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SANLAM LIMITED - Summarised audited results for the year ended 31 December 2015

Release Date: 10/03/2016 08:00
Code(s): SLM     PDF:  
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Summarised audited results for the year ended 31 December 2015

Sanlam Limited
Incorporated in the Republic of South Africa    
(Registration number 1959/001562/06)    
JSE share code (primary listing): SLM  
NSX share code: SLA 
ISIN: ZAE000070660
“Sanlam”, “Sanlam Group”, or “the Company” 

Summarised audited results for the year ended 31 December 2015

Key features
Earnings
- Net result from financial services per share increased by 6%
- Normalised headline earnings per share up 6%

Business volumes
- New business volumes up 16% to R211 billion
- Net value of new covered business down 15% to R1,4 billion
- Net new covered business margin of 2,62%
- Net fund inflows of R19 billion

Group Equity Value
- Group Equity Value per share of 5 057 cents 
- Return on Group Equity Value per share of 12,8%

Capital management
- Discretionary capital of R2,3 billion at 31 December 2015
- Sanlam Life Insurance Limited CAR cover of 5,8 times

Dividend
- Normal dividend of 245 cents per share up 9%


Salient results
for the year ended 31 December 2015
                                                                                       %
                                                                 2015       2014  Change    
Sanlam group                                                                               
Earnings                                                                                   
Net result from financial services per share          cents     355,2      336,2       6    
Normalised headline earnings per share(1)             cents     432,5      407,6       6    
Diluted headline earnings per share                   cents     459,5      411,6      12    
Net result from financial services                R million     7 269      6 879       6    
Normalised headline earnings(1)                   R million     8 851      8 340       6    
Headline earnings                                 R million     9 300      8 325      12    
Business volumes                                                                            
New business volumes                              R million   210 842    182 297      16    
Net fund inflows                                  R million    19 049     41 994     (55)   
Net new covered business                                                                    
Value of new covered business                     R million     1 360      1 592     (15)   
Covered business PVNBP(2)                         R million    51 856     54 518      (5)   
New covered business margin(3)                            %      2,62       2,92            
Group Equity Value                                                                          
Group Equity Value                                R million   103 506     95 936       8    
Group Equity Value per share                          cents     5 057      4 684       8    
Return on Group Equity Value per share(4)                 %      12,8       18,5            
Sanlam Life Insurance Limited                                                               
Shareholders’ fund                                R million    77 970     68 156            
Capital Adequacy Requirements (CAR)               R million     8 250      8 325            
CAR covered by prudential capital                     Times       5,8        4,5            
(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
2015 was one of the toughest years for business in and outside South Africa since the financial crisis in 2008.
However, our solid strategy and diversification across geographies, market segments and product solutions again provided the
resilience that enabled us to withstand these conditions and deliver a satisfactory performance. 

The following are some of our salient features for the year:
- Return on Group Equity Value (RoGEV) per share of 12,8% (adjusted 14,8%)
- Net result from financial services per share increased by 6% 
- New business volumes increased by 16% to R211 billion
- Net fund inflows of R19 billion
- Net value of new life business (VNB) down 15% to R1,4 billion
- Net VNB margin of 2,62%
 
The Group strategy was reviewed and approved by the Board of directors of Sanlam (Board) in December 2015. This
followed a six-month process driven by the Group Executive committee who identified refinements and shifts in some of 
the underlying plans. In essence the strategy remains unchanged and focuses on two geographic approaches:
- In South Africa, the Group aims to retain and extend its leadership position in financial services. 
- Outside South Africa, the Group aims to deepen and enhance its existing relationships and product ranges to become a
  leading player in targeted territories through accelerated organic growth. This is augmented by continued focus on
  identifying further opportunities for expansion to new businesses and territories.

2015 strategic initiatives    
The five pillars of our strategy remain constant:
- Improving performance through top-line earnings growth by increasing market share in key segments and diversifying
  the base (including diversification of geographical presence, products, market segments and distribution platforms).
- Optimising operational efficiencies.
- Enhancing capital utilisation on an ongoing basis, including the allocation of capital to business units in a manner
  that will best achieve stated RoGEV targets.
- Prioritising diversification by enhancing the Group’s international positioning and growing the relative importance
  and contribution of the international business to the Group, with a specific Pan-African focus.
- Commitment to the promotion of transformation and diversity within operations and broadly through the contribution
  to socio-economic development in the countries and markets in which the Group operates, whether that be directly, or 
  via collaboration with business partners.

We continue to place a high premium on strategy execution. The specific pace of implementation of the strategy and the
quantification of performance measures are driven through the Group’s business plans and the budgets of the respective
clusters. This is influenced significantly by factors such as specific opportunities and the capabilities available
within each of the businesses.

We have made good progress in the implementation of the elements of the five-pillar strategy. Below is a brief
overview of our main achievements in 2015 against the strategic pillars.


Earnings growth
Earnings growth for Sanlam Personal Finance (SPF) and Santam remained strong despite operating in mature markets.
Sanlam Emerging Markets (SEM) and Sanlam Investments (SI) had more muted earnings growth, with SEM most significantly
affected by the provisioning in Shriram Equipment Finance in India and the business environment in Zambia. Low investor
confidence due to challenging macro-economic factors and major investment market volatility impaired the ability of the
investment businesses to show growth at the same levels as in the past few years.

Operating and cost efficiencies
Costs remain under control despite the need to invest in systems and capacity creation. At SPF, additional capacity
was created at Glacier and Sanlam Sky, whereas Sanlam Individual Life retained tight control on costs. SEM is making
progress with system transitions to standardise a platform among its partners. The cluster is starting to experience
efficiency benefits from centralised buying, IT support and standardised product roll-outs. 

Following a period of extensive and careful planning, Sanlam Collective Investments’ administration and IT outsourcing
to Silica went live in October 2015. All client and funds data was successfully migrated and the process of supporting
all stakeholders continues as they adjust to the new system. 

The ability to manage claims costs is critical at Santam, given the deterioration in the exchange rate and the
subsequent negative impact on prices of motor vehicle parts and paint costs. Santam’s suppliers form an integral part of the
claims management process, necessitating building a sustainable network that enables Santam to improve pricing and refine
its product offering, which ultimately attracts and retains policyholders.

Optimal capital utilisation
Group businesses are each allocated an optimal level of capital and are measured against appropriate return hurdles.
By using capital optimisation opportunities available within a Solvency Assessment and Management (SAM) regulatory
environment, the Group released an additional R2,5 billion in 2015 for investment in expansion opportunities.

SPF continued to focus on the capital efficiency of its product range and especially new products, ensuring that
product pricing compensates for the underlying capital requirements. The cluster is maintaining an optimal level of capital. 

SEM continued balancing the need to achieve the hurdle rate with sensitivity towards the countries and stakeholder
expectations where the cluster operates. Excess capital is extracted via dividends as appropriate when taking these
considerations into account. Major new investments, subject to final regulatory approvals include a 30% interest in Saham
Finances and 23% additional interests in Shriram Life Insurance and Shriram General Insurance, with the Shriram insurance
transactions still being finalised.

The unwinding of Santam’s BBBEE scheme delivered a combined value of R1,1 billion to participants. The unwinding also
presented Santam with an opportunity to improve the efficiency of its capital structure by using a share buy back at
R190 per share to facilitate the unwinding. This reduced Santam’s capital base by R801 million.

Diversification
Prior to the Saham Finances transaction, the Group (through SEM) had nearly 40 operating life insurance, general
insurance and asset management businesses across 19 countries (through either a direct or an indirect presence) compared to
about 10 operating businesses five years ago. The Saham Finances transaction, which is one of the Group’s biggest
transactions yet, will provide access to new markets including Côte d’Ivoire, Gabon, Senegal and Cameroon in Francophone West
Africa, the Arabic-speaking North African country of Morocco and Lebanon in the Middle East, and Angola in Lusophone
Southern Africa. This will increase the number of operating businesses to more than 60.

Diversification opportunities within the Group were realised through the launch of MiWayLife to broaden SPF’s direct
offering. MiWayLife operates under the Sanlam Life licence, but is managed independently under its own brand. Santam’s
claims card is being rolled out in the Group and general insurance products have been launched in the Sanlam Life agency
network. 

SPF identified geographic areas where it is under-represented and is developing further capacity in Limpopo and the
northern parts of the country. The cluster is also improving its penetration of the middle market in Gauteng. 

Implemented Consulting, which formalises the investment implementation process through an investment committee
framework, was a key solution for SI to enable further growth and to assist with flows into the building blocks and solution
funds of the cluster.

Transformation
Ongoing transformation of the Group is driven from the centre and implemented at individual business unit level.
Accelerated transformation initiatives were identified within each cluster to ensure improvement in the demographics at
management levels. 

SI is creating a strong pipeline of black leaders through its Alternative Investment Academy, which is aimed at
setting up graduates to ultimately being able to manage their own funds. Just over 80% of the recruited employees for 2014 
and 2015 were black. 87% of SI’s employees under the age of 30 are black. They have excellent capability and potential to
develop into leaders of the business over the longer term. 

Transformation at SEM takes consideration of the emphasis in many markets on citizen empowerment and localisation of
jobs. The cluster is focusing on training and development across the whole value chain of in-country employees and
increased regional support capacity to transfer skills.

The unwinding of Santam’s BBBEE scheme delivered on its objectives of empowerment and transformation, particularly
through the community trust. The trust created value through its support of education, arts, culture, skills development
and job creation - and will continue funding transformation initiatives on a projects basis.

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, among 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.

Comments on the results

- Introduction    
The Sanlam Group International Financial Reporting Standards (IFRS) financial statements for the year ended 31
December 2015 are presented based on and in compliance with IFRS. The basis of presentation and accounting policies for the
IFRS financial statements and shareholders’ information are in all material respects consistent with those applied in the
2014 Annual Report.

- Group Equity Value    
Group Equity Value (GEV) amounted to R103,5 billion or 5 057 cents per share on 31 December 2015, exceeding R100 billion for 
the first time. Including the dividend of 225 cents per share paid during the year, a RoGEV per share of 12,8% was achieved 
for 2015. This exceeds the 2015 target of 12,1% despite the challenges faced by the Group and a significant rise in long-term 
interest rates in South Africa. Adjusted RoGEV per share, which excludes the impact of investment return earned in excess of 
the long-term assumptions, interest rate changes and other one-off effects not under management control (such as tax changes), 
amounted to 14,8% - well in excess of the target.

South African long-term interest rates increased by 200bp during 2015, with a corresponding 200bp rise in the risk
discount rate (RDR) used to value the Group’s South African businesses for GEV purposes. A discounted cash flow (DCF)
valuation basis is now used for essentially all of the Group’s operations, with the increase in RDR having a pronounced
negative effect on the end-2015 valuations and RoGEV for 2015. The diversification of the Group outside of South Africa
assisted in largely offsetting this negative impact, with the valuation and RoGEV of the Group’s international operations
benefiting from the sharp weakening in the rand exchange rate, particularly against developed market currencies and the
Indian rupee, and more stable long-term interest rates. Exchange rate gains contributed some 4% to RoGEV per share. The
strong investment market performance of 2014 also did not repeat in 2015, contributing to relatively lower RoGEV in the
2015 financial year compared to 2014. Adjusted RoGEV is a more comparable measure of the underlying operational
performance, which continues to reflect solid results.

