strategy
The RAF continues to place paramount importance on being relevant to our society and customers. We believe that this can be achieved by
proactively reaching out to communities and then aording them an ecient service. We continue to reach out to communities through
expanding our footprint and we are continuously enhancing our processing capability by improving our business processes and systems.
To this end, a more accessible Customer Service Network (CSN) and a more ecient claims-processing unit are both in the early stages of
operation.
1.1.9
1.1.10 Core Values

The core values of the RAF are as follows:
Value
Description
Ubuntu
We care about and support others
We involve and listen to others and recognise their contributions
We show concern for peoples well-being
We take personal responsibility for delivering our work and we do what we say well do
Freedom to succeed
Pride in what we do
We offer solutions, not problems
We empower others to take responsibility for their actions and decisions
We continually look for ways to improve what we do and how we do it
We are open to change and learn from new ideas and ways of working
We find ways to remove or minimise obstacles
We learn from our mistakes
We believe in the role and work of the RAF
We celebrate successes and achievements
We demonstrate integrity, consistency and fairness in our actions and decisions
We demonstrate energy, passion and conviction in everything we do
We model the highest standards of personal and professional behaviour
1.1.11 Business Model

The crux of the RAFs underlying business model is determined in the main by the legislative environment in which it operates. At present,
claims against the RAF for bodily injury and personal loss arising from road accidents are based on the common law rules of delict and liability
insurance principles. The remedy is both ineective for claimants and inappropriate for claims on a social security scheme. Not only are the
common law-based claims complex, time-consuming, expensive and fraught with practical diculties, but the outcome is unpredictable
and unreliable.
The current business model of the RAF does not invest the organisation with the capacity to proactively gather and manage road accident and
applicant information for better operational and nancial planning. There is no eort to collect information at the accident scene and/or to
nd and collect information as soon as possible after the accident. As a result, the Fund is unable to proactively originate benet applications
on behalf of accident victims based on available information, and thereby improve processing eciency and the quality of decision-making.
The immediate focus is on fault and blame to determine the cause of the accident and to exclude at-fault road users from compensation. As
a result, injured persons are unable to access medical care in time, while dependants of persons killed in road accidents are left to fend for
themselves. In addition, claims are received and administered in a litigious and dispute-ridden environment, and many cases take years to be
nalised and paid. This prolongs hardship and severely impacts the poor and vulnerable.
1.2 Turnaround Strategy

In order to transform the current structural problems of the compensation system for road users and to align a revised benet scheme to the
principles and objectives of the Constitution, a turnaround strategy was introduced ve years ago. The overall aim of the strategy is to provide
an eective benet scheme which is reasonable, equitable, aordable and sustainable in the long term. More specically, substantial reforms
to the present compensation system will be introduced to:
Expand access to include more persons exposed to the risks of road transportation by providing benets on a no-fault basis;
Optimise limited resources in favour of persons with serious injuries that have a life-changing and long-term impact;
Lessen spending on minor injuries with minimal duration;
Align benets and resource allocation to other social insurance arrangements;
Facilitate access to timely and appropriate medical care to reduce the impact of injury and disability;
Focus on more curative aspects, such as rehabilitation and accident prevention;
Provide nancial support to persons aected by injury or death of an earner in road accidents; and
Simplify claims procedures, reduce disputes and create certainty by providing dened and structured benets.
Three strategic areas of focus will bring about the desired outcomes:
1.
Legislative enablement The RAFs operations and activities must comply not only with its governing legislation, but also with all other
statutes, regulations and codes which apply to the organisation. Future legislation, specically envisaged in the terms of the Draft Policy
on the Restructuring of the Road Accident Fund that was published for comment in February 2010, will have a profound impact on the
relevance and future operations of the RAF. Activities relating to the strategic objective of legislative enablement will have four main
thrusts.
Firstly, the RAF will propose amendments to the RAF Act that will focus on achieving a more sustainable, reasonable and equitable
system and will simultaneously enable its business model. Secondly, the RAF will, together with the Department of Transport (DoT),
defend challenges that have been made to the constitutional validity of the RAF Act, as such challenges if successful will serve to
increase the RAFs liability and thus impact adversely on its sustainability. Thirdly, the RAF will play an active role in supporting and
assisting the DoT in the process to bring into being legislation to compensate the victims of road trac accidents that will be based
on no-fault xed and social security principles. Fourthly, the RAF will participate in the process that government has embarked on to
introduce a Comprehensive Social Security System (CSSS).
2.
Operational efficiency and effectiveness In as much as the RAF needs to align to broader governmental priorities and plans, there
is a denite need to ensure that the current needs of the customers are met with increasing levels of eectiveness. It is through fully
meeting its current mandate that the RAF is able to transform as per the social security plans of government. To meet the mandate,
the core impetus is improved customer-centric delivery of services. This impetus is driven rstly by increasing accessibility to the RAFs
services and then being able to service customers in an ecient and rened manner. Therefore, the focus will be on appropriately
positioning the RAF footprint and then employing the best available business processes and systems to manage RAF services to its
3.
Financial sustainability As government continues to mould the basis for its CSSS, there is an increased need for the RAF to achieve
nancial sustainability. If the RAF is able to secure appropriate funding and keep a low cost base, the organisation will be able to provide
a speedier and more eective service to customers. Further, a self-sustaining entity can more easily be assimilated into the emerging
CSSS. Therefore, the focus remains on establishing a sustainable nancial position for the RAF by raising sucient funds to meet the RAFs
liabilities, neutralising the accumulated decit, and consistently communicating the RAFs nancial dynamics with key stakeholders.
customers.
The strategic areas of focus are depicted in the diagram below:
Road Accident Fund

RAF to invest in new systems and processes that
provide superior service delivery to victims of motor
vehicle accidents, their families and service providers.
National Treasury
National Treasury to ensure that the system put in

place for South Africa is appropriately funded and that
correct economic models are used to determine the
pricing of the RAF Fuel Levy on a regular basis.
Government of RSA
DoT and Parliament to introduce appropriate legislation
in order to set up a benet system for South Africa that
is equitable, aordable, sustainable and appropriate for
the country, and eliminates wastages, ineciencies and
leakages inherent in the current system.
1.2.1 Geographic Footprint

As part of the RAFs turnaround strategy, a primary area of focus during the year under review was the expansion of its geographic footprint
by means of a distributed Customer Service Network (CSN) covering the breadth of the country and providing proactive and ecient access
to customers. Extending the number of customer touchpoints represents one of the key pillars of the New Operating Model (NOM) and has
been identied as a strategic imperative for the next three years. This model is discussed at length throughout this report.
WESTERN CAPE
Provincial
Hospital
Community
Mobile
1
12
1
1
Provincial
Hospital
Community
Mobile
NORTHERN CAPE
Provincial
Hospital
Community
Mobile
GEOGRAPHIC
CURRENT
FOOTPRINT
RAF
Provincial/Regional
5
Offices
Hospital
Service Centres
75
Community
Service Centres
1
Mobile
Service Centres
TOTAL
81
MPUMALANGA
FREE STATE
Provincial
Hospital
Community
Mobile
1
6
1
1
NORTH WEST
1
5
1
1
Provincial
Hospital
Community
Mobile
NEW
RAF
9
105
9
9
132
1
10
1
1
EASTERN CAPE
Provincial
Hospital
Community
Mobile
Provincial
Hospital
Community
Mobile
1
15
1
1
LIMPOPO
1
15
1
1
Provincial
Hospital
Community
Mobile
GAUTENG
Provincial
Hospital
Community
Mobile
KWAZULU-NATAL
1
15
1
1
1
15
1
1
1
12
1
1
1.3 Principal Risks and Uncertainties

The Board identied eight (8) key strategic risks to the RAF for the 2011 nancial year. These risks, as well as mitigation measures, are outlined
in the table below:
Risk
Description
Action Areas and Plans
Business
The RAF is in a process of overhauling its business. The process
Re-engineering
will lead to the establishment of a new RAF that is more

customer-centric, more effective and more efficient. While the
down of the old RAF.
core of the new RAF will be a new, fully electronic, paperless,

integrated claims management system, this is but one of many
Change management and

communication.
service channels, a broad geographic footprint, an internal legal

department and enhanced branding activities. These changes
Development of transitional
strategies.
components. The system will be supported by further changes

throughout the RAFs value chain and will include new customer
Incentive initiatives for the running
Designing of organisational structures

and business processes.
have all been designed to ensure that the RAF customer
Agreement concluded with organised

labour.
receives high-quality service, that claims are processed quickly

and accurately, that costs are contained and fraud eliminated.
Solvency
Due to its unsustainable financial model, the RAF runs at a
Engaging with National Treasury in
substantial deficit each year (claims incurred exceed revenue).
relation to future utilisation of the
Consequently, a backlog of unpaid claims has accumulated
Revenue Requirement Model (RRM).
over time, representing a liability to the RAF (provision for
outstanding claims). In recent years, this provision has grown
Assist DoT in finalising the No-fault

Policy.
substantially due to the expected growth in the cost of settling

these claims, while the RAF has been unable to invest funds to
cover these claims. Since the provision for future claims exceeds
the RAFs asset base, the RAF is technically insolvent.
Leadership
The RAF is in the process of re-engineering its business
and People
and therefore requires leaders and a workforce that are
Management
appropriately skilled, accountable, professional and motivated.

The non-customer-centric and performance culture has to be
All leaders and staff are being trained

based on personal development
plans.
The Executive Management team

is now operating under the new
managed during this critical phase.
performance management process

and system. The Performance
Management System was recently
rolled out to the rest of the RAF staff.
A Change Management Strategy is

being rolled out.
Appointment of resources in the

New Operating Model (NOM) is
underway.
Risk
Description
Fraud and
The RAF operates in an environment that is targeted by
Corruption
Implementation of the Fraud
fraudsters both internally and externally. The RAF has to deal
Prevention Policy, which includes
with professional syndicates and individual fraudsters.
rolling out of the Fraud Detection and

Prevention Awareness campaign.
Agreements concluded with law

enforcement agencies.
Reputation and
Image
The RAF is implementing fundamental changes to its
Training of all staff on fraud detection.
Roll-out of the Communication
operations and strategic direction. It is thus imperative that the

organisation communicates the coming changes to customers
Strategy.
and stakeholders. Existing relationships with key stakeholders

continue to be nurtured.
makers and other stakeholders.
Roll-out of the new RAF brand.
Increase the RAF geographical
A central factor relating to the outcome of this initiative will be

the RAFs ability to improve the accessibility and perception of
Engagement with high-level decision-
footprint.
the organisation to the public.
Intensive communication initiatives to

all RAF stakeholders.
Training of all staff on customercentricity.
Systems &
The RAF operates on old systems that are paper-intensive and
Finalisation and roll-out of the NOM
Processes to
still relies, to a large extent, on manual intervention when
Support the
processing claims. Management has made enormous progress
Enhancement of project governance.
Business
in modernising the RAFs systems to enable the organisation to
Reinforcement of the existing data
business processes.
deliver service of the appropriate quality to all users of South

African roads. Following a successful implementation of a new
centre and protection of data.
Maintenance of the information
SAP integrated enterprise resources planning solution, the
technology (IT) application for the
design of the new claims administration solution is complete and
old RAF.
in the process of being rolled out.
Outsourcing of other IT services (e.g.

wide area network and service desk).
Drafting and implementation of a

Disaster Recovery Plan based on the
Business Continuity Plan.
The current system for road accident compensation in South
Framework
Africa is fault-based and founded on the law of delict. This

scheme is complex and subjective in that it often requires
Assist the DoT in effecting legislative

changes.
Assist the DoT with the process to
time-consuming and expensive legal procedures in order to
have the No-fault Policy approved and
establish fault and the quantum of damages suffered. The
thereafter with the legislative process.
RAF strives to influence the introduction of a defined-benefit

no-fault system. While this intention is aligned with the DoTs
goals, it is understood that it may take several years before this
new legislation is enacted. Therefore, the RAF has attempted
to amend the current RAF Act by removing some of the
subjectivity from the current system.
Regulatory
Risk
Description
Liquidity
The RAF Fuel Levy is determined with little regard for the main
An RRM was developed to scientifically
drivers of the RAFs claims expenditure, i.e. number of accidents
establish the exact funding
on the roads, number of vehicles driven, the volume and
requirements of the RAF. The model
quantum of the benefits payable by the RAF, and various other
was presented to National Treasury
economic factors like the inherent inflation of the benefit levels.
where it received a favourable

response, but has not been fully
implemented by National Treasury.
The prevailing disconnects between the fuel levy awarded by

government and the RAFs operational cash requirements are the
Engaging with National Treasury in
primary cause of the poor liquidity currently being experienced
relation to future utilisation of
by the RAF.
the RRM.
A further complicating factor to the RAFs ability to manage its

limited cash pool is the change of the levy collection method.
Previously, the RAF Fuel Levy used to be collected by the Central
Cash flow forecasts and insurance

cover.
Energy Fund (CEF) before being changed to the current system

administered by the South African Revenue Service (SARS).
This revised system has introduced a two-month lag from the
collection of funds by SARS to its availability to the RAF.
1.4 Value Proposition

Government recognises that all citizens need to use South African roads in order to participate in economic activity. People from all
demographic and socio-economic groups, the wealthy and poor, the employed and unemployed, are all exposed to risks on the road. In a
developing country such as South Africa, a signicant proportion of road users will neither have the nancial means to access appropriate
healthcare and rehabilitation, nor to commence legal action to recover their loss. The RAF acts as a social security safety net to all users of
South African roads.
The provision of road accident compensation or benets could be viewed as a response to specic socio-economic risks associated with road
accidents and injuries, including:
a.
The need for trauma and other medical care;
b.
The risk of income loss due to injury;
c.
The risk of unemployment due to temporary or permanent disability; and
d.
The vulnerability of family members who become exposed to nancial burdens and dependency when a breadwinner dies.
Essentially, the State intervenes in the risks of road use to protect people from failing to provide sucient cover for themselves, and
thereby aims to alleviate disability and prevent impoverishment. Such State intervention aims to distribute the risks of injury, disability and
bereavement more evenly across the disparate socio-economic bands of society, where a large proportion of the population cannot aord
personal accident insurance. It also recognises that the majority of drivers may not have assets or liability insurance cover to meet the claims
for damages from persons whom they accidentally injure on the roads.
The RAF, through its current services and proposed forward planning, contributes to these national priorities as follows:
Transforming the economy and creating sustainable livelihoods by ensuring that motor vehicle accident victims are appropriately
covered in terms of both medical needs and income or support that is lost as a result of bodily injury or the death of a breadwinner.
Improving the health prole of South Africans by ensuring that accident victims have timely access to medical services and ongoing
medical rehabilitation.
Expanding its footprint (most notably the Community Service Centres and Mobile Service Points, which are covered in more detail in
this report), thus enabling the RAF to provide services at grassroots level and increasingly being able to reach out to rural and previously
underserviced areas. As such, the RAF is able to contribute to the development of caring and sustainable communities.
Building of a developmental state, since the organisation is increasingly aligning its service oering to governments emerging CSSS.
Finally, improving public services evidenced by its turnaround programme, which is already underway.
1.5 Historical Review

The history of the RAF and its predecessors spans more than 60 years, and commenced with the introduction of compulsory motor vehicle
accident (MVA) insurance in 1942. Since its commencement, the compensation system for MVA victims has remained relatively unchanged.
Commissions of Inquiry assessed structural, nancial and other diculties inherent in the compensation system.
During its lifespan, the MVA compensation system has been plagued by numerous challenges, including service delivery problems, restricted
access to medical care, long settlement delays, spiralling costs, insucient funding to pay claims, an ever-growing liability, multiple complex
and legalistic hurdles due to the adversarial nature of the system, and uncertainty over whether compensation is ultimately used for the
intended purpose.
The organisations historical overview below highlights the challenges encountered over the past decade.
Over the years, several problems pertaining to equity, aordability and sustainability of the system developed. Between 1954 and 2002, seven
1.5.1 Ten-year Financial Review
Statement of
Financial Position
31 March
2011
31 March
2010
Rmillion
Rmillion
31 March
2009
Restated
Rmillion
31 March
2008
31 March
2007
Restated
Rmillion
Rmillion
31 March
2006
Rmillion
Assets
Current Assets
4,239
3,523
3,110
3,155
4,054
4,275
Cash and cash equivalents
1,138
655
1,091
1,192
2,404
3,692
Transfers receivable from fuel levies
2,950
2,750
1,912
1,884
1,565
555
10
11
27
10
145
112
94
66
58
18
327
355
286
142
153
85
Other receivables
11
13
22
27
Investments
236
254
201
128
129
56
91
101
74
4,566
3,878
3,396
3,297
4,207
4,360
11,342
10,734
9,920
9,806
5,659
7,002
87
80
101
87
25
544
526
454
327
323
67
20
60
110
196
199
10,441
9,925
9,223
9,052
5,180
5,658
288
275
209
234
191
581
37,239
35,474
33,311
21,319
18,789
15,726
14
15
37,206
35,441
33,278
21,288
18,755
15,693
32
28
25
22
20
18
48,581
46,208
43,231
31,125
24,448
22,728
(44,015)
(42,330)
(39,835)
(27,828)
(20,241)
(18,368)
Interest receivable
Other financial assets
Consumable stock
Non-current Assets
Property, plant and equipment

Intangible assets
Total Assets
Liabilities
Current Liabilities
Payables and accruals
Financial liabilities measured at
amortised cost
Deferred government grant
Provision for outstanding claims
Other provisions
Non-current Liabilities
Financial liabilities measured at
amortised cost
Employee benefits
Total Liabilities
Net Decit
Net Decit
Investment reserve
Revaluation reserve
65
79
80
59
59
Accumulated deficit
Total Net Decit
(44,080)
(42,409)
(39,915)
(27,887)
(20,300)
(18,368)
(44,015)
(42,330)
(39,835)
(27,828)
(20,241)
(18,368)
Cash Holdings
4,000
3,692
2,500
297
349
441
338
291
297
59
62
67
63
80
595
980
502
904
63
80
93
76
1,708
768
1,250
1,632
5,515
4,881
3,708
3,687
843
57
26
11
4,006
4,076
3,241
3,618
666
748
441
58
16,058
14,444
12,972
14,474
16,044
14,433
12,963
14,474
14
11
21,573
19,325
16,680
18,161
(19,865)
(18,557)
(15,430)
(16,529)
(15,430)
(16,661)
(19,865)
(18,557)
(15,430)
(16,529)
2011
4,566
3,878
3,396
(44,015)
2005 2006 2007 2008 2009 2010

Financial Year
Total Assets Total Liabilities Net Decit
2011
(39,835)
(42,330)
(48,581)
(46,208)
(31,125)
(27,828)
(43,231)
4,207
(24,448)
(20,241)
3,297
4,360
(22,728)
(18,368)
(21,573)
1,708
(19,865)
(16,680)
1,250
(15,430)
2003
(19,325)
768
(18,557)
(18,161)
1,632
(16,529)
Rmillion
2002
2004
2002
2003
2004
2005
2006
2007
2008
2009
Total Current Liabilities
Net Current Liabilities
(7,103)
(11,342)
(7,211)
2010
Financial Year
Total Current Assets
4,239
3,523
(10,734)
3,110
3,155
(5,659)
4,054
688
(4,881)
655
(3,708)
(3,687)
652
Liquidity
2011
(18,557)
(6,810)
(19,865)
2010
(9,920)
2009
(9,806)
2008
(6,651)
2007
(1,605)
2006
Solvency
(4,193)
132
2005
(3,053)
2004
(3,035)
2003
Financial Year
Rmillion
2002
655
288
1,091
500
1,145
1,145
652
288
655
297
688
349
1,000
1,645
1,192
1,500
1,138
2,404
2,000
(7,002) 4,275
Rmillion
3,000
(2,727)
Rmillion
3,500
1,645
Rmillion
31 March
2002
11 months
Rmillion
(5,515)
31 March
2003
(3,870)
31 March
2004
R million
31 March
2005
Statement of
Financial Performance
31 March
2011
31 March
2010
Rmillion
Rmillion
31 March
2009
Restated
Rmillion
31 March
2008
31 March
2007
Restated
Rmillion
Rmillion
31 March
2006
Rmillion
Revenue from Non-exchange

Transactions
- Transfers from government
60
2,550
2,502
14,474
12,566
8,845
8,222
7,011
5,552
14,474
12,626
11,395
8,222
7,013
8,054
- Investment income and other revenue
52
58
574
183
264
88
Total Revenue
14,526
12,684
11,969
8,405
7,277
8,142
12,941
11,399
11,117
8,984
6,119
4,850
28
28
24
27
18
- Employee costs
621
595
534
426
397
352
- Administrative expenses
224
210
193
122
100
109
- Depreciation, amortisation and

impairments
60
39
28
13
15
- Finance costs
43
41
24
16
- Road Safety Project
- Road Accident Fund Commission
13,917
12,312
11,920
9,588
6,625
5,344
609
372
49
(1,183)
652
2,798
- Net fuel levies
Revenue from Exchange Transactions
Expenses:
- Claims expenditure (excluding
provision for outstanding claims)
- Reinsurance premiums
Total Expenses
Surplus/(Decit) before Provision for
Outstanding Claims
(2,281)
(2,866)
(12,161)
(6,404)
(2,511)
(1,301)
(Decit)/Surplus for the Year
(1,672)
(2,494)
(12,112)
(7,587)
(1,859)
1,497
Cash Flow Statement
31 March
2011
31 March
2010
Rmillion
Rmillion
31 March
2009
Restated
Rmillion
Net Cash Flows from

Operating Activities
526
Net Cash Flows from Investing

Activities
(43)
(122)
(67)
Net Increase/(Decrease) in Cash and

Cash Equivalents
483
(436)
(101)
Cash and cash equivalents at the

beginning of the year
655
1,091
1,138
655
Cash and Cash Equivalents at the End

of the Year
(314)
(34)
31 March
2008
Rmillion
(1,290)
78
31 March
2007
Restated
Rmillion
(1,508)
220
31 March
2006
Rmillion
2,475
72
(1,212)
(1,288)
2,547
1,192
2,404
3,692
1,145
1,091
1,192
2,404
3,692
Revenue
16,000
2,824
2,610
3,883
3,982
3,118
2,541
43
38
32
322
303
244
148
112
132
146
88
22
24
20
11
(50)
50
4,382
4,429
3,613
2,795
14,526
Analysis of Total Expenditure

25,000
20,000
15,000
10,000
5,000
621
355
3,600
2011
15,222
4,624
2010
595
318
169
2009
14,265
(36)
2008
534
269
88
2007
23 278
58
2006
Financial Year
426
178
2,441
2005
15,388
2,860
2004
397
109
3,512
2003
8,630
4,566
2002
6,151
2,441
352
142
2,860
5,425
3,512
244
6,634 201
50
4,566
148
106
5,681
Rmillion
2,824
2,000
2,610
4,000
12,684
11,969
6,000
7,277
8,142
8,000
8,405
10,000
4,624
Rmillion
12,000
322
177
Rmillion
14,000
3,600
Rmillion
31 March
2002
11 months
Rmillion
303
194
(50)
31 March
2003
6,288
31 March
2004
Rmillion
31 March
2005
2002 2003
2004 2005 2006 2007 2008 2009 2010
2011
Financial Year
(829)
(789)
Claims Expenditure including Provision
(185)
Admin and Other
(1,541)
(2,305)
(3,516)
(3,140)
(1,299)
(3,134)
(4,305)
(3,325)
31 March
2005
31 March
2004
31 March
2003
Rmillion
Rmillion
Rmillion
870
(5)
865
31 March
2002
11 months
Rmillion
(500)
(274)
(295)
491
222
289
(9)
(52)
(6)
280
297
349
355
1,145
288
297
349
Sta Costs
Road Safety Project
Composition of Claim Payments

Composition
of claim payments
RAFs Legal & Expert
10%
Loss of Earnings
Claimant Legal &
25%
Expert Cost 17%
Loss of Support
Claimant Medical Cost
7%
6%
Funeral
Costs
0%
General Damages
35%
242
1.5.2 Financial Ratios

31
31
March March
2011 2010
Ref. Units
31
31
March
March
2009
2008
Restated
31
March
2007
Restated
31
31
31
31
March March March March
2006
2005
2004
2003
31
March
2002
11 months
Protability
EBITDA
Rm
712
452
101
(1,154)
656
2,813
264
(805)
(769)
(174)
(Deficit)/surplus
to revenue
-12%
-20%
-101%
-90%
-26%
18%
-28%
-87%
-152%
-127%
Operating
(deficit)/surplus
to revenue
4%
3%
0%
-14%
9%
34%
5%
-23%
-28%
-7%
Return on
average equity
-4%
-6%
-36%
-32%
-10%
8%
-7%
-18%
-27%
-22%
Return on
average total
assets
-40%
-69%
-362%
-202%
-43%
49%
-105%
-311%
-299%
-186%
Cost-to-income
ratio
30%
28%
28%
31%
30%
22%
31%
40%
40%
30%
Liquidity
Cash-to-claimscover ratio
Mths
1.06
0.69
1.18
1.59
4.71
9.13
3.54
0.87
1.14
1.65
Current ratio
Ratio
0.37
0.33
0.31
0.32
0.72
0.61
0.30
0.14
0.18
0.18
Net working
capital
Rm
(1,605) (2,727) (3,870) (4,193)
(3,053)
(3,035)
Net working
capital, excluding
claims provision
10
Rm
11
(7,103) (7,211)
(6,810) (6,651)
3,338
2,714
2,413
2,401
3,575
2,931
136
(117)
188
583
9%
8%
8%
11%
17%
19%
8%
4%
7%
9%
Solvency
Total assets to
total liabilities
References
1.
EBITDA
Surplus or deficit before finance costs, taxation, depreciation, amortisation and provision for
outstanding claims.
2.
(Deficit)/surplus to revenue
Total surplus or deficit as a percentage of revenue.
3.
Operating surplus/(deficit)
to revenue
Total surplus or deficit before provision for outstanding claims as a percentage of revenue.
4.
Return on average equity
Total surplus or deficit for the financial year as a percentage of average net deficit at year-end.
5.
Return on average total

assets
Total surplus or deficit for the financial year as a percentage of average total assets during the
financial year.
6.
Cost-to-income ratio
Total administration and human resources costs, including RAF and claimant legal and expert
costs, as a percentage of total income during the financial year.
7.
Cash-to-claims-cover ratio
Cash and cash equivalents at the end of the financial year divided by average monthly claims
expenditure for the financial year (compensation and legal costs).
8.
Current ratio
Total current assets divided by total current liabilities.
9.
Net working capital
Current assets minus current liabilities.
10. Net working capital,

excluding claims provision
Current assets minus current liabilities, excluding provision for outstanding claims.
11. Total assets to total liabilities
Total assets as a percentage of total liabilities.
1.5.3 Fuel Levy Statistics
Calendar Year
* Fuel consumption for road
use:
Units
Megalitres
31
December
2010
17,448
31
December
2009
17,461
31
December
2008
17,682
31
December
2007
31
December
2006
18,157
31
December
2005
17,149
16,622
* Estimated fuel sales for road use (based on CSIR Report CR-2002/79), which recommended that 98% of all petrol sales and 70% of all diesel sales should be allocated for
road use purposes
Financial Year
Units
RAF Fuel Levy:
Petrol
C/l
Diesel
C/l
Gross fuel levy
R/m
Diesel refund
R/m
Net fuel levy
R/m
Diesel refund % of gross
%
fuel levy
Implied average fuel
consumption (Gross fuel
Megalitres
levy/RAF Fuel Levy c/l)
Implied average fuel
consumption subject to
Megalitres
diesel refund (Diesel refund/
RAF Fuel Levy c/l)
Implied average net fuel
consumption (Net fuel levy/ Megalitres
RAF Fuel Levy c/l)
31 March
2011
31 March
2010
31 March
2009
31 March
2008
31 March
2007
72
72
15,663
(1,189)
14,474
64
64
13,658
(1,092)
12,566
46.5
46.5
9,721
(876)
8,845
41.5
41.5
8,998
(776)
8,222
36.5
36.5
7,623
(612)
7,011
31.5
31.5
6,079
(527)
5,552
7.59%
8.00%
9.01%
8.62%
8.03%
8.67%
21,754
21,341
20,905
21,682
20,885
19,298
(1,651)
(1,706)
(1,884)
(1,870)
(1,677)
(1,673)
20,103
19,634
19,022
19,812
19,208
17,625
Source: South African Petrolium Industry Accociation (SAPIA), Department of Energy (DoE), Road Traffic Management Corporation (RTMC)
31 March
2006
RAF Fuel Levy Cents/Litre
14,910
72
31
December
2001
64
15,538
31
December
2002
14,675
31 March
2004
31 March
2003
31 March
2002
26.5
26.5
4,987
(421)
4,566
21.5
21.5
3,857
(345)
3,512
18.5
18.5
3,212
(352)
2,860
16.5
16.5
2,483
(42)
2,441
8.44%
8.94%
10.96%
1.69%
18,819
17,940
17,362
15,048
2003
2004
2005
41.5
36.5
31.5
26.5
2002
21.5
18.5
31 March
2005
16.5
Cents
16,140
31
December
2003
46.5
31
December
2004
2006 2007
Financial Year
2008
2009
2010
2011
2005
14,474
12,566
8,845
8,222
4,566
2004
7,011
3,512
2003
5,552
2,860
2002
Gross Fuel Levy
2006
2007
2008
Financial Year
Diesel Refund
2009
2010
2011
Net Fuel Levy
(1,605)
(1,589)
(1,673)
(1,677)
(1,870)
(1,884)
(1,706)
(1,651)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Financial Year
Gross Fuel Levy / RAF Fuel Levy c/l
Diesel Refund / RAF Fuel Levy c/l
Net Fuel Levy / RAF Fuel Levy c/l
20,103
21,754
19,634
21,341
19,022
20,905
19,812
21,682
19,208
20,885
17,625
19,298
17,230
18,819
17,940
16,335
Implied Average Fuel Consumption
15,459
14,794
17,362
15,459
(1,903)
16,335
2,441
17,230
14,794
(255)
15,048
(1,903)
(255)
(1,605)
Megalitres
(1,589)
R'million
Net Fuel Levy
1.5.4 Operational Statistics
Reference
Units
12
No.
31 March
2011
31 March
2010
31 March
2009
Restated
31 March
2008
Claims Finalisation
New Claims Lodged:
Increase/(Decrease)
Personal Claims
222,634
209,981
294,771
267,133
6%
-29%
10%
57%
165,513
No.
74,162
85,397
166,146
Pre-Amendment Act
No.
27,474
57,656
161,767
Post-Amendment Act
No.
46,688
27,741
4,379
No.
148,472
124,584
128,625
Supplier Claims
101,620
Pre-Amendment Act
No.
15,907
57,334
111,690
Post-Amendment Act
No.
132,565
67,250
16,935
No.
187,168*
262,185
330,453
311,207
Increase/(Decrease)
-29%
-21%
6%
13%
Personal Claims
172,073
Claims Finalised:
13
No.
60,682
128,664
193,193
Pre-Amendment Act
No.
59,152
122,352
193,161
Post-Amendment Act
No.
1,530
6,312
32
No.
126,486
133,521
137,260
Supplier Claims:
139,134
Pre-Amendment Act
No.
11,986
72,388
123,844
Post-Amendment Act
No.
114,500
61,133
13,416
No.
244,652
209,186
261,390
297,072
17%
-20%
-12%
-13%
Claims Outstanding:
14
Increase/(decrease)
Finalised/New
84%
125%
112%
116%
Personal Claims
No.
208,406
194,926
238,193
265,240
Supplier Claims
No.
36,246
14,260
23,197
31,832
No.
107,209
103,791
103,583
88,001
R000
R 85,984
R 82,009
R 80,926
R 58,740
Undertakings:
Total Undertakings registered
Total Rand value of Undertakings paid
15
* The above Claims Finalised gure for 2011 was calculated by referring to claims where compensation had been paid in the 2011 nancial year, but
ignoring the claims if the le had been closed in previous years. If the number of claims nalised had been calculated in accordance with previous years,
the gure would have been stated at 197,730 claims nalised. In line with the implementation of a new claims administration system, where claims
settled will be counted dierently, the RAF will review its way of reporting on relevant statistics in the 2012 nancial year.
2005
2006
Personal Claims
43%
173,570
141,436
65,000
132,869
101,384
46,749
25,116
27,522
341,146
445,682
443,399
347,742
1%
28%
2%
161%
99%
49%
96%
100,000
271,800
332,903
340,925
260,807
80,000
69,346
112,779
102,474
86,935
Number
-23%
60,000
40,000
20,000
80,912
69,443
56,751
42,878
R 59,125
R 58,724
R 59,184
R 57,592
36,246
14,260
23,197
Undertakings
120,000
2004
2005
2006
2007
2008
2009
2010
2011
Financial Year
Total Undertakings
Active Undertakings
-44%
2011
107,209
109%
2010
2,164
46%
2009
103,791
160,391
80,912
90,116
2008
Financial Year
Supplier Claims
2,707
188,185
69,443
274,954
2,741
40,081
56,751
58,041
42,878
2,395
57,054
2007
208,406
2004
57,951
69,346
194,926
50,000
2,438
126,573
238,193
127,732
103,583
133,414
100,000
2,537
112,467
150,000
265,240
-2%
88,001
11%
2,324
3%
271,800
-11%
200,000
2,383
166,654
260,807
185,773
Number
190,468
250,000
332,903
350,000
112,779
400,000
300,000
170,418
102,474
450,000
31 March
2004
340,925
31 March
2005
86,935
31 March
2006
31,832
Claims Outstanding
31 March
2007
Restated
Operational Statistics (cont.)
Reference
Units
31 March
2011
31 March
2009
Restated
31 March
2010
31 March
2008
Claims Payments
All Claims:
Rm
R 12,800
R 11,400
R 11,100
R 8,800
Rand value per claim
Ave.
R 46,995
R 38,502
R 33,171
R 26,519
Total individial claim payments
No.
270,479
290,710
336,511
331,155
Rm
R 12,400
R 10,900
R 10,800
R 8,300
Ave.
R 88,430
R 64,288
R 52,876
R 44,851
Total individual claim payments
No.
140,007
168,962
204,275
185,544
Rm
R 400
R 500
R 300
R 500
Ave.
R 2,533
R 2,716
R 2,730
R 3,209
Total individual claim payments
No.
130,478
121,748
132,235
145,594
Rm
R 4,400
R 4,800
R 4,900
R 3,900
Ave.
R 65,399
R 45,837
R 36,409
R 31,347
Total individual claim payments:
No.
67,960
102,705
134,160
125,572
Pre-Amendment Act
No.
67,768
102,661
134,154
Post-Amendment Act
No.
192
44
Personal Claims:
Supplier Claims:
16
17
18
Claims Payments per Heads of Damage

General Damages:
Loss of Earnings:
19
Rm
R 3,300
R 2,500
R 2,300
R 1,600
20
Ave.
R 393,672
R 314,270
R 335,503
R 264,337
No.
8,251
7,695
6,782
5,957
Pre-Amendment Act
No.
8,070
7,685
6,782
Post-Amendment Act
No.
181
10
Rm
R 900
R 700
R 600
R 500
Ave.
280,278
230,968
187,236
175,457
No.
3,045
3,117
2,986
2,758
Pre-Amendment Act
No.
2,889
3,083
2,986
Post-Amendment Act
No.
156
34
Rm
R 700
R 700
R 800
R 700
Ave.
R 4,879
R 4,678
R 5,241
R 4,367
No.
139,634
138,115
161,893
174,836
Pre-Amendment Act
No.
27,352
82,019
148,565
Post-Amendment Act
No.
112,282
56,096
13,328
Rm
Ave.
R 8,220
R 7,300
R 6,650
R 5,847
No.
2,949
3,223
3,952
3,450
Pre-Amendment Act
No.
2,609
3,092
3,926
Post-Amendment Act
No.
340
131
26
Loss of Support:
Medical Compensation:
Funeral Costs:
21
22
23
140,263
103,423
137,757
R 200
R 100
R 100
R 100
R 3,603
R 3,059
R 4,309
R 2,858
59,316
42,133
28,780
24,930
R 2,600
R 2,100
R 1,200
R 1,500
R 26,875
R 22,567
R 19,547
R 15,537
97,771
94,058
59,893
94,325
38,502
46,995
2011
Total Individual Claim Payments
270,479
290,710
336,511
331,155
211,798
182,397
132,204
162,688
2010
50,000
-
Financial Year
Number of Payments
Average Rand Value - All Claim Payments
General Damages Payment per Claim

70,000
60,000
50,000
160,000
40,000
30,000
140,000
120,000
100,000
80,000
60,000
20,000
10,000
-
40,000
2004
2005
2006
2007
2008
2009
2010
2011
152,480
2009
270 479
R 28,096
2008
67,960
R 28,829
2007
46 995
65,399
R 35,747
2006
102,705
R 41,883
2005
38 502
45,837
R 3,800
33,171
R 3,000
2004
336 511134,160
R 5,000
33 171
36,409
R 6,400
5,000
26,519
162,688
125,572
132,204
31,347
182,397
31,165
211,798
100,000
10,000
97,771
R 24,231
26,875
R 23,492
28,198
R 28,198
150,000
15,000
94,058
R 31,165
300,000
200,000
22,567
R 3,900
20,000
350,000
250,000
23,492
R 3,100
30,000
25,000
59,893
R 5,100
35,000
19,547
R 6,600
40,000
24,231
31 March
2004
94,325
31 March
2005
400,000
45,000
15,537
31 March
2006
Average R Value of Claim Payments
31 March
2007
Restated
Average R Value of All Claim Payments
Total Payment Per Claim

50,000
20,000
-
Financial Year
R 1,400
R 1,000
R 500
R 800
R 222,655
R 158,755
R 130,278
R 128,117
6,194
6,444
4,172
6,730
Number of Payments
Average Rand Value - General Damages
Loss of Earnings Payment per Claim
R 300
R 4,989
R 5,593
R 5,155
86,101
71,120
50,755
63,511
R 5,783
R 5,003
R 4,674
R 4,262
3,571
3,116
1,793
3,174
8,251
7,695
3,000
100,000
2,000
50,000
-
R 5,670
6,782
150,000
2004
2005
2006
2007
2008
2009
2010
2011
1,000
-
Financial Year
Average Rand Value - Loss of Earnings
Number of Payments
R 300
5,000
393,672
R 400
7,000
4,000
200,000
314,270
R 500
250,000
335,503
2,922
5,957
1,934
8,000
6,000
264,337
2,708
300,000
6,194
2,960
350,000
222,655
125,778
6,444
93,617
158,755
122,558
4,172
151,253
130,278
R 400
6,730
R 200
128,117
R 300
R 400
400,000
9,000
450,000
Operational Statistics (cont.)
31 March
2010
31 March
2009
Restated
31 March
2008
Units
24
Rm
R 2,200
R 1,700
R 1,600
R 1,300
Ave.
R 28,008
R 15,647
R 11,399
R 8,285
No.
78,319
107,572
139,276
152,550
Pre-Amendment Act
No.
77,443
107,399
139,272
Post-Amendment Act
No.
876
173
Rm
R 1,300
R 1,000
R 900
R 800
Ave.
R 13,476
R 10,224
R 9,977
R 9,483
No.
93,739
97,392
98,311
82,998
Pre-Amendment Act
No.
92,742
97,336
98,305
Post-Amendment Act
No.
997
36
Claimants Legal Costs:
RAFs Legal Costs:
31 March
2011
Reference
25
31 March
2007
Restated
31 March
2006
31 March
2005
31 March
2004
R 1,000
R 800
R 500
R 500
R 6,713
R 6,213
R 5,844
R 5,342
147,240
128,589
93,025
108,764
R 700
R 500
R 400
R 300
R 10,198
R 10,411
R 8,571
R 8,112
66,198
49,939
44,895
42,751
12. New claims lodged
Claims received and registered by the RAF during the financial year.
13. Claims finalised
Claims processed in the supplier and personal claim categories where compensation has been paid
in full.
14. Claims outstanding
Claims registered by the RAF that have not been finalised at year-end, or have been reopened and not
finalised by year-end.
15. Total Undertakings registered
An Undertaking is a medical certificate issued by the RAF to cover future medical costs.
16. All claims
All claims settled by the RAF.
17. Personal claims
A personal claim is a claim submitted by any person (the third party) for any loss or damage which that
person has suffered as a result of any bodily injury to himself/herself, or the death of, or any bodily injury
to any other person.
18. Supplier claims
A supplier claim is a claim submitted directly to the RAF by a person/institution that provided medical
treatment and accommodation to the victim of the accident.
19. General damages
General damages represent compensation paid by the RAF for loss of amenities of life, pain and
suffering, disability and disfigurement.
20. Loss of earnings
Loss of earnings represents past and future loss in earnings incurred by the accident victim as a result
of a motor vehicle accident.
21. Loss of support
Loss of support represents past and future loss of support incurred by the accident victims family as a
result of a motor vehicle accident.
22. Medical compensation
Medical compensation represents past and future medical costs incurred by the accident victim as a
result of a motor vehicle accident.
23. Funeral costs
Funeral costs represent cost of interment or cremation of the accident victim arising from a motor
vehicle accident.
24. Claimants legal costs
Claimants legal costs are expenses paid to accident victims attorneys and experts for their assistance
provided to the accident victim in lodging a claim with the RAF.
25. RAFs legal costs
RAFs legal costs are expenses paid to the RAFs panel attorneys to represent the RAF in legal cases
against it.
References
1.5.5 Historical Statistics by Region

Regional Statistics
CPT
Dbn
EL
Jhb
Pta
HO
Total
16,866
26,741
8,991
33,177
53,967 104,910 244,652
8,658
10,906
3,647
11,992
21,996
129,969
187,168
195,828
222,634
Finalisation of Claims
Number of Claims Outstanding 31/03/2011
Less: Claims finalised
3,461
5,851
2,718
7,548
7,228
Add: Claims lodged
22,063
31,796
9,920
37,621
68,735
39,051 209,186
19,011
19,822
7,908
24,949
47,741
142,754
262,185
209,981
Add: Claims lodged
10,837
11,397
3,968
11,911
17,558
154,310
30,237
40,221
13,860
50,659
98,918
27,495 261,390
25,948
51,868
11,168
47,519
60,879
133,071
330,453
34,320
59,354
132,524
294,771
Add: Claims lodged
25,654
35,829
7,090
30,531
56,260
17,938
63,858 100,443
28,042 297,072
41,674
57,313
10,756
49,566
83,150
68,748
311,207
35,883
61,137
95,013
267,133
Add: Claims lodged
25,803
40,100
9,197
46,402
73,473
19,497
77,541 122,456
46,333
60,840
11,428
59,016
96,696
Add: Claims lodged
26,597
35,639
10,096
31,544
66,466
20,829 105,013 152,686
1,777 341,146
641
274,954
76
170,418
2,342 445,682
66,138
98,674
28,234
39,684
9,314
38,433
72,520
188,185
Add: Claims lodged
32,015
38,233
9,643
34,737
73,498
2,342
190,468
62,357 100,125
14,670
15,243
4,619
17,904
37,680
90,116
Add: Claims lodged
33,040
34,908
9,184
46,732
61,909
185,773
43,987
80,460
15,935
79,881 127,479
- 347,742
21,567
38,218
6,620
32,657
61,329
160,391
Add: Claims lodged
25,159
33,710
9,201
29,741
68,843
166,654
40,395
84,968
13,354
31 March 2011 (Rm)
1,473
869
426
2,942
3,643
3,433
12,786
31 March 2010 (Rm)
1,375
910
324
2,153
3,340
3,268
11,370
31 March 2009 (Rm)
1,422
970
353
1,944
2,899
3,537
11,125
31 March 2008 (Rm)
1,434
894
292
1,615
2,390
2,123
8,748
31 March 2007 (Rm)
1,296
796
266
1,686
2,054
502
6,600
20,500 108,709 151,708
82,797 119,965
- 443,399
- 341,479
Claims Payments
Amounts Paid in Cash at:
31 March 2006 (Rm)
5,136*
31 March 2005 (Rm)
3,105*
31 March 2004 (Rm)
3,983*
* Split per person not available for 2004, 2005 and 2006 nancial years.
Stang
Number of Sta at:
31 March 2011
246
265
125
308
441
487
1,872
31 March 2010
256
277
130
334
477
486
1,960
31 March 2009
260
283
129
347
508
426
1,953
31 March 2008
260
287
112
340
440
371
1,810
31 March 2007
229
289
115
328
432
318
1,711
31 March 2006
197
258
108
309
415
279
1,566
31 March 2005
226
267
106
317
437
324
1,677
31 March 2004
231
275
113
344
442
346
1,751
Claims Lodged by Region

200,000
180,000
160,000
140,000
Number
120,000
100,000
80,000
60,000
40,000
20,000
-
CPT
Dbn
EL
2005
2006
Jhb
Region
2007
2008
Pta
2009
HO
2010
2011
Claims Finalised per Region

160,000
140,000
Number
120,000
100,000
80,000
60,000
40,000
20,000
CPT
Dbn
2005
2006
EL
2007
Region
2008
Jhb
Pta
2009
2010
HO
2011
160,000
140,000
Number
120,000
100,000
80,000
60,000
40,000
20,000
CPT
Dbn
2005
2006
EL
2007
Region
2008
Jhb
Pta
2009
2010
HO
2011
Claims Outstanding per Region
1.5.6 Average Delays in Settlement of Claims

Average Delay between Accident Date and Registration Date in Months (FY)
2011
2010
2009
2008
2007
2006
2005
2004
All Claims
Pre-Amendment Act
37.10
26.32
15.11
11.61
11.98
12.37
12.02
11.57
Post-Amendment Act
11.13
6.75
3.81
Pre-Amendment Act
36.53
24.16
12.02
11.62
12.57
12.96
12.95
12.68
Post-Amendment Act
14.88
7.71
3.91
Pre-Amendment Act
38.22
28.50
19.52
11.60
10.60
10.97
10.10
8.04
Post-Amendment Act
10.10
6.35
3.78
Personal Claims
Supplier Claims
Average Delay between Accident Date and Finalisation Date in Months (FY)
2011
2010
2009
2008
2007
2006
2005
2004
All Claims
Pre-Amendment Act
52.68
43.04
35.83
36.35
39.57
41.11
34.78
38.03
Post-Amendment Act
11.23
7.52
4.44
Pre-Amendment Act
54.19
47.55
43.51
45.77
44.13
44.38
39.63
41.84
Post-Amendment Act
19.09
9.22
2.61
Pre-Amendment Act
42.19
34.63
24.94
25.26
30.83
31.52
22.63
21.39
Post-Amendment Act
11.12
7.34
4.45
Personal Claims
Supplier Claims
Average Delay between Registration Date and Finalisation Date in Months (FY)
2011
2010
2009
2008
2007
2006
2005
2004
All Claims
Pre-Amendment Act
35.90
26.15
21.20
24.60
27.59
29.37
23.60
25.63
Post-Amendment Act
1.34
1.40
0.69
Pre-Amendment Act
39.34
34.33
31.11
33.10
31.40
31.88
27.00
28.34
Post-Amendment Act
9.00
2.77
1.64
Pre-Amendment Act
11.96
10.97
7.16
14.57
20.30
22.03
15.06
13.82
Post-Amendment Act
1.23
1.26
0.69
Personal Claims
Supplier Claims
Average Delay between Accident Date and Registration Date

(Heads of Damages) in Months (FY)
2011
2010
2009
2008
2007
2006
2005
2004
General Damages (GD)

GD: Pre
14.94
11.64
10.24
10.74
10.95
11.21
11.07
10.58
GD: Post
7.86
4.94
2.59
LoE: Pre
14.80
14.45
14.50
15.12
14.95
15.62
11.25
10.36
LoE: Post
10.97
4.43
LoS: Pre
23.75
22.45
23.49
22.99
20.99
21.03
11.00
10.26
LoS: Post
7.29
4.14
Med: Pre
21.15
20.08
13.20
11.02
10.78
10.95
10.41
10.56
Med: Post
9.88
5.91
3.75
Funeral: Pre
19.80
17.02
15.41
16.12
15.81
16.41
10.70
10.22
Funeral: Post
8.62
4.20
0.35
RAF Costs: Pre
13.93
12.64
12.59
12.30
13.03
13.49
13.87
14.85
RAF Costs: Post
6.57
4.98
2.22
Claimant Costs: Pre
14.08
12.21
11.09
11.11
10.92
10.82
10.83
11.47
Claimant Costs: Post
6.24
4.87
2.59
Loss of Earnings (LoE)
Loss of Support (LoS)
Medical Compensation (Med)
Funeral Costs
RAF Costs
Claimant Costs
Average Delay between Accident Date and Finalisation Date

2011
2010
2009
2008
2007
2006
2005
2004

GD: Pre
42.40
36.68
32.75
36.39
40.04
46.20
42.73
33.01
GD: Post
19.24
16.84
7.12

LoE: Pre
52.96
61.92
63.27
66.26
73.67
77.58
40.39
30.93
LoE: Post
20.58
13.51
LoS: Pre
60.67
67.14
70.02
71.99
71.05
74.52
36.67
30.22
LoS: Post
18.90
17.60
Med: Pre
49.12
36.26
25.13
30.26
37.52
43.57
38.07
32.52
Med: Post
11.10
7.08
4.49
Funeral: Pre
47.50
44.27
40.23
43.23
44.71
52.26
34.99
29.99
Funeral: Post
17.60
14.24
1.64
RAF Costs: Pre
47.67
51.21
55.51
62.37
69.94
73.17
69.35
69.07
RAF Costs: Post
16.83
15.31
11.74
Funeral Costs
RAF Costs
Claimant Costs
Claimant Costs: Pre
48.42
43.63
39.81
41.03
39.26
41.61
40.25
37.71
14.22
16.73
7.12
Average Delay between Registration Date and Finalisation Date

