SANLAM LIMITED - Summarised audited results for the year ended 31 December 2018
07 March 2019 7:05
SLM 201903070002A
Summarised audited results for the year ended 31 December 2018

Sanlam Limited

Incorporated in the Republic of South Africa      JSE Share code (Primary listing): SLM
(Registration number 1959/001562/06)                                NSX share code: SLA
"Sanlam", "Sanlam Group", or "the Company"                           ISIN: ZAE000070660
                                                                    A2X share code: SLM

Summarised audited results for the year ended 31 December 2018

Key features
Earnings
- Net result from financial services increased by 4%
- Dividend per share of 312 cents, up 8%

Business volumes
- Net value of new covered business up 7.8% to R2 billion (up 14% on consistent economic basis)
- Net new covered business margin of 2.67% on consistent economic basis (2.94% in 2017)
- New business volumes increased by 1% to R223 billion
- Net fund inflows of R42 billion compared to R37 billion in 2017

Group Equity Value
- Group Equity Value per share of R63.41  
- Return on Group Equity Value per share of 11.6%
- Adjusted Return on Group Equity Value per share of 19.4%; exceeding target of 13.0%

Capital management
- R7.9 billion of capital raised and released; R13.5 billion deployed in strategic investments
- Acquisition of remaining 53% stake in Saham Finances finalised
- Package of BBBEE transactions approved by shareholders; planned implementation 1H2019
- Sanlam Group SAM cover ratio of 215%; Sanlam Life Insurance Limited SAM cover ratio for covered business of 221%

Salient results
for the year ended 31 December 2018                             2018     2017  Change
Sanlam Group
Earnings
Net result from financial services per share      cents        423,6    417,2      2%
Normalised headline earnings per share (1)        cents        431,7    480,0    -10%
Diluted headline earnings per share               cents        441,1    481,3     -8%
Net result from financial services            R million        8 890    8 549      4%
Normalised headline earnings (1)              R million        9 056    9 835     -8%
Headline earnings                             R million        9 162    9 757     -6%
Dividend per share                                cents          312      290      8%
Business volumes
New business volumes                          R million      223 029  221 172      1%
Net fund inflows                              R million       41 539   37 143     12%
Net new covered business
 Value of new covered business                R million        1 985    1 841      8%
 Covered business PVNBP (2)                   R million       74 378   62 604     19%
 New covered business margin (3)                      %         2,67     2,94
Group Equity Value
Group Equity Value                            R million      134 052  121 763     10%
Group Equity Value per share                      cents        6 341    5 940      7%
Return on Group Equity Value per share (4)            %         11,6     14,8

SOLVENCY
Sanlam Group SCR cover ratio                          %          215      218
Sanlam Life Insurance SCR cover 
ratio - covered business                              %          221      233

Notes
(1) Normalised headline earnings = headline earnings, excluding fund transfers.
(2) PVNBP = present value of new business premiums and is equal to the present value of new recurring premiums plus single premiums.
(3) New covered business margin = value of new covered business as a percentage of PVNBP.
(4) Growth in Group Equity Value per share (with dividends paid, capital movements and cost of treasury shares acquired reversed) as a percentage 
    of Group Equity Value per share at the beginning of the year.

EXECUTIVE REVIEW

We made major progress in executing on our strategic pillars during 2018. Our federal model and diversified profile are major contributors, enabling a dual focus 
on growing our existing operations while also concluding new corporate transactions to drive enhanced future growth. This diligent focus on strategic execution 
enabled us to achieve solid growth in 2018 and double-digit average growth rates in most key performance indicators over the last 10 years. Highlights for the 
year include two major transformative transactions that positions us well for sustainable future growth: the acquisition of the remaining stake in Saham Finances 
in October 2018 and the approval of a package of Broad-Based Black Economic Empowerment (BBBEE) transactions by shareholders in December 2018. Growth of 14% in 
the value of new covered business (VNB) on a consistent economic basis and more than R2 billion in positive experience variance is testimony to Sanlam's resilience 
in difficult times.

We entered 2018 with renewed optimism in South Africa. The election of Mr Cyril Ramaphosa as president of the African National Congress and South Africa boded 
well for an improved operating environment. Corporate and individual investor confidence soared, but it was unfortunately short lived. It was soon realised that 
it will take longer than expected to transform the positive changes into enhanced economic growth. Investor confidence faded as a result, compounded by international 
developments including a steady rise in the US Federal Reserve policy interest rate, the uncertainties surrounding Brexit and an escalating trade war between the 
US and China. Operating conditions in South Africa remained challenging as a result, with pedestrian economic growth, negative returns on the local equity market 
and currency volatility. The negative return of 9% for the JSE/FTSE All Share index compared to a positive return of 21% in 2017 had a pronounced impact on RoGEV 
and earnings growth in 2018.

Economic growth in a number of the other key emerging markets where we operate were also constrained. In addition, equity markets across most of these markets 
recorded declines, placing severe pressure on our ability to grow earnings and create value for our clients. The currencies of oil-producing countries, Nigeria and 
Angola in particular, remained weak.

Despite these challenges, the Group delivered robust overall growth in key performance indicators, supported by our diversification across geographies, market 
segments and lines of business.

The key highlights and challenges for the year are:

HIGHLIGHTS                                                   CHALLENGES
Adjusted RoGEV of 19.4% per                                  Weak investment markets impacted on Sanlam Investment Group (SIG) and Sanlam Personal Finace (SPF)  
 share exceeded the target of 13%                            profitability
Exceptional underwriting performance by Santam               New business volumes at SIG and Glacier under pressure from low investor confidence
Strong growth in VNB, with a sterling performance            Adverse group risk claims experience continued in 2018
 by Sanlam Sky and Sanlam Corporate                          Underperformance in East Africa and Letshego
Continuation of track record of positive experience          Saham Finances 2H18 results impacted by adverse claims experience and lower investment markets 
 variances from covered business - exceeding R2 billion 
 for the first time. Positive variances from all 
 clusters and from various sources
Saham Finances acquisition concluded and consolidated
 from 1 October 2018
Package of BBBEE transactions approved and successful 
 book build of R5,5 billion in March 2018, increasing 
 issued share capital by 3% 

CORPORATE GOVERNANCE

The board of directors of Sanlam ("Board") is committed to ensuring the continued practice of good corporate governance and have decided on the following:

i)      Independent non-executive directors who have served on the board beyond 9 years would come up for rotation at the AGM on an annual basis going forward. 
        Mr Anton Botha and Mr Sipho Nkosi would stand for re-election at the Annual General Meeting ("AGM") of the Company being held on 05 June 2019. 
ii)     Dr Van Zyl would step down as chair of the Board on or before the AGM of 03 June 2020.  A suitable independent non-executive chairman would take his place.
        He would remain a non-executive director of the Board. He would step down as a member of the nominations committee.
iii)    Mr Chris Swanepoel will officially retire in November 2020 (when he reaches the age of 70 - Sanlam's retirement age) and he has requested that he formally 
        retire on 03 June 2020 at the AGM.
iv)     The intention of the Board is to appoint further independent non-executive directors in order to strengthen the independence at the board and board committee
        levels.

The above steps and timeframes is to ensure that Sanlam attracts the highest caliber of independent non-executive Board directors to the Company and this would take 
some time to implement through its structures. Sanlam continues to ensure the highest levels of corporate governance as governance standards develop in South Africa. 

Forward-looking statements

In this report we make certain statements that are not historical facts and relate to analyses and other information based on forecasts of future results 
not yet determinable, relating, amongst others, to new business volumes, investment returns (including exchange rate fluctuations) and actuarial assumptions. 
These statements may also relate to our future prospects, developments and business strategies. These are forward-looking statements as defined in the 
United States Private Securities Litigation Reform Act of 1995. Words such as "believe", "anticipate", "intend", "seek", "will", "plan", "could", "may", 
"endeavour" and "project" and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying 
such statements. Forward-looking statements involve inherent risks and uncertainties and, if one or more of these risks materialise, or should underlying 
assumptions prove incorrect, actual results may be very different from those anticipated. Forward-looking statements apply only as of the date on which they 
are made, and Sanlam does not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise. 
Any forward-looking information contained in this announcement has not been reviewed and reported on by Sanlam's external auditors.

COMMENTS ON THE RESULTS

Basis of presentation and accounting policies

The Sanlam Group IFRS financial statements for the year ended 31 December 2018 are presented based on and in compliance with International Financial Reporting 
Standards (IFRS). The basis of presentation and accounting policies for the IFRS financial statements are in all material respects consistent with those applied 
in the 2017 Integrated Report and Annual Financial Statements, apart from the adoption of IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts 
with Customers. The basis of presentation and accounting policies for the Shareholders' Information are also in all material respects consistent with those 
applied in the 2017 Integrated Report, apart from the following

- The SIG cluster was restructured with effect from 1 January 2018. Following the creation of the Central Credit Manager (CCM) within Sanlam Capital Markets (SCM),
  it was decided to further enhance focus on the management of Sanlam assets within the SIG cluster, while at the same time creating a third party asset manager
  that can more effectively compete with leading independent asset managers. The Sanlam Asset Management division and the part of Sanlam Structured Solutions
  responsible for the Sanlam assets were accordingly combined with SCM to form the new Sanlam Specialised Finance sub cluster.
  Comparative Shareholders' Information has been restated accordingly, apart from Group Equity Value (GEV) that has not been restated for Sanlam Asset Management. 
  The valuation of Sanlam Asset Management as a separate business was only finalised during 2018. Comparative GEV valuations are not available with the business 
  accordingly transferred to Sanfin with effect from 1 January 2018 for GEV purposes. As it is an intra cluster transfer, it does not have an impact on GEV or 
  RoGEV for the overall SIG cluster. As part of the restructuring, operational responsibility for the Group's term finance margin business was also transferred 
  from the Group Office to Sanlam Specialised Finance. Comparative information was not restated for this change in operational responsibility based on materiality.

- Non-annuity assets and business flows at Sanlam Private Wealth have been reclassified from Assets under Management to Assets under Administration in line with 
  industry practice. Business flows relating to these assets are commensurately excluded from new business volumes and net fund flows. Comparative 2017 information 
  for SIG and the Group has been restated as follows:

  - New business volumes decreased by R9 016 million
  - Net fund flows increased by R2 568 million
  - Reclassification of assets amounting to R98 446 million from assets under management to assets under administration.

- Savings business written through the Sanlam Sky distribution channels are recognised within the SPF Savings business with effect from 2018. Comparative 
  information has not been restated. The 2018 SPF Savings results include new business volumes of R118 million and VNB of negative R15 million relating to business 
  formerly recognised in Sanlam Sky.

All growth percentages reflected in this review are relative to the 12 months ended 31 December 2017, unless otherwise indicated.

The 3% new shares issued through an accelerated book build in the first quarter (refer Capital management section) had a 2.3% dilutive effect on earnings per share 
metrics due to an increase in the weighted average number of shares in issue during the year. In addition, the acquisition of the remaining stake in Saham Finances, 
for which the capital was raised, only completed and started contributing to earnings from 1 October 2018.

Corporate activity during 2017 and 2018 impacts on the comparability of the Group's results. The following were the largest transactions:

- SPF acquired a 53% stake in BrightRock with effect from 1 September 2017. Shares acquired subsequent to the initial acquisition has increased Sanlam's stake 
  to 55.1% at 31 December 2018.

- SPF started Indie as a new greenfields business in 2017, with initial losses recognised in earnings in both 2018 and 2017.

- SEM sold its stake in the Enterprise Group in Ghana with an effective date of 1 July 2017.

- Absa Consultants and Actuaries (renamed ACA Employee Benefits (ACA)) was acquired effective 1 April 2018.

- Saham Finances is consolidated with effect from 1 October 2018; before this date, the Group's investment in Saham Finances was recognised as an equity-accounted 
  investment. The table below provides a summary of Sanlam's participation in Saham Finances' earnings, new business volumes, VNB and net fund flows based on the 
  changes in shareholding:

Period                         Sanlam Group               SEM            Santam
1/1/2017 - 30/4/2017                    30%             22.5%              7.5%
1/5/2017 - 31/12/2017                 46.6%            39.63%             6.97%
1/1/2018 - 30/9/2018                  46.6%            39.63%             6.97%
1/10/2018 - 31/12/2018                 100%               90%               10%

The impact of corporate activity is highlighted in the remainder of this review where relevant.

The structural information included in this results announcement has been presented to illustrate the impact of changes in the group structure and is the 
responsibility of the Group's board of directors ("Board"). It is presented for illustrative purposes only and because its nature may not fairly present the Group's
financial position, changes in equity, result of operations or cash flows.

Sanlam's external auditor, Ernst & Young Inc., issued a limited assurance report in respect of the structural information in terms of section 8 of the JSE Listings 
Requirements. The limited assurance report is available for inspection at Sanlam Limited's registered addresss.
 
Group Equity Value

GEV amounted to R134 billion or 6 341 cents per share at 31 December 2018. Including the dividend of 290 cents per share paid during the year, a RoGEV per share 
of 11.6% was achieved. This was lower than the 13% target for the year. Strong growth in VNB, all-time high positive experience variances from covered business, 
good returns from the investment in Santam, the profit realised from the foreign exchange hedge implemented for the Saham Finances acquisition and the benefit of 
a weaker rand exchange rate on the valuation of non-South African operations provided support to returns in 2018. This was, however, not sufficient to compensate 
for the pronounced negative impact of weaker equity markets across most regions, higher risk discount rates (RDR) and the write-off of goodwill recognised in 
respect of the Saham Finances and other smaller acquisitions in terms of the Embedded Value methodology. The capital raising during 2018 (refer Capital management section below) 
occurred at a price of R87 per share, in excess of GEV per share at the time. This supported RoGEV per share by some 1% compared to the absolute RoGEV of 10.6% 
for 2018. 

Adjusted RoGEV per share, which excludes the impact of lower investment return than the long-term assumptions, interest rate changes and other one-off effects 
not under management control, and assuming normalised exchange rate movements, amounted to 19.4% - well in excess of the target. 

