Wrap Text
Audited summary consolidated financial
statement for the year ended 31 December 2018
Santam Limited and its subsidiaries
Incorporated in the Republic of South Africa
Registration number 1918/001680/06
ISIN ZAE000093779
JSE share code: SNT
NSX share code: SNM
AUDITED SUMMARY CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2018
SALIENT FEATURES FOR THE YEAR ENDED 31 DECEMBER 2018
Group gross written premium growth 11%
Conventional insurance gross written premium growth 7%
Conventional insurance net underwriting margin 9.2%
Economic capital coverage ratio 159%
Return on shareholders' funds 31.8%
Earnings per share increased 45%
Headline earnings per share increased 47%
Final dividend of 665 cents per share, up 8%
FINANCIAL REVIEW
The Santam group reported gross written premium growth of 11% (9.5% excluding the impact of the Santam Structured Insurance acquisition in March 2017), and
delivered excellent underwriting results under difficult economic circumstances.
The group's conventional insurance book achieved gross written premium growth of 7% and a net underwriting margin of 9.2% (2017: 6.0%), comfortably exceeding the
group's target range of 4% to 8%. The Alternative Risk Transfer (ART) insurance segment grew gross written premium by 40% (26% excluding the impact of the Santam
Structured Insurance acquisition) and reported operating results of R96 million (2017: R84 million). The Sanlam Emerging Markets (SEM) general insurance
businesses delivered acceptable operating results.
Net investment income attributable to shareholders, inclusive of investment return on insurance funds of R1 105 million (2017: R1 012 million) was reported.
Gains on foreign exchange differences of R376 million (2017: loss of R116 million) was the key contributor to the improved performance. The 2017 investment income
included the release of the foreign currency translation reserve of R175 million relating to the unwinding of the Santam International investment.
Cash generated from operations increased to R5.5 billion (2017: R3.3 billion), positively impacted by the improved claims experience.
The key drivers of the 47% increase in headline earnings per share from 1 425 cps in 2017 to 2 099 cps in 2018 was the significant improvement in the underwriting
and investment results.
A return on capital of 31.8% was achieved. The economic capital coverage ratio was 159% - slightly above the midpoint of the target range of 130% to 170%.
CONVENTIONAL INSURANCE
The conventional insurance business reported a net underwriting margin of 9.2% compared to the 6.0% reported in 2017. The underwriting results in the current
period benefitted from the absence of significant catastrophe claims in contrast to the severe catastrophe events experienced in 2017. Fewer large commercial fire
claims were also reported during this period, following improved risk management actions.
Gross written premium growth
Conventional insurance reported satisfactory growth of 7%. The intermediated personal and commercial lines business and MiWay experienced growth pressure in the
difficult economic conditions, while strong growth was achieved in the specialist business and Santam re.
Gross written premium growth from the rest of Africa was strained. Santam Namibia reported a contraction in GWP of 7% in a low-growth competitive market.
Specialist business benefitted from a one-off construction project in 2017 which did not reoccur in 2018. Santam re, on the other hand, achieved strong growth in
Southeast Asia, India and the Middle East through selective participations in these markets. The net effect was a 5% increase in premiums from outside of South
Africa written on the Santam Ltd and Santam Namibia Ltd licenses (2018: R3 367 million; 2017: R3 200 million).
The property class reported growth of 11% on the back of strong growth in the corporate property business following lower reinsurance capacity available in the
market. Crop insurance gross written premiums contracted by 12% following lower take-up of crop insurance in the 2018/2019 crop year.
The motor class grew by 6%, with MiWay reporting 8% growth (gross written premium of R2 496 million; 2017: R2 319 million). MiWay reversed the slowdown in growth
reported during the first half of the year with a strong performance during the second half of the year following focused management actions. The commercial and
personal lines intermediated business experienced a slowdown in growth of the motor book in competitive low-growth market conditions.
The liability class continued to experience significant competitive pressure and focused on improved profitability, resulting in growth of only 2% reported during
the period. The engineering class also reported low gross written premium growth of 3%, reflecting the impact of fewer large construction projects and the
uncertainties impacting the construction sector.
The accident and health class reported growth of 11%, mainly driven by excellent growth in the travel insurance business. The transportation class reported gross
written premium growth of 1% following Santam's continued focus on profitability. The growth in the guarantee class was positively impacted by the acquisition of
the Santam Structured Insurance credit guarantee business.
Underwriting result
The property class reported a significant turnaround from the R165 million net underwriting loss reported in 2017 to R519 million net underwriting profit in 2018
following the absence of significant catastrophe claims, as well as fewer large commercial fire claims. The underwriting results were positively impacted by the
underwriting actions implemented since the second half of 2017.
The motor class reported strong underwriting performance in both the intermediated and direct distribution channels. MiWay reported good results with a claims
ratio of 55.2% (2017: 56.9%) and reported an underwriting profit of R334 million (2017: R317 million).
