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Contents

Sanlam at a Glance

Key features, Sanlam in a nutshell, Investment case and Salient Results 1

Analysis of Return on Group Equity Value 15

Analysis of Shareholders 19

Economic Review 23

Results Presentation

Key Observations in 1H09 2

Financial & Actuarial Review 10

Review of Clusters 19

Strategic Focus 27

Outlook 29

Group Financial Review

Overview 2

Accounting Policies and Basis of Preparation 20

Group Equity Value 24

Shareholders’ Fund Financial Statements 30

Embedded Value of Covered Business 46

Group Financial Statements 55

Cluster Reviews

Sanlam Personal Finance 3

Sanlam Developing Markets 11

Sanlam UK 15

Sanlam Investments 21

Sanlam Employee Benefits 25

Sanlam Capital Markets 27

Santam 31

Key features

Earnings

Net result from financial services per share decreased by 4%

Core earnings per share down 2%

Normalised headline earnings per share up 34%

Business volumes

New business volumes up 1% to R51 billion

Net value of new covered business down 3% to R243 million

Net new covered business margin of 2,23%, up from 2,17%

Net fund inflows of R7,7 billion, up 40%

Group Equity Value

Group Equity Value per share of R21,72

Annualised return on Group Equity Value per share of 5,2%

Capital management

Discretionary capital of R2,8 billion at 30 June 2009

Sanlam Life CAR cover of 2,5 times

Sanlam at a glance 2SANLAM INTERIM RESULTS 2009

In a nutshell

Welcome

In this, our 11th year since listing on the JSE Limited and the Namibian Stock

Exchange in 1998, we again have the pleasure of reporting back on a company

that continues to strive for sustainable performance with the aim of providing all

our stakeholders with a journey for life.

The next few pages highlight the Sanlam Investment Case and summarise our

performance for the six months ended 30 June 2009.

We trust that this report on our performance, will further strengthen your

conviction in respect of the Sanlam Investment Case.

The journey for life is everyone’s journey

Sanlam acknowledges that people are individuals and that each person is on his

or her own, unique journey.

At Sanlam we are at your side for that journey.

The Sanlam Group

Who we are

We are a leading financial services group in South Africa. Our head office is in

Bellville near Cape Town.

We celebrated our 90th birthday in 2008. In nine decades Sanlam has set

benchmarks for wealth creation, innovation and empowerment in South Africa and

we expand on our latest achievements in these fields throughout this Report.

We have offices throughout South Africa and also have business interests

elsewhere in Africa, UK, Europe, India and Australia.

Thinking ahead for 2009 and beyond

“I expect that the challenging business environment of the first six months of

2009 will persist for the remainder of the year. We are nevertheless confident

that our businesses are well set to continue weathering the challenges and that

our strategy, underpinned by the pillars of optimal capital utilisation, earnings

growth, a focus on costs and efficiencies and increased diversification and

transformation, will continue to reward our stakeholders.”

(Dr Johan van Zyl – Group Chief Executive)


Our vision

Our vision is to be the leader in wealth creation and protection in South

Africa, leading that process in the emerging markets and playing a niche

role in the developed markets.

What we do

We provide financial solutions to individual and institutional clients.

These solutions include individual, group and short-term insurance, personal

financial services such as estate planning, trusts, home and personal loans,

savings and linked products, investment, asset management, property asset

management, stockbroking, risk management and capital market activities.

We provide these solutions to various segments of the markets where we

operate and offer the solutions from a number of mutually dependent

business entities in our Group.

From a life insurance company with our establishment in 1918, we have,

in short, grown into a diversified one-stop financial services group,

offering our clients a journey for life for their financial needs.

Our values

Our shared business philosophy has its roots in an entrepreneurial culture

with its essence captured in traditional values of honesty, diligence,

superior ethical behaviour, innovation, stakeholder values and strong ties

with business partners. Our business model is focused on client-centricity

and on being solution orientated.

Our strategy

Our steadfast strategy has five pillars:

To apply our resources to optimise our capital structure;

To implement growth opportunities through acquisitions and

collaboration and increase market share through client-centric

solutions and service;

To continue with our tight grip on costs;

To persist with our transformation initiatives to build a world-class

financial services group; and

To explore opportunities for diversification through a wider range of

financial solutions and geographic expansion.

The Sanlam Groupcontinued

4 Sanlam at a glance SANLAM INTERIM RESULTS 2009

2 - Institutional cluster

The Institutional cluster includes Sanlam

Investments, Sanlam Employee Benefits and

Sanlam Capital Markets.

› Sanlam Investments: incorporates Sanlam’s

investment-related businesses in South Africa,

Europe, Rest of Africa, India and Australasia.

Sanlam Investments’ areas of service and

solutions include traditional asset

management, alternative investment solutions,

property asset management, collective

investments (unit trusts), private client

investment management and stockbroking,

multi-manager management and investment

administration.

› Sanlam Employee Benefits: provides life

insurance, investment and annuity solutions

for group schemes and retirement funds and

fund administration for retirement and

umbrella funds.

› Sanlam Capital Markets: provides risk

management, structured product solutions

and associated capital market activities.

Group structure

Scope of business The Retail cluster includes Sanlam Personal

Finance, Sanlam Developing Markets and

Sanlam UK.

› Sanlam Personal Finance: is a major

provider of a wide range of individual life

insurance and personal financial services and

solutions, including estate planning and trusts,

home loans, personal loans, linked products,

money transfer and financial services in South

Africa, Namibia and the UK.

› Sanlam Developing Markets: provides

affordable financial services solutions primarily

to the entry-level market in South Africa and

to the wider financial services segments in

other developing markets in which Sanlam

operates (five other African countries as well

as India).

› Sanlam UK: provides life, specialist

pension, investment management and

financial advice services in the United

Kingdom market.

1 - Retail cluster

Contribution to net Group operating result

(six months ended 30 June 2009)

Contribution to Group Equity Value

(as at 30 June 2009)

R789 million

R24 887 million

R388 million

R10 887 million

R28 335 million

Sanlam Limited

South Africa, Botswana, Namibia, United Kingdom, Kenya, Ghana, India, Tanzania, Zambia

R16 971 million

Operational areas

Contribution to Group new business volumes

(six months ended 30 June 2009)

South Africa, Switzerland, Australia, Ireland, United Kingdom, Namibia, Botswana, Nigeria, Kenya, Zambia, India


4 - Corporate3 - Short-term Insurance cluster

The Short-term Insurance cluster is comprised

of a 57% shareholding in Santam, the leading

short-term insurer in South Africa, and a

direct 55% interest in MiWay, the Group’s

newly established direct financial services

business.

› Santam: focuses on the corporate,

commercial and personal markets. It has a

market share in excess of 20% and a

countrywide infrastructure and broker

network. Santam has related business

interests in Africa.

› MiWay: focuses on short-term insurance

through a direct sales channel, with the

intention of adding other financial services

over time.

The corporate head office is responsible for

the Group’s centralised functions, which

include strategic direction, financial and risk

management, group marketing and

communications, group human resources and

information technology, corporate social

investment and general group services.

R82 million

R5 636 million

(R25) million

R3 080 million

South AfricaSouth Africa, Namibia, India

R6 179 million


Sanlam – a leader in wealth creation and protection

Presence

Sanlam

Delivery

ClearStrategy

CoreExpertise

Driving increased returns

Growing profitability through (product and geographic)

diversification

Solid risk management

Innovation resulting in market-leading solutions

HR talent providing stability and proven track record

Vast agency networks offering scale, flexibility and efficiency in South Africa

Leading in emerging markets

Niche presence in developed markets, servicing existing clients

Successfully implementing the growth strategy

Good operational performance over the long term

Creating shareholder value – outperforming competitors

Investment Case

Clear strategy

Sanlam’s strategy is two-pronged. Firstly, it aims to drive

increased returns through a continual focus on optimising

capital, cutting costs and maximising efficiencies. Since

2005, more than R19 billion of existing capital (over 40%

of the current Group Equity Value) has been redeployed.

The second part of the strategy is growing profitably

through diversification by providing the full spectrum of

financial services and diversifying revenue streams into

new income markets and geographies, thus spreading the

risk and underpinning a resilient performance in all

market conditions. With a large stable life business at its

core, Sanlam provides stability and consistency during

difficult times, while its investment and capital market

businesses capitalise on more favourable equity market

conditions.

Our vision is to be a diversified financial services group

that is unrivalled in wealth creation and protection in

South Africa, leading in emerging markets, and

specialised in developed markets.

(See diagram 1 below)

Returns(ROGEV)

growth/earnings

capital efficiency

Entry-level market

Diversification and costs

Profitable growth

Application of capital

Balanced portfolio

Strategic investments

›

›

›

Diagram 1: Sanlam strategic focus


Presence

Retail

A vast internal distribution network of 1 917 tied financial advisers in

South Africa servicing the middle and upper-income markets, and 1 786

agents deployed for the lower-income market in SA, provides scale,

flexibility and efficiency in servicing our broad range of clients. In addition,

there are more than 10 000 independent financial advisers (IFAs) who

support our various businesses. There are approximately 3 million

policyholders in Sanlam’s SA core life businesses, Sanlam Personal

Finance and Sanlam Sky Solutions, which equals about a quarter of the

economically active population in the country.

Sanlam also has a strong corps of financial advisers and agents in the

emerging markets with 1 821 in the rest of Africa and more than 19 500

in India. It has a niche presence in developed markets, following its SA

client’s money abroad, with Merchant Investors and Principal providing

life, fund management and private client solutions in the UK.

In addition, Sanlam is not only increasing the breadth of its service

solution offering by its entry into “non-life” financial services-related

products, but is also expanding its breadth of distribution, by moving into

the direct market, thereby entrenching the Group’s leadership position in

the future.

Institutional

Sanlam has a vast footprint in the corporate market in South Africa with

almost every large SA corporation being a client of one of our businesses.

Sanlam Investments is predominantly entrenched in South Africa, and has

a presence in Europe, Australia, Rest of Africa and India. This presence

includes traditional asset management, alternative investment solutions,

property asset management, collective investment (unit trusts), private

client investment management and stockbroking, multi-manager

management and investment administration.

Sanlam Employee Benefits provides life insurance, investment and annuity

solutions to group schemes and retirement funds. The Group’s capital

markets business, Sanlam Capital Markets, provides risk management,

structured product solutions and associated capital market activities.


Core expertise

Solid risk management expertise is a core attribute

required in running the Sanlam life and investment

businesses, ensuring solid safety barriers in the

operations. Sanlam centrally adopts conservative risk/

return measures in all its pursuits, with a minimum hurdle

rate being a prerequisite for all acquisitions and new

capital allocations. Capital in existing businesses is also

rigorously evaluated against these return hurdles. Not only

is the Group planting the seeds for future growth through

a disciplined and methodical approach to ventures, it also

ensures that overall returns of the Group are enhanced

over the long term.

Innovation has allowed the Group to pre-empt changes in

an uncertain regulatory environment through market-

leading solutions such as the SanlamConnect and Sanlam

Life Power ranges, as well as to increase the breadth of

solution and distribution offering through the solutions of

Sanlam Liquid and MiWay.

Sanlam has the human resources talent to boast a stable,

proven track record, operating for more than 90 years in

life insurance. In addition, a relatively stable executive

management team has more than 150 years of combined

experience in life insurance and investments.

Jun-05Jun-04 Jun-06 Jun-07 Jun-08 Jun-090

50

100

150

200

250

300

350 25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

19.8% pa

8.7% pa

SLM Life Fini SLM (CAGR) Life (CAGR)

Not only is the Group planting the seeds for future growth through a disciplined and methodical approach to ventures, it also ensures that overall returns of the Group are enhanced over the long term

The Group’s employment standards have earned most of

its businesses full accreditation from the international

Investors in People Standards. In working to attract,

motivate and retain top talent, Sanlam encourages

employees to make a difference at every level within the

organisation through incentives which are directly aligned

with the performance of the businesses.

Sanlam pioneered black economic empowerment in South

Africa in 1993 and since then has been at the forefront,

implementing its own empowerment and transformation

strategies to ensure its long-term sustainability.

Delivery

Management has built solid foundations from which to grow

the business by successfully implementing growth strategies

in emerging markets in SA, the rest of Africa and India.

Good and improving operational performance over the

long term is evident in new business flows and a change

in the mix of offerings.

In creating shareholder value, Sanlam has outperformed

its competitors since listing and, on average, has

generated 11% higher share price returns per annum

over the past five years.

Investment casecontinued

Creating shareholder value


How we measure ourselves

The Sanlam Group’s performance measurement and financial

communication philosophy is based on its values which include

transparency, honesty and integrity. We are therefore passionate about

providing useful, clear and value-added information in our financial

statements to our shareholders and other stakeholders. This is why the

Sanlam Annual Report contains significant additional information than

prescribed by International Financial Reporting Standards (IFRS). We view

the requirements of IFRS and other relevant regulations and legislation as

the minimum compliance standards. Our disclosures are further aligned

with the Group’s internal reporting structure to ensure that external users

of the financial statements have the same insight into the Group’s financial

results as Sanlam’s management.

Optimising shareholder value through maximising Return on Group Equity

Value is the primary goal of the Group. Sanlam’s strategic focus areas of

capital efficiency, earnings growth, costs and efficiencies, diversification

and transformation are aimed at achieving this objective.

The interaction of these strategies can be illustrated as follows:

Cost vs income ratio

Distribution alternatives

Growing alternative

revenue sources

Diversification of undeveloped

markets

ROGEV

Earnings

Capital efficiency

Investment returns

Cost management

Net top-line growth

Application of capital

Strategic acquisitions

Regulatory capital

›

›Investment

profile optimised

Appropriate reward for capital/risk

Sustained top investment

performance

Grow assets under

management

Return to shareholders

Appropriate risk-adjusted

return


The performance indicators used by the Group to measure the success of the main components of its strategy are classified into

the following categories:

Shareholder value (all strategic focus areas)

Business volumes (future earnings growth)

Earnings (earnings growth and costs and efficiencies)

Diversification

Transformation

Capital efficiency

Shareholder value

Group Equity Value

Group Equity Value (GEV) is a measure of the value of the Group’s operations, and is the aggregate of the following:

The embedded value of the Group’s life insurance operations (referred to as covered business), which comprises the capital

supporting these operations and the net present value of the shareholder profits to be earned from these operations’ book of

in-force business;

The fair value of other Group operations based on longer-term assumptions, which includes the investment management,

capital markets, short-term insurance and the non-covered wealth management operations of the Group; and

The fair value of discretionary and other capital.

Growth in GEV per share is the most appropriate performance indicator to measure value creation for shareholders as it indicates

the value that has been created in the Group during a reporting period.

Given the exposure of the Group’s capital base to financial instruments, investment market performance has a significant impact

on the growth in GEV per share. An adjusted return on GEV is therefore also disclosed to eliminate this impact of investment

markets and to more accurately reflect management’s impact on value creation.

Business volumes

Business volumes have a direct impact on the Group’s assets under management and administration and commensurately on

the future earnings growth. In addition to business volume indicators, the Value of New Business indicator measures the

profitability of new life insurance business written during the year.

New business volumes

New business volumes measure the total new life insurance, short-term insurance and investment business written by the

Group’s operations during the year. New business contributes to the Group’s assets under management and administration and

thus increases the asset base from which the Group earns financial services income.

How we measure ourselvescontinued


Net fund flows

Net fund flows are the aggregate of the following:

New business volumes written during the year;

Premiums earned from existing business in force at the beginning of

the year; and

Payments to clients.

Net fund flows are a measure of the net business retained within the

Group and have a direct impact on the Group’s assets under management

and administration and commensurately the asset base on which the

Group earns financial services income.

Value of new business and new business margin

The value of new business measures the net present value of future

shareholder profits that the Group expects to earn from the new life

insurance business written during the year. The new business margin is an

indicator of the profitability of the new life insurance business written

during the year.

Earnings

Sanlam uses four key indicators to assess earnings performance and

operational efficiencies. These indicators are also presented on a per share

basis (as applicable), to reflect the earnings attributable to shareholders.

Net result from financial services

This is the earnings from the Group’s operating activities, net of minorities

and tax.

Core earnings

Core earnings is the aggregate of the net result from financial services

(refer above) and net investment income earned on the Group’s capital. It

is an indication of ‘stable’ earnings as it incorporates the relatively stable

portion of the investment return earned on the capital, being investment

income (interest, dividends and rental), but excludes investment surpluses

which are volatile in nature owing to fluctuations in investment markets.

Normalised headline earnings

Headline earnings is a JSE disclosure requirement, equating to total earnings

excluding items of a capital nature. Headline earnings is therefore equal to

core earnings plus net investment surpluses (which are volatile in nature),

equity-accounted earnings and other appropriate costs/amortisations.


Headline earnings includes what Sanlam refers to as ‘fund transfers’. Sanlam invests policyholder funds in the shares of Group

companies, but is required in terms of IFRS to show these assets only at the consolidated Group interest (in respect of shares in

subsidiaries), and at zero (in respect of Sanlam shares), instead of at fair value. This results in a non-economical mismatch

between policyholder assets and liabilities, for which a ‘fund transfer’ to/from the shareholders’ fund is made.

Owing to this inconsistency within headline earnings, Sanlam discloses a normalised headline earnings figure, which excludes

the effect of fund transfers, and therefore more accurately reflects the actual economic performance of the Group.

Administration cost ratio

The administration cost ratio measures the administration costs incurred by the Group as a percentage of financial services

income after sales remuneration. This ratio is an indicator of the cost and operational efficiency of the Group.

Diversification

Diversification is measured through an analysis of the net result from financial services and new business volumes based on:

Geographical exposure;

Market segmentation; and

Type of business

Transformation

Transformation is inextricably linked to the long-term sustainability of the Group. The Annual Report includes an abridged

Sustainability and Corporate Citizenship Report which measures the Group’s performance on the triple bottom-line basis

(economic, social and environmental performance) as well as against the targets of the Financial Sector Charter in South Africa.

The full version of the Sustainability and Corporate Citizenship Report is published on the Sanlam website (www.sanlam.co.za).

Capital efficiency

The Group’s actions in respect of capital management are covered in detail in the financial review.

How we measure ourselvescontinued


Executive Review

The Sanlam Group has shown pleasing resilience in challenging markets to record a solid operational performance for the six months

ended 30 June 2009. The strategic diversification into different market segments and solution offerings, as well as the effect of prudent

practices and assumptions followed in the past, shielded the Group from the most severe impact of the economic downturn.

2009 2008 Δ

SANLAM GROUP

Earnings:

Net result from financial services per share cents 60,4 62,6 (4%)

Core earnings per share (1) cents 87,5 89,7 (2%)

Normalised headline earnings per share (2) cents 78,5 58,8 34%

Diluted headline earnings per share cents 82,6 94,5 (13%)

Net result from financial services R million 1 234 1 334 (7%)

Core earnings (1) R million 1 789 1 913 (6%)

Normalised headline earnings (2) R million 1 605 1 254 28%

Headline earnings R million 1 664 1 955 (15%)

Group administration cost ratio (3) % 26,8 28,0

Group operating margin (4) % 15,1 17,8

Gross business volumes:

New business volumes R million 51 485 50 985 1%

Net fund flows R million 7 677 5 470 40%

Net new covered business

Value of new covered business R million 243 250 (3%)

Covered business PVNBP (5) R million 10 906 11 501 (5%)

New covered business margin (6) % 2,23 2,17

Group Equity Value:

Group Equity Value (7) R million 44 490 45 238 (2%)

Group Equity Value per share (7) cents 2 172 2 213 (2%)

Annualised return on Group Equity Value per share (7),(8) % 5,2 (1,7)

Adjusted annualised return on Group Equity Value per share (7) % 12,2 12,4

SANLAM LIFE INSURANCE LIMITED

Shareholders’ fund (7) R million 31 620 34 419

Capital Adequacy Requirements (CAR) (7) R million 8 200 8 075

CAR covered by prudential capital (7) times 2,5 2,7

Notes(1) Core earnings = net result from financial services and net investment income (including dividends received from non-operating associates).(2) Normalised headline earnings = core earnings, net investment surpluses, secondary tax on companies and equity-accounted headline earnings

less dividends received from non-operating associates, but excluding fund transfers. Headline earnings include fund transfers.(3) Administration costs as a percentage of income after sales remuneration.(4) Result from financial services as a percentage of income after sales remuneration.(5) PVNBP = present value of new business premiums and is equal to the present value of new recurring premiums plus single premiums.(6) New covered business margin = value of new covered business as a percentage of PVNBP.(7) Comparative figures are as at 31 December 2008. (8) 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 period.

Salient Resultsfor the six months ended 30 June 2009


Analysis of Return on Group Equity Value


Analysis of Return on Group Equity Value: 1H09

Component of Group Equity Value (weighting) Actual Return Weighted ROGEV

SANLAM PERSONAL FINANCE

45,8%(R20,4bn)

5,6% 2,6%(5,6% x 0,464*)

Dec 2008: 46,4%

SANLAM DEVELOPING MARKETS

6,9%(R3,1bn)

6,4% 0,4%(6,4% x 0,062*)

Dec 2008: 6,2%

SANLAM UK

3,3%(R1,5bn)

(14,3%) (0,5%)(-14,3% x 0,034*)

Dec 2008: 3,4%

INSTITUTIONAL CLUSTER

24,5%(R10,9bn)

8,4% 2,1%(8,4% x 0,255*)

Dec 2008: 25,5%

SHORT-TERM INSURANCE

12,7%(R5,6bn)

21,2% 2,5%(21,2% x 0,117*)

Dec 2008: 11,7%

OTHER 6,8%(R3,0bn)

(28,4%) (2,2%)(-28,4% x 0,068*)

Dec 2008: 6,8%

*Weighting of GEV at beginning of year 1H09 ANNUALISED ACTUAL ROGEV: 2,6% + 0,4% – 0,5% + 2,1% + 2,5% - 2,2% = 4,9% 1H09 ANNUALISED ROGEV PER SHARE: = 5,2%

Analysis of Adjusted Return on Group Equity Value: 1H09

Component of Group Equity Value (weighting) Adjusted Return Weighted ROGEV

SANLAM PERSONAL FINANCE

45,8%(R20,4bn)

13,7% 6,4%(13,7% x 0,464*)

Dec 2008: 46,4%

SANLAM DEVELOPING MARKETS

6,9%(R3,1bn)

21,8% 1,4%(21,8% x 0,062*)

Dec 2008: 6,2%

SANLAM UK

3,3%(R1,5bn)

(8,7%) (0,3%)(-8,7% x 0,034*)

Dec 2008: 3,4%


24,5%(R10,9bn)

15,5% 4,0%(15,5% x 0,255*)

Dec 2008: 25,5%

SHORT-TERM INSURANCE

12,7%(R5,6bn)

9,4% 1,1%(9,4% x 0,117*)

Dec 2008: 11,7%

OTHER 6,8%(R3,0bn)

(8,5%) (0,8%)(-8,5% x 0,068*)

Dec 2008: 6,8%

*Weighting of GEV at beginning of year 1H09 ANNUALISED ADJUSTED ROGEV: 6,4% + 1,4% – 0,3% + 4,0% + 1,1% - 0,8% = 11,8% 1H09 ANNUALISED ADJUSTED ROGEV PER SHARE: = 12,2%

Analysis of Return


Analysis of Return continued

GEV Earnings (Rm)

ROEGEV vs Target

Cumulative ROGEV exceed cost of capital rate since listing, but recently falling short against target (market impact).

0

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1000

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0

50

100

150

200

250

300

350

450

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1H09*

Target return (RFR + 400bps) Cost of Capital (RFR + 300bps) Actual

400

2008

*Annualised


Calculation of Annual Return on Equity (ROE)

2005 2006 2007 2008 2009

IFRS NAV (Opening balance) 19 685 25 020 29 121 29 334 27 651

Add: Consolidation reserve 2 820 1 931 1 859 1 843 539

Equity base 22 505 26 951 30 980 31 177 28 190

IFRS profit for the year attributable to shareholders

10 927 6 945 5 494 2 494 1 606

Less: Fund transfers (730) (205) 366 (736) (59)

Add: Items recognised directly in equity:

Share based payments 64 74 74 134 45

Foreign currency translation differences 81 318 (99) 60 (303)

Net realised investment surpluses on treasury shares

25 (188) (288) (307) (146)

Equity earnings 10 367 6 944 5 547 1 645 1 143

ROE (annualised) 46.1% 25.8% 17.9% 5.3% 8.3%

Calculation of Cumulative Internal Rate of Return (IRR)

2005 2006 2007 2008 2009

Movement in shareholders’ fund

Opening balance 22 505 26 951 30 980 31 177 28 190

Equity earnings 10 367 6 944 5 547 1 645 1 143

Dividends paid (1 363) (1 533) (1 768) (1 968) (1 978)

Net shares bought back (4 558) (1 382) (3 582) (2 664) 168

Closing balance 26 951 30 980 31 177 28 190 27 523

(22 505)

5 921 (26 951)

2 915 2 915 (30 980)

5 350 5 350 5 350 (31 177)

32 822 32 822 32 822 32 822

IRR up to December 2008 25.5% 16.9% 11.9% 5.3%

Analysis of Return continued


Shareholder Analysis


Geographic split of shareholders

Geographic split of investment managers & company related holdings – June 2009

Region Total shareholding % of issued capital

South Africa 1 633 589 322 75.63

United States of America & Canada 350 804 125 16.24

United Kingdom 33 097 785 1.53

Rest of Europe 35 350 164 1.64

Rest of the World¹ 107 158 604 4.96

Total 2 160 000 000 100.00

¹ Represents all shareholdings except those in the above regions

Geographic split of beneficial shareholders – June 2009

Region Total shareholding % of issued capital

South Africa 1 616 635 021 74.84

United States of America & Canada 334 383 886 15.48

United Kingdom 19 793 986 0.92

Rest of Europe 68 016 748 3.15

Rest of the World¹ 121 170 359 5.61

Total 2 160 000 000 100.00

¹ Represents all shareholdings except those in the above regions

Geographic split of beneficial shareholders – June 2009

TOTALAFRICANHOLDING

SPLIT OFBENEFICIAL

SHARES

Africa76.2%

Rest ofthe World23.8%

Swaziland0.3%

South Africa98.2%

Namibia1.4%

Asia/Pacific2.7%

Rest of the World97.3%

UAE34.9%

Australia22.5%

Singapore15.2%

Remainder27.5%

TOTALASIA/PACIFIC

HOLDING

SPLIT OFBENEFICIAL

SHARES

TOTALEUROPEANHOLDING

SPLIT OFBENEFICIAL

SHARES

UK/Europe4.1%


Netherlands32.1%

UK22.5%Ireland

11.5%

Remainder33.9%

NorthAmerica15.7%


Bermuda1.0%

USA96.3%

Canada2.5%

Remainder0.2%

TOTAL NORTHAMERICANHOLDING

SPLIT OFBENEFICIAL

SHARES


Shareholder categories

An analysis of beneficial shareholdings supported by the Section 140a enquiry process confirmed the following beneficial

shareholder types:

Beneficial shareholder categories – June 2009

Category Total shareholding % of issued capital

Pension Fund 604 453 289 27.98

Unit Trusts/Mutual Funds 503 236 175 23.30

Private Investors 464 625 094 21.51

Black Economic Empowerment 226 000 000 10.46

Insurance Companies 183 573 950 8.50

Other Managed Funds 92 499 010 4.28

Foreign Government 26 749 358 1.24

Custodians 16 307 324 0.75

Investment Trust 7 399 931 0.34

Delivery by Value (Colateral) 3 469 477 0.16

American Depository Receipts 2 906 620 0.13

Local Authority 2 267 330 0.10

Charity 1 745 482 0.08

University 1 554 629 0.07

Remainder 23 212 331 1.10

Total 2 160 000 000 100.00

Beneficial shareholders split by category¹ – June 2009

Pension Fund28.0%

Unit Trusts/Mutual Funds

23.3%

Private Investors21.5%

Black EconomicEmpowerment

10.5%

InsuranceCompanies

8.5%

OtherManaged

Funds4.3%

Remainder3.9%

¹ Includes categories above 1% only


Analysis into institutional attributes broadly indicates the following split of investment approach within the shareholder base:

Analysis of investment styles¹ – June 2009

Growth14.34%

BEE10.46%Value

34.26%

Retail19.59%

Index6.79%

Remainder12.39%

GARP2.17%

Analysis of investment styles

¹ Includes categories above 1% only


Economic Review


Economic and Financial Markets Review

Global and domestic economic and financial conditions

during the first half of 2009 should be viewed in the light

of the after effects of the financial crisis that overwhelmed

the world economy towards the end of 2008. The

unprecedented nature of the developing crisis since the

demise of Lehman Brothers in the USA in September

2008 made it extremely difficult for both policy makers

and financial markets to assess the possible future course

of events, and both groups defaulted to assuming the

worst and acting accordingly.