Group Equity Value at 31 December 2018
                                                    GEV                  RoGEV
R million                            December 2018  December 2017                    %
Group operations                           132 658        113 829       13 526    11.6
 Sanlam Personal Finance                    43 185         43 401        4 832    11.4
 Sanlam Emerging Markets                    44 659         27 621        4 580    14.8
 Sanlam Investments                         18 703         18 331          682     3.7
 Santam                                     20 102         18 108        2 658    14.7
 Sanlam Corporate                            6 009          6 368          774    12.8


Covered business                            56 234         54 283        5 933    11.0
 Value of in-force business                 41 456         39 245        5 137    12.9
 Adjusted net worth                         14 778         15 038          796     5.8
Other operations                            76 424         59 546        7 593    12.2
Group operations                           132 658        113 829       13 526    11.6
Discretionary capital and other              1 394          7 934         (668)  -12.3
Group equity value                         134 052        121 763       12 858    10.6
Per share (cents)                            6 341          5 940          691    11.6

Group operations yielded an overall return of 11.6% in 2018, the combination of 11% return on covered business and 12.2% on other Group operations. All clusters 
achieved satisfactory growth in GEV, apart from SIG, where valuations were severely suppressed by the negative equity market performance. Adjusted RoGEV for group 
operations amounted to 20.1% and 14.5% for SIG, which better reflects the underlying operational performance. 

The covered business operations delivered a very strong operational performance. Adjusted RoGEV amounted to 19.9%, with all businesses exceeding the Group 
hurdle rate by a healthy margin, apart from the SIG businesses. The latter is predominantly due to negative expense experience variances and assumption changes
at Sanlam Investments and Pensions in the UK.

The main components contributing to the return on covered business are included in the table below:

Return on covered business for the year ended 31 December 2018
%                                                            2018      2017
Expected return - unwinding of the RDR                        9,2       9,0
Value of new covered business                                 3,7       3,6
Operating experience variances                                3,9       3,0
Operating assumption changes                                  0,6      -0,8
Economic assumption changes                                  -1,4       0,5
Expected investment return on capital portfolio               1,7       2,0
Investment variances                                         -5,1       1,2
 Value of in-force                                           -4,9       1,4
 Capital portfolio                                           -0,2      -0,2
Foreign currency translation differences and other           -1,6       0,3
Return on covered business                                   11,0      18,8

The main items contributing to the return from covered business are:

- Expected return on covered business increased in 2018 relative to 2017 based on the slightly higher RDR applied at the end of 2017 and the change in mix of 
  the book to the higher-RDR SEM businesses.

- Value of new covered business: Despite the higher RDR in 2018, VNB still contributed 3.7% to the overall return. As highlighted in the Business volumes section, 
  Sanlam Sky, Sanlam Corporate and SEM Namibia made particularly satisfactory progress in growing their VNB.

- Operating experience variances reached an all-time high, exceeding R2 billion for the first time (2017: R1.6 billion), up 35%. 
  - Risk experience variances of R535 million increased by 20% on 2017, driven by favourable experience across most lines of business in SPF, including Sanlam Sky. 
    SEM also achieved overall positive experience, albeit slightly lower than 2017. Claims experience weakened further at SEB, contributing to negative experience 
    variances of R96 million compared to negative R43 million in 2017.

  - Our focus on client centricity is a major factor in our success to maintain good persistency under challenging economic conditions. Positive persistency 
    experience variances of R147 million in 2018 (up from R67 million in 2017) is a particularly satisfactory achievement. SPF's negative variance of R45 million 
    is largely due to lower than expected continuations of single premium savings products. Persistency across risk products remained resilient. Dedicated focus 
    on managing the in-force book contributed to an improvement in SEM's experience from negative R3 million in 2017 to positive R99 million in 2018.
  - Working capital experience variances include a one-off reserve release of R47 million. Excluding this, experience was in line with 2017, commensurate with 
    short-term interest rate trends during the year.

  - Credit spread experience increased by 10% in line with growth in the corporate debt book managed by Sanfin.

  - Other experience variances of R436 million include an amount of R272 million relating to a reduction in cost of capital following the release of R1.5 billion 
    of allocated capital from Sanlam Life's covered business (refer Capital management section below), which should be regarded as one-off. The remainder 
    comprises of a number of smaller variances.

- After strengthening the persistency and maintenance expense bases in 2017, no significant operating assumption changes were required in 2018. Modelling 
  improvements and other result from the continuous refinement of actuarial models and are small relative to the size of the in-force book. 

- RDR's increased across most of the portfolio in 2018 compared to a decline in the prior year. RoGEV from economic assumption changes were accordingly 
  negative in 2018 compared to a positive contribution in 2017.

- Negative returns from equity markets in a number of countries in 2018 had a 5.1% negative impact on RoGEV in 2018 (1.2% positive in 2017). The hedging 
  strategy applied in the Sanlam Life capital portfolio, the largest component of adjusted net worth, provided downside protection to returns on the overall 
  capital portfolio.

- Foreign currency translation differences and other include forex gains from a weaker rand exchange rate (R393 million), which was more than offset by the 
  write-off of goodwill acquired in terms of actuarial guidance (R1.2 billion). The goodwill write-off is net of R300 million of profit realised on the Saham 
  Finances forex hedge that is attributable to covered business. 

The main components contributing to the return on other Group operations are:

Return on other Group operations for the year ended 31 December 2018
%                                                            2018      2017
Return on investments valued at net asset value              -3,0      14,8
Return on investment in Santam                               14,7      18,0
Return on investments valued at discounted cash flows        11,7      10,5
Expected return - unwinding of the RDR                       14,2      14,1
Operating experience variances                               -0,3       1,0
Operating assumption changes                                 -4,3      -0,6
Economic assumption changes                                  -3,7      -1,2
Foreign currency translation differences and other            5,8      -2,8
Weighted return on other Group operations                    12,2      12,9

Other Group operations achieved a return of 12.2%:

- Sanlam Capital Markets within Sanfin is valued at net asset value for GEV purposes, with profits earned in this business the main contributor to RoGEV from 
  investments valued at net asset value. Losses recognised against equity-backed empowerment transactions and the non-recognition of income on the Mayfair 
  collateralised loan (refer Earnings section below) are the main drivers behind the decline in RoGEV in 2018.

- The Group's investment in Santam is valued at its listed share price, which significantly outperformed the market with a return of more than 14% in 2018, 
  compared to the 9% negative return of the JSE/FTSE All Share Index.

- The majority of the Group's other operations (excluding Santam and Nucleus) is valued on a discounted cash flow (DCF) basis. The benefits of the Group's diversified 
  profile are evident in the overall 11.7% return earned from these businesses, with negative operating and economic assumption changes largely offset by 
  foreign currency translation gains. 

  The impact of lower equity markets is noticeable in the 4.3% negative operating assumption changes. More than half of this relates to SIG, where future fee 
  income assumptions were reduced in line with lower than expected assets under management. A prudent valuation approach was also followed for Saham Finances 
  and the Indian businesses. It is our usual approach to keep valuations at or close to transaction prices shortly after acquisitions, which was applied for 
  Saham Finances' local currency valuation. Valuations of the Indian credit businesses were kept broadly unchanged in local currency given recent liquidity   
  constraints in the Indian market. This is also in line with movements in the listed share prices. 

  Economic assumption changes (-3.7%) reflect the higher RDR as referred to above. 
 
  The valuation of the non-South African operations benefited from the weaker rand exchange rate. This was augmented by some R1 billion of profit realised 
  on the Saham Finances forex hedge. The total hedge profit amounted to R1.3 billion after tax, of which R300 million is attributable to covered 
  business (refer above). Overall, foreign currency translation gains contributed 5.8% to the RoGEV of businesses valued on a DCF basis.
 
The low return on discretionary and other capital is essentially the combined effect of the following:

- Net corporate expenses of R109 million recognised in net result from financial services.

- The low-yielding nature of liquid assets held in the discretionary capital portfolio.

- Funding cost in respect of the temporary debt incurred for the Saham Finances acquisition.

- An increase in the present value of future corporate expenses, with additional investment in capacity, including new appointments to the Executive committee. 

Earnings

Normalised attributable earnings increased by 5% in 2018, the aggregate of an 8% decline in normalised headline earnings and a substantial increase in profit 
recognised on the (deemed and actual) disposal of subsidiaries and associates.

Shareholders' fund income statement for the year ended 31 December 2018

R million                                                    2018      2017   Change
Net result from financial services                          8 890     8 549       4%
 Sanlam Personal Finance                                    4 033     4 235      -5%
 Sanlam Emerging Markets                                    2 038     1 793      14%
 Sanlam Investment Group                                    1 152     1 227      -6%
 Santam                                                     1 196       851      41%
 Sanlam Corporate                                             580       558       4%
 Group office and other                                      (109)     (115)      5%
Net investment return                                         707     1 663     -57%
 Net investment income                                        644       846     -24%
 Net investment surpluses                                      63       817     -92%
Project costs and amortisation                               (536)     (375)    -43%
Equity participation costs                                     (5)       (2)  >-100%
Normalised headline earnings                                9 056     9 835      -8%
Profit on disposal of subsidiaries and associates           2 773     1 335   >-100%
Impairments                                                  (305)     (303)       -
Net equity-accounted non-headline earnings                     (3)      134   >-100%
Normalised attributable earnings                           11 521    11 001       5%

Net result from financial services

Net result from financial services (net operating profit) of R9 billion increased by 4% on 2017, with substantial growth in Santam's contribution. 

Corporate activity supported the results, as well as a benign claims environment at Santam in 2018 compared to large catastrophe events during June and 
October 2017 in the comparable period. Normalising for these, net result from financial services were marginally up on 2017.

SPF net result from financial services declined by 5% (also down 5% on a gross basis). Excluding corporate activity and new growth initiatives, SPF's contribution 
were 1% down on 2017 due to the major impact that the weak equity market performance had on fund-based fee income at Glacier, the Closed Book and 
Savings business units. 

SPF net result from financial services for the year ended 31 December 2018
R million                                                    2018      2017   Change
Sanlam Sky and African Rainbow Life Insurance               1 268     1 228       3%
Recurring premium sub cluster                               2 780     2 568       8%
Glacier                                                     1 190     1 753     -32%
 Life investments                                             651     1 260     -48%
 LISP                                                         539       493       9%
Strategic business development                                374       351       7%
 Sanlam Personal Loans                                        422       375      13%
 Other                                                        (48)      (24)   -100%

Gross result from financial services                        5 612     5 900      -5%
Tax on gross result from financial services                (1 636)   (1 679)      3%
Non-controlling interest                                       57        14    >100%
Net result from financial services                          4 033     4 235      -5%

Sanlam Sky and African Rainbow Life Insurance's gross profit contribution increased by 3%, the combination of 5% growth at Sanlam Sky and initial expenses of 
R25 million incurred in 2018 to create the new African Rainbow Life Insurance business (planned launch date in the first half of 2019). Strong new business 
growth at Sanlam Sky (refer Business volumes section) contributed to higher new business strain being recognised in 2018 in terms of the Group's prudent 
accounting policies, which recognise upfront acquisition costs incurred in respect of insurance contracts in earnings as opposed to capitalising and spreading 
it over the duration of the policies. Excluding the additional new business strain, Sanlam Sky's gross result from financial services increased by 10%, reflecting 
the increase in the size of the in-force book. Mortality experience improved in 2018, but was more than offset by a slight weakening in persistency experience and 
negative investment and other variances. 

The Recurring premium sub cluster's gross result from financial services grew by 8%. Excluding BrightRock, gross result from financial services was 15% higher 
than 2017. BrightRock is experiencing very strong growth as a relatively young company, with new business strain exceeding profit releases from the in-force book. 
It therefore still contributes operating losses to the SPF earnings. Strong growth in risk profits (excluding BrightRock) was partially offset by 3% and 4% 
respective declines in the profit contributions of the Savings and Closed Book businesses. Risk profits benefited from the increased size of the in-force book, 
improved claims experience and flat new business strain following no growth in new business volumes from the traditional risk business channels (excluding BrightRock). 
Earnings from the Savings and Closed Book businesses were negatively affected by the weak investment market performance that depressed growth in assets under management, 
and declining units in the Closed Book.

Glacier's Life investments profit was severely impacted by the weak investment market performance as well as negative modelling and assumption changes. The Life 
investments portfolio includes products where Glacier participates in the absolute investment return earned on the underlying asset base. These products experienced 
marginal negative investment returns in 2018 compared to double digit positive returns in 2017, contributing to a R317 million decline in fee income. Weak investment 
returns and net outflows of guaranteed business also placed pressure on fee income from the other lines of savings business. The Linked Investment Savings Plan (LISP) 
business's profit increased by 9%. The weakening in the rand exchange rate and good demand for international products protected the overall assets under management 
of the LISP business from the weak South African equity market performance. Cost saving initiatives also had a positive effect.

Strategic business development (SBD) profits increased by 7%. Growth in the size of the Sanlam Personal Loans book supported 12% growth in the business's profit 
contribution. Bad debt provisioning increased in line with the requirements of IFRS 9, which was adopted with effect from 2018.

SEM grew its net result from financial services by 14%; up 21% excluding the increase in new business strain recognised in terms of the Group's prudent 
accounting policies. Excluding corporate activity, earnings were marginally up on 2017 (up 8% excluding increased new business strain). Gross of tax and 
non-controlling interest, result from financial services also increased by 14%. Changes in the rand exchange rate did not have a significant impact on the 
translated SEM earnings, apart from India as indicated below.

SEM net result from financial services for the year ended 31 December 2018
R million                                                    2018      2017   Change 
Namibia                                                       412       535     -23%
Botswana                                                      916       872       5%
Rest of Africa                                              1 166       790      48%
 Saham Finances (including Lebanon)                         1 055       545      94%
 Enterprise Group Ghana                                         -        30    -100%
 Other                                                        111       215     -48%
 
Pan-Africa portfolio                                        2 494     2 197      14%
Other emerging markets                                      1 241     1 192       4%
 India                                                      1 169     1 134       3%
 Malaysia                                                      72        58      24%
Corporate - South Africa                                       38       (78)   >100%
Gross result from financial services                        3 773     3 311      14%
Tax on gross result from financial services                (1 109)     (936)    -18%
Non-controlling interest                                     (626)     (582)     -8%
Net result from financial services                          2 038     1 793      14%

Gross result from financial services from the Pan-Africa portfolio increased by 14%:

- Namibia's gross result from financial services declined by 23%. Corporate activity resulted in Bank Windhoek changing from a subsidiary to an associated 
  company of Capricorn Investment Holdings (CIH) in 2017. As a subsidiary, Bank Windhoek's gross earnings were included in the CIH gross result from
  financial services, with the Bank Windhoek non-controlling interest being recognised as a separate component in net result from financial services. As an
  associate, only CIH's effective stake in Bank Windhoek's earnings is recognised in gross result from financial services. Excluding this change in accounting
  treatment, as well as the additional new business strain in the life insurance business (refer below), gross result from financial services increased by 9%.