The engineering class of business achieved excellent underwriting results with limited claims activity during the period, while the guarantee class of business
was negatively impacted by the poor economic environment in South Africa. A number of large claims, including product recall claims relating to the listeriosis
outbreak, reduced the underwriting results of the liability class. Estimate adjustments on previously reported claims further contributed to a net underwriting
loss of R20 million for the liability class (2017: net underwriting profit of R85 million).
The crop insurance business reported strong underwriting results, although lower than the excellent results reported in the comparative period. Santam re was
negatively impacted by claims activity and increased claim provisions relating to previous periods on the foreign book of business.
Following the significant losses incurred by the global and South African reinsurance market during 2017, Santam's deductible per catastrophe event increased to
R150 million (2017: R100 million) for the 2018 financial year. It also resulted in increased reinsurance rates.
The net acquisition cost ratio of 30.4% increased from 28.1% in 2017. The management expense ratio increased from 16.0% in 2017 to 18.1% in 2018, mainly due to
increased variable incentive costs in 2018, increased direct acquisition costs to support growth initiatives at MiWay, as well as additional underwriting risk
management costs incurred to improve the loss ratio across all business lines. A further driver of increased cost was a provision raised to account for the
liquidity concerns at a third-party premium-collection agency that went into voluntary curatorship in September 2018. The impact of the increased incentive costs
and one-off items added 1% to the management expense ratio in 2018.
Strategic project costs, included as part of management expenses, amounted to 1% of net earned premium (2017: 0.8%). These costs mainly relate to the continued
development of a new core underwriting, administration and product management platform for the Santam intermediated business, compliance projects, data enhancement
and future digital solutions.
The new core underwriting platform project is progressing according to plan, with personal lines now fully deployed and almost 100% migrated to the new platform.
For commercial products, more than 90% of on-platform intermediaries have now been deployed for new business, while the migration process is well underway and
expected to be completed in 2019. Santam will continue to invest in strategic projects to optimise the use of technology in the group.
The net commission ratio was 12.4% compared to 12.1% in 2017.
Investment return on insurance funds
The investment return on insurance funds was negatively impacted by lower returns on the investment portfolios backing the insurance funds following lower interest
rates compared to 2017.
ALTERNATIVE RISK TRANSFER INSURANCE (ART)
The 2017 reporting period included the results of Santam Structured Insurance for nine months following the acquisition of the business in March 2017. The ART
business reported growth of 40% (26% on a like-for-like basis) with gross written premiums of R5 398 million (2017: R3 867 million). Centriq reported excellent
growth of 46%. Santam Structured Insurance also reported good growth over the comparative period.
The ART business reported solid operating results of R96 million (2017: R84 million).
SANLAM EMERGING MARKETS GENERAL INSURANCE BUSINESS
The emerging markets general insurance business portfolio includes investments in the Saham Finances Group in Morocco (with subsidiaries in 26 countries in Africa
and the Middle East), Pacific & Orient Insurance Co. Berhad (P&O) in Malaysia, Shriram General Insurance Company Ltd (SGI) in India and a further 12 general
insurance businesses throughout Africa which are held in conjunction with SEM, excluding South Africa and Namibia.
Santam's share of the gross written premiums of these businesses increased by 7% to R2 547 million (2017: R2 382 million) following the dilution of Santam's
effective shareholding in Saham Finances from 7.5% to 7% in May 2017 and the subsequent increase to 10% in October 2018, as well as the disposal of Enterprise
Insurance Company in Ghana in June 2017.
Saham Finances
Effective 9 October 2018, SEM and Santam, through SAN JV, acquired the remaining minority interest in Saham Finances via a subscription for new shares for US$1 045
million (R15.4 billion). Santam's share of the purchase price, including transaction costs, was US$64 million (R957 million), before applying hedge accounting.
Hedge accounting resulted in R46 million of foreign currency gains accounted for as part of the investment in San JV. This transaction increased Santam's effective
interest in Saham Finance from 7% to 10%.
Santam's share of net underwriting results of Saham Finances for the year amounted to R79 million (2017: R4 million loss). Given the changes in Santam's shareholding
in San JV (Saham Finances) during 2017 and 2018, the financial results of 100% of Saham Finances for 2017 and 2018 are analysed below to ensure like-for-like
comparison.
Gross written premiums increased by 4% (8% in local currency) to R16.6 billion (2017: R16 billion). The net underwriting profit decreased by 9% to R296 million, with
life insurance earnings decreasing by 7% due to investments in growth, and general insurance earnings being in line with 2017.
The general insurance businesses achieved a net underwriting margin of 4.1% (2017: 5.6%). The following items impacted on the general insurance results:
- One-off incentives of R28 million was paid to staff as part of the post-acquisition integration process.
- Angola's loss declined from R40 million in 2017 to R29 million in 2018. An improvement in claims experience was partially offset by a higher cost base.
Exchange rate weakness contributed to higher expense inflation.
- Lebanon also experienced a better claims environment resulting in an increase of 107% in underwriting profit.