2011
2010
2009
2008
2007
2006
2005
2004

GD: Pre
28.77
25.27
22.58
25.69
29.13
35.03
31.74
22.64
GD: Post
12.02
12.23
4.53
LoE: Pre
40.38
48.24
49.15
51.37
58.87
62.04
29.24
20.75
LoE: Post
9.90
9.08
LoS: Pre
39.50
45.55
46.90
49.22
50.17
53.53
25.77
20.12
LoS: Post
12.37
13.45
Med: Pre
28.62
16.33
12.00
19.29
26.79
32.69
27.76
22.13
Med: Post
1.22
1.17
0.74
Funeral: Pre
28.98
27.49
24.94
27.18
28.95
35.86
24.39
19.93
Funeral: Post
9.28
10.06
1.29
RAF Costs: Pre
36.28
39.48
43.34
50.36
57.17
59.91
56.05
54.92
RAF Costs: Post
11.66
11.02
9.52
Claimant Costs: Pre
35.68
31.74
28.84
29.98
28.38
30.82
29.80
26.44
10.05
12.60
4.53
Funeral Costs
RAF Costs
Claimant Costs
Leadership and Governance

SECTION 2
SECTION 2
leadership and governance

2.1 Chairpersons Statement
On behalf of the new Board of Directors of the Road Accident Fund (RAF), I am pleased
to present the organisations Integrated Annual Report and the Annual Financial
Statements for the nancial year ending 31 March 2011. King III recommends an apply
or explain approach and this regime shows an appreciation for the fact that it is often
not a case of whether to comply or not, but rather to consider how the principles and
recommendations can be applied. This approach is followed throughout this report.
The RAF, although reporting to the Department of Transport (DoT), has been
identied as a key part of our countrys social security system. Indications are that there
will be a signicant transformation of this system in the coming years to improve the
extent to which support is provided to those in need, while simultaneously reducing
the current duplication of functions by State institutions. The RAF is mindful of these
developments and is contributing to the process of policy development within the
context of its governance arrangements. Our primary focus, however, remains on
radically improving the way in which we serve our customers.
Performance
The RAF returned a steady performance during the current nancial year driven by
a 14.2% growth in revenue compared to the previous nancial year. Total revenue at
R14,5 billion was R1,8 billion higher than the revenue in the previous nancial year of
R12,7 billion, mostly as a result of an 8 cents per litre increase in the RAF Fuel Levy during the nancial year, as well as a 17.5 cents per litre
increase during the previous nancial year. As a result, claims expenditure increased by 13% over the previous nancial year to R12,9 billion
from R11,4 billion last year. With the average settlement per claim increasing by 22% to R46,995 in 2011 from R38,502 in the previous nancial
year, the number of claims nalised reduced dramatically to 187,168 this nancial year compared to 262,185 in the previous nancial year. The
RAF had hoped to maintain the claims processing rate of the past years by obtaining a fuel levy increase higher than the 8 cents awarded by
Due to the lower nalisation rate of claims, the RAF was not able to reduce the backlog of outstanding claims. In fact, the number of
outstanding claims at nancial year-end had increased by an additional 35,466 claims (17%) to 244,652 from 209,186 last year.
National Priorities
As per the State of the Nation Address, the Honourable President of the Republic of South Africa indicated that the medium-term strategic
framework contains the priorities which form the core of governments eorts in the medium term. These priorities are crucially important to
the RAF as a government entity. The RAF has to rstly make all eorts to align to the national priorities, and secondly, it needs to ensure that
its new growth path provides concrete evidence that the main actions include working towards some of the national priorities.
National Treasury.
Some of governments national priorities include speeding up economic growth and transforming the economy to create decent work and
sustainable livelihoods; improving the health prole of all South Africans; building cohesive, caring and sustainable communities; building a
developmental state; improving public services; and strengthening democratic institutions.
In essence, the RAFs operations touch upon every level and sphere of government. Social security and transport policy is set at national level;
provincial government provides a vital framework within which hospital-based operations occur; and local government provides, among
other, an essential liaison with metropolitan police departments for crash scene investigation. With regard to the spheres of government, the
Board and Executive Management provide the ultimate level of accountability and leadership for the RAF; the legislature determines the
RAFs legislative mandate; and the judiciary provides interpretation of that legislation.
South African Economy

According to King III, the credit crunch, and the resulting crisis among leading nancial institutions, is increasingly presented as a crisis of
corporate governance. However, although current problems are to an extent indicative of shortcomings in the global nancial architecture,
they should not be interpreted as reecting dysfunction in the broader South African corporate governance models, where values-based
principles are followed and governance is applied, not only in form but also in substance.
Economic activity in South Africa improved steadily during the 2010 calendar year, with real gross domestic product (GDP) increasing to
2.8%3. However, fuel consumption for road use dropped by 0.1% to 17,4484 megalitres in the 2010 calendar year from 17,461 megalitres in
the previous calendar year. The 15% increase in foreign visitors5 to the country, totalling 11,6 million during the 2010 calendar year from
10,1 million in the previous calendar year, did not improve the situation. Nevertheless, the implied net fuel consumption experienced by
the RAF showed an increase of 2.4% to 20,1 megalitres based on average net fuel levy income received divided by an average levy in cents
per litre.
Figures released by the Road Trac Management Corporation (RTMC) indicate that the number of accidents with fatalities6 decreased by
0.2% to 10,837 in the 2010 calendar year from 10,857 in the previous calendar year, while fatalities increased by 1.5% to 13,967 from 13,768
in the previous calendar year. In the absence of direct statistics and applying the global standard of an average 20 injuries for each one (1)
fatality, the expected number of persons injured on South African roads is approximately 279,340 per annum. With the introduction of the
Amendment Act in August 2008, which, among other, seeks to reduce frivolous claims by persons who are barely injured in car accidents, the
RAF expected a reduction in reported claims. Surprisingly, this gure increased by 6% to 222,634 during the 2011 nancial year from 209,981
claims in the previous nancial year.
The continuous nancial challenges once again forced the RAF to slow down the payment of claims during the nancial year. We trust that
the recovery of the South African economy and an increase in economic activity will allow the RAF to continue to process as many claims as
possible without being concerned about running out of funds.
Decade of Action for Road Safety

Sadly, road accidents remain the RAFs main cost driver. Recent statistics indicate that approximately 1.3 million people die on the worlds
roads each year, and between 20 and 50 million sustain non-fatal injuries. It is projected that these gures will increase by about 65% over
the next 20 years unless there is a renewed commitment to the prevention of road accidents. Nevertheless, the tragedy behind these gures
attracts less mass media attention than other, less frequent types of disaster.
SA Reserve Bank Quarterly Review March 2011
South African Petroleum Industry (SAPIA), Department of Minerals and Energy (DME), Estimated fuel levy based on
CSIR report CR-2002/79 which recommended that 98% of all petrol sales and 70% of all diesel sales should be allocated for road use purposes.
Statistics SA Tourism 2010, Report No. 03-51-02
Road Trac Management Corporation (RTMC) (Dec 2010)
To this end, the United Nations (UN) launched a Decade of Action for Road Safety in 2011, with the aim of stabilising and subsequently
halving road deaths by 2020. Major economies of the G20, leading developing countries and public institutions such as the World Bank and
the World Health Organization have all endorsed the Decade of Action. Recognising the tremendous global burden of fatalities resulting from
road crashes, the RAF is actively participating in this worldwide initiative.
It is no secret that low- and middle-income countries present unique challenges. Road safety is addressed mostly as an isolated issue with
dierent organisations working on dierent elements. Existing community structures are not used to their full potential to solve road safety
problems which are common to all communities, as well as those which are typical of a specic community.
In addition to this problem, trac safety management has developed into a complex scientic task for which specic skills and knowledge
are required. This implies that road safety practitioners need to be fully informed regarding the integration of activities of disciplines such
as education and communication, community-driven trac safety, trac law enforcement, trac engineering, information systems, road
trac legislation, accident investigation, research procedures, etc. (To this end, the RAF has been instrumental in establishing and training
Community Road Safety Councils in all nine provinces.)
The reasons to act on road deaths include, but are not limited to the following:
90% of casualties occur in developing countries;
It is the number one cause of death among young people worldwide;
The economic cost of road crashes to developing countries is at least $100 billion per annum; and
Forecasts indicate that deaths could rise to 1.9 million by 2020, should no preventative measures be put in place.
The most important reason, though, is that road deaths are preventable and it is our collective responsibility to support every eort possible
to curb the carnage on our roads. Leading road safety experts believe that, with the right action, up to 5 million lives could be saved and
50 million injuries prevented during the Decade of Action. This will represent a reduction of about 50% on the predicted global death toll
by 2020.
Future Prospects
The current Board assumed oce in October 2010 and Members have spent a great deal of time and energy in getting to understand the
RAF and the issues it faces. We take note of the rescue plan and the subsequent actions that have taken place, and while we believe there
has been progress, there are aspects of the execution of the strategy that concern us. We are taking action to get a full understanding of
the situation and will take the necessary steps to ensure that the objectives that were set in respect of transforming the RAF are achieved.
These include, but are not limited to, goals in respect of the human resources component and a fully operational IT backbone.
The Boards primary focus during the coming years will be to oversee the completion of the RAFs transformation by achieving full
implementation of the New Operating Model (NOM). This model will revolutionise the way in which claims are processed and the manner
in which we interact with our customers. With the implementation of the NOM we will: increase our geographic footprint and thus improve
timely and caring manner; and reduce delivery costs through improved eciencies as well as increased direct claims.
While the NOM, the amendments to the legislation (which have come into operation) and planned amendments will see a further improvement
to the RAFs nancial position, it must be noted that unless changes are introduced in the way the RAF is funded, the organisation will
continue operating under dicult circumstances without adequate funding to settle new claims and reduce the backlog.
our accessibility; improve speed of delivery to our customers; interact directly with more customers to ensure that their needs are met in a
Acknowledgements
On behalf of the new Board of the RAF, I wish to extend our sincere gratitude to the Honourable Minister of Transport, Mr Sibusiso Ndebele,
his Deputy, the Honourable Mr Jeremy Cronin and the entire DoT team. We would also like to thank the Portfolio Committee on Transport,
together with our partner stakeholders, for the support and guidance aorded to the RAF during this nancial year.
Thanks should also be extended to Members of the Advisory Committee for their role in overseeing the RAF prior to the appointment of the
new Board on 1 October 2010. In addition, we would like to thank the outgoing Chief Executive Ocer, Mr Jacob Modise, for his contribution
to the RAF over the past six years. Finally, my thanks too go to the Management and sta of the RAF for their ongoing loyalty and dedication.
DR NTUTHUKO BHENGU
Chairperson of the Board
Date: 28 July 2011
2.2 Overview by the Acting Chief Executive Officer

Introduction
Guided by the principles and recommendations of King III, the RAFs Integrated Annual
Report 2011 focuses on putting the nancial results in perspective by also reporting
on how the organisation has, both positively and negatively, impacted on the socioeconomic life of its principal customer base (i.e. all users of South African roads) during
the year under review, and how the organisation intends to enhance those positive
aspects and eradicate or ameliorate the negative aspects in the years ahead. The latter
includes the eight risks identied in Section One of this report.
Financial Performance
The RAFs nancial position improved during the current nancial year and the
organisation reected a steady performance, even though it recorded a net decit of
R1,7 billion compared to R2,5 billion the previous year. This represents a R0,8 billion
improvement over the previous nancial year. An operating surplus before provision
for outstanding claims of R0,6 billion was recorded, compared to R0,4 billion the
previous year, thus representing an improvement of R0,2 billion.
Total revenue for the year grew by 14.2%, from R12,7 billion to R14,5 billion, as a result
of the 8c per litre increase in the RAF Fuel Levy and a 17.5 cents per litre increase in the previous nancial year. Net fuel levies accounted
for more than 99% of total revenue and this has grown by 15%, from R12,6 billion to R14,5 billion, compared to the previous nancial year.
This is attributable mainly to the increases in the RAF Fuel Levy over the past two nancial years as a result of a 12.5% increase of 8 cents per
litre (from 64 cents to 72 cents per litre) during the year under review and a 37.6% increase of 17.5 cents per litre (from 46.5 cents to 64 cents
per litre) during the previous nancial year.
Total expenses for the year, excluding the increase in the provision for outstanding claims, increased by 13%, from R12,3 billion to
R13,9 billion, compared to the previous nancial year. Cash claims expenditure accounted for 93% of total expenses, with the rest made up of
employee costs, i.e. 4.5%, and administration and other costs, i.e. 2.5%. Our ability to pay claims is limited to the net fuel levy income that the
RAF receives. With the increase in fuel levy of 15%, claims expenditure has increased by 13% over the previous nancial year to R12,9 billion
from R11,4 billion last year.
With the average settlement per claim increasing by 22% to R46,995 in 2011 from R38,502 in the previous nancial year, the number of claims
nalised needed to be reduced dramatically to 187,168 this nancial year from 262,185 in the previous nancial year. The RAF had hoped
to maintain the claims processing rate of past years by obtaining a fuel levy increase higher than the 8 cents awarded by National Treasury.
by an additional 35,466 claims (or 17%) to 244,652 from 209,186 last year.
The provision for outstanding claims for the year increased by R2,28 billion. This is lower than the increase in the provision of R2,87 billion for
2010, but much lower compared to the R12,16 billion and R6,40 billion in the 2009 and 2008 nancial years respectively. The new Amendment
Act, apart from being required to ensure the sustainability of the system, has, through the introduction of new generally applicable limitations
on the RAFs liability, gone some way in addressing the systemic problems in the RAF Act. However, the changes brought about by the
Amendment Act are only interim measures and do not address the serious underlying problems of the system. The DoTs proposal to move
to a no-fault benet scheme is welcomed, as this will best meet the needs of the South African public by providing an equitable, aordable
and sustainable scheme that focuses on medical requirements and rehabilitation.
During the nancial year under review, the RAF was unable to reduce the backlog of outstanding claims. The backlog has indeed increased
The RAF achieved some signicant milestones during the current nancial year as a result of operational eciencies, namely:
A total of 187,168 claims were nalised despite the RAF not receiving the necessary funding as requested; and
The RAF paid out R12,9 billion in claims compared to R6,2 billion ve years ago, which represents an increase of 108%.
Unfortunately, wastages continue to exist in the scheme, resulting in inappropriate allocation of economic resources. From the R12,9 billion
paid out in compensation:
Only R700 million was paid in medical costs;
Over R3,5 billion was spent in legal and expert costs;
Over R4,4 billion was paid in general damages primarily to persons not seriously injured;
Success fees (contingency fees) paid to attorneys are estimated at R4,7 billion, exacerbating the plight of the poor who suer most
hardship from accidents; and
The average time it takes to settle a claim still hovers between 12 to 60 months for non-hospitalised claims, primarily because of the need
to prove fault and the subjectivity in determining loss of earnings and support benets.
Financial Sustainability
As government continues to mould the basis for its Comprehensive Social Security System (CSSS) plans, there is an increased need for the
RAF to achieve nancial sustainability. The aspirations of the RAF remain closely tied to its vision, mission and mandate, while simultaneously
remaining relevant in the light of national priorities. One nal perspective which needs to be factored in is the current reality regarding funding.
The balance sheet still remains grossly under-capitalised with a net decit of R44,0 billion compared to R42,3 billion in the previous year.
Based on the Revenue Requirement Model (RRM) developed by the RAF and adopted by National Treasury, the RAF requested an increase
of 23.5 cents per litre in the fuel levy. The actual increase awarded to the RAF by the Minister of Finance was only 8 cents per litre. This
contributed to some extent to the decit for the year. As a result, the RAF was required in the short to medium term to proportionately reduce
targets and measures, as such were only achievable on the basis of the funding increase that had been proposed by the RAF. For as long as
we are not funded in line with the proposed RRM, the Fund will continue to face liquidity and solvency problems and be hampered in paying
claimants on time.
It is important to draw attention to the fact that the claims payouts and other expenses have to be managed within the ambit of the fuel levy
received. The eect of this is that the RAF, in arriving at its nancial projections, has had to limit the number of claims it will nalise each year
so as not to exceed its annual income. Operationally, the RAF is capable of nalising a signicantly higher number of claims per reporting
period, but is unable to do so as it does not have the funds available to pay a greater number of claims.
If the RAF is able to secure appropriate funding and keep a low cost base, it will be able to provide a speedier and more eective service to
customers. Further, a self-sustaining entity can more easily be assimilated into the emerging social security system. In view of this, the RAF
continues to place paramount importance on being relevant to society and customers. We believe that this can be achieved by, among other
initiatives, proactively reaching out to communities and then aording them an ecient service.
Operational Efficiency and Effectiveness

The RAF is currently in the process of rolling out its New Operating Model (NOM), which is intended to put in place systems, tools and
technologies that will allow the organisation to serve its customers better and also address historical legacies, such as lack of access to the RAF
by poor communities. Elements of the NOM include centralised processing of all claims; specialised processing units; a paperless processing
environment; a distributed Customer Service Network (CSN) among communities; full national coverage in all nine provinces; servicing
of clients in all 11 ocial languages; a strong IT backbone, allowing direct links to hospitals and other service providers, and containing
customer-centric software.
Full roll-out will occur over an 18-month period, and will involve far-reaching organisational transformation, training of sta and a complete
break with past practices and cultures. The infrastructure being put in place has also been designed to be future-proof and takes cognisance
of changes occurring in the social security sector, including the potential of a Road Accident Benet Scheme (RABS) being introduced to
replace the RAF.
Regulatory Environment
The Road Accident Fund Amendment Act came into operation on 1 August 2008. The Law Society of South Africa (LSSA) and other applicants
challenged the constitutionality and administrative processes pertaining to certain provisions of this Act and this application was heard by
the North Gauteng High Court, Pretoria during March 2010. The Court dismissed all but one of the challenges, which related to a process
matter as to where claims must be lodged.
On 25 November 2010, the Constitutional Court handed down judgement in an appeal against certain aspects of the judgement and
order of the North Gauteng High Court. The Constitutional Court dismissed three of the challenges and the constitutional validity of the
non-emergency tari was the only challenge that was successful. The Constitutional Court declared the regulation that prescribes the tari
for non-emergency medical expenses inconsistent with the Constitution and made an order obliging the Minister of Transport to prescribe
a new tari. In the interim period, the RAF is obliged to compensate the reasonable, necessary cost of treatment in respect of claims for
non-emergency medical treatment.
Customer Service Network

During the year under review, the RAF increased its footprint by establishing 10 new Hospital Service Centres (HSCs) across the country,
bringing the total number to 75. The focus in the next nancial year will be to increase the number of Community Service Centres, which will
be strategically spread in identied towns and cities around the country. The launch of mobile oces in all provinces will be another focus
area, in order to position the RAF within communities that would otherwise have no access to its core service oering.
The CSN is also actively involved in Community Outreach Programmes with the main objectives being to educate and inform local
communities on the RAFs claims processes and procedures, as well as to assist road accident victims to lodge claims or obtain the status
of claims submitted. The RAFs Mass Accidents Burial Programme involves paying funeral undertakers for burial related costs and assisting
survivors with the origination of personal claims and dependants with the origination of loss of support claims. In addition, our Patient
Outreach Programme (POP) provides for regular home visits to assess victims needs and make the necessary recommendations in respect
of caregivers, home renovations and the procurement of wheelchairs, prostheses and other necessities.
Evolution of Turnaround Strategy

After embarking on a turnaround strategy ve years ago, the RAF is now at a pivotal point in its transformation. Investments made in recent
years are now starting to deliver a return. As we chart the RAFs course into challenging and exciting waters ahead, it is worthwhile reecting
Over the past few years, we have focused mainly on acquiring tools to support the transformation, as well as designing our NOM that will
enable the RAF to transform into the caring, ecient and eective organisation we know it can be. The design and planning process is over
and various elements of the turnaround strategy are already in place. Key achievements to date include: the successful implementation of the
Enterprise Resource Planning System (SAP); the acquisition of a strong IT infrastructure to support the NOM; and the acquisition and design
of a new, paperless claims administration system.
As part of reviewing past performance and planning ahead, it is also worthwhile to reect on the overall evolution of the RAF strategy from
the 2006 nancial year to date, as depicted in the diagram below.
on some of the key outcomes realised thus far.
July 2005 FY2008
FY2009
FY2010 2011
FY2012 2014
Promote good governance

and effectively manage risk
within the RAF
Cost management:
Reduce costs
Increase operational
efficiencies
Efficient processes and

systems
Operational efficiency
and effectiveness
Foster positive stakeholder

relations through proactive
engagement
Legislative influence
Legislative amendments
Legislative enablement
Develop a sustainable
economic model in
conjunction with necessary
stakeholders
Restructuring the
business
Funding model
Financial sustainability
Develop proposals with

stakeholders to restore the
RAF to financial health
Proactive prevention of
accidents
Deliver the mandate in an

operationally effective and
efficient manner
Minimise the cost of
administration and service
providers (thus maximising
funds available for payment
of compensation)
Figure 1 Evolution of the RAF Strategy

Strategic Objectives: July 2005 2008 Financial Years
Between the 2005 and 2008 nancial years, the RAF focused on the development of a turnaround strategy based on an in-depth business
diagnostic performed at the beginning of that period. The cornerstones to achieve full implementation of the turnaround strategy (and thus
transformation of the organisation) were put in place, including the roll-out of SAP, commencing to redesign business processes and the
development of an RRM.
Strategic Objectives: 2009 Financial Year
With the foundation for the rescue plan in place, the strategy in the 2009 nancial year was directed at restructuring internal business
processes and enhancing IT capability to replace the outdated paper-based claims process that had failed our customers. In addition, the RAF
extended its geographic footprint to make it more accessible to the public.
Strategic Objectives: 2010 2011 Financial Years
During the 2010 to 2011 nancial years, the strategy focused on piloting and testing new business processes, supporting the DoT in
transforming the inherently awed fault-based legislation and reducing the backlog of claims by means of improved eciencies.
Strategic Objectives: 2012 2014 Financial Years
During this period, the focus will be on legislative enablement, nancial sustainability and operational eciency and eectiveness, which
represent an expansion on the previous turnaround strategy. For one, the legislative enablement includes activities related to contributing to
and shaping DoTs position on RABS, as well as governments CSSS plans, in addition to driving the amendment of constraining legislation.
Financial sustainability refocuses the lenses on achieving a stable nancial position, but it expands on this by placing ever-increasing
importance on seeking options for capitalising the RAF in addition to the traditional fuel levy funding model.
Finally, in prior years, the focus has been on improving information communication technology (ICT) platforms and underlying business
processes, yet, our revised outlook places more emphasis on an integrated operating model which will focus on a seamless and appropriate
customer experience. Thus, we will continue to make our systems and processes more ecient, but, in addition, we will include the expansion
of our national footprint and the design of our customer interaction points to ensure that the total experience for the customer is of a
consistently high standard.
Looking to the Future

In addition to the aforementioned, the RAF has also recognised the signicance of certain areas of our business, most notably eective
communications, and skilled people and leadership. For the years ahead, the eorts in our turnaround strategy need to be intensied,
including pursuing legislative changes which will enable and improve the RAFs underlying business model, while oering equitable cover
to our customers; setting the RAF on a more sustainable nancial footing through investigating other capitalisation options, while still
orientating our stakeholders to our nancial realities; and nally, transforming the organisation through process and system improvements,
as well as extending our geographic footprint, which will bring us closer to our customers.
Acknowledgements
I wish to express my heartfelt thanks to the Honourable Minister of Transport, Mr Sibusiso Ndebele, and the Deputy Minister of Transport,
Mr Jeremy Cronin, for their ongoing assistance in seeking solutions for the RAF during the period under review; the Director-General,
Mr George Mahlalela and ocials at the DoT; the Members of the Interim Advisory Committee for their guidance and leadership; as well as
the new Board of Directors for their enthusiasm and dedication to the cause of transforming the RAF into a world-class provider of cover for
personal injury or death arising from the use of motor vehicles. And nally, my appreciation also goes to the outgoing Chief Executive Ocer,
as well as the RAF Management and sta for their continued support and loyalty.
MR MANDLA MVELASE
Acting Chief Executive Ocer
Date: 28 July 2011
2.3 Leadership
2.3.1 Board Member Profiles
Dr NM Bhengu (Chairperson of the Board)
Date of Appointment as Non-Executive Director: 1 October 2010
Qualifications: MBChB (University of Natal), Diploma in Anaesthetics (College of Medicine of South Africa),
MBA (Wales University, Cardi ), Master of Public Health, Healthcare Management (Harvard University)
Major Directorships held: Nestl South Africa, SA Nuclear Energy Corporation (NECSA)
Current Employment: Clinix Health Group
Mr V Mahlangu (Vice Chairperson of the Board)

Qualifications: Diploma in Public Relations (Damelin), National Certicate in Business Administration
(Technikon SA), Small Business Development Programme (Unisa), Certicate in Public Sector Governance
(Unisa), Certicate in Management Studies (MANCOSA), MBA (General) (MANCOSA)
Major Directorships held: None
Current Employment: Match Commissioner: Confederation of African Football (CAF)
Mr JN Masekoameng
Qualifications: BCom (University of the Witwatersrand), Higher Diploma in Tax Law (University of
Johannesburg), Certicate in Labour Law (Unisa), MBL (Unisa School of Business Leadership)
Major Directorships held: Matlotlo Trading cc and Epistar
Current Employment: Chief Executive Ocer: Ditsebi Solutions
Mr T Moyo

Qualifications: BCom (Accounting) (ROMA), Post-graduate Diploma in Strategic Management (Baruch
College City University of New York), MBA (Finance) (Cardi Business School, Wales University), Risk
Management (SU), Graduate Diploma in Company Direction (Graduate Institute of Management),
Executive Development Programme (Harvard Business School), AIRMSA, MCMA (UK)
Major Directorships held: Orion SA (Pty) Ltd, Yokoyo Investments (Pty) Ltd, Alpha Tours Africa (Pty) Ltd,
Innovida SA Dubai (Pty) Ltd, Innovida South Africa (Pty) Ltd, Push Umlozi (Pty) Ltd
Current Employment: Chairperson & Chief Executive Ocer: Yokoyo Investments (Pty) Ltd, Innovida
South Africa (Pty) Ltd and Alpha Tours Africa (Pty) Ltd
Adv DS Qocha
Qualifications: BA (Law) (National University of Lesotho), LLB (National University of Lesotho), Strategic
Leadership Programme (GIBS), Broadcasting Policy and Regulation (LINK Centre, Wits), Telecoms Policy
Regulation and Management (LINK Centre, Wits) and General Intellectual Property Course (WIPO)
Major Directorships held: Epode Construction cc
Current Employment: Deputy Executive Director: National Association of Broadcasters (NAB)
Ms NZ Qunta
Qualifications: BAdmin (University of Zululand), BCom (Hons) (University of Pretoria), MCom (Economics)
(University of Pretoria), MBA (University of Oxford Brookes) and Corporate Governance Certicate (Unisa)
Major Directorships held: Mintek, KwaZulu-Natal Tourism
Current Employment: Chief Executive Ocer: ZBQ Consulting
Adv MJ Ralefatane
Qualifications: BProc (UNIN), LLB (UNIN), LLM (Labour Law) (RAU), Certicate in Labour Relations
(University of Pretoria) and Certicate in Human Rights (University of Pretoria)
Major Directorships held: Gauteng Enterprise Propeller and Gauteng Development Agency
Current Employment: MJ Ralefatane & Associates cc
Mr DK Smith
Qualifications: BSc (University of Stellenbosch), International Senior Management Programme (Harvard
Business School)
Current Employment: Director of Companies
Major Directorships held: SANTAM, Clover Industries Ltd, Clover Danone Beverages (Pty) Ltd, MediClinic Corporation Ltd and Reinsurance Group of America (SA)
Ms A Steyn
Qualifications: BSc (University of Stellenbosch)
Current Employment: Private Practitioner
Mr T Tenza
Date of Appointment as Director-Generals Representative on the Board: 1 January 2010
Qualifications: Secondary Teachers Diploma (Indumiso College), BCom (Unisa), BCom Hons (Unisa),
Master of Arts in Applied Economics (University of Michigan, (USA)
Current Employment: Acting DDG: Transport Policy and Economic Regulation (DoT), Chief Director:
Research and Development (DoT)
2.3.2 Advisory Committee Profiles

Mr V Mahlangu (Chairperson Advisory Committee)
Date of Appointment as Advisory Committee Member: 1 August 2009. End of term: 30 September 2010
Qualifications: Diploma in Public Relations (Damelin), National Certicate in Business Administration (Technikon SA), Small Business Development
Programme (Unisa), Certicate in Public Sector Governance (Unisa), Certicate in Management Studies (MANCOSA), MBA (General) (MANCOSA)
Current Employment: Match Commissioner: Confederation of African Football (CAF)
Mr T Moyo
Qualifications: BCom (Accounting) (ROMA), Post-graduate Diploma in Strategic Management (Baruch College City University of New York),
MBA (Finance) (Cardi Business School, Wales University), Risk Management (SU), Graduate Diploma in Company Direction (Graduate Institute of
Management), Executive Development Programme (Harvard Business School), AIRMSA, MCMA (UK)
Major Directorships held: Orion SA (Pty) Ltd, Yokoyo Investments (Pty) Ltd, Alpha Tours Africa (Pty) Ltd, Innovida SA Dubai (Pty) Ltd, Innovida
South Africa (Pty) Ltd, Push Umlozi (Pty) Ltd
Current Employment: Chairperson & Chief Executive Ocer: Yokoyo Investments (Pty) Ltd, Innovida South Africa (Pty) Ltd and Alpha Tours Africa
(Pty) Ltd
Ms KE Moloto-Stole
Date of Appointment as Advisory Committee Member: 1 August 2009. End of term: 19 April 2010
Qualifications: BProc (Unisa), LLB (Wits), MBA (Thames Valley University, UK)
Major Directorships held: Moloto-Stole Inc, Rorisang Basadi Investment Holdings (Pty) Ltd, Gauteng Gambling Board
Current Employment: Managing Director: Moloto-Stole Inc
Prof. CJB Gree

Date of Appointment as Advisory Committee Member: 1 August 2009. End of term 30 September 2010
Qualifications: FFA, FASSA, FIAC, BSc Hons (Unisa)
Major Directorships held: Independent Actuarial Consultants, Zonkizizwe Insurance Brokers (Pty) Ltd
Current Employment: Actuarial Consultant: Independent Actuarial Consultants
Mr SA Msibi
Qualifications: BSc Chemical Engineering (UKZN)
Major Directorships held: Pamodzi Investment Holdings (Pty) Ltd, Altech Information Technologies (Pty) Ltd
Current Employment: Executive Director: Pamodzi Investment Holdings (Pty) Ltd
Dr AKA Dasoo
Current Employment: Chief Executive Ocer: Liseko Group
Qualifications: MBChB (UKZN)

Major Directorships held: Liseko Strategic Investments (Pty) Ltd, Liseko Life Science Investments (Pty) Ltd, Metswale (Pty) Ltd, Meditech SA (Pty)
Ltd, Yeikona (Pty) Ltd, Essential Access cc
Ms HG Motau
Date of Appointment as Advisory Committee Member: 1 August 2009. End of term: 30 April 2010
Qualifications: BCom (Accounting) (Unisa), BCom (Accounting) Hons (Unisa), CA (SA)
Major Directorships held: Pinnacle Technology Holdings Ltd, York Timber Organisation Ltd, The Innovation Hub Management Company
(Pty) Ltd
Current Employment: Director: Resources and Planning KPMG
Mr T Tenza
Date of Appointment as Director-Generals Representative on the Board: 1 January 2010
Qualifications: Secondary Teachers Diploma (Indumiso College), BCom (Unisa), BCom Hons (Unisa), Master of Arts in Applied Economics (University
of Michigan, USA)
Current Employment: Acting DDG: Transport Policy and Economic Regulation (DoT), Chief Director: Research and Development (DoT)
2.3.3 Executive Management
Mr JRD Modise
Position: Chief Executive Ocer (Outgoing)
Qualifications: BCom (Wits), BAcc (Wits), CA (SA), MBA (Wits Business School), Advanced Management
Programme (Harvard), Advanced Management Programme (Samford)
Major Directorships held: Allied Electronics Corporation Ltd, Blue IQ Investment Holdings (Pty) Ltd,
Eskom Holdings Ltd, Batsomi Group, Nelson Mandela Childrens Fund (Trustee)
Mr A Gernandt
Position: Chief Operations Ocer
Qualifications: BCom (Accounting) (UP), BCom Hons CTA (UP), CA (SA), Executive Leadership
Programme Certicate (Unisa), Executive Development Programme (Gibbs Institute)
Mr AAA Seedat
Position: Acting Chief Financial Ocer (From 2 March 2010)
Qualifications: BCom (Wits), BAcc (Wits), CA (SA), Executive Development Programme
(Wits Business School)
Mr J Hlabangane
Qualifications: BAdmin, Employee Relations Diploma, Executive Development Programme
(Gibbs Institute)
Position: Executive: Human Capital
Mr S Ramessur
Position: Chief Information Ocer
Qualifications: BSc Computer Science (University of Natal), Certicate in Accounting (Heriott Watt),
Certicate in Strategic Information Systems Planning (Heriott Watt), Executive Development Programme
(Gibbs Institute)
Ms L Steele
Position: Executive: Legal and Compliance
Qualifications: BA LLB (Wits)
Mr M Mvelase
Position: Executive: Marketing and Communications
Qualifications: Bachelor of Law (University of Zululand), Post-graduate Diploma in Marketing (Unisa),

Diploma in Financial Management (Damelin)
2.4 Corporate Governance

2.4.1 Introduction
According to King III, good governance rests on four fundamental principles, i.e. fairness, accountability, responsibility and transparency.
Fairness means that the interests of all the stakeholders must be taken into account. Within the context of the RAF, stakeholders are dened
as a person, group or organisation that has a direct stake in the business because they can aect or be aected by its activities, objectives
and policies. Accountability refers to the ability of a Board and Executive Management to explain and justify actions, while responsibility refers
to the obligation of the Board and Executive Management to take good care of the assets, investments and interests of the stakeholders.
Transparency implies disclosure of the organisations nancial, risk, social and environmental performance.
The philosophy underlying King III is concerned with three principles:
Eective leadership characterised by the four fundamental principles of fairness, accountability, responsibility and transparency, as well
as ubuntu, a South African concept that includes mutual support and respect, interdependence, unity, collective work and responsibility.
Sustainability, which implies conducting an entitys operations in such a manner, that existing needs are met while taking into
consideration the economic life of the society and the impact of its operations on future generations. An entity is expected to be
a responsible citizen that must, in an integrated manner, take the following into consideration when formulating strategy, risk and
performance: social, environmental and economic issues. The entity must, therefore, not only report on sustainability, but its performance
must be sustainable.
Corporate citizenship based on the Constitution that imposes responsibilities on individuals and corporate entities alike to ensure that
people can rely on the realisation of fundamental rights.
Since King III applies to all entities and not only listed companies, the voluntary nature of the Code is especially important since it is not
possible to have one set of rules that applies equally to all the variants of corporate life. Accordingly, King III follows an apply or explain
approach where the Board may decide not to follow a principle in particular circumstances, yet still achieve standards of good corporate
governance. The starting point of the Board, however, will always be to ensure that legal requirements are complied with.
King III follows a stakeholder-inclusive model, which is based on the principles that taking the legitimate interests of stakeholders of the
entity into consideration is also in the best interests of the entity. As such, success is now dened in terms of the long-term positive impact
on all stakeholders of the entity. As stakeholders need to assess the sustainability of the entity (that includes aspects such as brand, goodwill,
quality of management and risk management and whether sustainability issues have been taken into consideration), the entity must provide
integrated reports that will also supply forward-looking information as opposed to the nancial statements that focus only on a snapshot of
the entity at a given point in time. This report, therefore, contains sucient information for stakeholders to make informed decisions.
2.4.2 The Board: Duties and Responsibilities

The Minister of Transport appointed a new Board with eect from 1 October 2010.
Committee must consist of independent Non-executive Directors and the Chairman may not serve as the Chairman of the Board. The Board
is also responsible for compliance by the entity with all laws and codes and the integrity of the sustainability report based on the principles
of transparency and accountability.
As part of the Boards responsibility for risk governance, the Board must pre-determine the acceptable levels of risk and monitor that risks
taken are within set parameters of acceptable risk. The Audit or Risk Management Committee should assist the Board in carrying out this
function.
Relationships with and perceptions of stakeholders should be actively managed as an important aspect of protecting and enhancing the
reputation of the organisation.
The Board should ensure that an eective and independent Audit Committee exists that must conduct risk-based internal audits. The Audit
The Board of the RAF is responsible for determining the overall direction of the RAF. This is done through a three-year rolling strategic plan
submitted to the Executive Authority, the Minister of Transport, for approval on or before 30 September each year, in compliance with
Treasury Regulation 30. The Board is also responsible for formulating and implementing policies that are necessary to achieve the RAFs
strategic goals and maintain good governance.
The Board is tasked with monitoring the eciency and eectiveness of Management and renders support to Management in implementing
the strategies and policies of the Board. The onus to provide eective, compliant corporate governance is collectively assumed by the
Board. The Board is governed by the RAF Corporate Charter, which details the roles, structures and functions of the Board, its various Board
Sub-Committees, Chairs and Chief Executive Ocer. The Board comprises a majority of Non-Executive Directors. The Chairman is an
independent Non-executive Director. The Board was appointed on a three-year term, which commenced on 1 October 2010.
The RAFs Board of Directors regard corporate governance as fundamental to the success of the business and are fully committed to ensuring
that good corporate governance is practised in order for the RAF to remain a sustainable and viable business of global stature. The RAF
ensures that its processes and practices are reviewed on an ongoing basis to:
Ensure compliance with legal obligations;
Ensure the maintenance of appropriate internal controls and risk management policies and practices;
Ensure the use of RAF funds in an economic, ecient and eective manner;
Ensure adherence to good corporate governance practices that are continually benchmarked; and
Assess the impact of the RAFs operations on society, the economy and the environment.
The processes and practices are underpinned by the principles of transparency, integrity and accountability and an inclusive approach that
recognises the importance of all stakeholders with respect to the viability and sustainability of the RAF. The Board is responsible for ensuring
that this approach is followed and supports the organisation in instilling these principles within the RAF context.
2.4.3 Board Structure

The RAF has a unitary Board structure comprising ten Non-Executive Directors, including the Department of Transport (DoT) representative.
The Board is appointed by the Minister of Transport, who exercises control over the RAF on behalf of the government of the Republic of South
Africa. The RAF Act provides that the Minister shall appoint the Chairperson, Vice Chairperson and Non-Executive Directors of the RAF. The
Minister also appoints the Chief Executive Ocer (CEO) on such terms and conditions as may be determined by the Board.
The standard term of a Non-Executive Director is three years. Non-Executive Directors are eligible for re-appointment for a further two terms of
three years. The Executive Management team is appointed by the CEO, after consultation with the Board. Executive Management is employed
on the basis of either a standard permanent employment contract or a xed-term contract. The maximum duration of xed-term contracts
is three years.
The Board is required to meet as often as the business of the RAF requires, but at least four times a year.
Directors have unrestricted access to the advice and services of the Corporate Secretary. In addition, the Directors are entitled to obtain
independent, professional advice at the RAFs expense, where they deem it necessary.
The Board induction took place on 2 and 3 November 2010. Directors receive ongoing training as they attend relevant courses throughout
the year, as presented by various service providers, including the Institute of Directors.
2.4.4 Composition of the Board

Members of the Board (Appointed as from 1 October 2010)
1. Dr NM Bhengu (Chairperson of the Board)
2. Mr V Mahlangu (Vice Chairperson of the Board)
3. Mr JN Masekoameng
4. Mr T Moyo
5. Adv DS Qocha
6. Ms NZ Qunta
7. Adv MJ Ralefatane
8. Mr DK Smith
9. Ms A Steyn
10. Mr T Tenza (Director-General Transport Designee)
Chief Executive Officer: Mr JRD Modise

Corporate Secretary: Ms JR Cornelius
2.4.5 Powers and Functions of the Board

According to section 11 of the RAF Act:
(1)
The Board shall, subject to the powers of the Minister, exercise overall authority and control over the nancial position, operation and
management of the Fund, and may inter alia:
(a)
Make recommendations to the Minister in respect of:

(i)
The annual budget of the Fund;
(ii)
Any amendment to this Act;
(iii)
Entering into an agreement with any institution referred to in section 9;
(iv)
(This sub-paragraph was deleted by section 4 of Act No. 19 of 2005 with eect from 31 July 2006);
(v)
Any regulation to be made under this Act.
(b)
Terminate the appointment of any agent and determine conditions on which such appointment is eected or terminated;
(c)
Approve the appointment, determination of conditions of employment and dismissal by the Chief Executive Ocer of sta of the
Fund on management level;
Approve internal rules and directions in respect of the Management of the Fund;
(e)
Approve loans made or given by the Fund;
(f )
Approve donations for research in connection with any matter regarding injuries sustained in motor vehicle accidents;
(g)
Determine guidelines in relation to the investment of the money of the Fund; and
(h)
Delegate or assign to the Chief Executive Ocer and any member of the sta of the Fund any power or duty of the Board as it
may deem t, but shall not be divested of any power or duty so delegated or assigned, and may amend or withdraw any decision
made by virtue of such delegation or assignment.
(2)
The Board may report to the Minister of Transport as often as it deems necessary, but shall at least once during a nancial year, or when
requested by the Minister to do so, report to the Minister regarding matters dealt with during that year, or as requested by the Minister.
(3)
A quorum for any meeting of the Board shall be a majority of its voting members.
(4)
The Board shall meet as often as the business of the Fund may require.
(5)
(a)
The Members of the Board referred to in section 10(1)(a) shall be reimbursed by the Fund for all reasonable expenses incurred in
attending meetings of the Board.
(d)
(b)
Members of the Board shall be remunerated by the Fund for services rendered as such Members, and reimbursed for all reasonable
expenses incurred in attending meetings of the Board, provided that the Chairperson of the Board may receive such higher
remuneration than that of the other Members, as may be determined by the Board.
(6)
(a)
Resolutions of the Board shall, whenever practicable, be taken on the basis of consensus.
(b)
If consensus cannot be reached and except where otherwise expressly provided, all matters before the Board shall be decided by
a majority of the votes cast.
2.4.6 Board and Sub-Committees

The Corporate Charter of the RAF outlines the functions of the Sub-Committees of the Board, including the composition, role and
responsibilities, delegated authority and meeting requirements in respect of each of the Sub-Committees. The Board has established the
following Sub-Committees: Audit Committee; Risk Management Committee; Claims Committee; Remuneration and Human Resources
Committee; and Chairpersons Committee (ad hoc).
RAF BOARD
Dr Ntuthuko Bhengu
(Chairperson)
Mr Veli Mahlangu
(Vice Chairperson)
Chairpersons Committee
Dr NM Bhengu
Mr V Mahlangu
Mr T Moyo
Adv. MJ Ralefatane
Mr DK Smith
Audit Committee
Remuneration and
HR Committee
Claims Committee
Risk Management
Committee
Mr T Moyo
(Interim Chairperson)
Adv. MJ Ralefatane
Mr JN Masekoameng
Ms NZ Qunta
Adv. DS Qocha
Adv. MJ Ralefatane
(Chairperson)
Mr DK Smith
Mr V Mahlangu
Ms NZ Qunta
Mr T Moyo
Ms A Steyn
Mr DK Smith
(Chairperson)
Mr V Mahlangu
Ms A Steyn
Adv. DS Qocha
Mr JN Masekoameng
Mr T Moyo
(Chairperson)
Mr JN Masekoameng
Adv. DS Qocha
Ms A Steyn
Adv. MJ Ralefatane
The Board retains full and eective control over the operations of the organisation and has delegated some of its powers to Sub-Committees,
the CEO and Executive Management through a Delegation of Authority framework. The delegation of authority does not dilute the duties,
responsibilities and accountability of the individual Directors and the Board as a whole.
2.4.6.1
Audit Committee
Audit Committee Members

Role
(Board)
T Moyo
Chairperson
MJ Ralefetane
Member
JN Masekoameng
Member
NZ Qunta
Member
DS Qocha
Member (As of 28 January 2011)
The Board of the RAF, as the Accounting Authority, has established an Audit Committee in compliance with the PFMA, as well as the Treasury
Regulations issued in terms of the PFMA. The Committee consists of ve Non-Executive Directors. The Chairperson is appointed by the
Board and is an independent Non-Executive Director of the Board. The majority of current Audit Committee members are deemed to be
independent. The Chairperson of the Board is not eligible to chair the Audit Committee. The Audit Committee meets at least four times a year,
but may meet more frequently when necessary. The Committee may invite the Chairperson of the Board, the Chief Financial Ocer, external
auditors or the Chief Audit Executive, or any other person to attend meetings. The Committee meets with Internal Audit, the Auditor-General
of South Africa, or an external auditor, at least quarterly to ensure that there are no unresolved issues of concern.
The Audit Charter is reviewed annually and approved by the Board.
The overall objective of the Audit Committee is to assist the Board of the RAF in ensuring that Management has created and maintained
eective risk management, and an eective internal control environment in the organisation, and that Management demonstrates and
stimulates the necessary respect of the internal control and governance structures for the achievement of the objectives and goals of the
organisation, as well as the management of risks to an acceptable level. The Audit Committee further accepts responsibility for the Integrated
Annual Report.
The Committee satises itself of the level of expertise, resources and expertise of the Finance Department.
The Report of the Audit Committee, on page 156 of the Annual Financial Statements, provides a full description of its remit. The report
includes commentary on internal nancial controls, external audit, going concern, risk management, internal audit, sustainability reporting
and the expertise of the Chief Financial Ocer and the nance function.
2.4.6.2
Remuneration and Human Resources Committee
REMCO Members
Role
(Board)
MJ Ralefetane
Chairperson
DK Smith
Member
V Mahlangu
Member
NZ Qunta
Member
T Moyo
A Steyn
The Board of the RAF has also established a Remuneration and Human Resources Committee (REMCO). This Committee consists of six
Non-Executive Directors. The CEO is an ex ocio member of the Committee. The Chairperson is appointed by the Board and is an independent,
Non-Executive Director. The Committee meets twice a year, or as often as necessary.
REMCO is responsible for developing and implementing a competitive Human Resources (HR) Strategy to ensure that the RAF is able to
attract, retain and develop the best possible talent to support superior business performance. The objective is to create an organisational
culture, structure and processes to support the development of people and the optimisation of their potential. The HR Strategy forms part of
the strategic plan and REMCO is responsible for enforcing, monitoring and auditing development and progress.
The functions of REMCO include, but are not limited to:
Overseeing the setting and administration of remuneration at all levels in the RAF;
Ensuring that there is a Remuneration Policy in place which promotes the achievement of the RAFs strategic objectives and encourages
individual performance;
Reviewing the outcome of the implementation of the Remuneration Policy to ensure that the set objectives are being achieved;
Ensuring that a mix of xed and variable pay meets the RAFs needs and strategic objectives;
Satisfying itself as to the accuracy of recorded performance measures that govern the vesting of incentives;
Ensuring that all benets, including retirement benets and other nancial arrangements, are justied and correctly valued;
Considering the results of the performance evaluation of the CEO and Executives in determining remuneration;
Selecting an appropriate comparative group when comparing remuneration levels;
Developing appropriate HR policies for the RAF;
Monitoring the implementation of the RAFs HR Strategy, Employment Equity (EE) Policy and Skills Development Plan; and
Overseeing the preparation and recommending to the Board the Remuneration Report, to be included in the Integrated Report, with
specic reference to accuracy, completeness and transparency.
The Committee is required to ensure that the report provides a clear explanation of how the Remuneration Policy has been implemented.
2.4.6.3
Claims Committee
Claims Committee Members

Role
(Board)
DK Smith
Chairperson
V Mahlangu
JN Masekoameng
Member
Member as of 28 January 2011
A Steyn
Member
DS Qocha
Member
The Board of the RAF has also established a Claims Committee. This Committee consists of ve Non-Executive Directors. The CEO is an
ex ocio member of the Committee. The Chairperson is appointed by the Board and is an independent, Non-Executive Director. The
Committee meets four times a year, or as often as necessary. The Chief Operations Ocer and other Executives attend meetings of the Claims
Committee, as and when required.
The functions of this Committee include, but are not limited to, the following:
The setting up of appropriate policies and procedures relating to all aspects of claims administration;
Approving strategies relating to the streamlining of activities in the claims operations environment and improvement of service delivery;
Monitoring the performance of the claims operations of the RAF;
Monitoring settlement of claims in excess of R5 million;
Recommending the valuation of the outstanding claims liability to the Board for approval; and
Overseeing legislative amendments pertaining to the RAF Act.
2.4.6.4
Risk Management Committee
Risk Management Committee Members

Role
(Board )
T Moyo
Chairperson
JN Masekoameng
Member
DS Qocha
Member
A Steyn
Member
MJ Ralefatane
The Board of the RAF has an established Risk Management Committee in compliance with the PFMA, as well as the Treasury Regulations issued
Non-Executive Director of the Board. The CEO is an ex ocio member of the Committee. The Committee Chairperson is knowledgeable of
the status of the position, and has the requisite business, nancial and leadership skills. This Committee meets at least four times a year, but
may meet more frequently when necessary. The Committee may invite the Chairperson of the Board, the Chief Financial Ocer, or any other
person to attend meetings.
Risk management remains an integral part of the RAFs operations. The Risk Management Committee of the Board is satised that during the
2011 nancial year, the risks were managed within the risk appetite set by the Board and that sucient monitoring, reporting and controls
exists to ensure that risks are eectively managed.
in terms of the PFMA. The Committee consists of ve Non-Executive Directors appointed by the Board. The Chairperson is an independent,
The roles and responsibilities of the Risk Management Committee include:
Ensuring that the RAF has implemented an eective policy and plan for risk management that will enhance the RAFs ability to achieve
its strategic objectives;
Ensuring that disclosure regarding risk is comprehensive, timely and relevant;
Overseeing the development and annual review of a policy and plan for risk management to recommend to the Board for approval;
Monitoring implementation of the Risk Management Policy and Plan by means of risk management systems and processes;
Ensuring that the Risk Management Plan is widely disseminated throughout the organisation and integrated in the day-to-day activities
of the RAF;
Monitoring the quality, integrity and reliability of the organisations Risk Management framework;
Reviewing and assessing that the integrity of risk control systems and strategies are in place and are eectively managed;
Making recommendations to the Board concerning the levels of tolerance and appetite, as approved by the Board;
Ensuring that risk management assessments are performed on a continuous basis;
Ensuring that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks;
Ensuring that Management considers and implements appropriate risk responses;
Ensuring that continuous risk monitoring by Management takes place; and
Monitoring external developments relating to the practice of corporate risk accountability and the reporting of specically associated
risks, including emerging external risk trends and their impact on the RAF.
In line with King III, the Risk Committee will be re-examining its mandate to ensure its responsibilities are adequately addressed.
The Committee ensures that its processes assist Management to consider all risk areas in any decisions or recommendations made to the
Board, and ensures that subsequent risks that may arise from time to time are considered and reviewed. In addition, the Committee:
Reviews the reinsurance protection of the RAF, including type of cover, limits and deductibles and ensures that the Board is apprised of
uninsured and uninsurable risks;
Together with the RAFs Corporate Legal Services department, reviews any legal matters that could have a signicant impact on the
organisations business and monitors the decision-making processes within the RAF;
Reviews information to be provided in the Integrated Annual Report of the organisation related to risk management and makes
recommendations to the Board to ensure that the disclosure regarding risk is comprehensive, timely and relevant;
In carrying out its responsibilities under these terms of reference and via the coordinating ocial, the Committee is authorised to
investigate any activity within its terms of reference and may, as and when required, obtain independent professional and legal advice,
or appoint any advisors or consultants to assist in executing its duties;
Ensures that all decisions support and promote the RAFs Risk Management Strategy;
Conducts a self-assessment of its performance and eectiveness at least once a year and evaluates the performance of the Risk Manager;
Liaises closely with the Audit Committee to exchange information relevant to risk;
Provides a formal opinion to the Board on the eectiveness of the risk management system and processes; and
Reviews reporting pertaining to risk management to be included in the Integrated Annual Report with regard to relevance,
comprehensiveness and timeliness.