  Life insurance gross result from financial services declined by 22%, primarily due to a significant increase in new business strain emanating from the strong 
  growth in entry-level market new business volumes. Excluding this, operating earnings increased by 24%. Group life claims experience improved in the second 
  half of the year, with overall risk profit increasing on 2017. Fund withdrawals by the Government Institutions Pension Fund of R2 billion at the end of 2017 
  and a further R1 billion in 2018, combined with a weak equity market performance, depressed fee income and gross result from financial services of the asset 
  management business, with the latter declining by 10%. Santam Namibia struggled to grow its premium base under challenging operating conditions, with gross 
  written premiums declining by 5% and gross result from financial services declining by 17%. Earnings from credit business declined by 22% (up 7% excluding the
  impact of the change in accounting treatment of Bank Windhoek), with the relatively low growth reflecting the weak general operating environment in Namibia and 
  liquidity constraints within the banking sector.

- The Botswana operations achieved mixed results with an overall increase of 5% in gross result from financial services. Life insurance profit increased by 14%. 
  Annuities underperformed due to low new business volumes, but this was more than offset by good growth in the funeral, group credit life and term 
  assurance lines. Letshego's gross earnings were in line with 2017, the combined effect of limited growth in the size of the loan book, additional bad 
  debt provisions recognised in terms of IFRS 9 and some one-off expenses. A new business plan has been developed under the auspices of a new chief executive 
  to address the underperformance. The decline in the Botswana equity market placed pressure on the asset base and fee income of the investment management 
  business, which did well to increase its gross earnings by 1% despite the challenging conditions. Earnings contributions from the other Botswana businesses 
  were broadly in line with the prior year.

- The Rest of Africa gross result from financial services increased by 48%:
 
  - The Saham Finances contribution almost doubled, supported by corporate activity in 2018 and 2017. The table below provides an analysis of the Saham Finances 
    earnings on a 100% basis for both years, which eliminates the distortion caused by changes in shareholding at a Sanlam level. The average exchange rates used 
    for translation purposes were R/MAD 1.417 and R/MAD 1.388 for 2018 and 2017 respectively.

Saham Finances net result from financial services for the year ended 31 December 2018
R million                                                    2018      2017   Change
Gross written premiums                                     16 569    15 975       4%
Net earned premiums                                        13 843    12 723       9%
Net claims incurred                                        (9 448)   (8 537)    -11%
Net commission                                             (1 454)   (1 289)    -13%
Management expenses                                        (2 645)   (2 572)     -3%
Underwriting result                                           296       325      -9%
Investment return on insurance funds                          951     1 734     -45%
Non-insurance earnings                                         52       116     -55%
Gross result from financial services                        1 299     2 175     -40%
Taxation and non-controlling interest                        (609)   (1 078)     44%
Net result from financial services                            690     1 097     -37%

Key features for 2018:

- Gross written premiums increased by 4% (8% in local currency). Refer Business volumes section below for more information.

- Gross underwriting profit decreased by 9%, with life insurance earnings decreasing to a loss of R448 million (2017: loss of R419 million) due to 
  investments in growth, and general insurance earnings being in line with 2017. 

- The general insurance combined ratio amounted to 95.9% (2017: 94.4%). The following items impacted on the general insurance results:

  - One-off incentives of R28 million were paid to staff as part of the post-acquisition integration process.

  - General insurance claims experience weakened at Saham Maroc during the year, impacted by an increase in motor claims frequency and one-off fire claims in 
    the fourth quarter of 2018, which is traditionally a strong quarter for the Moroccan business.

  - Angola's loss declined from R40 million in 2017 to R29 million in 2018. An improvement in claims experience was partially offset by a higher cost base. 
    Exchange rate weakness contributed to higher expense inflation.

  - Lebanon also experienced a better claims environment, with a combined ratio of 88.2% in 2018 (2017: 91.2%). Underwriting profit increased by 107% as a
    result, despite the pressure on premium growth (refer Business volumes section below).

  - The other regions recorded lower earnings from direct insurance, primarily due to pressure on premium growth in Cote d'Ivoire.

  - Reinsurance profit increased by 11% from R232 million on 2017 to R257 million in 2018.

- Investment return earned on insurance funds declined by 45%. The underlying portfolios included legacy equity exposures, which benefited from positive 
  investment market returns in 2017, while most markets declined in 2018. The difference in relative market performance contributed R725 million to the 
  decline. The strategic asset allocation of these portfolios will be reassessed as part of the planned capital management activities following the 
  acquisition and Saham Finances becoming a wholly-owned subsidiary.  

Relative investment market returns and a number of one-off items impacted on the Saham Finances earnings for 2018. The table below provides an analysis of 
the Saham Finances attributable and normalised earnings in context of the purchase consideration:

Analysis of Saham Finances earnings 
R million                                                    2018      2017  
Net result from financial services                            690     1 097 
Net investment return                                         172       110
Net finance cost                                             (160)      (76)
Attributable earnings                                         702     1 131 
Foreign currency translation differences                     (124)      151
Comprehensive income                                          578     1 282 
 
Operational adjustments                                        68         -
 Prior year tax adjustment                                     49         -
 Post-acquisition incentives                                   28         -
 Profit on disposal of subsidiary                             (80)        -
 Net reduction in funding cost post acquisition                71         -
 
Investment market volatility                                  387      (271)
 Marked-to-market adjustments - return on insurance funds      86      (371)
 Marked-to-market adjustments - net investment return         123       215
 One-off currency gains and losses                            178      (115)
 
Normalised comprehensive income                             1 033     1 011 
 
Purchase price at hedged rate - 100% holding               25 914 
Transaction Price/Earnings ratio                               25        26 

A number of synergies have been identified during the acquisition phases. Good progress has already been made, with net synergies of USD1 million after tax 
and minorities realised in 2018, after allowing for integration costs.

- The other Rest of Africa operations had a disappointing year. Nigeria, Uganda and Zimbabwe achieved strong growth, with their combined gross earnings 
  increasing by 66%. This was, however, more than offset by underperformance in other large regions and the impact of the Ghana disposal in 2017. Ghana contributed 
  R30 million to the 2017 gross earnings.

  - The Zambian health business experienced one-off losses of R32 million, which includes bad debt provisions in respect of amounts owing by the former 
    outsourced partner. The health business was transferred to Saham Finances in the latter part of 2018, who has a strong track record of managing this 
    line of business profitably in Africa. A turnaround in prospects is already evident. The Zambian life business also had a difficult year, with low new 
    business production and one-off costs relating to a cost reduction initiative contributing to a break-even position. Corrective actions have been implemented, 
    including the pending appointment of a new chief executive as well as increased distribution support from a SEM cluster level.

  - Gross result from financial services of the Malawian life business exceeded the 2018 budget, but still declined by 23% from a high base in 2017. Profitability 
    of the general insurance business was under pressure from high claims and expense experience.

  - The Tanzanian life business had a good year and grew its earnings contribution by 15%. This was, however, not sufficient to compensate for underperformance 
    in the general insurance business. Regulatory changes in the general insurance industry in Tanzania included a change to a "no premium no cover" regime. 
    This had a one-off impact on both current year production and terminations within the in-force book. Combined with weaker claims experience, it reduced the 
    2018 general insurance earnings by R36 million compared to 2017.

  - The Kenya operations recorded a 17% decrease to R25 million. The life insurance business gained traction and achieved strong growth. The asset management 
    business exceeded expectations for the year and more than doubled its contribution, partly assisted by the acquisition of a controlling stake in the former 
    Pinebridge investment management business during 2017. These good performances were, however, more than countered by one-off restructuring and administration 
    costs of some R20 million. A new group chief executive with in depth insurance experience has been appointed, augmenting the appointment of the new life 
    insurance chief executive in 2017. This substantially strengthens the management team and prospects of the business. Cluster level distribution support will 
    also be provided in 2019 to accelerate new business production.

Other emerging markets delivered 4% growth in gross result from financial services. 

- The Indian businesses had a solid year, increasing their gross result from financial services by 3% in rand terms (10% in local currency). Shriram Transport 
  Finance delivered growth of 14% in local currency, supported by good growth in its loan book. The Shriram City Union Finance loan book also grew by double 
  digits, but a decline in net interest margin limited its operating earnings growth to 9% in local currency. Liquidity constraints in the Indian market 
  increased funding costs for the business. Shriram General Insurance earnings grew by 13% in local currency, attributable to an improvement in underwriting 
  margin. Expansion costs incurred by the life insurance business were recognised as project expenses in the initial two years of the initiative to take 
  cognisance of the fact that the growing in-force book will take some time to reflect in higher earnings. Recognition of these costs within project expenses 
  was discontinued on 30 June 2018 and reallocated to gross result from financial services with effect from 1 July 2018, limiting growth in life insurance 
  operating earnings to 2% in local currency.

- The Malaysian operations achieved satisfactory growth in 2018. Life insurance profit increased by 23% (17% in local currency), benefiting from positive 
  investment variances and lower administration costs. A more diversified book of business contributed to an improvement in the general insurance claims experience, 
  with operating earnings from this line of business increasing by 12% (6% in local currency).

The 18% increase in tax on financial services income includes prior year tax adjustments in Botswana and Kenya.
SIG overall net result from financial services declined by 6%:

SIG gross result from financial services for the year ended 31 December 2018
R million                                                    2018      2017   Change 
Sanlam Investments (3rd party business)                       377       396      -5%
Wealth Management                                             170       203     -16%
International                                                 515       401      28%
Corporate services                                            (16)       (5)  >-100%
Investment management                                       1 046       995       5%
Sanlam Specialised Finance                                    496       582     -15%
 Sanlam Asset Management                                      204       196       4%
 Central Credit Manager and other                             292       386     -24%
 
Gross result from financial services                        1 542     1 577      -2%
Tax on gross result from financial services                  (326)     (336)      3%
Non-controlling interest                                      (64)      (14)  >-100%
Net result from financial services                          1 152     1 227      -6%

The 3rd party Sanlam Investments gross result from financial services declined by 5% on 2017, attributable to a R47 million decrease in performance fees
from R58 million in 2017 to R11 million in 2018. This is due to a slight underperformance of some 0.3% in the larger portfolios, attributable to the severe
devaluation of properties in the first quarter of 2018 and underperformance in the emerging markets fund. Excluding performance fees, gross operating
earnings increased by 8%, a particularly satisfactory result given no growth in the average level of the South African equity market in 2018. Satrix
achieved meaningful earnings growth, with the positive impact of net fund inflows more than offsetting fee pressures in a highly competitive market. The
third party component of Sanlam Structured Solutions also had a good year, benefiting from a number of new structuring transactions. The other business
units experienced a decline in earnings in line with generally no growth in assets under management, but with administration costs increasing in line with
inflation.

Wealth Management gross result from financial services decreased by 16% (3% down excluding Summit Trust that was disposed of during 2017 and one-off
performance fees earned from a specific client arrangement in 2017). The 3% decline is substantially due to administration costs incurred in respect of
operational system upgrades.

The International business' gross results were positively impacted by Nucleus being consolidated after its listing (compared to equity-accounting as an
associate up to 30 June 2018), strong growth in assets under administration at the Ireland-based platform business due to third party inflows and increased
international allocation in the South African portfolios, and property development profits earned by Artisan. Excluding the change in accounting treatment
of Nucleus, gross results were up 12%.

Sanlam Specialised Finance did well to grow the profit contribution of the Sanlam Asset Manager and the related division of Sanlam Structured Solutions by
4% against the backdrop of weak equity markets. The Structured Solutions business earned higher structuring fee income and recognised its share in the
margin earned on the Sanlam Life bond that matured in August 2018. The proceeds from the Sanlam Life bonds are invested in a portfolio of matching assets,
with Structured Solutions sharing in the net margin earned over the period until maturity. The remainder of the operations were negatively impacted by
losses of some R40 million relating to equity-backed empowerment transactions following a decline in the underlying share prices and some R70 million in
respect of the non-recognition of income on the Mayfair collateralised loan. A prudent approach is followed in respect of the exposure during the winding
up of Mayfair Holdings and Mayfair Speculators.

Following a year of major catastrophe events in 2017, Santam experienced a relatively benign claims environment in 2018. Combined with acceptable growth in
net earned premiums, it contributed to a 37% increase in gross result from financial services (41% after tax and non-controlling interest). The
conventional insurance book achieved an underwriting margin of 9% in 2018 (6% in 2017), well in excess of its 4% to 8% target range. Profit from the motor
and property books, the largest lines of business, increased by 144%. This was driven by an absence of large catastrophe events and fewer large commercial
fires. The aggregate profit contribution from other insurance classes declined by 32%. Engineering and accident and health did well due to limited claims
activity. Liability business experienced a number of large claims, including the listeriosis outbreak early in 2018, while the Guarantee business
experienced losses in the difficult economic environment.

The management expense ratio increase compared to 2017, mainly due to increased variable incentive costs in 2018, increased direct acquisition costs to
support growth initiatives at MiWay, as well as additional underwriting risk management costs incurred to improve the loss ratio across all lines. A
provision was also raised to account for the liquidity concerns at a third-party collection agency that went into voluntary curatorship. The 16% increase
in gross result from financial services from the SEM investments reflect the benefit of the Saham Finances corporate activity. Excluding Saham Finances,
gross earnings from the SEM investments were in line with 2017 due to the weaker general insurance performance in the SEM Rest of Africa portfolio and
solid results from SGI in India (refer SEM section above).

Sanlam Corporate's net result from financial services increased by 4% (3% on a gross basis), with the muted growth caused by ongoing high group risk claims
experience. This conceals an overall good operational performance. SEB earnings declined by 3% due to a R66 million (39%) decline in risk profits.
Mortality and disability claims experience weakened significantly in the second half of the year, which is likely to require further rerating of premiums
in 2019. The administration units turned profitable in 2018, a major achievement after many years of operating losses. The healthcare businesses reported
satisfactory double digit growth in gross earnings, while ACA made a first time contribution of R54 million, well in excess of the business plan. The new
corporate solutions team established in 2018 contributed to an increase in cluster costs from R7 million in 2017 to R32 million in 2018.

Normalised headline earnings

Normalised headline earnings of R9,1 billion are 8% down on 2017. This is the combined effect of the 4% increase in net result from financial services, a
57% decline in net investment return earned on the capital portfolio, a 53% (R139 million) increase in amortisation of intangible assets as well as an
increase in net project expenses from R114 million in 2017 to R136 million in 2018.

Net investment return was negatively impacted by:
- A decline in equity and fixed interest markets across most regions where the Group operates;
- Impairment of corporate credit exposures in Kenya of some R86 million; and
- Investment return lost on capital redeployed for strategic acquisitions in 2017 and 2018.

The amortisation of the value of business acquired intangible asset recognised upon the consolidation of Saham Finances contributed R117 million to the
R139 million increase in the amortisation charge.

