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2008 Interim results
CONTENT | Salient features | Executive review | Comments | Accounting policies
| Shareholders' fund information | Group Financial statements | Embedded value
 

Group financial statements for the six months ended 30 June 2008

Contents

Group balance sheet
Group income statement
Group statement of changes in equity
Group cash flow statement
Notes to the financial statements

 
GROUP BALANCE SHEET at 30 June 2008    
  June    Full year   
  Reviewed Audited   
2008   2007   2007   
R million   R million   R million  
ASSETS        
  Property and equipment   313   280   298  
  Owner-occupied properties   648   622   650  
  Goodwill   2 607   2 391   2 447  
  Value of business acquired   1 583   970   1 000  
  Deferred acquisition costs   1 834   1 536   1 693  
  Long-term reinsurance assets   474   416   487  
  Investments   279 140   297 002   290 101  
      Properties   14 622   15 640   15 648  
      Equity-accounted investments   1 632   1 264   1 759  
      Equities and similar securities   142 369   152 217   149 038  
      Public sector stocks and loans   41 621   49 339   49 887  
      Debentures, insurance policies, preference shares
    and other loans  		 30 751   30 767   34 091  
      Cash, deposits and similar securities   48 145   47 775   39 678  
  Deferred tax   430   333   475  
  Non-current assets held for sale   2 239   –   2 060  
  Short-term insurance technical assets   2 782   2 248   2 263  
Working capital assets   44 542   46 446   38 791  
    Trade and other receivables   33 749   35 259   27 972  
    Cash, deposits and similar securities   10 793   11 187   10 819  
       
Total assets   336 592  352 244  340 265 

EQUITY AND LIABILITIES 

      
Shareholders' fund   27 666   28 936   29 334  
Minority shareholders' interest   2 484   3 275   2 220  
Total equity   30 150   32 211   31 554  
Long-term policy liabilities    237 518   248 350   244 660  
    Insurance contracts   120 144   128 749   128 398  
    Investment contracts   117 374   119 601   116 262  
Term finance   6 740   6 238   6 594  
    Margin business   2 968   2 764   2 687  
    Other interest-bearing liabilities   3 772   3 474   3 907  
External investors in consolidated funds   11 680   12 767   12 278  
Cell owners' interest   422   383   336  
Deferred tax    907   1 981   1 354  
Non-current liabilities held for sale   1 781   –   1 606  
Short-term insurance technical provisions   8 404   8 235   7 719  
Working capital liabilities   38 990   42 079   34 164  
    Trade and other payables   35 951   38 855   30 431  
    Provisions   1 039   1 106   973  
    Taxation   2 000   2 118   2 760  
       
Total equity and liabilities   336 592  352 244  340 265 

 

GROUP INCOME STATEMENT for the six months ended 30 June 2008      
  Six months    Full year   
  Reviewed   Audited  
  2008   2007   2007   
  R million   R million   R million  
Net income   6 572   31 115   52 504  
    Financial services income   13 816   12 588   26 715  
    Reinsurance commission received   195   187   373  
    Investment income   8 250   7 587   14 740  
    Investment surpluses   (14 212)  14 816   15 885  
    Finance cost – margin business   (126)  (120)  (246) 
    Change in fair value of external investors liability    273   (2 633)  (2 278) 
Net insurance and investment contract
benefits and claims   		 1 446   (20 735)  (33 414) 
    Long-term insurance and investment contract benefits   5 205   (17 483)  (26 413) 
    Short-term insurance claims   (5 107)  (3 886)  (8 533) 
    Reinsurance claims received   1 348   634   1 532  
Expenses   (5 173)  (4 596)  (9 939) 
    Sales remuneration   (1 987)  (1 698)  (3 554) 
    Administration costs   (3 186)  (2 898)  (6 385) 
Impairment of investments and goodwill   (135)  –   (7) 
Amortisation of value of business acquired    (31)  (23)  (51) 
       