- The other regions recorded lower earnings from direct insurance, primarily due to pressure on premium growth in Cote d'Ivoire.
- Reinsurance profit increased by 11% from R232 million in 2017 to R257 million in 2018.
Investment return earned on insurance funds declined by 45% to R951 million (2017: R1 734 million). The underlying portfolios included legacy equity exposures,
which benefitted from positive investment market returns in 2017, while most markets declined in 2018. The difference in relative market performance contributed
more than R700 million to the decline. The strategic asset allocation of these portfolios will be reassessed as part of the planned capital management activities.
The lower investment return earned on insurance funds resulted in the operating profit after taxation and non-controlling interest to decrease to R690 million
(2017: R1 097 million) and the comprehensive income recognised to R578 million (2017: R1 282 million). Relative investment market returns and a number of one off
items impacted on the Saham Finances earnings for 2018. Adjusting for these one off operational items of R68 million and the impact of investment market volatility
of R387 million (2017: negative adjustment of R271 million), the normalised comprehensive income for Saham Finances was R1 033 million (2017: R1 011 million).
Santam will be actively involved in 2019 to grow the Pan-African specialist and reinsurance markets.
Other SEM General Insurance businesses
SGI in India had a solid year, with the net insurance result growing by 13% in local currency, attributable to an improvement in underwriting margin.
P&O in Malaysia benefitted from a more diversified book of business, which contributed to an improvement in the claims experience. The net insurance result
increased by 6% in local currency.
INVESTMENT RESULTS
Listed equities achieved a negative return of 11% for the year ended 31 December 2018, relative to the SWIX benchmark (60% SWIX and 40% Capped SWIX), which
delivered a negative return of 11.9%.
The Santam group's interest exposure is managed in enhanced cash and active income portfolios. The interest portfolios performed in line with or exceeded their
STeFI-related benchmarks.
Exchange rate volatility due to the weakening of the rand in 2018 compared to December 2017 resulted in a foreign exchange gain of R480 million (2017: foreign
currency loss of R173 million), inclusive of the currency movements on Santam's interest in SEM's general insurance businesses in Africa, India and Southeast Asia.
Santam used the opportunity to lock in some of the foreign currency gains on R500 million worth of exposure against the USD. A foreign currency collar was entered
into on 10 September 2018 at a spot rate of 15.125 ZAR against the USD. As at 31 December 2018, the instrument's valuation amounted to R24.8 million. The collar
expired in two equal tranches on 4 January and 7 January 2019 and realised a total profit of R36.5 million.
Positive fair value movements (excluding the impact of currency movements) of R130 million (2017: R121 million) in Santam's interest in SEM's general insurance
businesses in Africa, India and Southeast Asia contributed to the improved investment performance. The main driver of the fair value movements was an increase in
the value of SGI of R120 million which was mainly attributed to improved loss ratios.
Net earnings from associated companies of R291 million (2017: R110 million) included R266 million (including profit on deemed disposal of associate of R164 million)
from Saham Finances. The other key contributor to earnings from associated companies was Western Group Holdings Ltd.
CAPITAL
The group economic capital requirement at 31 December 2018, based on the Santam internal economic model, amounted to R6.9 billion (2017: R6 billion). This
resulted in an economic capital coverage ratio of 159% (2017: 158%), somewhat above the midpoint of the target range of 130% to 170%. Santam has submitted its
internal model application pack to the Prudential Authority in July 2018 for approval. We remain committed to efficient capital management.
PROSPECTS
Trading conditions remain very competitive in a low-growth South African economic environment, which translates into limited growth of insurable assets for the
insurance industry. The South African economy slipped into a recession during the second quarter of 2018, but third-quarter growth of 2.2% ended the recession.
The South African Reserve Bank forecasts GDP growth of 1.9% for 2019 (announced in January 2019). It is expected that economic activity will in the near term be
constrained by weak consumer spending linked to the 2018 increase in value added tax and by unemployment, which is at near-record levels. Inflation (annual CPI) of
4.5% was reported on 23 January 2019.
Challenging environments and lower growth scenarios are, however, strong drivers for innovation and efficiency. We continue to focus on profitable growth,
cementing our leadership position in South Africa and capitalising on the opportunities presented by our emerging markets footprint. Following the further
investment in Saham Finance in October 2018, increased focus will be placed on establishing a platform for Santam and Saham Finances to become the leading
Pan-African specialist insurance provider, with significant growth potential.
The focus will remain on appropriate underwriting actions to manage the risk associated with weak economic conditions. Santam continues to work with local
municipalities to reduce risk and improve resilience.
The group remains focused on optimising efficiency by balancing management costs and underwriting profitability, as well as using technology to improve
underwriting results. Technology is playing a major role across the insurance value chain. Santam takes a measured and long-term approach to technological
advancements. During 2019, we will further embrace the value of technology to create better experiences for our clients and intermediaries.
The investment market is likely to remain uncertain. The increased exposure to non-rand-denominated business further increases foreign exchange volatility for the
group.