Net project expenses include R56 million one-off expenses incurred by SIG on new data capabilities and platforms (including big data and advanced
analytics) (2017: R8 million), R22 million due diligence and related expenses in respect of the Saham Finances acquisition (2017: R8 million), Shriram Life
Insurance expansion cost of R8 million up to 30 June 2018 (2017: R26 million) and R44 million of SEM cluster level project-related expenses 
(2017: R42 million).

Normalised attributable earnings

Normalised attributable earnings increased by 5% from R11 billion in 2017 to R11.5 billion in 2018. The biggest contributors to profit on disposal of
subsidiaries and associates of R2.8 billion is the change in accounting treatment of Saham Finances (R1.8 billion) and Nucleus (R0.7 billion) from
associated companies to subsidiaries. In terms of IFRS, when an associated company becomes a subsidiary, the former investment in the associated company
must be derecognised as a deemed disposal at fair value, with the subsidiary being fully recognised as an acquisition at fair value. In essence, the profit
on disposal of the associate is reflected in higher intangible assets being recognised on acquisition date of the subsidiary. The 2017 comparative profit
on disposal of subsidiaries and associates comprised substantially of R1.2 billion realised on the disposal of the Enterprise Group in Ghana. Impairment
charges largely relate to the impairment of the investments in Letshego (R105 million) and CIH (R96 million). Letshego's operational performance did not
improve in 2018, requiring a further impairment of the investment. The CIH impairment follows the decline in the Bank Windhoek performance and share price
due to pressure in the Namibian banking sector.

Business volumes

New business volumes increased by 1% amidst pressure on investor confidence in South Africa and a high comparative base in Botswana. Life insurance new
business volumes increased by 21%, investment business inflows declined by 8% and general insurance earned premiums increased by 19%, with the latter in
particular benefiting from corporate activity. Net fund flows increased by 12%, with all clusters apart from SIG achieving sterling growth.

Business volumes for the year ended 31 December 2018
R million                                                                         New business                   Net inflows
                                                                          2018         2017   Change       2018      2017    Change
Sanlam Personal Finance                                                 60 971       58 615       4%     10 294     8 454       22%
Sanlam Emerging Markets                                                 26 224       21 903      20%      8 607     2 140      302%
Sanlam Investment Group                                                 99 696      114 391     -13%      7 214    18 678      -61%
Santam                                                                  22 812       21 435       6%      8 986     7 265       24%
Sanlam Corporate                                                        13 326        4 828     176%      6 438       606      962%
Total                                                                  223 029      221 172       1%     41 539    37 143       12%

Life insurance business                                                 53 815       44 615      21%     16 814    10 235       64%
Investment business                                                    136 529      149 000      -8%     11 779    17 491      -33%
General insurance                                                       32 685       27 557      19%     12 946     9 417       37%
Total                                                                  223 029      221 172       1%     41 539    37 143       12%

SPF's new business sales increased by 4%, an overall satisfactory result under challenging conditions.

SPF new business volumes for the year ended 31 December 2018
R million                                                                                            2018    2017  Change
Sanlam Sky                                                                                          2 494   1 455     71%
Recurring premium sub cluster and Strategic business development                                    3 412   2 838     20%
  BrightRock                                                                                          410      64   >100%
  Other                                                                                             3 002   2 774      8%
Glacier                                                                                            55 065  54 322      1%
  Life investments                                                                                 10 082  10 219     -1%
  LISP                                                                                             44 983  44 103      2%

New business volumes                                                                               60 971  58 615      4%

Sanlam Sky's new business increased by an exceptional 71% (83% excluding the savings business transferred to the SPF Savings business). The annual 
R566 million Capitec credit life new business recognised in the first half of the year was augmented by strong demand for the new Capitec funeral product,
which generated new business of R433 million. The traditional individual life intermediary channel continued on its growth path, growing new business sales
by 13%. Safrican's performance improved in the second half of the year, achieving 9% growth for the full year.

New business volumes in the Recurring premium sub cluster and Strategic Business Development increased by 20%. Risk business sales increased by 51%. Strong
organic growth at BrightRock was augmented by the structural impact of the acquisition concluded during the course of 2017. Excluding BrightRock, new risk
business sales were up 3%, with MiWayLife providing the growth. Savings and personal loans credit life sales increased by 10%, with strong demand for
retirement annuities partially offset by lower traditional endowment sales.

Glacier new business grew marginally by 1%. Primary sales onto the LISP platform improved by 5%, an acceptable result given the pressure on investor
confidence in the mass affluent market. Secondary sales into Glacier funds declined by 4% - wrap inflows were down 7% as conversions of platform assets
slowed, but with good demand for global stock feeder funds and the artificial intelligence fund providing some relief. Life investments sales experienced
an overall decline of 1% with a significant change in mix of business from endowments to guaranteed plans and life annuities.

The BrightRock contribution and good sales of single premium LISP business supported an overall 22% rise in SPF's net fund inflows.

SEM new business volumes increased by 20%.

SEM new business volumes for the year ended 31 December 2018 
R million                                     2018    2017   Change
Namibia                                      6 802   5 593      22%
Botswana                                     5 833   7 137     -18%
Rest of Africa                              10 655   6 360      68%
  Saham Finances (including Lebanon)         7 569   3 385     124%
  Enterprise Group Ghana                         -     130    -100%
  Other                                      3 086   2 845       8%

Pan-Africa portfolio                        23 290  19 090      22%
Other emerging markets                       2 934   2 813       4%
  India                                      2 329   2 224       5%
  Malaysia                                     605     589       3%

New business volumes                        26 224  21 903      20%

Namibia did exceptionally well to increase new business volumes by 22% despite weak economic conditions. Both life and investment new business grew
strongly. Within the life insurance segment, the mix of business changed to the more profitable entry-level market.

The main detractor from new business growth in the Botswana business was the investment line of business, which declined by 24%. This line of business is
historically more volatile in nature. Life insurance new business volumes declined by 3%, with lower funeral and annuity sales offsetting good growth in
group life business.

The 68% new business growth in the Rest of Africa portfolio is largely due to corporate activity relating to Saham Finances.

- The Saham Finances growth of 124% was supported by corporate activity. On a 100% basis, gross written premiums increased by 4% (8% in local currency) 
  (life insurance up 8%, general insurance up 3% and reinsurance up 1%) and net earned premiums by 9%.
    - Morocco achieved 10% growth in gross written premiums, an acceptable performance in a competitive market. Renewals of contracts with national banks
      supported 11% growth in Saham Assistance gross written premiums.
    - Saham Angola gross written premiums decreased by 31%, entirely attributable to a weaker Kwanza exchange rate. In local currency, the business continued to
      deliver good growth. All lines of business achieved double digit growth rates.
    - The Lebanese insurance market contracted by 3% in 2018, reflective of the weak economic environment. The Saham Finances business did well to limit its
      decline to only 1.5%, half of the industry average. The motor class had a particularly difficult year as a slowdown in retail credit extension depressed
      vehicle sales.
    - The CIMA region experienced competitive pressures in the motor market and lower demand for fire insurance from exploration companies. This contributed to
      growth of only 4% in general insurance gross written premiums from the other Saham Finances regions. Life and health insurance provided some support, with
      overall growth of 7% across all lines of business.
    - Reinsurance premiums were broadly in line with 2017.
- The remainder of the Rest of Africa portfolio (excluding the Ghana disposal) increased by 8%. Kenya, Malawi and Rwanda underperformed, with strong growth
  in the other regions. The areas of underperformance are receiving attention, through a combination of management changes and cluster level distribution
  support.

The Indian insurance businesses continued to perform well, achieving double digit growth in both life and general insurance. Within the life insurance
business, group single premiums from the credit businesses' client bases did particularly well.

The Malaysian businesses are finding some traction after a period of underperformance, increasing their overall new business contribution by 3%. New
business production is not yet meeting expectations, but the mix of business improved at both businesses.

Net fund flows increased threefold, with most regions contributing to the strong growth.

Low investor confidence had a pronounced effect on SIG's new business volumes, which declined by 13%. The international businesses attracted strong new
inflows (up 57%), but this was more than offset by declines in South Africa across all business units. Institutional new inflows remained weak for the 
full year, while retail inflows also slowed down significantly after a more positive start to the year. A number of strategic initiatives aimed at gaining
market share are being implemented, including closer cooperation with Glacier and the package of BBBEE transactions approved by shareholders in 
December 2018. Improved investor confidence will, however, remain a key determinant of future growth. Lower new business volumes, coupled with an 
R8.5 billion withdrawal of a low margin index tracking fund managed for an institutional client on an outsourced basis, contributed to a 61% reduction 
in net fund flows from R18.7 billion in 2017 to R7.2 billion in 2018.

Gross written premiums at Santam increased by 11% (9.5% excluding the impact of the Santam Structured Insurance acquisition in 2017); 6% on a net earned
basis. Conventional insurance gross written premiums increased by a satisfactory 7%, while alternative risk transfer premiums grew by 40% (26% excluding
corporate activity). Intermediated personal and commercial lines of business, MiWay and Namibia experienced pressure on growth amidst difficult economic
conditions. The property class grew by 12% following strong growth in the corporate property market due to reinsurance capacity constraints. The motor
class grew by 6%, with an 8% higher contribution from MiWay. Within the specialist classes, accident and health grew by 11% on the back of strong demand
for travel insurance. Crop insurance premiums declined by 12% following lower take-up. The liability and transportation classes recorded growth of 2% and
1% respectively amidst a focus on profitability. Growth of 3% in engineering reflects the impact of fewer large construction contracts within an industry
under pressure.

Sanlam Corporate had an exceptional year, more than doubling life insurance new business volumes. Single premiums grew by 109%, while recurring premiums
increased by a particularly satisfactory 56%. Life licence business has been reclassified from SIG to Sanlam Corporate in 2018, which supported overall 
new business growth of 176%. The new business performance also reflects a substantial improvement in net fund inflows.

Overall Group net fund inflows of R41.5 billion in 2018 is a particularly satisfactory performance given the challenging market conditions and large
institutional withdrawal at SIG.

Value of new covered business

The discount rate used to determine VNB is directly linked to long-term interest rates. The 50bps and 60bps increase in the South African nine- and five-
year benchmark rates respectively during 2018 resulted in a commensurate rise in the risk discount rate, with a 6% negative effect on overall VNB growth.
VNB margins were also some 13 basis points lower due to the higher discount rate. The strong growth in Sanlam Sky and SEB new business volumes were the
main contributors to particularly satisfactory growth of 14% in net VNB on a consistent economic basis (CEB) (8% based on the actual economic basis at the
end of 2018). Overall net VNB margins declined from 2.94% in 2017 to 2.8% in 2018 (on a CEB), largely due to the underperformance in East Africa and a
relatively larger contribution from the lower margin SEB business.

Value of new covered business for the year ended 31 December 2018 
R million                                       2018      2017  Change      CEB
Net value of new covered business              1 985     1 841      8%      14%
  Sanlam Personal Finance                      1 504     1 407      7%      14%
  Sanlam Emerging Markets                        338       347     -3%      -1%
  Sanlam Investment Group                          -         -       -        -
  Sanlam Corporate                               143        87     64%      71%
Gross of non-controlling interest              2 187     2 008      9%      14%

Net present value of new business premiums    74 378    62 604     19%      20%
  Sanlam Personal Finance                     48 790    43 940     11%      12%
  Sanlam Emerging Markets                      8 366     7 146     17%      17%
  Sanlam Investment Group                      3 334     3 259      2%       2%
  Sanlam Corporate                            13 888     8 259     68%      70%
Gross of non-controlling interest             78 085    65 377     19%      20%

Net new covered business margin                2,67%     2,94%            2,80%
  Sanlam Personal Finance                      3,08%     3,20%            3,26%
  Sanlam Emerging Markets                      4,04%     4,86%            4,11%
  Sanlam Investment Group                          -         -                -
  Sanlam Corporate                             1.03%     1.05%            1,06%
Gross of non-controlling interest              2,80%     3,07%            2,92%

SPF achieved overall growth of 7% (14% on a comparable basis). The strong growth in new business volumes at Sanlam Sky had a major positive effect on VNB,
which increased by 16% (25% on a comparable basis). Capitec contributed R80 million. The Sanlam Sky VNB margin declined slightly from 8.88% in 2017 to
8.30% in 2018 due to a change in mix of business to lower margin group business. The Recurring premium sub cluster and Strategic Business Development
achieved growth of 13% (23% on a CEB, and 20% on an CEB and excluding BrightRock). MiWayLife made a welcome first contribution of R11 million, augmented by
good growth at BrightRock, a change in mix to more profitable lines of business, positive modelling changes and lower acquisition costs. VNB margins
improved commensurately. Glacier experienced an 8% decline in VNB (6% on a comparable basis) due to the change in mix from higher margin endowment business
to guaranteed and annuity business.

Net VNB at SEM declined by 3% (up 6% on a CEB and excluding Ghana and Saham Finances). Namibia did exceptional well pursuant to the strong growth in
entry-level market sales, growing its net VNB by more than 20%. Most other businesses contributed satisfactory growth, apart from Botswana, Kenya, Uganda
and Malawi that underperformed in line with their weak new business production and declining file sizes. Nigeria's contribution was broadly in line with
2017 despite strong new business growth, due to a one-off regulatory increase in capital requirements that resulted in a higher cost of capital charge.
Saham Finances contributed R38 million compared to R20 million in 2017.

The good growth in Sanlam Corporate recurring and single premium business, combined with modelling improvements, supported a 64% (71% on a comparable
basis) increase in the cluster's VNB contribution.

Capital management

The Group started the year with discretionary capital of R2 billion, after allowing for the ACA acquisition. A number of capital management actions during
2018 affected the balance of available discretionary capital, including the $1 billion (R13 billion) Saham Finances transaction. Discretionary capital at
the end of 2018 was negative due to the approved BBBEE share issuance not being concluded before year-end as we are still awaiting regulatory approvals.

Sanlam shareholders approved a BBBEE equity raising at the extraordinary general meeting held on 12 December 2018, with the cash raised from this issuance
earmarked to repay the internal (R1.7 billion) and external (R2 billion) debt incurred as partial funding for the Saham Finances acquisition and to restore
the discretionary capital portfolio to an appropriate level. All regulatory approvals have been received, apart from Mauritius. [Once these approvals are
granted, we will proceed with the issuance, subject to the Sanlam share price being within the R74 - R86 range approved by shareholders.]
Discretionary capital amounted to a negative R3.7 billion at 31 December 2018, equal to the combined internal and external debt. Cash proceeds of 
R4.6 billion will be raised at the lower end of the share issuance range (R74), which will restore the discretionary capital portfolio to some R1 billion.