Concern regarding the impact of the financial crisis on

real economic activity increased as the evidence of a

severe downturn continued to pour in. International trade

and the global manufacturing sector were hit especially

hard, and it gradually became clear that the world

economy was heading for its first recession in the post

World War II era. However, policy makers quickly signaled

their determination to stabilize and turn around the

situation by taking extraordinary steps.

Central banks injected vast amounts of liquidity into the

financial system and lowered their policy interest rates

sharply to approach zero in some instances. They also

took the unusual step of embarking on so-called

quantitative easing, purchasing large amounts of

government and other bonds without sterilizing its impact

on the supply of money.

Apart from injecting large amounts of capital into ailing

banks and providing a range of guarantees, governments

adopted large fiscal stimulus packages to boost domestic

demand through increased spending, especially on

infrastructure development, as well as some tax relief. In

most countries the effect of the fiscal stimulus will be felt

well into 2010 and it is therefore premature to speculate

on the necessity or not of a further stimulus package.

These steps eventually paid off and volatility in financial

markets declined steadily as confidence returned. As a

growing conviction that the economy was over the worst took

hold in the second quarter, equity markets in particular

bounced back strongly. The Morgan Stanley World Index

increased by 57% from its low in March and by 17% from

31 December 2008. The JP Morgan Emerging Market Free

Index rose by an astonishing 78% from its March-low and by

49% since the beginning of the year

South Africa followed the global trend quite closely, with

the economy contracting by 6,4% quarter-on-quarter in

the first quarter of 2009 and by 3% in the second quarter

at a seasonally adjusted and annualized rate. It therefore

finds itself in the category of countries that are lagging in

recovering from the impact of the financial crisis, with the

second quarter reflecting a slower rate of decline rather

than an outright return to positive growth.

The loosening in monetary policy, with the repo rate

having been reduced by 450 basis points since December

2008, and fiscal policy turning more expansionary, is

therefore apparently slow in taking effect. This could be

due to the fact that unlike many other emerging

economies, the South African economy was already in a

down turn that started late in 2006 and that was still

gaining momentum when global conditions turned

negative late in 2008. The economy hardly achieved

positive growth in the third quarter of last year and in fact

contracted if the agricultural sector is excluded.

Although export dependent sectors such as mining and

manufacturing were hardest hit, it is the deterioration in

household finances and spending that stands out. Having

started to decline in the third quarter of 2008, the rate of

decline in the real disposable income of households

accelerated to -4,5% (seasonally adjusted and

annualised) in the first quarter of 2009 on the back of

rising unemployment. Job losses amounted to 475 000 in

the first half of 2009, and the dire straits in which

consumers find themselves are well illustrated by the

decline of 4,4% in real retail sales in the first half of 2009

compared with the corresponding period in 2008.

Households are finding it difficult to reduce their debt

burden, with the ratio of debt to disposable income still at

76,7% compared with its peak of 78,2% a year ago. The

cost of servicing this debt has therefore likewise been slow

in falling in spite of lower interest rates, with the benefit of


Economic and Financial Markets Review continued

the latter being curbed by commercial banks tightening

their lending standards. The result has been continued

pressure on the discretionary income of households.

However, as in much of the global economy the first signs

of economic conditions stabilizing have become evident,

as reflected in the turn around in the Reserve Bank’s

leading indicator. A return to positive growth late in 2009

or early in 2010 seems possible. The upturn is

nevertheless likely to be slow in gaining traction in view of

the starting conditions being rather unfavourable – unlike

with the previous upturn the South African economy will

be burdened from the start with a sizeable current

account deficit, and as already mentioned the capacity of

households to respond to lower interest rates by

increasing debt and spending is limited.

Domestic financial markets have generally followed global

trends, with the notable exception of the bond market.

Equity prices on the JSE have recovered along with world

markets, although less buoyantly than emerging markets,

being 39% up from their low in early March, but as at a

global level further increases are likely to be constrained

by the uninspiring outlook for company earnings.

However, long term bond yields rose sharply from the start

of the year, with the 10-year generic government bond yield

increasing from approximately 7,25% to 9,25% at its peak.

The increase was mainly the result of inflation expectations

being adjusted upwards and the rapid deterioration in

government revenue and the concomitantly higher public

sector borrowing requirement.

In summary, although business conditions can be

expected to be relatively more benign in the second half

of 2009 compared with the first half of the year, they still

require more caution than usual, and the recovery will in

all likelihood only become visible in 2010.

Results Presentation 1SANLAM INTERIM RESULTS 2009

SANLAM INVESTOR PRESENTATION2009 Interim Results

Agenda

Key Observations in 1H09

Financial Review

Review of Clusters

Strategic Focus

Outlook

2 Results Presentation SANLAM INTERIM RESULTS 2009

KEY OBSERVATIONS IN 1H09

Headlines for 1H09

HighlightsStable Profits

Stable New Bus Volumes

Continued Net Inflows

Stable New Bus Margins

Macro ThemesEconomic Recession

Pressure on PDI

Volatile Equity

Markets

Bond Yields, Currency &

Commodities

Business Specific

Pressure on Retail Market

PersistencyCost

Containment

Lower Average

Asset Levels


Headlines for 1H09 – Highlights

HighlightsSatisfactory and resilient operational performance

in light of challenging conditions

What Sanlam Delivered in 1H09

Earnings per share:

Core earnings -2%

Normalised headline earnings +34%

Business Volumes:

New business volumes (ex-White label) +3%

Covered business -12%; VNB -3%; margin of 2,23%

Investment flows +6%

Net inflows of R8bn (ex-White label), net life inflows of R1bn

Group Equity Value of 2 172 cps:

Adjusted ROGEV of 12,2% (annualised)


Headlines for 1H09 – Macro Themes

Weakening Economy

Retail customer under strain

Macro ThemesTough economic and financial conditions

adversely impacting operating environment

Growth in retail sales, real GDP andpersonal disposable income

-10

-5

0

5

10

15

20

Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09

Growth y-o-y in real retail sales Growth y-o-y in real GDP Growth y-o-y in real personal disposable income

%


Bond Yields & Interest Rates

LT rates up 190bps : Negative impact on GEV

Prime rate down 400bps : Relief still to manifest in higher PDI

Lower Relative Equity Levels

Impact on investment values

Pressure on asset-based earnings

Major SA indices (re-based = 100)

50

70

80

90

100

110

120

Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Dec-08

Fini Swix Alsi

60

Feb-09 Apr-09Oct-08

SA Govt 10-year bond yield, interest rates and CPI (%)

6

8

9

13

14

15

16

Jun-08 Aug-08 Dec-08

SA Government 10-year yield (lhs) Prime interest rate (lhs) CPI (rhs)

7

Feb-09 Apr-09Oct-08

10

11

12

Jun-090

8

10

12

14

2

4

6


Stronger Rand

Negative impact on the GEV and operating results reported in respect of Group’s international businesses

Declining Commodity Prices

Negative impact on resource-driven African economies where Sanlam operates

Basket of currencies relative to SA Rand (re-based = 100)

60

100

110

120

130

Jun-08 Aug-08 Dec-08

Pound Sterling / ZAR Botswana Pula / ZAR Indian Rupee / ZAR

Feb-09 Apr-09Oct-08

70

80

90

Jun-09

All Commodities Index – US$ (2000 = 100)

100

200

220

240

260

280

300

Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Dec-08

180

Feb-09 Apr-09Oct-08

160

140

120


Headlines for 1H09 – Business Specific

New Business Growth Pressure on Middle-Income Market

SPF’s SA sales down by 12% from 1H08

Business Specific

Retail customer under pressure (deteriorating persistency), but operational resilience supported by diversified nature

of business and prudent practices

4.5

5.7

5.2

4.4

5.8

5.1

SPF New business flows (SA only) : Life vs Non-life (Rbn)

1H07 1H08 1H09

Life Non-Life


Persistency Marginal deterioration in SPF

PersistencySustained Quality of New Business

Sanlam’s share of total industry lapses have declined over the past year (new business market share broadly static)

Sanlam’s market share of total retail lapses(SPF and SDM)

Lapses within first year Total Lapses

Jun-08 Sep-08 Dec-08 Mar-09

16,3%

5,9%

16,0%

7,6%

Lapses, Surrenders & Fully Paid-Ups (Rm)

Jan Feb JunMar Apr May

1H09 - actual month-by-month 1H07 monthly average 1H08 monthly average


PersistencyPositive Net Life Flows

Ongoing improvement in net life cash flows : Positive retail net life cash flows & lower institutional net outflows

-5

1

4

Net life cash flows (Rbn)

0

2

3

-1

-2

Net Flows - Life (lhs) Life net flows as % of ph liabilities (rhs)

1H09*2005 2006 2007 2008

-3

-4

1%

4%

0%

2%

3%

-1%

-2%

-3%

-4%

-2,7% -2,0% -1,3%

-0,1%

1,2%

PersistencySuccessful Retention of Business

Level of retention of maturing policies maintained

Retention as percentage of maturities (SPF)

1H091H07 FY07 1H08 FY08

7,4% 6,3% 3,5% 3,4% 4,3%

Life - Retention Non-life - Retention

38,4% 39,6% 41,0% 40,5% 41,5%

45,8% 45,9% 44,5% 43,9% 45,8%

* Annualised


Focus on Cost Efficiencies

Intensified focus on costs in light of financial market crises and recessionary environment

SANLAM GROUPFinancial Review

Group administration ratio (%)

1H092003 2004 2005 2006 2007 2008

33,6%

26,8%

28,4%27,8%

27,1%

29,1%

31,4%


Changes in Key Assumptions

Change in asset mix (10% reduction in equity exposure)

– Release R900m in excess capital

– Increase CoC, R313m reduction in VIF

RDR down from Jun-08 (impact on relative VNB & margins)

– 150 bps (SPF)

– 230 bps (Sky)

RDR up from Dec-08 (impact on ROGEV)

– 190 bps (SPF)

– 140 bps (Sky)

Salient features

1H09 1H08 ∆

Group Equity Value* cps 2 172 2 213 (2%)

Annualised ROGEV per share* % 5,2 (1,7)

Annualised Adjusted ROGEV per share* % 12,2 12,4

Net operating profit R mil 1 234 1 334 (7%)

Core earnings R mil 1 789 1 913 (6%)

cps 87,5 89,7 (2%)

Normalised headline earnings R mil 1 605 1 254 28%

cps 78,5 58,8 34%

Headline earnings R mil 1 664 1 955 (15%)

cps 82,6 94,5 (13%)

New business volumes R mil 51 485 50 985 1%

Net fund flows R mil 7 677 5 470 40%

SIM AUM* R bn 403 409 (1%)

Net value of new covered business R mil 243 250 (3%)

Net new covered business margin % 2,23 2,17

* Comparative figures are as at 31 December 2008


Key Financial DriverGrowth in value per share

Long term target :

Cumulative Return on Group Equity Value to exceed cost of capital (RF + 300bp) by >100bp

Annual target :

Adjusted Return on Group Equity Value to exceed cost of capital (RF + 300bp) by >100bp

Adjusted for the effect of economic changes and market volatility on shareholder funds

Management Focus on ROGEV

Returns (ROGEV)

Optimal Application

Strategic Investments

Return of Excess

Capital Efficiency

Growth/Earnings

Net Business flows

Diversification

Operational Efficiencies

Maximise profitable growth

Maximise capital efficiencies


Business Flows

Rand Million 1H09 1H08 ∆ Net Flows 1H09

By business

Personal Finance 14 700 15 824 (7%) 3 411

Developing Markets 1 316 1 214 8% 610

Sanlam UK 955 807 18% (111)

Institutional Cluster 25 550 23 305 10% 2 571

Santam 6 179 6 085 2% 1 676

By license

Covered business 7 342 8 305 (12%) 1 032

Life License 991 686 44% 292

Investment 34 188 32 159 6% 5 157

Short-term insurance 6 179 6 085 2% 1 676

48 700 47 235 3% 8 157

White label 2 785 3 750 (26%) (480)

Total 51 485 50 985 1% 7 677

Business FlowsCovered business

Rand Million 1H09 1H08 ∆Net Flows

1H09

Personal Finance 5 433 6 014 (10%) 929

SA recurring premiums 452 505 (10%)

SA single premiums 4 609 5 315 (13%)

Non-SA operations 372 194 92%

Developing Markets 1 316 1 214 8% 610

SA recurring premiums 370 352 5%

Non-SA operations 681 549 24%

1 051 901 17%

SA single premiums 265 313 (15%)

Sanlam UK 451 807 (44%) (8)

Employee Benefits 142 270 (47%) (499)

Total (ex-White label) 7 342 8 305 (12%) 1 032


Value of New Covered Business

Rand Million 1H09 1H08 ∆

Value of New Business 276 290 (5%)

Personal Finance 135 160 (16%)

Developing Markets 136 113 20%

Sanlam UK - 3 (100%)

Employee Benefits 5 14 (64%)

Net of minorities 243 250 (3%)

New Business Margin 2,41% 2,39%

Personal Finance 1,80% 1,98%

Developing Markets 4,83% 4,85%

Sanlam UK 0,00% 0,36%

Employee Benefits 0,71% 1,58%

Net of minorities 2,23% 2,17%

Business FlowsInvestments

Rand Million 1H09 1H08 ∆Net Flows

1H09

Retail Cluster 9 771 9 810 0% 2 379

SA Operations 5 153 5 739 (10%)

Non-SA Operations 4 618 4 071 13%

Institutional Cluster 24 417 22 349 9% 2 778

Segregated funds 7 920 6 379 24%

Multi-Manager 1 768 2 099 (16%)

Private Investments 3 133 4 016 (22%)

Collective Investment 10 269 8 839 16%

SA Operations 23 090 21 333 8%

Non-SA Operations 1 327 1 016 31%

Total (ex-White label) 34 188 32 159 6% 5 157


Net Operating Profit


Retail cluster 789 793 (1%)

Personal Finance 691 678 2%

Developing Markets 85 78 9%

Sanlam UK 13 37 (65%)

Institutional cluster 388 404 (4%)

Investment Management 264 287 (8%)

Employee Benefits 65 83 (22%)

Capital Markets 59 34 74%

Santam 118 188 (37%)

MiWay (36) (23) (57%)

Corporate and other (25) (28) 11%

Total 1 234 1 334 (7%)

Net Operating Profit (continued)


Net result from financial services 1 234 1 334 (7%)

Add back : New business strain 602 491 23%

Add back : Start-up costs (MiWay) 36 23 57%

Net profit on comparable basis 1 872 1 848 1%

Cents per share 91,6 86,7 6%

Retail Cluster 1 364 1 265 8%

Institutional Cluster 415 423 (2%)

Santam 118 188 (37%)



Income Statement


Net operating profit 1 234 1 334 (7%)

Investment income 555 579 (4%)

Core earnings 1 789 1 913 (6%)

Cents per share 87,5 89,7 (2%)

Net investment surpluses 23 (447)

Net equity accounted headline earnings 10 (4)

Project expenses (15) (40)

Discontinued operations - (35)

STC, amortisation & BEE costs (202) (133)

Normalised headline earnings 1 605 1 254 28%

Cents per share 78,5 58,8 34%

Group Equity Value

Rand Million Jun 2009 Dec 2008

Covered business 27 773 62% 28 591 63%

Personal Finance 18 939 19 574

Developing Markets 3 040 2 796

Sanlam UK 685 680

Employee Benefits 5 109 5 541

Other operations 13 637 31% 13 560 30%

Retail Cluster 2 223 2 287

Institutional Cluster 5 778 6 000

Short-term insurance 5 636 5 273

Discretionary capital 2 785 6% 2 100 5%

Other 295 1% 987 2%

Total 44 490 100% 45 238 100%

GEV (cps) 2 172 2 213


Composition of Group Equity ValueR21,72 per share

SPF46%

SDM7%

SUK3%

SI12%

Short-terminsurance

13%

Discretionarycapital & Other

7%

Value ofin-force

30%

FV of CoveredBusinesses

32%

Other GroupOperations

31%

DiscretionaryCapital & Other

7%

SEB11%

SCM1%

Discretionary CapitalAnalysis of Change

Rand Billion

Balance – Dec 2008 2,1

Change in required capital 0,9

Corporate activity (0,4)

- Channel minorities (0,2)

- Other (0,2)

Investment return & other adjustments 0,2

Balance – June 2009 2,8


Group Solvency

Jun 2009 Dec 2008

Sanlam Life

Life CAR (Rm) 8 200 8 075

Statutory capital (Rm) 20 712 21 422

CAR cover (x) 2,5 2,7

Required capital (Rm) 16 228 16 863

- Capital 14 264 14 779

- Debt 1 964 2 084

CAR cover (x) 2,0 2,1

Santam

Solvency level (% of premiums) 42% 44%

Sanlam Capital Markets

Capital (Rm) 450 400

Capital at risk (% utilised) 59% 77%

Return on Group Equity Value

Rand Million Jun 2009 Jun 2008

Covered business 770 5,5% 998 7,1%

Personal Finance 446 4,6% 490 4,9%

Developing Markets 86 6,2% 180 17,4%

Sanlam UK 4 1,2% 139 32,5%

Employee Benefits 234 8,6% 189 7,3%

Other operations 790 12,0% (1 692) (20,7%)

Retail Cluster 18 1,6% 31 3,4%

Institutional Cluster 241 8,1% (301) (8,1%)

Short-term insurance 531 21,2% (1 422) (39,6%)

Discretionary capital & other capital (475) 119

Total 1 085 4,9% (575) (2,2%)

(cps) 5,2% 0,0%

cps (adjusted basis) 12,2% 13,6%


Summary

Strategic objectives are being achieved:

Business volumes:

– Satisfactory new business volumes (+3%), net cash inflows

– Maintained value of new business & improved margins (+6bps)

Profitability: Commendable operating profit result

Operational efficiencies: Improved admin ratio

Capital management: Value adding initiatives

– De-risking balance sheet unlocked further R900m

– Utilised R400m on ventures to further grow & diversify Group

Focus areas:

Capital efficiency & optimal application of discretionary capital

Bedding down new ventures

BUSINESS CLUSTERSOperational Review


A Portfolio of Diversified Assets

SPF46%

SDM7%

SI12%

SEB11%

SCM1%

Short-term13%


7%

SUK3%

1. Retail Cluster (SPF, SDM & SUK)

SPF46%

SDM7%

SUK3%

Stability & Growth (Optimise Capital)


Sanlam Personal Finance (SPF)“Satisfactory performance in difficult business conditions”

Overall Profits marginally up Admin costs contained Total sales down 7%, risk up 7% VNB 16% lower, margins 1,80% Deliberate slowdown in Retail Credit Net cash inflow up 54%

Key Challenges Business environment Manage persistency / retention Margin pressure

Snapshot

1H09 %∆

Net Operating Profit ▲ R691m +2%

New business flows ▼ R14 700m -7%

- SA Recurring ▼ R487m -13%

- SA Single ▼ R9 727m -12%

- Non SA ▲ R4 486m +5%

PVNB Premiums* ▼ R7 488m -7%

VNB* ▼ R135m -16%

Margin* ▼ 1,80% vs 1,98%

Annualised ROGEV 5,6%

Annualised Adj ROGEV 13,7%* Covered business only

Sanlam Developing Markets (SDM)“Another strong performance”

Overall Both VNB and profits up Deliberate reduction in lower margin

direct business in SA Bancassurance partnerships in Africa Successful launch of NEW Indian

distribution initiative

Key Challenges Economic conditions Consolidation of Sky and Channel Retention Maintaining RoA VNB margins Productivity / volumes in India

Snapshot

1H09 %∆


New business flows* ▲ R1 051m +17%

- SA Recurring ▲ R370m +5%

- Non-SA ▲ R681m +24%

PVNB Premiums ▲ R2 814m +21%

VNB ▲ R136m +20%

Margin ▼ 4,83% vs 4,85%


Annualised Adj ROGEV 21,8%* Excludes White Labels and Non-core businesses


Sanlam UK“Performance impacted by challenging environment”

Overall Economic conditions impact

volumes and AUM MI – satisfactory performance in

difficult environment Continued execution of start-up

business plans, despite strong headwinds

Key Challenges Execution risk of ‘growth phase’

businesses in face of economic and regulatory pressures

Continued investment aversion

Snapshot

1H09 %∆

Net Operating Profit ▼ R13m -65%

New business flows ▲ R955m +18%

- Life: Mainly SP ▼ R451m -44%

- Non-Life ▲ R504m n/a

PVNB Premiums ▼ R463m -45%

VNB ▼ - n/a

Margin ▼ - vs 0,36%

Annualised ROGEV (14,3%)

Annualised Adj ROGEV (8,7%)

2. Institutional Cluster (SI, SEB and SCM)

SI12%

SEB11%

SCM1%

Growth (Optimise Capital)


Sanlam Investments (SI)“Resilient performance, notwithstanding lower asset levels”

Overall Lower average asset levels feeding

into lower profits Businesses remain sound Improving investment performance

Key Challenges Cost containment Sustained investment returns Client retention / net flows Focus on international expansion

Snapshot

1H09 %∆


Gross business flows ▲ R25 408m +10%

- SA: Segregated ▲ R7 920m +24%

- SA: Other ▲ R15 580m +3%

- Non-SA ▲ R1 908m +28%

Net flows ▲ R2 590m

- Institutional & retail ▲ R3 070m

- White label ▲ (R480m)

FUM ▼ R403bn -1%


Annualised Adj ROGEV 18,7%

Focus on Investment Performance

0%

70%

100%

Percentage of SIM’s AUM exceeding benchmark -Jun 09 (R241bn)

60%

80%

90%

50%

40%

Rolling 1 Yr Rolling 3 Yrs Rolling 5 Yrs

30%

20%

10%

30/06/08 31/12/08 30/06/09


Sanlam Employee Benefits (SEB)“Steady progress in challenging conditions”

Overall Group Risk remains the SEB anchor Lower market values impacted SSS’s

fee income Admin migration on track (97% of

funds already off Wizard platform)

Key Challenges Deteriorating claims experience Administration transition from

“migration mode” to “business as usual mode”

Low returns on participating annuity business

Snapshot

1H09 %∆


New business flows ▼ R142m -47%

- SA: Recurring ▼ R76m -7%

- SA: Single ▼ R66m -65%

PVNB Premiums ▼ R704m -21%

VNB ▼ R5m -64%

Margin ▼ 0,71% vs 1,58%



Sanlam Capital Markets (SCM)“Return to profitability”

Overall A pleasing return on capital of

28,4% Well positioned to benefit from

market movements Allowance made for default risk

in the credit business

Key Challenges SCM remains susceptible to credit

and market events – retains a prudent approach

New deal flow limited in volatile markets – affects clients’ appetite

Snapshot

1H09 %∆


Total Revenue ▲ R162m +67%

Cost to income ratio ▼ 62% vs 100%

Capital R450m +13%




Short-term13%

Growth (Optimise Capital)

3. Short-term Insurance (Santam)

Santam“Pressure on underwriting results”

Overall Slow premium growth in line with

industry Underwriting margins under pressure Significant increase in return on

insurance funds Solvency at upper end of 35%-45%

target range

Key Challenges Improve risk management on

corporate property business Profitability of motor book Portfolio management profitability Client retention

Snapshot

1H09 %∆

Net Operating Profit* ▼ R118m -37%

Gross written premium ▲ R7 291m +7%

Net earned premiums ▲ R6 179m +9%

- Net claims ratio ▲ 72,9%

- Net acquisition ratio ▲ 25,6%

- Underwriting ratio ▼ 1,5%

International solvency 42%


Annualised Adj ROGEV 9,9%*Sanlam’s share of profit less tax & minorities


4. Capital Optimisation


7%

Utilise

Discretionary Capital

Ongoing focus on efficient utilisation of capital in 2009 …

Improve capital efficiency / optimisation:

– Capital allocated to business units in a manner which will achieve optimal ROGEV targets

Application of current discretionary capital of R2,8bn:

– Value-adding strategic initiatives (maximise return on GEV)

– Capital buffer remains prudent in prevailing market conditions, therefore buy back of Sanlam shares still on hold

Timeframe:

– Strategic projects assessed on an ongoing basis

Further optimisation of capital remains a priority


Summary of 1H09 performance

Strategic diversification and the effect of prudent practices and assumptions shielded the Group in the severe economic downturn

Life insurance businesses show their resilience:

– Value of new business and margins broadly stable

– Net life flows improve

– Some deterioration in persistency, but still broadly in line with assumptions

Lower asset base & increased volatility in investment business

Confirmation of capital management approach – remains on track

A sound platform and strategic base

STRATEGIC FOCUS FOR 2009 AND BEYOND


GoalDelivering sustainable growth

Specific Focus Areas

South Africa: Fully optimise and expand our diversified financial services presence:

Improve operational efficiency and performance

Optimise the capital structure

Pursue selective add-on or diversification opportunities

Transformation

International:

Africa / India : Position ourselves to have a leading position in the financial sector in these markets over time

UK : A differentiated strategy / niche approach, aimed at providing specialist HNW financial services

Operational efficiencies:

Cost containment

Harness further synergies between the Group’s existing businesses

Distribution initiatives:

Target 5% pa growth in SPF agency channel

Strengthen relationships and positioning in Gauteng IFA market

NEW distribution channel in India

Capital efficiencies and application

Stringent evaluation of capital investment opportunities – retain prudence

Growth initiatives:

Continued diversification of product set and markets

Exploring potential of new countries (Nigeria, etc)


OUTLOOK

Outlook for Remainder of 2009

Business Environment :

Uncertainty and volatility in global financial markets likely to continue, although there are some early signs of recovery / stability

Tough economic climate reflecting in consumer demand will take some time to subside

Regulatory change

Challenges:

Lower asset base

Persistency

Cost control

Profitable growth opportunities

Group’s portfolio is adequately diversified to spread the risks & creates a sound platform from which to operate


Notes

Group Financial Review 1SANLAM INTERIM RESULTS 2009

Contents

Overview 2

Key features 2

Salient results 3

Executive review 4

Comments on the results 8

Interim financial statements 19

Accounting policies and basis of presentation 20

External audit reports 21

Shareholders’ information 23

– Group Equity Value 24

– Change in Group Equity Value 26

– Return on Group Equity Value 27

– Adjusted return on Group Equity Value 28

– Shareholders’ fund at fair value 30

– Shareholders’ fund income statement 34

– Notes to the shareholders’ fund information 38

– Embedded value of covered business 46

Group financial statements 55

– Statement of financial position 56

– Statement of comprehensive income 57

– Statement of changes in equity 58

– Cash flow statement 59

– Notes to the financial statements 60

Administration 62

Sanlam GroupInterim Resultsfor the six months ended 30 June 2009

2 Group Financial Review SANLAM INTERIM RESULTS 2009

Key features

Earnings

Net result from financial services per share decreased by 4%

Core earnings per share down 2%

Normalised headline earnings per share up 34%

Business volumes

New business volumes up 1% to R51 billion

Net value of new covered business down 3% to R243 million

Net new covered business margin of 2,23%, up from 2,17%

Net fund inflows of R7,7 billion, up 40%

Group Equity Value

Group Equity Value per share of R21,72

Annualised return on Group Equity Value per share of 5,2%

Capital management

Discretionary capital of R2,8 billion at 30 June 2009

Sanlam Life CAR cover of 2,5 times


2009 2008 ∆

Sanlam Group

Earnings

Net result from financial services per share cents 60,4 62,6 -4%

Core earnings per share (1) cents 87,5 89,7 -2%

Normalised headline earnings per share (2) cents 78,5 58,8 34%

Diluted headline earnings per share cents 82,6 94,5 -13%

Net result from financial services R million 1 234 1 334 -7%

Core earnings (1) R million 1 789 1 913 -6%

Normalised headline earnings (2) R million 1 605 1 254 28%

Headline earnings R million 1 664 1 955 -15%

Group administration cost ratio (3) % 26,8 28,0

Group operating margin (4) % 15,1 17,8

Business volumes

New business volumes R million 51 485 50 985 1%

Net fund flows R million 7 677 5 470 40%

Net new covered business

Value of new covered business R million 243 250 -3%

Covered business PVNBP (5) R million 10 906 11 501 -5%

New covered business margin (6) % 2,23 2,17

Group Equity Value

Group Equity Value (7) R million 44 490 45 238 -2%

Group Equity Value per share (7) cents 2 172 2 213 -2%

Annualised return on Group Equity Value per share (7) (8) % 5,2 (1,7)

Adjusted annualised return on Group Equity Value per share (7) % 12,2 12,4

Sanlam Life Insurance Limited

Shareholders’ fund (7) R million 31 620 34 419

Capital adequacy requirements (CAR) (7) R million 8 200 8 075

CAR covered by prudential capital (7) times 2,5 2,7

(1) Core earnings = net result from financial services and net investment income (including dividends received from non-operating associates).(2) Normalised headline earnings = core earnings, net investment surpluses, secondary tax on companies and equity-accounted headline earnings less

dividends received from non-operating associates, but excluding fund transfers. Headline earnings include fund transfers.(3) Administration costs as a percentage of income after sales remuneration.(4) Result from financial services as a percentage of income after sales remuneration.(5) PVNBP = present value of new business premiums and is equal to the present value of new recurring premiums plus single premiums.(6) New covered business margin = value of new covered business as a percentage of PVNBP.(7) Comparative figures are as at 31 December 2008. (8) 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 period.

Salient Results for the six months ended 30 June 2009


the Swix Index 21% lower. Average funds under

management were commensurately significantly lower

during the first half of 2009 compared to the same period

in 2008, which impacted negatively on fund-based fee

income of the Group.

Executive Review

The Sanlam Group has shown pleasing resilience in

challenging markets to record a solid operational

performance for the six months ended 30 June 2009. The

strategic diversification into different market segments

and solution offerings, as well as the effect of prudent

practices and assumptions followed in the past, shielded

the Group from the most severe impact of the economic

downturn.

Business environment

The depressing financial and economic impact of the

global financial market crisis continued unabated during

the first half of 2009, although there were signs of some

recovery in global equity markets towards the end of the

reporting period.

A lower demand for resources following the slowdown in

the world’s largest economies had a negative impact on

the wealth creation and growth achieved in the African

commodity based economies in which the Group

operates. The Group’s key exposure remains to the

performance of the South African economy, which, as no

exception, followed the developed world into a recession.

This is reflected in major pressure on consumers’

disposable income, in addition to the effects of the high

interest rate and inflation conditions of the past two years.

The result has been contracting consumer spending, in

particular in the middle-income market. The interest rate

cuts announced by the South African Reserve Bank over

the past few months should provide some relief to

consumers, but it is likely to take some time before this

will be evident in increased consumer demand.

The South African equity market recorded marginally

positive returns for the six months ended 30 June 2009

on the back of stronger international markets and

expectations that the worst of the financial market crisis

may be over. Overall market levels, however, remain

significantly lower than the comparative period in 2008

and continue to display high levels of volatility.

JSE Indices

The JSE All Share and Swix indices increased by 2,5%

and 2,8% respectively during the first half of 2009,

recovering only slightly from the dismal performance in

the second half of 2008. The All Share Index remains

28% lower than the closing level at 30 June 2008, with

15 000

21 000

23 000

25 000

27 000

29 000

31 000

33 000 7 000

6 500

6 000

5 500

5 000

2 000

5.0%

-22.9%

19 000

17 000

Jan

08

Dec

07

Feb

08

Mar

08

Apr

08

Jun-

09

May

08

Jun

08

Jul 0

8

Aug

08

Sep

08

Oct

08

Nov

08

Dec

08

Jan

09

Feb

09

Mar

09

Apr

09

May

09

2 500

3 000

3 500

4 000

4 500

All

Sha

re

Sw

ix

-1.9%

-29.3%

2.8%

2.5%

SwixAll Share

Performance review

In the context of the challenging environment, the Group

achieved a pleasing operational performance for the first six

months of the 2009 financial year. This has been aided by

the diversified nature of the Group’s operations, in respect of

market segmentation, solutions offering and geographical

presence, which provided a platform for ongoing growth in

new business volumes and a sound level of profitability. The

pressure on the middle-income retail market in South Africa

is however evident in declining new business volumes at

Sanlam Personal Finance and Sanlam Private Investments,

but this was offset by strong performances in the institutional

and entry-level markets. Operating profit also reflects a

varied performance, with a solid contribution from the retail

life insurance and capital markets businesses, almost

offsetting the negative impact of the prevailing market

conditions on the reported earnings of the short-term

insurance and investment management operations.

Notwithstanding the pressure on earnings, the core

operations of all the major Group businesses remain sound.

The primary performance target of the Group is to

optimise shareholder value through maximising the return

on Group Equity Value (GEV). A target has been set for

the growth in GEV to exceed the Group’s cost of capital on

a sustainable basis. Cost of capital is set at the government

long bond yield plus 3%. The target is to exceed this

return by at least 1%. The annualised return on GEV per

share of 5% for the six months ended 30 June 2009 fell

short of this target, but still represents a strong

performance given the relatively weak investment markets


and an increase of some 2% in long-term interest rates

(and commensurately risk discount rates applied) during

the period. The increase in risk discount rates in

particular reduced the valuation and GEV earnings of the

life insurance and wealth management operations. On a

normalised basis, i.e. assuming a normalised investment

market performance and excluding any once-off items,

the annualised return of 12,2% for the six months

exceeded the target of 11,3%.

Total new business volumes, excluding the volatile and low

margin white label business, grew by 3%, a particularly

pleasing result in the current environment. Retail business

sales declined by 8%, with Sanlam Personal Finance and

Sanlam Private Investments reporting declines of 7% and

22% respectively. This was to an extent offset by strong

growth of 8% achieved by Sanlam Developing Markets.

Institutional business sales recorded a sterling performance,

increasing by 27% on 2008. Most of the institutional

business units contributed to this growth. The value of new

covered business (after minorities) decreased by 3% from

R250 million in the first half of 2008 to R243 million in

2009, reflecting the impact of lower new life business

volumes in the middle-income market. The profitability of

new covered business has been maintained through

continued focus on cost management and the quality of

new business written, with overall margins increasing from

2,17% in 2008 to 2,23% in 2009.

Core earnings of R1 789 million are 6% lower than in

2008, the combined effect of a 7% decrease in the net

result from financial services and a 4% decline in net

investment income earned on the capital portfolio. The

relatively lower base of assets under management

impacted on the growth in fee income and the profitability

of especially the investment management businesses. This

was further aggravated by a number of large commercial

property claims at Santam. Core earnings per share

decreased by only 2%, supported by the effect of the share

buy-back programme during 2008, which resulted in a 4%

reduction in the weighted average number of shares in

issue compared to the first half of 2008.

The investment return earned on the Group’s capital

portfolio was marginally positive during the first six months

of 2009, with positive local equity market return

somewhat offset by a reduction in the valuation of

interest-bearing instruments and offshore investments.

The investment return, however, improved significantly

compared to the negative performance in the first half of

2008. Normalised headline earnings per share benefited

from the turnaround in investment return and increased

by 34% on 2008. Diluted headline earnings per share,

which include the International Financial Reporting

Standards (IFRS) impact of Sanlam and Santam shares

held by the policyholders’ fund, are 13% down on 2008.

Delivering on strategy

The Group’s focussed strategy continued to serve it well

during the first six months of 2009, which was

characterised by the prolonged impact of the most

challenging environment faced by the Group in many

years. The Board and management remain committed to

the Group’s key objective of maximising shareholder

value. This is underpinned by the five pillars of optimal

capital utilisation, earnings growth, cost control and

efficiencies, diversification and transformation.

As indicated in the Group’s 2008 annual report, a more

prudent approach is required in the application of

discretionary capital in the current financial and economic

environment. The focus has accordingly been on further

optimising the capital base of the Group, while only a few

selected investments have been made in existing

operations and future growth markets. No share

buy-backs occurred during the first six months of 2009.

A major portion of the Group’s capital is utilised by the

covered business operations. Capital management and

modelling within these operations receive continuous

attention to achieve an optimal capital level, taking

cognisance of the impact of changes in the capital

management structure on expected return on GEV. This

process indicated that shareholder value can be further

enhanced by implementing a more conservative asset mix

for the capital backing the covered business operations,

thereby reducing the level of required capital. The Sanlam

Board approved as a target a 10% reduction in the capital

portfolio’s exposure to both equities and fixed-interest

instruments and a consequential 20% increase in the

cash exposure. This will result in less volatility in the

capital base and released some R900 million of capital to

the Group’s discretionary capital portfolio. The change in

asset mix caused an increase in the cost of capital and

consequently a once-off R313 million reduction in the

value of in-force covered business (refer results

commentary below). This negative impact will be more

Executive Reviewcontinued


than offset through a value enhancing application of the

additional discretionary capital.

A total of R375 million was utilised for corporate activity during

the period. The largest transactions concluded are as follows:

Some R200 million was utilised to acquire minority

shareholders’ interest in Channel Life, increasing the

Group’s interest to just under 100%. This acquisition

will enable the Group to further enhance synergies

between the life businesses operating in the

entry-level market segment in South Africa and to

more effectively manage the capital requirements of

the growth achieved in this market.

MiWay required additional financing of R30 million to

fund the start-up losses of this business. A further

R17 million has been utilised since the end of June

2009 to acquire a proportionate share of the PSG

Group’s interest in MiWay. The remainder of PSG’s

interest was acquired by existing shareholders.

Sanlam UK has been further capitalised by R30

million, which includes an increase in the Group’s

interest in Principal from 86% to 89%.

The Shriram Life Insurance acquisition agreement

allowed for three performance payments based on the

achievement of new business growth and expense

targets. The third payment of R39 million became

due during the six months.

The release of R900 million of capital from covered

business, investment return and the application of capital

for corporate activity contributed to a net increase in the

level of discretionary capital in the Group to R2,8 billion at

the end of June 2009. The Board remains committed to

the utilisation of the discretionary capital in the most

efficient manner, with a preference for new value-

enhancing initiatives. The buy-back of Sanlam shares is

not a priority but will be considered in periods of share

price weakness.

Despite pressure from the economic downturn, the Group

continues with initiatives to enhance its growth platform.

To this end, Sanlam Developing Markets is expanding its

distribution reach across all territories, with the following

important milestones reached during the six months:

Advisor numbers in South Africa increased by 29% to

1 786, unprofitable business has been discontinued

and the integration of the back office and

administration functions of the South African

businesses has been initiated;

A new distribution channel has been launched by

Shriram Life Insurance to cover the northern Indian

territories, augmenting the focus to date on the south

of India; and

Bancassurance joint venture arrangements have been

strengthened in Africa.

Sanlam Investments’ international expansion is also

progressing according to plan. The establishment of the

SMC wealth and investment management joint ventures

will provide Sanlam Investments with a strong entry point

into the fast growing Indian market. Sanlam International

Investment Partners’ operational structure has been

embedded and a number of international niche

acquisition opportunities are being evaluated.

Cost efficiency has been a strategic focus for the past five

years, but received even more intensified focus in light of

the financial market crisis and subsequent recessionary

environment. The investment management operations

and Sanlam Personal Finance, which have been impacted

most by lower assets under management and new

business volumes respectively, made a concerted effort to

reduce costs even further. Sanlam Investments reported a

9% reduction in expenditure, excluding the impact of a

release of excess provisions. Sanlam Personal Finance

initiated plans to reduce its cost base by some R100

million. Containment of cost in all other business units is

also receiving appropriate attention, although not to the

detriment of future growth opportunities.

Efforts to increase the representation of previously

disadvantaged individuals at middle and senior

management level is a priority for the Group’s

transformation. It remains a challenge given Sanlam’s

traditional low staff turnover, the freezing of vacancies in

the current environment and a shortage of individuals

with the required specialised financial services expertise.

We will, however, continue to use all available

opportunities to meet our targets in the years to come.

Looking ahead

International sentiment has improved over the last few

months, with many analysts of the opinion that the world

economy is at or past its lowest point of the current



recession. Risk aversion has also started to subside with

a renewed interest from international investors in

developing markets. This bodes well for the South African

equity market, which has seen a major improvement in

performance since the end of June. A continuation of

positive equity market returns will support improved

profitability in the Group’s investment management

operations in particular and should be positive for fund

flows into equity-based solutions. Investment market

volatility has, however, not fully subsided and downside

risk remains high.

The improved sentiment has also provided some support

for commodity prices, which should underpin an

improvement in the real economy of many of the African

countries in which the Group operates. The negative trend

in the South African economy is expected to stabilise and

show gradual recovery on the back of higher commodity

prices and improving consumer confidence and spending

power as the benefits of the recent interest rate cuts start

to emerge over the next few months. Any material impact

of the improvement in economic conditions is however

only expected to reflect in the Group’s operating results

from 2010 onwards.

Challenging trading conditions are therefore expected to

persist for the remainder of the 2009 financial year, but

we remain confident that our businesses are well set to

continue weathering the challenges. Relative market

movements during the second half of the year will impact

on the level of earnings growth to be reported for the full

2009 financial year.


Forward-looking statements

In this report we make certain statements that are not historical facts and relate to analyses and

other information based on forecasts of future results not yet determinable, relating, amongst

others, to new business volumes, investment returns (including exchange rate fluctuations) and

actuarial assumptions. These 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.


Group Equity Value at 30 June 2009

30 June 2009 31 December 2008

R million Total

Fair valueof assets

Value ofin-force Total

Fair valueof assets

Value of in-force

Embedded value of covered business 27 773 14 502 13 271 28 591 15 013 13 578

Sanlam Personal Finance 18 939 8 032 10 907 19 574 8 275 11 299

Sanlam Developing Markets 3 040 1 215 1 825 2 796 1 032 1 764

Sanlam UK 685 238 447 680 234 446

Sanlam Employee Benefits 5 109 5 017 92 5 541 5 472 69

Other group operations 13 637 13 637 – 13 560 13 560 –

Retail cluster 2 223 2 223 – 2 287 2 287 –

Institutional cluster 5 778 5 778 – 6 000 6 000 –

Short-term insurance 5 636 5 636 – 5 273 5 273 –

Capital diversification (1 137) (1 137) – (1 429) (1 429) –

Other capital and net worth adjustments 1 432 1 432 – 2 416 2 416 –

41 705 28 434 13 271 43 138 29 560 13 578

Discretionary capital 2 785 2 785 – 2 100 2 100 –

Group Equity Value 44 490 31 219 13 271 45 238 31 660 13 578

Issued shares for value per share (million)

2 048,2 2 044,2

Group Equity Value per share (cents) 2 172 2 213

Share price (cents) 1 728 1 700

Discount -20% -23%

The GEV as at 30 June 2009 amounted to R44,5 billion, down 2% on the R45,2 billion at the end of 2008. On a per share basis

GEV decreased by 2% from 2 213 cents to 2 172 cents at 30 June 2009, including the effect of the 98 cents per share dividend

paid during 2009. The Sanlam share price traded at a 20% discount to GEV by close of trading on 30 June 2009.

Comments on the Results

Group Equity Value (GEV)

GEV is the aggregate of the following components:

The embedded value of covered business, being the life insurance businesses of the Group, which comprises the

required capital supporting these operations and the net present value of their in-force books of business (VIF);

The fair value of other Group operations based on longer term assumptions, which includes the investment

management, capital markets, credit, short-term insurance and the non-covered wealth management operations of the

Group; and

The fair value of discretionary and other capital.

GEV provides an indication of the value of the Group’s operations, but without placing any value on future new covered

business to be written by the Group’s life insurance businesses. Sustainable return on GEV is the primary performance

benchmark used by the Group in evaluating the success of its strategy to maximise shareholder value.

Introduction

The Sanlam Group results for the six months ended 30 June 2009 are presented based on and in compliance with International

Financial Reporting Standards (IFRS), as applicable.


As a financial services organisation, the Group has a major exposure to financial markets in that the shareholder capital portfolio is

invested in financial instruments, a portion of the fee income base is linked to the level of assets under management, while the

valuation of the in force book of covered business is impacted by changes in long-term interest rates and investment return

assumptions. In addition to the subdued investment market performance in the first half of 2009, an increase of some 2% in

long-term interest rates required a commensurate increase in the risk-adjusted discount rate used for the valuation of the Group’s

covered and wealth management businesses. Given these conditions, the annualised return on GEV (ROGEV) per share of 5% for

the first six months of 2009 is an overall satisfactory performance. This is testimony to the defensive qualities of the Group’s

diversified portfolio of businesses. The return on the Group’s international operations was negatively impacted by a stronger rand

and the impact on the Sanlam UK operations of the recession in the United Kingdom. This was, however, compensated for by a

satisfactory return achieved on the other Group operations.

Return on Group Equity Value for the six months ended 30 June 2009

June 2009 June 2008

EarningsR million

Return*%

EarningsR million

Return* %

Covered business 770 5,5 998 7,1

Sanlam Personal Finance 446 4,6 490 4,9

Sanlam Developing Markets 86 6,2 180 17,4

Sanlam UK 4 1,2 139 32,5

Sanlam Employee Benefits 234 8,6 189 7,3

Other operations 790 12,0 (1 692) -20,7

Sanlam Personal Finance 133 19,6 13 2,2

Sanlam Developing Markets 2 24,9 (7) -43,8

Sanlam UK (117) -25,7 25 8,5

Institutional cluster 241 8,1 (301) -8,1

Short-term insurance 531 21,2 (1 422) -39,6

Discretionary and other capital (475) 119

Balance of portfolio (180) 240

Shares delivered to Sanlam Demutualisation Trust – (26)

Shriram goodwill less value of in-force acquired (39) (43)

Treasury shares and other (128) (130)

Change in net worth adjustments (128) 78

Return on Group Equity Value 1 085 4,9 (575) -2,2

Return on Group Equity Value per share 5,2 0,0

* Annualised

Covered business achieved a return of 6% compared to 7% in the first half of 2008. This lower level of return is mainly attributable to

an increase in the cost associated with the capital required to back these operations. As indicated above, the Sanlam Board approved

a more conservative asset mix for the required capital, which reduced the overall capital to be held in respect of covered business by

R900 million. A consequence of the more conservative asset mix is a reduction in the expected investment return to be earned on the

required capital in future. This increased the opportunity cost of holding the capital, referred to as the cost of capital, by R313 million.

Excluding this once-off net increase in the cost of capital, the annualised return on covered business amounted to 8%. The return on

covered business includes positive operating experience variances of R289 million, of which the majority relates to underwriting

experience that was better than the assumptions used in the actuarial basis. The focus on quality of business written also contributed

to positive persistency experience, a particularly satisfactory result given the overall negative market experience. This was offset by

negative economic assumption changes following the increase in risk discount rates.

Comments on the Resultscontinued


The other Group operations yielded an overall annualised return of 12%, compared to a negative return of 21% for the comparable

period in 2008. Sanlam Personal Finance and Santam delivered a marked improvement on their 2008 performances. This was

however offset by negative earnings of R117 million recorded by Sanlam UK. Most of Sanlam Personal Finance’s other operations

had a strong first six months of 2009, with future earnings prospects remaining positive. This supported the valuations, despite the

2% increase in the risk discount rate during the period. The return was also positively impacted by the release of some R40 million

of capital from Glacier. The investment in Santam also performed well, with the Santam share price increasing by 7% after allowing

for the payment of its final dividend. The Sanlam UK businesses are experiencing the aftermath of the financial market crisis more

severely than the South African based operations. The level of assets under management and profitability of Principal and Buckles

were in particular negatively impacted by the UK economic and financial market conditions. Under these conditions, a prudent

approach was followed in valuing these businesses, which required a further write-down of R77 million in their carrying values. The

stronger rand against the pound also aggravated the negative earnings. The valuation of the businesses in the Institutional cluster

remained on an overall basis broadly in line with the end of 2008, with the GEV earnings for the first six months to 30 June 2009

comprising mostly of the net operating profit earned during the period.

The return on discretionary and other capital was impacted by the following:

Negative investment return of R180 million on the balance of the capital portfolio. This can mostly be ascribed to negative

return on the offshore exposure in the portfolio due to the strengthening of the rand exchange rate, marked-to-market losses

on the interest-bearing instruments held, in line with the All Bond return, as well as negative investment return on the

discretionary capital invested in the Botswana equity markets;

The write-off for GEV purposes of the R39 million goodwill recognised in respect of the last remaining performance payment to

Shriram in terms of the acquisition agreement of Shriram Life Insurance in India;

A negative change of R128 million in the net worth adjustments. This is largely due to an increase in the allowance for

corporate costs in line with the expected inflationary increase in the annual corporate expenses; and

A loss of R128 million recognised in respect of treasury shares. This loss is substantially attributable to losses recognised on the

delivery of share incentive scheme shares to participants at the applicable strike prices.

Earnings

Summarised shareholders’ fund income statement for the six months ended 30 June 2009

R million 2009 2008 ∆

Net result from financial services 1 234 1 334 -7%

Net investment income 555 579 -4%

Core earnings 1 789 1 913 -6%

Project expenses (15) (40) 63%

Net equity-accounted headline earnings 10 (4) >100%

BEE transaction costs (3) (3) –

Net investment surpluses 23 (447) >100%

Secondary Tax on Companies (STC) (162) (99) -64%

Discontinued operations – (35) –

Amortisation of value of business acquired (37) (31) -19%

Normalised headline earnings 1 605 1 254 28%

Other non-headline earnings and impairments (58) (103) 44%

Normalised attributable earnings 1 547 1 151 34%



Core earnings for the six months of R1 789 million are 6% down on 2008, the combined effect of a 7% reduction in the net

result from financial services for the period and a 4% decline in net investment income. On a per share basis, core earnings

decreased by 2%, reflecting the impact of the 4% reduction in the weighted average number of shares in issue due to the share

buy-backs during 2008.

The net result from financial services of R1 234 million for the first six months of 2009 is 7% lower than in 2008. As indicated

before, the following items have an impact on this result:

In terms of IFRS only variable costs incurred in writing new investment management policy contracts can be capitalised and

expensed over the lifetime of the contract in line with fees earned. All fixed acquisition costs must be expensed at inception

of investment management policies. Similarly, the Group’s actuarial valuation basis for most insurance contracts does not

allow for the capitalisation of certain upfront acquisition costs, which commensurately results in accounting losses at

inception of these contracts. These losses, referred to as new business strain, have a particularly pronounced impact on

earnings in strong new business growth scenarios (as reported by Sanlam Developing Markets), as well as in instances of a

change in business mix (as experienced by Sanlam Personal Finance) in the first half of 2009.

The impact of MiWay only becoming operational during February 2008.

On a comparable basis the net result from financial services increased by 1% on 2008, a very pleasing result in the current

environment.

Net result from financial services for the six months ended 30 June 2009

R million 2009 2008 ∆

Net result from financial services on comparable basis 1 872 1 848 1%

Retail cluster 1 364 1 265 8%

Institutional cluster 415 423 -2%

Santam 118 188 -37%


MiWay (launched in February 2008) (36) (23) -57%

New business strain (602) (491) -23%



Core earnings

Core earnings comprise the net result from financial services (operating profit) and net investment income earned on the

shareholders’ fund, but exclude abnormal and non-recurring items as well as investment surpluses. Net investment income

includes dividends received from non-operating associated companies and joint ventures, but excludes the equity-

accounted retained earnings.