The group continues to prioritise and focus on its transformation priorities. These include the promotion of a diverse workforce, intermediary and supplier base;
access to insurance products by non-traditional markets; and further impactful investment in communities.
2019 will be the final year of our Vision 2020 strategy. We will therefore use the period to define our new strategy for 2020 and beyond. We must also anticipate
and leverage emerging trends related to climate change, urbanisation, new technology and changing client behaviour. It will be a priority in our next strategy
cycle to embed our knowledge about these trends and their impact into our core business practices.
EVENTS AFTER THE REPORTING PERIOD
There have been no material changes in the affairs or financial position of the company and its subsidiaries since the statement of financial position date.
DECLARATION OF ORDINARY DIVIDEND (NUMBER 130)
Notice is hereby given that the board has declared a gross final dividend of 665 cents per share (2017: 616.00 cents per share), 532 cents net of dividend withholding
taxation, where applicable, per ordinary share for the year ended 31 December 2018 to those members registered on the record date, being Friday, 22 March 2019.
The dividend has been declared from income reserves. A dividend withholding taxation of 20% will be applicable to all shareholders who are not exempt.
Share code: SNT
ISIN: ZAE000093779
Company registration number: 1918/001680/06
Company tax reference number: 9475/144/71/4
Gross cash dividend amount per share: 665 cents
Net dividend amount per share: 532 cents
Issued shares at 28 February 2019: 115 131 417
Declaration date: 28 February 2019
Last day to trade cum dividend: Monday, 18 March 2019
Shares trade ex-dividend: Tuesday, 19 March 2019
Record date: Friday, 22 March 2019
Payment date: Monday, 25 March 2019
Share certificates may not be dematerialised or rematerialised between Tuesday, 19 March 2019 and Friday, 22 March 2019, both days inclusive.
In terms of the dividends tax legislation, the dividends tax amount due will be withheld and paid over to the South African Revenue Service (SARS) by a nominee
company, stockbroker or Central Security Depository Participant (CSDP) (collectively Regulated Intermediary) on behalf of shareholders. Shareholders should seek
their own advice on the tax consequences associated with the dividend and are particularly encouraged to ensure their records are up to date so that the correct
withholding tax is applied to their dividend.
APPRECIATION
The board would like to extend its gratitude to Santam's management, employees, intermediaries and other business partners for their efforts and contributions
during the year.
PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS
The preparation of the audited annual financial statements was supervised by the chief financial officer of Santam Ltd, HD Nel CA(SA).
AUDITOR'S REPORT
These summary consolidated financial statements for the year ended 31 December 2018 have been audited by PricewaterhouseCoopers Inc., who expressed an unmodified
opinion thereon. The auditor also expressed an unmodified opinion on the annual financial statements from which these summary consolidated financial statements were
derived.
A copy of the auditor's report on the summary consolidated financial statements and of the auditor's report on the annual consolidated financial statements are
available for inspection at the company's registered office, together with the financial statements identified in the respective auditor's reports.
The auditor's report does not necessarily report on all of the information contained in this announcement/financial results. Shareholders are therefore advised that
in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report together with the accompanying
financial information from the issuer's registered office.
VP Khanyile L Lambrechts
Chairman Chief executive officer
27 February 2019
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated
Audited at Audited at
31 December 31 December
2018 2017
Notes R million R million
ASSETS
Intangible assets 885 841
Property and equipment 142 135
Investment in associates and joint ventures 2 927 1 789
Strategic investment - unquoted SEM target shares 2,6 1 323 1 089
Deferred income tax 155 91
Deposit with cell owners 191 174
Cell owners' and policyholders' interest 13 10
Financial assets at fair value through income 6 22 454 19 178
Reinsurance assets 7 6 487 5 824
Deferred acquisition costs 619 537
Loans and receivables including insurance receivables 6 6 274 5 253
Income tax assets 10 17
Cash and cash equivalents 3 618 4 321
Total assets 45 098 39 259
EQUITY
Capital and reserves attributable to the company's equity holders
Share capital 103 103
Treasury shares (467) (470)
Other reserves (90) (214)
Distributable reserves 9 311 7 999
8 857 7 418
Non-controlling interest 508 506
Total equity 9 365 7 924
LIABILITIES
Deferred income tax 81 87
Cell owners' and policyholders' interest 3 343 3 227
Reinsurance liability relating to cell owners 191 174
Financial liabilities at fair value through income
Debt securities 6 2 072 2 056
Investment contracts 6 1 528 1 703
Derivatives 6 4 -
Financial liabilities at amortised cost
Repo liability 6 759 531
Collateral guarantee contracts 6 158 130
Insurance liabilities 7 20 662 17 848
Deferred reinsurance acquisition revenue 487 326
Provisions for other liabilities and charges 162 106
Trade and other payables including insurance payables 6 5 922 4 953
Current income tax liabilities 364 194