Group Equity Value at 31 December 2015

                                           GEV                RoGEV    
R million                            2015       2014   Earnings       %    
Group operations                   91 558     87 739     12 191    13,8    
Sanlam Personal Finance            38 249     38 453      4 658    12,1    
Sanlam Emerging Markets            18 047     14 571      4 369    29,9    
Sanlam Investments                 22 412     20 122      4 386    21,3    
Santam                             12 850     14 593     (1 222)   (8,4)   
Covered business                   47 222     48 393      7 037    14,5    
Value of in-force                  32 114     31 207      5 338    17,1    
Adjusted net worth                 15 108     17 186      1 699     9,9    
Other operations                   44 336     39 346      5 154    12,9    
Group operations                   91 558     87 739     12 191    13,8    
Discretionary capital and other    11 948      8 197         35     0,5    
Group Equity Value                103 506     95 936     12 226    12,7    
Per share (cents)                   5 057      4 684        599    12,8    

Group operations yielded an overall return of 13,8% in 2015, the combination of 14,5% return on covered business and
12,9% on other Group operations.

The Group’s covered business operations (comprising 46% of GEV) achieved a solid performance, exceeding the Group
hurdle rate by a healthy margin despite the adverse impact of higher interest rates. The mature South African covered
business operations exceeded the 12,1% hurdle rate by 0,6% with an overall return of 12,7% (17,4% on an adjusted basis),
augmented by a return of 20% from the non-South African businesses. The latter benefited from the release of relatively
higher discount rates applied in the valuation base of these businesses and the weakening in the rand exchange rate during
2015. The main items contributing to the return are:
- Value of new covered business (VNB): A 0,9% lower return from VNB in 2015 is largely attributable to the base effect
  of the AECI policy written in 2014 and the negative change in economic basis in 2015.
- Positive operating experience variances persisted in 2015, with positive risk experience of some R800 million still
  being the largest contributor. Particularly satisfactory is positive persistency experience of R170 million, a sound
  performance in a low-growth economic environment with consumer disposable income under pressure. This is testimony to the
  success of the Group’s strategic focus on client-centricity and efforts to improve the quality of the in-force book.
  Positive working capital experience was largely offset by negative one-off expense experience due to a number of large
  regulatory and other projects currently being implemented across the Group.
- Operating assumption changes contributed slightly less to the return in 2015. A major contributor in 2015 is
  positive risk experience assumption changes of R810 million. The level of positive operating risk experience variances over a
  number of years indicates some expected continuance in these trends and required the capitalisation of a portion thereof
  in the value of in-force covered business (VIF) to align more closely to the SAM
  requirements. This was partly offset by a strengthening in one-off expense assumptions given the level of regulatory
  change currently being experienced in most operations, and a number of other modelling changes.
- The largest return variance compared to 2014 relates to economic assumption changes, turning from a positive return
  contribution of 0,2% in 2014 to negative 3,3% in 2015. This is attributable to the rise in long-term interest rates in
  South Africa, with the higher RDR only partly compensated for by an increase in the future investment return assumptions
  on the underlying asset base.
- Investment variances contributed less to the overall RoGEV due to a weaker investment market performance in 2015
  compared to 2014, partly offset by foreign exchange gains.

Capital allocated to covered business (adjusted net worth) declined from R17,2 billion at the end of 2014 to R15,1
billion at 31 December 2015, representing 32% of covered business compared to 36% at the end of 2014. The reduction is
largely due to the revised capital allocation approach applied to Sanlam Life’s covered business with effect from 2015
(refer Capital management below).

Other Group operations (comprising 43% of GEV) achieved a return of 12,9% (23,2% on an adjusted basis). The valuation
and return of the South African businesses were adversely impacted by the higher RDR, somewhat offset by good growth in
assets under management in a number of the asset management boutiques. Sanlam Investment Management, the traditional
retail and institutional asset manager in South Africa, experienced only a marginal increase in assets under management due
to large net outflows, particularly from the Public Investment Corporation (PIC).

The return on SI and SEM’s non-South African businesses was in general supported by the weakening in the rand exchange
rate. The Group’s investment in Santam is valued at its listed share price, which declined in 2015 commensurate with
other financial services stocks, resulting in a negative 8,4% RoGEV contribution from Santam.

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.
- A relatively low level of return earned on the portfolio’s exposure to low yielding liquid assets.
- Hedging of the Saham Finances and Shriram life and general insurance transactions. The transactions were hedged
  through the acquisition of foreign currency, which earns a very low rate of interest due to the US dollar denomination. 
  The application of hedge accounting principles in the GEV presentation furthermore eliminated the foreign currency gains,
  essentially exposing the portfolio to some R5 billion of assets that earned close to zero return.

Earnings    

Shareholders’ fund income statement for the year ended 31 December 2015

R million                                                                       Change    
                                                     2015             2014           %    
Net result from financial services                  7 269            6 879           6    
Sanlam Personal Finance                             3 831            3 476          10    
Sanlam Emerging Markets                             1 197            1 241          (4)   
Sanlam Investments                                  1 417            1 468          (3)   
Santam                                                933              801          16    
Corporate and other                                  (109)            (107)         (2)   
Net investment return                               1 946            1 794           8    
Project costs and amortisation                       (321)            (224)        (43)   
Equity participation costs                            (43)            (109)         61    
Normalised headline earnings                        8 851            8 340           6    
Per share (cents)                                     433              408           6    

Net result from financial services (net operating profit) of R7,3 billion increased by 6% on 2014, with solid
performances by SPF and Santam more than compensating for lower earnings at SI and SEM. Santam achieved an exceptional
underwriting performance, with its underwriting margin of 9,6% exceeding the new longer term target range of between 4% and 8%.
As indicated in the introduction, the Group faced a challenging operating environment in 2015, which together with a
number of internal one-off items had a pronounced impact on growth in net result from financial services. These items were:

- In SI, performance fees declined by 21% from 2014. A significant portion of the performance fees earned by SI in
  2014 related to funds managed on behalf of the Public Investment Corporation (PIC). The cumulative withdrawal by the PIC of
  some R20 billion of funds under management in 2014 and 2015 as part of the restructuring of their portfolios, reduced
  the base on which fees can be earned, with no performance fees accruing in 2015 on the PIC funds. A relatively lower
  level of outperformance of benchmarks in 2015 compared to the 2014 financial year also resulted in lower performance fees
  being earned on collective investment schemes.

The 2014 comparative earnings of SI’s International business included one-off profit of R58 million realised on the
disposal of Intrinsic in the United Kingdom (UK).

One-off expenditure increased SI’s administration costs by R83 million after tax in 2015, including the outsourcing of
Sanlam Collective Investments’ administration platform, further leveraging off the Group’s repositioned WealthsmithsTM
branding, restructuring of the UK private wealth business and costs associated with regulatory compliance in the UK.

Sanlam Employee Benefits (SEB) wrote one of the largest insurance policies in history in South Africa during 2014 when
it concluded an R8,3 billion pensions outsourcing agreement with the AECI retirement fund. This policy generated
effective net new business strain of R138 million in 2014, with a further R14 million being recognised in the 2015 earnings in
respect of the additional premium received during the year.

Capital Management experienced abnormal marked-to-market losses of R92 million in its debt and equity-structuring
units related to commodity market conditions, entity specific issues and political events in South Africa. Credit spreads on
Eurobonds issued by African governments and South African institutions widened significantly during the year. In the
case of African government bonds it is largely attributable to unfavourable investor sentiment towards emerging markets
following the severe slump in commodity prices that is likely to have an adverse impact on many governments’ ability to
service debt. Investors’ risk perception of South African institutional debt rose sharply during 2015 from a combination
of some company specific issues such as the regulatory penalty levied against MTN in Nigeria, and general negative
investor sentiment following the changes in Finance Ministers at the end of 2015. The widening of credit spreads culminated in
marked-to-market losses in Capital Management’s debt business that has exposure to these Eurobonds. In addition,
Capital Management also incurred marked-to-market losses on financing transactions backed by commodity stocks. The share
prices of commodity companies declined sharply during 2015 in line with the slump in commodity prices, which reduced the
underlying level of security within these instruments. This had a consequential negative impact on their fair values. In the
absence of defaults, these marked-to-market losses should reverse in future reporting periods.

- SEM experienced a difficult 2015, with its Indian, Malaysian and Zambian operations underperforming against 2014 and
the target for 2015.

The Shriram Capital results in India were affected by one-off items in both the 2014 and 2015 financial years, causing
a R154 million adverse change in net result from financial services. Shriram Transport Finance Company’s subsidiary
focused on equipment financing experienced abnormal levels of arrears in 2015. The subsidiary expanded its lending book in
anticipation of the newly elected government’s infrastructure projects. Delays in the roll-out of these projects placed
a large number of clients under financial pressure, with the outstanding loan book growing outside of normal parameters
during the year. This required a significant strengthening in the provision for bad debts. The position stabilised
recently with some projects being initiated. An improvement in recoveries and the arrears position is expected during 2016.
In addition, the 2014 comparative results for Shriram Capital included a R51 million one-off release of provisions
relating to Shriram General Insurance’s third party pool book, thereby increasing the comparative base.

The Zambian economy and currency are under severe pressure from low commodity prices, in particular copper that is its
main source of income and foreign currency inflows, unplanned elections and severe flooding during the year. Despite a
number of management actions, SEM’s Zambian operations could not escape the impact of the economic environment on
consumer disposable income, resulting in significantly lower operating earnings due to lower new business sales and negative
persistency experience.

Pacific & Orient, SEM’s general insurance business in Malaysia, appointed a new statutory actuary during 2015 in line
with Malaysian regulations. The new actuary required a strengthening of the reserving basis, which reduced the 2015 net
result from financial services by R30 million. This reserve can be released in future periods should actual experience
prove to be more favourable than that assumed in the current basis.

Excluding these items, net result from financial services grew by 11%, a solid performance against the overall
challenging backdrop.

SPF achieved solid growth for a largely mature business. Sanlam Individual Life remains the largest contributor to
SPF’s operating earnings with growth in its net result from financial services of 7% in 2015. Profit from investment
products grew by 27%, benefiting from strong guaranteed product sales over the last few years that increased the book size 
of this line of business. Market-related investment products also contributed to the growth, supported by a 14% increase 
in the average level of assets under management - partly attributable to the strong investment market performance of 2014.
The profit contribution of risk products declined by 8%, with a further improvement on the exceptionally favourable
mortality experience of 2014 difficult to achieve and due to an increase in new business strain in 2015 following the
strong growth in new risk business sales. Profit released from the asset mismatch reserve held in respect of non-participating 
risk business declined by 14% in line with the lower level of this reserve during 2015. Mortality experience in the annuity 
book normalised during 2015, which together with a lower level of asset mismatch profits contributed to a decline in earnings 
from this line of business. This was offset by higher profit from other products, which include the legacy universal life book.

Sanlam Sky’s net result from financial services increased by 19%. Growth in the size of the in-force book, positive
investment variances and economic basis changes as well as improved persistency and premium variances supported the
earnings growth.

Glacier grew its profit contribution by 21% after tax. Fund-based fee income benefited from an increase in assets
under management due to strong net fund inflows and favourable investment market performance in prior years.

SEM grew its net result from financial services by a satisfactory 14% excluding the abnormal items highlighted before.