A Risk Management Policy and Risk Management Framework have been approved that are supported by strong risk management
methodologies overseen by the Risk Management Committee. A Senior Risk Manager oversees the operational aspects of risk management
within the RAF.
On an annual basis, the Board undertakes a risk assessment whereby the top risks of the organisation are identied. A full Risk Strategy is then
developed to address the identied risks. The top eight (8) risks identied by the Board are as follows:
Business re-engineering;
Solvency;
Leadership and people management;
Fraud and corruption;
Reputation and image;
Systems and processes to support the business;
Regulatory framework; and
Liquidity.
A discussion of each of these risks and the systems in place by the RAF for managing the risks can be found in Section 3 of this report.
2.4.6.5
Chairpersons Committee
The Chairpersons Committee is an ad hoc Committee that meets as and when required by the Board to deal with, among other issues,
matters of emergency that cannot be dealt with through special Board meetings. There was no need to meet during the year under review.
Chairpersons Committee of the Board (1 October 2011 Currently)
Dr NM Bhengu (Chairperson)
Mr V Mahlangu (Vice Chairperson)
Mr T Moyo (Chairperson Audit and Risk Committees)
Mr DK Smith (Chairperson Claims Committee)
Adv. MJ Ralefatane (Chairperson Remuneration and Human Resources Committee)
2.4.7 Advisory Committee and Sub-Committees

The RAF Advisory Committees tenure ended during the period under review.
Members of the Advisory Committee (Term expired on 30 September 2010)

Mr V Mahlangu (Chairperson of the Advisory Committee)
Mr T Moyo
Ms KE Moloto-Stofile (Resigned 19 April 2010)
Prof. CJB Greeff
Mr SA Msibi
Dr AKA Dasoo
Ms HG Motau (Resigned 30 April 2010)
Mr T Tenza (Director-General Transport Designee)
Chief Executive Officer: Mr JRD Modise

Role
(Advisory Committee)
HG Motau
Chairperson (Resigned 30 April 2010)
CJB Greeff
Chairperson (As of 1 May 2010)
T Moyo
Member
AKA Dasoo
Member
SA Msibi
Member
Corporate Secretary: Ms JR Cornelius
REMCO Members
Role
SA Msibi
Chairperson
AKA Dasoo
Member
T Moyo
Member
KE Moloto-Stofile
Member (Resigned 19 April 2010)
T Tenza
Member

Role
CJB Greeff
Chairperson (Until 30 April 2010: thereafter a Member)
AKA Dasoo
(Chairperson as from 1 May 2010)
KE Moloto-Stofile
Member resigned 19 April 2010
HG Motau
Member resigned 30 April 2010
T Moyo
Member

Role
T Moyo
Chairperson
AKA Dasoo
Member
CJB Greeff
Member
HG Motau
Member (Resigned 30 April 2010)
SA Msibi
Member
Chairpersons Committee of the Advisory Committee (1 April 2010 to 30 September 2010)

Mr V Mahlangu (Chairperson)
Ms HG Motau (Chairperson Audit Committee resigned 30 April 2010)
Prof. CJB Greeff (Chairperson Audit Committee as from 1 May 2010)
Mr T Moyo (Chairperson Risk Management Committee)
Prof. CJB Greeff (Chairperson Claims Committee until 30 April 2010)

Dr AKA Dasoo (Chairperson Claims Committee from 1 May 2010)
Mr SA Msibi (Chairperson Remuneration and Human Resources Committee)
2.4.8 Attendance of Meetings
Board Members
19 October 2010
27 October 2010
3 November 2010
7 December 2010
8 January 2011
22 February 2011
15 March 2011
Total
Board Attendance
NM Bhengu
V Mahlangu
JN Masekoameng
T Moyo
DS Qocha
NZ Qunta
MJ Ralefatane
DK Smith
A Steyn
T Tenza
26 January 2011
28 February 2011
Total
T Moyo
MJ Ralefetane
JN Masekoameng
NZ Qunta
DS Qocha
n/a
n/a

(Board)
JRD Modise (Ex Officio)
10 November 2010
Audit Committee Attendance
1 December 2010
21 February 2011
Total
Claims Committee Attendance
DK Smith
V Mahlangu
n/a
A Steyn
DS Qocha

(Board)
JN Masekoameng
15 November 2010
Total
Risk Management Committee Attendance
T Moyo
J Masekoameng
DS Qocha
A Steyn
n/a

(Board)
MJ Ralefatane
16 November 2010
2 March 2011
9 March 2011
14 March 2011
Total
Remuneration and Human Resources Committee Attendance
MJ Ralefetane
DK Smith
V Mahlangu
NZ Qunta
T Moyo
n/a
A Steyn
n/a
REMCO Members
(Board)
27 July 2010
13 August 2010
14 September 2010
28 September 2010
30 September 2011
Total
V Mahlangu
T Moyo
CJB Greeff
AKA Dasoo
SA Msibi
T Tenza
HG Motau (Resigned 30 April 2010)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Advisory Committee Members
28 April 2010
26 July 2010
22 September 2010
Total
n/a
n/a
T Moyo
HG Motau
n/a
n/a
CJB Greeff
SA Msibi
21 July 2010
22 September 2010
Total
KE Moloto-Stofile (Resigned 19 April 2010)
CJB Greeff
AKA Dasoo
KE Moloto-Stofile
n/a
n/a
HG Motau
n/a
n/a
T Moyo

AKA Dasoo
28 April 2010
Advisory Committee Attendance
19 July 2010
28 September 2010
Total
T Moyo
AKA Dasoo
CJB Greeff
HG Motau
n/a
n/a
SA Msibi
REMCO Members
26 July 2010
31 August 2011
Total
SA Msibi
AKA Dasoo
T Moyo
KE Moloto-Stofile
T Tenza
2.4.9
Remuneration of Advisory Committee Members/Directors
The Minister of Transport determines the remuneration of RAF Directors, taking cognisance of National Treasury guidelines, as well as the
RAFs ability to attract and retain the leadership necessary for the turnaround of the organisation. National Treasury annually determines a
cost of living increment.
Directors/Advisory Committee Members as well as Executives emoluments are set out in note 30 of the Annual Financial Statements.
2.4.10 Performance Assessment

A formal evaluation of the Board, its Committees and the individual Directors will be performed during the next nancial year.
2.4.11 Performance Agreement

The RAF concludes, on an annual basis, a Performance Agreement with its Executive Authority, the Minister of Transport. The Agreement
documents the key performance indicators (KPIs) to be attained by the RAF, as agreed between the Board and the Minister. The Agreement
serves to promote and encourage good governance practices within the RAF, by clarifying the respective roles and responsibilities of the
Board and the Minister. The Agreement provides the Minister with a mechanism to direct the activities of the RAF in line with the national
strategic objectives of government.
The performance objectives agreed with the Minister for the year under review are contained on pages 138 to 140.
The RAFs performance against these objectives was audited by the Auditor-General of South Africa, whose report is contained on pages 154
to 155 of this Integrated Annual Report.
2.4.12 The Public Finance Management Act, 1999

The PFMA provides strong guidance to public entities on good corporate governance. The Board developed a dedicated capacity to ensure
compliance with the PFMA. The responsibilities of the Board, as dened in section 51 of the PFMA, include taking appropriate action to ensure:
Economic, ecient, eective and transparent systems of nancial, risk management and internal controls;
A system is maintained for properly evaluating all major capital projects prior to a nal decision on each project;
The implementation of appropriate and eective measures to prevent unauthorised, irregular or fruitless and wasteful expenditure,
All revenues due to the RAF are collected;
The economic and ecient management of available working capital; and
The denition of objectives and the allocation of resources in an economic, ecient, eective and transparent manner.
expenditure not complying with legislation, or losses from criminal conduct;
2.4.13 Code of Conduct and Ethical Standards

The responsibility of building and sustaining an ethical corporate culture is shared equally by the Board and Management.
An approved Code of Conduct, which should be read in conjunction with the Conict of Interest Policy, denes the RAFs organisational values
and requires adherence by Directors, employees and contractors to the RAF in accordance with the ethics prescribed in these documents.
The purpose of the Code of Conduct and the Conict of Interest Policy is to set ethical standards and values applicable to all Directors,
employees and contractors of the RAF. These documents are intended to assist in fostering adherence to the highest ethical standards within
the RAF and to clarify issues, policies and protocols relating to fraud, corruption and unacceptable conduct.
The Board has established eective procedures in terms of the Code of Conduct and Conict of Interest Policy to enable the Board/
Management to manage and address issues related to the declaration and management of conict of interests pertaining to nancial and
business interests, recruitment and selection, procurement, as well as dealings with stakeholders. Related matters dealt with include the use
of organisation assets, protection of condentiality and obligations of Management and the Board.
The Code of Conduct prescribes the mechanisms in place to deal with deviant behaviour.
The Audit Committee receives and deals with any concerns or complaints, whether from within or outside the RAF, relating to the accounting
practice and internal audit of the RAF, the content or auditing of the RAFs nancial statements, the internal nancial controls of the RAF and
related matters.
Organisational Performance
SECTION 3
SECTION 3
organisational performance
3.1 Operating Environment
3.1.1 Legal Framework
The central goals of the RAF, being that of service delivery in terms of its mandate and the optimisation of its business and ultimate
sustainability, are signicantly reliant on the legislative environment in which the organisation operates. Paradoxically, the current legislative
environment inhibits rather than enables the RAF in the attainment of its vision. While the RAF Act and the Regulations thereto brought about
much needed changes to the system, the system remains inherently awed in that it continues to be based on fault and insurance principles.
Achieving operational eciency and eectiveness in a system that is complex, encourages litigation and focuses on the cause of the accident
Figure 3.1
rather than the immediate medical and nancial needs of victims, is challenging.
3.1.1.1
Legal Mandate
The Road Accident Fund Act, 1996 (Act No. 56 of 1996) (the RAF Act) was amended by the Road Accident Fund Amendment Act, 2005 (Act
No. 19 of 2005) (hereinafter referred to as the RAF Amendment Act).
The RAF is responsible for providing appropriate cover to all road users within the borders of South Africa; rehabilitating and compensating
persons injured as a result of motor vehicles in a timely and caring manner; and actively promoting the safe use of our roads. Section 3 of
the RAF Act stipulates that the object of the Fund shall be the payment of compensation in accordance with this Act for loss or damage
wrongfully caused by the driving of a motor vehicle. The client base of the RAF, therefore, comprises not only the South African public, but
all foreigners within the borders of the country. The RAF provides two types of cover, namely personal insurance cover to accident victims or
their families, and indemnity cover to wrongdoers.
The provisions of the RAF Act govern all claims arising from motor vehicle accidents that occurred before 1 August 2008. Motor vehicle
accidents that occurred after midnight on 31 July 2008 are governed by the provisions of the RAF Amendment Act. The implications of some
of the changes eected to the system of compulsory motor vehicle insurance by the RAF Amendment Act are explained below.
The RAF Amendment Act provides a more equitable, sustainable and reasonable system to compensate victims of road trac accidents in
that it:
Removes discrimination that existed in the RAF Act, particularly relating to certain passenger claims;
Reduces abuse through the introduction of caps to loss of earnings and loss of support claims; limiting access to general damages, and
abolishing claims for secondary emotional shock;
Assists the poor in obtaining treatment in an emergency by determining that the healthcare providers will be paid at private sector rates.
Despite the positive outcomes of the RAF Amendment Act, the LSSA and a number of other applicants brought an application challenging
the constitutional validity of certain provisions of this Act, as well as certain Regulations thereto. The application was heard in the North
Gauteng High Court and the court dismissed all but one of the challenges, which related to the place of lodgement of claims.
The applicants applied for leave to appeal to the Constitutional Court so as to challenge the constitutional validity of the provisions in the
Amendment Act relating to:
The medical tari for non-emergency medical treatment (the Uniform Patient Fee Structure for fees payable by full-paying patients
prescribed by the National Health Act, 2003 (Act No. 61 of 2003));
The limitation of the RAFs liability for loss of income and support;
The abolition of the common law right to claim the balance of damages from the wrongdoer;
Judgement was delivered by the Constitutional Court on 25 November 2010. The attack on the constitutional validity of the non-emergency
tari was the only challenge that was successful. The Court declared the non-emergency tari to be inconsistent with the Constitution
and made an order obliging the Minister of Transport to prescribe a new tari. In the interim period the RAF is obliged to compensate the
reasonable, necessary cost of treatment in respect of claims for non-emergency medical treatment.
3.1.2 Liability of the RAF

3.1.2.1
Fault-based System
The system of compensation managed by the RAF in terms of the RAF Act and the RAF Amendment Act is based on the requirement of fault.
The RAF is obliged to pay compensation only if an injury or death is due to the negligent or other wrongful act of the driver or owner of a
motor vehicle, or his or her employee in the performance of the employees duties as an employee.
In establishing fault, the common law rules of delict, as developed and interpreted by the courts, are applied.
The eect of the system being fault-based is that in order for a claimant to succeed with a claim against the RAF, it must be established that
the damage or loss suered did not result from, or solely result from, that claimants own negligence or other wrongful act or omission. If the
claimant was not negligent in causing the collision, the RAF is liable for paying the full agreed or proven damages. If the claimant was solely
to blame for the collision, no claim can be made against the RAF.
Inherent in the fault-based system are numerous diculties, including long delays in accessing compensation, high delivery costs and
burdensome complexities. Appreciating that the current fault-based system does not meet the needs of victims of road trac accidents,
government is in the process of implementing more relevant policies and strategies to better serve the needs of persons who are aected by
injury or death resulting from road accidents. This transformation of the system is dealt with below.
3.1.2.2
Compensation Only for Bodily Injury
The RAF is liable to pay compensation only for loss or damage suered as a result of bodily injury or death. The eect of this is that the
RAF does not pay for any loss or damage to property (such as damage to motor vehicles, goods conveyed in a vehicle, etc.).
3.1.2.3
Accidents within South African Borders
The RAF is liable for loss or damage caused by the negligent or unlawful driving of a motor vehicle at any place within the Republic of
South Africa.
3.1.2.4
Losses and Damages Compensated
The compensation paid by the RAF is determined by the RAF Act and the RAF Amendment Act, and is based on the common law of delict.
Damages paid by the RAF are categorised as special damages and general damages. Special damages are paid for pecuniary losses that have
been, or will be suered, and include:
Past and future hospital, medical and related expenses;
Past and future loss of earnings;
Past and future loss of support; and
Funeral expenses.
General damages (non-pecuniary losses) are paid as compensation for loss of amenities of life, pain and suering, disability and disgurement
to persons who have suered bodily injury in a motor vehicle accident.
The extent of liability of the RAF diers in terms of the provisions of the RAF Act and the RAF Amendment Act. The limitations and exclusions
that are provided for in each of these Acts are explained below.
3.1.2.5
Apportionment of Damages
As the RAF Act and the Amendment Act provide for a fault-based system of compensation, the amount of damages recoverable by a claimant
is reduced by the extent to which the claimants fault contributed to his or her damages. This is calculated through the application of sections
The eect is that if a claimant was partly to blame, then the RAF will not be liable for the percentage of damage representing the claimants
own negligence.
3.1.2.6
Liability for Legal Expenses
In terms of the RAF Act, claimants who are paid compensation by the RAF are entitled to have their legal fees (on a party and party basis) paid
for by the RAF. However, this provision has been deleted in the RAF Amendment Act. The eect is that in claims to which the RAF Amendment
Act is applicable, the normal rules relating to the award of legal costs in litigated matters apply.
1 and 2 of the Apportionment of Damages Act, 1956 (Act No. 34 of 1956).
3.1.2.6.1 Exclusions of Liability

3.1.2.6.1.1 Exclusion of Liability in Terms of the RAF Act (Accidents that occurred prior to 1 August 2008)
The liability of the RAF for loss or damage is excluded in specic instances provided for in terms of section 19 of the RAF Act. In respect of claims
governed by the RAF Act, namely claims arising from accidents that occurred before 1 August 2008, liability is excluded in circumstances
where:
a)
The person who suered the loss or damage (dened in the Act as the third party) cannot hold the wrongdoer (usually the driver) liable
for the damages at common law;
b)
A paying motorcycle passenger is injured or killed by the exclusive negligence of the driver of the motorcycle;
c)
A person is a member of the same household as the driver of the motor vehicle in which such person was conveyed, and the collision
d)
A person was a passenger in a motor vehicle and was responsible for the maintenance of the driver of such motor vehicle and the
resulted solely from the negligence or unlawful act of such driver;

collision resulted solely from the negligence or unlawful act of such driver;
e)
A third party does not institute a third party claim against the RAF personally or through an admitted and practising attorney or other
authorised ocial;
f)
A third party enters into an agreement with any person other than an admitted and practising attorney or other authorised ocial in
terms of which such a person receives a portion of the compensation recovered, or any amount for services rendered in respect of a third
party claim;
g)
A third party unreasonably refuses or fails to submit to a medical examination by a medical practitioner appointed by the RAF on request
of the RAF and at its cost; and
h)
A third party refuses or fails to:

(i)
Submit to the RAF (at the latters cost) copies of all relevant medical reports in their possession;
(ii)
Allow inspection of their medical records held by a medical practitioner or a hospital;
(iii)
Submit an adavit setting out full particulars of the accident together with a claim form; and
(iv)
Supply, within a reasonable time from obtaining possession thereof, copies of all relevant statements and documents in respect
of the collision.
3.1.2.6.1.2 Exclusion of Liability in Terms of the RAF Amendment Act (Accidents that occurred on or after 1 August 2008)
Section 19 of the RAF Amendment Act continues to provide that liability is excluded in the instances referred to in sub-paragraphs (a), (e), (f ),
(g) and (h) above. However, the RAF Amendment Act does not provide for the liability of the RAF to be excluded in circumstances referred to
in sub-paragraphs (b), (c) and (d) above. The eect of this is that the RAF will be liable on the same principles applicable to other claimants if
a person is injured or killed on or after 1 August 2008 and at the time of the accident such person was:
a)
A paying motorcycle passenger injured or killed by the exclusive negligence of the driver of the motorcycle;
b)
A member of the same household as the driver of the motor vehicle in which such person was conveyed and the collision resulted solely
from the negligence or unlawful act of such driver;
c)
A passenger in a motor vehicle who is responsible for the maintenance of the driver of such motor vehicle and the collision resulted
solely from the negligence or unlawful act of such driver.

The exclusions listed in sub-paragraphs (a) and (e) to (h) above are still provided for in the RAF Amendment Act, and consequently in such
circumstances, the RAF will not be liable for any losses or damages, regardless as to whether the collision in question occurred prior or
subsequent to 1 August 2008.
The RAF Amendment Act brought into being one further instance where the RAFs liability is excluded, namely where the loss or damage
results from secondary emotional shock. The eect of this is that where an accident occurs after 31 July 2008 and a person suers shock as
a result of witnessing or hearing of such accident and the person suers losses consequent to the shock, the RAF will not be liable for these
losses. However, a person who suers loss as a result of secondary emotional shock will have the right to claim such loss from the wrongdoer
in terms of the common law.
3.1.2.7
Limitation of Liability
3.1.2.7.1 Limitation of Liability in Terms of the RAF Act (Accidents that occurred prior to 1 August 2008)
In terms of section 18 of the RAF Act, the liability of the RAF is limited in certain instances, in respect of accidents which occurred before
1 August 2008.
In respect of certain specied categories of passengers or the dependants of those passengers in the case of the death of the passenger,
the liability of the RAF is limited in respect of both the amount recoverable and the damages sought to be indemnied, depending on the
category into which the particular passenger falls.
The limitation becomes operative only where the injury or death is caused by the sole negligence of the driver of the vehicle in which the
passenger was conveyed.
In respect of passengers conveyed in vehicles under the following prescribed circumstances:
Passengers for reward (section 18(1)(a)(i));
Passengers conveyed in the course of the lawful business of the owner of that motor vehicle (section 18(1)(a)(ii));
Passengers conveyed in the course of their employment where they are not covered by the Compensation for Occupational Injuries and
Diseases Act, 1993 (Act No. 130 of 1993) (COIDA) (section 18(1)(a)(iii)); and
Lift club passengers (section 18(1)(a)(iv)),
the liability of the RAF is limited to an amount of R25,000 in respect of both general and special damages.
The liability of the RAF in respect of claims of all other passengers (social passengers, such as friends) is limited to R25,000 in respect of special
damages only (section 18(1)(b)). These passengers are not entitled to general damages.
Funeral Expenses
Section 18 of the RAF Act also limits the liability of the RAF for funeral expenses, with the RAF being liable to pay only the necessary actual
costs related to cremation or interment.
Reduction of Liability
In terms of section 18 of the RAF Act, the RAF may deduct from its liability amounts that claimants are entitled to under certain other specied
legislation. In this regard, the RAF is entitled to reduce its liability in the following circumstances:
Passengers who are employees injured or killed in the course of their employment and who are covered by COIDA. In terms of the RAF
Act, the monetary amount for which the RAF is liable is limited to the amount which the claimant could have claimed but for section 18
of the Act or R25,000, whichever is the lesser, minus any compensation to which the claimant is entitled under COIDA.
Members of the South African National Defence Force (SANDF) who have claims against the Minister of Defence in terms of the
Defence Act, 2002 (Act No. 42 of 2002) (the Defence Act). This refers to members of the SANDF who are, at the time of the accident,
rendering a military service or undergoing military training in terms of the Defence Act or any other Act governing the SANDF.
to under the Defence Act (section 18(2)).

A Mvumvu and Others v Minister of Transport and Another
Three applicants, all victims of motor vehicle accidents that occurred before 1 August 2008, lodged claims with the RAF and were informed
that their claims were limited to R25,000 by section 18 of the RAF Act. The applicants challenged the constitutional validity of section 18 of
the RAF Act on the basis that the section infringed certain constitutional rights, including the right to equality. The Western Cape High Court
proceeded to declare parts of section 18 of the RAF Act invalid. The Constitutional Court heard the application for conrmation of the order
of constitutional invalidity issued by the Western Cape High Court and, on 17 February 2011, the Constitutional Court ordered that sections
18(1)(a)(i), 18(1)(b) and 18(2) of the RAF Act are inconsistent with the Constitution and invalid. The declaration of invalidity was, however,
suspended for a period of 18 months from the date of the order to enable Parliament to cure the defect.
The claimants common law damages suered as a result of the accident are reduced by the RAF in the sum that such a claimant is entitled
3.1.2.7.2 Limitation of Liability in Terms of the RAF Amendment Act (Accidents that occurred on or after 1 August 2008)
Limitation on Passenger Claims Removed
The inequitable and discriminatory provisions in the RAF Act that provided for the RAFs liability to be limited to R25,000 where a person is
injured or killed while a passenger in a vehicle that was solely to blame for the accident, was removed in terms of the RAF Amendment Act.
The eect of this is that the RAF is liable on the same principles applicable to all other claimants if a person is injured or killed on or after
1 August 2008, and at the time of the accident such person was a passenger in the vehicle that was solely to blame for the accident.
Funeral Expenses
The limitation of the RAFs liability to pay only the necessary actual costs of cremation or interment remains in the RAF Amendment Act.
Reduction of Liability
The RAF Amendment Act retained the provision that the RAF may deduct payments received by third parties in terms of COIDA and the
Defence Act.
Additional Limitations in the RAF Amendment Act
The removal of the limitation on passenger claims served to increase the liability of the RAF. So as to ensure the sustainability of the system, it
was necessary for new limitations on the RAFs liability to be introduced in the RAF Amendment Act. In respect of accidents occurring on or
after 1 August 2008, the liability of the RAF is limited as follows:
1.
Hospital, medical and related expenses are now paid on the basis of two taris. The rst relates to emergency medical treatment and
the applicable tari is based on the National Health Reference Price List. The second relates to non-emergency medical treatment and
the tari applicable for such treatment is the Uniform Patient Fee Structure for fees payable by full-paying patients prescribed by the
National Health Act, 2003 (Act No. 61 of 2003), as revised from time to time. However, as discussed above, the Constitutional Court has
now held that the tari applicable to non-emergency medical treatment is inconsistent with the Constitution and that, until the Minister
of Transport prescribes a new tari, the RAF shall be liable for the reasonable, necessary costs of such treatment.
2.
Loss of income and support is now capped at a maximum of R160,000 per annum, irrespective of the actual loss. This cap is adjusted
quarterly to counter the eect of ination. The latest adjustment took place on 31 January 2011, adjusting the cap to R182,857
per annum.
3.
Payment of general damages is now limited only to instances where a serious injury has been sustained. In terms of the Regulations to
the RAF Amendment Act, an injury will be assessed as serious if the injury results in 30% or more impairment of the Whole Person as
provided for in the American Medical Association Guides (AMA Guides). The Regulations further provide that such an injury may be
assessed as serious if that injury:

(i)
Resulted in a serious long-term impairment or the loss of a body function;
(ii)
Constitutes permanent serious disgurement;
(iii)
Resulted in severe long-term mental or severe long-term behavioural disturbance or disorder; or
(iv)
Resulted in the loss of a foetus.
Apart from being required to ensure the sustainability of the system, the introduction of new generally applicable limitations on the RAFs
liability has gone some way in addressing the systemic problems in the RAF Act, in that:
1.
The inequity of the poor subsidising the rich has been partially addressed through the cap on loss of income and support and the
medical taris;
2.
The payment of general damages, in instances only where a serious injury has been sustained, limits wastages in the system and curtails
abuse; and
3.
By limiting liability for loss of income and support, the system is more reasonable and sustainable, as the risk of enormous claims by
foreign road users has been removed.
3.1.2.8
Comparison of Liability of the RAF in terms of the RAF Act and RAF Amendment Act
Passengers whose injury or death
RAF Act
RAF Amendment Act
Applicable to Accidents that Occurred
Applicable to Accidents that
before 1 August 2008
Occurred on or after 1 August 2008.
a) Liability limited to R25,000 for special
R25,000 limitation removed and the
is caused by the sole negligence of
damages and general damages in
RAF is liable on the same principles
the driver of the vehicle in which the
instances where:
applicable to all other claimants.
passenger was conveyed
(i) Passengers are conveyed for reward;

(ii) Passengers are conveyed in the course of
the lawful business of the owner of that
motor vehicle;
(iii) Passengers are conveyed in the course
of their employment where they are
not covered by the Compensation for
Occupational Injuries and Diseases Act,
1993 (Act No. 130 of 1993) (COIDA); and
(iv) Passengers are conveyed as part of a
lift club.
However, on 17 February 2011, the
Constitutional Court held that the sections
limiting the liability of the RAF to R25,000
for passengers (for claims of passengers for
reward and passengers in the course and
scope of their employment) are inconsistent
with the Constitution and invalid. The
declaration of invalidity was suspended for a
period of 18 months.
Passengers whose injury or death
Liability limited to R25,000 for special
R25,000 limitation removed and the
is caused by the sole negligence of
damages only. However, on 17 February
RAF is liable on the same principles
the driver of the vehicle in which
2011, the Constitutional Court held that the
applicable to all other claimants.
the passenger was conveyed, in
sections limiting the liability of the RAF to
circumstances other than the four
R25,000 for social passengers are inconsistent
instances set out in the previous line
with the Constitution and invalid. The

period of 18 months.
A paying motorcycle passenger where
Liability excluded.
Exclusion removed and the RAF is liable
the injury or death results from the
on the same principles applicable to all
exclusive negligence of the driver of
other claimants.
the motorcycle
declaration of invalidity was suspended for a
A member of the same household
RAF Act
RAF Amendment Act
Liability excluded.
as the driver of the motor vehicle in
which such person was conveyed and
other claimants.
the collision resulted solely from the

negligence or unlawful act of such
driver
A passenger in a motor vehicle who
Liability excluded.
is responsible for the maintenance of
the driver of such motor vehicle where
other claimants.
the collision resulted solely from the

negligence or unlawful act of such
driver
The person who suffered the loss
Liability excluded.
Liability excluded.
Liability excluded.
Liability excluded.
Liability excluded.
Liability excluded.
Liability excluded.
Liability excluded.
or damage (called the third party)

cannot hold the wrongdoer (usually
the driver) liable for the damages at
common law
A third party refuses or fails to:
(i) Submit to the RAF at the RAFs
cost, copies of all relevant medical
reports in their possession;
(ii) Allow inspection of their medical
records held by a medical
practitioner or a hospital;
(iii) Submit an affidavit setting out
full particulars of the accident
together with a claim form;
(iv) Supply, within a reasonable time
from obtaining possession thereof,
copies of all relevant statements
and documents in respect of
the collision
A third party does not institute a third

party claim against the RAF personally
or through an admitted and practising
attorney or other authorised official
A third party enters into an agreement
with any person other than an
admitted and practising attorney or
other authorised official in terms of
which such a person receives a portion
of the compensation recovered, or
any amount for services rendered in
respect of a third party claim
RAF Act
RAF Amendment Act
Liability excluded.
Liability excluded.
Claims arising from secondary
The RAF is liable for full agreed amount of
Liability excluded.
emotional shock. (Secondary
proven loss or the amount awarded by
emotional shock refers to instances
the court.
A third party unreasonably refuses

or fails to submit to a medical
examination by a medical practitioner
appointed by the RAF on request of the
RAF and at its cost
where the claimant was not involved

in the accident, but either witnessed or
heard of the accident)
Funeral expenses
The RAF is liable to pay the necessary actual
The RAF is liable to pay the necessary
costs related to cremation or interment.
actual costs related to cremation or

interment.
Hospital, medical and related expenses
The RAF is liable to pay the reasonable and
Liability of the RAF is determined on
necessary costs resulting from the injuries
the basis of two tariffs:
sustained.
(i) Emergency medical treatment is

paid according to a tariff based
on the National Health Reference
Price List;
(ii) Non-emergency medical treatment
is paid in accordance with the
Uniform Patient Fee Schedule
for fees payable by full-paying
patients prescribed by the National
Health Act, 2003 (Act No. 61 of
2003), as revised from time to time.
However, with effect from 25
November 2010, until the Minister of
Transport prescribes a new tariff, the
RAF is liable to pay the reasonable
and necessary costs resulting from the
emergency medical treatment.
Loss of income
RAF is liable for the unlimited actual loss,
Liability capped at a maximum of
except in instances where the passenger
R160,000 per annum, irrespective of
limitation of R25,000 applies.
the actual loss. This cap is adjusted

quarterly to counter the effect of
inflation.
injuries sustained, in respect of non-
Loss of support
RAF Act
RAF Amendment Act
The RAF is liable for the unlimited actual loss,
Liability capped at a maximum of
except in instances where the passenger
R160,000 per annum, per deceased
limitation of R25,000 applies.
breadwinner, irrespective of the actual

loss. This cap is adjusted quarterly to
counter the effect of inflation.
General damages (pain and suffering,
The RAF is liable for damages in all instances
The RAF is liable only if a serious injury
loss of amenities of life, disfigurement
where an injury is sustained, except where
has been sustained. An injury will be
and disability)
the passenger limitation is applicable, in
assessed as serious if the injury results
which case the damages are capped.
in 30% or more impairment of the

Whole Person as provided for in the
AMA Guides.
Certain injuries will be regarded as
serious even if the injury does not
result in 30% or more impairment of
the Whole Person. These are injuries
that:
(i) Result in a serious long-term
impairment, or the loss of a
body function;
(ii) Constitute permanent serious
disfigurement;
(iii) Result in severe long-term mental,
or severe long-term behavioural
disturbance or disorder; or
(iv) Result in the loss of a foetus.
Legal costs
Upon acceptance of an amount offered, the
Automatic liability to pay costs not
RAF is liable to pay the agreed or taxed party
retained. Normal rules applicable to
and party costs in respect of the claim.
costs of litigation apply.
Right to claim against the wrongdoer in
Retained where the RAF is unable to pay the
Retained only where:
terms of the common law
compensation and in instances where the
(i) The RAF is unable to pay any
balance of any damages of a claim is above
the R25,000 limitation.
compensation, and
(ii) In instances of secondary
emotional shock.
3.1.2.9
Compliance Framework and Processes
Quarterly legislation reports, detailing changes in all applicable laws, rules, codes and standards that may impact on the operations of the RAF,
are submitted to the Risk Committee for review. The reporting function is performed by the Corporate Legal Services department.
PFMA compliance is submitted to the Executive Authority and National Treasury on a quarterly basis. Other checklists relating to areas such
as employment law are completed on a quarterly basis for internal control purposes.
A Constitutional Court register is kept by the Corporate Legal Services department.
3.1.2.9.1 Regulatory Penalties, Sanctions or Fines

No nes, sanctions or penalties were imposed on the RAF or any of its Board/Advisory Committee Members or ocers during the nancial
year.
3.1.2.10 The Way Forward Transformation of the System
The present system based on fault and insurance principles is not achieving the purpose for which it was created. Over the years signicant
problems relating to equity, aordability and sustainability of the system have developed. Among the shortcomings of a fault-based
compensatory system are:
The high and spiralling cost structure;
A focus on fault and cause of the accidents, rather than the immediate medical and nancial needs of the road accident victims;
Long settlement delays that prolong hardship and suering; and
The legal complexity and the litigious environment in which it operates.
Government is in the process of implementing more relevant policies and strategies to serve the needs of persons who are directly aected
by injury or death resulting from road trac accidents. Cabinet has approved the publication for comment of the Draft Policy on the
Restructuring of the RAF on a No-Fault Basis and as Compulsory Social Insurance in relation to the Comprehensive Social Security System
(the Draft Policy). Through the restructuring of the system, the overall aim is to provide an eective benet system that is reasonable,
equitable, aordable and sustainable in the long term. More specically, the reforms to the current system will be introduced to:
Expand access to include more persons exposed to the risks of road transportation by providing benets on a no-fault basis;
Optimise limited resources in favour of persons with serious injuries that have a life-changing and long-term impact;
Lessen spending on minor injuries with limited duration;
Align benets and resources allocated to other social insurance arrangements;
Facilitate access to timely and appropriate medical care to reduce the impact of injury and disability;
Focus on more curative aspects such as rehabilitation and accident prevention;
Provide nancial support to persons aected by injury or the death of an earner in road accidents; and
Simplify claims procedures, reduce disputes and create certainty by providing dened and structured benets.
The Draft Policy proposes a move away from a fault-based system founded on insurance principles to a no-fault scheme of benets based on
principles of social security. The strategic objectives of such a scheme will be to:
Facilitate access to timely and appropriate healthcare;
Enable and encourage rehabilitation to prevent or reduce permanent disability and to advance independence, earning capacity and
social participation of persons injured in road accidents;
Provide long-term and life care for the seriously injured;
Alleviate nancial hardships of persons injured and of dependants of persons killed in road accidents;
Be accessible and eciently administered, with less resources spent on delivery costs, and more resources allocated to healthcare and
to relieve nancial losses; and
Be accountable to road users, assist victims of road trac accidents and provide relevant and timely service to claimants.
3.1.3 Funding
3.1.3.1
RAF Fuel Levy
The primary source of income for the RAF compensation scheme is a levy raised on fuel and diesel sold. The levy is expressed as a rate per
litre of fuel sold and forms part of the general fuel tax regulated by government. The RAF is not involved in the collection of its fuel levy.
SARS administers the collection of the fuel levy and pays it to the RAF, in accordance with provisions of the Customs and Excise Act, 1964
(Act No. 91 of 1964) and the RAF Act.
Two variables determine the income of the RAF: the volume of petrol and diesel sold per annum and the rate of the levy. Government
determines the appropriation made to the RAF. The setting and regulation of the fuel levy by government is determined mainly by macroeconomic considerations. The RAF Fuel Levy can be viewed as a compulsory contribution to social security benets, which is used only for
the specic purposes as provided for in legislation.
The RAF plays no part whatsoever in the collection of its fuel levy income. The RAF levy collection process is depicted in the gure below.
Figure 3.2
The RAF can obtain funding from four sources, outlined below:
Fuel levy income is a function of the fuel levy (per litre of fuel purchased) and the total fuel sales in South Africa. During the 2011 nancial
year, the RAF Fuel Levy was set at 72c per litre, which means that for every litre of diesel and petrol purchased in South Africa, 72 cents
was collected by SARS on behalf of the RAF. The fuel levy per litre is set by National Treasury on an annual basis, whereas total fuel sales
are inuenced by a number of macroeconomic factors. The RAF, therefore, has little control over its fuel levy income. Furthermore, there
is a diesel rebate provided to certain sectors of the economy, granted on the basis of the level of o-road use by the diesel consumers
in that sector. These fuel users (e.g. those people using diesel fuel for marine or agricultural applications) do not contribute to the Fund
and hence cannot claim from the RAF.
Government grants, paid by National Treasury when there is a pressing need, such as an acute cash shortage.
Loans, which are an allowed source of funding according to the RAF Act. This option has not been used to date.
Investment income, acquired from invested funds that occasionally result when the RAFs operational capacity prevents it from paying
out all its funds.
Capital maintained by the RAF is an important part of managing the uncertainties that would impact on the RAFs ability to service claims.
Incoming capital needs to be applied to the RAFs current and historical liabilities, which are driven primarily by current claims and the
provision for outstanding claims. This can be done in one of two ways: Preferably, incoming funds should be used to settle the outstanding
claims, thereby reducing the provision and liability. However, should operational capacity limitations prevent this; incoming funds can be
invested, increasing the RAFs asset base. It should be noted though, that the liability for outstanding claims will escalate due to the interest
on the original claim.
Over the past couple of years, the RAF has expressed its concern that the RAF Fuel Levy is determined with little regard for the main drivers
of the RAFs claims expenditure, i.e. number of accidents on the roads, number of vehicles driven, the volume and quantum of the benets
payable by the RAF, and various other economic factors like the inherent ination of the benet levels. To this end, the RAF has developed
a nancial model that incorporates all of the above in order to scientically and objectively determine the required fuel levy for any given
future accident year, as well as the levy required to pay o the claims backlog. This model has been developed in conjunction with the RAFs
actuaries, and has been presented and accepted by the DoT and National Treasury. This model has been utilised by National Treasury to a
certain extent to determine the fuel levy for the 2010/11 nancial year. Based on the preferred model, a fuel levy increase of 23.5 cents per
litre has been requested for the 2011/2012 nancial year.
The purpose of the model is to predict the RAFs funding (or revenue) requirement for a particular scenario. For example, the required revenue
can be calculated and will vary depending on the number of claims the RAF intends paying over the forecast period. While the model is
exible and can accommodate a near innite number of scenarios, this document presents nancial forecasts based on the fuel levy as
determined by the model. The actual increase in the fuel levy payable to the RAF is conrmed and approved by the Minister of Finance and
is ocially announced in the Budget speech in February each year.
3.1.4 Diesel Refund

The fuel levy income received by the RAF is reduced by the fuel levy refunded by the Commissioner of SARS in respect of diesel concessions
provided to certain sectors of the economy. These diesel concessions are granted on the basis of the level of o-road use by the diesel
consumer in that sector. By way of illustration, the shing, coastal shipping, oshore mining, rail freight sectors/industries and Eskom make no
use of the road network during their consumption of diesel. They, therefore, derive no benets from the system of compulsory motor vehicle
insurance administered by the RAF in terms of the RAF Act. As a result, these sectors are entitled to a 100% concession in respect of their diesel
fuel consumption. The agriculture and forestry sector and the onshore mining sectors utilise approximately 20% of their diesel consumption
while making use of the road network and are thus entitled to an 80% refund of the RAF Fuel Levy. The payment of the 20% portion of the
diesel levy aords these users cover by the RAF in respect of their on-road vehicle use.
Agriculture and Forestry
80%
Onshore Mining
80%
Fishing and Coastal Shipping
100%
Oshore Mining
100%
Rail Freight
100%
Eskom
100%
3.1.5
Borrowings
The RAF Act allows for funding to be procured by way of the raising of loans.
The concessions have been granted as follows:
3.1.6 Key Operating Environment Challenges

From the aforementioned, it is evident that the eective functioning of the RAF is hampered by a number of factors. As depicted by the
diagram below, these factors can be divided into three categories, namely:
Flaws in the fundamental design of the accident compensation scheme;
Environmental issues; and
Internal challenges faced by the RAF environmental issues.
Systemic
aws
Issues common to all delictual bases

systems:
Subjectivity;
Complexity;
Inequities;
Wastages;
Unpredictable and unreliable;
Perverse incentives;
Delays; and
Adversarial relationships.
Issues specific to South African system:
Income and expenditure not linked;
Unaffordable;
Open to fraud;
Inhibited by legislation and precedent;
No established institutional
framework;
Presence of contingency fees;
Inappropriate allocation of resources;
and
Allows for inequitable benefits.
Figure 3.3 Key operating environment challenges
Environmental
issues
Internal
challenges
High accident rates;
Unsustainable economic model;
Scheme is open to fraud;
Inability to effectively process claims

and reduce backlog;
Strong interest groups with conflicting

views;
Scheme open to fraud;
Lack of integration between role

players; and
Dissatisfied and disillusioned

stakeholders; and
High degree of fragmentation in

the industry.
Culture is not customer-centric.
3.2 Review of Operations

3.2.1 Financial Position
The diagram below illustrates that, like any other business, the RAF is aected by general economic conditions and other environmental
factors, and by the extent to which it manages its costs eectively.
Grants and
Investment
revenue
REVENUE
Levy on fuel
Fuel sold
Road
Activity
Financial
Position
COST
Administrative
costs
Number and
severity of
accidents
Volume of
claims
Value of
claims
Third party
costs
Figure 3.4 Factors influencing the RAFs financial position

The nexus of all these factors is road activity in South Africa:
The number of vehicles on the road inuences the amount of fuel sold, which itself translates into the revenue due to the RAF in terms of
the levy that it is granted by National Treasury. Fuel levy combines with ad hoc government grants and minor income from investments
to equal the RAFs total revenue.
The number of vehicles on the road also inuences the number of accidents, although many other factors inuence this statistic,
particularly the relative severity of accidents. Volume and severity of accidents inuence the volume and average value of claims made
against the RAF. Claims combine with the cost of third parties, like attorneys and medical/legal experts, and the RAFs administration
costs to equal its total costs.
3.2.2 Key Value Drivers
Expenditure
Statement of
Financial
Performance
Figure 3.5 Key value drivers of the RAF
Levy
Volume of fuel sold
Level of claims
Claims expenditure per claim
Outstanding claims provision

Cash available
Revenue
Explained further, the revenue of the RAF is still largely dependent on the amount of fuel sold and the relevant levy that is agreed with
National Treasury. Expenses comprise largely of claims payments. Therefore, the number and value of claims received and paid along with
associated expenses are large expense items. From a nancial position perspective, the liquidity is determined by the cash available after
claims have been paid out for a specic period and, nally, the liability of the RAF is composed largely of outstanding claims that need to be
settled along with their associated costs.
Whilst these value drivers may appear conceptually simple, they are in turn driven by numerous other factors, for example claims expenditure
per claims is inuenced by whether a customer chooses to claim directly or have the claim represented by an attorney. As a consequence
of these revenue and cost drivers, the gap between the RAFs decit and its income has been growing over the last three decades but
exponentially in recent years as depicted in the graph below:
Analysis of Important Financial Indicators
Rmillion
50,000
40,000
30,000
20,000
10,000
Financial Year
Provision for Outstanding Claims
Net Fuel Levy Income
Accumulated Decit
Total Cash Claims Expenditure
Graph 3.1 The widening gap between income and deficit
3.2.3 Revenue
Total revenue for the review period increased by almost R1,8 billion (14.5%) to R14,5 billion (previous nancial year: R12,6 billion) (Graph 3.2).
This is attributable to the following primary factors:
The eect of the increase in the RAF Fuel Levy of 8 cents per litre from April 2010;
Investment income decreased to R40 million (previous nancial year: R48 million); and
Reinsurance income increased to R10 million (previous nancial year: R8 million) (Graph 3.3).
Revenue
16,000
11,969
12,000
10,000
8,405
8,000
7,277
Rmillion
12,683
14,526
14,000
6,000
4,000
2,000
-
2007
2008
2009
Financial Year
2010
2011
Graph 3.2
Composition of Total Revenue

16,000
14,474
14,000
12,566
12,000
6,000
8,845
8,222
8,000
7,011
Rmillion
10,000
12
40
60
48
470
104
180
27
238
2,000
2,550
4,000
2007
Net Fuel Levies
2008
2009
Financial Year
Investment Income
Government Grant
2010
2011
Reinsurance and Other Income
Graph 3.3
3.2.3.1
Fuel Levy
The growth in the fuel levy income (Graph 3.3) arose primarily as a result of the 8 cents per litre increase in the RAF Fuel Levy, announced
by the Minister of Finance and eective from the beginning of the nancial year. The volume of total petrol and diesel usage in the country
increased by 0.5% to 20,5 megalitres for the period January to December 2010 (Jan to Dec 2009: 20,4 megalitres). (Graph 3.4).
Fuel Sold Annually
21,315
21,500
20,477
20,000
20,420
20,832
20,500
2009
2010
19,987
Million litres
21,000
19,500
19,000
2006
2007
2008
Months: Jan - Dec

Graph 3.4
Sources: Statistics on All Fuel Sales: Petrol and Diesel RTMC;
Statistics on Fuel Sales Volume SA: Petrol and Diesel DoE;
Sales of Major Petroleum Products in South Africa SAPIA
At these levels, the RAF Fuel Levy represents 8% of the total fuel price at the pump, which averaged more than 850 cents per litre in Gauteng
for the year under review (Graph 3.5 and Figure 3.6).
Historical Analysis of RAF Fuel Levy vs Fuel Price and Basic Fuel Levy
1,200
1070
1,000
942
872
Cents
800
769
600
200
-
127
46.5
121
41.5
167.5
150
64
72
4/2007
5/2007
6/2007
7/2007
8/2007
9/2007
10/2007
11/2007
12/2007
1/2008
2/2008
3/2008
4/2008
5/2008
6/2008
7/2008
8/2008
9/2008
10/2008
11/2008
12/2008
1/2009
2/2009
3/2009
4/2009
5/2009
6/2009
7/2009
8/2009
9/2009
10/2009
11/2009
12/2009
1/2010
2/2010
3/2010
4/2010
5/2010
6/2010
7/2010
8/2010
9/2010
10/2010
11/2010
12/2010
1/2011
2/2011
3/2011
400
Month
Gauteng Fuel Price c/l
Graph 3.5
RAF Fuel Levy c/l
Basic Fuel Levy c/l
95 Unleaded Petrol Price Breakdown in