Total liabilities 35 733 31 335
Total shareholders' equity and liabilities 45 098 39 259
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Year ended Year ended
31 December 31 December
2018 2017
Notes R million R million Change
Gross written premium 33 109 29 720 11%
Less: reinsurance written premium 9 041 8 027
Net written premium 24 068 21 693 11%
Less: change in unearned premium
Gross amount 2 019 648
Reinsurers' share (763) (285)
Net insurance premium revenue 22 812 21 330 7%
Interest income on amortised cost instruments 9 91 136
Interest income on fair value through income instruments 9 2 205 1 184
Other investment income 9 523 15
Income from reinsurance contracts ceded 1 889 1 794
Net (losses)/gains on financial assets and liabilities at fair value through income 9 (1 136) 427
Investment income and fair value losses on financial assets held for sale 9 - 175
Other income 246 127
Net income 26 630 25 188 6%
Insurance claims and loss adjustment expenses 18 442 20 466
Insurance claims and loss adjustment expenses recovered from reinsurers (4 615) (6 400)
Net insurance benefits and claims 13 827 14 066 (2%)
Expenses for the acquisition of insurance contracts 4 524 4 218
Expenses for marketing and administration 4 465 3 652
Expenses for investment-related activities 67 67
Amortisation and impairment of intangible assets 69 71
Impairment of loans 5 -
Investment return allocated to cell owners and structured insurance products 179 563
Total expenses 23 136 22 637 2%
Results of operating activities 3 494 2 551 37%
Finance costs (331) (295)
Net income from associates and joint ventures 291 110
Profit on sale of associates 11 40 5
(Loss)/gain on dilution of associate 11 (88) 18
Reclassification of foreign currency translation reserve on dilution of associate 11 19 (90)
Impairment of associates (12) (3)
Income tax recovered from cell owners and structured insurance products 10 106 -
Profit before tax 3 519 2 296
Tax expense allocated to shareholders 10 (884) (489)
Tax expense allocated to cell owners and structured insurance products (106) -
Total tax expense (990) (489)
Profit for the year 2 529 1 807 40%
Other comprehensive income, net of tax
Items that may subsequently be reclassified to income:
Currency translation differences - (3)
Release of translation differences on financial assets held for sale - (175)
Share of associates' currency translation differences 143 (41)
Reclassification of foreign currency translation reserve on dilution of associate (19) 90
Hedging reserve release (46) 6
Hedging reserve movement 46 -
Total comprehensive income for the year 2 653 1 684 58%
Profit attributable to:
- equity holders of the company 2 427 1 667 46%
- non-controlling interest 102 140
2 529 1 807
Total comprehensive income attributable to:
- equity holders of the company 2 551 1 544 65%
- non-controlling interest 102 140
2 653 1 684
Earnings attributable to equity shareholders
Earnings per share (cents) 12
Basic earnings per share 2 198 1 511 45%
Diluted earnings per share 2 182 1 496 46%
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the company Non-
Share Treasury Other Distributable controlling
capital shares reserves reserves Total interest Total
R million R million R million R million R million R million R million
Balance as at 1 January 2017 103 (472) (41) 7 286 6 876 469 7 345
Profit for the year - - - 1 667 1 667 140 1 807
Other comprehensive income:
Currency translation differences - - (3) - (3) - (3)
Release of translation differences on financial assets
held for sale - - (175) - (175) - (175)
Share of associates' currency translation differences - - (41) - (41) - (41)
Reclassification of foreign currency translation reserve
on dilution of associate - - 90 - 90 - 90
Hedging reserve release - - 6 - 6 - 6
Total comprehensive income for the year ended 31 December 2017 - - (123) 1 667 1 544 140 1 684
Issue of treasury shares in terms of share option schemes - 78 - (78) - - -
Purchase of treasury shares - (76) - - (76) - (76)
Transfer to reserves - - (50) 50 - - -
Share-based payment costs - - - 77 77 - 77
Dividends paid - - - (1 003) (1 003) (103) (1 106)
Balance as at 31 December 2017 103 (470) (214) 7 999 7 418 506 7 924
Profit for the year - - - 2 427 2 427 102 2 529
Other comprehensive income:
Share of associates' currency translation differences - - 143 - 143 - 143
Reclassification of foreign currency translation reserve on
dilution of associate - - (19) - (19) - (19)
Hedging reserve release - - (46) - (46) - (46)
Hedging reserve movement - - 46 - 46 - 46
Total comprehensive income for the year ended 31 December 2018 - - 124 2 427 2 551 102 2 653
Issue of treasury shares in terms of share option schemes - 94 - (94) - - -
Purchase of treasury shares - (91) - - (91) - (91)
Share-based payment costs - - - 65 65 - 65
Dividends paid - - - (1 086) (1 086) (100) (1 186)
Balance as at 31 December 2018 103 (467) (90) 9 311 8 857 508 9 365
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
Restated(1)
Audited Audited
Year ended Year ended
31 December 31 December
2018 2017
Notes R million R million
Cash flows from operating activities
Cash generated from operations 5 461 3 289
Interest paid (322) (252)
Income tax paid (785) (543)
Acquisition of financial assets (19 025) (18 482)
Proceeds from sale of financial assets 15 807 17 229
Net cash from operating activities 1 136 1 241
Cash flows from investing activities
Acquisition of financial assets (909) (1 840)
Proceeds from sale of financial assets 1 166 2 825
Settlement of zero cost collar - (58)
Acquisition of subsidiaries, net of cash acquired 11 (86) 852