Namibia (up 10% net of tax and non-controlling interests; 16% on a gross basis) benefited from sound profit growth at
Santam Namibia and Capricorn Investment Holdings (CIH). Santam Namibia experienced a benign claims environment during
2015, similar to Santam’s South African experience. Bank Windhoek, CIH’s major investment, continued to deliver good
growth. Profit realised in 2014 in the closed fund life book from credit spread moves did not repeat in 2015, which together
with a shrinking book contributed to lower operating earnings from this business. The renegotiation of the Bank Windhoek
credit life profit share arrangement also had a negative impact on earnings growth in 2015. The variance between gross
and net growth is mostly attributable to relatively stronger growth in the businesses with non-controlling interests.

Botswana achieved good growth of 17% in its net result from financial services (22% before tax and non-controlling
interests). The life business’ results benefited from good annuity volumes and margins and an increase in the size of the
book following the strong new business performance over the last number of years. Letshego, which earns more than half of
its profit outside Botswana, experienced currency translation losses as well as a higher effective tax rate due to a
change in the various countries’ contribution to overall earnings. Its profit contribution was in line with 2014. The
general insurance business Legal Guard made a welcome recovery and turned around from a net loss in 2014 to a small net
profit in 2015. Botswana Insurance Fund Management (BIFM), the Botswana asset manager, was adversely impacted by the
withdrawal of R12,4 billion of assets under management by the Botswana Public Officers Pension Fund (BPOPF). Restructuring of
the business limited the negative profit impact to some R10 million.

The Rest of Africa operations, excluding Zambia, achieved growth in net result from financial services of 17%. Most
countries and lines of business delivered strong growth. The exception was general insurance where all businesses
experienced claims pressure, apart from the Ghanaian operations.

Net result from financial services in India rose 13% excluding structural changes and the abnormal items listed
before. The credit and general insurance businesses achieved satisfactory growth, while the life insurance business continued
to invest in expanding its distribution footprint.

In Malaysia, growth in general insurance business premiums came under pressure from a combination of lower sales of
two-wheelers and increased competition. Appropriate management action has been taken, which limited the impact on
profitability to some extent. The life business also did not perform in line with expectations due to losses in the medical
portfolio, contributing to a disappointing overall performance. A new Regional Executive for Malaysia has been appointed
towards the end of the year. His focus will be on improving the performance of the individual businesses, but also
extracting synergies from the combined operations.

SI achieved overall growth of 6% in its net result from financial services excluding abnormal items.

The relatively weaker investment market performance in 2015 impacted adversely on the Investment Management
businesses’ ability to grow assets under management, aggravated by:
- Continued net outflows from the South African life book and capital portfolio. The legacy life book managed by SI is
  running off while SPF’s open architecture results in only a portion of its new business being managed by SI. Outflows
  from the older life books are therefore not replaced by new inflows, resulting in consistent net outflows of assets under
  management for SI. SI’s strategic focus remains on replacing the life outflows with third-party business and an increase 
  in the proportion of SPF open architecture business managed. A consequence of the Group’s strategic focus on capital
  efficiency has been a reduction in the capital backing the South African life business, which is managed by SI. A further
  R4 billion has been released during 2015, which will be redeployed for investment in strategic operations on which SI
  does not earn any fee income.
- The R20 billion of funds under management withdrawn by the PIC over the last two years.
- The funds withdrawn from SEM by the BPOPF during 2015 included some R3 billion of funds managed by SI’s
  International business.

Average assets under management of the South African investment manager, the largest contributor to the sub-clusters’
profit, increased by only 6% as a result. Growth of 8% in net result from financial services, excluding abnormal items,
represents a solid performance in this context.

SEB’s profit contribution grew marginally by 1% if the new business strain from the AECI policy is excluded. A
reduction in losses from the administration businesses and 32% growth at SEB investments were offset by a 7% decline in risk
profits following a normalisation in claims experience during 2015 from a particularly favourable experience in 2014.

Capital Management managed to achieve 11% growth in its net result from financial services, excluding marked-to-market
losses from widening credit spreads on Eurobonds and equity-backed financing structures.

Santam had an exceptional year, with its underwriting margin improving from an already high base of 8,7% in 2014 to
9,6% in 2015. The benign claims environment of 2014 persisted into 2015, which together with disciplined underwriting
action contributed to the 16% growth in Santam’s net result from financial services. Premium growth was less than planned
for 2015 in a competitive environment, commercial business in particular.

Normalised headline earnings of R8,9 billion are 6% up on 2014. This is the combined effect of the 6% increase in net
result from financial services, 8% growth in net investment return earned on the capital portfolio and a 43% increase in
amortisation of intangible assets. The latter is essentially due to intangible assets recognised in respect of the
acquisition of MCIS in Malaysia during 2014. Despite the relatively weaker investment market performance in 2015, net
investment surpluses earned on the capital portfolio increased by 16% due to a well-timed change in strategic asset allocation
(refer capital section below) and the international exposure in the portfolio. The change in strategic asset allocation
from unhedged to hedged equities was implemented before the decline in the South African equity market in December,
protecting the portfolio against these losses and locking in the gains made up to that stage. In addition, investment
return earned on the international exposure in the portfolio benefited from the sharp weakening of the rand exchange rate
against developed market currencies during 2015.

Business volumes    
The Group achieved overall growth of 16% in new business volumes from a high base in 2014. Excluding the R8,3 billion
AECI premium recognised in 2014, new business increased by 21%, a particularly pleasing performance in a difficult
economic environment.

Life insurance new business volumes increased by 18% (excluding the AECI policy), investment business inflows by 24%
and general insurance earned premiums by 8%. All businesses contributed to the solid performance, apart from SI’s
International business.

Business volumes for the year ended 31 December 2015

                                     New business                                   Net inflows  
                                                   Change         2015       2014       Change    
R million                       2015        2014        %                                    %    
Sanlam Personal Finance       63 825      52 566       21       22 895     19 580           17    
Sanlam Emerging Markets       11 913       9 259       29       (7 346)     3 971        (>100)   
Sanlam Investments           116 582     103 250       13       (3 512)    12 099        (>100)   
Santam                        18 522      17 222        8        7 012      6 344           11    
Total                        210 842     182 297       16       19 049     41 994          (55)   

Covered business              39 976      42 290       (5)      12 081     18 430          (34)   
Investment business          150 670     121 383       24         (523)    16 853        (>100)   
General insurance             20 196      18 624        8        7 491      6 711           12    
Total                        210 842     182 297       16       19 049     41 994          (55)   

SPF’s new business sales grew by 21%, a stellar performance for this mature business.

Sanlam Sky, operating largely in the South African entry-level market, achieved growth of 13%. Individual life
recurring premium new business increased by 12% and Group recurring premium sales by 21%. The tax free savings product 
launched in March 2015 after changes in tax legislation proved much more popular than anticipated, with new savings business
volumes increasing by 50% on the comparable period in 2014. To some degree this came at the expense of the higher margin
risk business sales, which increased by only 4%. Some replacement sales are not unusual after the introduction of a new
product, but this was particularly pronounced at Sanlam Sky due to the non-availability of a competitive Sanlam savings
solution that intermediaries could sell in this market segment in prior years and industry-wide marketing of the new
product line that intensified client attention and demand. Sales trends started normalising towards the end of the year, 
with the mix between risk and savings products moving to more appropriate levels. Group recurring premium sales were
supported by a large new scheme written during 2015 and the biennial renewal of the ZCC scheme, which more than offset the
impact of the cancellation of the Capitec credit life agreement in 2014.

New business volumes in the Individual Life segment, which is largely focused on the middle income segment in South
Africa, increased by 3%. Single premium sales increased by 3%, reflecting pressure on disposable income, the competitive
environment and a shift in sales to the Glacier platform. Annuity and guaranteed plan sales reflected good growth, offset
by lower sales from bank brokers as these channels increasingly focused on their own in-house products. New recurring
premium sales grew by 10% with all lines of business contributing to the growth. A strong recovery in the sales of risk
business was particularly satisfactory, with this line of business growing by 17% in the second half of 2015 (flat for
the six months to 30 June 2015) to reach overall growth of 9% for the full 2015 financial year. Similar to the entry-level
market, the mix of recurring premium savings products changed towards the new tax-free savings products, although in
this market segment the tax-free savings products was favoured above existing low margin endowments.

Glacier achieved another exemplary performance in 2015, growing its new business volumes by 27%. Demand for offshore
and wrap solutions were particularly strong, driven by a weaker rand and competitive investment performance offered by
the wrap solutions respectively.

The SEM operations grew their new business contribution by 29% - new life business increased by 32%, investment
business inflows by 29% and general insurance earned premiums by 19%. The growth in life and general insurance business was to
some extent supported by acquisitions during 2014 and 2015.

New business volumes in Namibia declined by 16%, the combined result of 36% growth in new life business and a 23%
decline in unit trust inflows in a competitive environment. The strong growth in life business is largely due to an increase
in per policy premium size in the affluent market.

The Botswana operations had another sterling year with new business volumes rising by 78%. Strong annuity sales
continue to be the main driver of new life business (up 41%), augmented by a more than doubling in new investment mandates at
the asset management operations.

A 35% increase in Rest of Africa new business volumes is attributable to a twofold increase in investment business
inflows and a 94% rise in general insurance business, the latter partly due to the base effect of new acquisitions. Life
business growth disappointed at 2%. The Zambian operations struggled in difficult economic conditions, recording a 37%
decline in new business sales. The Kenyan business made progress in rebuilding its agency force after the major impact of
the system implementation issues experienced in the first half of the year. As anticipated, a major improvement in sales
volumes will only reflect in 2016 as new agent productivity improves. New life business sales for the full year declined
by 19%, with some improvement evident in the second-half performance. Excluding Zambia and Kenya, Rest of Africa new
life business volumes increased by 30%, with all regions contributing to the strong growth.

New business growth in India persisted in line with the first-half 2015 trends. New life and general insurance
business sales increased by 60% and 24% respectively, benefiting from the investments made in growing the distribution
footprint.

As indicated before, lower two-wheeler sales and competitive pressures impacted negatively on Pacific & Orient in
Malaysia. This is evident in its earned premiums that declined by 22%. The base effect of the MCIS acquisition during 2014
supported a more than doubling in Malaysian new life business sales.

The AECI policy written by SEB in 2014 had a major negative impact on the 13% overall year-on-year growth in SI’s new business
volumes. Excluding the AECI policy, new business volumes increased by 23%. All business units achieved growth in excess of
20%, apart from International where an 18% decline in inflows is largely attributable to the disposal of Intrinsic during
2014. A 57% increase in new life business at SEB (excluding AECI) is particularly satisfactory. Recurring and single
premium new business grew by 60% and 57% respectively. Another highlight for the year was the success of the SI retail
unit in yielding new inflows. By partnering with intermediaries through the Implemented Consulting initiative, the unit
attracted new inflows of more than R8 billion during 2015. Also pleasing is the significant portion of the funds that
flowed to the SI investment core, supporting strong net inflows into Sanlam Collective Investments.

The bulk of Santam’s premiums are still written in the highly competitive South African market. Earned premiums grew
by 8%, reflecting the maturity of the South African market and the current low-growth economic environment. The severe
drought experienced in large parts of the country manifested in reduced planting and commensurately lower premiums written
in the agricultural business line. MiWay, Santam’s direct insurance business, continues to make inroads and grew its
premium base by 19%.

Net fund inflows of R19,1 billion in 2015 is an acceptable performance given the large withdrawals experienced from
the PIC and BPOPF and the economic and investment market headwinds faced in the 2015 financial year.