Gauteng as at 31 March 2011
Fuel prices are set in line with import and cost-recovery principles by the
Department of Energy and comprises the following components:
Basic fuel price:
55.52%
Dealers margin:
8.62%
RAF Fuel Levy:
7.64%
Wholesale margin:
5.74%
Taxes: (Fuel levy 17.78% and Customs and Excise 0.43%)
18.21%
Storage, handling and delivery, incl. minor transport costs:
Secondary transport and storage costs 1.21%,
Primary transport costs (Gauteng) 1.65%,
Petroleum products levy 0.02%, DSML 1.05% and
Incremental Inland Transport Recovery levy 0.32%
4.25%
Pump rounding:
0.02%
* Source: Department of Energy
100.00%
Figure 3.6
3.2.3.2
Diesel Refund
The refund on diesel fuel provided to certain industrial sectors of the economy increased to almost R1,2 billion (previous nancial year:
R1,1 billion). The refund, which represents 8% of the RAF Fuel Levy income, is a major concession on income due to the RAF. The refund has
continued to grow steadily over the years (Graph 3.6).
Diesel Refund
1,400
600
876
776
800
612
Rmillion
1,000
1,189
1,092
1,200
400
200
2007
2009
2010
2011
Investment Income
Investment income decreased to R40 million (previous nancial year: R48 million) due mainly to lower average cash holdings during the year
caused by the depletion of RAF cash reserves due to higher average claims values, improved eciencies in claims processing and a reduction
in interest rates. The prime lending rate dropped by 1% to 9% currently from 10% during the corresponding period of the previous nancial
year. The average interest rate on investments dropped from 6.94% in the previous nancial year to 5.55% during the year under review.
Cash holdings for the period ended 31 March 2011 were R1,1 billion compared to R655 million in the previous nancial year. Due to poor
capitalisation, the benets of increased claim processing capabilities continue to be hampered by availability of cash (Graph 3.7).
Financial Year
Graph 3.6
3.2.3.3
2008
Investment Income
238
250
180
R'million
200
150
104
100
48
40
50
2010
2011
2007
2008
2009
Financial Year
Graph 3.7
3.2.3.4
Reinsurance Income
The RAF enters into reinsurance treaties with major international reinsurance companies to cover catastrophic accidents. During the review
period, the RAF recovered R10 million (previous nancial year: R8 million).
3.2.4 Expenditure
Total RAF expenditure including the adjustment in the provision for outstanding claims increased by 6.6% to R16,2 billion (previous nancial
year: R15,2 billion) mainly as a result of an increase in the claims expenditure, which was inuenced by higher payouts and increase in the
claims provision (Graph 3.8). Total claims expenditure, including provision for outstanding claims increased by 6.3% to R15,2 billion (previous
nancial year: R14,3 billion). Sta and administration costs remained a relatively small portion of total expenses, although sta costs increased
by 5% to R0.62 billion (2010: R0,59 billion). Administration costs increased by 9% to R0,35 billion (2010: R0,32 billion). More detail on sta and
administration costs is listed under subsections 3.2.4.5 and 3.2.4.6 of this review.
Analysis of Total Expenditure

534
269
30,000
5,000
14,264
621
355
8,630
10,000
15,222
595
318
426
178
15,388
15,000
397
109
Rmillion
20,000
23,278
25,000
2007
2008
2009
2010
Financial Year
Graph 3.8
Claims Expenditure Including Provision
Sta Costs
Admin and Other
2011
3.2.4.1
Claims Expenditure
The increase in claims expenditure during the nancial year was due mainly to higher claims payouts and an increase in the provision for
outstanding claims (R2,3 billion), being 21% lower than the increase for the previous nancial year (R2,9 billion). The total cash payout for
claims increased by 12% to R12,8 billion (previous nancial year: R11,4 billion). Also included in total claims expenditure are payments accrued
in the previous nancial year of R155 million (Graph 3.9).
Composition of Claims Expenditure
2,866
8,748
2007
2008
12,786
6,600
5,000
11,370
10,000
11,125
6,404
15,000
2,511
Rmillion
20,000
2,281
12,161
25,000
2009
2010
2011
Financial Year
Net Increase in Provision
Claims Paid in Cash

Graph 3.9
3.2.4.1.1 Claims Volumes
The claims backlog decreased from 209,186 outstanding claims at the end of the previous nancial year to 244,652 outstanding claims at the
end of the reporting period (Graph 3.10). A total number of 187,168 claims were processed during the nancial year.
200,000
36,246
23,197
250,000
14,260
Number
300,000
31,832
350,000
69,346
Claims Outstanding
194,926
208,406
2007
2008
2009
2010
2011
Financial Year
Graph 3.10
Personal Claims
Supplier Claims
238,193
50,000
265,240
100,000
271,800
150,000
Claims lodged increased by 6% from a total of 209,981 in the previous reporting period to 222,634 in the 2011 nancial year (Graph 3.11).
Claims Lodged
350,000
112,467
165,513
166,146
100,000
2007
2008
2009
50,000
148,472
74,162
150,000
85,397
124,584
101,620
200,000
57,951
Number
250,000
128,625
300,000
2010
2011
Financial Year
Supplier Claims
Personal Claims
Graph 3.11
Some 68% of the claims nalised during the year under review were supplier claims (previous nancial year: 51%). At 31 March 2011, the
number of outstanding claims was made up of 208,406 personal claims (previous nancial year: 194,926 personal claims) and 36,246 supplier
claims (previous nancial year: 14,260 supplier claims) (Graphs 3.10 and 3.12). The process of direct payment to service providers has shown
positive benets. Not only has it accelerated the payment of accounts, but it has also reduced unnecessary delays occasioned by the
involvement of intermediaries.
Claims Finalised
139,134
133,521
200,000
126,486
Number
250,000
101,384
300,000
137,260
350,000
150,000
193,193
128,664
2007
2008
2009
2010
60,682
172,073
50,000
173,570
100,000
2011
Financial Year
Personal Claims
Supplier Claims
Graph 3.12
The above Claims Finalised gure for 2011 was calculated by referring to claims where compensation had been paid in the 2011 nancial
year, but ignoring the claims if the le had been closed in previous years. If the number of Claims Finalised had been calculated in
accordance with previous years, the gure would have been stated at 197,730 claims nalised. In line with the implementation of a new
claims administration system, where claims settled will be calculated dierently, the RAF will review its way of reporting on relevant statistics
in the 2012 nancial year.
Claims younger than one year decreased from 36% in 2010 to 35% in 2011 and the percentage of claims older than three (3) years have
increased from 15% to 20% at the end of the nancial year (Graph 3.13). The bulk of claims outstanding at year-end arose from new accidents.
Claims Age Analysis at 31 March 2011
Percentage of Total Outstanding Claims
60
50
51
47
40
38
36 34
30
35
28
24
20
24
24
21
18
15 15
15
13
10
11
20 21
10
2007
2008
2009
2010
2011
Financial Year
% of claims younger than one year
% of claims between 2 and 3 years
Graph 3.13
% of claims between 1 and 2 years

% of claims older than 3 years
A large number of claims processed are less than R1,000 (87,664 claims in 2011 versus 79,057 in 2010) (Graph 3.14). This is owing to an
accelerated approach to supplier claims, which allowed for hospitals and other service providers to be paid directly by the RAF. As a result
of the direct payment system to suppliers, the RAF managed to reduce the backlog of supplier claims more eectively than the backlog of
personal claims (Ref. Graph 3.10).
Average Size of Claims Paid

100,000
65,167
65,167
71,160
50,000
R1,000 R9,999
R10,000 R19,999
R20,000 R49,999
Category
Graph 3.14
55
55
1,804
2,877
2,341
5,608
4,129
12,220
R50,000 - R100,000 - R250,000 - R500,000 - R1,000,000 >R5,000,000

R99,999 R249,999 R499,999 R999,999 R4,999,999
Number of Claims 2010
Number of Claims 2011
<R1,000
1,302
9,790
10,000
17,614
20,000
43,240
30,000
25,421
32,071
32,071
40,000
18,675
18,675
60,000
75,605
75,605
70,000
87,664
80,000
79,057
79,057
Number of Claims
90,000
The RAF continues to receive and settle a high volume of small claims, with more than 85% of the claims processed during the nancial year
being for settlement values below R50,000 (Graph 3.15).
Cumulative % of Claims Paid
100
100
100
100
100
99
100
100
98
99
99
96
97
97
92
60
54
54
60
69
65
65
80
85
88
88
94
94
100
20
33
40
29
29
Cumulative % of Claims Paid
120
< R1,000
R1,000 R9,999
R10,000 R19,999
R20,000 R49,999
R50,000 - R100,000 - R250,000 - R500,000 - R1,000,000 -> R5,000,000

R99,999 R249,999 R499,999 R999,999 R4,999,999
Category
% of Claims Paid 2010
% of Claims Paid 2011
Graph 3.15
3.2.4.1.2 Claims Value
Of the R12,8 billion paid out in respect of claims for the nancial year, (previous nancial year: R11,4 billion), R9,4 billion (previous nancial year:
R8,7 billion) represented the payout of compensation. The balance of R3,4 billion (previous nancial year: R2,7 billion) was paid to the legal
fraternity for legal and expert fees (Graph 3.16). The inadequacies of the old system of compensation continue to be seen in the composition
of the claims payments.
Composition of Claim Payments
6,000
2,050
1,668
8,000
8,575
8,685
9,368
2,000
6,698
4,000
4,934
Rmillion
10,000
2,686
2,530
12,000
3,417
14,000
2007
2008
2009
2010
2011
Financial Year
Compensation and Medical Cost
Graph 3.16
RAF and Claimant Legal Cost
Reality is that the majority of claims lodged with the RAF are submitted via attorneys, most of whom charge contingency fees that are not
in line with the Contingency Fee Act, 1997 (Act No. 66 of 1997). The Contingency Fee Act allows attorneys to charge client-attorney fees
to a maximum of 25% of the nal compensation. The contingency agreement between the accident victim and the attorney must be
made available to the courts upon settlement of the claim. Such agreements are seldom lodged in RAF matters. Attorneys prefer to use the
common law contingency fee agreements, which results in as much as 50% of compensation taken in contingency fees.
As illustrated in Graph 3.17 below, it is assumed that contingency fees charged by attorneys amount to 50% of compensation, thus meaning
that only R4,68 billion for the 12-month period to 31 March 2011 (previous nancial year: R4,34 billion) of cash paid out by the RAF will actually
reach the victims of road accidents.
Composition of Claim Payments Including Estimated Contingency Fees
3,417
2,686
2,530
3,349
2007
4,684
4,343
2,000
4,297
4,000
2,050
6,000
3,349
8,000
2,467 1,668 2,467
Rmillion
10,000
3,343
4,298
12,000
4,684
14,000
2008
2009
2010
2011
Financial Year
Compensation and Medical Cost
RAF and Claimant Legal Cost
Contingency Fee
Graph 3.17
A matter of extreme concern for the RAF is that the cost of service delivery remains disproportionately high in relation to the compensation
paid in comparison with the RAF Fuel Levy received, more so because the bulk of the cash that the RAF pays is in respect of loss of amenities
of life and general damages, as opposed to medical costs and loss of income and support.
During the 2011 nancial year, R4,5 billion (previous nancial year: R4,8 billion) was paid out as general damages. This represented 48%
(previous nancial year: 55%) of the compensation paid (excluding legal fees). Medical payments of R0,77 billion (previous nancial year:
R0,73 billion), represented 8% (previous nancial year: 8%) of compensation paid; loss of income and support payments at R4,1 billion
(previous nancial year: R3,2 billion) represented 44% (previous nancial year: 37%) of compensation paid; and funeral costs, at R0,026 billion
(Graph 3.18).
While these ratios show some improvement over the previous nancial year, the fact remains that accident victims with long-term or disabling
injuries receive a small portion of the reimbursement paid out by the RAF.
(previous nancial year: R0,024 billion) remained virtually unchanged, representing 0.3% (previous nancial year: 0.3%) of compensation paid
Composition of Compensation
2008
2007
2009
4,467
768
2010
26
733
24
26
847
20
764
488
1,000
21
1,795
2,000
2,009
2,630
2,827
3,000
3,177
3,905
Rmillion
4,000
4,108
4,751
4,895
5,000
2011
Financial Year
Loss of Earnings and Support
General Damages
Claimant Medical Costs
Funeral Costs
Graph 3.18
The RAF Amendment Act seeks, among other issues, to address the area of general damages claims and, as can be seen from the above
graph, is starting to reduce the general damages relative to other benets payable.
3.2.4.1.3 Undertakings
Medical cost payments are inclusive of certicates issued to claimants by the RAF to cover future medical treatments, known as Undertakings.
An Undertaking is regarded as active if a claim is made against it during the year. The total number of Undertaking certicates issued increased
by 3% to 107,209 (previous nancial year: 103,791). The number of active Undertakings in respect of which payments were made decreased
to 2% of all Undertakings issued (previous nancial year: 2.4%) (Graph 3.19). This is in line with the nature of the instrument issued, since most
injuries arising from motor vehicle accidents heal and do not represent chronic illnesses.
Undertakings
60,000
103,791
88,001
80,912
Number
80,000
103,583
100,000
107,209
120,000
2,164
2,438
2,537
2,324
20,000
2,383
40,000
2007
2009
2008
2010
Financial Year
Graph 3.19
Total Undertakings
Active Undertakings
2011
Payments in respect of all Undertakings issued for the 2011 nancial year were R86 million during the 2011 nancial year (previous nancial
year: R82 million) (Graph 3.20).
Undertakings - Amount Paid

90,000
82,009
2009
2010
R'000
70,000
59,125
58,740
60,000
2007
2008
50,000
40,000
85,984
80,926
80,000
30,000
20,000
10,000
-
Financial Year
Graph 3.20
3.2.4.2
2011
Claims Categories and Averages
Claims settled by the RAF dier materially when the make-up of the claim is considered. The following analysis provides insight into the
average number of claims paid over the past ve years, as well as the composition of these claims.
3.2.4.2.1 Total Claim Payments
The average Rand value of all claims paid increased by 22% during the nancial year from R38,502 to R46,995 (previous nancial year: increase
of 16% from R33,171 to R38,502). The average increase in payments per claim from 2007 to 2011 has been 12% per annum. This increase was
due to the higher value personal claims that were processed compared with lower value supplier claims.
The total number of individual claim payments decreased by 7% during the nancial year from 290,710 to 270,479 (2010: decrease of 14%
from 336,511 to 290,710). The average decrease in the number of claims from 2007 to the 2011 nancial year has been 11% per annum
(Graph 3.21).
250,000
25,000
200,000
20,000
150,000
15,000
100,000
38,502
46,995
33,171
5,000
26,519
10,000
2007
2008
2009
2010
2011
Financial Year
Graph 3.21
Average Rand Value All Claim Payments
Number of Payments
50,000
-
300,000
30,000
270,479
35,000
350,000
211,798
40,000
400,000
290,710
45,000
336,511
331,155
50,000
31,165
Total Payment per Claim
3.2.4.2.2 Personal* versus Supplier Claims **

*A personal claim is a claim submitted by any person (the third party) for any loss or damage which that person has suered as a result of
any bodily injury to himself/herself, or the death of, or any bodily injury to any other person.
**A supplier claim is a claim submitted by a person/institution that provided medical treatment and/or accommodation to the victim of
the accident.
The average Rand value of all personal claims paid increased by 37% at the end of the nancial year from R64,288 to R88,430 (2010: increase
of 22% from R52,876 to R64,288). The increase in average payments of personal claims from 2007 to the end of the nancial year was 20%
per annum.
The total number of individual personal claim payments decreased by 17% at the end of the 2011 nancial year from 168,962 to 140,007
(2010: decrease of 17% from 204,275 to 168,962). The average decrease in the number of payments per claim from 2007 to the 2011 nancial
year has been 1% per annum (Graph 3.22).
150,000
50,000
40,000
100,000
30,000
2008
2009
50,000
88,430
2007
64,288
52,876
10,000
44,851
20,000
204,275
60,000
200,000
140,007
70,000
250,000
168,962
80,000
152,480
90,000
185,544
100,000
41,883
Personal Claim Payments per Claim
2010
2011
Financial Year
Graph 3.22
Average Rand Value Personal Claims
Number of Payments
The average Rand value of all supplier claims paid decreased by 7% at the end of the review period from R2,716 to R2,533 (2010: decrease of
1% from R2,730 to R2,716). The decrease in average payment per claim from 2007 to the end of the review period has been 3% per annum.
The decrease in the average payment per supplier claim was due to an increase in the number of payments to suppliers by the RAF during
the nancial year.
The total number of individual supplier claim payments increased by 7% at the end of the nancial year from 121,748 to 130,478
(2010: decrease of 8% from 132,235 to 121,748). The average increase in the number of claims from 2007 to the end of the review period has
been 35% (Graph 3.23).
140,000
120,000
2,500
100,000
59,316
3,000
2,000
80,000
500
20,000
2,533
40,000
2,716
1,000
2,730
60,000
3,209
1,500
2007
2008
2009
2010
2011
130,478
121,748
3,500
160,000
132,235
145,594
4,000
3,603
Supplier Payments per Claim
Financial Year
Average Rand Value Supplier Claims
Number
ments
Number of
of Pay
Payments
Graph 3.23
3.2.4.2.3 General Damages
The average Rand value per general damages claims paid increased by 43% during the nancial year from R45,837 in the previous nancial
year, to R65,399 (2010: increase of 26% from R36,409 to R45,837). The average payment for general damages claims increased by 24% per
annum between 2007 and the current reporting period.
The number of individual general damages claims showed a substantial decrease of 34% from 102,705 in the previous nancial year to
67,960 in the 2011 nancial year (2010: decrease of 23% from 134,160 to 102,705). This is in line with the expected decrease as a result of the
implementation of provisions of the RAF Amendment Act. On average, the number of claims in respect of general damages has decreased
by 4% per annum since 2007 (Graph 3.24).
40,000
80,000
30,000
60,000
20,000
36,409
45,837
65,399
31,347
10,000
40,000
2007
2008
2009
2010
2011
20,000
-
Financial Year
Average Rand Value General Damages
Graph 3.24
100,000
Number of Payments
67,960
120,000
140,000
102,705
50,000
97,771
60,000
160,000
134,160
125,572
70,000
26,875
General Damages Payment per Claim
3.2.4.2.4 Loss of Earnings

The average Rand value per loss of earnings claim paid increased by 25% from R314,270 in the previous nancial year to R393,672 (2010:
decrease of 6% from R335,503 to R314,270). However, the average loss of earnings payments per claim has increased by 21% per annum since
2007. This represents settlement amounts far in excess of the growth in gross national income and the average wage and salary increases
throughout the country. The introduction of the RAF Amendment Act will, however, not result in a material reduction in the payment of loss
of earnings, despite the cap being set as R160,000 per annum. Since most South Africans earn an annual income of less than the capped
amount and more accident victims are entitled to claim for loss of income and loss of support as a result of the removal of the R25,000 limit
on passenger claims, an increase in the payment of loss of earnings claims is likely in the future.
The total number of individual loss of earnings claim payments increased by 7% from 7,695 in the previous reporting period to 8,251 (2010:
increase of 13% from 6,782 to 7,695). The number of individual loss of earnings claims has increased on average by 5% per annum since 2007
(Graph 3.25).
Only 7,246 out of a total of 225,723 claimants were paid for their loss of earnings claims. This represents 3% of the total number of claims paid.
This is a reection of the attempted level of abuse of the Fund and points to the resources required by the RAF just to prevent such abuse.
.
9,000
8,000
7,000
200,000
4,000
150,000
3,000
100,000
2,000
50,000
-
2007
2008
2009
393,672
5,000
314,270
250,000
335,503
6,000
264,337
300,000
7,695
6,782
5,957
350,000
6,194
400,000
222,655
450,000
8,251
Loss of Earnings Payment per Claim
1,000
-
2010
2011
Financial Year
Average Rand Value - Loss of Earnings
Number of Payments
Graph 3.25
3.2.4.2.5 Loss of Support

The average Rand value per loss of support claim paid increased by 21% from R230,968 to R280,278 (2010: increase of 23% from R187,236 to
R230,968). Loss of support payments per claim have increased on average by 18% per annum since 2007.
The number of individual loss of support claim payments decreased by 2% from 3,117 in the previous reporting period to 3,045
(2010: increase of 4% from 2,986 to 3,117). On average, the number of loss of support claims has decreased by 3% per annum since 2007
(Graph 3.26).
3,045
3,500
3,000
2,500
200,000
2,000
150,000
1,500
100,000
230,968
280,278
2007
2009
2010
2011
175,457
50,000
187,236
1,000
2008
500
250,000
3,117
2,986
2,758
2,960
300,000
151,253
Loss of Support Payment per Claim
Financial Year
Average Rand Value Loss of Support
Number of Payments
Graph 3.26
3.2.4.2.6 Medical Compensation
The average Rand value of all medical compensation claims increased by 4% from R4,678 in the previous reporting period to R4,879 (2010:
decrease of 11% from R5,241 to R4,678). On average, medical compensation payments per claim have increased by 1% per annum since 2007.
The number of individual medical compensation claim payments increased by 1% from 138,115 at the end of the previous reporting period
to 139,634 (2010: decrease of 15% from 161,893 to 138,115). The number of medical compensation claims has shown an average increase of
21% per annum since 2007 (Graph 3.27).
140,000
86,101
120,000
100,000
80,000
2,000
4,879
2008
4,678
2007
5,241
40,000
4,367
1,000
60,000
2009
2010
2011
Financial Year
Average
AverageRand
RandValue
ValueMedical
MedicalCompensation
Compensation
Graph 3.27
20,000
Number
NumberofofPayments
Claim Payments
180,000
160,000
4,000
3,000
200,000
139,634
5,000
138,115
161,893
174,836
6,000
5,670
Medical Compensation Payment per Claim
3.2.4.2.7 Funeral Costs

The average Rand value per funeral cost claim paid increased by 13% from R7,300 in the previous nancial year to R8,220 (2010: increase of
10% from R6,650 to R7,300). On average, funeral cost payments per claim have increased by 11% per annum since 2007.
The number of individual funeral cost claim payments decreased by 9% from 3,223 in the previous reporting period to 2,949 (2010: decrease
of 18% from 3,952 to 3,223). The number of individual funeral cost claim payments has decreased on average by 0.2% per annum over the
past ve years (Graph 3.28).
3,952
Funeral Cost Payment per Claim

3,450
4,500
7,000
3500
2,500
4,000
2,000
3,000
1,500
2,000
1,000
1,000
500
5,847
2007
2008
2009
2010
8,220
5,000
7,300
3,000
6,650
6,000
2011
3,223
4,000
2,949
3,571
8,000
5,783
9,000
Financial Year
Average Rand Value Funeral Costs
Number of Payments
Graph 3.28
3.2.4.2.8 Claimants Legal Costs
The average Rand value per claimants legal cost claims settled increased by 79% from R15,647 in the previous reporting period to R28,008
(2010: increase of 37% from R11,399 to R15,647). On average, the Rand value per claimants legal cost payments over the ve-year period, 2007
to 2011, has increased by 37% per annum.
The current system benets attorneys who, despite being paid their legal costs in full by the RAF, continue to charge a contingency fee to the
claimants. The current common law, fault-based system of compensation results in vast legal costs being incurred in determining fault, future
loss of earnings/support and the amount of the payment. A proposed and properly dened no-fault compensation system in the future
should see signicant savings in this regard.

The total number of individual legal cost claim payments decreased by 27% from 107,572 to 78,319 at the end of the reporting period
(2010: decrease of 23% from 139,276 to 107,572). Calculated over the ve-year period, 2007 to 2011, the total number of individual legal cost
claim payments has decreased on average by 8% per annum (Graph 3.29)
140,000
120,000
78,319
20,000
28008
15,000
100,000
80,000
60,000
10,000
2007
2008
2009
28,008
8,285
11,399
8285
15,647
40,000
5,000
2010
2011
160,000
107,572
11399
139,276
147,240
25,000
180,000
15647
6,713
30,000
152,550
Claimants Legal Costs Payment per Claim
20,000
Financial Year
Average Rand
Rand Value
Costs
Average
Value-Claimant
Claimantlegal
Legal
Costs
of Claims
Number ofNumber
Payments
Graph 3.29
3.2.4.2.9 RAFs Legal Costs
The average Rand value of the RAFs legal cost payments per claim increased by 32% from R10,224 in the previous nancial year to R13,476
(2010: increase of 2% from R9,977 to R10,224). On average, the RAFs legal cost payment per claim from 2007 to the present has shown a 6%
increase per annum.
The establishment of an in-house legal department will begin to yield savings in legal costs incurred by the RAF in the medium- to long-term.
The total number of individual RAFs legal cost payments decreased by 4% from 97,392 at the end of the previous reporting period to 93,739
(2010: decrease of 1% from 98,311 to 97,372). On average, the number of individual RAFs legal cost payments increased by 14% per annum
over the ve-year period from 2007 (Graph 3.30).
100,000
80,000
8,000
60,000
6,000
40,000
13,476
2008
10,224
2007
9,977
2,000
9,483
4,000
2010
2011
20,000
-
Graph 3.30
2009
Financial Year
Average Rand Value RAF Legal Costs
Number of Payments
93,739
97,392
120,000
10,000
82,998
12,000
66,198
14,000
10,198
16,000
6713
98,311
RAFs Legal Costs Payment per Claim
3.2.4.3
High-value Claims
The number of high-value claims (claims where compensation paid is greater than R500,000) increased to 0.72% of the total number of claims
nalised during the year (2010: 0.5%). These claims still represent a small proportion of the total claims settled by the RAF during the reporting
period (Graph 3.31).
Finalised Number of Claims where Compensation Paid is Greater than R500 000
(In Real Terms) as Percentage of Total Finalised Claims
0.8
0.72%
0.7
Percentage
0.6
0.50%
0.5
0.4
0.1
0.21%
0.23%
0.2
0.21%
0.3
2007
2008
2009
2010
2011
Financial Year
Graph 3.31
In terms of total Rand value paid, these claims constituted 31.3% of the total compensation paid out during the reporting period
(2010: 24.8%) (Graph 3.32).
Rand Value of Compensation Claim Payments Greater than

R500 000 as Percentage of Total Compensation Paid
40
31.3%
24.8%
Percentage
30
20
2007
2008
8.6%
6.1%
4.0%
10
2009
2010
2011
Financial Year
Graph 3.32
3.2.4.4
Foreign Claims
Claims by foreign visitors to South Africa continued to form a substantial proportion of high-value claims. The bulk of payment to foreigners is
made in their currency of origin and they have enjoyed unlimited benets in the past. With the implementation of the RAF Amendment Act,
loss of earnings and loss of support payments to foreigners have been capped at R160,000 per annum. The eect of this change in legislation
should become visible in future nancial periods.
As at 31 March 2011, there were 51 claims lodged (not yet settled) where the RAF estimates its outstanding liability to be R5 million or in
excess thereof, at an average of R8,2 million per claim. These constituted 25% (previous nancial year: 32%) of the value of the estimated
liability of claims in excess of R5 million (Graph 3.33).
Estimated Outstanding Liability as at 31 March 2010

for Claims in Excess of R5 Million
Estimated Outstanding Liability as at 31 March 2011

for Claims in Excess of R5 Million
0,0
0,2
0,4
0,6
0,8
1,0
75%
Total RSA
68%
Total RSA
25%
Total Foreigners
32%
Total Foreigners
Graph 3.33
3.2.4.5
Staff Costs
The number of permanent sta members decreased by 4% from 1,960 in the previous reporting period to 1,872. The sta costs for the year
increased by 4.4% to R0,62 billion (2010: R0,59 billion). This increase is much lower than the annual salary increase. The lower increase can be
attributable to a drop in sta numbers during the year under review compared to the previous nancial year (Graph 3.34).
Sta Count
1,953
1,960
1,810
1,711
2009
2010
1,000
500
8285
2007
2008
2011
Financial Year
Graph 3.34
3.2.4.6
Administration and other Costs
Administration and other costs increased to R0,35 billion (2010: R0,32 billion). Administration and sta costs still represent a small portion of
2% and 4% of total expenditure respectively (Graph 3.35).
Number of Permanent Sta
1,500
1,872
28008
2,000
Composition of Total Expenditure 2010
94%
Claims Expenditure
4%
2%
Sta Costs
Administration and
Other Expenses
Composition of Total Expenditure 2011
94%
Claims Expenditure
4%
2%
Sta Costs
Administration and
Other Expenses
Graph 3.35
The roll-out of the New Operating Model (NOM), expansion of the RAFs presence through hospital and satellite oces countrywide,
stabilisation of the model oce in Eco Glades, Centurion, as well as the subsequent upgrade of IT systems and networks have resulted in
an increase of administration and other costs by 9% to R0,35 billion (previous nancial year: R0,32 billion). The increases were necessary to
achieve the RAFs objectives to improve business processes and its service delivery to the public.
3.2.5 Profitability
In its continued drive to reduce the claims backlog, the RAF has once again incurred a decit for the nancial year of R1,7 billion (previous
nancial year decit: R2,5 billion) (Graph 3.36). The eorts to reduce the backlog resulted in claims expenditure, including provision being
R15,2 billion (previous nancial year: R14,3 billion), which slightly exceeded revenues accrued from fuel levies of R14,5 billion (previous
nancial year: R12,6 billion).
The RAFs recent activities have again reected its capacity to reduce the backlog of outstanding claims. However, the constraint the RAF will
continue to experience will be that the fuel levy income, at current levels, will not allow the RAF to achieve this objective in full.
Cash and cash equivalents increased from R0,66 billion during the previous nancial year to R1,1 billion at the end of the reporting period.
Despite a cash balance of R1,1 billion, the claims requested not yet paid at year-end amounted to R0,16 billion.
During the year under review, the RAF had to manage cash-ow constraints with claims requested that could not be paid, due to insucient
cash balances. The overall improvement over the previous nancial year was facilitated by the increase in the fuel levy of 8c per litre, as well as
a decline in the increase in the provision for outstanding claims, and reects the sterling commitment of the RAF to rectify its decit position.
(1,672)
(2,494)
(2,281)
372
(2,866)
- 6,000
(7,587)
(6,404)
- 4,000
R'million
(1,183)
- 2,000
(1,859)
(2,511)
49
652
2,000
609
Profitability
-10,000
(12,112)
(12,161)
- 8,000
-12,000
-14,000
2007
2008
2009
2010
2011
Financial Year
Surplus /(Deficit) Before Provision for Outstanding Claims
Provision for Outstanding Claims
(Deficit)/Surplus for the year
Graph 3.36
3.2.6 Cost of Service Delivery

The RAF focuses on cost reduction to improve eciencies, and to make more cash available for the payment of compensation.
The cost-to-income ratio for the nancial year increased to 30% (previous nancial year: 28%). Administration costs stabilised at 7% (previous
nancial year: 7%), RAF legal and expert costs stabilised at 8% (previous nancial year: 8%) and claimants legal and expert costs increased to
15% (previous nancial year: 13%). All costs, except for claimants legal and expert costs remained fairly constant during the year (Graph 3.37).
Additional measures, currently being introduced within the RAF, include the roll-out of a new claims system and processes, as well as a
process of dealing with claimants directly rather than through third parties. These interventions have already yielded cost reductions and are
expected to reduce costs even further in the longer term.
Cost-to-Income Ratio
35
31
30
28
Percentage
25
30
28
20
15
10
15
14
13
9
5
15
13
7
2007
2008
2009
2010
2011
Financial Year
Claimants' Legal & Expert Costs as % of Total Income
Graph 3.37
RAF's Admin Costs as % of Total Income
RAF's Legal & Expert Costs as % of Total Income

Total Costs as % of Total Income
30
3.2.7 Productivity
Eciency measures that are being introduced within the RAF include changes in processes to increase productivity. Sta members in the
claims environment are also furnished with new tools to increase eciency. The results will become more pronounced in the future when the
NOM is fully rolled out. As a result of technical problems experienced during the switch-over to the new claims system during the rst quarter
and cash constraints experienced during the 2011 nancial year, claims targets had to be aligned with available cash resources in order to
maximise the number of claims nalised per sta member. Due to the reasons stated above, sta productivity appeared to be declining
(Graph 3.38).
Claims Finalised per Sta Member

250
166
196
152
100
100
Number of Claims
150
205
28008
200
50
8285
2007
2008
2009
2010
2011
Financial Year
Graph 3.38
3.2.8 Financial Health

3.2.8.1
Solvency and Capitalisation
The RAF remains grossly under-capitalised with liabilities exceeding assets by R44,0 billion (previous nancial year: R42,3 billion) (Graph 3.39).
The only assets of substance that the RAF owns, other than cash and cash equivalents, are land and buildings valued at R99 million. Road
Accident Funds comparable to the RAF have investments that cover up to 110% of the full outstanding liability.
The Board approved an economic model for the RAF that will provide sustainable funding for the RAF in the future, inclusive of a strategy to
build up assets to cover the outstanding liability over time. The impact of the economic model will be noticeable only in future nancial years.
The RAF will, however, continue with discussions with the DoT and National Treasury to arrive at a more sustainable solution to the adequate
capitalisation of the Fund.
4,566
(44,015)
(48,581)
(46,208)
(40,000)
(42,330)
3,878
(43,231)
(30,000)
(39,835)
(27,828)
(31,125)
(20,241)
(24,448)
R'million
(20,000)
(10,000)
3.396
3,297
10,000
4,207
Solvency
(50,000)
(60,000)
2007
2008
2009
2010
2011
Financial Year
Total Assets
Total Liabilities
Net Deficit
Graph 3.39
3.2.9 Liability for Outstanding Claims

The RAF makes use of external actuaries to estimate the provision for outstanding claims. The actuaries estimated that the RAF could still
expect to pay an estimated amount of R49,5 billion (in March 2011 monetary terms) in respect of accidents that occurred prior to 1 April 2011.
If the RAF held assets of R47,7 billion, this together with interest earned on the assets, was estimated to be sucient to cover these future
payments. This R47,7 billion is the estimated discounted liability for outstanding claims.
This estimated liability was determined by separately considering the following three components:
Pre-Amendment Act claims;
Post-Amendment Act claims; and
Undertaking payments.
The estimated discounted liability in respect of pre-Amendment Act claims (R22,8 billion) constituted 48% of the total estimated discounted
liability (R47,7 billion) whereas the estimated discounted liability in respect of post-Amendment Act claims (R22,1 billion) constituted 46% of
the total estimated discounted liability. The remaining 6% was in respect of Undertakings.
This expected future payments in respect of pre-Amendment Act claims were estimated by rst estimating the number of outstanding
and then multiplying the estimated outstanding number of claims in each group by the average amount (in March 2011 monetary terms)
expected to be paid per claim. These average amounts per group diered per accident year because, on average, larger claims take longer
to settle. The estimated future payments (in March 2011 monetary terms) were then discounted at a rate of 1% per year (on the assumption
that the investment return on notional assets could have been 1% above claims ination) from the expected payment date back to the
valuation date.
Graph 3.40 shows the estimated number of outstanding personal pre-Amendment Act claims for each accident year, split up into settled
claims, unsettled reported claims and incurred but not reported claims (IBNR). The estimated number of personal pre-Amendment Act
claims shown in the graph for 2009 represents only the four months from April to July 2008, before the introduction of the Amendment
Act. The estimated ultimate number of claims for the accident year ending 31 March 2008 and for the four months ending July 2008 was
signicantly higher than that of previous accident years.
claims for each accident year, grouping these claims into eight homogeneous groups (supplier claims and seven groups of personal claims)
Split of Estimated Number of Ultimate Personal Pre-Amendment Act Claims

200,000
180,000
160,000
Number
140,000
120,000
100,000
80,000
60,000
40,000
20,000
Accident Year
Ultimate
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
80,789
90,321
107,916
128,562
144,008
116,525
125,064
111,800
119,068
140,526
190,068
81,776
IBNR
84
94
113
134
193
218
336
434
684
1,264
3,056
6,177
Unsettled reported
471
555
821
915
1,214
1,327
1,879
2,013
2,698
2,891
3,006
3,284
4,862
5,198
7,717
8,151
13,775
14,459
25,733
26,997
51,357
54,413
24,604
30,781
80,234
80,150
89,406
89,312
106,589
106,476
126,549
126,415
141,117
140,924
113,241
113,023
119,866
119,530
103,649
103,215
104,609
103,925
113,529
112,265
135,655
132,599
50,995
44,818
Settled
Graph 3.40
The estimated number of ultimate personal pre-Amendment Act claims for the last full accident year prior to the RAF Amendment Act, i.e. for
the accident year ending 31 March 2008, are expected to fall into the groups as shown in Graph 3.41:
Breakdown of Ultimate Personal Pre-Amendment Act Claims for the

Accident Year 31 March 2008, Subdivided into Groups
80.4%
4.9%
2.1%
1.7%
8.9%
1.0%
1.1%
Group D2: Death: Only Funeral

Group D1: Death: With LOS
Group C3: Injury: GD R125k
Group C2: Injury: GD R125k
Group C1: Injury: No GD
Group B: Only Costs
Group A: No Payments
Graph 3.41
The subdivision of Injury claims into sub-groups with general damages above and below R125,000 (in March 2010 terms) was to estimate
the percentage claims expected to be aected by the provision in the Amendment Act that general damages will only be payable to the
seriously injured. The amount of general damages payable was used as a proxy for the seriousness of the injury assuming those with general
damages below R125,000 are not seriously injured and those with general damages above R125,000 are seriously injured.
The average amounts expected to be paid in respect of personal pre-Amendment Act claims falling into each of these groups are dierent
for each accident year (as larger claims take on average longer to nalise). For example, the average amounts (in March 2011 money terms)
were estimated to be as follows for the dierent groups (where the x-axis denotes the chronological order, i.e. time between accident date
and settlement date) (Graph 3.42).
Average Amounts Expected to be Paid in Respect of Personal Pre-Amendment Act Claims Divided into Groups
Group C1: Injury: No GD
Group B: Only Costs
25,000
80,000
20,000
60,000
15,000
40,000
10,000
20,000
5,000
0%
20%
40%
60%
80%
100%
0%
20%
Group C2: Injury: GD<R125k
40%
60%
Group C3: Injury: GD
100,000
80%
100%
80%
100%
80%
100%
R125k
1,200,000
1,000,000
80,000
800,000
60,000
600,000
40,000
400,000
20,000
0%
200,000
20%
40%
60%
80%
100%
0%
20%
40%
60%
Group D2: Death: only Funeral
Group D1: Death: with LOS
25,000
400,000
20,000
300,000
15,000
200,000
10,000
100,000
0%
5,000
20%
40%
60%
80%
100%
0%
20%
40%
60%
Graph 3.42
Most other statistics shown in this Integrated Annual Report break down claim payments into Heads of Damage as opposed to Groups used
for estimating the liability of outstanding claims. Claims falling into any Group could have payments in respect of dierent Heads of Damage.
The table below demonstrates the relationship between the Groups and the Heads of Damage. For example, for the accident year ending
March 2007, ultimate payments (excluding Undertakings) are expected to be R12,8 billion. This is expected to be broken down as follows:
C1
C2
C3
D1
D2
Supplier
Total
Rmillion
Rmillion
Rmillion
Rmillion
Rmillion
Rmillion
Rmillion
Rmillion
Medical
22
111
355
76
306
872
Loss of Earnings
32
437
2,800
21
3,291
Loss of Support
433
433
Funeral
223
225
General Damages
3,450
1,880
10
5,341
RAF Legal
15
575
344
33
82
1,061
Claimant Legal
14
968
491
40
124
13
1,659
Other
(11)
(23)
(6)
(41)
Total
29
70
5,529
5,845
536
508
324
12,841
Group:
Heads:
Payments in respect of post-Amendment Act claims have not developed suciently to independently produce reliable estimates. However,
experience to date shows that the ultimate number of post-Amendment Act claims is expected to be similar to what would have been
expected if the Amendment Act was applied to the data for the 2007 accident year. The estimate for the liability in respect of post-Amendment
Act claims has been based on the estimated total amount that would have been paid in respect of claims for the 2007 accident year if the
Amendment Act would have applied to these claims. The liability in respect of post-Amendment Act accident intervals was then taken as this
estimated ultimate amount minus amounts already paid.
The discounted provision in respect of outstanding claims (excluding the provision for outstanding liability in respect of Undertakings issued)
was estimated to be R44,9 billion, made up per Graph 3.43 for the dierent accident years:
Estimated Discounted Liability for Outstanding Claims per

Accident Year, Excluding Undertakings Issued
10,000
9,000
Rmillion
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
pre 98
Accident Year
173
Estimated Liability 173.4
Graph 3.43
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
112
169
229
341
487
632
970
1,555
1555
2,619
2619
4,347
4347
7,667
7667
8,928
8928
8,258
8257
8,430
8430
The discounted provision in respect of outstanding Undertaking payments was estimated to be R2,784 million, made up as shown in
Graph 3.44 for the dierent accident years:
Estimated Discounted Liability in Respect of Outstanding Undertakings Payments

600
500
R million
400
300
200
100
pre 98
Accident Year
Estimated Liability 562
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
124
160
115
148
165
159
167
164
175
183
211
169
1371
37
Graph 3.44
3.2.10 Liquidity
Some 94% of the RAFs cash resources are directed towards the payment of claims. The RAFs continued focus on reducing the claims backlog
has once again been the cause of the Fund not being able to stabilise the downward trend in cash resources, which have been on the decline
since 2006.
Earlier in this report it was mentioned that the RAF still had to manage cash-ow constraints during the year under review, with claims
requested not having been paid due to cash balances being exceeded on several occasions during the year (Graph 3.45).
Cash Holdings
21.5
2008
Financial Year
Graph 3.45
1,138
46.5
41.5
655
36.5
31.5
2009
2010
2011
2007
18.5
16.5
500
26.5
1,000
1,091
1,500
1,192
R'million
64
2,000
72
2,404
2,500
As at 31 March 2011, current liabilities of the RAF exceeded current assets by R7,1 billion (previous nancial year: R7,2 billion) (Graph 3.46).
Liquidity
6,000
(10,734
(11,342)
(7,211)
(7,103)
4,239
3,523
(6,810)
(9,920)
(8,000)
(6,651)
(6,000)
(9,806)
(4,000)
(1,605)
(1,605)
R'million
(2,000)
(5,659)
3,110
3,155
2,000
4,054
4,000
2008
2009
2010
2011
(10,000)
(12,000)
(14,000)
2007
Financial Year
Total Current assets
Total Current Liabilities
Net Current Liabilities
Graph 3.46
3.3 Support Functions

3.3.1 Customer Service Network
3.3.1.1
Introduction
In 2008, the RAF initiated a Customer Service Network (CSN) to address areas that impacted on the delivery of its mandate.
The CSN aims to:
Improve the RAFs visibility and increase the publics accessibility to the organisation;
Ensure direct and early involvement in the rehabilitation of road accident victims;
Proactively gather road accident victim and customer information to reduce time taken to lodge claims and improve processing; and
Improve customer and stakeholder relationships with the RAF.
3.3.1.2
Accessibility and Visibility
Since the inception of the CSN, the RAF has markedly increased the number of physical touchpoints around the country. During the year under
review, 10 new Hospital Service Centres were opened, bringing the total number to 75. In the next nancial year, several new Community
Centres will be opened, strategically placed in towns and cities around the country. Mobile Service Centres will be established in all provinces
to position the RAF in communities that would otherwise have no access to the organisations service oering.
Additional programmes ensuring accessibility and visibility include, among other, Community Outreach Programmes, which bring the RAFs
service oering to people located in peri-urban and rural areas.
These programmes, in partnership with other stakeholders, are aimed at:
Educating and informing local communities on the RAFs claims processes and procedures;
Assisting road accident victims to originate and submit claims to the RAF; and
Provide a face to face channel to victims enquiring about the status of claims submitted.
During the year under review, the RAF participated in major events, including the Healing of the Wounds campaign at eMsinga, KwaZuluNatal, with the MEC of Transport and MEC of Social Development, as well as the launch of the 2010 Festive Season Arrive Alive campaign at
eNgcobo, Eastern Cape, with the Minister of Transport.
In addition, through its Mass Accidents Burial Programme, the RAF:
Pays funeral undertakers on behalf of the families for burial-related costs, i.e. caskets, storage and transportation of bodies;
Assists survivors with origination of personal claims; and
Assists dependants with the origination of loss of support claims.
From April 2009 to date, the RAF has covered the burial costs of more than 150 people in the country on this programme.
3.3.1.3
Rehabilitation of Road Accident Victims
The RAF has intensied its Patient Outreach Programme (POP), which provides care to road accident victims who have suered permanent
injuries and require medical attention for life.
The programme provides:
Regular home visits to assess victims needs and make recommendations;
Caregivers for quadriplegic and paraplegic accident victims;
Home renovations to accommodate road accident victims, and
Wheelchairs, prostheses and other necessities.
3.3.1.4
Expansion of Geographic Footprint
One of the RAFs major initiatives for the year was the expansion of its geographic footprint, allowing the organisation to serve accident
victims directly (through a presence at various hospitals), rather than via an intermediary. It is envisaged that this initiative will reduce costs,
speed up the claims process and assist in the elimination of fraudulent claims.
Geographic Footprint
Current RAF
New RAF
Provincial/Regional Offices
Hospital Service Centres
75
105
Retail Service Centres
Mobile Service Centres
81
132
Total
3.3.1.5
New Operating Model
The transformation process kicked o during 2006 with the development of a business diagnostic that mapped the turnaround strategy
the start of the 2012 nancial year. This new nancial year will be critical in the development stages of the NOM in order to see the model
achieving full resolution by 2014.
The success of the turnaround strategy will be dependent on:
1.
Operational eciency and eectiveness in changing the RAFs business model to make it more ecient and accessible to customers;
2.
Financial sustainability in ensuring that enough cash is available in order to pay out valid claims, as well as ensuring a credible plan for
eradicating its decit ; and
3.
Legislative enablement in changing the RAFs mandate in legislation to make it easier to implement.
for the RAF. The establishment of the NOM for the RAF commenced in earnest during the year under review and will be well advanced by
3.3.1.5.1 New Systems and Processes

The approach to re-invent the wheel in developing new systems and processes was not followed, but rather proven solutions that are in
use in organisations similar to the RAF, such as the Accident Compensation Corporation (New Zealand) (ACC) and the Transport Accident
Commission (Australia) (TAC), as well as corporates such as Macquarie, Northern Rock, ING and Legal & General, which are arguably leaders
in their market segments. The fundamentals of the RAFs current processes and systems will not change under the NOM. The NOM will, in fact,
see the organisation transforming itself into an ecient service provider through:
Streamlined business processes: The larger customer footprint (CSN), a central processing hub (Benet Administration Unit) and
cutting-edge technology aim to improve the overall customer experience, while streamlining business processes.
Efficient systems: Integrated and ecient claims payment and nancial systems, which will contribute to improving the turnaround
time for the payment of claims.
Customer-centric staff: Appropriately skilled sta will be empowered to deal with claimants, whether at the scene of accidents, in
hospitals or in the call centres.
Dynamic leadership: The RAF will continue to invest in growing leaders who are diverse in facilitating organisational transformation and
will contribute to a successful turnaround of the RAF.
Improved customer-centricity: The improved footprint, the deliberate intent of the RAF to obtain a greater number of direct claims and
greater focus on service delivery will see more eort being made to improve customer-centricity.
Faster payment turnaround time: The internal operational eciencies, motivation for more sustainable funding and better systems
will all contribute equally to improving turnaround time from date of accident to payment date.
Focus on rehabilitation: The RAFs intent to place greater emphasis on patient rehabilitation, thereby ensuring that such patients
become economically active sooner, and thereby reducing the longer term nancial obligation of the RAF.
Road safety awareness: Road accidents represent the RAFs key cost driver, and the RAFs active role in accident prevention should
ultimately result in a reduction in the number of claims lodged.
Fair and equitable compensation: Amendments to the current RAF Act and the impending no-fault system will see customers
receiving fair and equitable compensation.
Communication: The RAFs engagement with strategic partners will see the expansion of its footprint in a manner which is both
economical and mutually benecial to all parties.
Change management: The RAF will make deliberate eorts to ensure eective change management throughout the period of transition
that the organisation is going through to ensure a seamless process.
RAF brand: The re-branding of the RAF and communication and marketing of its brand will see improvement in reputation and
market share.
Core elements of the strategy are outlined in the diagram below:

Customers

Decentralised to enhance customer accessibility
Primarily involved in claims origination
Hospital
Service
Centres
Mobile
RAF
Act as first line of customer support

Provide initial assessment of merits
Walk-in
Centres
Regional
Satellite
Offices
Provincial
Offices
Contact
Call Centres
Internet
Benets Administration Unit
Centralised hub for claims processing

Primarily involved back-end processes to finalise
claims
Merits
Medical
Benefits
Also involved in litigation should claims reach

the courts
Undertakings
Litigation
Facilities
Marketing
and Comms
Business Support
Centralised enterprise support services

Manage the payout of claims through Finance
function
Ongoing people and organisational development
ICT support and innovation
Extension and management of physical footprint
Finance
Human
Capital
ICT
Strategic Relationships
Synergise on collective goals
Strategic
Partners
Provide economies of scale

Assist with operational efficiencies
Joint
Ventures
Vendors
Institutional Relationships
Drive legislative and regulatory environment
DoT
Assist with development of RABS
National
Treasury
Dept
of Health
Provincial
Government
Community Road
Safety Councils
Figure 3.7 New Operating Model for the RAF

3.3.1.5.2 Value Chain
The dierent components of the new value chain are depicted in the diagram below:
Collect
accident info
Crash
Collection
of accident
information
Networking
with partners
and gathering
information
from them
Contact
accident
victim
Digitise
lodgement
Make initial
Collect, batch
contact with the and forward
accident victim
lodgement
Assist with
details to BAU
origination of
the claim
Benets Administration Unit

Assess initial
merits
Perform
initial merit
assessment
Final merit
assessment
Make offer
Arrange medical Develop

checks
quantum of
Finalise merits of benets
claim
Negotiate oer
with claimant
or proxy i.e.
attorney
Litigation
Finance
Payout
Defend any
Manage the
litigation related payout to the
to claims
claimant either
as instalments or
as a single gure
payout
3.3.1.5.3 Transition
The transition to the NOM has and will require the RAF to change the constitution and location of its workforce, transform its processes
and complete the implementation of FINEOS, the new claims processing system. The winding down of the old operational model, while
concurrently implementing the NOM, has proved to be challenging. This has also had HR implications and risks, which are addressed under
Human Capital.
Figure 3.8 New core processes for the RAF
This transition is described in more detail in the gure below.
From a passive and inecient organisation that

provides non-sympathetic care and relief to
MVA* victims
People
Process
Systems
Predominantly office-based workforce

skilled claims processing and legal
compliance
Monolithic process that is inefficient,

lacks transparency and prone to fraud
Paper-based and aging legacy systems

that are increasingly difficult and
expensive to manage
...To a customer centric, visible and easily

reachable organisation that provides
sympathetic and speedy service to MVA victims
People
Predominantly field-based workforce

skilled in customer relations
management supported by a small and
highly productive processing personnel
Process
Workflow-based process that supports

work activity governance and expedites
processing of claims
Systems
World-class systems that automate work

activities and reduce errors and fraud
The transformation requires that the RAF expands its geographical footprint, create a multi-channel environment to
engage its customers and improve its claims processing capability
Figure 3.9: Summary of differences between the current and New Operating Model
3.3.2 Information and Communication Technology

3.3.2.1
Optimisation and Innovation
After having stabilised the RAFs ICT environment, the ICT department this year embarked on both the second and third phases of its threeyear strategy, i.e. optimisation and innovation of ICT services, systems and processes, which included implementing an ICT governance
structure.
In line with good governance principles, as outlined by the King III Report, the RAF ICT departments strategy and objectives are aligned to the
business. The Control Objectives for Information and Related Technology (COBIT) governance and Information Technology Infrastructure
Library (ITIL) service delivery frameworks have been adopted and are in various stages of implementation and maturity. The Governance,
Risk and Security business unit within the ICT department is entrusted with the responsibility of establishing, maintaining, monitoring and
reporting on ICT governance, risk and security related matters.
The ICT Security Strategy is implemented through a comprehensive information security programme that includes well-conceived and
complete policies and standards. Existing business continuity and disaster recovery plans are being reviewed to ensure continuity of ICT
services to the business.