Discretionary capital at 31 December 2018
R million
Discretionary capital at 31 December 2017             2 000
Excess dividend cover                                   693
Capital released from Sanlam Life                     1 813
  Allocated capital                                   1 500
  Excess investment return                              313
Capital raised through accelerated book build         5 455
Investment return and other                            (104)
Corporate activity                                  (13 535)
  South Africa                                         (267)
    Catalyst Fund Managers SA                          (168)
    Sanlam Private Wealth                               (96)
    Other                                                (3)
  Other emerging markets                            (12 913)
    Saham Finances                                  (12 983)
    Sanlam Investments East Africa                      101
    Sanlam General Insurance Uganda                     (19)
    Other                                               (12)
  Developed markets                                    (355)
    Catalyst Fund Managers Foreign                     (250)
    Phoenix Infraworks                                 (102)
    Other                                                (3)

Discretionary capital at 31 December 2018*           (3 678)

* Before planned BBBEE issuance referred to above.

Movements in discretionary capital during 2018 included the following:

- The excess cash operating earnings cover in respect of the dividend paid in 2018.
- Capital of R1.8 billion released from the covered business operations in Sanlam Life. As communicated in the Group's 2017 annual results announcement,
  capital allocated to the covered business operations on the Sanlam Life balance sheet was reduced by R1.5 billion in the first half of 2018. Investment
  return earned on the Sanlam Life capital base in 2018 (R313 million) was also available for release.
- Capital of R5.5 billion was raised through an accelerated book build at the end of March 2018 as partial funding for the acquisition of the remaining stake
  in Saham Finances.
- Corporate activity during 2018 included:
  - The acquisition of the remaining 53% stake in Saham Finances for R12.9 billion at the hedged rate of R13.24 (after allowing for Santam's contribution to
    increase its effective stake in Saham Finances from 7% to 10%). The actual exchange rate on payment date was R14.77, with the forex hedges providing
    protection of some R1.5 billion on close-out.
  - SIG acquired 69% and 100% stakes in Catalyst Fund Managers' South African and foreign operations respectively for a total consideration of R418 million.
    The acquisition significantly enhances SIG's property management offering in line with the strategic investment in alternative asset management
    capabilities. In line with this strategy, SIG also invested R102 million for a 30% stake in Phoenix Infraworks, a specialist infrastructure investment
    business.
  - Sanlam Private Wealth acquired a wealth management book for R96 million.
  - SEM sold a stake in the Kenyan-based Sanlam Investments East Africa asset management business to its local partner, realising R101 million. This disposal
    compliments SEM's Pan-Africa partnership model.
- Investment return, taxation on the forex hedges and other small movements utilised R104 million.

Solvency

All of the major life insurance businesses within the Group were sufficiently capitalised at the end of December 2018. The Sanlam Group SCR cover ratio of
215% remained largely in line with the 218% cover at 31 December 2017. As indicated in previous results announcements, a Solvency Capital Requirement (SCR)
target cover range of between 170% and 210% has been set for Sanlam Life Insurance Limited's (Sanlam Life) covered business. The R8 billion of IFRS-based
required capital allocated to these operations at the end of December 2018 translated into a SCR cover of 221%. The SCR cover ratio for the Sanlam Life
entity as a whole at 264% exceeded the covered business ratio at the end of December 2018 due to the inclusion of discretionary and other capital held on
the Sanlam Life balance sheet as well as investments in Santam and other Group operations that are not allocated to Sanlam Life's covered business
operations (i.e. not included in the R8 billion allocated capital referred to above).

Dividend

Applying the Group's dividend policy, the Board decided to increase the normal dividend per share by 7.6% to 312 cents. This is well within our target
range of 2% to 4% real growth given the 2018 average inflation rate of 4.6%. It will maintain a cash operating earnings cover of approximately 1.05 times.

The South African dividend withholding tax regime applies in respect of this dividend. The dividend will in full be subject to the 20% withholding tax,
where applicable, which will result in a net final dividend, to the shareholders who are not exempt from paying dividend tax, of 249.6 cents per share. 
The number of ordinary shares in issue in the company's share capital as at the date of the declaration is 2 070 079 299 excluding treasury shares of 
161 909 748 at 31 December 2018. The company's tax reference number is 9536/346/84/5.

Shareholders are advised that the final cash dividend of 312 cents for the year ended 31 December 2018 is payable on Monday, 15 April 2019 by way of
electronic bank transfers to ordinary shareholders recorded in the register of Sanlam at close of business on Friday, 12 April 2019. The last date to trade
to qualify for this dividend will be Tuesday, 9 April 2019, and Sanlam shares will trade ex-dividend from Wednesday, 10 April 2019. Share certificates may
not be dematerialised or rematerialised between Wednesday, 10 April 2019 and Friday, 12 April 2019, both days included.

Sanlam Group

Summarised financial statements for the year ended 31 December 2018

Accounting policies and basis of presentation 

Basis of presentation

Introduction
The consolidated financial statements are prepared on the historical-cost basis, unless otherwise indicated, in accordance with The JSE Listings Requirements,
the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council , the information required by 
IAS 34 Interim Financial Reporting and the requirements of the Companies Act , No. 71 of 2008 (as amended), in South Africa. The financial statements are 
presented in South African rand rounded to the nearest million, unless otherwise stated.

The following new or revised IFRS and interpretations became effective in the current financial year and have therefore been applied:

- IFRS 9 - Financial Instruments (effective 1 January 2018)
- IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018)

The following new or revised IFRS and interpretations have effective dates applicable to future financial years and have not been early adopted:

- IFRS 16 - Leases (effective 1 January 2019)
- IFRIC 23 - Uncertainty over Income Tax Treatments (effective 1 January 2019)
- IFRS 17- Insurance Contracts (effective 1 January 2022)

IFRS 16: Leases was issued by the IASB in January 2016 and replaces IAS 17: Leases for reporting periods beginning on or after 1 January 2019. The group
does not intend to adopt the standard before its effective date. IFRS 16 has one model for lessees which will result in almost all leases being included on
the statement of financial position. Under the new standard, an asset (the right to use the leased item) and the liability to pay rentals are recognised.
The only exceptions are short-term and low-value leases. In addition, the nature of expenses related to those leases will now change as IFRS 16 replaces
the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities. The accounting for 
lessors will not significantly change.

As lessor: This new standard is not expected to have a significant impact on how the group (as lessor) accounts for leases due to the carry forward of the
lessor accounting model from IAS 17. However, the group anticipates an impact as a result of the enhanced disclosures for lessors required by IFRS 16
namely: components of lease income and risk management with respect to exposure to residual asset risk.

As lessee: The standard will affect primarily the accounting of the group's operating leases.  As at the reporting date, the group has non-cancellable
operating lease commitments of R2 765 million. However, the group has not yet determined to what extent these commitments will result in recognition of an
asset and a liability for future payments and how this affects the group's profit and classification of cash flows.

Some of the commitments may be covered by the exception for short-term and low-value assets and some commitments may relate to arrangements that will not
qualify as leases under IFRS 16.

As lessee, the Group can either apply the standard using a:
- Retrospective approach; or
- Modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all of its leases. The Group plans to apply IFRS 16 using the modified retrospective approach. Therefore,
the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 January 2019, with no
restatement of comparative information.

When applying the modified retrospective approach the leases previously classified as operating leases under IAS 17, the lessee can elect, on a lease-by-
lease basis, whether to apply a number of practical expedients on transition. The Group is assessing the potential impact of using these practical
expedients.

The Group is not required to make any adjustments for any leases in which it is a lessor except where it is an intermediate lessor in a sub-lease.

IFRIC 23: Uncertainty over Income Tax Treatments was issued in June 2017. The Interpretation addresses the accounting for income taxes when tax
treatments involve uncertainty that affects the application of IAS 12. Initial work performed, indicates that there will be limited impact on the financial
statements as a result of this standard interpretation.

IFRS 17: Insurance Contracts was issued in May 2017. The standard establishes the principles for the recognition, measurement, presentation and disclosure
of insurance contracts within the scope of the standard. Initial work performed on the impact of IFRS 17 indicates that there will be a significant impact
on the underlying valuation models, systems and processes. The Group is in the process of assessing the requirements of the standard against current data,
processes and valuation models and is expected to finalise this assessment during 2019.

Other: The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.

External audit 

This summarised report is extracted from audited information, but is not itself audited. The annual financial statements were audited by 
Ernst & Young Inc., who expressed an unmodified opinion thereon. The audited annual financial statements and the auditor's report thereon are available 
for inspection at the company's registered office. The shareholders' information was audited by Ernst & Young Inc., who expressed an unmodified opinion 
thereon. The audited shareholders' information and the auditor's report thereon are available for inspection at the company's registered office.
The directors take full responsibility for the preparation of the summarised report and that the financial information has been correctly extracted from
the underlying annual financial statements and shareholders' information.

Summarised shareholders' information for the year ended 31 December 2018

Contents
Group Equity Value  
Shareholders' fund income statement  
Notes to the shareholders' information  
Embedded value of covered business  

Group equity value 
at 31 December 2018   
                                                                          2018       2017
                                                                     R million  R million
Embedded value of covered business                                      56 234     54 283
Sanlam Personal Finance                                                 39 209     39 546
  Adjusted net worth                                                     5 351      6 256
  Value of in-force                                                     33 858     33 290
Sanlam Emerging Markets                                                  9 151      6 686
  Adjusted net worth                                                     4 257      3 021
  Value of in-force                                                      4 894      3 665
Sanlam Investment Group                                                  2 797      2 768
  Adjusted net worth                                                     2 803      2 644
  Value of in-force                                                         (6)       124
Sanlam Corporate                                                         5 077      5 283
  Adjusted net worth                                                     2 367      3 117
  Value of in-force                                                      2 710      2 166
Other Group operations                                                  76 424     59 546
Sanlam Personal Finance                                                  3 976      3 855
Sanlam Emerging Markets                                                 35 508     20 935
Sanlam Investment Group                                                 15 906     15 563
Santam                                                                  20 102     18 108
Sanlam Corporate                                                           932      1 085

Other capital and net worth adjustments                                  5 072      5 934
                                                                       137 730    119 763

Discretionary capital                                                   (3 678)     2 000
Group equity value                                                     134 052    121 763
Group equity value per share (cents)                                     6 341      5 940

Shareholders' fund income statement  
for the year ended 31 December 2018
                                                                          2018       2017
                                                                     R million  R million
Result from financial services before tax                               14 544     13 558
  Sanlam Personal Finance                                                5 612      5 900
  Sanlam Emerging Markets                                                3 773      3 311
  Sanlam Investments                                                     1 542      1 577
  Santam                                                                 2 978      2 173
  Sanlam Corporate                                                         804        779
  Group office and other                                                  (165)      (182)
Tax on financial services income                                        (4 116)    (3 726)
Non-controlling interest                                                (1 538)    (1 283)
Net result from financial services                                       8 890      8 549
Net investment return                                                      707      1 663
  Net investment income                                                    638        808
  Net investment surpluses                                                  63        817
  Net equity-accounted headline earnings                                     6         38
Net project expenses                                                      (136)      (114)
Equity participation costs                                                  (5)        (2)
Amortisation of intangibles                                               (400)      (261)
Normalised headline earnings                                             9 056      9 835
Profit on disposal of operations                                         2 773      1 335
Net equity-accounted non-headline earnings                                  (3)       134
Impairments                                                               (305)      (303)
Normalised attributable earnings                                        11 521     11 001
Fund transfers                                                             106        (78)
Attributable earnings per Group statement of comprehensive income       11 627     10 923


Notes to the shareholders' information 
for the year ended 31 December 2018  
                                          2018       2017
                                     R million  R million
1. New business

Analysed per licence:
  Life Insurance                        53 815     44 615
    Sanlam Personal Finance             34 112     31 182
    Sanlam Emerging Markets              6 410      5 468
    Sanlam Corporate                    10 074      4 828
    Sanlam Investment Group              3 219      3 137
  Investment business and other        169 214    176 557
    Sanlam Personal Finance             26 859     27 433
    Sanlam Emerging Markets             19 814     16 435
    Sanlam Investment Group             96 477    111 254
    Santam                              22 812     21 435
    Sanlam Corporate                     3 252          -

Total new business                     223 029    221 172

2. Net flows of funds

Analysed per licence:
  Life Insurance                        16 814     10 235
    Sanlam Personal Finance              8 719      6 840
    Sanlam Emerging Markets              4 226      3 146
    Sanlam Corporate                     4 257        606
    Sanlam Investment Group               (388)      (357)
  Investment business and other         24 725     26 908
    Sanlam Personal Finance              1 575      1 614
    Sanlam Emerging Markets              4 381     (1 006)
    Sanlam Investment Group              7 602     19 035
    Sanlam Corporate                     2 181          -
    Santam                               8 986      7 265

Total net flow of funds                 41 539     37 143

3. Normalised earnings per share

In terms of IFRS, a consolidation reserve is created for differences in the valuation bases of long-term policy liabilities and assets supporting those
liabilities. Certain investments held in policyholder portfolios may not be recognised at fair value in terms of IFRS, whereas the valuation of the related
policy liabilities is based on the assets at fair value. Similarly, deferred tax assets recognised in respect of assessed tax losses in policyholder funds
increases the Group's net assets without a corresponding increase in policy liabilities. These create mismatches with a corresponding impact on the
shareholders' fund. A separate reserve is created for these valuation differences owing to the fact that they represent accounting differences and not
economic gains or losses for the shareholders' fund.  The number of shares in issue must also be reduced with the treasury shares held by the
policyholders' fund for the calculation of IFRS basic and diluted earnings per share.  This is, in management's view, not a true representation of the
earnings attributable to the Group's shareholders, specifically in instances where the share prices and/or the number of shares held by the policyholders'
fund varies significantly. The Group therefore calculates normalised earnings per share to eliminate these impacts. 