Value of new covered business for the year ended 31 December 2015

                                                  2015 economic basis            2014 economic basis   
                                                                Change                        Change    
R million                                    2015      2014        %        2015      2014       %    
Value of new covered business               1 514     1 743      (13)      1 707     1 743      (2)   
Sanlam Personal Finance                       955     1 084      (12)      1 148     1 084       6    
Sanlam Emerging Markets                       448       431        4         467       431       8    
Sanlam Investments                            111       228      (51)         92       228     (60)   
Net of non-controlling interest             1 360     1 592      (15)      1 545     1 592      (3)   
Present value of new business premiums     54 362    56 394       (4)     55 555    56 394      (1)   
Sanlam Personal Finance                    38 572    34 798       11      39 712    34 798      14    
Sanlam Emerging Markets                     7 510     5 673       32       7 600     5 673      34    
Sanlam Investments                          8 280    15 923      (48)      8 243    15 923     (48)   
Net of non-controlling interest            51 856    54 518       (5)     53 005    54 518      (3)   
New covered business margin                 2,80%     3,09%                3,07%     3,09%            
Sanlam Personal Finance                     2,48%     3,12%                2,89%     3,12%            
Sanlam Emerging Markets                     5,97%     7,60%                6,14%     7,60%            
Sanlam Investments                          1,34%     1,43%                1,12%     1,43%            
Net of non-controlling interest             2,62%     2,92%                2,91%     2,92%            


The discount rate used to determine VNB is directly linked to long-term interest rates. The 200bp rise in the South
African five and nine-year benchmark rates during 2015 resulted in a commensurate increase in the risk discount rate and a
significant negative impact on VNB growth and margins. This was aggravated by the high base in 2014 related to the AECI
policy. VNB at actual discount rates declined by 13% (6% excluding AECI). On a comparable basis (before economic
assumption changes) VNB decreased by 2% (increased by 6% excluding AECI).

SPF achieved overall growth of 6% on a comparable basis. The significant change in business mix in Sanlam Sky to the
lower margin tax free savings products contributed to a 9% decline in Sanlam Sky’s VNB and a reduction in new business
margins from 9,51% in 2014 to 7,44% in 2015. The normalisation in business mix towards the end of the year should support
VNB growth in 2016. The strong growth in recurring premium risk business in the Individual Life segment more than
compensated for the change in mix of savings business to tax-free savings products. VNB margins improved from 2,88% to 2,97%,
driving VNB growth of 9% in this mature segment. Glacier’s VNB growth was in line with its new business performance.

VNB growth and margins at SEM were negatively impacted by the significantly lower new business production in Kenya and
Zambia, the renegotiation of the Bank Windhoek credit life profit sharing arrangement and higher long-term interest
rates in Namibia. All of the other businesses achieved strong VNB growth largely in line with their new business
performance. On a consistent economic basis, overall VNB increased by 8% to R467 million. Excluding Kenya and Zambia, VNB grew by
24% and Rest of Africa’s contribution by 35%.

SI’s VNB declined by 60%, largely due to the base effect of the AECI transaction concluded in 2014 and a lower
contribution from the International business in line with its lower new business volumes.

VNB margins were in general maintained at a product level, apart from the Namibian credit life business.

- Capital management    
Sanlam Life capital allocation approach
Under the current Financial Soundness Valuation (FSV) regime, participations or strategic investments held by a life
insurance company can be taken into account for purposes of the statutory capital available to cover its CAR. This creates
an opportunity in a diversified group to optimise its capital allocation by using trategic investments to cover a portion of
sthe capital required to meet its targeted CAR ratio, with the remainder being held in the form of a balanced portfolio 
and/or subordinated debt. This is referred to as capital diversification. In the transition to SAM, the new solvency regime,
some uncertainty existed as to whether any capital diversification would also be allowed under the SAM regime.
The Group therefore followed a prudent capital allocation approach during the development phase of the SAM specifications,
essentially capitalising each life insurance business on a standalone basis without any allowance for diversification.
The SAM specifications have largely been finalised during 2015, with the outcome that participations will be allowed 
to contribute to available capital (own funds) under SAM, both at a company (solo) and group level, with a corresponding
capital requirement (SCR). Prescribed valuation bases are applicable at a solo and group level. 
The valuation and SCR bases for participations provide some stability to the entity’s SCR cover ratio and
potentially generate surplus own funds that can be redeployed.

The improved clarity on the final SAM specifications enabled the Group to extract further capital efficiencies during
2015. This was achieved through a combination of capital diversification and a more conservative asset allocation for
the balanced portfolio backing Sanlam Life’s covered business.

For Sanlam Life, the Group’s target under the FSV basis is to ensure that its CAR cover would be at least 1,5 times
over a 10-year period, within a 95% confidence level. At the end of 2014 this translated into IFRS-based required capital
of some R14,7 billion for Sanlam Life’s covered business. Consistent with the prudent approach then followed, this
capital requirement was fully covered by subordinated debt of R2 billion and a balanced portfolio of R12,7 billion, with no
allowance for the value attributed to investments in strategic businesses. This basis of capital allocation contributed
to Sanlam Life’s high CAR cover ratio under the FSV regime, as its investment in Santam alone contributes more than 
R4 billion in available statutory capital.

The investment in Santam also provides a major diversification opportunity under SAM. The utilising of capital 
diversification was accordingly introduced at the end of 2015, initially limited to R2,5 billion. The first R2,5 billion of
Sanlam Life’s IFRS-based capital requirement will therefore be covered by Santam shares, with the remainder covered by
subordinated debt and the balanced portfolio.

In conjunction with the use of the diversification benefit, the Group also reconsidered the strategic asset allocation
of the balanced portfolio to optimise RoGEV under SAM, given that the SAM regime is particularly punitive with regards
to equity holdings. The strategic asset allocation was significantly changed as follows, taking cognisance of the
utilisation of diversification benefits:

                                   Asset allocation   
                            31 December    31 December  
                                   2015           2014  
Asset class                           %              %  
Balanced portfolio                                      
Equities                              -             31  
Offshore investments                  8             12  
Hedged equities                      80             15  
Cash                                 12             42  
Total balanced portfolio            100            100  
Subordinated debt                                       
Fixed interest                      100            100  
Total subordinated debt             100            100  



Sanlam Life’s IFRS-based required capital amounted to R14,5 billion at the end of 2015 based on the revised capital
allocation approach, covered as follows:
- R2,5 billion by Santam shares;
- R2 billion by the subordinated debt issued by Sanlam Life; and
- R10 billion by a balanced portfolio.

The revised capital allocation approach effectively released a total of R4 billion additional discretionary capital:
- R200 million emanated from the reduction in the overall required capital from R14,7 billion to R14,5 billion.
- Given a slightly lower overall capital requirement, the investment return of R1,3 billion earned on the balanced
  portfolio during 2015 could be released to the discretionary capital portfolio.
- The reduction in the capital requirement funded by the balanced portfolio from R12,5 billion before the utilisation
  of diversification benefits to R10 billion thereafter, released a further R2,5 billion.

As indicated in the Group’s interim results announcement, a SCR target cover range of between 1,7 times and 2,1 times
has been set for Sanlam Life’s covered business. The R14,5 billion of IFRS-based required capital translated into a SCR
cover at the upper end of the target range at 31 December 2015.

From a RoGEV perspective, the lower expected return from the more conservative asset allocation is compensated for by
the lower level of capital held in the balanced portfolio. The cost of capital charge in the embedded value of covered
business therefore remained largely unchanged.

Discretionary capital    

The Group started the year with discretionary capital of R3,3 billion, which was earmarked for new growth and
expansion opportunities as well as to strengthen existing relationships. A net total of R6 billion was redeployed in the 
year, which included the following:
- R4,2 billion (excluding Santam’s contribution) allocated to the acquisition of Saham Finances, which will
  significantly expand the Group’s African footprint and general insurance diversification. The acquisition price is payable 
  in US dollars, which the Group hedged during 2015 by acquiring the foreign currency. In terms of the IFRS hedge accounting
  specifications, the investment will be recognised in 2016 at the US dollar/R14,08 exchange rate at which the foreign
  currency was acquired.
- The Group also indicated after the release of the interim results in September 2015 that it will acquire a 23%
  additional stake in the Shiram life and general insurance businesses. A total of some R970 million has been earmarked for
  this transaction, which has also been hedged during 2015 against exchange rate movements.
- R703 million was utilised for the acquisition of an effective 27% stake in Medscheme, which improves the Group’s
  healthcare proposition for clients in addition to offering a number of potential synergies. The first of these has been
  realised through the roll-out of the Reality loyalty scheme to medical aid members administered by Medscheme.
- Some R240 million was invested by SEM to enter the Mozambique and Zimbabwe markets and to increase its stakes in the
  Nigerian and Tanzanian general insurance businesses.
- As indicated in the 2014 Sanlam Annual Report, the Group extended its relationship with its empowerment partner,
  Ubuntu-Botho Investments (UB), for an additional 10 years with the aim, among others, to jointly explore mutually
  beneficial transactions. The first transaction concluded in terms of this arrangement is the transformation of Indwe Brokers
  Holdings (Indwe), a general insurance intermediary, into a black-owned company through the disposal by Santam of a 51%
  shareholding in the business to African Rainbow Capital, a wholly owned subsidiary of UB. Sanlam also acquired a 25% stake 
  in Indwe for a total amount of R69 million. The transaction better positions Indwe in a highly competitive market, opens
  up new opportunities for the business and enabled the Group to further execute on the transformation pillar of its strategy.
- R46 million was received from Santam as its contribution to recent general insurance investments made in Africa.
- SI utilised R36 million for investment in its US-based asset manager and for trail payments for the acquisition of
  the Vukile property management agreement.
- SPF invested R57 million in a distribution business in the entry-level market in South Africa.
- SI established a seeding capital portfolio that will be utilised to grow some of their new products and portfolios
  while building a track record. Discretionary capital of R200 million was utilised to bolster the portfolio.
- A special dividend of R226 million was received from MCIS in Malaysia as part of its capital optimisation
  initiatives.
- R165 million was realised from the disposal of SEM’s direct stake in Nico Holdings in Malawi to Botswana Insurance
  Holdings, SEM’s subsidiary in Botswana. Not only does this transaction enhance the potential to extract synergies between
  the businesses, but it also effectively released illiquid excess capital held in the Botswana operations.

Investment return earned on the discretionary capital portfolio and the 2014 dividend cover in excess of cash
operating earnings added some R1 billion of discretionary capital. Together with the R4 billion of capital released from the
capital allocation changes in Sanlam Life, unallocated discretionary capital amounted to R2,3 billion at the end of
December 2015. We remain focused on utilising the available discretionary capital for value-accretive investment opportunities.

- Solvency    
All of the life insurance businesses within the Group were sufficiently capitalised at the end of December 2015. The
total admissible regulatory capital (including identified discretionary capital) of Sanlam Life Insurance Limited, the
holding company of the Group’s major life insurance subsidiaries, of R47,8 billion, covered its CAR 5,8 times. No 
policyholder portfolio had a negative bonus stabilisation reserve at the end of December 2015.

The Group appointed Standard & Poor’s (S&P) during 2015 to replace Fitch Ratings as the Group’s credit ratings agency
following the cancellation of Fitch Ratings’ registration as a ratings agency for regulatory purposes by the FSB. S&P
issued the following South Africa National Scale ratings at the beginning of 2016: Sanlam Limited: zaAA-; Sanlam Life
Insurance Limited: zaAAA, Subordinated debt: zaAA+. These ratings confirm the strength of the Group’s balance sheet and
operations.