The table below provides an analysis of the net result from financial services per individual business.

Net result from financial services for the six months ended 30 June 2009

R million 2009 2008 ∆

Retail cluster 789 793 -1%

Sanlam Personal Finance 691 678 2%

Sanlam Developing Markets 85 78 9%

Sanlam UK 13 37 -65%

Institutional cluster 388 404 -4%

Sanlam Investments 264 287 -8%

Sanlam Employee Benefits 65 83 -22%

Sanlam Capital Markets 59 34 74%

Short-term insurance cluster 82 165 -50%

Santam 118 188 -37%

MiWay (36) (23) -57%



Sanlam Personal Finance’s net result from financial services for the six months of R691 million is 2% up on 2008. Before

tax and minority interests, the gross result from financial services is marginally down on 2008. Risk underwriting profit

increased by 28% to R248 million, underpinned by an improved underwriting experience. The relatively lower level of assets

under management during the first half of 2009 reduced fund-based fee income, with a commensurate negative impact on

administration fee income. Containment of costs, however, assisted in limiting the decline in overall administration profit to 11%.

Market related profit of R514 million is also 7% lower than 2008, largely attributable to lower interest earned on working

capital and a lower release of profit from the asset mismatch provision. The balance of the asset mismatch provision was

some R500 million lower at the end of 2008 compared to 2007, resulting in a relatively lower base from which profit is released.

The Sanlam Developing Markets net result from financial services of R85 million is 9% up on 2008 (up 13% before tax and

minority shareholders’ interest).

– The South African operations more than doubled their contribution to the gross result from financial services. Sanlam

Sky Solutions reported an increase in earnings, but the main contributor to the growth was Channel Life, whose 2008

earnings were impacted by expenses relating to the closure of its call centre.

– Botswana Life managed to increase its gross result from financial services by 8%, with positive mortality experience on

the annuity book and a reduction in the credit default provision being partially offset by the negative impacts of the weak

equity markets and some mismatch losses in the annuity portfolio.

– The rest of Africa operations reported lower earnings on an overall basis. Most territories experienced lower new

business volumes in the current economic environment, which resulted in an under recovery of fixed costs. Also

contributing to the lower earnings are additional bad debt provisions, a strengthening of persistency bases, as well as

lower credit life business following a general reduction in lending activities of banks in the current environment.

As indicated before, the retail market in the United Kingdom (UK) has been more severely impacted by the financial crisis

than South Africa. Despite some recent improvement in sentiment and economic statistics, the first six months of 2009 has

been characterised by continued economic uncertainty, rising unemployment, poor consumer confidence and depressed

financial and housing markets. This had a particularly negative impact on the Punter Southall Group, Principal and Buckles,

whose results are directly affected by investment market performance and business volumes. Both these indicators

underperformed in the first half of the 2009 financial year, impacting negatively on the earnings reported by these

operations. Merchant Investors provided some resilience and reported an improved performance. The growth in rand-based



earnings was further negatively impacted by an average 9% strengthening of the rand against the British pound, which

contributed to an overall 65% decline in Sanlam UK’s net result from financial services.

The Institutional cluster operations were in particular affected by a lower average level of assets under management,

following the under performance in investment markets since June 2008.

– Sanlam Investments’ net result from financial services of R264 million is down 8% on the comparable period in 2008

(down 12% to R370 million before tax and minorities). Excluding the impact of a release of over provisions of some

R40 million (after tax), the net result from financial services decreased by 22%, which is mainly attributable to a decline

in the average level of assets under management in 2009 compared to the same period in 2008, as well as a

R14 million decrease in performance fees earned. A positive development has been that both SIM Global and Octane

have reached the high water mark for a number of their portfolios and have started earning performance fees again.

Costs were also well managed and are 9% lower than 2008, excluding the positive impact of the release of provisions.

– Sanlam Employee Benefits’ net result from financial services decreased by 22% from R83 million in 2008 to R65 million

for the first half of 2009. Good growth in risk underwriting profit was more than offset by an under recovery of fixed cost

at Sanlam Structured Solutions, following low new business volumes and a reduction in interest earned on working capital.

– Sanlam Capital Markets made a welcome return to profitability and recorded a gross result from financial services of R61

million compared to a breakeven position in the first half of 2008. After taxation, the net result from financial services

increased by 74% from R34 million in 2008 to R59 million. The equities division had a very strong six months, driven by

equity-backed finance transactions. The debt division also recorded satisfactory results, despite continued pressure from

credit valuations. Deal flow at the market activity division, however, remained subdued, which contributed to an under -

performance by this division. Capital allocated to Sanlam Capital Markets was increased by R50 million during the period,

translating into a return of 26% on the R450 million capital base, a very satis-factory result in the prevailing conditions.

The underwriting results of the short-term insurance cluster were hard hit by a number of large fire-related corporate claims, in

line with a general increase in these claims across the industry. This contributed to a 50% decline in the cluster’s net result

from financial services. Santam still managed to achieve an underwriting margin of 1,5%, a satisfactory result compared to the

industry average. Income earned on Santam’s float was significantly higher as a result of a higher level of float.

Corporate administration expenses are 11% lower than 2008, the combined effect of timing differences in the recognition of

expenses and focussed cost management.

Net investment income declined by 4%. This is mainly attributable to a lower absolute level of capital following the utilisation of

discretionary capital for share buy-backs and corporate activity during 2008 and 2009.

Normalised headline earnings

Normalised headline earnings of R1 605 million are 28% higher than the comparable period in 2008. The increase in

normalised headline earnings is in the main attributable to the following:

A reduction of 6% in core earnings as discussed above.

Investment markets performed relatively better in the first six months of 2009 than the comparable period in 2008 (refer

discussion of business environment above). The performance of the capital portfolio compared to mandate also improved.

This resulted in a turnaround of the negative investment surpluses of R447 million recorded in 2008 to a net positive return

of R23 million in 2009.

The 64% increase in the secondary tax on companies (STC) charge is mainly attributable to the utilisation of available STC credits

for the dividend paid in May 2009. STC credits generated in the first half of 2009 are lower than in 2008 due to the utilisation

of discretionary capital during 2008 and 2009 for share buy-backs and other corporate activity (thereby reducing the absolute

level of capital on which investment income is earned), as well as a decrease in the capital portfolio’s exposure to equities.



Business volumes

New business flows

New business volumes, excluding white label, increased by 3% on the first six months of 2008.

New business volumes for the six months ended 30 June 2009

R million 2009 2008 ∆

Sanlam Personal Finance 14 700 15 824 -7%

South Africa 10 214 11 559 -12%

Africa 4 486 4 265 5%

Sanlam Developing Markets 1 316 1 214 8%

South Africa 635 665 -5%

Africa 605 449 35%

Other international 76 100 -24%

Sanlam UK 955 807 18%

Institutional cluster 25 550 23 305 10%

Sanlam Investments 25 408 23 035 10%


Santam 6 179 6 085 2%

New business excluding white label 48 700 47 235 3%

White label 2 785 3 750 -26%

Total new business 51 485 50 985 1%

Sanlam Personal Finance new business sales slowed down as the challenging economic and business environment impacted

on Topaz middle market sales in particular. The Topaz market is more sensitive to the current economic environment and

investment market volatility. The combined life and non-life sales are 7% lower than the comparable period in 2008.

Total South African new business volumes decreased by 12% compared to 2008.

– Recurring premium life sales are 10% lower than the same period in 2008. The high interest rate and inflation

environment of 2007 and 2008 continues to negatively impact disposable income, with a commensurate negative

impact on recurring premium savings and retirement solutions. Recurring risk business is less sensitive to these

conditions and are 7% higher than 2008.

– Single premium life sales are down 13% on 2008. The market conditions are now also impacting on Glacier’s volumes,

which are 8% lower than the comparable period in 2008. Part of the lower demand can be attributed to clients’

preference to reduce their personal debt, but alternative investment classes, for example property, has also become

more attractive as an investment choice after decreasing valuations over the past two years. Single premium sales of

Topaz life solutions decreased by 17% on 2008. Guaranteed plans performed strongly in 2008, but demand slowed

down in the first six months of 2009 as the recent interest rate cuts reduced the attractiveness of guaranteed rates.

– Investment business is also struggling with lower demand for Glacier investment solutions. The same drivers affecting

Glacier life sales are also impacting on the investment solution sales. This contributed to a 10% reduction in new

investment business volumes.

The Namibian operations recorded a 5% increase in volumes, which is attributable to demand for both life insurance

solutions and unit trusts. The same factors impacting on the South African operations are also affecting Namibia.

Sanlam Developing Markets inflows are 8% higher than 2008. Excluding the discontinued South African single premium

business, new business volumes grew by 17% – a commendable result.



South African inflows are 5% lower than the comparable period in 2008, but this includes the impact of discontinued single

premium business. Single premiums recorded comprise of continuations of existing business reaching maturity date and are

expected to decline over time as the in-force book winds down. The core recurring premiums business is up 5% on 2008.

Sanlam Sky Solutions increased its new recurring premium sales by 8%, with a strong underlying performance masked by

an intentional decision to scale back on low margin broker direct business. This decision has resulted in a marked

improvement in the quality and profitability (as measured by the value of new business margin) of business written. Channel

Life individual life sales underperformed during the first six months of 2009, offsetting an otherwise healthy growth

contribution from Safrican and group benefits business.

African inflows are 35% up on 2008, supported by a sterling performance from Botswana, the largest African operation.

Recurring premiums increased by 30%, with single premiums exceeding 2008 by 37%. Both individual life and annuity

sales performed strongly in Botswana with bancassurance volumes also well up on the comparable period in 2008. A weaker

rand exchange rate also had a positive impact on the rand-based growth recorded by Botswana Life. Apart from Ghana, the

other African operations are in general struggling to record growth on the prior year, being affected by the economic

downturn caused by low commodity prices and the closure of mines.

Shriram’s new business volumes of R76 million is 24% lower than 2008, in part due to a marked switch from single to

recurring business. The latter increased by 57% on 2008. Single premiums are well down as the Indian market did not

escape the impact of the tougher economic environment. The outlook for the rest of the year has improved, with the new

distribution channel expected to start contributing to new business volumes.

Sanlam UK started to experience a slowdown in new business volumes towards the end of 2008 as the UK economy continued

to deteriorate. This trend continued into the first six months of 2009, with new life business volumes decreasing by 44% on the

first half of 2008. Principal contributed new business of R504 million for the six months. The combined life and investment new

business volumes are 18% up on 2008. New business volumes are only expected to improve in 2010, as the UK economy

emerges from its deepest recession in years.

The Institutional cluster recorded an overall 10% increase in new business volumes. Retail business volumes are reflecting a

similar result to Sanlam Personal Finance, as the client bases are affected similarly by the pressure on consumer spending

power and risk aversion caused by market volatility. In contrast, institutional business flows were particularly strong.

Sanlam Investments new business volumes increased by 10% compared to 2008.

– The South African businesses performed strongly in the current environment, exceeding the 2008 new business sales

by 9%. The biggest contributor is RSA segregated business, recording growth of 24%. Segregated business include an

increase of R2,7 billion in the mandate awarded by the Public Investment Corporation (PIC). The pressure on the retail

middle market is reflected in the new retail business recorded by Sanlam Collective Investments, which is 10% down on

2008. This was however offset by strong wholesale business inflows, which contributed to an overall 16% increase in

Sanlam Collective Investments’ new business sales compared to 2008. Sanlam Private Investments is also experiencing

the effect of the pressures on the retail market, with its volumes decreasing by 22% on the high base in 2008.

– New inflows in the Rest of Africa increased by 35%, with especially segregated business performing exceptionally well.

– International (non-Africa) investment business flows are 23% lower than the first six months of 2008. The volatile

international investment markets continued to impact on Octane and SIM Global, with both businesses lagging the

comparable period. Recent outperformance of investment mandates, combined with a reduction in investor risk

aversion, should be positive for future net inflows into these businesses.

Sanlam Employee Benefits’ new business volumes are 47% lower than the comparable 2008 inflows, an overall disappointing

result. This is largely attributable to lower single premium volumes (65% lower than 2008), with new recurring premiums

decreasing by 7%. The competitiveness of Sanlam Employee Benefits’ pricing is being investigated as part of the process to regain

market share. The Group however continues to be driven by profitability and not by pure market share.




Santam recorded a 2% increase in net premium inflows over the first six months of 2009. Net written premiums of continued

operations increased by 7%, a very satisfactory result in the difficult industry conditions. The relatively low level of growth is in

part attributable to reinsurance reinstatement premiums paid following the large corporate claims.

Net fund flows

The Group has been very successful in retaining funds under management and achieved net inflows (excluding white label

business) for the six months of R8,2 billion, 12% up on the R7,3 billion in the corresponding period in 2008. Excluding a low

margin outflow at Sanlam Private Investments (refer below), net fund inflows increased by 74% to R12,7 billion, a particularly

satisfactory result in the current environment. Total inflows increased by 2% to R59,4 billion while outflows in respect of fund

withdrawals and policy benefits of R51,7 billion were down by 2%.

Net fund flows for the six months ended 30 June 2009

R million 2009 2008

Sanlam Personal Finance 3 411 2 221

Life business 929 861

Investment business 2 482 1 360

Sanlam Developing Markets 610 673

Sanlam UK (111) 91

Institutional cluster 2 571 2 538

Sanlam Employee Benefits (499) (517)

Sanlam Investments 3 070 3 055

Santam 1 676 1 768

Net fund flows excluding white label 8 157 7 291

White label (480) (1 821)

Total net fund flows 7 677 5 470

The main contributors to the increase in net inflows are Sanlam Personal Finance and Sanlam Investment Management.

Net inflows of investment business at Sanlam Personal Finance were supported by good retention of Namibian unit trusts.

Despite lower life new business volumes, Sanlam Personal Finance managed to increase its net inflow of life business. This

is the combined result of improved retention as well as lower equity markets reducing the value of benefit payments. The

persistency levels of life business during the six months, measured in terms of the aggregate of lapses, surrenders and

paid-ups, deteriorated only marginally relative to that of the first six months in 2008.

Sanlam Investments’ net inflows of R3,1 billion include a withdrawal of low margin custody business of R4,5 billion at

Sanlam Private Investments, which will have a negligible impact on earnings. Excluding this flow, Sanlam Investments

increased its net inflows by R4,5 billion, of which R2,7 billion is attributable to the new PIC mandate.

Value of new covered business

Despite an overall 7% decline in new life insurance business volumes, the Group retained the profitability of new business. The

total value of new life business (VNB) of R276 million is 5% lower than that reported in 2008. Net of minority interests VNB

decreased by 3% to R243 million. The overall average new life business margin (after minorities) increased from 2,17% to 2,23%.


Value of new covered business for the six months ended 30 June 2009

R million 2009 2008 ∆

Value of new covered business 276 290 -5%

Sanlam Personal Finance 135 160 -16%

Sanlam Developing Markets 136 113 20%

Sanlam UK – 3 -100%


Net of minorities 243 250 -3%

Present value of new business premiums 11 469 12 141 -6%

Sanlam Personal Finance 7 488 8 089 -7%

Sanlam Developing Markets 2 814 2 330 21%

Sanlam UK 463 836 -45%


Net of minorities 10 906 11 501 -5%

New covered business margin 2,41% 2,39%

Sanlam Personal Finance 1,80% 1,98%

Sanlam Developing Markets 4,83% 4,85%

Sanlam UK – 0,36%

Sanlam Employee Benefits 0,71% 1,58%

Net of minorities 2,23% 2,17%

Sanlam Personal Finance’s VNB decreased by 16% to R135 million. This is attributable to the lower new business volumes,

partially compensated for by the change in business mix towards risk underwriting and a strong focus on containment of costs.

The average VNB margin declined from 1,98% in 2008 to 1,80%, which still represents a satisfactory performance.

The Sanlam Developing Markets operations reported a commendable 20% increase in gross VNB to R136 million, continuing its

growth trend. The average VNB margin decreased marginally from 4,85% to 4,83%. The South African operations’ margins

improved, principally due to the intentional change in business mix away from the low margin broker direct business. Botswana

Life’s VNB margin decreased slightly compared to the first six months of 2008, the result of a strengthening of the persistency

basis and a reduction in annuity margins following a decline in interest rates. The VNB and margins of the other African

operations were negatively impacted by lower sales volumes and a general strengthening of the persistency bases.

Both Sanlam UK and Sanlam Employee Benefits reported a significant reduction in VNB in line with their new business

performance.

Solvency

All of the life insurance businesses within the Group were sufficiently capitalised at the end of June 2009. The total capital of

Sanlam Life Insurance Limited, the holding company of the Group’s major life insurance subsidiaries, amounted to R31,6 billion

on 30 June 2009. Its admissible regulatory capital at the end of June 2009 amounted to R20,7 billion, which covered its

regulatory Capital Adequacy Requirements (CAR) 2,5 times, compared to 2,7 times on 31 December 2008. No policyholder

portfolio held a negative bonus stabilisation reserve in excess of 7,5% of policyholder liabilities at the end of June 2009.

Santam’s capital (shareholders’ funds including bonds) constituted 42% of net earned premiums on 30 June 2009, which is at

the higher end of the target range of 35% to 45% set by Santam.



FitchRatings has affirmed the following ratings of the Group in 2009:

Sanlam Limited:

National Long-term: AA-(zaf)

Sanlam Life Insurance Limited:

National Insurer Financial Strength: AA+(zaf)

National Long-term: AA(zaf)

National Short-term: F1+(zaf)

Subordinated debt: AA-(zaf)

Santam Limited:

National Insurer Financial Strength: AA+(zaf)

National Long-term: AA(zaf)

Dividend

No interim dividend has been declared. It is Sanlam’s practice to pay only an annual dividend, given the cost associated with the

distribution of a dividend to our large shareholder base.

Roy Andersen Johan van Zyl

Chairman Group Chief Executive

Sanlam Limited

Cape Town

2 September 2009



SANLAM GROUP INTERIM FINANCIAL STATEMENTS

for the six months ended 30 June 2009


The accounting policies adopted for purposes of the

financial statements comply with International Financial

Reporting Standards (IFRS), specifically IAS 34 on interim

financial reporting, and with applicable legislation. The

condensed financial statements are presented in terms of

IAS 34, with additional disclosure where applicable, using

accounting policies consistent with those applied in the

2008 financial statements, apart from the changes

resulting from new and revised standards (refer below).

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 2008, apart from

changes in the economic assumptions.

The basis of preparation and presentation of the

shareholders’ information is also consistent with that

applied in the 2008 financial statements.

Application of new and revised IFRSs and interpretations

The following new or revised IFRSs and interpretations are

applied in the Group’s 2009 financial year:

IAS 1 Revised Presentation of Financial Statements

IAS 1 Amended Presentation of Financial Statements

– Puttable Financial Instruments and Obligations

Arising on Liquidation

IAS 32 Amended Financial Instruments: Presentation

– Puttable Financial Instruments and Obligations

Arising on Liquidation

IFRS 2 Amended Share-based Payment – Vesting

Conditions and Cancellations

May 2008 Improvements to IFRS

Amendments to IFRIC 9 – Reassessment of Embedded

Derivatives and IAS 39 Financial Instruments:

Recognition and Measurement – Embedded Derivatives

Amendment to IFRS 7 Financial Instruments:

Disclosure – Improving Disclosures about Financial

Instruments

AC 503: Amendment to AC 503 – Accounting for

Black Economic Empowerment (BEE) Transactions

The application of these standards and interpretations did

not have a significant impact on the Group’s reported

results and cash flows for the six months ended 30 June

2009 and the financial position at 30 June 2009. The

following presentational changes were introduced upon

adoption of the revised IAS 1:

The Group income statement has been replaced with

a Group statement of comprehensive income,

presenting all items of recognised income and

expense in one statement;

The Group statement of changes in equity only

includes details of transactions with owners – non-

owner changes in equity are presented in a single

line; and

The Group balance sheet has been renamed to a

Group statement of financial position.

The following new or revised IFRSs and interpretations

have effective dates applicable to future financial years

and have not been early adopted:

IAS 27 Amended Consolidated and Separate

Financial Statements (effective 1 July 2009)

IAS 39 Amended Financial Instruments: Recognition

and Measurement – Eligible Hedged Items (effective

1 July 2009)

IFRS 3 Revised Business Combinations (effective 1

July 2009)

IFRS 5 Amended Non-current Assets Held for Sale

and Discontinued Operations (effective 1 July 2009)

IFRIC 17 Distribution of Non-cash Assets to Owners

(effective 1 July 2009)

April 2009 Improvements to IFRS (mostly effective 1

January 2010)

Amendments to IFRS 2: Group Cash-settled

Share-based Payment Transactions (effective 1

January 2010)

AC 504: IAS 19 – The Limit on a Defined Benefit

Asset, Minimum Funding Requirements and their

Interaction in a South African Pension Fund

Environment (effective 1 April 2009)

The application of these revised standards and

interpretations in future financial reporting periods is not

expected to have a significant impact on the Group’s

reported results, financial position and cash flows, except

for IFRS 3 Revised and IAS 27 Amended for which the

impact cannot be quantified as it will depend on the

nature and structure of a specific business combination.

Accounting policies and basis of presentation


Report on review of interim condensed financial statements

To the directors of Sanlam Limited

Introduction

We have reviewed the accompanying consolidated

condensed statement of financial position of Sanlam

Limited as of 30 June 2009 and the related statements of

comprehensive income, changes in equity and cash flow

for the six-month period then ended and other

explanatory notes set out on pages 20 and 56 to 61.

Directors’ responsibility

The Group’s directors are responsible for the preparation

and fair presentation of these interim condensed financial

statements in accordance with International Financial

Reporting Standard IAS 34 – “Interim Financial Reporting”.

Auditor’s responsibility

Our responsibility is to express a conclusion on these interim

condensed financial statements based on our review.

Scope of review

We conducted our review in accordance with International

Standard of Review Engagements 2410, “Review of Interim

Financial Information Performed by the Independent Auditor

of the Entity”. A review of interim financial information

consists of making inquiries, primarily of persons responsible

for financial and accounting matters, and applying analytical

and other review procedures. A review is substantially less in

scope than an audit conducted in accordance with

International Standards on Auditing and consequently does

not enable us to obtain assurance that we would become

aware of all significant matters that might be identified in an

audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention

that causes us to believe that the accompanying interim

condensed financial statements of Sanlam Limited were

not prepared, in all material respects, in accordance with

International Financial Reporting Standard IAS 34,

“Interim Financial Reporting”.

Ernst & Young Inc.

Director: MP Rapson

Registered Auditor

Cape Town

2 September 2009

Limited assurance report of the independent auditors on the Sanlam Limited financial information for the Shareholders’ Fund

To the directors of Sanlam Limited

Introduction

We have carried out a limited assurance engagement on

the Sanlam Limited financial information for the

Shareholders’ Fund (Sanlam Limited Shareholders’

Information) for the six months ended 30 June 2009 on

pages 24 to 54, which has been prepared in accordance

with the basis of preparation and presentation set out on

page 20. This report should be read in conjunction with

the reviewed interim condensed financial statements

where the policy liabilities are calculated on the financial

soundness valuation basis.

Respective responsibilities of directors and

independent auditors

The directors are responsible for the interim Group

financial statements, and the Sanlam Limited

Shareholders’ Information. Our responsibilities in relation

to the interim Group financial statements are to review the

interim financial information as set out on page 21.

Our responsibilities, as independent assurance providers,

in relation to the Sanlam Limited Shareholders’

Information are to express a limited assurance conclusion

to the board of directors to confirm that nothing has come

to our attention during our limited assurance engagement

that causes us to believe that the Sanlam Limited

Shareholders’ Information at 30 June 2009 was not

prepared in accordance with the basis of preparation and

presentation set out on page 20.

Scope of engagement

We conducted our limited assurance engagement in

accordance with the International Standards on

Assurance Engagements: ISAE 3000, “Assurance

Engagements other than Audits or Reviews of Historical

Financial Information”. A limited assurance engagement

consists of making inquiries, primarily of persons

responsible for financial, accounting and actuarial

matters, and applying analytical and other review

procedures. A limited assurance engagement is

substantially less in scope than an audit conducted in

accordance with International Standards on Auditing and

consequently does not enable us to obtain assurance that

External Audit Reports


we would become aware of all significant matters that

might be identified in an audit. Accordingly, we do not

express an audit opinion.

Limited assurance conclusion

Based on our review, nothing has come to our attention

that causes us to believe that the accompanying

Shareholders’ Information at 30 June 2009 has not been

properly prepared, in all material respects, in accordance

with the basis of preparation and presentation set out on

page 20.

Ernst & Young Inc.