Purchases of equipment (62) (68)
Purchases of intangible assets (27) (27)
Proceeds from sale of equipment and intangible assets 3 3
Acquisition of associates and joint ventures 11 (923) (152)
Capitalisation of associates 11 (15) (23)
Proceeds from sale of associates 11 168 23
Net cash (used in)/from investing activities (685) 1 535
Cash flows from financing activities
Purchase of treasury shares (91) (76)
Proceeds from issue of unsecured subordinated callable notes - 1 000
Redemption of unsecured subordinated callable notes - (1 000)
Decrease in investment contract liabilities(2) - (32)
Decrease in collateral guarantee contracts(2) - (1)
Dividends paid to company's shareholders (1 086) (1 003)
Dividends paid to non-controlling interest (100) (103)
Decrease in cell owners' and policyholders' interest(2) - (51)
Net cash used in financing activities (1 277) (1 266)
Net (decrease)/increase in cash and cash equivalents (826) 1 510
Cash and cash equivalents at beginning of year 4 321 2 887
Exchange gains/(losses) on cash and cash equivalents 123 (76)
Cash and cash equivalents at end of year 3 618 4 321
1 Refer to note 14 for detail.
2 Cash flows relating to investment contract liabilities, collateral guarantee contracts and cell owners' and policyholders' interest have previously been included
as part of financing activities in the statement of cash flows. As a result of the acquisition of SSI, management has reassessed the classification of these cash
flows and determined that these cash flows relate to operating activities. This change in classification has been applied prospectively, as these cash flows were
previously considered immaterial.
NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE for summary financial statements, and the
requirements of the Companies Act applicable to summary financial statements. The JSE requires summary financial statements to be prepared in accordance with
the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a
minimum, contain the information required by IAS 34 Interim Financial Reporting.
2. ACCOUNTING POLICIES
The accounting policies applied in the preparation of the consolidated financial statements from which the summary consolidated financial statements were
derived are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial
statements, except for those referred to below:
The following changes were made to the annual financial statements in the current year:
- Change in accounting policy to present the statement of financial position in order of liquidity (refer to note 14.1). Doing away with the
current/non-current distinction resulted in the aggregation of some line items, but in total, no changes were made to the amounts previously presented,
except for the strategic investment in unquoted SEM target shares now separately disclosed.
- Reclassification of some investment portfolios from investment activities to operating activities in the statement of cash flows (refer to note 14.2).
- Recognition of the repo liability, as well as underlying financial assets, relating to a repurchase agreement entered into by the SSI group
(refer to note 14.3)
- The tax on cell owners and structured insurance products has been separately disclosed in the statement of comprehensive income in the current year, as with
the acquisition of SSI in 2017, the tax on cell owners and structured insurance products became more significant. In the prior period, this tax was
disclosed as part of tax expense.
- Cash flows relating to investment contract liabilities, collateral guarantee contracts and cell and policyholders' interest have previously been included
as part of financing activities in the statement of cash flows. As a result of the acquisition of SSI, management has reassessed the classification of these
cash flows and determined that these cash flows relate to operating activities. This change in classification has been applied prospectively, as these cash
flows were previously considered immaterial.
The following new IFRSs and/or IFRICs were effective for the first time from 1 January 2018:
- Amendment to IFRS 2 - Classification and measurement of share-based payment transactions
- Amendments to IFRS 4 - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
- IFRS 9 Financial Instruments
- IFRS 15 Revenue from Contracts with Customers
- Amendment to IAS 40 - Investment Property
- Annual improvements 2014-16 cycle
- IFRIC 22 Foreign Currency Transactions and Advance Consideration
STANDARDS EFFECTIVE IN 2018
No material impact on the summary consolidated financial statements was identified.
IFRS 9 FINANCIAL INSTRUMENTS
Specifically regarding IFRS 9, the assessment of the impact of implementation included the following:
Classification and measurement - financial assets
- Debt instruments, previously measured as designated at FVPL (fair value through profit and loss), are now measured as mandatorily at FVPL under IFRS 9.
A key input in the assessment of the classification of debt instruments held was the business model applied to manage the financial assets. Financial
assets that are held to sell and those that are managed and whose performance is evaluated on a fair value basis will be measured at FVPL because they are
neither held to collect contractual cash flows nor held to collect contractual cash flows and to sell.
- Loans and receivables, previously measured at amortised cost, continue to be measured at amortised cost under IFRS 9 as the business model is hold to
collect and their cash flows solely represent payments of principle and interest.