- Dividend    
The Group only declares an annual dividend due to the costs involved in distributing an interim dividend to our large
shareholder base. Sustainable growth in dividend payments is an important consideration for the Board in determining the
dividend for the year. The Board uses cash operating earnings as a guideline in setting the level of the normal
dividend, subject to the Group’s liquidity and solvency requirements. The operational performance of the Group in the 2015
financial year enabled the Board to increase the normal dividend per share by 9% to 245 cents. This will maintain a cash
operating earnings cover of approximately 1,1 times. The South African dividend withholding tax regime applies in respect
of this dividend. The dividend will in full be subject to the 15% withholding tax, where applicable, which will result in a
net final dividend, to those shareholders who are not exempt from paying dividend tax, of 208,25 cents per ordinary share.
The number of ordinary shares in issue in the company’s share capital at the date of the declaration is 2 003 141 288
(excluding treasury shares of 163 330 518). The company’s tax reference number is 9536/346/84/5.

Shareholders are advised that the final gross cash dividend of 245 cents for the year ended 31 December 2015 is payable on
Monday, 11 April 2016 by way of electronic bank transfers to ordinary shareholders recorded in the register of Sanlam at
close of business on Friday, 8 April 2016. The last date to trade to qualify for this dividend will be Friday, 
1 April 2016, and Sanlam shares will trade ex-dividend from Monday, 4 April 2016.

Share certificates may not be dematerialised or rematerialised between Monday, 4 April 2016 and Friday, 8 April 2016,
both days included.

Sanlam Group

Summarised financial statements for the year ended 31 December 2015 

- Accounting policies and basis of presentation    
The summary consolidated financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for abridged reports, and the requirements of the Companies Act applicable to summary financial
statements. The Listings Requirements require abridged reports to be prepared in accordance with the framework concepts and
the measurement and recognition requirements of IFRS and the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also,
as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies
applied in the preparation of the consolidated financial statements, from which the summary consolidated financial statements
were derived, are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the
previous consolidated annual financial statements.
 
The policy liabilities and profit entitlement rules are determined in accordance with prevailing legislation,
generally accepted actuarial practice and the stipulations contained in the demutualisation proposal. There have been no
material changes in the financial soundness valuation basis since 31 December 2014, apart from changes in the economic
assumptions. 

The basis of presentation and accounting policies for the IFRS financial statements and Shareholders’ information are
in all material respects consistent with those applied in the 2014 annual report.
The preparation of the Group’s audited annual results was supervised by the Financial Director, Kobus Möller CA(SA).

The following new or revised IFRS and interpretations have effective dates applicable to future financial years and
have not been early adopted:
- IFRS 9  - Financial Instruments (effective 1 January 2018)
- IFRS 15 - Revenue from Contracts with Customers (effective 1 January 2018)
- IFRS 16 - Leases (effective 1 January 2019)

The impact of the application of these revised standards and interpretations in future financial reporting periods on
the Group’s reported results, financial position and cash flows are still being assessed.

- 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 2015

Group Equity Value
at 31 December 2015
                                                   2015          2014  
                                              R million     R million  
Embedded value of covered business               47 222        48 393  
Sanlam Personal Finance                          34 526        35 444  
Adjusted net worth                                8 287         9 446  
Value of in-force                                26 239        25 998  
Sanlam Emerging Markets                           5 486         5 116  
Adjusted net worth                                2 323         2 324  
Value of in-force                                 3 163         2 792  
Sanlam Investments                                7 210         7 833  
Adjusted net worth                                4 498         5 416  
Value of in-force                                 2 712         2 417  
Other Group operations                           44 336        39 346  
Sanlam Personal Finance                           3 723         3 009  
Sanlam Emerging Markets                          12 561         9 455  
Sanlam Investments                               15 202        12 289  
Santam                                           12 850        14 593  
Other capital and net worth adjustments           9 648         4 897  
                                                101 206        92 636  
Discretionary capital                             2 300         3 300  
Group equity value                              103 506        95 936  
Group equity value per share (cents)              5 057         4 684  


Shareholders’ fund income statement
for the year ended 31 December 2015
                                                                         2015            2014  
                                                                    R million       R million  
Result from financial services before tax                              11 595          10 744  
Sanlam Personal Finance                                                 5 313           4 801  
Sanlam Emerging Markets                                                 2 248           2 213  
Sanlam Investments                                                      1 877           1 927  
Santam                                                                  2 321           1 968  
Corporate and other                                                      (164)           (165) 
Tax on financial services income                                       (3 098)         (2 849) 
Non-controlling interest                                               (1 228)         (1 016) 
Net result from financial services                                      7 269           6 879  
Net investment return                                                   1 946           1 794  
Net investment income                                                     968             931  
Net investment surpluses                                                  946             817  
Net equity-accounted headline earnings                                     32              46  
Net project expenses                                                      (15)            (14) 
Equity participation costs                                                (43)           (109) 
Amortisation of intangibles                                              (306)           (210) 
Normalised headline earnings                                            8 851           8 340  
Profit on disposal of operations                                          200             387  
Net equity-accounted non-headline earnings                                  -             118  
Impairments                                                              (109)           (101) 
Normalised attributable earnings                                        8 942           8 744  
Fund transfers                                                            449             (15) 
Attributable profit per Group statement of comprehensive income         9 391           8 729  


Notes to the shareholders’ fund information
for the year ended 31 December 2015

                                            2015           2014 
                                       R million      R million 
1. New business                                                 
   Analysed per licence:                                        
   Life Insurance                         39 976         42 290 
   Sanlam Personal Finance                28 974         25 145 
   Sanlam Emerging Markets                 4 338          3 286 
   Sanlam Investments                      6 664         13 859 
   Investment business and other         170 866        140 007 
   Sanlam Personal Finance                34 851         27 421 
   Sanlam Emerging Markets                 7 575          5 973 
   Sanlam Investments                    109 918         89 391 
   Santam                                 18 522         17 222 
   Total new business                    210 842        182 297 

2. Net flow of funds                                            
   Analysed per licence:                                        
   Life Insurance                         12 081         18 430 
   Sanlam Personal Finance                 9 168          8 214 
   Sanlam Emerging Markets                 3 174          2 214 
   Sanlam Investments                       (261)         8 002 
   Investment business and other           6 968         23 564 
   Sanlam Personal Finance                13 727         11 366 
   Sanlam Emerging Markets               (10 520)         1 757 
   Sanlam Investments                     (3 251)         4 097 
   Santam                                  7 012          6 344 
   Total net flow of funds                19 049         41 994 

3. Normalised earnings per share      
   In terms of IFRS, the policyholders’ fund’s investments in Sanlam shares and Group subsidiaries are not 
   reflected as equity investments in the Sanlam statement of financial position, but deducted in full from 
   equity on consolidation (in respect of Sanlam shares) or reflected at net asset value (in respect of 
   subsidiaries). The valuation of the related policy liabilities however includes the fair value of these 
   shares, resulting in a mismatch between policy liabilities and policyholder investments, with a consequential 
   impact on the Group’s earnings. 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 the impact of 
   investments in Sanlam shares and Group subsidiaries held by the policyholders’ fund.     
   
   cents                                                               2015         2014       
   Normalised diluted earnings per share:                                                     
   Net result from financial services                                 355,2        336,2      
   Headline earnings                                                  432,5        407,6      
   Profit attributable to shareholders’ fund                          437,0        427,3      
   
   R million                                                           2015         2014       
   Analysis of normalised earnings (refer shareholders’ 
   fund income statement):                                       
   Net result from financial services                                 7 269        6 879      
   Headline earnings                                                  8 851        8 340      
   Profit attributable to shareholders’ fund                          8 942        8 744      
                                                                                              
   million                                                             2015         2014       
   Adjusted number of shares:                                                               
   Weighted average number of shares for diluted earnings per 
   share                                                            2 024,0      2 022,8    
   Add: Weighted average Sanlam shares held by policyholders           22,3         23,4       
   Adjusted weighted average number of shares for normalised 
   diluted earnings per share                                       2 046,3      2 046,2    
   Number of ordinary shares in issue                               2 166,5      2 166,5    
   Shares held by subsidiaries in shareholders’ fund                 (141,2)      (142,1)    
   Outstanding shares and share options in respect of Sanlam 
   Limited long-term incentive scheme                                  21,3         23,9       
   Adjusted number of shares for value per share                    2 046,6      2 048,3    


Embedded value of covered business
at 31 December 2015

                                                                                   
   R million                                   Note           2015          2014   
   Sanlam Personal Finance                                  34 526        35 444   
   Adjusted net worth                                        8 287         9 446   
   Net value of in-force covered business                   26 239        25 998   
   Value of in-force covered business                       28 139        27 872   
   Cost of capital                                          (1 900)       (1 874)  
   Sanlam Emerging Markets                                   5 486         5 116   
   Adjusted net worth                                        2 323         2 324   
   Net value of in-force covered business                    3 163         2 792   
   Value of in-force covered business                        5 317         4 618   
   Cost of capital                                            (525)         (384)  
   Non-controlling interest                                 (1 629)       (1 442)  
   Sanlam UK(1)                                              1 633         1 193   
   Adjusted net worth                                          778           391   
   Net value of in-force covered business                      855           802   
   Value of in-force covered business                        1 066         858     
   Cost of capital                                            (211)         (56)   
   Sanlam Employee Benefits(1)                               5 577         6 640   
   Adjusted net worth                                        3 720         5 025   
   Net value of in-force covered business                    1 857         1 615   
   Value of in-force covered business                        2 804         2 520   
   Cost of capital                                            (947)         (905)  
   Embedded value of covered business                       47 222        48 393   
   Adjusted net worth(2)                                    15 108        17 186   
   Net value of in-force covered business         1         32 114        31 207   
   Embedded value of covered business                       47 222        48 393   
   (1) Sanlam UK and Sanlam Employee Benefits are part of the Sanlam Investments cluster.    
   (2) Excludes subordinated debt funding of Sanlam Life.  