Director: MP Rapson

Registered Auditor

Cape Town

2 September 2009

External Audit Reportscontinued


Contents

Group Equity Value 24

Change in Group Equity Value 26

Return on Group Equity Value 27

Adjusted return on Group Equity Value 28

Shareholders’ fund at fair value 30

Shareholders’ fund income statement 34

Notes to the shareholders’ fund information 38

Embedded value of covered business 46

Shareholders’ Informationfor the six months ended 30 June 2009


Sanlam GroupGroup Equity Valueat 30 June 2009

June Reviewed 2009 June Reviewed 2009 December Audited 2008

R million Note TotalFair value of

assetsValue of in-force Total

Fair value of assets

Value of in-force Total


Value of in-force

Sanlam Personal Finance 20 364 9 457 10 907 21 099 9 425 11 674 20 997 9 698 11 299 Covered business (1) 18 939 8 032 10 907 19 974 8 300 11 674 19 574 8 275 11 299 Glacier 695 695 – 584 584 – 696 696 –Sanlam Personal Loans 73 73 – 73 73 – 71 71 –Multi-Data 172 172 – 172 172 – 190 190 – Sanlam Trust 149 149 – 111 111 – 144 144 –Sanlam Home Loans 120 120 – 61 61 – 133 133 –Anglo African Finance 40 40 – 54 54 – 33 33 –Sanlam Healthcare Management 93 93 – – – – 78 78 –Sanlam Namibia Holdings 83 83 – 70 70 – 78 78 –

Sanlam Developing Markets 3 062 1 237 1 825 2 302 946 1 356 2 813 1 049 1 764 Covered business (1) 3 040 1 215 1 825 2 281 925 1 356 2 796 1 032 1 764 Alfinanz 22 22 – 21 21 – 17 17 –

Sanlam UK 1 461 1 014 447 2 335 1 815 520 1 527 1 081 446 Covered business (1) 685 238 447 1 030 510 520 680 234 446 Principal 253 253 – 584 584 – 299 299 –Buckles 38 38 – 78 78 – 69 69 –Punter Southall Group 236 236 – 318 318 – 219 219 – Other UK operations – – – 56 56 – 18 18 –Preference shares and interest-bearing instruments 249 249 – 269 269 – 242 242 –

Institutional cluster 10 887 10 795 92 11 582 11 369 213 11 541 11 472 69 Covered business (1) 5 109 5 017 92 5 333 5 120 213 5 541 5 472 69 Sanlam Investments 5 244 5 244 – 5 769 5 769 – 5 581 5 581 – Coris Administration 24 24 – 46 46 – 54 54 – Capital Markets 510 510 – 434 434 – 365 365 –

Short-term insurance 5 636 5 636 – 5 235 5 235 – 5 273 5 273 –MiWay 110 110 – 110 110 – 110 110 –Shriram General Insurance 115 115 – 115 115 – 115 115 –Santam 5 411 5 411 – 5 010 5 010 – 5 048 5 048 –

Group operations 41 410 28 139 13 271 42 553 28 790 13 763 42 151 28 573 13 578 Capital diversification (1 137) (1 137) – (1 057) (1 057) – (1 429) (1 429) – Discretionary capital 2 785 2 785 – 3 000 3 000 – 2 100 2 100 – Balanced portfolio – other 2 643 2 643 – 2 852 2 852 – 3 499 3 499 – Group Equity Value before adjustments to net worth 45 701 32 430 13 271 47 348 33 585 13 763 46 321 32 743 13 578 Net worth adjustments (1 211) (1 211) – (809) (809) – (1 083) (1 083) –

Present value of holding company expenses (1 194) (1 194) – (763) (763) – (1 052) (1 052) –Fair value of outstanding equity compensation shares granted by subsidiaries on own shares (17) (17) – (46) (46) – (31) (31) –

Group Equity Value 44 490 31 219 13 271 46 539 32 776 13 763 45 238 31 660 13 578

Value per share (cents) 6 2 172 1 524 648 2 254 1 587 667 2 213 1 549 664

Analysis per type of businessCovered business (1) 27 773 14 502 13 271 28 618 14 855 13 763 28 591 15 013 13 578

Sanlam Personal Finance 18 939 8 032 10 907 19 974 8 300 11 674 19 574 8 275 11 299 Sanlam Developing Markets 3 040 1 215 1 825 2 281 925 1 356 2 796 1 032 1 764 Sanlam UK 685 238 447 1 030 510 520 680 234 446 Institutional cluster 5 109 5 017 92 5 333 5 120 213 5 541 5 472 69

Other Group operations 5 13 637 13 637 – 13 935 13 935 – 13 560 13 560 –Discretionary and other capital 3 080 3 080 – 3 986 3 986 – 3 087 3 087 –Group Equity Value 44 490 31 219 13 271 46 539 32 776 13 763 45 238 31 660 13 578

(1) Refer embedded value of covered business on page 46.



R million Note TotalFair value of

assetsValue of in-force Total


Value of in-force Total


Value of in-force

Sanlam Personal Finance 20 364 9 457 10 907 21 099 9 425 11 674 20 997 9 698 11 299 Covered business (1) 18 939 8 032 10 907 19 974 8 300 11 674 19 574 8 275 11 299 Glacier 695 695 – 584 584 – 696 696 –Sanlam Personal Loans 73 73 – 73 73 – 71 71 –Multi-Data 172 172 – 172 172 – 190 190 – Sanlam Trust 149 149 – 111 111 – 144 144 –Sanlam Home Loans 120 120 – 61 61 – 133 133 –Anglo African Finance 40 40 – 54 54 – 33 33 –Sanlam Healthcare Management 93 93 – – – – 78 78 –Sanlam Namibia Holdings 83 83 – 70 70 – 78 78 –

Sanlam Developing Markets 3 062 1 237 1 825 2 302 946 1 356 2 813 1 049 1 764 Covered business (1) 3 040 1 215 1 825 2 281 925 1 356 2 796 1 032 1 764 Alfinanz 22 22 – 21 21 – 17 17 –

Sanlam UK 1 461 1 014 447 2 335 1 815 520 1 527 1 081 446 Covered business (1) 685 238 447 1 030 510 520 680 234 446 Principal 253 253 – 584 584 – 299 299 –Buckles 38 38 – 78 78 – 69 69 –Punter Southall Group 236 236 – 318 318 – 219 219 – Other UK operations – – – 56 56 – 18 18 –Preference shares and interest-bearing instruments 249 249 – 269 269 – 242 242 –

Institutional cluster 10 887 10 795 92 11 582 11 369 213 11 541 11 472 69 Covered business (1) 5 109 5 017 92 5 333 5 120 213 5 541 5 472 69 Sanlam Investments 5 244 5 244 – 5 769 5 769 – 5 581 5 581 – Coris Administration 24 24 – 46 46 – 54 54 – Capital Markets 510 510 – 434 434 – 365 365 –

Short-term insurance 5 636 5 636 – 5 235 5 235 – 5 273 5 273 –MiWay 110 110 – 110 110 – 110 110 –Shriram General Insurance 115 115 – 115 115 – 115 115 –Santam 5 411 5 411 – 5 010 5 010 – 5 048 5 048 –

Group operations 41 410 28 139 13 271 42 553 28 790 13 763 42 151 28 573 13 578 Capital diversification (1 137) (1 137) – (1 057) (1 057) – (1 429) (1 429) – Discretionary capital 2 785 2 785 – 3 000 3 000 – 2 100 2 100 – Balanced portfolio – other 2 643 2 643 – 2 852 2 852 – 3 499 3 499 – Group Equity Value before adjustments to net worth 45 701 32 430 13 271 47 348 33 585 13 763 46 321 32 743 13 578 Net worth adjustments (1 211) (1 211) – (809) (809) – (1 083) (1 083) –

Present value of holding company expenses (1 194) (1 194) – (763) (763) – (1 052) (1 052) –Fair value of outstanding equity compensation shares granted by subsidiaries on own shares (17) (17) – (46) (46) – (31) (31) –

Group Equity Value 44 490 31 219 13 271 46 539 32 776 13 763 45 238 31 660 13 578

Value per share (cents) 6 2 172 1 524 648 2 254 1 587 667 2 213 1 549 664

Analysis per type of businessCovered business (1) 27 773 14 502 13 271 28 618 14 855 13 763 28 591 15 013 13 578

Sanlam Personal Finance 18 939 8 032 10 907 19 974 8 300 11 674 19 574 8 275 11 299 Sanlam Developing Markets 3 040 1 215 1 825 2 281 925 1 356 2 796 1 032 1 764 Sanlam UK 685 238 447 1 030 510 520 680 234 446 Institutional cluster 5 109 5 017 92 5 333 5 120 213 5 541 5 472 69

Other Group operations 5 13 637 13 637 – 13 935 13 935 – 13 560 13 560 –Discretionary and other capital 3 080 3 080 – 3 986 3 986 – 3 087 3 087 –Group Equity Value 44 490 31 219 13 271 46 539 32 776 13 763 45 238 31 660 13 578



Sanlam GroupChange in Group Equity Valuefor the six months ended 30 June 2009

Six months Reviewed

Full yearAudited

R million 2009 2008 2008

Earnings from covered business (1) 770 998 919 Earnings from other Group operations 790 (1 692) (1 885)

Operations valued based on ratio of price to assets under management

187 ( 335) (715)

Assumption changes (30) 10 ( 99) Change in assets under management 119 (430) (1 005) Earnings for the period and changes in capital requirements 323 ( 103) 188 Foreign currency translation differences and other (225) 188 201

Operations valued based on discounted cash flows 12 31 144 Expected return 156 132 275 Operating experience variances and other 44 12 (6) Assumption changes (160) (194) (104) Foreign currency translation differences (28) 81 (21)

Operations valued at net asset value – earnings for the period 60 34 (35) Listed operations – investment return 531 (1 422) (1 279)

Earnings from discretionary and other capital (475) 119 (440) Investment return (180) 214 68

Shriram Life Insurance goodwill less value of in-force acquired

(39) (43) (43)

Treasury shares and other (128) (130) (269) Change in adjustments to net worth (128) 78 (196)

Group Equity Value earnings 1 085 (575) (1 406) Dividends paid (1 978) (1 968) (1 968) Shares cancelled ( 615) (1 439) (2 481) Cost of treasury shares acquired 760 (772) (200)

Sanlam share buy back – (1 616) (2 238) Transfer to shares cancelled 615 1 439 2 481 Share incentive scheme and other 145 (595) (443)

Group Equity Value at beginning of the period 45 238 51 293 51 293 Group Equity Value at end of the period 44 490 46 539 45 238



Sanlam GroupReturn on Group Equity Valuefor the six months ended 30 June 2009

Six months Reviewed 2009


Full year Audited 2008

EarningsR million

Return%

EarningsR million

Return%

EarningsR million

Return%

Sanlam Personal Finance 579 5,6 503 4,8 744 3,5Covered business (1) 446 4,6 490 4,9 453 2,3Other operations 133 19,6 13 2,2 291 24,4

Sanlam Developing Markets 88 6,4 173 16,4 648 29,6Covered business (1) 86 6,2 180 17,4 659 30,5Other operations 2 24,9 (7) (43,8) (11) (39,3)

Sanlam UK (113) (14,3) 164 22,7 ( 356) (23,4)Covered business (1) 4 1,2 139 32,5 (36) (3,9)Other operations (117) (25,7) 25 8,5 (320) (53,3)

Institutional cluster 475 8,4 (112) (1,8) (723) (5,8)Covered business (1) 234 8,6 189 7,3 (157) (3,0)Sanlam Investments 227 8,3 (343) (10,0) (547) (8,2)Coris Administration (46) (97,8) 8 46,5 16 42,1Capital markets 60 28,4 34 17,7 (35) (8,8)

Short-term insurance 531 21,2 (1 422) (39,6) (1 279) (20,1)Discretionary and other capital (475) 119 (440)

Balance of portfolio (180) 240 114 Shares delivered to Sanlam Demutualisation Trust – (26) (46)

Shriram Life Insurance goodwill less value of in-force acquired (39) (43) (43)

Treasury shares (128) (130) (269) Change in net worth adjustments (128) 78 (196)

Return on Group Equity Value 1 085 4,9 (575) (2,2) (1 406) (2,7)Return on Group Equity Value per share 5,2 0,0 (1,7)

(1) Refer embedded value of covered business on page 46

Six months Reviewed Full yearAudited

R million 2009 2008 2008

Reconciliation of return on Group Equity Value:

The return on Group Equity Value reconciles as follows to normalised attributable earnings:

Normalised attributable earnings per shareholders’ fund income statement on page 34

1 547

1 151

1 758

Earnings recognised directly in equity (263) 481 175 Net foreign currency translation gains (303) 461 60Dilution from Santam treasury share transactions (5) (29) (19)Share-based payments 45 49 134

Movement in fair value adjustment – shareholders’ fund at fair value 444 (2 168) (2 724) Movement in adjustments to net worth (171) 50 (200)

Present value of holding company expenses (142) 30 (259)

Fair value of outstanding equity compensation shares granted by subsidiaries on own shares

14

48

63

Change in intangible assets less value of in-force acquired (43) (28) (4) Treasury shares and other (121) (130) (271) Growth from covered business: value of in-force (1) (351) 41 (144) Return on Group Equity Value 1 085 (575) (1 406)





Full year Audited 2008

EarningsR million

Return%

EarningsR million

Return%

EarningsR million

Return%

Sanlam Personal Finance 1 392 13,7 1 441 14,0 2 697 12,7Covered business 1 259 13,3 1 428 14,7 2 406 12,0Other operations 133 19,6 13 2,2 291 24,4

Sanlam Developing Markets 292 21,8 221 21,2 561 25,6Covered business 290 21,8 228 22,2 572 26,5Other operations 2 24,9 (7) (43,8) (11) (39,3)

Sanlam UK (68) (8,7) 74 10,0 (52) (3,4)Covered business 32 9,6 49 10,9 141 15,3Other operations (100) (22,2) 25 8,5 (193) (32,2)

Institutional cluster 867 15,5 318 5,2 980 7,9Covered business 353 13,1 333 13,1 558 10,6Other operations 514 17,6 (15) (0,4) 422 5,9

Short-term insurance 243 9,4 335 10,8 669 10,5Discretionary and other capital (134) 285 549 Adjusted return on Group Equity Value 2 592 11,8 2 674 10,7 5 404 10,5

Adjusted return on Group Equity Value per share 12,2 13,6 12,4

Sanlam GroupAdjusted return on Group Equity Valuefor the six months ended 30 June 2009


Sanlam GroupShareholders’ fund at fair valueat 30 June 2009


R million Fair valueFair value

adjustmentNet asset

value Fair valueFair value

adjustmentNet asset


adjustmentNet asset

value

Covered business, discretionary and other capital 20 277 120 20 157 21 068 169 20 899 20 577 120 20 457 Property and equipment 209 – 209 204 – 204 228 – 228 Owner-occupied properties 613 – 613 610 – 610 613 – 613 Goodwill (2) 497 – 497 475 – 475 473 – 473 Value of business acquired (2) 774 – 774 826 – 826 802 – 802 Other intangible assets 48 – 48 – – – – – –Deferred acquisition costs 1 348 – 1 348 1 177 – 1 177 1 260 – 1 260 Investments 18 422 120 18 302 19 990 169 19 821 18 247 120 18 127

Equities and similar securities 8 472 112 8 360 11 346 112 11 234 9 036 112 8 924 Associated companies 225 8 217 336 15 321 234 8 226 Joint ventures

Safair Lease Finance – – – 254 48 206 – – – Shriram Life Insurance and other (3) 247 – 247 211 – 211 208 – 208

Public sector stocks and loans 550 – 550 1 171 – 1 171 1 411 – 1 411 Investment properties 491 – 491 360 – 360 491 – 491 Other interest-bearing and preference share investments 8 437 – 8 437 6 312 (6) 6 318 6 867 – 6 867

Net term finance – – – – – – – – –Term finance (4 790) – (4 790) (4 933) – (4 933) (5 101) – (5 101) Assets held in respect of term finance 4 790 – 4 790 4 933 – 4 933 5 101 – 5 101

Net deferred tax 279 – 279 – – – 352 – 352 Net working capital (1 165) – (1 165) (1 273) – (1 273) (451) – (451) Minority shareholders' interest (748) – (748) (941) – (941) (947) – (947)

Other Group operations 13 637 6 271 7 366 13 935 6 334 7 601 13 560 5 827 7 733 Sanlam Investments 5 244 3 973 1 271 5 769 4 417 1 352 5 581 3 949 1 632

SIM Wholesale 3 603 2 793 810 3 778 3 010 768 3 903 2 844 1 059 International 1 314 912 402 1 682 1 174 508 1 358 854 504 Sanlam Collective Investments 327 268 59 309 233 76 320 251 69

Sanlam Personal Finance 1 425 895 530 1 125 656 469 1 423 837 586 Glacier 695 414 281 584 317 267 696 387 309 Sanlam Personal Loans (4) 73 33 40 73 (18) 91 71 27 44 Multi-Data 172 160 12 172 159 13 190 164 26 Sanlam Trust 149 142 7 111 105 6 144 127 17 Sanlam Home Loans 120 – 120 61 – 61 133 – 133 Anglo African Finance 40 18 22 54 40 14 33 19 14 Sanlam Healthcare Management 93 68 25 – – – 78 58 20 Sanlam Namibia Holdings 83 60 23 70 53 17 78 55 23

Sanlam UK 776 28 748 1 305 141 1 164 847 28 819 Principal 253 1 252 584 24 560 299 2 297 Buckles 38 (5) 43 78 (1) 79 69 8 61 Punter Southall Group 236 19 217 318 62 256 219 – 219 Other UK operations – 13 (13) 56 56 – 18 18 – Preference shares and interest-bearing instruments 249 – 249 269 – 269 242 – 242

Alfinanz 22 18 4 21 21 – 17 13 4 Coris Administration 24 – 24 46 20 26 54 28 26 Sanlam Capital Markets 510 – 510 434 – 434 365 – 365 MiWay 110 84 26 110 34 76 110 58 52 Shriram General Insurance 115 – 115 115 – 115 115 – 115 Santam 5 411 2 520 2 891 5 010 2 292 2 718 5 048 2 161 2 887 Goodwill held on Group level in respect of the above businesses – (1 247) 1 247 – (1 247) 1 247 – (1 247) 1 247 Shareholders’ fund at fair value 33 914 6 391 27 523 35 003 6 503 28 500 34 137 5 947 28 190 Value per share (cents) 1 656 312 1 344 1 696 315 1 381 1 670 291 1 379




adjustmentNet asset


adjustmentNet asset


adjustmentNet asset

value

Covered business, discretionary and other capital 20 277 120 20 157 21 068 169 20 899 20 577 120 20 457 Property and equipment 209 – 209 204 – 204 228 – 228 Owner-occupied properties 613 – 613 610 – 610 613 – 613 Goodwill (2) 497 – 497 475 – 475 473 – 473 Value of business acquired (2) 774 – 774 826 – 826 802 – 802 Other intangible assets 48 – 48 – – – – – –Deferred acquisition costs 1 348 – 1 348 1 177 – 1 177 1 260 – 1 260 Investments 18 422 120 18 302 19 990 169 19 821 18 247 120 18 127

Equities and similar securities 8 472 112 8 360 11 346 112 11 234 9 036 112 8 924 Associated companies 225 8 217 336 15 321 234 8 226 Joint ventures

Safair Lease Finance – – – 254 48 206 – – – Shriram Life Insurance and other (3) 247 – 247 211 – 211 208 – 208

Public sector stocks and loans 550 – 550 1 171 – 1 171 1 411 – 1 411 Investment properties 491 – 491 360 – 360 491 – 491 Other interest-bearing and preference share investments 8 437 – 8 437 6 312 (6) 6 318 6 867 – 6 867

Net term finance – – – – – – – – –Term finance (4 790) – (4 790) (4 933) – (4 933) (5 101) – (5 101) Assets held in respect of term finance 4 790 – 4 790 4 933 – 4 933 5 101 – 5 101

Net deferred tax 279 – 279 – – – 352 – 352 Net working capital (1 165) – (1 165) (1 273) – (1 273) (451) – (451) Minority shareholders' interest (748) – (748) (941) – (941) (947) – (947)

Other Group operations 13 637 6 271 7 366 13 935 6 334 7 601 13 560 5 827 7 733 Sanlam Investments 5 244 3 973 1 271 5 769 4 417 1 352 5 581 3 949 1 632

SIM Wholesale 3 603 2 793 810 3 778 3 010 768 3 903 2 844 1 059 International 1 314 912 402 1 682 1 174 508 1 358 854 504 Sanlam Collective Investments 327 268 59 309 233 76 320 251 69

Sanlam Personal Finance 1 425 895 530 1 125 656 469 1 423 837 586 Glacier 695 414 281 584 317 267 696 387 309 Sanlam Personal Loans (4) 73 33 40 73 (18) 91 71 27 44 Multi-Data 172 160 12 172 159 13 190 164 26 Sanlam Trust 149 142 7 111 105 6 144 127 17 Sanlam Home Loans 120 – 120 61 – 61 133 – 133 Anglo African Finance 40 18 22 54 40 14 33 19 14 Sanlam Healthcare Management 93 68 25 – – – 78 58 20 Sanlam Namibia Holdings 83 60 23 70 53 17 78 55 23

Sanlam UK 776 28 748 1 305 141 1 164 847 28 819 Principal 253 1 252 584 24 560 299 2 297 Buckles 38 (5) 43 78 (1) 79 69 8 61 Punter Southall Group 236 19 217 318 62 256 219 – 219 Other UK operations – 13 (13) 56 56 – 18 18 – Preference shares and interest-bearing instruments 249 – 249 269 – 269 242 – 242

Alfinanz 22 18 4 21 21 – 17 13 4 Coris Administration 24 – 24 46 20 26 54 28 26 Sanlam Capital Markets 510 – 510 434 – 434 365 – 365 MiWay 110 84 26 110 34 76 110 58 52 Shriram General Insurance 115 – 115 115 – 115 115 – 115 Santam 5 411 2 520 2 891 5 010 2 292 2 718 5 048 2 161 2 887 Goodwill held on Group level in respect of the above businesses – (1 247) 1 247 – (1 247) 1 247 – (1 247) 1 247 Shareholders’ fund at fair value 33 914 6 391 27 523 35 003 6 503 28 500 34 137 5 947 28 190 Value per share (cents) 1 656 312 1 344 1 696 315 1 381 1 670 291 1 379


Sanlam GroupShareholders’ fund at fair valueat 30 June 2009 continued



adjustmentNet asset


adjustmentNet asset


adjustmentNet asset

value

Reconciliation to Group Equity ValueGroup Equity Value before adjustments to net worth 45 701 32 430 13 271 47 348 33 585 13 763 46 321 32 743 13 578

Add: Goodwill and value of business acquired replaced by value of in-force

1 484 1 484 – 1 418 1 418 – 1 394 1 394 –

Merchant Investors 356 356 – 356 356 – 356 356 –Sanlam Sky Solutions 786 786 – 778 778 – 760 760 – Channel Life 136 136 – 115 115 – 110 110 – Shriram Life Insurance (3) 190 190 – 151 151 – 151 151 – Other 16 16 – 18 18 – 17 17 –

Less: Value of in-force (13 271) – (13 271) (13 763) – (13 763) (13 578) – (13 578) Shareholders' fund at fair value 33 914 33 914 – 35 003 35 003 – 34 137 34 137 –

R million

JuneReviewed

2009

JuneReviewed

2008

DecemberAudited

2008

Reconciliation to Group statement of financial positionShareholders' fund at net asset value 27 523 28 500 28 190 Consolidation reserve (460) (834) (539) Shareholders’ fund per Group statement of financial position 27 063 27 666 27 651

(1) Group businesses listed above are not consolidated, but reflected as investments at fair value.(2) The value of business acquired and goodwill relate mainly to the consolidation of Sanlam Sky Solutions, Channel Life and Merchant Investors and are

excluded in the build-up of the Group Equity Value, as the current value of in-force business for these life insurance companies are included in the embedded value of covered business.

(3) The carrying value of Shriram Life Insurance includes goodwill of R190 million that is excluded in the build-up of the Group Equity Value, as the current value of in-force business for Shriram Life Insurance is included in the embedded value of covered business.

(4) The life insurance component of Sanlam Personal Loans’ operations is included in the value of in-force business and therefore excluded from the Sanlam Personal Loans fair value.




adjustmentNet asset


adjustmentNet asset


adjustmentNet asset

value

Reconciliation to Group Equity ValueGroup Equity Value before adjustments to net worth 45 701 32 430 13 271 47 348 33 585 13 763 46 321 32 743 13 578

Add: Goodwill and value of business acquired replaced by value of in-force

1 484 1 484 – 1 418 1 418 – 1 394 1 394 –

Merchant Investors 356 356 – 356 356 – 356 356 –Sanlam Sky Solutions 786 786 – 778 778 – 760 760 – Channel Life 136 136 – 115 115 – 110 110 – Shriram Life Insurance (3) 190 190 – 151 151 – 151 151 – Other 16 16 – 18 18 – 17 17 –

Less: Value of in-force (13 271) – (13 271) (13 763) – (13 763) (13 578) – (13 578) Shareholders' fund at fair value 33 914 33 914 – 35 003 35 003 – 34 137 34 137 –


Sanlam Group Shareholders’ fund income statementfor the six months ended 30 June 2009

Sanlam Personal Finance

Sanlam Developing Markets Sanlam UK Sanlam

Employee BenefitsShort-term Insurance

SanlamInvestments

SanlamCapital Markets

Subtotal: Operating businesses

R million 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Financial services income 3 184 3 090 1 794 1 504 182 182 1 056 1 006 6 415 5 829 928 1 097 162 97 13 721 12 805 Sales remuneration (532) (508) (462) (419) (28) (23) (19) (18) (969) (837) – – – – (2 010) (1 805) Income after sales remuneration 2 652 2 582 1 332 1 085 154 159 1 037 988 5 446 4 992 928 1 097 162 97 11 711 11 000 Underwriting policy benefits (808) (782) (736) (559) – – (815) (726) (4 503) (3 937) – – – – (6 862) (6 004) Administration costs (952) (905) (454) (400) (141) (113) (130) (145) (699) (652) (558) (676) (101) (97) (3 035) (2 988) Result from financial services before tax 892 895 142 126 13 46 92 117 244 403 370 421 61 – 1 814 2 008 Tax on financial services income (189) (203) (20) (12) (3) (8) (27) (34) (71) (92) (91) (96) (2) 34 ( 403) (411) Result from financial services after tax 703 692 122 114 10 38 65 83 173 311 279 325 59 34 1 411 1 597 Minority shareholders’ interest (12) (14) (37) (36) 3 (1) – – (91) (146) (15) (38) – – (152) (235) Net result from financial services 691 678 85 78 13 37 65 83 82 165 264 287 59 34 1 259 1 362 Net investment income 343 401 34 38 1 11 122 95 54 53 3 19 – – 557 617

Dividends received – Group companies 110 86 – – – – – – – – – – – – 110 86 Other investment income 270 391 66 78 1 12 142 117 85 103 9 29 – – 573 730 Tax on investment income (37) (76) (16) (14) – (1) (20) (22) 15 (4) (2) (4) – – (60) (121) Minority shareholders’ interest – – (16) (26) – – – – (46) (46) (4) (6) – – (66) (78)

Core earnings 1 034 1 079 119 116 14 48 187 178 136 218 267 306 59 34 1 816 1 979 Project expenses (13) (32) (2) – – – – – – (3) – – – – (15) (35) Amortisation of value of business aquired – – (23) (21) (12) (10) – – (2) – – – – – (37) (31) BEE transaction cost – – – – – – – – (3) (3) – – – – (3) (3) Net equity-accounted headline earnings – – – 3 – – – – 10 6 – (19) – – 10 (10)

Equity-accounted headline earnings – – (1) 6 – – – – 17 11 – (16) – – 16 1 Minority shareholders’ interest – – 1 (3) – – – – (7) (5) – (3) – – (6) (11)

Net investment surpluses (44) (998) (48) (37) – – 15 (56) 20 (137) (4) (36) – – (61) (1 264) Investment surpluses – Group companies (63) (945) – – – – – – – – – – – – (63) (945) Other investment surpluses 28 (72) (97) (71) – – 21 (65) 56 (396) (2) (35) – – 6 (639) Tax on investment surpluses (9) 19 30 4 – – (6) 9 (18) 138 1 – – – (2) 170 Minority shareholders’ interest – – 19 30 – – – – (18) 121 (3) (1) – – (2) 150

Secondary tax on companies – after minorities (119) (136) – (14) – – – – (5) (10) – – – – (124) (160) Net loss from discontinued operations – – – – – – – – – (35) – – – – – (35)

Loss from discontinued operations – – – – – – – – – (63) – – – – – (63) Minority shareholders’ interest – – – – – – – – – 28 – – – – – 28

Normalised headline earnings 858 (87) 46 47 2 38 202 122 156 36 263 251 59 34 1 586 441 Other equity-accounted earnings – – – – – 32 – – – – – – – – – 32 Profit on disposal of subsidiaries – – – – – – – – – – – – – – – – Impairment (3) (120) – (1) (43) – (8) – (3) (3) (1) (2) – – (58) (126) Normalised attributable earnings 855 (207) 46 46 (41) 70 194 122 153 33 262 249 59 34 1 528 347 Fund transfers – – – – – – – – – – – – – – – –

Attributable profit per Group statement of comprehensive income 855 (207) 46 46 (41) 70 194 122 153 33 262 249 59 34 1 528 347

RatiosAdmin ratio (1) 35,9% 35,1% 34,1% 36,9% 91,6% 71,1% 12,5% 14,7% 12,8% 13,1% 60,1% 61,6% 62,3% 100,0% 25,9% 27,2%Operating margin (2) 33,6% 34,7% 10,7% 11,6% 8,4% 28,9% 8,9% 11,8% 4,5% 8,1% 39,9% 38,4% 37,7% 0,0% 15,5% 18,3%

Diluted earnings per share

Adjusted weighted average number of shares (million)

Net result from financial services (cents) 33,8 31,8 4,2 3,7 0,6 1,7 3,2 3,9 4,0 7,7 12,9 13,5 2,9 1,6 61,6 63,9Core earnings (cents)

(1) Administration costs as a percentage of income earned by the shareholders’ fund less sales remuneration.(2) Result from financial services before tax as a percentage of income earned by the shareholders’ fund less sales remuneration.(3) Comparative information for Sanlam UK and Sanlam Investments have been restated for the reallocation of Sanlam Multi-Manager International from

Sanlam UK to Sanlam Investments.