During the year under review, the ICT department initiated a project to develop skilled resources to support the newly implemented ICT
infrastructure, designed specically to optimise and streamline the RAF business model.
As part of the optimisation process, the following initiatives were implemented:
Data Centre Consolidation: The RAF initially operated six decentralised data centres nationally. These were subsequently consolidated
and centralised into a single Tier-4 hosted data centre. This has greatly reduced costs pertaining to ICT administration, hardware and
software, operations and electricity, and has contributed to a reduced power footprint in support of a greener IT infrastructure. The
consolidation furthermore increases data security with the capability of central data storage and allows ICT to be agile and scalable to
meet business demands.
Wintel Project (Private Cloud Computing): The Wintel Project has been successful in facilitating a complete revamp of the Citrix
and Windows technology environment, which, in turn, has enabled the RAF to deliver on its new business model, i.e. expanding its
national footprint through its CSN. The project delivered on private cloud computing built on virtualisation technology that is supported
by an underlying infrastructure architecture which can be shared, is accessible from anywhere and has the ability to swiftly scale to
allow for rapid and elastic expansion. Private cloud computing services, together with the introduction of Corporate APN and broadbanding solutions into the network architecture, have allowed for mobility and satellite oce operations from hospitals, walk-in centres,
townships, rural areas, etc.
The Wintel Project has made it possible to migrate 2,000 employees into the new Citrix and Windows environment.
To enhance the consolidation eorts brought about by virtualisation technology, ICT has also embarked on a project to build a solid and
resilient private cloud computing technology by introducing high availability enhancements on infrastructure architecture in the Citrix and
Windows environment.
Centralised Information Portal: The implementation of Microsoft SharePoint portals generally provides business with an eective
and ecient platform for the sharing of information. The Centre of Excellence (CoE) was established to realise the implementation and
support of SharePoint.
Enhanced Business Applications: Key business applications have been enhanced to further support ecient and eective RAF
business processes in the following areas:
Legal costs management;
Writs and summons management; and
Consistent payment management.
National Operations Centre (NOC): The NOC was established to provide an environment within which ICT support teams are able
to monitor all components of the ICT infrastructure and critical business applications which support business operations. The benets of
this centre include: proactive management of ICT systems; a reduction of ICT services downtime; and eective monitoring and reporting.
Converged and Unified Communication: Existing data networks have been converged to include voice trac over the same
infrastructure, signicantly reducing the telecommunication costs of inter-branch voice communication. A Fax-to-Email solution has
also been implemented as an IP-based centralised solution, substantially reducing the need for physical fax machines.
Enhanced Network Infrastructure: The deployment of new network switches in all RAF oces has introduced enhanced network
capabilities, such as:
Power over Ethernet (PoE) Telephone equipment is powered through network switches, which reduces the need for additional
Intrusion prevention and detection capabilities This capability allows ICT to proactively curb the threat of malicious attacks on the
electrical and data cabling and promotes green IT;

network by detecting and limiting the spread of the threat.
Consolidation of Printing: Individual printers were eliminated by the introduction of network-based multifunction printing devices
general cost savings.
Green IT: Various initiatives within the ICT environment have supported the overall drive towards delivering IT services to the RAF in
a manner which enhances the worldwide move towards Green IT. These include, but are not limited to, virtualisation of IT systems;
reduction in power consumption; paper savings; reduction in power footprint; and Thin Clients.
(MFDs), with the following benets: controlled printing; improved condentiality; reduced paper wastage in support of Green IT; and
3.3.3 Human Capital

3.3.3.1
Key Focus Areas
The King III Report contains several references to governance matters aecting HR, either directly or indirectly. While certain HR issues are
addressed very explicitly, such as performance management, employment equity (EE), and succession planning, there are many other areas
outlined in King III that should be considered by the HR department. The RAF recognises that good governance is essential for sound HR
management and the improvement of business performance in an increasingly competitive local and global economic market. As such, HR
has a critical role to play as champion of governance issues aecting the people and management of the business.
One of the key HR achievements for the year under review was the roll-out of the Performance Management System across all levels of the
organisation. This system is aimed at continuously managing the performance and personal development of the organisations sta.
The second major focus was to oer support in respect of the RAFs transformation process, including extensive consultation with organised
labour. It has become imperative for the Human Capital department to come up with both a strategic and operational plan on how the
department intends to assist or enable the RAF to achieve its strategic and operational objectives, also taking into consideration the transition
from the old business model to the NOM.
3.3.3.2
Change Management
Change management has become a critical aspect of the entire transformation process to ensure the support and buy-in of all relevant
stakeholders. To this end, the organisation developed a Change Management Strategy which seeks to support the strategic plans in providing
a basis for the management of change during the transformation period. It further sets out a programme of change and identies areas
where change will occur.
The approach is to engage all stakeholders on the change management process and establish partnerships, particularly with organised
labour, on the roll-out of the process. The organisation has established an Internal Transformation Committee consisting of the Executive
team and the National Oce Bearers of the South African Transport and Allied Workers Union (SATAWU). The purpose of the committee is
to create a platform for Management and organised labour to engage each other on the transformation approach and address issues that
may impact on the conditions of service as a result of the change process. The parties entered into a Memorandum of Agreement (MoA),
which aims to regulate the terms by which certain aspects of the internal transformation process of the organisation will be managed. Some
of the key aspects of the agreement include, but are not limited to, the migration process, measures to avoid job losses and absorption into
the NOM.
3.3.3.3
Performance Management
The RAF has adopted ERP SAP as its system solution and it was agreed to implement an automated online Performance Management System
using the SAP system as a platform. MySAP Performance Management System was implemented based on Balanced Scorecard principles.
The overriding purpose of the Performance Management Strategy is to enable the management of team and individual performance to
ensure the achievement of the RAFs strategic objectives. Furthermore, the strategy provides guidelines and standards in terms of which
the performance of employees can be monitored, measured and rewarded in order to enhance eciency and eectiveness, and improve
service delivery within the RAF. The organisation has taken a principled decision that performance management will not be used as a punitive
measure, but as a developmental tool to build organisational capacity.
The RAF embarked on the performance process providing training on the Balanced Scorecard methodology and MySAP reporting system to
both Management and sta. For the year under review, 85% of employees entered into formal individual performance agreements.
3.3.3.4
Remuneration Philosophy
In the near future, the remuneration of employees within the RAF will reect the dynamics of the market and context in which the organisation
operates. It will at all times align to the strategic direction and specic value drivers of the business. Remuneration will play a critical role
in attracting, motivating and retaining high-performing individuals. Remuneration will also reinforce, encourage and promote superior
performance. Through variable remuneration linked to value drivers, superior performance will be recognised and rewarded, whilst poor
performance and under-achievement will be penalised. Remuneration will never be a stand-alone management process, but will rather be
fully integrated into other management processes, such as the performance management process, and other HR policies.
Recognition and Reward is one of the RAFs key strategies to foster a high-performance culture with engaged employees. Performancerelated remuneration forms the cornerstone of the organisations reward philosophy, supported by a robust Performance Management
System.
3.3.3.4.1 Variable Remuneration
Variable remuneration programmes will be established within the RAF to support the achievement of its objectives. In addition, participants
will obtain a clear view of their remuneration opportunities.
3.3.3.4.2 Short-Term Incentive
RAF sta receive an incentive bonus related to the achievement of nancial targets and other non-nancial objectives. The incentive bonus
represents a percentage of the total guarantee package allocated to each level or category of employee. The discretionary bonus is a
discretionary amount that bears some relationship to performance.
3.3.3.4.3 Annual Remuneration Reviews
For the RAF to maintain appropriate remuneration competitiveness vis--vis the labour market, remuneration will be reviewed on an annual
basis. The organisation has an agreement with SATAWU to negotiate annual salary increases on behalf of its members. Annual salary increases
are paid in April of each year in line with the organisations nancial year-end. The percentage annual salary increase is mandated by the RAF
Board. The RAF has introduced a performance-based salary increase for Management and sta and this process will be introduced to the
entire organisation in the near future.
3.3.3.5
Employment Equity
In terms of the Employment Equity Act, the RAF is a designated employer, and as such, is obliged to provide annual EE reports on or before
1 October each year. The organisation submitted its report on 30 September 2010. EE targets, as set out in the provincial and national
guidelines, were well achieved during the reporting period. To ensure that the RAF meets both provincial and national EE targets, individual
regional targets were set. What remains to be done, taking into account the numerical goals and targets set in the recently submitted report,
is to revise both the national and regional plans.
As a designated employer, the RAF prepared an EE Plan in order to achieve progress towards EE in the workplace. The RAF seems to be
doing well at all levels, except at Executive level where there is a need to employ more females. A plan is in place to ll the existing Executive
employees already at Senior Management level to prepare them for possible Executive appointments.
vacant posts with females, where possible. An alternative in addressing this challenge is an aggressive development programme for female
Graph 3.47 illustrates the internal versus external demographics.
Internal vs National Demographics

90
Percentage
60
72%
70
79.4%
80
50
40
30
20
9.2%
12%
White
Indian
Coloured
African
2.7%
7%
9%
8.8%
10
Race
Internal Composition
composition
SA Composition
Graph 3.47
3.3.3.6
Staff Composition
The following table and graphs outline the RAFs sta composition and gender analysis:
Sta
Categories
Female Male
Coloured
Indian
White
Total
Female
Male
Total
Female
Male
Total
Female
Male
Total
Grand
Total
CEO
Executives
Senior Managers
21
Managers
16
20
36
10
60
Bargaining Unit
709
563
1,272
99
59
158
73
38
111
143
68
211
1,752
Employees Living
with Disability
15
13
28
33
742
604
1,346
104
66
170
77
122
152
82
234
1,872
Grand Total
African
45
RAF Management
25
20
20
4
1
8405
6 6
7277
14526
12683
11969
10
8142
Number
16
15
4
1
Female
Male
Race/Gender
CEO
Executives
Managers
Senior Managers
Graph 3.48
Gender Distribution
Male
43%
57%
Female
Graph 3.49
Race Analysis per Category of Sta

0.9
0.8
Percentage
0.7
0.6
0.5
0.4
0.3
0.2
0.1
CEO & Executives
Senior Managers &

Managers
African
Coloured
Bargaining Unit
Employess living with

disability
White
Indian
Graph 3.50
Graph 3.51 and Graph 3.52 indicate the RAFs sta establishment grouped by business unit and per region as at 31 March 2011.
Sta Complement per Business Unit
14%
0%
8%
3%
3%
64%
Graph 3.51
Business Development
Finance
ICT
Legal & Compliance
Operations
4%
3%
CEO
Human Capital
Internal Audit
Marketing & Communications
1%
600
441
487
500
265
308
300
246
Number
400
200
125
100
Cape Town
East London
Durban
Johannesburg
Pretoria
Region
Graph 3.52
Gender Distribution
57%
43%
60
56%
44%
40
56%
44%
43%
20
Percentage
57%
2010
April-June
2010
2010
July-September
2011
October-December
January-March
2010 - 2011 Quarters
Graph 3.53
Female
Male
Race Distribution
80
72%
72%
72%
72%
70
Percentage
60
50
40
30
20
13%
9%
10
13%
9%
6%
13%
9%
6%
9%
6%
12%
7%
2010
July - September
2010
April - June
2010
October - December
2011
January - March
2010 - 2011 Quarters

Coloured
African
Indian
White
Graph 3.54
The RAF had 1,872 permanent employees as at 31 March 2011 (previous nancial year: 1,960). Of these, 64% falls within the core business
unit, i.e. Claims Operations (Graph 3.51).
3.3.3.7
Staff Turnover
During the year under review, the RAF had a turnover of 7% sta members due to terminations in the following categories:
Termination Reasons
Numbers
Death
Disability
Dismissal
Expiry of contract
14
Resign Health Reasons
Resign Salary/Benefits
109
Resign Start Own Business
Retirement
Grand Total
145
Sta turnover is further split to show statistics by age group, gender and race:
Turnover Rate by Age Groups
Terminations
Sta Complement
Turnover Rate
<25
41
5%
26 - 34
65
763
9%
35 - 44
57
815
7%
45 - 54
201
4%
55+
13
52
25%
145
1,872
8%
Age Groups
Grand Total
Turnover Rate by Gender

Gender
Terminations
Sta Complement
Turnover Rate
Female
72
1,075
7%
Male
73
797
9%
145
1,872
8%
Terminations
Sta Complement
Turnover Rate
African
112
1,346
8%
Coloured
10
170
6%
Indian
122
2%
White
20
234
9%
145
1,872
8%
Grand Total
Turnover Rate by Race

Race
Grand Total
3.3.3.8
Learning and Development
The Learning and Development business unit established a solid foundation during the 2009 nancial year. The emphasis for the 2011
nancial year was to build on this foundation and a number of planned initiatives were implemented. Below follows an overview of the key
projects that were implemented during this reporting period.
3.3.3.8.1 Learning Academy
The RAF Virtual Learning Academy was established in August 2009. The academy is an organisational entity dedicated to turning businessrelated learning into action. During the year under review, additional services, such as a library and a Career and Assessment Centre were
established. The library for now focuses on legal publications, but will start to incorporate other business-related publications in the next
nancial year. The Career & Assessment Centre provides a host of assessment, succession planning and career coaching services.
3.3.3.8.2 Leadership Development
The RAFs Leadership Strategy and Model outlines an approach that considers leadership competence at dierent levels of organisational
complexity. It further translates leadership competence into three areas, i.e. leading self, leading others and leading business. The Leadership
Framework identies the key competencies to support the development of employees. It addresses the way the RAF works, as well as the
Supports the organisation by providing concrete examples of the ways of working within the organisation;
Communicates a clear understanding of the organisational values;
Identies the required development areas in order to support a more targeted training and development plan;
Oers clear examples of how the context/environment assists or impedes the development of behaviours;
Ensures consistency in the evaluation of employees throughout the RAF organisation; and
Provides for a common language in the identication of tomorrows leaders and sourcing within the organisation.
manner in which employees achieve their targets and objectives. It further:
Below is a conceptual view of the Leadership Competence Model:
Personal Mastery
Judgement & Decision-making
Emotional Wisdom
Ethics & Governance
Leading
Self
Leading
Others
Organisational Resilience/Change
Communication
Team Orientation
Network & Alliances
Inspire Commitment
Talent Management
Leading
Business
Results Orientation
Strategic Thinking
Business & Financial Acumen
Brand & Customer Orientation
Figure 3.10: Leadership Development
The following elements of this model were implemented during the year under review:
Supervisory Development Programme: 59 employees at supervisory level have completed a seven-module programme.
Coaching Programme for Senior Managers: A number of Senior Managers are busy with a coaching programme to address leadership
development gaps.
Leadership for Women: Five females in Senior Management positions attended the leadership development workshop specically
aimed at women.
Other Leadership Development Initiatives: During the year under review, two other programmes aimed at employees in
management positions were also implemented, namely Personal Mastery for Leaders and a programme relating to Strategy, King III &
Risk Management.
A Leadership Development Programme for Management is planned for the new nancial year. This programme will consist of seven modules
and will be implemented over a period of eight months.
3.3.3.8.3 Skills Development
The National Skills Development Strategy (NSDS) III was launched in August 2010. Central to the strategy are partnerships between
employers, public education institutions, private training providers and Sector Education and Training Authorities (SETAs), to ensure that
cross-sectoral and inter-sectoral needs are addressed. The RAF has aligned itself to the strategy in the following ways:
The better use of workplace-based skills development opportunities by optimising the current personal development process within
the RAF. The process will in future also be aligned to the performance management review cycle.
Building career and vocational guidance: This has been implemented through the launch of career coaching sessions.
Addressing the shortage of actuarial skills within the sector through a partnership with the Insurance Sector Education and Training
Authority (INSETA) and South African Actuaries Development Programme (SAADP).
3.3.3.8.4 Internships and Learnerships

The RAF is participating in a number of learnership and internship programmes aimed at providing learning and valuable work experience
for previously disadvantaged individuals. These initiatives take the form of a three-way agreement between the RAF, service providers
and INSETA.
3.3.3.8.5 Operational Toolkit and Training

The past six months were spent on designing an operational toolkit, as well as an update on the training material for employees in core
business. One of the innovations is the introduction of competence assessments for core business. This will be rolled out in April 2011. The
purpose of the assessment is to ensure levels of competence after training and not merely the transfer of knowledge.
The operational toolkit consists of a number of tools and documents to ensure the standardisation and optimisation of operations. The toolkit
will enable employees to provide better service delivery.
3.3.3.9
Employee Wellness Services
The RAFs Employee Wellness Services (EWS) is in the process of implementing the Department of Public Service Administrations
(DPSA) Integrated Model of Employee Wellness Services. During the year under review, the utilisation of the departments services grew,
with increasing focus on proactive management. The RAF has entered into a partnership with Independent Counselling and Advisory
Services (ICAS) to provide a 24/7 counselling service to the organisations employees and their immediate family members. The ICAS
utilisation reected a slight decline in the last quarter of the 2010 calendar year. However, the RAF utilisation is still above the ICAS average
and there has been an increase in the in-house utilisation of psycho-social and disease management counselling. This trend reects the
increase in awareness and appreciation of sta on the availability of these on-site services. The RAF EWS was benchmarked against other
workplace programmes and was found to be above average. The gure below outlines the services, objectives and implications of EWS.
Vision for the EWS

Employee Wellness
Quality of Life
PILLAR 1
PILLAR 2
PILLAR 3
PILLAR 4
HIV/AIDS
Management
Employee Assistance Programme
Wellness
Programmes
Occupational Health & Safety

Management
Prevention
Alcohol and Substance Abuse
Work/Life Balance
Workplace Ergonomics
Treatment Care and Support
Basic Financial Management Skills
Individual Psycho-social Wellness
Health Risk and Impact Assessment

& Management
Human Rights and Access to Justice
Family Matters
Individual Physical Wellness
First Aid Coordination
Research Monitoring and Evaluation
Work/Personal Stress
Organisational Wellness
Advice to the Safety, Health

and Environment Committee
Figure 3.11: Vision for the EWS
3.3.3.9.1 The Objectives of EWS

The EWS is designed to:
Promote a workplace wellness programme;
Create awareness, provide care and support on HIV/Aids and other life-threatening diseases;
Reduce behavioural crises associated with personal problems;
Assist Management in demonstrating concerns for the well-being of employees by oering a service to assist employees when struggling
to cope with personal issues;
Key process pillars for high performance in the RAF through EWS:
Capacity Building, Organisational Support, Personal Growth and Development
Create a supportive and non-discriminatory environment;
Reduce absenteeism; and
Enhance productivity.
3.3.3.9.2 EWS Programmes

The HIV/Aids Programme forms one of the most important pillars of the EWS Model. Similar to other organisations, the RAF has started to
experience the impact of HIV/Aids. During the reporting period, Voluntary Counselling and Testing (VCT) sessions were performed and 45%
employees were tested for HIV. This rate of participation is above normal workplace standards. Although there are still challenges of stigma in
the workplace, the high rate of participation reects the fact that the RAF is embracing employees who are living with HIV and the employees
have condence in the services provided by EWS.
In addition, EWS provides combined counselling and advisory services to employees and Management, while others are referred to ICAS
either as a formal referral or self-referral. The table below outlines both in-house and ICAS statistics for a number of personal problems
experienced. During the year under review, the utilisation of ICAS services ranged between 18.5 31.9% (excluding an assumption of a 10%
overlapping possibility).
Summary of In-house Counselling
Problems
Total
Stress/Depression
48
Money Management
13
Organisational Issues
21
Loss Issues
18
Relationship Issues
26
Threatening/Suicide
Trauma Debriefing
Addictive Issues
HIV Disclosure
Physical Health Problems
37
Physical/Disease Management
130
Other (Anxiety/Phobia)
TOTAL
313
Summary of ICAS Utilisation by % during the 2011 Financial Year

1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
19.6%
25.1%
31.9%
18.5 %
3.3.3.9.3 National Days of Importance

The RAF participated in the following national days of importance:
A candle-lighting ceremony was successfully commemorated and sports heroes were invited as part of raising awareness on HIV/Aids.
Womens Day and Heritage Day were successfully celebrated at all regions during the nancial year.
World Aids Day was commemorated at Head Oce and RAF regional oces.
3.3.3.9.4 RAF Sports

The RAF regards sports as a tool to unite the diverse population of the organisation in addition to its benets with regard to employee health
and well-being. The RAF National Sports Tournament was held successfully in Durban during October 2010. A national team was selected by
the South African Football Association (SAFA), Netball SA and Volleyball SA to participate at the Inter-Fund Tournament to be held in Namibia
during the next nancial year.
3.3.3.9.5 Disability Programme
The RAF has 37 sta members living with disabilities (ranging from masculo-skeletal to neurological), who are all victims of motor vehicle
accidents. In December 2010, the RAF celebrated National Disability Day with the donation of 94 entry level wheelchairs to disadvantaged
people who were involved in motor vehicle accidents, but due to the fault-based system could not claim from the RAF. The RAF has been
commended by INSETA for its contribution to uplifting and empowering people living with a disability in the workplace.
3.3.3.9.6 Occupational Health and Safety
During the reporting period, 34 First Aid Buddies were trained by the Tshwane Disaster Management Department. The EWS performs
an advisory and coordination role in respect of Occupational Health and Safety Committees to ensure organisational adherence to the
Occupational Health and Safety Act.
3.3.3.9.7 Transformation
Although the EWS does not form part of the transformation forum, a Change Management Strategy has been developed in conjunction with
ICAS to assist the organisation in mitigating any adverse eects of change.
3.3.3.9.8 Challenges and Way Forward
The RAF has a young workforce as depicted in the graph below, hence the high HIV prevalence. In addition, the high rate of lifestyle health
risk conditions is alarming. There is a need to intensify awareness and lifestyle programmes. During the reporting period, EWS (in partnership
with ICAS) designed and developed a Change Management Strategy as a pro-active measure to mitigate change-stress impact.
Age Analysis
500
450
400
Number
350
300
250
200
150
100
<25
26 - 34
35 - 44
45 - 54
55+
Female
26
449
451
119
30
Male
15
314
364
82
22
Age Group
Graph 3.55
50
3.3.4 Marketing & Communications

3.3.4.1
Repositioning the RAF Brand
The corporate makeover of the RAF is a journey that commenced in the 2006 nancial year. In 2010 as part of this corporate repositioning
the RAF entered the rebranding phase of the organisation. This decision entailed a critical strategic makeover and not merely a cosmetic
change by means of the adoption of a new logo. The new corporate identity forms part of the overall repositioning of the organisation from
being a mere provider of cover versus putting the customer at the centre of all its operations and its everyday decision-making processes.
3.3.4.2
Strategic Basis for Rebranding
The thinking behind the rebranding of the RAF entails the use of the brand as a single organisational thought. Typically, organisations create
functional initiatives and plans to deliver against the business strategy. Positioning the brand as a central organising principle for functional
initiatives provides the basis for collaboration and alignment across all the organisations activities. All business units, therefore, use the brands
mission and objectives as the basis for their functional activities.
The new brand was adopted to:
Position the RAF as a trustworthy, caring and relevant organisation;
Improve the corporate image internally and externally; and
Develop excellent relations with customers and key stakeholders.
In addition, the brand design supports the RAFs strategic objectives, among other, to deliver a superior customer value proposition;
increase accessibility to its services; foster positive stakeholder relations; develop a customer-centric culture; and ensure eective corporate
communication to all stakeholders internally and externally.
Critical to eective brand management is the clear denition of the brands audience and the objectives that the brand needs to achieve.
The following have been identied as the brands objectives. These guide and inform the marketing and communication activities of
the organisation:
Internal and External
Reposition the RAF and build a world-class brand for all users of South African roads;
Create awareness of a newly revamped RAF brand, and its new modus operandi;
Rejuvenate the RAF oering by making it relevant to users of South Afrrican roads and RAF sta ; and
Assist in aligning all stakeholders with the RAFs strategic vision and key deliverables.
Internal
Motivate and inspire RAF sta and culture.
External
Increase road users understanding of the RAFs products, benets, services and claims processes (with a specic goal of increasing direct
claims from the current 2%);
Reverse negative perceptions about the organisation; and
Help develop a South African road users database.
International
Sensitise current and future international travellers to the RAFs service oering.
3.3.4.3
Brand Shift
FROM
TO
An organisation that is perceived to be inefficient and does not

pay claimants
An efficient organisation that pays out timeously.
A seemingly unapproachable and inaccessible organisation
A welcoming and compassionate organisation that is there when

and where it is needed.
A brand with low awareness
A well-known and respected organisation used as the first point of

contact by claimants.
A brand that is riddled by misconception
A brand that is recognised for the good it does in the community.
3.3.4.4
Achievements to Date
From a branding perspective, the RAF has embarked on a number of initiatives to achieve its rebranding and repositioning targets. These are
discussed below.
3.3.4.4.1 Brand Management
The RAFs approach to brand management is to establish, grow and maintain the corporate brand. To this end, the following interventions
have taken place:
A new corporate identity has been developed and introduced to employees, stakeholders and the general public;
A corporate identity manual has been developed and issued to key business functions, such as Procurement, for use and to ensure
consistent application of the brand guidelines; and
All branding material, including promotional materials, signage and stationery, etc now bear the new corporate identity.
The coming year will see the replacement of the old corporate identity with the new one in all regional oces, as well as expanded
CSN points.
3.3.4.4.2 Advertising
The RAF launched its rst radio campaign during the latter part of the 2011 nancial year. This campaign ran in 10 of South Africas ocial
languages on 10 radio stations. This resulted in a 17% increase in calls received by the call centre, as well as an increase in direct enquiries
at the Funds regional oces. There will be another burst of radio activity in the next nancial year building up to October Transport Month.
Advertising in the 2012 nancial year will be dedicated to the building of awareness around the RAF itself, what it does, how it carries out its
mandate, as well as its products and service oering. Other media to be incorporated into the years activities include an online presence,
outdoor advertising, television and large format media.
3.3.4.4.3 Activation, Promotions and Community Engagement
This year saw the RAF dramatically increase its direct engagement with communities. The organisation was taken to new and particularly
rural communities of eNgcobo, eMsinga and many others in Limpopo, Mpumalanga and the Northern Cape. This trend is set to continue in
are a regular annual feature.
Participation in events such as the Comrades Marathon, ACSA Disability Expo and October Transport Month will be expanded with the
introduction of events such as the Tourism Indaba, Soweto Marathon and other ad hoc activities that will be identied and deemed to be of
tactical benet to the creation of awareness of the Fund and its products and services.
3.3.4.4.4 Research
There will be an aggressive increase in research activity in the 2012 nancial year. The Customer Service Index measuring customer
satisfaction levels will be nalised early in the new nancial year. The ndings will inform departmental operational activities, in particular
internal marketing and human capital practices such as recruitment, training, retention, learning and development. The outcomes will also
2012, as each province has a plan to target at least 20 local communities in each province over and above exhibitions and promotions that
be useful in determining areas in need of improvement, as well as shaping employee attitudes and behaviours. Research on the RAFs road
safety interventions, as well as other road safety campaigns, will also be conducted in the new year.
3.3.4.4.5 Marketing Materials
The informative All You Need to Know information pamphlet has been translated into all 11 ocial South African languages. These are
distributed through a number of channels, including all the Funds contact points, other government departments, as well as at promotions,
activations and customer engagement activities. The year under review also saw the introduction of two new information pamphlets, i.e. one
relating to the Funds Patient Outreach Programme (POP) and the other providing insight into Undertakings.
3.3.4.4.6 Customer Service Network Roll-out Support
The Marketing and Communications department will oer support to the roll-out of the CSN in the form of outlet branding, signage,
marketing materials and internal campaigns focused on the improvement of sta attitudes and behaviours in order to improve the customer
experience at these and other customer contact points.
3.3.5 Risk Management

In the King III Report on Governance, Chapter 4 is specically dedicated to risk management. As a public entity, the RAF is required in terms
of section 51 of the PFMA, to implement and maintain eective, ecient and transparent systems of nancial and risk management, as well
as internal controls.
The RAF has adopted an Enterprise-wide Risk Management approach in managing its risks. Risk management methodologies are applied in
strategy setting, planning, projects, decision-making and all other business processes. Progressive risk maturity is evident in the organisation.
Risk governance structures exist and are fully operational. A dedicated Risk Management function has been established and is mainly
responsible for:
Exercising specialist expertise to assist the RAF to embed risk management and leverage its benets to enhance performance;
Assisting the Board and the CEO in discharging their duties in terms of risk management within the RAF;
Interacting regularly on strategic risk matters with the Board and appropriate Board Committees and Executive Management;
Ensuring that risk management in the RAF is in line with the Risk Management Policy and Plan;
Formulating the risk management methodology most suitable to the RAF, and continuously conducting research into best practices;
Facilitating the risk assessment process and preparing and updating the RAF risk registers;
Conducting an independent risk assessment for all business units and activities of the organisation, at least annually, and the continuous
assessment of emerging risks;
Providing assurance as to the adequacy and eectiveness of the risk management process;
Reporting to the CEO and the Risk Management Committee on the eectiveness of the risk management process, as well as the risk
prole of the RAF;
Ensuring that Risk Management Strategies adopted are implemented, adequate and eective; and
Evaluating the adequacy and eectiveness of internal controls designed to mitigate risks.
The RAF dierentiates between strategic and operational risks, where strategic risks are identied by the RAF Board as being risks that threaten
the achievement of the RAFs strategic goals and objectives, while operational risks are identied within each business unit as risks that are
operational in nature and potentially threaten the achievement of business unit objectives.
An annual risk assessment is conducted for both strategic and operational risks, and is aligned to the strategic planning process of the RAF.
The risks are documented utilising risk management software, and monitored on an ongoing basis in relation to progress on risk mitigation
strategies, relevance of existing risks and addition of new risks.
Quarterly reporting to the Risk Management Committee includes the updated strategic risk register, business unit reports in terms of the
Enterprise-wide Risk Management Framework and any other areas of risk of interest to the Risk Management Committee.
The risk categories utilised by the RAF in its Enterprise-wide Risk Management Framework are:
Enterprise-wide business risks;
Strategic risks;
Compliance risks;
Accounting risks;
Insurance and assurance risks;
Operational risks;
New business risks;
Credit risks;
Liquidity risks;
Investment risks;
Capital risks;
Market risks;
Information and Communication Technology risks;
Marketing and Communication risks (including Reputation risks);
Social and environment risks;
People risks; and
Client service risks.
The Board identied eight (8) key strategic risks to the RAF for the 2011 nancial year. The graph below depicts these strategic risks with the
residual and inherent values of each risk having been evaluated as at the end of the rst quarter of the 2011 nancial year.
60
55
50
45
40
35
30
25
Graph 3.56
Inherent Risk
Current Residual Risk
Liquidity
Regulatory Framework
Systems & Processes to Support the Business
Reputation & Image
Fraud & Corruption
Leadership & People Management
Solvency
Business Re-engineering
20
Overall Current Control Eectiveness
30
28
26
24
22
20
18
16
14
12
10
8
6
4
2
Overall Current Control Eectiveness (%)
Inherent Residual Risk
Inherent Risk vs Residual Risk with Overall Current Control Eectiveness
3.3.6 Forensics
3.3.6.1
Reducing Fraud and Corruption
Regrettably, fraud represents a signicant risk to the RAFs assets, service delivery, eciency and reputation. While policies and controls to
detect and prevent fraud are in place, the potential spoils from committing economic fraud against the RAF are often too tempting for
fraudsters to resist.
The RAF experiences fraud by individuals, collusion by groups of stakeholders and organised criminal syndicates. The methods for defrauding
the RAF take many forms, including:
Exaggerating injuries so as to inate claims;
Lodging claims when the individual was not involved in a motor vehicle accident; and
False information furnished as to earnings prior to the person being involved in the accident.
The combating of fraud is governed by a Fraud Policy and Prevention Framework that mandates the Forensic department to investigate
all allegations of fraud and other irregularities committed within or against the RAF. In addition, the RAF has a Whistle Blowing Policy that
encourages sta to report instances of suspected fraud anonymously. The RAFs fraud hotline allows all reports of alleged fraud to be made
condentially and if desired, anonymously, and each report is fully investigated.
The Fraud Policy and Prevention Framework is buttressed by the multi-faceted approach adopted by the Forensic department in dealing
with incidents of fraud and other irregularities. This department not only investigates suspected fraud and other irregularities, but is also
concerned with fraud detection, deterrence, prevention and awareness.
The RAF believes that it has a responsibility to the Executive Authority and all stakeholders, to uphold the highest ethical standards possible.
Its core values of ubuntu, freedom to succeed and pride in what it does, set the standard that the RAF expects to attain when dealing
with customers, suppliers, employees, and the Executive Authority. A zero tolerance approach to fraudulent and corrupt activities has been
adopted, and the RAF has, in its Fraud Policy, declared its intention to vigorously oppose any party, by all legal means available, that engage
in such activities or attempt to do so.
The RAF, through a joint venture with the National Prosecuting Authority (NPA) and the South African Police Services (SAPS), gained
convictions in 300 criminal matters of fraud against the organisation during the reporting period. The RAF appreciates that in order to
safeguard against future potential nancial loss, a proactive approach must be followed to prevent the occurrence of fraud. Hence, several
fraud reduction initiatives will be undertaken over the next three years. These include:
An increased focus on rooting out fraudulent claims through improved claims processes and systems, thereby identifying and escalating
potential fraudulent activity early in the claims process, and preventing excessive costs and resources being devoted to these matters;
Improving and tightening system security within the organisation, making it more dicult for employees or any external individuals to
commit fraud; and
Continuing to run campaigns to educate the public about fraud and encourage all employees and members of the public to report any
fraudulent activity.
In order to determine whether the various initiatives are having the desired impact, independent fraud risk audits will be conducted annually
that will assist in identifying the potential risk factors, as well as determining the potential nancial impact of any fraudulent activity. Progress
will be measured against the RAFs ability to reduce this risk.
The RAF recognises the importance of reducing fraudulent activity within the organisation and understands that signicant priority should
be given to any initiatives dealing with this.
Statistics obtained from the RAF Forensic department for the period 1 April 2010 to 31 March 2011 are evident of the extent of fraud and the
RAFs commitment to root out fraud in the MVA environment.
1.
No. of files received
10,995
2.
No. of files on hand
4,784
3.
No. of files finalised
10,121
4.
No. of files where fraud was detected
4,777
5.
No. of statements obtained
4,027
6.
No. of SAPS cases registered
1,047
7.
No. of arrests
508
8.
No. of convictions
300
9.
No. of guilty pleas
251
10.
Estimated value of fraud identified
11.
Days spent in court
R249,933,368
269
3.4 Performance against Strategic Objectives for the 2011 Financial Year
The RAF has concluded a Performance Agreement with the Minister of Transport incorporating the performance objectives and targets listed
in the schedule below. Despite dicult operating conditions, almost all targets were achieved.
The RAFs performance against objectives as presented below was subject to an independent assurance audit by the Auditor-General of
South Africa.
RAF: Board Performance Targets for the Financial Year ending 31 March 2011
Finance Perspective
No.
1
National
Ojectives
RAF Strategic
Objective
Measure
Target
Actual
Dierence
Comment
Management
Manage RAF
Net deficit at
(R45,543
(R44,015
R1,528
Achieved.
of transport
solvency.
31 March 2011.
million)
million)
million
costs and
Ensure that
Date of submission
infrastructure
the RAF is
of RAF Fuel Levy
development
appropriately
increase to National
fuel levy
to contribute to
funded by
Treasury.
increase
AsgiSA.
timeously
submitted
submitting
together
the Fuel Levy
with the
31-Dec-10
30-Sep-10
Achieved.
Request for
increase
Three-year
application
Strategic
to National
Plan.
Treasury using
the Revenue
Requirement
Model (RRM).
2
Efficient
Manage RAF
Total RAF legal,
administration of
costs.
claimant legal,
the organisation.
administration
and human
resources costs, as a
percentage of fuel
levy income to be
lower than or equal
to the target amount.
34%
30%
4%
Achieved.
No.
National
Ojectives
RAF Strategic
Objective
Measure
Target
Actual
Dierence
Comment
20,000
22,695
2,695
Achieved.
Customer Perspective
3
Efficient
Increase the RAF
Number of claims
administration of
footprint across
originating from
the organisation.
the country.
the CSN (hospitals,

mobile units, etc.) to
be greater than or
equal to the target.
Improve
Commence
stakeholder
communication.
31-Mar-11
All
All
communication with
engagement
engagement
RAF stakeholders
targets met
targets met
in accordance with
as per the
as per the
the clearly defined
engagement
engagement
Communication
plan.
plan.
Achieved.
Strategy by target
date.
4
2010 FIFA Soccer
Promote Road
Amount spent
World Cup
Safety awareness
on Road Safety
objectives.
ahead of 2010.
awareness
R1,500,000
R2,462,794
10
10
31-Mar-11
31-Mar-11
R962,794
Achieved.
campaigns to be
greater than or equal
to the target.
Process Perspective
5
Management
Increase the RAF
Number of new
of transport
footprint across
customer service
costs and
the country.
points opened.
Efficient
Commence
Date by which
administration of
the roll-out of
elements of the NOM
the organisation.
the RAFs New
begin to be rolled
Operating Model
out.
Achieved.
infrastructure
development
to contribute to
AsgiSA.
Not
Achieved.
(NOM).
Process claims
Total number of
efficiently.
claims finalised for

the financial year
ended 31 March
2011 to be greater
than or equal to the
target.
180,000
187,168
7,168
Achieved.
Innovation and Learning Perspective

No.
National
Ojectives
RAF Strategic
Objective
Measure
Management
Submit
Date of submission
of transport
proposals/
of proposals/
costs and
comments to
comments.
infrastructure
DoT on the No-
development
Fault System.
to contribute
Increase BEE
Discretionary
to AsgiSA/
procurement.
BEE spending on
Black Economic
administration, total
Empowerment
administration, RAF
(BEE)/EE and
legal and experts
Corporate Social
costs as a percentage
Investment
of the total
(CSI).
administration, RAF
Target
Actual
16-Apr-10
Submitted
Dierence
Comment
Achieved.
on 16-Apr-10.
54%
57%
3%
Achieved.
70%
88%
18%
Achieved.
1.30%
2.19%
0.89%
Achieved.
0.30%
1.87%
1.57%
Achieved.
R1,000,000
R1,452,299
R452,299
Achieved.
legal and experts

cost to be greater
than or equal to the
target.
Improve EE
Number of African,
among staff.
Coloured, and Indian

staff members
as a percentage
of the total staff
complement to be
to the target.
Build capacity
Amount spent on
among staff.
training of staff and

learnerships as a
percentage of the
total staff cost to be
to the target.
Provide
Number of staff
employment
members with
opportunities
disabilities as a
for people with
percentage of
disabilities.
the total staff

complement to be
to the target.
Invest in social
Amount spent on CSI
development.
to be greater than or
equal to the target.
3.5 Governance of Sustainability

3.5.1 Introduction
The King III Code has tasked Board Members with ensuring that an organisation is a responsible corporate citizen, which protects, enhances
and invests in the well-being of the economy, society and the natural environment. The World Business Council for Sustainable Development
sees sustainable development as a broader concept, with three components:
Corporate social responsibility;
Corporate nancial responsibility; and
Corporate environmental responsibility.
The three together equate to the so-called triple bottom line. The European Commission denes corporate social responsibility as
the voluntary integration of social and environmental concerns in enterprises daily business operations and in the interaction with their
stakeholders. In essence, it is the ethical behaviour of an organisation towards society and, in particular, how Management acts in its
relationships with all other stakeholders.
The GRI denes sustainability reporting as the practice of measuring, disclosing, and being accountable to internal and external stakeholders
for organisational performance towards the goal of sustainable development. An organisations Annual Report, therefore, refers to a single,
consolidated disclosure that provides a reasonable and balanced presentation of performance over a xed time period.
The management and governance of sustainability within the RAF also deals with the understanding and managing of the non-nancial
impact of the RAFs activities.
3.5.2 RAF Operating Environment and Parameters

Each year, the lives of thousands of road users are disrupted by road accidents. Those injured need to access emergency medical care, nd
appropriate healthcare and treatment and often require rehabilitation to continue with employment. Children, spouses, dependants, friends
and employers of injured or killed road users also share in the burden of road accidents. If injured road users are so disabled that they cannot
resume gainful employment, or are killed, their families and loved ones may suer for many years. In essence, road accidents may cause
extensive damage, loss, anxiety and distress.
Government intervenes on two levels to address the suering caused by road accidents:
a)
By applying measures in criminal law to punish oenders who are prosecuted for driving under the inuence of alcohol, reckless or
negligent driving, or who are found guilty of culpable homicide following the death of a road user, etc.
b)
In recognising a civil law remedy for the aggrieved victim who has a nancial claim against the wrongdoer for the loss or damage
caused. The RAF Act provides such a remedy, which is based partially on the common law of delict and on statutory provisions. The RAF
is a specialised statutory insurance entity paying compensation to injured road users for personal bodily injuries sustained and death
Trends show a signicant increase in the rate of fatalities and casualties per 100 000 population over the last decade. The severity of crashes
is also increasing, as more persons are killed per fatal crash and more are injured per casualty crash. It is worth noting that road accidents are
caused by a broader range of factors than mere human error. Socio-economic and demographic factors determine the extent of exposure to
risk on the roads. External factors, such as road design, maintenance and law enforcement all have a bearing on crash risks and the severity of
accidents. Multiple risk factors aect the severity of injuries, including the presence of alcohol and drugs, delays in rescuing injured road users,
lack of pre-hospital care, the quality of trauma care and post-crash rehabilitation. Among other factors, these trends have had a signicant
impact on the RAFs liquidity status.
benets to dependants of breadwinners killed in trac collisions.
The basis of the current RAF is the RAF Act, which provides that: The object of the Fund shall be the payment of compensation in accordance
with this Act for loss or damage wrongfully caused by driving a motor vehicle. Within this mandate, the RAF provides two types of cover,
namely, personal insurance cover to accident victims or their families, and indemnity cover to the wrongdoer in an accident. Claims against
the RAF for bodily injury and personal loss arising from road accidents are based on the common law of delict and liability insurance principles.
Amendments to the RAF Act were enacted on 1 August 2008 with the aim of reducing the liability of the RAF and increasing the equity of its
arrangements for all users of South African roads.
Within the context of a comprehensive review of social security arrangements in South Africa, government is exploring ways for the RAF to
contribute more directly to social security objectives. In turn, the RAF is positioning itself to form part of governments proposed CSSS.
3.5.3 Regulatory Arrangements

Being a creation of statute, the mandate, powers and obligations of the RAF are derived primarily from its founding legislation, the RAF Act. In
terms of the Act, accountability for the business of the RAF is held by its Board, which reports directly to the DoT, which exercises an oversight
role on behalf of the government of the Republic of South Africa.
The principal legislation relating to the nancial management of the RAF is the PFMA (1999) and the nancial aairs of the RAF are further
regulated by the Financial Supervision of the Road Accident Fund Act, 1993 (Act No. 8 of 1993) (FSRAFA), in terms of which the Financial
Services Board (FSB) reports annually on the business of the RAF.
Numerous other legislation, regulations and codes are applicable to the RAF, including the Constitution of South Africa, the Promotion of
Administrative Justice Act, the Basic Conditions of Employment Act and the King Reports on Governance for South Africa.
3.5.4 Stakeholder Engagement

The RAFs operations touch upon every level and sphere of government, as depicted in the gure below. Regarding the levels of government,
social security and transport policy is set at national level; provincial government provides an essential framework in which hospitalbased operations occur; and local government provides, among other, an essential liaison with metropolitan departments for crash scene
investigation. As to the spheres of government, the Executive Authority provides the ultimate level of accountability and leadership for the
RAF; the legislature determines the RAFs legislative mandate; and the judiciary provides interpretation of that legislation.
Local
Provincial
Local: Local government is primarily made up of the municipalities

of South Africa. This includes metropolitan district and local
municipalities.
Provincial: Provincial government is made up of all departments at
provincial level, e.g. Gauteng Provincial Government.
National
National: Government presence at a national level.