Net operating result   2 679   5 761   9 093  
Equity-accounted earnings   63   201   228  
Finance cost – other   (160)  (117)  (281) 
       
Profit before tax   2 582   5 845   9 040  
Taxation   (528)  (1 820)  (2 493) 
    Shareholders' fund   (419)  (1 195)  (1 678) 
    Policyholders' fund   (109)  (625)  (815) 
       
Profit from continued operations   2 054   4 025   6 547  
Discontinued operations   (63)  (21)  (168) 
       
Profit for the year    1 991  4 004  6 379 
          
Attributable to:        
Shareholders' fund   1 852   3 359   5 494  
Minority shareholders' interest    139   645   885  
  1 991  4 004  6 379 
Earnings attributable to shareholders of the company (cents):        
Basic earnings per share   91.4   154,5   256,6  
Diluted earnings per share   89.5   152,0   250,9  
Earnings attributable to shareholders of the company from continuing operations (cents):         
Basic earnings per share   93.1   155,0   260,8  
Diluted earnings per share   91.2  152,5  255,1 

 

GROUP STATEMENT OF CHANGES IN EQUITY         
for the six months ended 30 June 2008                     
  Six months    December   
  Reviewed   Audited  
  2008   2007   2007   
  R million   R million   R million  
Shareholders' fund:        
Balance at beginning of the period    29 334   29 121   29 121  
Total recognised income   2 313   3 354   5 395  
    Profit for the period   1 852   3 359   5 494  
    Movement in foreign currency translation reserve   461   (5)  (99) 
Net movement in treasury shares   (684)  (1 862)  (3 551) 
    Net realised investment surpluses on treasury shares   (159)  (203)  (288) 
    Cost of net treasury shares acquired (1)  (525)  (1 659)  (3 263) 
Share-based payments   49   28   74  
Dividends paid (2) (1 907)  (1 705)  (1 705) 
Shares cancelled   (1 439)  –   –  
Balance at end of the period   27 666  28 936  29 334 
Minority shareholders' interest:        
Balance at beginning of the period   2 220   3 934   3 934  
Total recognised income   265   640   858  
    Profit for the period   139   645   885  
    Movement in foreign currency translation reserve   126   (5)  (27) 
Net movement in treasury shares   69   (541)  (527) 
    Net realised investment surpluses on treasury shares   47   –   24  
    Cost of net treasury shares disposed/(acquired) (1)  22   (541)  (551) 
Share-based payments   7   4   10  
Dividends paid   (245)  (255)  (1 474) 
Acquisitions, disposals and other movements in minority interests   168   (507)  (581) 
Balance at end of the period   2 484  3 275  2 220 
       
Shareholders' fund   29 334   29 121   29 121  
Minority shareholders' interest   2 220   3 934   3 934  
Total equity at beginning of the period   31 554  33 055  33 055 
       
Shareholders' fund   27 666   28 936   29 334  
Minority shareholders' interest   2 484   3 275   2 220  
Total equity at end of the period   30 150  32 211  31 554 
(1)    Comprises movement in cost of shares held by subsidiaries and the share incentive trust.
(2)    Dividend of 93 cents per share paid during 2008 (2007: 77 cents per share) in respect of the
       2007 financial year.

 

GROUP CASH FLOW STATEMENT  
for the six months ended 30 June 2008  
  Six months   Full year  
  Reviewed   Audited  
  2008   2007   2007   
  R million   R million   R million  
Net cash inflow from operating activities   5 746   1 017   30  
Net cash inflow from investment activities   4 679   14 653   9 859  
Net cash outflow from financing activities   (1 881)  (1 355)  (3 227) 
Net increase in cash and cash equivalents   8 544   14 315   6 662  
Cash, deposits and similar securities at beginning of the period   51 309   44 647   44 647  
Cash, deposits and similar securities
at end of the period  		 59 853   58 962   51 309  
Cash, deposits and similar securities
classified as held for sale  		 (915)  –   (812) 
Cash, deposits and similar securities
at end of the period – continuing operations  		 58 938  58 962  50 497 
Cash inflow from discontinued operations   103   60   4  
Cash, deposits and similar securities at
beginning of the period  		 812   808   808  
Cash, deposits and similar securities
at end of the period – discontinued operations  		 915  868  812 