Sanlam Developing Markets Sanlam UK Sanlam

Employee BenefitsShort-term Insurance

SanlamInvestments

SanlamCapital Markets

Subtotal: Operating businesses

R million 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Financial services income 3 184 3 090 1 794 1 504 182 182 1 056 1 006 6 415 5 829 928 1 097 162 97 13 721 12 805 Sales remuneration (532) (508) (462) (419) (28) (23) (19) (18) (969) (837) – – – – (2 010) (1 805) Income after sales remuneration 2 652 2 582 1 332 1 085 154 159 1 037 988 5 446 4 992 928 1 097 162 97 11 711 11 000 Underwriting policy benefits (808) (782) (736) (559) – – (815) (726) (4 503) (3 937) – – – – (6 862) (6 004) Administration costs (952) (905) (454) (400) (141) (113) (130) (145) (699) (652) (558) (676) (101) (97) (3 035) (2 988) Result from financial services before tax 892 895 142 126 13 46 92 117 244 403 370 421 61 – 1 814 2 008 Tax on financial services income (189) (203) (20) (12) (3) (8) (27) (34) (71) (92) (91) (96) (2) 34 ( 403) (411) Result from financial services after tax 703 692 122 114 10 38 65 83 173 311 279 325 59 34 1 411 1 597 Minority shareholders’ interest (12) (14) (37) (36) 3 (1) – – (91) (146) (15) (38) – – (152) (235) Net result from financial services 691 678 85 78 13 37 65 83 82 165 264 287 59 34 1 259 1 362 Net investment income 343 401 34 38 1 11 122 95 54 53 3 19 – – 557 617

Dividends received – Group companies 110 86 – – – – – – – – – – – – 110 86 Other investment income 270 391 66 78 1 12 142 117 85 103 9 29 – – 573 730 Tax on investment income (37) (76) (16) (14) – (1) (20) (22) 15 (4) (2) (4) – – (60) (121) Minority shareholders’ interest – – (16) (26) – – – – (46) (46) (4) (6) – – (66) (78)

Core earnings 1 034 1 079 119 116 14 48 187 178 136 218 267 306 59 34 1 816 1 979 Project expenses (13) (32) (2) – – – – – – (3) – – – – (15) (35) Amortisation of value of business aquired – – (23) (21) (12) (10) – – (2) – – – – – (37) (31) BEE transaction cost – – – – – – – – (3) (3) – – – – (3) (3) Net equity-accounted headline earnings – – – 3 – – – – 10 6 – (19) – – 10 (10)

Equity-accounted headline earnings – – (1) 6 – – – – 17 11 – (16) – – 16 1 Minority shareholders’ interest – – 1 (3) – – – – (7) (5) – (3) – – (6) (11)

Net investment surpluses (44) (998) (48) (37) – – 15 (56) 20 (137) (4) (36) – – (61) (1 264) Investment surpluses – Group companies (63) (945) – – – – – – – – – – – – (63) (945) Other investment surpluses 28 (72) (97) (71) – – 21 (65) 56 (396) (2) (35) – – 6 (639) Tax on investment surpluses (9) 19 30 4 – – (6) 9 (18) 138 1 – – – (2) 170 Minority shareholders’ interest – – 19 30 – – – – (18) 121 (3) (1) – – (2) 150

Secondary tax on companies – after minorities (119) (136) – (14) – – – – (5) (10) – – – – (124) (160) Net loss from discontinued operations – – – – – – – – – (35) – – – – – (35)

Loss from discontinued operations – – – – – – – – – (63) – – – – – (63) Minority shareholders’ interest – – – – – – – – – 28 – – – – – 28

Normalised headline earnings 858 (87) 46 47 2 38 202 122 156 36 263 251 59 34 1 586 441 Other equity-accounted earnings – – – – – 32 – – – – – – – – – 32 Profit on disposal of subsidiaries – – – – – – – – – – – – – – – – Impairment (3) (120) – (1) (43) – (8) – (3) (3) (1) (2) – – (58) (126) Normalised attributable earnings 855 (207) 46 46 (41) 70 194 122 153 33 262 249 59 34 1 528 347 Fund transfers – – – – – – – – – – – – – – – –

Attributable profit per Group statement of comprehensive income 855 (207) 46 46 (41) 70 194 122 153 33 262 249 59 34 1 528 347

RatiosAdmin ratio (1) 35,9% 35,1% 34,1% 36,9% 91,6% 71,1% 12,5% 14,7% 12,8% 13,1% 60,1% 61,6% 62,3% 100,0% 25,9% 27,2%Operating margin (2) 33,6% 34,7% 10,7% 11,6% 8,4% 28,9% 8,9% 11,8% 4,5% 8,1% 39,9% 38,4% 37,7% 0,0% 15,5% 18,3%


Adjusted weighted average number of shares (million)

Net result from financial services (cents) 33,8 31,8 4,2 3,7 0,6 1,7 3,2 3,9 4,0 7,7 12,9 13,5 2,9 1,6 61,6 63,9Core earnings (cents)




Sanlam Group Shareholders’ fund income statementfor the six months ended 30 June 2009 continued

Subtotal: Operating Business

Corporate & Other

Consolidation entries

Total Six months Reviewed

Total Full year Audited

R million 2009 2008 2009 2008 2009 2008 2009 2008 2008

Financial services income 13 721 12 805 87 75 – – 13 808 12 880 26 969 Sales remuneration (2 010) (1 805) – – – – (2 010) (1 805) (3 861) Income after sales remuneration 11 711 11 000 87 75 – – 11 798 11 075 23 108 Underwriting policy benefits (6 862) (6 004) – – – – (6 862) (6 004) (12 287) Administration costs (3 035) (2 988) (123) (117) – – (3 158) (3 105) (6 561) Result from financial services before tax 1 814 2 008 (36) (42) – – 1 778 1 966 4 260 Tax on financial services income (403) (411) 11 14 – – (392) (397) ( 966) Result from financial services after tax 1 411 1 597 (25) (28) – – 1 386 1 569 3 294 Minority shareholders’ interest (152) (235) – – – – (152) (235) (492) Net result from financial services 1 259 1 362 (25) (28) – – 1 234 1 334 2 802 Net investment income 557 617 108 48 (110) (86) 555 579 1 068

Dividends received – Group companies 110 86 – – (110) (86) – – – Other investment income 573 730 118 32 – – 691 762 1 432 Tax on investment income (60) (121) (10) 16 – – (70) (105) (221) Minority shareholders’ interest (66) (78) – – – – (66) (78) (143)

Core earnings 1 816 1 979 83 20 (110) (86) 1 789 1 913 3 870 Project expenses (15) (35) – ( 5) – – (15) (40) (56) Amortisation of value of business aquired (37) (31) – – – – (37) (31) (77) BEE transaction cost (3) (3) – – – – (3) (3) (7) Net equity-accounted headline earnings 10 (10) – 6 – – 10 (4) 16

Equity-accounted headline earnings 16 1 – 6 – – 16 7 24 Minority shareholders’ interest (6) (11) – – – – (6) (11) (8)

Net investment surpluses (61) (1 264) 21 (128) 63 945 23 (447) (1 699)Investment surpluses – Group companies (63) (945) – – 63 945 – – –Other investment surpluses 6 (639) 21 (128) – – 27 (767) (2 515) Tax on investment surpluses (2) 170 – – – – (2) 170 625 Minority shareholders’ interest (2) 150 – – – – (2) 150 191

Secondary tax on companies – after minorities (124) (160) (38) 61 – – (162) (99) (59) Net loss from discontinued operations – (35) – – – – – (35) (22)

Loss from discontinued operations – (63) – – – – – (63) (41) Minority shareholders’ interest – 28 – – – – – 28 19

Normalised headline earnings 1 586 441 66 (46) (47) 859 1 605 1 254 1 966 Other equity-accounted earnings – 32 – – – – – 32 33 Profit on disposal of subsidiaries – – – – – – – – 3 Impairment (58) (126) – (9) – – (58) (135) (244) Normalised attributable earnings 1 528 347 66 (55) (47) 859 1 547 1 151 1 758 Fund transfers – – – – 59 701 59 701 736 Attributable profit per Group statement of comprehensive income 1 528 347 66 (55) 12 1 560 1 606 1 852 2 494

RatiosAdmin ratio (1) 25,9% 27,2% 26,8% 28,0% 28,4%Operating margin (2) 15,5% 18,3% 15,1% 17,8% 18,4%


Adjusted weighted average number of shares (million) 2 044,4 2 132,6 2 094,0 Net result from financial services (cents) 61,6 63,9 (1,2) (1,3) – – 60,4 62,6 133,8 Core earnings (cents) 87,5 89,7 184,8




Subtotal: Operating Business

Corporate & Other

Consolidation entries

Total Six months Reviewed

Total Full year Audited

R million 2009 2008 2009 2008 2009 2008 2009 2008 2008

Financial services income 13 721 12 805 87 75 – – 13 808 12 880 26 969 Sales remuneration (2 010) (1 805) – – – – (2 010) (1 805) (3 861) Income after sales remuneration 11 711 11 000 87 75 – – 11 798 11 075 23 108 Underwriting policy benefits (6 862) (6 004) – – – – (6 862) (6 004) (12 287) Administration costs (3 035) (2 988) (123) (117) – – (3 158) (3 105) (6 561) Result from financial services before tax 1 814 2 008 (36) (42) – – 1 778 1 966 4 260 Tax on financial services income (403) (411) 11 14 – – (392) (397) ( 966) Result from financial services after tax 1 411 1 597 (25) (28) – – 1 386 1 569 3 294 Minority shareholders’ interest (152) (235) – – – – (152) (235) (492) Net result from financial services 1 259 1 362 (25) (28) – – 1 234 1 334 2 802 Net investment income 557 617 108 48 (110) (86) 555 579 1 068

Dividends received – Group companies 110 86 – – (110) (86) – – – Other investment income 573 730 118 32 – – 691 762 1 432 Tax on investment income (60) (121) (10) 16 – – (70) (105) (221) Minority shareholders’ interest (66) (78) – – – – (66) (78) (143)

Core earnings 1 816 1 979 83 20 (110) (86) 1 789 1 913 3 870 Project expenses (15) (35) – ( 5) – – (15) (40) (56) Amortisation of value of business aquired (37) (31) – – – – (37) (31) (77) BEE transaction cost (3) (3) – – – – (3) (3) (7) Net equity-accounted headline earnings 10 (10) – 6 – – 10 (4) 16

Equity-accounted headline earnings 16 1 – 6 – – 16 7 24 Minority shareholders’ interest (6) (11) – – – – (6) (11) (8)

Net investment surpluses (61) (1 264) 21 (128) 63 945 23 (447) (1 699)Investment surpluses – Group companies (63) (945) – – 63 945 – – –Other investment surpluses 6 (639) 21 (128) – – 27 (767) (2 515) Tax on investment surpluses (2) 170 – – – – (2) 170 625 Minority shareholders’ interest (2) 150 – – – – (2) 150 191

Secondary tax on companies – after minorities (124) (160) (38) 61 – – (162) (99) (59) Net loss from discontinued operations – (35) – – – – – (35) (22)

Loss from discontinued operations – (63) – – – – – (63) (41) Minority shareholders’ interest – 28 – – – – – 28 19

Normalised headline earnings 1 586 441 66 (46) (47) 859 1 605 1 254 1 966 Other equity-accounted earnings – 32 – – – – – 32 33 Profit on disposal of subsidiaries – – – – – – – – 3 Impairment (58) (126) – (9) – – (58) (135) (244) Normalised attributable earnings 1 528 347 66 (55) (47) 859 1 547 1 151 1 758 Fund transfers – – – – 59 701 59 701 736 Attributable profit per Group statement of comprehensive income 1 528 347 66 (55) 12 1 560 1 606 1 852 2 494

RatiosAdmin ratio (1) 25,9% 27,2% 26,8% 28,0% 28,4%Operating margin (2) 15,5% 18,3% 15,1% 17,8% 18,4%


Adjusted weighted average number of shares (million) 2 044,4 2 132,6 2 094,0 Net result from financial services (cents) 61,6 63,9 (1,2) (1,3) – – 60,4 62,6 133,8 Core earnings (cents) 87,5 89,7 184,8




Notes to the shareholders’ fund informationfor the six months ended 30 June 2009

1. Analysis of new business and total funds receivedAnalysed per business, reflecting the split between life and non-life business

Total Life Insurance (1) Life Licence (2) OtherR million 2009 2008 2009 2008 2009 2008 2009 2008

Sanlam Personal Finance 14 700 15 824 5 433 6 014 – – 9 267 9 810 South Africa 10 214 11 559 5 061 5 820 – – 5 153 5 739

Recurring 487 558 452 505 – – 35 53 Single 8 995 10 164 3 877 4 478 – – 5 118 5 686 Continuations 732 837 732 837 – – – –

Africa 4 486 4 265 372 194 – – 4 114 4 071 Recurring 38 32 38 32 – – – – Single 4 448 4 233 334 162 – – 4 114 4 071

Sanlam Developing Markets 1 316 1 214 1 316 1 214 – – – – South Africa 635 665 635 665 – – – –

Recurring 370 352 370 352 – – – – Single 265 313 265 313 – – – –

Africa 605 449 605 449 – – – – Recurring 195 150 195 150 – – – – Single 410 299 410 299 – – – –

Other international 76 100 76 100 – – – – Recurring 58 37 58 37 – – – – Single 18 63 18 63 – – – –

Sanlam UK 955 807 451 807 – – 504 – Other international 955 807 451 807 – – 504 –

Recurring 5 10 5 10 – – – – Single 950 797 446 797 – – 504 –

Sanlam Employee Benefits 142 270 142 270 – – – – South Africa 142 270 142 270 – – – –

Recurring 76 82 76 82 – – – – Single 66 188 66 188 – – – –

Sanlam Investment 25 408 23 035 – – 991 686 24 417 22 349 Employee benefits 410 207 – – 410 207 – –

Recurring 6 – – – 6 – – – Single 404 207 – – 404 207 – –

Collective investment schemes 10 269 8 839 – – – – 10 269 8 839 Retail funds 5 031 5 603 – – – – 5 031 5 603 Wholesale business 5 238 3 236 – – – – 5 238 3 236

Segregated funds 12 821 12 494 – – – – 12 821 12 494 Wholesale business 9 688 8 478 – – – – 9 688 8 478 Private Investments 3 133 4 016 – – – – 3 133 4 016

Non-South African 1 908 1 495 – – 581 479 1 327 1 016 Short-term insurance 6 179 6 085 – – – – 6 179 6 085New business excluding white label 48 700 47 235 7 342 8 305 991 686 40 367 38 244 White label 2 785 3 750 – – – – 2 785 3 750

Sanlam Collective Investments 2 785 3 750 – – – – 2 785 3 750 Sanlam Developing Markets – – – – – – – –

Total new business 51 485 50 985 7 342 8 305 991 686 43 152 41 994

Recurring premiums on existing funds:Sanlam Personal Finance 4 763 4 525 Sanlam Developing Markets 1 337 1 106 Sanlam UK 300 286 Institutional cluster 1 484 1 462 Total funds received 59 369 58 364

(1) Life insurance business relates to business written under a life licence that is included in the calculation of embedded value of covered business.(2) Life licence business relates to investment products provided by means of a life insurance policy where there is very little or no insurance risk. Life

licence business is excluded from the calculation of embedded value of covered business.


1. Analysis of new business and total funds received (continued)

R million 2009 2008

Analysed per market

RetailLife business 5 696 6 485

Sanlam Personal Finance 5 061 5 820 Sanlam Developing Markets 635 665

Non-life business 13 317 15 358 Sanlam Personal Finance 5 153 5 739 Sanlam Private Investments 3 133 4 016 Sanlam Collective Investments 5 031 5 603

South African 19 013 21 843 Non-South African 6 122 5 621

Sanlam Personal Finance 4 486 4 265 Sanlam Developing Markets 681 549 Sanlam UK 955 807

Total retail 25 135 27 464

InstitutionalGroup life business 552 477

Sanlam Employee Benefits 142 270 Investment Management 410 207

Non-life business 14 926 11 714 Segregated 7 920 6 379 Sanlam Multi-Manager 1 768 2 099 Sanlam Collective Investments 5 238 3 236

South African 15 478 12 191 Investment Management Non-South African 1 908 1 495

Total institutional 17 386 13 686

White label 2 785 3 750 Sanlam Collective Investments 2 785 3 750 Sanlam Developing Markets – –

Short-term insurance 6 179 6 085 Total new business 51 485 50 985


Notes to the shareholders’ fund informationfor the six months ended 30 June 2009 continued

2. Analysis of payments to clients

Total Life Insurance (1) Life Licence (2) OtherR million 2009 2008 2009 2008 2009 2008 2009 2008

Sanlam Personal Finance 16 052 18 128 9 221 9 677 – – 6 831 8 451 South Africa 12 755 13 791 8 804 9 351 – – 3 951 4 440

Surrenders 1 777 1 962 1 777 1 962 – – – – Other 10 978 11 829 7 027 7 389 – – 3 951 4 440

Africa 3 297 4 337 417 326 – – 2 880 4 011 Surrenders 130 62 130 62 – – – – Other 3 167 4 275 287 264 – – 2 880 4 011

Sanlam Developing Markets 2 043 1 647 2 043 1 647 – – – – South Africa 1 664 1 326 1 664 1 326 – – – –

Surrenders 162 202 162 202 – – – – Other 1 502 1 124 1 502 1 124 – – – –

Africa 374 321 374 321 – – – – Surrenders 75 91 75 91 – – – – Other 299 230 299 230 – – – –

Other international 5 – 5 – – – – – Surrenders 5 – 5 – – – – – Other – – – – – – – –

Sanlam UK 1 366 1 002 759 1 002 – – 607 – Other international 1 366 1 002 759 1 002 – – 607 –

Surrenders 1 224 740 617 740 – – 607 – Other 142 262 142 262 – – – –

Sanlam Employee Benefits 1 852 1 993 1 852 1 993 – – – – South Africa 1 852 1 993 1 852 1 993 – – – –

Terminations 134 195 134 195 – – – – Other 1 718 1 798 1 718 1 798 – – – –

Sanlam Investments 22 611 20 236 – – 972 1 411 21 639 18 825 Employee benefits 957 1 164 – – 957 1 164 – –

Terminations 422 687 – – 422 687 – – Other 535 477 – – 535 477 – –

Collective investment schemes 7 587 7 873 – – – – 7 587 7 873 Retail funds 4 265 5 564 – – – – 4 265 5 564 Wholesale business 3 322 2 309 – – – – 3 322 2 309

Segregated funds 12 570 9 286 – – – – 12 570 9 286 Wholesale business 6 866 7 853 – – – – 6 866 7 853 Private Investments 5 704 1 433 – – – – 5 704 1 433

Non-South African 1 497 1 913 – – 15 247 1 482 1 666 Short-term insurance 4 503 4 317 – – – – 4 503 4 317

Payments to clients excluding white label 48 427 47 323 13 875 14 319 972 1 411 33 580 31 593

White label 3 265 5 571 – – – – 3 265 5 571 Sanlam Collective Investments 3 265 5 571 – – – – 3 265 5 571 Sanlam Developing Markets – – – – – – – –

Total payments to clients 51 692 52 894 13 875 14 319 972 1 411 36 845 37 164




3. Analysis of net inflow/(outflow) of funds

Total Life Insurance (1) Life Licence (2) Other R million 2009 2008 2009 2008 2009 2008 2009 2008

Sanlam Personal Finance 3 411 2 221 929 861 – – 2 482 1 360 South Africa 1 989 2 068 741 768 – – 1 248 1 300 Africa 1 422 153 188 93 – – 1 234 60

Sanlam Developing Markets 610 673 610 673 – – – – South Africa (132) 83 (132) 83 – – – – Africa 636 471 636 471 – – – – Other international 106 119 106 119 – – – –

Sanlam UK (111) 91 (8) 91 – – (103) – Sanlam Employee Benefits (499) (517) (499) (517) – – – – Sanlam Investments 3 070 3 055 – – 292 (469) 2 778 3 524 Employee benefits (274) (701) – – (274) (701) – – Collective investment schemes 2 682 966 – – – – 2 682 966

Retail funds 766 39 – – – – 766 39 Wholesale business 1 916 927 – – – – 1 916 927

Segregated funds 251 3 208 – – – – 251 3 208 Wholesale business 2 822 625 – – – – 2 822 625 Private Investments (2 571) 2 583 – – – – (2 571) 2 583

Non-South African 411 (418) – – 566 232 (155) (650) Santam 1 676 1 768 – – – – 1 676 1 768

Net inflow/(outflow) excluding white label 8 157 7 291 1 032 1 108 292 (469) 6 833 6 652

White label (480) (1 821) – – – – (480) (1 821) Sanlam Collective Investments (480) (1 821) – – – – (480) (1 821) Sanlam Developing Markets – – – – – – – –

Total net inflow/(outflow) 7 677 5 470 1 032 1 108 292 (469) 6 353 4 831





3. Analysis of net inflow/(outflow) of funds (continued)

R million 2009 2008

Analysed per market

RetailLife business 609 851

Sanlam Personal Finance 741 768 Sanlam Developing Markets (132) 83

Non-life business (557) 3 922 Sanlam Personal Finance 1 248 1 300 Sanlam Private Investments (2 571) 2 583 Sanlam Collective Investments 766 39

South African 52 4 773 Non-South African 2 053 834

Sanlam Personal Finance 1 422 153 Sanlam Developing Markets 742 590 Sanlam UK (111) 91

Total retail 2 105 5 607 Institutional

Group life business (773) (1 218)Sanlam Employee Benefits (499) (517)Investment Management (274) (701)

Non-life business 4 738 1 552 Segregated 3 032 2 974 Sanlam Multi-Manager (210) (2 349)Sanlam Collective Investments 1 916 927

South African 3 965 334 Investment Management Non-South African 411 (418)

Total institutional 4 376 (84)White label (480) (1 821)

Sanlam Collective Investments (480) (1 821)Sanlam Developing Markets – –

Short-term insurance 1 676 1 768 Total net inflow 7 677 5 470


4. Normalised diluted earnings per shareIn terms of IFRS, the policyholders’ fund’s investments in Sanlam shares and Group subsidiaries are not reflected as equity

investments in the Sanlam balance sheet, 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

diluted earnings per share to eliminate the impact of investments in Sanlam shares and Group subsidiaries held by the

policyholders’ fund.

Six months Reviewed

Full yearAudited

2009cents

2008cents

2008cents

Normalised diluted earnings per share:Net result from financial services 60,4 62,6 133,8 Core earnings 87,5 89,7 184,8 Headline earnings 78,5 58,8 93,9 Profit attributable to shareholders’ fund 75,7 54,0 84,0

R million R million R million

Analysis of normalised earnings (refer shareholders’ fund income statement on page 34):

Net result from financial services 1 234 1 334 2 802 Core earnings 1 789 1 913 3 870 Headline earnings 1 605 1 254 1 966 Profit attributable to shareholders’ fund 1 547 1 151 1 758 Reconciliation of normalised headline earnings:Headline earnings per note 1 on page 60 1 664 1 955 2 702 Less: Fund transfers (59) (701) (736) Normalised headline earnings 1 605 1 254 1 966

million million million

Adjusted number of shares:

Weighted average number of shares for diluted earnings per share (refer to note 1 on page 60)

2 015,1 2 068,1 2 043,5

Add: Weighted average Sanlam shares held by policyholders 29,3 64,5 50,5

Adjusted weighted average number of shares for normalised diluted earnings per share 2 044,4 2 132,6 2 094,0



5. Fair value of other Group operationsThe shareholders’ fund at fair value includes the value of the Sanlam businesses based on directors’ valuation, apart from

Santam, which is valued according to ruling share prices.

Valuation methodologyThe fair value of the unlisted Sanlam businesses has been determined by the application of the following valuation

methodologies:

Fair value of Sanlam business

Valuation method

June Reviewed

DecemberAudited

R million 2009 2008 2008

Ratio of price to assets under management 5 580 5 839 5 958 SIM Wholesale 3 603 3 778 3 903 SIM International 1 314 1 682 1 358 Sanlam Collective Investments 327 309 320 Principal 253 – 299 Sanlam Namibia Holdings 83 70 78

Discounted cash flows 1 911 1 765 1 964 Glacier 695 584 696 Sanlam Personal Loans 73 73 71 Multi-Data 172 172 190 Sanlam Trust 149 111 144 Sanlam Home Loans 120 61 133 Punter Southall Group 236 318 219 Other 466 446 511

Net asset value 735 1 321 590 Principal – 584 – Buckles – 78 – MiWay 110 110 110 Shriram General Insurance 115 115 115 Sanlam Capital Markets 510 434 365

Fair value of unlisted businesses 8 226 8 925 8 512

The main assumptions applied in the primary valuation for the unlisted businesses are presented below.