Spheres of government
Figure 3.12
Executive
* Consists of the President,

Deputy President & Ministers,
i.e. the Cabinet of South Africa
Legislative
* Comprises Parliament
made up of the National Assembly
and the National Council of Provinces
Judicial
* Consists of Chief Justice, the

Constitutional Court, the Supreme Court
of Appeal, the High Court and the
Magistrates Courts
Besides the DoT, the RAF also liaises with the following areas of government:
National Treasury
Determines the fuel levy, the RAFs primary source of income
Department of Health
Delivers medical care and rehabilitation funded by the RAF
Department of Justice
Provides the platform used by the RAF and claimants to debate the value of the claims
Department of Home Aairs
Provides the RAF with information on the population of South Africa
Department of Police
Responsible for accident investigations
Department of Social Development
Policy framework in respect of governments CSSS
Provincial Government
Works primarily with the RAF to provide an oce base in public hospitals, as well as training
of the Provincial Community Road Safety Councils
3.5.4.1
Understanding Stakeholders
The RAF recognises that the organisation has the opportunity to improve governance in line with the King III Report on Governance by
revitalising its image through enhanced service delivery. During the year under review, the RAF used a mix of networking relationships
ranging from transactional exchanges (such as compliance with the Promotion to Access to Information Act, Memoranda of Understanding,
Service Level Agreements, and the like), interactive encounters and a network of interactions aimed at establishing long-term relationships
beneting both the organisation and its stakeholders.
New practices implemented included segmenting, targeting and positioning oerings within stakeholder markets. The RAF also moved
away from the individual, one-on-one transaction approach to using a mix of tools and techniques (such as activation and promotion
campaigns, exhibitions, sponsorships, and the like) to support a relationship-marketing strategy, thus building stronger relationships between
the organisation and all its stakeholder markets. Within this new paradigm, each interaction provided an opportunity to strengthen the
stakeholder relationship.
It is important to note that the public sector performs most successfully when it delivers services at an appropriate level of quality for
an acceptable value to both internal and external stakeholders. This perception of success depends on both stakeholders opinion about
the government in general and impressions from personal interactions with public institutions. The RAF realises that this focus on quality
improvement should ultimately be aimed at creating long-term customer satisfaction and welfare as a key business strategy.
3.5.4.2
Barriers to Developing Stakeholder Relationships
Traditionally, the RAF has not delivered an integrated message to stakeholders. As so many dierent parts of the organisation are involved
in stakeholder management, the various stakeholder groups are frequently managed in an uncoordinated, disparate manner. Moreover,
the RAF is structured by units based on function, functional silos, working in isolation from other units with little or no communication or
cross-functional collaboration. Functional silos frequently dene unique goals, mission and direction apart from the other units and the
organisation as a whole. As with other functionally based organisations, the RAF typically places too much resource emphasis on highly
visible stakeholders such as its customers, and too little emphasis on other special interest groups whose management falls outside specic
interactions with stakeholders.
Regrettably, the RAF has suered from poor quality service delivery, caused not only from within a particular functional unit, but also as a
result of passing stakeholders from one unit to another. Slow payments, complex processes and an adversarial attitude towards claimants
have all contributed to negative perceptions, often outside the direct control of the RAF. The service, along with stakeholder communication
can be disrupted between silos, providing a poor service experience and inconsistent organisational messages to customers. This dilemma
can be remedied in part by integrated marketing communication, under which an organisation carefully integrates and coordinates its many
communications channels to deliver a clear, consistent and compelling message about the organisation and its products.
functional boundaries. In view of this, the RAF intends to move away from self-interested communication to more mutually benecial
3.5.4.3
Re-orientation towards Service Delivery
As a public service organisation, the RAF recognises that its employees are key to the organisations success. Customers rst point of contact
(e.g. reception, call centre agents and claims handlers) represents an integral part of the RAFs service/stakeholder oering. These employees
communicate a marketing message in each customer interaction. Whether it is the preferred message and it is communicated appropriately
can be inuenced by several factors, including HR practices such as training; marketing inuences such as reinforced and consistent
communication of organisational goals; and operational practices, which encourage employee empowerment and job satisfaction.
As the RAF develops relationships with stakeholders, the distribution channels for services will become increasingly important. A mix of
channels, including technologies such as a regularly updated website and new customer service points, will need to be available to reach
more customers. Along with the enhanced delivery channels, activation and promotion campaigns can be used to inform, educate and
persuade stakeholders. All of this eort, though, requires thorough coordination.
3.5.4.4
Breaking down Functional Silos
Starting with a common purpose and vision is the rst step to bridging gaps and unifying organisational areas. Ideally, with cross-functional
collaboration between functional areas, the relationship between the organisation and its stakeholders strengthens. To improve service
delivery, the RAF must extend the denition of stakeholders from service recipients to include all entities and organisations aected by its
behaviour. It can then transcend the short-term focus of the current customer engaged in the current transaction and look beyond to a
continuum of transactions and interactions aimed at developing long-term relationships.
3.5.4.5
Stakeholder Engagement Plan: 2010/11
During the reporting period, the RAFs stakeholders were grouped in accordance with their level of impact and inuence on the organisation.
Through stakeholder relations, the RAF aimed to strengthen support for its strategic objectives, minimise and manage opposition and
interference, and enhance road accident prevention. In the process, the value of the organisation was enhanced through relationship capital.
The table below outlines stakeholder engagements during the year under review:
Stakeholder Group
Level of
Communication Required
Objective Engagement/Communication
Key Message
Minister: DoT and DirectorGeneral of Transport
CEO
COO
CFO
Executive: Marketing &
Communications
Direct reporting entity for the RAF.

Support for the speedy implementation of
a favourable legal/policy framework and
business model for a future RAF.
Support for any of the other short- and
long term needs of the RAF (e.g. funding).
Quarterly workshops and meetings.
Progress on the delivery status

of the RAFs business model to
enhance service delivery.
Support Shareholder
programmes.
Minister of Finance,
National Treasury and
Director- General of
National Treasury
CEO
COO
CFO
Communications
Support for a reasonable funding model

that will provide for the solvency of the
RAF and allow it to pay out claims speedily.
Support for the RAFs liquidity

status.
Director-General:
COO
CFO
Communications
Delivers the medical care and rehabilitation

funded by the RAF.
Support for the establishment of inhospital RAF branches to facilitate direct
claims.
Efficient delivery of medical care to
accident victims that will result in minimal
expense to the RAF and maximum
rehabilitation of the victim.
Support for the RAF to

operationalise its footprint.
Level of
Communication Required
Objective Engagement/Communication
Manages the legal system, which
Key Message
Department of Justice:
Chief Justice and DirectorGeneral
COO
CFO
Communications
Executive: Legal & Compliance
Executive: HR
Transport Portfolio
Committee
CEO
COO
CFO
Communications
One of the oversight bodies of

government.
Agree on action items and provide
feedback on progress made.
Delivery status of RAF business

model and strategic view of RAF
business.
- Strategic Plan.
- Annual Report.
South African Press

Association (SAPA)
CEO
COO
CFO
Communications
Distribute news about the RAF.

Provide SAPA with the status of key
projects and internal developments and
improvements.
Key operational information.

Key projects, internal developments and success stories.
Media
CEO
COO
CFO
Communications
Disseminate information on the RAF

inform and educate the public.
Provide a platform for the media to engage
with the RAF, and to discuss milestones
and future plans.

Key projects, internal
developments and success
stories.
Doctors and medical

providers
COO
CFO
Communications
Suppliers of the Fund.

Build long-term relationships and ensure
cooperation.
Understanding of RAF business

and cooperation to support the
implementation of the RAF CSN.
Medical Association
Board of Health Care
COO
CFO
Communications
Guidance on medical tariffs

- AMA training
- Protocol of engagement
- Dispute tribunal
- Guidance on whiplash injuries.
Support implementation around

key Amendment Act matters.
AMA training for doctors.
Definition of Emergency Care
(discussions).
Lawyers and firms
CFO
COO
Communications
Represent claimants.
Signing of cooperation agreement, and
implementation of a feedback mechanism.

Key projects, internal
developments and success
stories.
General public
CEO
COO
Communications
Improve RAF image, inform the public

of service offering, as well as changes,
successes and milestones (including
active response to all negative or incorrect
commentary).
Keep the public up to date with

RAF service offering.
Leverage and expand on
Community Road Safety Councils
in nine provinces.
Public entities and

partnership campaigns
CEO
COO
Communications
Partners in road safety.

Implement preventative strategies.
Feedback on RAF service delivery

and support for road safety
partnership campaigns.
Funders
Health Professions Council
Dean of Medunsa
American Board of
Independent Examiners
determines the level of compensation to

be paid out by the RAF.
Discuss relevant RAF operational matters.
Efficient management of the

legal process associated with RAF
activities.
Proposal of specific RAF related
matters.
Stakeholder Group
3.5.4.6
Achievements
As outlined above, the following key engagement platforms were used to create value:
Formalising strategic partnerships with stakeholders through agreements and other formal arrangements;
Enhancing the reputation of the RAF through constructive stakeholder engagement with the focus on RAF core business and service
delivery;
Encouraging strategic discourse with all external stakeholders; and
Educating road users about the RAFs service oering through leveraging o other platforms, such as the establishment of Community
Road Safety Council structures.
3.5.5 Strategic Partnerships: Road Accident Prevention

The RAF is well aware that road trac injuries represent a global problem aecting all sectors of society. It also subscribes to the notion that
road trac injuries are a growing public health issue, which disproportionately aects vulnerable groups of road users, including the poor.
The greater the number of accidents on South African roads, the greater the liability incurred by the RAF. The RAF, therefore, has a strategic
business interest in working together with other stakeholders to prevent the occurrence of road accidents. The National Road Safety Strategy
recommends a number of initiatives based on ve pillars (education, engineering, enforcement, evaluation and post-crash rehabilitation)
and the RAF participates in as many as possible, since eective road accident prevention strategies will ultimately reduce RAF costs and
liabilities.
There are approximately 8.8 million licensed drivers and 9.6 million registered vehicles in South Africa. Motorised vehicles make up 90% of the
total vehicle population. More than 13,000 people are killed in road accidents, with a total cost of more than R14 billion to the South African
economy annually.
South Africa has one of the worst road safety records in the world, losing more than 40 people per day to trac crashes, with a further
20 being left permanently disabled and several hundred suering serious injuries. There are approximately one (1) million crashes a year in
South Africa. The RAF hopes to positively inuence the behaviour and attitudes of South African road users and thereby decrease the number
of road accidents. Notwithstanding, the cost benet of each preventative measure is evaluated before substantial funds are allocated.
3.5.5.1
RAF Involvement in Road Accident Prevention
During the year under review, the RAF was involved in numerous initiatives to prevent road accidents, with the aim of reducing claims against
the Fund. The main areas of involvement are depicted below:
Methods to Reduce Road Accicents and RAF Claims
Road Safety Partnership Programmes
Follow-up of nes
?
?
?
Costs?
High level political

support from RAF
Shareholder
POST-CRASH CARE
Figure 3.13
Community Involvement
Community Road Safety
Councils
Focused CSI projects on
Road Safety
3.5.5.2
Millennium Development Goals
Road accident deaths, particularly resulting from head injuries, continue to increase with a substantial toll on communities, families and
hospitals. The United Nations (UN) General Assembly took a bold action on 25 April 2008 by adopting a resolution to improve global road
safety. The resolution encouraged member states to adhere to the Convention on Road Trac and to strive to reduce road trac injuries and
mortality in order to achieve the Millennium Development Goals. The African Health and Transport Ministers agreed to reduce road fatalities
by 50% by 2015.
Road fatalities have generally continued to rise over the past decade, although minimal successes have been achieved in a 1% reduction
in deaths per annum in recent years. To achieve the current goal of a 50% reduction by 2015, a decrease of 15% in fatalities per annum is
required. If this goal is achieved, 27 000 lives will be saved over the next ve years.
3.5.5.3
Decade of Action for Road Safety: 2011 2020
On 2 March 2010, at the rst Global UN Ministerial Conference on Road Safety in Moscow, Russia, road safety was escalated in urgency before
the world. Governments around the world took the historic decision to increase action over the next ten years in order to address the road
safety crisis. The UN General Assembly resolution proclaimed 2011-2020 the Decade of Action for Road Safety. The declaration was tabled by
the government of the Russian Federation and co-sponsored by more than 90 countries.
South Africa is proud to be one of the member countries that has committed itself to the Decade of Action. The RAF, in partnership with other
DoT entities, is actively supporting its Executive Authority by means of integrated road accident awareness programmes with a specic focus
on vulnerable groups and post-accident care initiatives.
It is important to take into account that South Africa will have to report to the UN and indicate success in the following areas:
Reduction in fatalities on South Africas roads by 15% per annum to achieve the goals by 2015 (the halfway mark of the Decade);
The production of the comprehensive strategy indicating a data-based approach to solutions, specic to the challenges being
experienced, with an emphasis on international best practice: enforcement, education, engineering and evaluation;
Participation in the international road safety weeks as stipulated by the UN;
The participation of business and industry to support initiatives with the amount of money raised from the private sector being specied;
A multi-sectored and multi-disciplinary approach;
Improvement in data collection and analysis;
Good governance and eective use of government and sponsored resources; and
Cost benet exercises as part of the monitoring and evaluation process.
3.5.5.4
SADC Road Accident Prevention Programme
The RAF, under the auspices of the DoT, is also a key stakeholder in the Southern African Development Community (SADC) Road Accident
Prevention Programme.
Road Incident Management System: National Framework
The RAF is actively involved in supporting the DoT to develop a Road Incident Management System (IMS) for South Africa. The objective
is to produce a comprehensive document that will cover all aspects of an IMS and identify legislative requirements. The focal areas include:
Revising the guidelines on IMS;
Developing a national framework for IMS;
Developing policies on IMS;
Introducing legislation on IMS; and
Developing regulation guidelines for IMS.
3.5.5.5
3.5.5.6
Community Road Safety Councils
During the year under review, the RAF established Community Road Safety Councils in all nine provinces. Council members were trained
on the RAF claims process and linked to RAF customer touchpoints in their respective provinces. Training will continue during the next
nancial year.
3.5.5.7
Road Accident Prevention Campaigns
The RAF participated in a vast number of road accident prevention campaigns during the reporting period. A select number of these are
highlighted below.
Chief Trac Ocers Summit
The RAF signed a Road Safety Pledge with the Minister of Transport and the Transport MECs in support of the National Rolling Enforcement
Plan aimed at pulling over one (1) million vehicles per month at road safety road blocks.
National Schools Debate Competition
This campaign was launched in partnership with the DoT, the RTMC, Transnet, BP, the Department of Education and provincial governments
in support of road safety education. A total of 120,000 children were reached with this campaign.
World Remembrance Day
The RAF participated in this worldwide initiative and pledged full support to the Make Road Safe and Arrive Alive campaigns.
Participation Education Techniques (PET) Road Safety Campaign
The RAF, in partnership with other key stakeholders, supported this programme, in which schoolchildren developed infrastructure models
as part of a drive to enhance road safety.
October Transport Month
The RAF was actively involved in Transport Month activities and rendered a word of support on road safety awareness at the OR Tambo
International Airport. More than one (1) million people signed a Road Accident Prevention Pledge.
3.5.6 Corporate Social Investment

During the year under review, the RAF apportioned its Corporate Social Investment (CSI) budget to the following worthy social and
environmental initiatives:
3.5.6.1
N3TC Litter Campaign
The issue of keeping the N3 Toll Route (between Cedara and Heidelberg) clean requires ongoing eort and commitment. Litter collection
along the N3 Toll Route in the 2010 calendar year amounted to approximately R2 million. The RAF made a substantial investment in the N3TC
anti-litter initiative, as it believes that this money could be better spent by contributing to environmental projects along the route, as opposed
to spending vast amounts of money on litter collection. While some may think that throwing their used burger wrapping out of their car
window is contributing to job creation, they are, in fact, contributing towards clogging natural water resources and impacting on the quality
of water supplied to dams, homes and communities. Not to mention the potential impact on road safety as cans, bottles and large bags are
thrown from vehicles.
3.5.6.2
Khanyisile Foundation
The Khanyisile Foundation works predominately with young children of various school-going ages. However, the activities are not limited
to this age group. During the winter months of 2010, donations of blankets were obtained and distributed among some of the more needy
older folk in the Van Reenen area (KwaZulu-Natal).
Eboyeni Primary School, one of the nine schools that form part of the Khanyisile Foundation Van Reenen Schools Project in KwaZulu-Natal has
been identied as a priority beneciary for the next kitchen to be constructed by the Foundation. This particular school has access to running
water, but unfortunately there is no electricity supply, so cooking will have to be done by gas (currently cooking is done on an open-air re).
The RAF supported this CSI project in line with its Executive Authoritys request to assist underprivileged children in rural areas.
3.5.6.3
Khanyisa School for the Visually Impaired
The Khanyisa School started in 1984 and was ocially opened in 1987. The school accommodates 125 blind and partially sighted learners
with albinism. The Khanyisa School is the only institution of this nature in the Eastern Cape. The RAF selected this school as one of its
CSI projects.
3.5.6.4
Community Medical Services
Community Medical Services (CMS) celebrates its 28th anniversary during Easter 2011. Its primary function during this period has been the
positioning of a medical team at one of South Africas highest accident locations, Van Reenens Pass on the N3 Toll Route between Gauteng
and KwaZulu-Natal. During this period, a team of medical volunteers, including doctors, paramedics and nursing personnel, assists hundreds
of accident victims, and provides support services to the local trac police at road obstructions caused by vehicles that have broken down,
or have been involved in accidents.
3.5.6.5
Road Safety Foundation
The key focus of the Foundation is to engage with all role-players and interested parties in an eort to reduce the number of crashes and
resulting fatalities and injuries in South Africa. This project focuses on the long-haul trucking industry in particular. It is important to note that
30% of trac on the N3 Toll Route comprises heavy vehicles, and that 50% of these are involved in road accidents.
3.5.6.6
Hands of Hope
The objectives of Hands of Hope include the following:
Supporting organisations that shelter abused women and children, orphans, and the frail; and
Empowering women through counselling, workshops and friendship support.
On a monthly basis, Hands of Hope helps those in need by handing out cooked food, food parcels, toiletries, clothing and household items,
and also oers nancial assistance where necessary. It also interacts with teen girls from Elsies River and Freedom Park in Mitchells Plain.
3.5.6.7
ESDA Old Age Home
ESDA was rst registered on 12 January 1976 as an old age home. Later, in 1987, a new section was added to the current building. This
increased the bed capacity to accommodate 120 residents.
ESDA renders a holistic service to the elderly and persons with disabilities. It is further involved in community outreach programmes, such as a
feeding scheme to an orphanage, a preventative clinic where blood pressure of senior citizens is monitored and recorded, as well as a feeding
3.5.6.8
Rainbow Haven
Rainbow Haven is a non-governmental organisation (NGO), located about 15km from Pietermaritzburg city centre. Rainbow Haven has
been in existence for the past 11 years under the leadership of Sungetha Maharaj. With the assistance of dedicated sta and voluntary
community members, Rainbow Haven is able to provide quality service to those that are placed in its care.
Rainbow Haven provides service of the highest quality possible to those who are disadvantaged by illness and those against whom society
discriminates due to their physical or mental challenges.
The NGO is intent on creating awareness and educating those who do not fully understand the implications of being mentally challenged.
scheme at the Osizweni Clinic at the Far East Rand Hospital for HIV/Aids outpatients.
3.5.6.9
National Disability Day
The RAF celebrated National Disability Day by donating nine wheelchairs to victims of motor vehicle accidents.
3.5.6.10 National HIV Counselling and Testing Campaign Harrismith
The National HIV Counselling and Testing Campaign was launched on 15 April 2010 with the objective of testing more than 15 million
South Africans by June 2011. The transport sector targeted the trucking fraternity en route to Durban at the Harrismith Truck Stop. Approximately
1,000 truck drivers and 2,000 community members were tested.
3.5.7 Reducing Environmental Impact

Monitoring the environmental impact of a business is an ongoing corporate governance issue, and the RAF is committed to doing this,
especially as the organisation has a public service mandate.
At present, some of the general measures being taken to reduce the environmental impact of the RAF are as follows:
At the start of the nancial year, the RAF utilised about 68,000 m of oce space countrywide. This has been decreased to approximately
50,000m a reduction of about 26%. This measure has also resulted in a reduction of cleaning materials, water and electricity
consumption, as well as less maintenance.
To be in line with international design and space layout standards, the RAF has opted for an open-plan layout as far as possible.
Oces are located next to the core of the building, allowing for maximum natural light, which has brought about a reduction in the use
of electricity and impacts positively on eyesight.
All building lighting, except for key security lighting, is switched o by 20:00 every night, as well as over weekends by means of electrical
timer switches.
All computer users are encouraged to switch o their computers at night and over weekends, as computers that are left on all the time
have proven to be one of the most signicant ways in which businesses waste energy and so contribute to greenhouse gas (GHG)
emissions. The RAF has also replaced PCs with Thin Client technology, which is also more energy ecient.
The RAFs eet of vehicles is carefully maintained and managed to ensure that vehicle engines are running smoothly and eciently. Fuel
consumption is carefully monitored to ensure maximum eciency and minimum emissions.
The RAF is in the ongoing process of converting all incandescent light bulbs in use in its oces to energy-saving compact uorescent
lights (CFLs).
Used CFL light bulbs, which contain mercury, are collected and deposited into dedicated recycling bins.
The RAF is in the process of moving from a paper-based to a paperless environment for external clients, whilst it is already 60% paperless
internally.
The RAF has also introduced Sappi War on Waste bins at all oces, as recycling signicantly reduces the amount of waste going into
landlls, which release large quantities of methane into the atmosphere.
Network printers are utilised. RAF is doing away with desktop printing.
Printer cartridges are recycled, thus minimising waste.
Finally, the RAF is committed to a green design approach in all its oces countrywide.
Annual Financial Statements

SECTION 4
SECTION 4
annual nancial statements
Annual Financial Statements for the Financial Year ended 31 March 2011
154
Report of the
Audit Committee
156
Report of the
Board of Directors
160
164
Statement of Financial
Position as at
31 March 2011
165
Statement of Responsibility
by the Board of
Directors
163
Certificate by the
Corporate Secretary
Statement of Financial
Performance for the
Financial Year ended
31 March 2011
166
Statement of Changes in
Net Assets for the
31 March 2011
167
Notes to the Financial

Statements for the
31 March 2011
169
Cash Flow Statement for the

31 March 2011
168
Report of the
Auditor General
report of the auditor-general
to parliament on the financial statements of the road accident fund
Report on the Financial Statements
Introduction
I have audited the accompanying nancial statements of the Road Accident Fund, which comprise of the statement of nancial position as
at 31 March 2011, and the statement of nancial performance, statement of changes in net assets and cash ow statement for the year then
ended, a summary of signicant accounting policies and other explanatory information, as set out on pages 165 to 210.
Accounting Authoritys Responsibility for the Financial Statements

The accounting authority is responsible for the preparation and fair presentation of these nancial statements in accordance with South
African Standards of Generally Recognised Accounting Practice (GRAP) and the requirements of the Public Finance Management Act of
South Africa, 1999 (Act No. 1 of 1999) (PFMA), and for such internal control as management determines necessary to enable the preparation
of nancial statements that are free from material misstatement, whether due to fraud or error.
Auditor-Generals Responsibility
As required by section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) and section 4 of the Public Audit Act
of South Africa, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these nancial statements based on my audit.
I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in Government Gazette
33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The
procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the nancial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys
preparation and fair presentation of the nancial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the eectiveness of the entitys 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 nancial statements.
I believe that the audit evidence I have obtained is sucient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, the nancial statements present fairly, in all material respects, the nancial position of the Road Accident Fund as at 31 March
2011 and its nancial performance and cash ows for the year then ended, in accordance with the South African Standards of GRAP and the
requirements of the PFMA.
Emphasis of Matters
I draw attention to the matters below. My opinion is not modied in respect of these matters:
Going Concern
The report of the board of directors on page number 160 and Note 37 to the nancial statements indicates that the Road Accident Fund
incurred a net loss of R1.6 billion during the year ended 31 March 2011 and, as of that date, the entitys total liabilities exceeded its total assets
by R44 billion. These conditions, along with other matters as set forth in the accounting authoritys report and note 37, indicate the existence
of a material uncertainty that may cast signicant doubt on the entitys ability to operate as a going concern.
Restatement of Corresponding Figures

As disclosed in note 36 to the nancial statements, the corresponding gures for 31 March 2010 have been restated as a result of an error
discovered during 2011 in the nancial statements of the Road Accident Fund for the year ended, 31 March 2010.
Report on Other Legal and Regulatory Requirements

In accordance with the PAA and in terms of General notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I include
below my ndings on the annual performance report as set out on pages 138 to 140 and material non-compliance with laws and regulations
applicable to the Road Accident Fund.
Predetermined Objectives
There were no material ndings on the annual performance report concerning the presentation, usefulness and reliability of the information.
Compliance with Laws and Regulations

Included below are ndings on material non-compliance with laws and regulations applicable to the Road Accident Fund:
Procurement and Contract Management

Goods and services with a transaction value of over R500 000 were not procured by means of a competitive bidding process as per the
requirements of Treasury Regulation (TR) 16A6.1, TR 16A6.4 and National Treasury Practice Note 6 and 8 of 2007/08 issued in terms of section
76 (4)(c) of the PFMA.
Invitations for competitive bidding were not advertised for a minimum period of 21 days as per the requirements of TR 16A6.3(c).
Expenditure Management
The accounting authority did not take eective and appropriate steps to prevent irregular expenditure and fruitless and wasteful expenditure
as per the requirements of section 51(1)(b)(ii) of the PFMA.
Interest and sheri costs were incurred as a result of delays in the payment of claims.
Irregular expenditure was incurred as a result of non-compliance with TR 16A6.1, TR 16A6.4, TR 16A6.3 (c) and National Treasury Practice Note
6 and 8 of 2007/08 issued in terms of section 76 (4)(c) of the PFMA.
Internal Control
In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I considered
internal control relevant to my audit, but not for the purpose of expressing an opinion on the eectiveness of internal control. The matters
reported below are limited to the signicant deciencies that resulted in the ndings on compliance with laws and regulations included in
this report.
Leadership
Pretoria
30 July 2011
Ineective oversight to detect and prevent non-compliance with applicable laws and regulations.
report of the audit committee

The Audit Committee is pleased to present its report for the nancial year ended 31 March 2011.
The Audit Committee is an independent statutory committee appointed by the Board/Advisory Committee of the RAF. Further duties
are delegated to the Audit Committee by the Board/Advisory Committee of the RAF. This report includes both these sets of duties and
responsibilities.
1.
Audit Committee Terms of Reference
The Audit Committee has adopted formal terms of reference as its Audit Committee Charter, which has been approved by the Board/Advisory
Committee of the RAF. The Committee has conducted its aairs in compliance with this Charter and has discharged its responsibilities
contained therein. The Charter is available on request.
2.
Audit Committee Members and Meeting Attendance
The Audit Committee is independent and consists of ve independent Non-Executive Directors. It meets at least four times per year as
specied in terms of the Audit Committee Charter.
The Chairman of the Board/Advisory Committee, Chief Executive Ocer, Chief Financial Ocer, Chief Audit Executive, external auditors and
other assurance providers (legal, compliance, risk, health and safety) attend meetings by invitation only.
During the year under review six meetings were held.
Audit Committee
28 April 2010
26 July 2010
22 September 2010
Total
n/a
n/a
T Moyo
HG Motau (resigned
30 April 2010)
n/a
n/a
CJB Greeff
SA Msibi
JRD Modise (Ex Ocio)
10 November 2010
26 January 2011
28 February 2011
Total
T Moyo
MJ Ralefatane
JN Masekoameng
NZ Qunta
n/a
n/a
AKA Dasoo
Audit Committee
(Board)
DS Qocha (appointed 28
January 2011)
JRD Modise (Ex Ocio)
3.
Roles and Responsibilities
3.1
Statutory Duties
The Audit Committees roles and responsibilities include its statutory duties as per the Public Finance Management Act, 1999 (Act No. 1 of
1999) (PFMA) as well as the Treasury Regulations issued in terms of the PFMA and the responsibilities assigned to it by the Board/Advisory
Committee. The Audit Committee executed its duties in terms of the requirements of King III and instances where King III requirements have
not been applied have been explained in the corporate governance statement, included elsewhere in the Annual Report.
The Committee was responsible for performing its duties as set out in the Terms of Reference, which included reviewing the following:
The eectiveness of the RAFs internal control systems;
The risk areas of the RAFs operations to be covered in the scope of the internal and external audits;
The accounting and auditing concerns identied as a result of the internal or external audits;
The RAFs compliance with legal and regulatory provisions, in particular the Road Accident Fund Act, 1996 (Act No. 56 of 1996); the Public
Finance Management Act, 1999 (Act No. 1 of 1999) (as amended by Act 29 of 1999),(PFMA), as well as the National Treasury Regulations;
The activities of the Internal Audit department, including its work programmes, coordination with the external auditors, the reports of
signicant investigations and the responses of Management to specic recommendations;
The independence and objectivity of the external auditors;
The review of the Financial Statements with specic attention to:

Underlying accounting policies or changes thereto;
Major estimates and managerial judgements;
Signicant adjustments owing from the year-end audit;
Compliance with eective South African Standards of Generally Recognised Accounting Practices (GRAP), the PFMA and other
statutory precepts; and
The appropriateness of the going concern assumption.
The Audit Committee also undertook the following activities during the year under review:
Reviewing and approving the Internal Audit Departments Charter and Internal Audit Plan;
Conducting investigations within its Terms of Reference; and
Encouraging communication between Members of the Board/Advisory Committee, Senior and Executive Management, Internal Audit
department and the External Audit partner.
3.1.1
External Auditors
The Audit Committee has satised itself that the external auditors were appointed in line with Chapter 6, Part 4, Sections 58, 59, 60 and 61 of
the PFMA.
The Audit Committee, in consultation with Executive Management, agreed to the engagement letter, terms, audit plan and budgeted audit
3.1.2
Financial Statements and Accounting Policies
The Audit Committee has evaluated the accounting policies and Financial Statements of the RAF for the year ended 31 March 2011 and
concluded that they comply, in all material respects, with the requirements of the PFMA, and were prepared in accordance with the eective
South African Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board (ASB).
An Audit Committee process has been established to receive and deal appropriately with any concerns and complaints relating to the
reporting practices of the RAF. No matters of signicance have been raised in the past nancial year.
fees for the 2011 nancial year.
3.1.3
Internal Financial Controls
The Audit Committee has overseen a process by which Internal Audit performed a written assessment of the eectiveness of the RAFs system
of internal control.
The Audit Committees assessment of the internal controls in the claims environment is that the systems, although enhanced, should still be
improved. The roll-out of the new paperless claims management solution should provide this much-needed improvement. Despite this, and
based on the information and explanations given by Management and the Internal Audit department together with discussions held with
the Auditor-General of South Africa on the result of their audits, the Audit Committee is of the opinion that the internal accounting controls
are adequate to ensure that the nancial records may be relied upon for preparing the Financial Statements, and accountability for the assets
and liabilities is maintained.
Based on the results of the formal documented review of the design, implementation and eectiveness of the RAFs system of internal nancial
controls conducted by the Internal Audit function during the 2011 nancial year and, in addition, considering information and explanations
given by Management and discussions with the Auditor General of South Africa on the results of their audit, the Audit Committee is of
the opinion that the RAFs system of internal nancial controls is eective and forms a sound basis for the preparation of reliable Financial
Statements.
3.1.4
Whistle-blowing
The Audit Committee receives and deals with any concern or complaint, whether from within or outside the RAF, relating to the accounting
practices and internal audit of the RAF, the content or auditing of the RAFs nancial statements, the internal nancial controls of the RAF and
related matters.
3.2
Duties Assigned by the Board/Advisory Committee
In addition to the statutory duties of the Audit Committee, as reported above, the Board/Advisory Committee has determined further
functions for the Audit Committee to perform, as set out in the Audit Committee Charter. These functions include the following:
3.2.1
Integrated Reporting and Combined Assurance
The Audit Committee fulls an oversight role regarding the RAFs Integrated Annual Report and the reporting process, including the system of
internal nancial control. It is responsible for ensuring that the RAFs Internal Audit function is independent and has the necessary resources,
standing and authority within the RAF to enable it to discharge its duties. Furthermore, the Audit Committee oversees cooperation between
the internal and external auditors, and serves as a link between the Board/Advisory Committee and these functions.
The Audit Committee considered the RAFs sustainability information as disclosed in the Integrated Annual Report and has assessed its
consistency with operational and other information known to the Audit Committee members, and for consistency with the Annual Financial
Statements. The Audit Committee discussed the sustainability information with Management and has considered the conclusion of the
Auditor-General of South Africa. The Audit Committee is satised that the sustainability information is reliable and consistent with the
nancial results.
The Oce of the Auditor-General of South Africa performed an assurance engagement on annual performance indicators included under the
heading Performance against Objectives that forms part of the RAFs integrated sustainability reporting. The Audit Committee determined
the scope of this assurance engagement. It is envisaged that such assurance of sustainability information will become more encompassing
in line with the recommendations of King III.
3.2.2
Going Concern
The Audit Committee reviewed a documented assessment by Management of the going concern premise before agreeing that the adoption
of the going concern premise is appropriate in preparing the nancial statements.
3.2.3
Governance of Risk
The Board has assigned oversight of the RAFs Risk Management function to the Risk Management Committee. The Chairperson of the Audit
Committee is also the Chairperson of the Risk Committee. Some members of the Audit Committee are also members of the Risk Committee
to ensure that information relevant to these committees is transferred regularly. The Audit Committee fulls an oversight role regarding
nancial reporting risks, internal nancial controls, and fraud and IT risks, as they relate to nancial reporting.
3.2.4
Internal Audit
The Audit Committee is responsible for ensuring that the RAFs Internal Audit function is independent and has the necessary resources,
standing and authority within the RAF to enable it to discharge its duties. Furthermore, the Audit Committee oversees cooperation between
the internal and external auditors, and serves as a link between the Board of Directors and these functions.
The Audit Committee considered and recommended the Internal Audit Charter for approval by the Board/Advisory Committee. The Internal
Audit functions annual Audit Plan was approved by the Audit Committee.
The Internal Audit function reports centrally with responsibility for reviewing and providing assurance on the adequacy of the internal control
environment across all of the RAFs operations. The Chief Audit Executive is responsible for reporting the ndings of the internal audit work
against the agreed internal Audit Plan to the Audit Committee on a regular basis.
The Chief Audit Executive has direct access to the Audit Committee, primarily through its Chairperson. The Audit Committee is also responsible
for the assessment of the performance of the Chief Audit Executive and the Internal Audit function.
During the year, the Committee met with the external auditors and with the Chief Audit Executive without Management being present.
The Audit Committee is satised that it complied with its legal, regulatory or other responsibilities.
3.2.5
Evaluation of the Expertise and Experience of the Chief Financial Officer and Finance Function
The Audit Committee has satised itself that the Chief Financial Ocer has appropriate expertise and experience.
The Audit Committee has considered, and has satised itself of the appropriateness of the expertise and adequacy of resources of the Finance
T MOYO
Chairperson of the Audit Committee
Date: 28 July 2011
function and expertise of the senior members of Management responsible for the nancial function.
report of the board of directors

1.
Introduction
The Board of Directors presents its report which forms part of the Annual Financial Statements of the Road Accident Fund (RAF) for the
year ended 31 March 2011 to the Minister of Transport, who is the Executive Authority in terms of section 55(1)(d) of the Public Finance
Management Act, 1999 (Act No. 1 of 1999), (as amended by Act 29 of 1999) (PFMA). The RAF, as established by the Road Accident Fund Act,
1996 (Act No. 56 of 1996), (RAF Act), is listed as a national public entity in accordance with schedule 3A of the PFMA. The Board of Directors/
Advisory Committee acts as the Accounting Authority in terms of the PFMA.
2.
Board and Secretary of the Road Accident Fund
The ocial term of the Advisory Committee expired on 30 September 2010. The Minister of Transport appointed a new Board of Directors
with eect from 10 October 2010.
The Advisory Committee, Board and Corporate Secretary at the date of this report are as follows:
Advisory Committee until 30 September 2010

Mr V Mahlangu (Chairperson)
Mr T Moyo
Prof. CJB Gree
Dr AKA Dasoo
Ms HG Motau (resigned 30/04/2010)
Mr SA Msibi
Ms KE Moloto-Stole (resigned 19/04/2010)
Mr T Tenza (Director-General Designee appointed 1January 2010)*
Board of Directors from 1 October 2010 to date

Non-Executive Board Members
Dr NM Bhengu (Chairperson)
Mr V Mahlangu (Vice Chairperson)
Mr T Moyo
Mr JN Masekoameng
Adv MJ Ralefatane
Adv DS Qocha
Ms NZ Qunta
Mr DK Smith
Ms A Steyn
Mr T Tenza (Director-General Designee appointed 1 January 2010)*
* The Director-General of the DoT or any other senior ocer in the DoT, designated by him or her for a particular purpose, serves as an
ex ocio Member of the Advisory Committee/Board.
Chief Executive Officer

Mr JRD Modise.
Acting Chief Financial Officer

Mr AAA Seedat was appointed as Acting Chief Financial Ocer (CFO) with eect from 2 March 2010. (The Acting CFO was replaced by
Ms L Fosu as CFO on 1 May 2011.)
Corporate Secretary
Ms JR Cornelius.
3.
Review of Activities
Principal Activities and Results

The RAF provides compulsory cover to all users of South African Roads, citizens and foreigners, against injuries sustained or death arising from
accidents involving motor vehicles within the borders of South Africa. This cover is in the form of indemnity insurance to persons who cause
the accident, as well as personal injury and death insurance to victims of motor vehicle accidents and their families.
The detailed review of the results of the RAF for the year ended 31 March 2011 is included under the Historical Review and the Review of
Operations in this Annual Report.
4.
Solvency and Going Concern
The going concern basis was used in preparing the Annual Financial Statements. This basis presumes that funds will be available to nance
future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the
ordinary course of business. In the past, the RAF received nancial support from National Treasury in the form of cash injections over and
above the normal fuel levy income as and when it faced liquidity problems. During the 2006 nancial year, the RAF received a cash injection
of R2,502 billion and in the 2009 nancial year it received R2,550 billion. The Board and Management are committed to implementing plans
to contain the growing decit caused by the rising provision of outstanding claims.
As part of these plans, the RAF has engaged National Treasury and the DoT in discussions to resolve the short-, medium- and long-term
funding position of the RAF.
Total Assets
Total Liabilities
2011
2010
2009
2008
2007
R000
R000
R000
R000
R000
4,566,637
3,878,585
3,395,738
3,296,916
4,207,589
(48,581,626)
(46,208,577)
(43,231,115)
(31,124,667)
(24,448,415)
(44,014,989)
(42,329,992)
(39,835,377)
(27,827,751)
(20,240,826)
From the table above it is clear that the RAF has not been solvent for a number of years. The net decit increased by R1,684,997 in the 2011
nancial year.
5.
Events Subsequent to Reporting Date
No undisclosed material events have taken place between the Statement of Financial Position date and the authorisation of the Annual
Financial Statements.
The following table depicts the total assets and the total liabilities of the RAF over the past ve years:
6.
Accounting Policies
During the year under review, a number of new GRAP standards were applied for the rst time. A list of these standards, as well as a description
of the impact, is detailed in note 2. The application of these standards did not have a signicant impact on the Financial Statements.
The Annual Financial Statements are prepared in accordance with the prescribed South African Standards of Generally Recognised Accounting
Practices (GRAP) issued by the ASB as the prescribed framework by National Treasury.
7.
Fruitless and Wasteful Expenditure
Fruitless and wasteful expenditure, relating to interest and sheri costs, of R26,267,048 (2010: R23,206,647) has been disclosed in Note 26 of
the Annual Financial Statements.
Interest and Sheri Costs As per the denition of the PFMA, fruitless and wasteful expenditure means expenditure which was made in vain
and could have been avoided had reasonable care been exercised. The amounts listed are costs incurred in the settlement process of claims
inuenced by the external legal processes and time limits legally enforced on the RAF in the settlement of claims. A portion of the mentioned
costs could not be regarded as fruitless and wasteful as in certain instances, it is physically impossible to comply with the time limits that are
in place, i.e. where a writ can be issued against the RAF immediately after a claimants legal cost bill has been taxed. It must be highlighted
that the RAF operates in a highly litigious environment where legal processes place huge demands on its operations.
Disciplinary action has been taken against sta members as a resulting of negligence resulting in the payment of sheri and interest costs, as
well as duplicate payments. To date, 55 people have been disciplined resulting in 32 written warnings and 23 verbal warnings being issued.
8.
Addresses
The RAFs head oce, postal and web addresses are as follows:
Head Office:
Postal Address:
Website Address:
38 Ida Street
Private Bag X2003
www.raf.co.za
Menlopark
MENLYN
PRETORIA
0063
0081
The Annual Financial Statements set out on pages 165 to 210, which have been prepared on the going concern basis, were approved and
signed on behalf of the Accounting Authority on 28 July 2011 by:
DR NM BHENGU
MR MI MVELASE
Chairperson of the Board of Directors
Acting Chief Executive Ocer*
28 July 2011
28 July 2011
* The contract of the Chief Executive Ocer of the RAF, Mr JRD Modise, was terminated on 28 July 2011, and Mr MI Mvelase was appointed as
Acting Chief Executive Ocer on the same date.
statement of responsibility
by the board of directors
The PFMA requires the Accounting Authority to ensure that the RAF keeps full and proper records of its nancial aairs. The Financial
Statements should fairly present the state of aairs of the RAF, its nancial results, its performance against predetermined objectives and
its nancial position at the end of the year in terms of the eective South African Standards of Generally Recognised Accounting Practices
(GRAP).
The Financial Statements are the responsibility of the Board of Directors. The external auditors are responsible for independently auditing and
reporting on the Financial Statements.
The Financial Statements of the RAF have been prepared in terms of South African Standards of Generally Recognised Accounting Practices
(GRAP). These Financial Statements are based on appropriate accounting policies, supported by reasonable and prudent judgements and
estimates and are prepared on the going concern basis.
The Board of Directors has reviewed the RAFs cash ow forecast for the year ending 31 March 2012 and considered the risks and challenges
for the future. In light of this review and the current nancial position, it is satised that the RAF has adequate resources or has access to
adequate resources to continue in operational existence for the short-term future.
To enable the Board of Directors to meet the above-mentioned responsibilities, the RAF Board of Directors sets standards and implements
systems of internal control. The controls are designed to provide cost-eective assurance that assets are safeguarded, and that liabilities and
working capital are eciently managed.
Policies, procedures, structures and approval frameworks provide direction, accountability and division of responsibilities, and contain selfmonitoring mechanisms. The controls throughout the RAF focus on those critical risk areas identied by operational risk management and
conrmed by Executive Management. Both Management and the Internal Audit department closely monitor the controls and actions taken
to correct deciencies as they are identied.
Based on the information and explanations given by Management and the Internal Audit department, and discussions held with the AuditorGeneral of South Africa on the result of their audits, the Board of Directors is of the opinion that the internal accounting controls are adequate
to ensure that the nancial records may be relied upon for preparing the Financial Statements, and accountability for the assets and liabilities
is maintained.
Nothing signicant has come to the attention of the Board of Directors to indicate that any material breakdown has occurred in the functioning
of these controls, procedures and systems during the year under review.
position of the RAF at 31 March 2011 and the results of its operations and cash ow information for the year.
The Financial Statements of the RAF for the year ended 31 March 2011, which have been prepared on the going concern basis, have been
approved by the Board of Directors and signed on its behalf by:
DR NM BHENGU
Chairperson of the Board of Directors
28 July 2011
In the opinion of the Board of Directors, based on the information available to date, the Financial Statements fairly present the nancial
certicate by the
corporate secretary
I hereby certify that the RAF has lodged all returns as required by the Public Finance Management Act, 1999 (Act No. 1 of 1999), as amended
by Act No. 29 of 1999.
Ms JR CORNELIUS
Corporate Secretary
28 July 2011
statement of nancial position

as at 31 march 2011
Note(s)
2011
2010
R000
R000
Assets
Current Assets
1,137,636
655,166
Transfers receivable from fuel levies
2,950,173
2,750,182
Interest receivable
4,317
3,944
Other nancial assets
144,546
111,641
Consumable stock
2,365
2,508
4,239,037
3,523,441
Non-Current Assets
Property, plant and equipment
236,147
254,572
Intangible assets
91,453
100,572
327,600
355,144
4,566,637
3,878,585
87,009
80,289
Total Assets
Liabilities
10
Financial liabilities measured at amortised cost
11
526,560
454,951
13
10,441,050
9,924,998
Other provisions
14
287,989
274,519
11,342,608
10,734,757
Non-Current Liabilities
11
1,410
4,697
13
37,206,000
35,441,000
Employee benets
15
31,608
28,123
37,239,018
35,473,820
48,581,626
46,208,577
(44,014,989)
(42,329,992)
Total Liabilities
Net Decit
Net Decit
Reserves
Revaluation reserve
Accumulated decit
Total Net Decit
65,486
78,740
(44,080,475)
(42,408,732)
(44,014,989)
(42,329,992)
Current Liabilities
statement of nancial
performance
for the nancial year ended 31 march 2011
Note(s)
2011
2010
R000
R000
Revenue from Non-exchange Transactions

Transfers from government
12
59,781
Net fuel levies
16
14,474,058
12,566,090
14,474,058
12,625,871
1,120

Other income
18
2,269
Reinsurance revenue
19
10,135
8,060
Investment income
17
39,760
48,347
52,164
57,527
LESS EXPENSES
Claims expenditure
20
15,222,198
14,264,200
Reinsurance premiums
21
27,690
27,890
Employee costs
22
620,803
594,935
Administrative expenses
23
224,431
210,041
Depreciation, amortisation and impairments
25
59,555
39,081
16,154,677
15,136,147
Finance costs
24
(43,288)
(40,756)
(1,671,743)
(2,493,505)
Decit for the Year
statement of changes
in net assets
Balance at 31 March 2009
Revaluation Reserve
Accumulated Decit
Total Net Assets
R000
R000
R000
79,850
(39,915,227)
(39,835,377)
Changes in net assets

Devaluation of land
(166)
(166)
Devaluation of building
(944)
(944)
Net losses recognised directly in net assets
(1,110)
(1,110)
(2,493,505)
(2,493,505)
(1,110)
(2,493,505)
(2,494,615)
78,740
(42,408,732)
(42,329,992)
(1,671,743)
(1,671,743)
Decit for the year

Total changes
Decit for the year
Devaluation of land
(1,989)
(1,989)
Devaluation of building
(11,265)
(11,265)
Total changes
(13,254)
(1,671,743)
(1,684,997)
65,486
(44,080,475)
(44,014,989)
Changes in net assets
cash ow statement
Note(s)
2011
2010
R000
R000
Cash Flows from Operating Activities

Receipts
Fuel Levy
14,287,161
11,793,390
Investment income
39,763
54,173
Reinsurance claims received
10,135
8,060
439
1,097
14,337,498
11,856,720
Grants received
Other income
Payments
Employee costs
Claims expenditure
Finance costs
Reinsurance premiums
(620,803)
(594,935)
(12,785,919)
(11,369,996)
(43,288)
(40,756)
(27,690)
(27,890)
(333,893)
(137,248)
(13,811,593)
(12,170,825)
28
525,905
(314,105)
Purchase of property, plant and equipment
(26,887)
(77,213)
Proceeds on disposal of property, plant and equipment
1,830
134
Purchase of other intangible assets
(18,378)
(44,348)
Net Cash Flows from Investing Activities
(43,435)
(121,427)
Net Increase/(Decrease) in Cash and Cash Equivalents
482,470
(435,532)
655,166
1,090,698
1,137,636
655,166
Other expenditure
Net Cash Flows from Operating Activities
Cash Flows from Investing Activities
Cash and cash equivalents at the beginning of the year

Cash and Cash Equivalents at the End of the Year
notes to the nancial

statements
ACCOUNTING POLICIES
1.
Basis of Presentation
Statement Compliance
The Annual Financial Statements have been prepared in accordance with the eective South African Standards of Generally Recognised
Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the ASB in accordance with the PFMA.
These accounting policies are consistent with the previous period.
1.1
Reporting Entity
The Road Accident Fund (RAF) is an entity domiciled in South Africa. The address of the RAFs Head Oce is 38 Ida Street, Menlo Park,
Pretoria. The RAFs primary business is to provide cover to all users of South African roads, local or foreign, against injuries or death they may
sustain as a result of the wrongful driving of motor vehicles within the borders of the country. The cover provided is in the form of a social
security insurance in that the benets are enjoyed by the whole population, including foreigners and illegal immigrants, even though the
contribution towards the cover may be made primarily by the economically active members of society. The full responsibilities of the RAF
are contained in the Road Accident Fund Act, 1996 (Act No. 56 of 1996), as amended.
The Financial Statements were approved by the Board of Directors on 28 July 2011.
1.2
Basis of Measurement
The Financial Statements have been prepared on the historical cost basis except for land and buildings, which are carried at their revalued
amounts, and outstanding claims liabilities and fuel levy debtors, which are presented at their present values.
1.3
Functional and Presentation Currency
These Financial Statements are presented in South African Rand (ZAR), which is the RAFs functional currency. All nancial information
presented in ZAR has been rounded to the nearest thousand.
1.4
Use of Estimates and Judgements
In preparing the Annual Financial Statements, Management is required to make estimates and assumptions that aect the amounts
represented in the Annual Financial Statements and related disclosures. Use of available information and the application of judgement are
inherent in the formation of estimates. Actual results in the future could dier from these estimates, which may be material to the Annual
Financial Statements.
The methods used to measure fair values are discussed further in Note 1.7.
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 and in any future periods aected.
Critical Accounting Estimates and Assumptions in Applying Accounting Policies
Information about signicant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most
signicant eect on the amounts recognised in the Financial Statements are:
Revenue Recognition on the Road Accident Fund Levy
Eective as from 1 April 2006, the responsibility for the collection of the fuel levy was devolved from the CEF to SARS.
The changes to the Customs and Excise Act have introduced new provisions that require the fuel companies to pay 50% of the RAF Fuel
Levy at the end of the month following the month of removal of the fuel from the renery and the remaining 50% at the end of the following
month.
The eect of these provisions is that cash receipts of the RAF Fuel Levy do not correspond with the accrual of the fuel levy revenue by the
RAF. This impacts particularly the year-end revenue receivable, raised from the RAF Fuel Levy. To correctly accrue for the revenue for the
period, Management makes an estimate as to what the expected fuel levy income should be, based on historical evidence.
Diesel Refunds
Diesel refunds are concessions deducted from the fuel levies received. Diesel concessions are granted to certain sectors of the economy on
the basis of the level of certain use by the diesel consumer in primary production activities.
In terms of section 5(2) of the RAF Act, after being amended by the Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005), the RAF
receives the RAF Fuel Levy net of diesel refund after it has been collected by SARS.
Diesel refunds aect the amount of revenue to be recognised and cannot be measured accurately at the point of revenue recognition.
Consequently estimates are made by Management as to what the value of the diesel refunds will be. The estimates are based on historical
evidence, and Management formulates a percentage that is applied to the RAF Fuel Levy. The percentage range for diesel refunds for the
current year is 8% to 9% of the gross fuel levy for the year.
Outstanding Claims Provision
The estimation of the ultimate liability arising from claims incurred but not settled at the reporting date is the RAFs most critical accounting
estimate. There are several sources of uncertainty that need to be considered in the estimate of the liability that the RAF will ultimately pay
for such claims. The provision for outstanding claims is actuarially determined on an annual basis. The measurement of the obligations in
respect of this liability requires actuarial estimates and valuations. An actuary is engaged to perform these calculations. More detail on the
actuarial assumptions can be found in notes 1.6 and 13.
Post-retirement Employee Benets
The RAF provides a dened benet pension plan and a post-retirement medical plan to some of its employees. The measurement of the
obligations (and assets) in respect of this liability requires actuarial estimates and valuations. An actuary is engaged to perform these
calculations. More detail on the actuarial assumptions can be found in notes 1.13 and 15.
1.5
Translation of Foreign Currencies
Foreign Currency Transactions