                                                                                                   2018         2017
                                                                                                  cents        cents
Normalised diluted earnings per share:
Net result from financial services                                                                423,6        417,2
Headline earnings                                                                                 431,7        480,0
Profit attributable to shareholders' fund                                                         548,9        536,9

                                                                                              R million    R million
Analysis of normalised earnings (refer shareholders' fund income statement):
Net result from financial services                                                                8 890        8 549
Headline earnings                                                                                 9 056        9 835
Profit attributable to shareholders' fund                                                        11 521       11 001

                                                                                                Million      Million
Adjusted number of shares:                                                                     
Weighted average number of shares for diluted earnings per share                                2 077,3      2 027,3
Add: Weighted average Sanlam shares held by policyholders                                          21,5         21,8
Adjusted weighted average number of shares for normalised diluted earnings per share            2 098,8      2 049,1

Number of ordinary shares in issue                                                              2 232,0      2 166,5
Shares held by subsidiaries in shareholders' fund                                                (137,7)      (137,4)
Outstanding shares and share options in respect of Sanlam Limited long-term incentive scheme       21,0         20,8
Adjusted number of shares for value per share                                                   2 115,3      2 049,9

Embedded value of covered business at 31 December 2018

                                                                2018       2017
                                               Note        R million  R million

Sanlam Personal Finance                                       39 209     39 546
  Adjusted net worth                                           5 351      6 256
  Net value of in-force covered business                      33 858     33 290
  Value of in-force covered business                          35 336     34 840
  Cost of capital                                             (1 242)    (1 400)
  Non-controlling interest                                      (236)      (150)

Sanlam Emerging Markets                                        9 151      6 686
  Adjusted net worth                                           4 257      3 021
  Net value of in-force covered business                       4 894      3 665
    Value of in-force covered business                         7 654      5 962
    Cost of capital                                             (842)      (593)
    Non-controlling interest                                  (1 918)    (1 704)

Sanlam Investment Group                                        2 797      2 768
  Adjusted net worth                                           2 803      2 644
  Net value of in-force covered business                          (6)       124    
    Value of in-force covered business                           781        828
    Cost of capital                                             (787)      (704)

Sanlam Corporate                                               5 077      5 283
  Adjusted net worth                                           2 367      3 117
  Net value of in-force covered business                       2 710      2 166
    Value of in-force covered business                         3 376      3 065
    Cost of capital                                             (666)      (899)

Embedded value of covered business                            56 234     54 283

  Adjusted net worth (1)                                      14 778     15 038
  Net value of in-force covered business                      41 456     39 245
Embedded value of covered business                            56 234     54 283

(1) Excludes subordinated debt funding of Sanlam Life. At 1 January 2018, capital allocated to Sanlam Personal Finances and Sanlam Employee
    Benefits were reduced as follows:
    - From Sanlam Personal Finance: R969 million;
    - From Sanlam Employee Benefits: R531 million.

Change in embedded value of covered business for the year ended 31 December 2018

                                                                                                            2018                        2017
                                                                                                  Net Value of           Adjusted 
R million                                                                     Note      Total         in-force          net worth      Total

Embedded value of covered business at the beginning of the year                        54 283           39 245             15 038     51 246
  Value of new business                                                          2      1 985            4 552             (2 567)     1 841
  Net earnings from existing covered business                                           7 389             (806)             8 195      5 771
    Expected return on value of in-force business                                       4 937            4 937                  -      4 620
    Expected transfer of profit to adjusted net worth                                       -           (6 831)             6 831          -
    Operating experience variances                                               3      2 114              625              1 489      1 558
    Operating assumption changes                                                 4        338              463               (125)      (407)
  Expected investment return on adjusted net worth                                        921                -                921      1 020

Embedded value earnings from operations                                                10 295            3 746              6 549      8 632
  Economic assumption changes                                                    5       (755)            (762)                 7        234
  Tax changes                                                                    6        (36)             (20)               (16)         -
  Investment variances - value of in-force                                             (2 603)         (2 176)               (427)       691
  Investment variances - investment return on adjusted net worth                         (125)              -                (125)       (90)
  Profit on disposal of subsidiaries and associated companies                               -               -                   -        789
  Goodwill from business                                                               (1 223)         (1 212)                (11)      (485)
  Exchange rate movements                                                                 393             393                   -       (163)
  Net project expenses                                                                    (13)              -                 (13)         -

Embedded value earnings from covered business                                           5 933             (31)               5 964     9 608
  Acquired value of in-force                                                            3 124           2 242                  882     1 443
  Transfer (to)/from other Group operations                                                 -               -                    -         -
  Disposal of businesses                                                                    -               -                    -    (1 331)
  Net transfers from covered business                                                  (7 106)              -               (7 106)   (6 683)
  Embedded value of covered business at the end of the year                            56 234          41 456               14 778    54 283

Analysis of earnings from covered business
  Sanlam Personal Finance                                                               4 372             544                3 828     6 659
  Sanlam Emerging Markets                                                                 417            (748)               1 165     1 476
  Sanlam Investment Group                                                                 305            (130)                 435       403
  Sanlam Corporate                                                                        839             303                  536     1 070
Embedded value earnings from covered business                                           5 933             (31)               5 964     9 608

Value of new business for the year ended 31 December 2018

R million                                                 Note         2018    2017
Value of new business (at point of sale):
  Gross value of new business                                         2 426   2 217
    Sanlam Personal Finance                                           1 630   1 512
    Sanlam Emerging Markets                                             592     550
    Sanlam Investment Group                                               7       7
    Sanlam Corporate                                                    197     148

  Cost of capital                                                      (239)   (209)
    Sanlam Personal Finance (1)                                         (95)    (96)
    Sanlam Emerging Markets                                             (83)    (45)
    Sanlam Investment Group                                              (7)     (7)
    Sanlam Corporate                                                    (54)    (61)

  Value of new business                                               2 187   2 008
    Sanlam Personal Finance                                           1 535   1 416
    Sanlam Emerging Markets                                             509     505
    Sanlam Investment Group                                               -       -
    Sanlam Corporate                                                    143      87

  Value of new business attributable to:
    Shareholders' fund                                        2       1 985   1 841
    Sanlam Personal Finance                                           1 504   1 407
    Sanlam Emerging Markets                                             338     347
    Sanlam Investment Group                                               -       -
    Sanlam Corporate                                                    143      87

  Non-controlling interest                                              202     167
    Sanlam Personal Finance                                              31       9
    Sanlam Emerging Markets                                             171     158
    Sanlam Investment Group                                               -       -
    Sanlam Corporate                                                      -       -

Value of new business                                                 2 187   2 008

Geographical analysis:
  South Africa                                                        1 678   1 503
  Africa                                                                405     424
  Other international                                                   104      81
Value of new business                                                 2 187   2 008

Analysis of new business profitability:
  Before non-controlling interest:
    Present value of new business premiums                           78 085  65 377
      Sanlam Personal Finance                                        49 764  44 101
      Sanlam Emerging Markets                                        11 099   9 758
      Sanlam Investment Group                                         3 334   3 259
      Sanlam Corporate                                               13 888   8 259

    New business margin                                               2,80%   3,07%
      Sanlam Personal Finance                                         3,08%   3,21%
      Sanlam Emerging Markets                                         4,59%   5,18%
      Sanlam Investment Group                                             -       -
      Sanlam Corporate                                                1,03%   1,05%

  After non-controlling interest:
    Present value of new business premiums                           74 378  62 604
      Sanlam Personal Finance                                        48 790  43 940
      Sanlam Emerging Markets                                         8 366   7 146
      Sanlam Investment Group                                         3 334   3 259
      Sanlam Corporate                                               13 888   8 259

     New business margin                                              2,67%   2,94%
      Sanlam Personal Finance                                         3,08%   3,20%
      Sanlam Emerging Markets                                         4,04%   4,86%
      Sanlam Investment Group                                             -       -
      Sanlam Corporate                                                1,03%   1,05%

Notes to the embedded value of covered business
for the year ended 31 December 2018

1. VALUE OF IN-FORCE COVERED BUSINESS SENSITIVITY ANALYSIS                                                                
 
                                                                                Gross value of             Net value of   
                                                                                      in-force    Cost of      in-force    Change from
                                                                                      business    capital      business     base value
                                                                                     R million  R million     R million              %

BASE VALUE                                                                              44 744     (3 288)       41 456

Risk discount rate increase by 1%                                                       42 475     (3 708)       38 767             (6)
Investment return and inflation decrease by 1%, 
coupled with a 1% decrease in risk discount rates, 
and with bonus rates changing commensurately                                            45 812     (3 342)       42 470              2
Equity and property values decrease by 10%, 
without a corresponding change in dividend and 
rental yields                                                                           43 504     (3 231)       40 273             (3)
Expected return on equity and property 
investments increase by 1%, without a 
corresponding change in discount rates                                                  45 377     (2 981)       42 396              2
Rand exchange rate depreciation by 10%                                                  45 227     (3 356)       41 871              1
Non-commission maintenance expenses 
(excluding investment expenses) decrease by 10%                                         46 571     (3 316)       43 255              4
Discontinuance rates decrease by 10%                                                    46 147     (3 364)       42 783              3
Mortality and morbidity decrease by 5% for life 
assurance business                                                                      46 641     (3 287)       43 354              5
Mortality and morbidity decrease by 5% for 
annuity business                                                                        44 492     (3 285)       41 207             (1)

2. VALUE OF NEW COVERED BUSINESS SENSITIVITY ANALYSIS          
                                                                                Gross value of    Cost of  Net value of    Change from 
                                                                                  new business    capital  new business     base value                                                                                                                                 
                                                                                     R million  R million     R million              %
Base value                                                                               2 191       (206)        1 985

Risk discount rate increase by 1%                                                        1 945       (235)        1 710            (14)
Investment return and inflation decrease by 1%, 
coupled with a 1% decrease in risk discount rates, 
and with bonus rates changing commensurately                                             2 316       (205)        2 111              6
Non-commission maintenance expenses 
(excluding investment expenses) decrease by 10%                                          2 396       (208)        2 188             10
Acquisition expenses (excluding commission and 
commission related expenses) decrease by 10%                                             2 405       (208)        2 197             11
Discontinuance rates decrease by 10%                                                     2 477       (219)        2 258             14
Mortality and morbidity decrease by 5% for life 
assurance business                                                                       2 441       (207)        2 234             13
Mortality and morbidity decrease by 5% for 
annuity business                                                                         2 183       (208)        1 975             (1)


                                                                                          2018       2017
                                                                                     R million  R million
3. OPERATING EXPERIENCE VARIANCES
Risk experience                                                                            535        447
Persistency                                                                                147         67
Maintenance expenses                                                                        43         (9)
Working capital management                                                                 507        452
Credit spread                                                                              437        396
Other                                                                                      445        205
Total operating experience variances                                                     2 114      1 558



4. OPERATING ASSUMPTION CHANGES
Risk experience                                                                            177        183
Persistency                                                                                 66       (115)
Maintenance expenses                                                                        20       (239)
Modelling changes and other                                                                 75       (236)
Total operating assumption changes                                                         338       (407)

5. ECONOMIC ASSUMPTION CHANGES
Investment yields                                                                         (717)       260
Long-term asset mix assumptions and other                                                  (38)       (26)
Total economic assumption changes                                                         (755)       234





Summarised Group IFRS financial statements for the year ended 31 December 2018

Contents

Statement of financial position

Statement of comprehensive income

Statement of changes in equity

Cash flow statement

Notes to the financial statements


STATEMENT OF FINANCIAL POSITION at 31 December 2018
                                                                                      Restated
                                                                     2018                 2017
                                                                R million            R million
ASSETS
Equipment                                                           1 587                  876
Owner-occupied properties                                           2 010                  963
Goodwill                                                           19 985                4 158
Value of business acquired                                          9 985                1 930
Other intangible assets                                             1 082                  517
Deferred acquisition costs                                          3 446                3 659
Long-term reinsurance assets                                        1 971                1 063
Investments                                                       690 744              656 020
 Properties                                                        21 349               11 505
 Equity-accounted investments                                      18 361               26 476
 Equities and similar securities                                  184 787              201 095
 Interest-bearing investments                                     211 770              185 363
 Structured transactions                                           21 341               15 381
 Investment funds                                                 190 005              177 235
 Cash, deposits and similar securities                             43 131               38 965
Deferred tax                                                        2 249                2 083
Assets of disposal groups classified as held for sale                 139                  321
General insurance technical assets                                  9 540                6 400
Working capital assets                                             72 863               55 593
 Trade and other receivables                                       44 712               33 633
 Cash, deposits and similar securities                             28 151               21 960

Total assets                                                      815 601              733 583
Equity and liabilities
Shareholders' fund                                                 69 506               57 420
Non-controlling interest                                           12 111                6 017
Total equity                                                       81 617               63 437
Long-term policy liabilities                                      543 785              524 441
 Insurance contracts                                              188 448              178 868
 Investment contracts                                             355 337              345 573
Term finance                                                        7 413                6 426
 Margin business                                                    3 654                1 918
 Other interest-bearing liabilities                                 3 759                4 508
Structured transactions liabilities                                15 629                4 187
External investors in consolidated funds                           66 146               62 329
Cell owners' interest                                               3 305                3 217
Deferred tax                                                        5 460                2 435
General insurance technical provisions                             37 950               18 668
Working capital liabilities                                        54 296               48 443
 Trade and other payables                                          50 761               46 507
 Provisions                                                           450                  333
 Taxation                                                           3 085                1 603

Total equity and liabilities                                      815 601              733 583

STATEMENT OF COMPREHENSIVE INCOME 
for the year ended 31 December 2018
                                                                     2018                 2017
                                                                R million            R million
Net income                                                         77 721              113 976
 Financial services income                                         73 619               63 930
 Reinsurance premiums paid                                        (11 262)              (9 546)
 Reinsurance commission received                                    2 166                1 685
 Investment income                                                 31 208               30 288
 Investment surpluses                                             (16 447)              33 423
 Finance cost - margin business                                      (164)                (134)
 Change in fair value of external investors liability              (1 399)              (5 670)
Net insurance and investment contract benefits and claims         (29 524)             (72 576) 
 Long-term insurance contract benefits                            (18 566)             (26 863)
 Long-term investment contract benefits                             2 999              (32 588)
 General insurance claims                                         (20 662)             (21 036)
 Reinsurance claims received                                        6 705                7 911
Expenses                                                          (31 701)             (26 279)
 Sales remuneration                                               (10 139)              (8 832)
 Administration costs                                             (21 562)             (17 447)
Impairments                                                          (449)                (395)
Amortisation of intangibles                                          (659)                (350)
Net operating result                                               15 338               14 376
Equity-accounted earnings                                           2 424                2 646
Finance cost - other                                                 (846)                (690)
Profit before tax                                                  16 966               16 332
Taxation                                                           (4 164)              (4 342)
 Shareholders' fund                                                (3 510)              (3 087)
 Policyholders' fund                                                 (654)              (1 255)

Profit for the year                                                12 802               11 990
Other comprehensive income
 Movement in foreign currency translation reserve (1)               2 002               (1 217)
 Movement in cash flow hedge                                          166                 (602)
 Other comprehensive income of equity accounted investments (1)       126                   21
 Employee benefits re-measurement loss                                  4                  (12)
Comprehensive income for the year                                  15 100               10 180
Allocation of comprehensive income:
Profit for the year                                                12 802               11 990
 Shareholders' fund                                                11 627               10 923
 Non-controlling interest                                           1 175                1 067
Comprehensive income for the year                                  15 100               10 180
 Shareholders' fund                                                13 698                9 272
 Non-controlling interest                                           1 402                  908