Change in embedded value of covered business
for the year ended 31 December 2015
 
                                                                                          2015                         2014    
                                                                                        Net value     Adjusted             
R million                                                            Note     Total   of in-force    net worth        Total         
Embedded value of covered business at the beginning of the year              48 393        31 207       17 186       43 475    
Value of new business                                                   2     1 360         3 164       (1 804)       1 592    
Net earnings from existing covered business                                   5 328          (684)       6 012        4 881    
Expected return on value of in-force business                                 3 759         3 759            -        3 368    
Expected transfer of profit to adjusted net worth                                 -        (5 177)       5 177            -    
Operating experience variances                                          3     1 081           276          805          991    
Operating assumption changes                                            4       488           458           30          522    
Expected investment return on adjusted net worth                              1 256             -        1 256        1 179    
Embedded value earnings from operations                                       7 944         2 480        5 464        7 652    
Economic assumption changes                                             5    (1 608)       (1 646)          38           86    
Tax changes                                                                       7             6            1           (6)   
Investment variances - value of in-force                                        (74)         (311)         237          557    
Investment variances - investment return on adjusted net worth                  443             -          443          118    
Goodwill from business                                                          (69)          (69)           -         (162)   
Exchange rate movements                                                         394           394            -           (6)   
Embedded value earnings from covered business                                 7 037           854        6 183        8 239    
Acquired value of in-force                                                      124            53           71        1 358    
Transfer from/(to) other Group operations                                         -             -            -         (106)   
Net transfers from covered business                                          (8 332)            -       (8 332)      (4 573)   
Embedded value of covered business at the end of the year                    47 222        32 114       15 108       48 393    
Analysis of earnings from covered business                                                                                     
Sanlam Personal Finance                                                       4 363           241        4 122        5 805    
Sanlam Emerging Markets                                                       1 403           318        1 085          932    
Sanlam UK                                                                       277            53          224          147    
Sanlam Employee Benefits                                                        994           242          752        1 355    
Embedded value earnings from covered business                                 7 037           854        6 183        8 239    


Value of new business
for the year ended 31 December 2015
                                                                             
R million                                      Note       2015         2014  
Value of new business (at point of sale):                                    
Gross value of new business                              1 729        1 979  
Sanlam Personal Finance                                  1 065        1 191  
Sanlam Emerging Markets                                    499          466  
Sanlam UK                                                   28           33  
Sanlam Employee Benefits                                   137          289  
Cost of capital                                           (215)        (236) 
Sanlam Personal Finance                                   (110)        (107) 
Sanlam Emerging Markets                                    (51)         (35) 
Sanlam UK                                                   (2)          (3) 
Sanlam Employee Benefits                                   (52)         (91) 
Value of new business                                    1 514        1 743  
Sanlam Personal Finance                                    955        1 084  
Sanlam Emerging Markets                                    448          431  
Sanlam UK                                                   26           30  
Sanlam Employee Benefits                                    85          198  
Value of new business attributable to:                                       
Shareholders’ fund                                2      1 360        1 592  
Sanlam Personal Finance                                    955        1 084  
Sanlam Emerging Markets                                    294          280  
Sanlam UK                                                   26           30  
Sanlam Employee Benefits                                    85          198  
Non-controlling interest                                   154          151  
Sanlam Personal Finance                                      -            -  
Sanlam Emerging Markets                                    154          151  
Sanlam UK                                                    -            -  
Sanlam Employee Benefits                                     -            -  
Value of new business                                    1 514        1 743  
Geographical analysis:                                                       
South Africa                                             1 040        1 282  
Africa                                                     400          409  
Other international                                         74           52  
Value of new business                                    1 514        1 743  


R million                                                 2015         2014  
Analysis of new business profitability:                                      
Before non-controlling interest:                                             
Present value of new business premiums                  54 362       56 394  
Sanlam Personal Finance                                 38 572       34 798  
Sanlam Emerging Markets                                  7 510        5 673  
Sanlam UK                                                3 947        3 978  
Sanlam Employee Benefits                                 4 333       11 945  
New business margin                                      2,79%        3,09%  
Sanlam Personal Finance                                  2,48%        3,12%  
Sanlam Emerging Markets                                  5,97%        7,60%  
Sanlam UK                                                0,66%        0,75%  
Sanlam Employee Benefits                                 1,96%        1,66%  
After non-controlling interest:                                              
Present value of new business premiums                  51 856       54 518  
Sanlam Personal Finance                                 38 572       34 798  
Sanlam Emerging Markets                                  5 004        3 797  
Sanlam UK                                                3 947        3 978  
Sanlam Employee Benefits                                 4 333       11 945  
New business margin                                      2,62%        2,92%  
Sanlam Personal Finance                                  2,48%        3,12%  
Sanlam Emerging Markets                                  5,88%        7,37%  
Sanlam UK                                                0,66%        0,75%  
Sanlam Employee Benefits                                 1,96%        1,66%  



Notes to the embedded value of covered business
for the year ended 31 December 2015

                                                                                      Net        
                                                       Gross                     value of         Change    
                                                    value of                     in-force      from base   
                                                    in-force       Cost of       business          value   
   R million                                        business       capital      R million              %   
1. Value of in-force sensitivity analysis                                                                  
   Base value                                         35 506        (3 392)        32 114                  
   Risk discount rate increase by 1%                  33 675        (4 025)        29 650             (8)   
                                                                                                           
                                                       Gross                          Net         Change     
                                                    value of                     value of      from base     
                                                         new       Cost of            new          value    
   R million                                        business       capital       business              %    
2. Value of new business sensitivity analysis                                                              
   Base value                                          1 560          (200)         1 360                  
   Risk discount rate increase by 1%                   1 375          (242)         1 131            (17)   
    
   R million                                                                  2015        2014    
3. Operating experience variances                                                                 
   Risk experience                                                             816         842    
   Persistency                                                                 174         (64)   
   Maintenance expenses                                                        (16)         22    
   Working capital and other                                                   107         191    
   Total operating experience variances                                      1 081         991
   
4. Operating assumption changes                                                                   
   Risk experience                                                             810         167    
   Persistency                                                                 (60)         88    
   Maintenance expenses                                                         (3)         32    
   Modelling improvements and other                                           (259)        235    
   Total operating assumption changes                                          488         522 
   
5. Economic assumption changes                                                                    
   Investment yields                                                        (1 603)         86    
   Long-term asset mix assumptions, inflation gap change and other              (5)          -    
   Total economic assumption changes                                        (1 608)         86    
   
   
   R million                                                                  2015        2014    
6. Reconciliation of growth from covered business   
   The embedded value earnings from covered business reconcile as 
   follows to the net result from financial services for the year: 
   Net results from financial services of covered business per 
   shareholders’ fund income statement                                       4 484       3 889  
   Sanlam Personal Finance                                                   3 446       3 110  
   Sanlam Emerging Markets                                                     603         477  
   Sanlam UK                                                                    74          68  
   Sanlam Employee Benefits                                                    361         234  
   Investment return on adjusted net worth                                   1 699       1 297  
   Embedded value earnings from covered business: value of in-force            854       3 053  
   Embedded value earnings from covered business                             7 037       8 239  

   %                                                                          2015        2014 
7. Economic assumptions                                                                        
   Gross investment return, risk discount rate and inflation                                   
   Sanlam Life:                                                                                
   Point used on the relevant yield curve                                   9 year      9 year 
   Fixed-interest securities                                                  10,1         8,1 
   Equities and offshore investments                                          13,6        11,6 
   Hedged equities                                                             9,5         8,6 
   Property                                                                   11,1         9,1 
   Cash                                                                        9,1         7,1 
   Gross return on required capital(1)                                         9,8         9,3 
   Net return on required capital                                              8,4         7,6 
   Inflation rate(2)                                                           8,1         6,1 
   Risk discount rate                                                         12,6        10,6 
   Sanlam Investments and Pensions:                                                            
   Point used on the relevant yield curve                                  15 year     15 year 
   Fixed-interest securities                                                   2,4         2,2 
   Equities and offshore investments                                           5,6         5,4 
   Hedged equities                                                             n/a         n/a 
   Property                                                                    5,6         5,4 
   Cash                                                                        2,4         2,2 
   Return on required capital                                                  2,4         2,2 
   Inflation rate                                                              3,2         2,9 
   Risk discount rate                                                          6,1         5,9 

   %                                                                          2015        2014 
7. Economic assumptions (continued)                                                            
   SDM Limited:                                                                                
   Point used on the relevant yield curve                                   5 year      5 year 
   Fixed-interest securities                                                   9,6         7,6 
   Equities and offshore investments                                          13,1        11,1 
   Hedged equities                                                             n/a         n/a 
   Property                                                                   10,6         8,6 
   Cash                                                                        8,6         6,6 
   Return on required capital                                                 10,9         8,9 
   Inflation rate                                                              7,6         5,6 
   Risk discount rate                                                         12,1        10,1 
   Botswana Life Insurance:                                                                    
   Fixed-interest securities                                                   7,5         7,5 
   Equities and offshore investments                                          11,0        11,0 
   Hedged equities                                                             n/a         n/a 
   Property                                                                    8,5         8,5 
   Cash                                                                        6,5         6,5 
   Return on required capital                                                  8,8         8,8 
   Inflation rate                                                              4,5         4,5 
   Risk discount rate                                                         11,0        11,0 
   (1) 2014 return has been adjusted to exclude the assets matching the subordinated debt. 
       This is consistent with the 2015 disclosure and in line with how the asset mix was 
       modelled in the 2014 and 2015 valuations. 
   (2) Expense inflation of 10,1% (2014: 8,1%) assumed for retail business administered on 
       old platforms.                                                

   Illiquidity premiums                                                                      
   Investment returns on non-participating and inflation-linked annuities as well as guaranteed plans include 
   assumed illiquidity premiums due to matching assets being held to maturity.    
   
   Assumed illiquidity premiums generally amount to between 25bps and 55bps (2014: 25bps and 55bps) for 
   non-participating annuities, between 25bps and 75bps (2014: 25bps to 75bps) for inflation-linked annuities 
   and capped at 80bps (2014: 50bps and 110bps) for guaranteed plans.   
                                                                                             
                                                                                                     
   %                                                                          2015        2014    
   Asset mix for assets supporting required capital                                               
   Sanlam Life(1):                                                                                
   Equities                                                                      -          31    
   Offshore investments                                                          8          12    
   Hedged equities                                                              80          15    
   Cash                                                                         12          42    
                                                                               100         100    
   Sanlam Investments and Pensions:                                                               
   Cash                                                                        100         100    
                                                                               100         100    
   SDM Limited:                                                                                   
   Equities                                                                     50          50    
   Cash                                                                         50          50    
                                                                               100         100    
   Botswana Life Insurance:                                                                       
   Equities                                                                     50          50    
   Cash                                                                         50          50    
                                                                               100         100    
   (1) Towards the end of 2015 the strategic asset allocation of the balanced portfolio for 
       Sanlam Life was revised including using the investment in Santam to back a portion of 
       Sanlam Life’s required capital.                                          
   
    
Summarised Group IFRS financial statements 
for the year ended 31 December 2015

Group statement of financial position
at 31 December 2015

   R million                                                                      2015            2014    
   Assets                                                                                                 
   Equipment                                                                       892             723    
   Owner-occupied properties                                                     1 329           1 096    
   Goodwill                                                                      3 895           3 974    
   Other intangible assets                                                         487             439    
   Value of business acquired                                                    1 943           2 045    
   Deferred acquisition costs                                                    3 463           3 281    
   Long-term reinsurance assets                                                    945             941    
   Investments                                                                 590 894         538 155    
   Properties                                                                   11 606          10 333    
   Equity-accounted investments                                                 15 999          11 895    
   Equities and similar securities                                             189 214         183 040    
   Interest-bearing investments                                                165 261         161 778    
   Structured transactions                                                      14 179          12 348    
   Investment funds                                                            157 288         133 552    
   Cash, deposits and similar securities                                        37 347          25 209    
   Deferred tax                                                                    368             365    
   Assets of disposal groups classified as held for sale                           540           1 893    
   Net defined benefit asset                                                         -             144       
   General insurance technical assets                                            4 251           3 964       
   Working capital assets                                                       65 501          54 233       
   Trade and other receivables                                                  45 360          37 974       
   Cash, deposits and similar securities                                        20 141          16 259
   Total assets                                                                674 508         611 253       
   Equity and liabilities                                                                                    
   Shareholders’ fund                                                           53 621          46 037       
   Non-controlling interest                                                      6 571           5 198       
   Total equity                                                                 60 192          51 235       
   Long-term policy liabilities                                                480 910         443 672       
   Insurance contracts                                                         183 972         186 626       
   Investment contracts                                                        296 938         257 046       
   Term finance                                                                  5 637           5 775       
   Margin business                                                               1 737           1 835       
   Other interest-bearing liabilities                                            3 900           3 940       
   Structured transactions liabilities                                           2 374             766       
   External investors in consolidated funds                                     53 641          49 625       
   Cell owners’ interest                                                           980             925       
   Deferred tax                                                                  2 180           2 498       
   Liabilities of disposal groups classified as held for sale                        -           1 466       
   General insurance technical provisions                                       13 523          12 592       
   Working capital liabilities                                                  55 071          42 699       
   Trade and other payables                                                     52 751          40 529       
   Provisions                                                                      319             283       
   Taxation                                                                      2 001           1 887
   Total equity and liabilities                                                674 508         611 253    