- Equity instruments, previously measured at FVPL, are also measured at FVPL under IFRS 9. Management has not taken the irrevocable election to present
changes through FVOCI (fair value through other comprehensive income) for equities not held for trading.
Classification - financial liabilities
- Debt securities issued by Santam are measured at FVPL under IFRS 9 as these instruments are managed at fair value in terms of the related business model.
The amount of changes in fair value attributable to changes in own credit risk of these liabilities were considered immaterial.
- Investment contract liabilities predominantly consist of unit-linked contracts, where the value of the liability is directly derived from the performance
of the related assets. Based on the principle of eliminating an accounting mismatch in the financial statements, investment contracts are designated to be
measured at FVPL.
Hedge accounting
The group has elected to apply IFRS 9 for hedge accounting.
Impairment of financial assets
The majority of financial assets in the Santam group are measured at FVPL. All insurance and reinsurance receivables are recognised and measured in terms of
IFRS 4 Insurance Contracts and the group has not amended its policies for the measurement of IFRS 4. The insurance and reinsurance receivables are therefore
excluded from the scope of IFRS 9's expected credit loss (ECL) impairment. The most significant class of financial asset subject to an ECL impairment is loans
and receivables. Applying the expected credit loss model to loans and receivables at amortised cost did not result in material additional provisions for
impairment.
IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
IFRS 15 Revenue from Contracts with Customers introduces a single, principles-based five-step model to be applied to all contracts with customers. IFRS 15
does not apply to insurance contracts within the scope of IFRS 4 Insurance Contracts. Based on management's assessment, the impact on the net results was not
material.
STANDARDS NOT YET EFFECTIVE IN 2018
The group did not early adopt any of the standards not yet effective. Of the standards that are not yet effective, management expects IFRS 17 and IFRS 16 to
have a future impact on the group and company.
IFRS 16 LEASES
IFRS 16 Leases (effective 1 January 2019) addresses the establishment of principles for the recognition, measurement, presentation and disclosure of all lease
arrangements within the scope of the standard. Under the new standard, an asset (the right to use the leased item) and the liability to pay rentals are
recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change. The group plans to apply IFRS 16
using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of
retained earnings at 1 January 2019, with no restatement of comparative information. As at the reporting date, the group has non-cancellable operating lease
commitments of R1 795 million. However, the group is in the process to determine to what extent these commitments will result in recognition of an asset and
a liability for future payments and how this will affect the group's profit and classification of cash flows.
IFRS 17 INSURANCE CONTRACTS
IFRS 17 Insurance Contracts (effective 1 January 2022) addresses the establishment of principles for the recognition, measurement, presentation and disclosure
of insurance contracts within the scope of the standard. This is to effect a measurement model for insurance liabilities relating to policyholder contracts,
as well as related accounting treatments. The implementation of IFRS 17 will have different financial and operational implications for each entity that adopts
the standard. It is, however, expected that fundamental changes will be required in the following areas:
- Liability measurement
- Data requirements
- Operations and the underlying systems
- Management reporting
The group is currently facilitating a programme to review the impact of the implementation and to ensure a seamless transition.
3. ESTIMATES
The preparation of summary consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these summary consolidated financial statements, the significant judgements made by management in applying the group's accounting policies and
the key sources of estimation uncertainty are the same as those that applied to the consolidated annual financial statements for the year ended 31 December 2018.
There have been no changes since 31 December 2017.
4. RISK MANAGEMENT
The group's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk, foreign currency risk and derivatives
risk), credit risk and liquidity risk. Insurance activities expose the group to insurance risk (including pricing risk, reserving risk, accumulation risk and
reinsurance risk). The group is also exposed to operational risk and legal risk.
The capital risk management philosophy is to maximise the return on shareholders' capital within an appropriate risk framework.
The summary consolidated financial statements do not include all risk management information and disclosures required in the annual financial statements and
should be read in conjunction with the group's annual financial statements for the year ended 31 December 2018.
There have been no material changes to the risk management policies since 31 December 2017.
5. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the chief
executive officer, supported by the group executive committee.
The group conducts mainly insurance and investment activities.
INSURANCE ACTIVITIES:
The group presents its insurance results in the following segments:
- Conventional insurance business written on insurance licences controlled by the group, consisting of Santam Commercial and Personal, Santam Specialist
(niche business and agriculture), credit insurance written by Santam Structured Insurance (SSI), Santam re and MiWay;
- Alternative risk transfer insurance business written on the insurance licences of Centriq and SSI; and
- Santam's share of the insurance results of the Sanlam Emerging Markets (SEM) general insurance businesses, including SAN JV (Saham Finances).
Conventional insurance is further analysed by insurance class. Operating segments are aggregated based on quantitative and/or qualitative significance.
The performance of insurance activities is based on gross written premium as a measure of growth, with operating result as measure of profitability.