Earnings attributable to shareholders of the company (cents):
Basic earnings per share                                            565,4                544,4
Diluted earnings per share                                          559,7                538,8


STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2018
                                                                     2018                 2017
                                                                R million            R million
Shareholders' fund:
Balance at beginning of the year                                   57 420               53 390
IFRS Transitional adjustments (4)                                    (429)                   -
Comprehensive income                                               13 698                9 272
 Profit for the year                                               11 627               10 923
 Other comprehensive income (3)                                     2 071               (1 651)
Net (acquisition)/disposal of treasury shares (2)                  (1 022)                (119)
Shares issued                                                       5 635                    -
Share-based payments                                                  358                  340
Dividends paid (1)                                                 (6 053)              (5 400)
Acquisitions, disposals and other movements in interests             (101)                 (63)
Balance at end of the year                                         69 506               57 420
Non-controlling interest:
Balance at beginning of the year                                    6 017                5 696
IFRS Transitional adjustments (4)                                     (12)                   -
Comprehensive income                                                1 402                  908
 Profit for the year                                                1 175                1 067
 Other comprehensive income (3)                                       227                 (159)
Net (acquisition)/ disposal of treasury shares (2)                    (29)                 (19)
Share-based payments                                                   26                   36
Dividends paid (1)                                                   (867)                (796)
Acquisitions, disposals and other movements in interests            5 574                  192
Balance at end of the year                                         12 111                6 017

Shareholders' fund                                                 57 420               53 390
Non-controlling interest                                            6 017                5 696
Total equity at beginning of the year                              63 437               59 086

Shareholders' fund                                                 69 506               57 420
Non-controlling interest                                           12 111                6 017
Total equity at end of the year                                    81 617               63 437

(1) A dividend of 312 cents per share (2017: 290 cents per share) was declared in 2019 in respect of the 2018 earnings. 
    Based on the number of shares in issue on declaration date, the total dividend is expected to amount to R6.5 billion, 
    but may vary depending on the number of shares in issue on the last day to trade. Dividends proposed or declared after 
    the statement of financial position date are not recognised at the statement of financial position date.
(2) Comprises movement in cost of shares held by subsidiaries, the share incentive trust and other consolidated funds.
(3) Other comprehensive income include, a realisation of cash flow hedging adjustment of R1 500 million (gross and net
    of tax) in respect of the acquisition of interests in Saham Finances.
(4) The following new standards have been adopted in the 2018 financial year:
    - IFRS 9
    - IFRS 15


CASH FLOW STATEMENT 
for the year ended 31 December 2018

                                                                                    Restated(1)
                                                                       2018               2017
                                                                  R million          R million
Cash flow from operating activities                                  10 760              6 356
Cash utilised in operations                                          (7 286)           (12 101)
Interest and preference share dividends received                     18 199             18 343
Interest paid                                                        (1 136)              (868)
Dividends received                                                   12 307             11 343
Dividends paid                                                       (6 844)            (6 118)
Taxation paid                                                        (4 480)            (4 243)

Cash flow from investment activities                                 (6 764)            (3 221)
Acquisition of subsidiaries and associated companies                 (7 254)            (4 917)
Disposal of subsidiaries and associated companies                       490              1 696

Cash flow from financing activities                                   4 052               (215)
Shares issued                                                         5 635                  -
Movement in treasury shares                                          (1 051)              (138)
Disposal/(acquisition) of non-controlling interest                       90               (113)
Term finance raised                                                   2 455              1 388
Term finance repaid                                                  (3 077)            (1 352)

Net increase in cash and cash equivalents                             8 048              2 920
Net foreign exchange difference                                        (124)              (122)
Cash and cash equivalents at beginning of the year                   55 419             52 621 
Cash and cash equivalents at end of the year                         63 343             55 419

(1) Comparative information has been restated. Refer to note 8.2 for additional information.



NOTES TO THE FINANCIAL STATEMENTS 
for the year ended 31 December 2018
                                                                    2018         2017
                                                                   cents        cents

EARNINGS PER SHARE
Basic earnings per share:
Headline earnings                                                  445,6        486,3
Profit attributable to shareholders' fund                          565,4        544,4
Diluted earnings per share:
Headline earnings                                                  441,1        481,3
Profit attributable to shareholders' fund                          559,7        538,8
                                                             
                                                               R million    R million

Analysis of earnings:
Profit attributable to shareholders' fund                         11 627       10 923
Less: Net profit on disposal of operations                        (2 773)      (1 335)
Less: Equity-accounted non-headline earnings                         (17)        (134)
Plus: Impairments                                                    325          303
Headline earnings                                                  9 162        9 757

                                                                 million      million
Number of shares:

Weighted number of ordinary shares in issue                      2 215,6      2 166,5
Less: Weighted Sanlam shares held by subsidiaries and 
consolidated investment funds (including policyholders)           (159,3)      (160,0)
Adjusted weighted average number of shares for basic earnings
per share                                                        2 056,3      2 006,5
Add: Total number of shares in respect of Sanlam Limited 
long-term incentive schemes                                         21,0         20,8
Adjusted weighted average number of shares for diluted 
earnings per share                                               2 077,3      2 027,3



2. SEGMENTAL INFORMATION
                                                                    2018         2017
                                                               R million    R million
Segment financial services income (per shareholders' fund 
information)                                                      66 529       58 700
 Sanlam Personal Finance                                          19 136       17 823
 Sanlam Emerging Markets                                          11 526        7 978
 Sanlam Investment Group                                           6 396        5 581
 Santam                                                           23 693       22 327
 Sanlam Corporate                                                  5 622        4 825
 Group Office and other                                              156          166
IFRS adjustments                                                   7 090        5 230
Total financial services income                                   73 619       63 930

Segment result (per shareholders' fund information after 
tax and non-controlling interest)                                 11 521       11 001
 Sanlam Personal Finance                                           4 218        4 680
 Sanlam Emerging Markets                                           3 561        3 057
 Sanlam Investment Group                                           1 693        1 401
 Santam                                                            1 609        1 122
 Sanlam Corporate                                                    637          845
 Group Office and other                                             (197)        (104)
Reverse Non-controlling interest included in segment result        1 175         1067
Fund transfers                                                       106          (78)
Total profit for the year                                         12 802       11 990

Segment IFRS 15 revenue from contracts with customers(1)                         2018

 Sanlam Personal Finance                                                        3 874
 Sanlam Emerging Markets                                                          704
 Sanlam Investment Group                                                        6 060
 Santam                                                                           234
 Sanlam Corporate                                                               1 747
Total IFRS 15 revenue                                                          12 619

(1)  Comparative information not required in terms of IFRS 15.

Disaggregation of revenue
According to primary geography
                                                                                Other
                                                South            Rest of       Inter-
                                               Africa             Africa     national      Total

IFRS 15 Revenue                                 9 148                738        2 733     12 619
 Administration fees                            5 093                438          498      6 029
 Asset management and performance fees          2 832                228        1 744      4 804
 Commissions                                      372                 57          479        908
 Consulting fees                                  367                 12            1        380
 Actuarial and risk management fees               198                  -            -        198
 Other(1)                                         286                  3           11        300

Revenue not within the scope of IFRS 15        51 710              8 217        1 073     61 000
Financial services income                      60 858              8 955        3 806     73 619

3. SHARE REPURCHASES
The Sanlam shareholders granted general authorities to the Group at the 2017 and 2016 annual general meetings to repurchase Sanlam shares in the market. 
The Group did not acquire any shares in terms of these general authorities.

4. CONTINGENT LIABILITIES
Shareholders are referred to the contingent liabilities disclosure in the 2018 annual financial statements. The circumstances surrounding the contingent
liabilities remain materially unchanged.

5. SUBSEQUENT EVENTS
No other material facts or circumstances have arisen between the date of the statement of financial position and this report which materially affects the 
financial position of the Sanlam Limited Group at 31 December 2018 as reflected in these financial statements.

6. FAIR VALUE DISCLOSURES
Determination of fair value and fair value hierarchy

Below follows required disclosure of fair value measurements, using a three-level fair value hierarchy that reflects the significance of the inputs used in
determining the measurements. It should be noted that these disclosure only cover assets and liabilities measured at fair value.  

Included in level 1 category are assets and liabilities that are measured by reference to unadjusted, quoted prices in an active market for identical assets 
and liabilities.

Included in level 2 category are assets and liabilities measured using inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). For example, instruments measured using a valuation technique
based on assumptions that are supported by prices from observable current market transactions are categorised as level 2.

Assets and liabilities measured using inputs that are not based on observable market data are categorised as level 3.

R million
Recurring fair value measurements
31 December 2018                          Level 1  Level 2  Level 3    Total

Properties                                      -        -   21 349   21 349
Investment in joint ventures                    -        -      539      539
Equities and similar securities           179 365    4 918      504  184 787
Interest-bearing investments               30 137  174 617       69  204 823
Structured transactions                     8 013   13 328        -   21 341
Investment funds                          182 926    6 347      732  190 005
Trade and other receivables                10 855    5 653        -   16 508
Cash deposits and similar securities:
Investments                                     -   43 131        -   43 131
Cash deposits and similar securities:
Working capital assets                          -    2 359        -    2 359
Total assets at fair value                411 296  250 353   23 193  684 842

Investment contract liabilities                 -  353 672    1 665  355 337
Term finance                                    -    3 085        -    3 085
Structured transactions liabilities             -   15 629        -   15 629
Trading account liabilities                 5 595   11 088        -   16 683
External investors in consolidated funds   61 573    3 960      613   66 146
Total liabilities at fair value            67 168  387 434    2 278  456 880

R million
Recurring fair value measurements
31 December 2017                          Level 1  Level 2  Level 3    Total

Properties                                      -        -   11 505   11 505
Equities and similar securities           198 226    2 436      433  201 095
Interest-bearing investments               42 154  141 825       30  184 009
Structured transactions                     7 130    8 251        -   15 381
Investment funds                          173 802    3 103      330  177 235
Trading account assets                     11 090    5 233        -   16 323
Cash deposits and similar securities:
Investments                                24 353   14 572        -   38 925
Investment in joint ventures                    -        -      359      359
Total assets at fair value                456 755  175 420   12 657  644 832

Investment contract liabilities                 -  343 368    2 205  345 573
Term finance                                    -    4 300        -    4 300
Structured transactions liabilities             -    4 187        -    4 187
Trade and other payables                   11 547   11 447        -   22 994
External investors in consolidated funds   61 882        -      527   62 329
Total liabilities at fair value            73 349  363 302    2 732  439 383


R million
Reconciliation of movements in level 3 assets and liabilities measured at fair value
31 December 2018

Assets                                                                                Equities and      Interest                Investment    
                                                                                           similar       bearing   Investment     in joint
                                                                        Properties      securities   investments        funds     ventures    Total Assets
Balance at 1 January 2018                                                   11 505             433            30          330          359          12 657
                                                                                                                                                                                                       
Total gains/(loss) in statement of comprehensive income                        309              20             3           33          180             545
Acquired through business combinations                                       7 446               -             -            -            -           7 446
Acquisitions                                                                 2 165             131            36          368            -           2 700
                                                                                           
Disposals                                                                     (171)           (100)            -            -            -            (271)
Reclassified from disposal groups classified as held for sale                 (128)              -             -            -            -            (128)
Foreign exchange movements                                                     224              20             -            1            -             245
Transfer to owner-occupied properties                                           (1)              -             -            -            -              (1)
Balance at 31 December 2018                                                 21 349             504            69          732          539          23 193

31 December 2017
Balance at 1 January 2017                                                   10 664             420           392          467          423          12 366                          
Total gains/(loss) in statement of comprehensive income                        499               1             -          (19)         (64)            417
Acquisitions                                                                   544              21             -            -            -             565
Disposals                                                                     (501)             (2)            -         (118)           -            (621)
Reclassified as disposal groups classified as held for sale                    551               -             -            -            -             551
Settlements                                                                      -               -          (362)           -            -            (362)
Foreign exchange movements                                                    (239)             (7)            -            -            -            (246)
Transfer from owner-occupied properties                                        (13)              -             -            -            -             (13)
Balance at 31 December 2017                                                 11 505            433            30          330          359          12 657


Liabilities                                                                                                            External  
                                                                                       Investment                  investors in
                                                                                         contract          Term    consolidated        Total 
                                                                                      liabilities       finance           funds  liabilities
R million                                                                                                                                                      
31 December 2018
Balance at 1 January 2018                                                                   2 205             -             527        2 732
Total gains in statement of comprehensive income                                               25             -               1           26
Acquisitions                                                                                   65             -               -           65
Disposals                                                                                    (797)            -               -         (797)
Foreign exchange movements                                                                    167             -              85          252
Settlements                                                                                     -             -               -            -
Balance at 31 December 2018                                                                 1 665             -             613        2 278

31 December 2017
Balance at 1 January 2017                                                                   2 312           201             604        3 117
Total gains in statement of comprehensive income                                               72             -             (38)          34
Acquisitions                                                                                   36             -               -           36
Disposals                                                                                    (189)            -               -         (189)
Foreign exchange movements                                                                    (26)          (37)            (39)        (102)
Settlements                                                                                     -          (164)              -         (164)
Balance at 31 December 2017                                                                 2 205             -             527        2 732

Gains and losses (realised and unrealised) included in profit and loss
R million                                                                                                                  2018         2017

Total gains or losses included in profit or loss for the period                                                             519          383
Total unrealised gains or losses included in profit or loss for the period for 
assets held at the end of the reporting period                                                                               89          258

(1) The market for the shares to which the external investors in consolidated funds relate became inactive during the year.


Transfers between categories

Assets
                                                                                                
                                                           Equities and           Interest-                                         Cash, deposits
                                                                similar            bearing           Structured      Investment        and similar      Total 
                                                             securities     investments (1)        transactions           funds         securities     assets

R million

2018

Transfer from level 1 to level 2                                      -                142                    -               -                  -        142
Transfer from level 2 to level 1                                      -                  -                    -               -                  -          -

2017
Transfer from level 1 to level 2                                      -                169                    -               -                  -        169
Transfer from level 2 to level 1                                      -                107                    -               -                  -        107

Liabilities                                                    External               Term                Total 
                                                           investors (2)           finance          liabilities

2018

Transfer from level 2 to level 1                                      -                  -                    -

2017

Transfer from level 1 to level 2                                    328                  -                  328


(1) Instruments that were not actively traded in the market have been transferred from level 1 to level 2. Conversely, instrument that have become actively traded 
    in the market have been transferred from level 2 to level 1.
(2) External investors in consolidated funds transfers relate to investment funds that listed during the year ended December 2017. As a result, those funds are
    now classified as level 1.