Transactions in foreign currencies are translated to the functional currency of the RAF at the prevailing exchange rates at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional
currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the dierence between amortised cost in
the functional currency at the beginning of the period, adjusted for eective interest and payments during the period, and the amortised
cost in foreign currency translated at the exchange rate at the end of the period.
Foreign exchange gains and losses that relate to items that meet the denition of a nancial instrument are presented in the Statement
of Financial Performance within nance income or cost. All other foreign exchange gains and losses are presented in the Statement of
Financial Performance within net foreign exchange gains/(losses).
1.6
Insurance Contracts
Contracts under which the RAF accepts signicant insurance risk from another party (the claimant) by agreeing to compensate the claimant
if a specied uncertain future event (the insured event) adversely aects the claimant, are classied as insurance contracts. The RAF accepts
insurance risk as it is mandated by legislation to compensate victims of road accidents for injuries suered as a result of motor vehicle
accidents.
Insurance risk is signicant if, and only if, an insured event could cause the RAF to pay signicant additional benets. Once a contract is
classied as an insurance contract it remains classied as an insurance contract until all rights and obligations are extinguished or expire.
Claims Incurred
Claims incurred comprise claims and related expenses incurred during the year and changes in the provisions for outstanding claims,
including provisions for claims incurred but not reported and related external expenses, together with any other adjustments to claims
from previous years.
Outstanding Claims Provision
Provision is made at year-end for the estimated cost of claims incurred but not settled at the reporting date, including the cost of claims
incurred but not yet reported (commonly referred to as Claims IBNR) to the RAF and the cost of claims reported but not yet settled as at
the reporting date. Claims outstanding are determined as accurately as possible on the basis of a number of factors, which include previous
experience in claims patterns, claims settlement patterns and trends in claims frequency.
Further, the outstanding claims provision is calculated taking the following elements into account:
Estimates of additional claims payments that may be required on claims that have already been reported to the RAF and are still open;
Estimates of additional claims payments that may be required on claims that have already been reported to the RAF and are closed, but
could be reopened in the future; and
Estimates of external claims handling expenses, i.e. legal and medical experts, assessors and other experts excluding the RAFs overhead
administrative costs.
The estimates of the outstanding claims provision were produced on a going concern basis, and the outstanding claims estimate is reected
in the Financial Statements at a discounted value, based on expected monetary values at the expected time of payment of those claims.
Reserves for internal or indirect claim handling expenses (e.g. administration costs) are specically excluded from the estimates.
The outstanding claims provision is calculated gross of any reinsurance recoveries. A separate estimate is made of the amounts that will be
Reinsurance Contracts Held

The RAF procures reinsurance cover for the purposes of limiting its net loss potential. The reinsurance policies do not release the RAF from
its direct obligations to its claimants, as the duty to compensate the claimants remains with the RAF in spite of the fact that the reinsurance
cover has been procured.
The contracts entered into by the RAF with reinsurers under which the RAF is compensated for losses on one or more contracts issued by
the RAF and that meet the classication requirements for insurance contracts above are classied as reinsurance contracts held. Only rights
under contracts that give rise to a signicant transfer of insurance risk are accounted for as reinsurance assets. Rights under contracts that
do not transfer signicant insurance risk are accounted for as nancial instruments.
recoverable from reinsurers based upon the gross provision and having due regard to collectability.
Reinsurance premiums for reinsurance cover are recognised as expenses on a basis that is consistent with the recognition basis for premiums
on other similar insurance contracts. Reinsurance premiums are charged to the Statement of Financial Performance over the period that the
reinsurance cover is provided based on the expected pattern of the reinsured risks.
The net amounts paid to a reinsurer at the inception of a contract may be less than the reinsurance assets recognised by the RAF in respect
of its rights under such contracts. Any dierence between the premium due to the reinsurer and the reinsurance asset recognised is
included in surplus or decit in the period in which the reinsurance premium is due.
The RAF does not recognise reinsurance assets except for claims which have already been lodged with reinsurers and liability acknowledged,
due to uncertainty regarding the successful realisation of the claims.
1.7
Financial Instruments
Initial Recognition and Measurement

Financial instruments are initially recognised when the entity becomes a party to the contract. The entity has adopted trade date accounting
for regular way purchases or sales of nancial assets. The trade date is the date that the entity commits to purchase or sell an asset.
The entity determines the classication of its nancial instruments at initial recognition and, where allowed and appropriate, re-evaluates
this decision at each nancial year-end.
Financial instruments are initially measured at fair value plus transaction costs, except that transaction costs in respect of nancial
instruments classied at fair value through surplus or decit are expensed immediately. Transaction costs are the incremental costs that
are directly attributable to the acquisition of a nancial instrument, i.e. those costs that would have been incurred had the instrument not
been acquired.
Classication
The entitys classication of nancial assets and nancial liabilities is as follows:
Description of Asset/Liability
Classication
Advance payment i.r.o. suppliers claims
Loans and receivables
Employee debtors/Loans and bursaries
Sundry debtors
Claims debtors
Other deposits
Cash and cash equivalents*
Cell Captive Insurance
Short-term investment
Claims recognised, but not yet paid at year-end
Other liabilities
Trade and other creditors
Other liabilities
* Cash and cash equivalents include cash in hand, deposits held at call and other short-term highly liquid investments with original
maturities of three months or less.
Subsequent Measurement
Loans and Receivables
Loans and receivables are non-derivative nancial assets with xed or determinable payments that are not quoted in an active market. After
initial recognition, loans and receivables are measured at amortised cost less impairment losses.
Gains and losses are recognised in the Statement of Financial Performance when the loans and receivables are derecognised or impaired, as
well as through the amortisation process. Loans and receivables are subsequently measured at amortised cost, using the eective interest
method, less accumulated impairment losses.
Other Liabilities
Liabilities are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial
recognition, liabilities that are not carried at fair value through surplus or decit are measured at amortised cost using the eective interest
rate method.
Gains and losses are recognised in the Statement of Financial Performance when the liabilities are derecognised as well as through the
amortisation process.
Short-term Investments
After intitial recognition, the short-term investments are measured at amortised cost using the eective interest rate method, less
accumulated impairment losses.
Gains and losses are recognised in the Statement of Financial Performance when the short term investments are derecognised or impaired,
as well as through the amortisation process.
Determination of Fair Values
A number of the RAFs accounting policies and disclosures require the determination of fair value, for both nancial and non-nancial assets
and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods described below.
Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specic to that asset
or liability.
Derecognition of Financial Assets and Financial Liabilities
Financial assets or parts thereof are derecognised when:
The right to receive the cash ows has expired;
The right to receive the cash ows is retained, but an obligation to pay them to a third party under a pass-through arrangement is
assumed; or
The entity transfers the right to receive the cash ows, and also transfers either all the risks and rewards, or control over the asset.
Financial liabilities are derecognised when the obligation is discharged, cancelled or expired.
1.8
Property, Plant and Equipment
Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the production or
The cost of an item of property, plant and equipment is recognised as an asset when:
It is probable that future economic benets or service potential associated with the item will ow to the entity; and
The cost of the item can be measured reliably.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and
condition necessary for it to be capable of operating in the manner intended by Management. Trade discounts and rebates are deducted
in arriving at the cost.
Where an asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.
supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of
monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired items fair value was not
determinable, its deemed cost is the carrying amount of the asset(s) given up.
When signicant components of an item of property, plant and equipment have dierent useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to
add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment,
the carrying amount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the
cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of
acquiring the asset or using it for purposes other than the production of inventories.
Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and
condition necessary for it to be capable of operating in the manner intended by management.
Major spare parts and stand-by equipment, which are expected to be used for more than one period, are included in property, plant and
equipment. In addition, spare parts and stand-by equipment, which can be used only in connection with an item of property, plant and
equipment, are accounted for as property, plant and equipment.
Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition
criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from
the previous inspection are derecognised.
Property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses.
Land and buildings held for administrative purposes are carried at their revalued amounts, being the fair value at the date of revaluation less
any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Revaluations are performed by an independent valuer on a yearly basis such that the carrying amounts do not dier materially from
those that would be determined using fair values at reporting date. The fair value of land and buildings measured using the valuation
model is based on market values. The market value of property is determined by taking into account the market rentals that are paid in
the immediate area. The applicable relevant market rental is used to determine potential income. Thereafter the relevant expenditure is
deducted to determine the net income and with a relevant capitalisation rate, the market value if calculated.
When an item of land and buildings is revalued, any accumulated depreciation at the date of the revaluation is restated proportionately with
the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.
Any increase in an assets carrying amount, as a result of a revaluation, is credited directly to a revaluation surplus. The increase is recognised
in surplus or decit to the extent that it reverses a revaluation decrease of the same asset previously recognised in surplus or decit.
Any decrease in an assets carrying amount, as a result of a revaluation, is recognised in surplus or decit in the review period. The decrease
is debited directly to a revaluation surplus to the extent of any credit balance existing in the revaluation surplus in respect of that asset.
The revaluation surplus in equity related to a specic item of land and buildings is transferred directly to retained earnings when the asset
is derecognised.
The revaluation surplus in equity related to a specic item of land and buildings is transferred directly to retained earnings as the asset is
used. The amount transferred is equal to the dierence between depreciation based on the revalued carrying amount and depreciation
based on the original cost of the asset.
Property, plant and equipment are depreciated on the straight-line basis over their expected useful lives to their estimated residual value.
The useful lives of items of property, plant and equipment have been assessed as follows:
2011
Average Useful Life
2010
Average Useful Life
Buildings
30 years
Buildings
30 years
Office furniture
15 years
Office furniture
15 years
Motor vehicles
5 years
Motor vehicles
5 years
Office equipment
10 years
Office equipment
10 years
Computer equipment
7 years
Computer equipment
7 years
Leasehold improvements
3 years
3 years
The residual value, and the useful life and depreciation method of each asset is reviewed at the end of each reporting date. If the expectations
dier from previous estimates, the change is accounted for as a change in accounting estimate.
Each part of an item of property, plant and equipment with a cost that is signicant in relation to the total cost of the item is depreciated
separately.
The depreciation charge for each period is recognised in surplus or decit unless it is included in the carrying amount of another asset.
Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benets or
service potential expected from the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or decit when the item
is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the dierence
between the net disposal proceeds, if any, and the carrying amount of the item.
Assets which the entity holds for rentals to others and subsequently routinely sell as part of the ordinary course of activities, are transferred
to inventories when the rentals end and the assets are available-for-sale. These assets are not accounted for as non-current assets held for
sale. Proceeds from sales of these assets are recognised as revenue. All cash ows on these assets are included in cash ows from operating
activities in the Cash Flow Statement.
Intangible Assets
An asset is identied as an intangible asset when it:
Is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or
together with a related contract, assets or liability; or
Arises from contractual rights or other legal rights, regardless of whether those rights are transferable or separate from the entity or
from other rights and obligations.
An intangible asset is recognised when:
It is probable that the expected future economic benets or service potential that are attributable to the asset will ow to the entity; and
The cost or fair value of the asset can be measured reliably.
Intangible assets are initially recognised at cost.
1.9
For an intangible asset acquired at no or nominal cost, the cost shall be its fair value as at the date of acquisition.
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised when:
It is technically feasible to complete the asset so that it will be available for use or sale;
There is an intention to complete and use or sell it;
There is an ability to use or sell it;
It will generate probable future economic benets or service potential;
There are available technical, nancial and other resources to complete the development and to use or sell the asset; and
The expenditure attributable to the asset during its development can be measured reliably.
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.
An intangible asset is regarded as having an indenite useful life when, based on all relevant factors, there is no foreseeable limit to the period
over which the asset is expected to generate net cash inows or service potential. Amortisation is not provided for these intangible assets,
but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible
assets, amortisation is provided on a straight-line basis over their useful life.
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessing the useful life of an intangible asset with a nite useful life after it was classied as indenite is an indicator that the asset may
be impaired. As a result, the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible
assets.
Amortisation is provided to write down the intangible assets, on a straight-line basis, to their residual values.
The estimated useful life for the current and comparative period is as follows:
2011
Computer software
Useful Life
2010
Useful Life
5 years
Computer software
5 years
Intangible assets are derecognised:
On disposal; or
When no future economic benets or service potential are expected from its use or disposal.
1.10 Consumable Stock

Inventories comprise consumable stock which are measured at the lower of cost and net realisable value. The cost of the consumable stock
is measured on the weighted average principle, and includes expenditure incurred in acquiring the consumable stock and other direct costs
incurred in bringing them to their existing location and condition.
The cost of consumable stock comprises all costs of purchase, costs of conversion and other costs incurred in bringing the consumable
stock to its present location and condition.
The cost of consumable stock of items that are not ordinarily interchangeable and goods or services produced and segregated for specic
projects is assigned using specic identication of the individual costs.
1.11 Impairment
Financial Assests
The entity assesses at each Statement of Financial Position date whether there is objective evidence that a nancial asset, or entity of assets,
is impaired.
Assets Carried at Amortised Cost
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the dierence between the
assets carrying amount and the present value of the estimated future cash ows (excluding future expected credit losses) discounted at the
assets original eective interest rate.
Signicant nancial assets are tested for impairment on an individual basis. The remaining nancial assets are assessed collectively in groups
that share similar credit risk characteristics.
The entity assesses whether there is objective evidence of impairment individually for nancial assets that are individually signicant, and
individually or collectively for nance assets that are not individually signicant. In relation to trade receivables, a provision for impairment
is made when there is objective evidence (such as the probability of insolvency or signicant nancial diculties of the debtor) that the
entity will not be able to collect all of the amounts due under the original terms of the sale. The carrying amount of the receivable is reduced
through use of an allowance account and is recognised in surplus or decit. Impaired debts are derecognised when they are assessed as
uncollectable.
If, in a subsequent period, the amount of the impairment decreases and the decrease relates objectively to an event occurring after the
impairment, it is reversed to the extent that the carrying value does not exceed the amortised cost. Any subsequent reversal of an impairment
loss is recognised in surplus or decit. A nancial asset is considered to be impaired if objective evidence indicates that one or more events
have had a negative eect on the estimated future cash ows of that asset.
Non-cash-generating Non-nancial Assets
The carrying amounts of the RAFs non-nancial assets, other than consumable stock, are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated.
The recoverable service amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the
estimated cash ows are discounted to their present value using a pre-tax discount rate that reects current market assessments of the time
value of money and the risks specic to the asset.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable service amount. Impairment losses
are recognised in surplus or decit.
impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
1.12 Government Grants

Government grants are recognised when there is reasonable assurance that:
The entity will comply with the conditions attached to them; and
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
The grants will be received.
Government Grants Related to Projects

Grants that compensate entities for projects undertaken and for which there is no return on investments are recognised as expenses when
incurred.
Government Grants Related to Assets
Government grants are classied as revenue from non-exchange transactions. Such revenue arises when an entity receives value from
another entity without directly giving approximately equal value in exchange. Management has applied judgement when developing the
accounting policy for goverment grants since there is no standard in the GRAP framework that provides guidance on the accounting
treatment of such transactions.
An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.
The revenue will be measured at the amount of increase in net assets recognised by the entity.
An inow of resources from a non-exchange transaction recognised as an asset shall be recognised as revenue, except to the extent that
a liability is recognised for the same inow. As an entity satises a present obligation recognised as a liability in respect of an inow of
resources from a non-exchange transaction recognised as an asset , it will reduce the carrying amount of the liability recognised as an asset
in an amount equal to that reduction.
Government Grants Related to Income
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate
nancial support to the RAF with no future related costs are recognised in surplus or decit in the period in which they become receivable.
Government grants are recognised as revenue when all the conditions attached to the grant are satised.
Repayment of a grant related to income is applied rst against any unamortised deferred credit set up in respect of the grant. To the extent
that the repayment exceeds any such deferred credit, or where no deferred credit exists, the repayment is recognised immediately as an
expense.
Where a loan is received from government at below market interest rate, the dierence between the fair value of the loan and the amount
received is recognised as government grant.
1.13 Employee Benefits

Short-term Employee Benets
Short-term employee benet obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or prot-sharing plans, if the RAF has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Dened Contribution Plans
A dened contribution plan is a post-employment benet plan under which the RAF pays xed contributions into a separate entity and will
have no legal or constructive obligation to pay further amounts. Obligations for contributions to dened contribution pension plans are
recognised as an expense in surplus or decit when they are due.
Dened Benet Plans

Dened Benet Pension Plan
The RAFs net obligation in respect of dened benet pension plans is calculated separately for each plan by estimating the amount of
future benet that employees have earned in return for their service in the current and prior periods. That benet is discounted to determine
its present value and any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield
at the reporting date on AA credit-rated or similar bonds that have maturity dates approximating the terms of the RAFs obligations. The
calculation is performed by a qualied actuary using the projected unit credit method. When the calculation results in a benet to the RAF,
the recognised asset is limited to the net total of any unrecognised past service costs and the present value of any future refunds from the
plan or reductions in future contributions to the plan.
When the benets of a plan are improved, the portion of the increased benet relating to past service by employees is recognised in surplus
or decit on a straight-line basis over the average period until the benets vest. To the extent that the benets vest immediately, the expense
is recognised immediately in surplus or decit.
Post-retirement Medical Obligations
The RAF provides post-retirement healthcare benets to its retirees based on the following subsidy policy:
An employee who joined the RAF before 1 May 1998 will pay 50% of the total healthcare contribution and the RAF the balance. The
entitlement to post-retirement healthcare benets is based on the employee remaining in service up to retirement age.
An employee who joined the RAF from 1 May 1998 will after retirement pay 100% of the total healthcare contribution. Therefore, the RAF
will have no further obligation with regards to these employees healthcare benets upon retirement.
The expected costs of these benets are accrued over the period of employment, using the projected unit credit method.
Valuations of these obligations are carried out by independent actuaries.
Recognition of Actuarial Gains and Losses on Dened Benet Obligations
A portion of actuarial gains and losses is recognised as surplus or decit in the period if the net cumulative unrecognised actuarial gains and
losses at the end of the previous reporting period exceed the greater of:
10% of the present value of the dened benet obligation at the date before deducting plan assets, or
10% of the fair value of any plan assets at that date.
The portion of actuarial gains and losses to be recognised is the excess referred to above, divided by the expected remaining working lives
of the employees participating in the plan.
This policy is applied for both the dened benet pension plan and the post-retirement medical obligations.
a formal detailed plan to terminate employment before the normal retirement date. Termination benets for voluntary redundancies are
recognised if the RAF has made an oer encouraging voluntary redundancy, it is probable that the oer will be accepted, and the number
of acceptances can be estimated reliably.
1.14 Provisions
Provisions are recognised when:
The entity has a present obligation as a result of a past event;
It is probable that an outow of resources embodying economic benets or service potential will be required to settle the obligation;
and
A reliable estimate can be made of the obligation.
Termination benets are recognised as an expense when the RAF is demonstrably committed, without realistic possibility of withdrawal, to
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the
reporting date.
Where the eect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be
required to settle the obligation.
The discount rate is a pre-tax rate that reects current market assessments of the time value of money and the risks specic to the liability.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement
is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The
reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisions are reviewed at each reporting date and adjusted to reect the current best estimate. Provisions are reversed if it is no longer
probable that an outow of resources, embodying economic benets or service potential, will be required to settle the obligation.
Provisions are not recognised for future operating decit.
If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a
provision.
A constructive obligation to restructure arises only when an entity:
has a detailed formal plan for the restructuring, identifying at least:

- the activity/operating unit or part of an activity/operating unit concerned;
- the principal locations aected;
- the location, function and approximate number of employees who will be compensated for services being terminated;
- the expenditures that will be undertaken; and
- when the plan will be implemented;
has raised a valid expectation in those aected that it will carry out the restructuring by starting to implement that plan or announcing
its main features to those aected by it.
No obligation arises as a consequence of the sale or transfer of an operation until the entity is committed to the sale or transfer, that is, there
is a binding agreement.
After their initial recognition, contingent liabilities recognised in business combinations that are recognised separately are subsequently
measured at the higher of:
The amount that would be recognised as a provision; and
The amount initially recognised less cumulative amortisation.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 35.
1.15 Revenue
Revenue is the gross inow of economic benets or service potential during the reporting period when those inows result in an increase
in net assets, other than increases relating to contributions from owners.
Revenue comprises mainly fuel levies, government grants/transfer payments, investment income and insurance income.
Revenue from Non-exchange Transactions

Fuel Levy
The main income received by the RAF is a levy that is based on fuel sales known as the RAF Fuel Levy. The RAF Fuel Levy income is a charge
levied on fuel throughout the country and the quantum of the RAF Fuel Levy per litre is determined by National Treasury. The RAF Fuel Levy
amendments are communicated through the Budget Speech.
The RAF recognises revenue from fuel levies when the amount of revenue can be reliably measured and it is probable that future economic
benets will ow to the RAF.
Revenue is measured at the fair value of the consideration received or receivable.
Government Grants/Transfer Payments
The RAF recognises revenue from the transfer payments when the amount of revenue can be reliably measured. It is probable that the future
economic benets will ow to the RAF and the conditions relating to the transfer payment have been complied with.
Investment Income
Investment income comprises interest income on funds invested. Interest income for nancial assets not classied at fair value through
surplus or decit is recognised on a time-proportion basis using the eective interest method.
Reinsurance Revenue
Reinsurance income comprises settlements by reinsurance companies in respect of insured events that are covered by the reinsurance
policy.
Other Income
Other income comprises fees that are collected for published tenders, vending machines and parking fees received from employees.
1.16 Lease Payments

Payments made under operating leases are recognised in surplus or decit on a straight-line basis over the term of the lease. Lease incentives
received are recognised as an integral part of the total lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease
adjustment is conrmed.
Finance costs comprise interest charged on outstanding creditors, interest charged in the claims handling process, unwinding of the
discount on provisions and impairment losses recognised on nancial assets. Interest charged is recognised in surplus or decit using the
eective interest method.
1.18 Tax
Income Tax Expense
The RAF is exempt from taxation in terms of the provision of section 10(1)(cA)(i) of the Income Tax Act, 1962 (Act No. 58 of 1962) and
section 16 of the RAF Act, 1996 (Act No. 56 of 1996).
1.17 Finance Costs
1.19 Related Parties

The RAF operates in an economic environment currently dominated by entities directly or indirectly owned by the South African government.
As a result of the constitutional independence of all three spheres of government in South Africa, only parties within the national sphere of
government that inuence the RAF or vice versa will be considered to be related parties.
Key management is dened as being individuals with the authority and responsibility for planning, directing and controlling the activities
of the entity. We regard all individuals from the level of Executive Management up to the Board of Directors as key Management per
the denition.
Close family members of key Management personnel are considered to be those family members who may be expected to inuence, or be
inuenced by key Management individuals in their dealings with the entity.
The objective of the Financial Statements is to provide relevant and reliable information and therefore materiality is considered in the
disclosure of these transactions.
1.20 Irregular, Fruitless and Wasteful Expenditure

Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation,
including:
The PFMA, or
Any national legislation providing for procurement in that national government.
Fruitless and wasteful expenditure means expenditure that was made in vain and could have been avoided had reasonable care been
exercised.
Any irregular, fruitless and wasteful expenditure is charged against surplus or decit in the period in which it is incurred.
2.
New Standards and Interpretations
2.1
Standards and Interpretations Early Adopted
The following standards have been approved by the Minister with a future eective date and the RAF has decided to early adopt these
standards:
GRAP 21 Impairment of Non-cash-generating Assets
The objective of this standard is to prescribe the procedures that an entity applies to determine whether a non-cash-generating asset is
impaired and to ensure that impairment losses are recognised. The standard also species when an entity would reverse an impairment loss
and prescribe disclosures. The impact of the standard is not material to the previously adopted standards. The eective date is 1 April 2012.
GRAP 23 Revenue from Non-exchange Transactions (Taxes and Transfers)
The objective of this standard is to prescribe requirements for the nancial reporting of revenue arising from non-exchange transactions,
other than non-exchange transactions that give rise to an entity combination. The standard deals with issues that need to be considered in
recognising and measuring revenue from non-exchange transactions, including the identication of contributions from owners. The impact
of the standard is not material to the previously adopted standards. The eective date is 1 April 2012.
GRAP 26 Impairment of Cash-Generating Assets
The objective of this standard is to prescribe the procedure that an entity applies to determine whether a cash-generating asset is impaired
and to ensure teat impairment losses are recognised. The standard also species when an entity should reverse an impairment loss and
prescribes disclosures. The impact of the standard is not material to the previously adopted standards. The eective date is 1 April 2012.
GRAP 103 Heritage Assets
The objective of this standard is to prescribe the accounting treatment for heritage assets and related disclosure requirements. The eective
date is 1 April 2012. This standard has no impact on the entity.
2.2
Standards Issued with Future Effective Date not yet Adopted
Standards issued with a future eective date are those standards which have been issued with future eective dates and have not been
adopted earlier in the current nancial year.
GRAP 24 Presentation of Budget Information in Financial Statements
This standard requires a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in
the nancial statements of entities that are required to, or elect to, make publicly available their approved budget(s) and for which they are,
therefore, held publicly accountable. The standard also requires disclosure of an explanation of the reasons for material dierences between
the budget and actual amounts. Compliance with the requirements of this standard will ensure that entities discharge their accountability
obligations and enhance the transparency of their nancial statements by demonstrating compliance with the approved budget(s) for
This standard will result in additional disclosure being presented.

The eective date is 1 April 2012.
2.3
Standards Issued but not yet Effective
Standards issued but not yet eective up to date of issuance of the RAFs nancial statements are listed below. As at the date of this report,
the Minister had not yet announced an eective date for these standards.
which they are held publicly accountable and their nancial performance in achieving the budgeted results.
GRAP 18 Segment Reporting

The objective of this standard is to establish principles for reporting nancial information by segments. This standard is unlikely to have an
impact on the entity.
GRAP 25 Employee Benets
The objective of this standard is to prescribe the accounting and disclosure for employee benets. This standard requires an entity to
recognise;
a.
A liability when an employee has provided service in exchange for employee benets to be paid in the future; and
b.
An expense when the entity consumes the economic benets or service potential arising from service providers by an employee in
exchange for employee benets.
The impact of the standard will result in the recognition of actuarial losses or gains in the year that arose instead of the current accounting
policy which defers the recognition. This will result in an increase or decrease in the obligations on recognition of the cumulative
unrecognised gains and losses.
GRAP 104 Financial Instruments
The objective of this standard is to establish principles for recognising, measuring, presenting and disclosing nancial statements.
The impact of the standard will not be material to the previously adopted standards, except for the subsequent measurement of amortised
cost for those nancial instruments with shor-term duration. The cost will be the original invoice amount and the nominal interest rate will
be deemed to equal the eective interest rate.
3.
Cash and Cash Equivalents

2011
2010
R000
R000
Cash and cash equivalents include the following:

Short-term call deposits
1,113,400
554,176
Current accounts
2,639
79,393
Deposit accounts
21,564
21,564
Cash on hand
Total
33
33
1,137,636
655,166
21,564
21,564
Cash and cash equivalents held by the entity that are not available for use
The eective interest rate on call deposits in 2011 was 5.55% (2010: 6.94%).
The RAFs exposure to interest rate risk and a sensitivity analysis for nancial assets and liabilities is disclosed in note 32.
4.
Transfers Receivable from Fuel Levies
The Road Accident Fund Levies are recovered directly from the oil reneries by SARS and are paid into the National Revenue Fund. SARS pays
the funds into the National Revenue Fund after certain deductions are made in terms of section 47 of the Customs and Excise Act, 1964
(Act No. 91 of 1964), section 5 of the RAF Act, as well as Schedule No. 6 to the Customs and Excise Act No. 91 of 1964. National Treasury then
pays these levies from the National Revenue Fund to the DoT, which then pays these funds to the RAF.
Approximately 50% of the levies due are payable by the reneries at the end of the month following the month of removal from the renery
and the remaining 50% at the end of the following month.
2011
2010
R000
R000
This amount is impaired by any bad debts that the reneries have sustained that need to be refunded by the RAF.
Fuel levy receivable
2,950,173
2,749,806
376
2,950,173
2,750,182
4,317
3,944
106,227
62,529
21,359
18,432
312
411
Interest receivable from fuel companies

Total
5.
Interest Receivable
Interest receivable from money market investments
6.
Other Financial Assets
Short-term Investments
The balance above is reserved with dierent insurance companies through an
insurance broker, Indwe Risk Management Services, for use in cases where claims
above R100 million are lodged. This policy may be terminated by the RAF or
the insured at any given time by giving 30 days written notice. The policy is also
renewable on an annual basis and therefore deemed short-term in nature.
Loans and Receivables
Advance payment i.r.o. supplier claims and other
Employee debtors/Loans and bursaries
Sundry debtors
Cell captive insurance
3,080
3,124
106,227
62,529
341
365
Other deposits/Cash collateral provided

Claims debtors
13,227
26,780
Total Loans and Receivables
38,319
49,112
Total Other Financial Assets
144,546
111,641
Short-term invesments
106,227
62,529
38,319
49,112
144,546
111,641
The Board of Directors considers the carrying amount of other nancial assets to approximate fair value.
7.
Consumable Stock
Consumable stock
2,365
2,508
Current Assets
8.
Property, Plant and Equipment

2011
2010
Cost/
Valuation
Accumulated
Depreciation
Carrying
Value
Cost/
Valuation
Accumulated
Depreciation
Carrying
Value
R000
R000
R000
R000
R000
R000
Land
16,133
16,133
18,122
18,122
Buildings
82,867
82,867
97,378
97,378
16,294
(6,606)
9,688
13,340
(1,840)
11,500
Motor vehicles
11,502
(4,587)
6,915
15,370
(6,521)
8,849
Oce equipment
31,805
(14,342)
17,463
24,106
(10,943)
13,163
Oce furniture
26,898
(12,342)
14,556
26,193
(10,871)
15,322
Computer equipment
192,762
(104,237)
88,525
177,430
(87,192)
90,238
Total
378,261
(142,114)
236,147
371,939
(117,367)
254,572
Revaluations
Accumulated
Depreciation
of Disposed
Assets
Depreciation
Total
R000
R000
R000
R000
Reconciliation of Property, Plant and Equipment 2011

Opening
Balance
Additions
R000
R000
Disposals
R000
Land
18,122
(1,989)
16,133
Buildings
97,378
(11,265)
(3,246)
82,867
11,500
2,954
(4,766)
9,688
Motor vehicles
8,849
198
(4,067)
4,067
(2,132)
6,915
Oce equipment
13,163
7,502
(3,202)
17,463
Oce furniture
15,322
705
(1,471)
14,556
Computer equipment
90,238
15,528
(17,241)
88,525
254,572
26,887
(4,067)
(13,254)
4,067
(32,058)
236,147
Revaluations
Accumulated
Depreciation
of Disposed
Assets
Depreciation
Total
R000
R000
R000
R000
Reconciliation of Property, Plant and Equipment 2010
Land
Buildings
Motor vehicles
Oce equipment
Oce furniture
Computer equipment
Opening
Balance
Additions
R000
R000
Disposals
R000
18,288
(166)
18,122
101,712
(944)
(3,390)
97,378
13,340
(1,840)
11,500
2,211
7,670
(1,032)
8,849
12,060
3,730
(65)
(2,562)
13,163
9,001
8,275
(790)
(1,164)
15,322
57,525
44,198
(132)
(11,353)
90,238
200,797
77,213
(987)
(1,110)
(21,341)
254,572
Revaluations
The eective date of the revaluation was 31 March 2011. The revaluation was performed by an independent valuer, Mr S Barlow (Professional
Associated Valuer), of Pace Property Group (Pty) Ltd. Pace Property Group is not connected to the RAF.
Land and buildings are revalued independently every year.

The valuation was performed using the income capitalisation method to determine the market value by discounting the future income ow
to a present value. A discount rate of 11% was used to discount the income.
9.
Intangible Assets
2011
2010
Cost/Valuation
Accumulated
Amortisation
Carrying Value
Cost/Valuation
Accumulated
Amortisation
Carrying Value
R000
R000
R000
R000
R000
R000
Computer software
154,941
(63,488)
91,453
136,563
(35,991)
100,572
Reconciliation of Intangible Assets 2011
Computer software
Opening
Balance
Additions
Amortisation
Total
R000
R000
R000
R000
100,572
18,378
(27,497)
91,453
Reconciliation of Intangible Assets 2010
Computer software
Opening
Balance
Additions
Amortisation
Total
R000
R000
R000
R000
73,964
44,348
(17,740)
100,572
10. Payables and Accruals
Accrual for overtime

Accrual for leave
Accrual for 13th cheque
Accrual for performance bonuses
2011
2010
R000
R000
3,442
271
32,864
31,907
8,573
9,139
42,130
38,972
87,009
80,289
66,363
149,981
460,197
304,970
1,410
4,697
527,970
459,648
1,410
4,697
526,560
454,951
527,970
459,648
11. Financial Liabilities Measured at Amortised Cost

Claim amounts requested, but not paid at year-end
Unrecognised portion of straight-lined leases
Non-current Liabilities
Current Liabilities
12. Deferred Government Grant Income

2011
2010
R000
R000
Unutilised Government Grant Comprises:

Unutilised portion at the beginning of the year
59,781
Recognised in Statement of Financial Performance
(59,781)
Amount Transferred to the Following Year
13. Provision for Outstanding Claims

Reconciliation of Provision for Outstanding Claims 2011
Opening
Balance
Provisions
made during
the Year
Utilised during
the Year
Total
R000
R000
R000
R000
45,365,998
15,222,198
(12,941,146)
47,647,050
Reconciliation of Provision for Outstanding Claims 2010
Opening
Balance
Provisions
made during
the Year
Utilised during
the Year
Total
R000
R000
R000
R000
42,500,355
14,264,200
(11,398,557)
45,365,998
2011
2010
R000
R000
Current liabilities
10,441,050
9,924,998
Non-current liabilities
37,206,000
35,441,000
47,647,050
45,365,998
The valuation methodology used in 2011 is consistent with the methodology used in the prior year.
The discounted outstanding claims liability as at 31 March 2011, net of reinsurance, was estimated to be R47,6 billion (2010: R45,4 billion).
This R47,6 billion should be interpreted as the expected monetary amount that, together with notional investment income on this amount,
would be sucient to cover future payments in respect of accidents that occurred prior to 1 April 2011. The estimate of the outstanding
claims liability increased by R2,28 billion from the March 2010 estimate.
It was further estimated that, had the Amendment Act not been introduced, the liability would have been approximately R13,5 billion higher
(i.e. a total liability of approximately R61,1 billion). If the actual future experience is as expected, the outstanding claims liability is expected to
increase at a much lower rate than claims ination during the next ve years as the eect of the Amendment Act lters through. Thereafter,
it is expected to increase with claims ination as well as any increase in the number of accidents.
Methodology Used in Determining the Provision for Outstanding Claims
The calculation of the Provision for Outstanding Claims was divided into the following components:
1. Pre-Amendment Act claims
2. Post-Amendment Act claims
3. Undertakings
The above claims were further divided into supplier and non-supplier claims and non-supplier claims were then subdivided into the following
groups:
Group A: Nil claims: Claims with no compensation payments and no expense payments.
Group B: Small claims: Claims with no compensation but some expenses.
Group C: Injury claims, further split into the fowlling:
Group C1: Injury claims with no general damages, but some past medical or loss of earnings.
Group C2: Injury claims with general damages below R125,000 (in 2010 terms).
Group C3: Injury claims with general damages in excess of R125,000 (in 2010 terms).
Group D: Death claims, further split into the following:
Group D1: Death claims with loss of support.
Group D2: Death claims with only funeral costs, but no loss of support.
The reasons for subdividing non-supplier claims into these groups were:
To obtain homogeneous groups: The claims in the dierent groups have very dierent characteristics. Estimates of future payments
based on historical data are better if homogeneous groups are used.
To assist with estimating future payments in respect of post-Amendment Act claims: The most signicant nancial eect of
the Amendment Act is that general damages are payable only in respect of seriously injured claimants. We used the amounts paid in
respect of general damages for the injured as a proxy for the seriousness of the injury assuming that general damages in excess of
R125,000 in March 2010 terms, indicate a serious injury.
Method used to estimate liability for pre-Amendment Act claims:

The liability in respect of the pre-Amendment Act claims was estimated as follows:
Firstly, the number of ultimate and hence the number of outstanding claims for each accident interval was estimated.
Secondly, it was estimated how many of the outstanding Non-Supplier claims (both reported and IBNR) are expected to fall into
each group.
Then the average amount expected to be paid on outstanding claims in each group was estimated, taking into account that past
experience showed that, on average, larger claims in each group took longer to nalise than smaller claims.
The outstanding liability was then estimated by multiplying the estimated number of outstanding claims in each group by the average
amounts for the respective groups, for each accident year.
Amounts already paid in respect of open claims were then deducted and further amounts payable in respect of nalised claims were
then estimated and added. These additional payments were also taken into account in determining the average amounts.
Method used to estimate liability for post-Amendment Act claims:

Payments in respect of post-Amendment Act claims have not developed suciently to independently produce reliable estimates.
However, experience to date shows that the number of post-Amendment Act claims is similar to what would have been expected if the
Amendment Act is applied to the 2007 accident year. The estimate for the liability in respect of post-Amendment Act claims has been based
on the estimated total amount that would have been paid in respect of claims for the 2007 accident year if the Amendment Act would
already paid.
Method used to estimate liability for Undertakings:
It was assumed that Undertaking payments in respect of accidents up to 2003 have stabilised. For these accident years the liability for future
payments was estimated by multiplying the annual amounts paid with an annuity factor based on the average age of claimants receiving
these benets.
For accident years 2001 to 2003, current annual payments ranged between R821 and R881 per estimated ultimate number of Group C1 and
C3 claims (average R850). For pre-Amendment Act claims in respect of accident years 2004 to 2009, it was assumed that ultimate annual
Undertaking payments would be a similar factor (R850) of ultimate Group C1 and Group C3 claims. For post-Amendment Act claims it was
have applied to these claims. Then the liability in respect of post-Amendment Act accident intervals was estimated, allowing for amounts
assumed that ultimate Undertaking payments would have been equal to R637,50 (75% of R850 to allow for assumed saving of 25% due to
the introduced medical taris following the Amendment Act) of assumed ultimate Group C1 and Group C3 claims.
Discounted and Undiscounted Provisions
The method outlined above leads to an estimate of R49,5 billion for outstanding payments (in March 2011 monetary terms) in respect of
accidents prior to 1 April 2011. The table below summarises the overall results, based on future claims ination of 7% per year (2% above
assumed CPI of 5%) and a discount rate of 8% per year (3% above assumed CPI of 5%) further assuming past payment patterns wil be
repeated in future. (Note that the undiscounted liability for Undertakings is shown in March 2011 terms without allowing for future ination.
This is done because we are of the opinion that an undiscounted liability in respect of Undertakings is meaningless, considering the longterm nature of Undertakings):
March 2011
Monetary Terms
Discounted
Liability
Undiscounted
Liability
Rmillion
Rmillion
Rmillion
Pre-Amendment Act
23,409
22,843
28,325
Post-Amendment Act
22,973
22,073
31,473
3,164
2,784
3,164
49,546
47,700
62,962
Undertakings
Total
In previous valuations the liability for supplier and non-supplier claims was shown separately. It has been decided not to show them
separately for a number of reasons (including the relatively low liability for non-supplier claims, the way Supplier claims are recorded in the
new RAF claims system and the method of valuing post-Amendment Act claims). The discounted liability for supplier claims included in the
above is R423 million (2010: R587 million).
The majority of the supplier liablity is in respect of post-Amendment Act claims, where our valuation method changed from previous
valuations in that the total estimated ultimate amount paid (supplier and non-supplier) for the 2007 accident year was used as basis for the
estimate. Considering that more direct supplier claims would imply that the medical costs claimed for as part of the non-supplier claims
would be lower, we are of the opinion that the changed valuation method is appropriate.
Assumptions
The experience over the last four years has been reasonably similar to what was expected in our previous valuations. The assumptions that
have the greatest eect on the measurement of the outstanding claims provision are:
The proportion of the number of claims falling into each of the dened groups (taking into account that some groups take on average
longer to nalise) will remain similar to the past experience.
The average amount payable per claim in each dened group (taking into account that larger claims take on average longer to nalise)
will remain similar to the past experience, allowing for claims ination of 2% above price ination.
The number of post-Amendment Act claims: The actual number registered to date was lower than expected. There is some uncertainty
as to whether the ultimate claims will be lower than expected, or whether they will just be served later. In this light, we changed some of
our assumptions regarding the post-Amendment Act claims, resulting in a lower liablity than would have been the case under previous
assumptions.
Payments in respect of Undertakings will follow similar patterns as in the recent past.
Movement in Outstanding Claims Liability

The movement in the claims liability is recorded as follows:
Opening balance of liability
2011
R billion
2010
R billion
(45,4)
(42,5)
New claims in respect of the current year
(9,1)
(9,9)
Amount paid during the year
12,8
11,4
Unwinding of interest rate
(3,2)
(3,8)
Actual experience diering from expected experience
(2,7)
(0,6)
(47,6)
(45,4)
Closing Balance of Liability

Explanation of the main reasons for the increase in the provision for outstanding claims:
The liability increased by R9,1 billion in respect of accidents which occurred during the most recent 12 months. During the same period, the
RAF paid R12,8 billion of claims, which resulted in a commensurate decrease in the liability. The eect of restating the discounted liability in
2011 money terms is referred to as unwinding the discount rate and results to an increase of R3,2 billion. The remaining R2,7 billion is as a
result of actual experience diering from expected experience, also aecting assumptions regarding future experience.
Sensitivity Analysis
Where variables are considered to be immaterial, no impact has been assessed for insignicant changes to these variables. Particular
variables may not be considered material at present. Should the materiality level of an individual variable change, however, an assessment
of reasonable possible changes to that variable in the future may be required.
The RAF believes that the stated discount liability of R47,6 billion is reasonable. It was calculated on a best estimate basis. The actual payments
will dier from the estimated liability because the estimate was based on certain variables and assumptions. However, considering that the
same method resulted in stable estimates over the last four years, the RAF is condent that variables and assumptions could be considered
to be a reasonable estimate. The sensitivity of some of the assumptions is shown below:
Allocation of Number of Claims Falling into Dierent Groups.
The Group C3 - Injury claims with General Damages exceeding R125,000, has the highest expected average amounts while the Group A - Nil
Claims has no payments. If 10% of the assumed outstanding Group A claims are reallocated to Group C3, the estimated discounted liability
would increase by 7.5% from R47,6 billion to R51,2 billion.
Average Amounts
If actual average amounts would be 5% higher than the estimated average amounts, the estimated discounted liability would simply
increase by 5% from R47,6 billion to R50 billion.
An interest rate of 3% above the price ination was used to estimate the discounted liability. Claims ination was assumed to be 2% above
price ination, i.e. 1% below the discount rate. Results are not as sensitive to the nominal claims ination and nominal discount rate as they
are to the claims ination relative to the discount rate. If actual claims ination is equal to the discount rate, the estimated discounted liability
would increase by 4%, from R47,6 billion to R49,5 billion.
It should be noted that the above sensitivity test showed only the estimated increase in liability if actual experience is worse than expected.
The percentage decrease in liability would be similar if actual experience is better than expected.
Claims Ination and Discounting
Undertakings
Considering historical payments, it seems as if Undertaking payments in respect of accidents up to 2003 have stabilised. For these accident
years, we estimated the liability for future payments by multiplying the annual amounts paid (taken as amounts paid during the 2011
nancial year, in March 2011 monetary terms) with an annuity factor of 25 (based on the average age of claimants receiving these benets
and a net discount rate of 0% per year). The result, therefore, shows future payments in current monetary terms.
For accident years 2001 to 2003 current annual payments ranged between R821 and R881 per estimated ultimate number of Group C1 and
C3 claims (average R850). For pre-Amendment Act claims in respect of accident years 2004 to 2009, it was assumed that ultimate annual
Undertaking payments would be a similar factor (R850) of ultimate Group C1 and Group C3 claims. For post-Amendment Act claims it was
assumed that ultimate Undertaking payments would have been equal to R637,50 (75% of R850, to allow for assumed saving of 25% due to
the introduced medical taris following the Amendment Act) of assumed ultimate Group C1 and Group C3 claims.
The total liability in respect of Undertakings was estimated as R3,164 million in March 2011 monetary terms. This is lower than previous
estimates due to a reduction in annual undertaking payments in real terms.
14. Other Provisions

Fuel/Diesel Refund
In terms of legislation, the RAF has an obligation to refund 72 cents per litre (2010/11) 64 cents per litre (2009/10) in the RAF Fuel Levy to
dierent economic sectors. The provision is calculated based on actual claims from these sectors processed through SARS. The provision is
settled on a quarterly basis with the provision at year end being based on the last quarters results. These results are generally nalised after
year end after all rebates has been taken into account.
Opening balance
2011
2010
R000
R000
274,519
209,535
Increase in the provision charged to income
1,189,044
1,091,754
Provision utilised
(1,175,574)
(1,026,770)
287,989
274,519
Total
15. Post-Retirement Employee Benefits

15.1 Post-Employment Pension Benefit
The RAF operates a pension fund, which provides benets on both dened benet and dened contribution plans for permanent sta.
This fund is administered on behalf of the RAF by pension fund administrators and is governed by the Pension Funds Act, 1956 (Act No. 24
of 1956).
The Pension Funds Act requires a statutory actuarial valuation every three years.
The dened benet plan fund was actuarially valued using the projected unit credit method as at 31 March 2011. The valuation revealed
that the assets of the fund represent 173.8% (31 March 2010 179.6%) of the liabilities. This is after minimum withdrawal values have been
provided for in terms of the Pension Funds Second Amendment Act, 2001 for existing members from a date 12 months after the surplus
apportionment date (31 March 2003).
The RAF has carried out a surplus apportionment exercise. As the surplus apportionment has not yet been approved by the FSB, the RAF has
not recognised an asset in respect of the surplus.
The assets of the plan mainly comprise investments. The investments are broadly in: equities (46.2%), cash (17.6%), bonds (17.2%) and
international (19.0%).
The average remaining working lives of employees on the plan is 13 years and actuarial gains and losses exceeding the 10% corridor have
been recognised over this period.
2011
2010
R000
R000
Sta Costs
Dened Benet Plan Expense
Current service costs
173
213
Interest costs
3,721
3,172
Expected return on plan assets
(7,426)
(5,581)
Actuarial loss recognised in the current year
4,055
(2,526)
Movement in unrecognised post-employment benet asset
170
8,380
Total expensed in the Statement of Financial Performance
693
3,658
The amount included in the Statement of Financial Position arising from the Dened Benet Plan is as follows:
Present value of plan liability: End of year
(44,777)
(42,063)
Fair value of plan assets: End of year
77,839
75,544
3,113
3,113
(36,175)
(36,594)
Amount charged to the statement of nancial performance
(693)
(3,658)
Contributions received by the fund
693
3,658
Unrecognised actuarial loss: End of year

Unrecognised post-employment benet asset
Movements in the net asset/(liability) recognised in the Statement of Financial Position
Closing Balance
Actual Return on Plan Assets
Expected return on plan assets
7,426
5,581
Actuarial gain/(loss) on plan assets
(1,971)
12,974
Actual Return on Plan Assets
5,455
18,555
Discount rate pre-retirement
9.15 %
9.00 %
Price ination
6.29 %
5.71 %
Salary escalation
8.29 %
7.71 %
Pension increases
4.54 %
4.00 %
Post-retirement rate
4.54 %
4.98 %
10.04 %
9.46 %
SA56-65 tables
Nil
Expected return on fund assets

Pre-retirement mortality
The principal actuarial assumptions used for accounting purposes were as follows:
Other Assumptions
Post-retirement Mortality
PA(90) rated down by one (1) year
Proportions Married
100% of all future pensioners married at retirement, husband three (3) years older than the wife.
Expected Return on Assets
A blended average of the projected long-term real returns for the various asset classes, with allowance being made for price ination, fees
and tax is used to determine the expected return on assets.
2011
2010
R000
Present value of the obligation
R000
(44,777)
(42,063)
Fair value of plan assets
77,839
75,544
Surplus
33,062
33,481
Expected contributions to the plan during the subsequent 2012 nancial period: R53,437.
The next actuarial valuation for the dened benet plan is due on 31 March 2012.
15.2 Post-Employment Medical Obligations

The RAF operates a post-employment medical benet scheme that covers employees who were appointed prior to 1 May 1998.
The latest valuation of the RAFs liability in respect of post-retirement benets for the nancial year-end was performed on 31 March 2011
and it will be valued at annual intervals thereafter.
Twenty-eight (28) current pensioners qualify for this benet and approximately 10% of employees are prospectively entitled to this benet.
The initial liability and future increases thereof are charged to surplus or decit.
No plan assets are shown as the medical benets are unfunded.
Present value of plan liability: End of year