The sensitivity analysis is based on the following changes in assumptions:

Assumption Change in assumption

Ratio of price to assets under management (P/AuM) 0,1%Risk discount rate (RDR) 1,0%Perpetuity growth rate (PGR) 1,0%

Fair value of Sanlam business

R million

Weighted average assumption

Basevalue

Decrease inassumption

Increase inassumption

Ratio of price to assets under management

P/AuM = 1,46% (Dec 2008: 1,44%) 5 580 5 096 6 064

Discounted cash flows RDR = 18,3% (Dec 2008: 17,9%) 1 911 2 032 1 809 PGR = 2,5% – 5% (Dec 2008: 2,5% – 5%) 1 911 1 869 1 959


6. Value per share

June Reviewed DecemberAudited

2009million

2008million

2008million

Number of shares for value per share:Number of ordinary shares in issue at beginning of the period 2 190,1 2 303,6 2 303,6Shares cancelled (30,1) (63,5) (113,5)Number of ordinary shares in issue 2 160,0 2 240,1 2 190,1Shares held by subsidiaries in shareholders’ fund (159,8) (218,5) (197,3)

Outstanding shares and share options in respect of Sanlam Limited long-term incentive schemes

37,6 43,2 45,5

Number of shares under option that would have been issued at fair value (10,5) (14,4) (12,7)Convertible deferred shares held by Ubuntu-Botho 20,9 13,9 18,6Adjusted number of shares for value per share 2 048,2 2 064,3 2 044,2

7. Share repurchasesThe Sanlam shareholders granted general authorities to the Group at the 2009 and 2008 annual general meetings to repurchase

Sanlam shares in the market. The Group did not acquire any shares during 2009 in terms of the general authorities.


June Reviewed DecemberAudited

R million Note 2009 2008 2008

Sanlam Personal Finance 18 939 19 974 19 574 Adjusted net worth 8 032 8 300 8 275 Net value of in-force covered business 10 907 11 674 11 299

Value of in-force covered business 12 649 13 309 12 809 Cost of capital (1 613) (1 528) (1 378)Minority shareholders’ interest (129) (107) (132)

Sanlam Developing Markets 3 040 2 281 2 796 Adjusted net worth 1 215 925 1 032 Net value of in-force covered business 1 825 1 356 1 764

Value of in-force covered business 2 428 1 956 2 432 Cost of capital (273) (280) (284)Minority shareholders’ interest (330) (320) (384)

Sanlam UK 685 1 030 680 Adjusted net worth 238 510 234 Net value of in-force covered business 447 520 446

Value of in-force covered business 479 560 481 Cost of capital (32) (40) (35)Minority shareholders’ interest – – –

Sanlam Employee Benefits 5 109 5 333 5 541 Adjusted net worth 5 017 5 120 5 472 Net value of in-force covered business 92 213 69

Value of in-force covered business 1 014 1 075 824 Cost of capital (922) (862) (755)Minority shareholders’ interest – – –

Embedded value of covered business 27 773 28 618 28 591

Adjusted net worth (1) 14 502 14 855 15 013 Net value of in-force covered business 1 13 271 13 763 13 578 Embedded value of covered business 27 773 28 618 28 591

(1) Excludes subordinated debt funding of Sanlam Life.

Sanlam Group Embedded value of covered businessat 30 June 2009


Sanlam Group Change in embedded value of covered businessfor the six months ended 30 June 2009

Six months Reviewed

Six months Reviewed

Full yearAudited

2009 2008 2008

R million Note TotalValue ofin-force

Cost of capital

Adjustednet worth Total

Value ofin-force

Cost of capital


Embedded value of covered business at beginning of the period

28 591

15 939

(2 361)

15 013

28 432

16 316

(2 594)

14 710

28 432

Value of new business 2 243 882 (37) (602) 250 777 (36) (491) 612Net earnings from existing covered business 1 145 (307) 83 1 369 1 200 (188) 112 1 276 1 885

Expected return on value of in-force business 839 771 68 – 886 857 29 – 1 838

Expected transfer of profit to adjusted net worth – (1 155) – 1 155 – (1 070) – 1 070 –Operating experience variances 3 289 102 (1) 188 250 71 6 173 278Operating assumption changes 4 17 (25) 16 26 64 (46) 77 33 (231)

Expected investment return on adjusted net worth 546 – – 546 588 – – 588 1 180

Embedded value earnings from operations 1 934 575 46 1 313 2 038 589 76 1 373 3 677Economic assumption changes 5 (1 020) (526) (487) (7) (705) (532) (157) (16) 356Tax changes – change in corporate tax rates – – – – 196 191 5 – 215Investment variances – value of in-force 176 88 41 47 (234) (288) 54 – (1 435)

Investment variances – investment return on adjusted net worth (209) – – (209) (368) – – (368) (1 864)

Exchange rate movements (96) (95) 7 (8) 103 113 (10) – 23Net project expenses 6 (15) – – (15) (32) – – (32) (53)

Embedded value earnings from covered business 770 42 (393) 1 121 998 73 (32) 957 919Acquired value of in-force 228 72 (28) 184 – – – – –Change in utilisation of capital diversification (292) – – (292) (175) – – (175) 197Transfers from covered business (1 524) – – (1 524) (637) – – (637) (957)

Embedded value of covered business at end of the period 27 773 16 053 (2 782) 14 502 28 618 16 389 (2 626) 14 855 28 591

Analysis of earnings from covered businessSanlam Personal Finance 446 (157) (235) 838 490 (158) 28 620 453Sanlam Developing Markets 86 11 6 69 180 63 (7) 124 659Sanlam UK 4 (2) 3 3 139 54 (8) 93 (36)Sanlam Employee Benefits 234 190 (167) 211 189 114 (45) 120 (157)

Embedded value earnings from covered business 770 42 (393) 1 121 998 73 (32) 957 919

(1) June 2008 comparative information has been restated to allocate the change in minority shareholders’ interest to the individual line items. All line items are accordingly presented net of minority shareholders’ interest.


Six months Reviewed

Six months Reviewed

Full yearAudited

2009 2008 2008

R million Note TotalValue ofin-force

Cost of capital


Value ofin-force

Cost of capital


Embedded value of covered business at beginning of the period

28 591

15 939

(2 361)

15 013

28 432

16 316

(2 594)

14 710

28 432

Value of new business 2 243 882 (37) (602) 250 777 (36) (491) 612Net earnings from existing covered business 1 145 (307) 83 1 369 1 200 (188) 112 1 276 1 885

Expected return on value of in-force business 839 771 68 – 886 857 29 – 1 838

Expected transfer of profit to adjusted net worth – (1 155) – 1 155 – (1 070) – 1 070 –Operating experience variances 3 289 102 (1) 188 250 71 6 173 278Operating assumption changes 4 17 (25) 16 26 64 (46) 77 33 (231)

Expected investment return on adjusted net worth 546 – – 546 588 – – 588 1 180

Embedded value earnings from operations 1 934 575 46 1 313 2 038 589 76 1 373 3 677Economic assumption changes 5 (1 020) (526) (487) (7) (705) (532) (157) (16) 356Tax changes – change in corporate tax rates – – – – 196 191 5 – 215Investment variances – value of in-force 176 88 41 47 (234) (288) 54 – (1 435)

Investment variances – investment return on adjusted net worth (209) – – (209) (368) – – (368) (1 864)

Exchange rate movements (96) (95) 7 (8) 103 113 (10) – 23Net project expenses 6 (15) – – (15) (32) – – (32) (53)

Embedded value earnings from covered business 770 42 (393) 1 121 998 73 (32) 957 919Acquired value of in-force 228 72 (28) 184 – – – – –Change in utilisation of capital diversification (292) – – (292) (175) – – (175) 197Transfers from covered business (1 524) – – (1 524) (637) – – (637) (957)

Embedded value of covered business at end of the period 27 773 16 053 (2 782) 14 502 28 618 16 389 (2 626) 14 855 28 591

Analysis of earnings from covered businessSanlam Personal Finance 446 (157) (235) 838 490 (158) 28 620 453Sanlam Developing Markets 86 11 6 69 180 63 (7) 124 659Sanlam UK 4 (2) 3 3 139 54 (8) 93 (36)Sanlam Employee Benefits 234 190 (167) 211 189 114 (45) 120 (157)

Embedded value earnings from covered business 770 42 (393) 1 121 998 73 (32) 957 919

(1) June 2008 comparative information has been restated to allocate the change in minority shareholders’ interest to the individual line items. All line items are accordingly presented net of minority shareholders’ interest.


Sanlam GroupValue of new businessfor the six months ended 30 June 2009

Six months Reviewed

Full yearAudited

R million Note 2009 2008 2008

Value of new business (at point of sale):

Gross value of new business 321 332 787Sanlam Personal Finance 154 178 419Sanlam Developing Markets 156 128 343Sanlam UK 1 6 6Sanlam Employee Benefits 10 20 19

Cost of capital (45) (42) (89)Sanlam Personal Finance (19) (18) (33)Sanlam Developing Markets (20) (15) (41)Sanlam UK (1) (3) (5)Sanlam Employee Benefits (5) (6) (10)

Value of new business 276 290 698Sanlam Personal Finance 135 160 386Sanlam Developing Markets 136 113 302Sanlam UK – 3 1Sanlam Employee Benefits 5 14 9

Value of new business attributable to:Shareholders’ fund 2 243 250 612

Sanlam Personal Finance 133 157 377Sanlam Developing Markets 105 76 225Sanlam UK – 3 1Sanlam Employee Benefits 5 14 9

Minority shareholders’ interest 33 40 86Sanlam Personal Finance 2 3 9Sanlam Developing Markets 31 37 77Sanlam UK – – – Sanlam Employee Benefits – – –

Value of new business 276 290 698

Geographical analysis:South Africa 196 198 507Africa 77 85 181Other international 3 7 10

Value of new business 276 290 698


Six months Reviewed

Full yearAudited

R million 2009 2008 2008

Analysis of new business profitability:

Before minorities:Present value of new business premiums 11 469 12 141 26 033

Sanlam Personal Finance 7 488 8 089 17 371Sanlam Developing Markets 2 814 2 330 5 332Sanlam UK 463 836 1 484Sanlam Employee Benefits 704 886 1 846

New business margin 2,41% 2,39% 2,68%Sanlam Personal Finance 1,80% 1,98% 2,22%Sanlam Developing Markets 4,83% 4,85% 5,66%Sanlam UK 0,00% 0,36% 0,07%Sanlam Employee Benefits 0,71% 1,58% 0,49%

After minorities:Present value of new business premiums 10 906 11 501 24 459

Sanlam Personal Finance 7 395 8 020 17 080Sanlam Developing Markets 2 344 1 759 4 049Sanlam UK 463 836 1 484Sanlam Employee Benefits 704 886 1 846

New business margin 2,23% 2,17% 2,50%Sanlam Personal Finance 1,80% 1,96% 2,21%Sanlam Developing Markets 4,48% 4,32% 5,56%Sanlam UK 0,00% 0,36% 0,07%Sanlam Employee Benefits 0,71% 1,58% 0,49%


1. Value of in-force sensitivity analysis

Gross valueof in-force

businessCost ofcapital

Net valueof in-force

businessChange from

base value

R million R million R million %

Base value 16 053 (2 782) 13 271

• Risk discount rate increase by 1% 15 108 (3 382) 11 726 (12)

2. Value of new business sensitivity analysis

Gross valueof new

businessCost ofcapital

Value ofnew business

Change frombase value

R million R million R million %

Base value 280 (37) 243

• Risk discount rate increase by 1% 241 (43) 198 (19)

3. Operating experience variances

Six months ReviewedFull yearAudited

R million 2009 2008 2008

Risk experience 167 90 307Investment guarantee reserve 64 24 (117)Working capital and other 58 136 88Total operating experience variances 289 250 278

4. Operating assumption changes


R million 2009 2008 2008

Mortality and morbidity 34 (13) (196)Persistency (6) (34) (31)Modelling improvements and other (11) 111 (4)Total operating assumption changes 17 64 (231)

5. Economic assumption changes


R million 2009 2008 2008

Investment yields and risk premiums (707) (710) 363Long-term asset mix assumptions (313) 5 (7)Total economic assumption changes (1 020) (705) 356

6. Net project expensesNet project expenses relate to once-off expenditure on the Group’s distribution platform that has not been allowed for in the

embedded value assumptions.

Notes to the embedded value of covered businessfor the six months ended 30 June 2009


7. Economic assumptions

June Reviewed

DecemberAudited

% 2009 2008 2008

Gross investment return, risk discount rate and inflation

Sanlam lifePoint used on the relevant yield curve 9 year 9 year 9 yearFixed-interest securities 9,2 10,7 7,3Equities and offshore investments 12,7 14,2 10,8Hedged equities 9,7 11,2 7,8Property 10,2 11,7 8,3Cash 8,2 9,7 6,3Return on required capital 10,0 12,2 8,8Inflation rate 6,2 7,7 4,3Risk discount rate 11,7 13,2 9,8

SDM LimitedPoint used on the relevant yield curve 6 year 6 year 6 year Fixed-interest securities 8,7 11,0 7,3Equities and offshore investments 12,2 14,5 10,8Hedged equities n/a n/a n/aProperty 9,7 12,0 8,3Cash 7,7 10,0 6,3Return on required capital 10,0 12,3 8,6Inflation rate 5,7 8,0 4,3Risk discount rate 11,2 13,5 9,8

Merchant investorsPoint used on the relevant yield curve 15 year 15 year 15 year Fixed-interest securities 4,1 5,2 3,7Equities and offshore investments 7,3 8,4 7,0Hedged equities 7,3 8,4 7,0Property 7,3 8,4 7,0Cash 4,1 5,2 3,7Return on required capital 4,1 5,2 3,7Inflation rate 3,3 4,5 2,9Risk discount rate 7,8 8,9 7,5

Botswana Life InsuranceFixed-interest securities 10,5 10,5 10,5Equities and offshore investments 14,0 14,0 14,0Hedged equities n/a n/a n/aProperty 11,5 11,5 11,5Cash 9,5 9,5 9,5Return on required capital 10,6 10,6 10,6Inflation rate 7,5 7,5 7,5Risk discount rate 14,0 14,0 14,0


Notes to the embedded value of covered businessfor the six months ended 30 June 2009 continued

7. Economic assumptions (continued)

June Reviewed

DecemberAudited

% 2009 2008 2008

Asset mix for assets supporting required capital

Sanlam lifeEquities 34 44 44Hedged equities 13 13 13Property 3 3 3Fixed-interest securities 15 25 25Cash 35 15 15

100 100 100

SDM LimitedEquities 50 50 50Hedged equities – – – Property – – – Fixed-interest securities – – – Cash 50 50 50

100 100 100

Merchant investorsEquities – – – Hedged equities – – – Property – – – Fixed-interest securities – – – Cash 100 100 100

100 100 100

Botswana Life InsuranceEquities 15 15 15Hedged equities – – –Property 10 10 10Fixed-interest securities 25 25 25Cash 50 50 50

100 100 100


Contents

Statement of financial position 56

Statement of comprehensive income 57

Statement of changes in equity 58

Cash flow statement 59

Notes to the financial statements 60

Group Financial Statementsfor the six months ended 30 June 2009


Statement of financial positionat 30 June 2009

R millionReviewed

June 2009December

Audited 2008

AssetsProperty and equipment 376 382 Owner-occupied properties 651 652 Goodwill 2 668 2 623 Other intangible assets 50 – Value of business acquired 1 205 1 309 Deferred acquisition costs 2 047 1 970 Long-term reinsurance assets 493 506 Investments 262 316 268 530

Properties 15 490 15 981 Equity-accounted investments 1 314 1 317 Equities and similar securities 119 926 120 284 Public sector stocks and loans 46 460 50 531 Debentures, insurance policies, preference shares and other loans 34 763 35 309 Cash, deposits and similar securities 44 363 45 108

Deferred tax 572 712 Short-term insurance technical assets 2 665 2 250 Working capital assets 34 981 38 974

Trade and other receivables 26 396 28 908 Cash, deposits and similar securities 8 585 10 066

Total assets 308 024 317 908

Equity and liabilitiesCapital and reserves

Share capital and premium 23 23 Treasury shares (3 359) (4 142) Other reserves 9 100 9 312 Retained earnings 21 299 22 458

Shareholders’ fund 27 063 27 651 Minority shareholders’ interest 2 370 2 596

Total equity 29 433 30 247 Long-term policy liabilities 225 111 229 268

Insurance contracts 116 101 120 879 Investment contracts 109 010 108 389

Term finance 6 471 6 763 Margin business 2 882 2 830 Other interest-bearing liabilities 3 589 3 933

External investors in consolidated funds 9 273 9 822 Cell owners’ interest 475 447 Deferred tax 303 440 Short-term insurance technical provisions 8 700 8 229 Working capital liabilities 28 258 32 692

Trade and other payables 25 428 29 325 Provisions 1 541 1 453 Taxation 1 289 1 914

Total equity and liabilities 308 024 317 908


R million NoteReviewed

2009Reviewed

2008

Net income 15 854 6 572 Financial services income 15 034 13 816 Reinsurance premiums paid (1 765) (1 624) Reinsurance commission received 147 195 Investment income 8 863 8 250 Investment surpluses (6 519) (14 212) Finance cost – margin business (114) (126) Change in fair value of external investors’ liability 208 273

Net insurance and investment contract benefits and claims (7 513) 1 446Long-term insurance and investment contract benefits (3 219) 5 205 Short-term insurance claims (5 776) (5 107) Reinsurance claims received 1 482 1 348

Expenses (5 383) (5 173) Sales remuneration (2 127) (1 987) Administration costs (3 256) (3 186)

Impairments (62) (135) Amortisation of value of business acquired (37) (31) Net operating result 2 859 2 679 Equity-accounted earnings (5) 63 Finance cost – other (164) (160) Profit before tax 2 690 2 582 Taxation (853) (528)

Shareholders’ fund (613) (419) Policyholders’ fund (240) (109)

Profit from continuing operations 1 837 2 054 Discontinued operations – (63) Profit for the period 1 837 1 991 Other comprehensive income

Movement in foreign currency translation reserve (383) 587Comprehensive income for the period 1 454 2 578

Allocation of comprehensive incomeProfit for the period 1 837 1 991Shareholders’ fund 1 606 1 852 Minority shareholders’ interest 231 139 Comprehensive income for the period 1 454 2 578Shareholders’ fund 1 303 2 313 Minority shareholders’ interest 151 265

Earnings attributable to shareholders of the company (cents)Profit for the year

Basic earnings per share 1 81,6 91,4Diluted earnings per share 1 79,7 89,5

Earnings attributable to shareholders of the company from continuing operations (cents):

Profit for the yearBasic earnings per share 1 81,6 93,1 Diluted earnings per share 1 79,7 91,2

Statement of comprehensive incomefor the six months ended 30 June 2009


R millionReviewed

2009Reviewed

2008

Shareholders’ fundBalance at beginning of the period 27 651 29 334 Comprehensive income 1 303 2 313

Profit for the period 1 606 1 852 Other comprehensive income: movement in foreign currency translation reserve (303) 461

Net movement in treasury shares 633 ( 684) Net realised investment surpluses on treasury shares (146) (159) Cost of net treasury shares disposed/(acquired) (1) 779 (525)

Share-based payments 45 49 Dividends paid (2) (1 954) (1 907) Shares cancelled (615) (1 439) Balance at end of the period 27 063 27 666

Minority shareholders’ interestBalance at beginning of the period 2 596 2 220 Comprehensive income 151 265

Profit for the period 231 139 Other comprehensive income: movement in foreign currency translation reserve (80) 126

Net movement in treasury shares 9 69 Net realised investment surpluses on treasury shares (13) 47 Cost of net treasury shares disposed (1) 22 22

Share-based payments 9 7 Dividends paid (279) (245) Acquisitions, disposals and other movements in minority interests (116) 168 Balance at end of the period 2 370 2 484

Shareholders’ fund 27 651 29 334 Minority shareholders’ interest 2 596 2 220 Total equity at beginning of the period 30 247 31 554

Shareholders’ fund 27 063 27 666 Minority shareholders’ interest 2 370 2 484 Total equity at end of the period 29 433 30 150

(1) Comprises movement in cost of shares held by subsidiaries and the share incentive trust.(2) Dividend of 98 cents per share paid during 2009 (2008: 93 cents per share) in respect of the 2008 financial year.

Statement of changes in equityfor the six months ended 30 June 2009


Cash flow statementfor the six months ended 30 June 2009

R millionReviewed

2009Reviewed

2008

Cash flow from operating activities 357 5 746 Cash flow from investment activities (2 411) 4 679 Cash flow from financing activities (147) (1 881)

Net (decrease)/increase in cash and cash equivalents (2 201) 8 544 Cash, deposits and similar securities at beginning of the period 55 145 51 309

Cash, deposits and similar securities at end of the period 52 944 59 853 Non-current assets classified as held for sale – (915)

Cash, deposits and similar securities at end of the period – continuing operations 52 944 58 938

Cash flows relating to discontinued operationsIncluded in the above are the following cash flows from discontinued operations:Cash flow from operating activities – (215) Cash flow from investment activities – 318 Cash flow from financing activities – – Net increase in cash and cash equivalents – 103

Cash, deposits and similar securities at beginning of the period – discontinued operations

– 812

Cash, deposits and similar securities at end of the period – discontinued operations – 915


1. Earnings per share

For basic earnings per share the weighted average number of ordinary shares is adjusted for the treasury shares held by

subsidiaries. Basic earnings per share is calculated by dividing earnings by the adjusted weighted average number of shares

in issue. For diluted earnings per share the weighted average number of ordinary shares is adjusted for the shares not yet

issued under the Sanlam Share Incentive Scheme, treasury shares held by subsidiaries and the conversion of deferred

shares. Diluted earnings per share is calculated by dividing earnings by the adjusted diluted weighted average number of

shares in issue. Refer to page 43 for normalised earnings per share, which is based on the economic earnings attributable to

the shareholders’ fund, and should be used when evaluating the Group’s economic performance.

Reviewed 2009

Reviewed 2008

cents cents

Basic earnings per share:Headline earnings 84,6 96,5 Profit attributable to shareholders’ fund 81,6 91,4 Diluted earnings per share:Headline earnings 82,6 94,5 Profit attributable to shareholders’ fund 79,7 89,5 Basic earnings per share for continuing operations:Profit attributable to shareholders’ fund 81,6 93,1 Diluted earnings per share for continuing operations:Profit attributable to shareholders’ fund 79,7 91,2

R million R millionAnalysis of earnings:Profit attributable to shareholders’ fund 1 606 1 852 Less: Equity-accounted non-headline earnings – (32) Plus: Impairments 58 135 Impairments 60 135 Minority shareholders’ interest (2) –

Headline earnings 1 664 1 955

Headline earnings include re-measurements of investment properties, which are largely attributable to policyholder funds.

Analysis of earnings from continuing operations:Profit attributable to shareholders’ fund 1 606 1 852 Discontinued operations – 35

Loss from discontinued operations – 74 Tax on loss from discontinued operations – (11) Minority shareholders’ interest – (28)

Profit attributable to shareholders’ fund from continuing operations 1 606 1 887

million millionNumber of shares:Number of ordinary shares in issue at beginning of period 2 190,1 2 303,6 Less: Weighted number of shares cancelled (20,1) (31,8) Less: Weighted Sanlam shares held by subsidiaries (including policyholders) (202,0) (245,6)Adjusted weighted average number of shares for basic earnings per share 1 968,0 2 026,2 Add: Weighted conversion of deferred shares 20,0 13,1 Add: Total number of shares and options 37,6 43,2 Less: Number of shares (under option) that would have been issued at fair value (10,5) (14,4)Adjusted weighted average number of shares for diluted earnings per share 2 015,1 2 068,1

Notes to the financial statements for the six months ended 30 June 2009


2. Reconciliation of segmental information

R millionReviewed

2009Reviewed

2008

Segment financial services income (per shareholders’ fund information) 13 808 12 880 Sanlam Personal Finance 3 184 3 090 Sanlam Developing Markets 1 794 1 504 Sanlam UK 182 182 Sanlam Employee Benefits 1 056 1 006 Short-term Insurance 6 415 5 829 Sanlam Investments 928 1 097 Sanlam Capital Markets 162 97 Corporate, consolidation and other 87 75

IFRS adjustments 1 226 936 Total financial services income 15 034 13 816

Segment result (per shareholders’ fund information after tax and minorities) 1 547 1 151 Sanlam Personal Finance 855 (207) Sanlam Developing Markets 46 46 Sanlam UK (41) 70 Sanlam Employee Benefits 194 122 Short-term Insurance 153 33 Sanlam Investments 262 249 Sanlam Capital Markets 59 34 Corporate, consolidation and other 19 804

Reverse minority shareholders’ interest included in segment result 231 139 Fund transfers 59 701 Total profit for the period 1 837 1 991

Additional segmental information is provided in the Shareholders’ fund information (refer pages 30 to 37).

3. Pension and Retirement Fund Investigation

Shareholders are referred to the ongoing investigations by the Financial Services Board (FSB) and the National Prosecuting

Authorities into alleged fraud within a number of pension and retirement funds. The events in question took place in the mid

to late 1990’s. Sanlam acted as administrator for three of these funds at the time and has been supporting the authorities

since their investigation started in 2004.

Sanlam in 2006 made a payment in good faith to the funds, representing the benefit, plus interest, that Sanlam indirectly

received through the sale of a company that previously formed part of the Sanlam group, which was the controlling

shareholder of the participating employers of three of the funds.

The curator of the funds subsequently issued civil claims against a number of parties, including Sanlam, for the alleged

losses suffered by the funds. Sanlam and the curator of the funds are involved in litigation in respect of the merits of his

claims against Sanlam. Sanlam was not involved in fraudulent or illegal activities relating to these cases.

We are confident that, inter alia through the involvement of the FSB, an amicable resolution to this matter will be reached in

due course.

4. Contingent Liabilities

Shareholders are referred to the contingent liabilities disclosed in the 2008 annual report. The circumstances surrounding

these contingent liabilities remained materially unchanged.

5. Subsequent Events

No material facts or circumstances have arisen between the dates of the balance sheet and this report that affect the

financial position of the Sanlam Group at 30 June 2009 as reflected in these financial statements.