Valuation techniques used in determining the fair value of assets and liabilities
Instrument                                            Applicable to level         Valuation basis               Main assumptions             Significant Unobservable input

Properties                                            3                           Recently contracted prices,   Bond and interbank           Capitalisation rate
                                                                                  Discounted cash flow          swap interest rate 
                                                                                  model (DCF), Earnings         curve, Cost of Capital,      Discount rate
                                                                                  multiple                      Consumer price index, 
                                                                                                                Cash flow forecasts          Cash flow forecasts 
                                                                                                                (including vacancy rates)    (including vacancy rates)

Equities and similar securities                       2 and 3                     DCF,Earnings multiple         Cost of Capital,             Cost of Capital
                                                                                                                Consumer price index         Adjusted earnings multiple
                                                                                                                                                                                                                                                            
Interest bearing investments                          2 and 3                     DCF,Quoted put/surrender      Bond and interbank swap      Discount rate 
                                                                                  price by issuer               interest rate curve,         
                                                                                                                Cost of Capital, 
                                                                                                                Consumer price index

                                                                                                                                                                                                                                                            
Trade and other receivables/                               2                      DCF, Earnings multiple        Bond and interbank swap      n/a         
payables                                                                          Quoted put/surrender price    interest rate curve,                                    
                                                                                  by issuer                     Cost of Capital,
                                                                                                                Consumer price index                                   
                                                                                                                
Investment contract liabilities                       2 and 3                     Current unit price of         Bond and interbank swap      Earnings Multiple
and Investment funds                                                              underlying unitised asset,    interest rate curve                                                           
                                                                                  multiplied by the number      Cost of capital                                                     
                                                                                  of units held.                Consumer price index
                                                                                  Earnings multiple             Bond interest rate curve
                                                                                  DCF
                                                                                  
Term finance                                          2                           DCF                           Bond and forward rate        n/a
                                                                                                                Credit ratings of issuer
                                                                                                                Liquidity spread
                                                                                                                Agreement interest curves

Structured transactions assets                        2                           Option pricing models         Bond and interbank swap      n/a
and liabilities                                                                   DCF                           interest rate curve
                                                                                                                Forward equity and 
                                                                                                                currency rates
                                                                                                                Volatility risk 
                                                                                                                adjustments
External investors in 
consolidated funds                                    2 and 3                     Current unit price of         Bond and interbank swap      Based on underlying 
                                                                                  underlying unitised asset,    interest rate curve,         assets                                                            
                                                                                  multiplied by the number      Cost of Capital,
                                                                                  of units held                 Consumer price index,
                                                                                                                unit prices

Cash, deposits and similar securities                 2                           Mark-to-market                Bond and interbank swap      n/a
                                                                                  Yield curve                   interest rate curve

Investment in joint ventures                          3                           DCF                           Bond and interbank swap      Cost of Capital
                                                                                                                interest rate curve, 
                                                                                                                Cost of Capital, 
                                                                                                                Consumer price index 

Sensitivity of level 3 assets and liabilities measured at fair value to changes in key assumptions

Assets
                                                                                               Effect of a      Effect of a    
                                                 Effect of a     Effect of a                   1% increase      1% decrease
                                                10% increase    10% decrease                      in base/         in base/
                                                     in risk        in  risk     Carrying   capitalisation   capitalisation
R million                    Carrying amount     adjustments     adjustments       amount             rate             rate

Properties (1)
2018
Cash flow risk adjustments           21 349           (2 135)          2 135            -                -
 Base rate                                -                -               -        9 864             (240)             258
Capitalisation rate                       -                -               -        9 864             (297)             364

                                                                                               Effect of a      Effect of a  
                                                                                 Carrying     10% increase     10% decrease
                                                                                   amount      in earnings      in earnings

Earnings multiple                                                                  11 477            1 002             (969)

2017
Cash flow risk adjustments           11 505           (1 151)          1 151            -                -                -
Base rate                                 -                -                        8 091             (264)             284
Capitalisation rate                       -                -                        8 091             (357)             437


                                                 Effect of a     Effect of a                Effect of a 1%   Effect of a 1%  
                                    Carrying    10% increase    10% decrease     Carrying      increase in      decrease in
R million                           amount(2)    in multiple    in multiple      amount(3)   discount rate    discount rate
                                                                                                       
Other Investments

2018

Equities and similar securities          504            (50)              50            -                -                -
Interest-bearing investments               -              -                -           69               (1)               2
Investment funds                         732            (73)              73            -                -                -
Investment in joint ventures               -              -                -          539              (44)              50
Total                                  1 236           (123)             123          608              (45)              52
                                                       
2017

Equities and similar securities
                                         433             43              (43)           -                -                -
Interest-bearing investments               -              -                -           30               (1)               1
Investment funds                         330             33              (33)           -                -                -
Investment in joint ventures               -              -                -          359              (32)              36
Total                                    763             76              (76)         389              (33)              37
                                              

Liabilities


                                             Effect of a 10%  Effect of a 10%
                                    Carrying     increase in      decrease in                          
R million                          amount(2)           value            value

2018
Investment contract liabilities        1 665             167             (167)
                                                                                                                            
External investors in 
consolidated funds                       613              61              (61)
                                                      
Total Liabilities                      2 278             228             (228)


2017
Investment contract liabilities        2 205             221             (221)

External investors in 
consolidated funds                       527              53              (53)
                                                                                         
Total Liabilities                      2 732             274            ( 274)

(1) Investment Properties comprise a majority of Sanlam Life properties valued using capitalisation and discount rates, with sensitivities
    based on these two unobservable inputs.
(2) Represents mainly private equity investments valued on earnings multiple, with sensitivities based on the full valuation.
(3) Represents mainly instruments valued on a discounted cash flow basis, with sensitivities based on changes in the discount rate.

7. BUSINESS COMBINATIONS

Material acquisitions of the Group consolidated in the 2018 financial year

Saham Finances Group

Effective 1 October 2018, The Sanlam Group acquired the remaining stake (53,37%) in Saham Finances, gaining control for the first time. 
The acquisition supports the Group's vision to be a leading Pan-African financial services group. Sanlam Emerging Markets and Santam Limited 
hold an effective interest of 90% and 10% respectively. The Saham Finances Group provides financial services (predominately general insurance) 
across various countries in Africa.

The goodwill arising on the acquisition is attributable to synergies and future opportunities expected.


Details of the assets acquired and liabilities assumed, at fair value, are as follows:


R million
                                                           NAV                 Recognise      Recognise deferred            
                                                        acquired             intangibles     tax/Cash flow hedge     Total


Assets
Equipment                                                    702                       -                       -       702 
Owner-occupied properties                                    971                       -                       -       971 
Value of business acquired                                    73                   7 400                       -     7 473 
Other intangible assets                                      460                     213                       -       673 
Deferred acquisition costs                                   170                       -                       -       170 
Long-term reinsurance assets                                 832                       -                       -       832 
Investments                                               29 296                       -                       -    29 296 
Deferred tax                                                 566                       -                       -       566 
General insurance technical assets                         2 662                       -                       -     2 662 
Working capital assets
 Trade and other receivables                              13 881                       -                       -    13 881 
 Cash, deposits and similar securities                     8 959                       -                       -     8 959 
Total identifiable assets                                 58 572                   7 613                       -    66 185 

Liabilities
Long-term policy liabilities                             (15 037)                      -                       -   (15 037) 
Term finance                                              (1 683)                      -                       -    (1 683) 
General insurance technical provisions                   (17 486)                      -                       -   (17 486) 
Deferred tax liability                                    (1 690)                      -                  (2 290)   (3 980) 
Trade and other payables                                  (9 059)                      -                       -    (9 059) 
Provisions                                                  (361)                      -                       -      (361) 
Taxation                                                    (919)                      -                       -      (919) 
Total identifiable liabilities                           (46 235)                      -                  (2 290)  (48 525) 

Equity
Non-controlling interest                                  (4 278)                 (1 795)                    550    (5 523) 
Total Equity and Liabilities                             (50 513)                 (1 795)                 (1 740)  (54 048) 
Total identifiable net assets                              8 059                   5 818                  (1 740)   12 137 
Goodwill arising on acquisition                            4 822                  10 359                     240    15 421 
Net purchase consideration                                12 881                  16 177                  (1 500)   27 558 

  Purchase consideration                                                                                            29 058
  Cash flow hedge                                                                                                   (1 500)
 Less: Previously held interest at fair value                                                                      (13 550) 
Net consideration                                                                                                   14 008 

  Cash element of consideration                                                                                     15 508
  Cash flow hedge                                                                                                   (1 500)

Refer to the Shareholder's Fund Information for the analysis of Saham Finances results. The post acquisition profits for the 3 month period 
amounted to R154 million.

8.  Restatements

8.1 IFRS Transitional adjustments

STATEMENT OF FINANCIAL POSITION
At 31 December 2017  
                                                  Previously reported        Adjustments          Restated
                                                              Audited             IFRS 9          Reviewed

R million
ASSETS
Investments                                                   656 020               (434)          655 586 
 Properties                                                    11 505                               11 505 
 Investment in associated and joint ventures                   26 476               (428)           26 048 
 Equities and similar securities                              201 095                              201 095 
 Interest-bearing investments                                 185 363                 (6)          185 357 
 Structured transactions                                       15 381                               15 381 
 Investment funds                                             177 235                              177 235 
 Cash, deposits and similar securities                         38 965                               38 965 
Working capital assets                                         55 593                 (7)           55 586 
 Trade and other receivables                                   33 633                 (7)           33 626 
 Cash, deposits and similar securities                         21 960                               21 960 
Other assets                                                   21 970                               21 970 

Total asset                                                   733 583               (441)          733 142 

EQUITY AND LIABILITIES
Capital and reserves
 Share capital and premium                                         22                                   22 
 Treasury shares                                               (3 811)                              (3 811) 
 Other reserves                                                 9 084                                9 084 
 Retained earnings                                             52 125               (429)           51 696 
Shareholders' fund                                             57 420               (429)           56 991 
Non-controlling interests                                       6 017                (12)            6 005 
Total equity                                                   63 437               (441)           62 996 
Total liabilities                                             670 146                              670 146 

Total equity and liabilities                                  733 583               (441)          733 142 

IFRS 9 - Financial Instruments
The principles with regards to the classification and measurement of financial assets and liabilities,measuring impairment allowances for 
financial assets, and hedge accounting have been amended due to the implementation of the new accounting standard, IFRS 9 - Financial Instruments,
applicable to all accounting periods beginning on or after 1 January 2018. Sanlam has implemented the standard, other than the hedging provisions
which have not yet been adopted, on a modified retrospective basis and therefore comparatives are not restated and the impact of the adoption is
recognised in equity on 1 January 2018.

The key changes introduced by IFRS 9 are as follows:
1. Classification and measurement - financial assets are required to be measured and classified based on the cash flow characteristics of the 
   instrument and the business model under which the asset is managed. The classification and measurement of financial liabilities is largely 
   unchanged, with the exception of the amendment requiring that the own credit risk component of fair value movements on liabilities designated
   at fair value through profit or loss now be presented in other comprehensive income.
2. Impairment - IFRS 9 introduces an expected credit loss model. This entails the recognition of an allowance for expected credit loss looking 
   one year into the future or over the lifetime of the financial asset if the credit risk relating to the financial asset has increased 
   significantly. The impairment model is therefore "forward looking", replacing the incurred loss model as previously required by IAS 39.
  
The adoption of IFRS 9 has resulted in a reduction in total equity of R441 million on 1 January 2018. The impact is primarily a result of the 
recognition of expected credit losses in associated entities as well as isolated incidents of changes in the classification and measurement of 
certain financial instruments.

The majority of financial assets were measured at fair value through profit and loss under IAS 39, and continue to be under IFRS 9, either 
because they are mandatorily measured as such, or through designation.

The changes in classification and measurement are as follows:
- Certain financial assets, predominantly interest bearing investments, previously measured at amortised cost under IAS 39, have been reclassified
  to fair value through profit or loss under IFRS 9. The remeasurement impact on opening retained earnings is an increase of R6 million.
- The change in fair value that is attributable to changes in the credit risk of financial liabilities designated at fair value through profit or 
  loss is presented in other comprehensive income under IFRS 9. In the current period, this portion of the movement in such instruments was immaterial.

Impairment of financial assets
Based on the impairment methodology described above, the Group has determined that the application of IFRS 9's impairment requirements at 1 January 2018
results in additional impairment allowances in a number if equity-accounted associates.

The total impact on the balance of associates and opening retained earnings at 1 January 2018 is negative R428 million. The impact of applying the
expected credit losses model in subsidiary entities resulted in a decrease in net asset value of R19 million.

IFRS 15 - Revenue from Contracts with Customers
This standard relates to the measurement, classification and disclosure of revenue from contracts with customers of the Sanlam Group. 

The key factors in the application of IFRS 15 are as follows:
- A five-step model is applied to determine when to recognise revenue from contracts with customers, and at what amount.
- Revenue is recognised when (or as) Sanlam satisfies a performance obligation and transfers control of goods or services to a customer at the
  amount to which the company expects to be entitled and that is allocated to that specific performance obligation.
- Depending on whether certain criteria are met, revenue is recognised either over time or at a point in time, as or when control of the goods or 
  services is transferred to the customer.
- More extensive and detailed disclosure are required in terms of IFRS 15.

The Group has assessed the impact of the adoption of IFRS 15 on opening retained earnings and concluded that there is no quantitative impact for Sanlam. 

8.2   Restatement of Group cash flow statement

Management reassessed the presentation of the Group's cash flow statement in respect of cash flows relating to the acquisition and disposal 
of investments that are backing its core operations. These were previously classified as investing cash flows and created a disconnect between 
operating and investing cash flows, as these investments are funded by cash flows associated with the origination of insurance and investment 
contracts, which are treated as operating cash flows. Management concluded that presenting acquisitions and disposals of investments as part of 
operating cash flows more accurately reflects to the users of the financial statements, the link between the ability to generate cash from 
investment and insurance contracts and the utilisation of those cash flows on various investments. 

                                                                                        2017
                                                        As previously reported         Adjustments             Restated
Cash flows from operating activities                                    23 402             (17 046)               6 356
Cash flows from investing activities                                   (20 267)             17 046               (3 221)
 Net acquisition of investments                                        (17 046)             17 046                    -   
 Acquisition of subsidiaries and associates                             (4 917)                  -               (4 917)
 Disposal of subsidiaries and associated companies                       1 696                   -                1 696

The above restatements did not have any impact on the Group's statement of financial position, statement of comprehensive income and statement of 
changes in equity.


Bellville
7 March 2019

JSE Sponsor
The Standard Bank Group of South Africa Limited







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