Group statement of comprehensive income
for the year ended 31 December 2015

   R million                                                                     2015             2014    
   Net income                                                                  85 293           92 060    
   Financial services income                                                   53 754           49 683    
   Reinsurance premiums paid                                                   (6 831)          (6 341)   
   Reinsurance commission received                                              1 275            1 125    
   Investment income                                                           25 241           22 491    
   Investment surpluses                                                        13 942           28 891    
   Finance cost - margin business                                                (101)            (105)   
   Change in fair value of external investors liability                        (1 987)          (3 684)   
   Net insurance and investment contract benefits and claims                  (47 675)         (58 626)   
   Long-term insurance contract benefits                                      (15 247)         (26 388)   
   Long-term investment contract benefits                                     (21 736)         (22 168)   
   General insurance claims                                                   (14 206)         (14 404)   
   Reinsurance claims received                                                  3 514            4 334    
   Expenses                                                                   (23 024)         (20 811)   
   Sales remuneration                                                          (7 269)          (6 442)   
   Administration costs                                                       (15 755)         (14 369)   
   Impairments                                                                   (173)            (140)   
   Amortisation of intangibles                                                   (382)            (240)   
   Net operating result                                                        14 039           12 243    
   Equity-accounted earnings                                                    1 310            1 603    
   Finance cost - other                                                          (580)            (517)   
   Profit before tax                                                           14 769           13 329    
   Taxation                                                                    (3 859)          (3 534)   
   Shareholders’ fund                                                          (3 078)          (3 007)   
   Policyholders’ fund                                                           (781)            (527)   
   Profit for the year                                                         10 910            9 795    
   Other comprehensive income                                                                             
   Movement in foreign currency translation reserve                             3 390              569    
   Cash flow hedge reserve                                                        509                -    
   Employee benefits re-measurement gain                                          (11)             128    
   Comprehensive income for the year                                           14 798           10 492    
   Allocation of comprehensive income:                                                                    
   Profit for the year                                                         10 910            9 795    
   Shareholders’ fund                                                           9 391            8 729    
   Non-controlling interest                                                     1 519            1 066    
   Comprehensive income for the year                                           14 798           10 492    
   Shareholders’ fund                                                          12 863            9 393    
   Non-controlling interest                                                     1 935            1 099    
   Earnings attributable to shareholders of the Company (cents):                                          
   Basic earnings per share                                                     468,9            436,7    
   Diluted earnings per share                                                   464,0            431,5    


Group statement of changes in equity
for the year ended 31 December 2015

   R million                                                                    2015             2014    
   Shareholders’ fund:                                                                                   
   Balance at beginning of the year                                           46 037           40 965    
   Comprehensive income                                                       12 863            9 393    
   Profit for the year                                                         9 391            8 729    
   Other comprehensive income                                                  3 472              664    
   Net acquisition of treasury shares(1)                                      (1 146)            (515)   
   Share-based payments                                                          409              376    
   Dividends paid(2)                                                          (4 526)          (4 009)   
   Acquisitions, disposals and other movements in interests                      (16)            (173)   
   Balance at end of the year                                                 53 621           46 037    
   Non-controlling interest:                                                                             
   Balance at beginning of the year                                            5 198            3 651    
   Comprehensive income                                                        1 935            1 099    
   Profit for the year                                                         1 519            1 066    
   Other comprehensive income:                                                   416               33    
   Net (acquisition)/disposal of treasury shares(1)                              (16)             (20)   
   Share-based payments                                                           57               57    
   Dividends paid(2)                                                            (891)            (636)   
   Acquisitions, disposals and other movements in interests                      288            1 047    
   Balance at end of the year                                                  6 571            5 198    
   Shareholders’ fund                                                         46 037           40 965    
   Non-controlling interest                                                    5 198            3 651    
   Total equity at beginning of the year                                      51 235           44 616    
   Shareholders’ fund                                                         53 621           46 037    
   Non-controlling interest                                                    6 571            5 198    
   Total equity at end of the year                                            60 192           51 235    
   (1) Includes movement in cost of shares held by subsidiaries and the share incentive trust.  
   (2) Normal dividend of 225 cents per share (2014: 200 cents per share) declared during 2015 in 
       respect of the 2014 financial year.                                                


Group cash flow statement
for the year ended 31 December 2015

   R million                                                                   2015             2014  
   Net cash flow from operating activities                                   32 593           35 944  
   Net cash flow from investment activities                                 (15 911)         (30 033) 
   Net cash flow from financing activities                                   (1 477)            (971) 
   Net increase in cash and cash equivalents                                 15 205            4 940  
   Net foreign exchange difference                                              707                -  
   Cash, deposits and similar securities at beginning of the year            41 431           36 491  
   Cash, deposits and similar securities at end of the year                  57 343           41 431  


Notes to the Group financial statements
for the year ended 31 December 2015
  
   Cents                                                                                  2015          2014       
1. Earnings per share                                                                                             
   Basic earnings per share:                                                                                      
   Headline earnings                                                                     464,4         416,5      
   Profit attributable to shareholders’ fund                                             468,9         436,7      
   Diluted earnings per share:                                                                                    
   Headline earnings                                                                     459,5         411,6      
   Profit attributable to shareholders’ fund                                             464,0         431,5      
                                                                                                                  
   R million                                                                              2015          2014       
   Analysis of earnings:                                                                                          
   Profit attributable to shareholders’ fund                                             9 391         8 729      
   Less: Net profit on disposal of operations                                             (200)         (387)      
   Less: Equity-accounted non-headline earnings                                              -          (118)      
   Plus: Impairment of investments and goodwill                                            109           101        
   Headline earnings                                                                     9 300         8 325      
                                                                                                                   
   Million                                                                                2015          2014       
   Number of shares:                                                                                              
   Number of ordinary shares in issue at beginning of year                             2 166,5       2 100,0    
   Add: Shares reclassified during the year                                                  -          66,5       
   Less: Weighted Sanlam shares held by subsidiaries (including policyholders)          (163,8)       (167,6)    
   Adjusted weighted average number of shares for basic earnings per share             2 002,7       1 998,9    
   Add: Total number of shares in respect of Sanlam Limited long-term incentive                           
   schemes                                                                                21,3          23,9       
   Adjusted weighted average number of shares for diluted earnings per share           2 024,0       2 022,8    

   R million                                                                              2015          2014       
2. Reconciliation of segmental information                                                                       
   Segment financial services income (per shareholders’ fund information)               49 365        45 713     
   Sanlam Personal Finance                                                              15 221        14 364     
   Sanlam Emerging Markets                                                               6 078         5 236      
   Sanlam Investments                                                                    8 859         8 286      
   Santam                                                                               19 066        17 700     
   Corporate and other                                                                     141           127        
   IFRS adjustments                                                                      4 389         3 970      
   Total financial services income                                                      53 754        49 683     
   Segment result (per shareholders’ fund information after tax and                                  
   non-controlling interest)                                                             8 942         8 744      
   Sanlam Personal Finance                                                               3 710         6 578      
   Sanlam Emerging Markets                                                               1 445         1 504      
   Sanlam Investments                                                                    1 618         2 055      
   Santam                                                                                1 367           916        
   Corporate and other                                                                     802        (2 309)    
   Reverse non-controlling interest included in segment result                           1 519         1 066      
   Fund transfers                                                                          449           (15)       
   Total profit for the year                                                            10 910         9 795      

3. Share repurchases  
   The Sanlam shareholders granted general authorities to the Group at the 2015 and 2014 annual general meetings 
   to repurchase Sanlam shares in the market. The Group acquired 142,000 shares at an average price of R46,85 in      
   terms of general authorities. The total consideration paid of R6,7 million was funded from existing cash resources. 
   All purchases were effected through the JSE trading system without any prior understanding or arrangement between 
   the Group and the other counterparties. Authority to repurchase 108,2 million shares, or 4,99% of Sanlam’s issued 
   share capital at the time, remain outstanding in terms of the general authority granted at the annual general 
   meeting held on 3 June 2015. The financial effect of the share repurchases during 2015 on the IFRS earnings and 
   net asset value per share is not material.

4. Contingent liabilities   
   Shareholders are referred to the contingent liabilities disclosure in the 2015 Annual Report. The circumstances
   surrounding the contingent liabilities remain materially unchanged.    

5. Subsequent events                                                                                    
   During November 2015 agreements were concluded whereby SEM and Santam will jointly acquire an effective 30% 
   interest in Saham Finances, the insurance arm of the Saham group. Saham Finances operates in 26 countries across 
   North, West and East Africa, and the Middle East. It is the largest insurer in Africa, excluding South Africa. 
   The acquisition consideration amounts to US$400 million, including transaction related costs and working capital 
   for the Group company that will hold the investment in Saham Finances. All the required regulatory approvals were 
   obtained after year-end and the transaction will be closed shortly.
   
   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 2015 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 
   disclosures 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                                                 Level 1      Level 2      Level 3        Total 
   Recurring fair value measurements                                                                        
   31 December 2015                                                                                          
   Properties                                                      -            -       11 606       11 606  
   Equities and similar securities                           186 222        2 562          430      189 214  
   Interest-bearing investments                               72 478       91 049          490      164 017  
   Structured transactions                                     6 391        7 788            -       14 179  
   Investment funds                                          132 186       24 595          507      157 288  
   Trading account assets                                      5 549       24 243            -       29 792  
   Cash deposits and similar securities                       25 769       11 573            -       37 342  
   Total assets at fair value                                428 595      161 810       13 033      603 438  
   Investment contract liabilities                                 -      293 760        3 178      296 938  
   Term finance                                                2 937          104          359        3 400  
   Valued at stock exchange prices                             2 937            -            -        2 937  
   Based on internal valuation                                     -          104          359          463  
   Structured transactions liabilities                             -        2 374            -        2 374  
   Trading account liabilities                                   170       33 416            -       33 586  
   External investors in consolidated funds                   53 437          204            -       53 641  
   Total liabilities at fair value                            56 544      329 858        3 537      389 939  

   31 December 2014                                                                                           
   Properties                                                      -            -       10 333       10 333   
   Equities and similar securities                           180 185        2 460          395      183 040   
   Interest-bearing investments                              107 061       53 063          396      160 520   
   Structured transactions                                     4 653        7 695            -       12 348     
   Investment funds                                          114 691       18 409          452      133 552    
   Trading account assets                                      7 522       15 304            -       22 826     
   Cash deposits and similar securities                       20 053        5 153            -       25 206     
   Total assets at fair value                                434 165      102 084       11 576      547 825    
   Investment contract liabilities                                 -      254 494        2 552      257 046    
   Term finance                                                3 031          111          347        3 489      
   Valued at stock exchange prices                             3 031            -            -        3 031      
   Based on internal valuation                                     -          111          347          458       
   Structured transactions liabilities                             -          766            -          766        
   Trading account liabilities                                 1 008       21 111            -       22 119     
   External investors in consolidated funds                   49 476          149            -       49 625     
   Total liabilities at fair value                            53 515      276 631        2 899      333 045    