Group secretary

Johan Bester

Registered office

2 Strand Road, Bellville 7530, South Africa

Telephone +27 21 947-9111

Fax +27 21 947-3670

Postal address

PO Box 1, Sanlamhof 7532, South Africa

Registered name: Sanlam Limited

(Registration number 1959/001562/06)

JSE share code: SLM

NSX share code: SLA

ISIN number: ZAE000070660

Incorporated in South Africa

Transfer secretaries

Computershare Investor Services (Proprietary) Limited

(Registration number 2004/003647/07)

70 Marshall Street, Johannesburg 2001,

South Africa

PO Box 61051, Marshalltown 2107, South Africa

Tel +27 (0)11 373-0000

Fax +27 (0)11 688-5200

www.sanlam.co.za

Directors

RC Andersen (Chairman), PT Motsepe (Deputy Chairman), J van Zyl (1) (Group Chief Executive), MMM Bakane-Tuoane,

AD Botha, AS du Plessis, FA du Plessis, MV Moosa, JP Möller (1), SA Nkosi, I Plenderleith (2), GE Rudman, RV Simelane,

DK Smith, ZB Swanepoel, PL Zim

(1) Executive(2) British

Administration

Cluster Reviews 1SANLAM INTERIM RESULTS 2009

RETAIL CLUSTER


Who we are

We provide clients in the middle, affluent and self-

employed markets in South Africa and Namibia with a

comprehensive range of appropriate and competitive

financial services solutions designed to facilitate their

long-term wealth creation, protection and niche financing

needs.

Engineering these solutions around client needs and

delivering the solutions through credible financial advice

enables us to grow SPF on a sustainable basis, thereby

maximising shareholder value while building long-term

relationships with our clients.

We achieve this through our people – we foster a culture of

passion for our clients and place great emphasis on

diversity and innovation. At SPF we strive to be an

employer of choice.

SPF provides the following financial services and advice to

clients in the middle, affluent, and self-employed and

professional markets:

Client protection

– Life insurance, short-term insurance and medical

cover

Providing for retirement

Providing for non-retirement savings needs

– Endowments, savings accounts and fixed deposits

Protecting and growing wealth

– Linked investment solutions

Managing assets in retirement

– Flexible investment-linked annuities

– Guaranteed annuities

Ensuring transfer of wealth between generations

– Estate and trust services

Transactional requirements

– Debit card

Financing and credit needs

– Home solutions

– Personal loans

Our competitive advantage is our established client centric

strategy, which is driven by focused market segmentation

and diversification of our financial services solutions, as

well as our extensive distribution footprint.


4 Cluster Reviews SANLAM INTERIM RESULTS 2009


R million 1H09 %∆

Net operating profit 691 2

New business flows

– SA recurring 487 (13)

– SA single 9 727 (12)

– Non-SA 4 486 5

PVNB premiums* 7 488 (7)

VNB* 135 (16)

Margin* 1,80% vs 1,98%


* Excludes non-life business

Group Profile and Shareholding Structure

South African operations %

Middle market and self-employed focus

Sanlam Individual Life division 100 Life insurance

Sanlam Home Loans 50 Home loan joint venture with Absa

Multi Data 100 Electronic money transfer

Sanlam Trust 100 Estate and trust services

Sanlam Liquid(1) 100 Debit card and savings facility

Anglo African Finance 65 Niche trade and bridge finance

Sanlam Health Management 100 Medical scheme services

Sanlam Linked Investments 100 Linked product provider

Affluent market focus

Glacier(2) 100 Financial services for affluent market

(1) Previously a joint venture with Sanlam Collective Investments. From 2009 it is wholly-owned.(2) Glacier will also source solutions from the middle market and self-employed operations above.

Non-South African operations %

Sanlam Namibia Holdings (SNH) 54 Financial services in Namibia

Sanlam Life Namibia 100 Closed fund business in Namibia

Sanlam Personal Finance continued



Analysis of Operating Profit (per Profit Source)

June 2009 R million

June 2008 R million

Admin income 131 147

Risk income 248 194

Market Related income 514 554

Net interest income (working capital & loan business) 216 238

Other 298 316

Operating profit before tax & minorities 892 895

Tax & minorities (201) (217)

Operating profit after tax & minorities 691 678

Admin Ratio 35,9% 35,1%

Analysis of Operating Profit (per Business Unit)

June 2009 R million

June 2008 R million

SA Life 736 736

SA Non-life 107 106

Glacier 60 61

Other 47 45

Non-SA 49 53

Operating profit before tax & minorities 892 895



Administration Costs (Rm)

Second HalfFirst Half

500

600

700

800

900

1 000

1 100

2002 2003 2004 2005 2006 2007 2008 2009*

961

906

846

882

937

1023

1062

787818

757779

808

859

905 897

* Excludes the costs associated with new ventures of R55m (Sanlam Healthcare Management and Sanlam Home Solutions)

Administration Cost Ratio (%)

30%

35%

40%

45%

50%

44,1

42,1

38,4 38,136,8

35,6 35,334,6

2002 2003 2004 2005 2006 2007 1H2009*2008

*Admin ratio excludes new ventures (Sanlam Healthcare Management and Sanlam Home Solutions)


Persistency: Number of Lapses, Surrenders & Fully Paid-Up Policies as % of In Force


0,0

1,0

2,0

3,0

4,0

5,0

4,24,0

3,8 3,7 3,6

4,2

4,8

3,9 3,93,6

3,4

3,8 3,9

2003 2004 2005 2006 2007 2008 2009


SA Surrender Benefits Paid (Rm)


500

1 400

1 600

1 800

2 000

2 200

2 400

2 6002 419

1 374

1 823

1 668

2 104

1 963

2 213

2 378

1 707

1 367

1 535

1 678

1 790

1 962

1 777

1 200

1 000

2002 2003 2004 2005 2006 2007 20092008

Total Benefits Paid (SA)

June 2009 R million

June 2008 R million

Total life benefits 8 804 9 351

Death & disability benefits 1 015 985

Maturity benefits 4 166 4 757

Life & term annuities 1 762 1 625

Surrenders 1 777 1 962

Other 84 22

Non-life benefits (linked) 3 951 4 440

Total benefits paid 12 755 13 791




SA Single Premiums (life & non-life) (%)

SA Total Premiums (life & non-life) (%)

ABSA BrokersDirect and otherOther BrokersAdvisor

2004 2005 2006 2007 1H20090%

10%

20%

30%

40%

50%

70%

60%

2008

8,011,5

8,56,0

9,8

3,8

9,4 8,7 9,06,9 6,9 6,2

40,0 38,541,5

45,442,5

51,3

42,6 41,3 41,0 41,7 40,838,7


2004 2005 2006 2007 1H20090%

10%

20%

30%

40%

50%

70%

60%

2008

8,011,6

9,06,6

9,6

4,2

8,8 8,2 8,56,6 6,6 5,9

39,6 38,040,4

44,142,0

49,9

43,6 42,2 42,1 42,7 41,840,0

SA New Recurring Premiums (%)


0%

10%

20%

30%

40%

50%

70%

2004 2005 2006 2007 1H2009

60%

7.5

11.7 11.9 13.3

7.2 8.6

2.8 3.5 3.6 3.0 3.25.3

36.132.9

30.5 31.5

36.6

31.2

53.651.9

54.052.2 53.0

54.9

2008


SA New Business Recurring Premiums (Rm)

SA Single Premiums (life vs non-life) (Rm)

0

200

300

700

2004 2005 2006 2007 20092003

600

500

400

2008

430 413458

523

613 609

417388 375

422

544 556

487


0

2 000

6 000Life Non-Life

1 000

3 000

5 000

4 000

1608

27352572

3823

4449

5686

5118

30293186

2903

35633871

5315

4609

1H2004 1H2005 1H2006 1H2007 1H20091H2003 1H2008



Who we are

Sanlam Developing Markets (SDM) provides affordable

financial services solutions to the entry-level market in

South Africa and all market segments in other developing

markets where Sanlam has established a presence,

namely Botswana, Kenya, Tanzania, Zambia, Ghana and

India.

In the three years since our launch, the emphasis has

been on establishing a diverse mix of operations across the

African continent and in India with the aim of ensuring

sustainable delivery and growth across the various

businesses that make up SDM.

Our client-centric approach is aimed at protecting and

growing the financial interests of our clients across all our

markets by providing superior financial solutions.

The success of SDM can largely be ascribed to our

approach of partnering with reputable and established

operations in developing markets where potential for

growth has been identified. Our preference for

partnerships rather than outright acquisitions has enabled

us to allocate our capital resources and expertise to

support these partnerships by strengthening their

operational base and distribution channels to enable

further growth.

Our competitive advantage remains a team that is

committed to implement and deliver simple but focused

strategies and plans, underpinned by a strong Sanlam

brand, distribution network and claims management skills.

Sanlam Developing Markets


Sanlam Developing Markets

R million 1H09 %∆


New business flows*

– SA recurring370 5

– Non-SA 681 24

PVNB premiums 2 814 21

VNB 136 20

Margin 4,83% vs 4,85%


*Excludes white labels and non-core businesses

Group Profile and Shareholding Structure

South Africa Rest of Africa Other international

Sanlam Sky(100%)

Botswana Life(54%)

Shriram Life India(26%)

Channel Life(100%)(i)

Pan Africa Life Kenya(50%)

Safrican(85%)

ELAC Ghana(49%)

African Life Tanzania(65%)

African Life Zambia(70%)

Alfinanz (100%) – Application Service Provider(i) Actual holding of 99.98% (still a small component of minority interests)

Sanlam Developing Markets continued


Operating Profit for the Six Months Ended 30 June 2009

Operating profit

before tax R million

Tax R million

Operating profit

after tax R million

Minorities R million

June 2009 Operating

profit after tax & minorities

R million

June 2008 Operating

profit after tax & minorities

R million

RSA 50 (1) 49 (1) 48 34

Africa 97 (19) 78 (36) 42 46

Other International * (5) - (5) - (5) (2)

Total 142 (20) 122 (37) 85 78

* Sanlam’s share only

New Business Recurring Premiums for the Six Months Ended 30 June 2009

RSA R million

Africa R million

* Other International

R million

June 2009 Total

R million

June 2008 Total

R million

Brokers 147 42 - 189 185

Agents 115 123 58 296 229

Bancassurance - 18 - 18 1

Direct 5 12 - 17 45

Other** 103 - - 103 79

Total New business 370 195 58 623 539

* Sanlam’s share only** Group risk & Group benefits

New Business Single Premiums for the Six Months Ended 30 June 2009

RSA R million

Africa R million

* Other International

R million

June 2009 Total

R million

June 2008 Total

R million

Brokers 258 33 - 291 162

Agents - 7 18 25 101

Bancassurance - 124 - 124 84

Direct - - - - -

Other** 7 246 - 253 328

Total New business 265 410 18 693 675

* Sanlam’s share only** Brokers-Annuity (BIHL) & Group benefits

Sanlam Developing Markets continued


Who we are

In June last year, Sanlam announced the reorganisation of

its interests in the United Kingdom, to be consolidated

within a single holding company, Sanlam UK Limited, in

2009

The Sanlam UK cluster therefore consists of subsidiary

companies Merchant Investors (100% owned), Principal

(90% owned) and Buckles (60% owned). The portfolio is

further complemented by Sanlam’s minority holdings in

Intrinsic, Nucleus and the Punter Southall Group. The

minority interests were previously part of Sanlam

Independent Financial Services, which has been phased

out as a business unit of the Sanlam Group.

The aim of consolidating our interests in the UK is to

ensure the co-ordinated development of our growing

portfolio of financial services businesses operating in

distribution, product packaging, administration and asset

management services. In addition, this initiative will

position Sanlam to further develop quality intermediary

relationships in a changing retail financial services

landscape in the UK.

Sanlam UK is about creating a framework that will enable

each of our businesses to thrive through the linking of

business opportunities, sharing of knowledge and

experience, and having access to the necessary capital for

growth, as opposed to being an additional operating entity

with centralised costs.

Our competitive advantage lies in our “newcomer” status

– there is no historical conduct that prohibits us from

taking a fresh partnering approach to the Independent

Financial Adviser (IFA) market in the UK and no material

legacy business that could lead to conflicts or vested

interests.

We also have the potential to move faster than other

players to capture and benefit from current and emerging

opportunities, since we are backed by the Sanlam Group

and its resources and because the basic building blocks

are already in place.

Sanlam UK


Sanlam UKcontinued

Sanlam UK

R million 1H09 %∆

Net operating profit 13 (65)

New business flows

– Life insurance 451 (44)

– Investment 504 –

PVNB premiums 463 (45)

VNB – –

Margin 0,00 % vs 0,36%

Annualised ROGEV (14,3%)

Group profile and shareholding structure

Investment Shareholding Description

Merchant Investors 100% Bristol-based niche player in the affluent life and specialist pension markets

Principal 89% Leading independent investment management company specialising in discretionary portfolio management

Buckles 60% Largest independent financial adviser practice based in Wales

Nucleus 42,5% Linked investment product platform controlled by independent financial advisers

Intrinsic 28% Multi-tied financial intermediary business consisting of financial planning and mortgage advisory divisions

Punter Southall Group 26% UK-based financial services advisory group


Key performance measurements – 30 June 2009

Total controlled entities1

Total - associates2 Sanlam UK Total

Funds under Management (£bn) 2009 2,3 1,6 3,9

2008 1,6 1,4 3,0

Funds under Administration (£bn) 2009 0,0 0,3 0,3

2008 0,0 0,1 0,1

Number of Advisers 2009 48 1 654 1 702

2008 42 1 502 1 544

Flows

- New business (£m) 2009 70 250 320

2008 54 262 316

- Total (£m) 2009 92 250 342

2008 75 262 337

- Net flows (£m) 2009 (8) 79 71

2008 8 93 101

- VNB (Life Insurance) (£m) 2009 0,0 0,0 0,0

2008 0,3 0,0 0,3

Operating Profit (£m) 2009 1,5 (0,1) (0,4) 1,0

2008 1,7 0,7 0 2,4

(1) Total controlled entities comprise of Merchant Investors (100%), Principal (89%) and Buckles (60%)(2) Total associates comprise of Punter Southall Group (26%), Intrinsic (28%) and Nucleus (42.5%)

Sanlam UKcontinued


Who we are

Sanlam Investments is one of the core clusters within the

Sanlam Group and consists of 15 businesses working

collaboratively to offer individual and institutional clients

access to a comprehensive range of specialised investment

and risk management expertise spanning local and

international asset management, private equity, hedge

funds, employee benefits, property investments and more.

Each business within the Sanlam Investments cluster

functions as an entrepreneurial entity with a shared focus

on delivering leading performance and exceptional client

service. We achieve this by instilling passionate ownership

as an intrinsic value among our employees.

We are based in South Africa, with a strong presence in

sub-Saharan Africa and footprints in the United Kingdom,

Europe, Australia and India. Our diverse client base

includes retirement funds, corporations, financial

institutions, individual investors, trade unions, non-

governmental organisations, governments and their

agencies.

Sanlam Investments’ competitive advantage lies in its

ability to cultivate a unique entrepreneurial culture within

the stability and structures of a big group. For this reason,

we are able to attract talented and innovative individuals to

establish investment-related businesses within the cluster.

Our core value of passionate ownership encourages people

to run their business as if it is their own, while we offer

support in the form of essential shared services such as

finance, HR, IT, marketing, compliance and legal services.

Moreover, being within the cluster gives the business

access to capital for innovative ideas as well as a ready

support network and the advantages of cross-selling.

Sanlam Investments


Sanlam Investments

R million 1H09 %∆


New business flows

– SA: Segregated 7 920 24

– SA: Other 15 580 3

– Non-SA 1 908 28

Net flows 2 590 —

FUM (R billion) 403 (1)

Annualised ROGEV 8,3 —

Profile of Sanlam Investments

Sanlam Investment Management (SIM)

One of the largest investment managers in South Africa as measured by assets under management, SIM manages financial assets for individual, institutional, retail and corporate clients and offers investment strategies in vehicles ranging from collective investments to institutional portfolios.

SIM is grouped into six boutiques that share a common research platform. The boutiques are Equities, Fixed Interest, Absolute Return, Liability Driven, Active Quants and Balanced Mandates. Our structure ensures focus, a small-team culture and speedy decision-making so our clients get access to our best thinking at all times.

Sanlam Collective Investments (SCI)

The third largest manager of collective investment portfolios in South Africa, SCI offers a wide range of retail, multi-managed, institutional and third-party collective investment funds.

Sanlam Employee Benefits (SEB)

Sanlam Employee Benefits specialises in the provision of risk, investment and fund administration services to institutions and retirement funds.

Sanlam Multi Manager International (SMMI)

An investment management advisory business, SMMI is dedicated to active multi-management.

Sanlam Private Investments (SPI)

SPI is a private client portfolio management and stockbroking business, serving high net worth individuals, charitable trusts and smaller institutions.

Sanlam Capital Markets (SCM) SCM is a provider of risk management and structured product solutions.

SIM Emerging Markets (SIM-EM)

A fund and investment management business, SIM-EM focuses on emerging markets, particularly in Africa and Asia. SIM-EM has offices in Namibia, Botswana, Nigeria, Kenya, Zambia and India.

Sanlam International Investment Partners (SIIP)

SIIP actively seeks to form partnerships with investment teams in developed markets such as the US, UK, Europe and Australasia and to work with them to build businesses which can capably service their unique markets.

Sanlam Properties (SP) Sanlam Properties specialises in strategic property services, including portfolio management, development, sales and listings.

Sanlam Asset Management – Ireland (SAMI)

SAMI is an international investment management business based in Dublin, and manages funds domiciled in Ireland for the Sanlam Group.

Sanlam Private Equity (SPE)

One of the largest private equity fund managers in South Africa, SPE offers both a direct and fund-of-funds investment programme. SPE also drives the Group’s BEE investment programme.

SIM Global SIM Global actively manages long-only international funds from South Africa for local and international clients.

Octane A specialist alternative investment provider, focusing on hedge fund-of-funds, Octane is based in Switzerland with offices in South Africa. Octane also incorporates Blue Ink, which specialises in alternative investment strategies.

Sanlam Structured Solutions (SSS)

SSS offers derivative-based skills to the Investments cluster to enhance returns on portfolios and to improve the product offering to clients, such as derivative, tax and legal-based structured products.

Simeka Wholly owned by Sanlam Investments, Simeka is an employee benefits consulting company operating independently within the larger Investments cluster.

Sanlam Investmentscontinued


Income Statement per Division

Total Investment

Cluster

Total South African

operation

Total Rest of Africa

operation

Total International

operationR million Jun

2009Jun

2008Jun

2009Jun

2008Jun

2009Jun

2008Jun

2009Jun

2008

Income 915 1 071 704 782 61 81 150 208

Operating expenses (422) (517) (313) (371) (42) (42) (67) (104)

Asset Management and distribution fees paid

(134) (159) (130) (152) - - (4) (7)

Profit before tax & performance fees

359 395 261 259 19 39 79 97

Net performance fees 11 26 3 23 - - 8 3

Profit before tax 370 421 264 282 19 39 87 100

Tax and minorities (106) (134) (73) (79) (16) (26) (17) (29)

Operating profit after tax 264 287 191 203 3 13 70 71

Assets under management (R’ billion)

403 437 343 354 25 27 35 56

Split in Assets Under Management (Rbn)

June 2009

June 2008

December 2008

Wholesale 321,3 345,3 324,7

- Sanlam (SA assets) 165,6 168,8 161,1

- Sanlam (International assets) 31,6 49,1 37,3

- Segregated * 108,0 112,0 111,4

- Sanlam Properties 4,5 4,1 4,0

- Sanlam Collective Investments 11,6 11,3 10,9

Retail 81,5 92,2 84,0

- Sanlam Private Investments 34,4 44,3 37,6

- Sanlam Collective Investments 39,7 39,6 38,5

- Sanlam Multi Manager (Glacier) ** 7,4 8,3 7,9

Total AUM (Consolidated) 402,8 437,5 408,7`

* The assets of SIM Emerging Markets are included in this number. ** The rest of Sanlam Multi Manager assets are included in Sanlam and Segregated assets.

Sanlam Investmentscontinued


Sanlam Investments continued

Split of Operating Profit before Tax (South Africa and International) – 6 month periods ending 30 June

Net Fund Flows (Rbn) – excluding White Labels

0%

20%

40%

60%

80%

100%

1H2003 1H2005 1H2006 1H2007International

SA

1H2004 1H2009

16 27 32 47 33 28

100

84

7368

53

6772

1H2008

0

4

6

8

2

0,3

5,4

6,6 6,7

4,5

5,3

3,1 3,1

2003 2004 2005 2006 2007 H12009H120082008

Note: 2005 excludes PIC outflows of R6.0bn 2006 excludes PIC outflows of R21.6bn


Who we are

Sanlam Employee Benefits (SEB) forms part of the Sanlam

Investments cluster and specialises in the provision of risk

and investment solutions as well as administration services

to institutions and retirement funds.

As a result of significant restructuring in 2007, SEB now

consists of four entrepreneurial divisions: Sanlam Group

Risk, Sanlam Structured Solutions, Sanlam Umbrella

Solutions and Coris Capital, our retirement fund

administration platform.

Our underlying philosophy is to be driven by the needs of

our clients. We therefore dedicate our time and resources

to creating employee benefit solutions that respond to our

clients’ needs on all levels. As such we are also a leading

provider of retirement fund membership information via

state-of-the-art systems.

Our vision is to be the leader in client-centric wealth

creation and protection by ensuring that retirement fund

members realise their life-long goal: having sufficient

resources enabling them to enjoy their retirement.

We offer our clients institutional investment products

(market-linked investments and smoothed bonus

portfolios), group life benefits, group disability benefits, cell

insurance schemes, retirement fund administration,

annuity solutions and an umbrella fund offering.

The SEB brand is associated with well-established and

highly rated retirement fund research. Our research

findings are presented annually at the SEB Benchmark

Symposium and are sought after by pension fund trustees,

principal officers, consultants as well as competitors.

This market research enables us to identify key trends in

the retirement fund industry, making it possible for us to

link our solutions closely to client needs.

Sanlam Employee Benefits


Sanlam Employee Benefitscontinued

Sanlam Employee Benefits

R million 1H09 %∆


New business flows

– SA recurring 76 (7)

– SA single 66 (65)

PVNB premiums 704 (21)

VNB 5 (64)

Margin 0,71% vs 1,58%


Group profile and shareholding structure

Investment Shareholding Description

Sanlam Employee Benefits (SEB) 100 Retirement fund business

Sanlam Umbrella Fund Administrators (SUFA) 100 Umbrella fund administration (SME focus)

Sanlam Customised Insurance Limited (SCIL) 100 Cell captive insurer

Infinit Group Solutions 50,1 Distribution of diversified Group risk products

Coris Capital 62 Retirement fund administration on outsourced basis

Analysis of Operating Profit

June 2009 R million

June 2008 R million

Underwriting risk 75 68

Investment & other 57 74

Administration (40) (25)

Operating profit 92 117


Who we are

Sanlam Capital Markets (SCM) forms part of the Sanlam

Institutional Cluster and is a financial engineering business

that provides solutions for its clients through the use of

debt, equity and derivative instruments, and exploits

specific synergies within other businesses in the Sanlam

Group.

Sanlam Capital Markets consists of the following business

units:

Debt Structuring – debt origination, structuring and

portfolio management.

Equities – structured equity transactions, equity

trading, underwriting and stockbroking.

Market Activity – trading and structuring of equity and

interest rate derivative products and funding of SCM.

At SCM, people are the driving force of the business,

applying their skill and experience to design optimal

solutions for SCM’s clients while appropriately managing

the financial risks resulting from these transactions.




R million 1H09 %∆


Total revenue 162 67

Cost to income ratio 62% vs 100%

Capital 450 13


Analysis of Operating Profit

June 2009

R million

June 2008

R million

Total revenue 162 97

Capital 16 20

Equities 104 84

Debt 46 28

Market Activity (4) (35)

Total expenses (101) (97)

Income before taxation 61 0

Taxation (2) 34

Attributable income 59 34

Capital 450 400

Return on Equity 28,4% 17,7%

Sanlam Capital Marketscontinued


SHORT-TERM INSURANCE CLUSTER


Who we are

Santam is the largest short-term insurer in South Africa

with a market share exceeding 20% and a client list that

includes the majority of the top 100 companies listed on

the JSE Limited.

Santam is a well diversified group, providing insurance

cover on all classes of short-term insurance. On a

segmented basis, Santam’s business is made up of the

following segments:

Personal Lines 39%

Commercial Lines 47%

Alternative risk 14%

Following a successful 2008, Santam’s operational

excellence was again recognized by being voted the “Best

Personal, Commercial and Corporate Insurer of 2009” by

the Financial Intermediaries’ Association (FIA).

Santam Limited


Santam Limitedcontinued

Santam

R million 1H09 %∆

Net operating profit* 118 (37)

Gross written premium 7 291 7

New earned premiums 6 179 9

– Net claims ratio 72,9%

– Net acquisition ratio 25,6%

– Underwriting ratio 1,5%

Regulatory solvency 42%


*Contribution to Sanlam’s net operating profit

Business Profile

Insurance classes % contribution to gross

written premium

Motor 40

Property 28

Alternative risk 14

Liability 7

Engineering 4

Transportation 3

Accident and health 3

Crop 1

Miscellaneous <1

Guarantee <1

Key Results

R million June 2009 June 2008 %∆

Gross written premium* 7 291 6 801 7

Underwriting result* 88 326 (73)

Investment return on insurance funds* 217 129 68

Net insurance result* 311 462 (33)

*Continuing operations only


Net operating profit for the six months ended 30 June 2009

2009 2008 %∆

Net earned premiums 6 179 5 694 9

Interest on working capital 217 129 68

Financial services income 6 396 5 823 10

Sales remuneration (940) (818) 15

Income after sales remuneration 5 456 5 005 9

Underwriting policy benefits (4 503) (3 936) 14

Administration costs (642) (607) 6

Result from financial services before tax 311 462 (33)

Tax on result from financial services (90) (109) (17)

Result from financial services after tax 221 353 (37)

Minority shareholders’ interest (103) (165) (38)

Net result from financial services 118 188 (37)

Key Ratios

June 2009

June 2008

Ratios % %

Net claims ratio 72,9 69,2

Net acquisition cost ratio 25,6 25,1

Net underwriting ratio 1,5 5,7

Net insurance result margin on net earned premium 5,0 8,1

Solvency

Net asset value (NAV) Rm 4 266 3 970

NAV per share cps 3 525 3 525

Net written premium** Rm 12 229 11 307

Regulatory solvency % 42 40

Santam Limitedcontinued


Motor

Property

Alternative Risk

Liability

Engineering

Crop

Transportation

Accident and health

Miscellaneous

Guarantee

(400)

(200)

(100)

0

100

200

300

Guarantee Miscellaneous Crop Transportation Accident& health

Engineering Liability Motor

(300)

ART Property

June 2008June 2009

Santam Limited continued

GWP per Insurance Class (%) – Continuing activities only

Underwriting Surplus per Insurance Class (Rm) – Continuing activities only

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