Unrecognised actuarial (gain): End of year
Closing Net (Liability)
(33,802)
(26,606)
2,194
(1,517)
(31,608)
(28,123)
(28,123)
(24,842)
426
385
(3,911)
(3,666)
(31,608)
(28,123)
Movements in the net asset/(liability) recognised in the Statement of Financial Position

Net past service (liability): Beginning of the year
Contributions received by the Fund
Amount charged to the Statement of Financial Performance
Closing Net (Liability)
2011
2010
R000
R000
Current service cost
1,488
1,460
Interest cost
2,423
2,206
Total Expensed in the Statement of Financial Performance
3,911
3,666
Discount rate
9.15%
9.18%
Healthcare cost ination
8.15%
7.71%
Real discount rate
0.92%
1.36%
Normal retirement age
60.0
60.0
Expected average retirement age
59.4
59.4
3 years
3 years
100.00%
100.00%
80.00%
80.00%
The principal actuarial assumptions used for accounting purposes were as follows:
Spouse age gap

Continuation at retirement
Proportion married at retirement
Other Assumptions
Mortality: Pre-expected Retirement Age
SA1985-90 light
Mortality: Post-expected Retirement Age
PA(90)-1
Expected Return on Assets
There are currently no plan assets set aside in respect of the post-employment healthcare liability. Therefore, no assumption specic to the
assets have been made.
Present Value of the Obligation
The value of the accrued contractual liability as at 31 March is as follows:
33,802
26,606
Sensitivity Analysis
Assumption
Healthcare cost ination

Mortality
Resignation rate
Variation
% Change in Pastservice Contractual

Liability
% Change in Service
Cost plus Interest Cost
+1%
+19.9%
+21.1%
-1%
-15.7%
-16.6%
+1%
-16.6%
-17.6%
-1%
+21.4%
+22.8%
+1%
-6.5%
-7.4%
-1%
+7.5%
+8.5%
Expected contributions to the plan during the subsequent 2012 nancial period: R539 000
2011
2010
R000
R000
16. Net Fuel Levies

Gross fuel levies
Less: diesel rebate
Total
15,663,102
13,657,844
(1,189,044)
(1,091,754)
14,474,058
12,566,090
17. Investment Income

Interest received from money market investments
Interest received from rent-a-captive
Interest received - other
36,259
44,280
3,479
4,046
22
21
39,760
48,347
Recoveries
153
1,097
Foreign exchange gains
286
Total
18. Other Income
Prot on sale of property, plant and equipment
1,830
23
Total
2,269
1,120
19. Reinsurance Revenue

Revenue received in terms of high-value claims insured by
reinsurance companies and commutation oers received
from same
10,135
8,060
20. Claims Expenditure

Claims paid
Claims nalised and not paid
Reversal of claims nalised not paid
Net increase in claims provision
Total
12,785,919
11,369,996
460,197
304,970
(304,970)
(276,409)
2,281,052
2,865,643
15,222,198
14,264,200
27,690
27,890
21. Reinsurance Premiums
Paid to re-insurers during the year
Note(s)
2011
2010
R000
R000
22. Employee-related Costs

Total sta costs
620,803
594,935
693
3,658
49,261
41,090
3,911
3,666
Included in sta costs are:

Contributions to dened benet plan
15
Contibutions to dened contribution plan

Contributions to post retirement healthcare benet
15
As at 31 March 2011, 1 872 sta members were employed by the

RAF (2010: 1 960).
23. Administrative Expenses

Administrative expenses include, among other, the following:
External audit fees
4,852
3,927
Directors fees
3,522
3,261
Directors expenses
1,881
1,440
38,301
32,680
31
230
Operating lease rental buildings*

Operating lease rental equipment
Loss on sale of property, plant and equipment
876
175,844
167,627
224,431
210,041
7,054
30,682
Computer services
53,146
28,968
Telephone, stationery and postage
20,696
19,652
Operating costs oces
27,587
27,143
Subsistence and transport
12,573
13,072
Maintenance
15,333
9,078
Marketing
9,177
10,848
Forensic and fraud combat services
9,028
7,999
Legal fees on corporate matters
4,569
3,821
Other expenses
Total
Included in other expenses are:
Professional services
varying between one to ve years and are subject to escalation of 8% to 10% per annum.
* The RAF occupies a number of oce premises which are under long-term operating leases. These lease agreements range over periods
2011
2010
R000
R000
24. Finance Costs

Foreign exchange losses
4,465
16,268
(1)
38,820
24,489
43,288
40,756
Buildings
3,246
3,390
Motor vehicles
2,132
1,032
Oce equipment
3,202
2,562
Oce furniture
1,471
1,164
17,241
11,353
Interest charged by creditors

Interest charged on claims
25. Depreciation and Amortisation
Computer equipment
4,766
1,840
Total Depreciation
32,058
21,341
Intangible assets
27,497
17,740
Total Depreciation and Amortisation
59,555
39,081
26. Fruitless and Wasteful Expenditure

The following items of potential fruitless expenditure are being disclosed:
Interest and sheri costs
26,267
23,207
Interest and sheri costs As per the denition of the PFMA, fruitless and wasteful expenditure means expenditure which was made in
vain and could have been avoided had reasonable care been exercised. The amounts listed are costs incurred in the settlement process of
claims inuenced by the external legal processes and time limits legally enforced on the RAF in the settlement of claims. A portion of the
mentioned costs could not be regarded as fruitless and wasteful as in certain instances, it is physically impossible to comply with the time
limits that are in place, i.e. where a writ can be issued against the RAF immediately after a claimant legal cost bill has been taxed. It must be
highlighted that the RAF operates in a highly litigious environment where legal processes place huge demands on its operations.
Disciplinary action has been taken against sta members as a result of negligence resulting in the payment of sheri and interest cost as
well as duplicate payments. To date, 55 people have been disciplined, resulting in 32 written warnings and 23 verbal warnings being issued.
27. Financial Misconduct Expenditure

During the year no employees were found guilty of nancial misconduct. There is one criminal case currently pending resulting from an
incident of alleged nancial misconduct during the 2008/09 nancial year.
2011
2010
R000
R000
28. Cash Generated from (used in) Operations

Decit
(1,671,743)
(2,493,505)
Depreciation and amortisation
59,555
39,081
Decit/(surplus) on sale of assets
(1,830)
853
Increase in provision for employee benets
3,485
3,281
Increase in provision for outstanding claims
2,281,052
2,865,643
13,470
64,985
(3,115)
143
433
(32,906)
(3,457)
(200,364)
(831,858)
75,043
103,335
(59,781)
525,905
(314,105)
Adjustments for:
(Decrease)/Increase in provisions
Eect of discounting of long-term debtors
Changes in Working Capital:
Consumable stock
Trade and other receivables from exchange transactions
Transfers receivables from fuel levies
Deferred government grant income
29. Related Parties

The RAF is an entity created by statute with the Minister of Transport being the Executive Authority representing the government of
South Africa. The RAF is a Schedule 3A Public Entity in terms of the PFMA. The related party disclosures are in terms of the requirements of
IPSAS 20. The related parties of the RAF consist mainly of departments, state-owned entities (SOEs), other public entities in the national
sphere of government and key Management personnel of the RAF, or its Executive Authority and close family members of related parties.
The list of public entities in the national sphere of government is provided by National Treasury on its website, www.treasury.gov.za.
National Treasury also provides the names of subsidiaries of public entities.
The following transactions were carried out with related parties:
Government grant not utilised at the beginning of the year
59,781
Government grant utilised during year
(59,781)
Amounts transferred to the following year
Although the RAF transacted with other public entities within the national sphere of government, none of the related parties identied
inuenced or was inuenced by the RAF during the reporting period and therefore no related party transactions with other entities in the
national sphere of government are disclosed.
The following transactions were concluded with key Management of the RAF in terms of employment contracts entered into with the RAF.
Key Management compensation
15,969
15,591
Less - Amounts recognised in the nancial year
30. Board/Advisory Committee and Executive Members Emoluments

Non-executive Directors
The Executive Authority approves the remunertion of the Board. Remuneration of Non-executive Directors is benchmarked agains the norms
for organisations of similar size and in line with the guidelines issued by the Executive Authority. Non-executive Directors receive a xed
monthly remuneration.
Executive Remuneration
The Chief Executive Ocer makes recommendations to the the Board concerning the renuneration of Executives and approves the
remuneration of EXCO members including that of the Chief Executive Ocer. Factors inuencing the remuneration of the EXCO members
include level of skill, experience and contribution to organisational performance.
The RAF introduced performance-based remuneration for its Management sta by linking annual salary increases to individual contributions.
Management receives an annual increase based on a combination of CPI and individual performance. The organisation conducts an annual
salary survey/benchmark to ensure that Management rewards and remuneration are market-related and kept at levels that will assist the RAF
in retaining and attracting key leadership skills. The Fund aims to remunerate in line with the 50th percentile (median) of the market to recruit
and retain the Management team to lead the organisation. Over and above the basic salary, sta members receive a performance incentive
as a percentage of their total cost.
All EXCO members are are on a three (3) year xed contract of employment.
Executive
Management
Term
Salary
Performance
Bonus
Pension
Contribution
R000
R000
R000
Medical
Total
Contributions Employment
Cost 2011
R000
R000
JRD Modise
Chief
Executive
Officer
01-Apr-10 to
31-Mar-11
4,172
2,068
417
51
6,708
A Gernandt
Chief
Operations
Officer
01-Apr-10 to
31-Mar-11
1,693
342
192
48
2,275
Executive:
01-Apr-10 to
Marketing and 31-Mar-11
Comms
1,104
229
107
1,440
M Mvelase
DJ Hlabangane
Oce Held
Executive:
Human
Resources
01-Apr-10 to
31-Mar-11
994
215
99
41
1,349
SS Ramessur
Chief
Information
Officer
01-Apr-10 to
31-Mar-11
1,160
255
136
49
1,600
LM Steele
Executive:
Legal and
Compliance
01-Apr-10 to
31-Mar-11
1,075
189
110
1,374
AAA Seedat
Acting Chief
Financial
Officer
01-Apr-10 to
31-Mar-11
814
273
87
49
1,223
11,012
3,571
1,148
238
15,969
Non-Executive Board/Advisory Committee Members

Board Members
Oce Held
Term
Annual Fee 2011

R000
N Bhengu (Chairperson)
Board Member
01-Oct-10 to 31-Mar-11
328
V Mahlangu (Vice Chairperson)
Board Member
01-Oct-10 to 31-Mar-11
290
J Masekoameng
Board Member
01-Oct-10 to 31-Mar-11
219
D Qocha
Board Member
01-Oct-10 to 31-Mar-11
219
Z Qunta
Board Member
01-Oct-10 to 31-Mar-11
219
M Ralefatane
Board Member
01-Oct-10 to 31-Mar-11
241
D Smith
Board Member
01-Oct-10 to 31-Mar-11
241
A Steyn
Board Member
01-Oct-10 to 31-Mar-11
219
T Moyo
Board Member
01-Oct-10 to 31-Mar-11
241
Total
2,217
Oce Held
Term
Annual Fee 2011

R000
V Mahlangu (Chairperson)
Advisory Committee
01-Apr-10 to 30-Sep-10
290
T Moyo
Advisory Committee
01-Apr-10 to 30-Sep-10
241
CJB Greeff
Advisory Committee
01-Apr-10 to 30-Sep-10
240
AKA Dasoo
Advisory Committee
01-Apr-10 to 30-Sep-10
237
HG Motau
Advisory Committee
01-Apr-10 to 30-Sep-10
38
SA Msibi
Advisory Committee
01-Apr-10 to 30-Sep-10
240
KE Moloto-Stofile
Advisory Committee
01-Apr-10 to 30-Sep-10
20
1,306
Summary
Total Employment Cost

2011
Total Employment Cost

2010
R000
R000
Key Management
Executive Management
Non-executive Board/Advisory Committee Members
15,969
15,591
3,523
3,261
31. Taxation
The RAF is exempt from taxation in terms of the provision of section 10(1)(cA)(i) of the Income Tax Act, 1962 (Act No. 58 of 1962) and section
16 of the RAF Act, 1996 (Act No. 56 of 1996).
Overview
The RAF is exposed to a range of nancial risks through its nancial assets, nancial liabilities, reinsurance assets and insurance liabilities.
In particular, the key nancial risk is that the proceeds from its nancial assets are not sucient to fund the obligations arising from its
insurance contracts. The most important components of nancial risks are credit risk, liquidity risk and market risk (which comprises interest
rate risk, currency risk and other price risk). The risks that the RAF primarily faces due to the nature of its assets and liabilities are liquidity risk,
interest rate risk and currency risk.
32. Risk Management
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, that will aect the RAFs income or
the value of its holdings of nancial instruments. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return on investment.
The RAFs activities expose it primarily to the nancial risks of changes in foreign exchange rates for formal contracts that it has entered into.
The RAF has entered into a contract with a foreign company to deliver a claims management information technology system. This service
and some of the related hardware are subject to foreign exchange uctuations that are covered by forward currency contracts.
The RAF is also exposed to foreign exchange uctuations where claims from foreigners have been lodged, and damages for future medical
expenses and loss of earnings or support are claimed in a foreign currency. When such claims are settled, the RAF pays the compensation
as soon as possible after settlement date so as to minimise the risk of foreign exchange uctuations.
Liquidity Risk
Liquidity risk is the risk that the RAF will not be able to meet its nancial obligations as they fall due. Ultimate responsibility for liquidity risk
management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management
of the RAFs short-, medium- and long-term funding and liquidity management requirements.
The RAF manages liquidity risk by maintaining sucient cash reserves and by matching nancial assets and liabilities as far as is practical.
Reinsurance is also used to manage liquidity risk.
The following table analyses the entitys nancial liabilities and net-settled derivative nancial liabilities into relevant maturity groupings
based on the remaining period at the Statement of Financial Position to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash ows. Balances due within 12 months equal their carrying balances as the impact of discounting is
not signicant.
At 31 March 2011
On Demand
1-3 months
1-5 years
Total
R000
R000
R000
R000
(66,363)
(66,363)
Claims creditors
(460,197)
(460,197)
5.55%
1,137,636
Cell captive insurance
6.15%
106,227
At 31 March 2010
Weighted
Average
Eective Interest
Rate
Weighted
Average
Eective Interest
Rate
1,137,636
-
106,227
On Demand
1-3 months
1-5 years
Total
R000
R000
R000
R000
(149,981)
(149,981)
Claims creditors
(304,970)
(304,970)
6.94%
655,166
655,166
7.43%
62,529
62,529
Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash ows of a nancial instrument will uctuate because of changes in market
interest rates. The RAF is exposed to interest rate risk as it invests funds in the money market at oating interest rates. As at 31 March 2011,
no derivative nancial instruments were used to manage the RAFs exposure to interest rate risk.
All liquid funds are invested with registered South African banking institutions with maturities of 90 days or less, thereby minimising interest
rate risk.
Interest rates of interest-bearing debts are linked to the prime overdraft rate.
The interest rate applicable on study loans and bursaries is equivalent to the ocial rate of interest for determining a fringe benet as
approved by the Minister of Finance from time to time. The interest rate applicable to the payments of interest on capital and legal costs is
determined by the Prescribed Rate of Interest Act No. 55 of 1975.
Interest Rate Risk Sensitivity Analysis
The sensitivity analysis for interest rate risk illustrates how changes in the fair value or future cash ows of a nancial instrument will uctuate
because of changes in market interest rates at the reporting date. For nancial instruments and insurance contracts, the sensitivity is solely
associated with the former as the carrying amounts of the latter are not directly aected by changes in the interest rate.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the RAFs decit for the year ended
31 March 2011 would decrease/(increase) by R3,6 million (2010: decrease/(increase) by R2,7 million). This is mainly attributable to the RAFs
exposure to interest rates on its oating rate investments. The sensitivity analysis has been determined based on the exposure to interest
rates for the RAFs non-derivative instruments at the nancial reporting date. The analysis was prepared assuming that the investments at
year-end were constant throughout the year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents managements assessment of the reasonably possible change in interest rates.
Credit Risk
The RAF has exposure to credit risk, which is the risk of nancial loss to the RAF if a counterparty to a nancial instrument fails to meet its
contractual obligations. Key areas where the RAF is exposed to credit risk are:
Reinsurers share of insurance liabilities;
Amounts due from reinsurers in respect of claims already paid;
Amounts due with respect to claims debtors
Amounts due with respect to study loans and bursaries (this risk is minimal as the amounts are immaterial); and
The ultimate amount due from the self-funding claims re-insurance policy (note 6).
The nature of the RAFs exposure to credit risk, as well as the policies and processes for managing the credit risk, has not changed signicantly
from the prior period.
Potential concentrations of credit risk consist mainly of short-term cash. Money market instrument operations are entered into only with well
established and reputable nancial institutions.
Monthly installments are deducted directly from payroll in relation to study loans.
The Cell Captive Insurance includes an amount set aside as a self-funding claims reinsurance policy. This policy will be utilised to fund the rst
R100 million of the retention amount of the claims reinsurance policy in the event of catastrophic claims being instituted against the RAF. The
deposit amount represents the balance of the special experience account, an account the insurer maintains for the purposes of recording this
policy. The insurer is a well established and reputable nancial institution.
Under the terms of reinsurance agreements, reinsurers agree to reimburse the ceded amount in the event that a gross claim is paid. The RAF,
however, remains liable to its claimants regardless of whether the reinsurer meets the obligations it has assumed. Consequently, the RAF is
exposed to credit risk.
It is RAFs policy to grant bursaries and study loans to employees in the elds of study that are relevant only to the RAFs line of business.
The RAF monitors the nancial condition of reinsurers on an ongoing basis and reviews its reinsurance arrangements periodically.
The carrying amounts of nancial assets and reinsurance assets included in the statement of nancial position represent the RAFs exposure
to credit risk in relation to these assets. At 31 March 2011, the RAF did not consider there to be a signicant concentration of credit risk which
had not been adequately provided for.
Credit Risk Analysis 2011
Counterparty Categories
Recoverable
Doubtful
R000
R000
Fuel levy debtors
Impaired
R000
2,950,173
Sundry debtors
3,080
636
Claims debtors
13,227
Other receivables
22,012
1,137,636

Indemnity policy
106,227
4,232,355
636
Credit Risk Analysis 2010

Counterparty Categories
Recoverable
Doubtful
Impaired
R000
R000
R000
Fuel levy debtors
2,749,806
893
Sundry debtors
3,124
636
Claims debtors
26,780
Other receivables
Indemnity policy
19,208
655,166
62,529
3,516,613
1,529
Currency Risk
The nancial items that are exposed to currency risk at the reporting date are claims that have not been paid to foreign claimants yet, as well
as the exposure on the acquisition of intangible assets in foreign currencies. The engaging of forward cover is considered on a case-by-case
basis if the period between making an oer and nal payment is material. As at 31 March 2011, no derivative nancial instruments were used
to manage the RAFs exposure to foreign currency risk. Only xed term forward cover contracts were utilised.
The carrying amounts of RAFs outstanding foreign currency denominated claims are as follows:
2011
2010
000
000
USD
13,411
93
GBP
1,757
14,052
Euro
2,282
2,282
JPY
The carrying amount of the RAFs outstanding foreign currency related contract with the foreign company is as follows:
Euro
2,112
The following table details the RAFs sensitivity to a 10% increase and decrease in the South African Rand against the relevant foreign
currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key Management and represents Managements
assessment of the reasonably possible change in foreign exchange rates.
Foreign Currency Sensitivity

Analysis
USD Impact
GBP Impact
Euro Impact
All Foreign
Currencies
R000
R000
R000
R000
2011
9,070
1,904
2,188
13,162
2010
68
15,622
2,089
17,779
The sensitivity analysis includes only outstanding foreign currency denominated claims at reporting date and adjusts their translation at the
period end for a 10% change in foreign currency rates. The gures above indicate an increase in surplus or decit where the presentation
currency strengthens 10% against the relevant currency. For a 10% weakening of the presentation currency against the relevant currency,
there would be an equal and opposite impact on the surplus or decit and the balances above would be negative.
33. Insurance Risk Management

Overview
The RAF accepts insurance risk as it is mandated by legislation to compensate victims of road accidents for injuries suered as a result of
motor vehicle accidents. The RAF is exposed to uncertainty surrounding the timing, frequency and severity of claims under these contracts.
This note presents information about the RAFs exposure to insurance risk and the RAFs objectives, policies and processes for managing
this risk.
The RAF has developed, implemented and maintained a sound and prudent insurance Risk Management Strategy that encompasses all
aspects of the RAFs operations, including the reinsurance risk retention limits. Key aspects of the processes established to mitigate insurance
risk include:
The maintenance and use of sophisticated management information systems, which provide reliable and up-to-date data on the risks to
which the business is exposed at any point in time;
Actuarial models, using information derived from the management information systems are used to monitor claims patterns. Past
experience and statistical methods are used as part of the process;
Catastrophic accidents are modelled and the RAFs exposures are protected by arranging reinsurance to limit the losses arising from an
individual event. The retention and limits are approved by the RAFs Board; and
Only reinsurers with credit ratings equal to AA, or in excess of a minimum level determined by Management are accepted as participants
in the RAFs reinsurance agreements.
Reinsurance Income
The RAF enters into reinsurance treaties with major international reinsurance companies to cover catastrophic accidents.
The RAF recovered R10 134 641 (2010: R8 060 203) from reinsurers during the current nancial year in respect of claims settled by the RAF.
The number of claims by foreign visitors to South Africa continues to rise as the volume of visitors to the country increases. As the bulk of
these claims are paid in the applicable foreign currency and these claimants also enjoy unlimited benets, foreigners claims form a large
proportion of high-value claims. At 31 March 2011, 25% (2010: 32%) of the value of the provision for outstanding claims in excess of R5 million
was made up of claims by foreign nationals.
It is important to note, however, that the actual claimed amount often exceeds the estimated value of the claim.
Claims Reinsurance
In terms of section 4(1)(d) of the RAF Act, 1996 (Act No. 56 of 1996) the RAF may procure reinsurance for any risk undertaken in accordance
with this Act.
Foreign Claims
Simultaneously, section 51(1)(a)(i) of the PFMA states a condition that a public entity must ensure that it has and maintains eective, ecient
and transparent systems of nancial and risk management.
The RAF, each year through its reinsurance brokers, procures reinsurance cover and negotiates reinsurance treaties for the RAF. The RAFs
reinsurance treaties are all excess of loss agreements. Therefore, the reinsurers indemnify the RAF for that part of the ultimate net loss (total
amount paid) which exceeds the retention amount, as per the relevant treaty subject to an indexation clause as contained in the treaties.
The RAF will accept terms provided only by reinsurers with acceptable ratings. The ratings are done by Standard & Poor and AM & Best which
are international quality-rating companies. The RAF currently places its limited reinsurance cover with a South African company, AIG SA, and
unlimited cover with reinsurers based in London. The current limited cover has a set retention level of R100 million and in terms of the treaty
the reinsurers liability is limited to pay up to R300 million per any one loss occurrence event, on account of each and every loss occurrence.
The unlimited cover placed in the London reinsurance market provides for cover in excess of R400 million per any loss occurrence event, on
account of each and every loss occurrence.
The RAF must report to reinsurers all losses (all claims arising from an accident) likely to exceed the notication amounts as specied in the
respective reinsurance treaties.
In terms of the reinsurance treaties, the reinsurers indemnify the RAF for that part of the ultimate net loss (total amount paid) which exceeds
the retention amounts as specied in the treaties, subject to the indexation clause.
The following table illustrates the notication amounts and retention amounts for the respective annual reinsurance treaties:
Accident Year
Notication Amount
(Rand)
Retention Amount
(Rand)
1984/85
500,000
1,500,000
1985/86
500,000
1,500,000
1986/87
3,000,000
5,000,000
1987/88
3,000,000
5,000,000
1988/89
1,000,000
2,500,000
1989/90
1,000,000
3,000,000
1990/91
1,000,000
3,000,000
1991/92
1,000,000
4,000,000
1992/93
1,000,000
4,500,000
1993/94
2,000,000
4,500,000
1994/95
2,000,000
5,000,000
1995/96
2,000,000
5,000,000
1996/97
,2,000,000
10,000,000
1997/98
5,000,000
10,000,000
1998/99
5,000,000
10,000,000
Accident Year
Notication Amount
(Rand)
1999/2000
Retention Amount
(Rand)
7,500,000
15,000,000
2000/01
15,000,000
20,000,000
2001/02
15,000,000
20,000,000
2002/03
15,000,000
50,000,000
2003/04
15,000,000
50,000,000
2004/05
15,000,000
50,000,000
2005/06
15,000,000
100,000,000
2006/07
15,000,000
100,000,000
2007/08
15,000,000
100,000,000
2008/09
15,000,000
100,000,000
2009/10
15,000,000
100,000,000
2010/11
15,000,000
100,000,000
The RAF monitors its reinsurance risk on a quarterly basis by reviewing and updating reports to reinsurers which indicates the current status
with regard to matters reported to reinsurers. Furthermore, regular reports are run against the RAFs database to identify potential reportable
matters, as a proactive measure.
Directors and Ocers Liability Insurance
The RAF manages the risks that the Directors and Ocers of the RAF are exposed to, by way of Directors and Ocers liability.
The RAFs current Directors and Ocers insurance cover is placed with two underwriters.
The total limit of indemnity per claim is R250 million and to all in the aggregate.
The net total annual premium for this cover is R2,7 million.
2011
2010
R000
R000
34. Lease Commitments

The RAF leases various outlets and oces under non-cancellable operating lease agreements. The leases have varying terms, escalation
clauses and renewal rights.
Up to one year
39,612
32,257
Two to ve years
10,655
26,424
Total Minimum Lease Payments
50,267
58,681
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
35. Contingencies
The RAF has contingent liabilities in respect of the following:
Guarantees
The RAF signed the following sureties prior to 31 March 2011:
Description
Purpose
SA Mutual Life Assurance Society
Oce accommodation Durban
Rycklo Beleggings
Oce accommodation
Johannesburg
Gensec Property Services

Apexhi Properties Limited
2011
2010
R000
R000
300
300
3,950
3,950
Oce accommodation Pretoria
19
19
Oce accommodation Centurion
82
82
South African Post Oce Limited
Oce accommodation Port Elizabeth
28
28
Paramount Property Fund Ltd
Oce accommodation Forensics

Cape Town
78
78
Changing Tides (Pty) Ltd
Oce accommodation Polokwane
15
15
Chessboard Trade and Invest 79 (Pty) Ltd
Oce accommodation East London
283
283
Lichcrete CC
Oce accommodation Lichtenburg
Joburg Skyscraper (Pty) Ltd
Oce accommodation
Johannesburg
1,402
1,402
Quantum Leap Investments 94 (Pty) Ltd
Oce accommodation Newcastle
ZIG ZAG Properties (Pty) Ltd
Oce accommodation Port Elizabeth
18
18
Faerie Glen Waterpark (Pty) Ltd
Oce accommodation Highveld

Centurion
969
969
Card facilities (eet cards)
774
774
Guarantee for Fineos FEC
23,190
7,926
31,116
Total
The RAF has ceded to ABSA Bank Limited a special deposit account with a balance of R21,563,769 as at 31 March 2011 as security for the
guarantees issued, facilities and loans granted by ABSA Bank Limited on behalf of the RAF.
Security Furnished Pending Finalisation of Legal Proceedings
According to current legal processes and court rules, the RAF has furnished security to the amount of R158,516 in respect of legal proceedings
pending.
The amount has been invested in terms of section 78(2A) of the Attorneys Act (1979) in interest-bearing term deposit investment instruments
at registered banking institutions for the benet of the RAF.
Other Contingent Liabilities
The provision for outstanding claims is calculated by the actuaries after taking into consideration relevant external litigation and other costs
in order to settle the claims.
Because the system of compensation administered by the RAF is based on the law of delict requiring claimants to prove both fault and their
damages, the RAF is continuously engaged in litigation. Whilst the provision calculated by the actuaries attempts to cover all these litigated
claims, the inherent uncertainty of the outcome means that there may be additional contingent liabilities.
2011
2010
R000
R000
In addition, the RAF is involved in other commercial and labour-related litigious matters. The quantum of this exposure is not disclosed as
these matters are sub judice.
36. Prior-year Error

Certain comparative gures in the Cash Flow Statement for the prior year have been reclassied.
The comparative gures in the Cash Flow Statement relating to receipts and payments included in net cash ows from operating activities
have been reclassied as a result of an allocation error in the prior year.
The eects of the reclassication are as follows:
Receipts
Fuel levies
Grants received
Investment income
Other income
(1)
(59,781)
5,826
63,612
Payments
Claims expenditure
Other expenditure
1
9,655
The net eect of this reclassication on the net cash ows from operating activities is zero.
37. Going Concern

We draw attention to the fact that at 31 March 2011, the entity had an accumulated decit of R44,080,475 and that the entitys total liabilities
exceed its assets by R44,014,989.
The going concern basis was used in preparing the Annual Financial Statements. This basis presumes that funds will be available to nance
future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the
ordinary course of business. In the past, the RAF received nancial support from National Treasury in the form of cash injections over and
above the normal fuel levy income as and when it faced severe liquidity problems. During the 2006 Financial Year, it received a cash injection
of R2,502 billion and in the 2009 Financial Year it received R2,550 billion. The Board and Management are committed to implementing plans
to contain the growing decit caused by the rising provision of outstanding claims.
38.
2011
2010
R000
R000
Irregular Expenditure
Irregular expenditure Current year
14,529
Non-compliance to supply chain management practices resulted in irregular expenditure being incurred.
39. Reconciliation between Budget and Statement of Financial Performance

Reconciliation of budget surplus/decit with the surplus/decit in the Statement of Financial Performance:
Net decit per the Statement of Financial pPerformance
(1,671,743)
(2,493,505)
1,658
3,115
Adjusted for:
Fair value adjustments
Prot/(Loss) on the sale of assets
Fruitless expenditure
Additional net fuel levies received
Additional other income received
(853)
23,207
(1,344,908)
(143,615)
(2,269)
(64,325)
Additional investment income received
(17,409)
Additional reinsurance revenue and recoveries
(10,135)
Higher/(Lower) claims expenditure than expected
5,558,801
(3,153,077)
Savings in other expenses
(1,200,708)
(336,117)
1,846
Additional reinsurance premium paid

Net Surplus (Decit) per Approved Budget
1,830
26,267
1,343,230
(6,165,170)
Additional Information
SECTION 5
SECTION 5
additional information
Annexure I
Global Reporting Initiative (GRI) Index
An index to the Road Accident Fund Annual Report 2011 based on the Global Reporting Initiative (GRI) sustainability reporting guideline
criteria, as provided in the table below.
Description
Reference in the Annual Report
Strategy and
Analysis
Statement of senior decision-makers,

description of impacts, risks and
opportunities
Messages from the Chairperson

and CEO
Organisational
Prole
Organisational profile, details and scale

of organisation, ownership, significant
changes introduced
RAF at a Glance
RAF Locations Contact Information
Governing Structure
and CEO
Legal Framework
Report
Parameters
Governance,
Commitments
and
Engagements
Report profile, scope and boundaries
Governance, commitments to external

initiatives and stakeholder engagement
Page
37
5
Annexure III/Cover
5
37
71
71
Scope of the Report

RAF at a Glance
Turnaround Strategy
Historical Review
and CEO
Leadership
Corporate Governance
Legal Framework
Performance against Objectives
Governance of Sustainability
37
46
53
71
71
114
138
141
153
Vision, Mission and Core Values

Turnaround Strategy
Historical Review
Leadership
Corporate Governance
Stakeholder Engagement
7/8
9
15
46
53
71
114
141
142
1
5
9
15
GRI Reference
GRI Reference
Description
Reference in the Annual Report
Page
Management
Approach
and Key
Performance
Indicators
Economic performance, service offering,

role and impact on SA economy, human
resources
Historical Review
Human Capital
Performance against Objectives
15
71
114
120
138
141
153
Environmental
Framework
Environmental impact
141
Social
Performance
Indicators,
Labour
Practices and
Decent work
Employment, labour /management

relations, occupational health and safety,
training and skills
Human Capital
120
Annexure II
ACC
Accident Compensation Corporation (New Zealand)
AMA
American Medical Association
Amendment Act
RAF Amendment Act, 2005 (Act No. 10 of 2005)
ASB
Accounting Standards Board
AsgiSA
Accelerated and Shared Growth Initiative for South Africa
BAU
Benefits Administration Unit
BEE
Black Economic Empowerment
C-BRTA
Cross-Border Road Transport Agency
CA (SA)
Chartered Accountant (South Africa)
CAF
Confederation of African Football
CEF
Central Energy Fund
CEO
Chief Executive Officer
CIO
Chief Information Officer
CMS
Community Medical Services
COBIT
Control Objectives for Information and Related Technologies
COE
Centre of Excellence
COIDA
Compensation for Occupational Injuries and Diseases Act, 1993 (Act Nr. 130 of 1993)
CSI
Corporate Social Investment
CSIR
Council for Scientific and Industrial Research
CSN
CSSS
Comprehensive Social Security System
Defence Act
The Defence Act, 2002 (Act No. 42 of 2002)
DDG
Deputy Director-General
DoE
Department of Energy
DoH
DoT
Department of Transport
DPSA
Department of Public Service Administration
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation
EAP
Employee Assistance Programme
EE
Employment Equity
ERP
Enterprise Resource Planning
EWP
Employee Wellness Programme
EWS
Employee Wellness Services
EXCO
Executive Management Committee
Fineos
Claims Management Solution
FSB
Financial Services Board
GAAP
Generally Accepted Accounting Practices
GD
General Damages
GDP
Gross Domestic Product
List of Abbreviations/Acronyms
GRAP
Generally Recognised Accounting Practices
GRI
Global Reporting Initiative
HR
Human Resources
HSCs
IBNR
The number of claims incurred, but not yet reported
ICAS
Independent Counselling and Advisory Services
ICT
Information Communication Technology
IMS
Incident Management System
INSETA
Insurance Sector Education and Training Authority
IT
Information Technology
ITIL
Information Technology Infrastructure Library
King III
King Code on Corporate Governance
KPI
Key Performance Indicator
LoE
Loss of Earnings
LoS
Loss of Support
LSSA
Law Society of South Africa
MANCOSA
Management College of Southern Africa
MBA
Masters Business Administration
Med
Medical Costs
MFDs
Multifunction Printing Devices
Minister
Minister of Transport
MoA
Memorandum of Agreement
MMF
Multilateral Motor Vehicle Accidents Fund
MVA
Motor Vehicle Accident
NECSA
South African Nuclear Energy Corporation
NGO
Non-Governmental Organisation
NOC
National Operations Centre
NOM
New Operating Model
NPA
National Prosecuting Authority
NSDS
National Skills Development Strategy
OHS
Occupational Health and Safety
PAA
Public Audit Act, 2004
PET
Participation Education Techniques
POE
Power Over Ethernet
POP
Patient Outreach Programme
PFMA
Public Finance Management Act
RABS
Road Accident Benefit Scheme
RAF
Road Accident Fund
RAF Act
Road Accident Fund Act, 1996, (Act No. 56 of 1996)
RAU
Rand Afrikaans University
REMCO
Remuneration and Human Resources Committee
RRM
Revenue Requirement Model
Road Traffic Management Corporation
SAADP
South African Actuaries Development Programme
SADC
Southern African Development Community
SAFA
South African Football Association
SANDF
South African National Defence Force
SAP
Enterprise Resource Planning System
SAPA
South African Press Association
SAPS
South African Police Service
SAPIA
South African Petroleum Industry Association
SARS
South African Revenue Services
SATAWU
South African Transport and Allied Workers Union
SCOPA
Standing Committee on Public Accounts
SETAs
Sector Education and Training Authorities
SOE
State Owned Entities
SU
Stellenbosch University
TAC
Transport Accident Commission
UCT
University of Cape Town
UK
United Kingdom
UKZN
University of KwaZulu-Natal
UN
United Nations
UN
University of Natal
UNISA
University of South Africa
UP
University of Pretoria
VCT
Voluntary Counselling and Testing
VOIP
Voice-over-internet-protocol
WAN
Wide Area Network
WITS
University of Witwatersrand
ZAR
South African Rand
RTMC
Annexure III
List of Contacts
Satellite Offices
Location
Sanlam Centre
Physical Address
Bell Street, Office 25 Ground
City/Town
Province
Contact Number
Nelspruit
Mpumalanga
013 752 3075
floor
TM Centre
78 Harding Street, Shop 1B
21 Peace Street
21 Peace Street
Library Gardens
Cnr Grobler and Schoeman Street
Nedbank Building
Ryk Street Suite 105
Main Post Office Building
259 Govan Mbeki Avenue
Golden Acre
083 637 0685

034 312 7946
Newcastle
KwaZulu-Natal
Tzaneen
Limpopo
Polokwane
Limpopo
Welkom
Free State
Port Elizabeth
Eastern Cape
041 582 4244
Adderley Street
Cape Town
Western Cape
083 326 1235
Shop No 2
109 Scholtz Street
Lichtenburg
North West
083 627 5318
Corner House
156 Govan Mbeki Avenue
Port Elizabeth
Eastern Cape
084 403 8601
Spooral Park
1002 Lenchen Street
Centurion
Gauteng
083 627 5318
Physical Address
City/Town
Province
Contact Number
Nelspruit
Mpumalanga
013 741 3551/2
084 515 5465

015 307 6489
082 764 8899
015 291 3951
083 641 9761
057 357 1198
083 637 0682

Hospital Name
Rob Ferreira
Cnr Madiba Drive & Piet Retief

Street
Temba
Kabokweni Main Road
Temba
Mpumalanga
013 741 3551/2
Tonga
Tonga View, Kwalugedlana
Tonga
Mpumalanga
013741 3551/2
Shongwe
Jeppes Reef Street
Shongwe
Mpumalanga
013 741 3551/2
Barberton
1 Hospital Street
Barberton
Mpumalanga
013 741 3551/2
Standerton
Cnr Beyers Naude & Kruger Street
Standerton
Mpumalanga
017 7125872
Witbank
President Mandela Street
Witbank
Mpumalanga
013653 2504
Evander
Cnr Bologna & Lausanne Street
Evander
Mpumalanga
017 632 4480
Mapulaneng
Graskop Road
Bushbuckridge
Mpumalanga
013 741 3551
Tintswalo
Acornhoek Street
Nelspruit
Mpumalanga
013 741 3551
Kwa-Mhlanga
1128 Section C
Kwa-Mhlanga
Mpumalanga
013 947 3659
Middelburg
Cnr OR Tambo and Joubert Street
Middelburg
Mpumalanga
013653 2504
Mmametlhake
Mpumalanga
012721 2391
Pietermaritzburg
KwaZulu-Natal
033 395 4033
Mmametlhake
Edendale
Mmametlhake Main Road,

Napiri Section
Old Edendale Road, Plessislaer
Physical Address
City/Town
Province
Addington
16 Erskine Terrace, South Beach
Durban
KwaZulu-Natal
Prince Mshiyeni
Mangosuthu Highway, V Section
Umlazi
KwaZulu-Natal
031 906 0881
RK Khan
Road 336, RK Khan Circle
Chatsworth
KwaZulu-Natal
031 403 2258/9
Newcastle
4 Hospital Street
Newcastle
KwaZulu-Natal
034 312 5164
Madadeni
Prince Shingane Street, Section F
Newcastle
KwaZulu-Natal
034 312 4301
Durban
KwaZulu-Natal
031 205 4586
Inkosi Albert Luthuli

Memorial
800 Bellair, Cato Manor
Contact Number
031 332 3006
0313326565
033 342 9023
Greys Hospital
Townbush Road, Chase Valley
Pietermaritzburg
KwaZulu-Natal
King Edward VIII
Cnr Sydney and Francois Road
Umbilo
KwaZulu-Natal
031 205 4586
Ladysmith
36 Malcolm Road
Ladysmith
KwaZulu-Natal
036 631 4586
Empangeni
KwaZulu-Natal
Ngwelezane
Thandayise Road, Ngwelezane

Township
033342 7546
035 794 2693

035794 2669
Gordonia
Schrder Street
Upington
Northern Cape
054 331 0007
Kimberley
144 Du Toitpan Road
Kimberley
Northern Cape
053 802 2159
Central Karoo
Visser Street
De Aar
Northern Cape
053631 2123
Manne Dipico
Station Street
Colesberg
Northern Cape
051 753 2151
Polokwane
Cnr Hospital & Dorp Street
Polokwane
Limpopo
015 297 0450
Mankweng
Houtbosdorp Street
Mankweng
Limpopo
015 267 0234
Voortrekker
2 Geiser Street
Mokopane
Limpopo
015 491 1419
Mokopane
Dudu Mahwelereng, Zone 1
Mahwelereng
Limpopo
015483 1419
Tshilidzini
Phundamaria Street, Shayandima
Thohoyandou
Limpopo
015 964 1169
Elim
Castoba House, Old Admin Block
Elim
Limpopo
015 556 3496
Dilokong
Cnr R37 Road & Modikwa Mine
Burgersfort
Limpopo
031 214 7270
Maphutha Malatji
Maphutha Drive, Namakgale
Phalaborwa
Limpopo
015769 1520
Nkhensani
Hospital Road
Giyani
Limpopo
015 812 0039
Bela Bela
54 Chris Hani Drive
Bela Bela
Limpopo
014736 2121
Jane Furse
Sekhukhune Area
Jane Furse
Limpopo
013265 1555
Somerset
Somerset Beach Road, Greenpoint
Cape Town
Western Cape
021 402 6495
GF Jooste
Duinefontein Road, Manenberg
Cape Town
Western Cape
021 691 1534
Cape Town
Western Cape
021 933 8924
Cape Town
Western Cape
021 447 2666
Paarl
Western Cape
021 860 2569
Tygerberg
Cnr Sranfie and Francie Van Zyl

Road
Grootte Schuur
Main Road, Observatory
Paarl
Hospital Street
Hospital Name
Hospital Name
Physical Address
Stellenbosch
Marrimen Street
Worcester
Robertson
Charlotte Maxeke - JHB

Academic
City/Town
Province
Contact Number
Stellenbosch
Western Cape
021 883 3074
Murray Street
Worcester
Western Cape
023 347 8976
Van Outdshoorn Street
Robertson
Western Cape
023 626 2710
Johannesburg
Gauteng
011 642 6709
Tembisa
Gauteng
011920 2831
17 Jubilee Road, Parktown
Tembisa
Industrial Road, Olifantsfontein
Jubilee
92 Jubilee Road
Hammanskraal
Gauteng
Helen Joseph
1 Perth Road, Auckland Park
Johannesburg
Gauteng
SAPEASA
385 Tram Street
Brooklyn
Gauteng
012 460 8366
Dr George Mukhari
Admin Building, Medunsa Road
Ga-Rankuwa
Gauteng
012 560 0420
Netcare 911
49 New Road
Midrand
Gauteng
011 923 2082
Chris Hani Baragwanath
Cnr Chris Hani and Martinus Road
Johannesburg
Gauteng
011 933 9336
Tambo Memorial Hospital
Railway Street, Plantation
Boksburg
Gauteng
011892 1941
Leratong
1 Adcock Street, Chamdor
Krugersdorp
Gauteng
011 410 4621
Kalafong
1 Klipspringer Street
Pretoria
Gauteng
012318 6400
Tshwane District
Dr Savage Road
Pretoria
Gauteng
012354 5957
Katlehong
Gauteng
011389 0500
Uitenhage
Eastern Cape
041 995 1111
Natalspruit
46 Hospital Road, Sekhosana

Section
012 717 3151

012717 2397
011 482 8382
011482 5036
Uitenhage
Channer Street
Frere Hospital
Main Amalinda Street
East London
Eastern Cape
043 722 5056
Cecilia Makiwane
NU 9, Mdantsane
East London
Eastern Cape
041722 5056
Livingstone
Standford Road, Korsten
Port Elizabeth
Eastern Cape
041451 0504
Nelson Mandela
Burkingham Road, Central
Umthatha
Eastern Cape
047 502 4716
Dora Nginza
Spondo Street, Zwide
Port Elizabeth
Eastern Cape
041451 0504
Tshepong
Benji Olifant Road, Uraniaville
Klerksdorp
North West
018465 2272
Mafikeng
North West
018 383 2081
Rustenburg
North West
014 590 5155
Brits
North West
012 252 1029
Mafikeng
Cnr Danville and Lichtenburg

Road
JS Tabane
Cnr Heystek and Bosch Street
Brits
Crocodile Street, Bojanala Region
Pelonomi
Dr Belcher Road, Hedendal
Bloemfontein
Free State
051432 9952
Universitas
Paul Kruger Avenue
Bloemfontein
Free State
051432 9952
Boitumelo
Smaaldeel Street
Kroonstadt
Free State
056216 5200
Bongani
Numbi Road, Hazyview
Welkom
Free State
013737 7217
Parys
Hospital Road
Parys
Free State
056811 2155
ROAD ACCIDENT FUND

Head Ofce:
38 Ida Street
Menlopark, PRETORIA, 0081
+27 12 429 5000
Centurion Ofce:
420 Witch-Hazel Avenue, Eco Glades, CENTURION,
P/Bag X178, CENTURION, 0046
Tel: +27 12 621 1600
Customer Care Share Call Number:
0860 235 523
www.raf.co.za
RP: 87/2011
ISBN: 978-0-621-40087-8
contact details
Head Ofce:
Road Accident Fund Building, 38 Ida Street,
P/Bag X2003, MENLYN, 0063
Tel: +27 12 429 5000 / 5017
Centurion Ofce:
East London
420 Witch-Hazel Avenue, Eco Glades,
Metropolitan Building, 4th Floor,
CENTURION,
c/o Drury Lane & Caxton Street, EAST LONDON, 5200
P/Bag X178, CENTURION, 0046
P/Bag X9000, EAST LONDON, 5200
Tel: +27 12 621 1600
Tel: +27 43 702 7800
Major Regions:
Durban
Pretoria
The Embassy Building, 12th Floor, 199 Anton Lembede
Road Accident Fund Building, 38 Ida Street,
Street (previously Smith Street), DURBAN, 4001
P/Bag X54371, DURBAN, 4000
PO Box 2743, PRETORIA, 0001
Tel: +27 31 565 2800
Tel: +27 12 429 5000 / 5017

Cape Town
Pretoria (Walkin Centre)
1 Thibault Square, 7th Floor, Long Street,
Middestad Building, 252 Andries Street,
CAPE TOWN, 8001
PRETORIA, 0002
PO Box 2443, CAPE TOWN, 8000
PO Box 2743, PRETORIA, 0001
Tel: +27 21 408 3300
Tel: +27 12 429 5359 / 5362

Other Customer Contact Centres
Johannesburg
Refer to Annexure III
Marble Towers, 29th Floor, 212 Jeppe Street
Customer Care Share Call Number: 0860 23 55 23
(c/o Jeppe & Von Wielligh Street),
Anonymous Fraud Hotline: 0800 00 59 19
JOHANNESBURG, 2001
Website: www.raf.co.za
P/Bag X02, JOHANNESBURG, 2000
Auditors: Auditor-General
Tel: +27 11 223 0000
Bankers: ABSA Bank

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2011

INTEGRATED ANNUAL REPORT

Caring for you

Section 1: RAF at a Glance

Section 2: Leadership and Governance

2.2 Overview by the

Section 3: Organisational Performance

Section 4: Annual Financial Statements

Report of the Audit

Section 5: Additional Information

scope of the report

Nature and Scope of Assurance

1- RAF - Integrated Annual Report 2011

Scope of the Report and Board Statement;

Leadership and Governance;

Annual Financial Statements; and

2- RAF - Integrated Annual Report 2011

Motor Vehicle Insurance Act, 1942 (Act No. 29 of 1942);

Compulsory Motor Vehicle Insurance Act, 1972 (Act No. 56 of 1972);

Motor Vehicle Accident Act, 1986 (Act No. 84 of 1986); and

The Executive Authority, the Honourable Minister of Transport; and

The Board of the RAF.

5- RAF - Integrated Annual Report 2011

6- RAF - Integrated Annual Report 2011

1.1.6 Social Role

7- RAF - Integrated Annual Report 2011

1.1.10 Core Values

We care about and support others

We involve and listen to others and recognise their contributions

We show concern for peoples well-being

We offer solutions, not problems

We empower others to take responsibility for their actions and decisions

We continually look for ways to improve what we do and how we do it

We find ways to remove or minimise obstacles

We learn from our mistakes

We believe in the role and work of the RAF

We celebrate successes and achievements

We demonstrate integrity, consistency and fairness in our actions and decisions

We demonstrate energy, passion and conviction in everything we do

We model the highest standards of personal and professional behaviour

1.1.11 Business Model

8- RAF - Integrated Annual Report 2011

1.2 Turnaround Strategy

Lessen spending on minor injuries with minimal duration;

Align benets and resource allocation to other social insurance arrangements;

Focus on more curative aspects, such as rehabilitation and accident prevention;

9- RAF - Integrated Annual Report 2011

The strategic areas of focus are depicted in the diagram below:

Road Accident Fund

10- RAF - Integrated Annual Report 2011

National Treasury to ensure that the system put in

1.2.1 Geographic Footprint

1.3 Principal Risks and Uncertainties

Action Areas and Plans

The RAF is in a process of overhauling its business. The process

will lead to the establishment of a new RAF that is more

down of the old RAF.

core of the new RAF will be a new, fully electronic, paperless,

Change management and

service channels, a broad geographic footprint, an internal legal

components. The system will be supported by further changes

Incentive initiatives for the running

Designing of organisational structures

have all been designed to ensure that the RAF customer