      
   Reconciliation of movements in level 3 assets and liabilities measured at fair value  
  
                                                                            Equities      Interest-                       
                                                                         and similar        bearing       Structured    Investment       Total  
   R million                                                Properties    securities    investments     transactions         funds      assets   
   Assets                                                                                                                                        
   31 December 2015                                                                                                                              
   Balance at 1 January 2015                                    10 333           395            396                -           452      11 576  
   Total gains/(loss) in statement of comprehensive income          42            23             41                -            60         166   
   Acquisitions                                                    400            64              -                -             2         466   
   Disposals                                                      (207)          (70)            (1)               -            (7)       (285)  
   Foreign exchange movements                                    1 049            18             54                -             -       1 121   
   Transfer from owner-occupied properties                         (11)            -              -                -             -         (11)  
   Balance at 31 December 2015                                  11 606           430            490                -           507      13 033  
                                                                                                               
   31 December 2014                                                                                            
   Balance at 1 January 2014                                     7 227         1 313            394                -           459       9 393   
   Total gain/(loss) in statement of comprehensive income          181            82             34                2            50         349     
   Acquisitions                                                  1 022           130             13                -             -       1 165   
   Disposals                                                      (301)       (1 133)           (51)              (2)          (57)     (1 544)  
   Foreign exchange movements                                      138             3              6                -             -         147    
   Transfer from owner-occupied property                           111             -              -                -             -         111     
   Transfers from level 1(1)                                     1 955             -              -                -             -       1 955   
   Balance at 31 December 2014                                  10 333           395            396                -           452      11 576   
   (1) In the valuation performed on these investments, insignificant adjustments were made to the rates used to discount future cash flows. 
       The valuation methodology has been revisited and additional unobservable inputs are included, changing the classification.   

                                                                                                       Struc-            
                                                                        Invest-                         tured           
                                                                           ment                        trans-                 
                                                                       contract         Term          actions         Total   
   R million                                                        liabilities      finance      liabilities   liabilities   
   Liabilities                                                                                                                
   31 December 2015                                                                                                           
   Balance at 1 January 2015                                              2 552          347                -         2 899   
   Total (gain)/loss in statement of comprehensive income                   152           21                -           173   
   Acquisitions                                                              73            -                -            73   
   Disposals                                                               (193)        (101)               -         (294)   
   Foreign exchange movements                                               594           92                -           686   
   Balance at                                                             3 178          359                -         3 537   
   31 December 2015                                                                                                           
   31 December 2014                                                                                                           
   Balance at 1 January 2014                                                767          259              203         1 229   
   Total (gain)/loss in statement of comprehensive income                    82           59               94           235   
   Acquisitions                                                             195            -                -           195   
   Disposals                                                               (505)           -             (297)        (802)   
   Foreign exchange movements                                                29           29                -            58   
   Transfers from level 1 and level 2(1)                                  1 984            -                -         1 984   
   Balance at                                                             2 552          347                -         2 899   
   31 December 2014                                                                                                           
   (1) The classification of investment contracts backing investment property has changed in line with the change in the 
       classification of the underlying investments. The policy of the Group is to effect transfers of financial instruments 
       between the fair value hierarchy levels at the beginning of the reporting period.  


   Reconciliation of movements in level 3 assets and liabilities measured at fair value  
                                                                                                             
                                                                                                             
   R million                                                                             2015        2014    
   Gains and losses (realised and unrealised) included in profit and loss                                    
   Total gains or losses included in profit or loss for the period                         (7)        114     
   Total unrealised gains or losses included in profit or loss for the period                     
   for assets held at the end of the reporting period                                     (47)        191     


   Transfers between categories                                                                                       
                                                                                                     Cash,   
                                                Equities       Interest-    Struc-                deposits            
                                                     and         bearing     tured    Invest-          and            
                                                 similar         invest-    trans-       ment      similar     Total  
                                              securities           ments   actions      funds   securities    assets  
   R million                                                                                                  
   2015                                                                                                               
   Assets                                                                                                             
   Transfer from level 1 to level 2                    -           2 603         -          -        1 331     3 934  
   Transfer from level 2 to level 1                    -             313       142        469          153     1 077  
   2014                                                                                                               
   Transfer from level 1 to level 2                    -             380       106          -           36       522  
   Transfer from level 2 to level 1                    5               -         -          -            -         5  
   Investments traded in a market that became inactive during the year have been transferred from level 1 to level 2. 
   Conversely, investments traded in a market that became active have been transferred from level 2 to level 1. 


   Valuation techniques used in determining the fair value of assets and liabilities 

                                                                                                                                                   Significant  
                                      Applicable                                                                                                  unobservable  
   Instrument                           to level    Valuation basis                          Main assumptions                                            input  
   Properties                                  3    Discounted cash flow model (DCF)         Bond and interbank swap interest rate curve   Capitalisation rate  
                                                    Earnings multiple                        Cost of capital                                     Discount rate  
                                                                                             Consumer price index                                               
   Equities and similar securities         2 and    Discounted cash flow model (DCF)         Bond and interbank swap interest rate curve      Cost of capital   
                                               3    Earnings multiple                        Cost of capital                                 Earnings multiple  
                                                                                             Consumer price index                                               
   Interest-bearing investments            2 and    Discounted cash flow model (DCF)         Bond and interbank swap interest rate curve     Earnings multiple  
   (including insurance policies)              3    Earnings multiple                        Cost of capital                                                    
                                                    Quoted put/surrender price by issuer     Consumer price index                                               
   Trading account assets and                  2    DCF                                      Forward rate                                                  n/a  
   liabilities                                                                               Credit risk spread                                                 
                                                                                             Liquidity spread                                                   
   Investment contract liabilities         2 and    Current unit price of                    Bond and interbank swap interest rate curve     Earnings multiple  
   and investment funds                        3    underlying unitised asset, multiplied    Cost of capital                                               n/a 
                                                    by the number of units held
                                                    DCF                                      Consumer price index                                               
                                                    Earnings multiple                        Bond interest rate curves                                          
   Term finance                            2 and    DCF                                      Bond and forward rate                            Liquidity spread  
                                               3                                             Credit ratings of issuer                                           
                                                                                             Liquidity spread                                                   
                                                                                             Agreement interest curves                                          
   Structured transactions assets              2    Option pricing models                    Bond and interbank swap interest rate curve                   n/a  
   and liabilities                                  DCF                                      Forward equity and currency rates                                  
                                                                                             Volatility risk adjustments                                        
   External investors in consolidated          2    Current unit price of                    Based on underlying assets as discussed above                 n/a  
   funds                                            underlying unitised asset, multiplied  
                                                    by the number of units held
   Cash, deposits and similar securities       2    Mark-to-market                           Bond and interbank swap interest rate curve                   n/a  
                                                    Yield curve 


                                                                                                         
   Sensitivity of level 3 assets and liabilities measured at fair value to changes in key assumptions  
   Assets                   
                            
                                                                                                    Effect         Effect  
                                                    Effect of      Effect of                       of a 1%        of a 1%   
                                                        a 10%          a 10%                      increase       decrease   
                                                     increase       decrease                       in base        in base   
                                                      in risk        in risk                     capitali-      capitali-   
                                      Carrying        adjust-        adjust-       Carrying         sation         sation   
                                        amount          ments          ments       amount(1)          rate           rate   
   R million                                                                                             
   Properties                                                                                                               
   2015                                                                                                                     
   Cash flow risk adjustments           11 606         (1 161)         1 161              -              -              -   
   Base rate                                 -              -              -          8 371           (293)           314   
   Capitalisation                            -              -              -          8 371           (350)           427   
   2014                                                                                                                     
   Cash flow risk adjustments           10 333         (1 033)         1 033              -              -              -   
   Base rate                                 -              -              -          7 097           (264)          (282)  
   Capitalisation                            -              -              -          7 097           (382)          (466)  
                                                                                                                            
                                                                                                   Effect         Effect   
                                                   Effect of      Effect of                       of a 1%        of a 1%    
                                                       a 10%          a 10%                      increase       decrease    
                                                    increase       decrease                            in             in    
                                     Carrying             in             in       Carrying       discount       discount    
                                     amount(2)      multiple       multiple       amount(3)          rate           rate    
   R million                                                                                              
   Other investments                                                                                                      
   2015                                                                                                                   
   Equities and similar securities        399             40            (40)            31             (6)             5  
   Interest-bearing investments           490             49            (49)             -              -              -  
   Investment funds                       507             51            (51)             -              -              -  
   Total                                1 396            140           (140)            31             (6)             5  
   2014                                                                                                                   
   Equities and similar securities        323             32            (32)            72             (3)             3  
   Interest-bearing investments           396             40            (40)             -              -              -  
   Investment funds                       452             45            (45)             -              -              -  
   Total                                1 171            117           (117)            72             (3)             3  
          
         
   Liabilities   
                                                                                                             Effect         Effect 
                                                             Effect of      Effect of                       of a 1%        of a 1%  
                                                                 a 10%          a 10%                      increase       decrease  
                                                              increase       decrease                            in             in  
                                              Carrying              in             in       Carrying       discount       discount  
                                              amount(2)          value          value       amount(3)          rate           rate  
   R million                                                                                                        
   2015                                                                                                                             
   Investment contract liabilities                3 178            318           (318)             -              -              -  
   Term finance                                     359             36            (36)             -              -              -  
   Total liabilities                              3 537            354           (354)             -              -              -  
   2014                                                                                                                             
   Investment contract liabilities                2 552            255           (255)             -              -              -  
   Term finance                                     347             35            (35)             -              -              -  
   Total liabilities                              2 899            290           (290)             -              -              -  
   (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                                            
   There were no material business combinations during the year.    

Administration

Registered name
Sanlam Limited
(Registration number 1959/001562/06)
JSE share code (primary listing): SLM 
NSX share code: SLA
ISIN: ZAE000070660
Incorporated in South Africa

Group Company Secretary
Sana-Ullah Bray

Registered office
2 Strand Road, Bellville 7530
South Africa
Telephone +27 (0)21 947 9111
Fax +27 (0)21 947 3670

Postal address
PO Box 1, Sanlamhof 7532
South Africa

Sponsor
Deutsche Securities (SA) Proprietary Limited

Internet address
www.sanlam.co.za

Transfer secretaries
Computershare Investor Services (Pty) Limited
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg 2001, South Africa
PO Box 61051, Marshalltown 2107
South Africa
Telephone +27 (0)11 370 5000
Fax +27 (0)11 688 5200

Directors
DK Smith (Chairman), PT Motsepe (Deputy Chairman), Ian Kirk(1) (Group Chief Executive), MM Bakane-Tuoane, CB Booth(2),
AD Botha, PR Bradshaw(2), JP Möller(1), MV Moosa, TI Mvusi(1), SA Nkosi, K Nondumo(3), P Rademeyer, Y Ramiah(1), RV
Simelane, CG Swanepoel, PL Zim

(1) Executive
(2) British
(3) Appointed 3 December 2015


Bellville
9 March 2016
Date: 10/03/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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