 

NOTES TO THE FINANCIAL STATEMENTS   
for the six months ended 30 June 2008     
    Six months   Full year  
    Reviewed   Audited  
    2008   2007   2007  
    cents   cents   cents  
1.  EARNINGS PER SHARE
     
  Basic earnings per share:        
  Headline earnings   96,5   126,2   225,7  
  Profit attributable to shareholders' fund   91,4   154,5   256,6  
         
  Diluted earnings per share:        
  Headline earnings   94,5   124,2   220,8  
  Profit attributable to shareholders' fund   89,5   152,0   250,9  
    R million    R million   R million  
  Analysis of earnings:        
  Profit attributable to shareholders   1 852   3 359   5 494  
  Less: Net profit on disposal of subsidiaries   –   (13)  (44) 
  Less: Net profit on disposal of associates   –   (601)  (624) 
  Less: Equity-accounted non-headline earnings   (32)  –   –  
  Plus: Impairment of investments and goodwill   135   –   7  
  Headline earnings   1 955  2 745  4 833 
         
    million   million   million  
  Number of shares:         
         
  Number of ordinary shares in issue at beginning of period   2 303,6   2 303,6   2 303,6  
  Less: Weighted average number of shares cancelled   (31,8)  –   –  
  Less: Weighted average Sanlam shares held by subsidiaries (including policyholders)  (245,6)  (129,4)  (162,4) 
  Weighted average number of shares for basic earnings per share   2 026,2   2 174,2   2 141,2  
  Add:  Weighted conversion of deferred shares   13,1   8,7   12,1  
  Add:  Total number of shares and options   43,2   42,7   43,3  
  Less:  Number of shares (under option) that would have been issued at fair value   (14,4)  (15,8)  (7,3) 
  Weighted average number of shares for diluted earnings per share   2 068,1  2 209,8  2 189,3 

2.   RECONCILIATION OF SEGMENTAL INFORMATION  
    Six months   Full year  
    Reviewed   Audited  
    2008   2007   2007  
    R million   R million   R million  
  Segment financial services income    12 880   11 936   25 026  
    Sanlam Personal Finance   3 090   2 922   6 257  
    Sanlam Developing Markets   1 504   1 262   2 817  
    Sanlam UK   218   141   265  
    Sanlam Employee Benefits   1 006   908   1 796  
    Short-term Insurance   5 829   5 299   11 035  
    Investment Management   1 061   1 105   2 514  
    Sanlam Capital Markets   97   237   283  
    Corporate, consolidation and other   75   62   59  
  IFRS adjustments   936   652   1 689  
  Total financial services income   13 816   12 588   26 715  
         
  Segment result    1 151   3 740   5 860  
    Sanlam Personal Finance   (1 788)  4 140   6 677  
    Sanlam Developing Markets   46   232   474  
    Sanlam UK   85   55   112  
    Sanlam Employee Benefits   122   418   775  
    Short-term Insurance   33   504   570  
    Investment Management   234   427   908  
    Sanlam Capital Markets   34   139   139  
  Corporate, consolidation and other   2 385   (2 175)  (3 795) 
  Reverse minority shareholders' interest included in segment result   139   645   885  
  Fund transfers   701   (381)  (366) 
  Total profit for the period   1 991   4 004   6 379  

3.   CONTINGENT LIABILITIES

Shareholders are referred to the contingent liabilities disclosed in the 2007 annual report.  The circumstances surrounding these contingent liabilities remained materially unchanged.

 

4.   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 Limited group as reflected in these financial statements.

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