Growth is measured for SEM General Insurance businesses based on the gross written premium generated by the underlying businesses. With regard to the SEM and
SAN JV (Saham Finances) insurance business, this information is considered to be a reallocation of fair value movements recognised on the SEM target shares
as well as equity-accounted earnings on the investments in associates and joint ventures. It is also included as reconciling items in order to reconcile to
the consolidated statement of comprehensive income. Overall profitability is measured based on net investment income and fair value movements from SEM target
share investments and net income from associates for the investment in SAN JV.
Insurance business denominated in foreign currencies is covered by foreign denominated bank accounts and investment portfolios. Foreign exchange movements on
underwriting activities are therefore offset against the foreign exchange movements recognised on the bank accounts and investment portfolios.
INVESTMENT ACTIVITIES:
Investment activities are all investment-related activities undertaken by the group excluding investment returns on insurance funds. Due to the nature of the
activities conducted, investment activities are considered to be one operating segment. Investment activities are measured based on net investment income.
Given the nature of the operations, there is no single external client that provides 10% or more of the group's revenues.
The investment return on insurance funds is calculated based on the day-weighted effective return realised by the group on the assets held to cover the
group's net insurance working capital requirements.
The Santam BEE transaction costs are unrelated to the core underwriting and investment performance of the group. Therefore, these costs are disclosed as
unallocated activities.
Santam Ltd is domiciled in South Africa. Geographical analysis of the gross written premium and non-current assets and liabilities is based on the countries
in which the business is underwritten or managed. Non-current assets comprise goodwill and intangible assets, property and equipment, investments in
associates and joint ventures and SEM target shares.
5.1 FOR THE YEAR ENDED 31 DECEMBER 2018
Insurance
Reconciling
Alternative Santam's and IFRS
Conventional risk share of SEM Total Investment Total unallocated Total
Business activity R million R million R million R million R million R million R million R million
Revenue 27 711 5 398 2 547 35 656 725 36 381 (3 272) 33 109
Net earned premium 22 371 441 1 994 24 806 - 24 806 (1 994) 22 812
Net claims incurred 13 499 328 1 354 15 181 - 15 181 (1 354) 13 827
Net commission 2 764 (129) 161 2 796 - 2 796 (161) 2 635
Management expenses (excluding BEE costs)(1) 4 042 211 453 4 706 - 4 706 (453) 4 253
Net underwriting result 2 066 31 26 2 123 - 2 123 (26) 2 097
Investment return on insurance funds 532 65 257 854 - 854 (257) 597
Net insurance result 2 598 96 283 2 977 - 2 977 (283) 2 694
Other income(2) 187 59 4 250 - 250 (4) 246
Other expenses(2) (189) (59) - (248) - (248) - (248)
Operating result before non-controlling
interest and tax 2 596 96 287 2 979 - 2 979 (287) 2 692
Reallocation of operating result(3) - - (287) (287) - (287) 287 -
Investment income net of
investment-related fees - 179 234 413 605 1 018 - 1 018
Investment return allocated to cell owners
and structured insurance products - (179) - (179) - (179) - (179)
Finance costs - - - - (331) (331) - (331)
Income from associates and joint ventures
including profit on sale and impairment - - 266 266 53 319 - 319
Loss on dilution of associate - - (88) (88) - (88) - (88)
Reclassification of foreign currency
translation reserve on dilution of associate - - 19 19 - 19 - 19
Santam BEE costs - - - - - - (8) (8)
Amortisation and impairment of intangible
assets(1) (23) (1) - (24) - (24) - (24)
Impairment of loans (5) - - (5) - (5) - (5)
Income tax recovered from cell owners and
structured insurance products - 106 - 106 - 106 - 106
Profit before tax 2 568 201 431 3 200 327 3 527 (8) 3 519
1 Amortisation of computer software included as part of management expenses. Santam's share of the costs to manage the SEM portfolio of R36 million has
been included in management expenses.
2 Includes other operating income and expenses not related to underwriting results.
3 Reconciling items consist of the reallocation of net operating results relating to the underlying investments of the SEM target shares and SAN JV
(Saham Finances) for management reporting purposes.
FOR THE YEAR ENDED 31 DECEMBER 2017
Insurance
Reconciling
Alternative Santam's and IFRS
Conventional risk share of SEM Total Investment Total unallocated Total
Business activity R million R million R million R million R million R million R million R million
Revenue 25 853 3 867 2 382 32 102 689 32 791 (3 071) 29 720
Net earned premium 20 893 437 1 790 23 120 - 23 120 (1 790) 21 330
Net claims incurred 13 753 313 1 344 15 410 - 15 410 (1 344) 14 066
Net commission 2 526 (102) 125 2 549 - 2 549 (125) 2 424
Management expenses
(excluding BEE costs)(1) 3 354 206 433 3 993 - 3 993 (433) 3 560
Net underwriting result 1 260 20 (112) 1 168 - 1 168 112 1 280
Investment return on insurance funds 584 64 356 1 004 - 1 004 (356) 648
Net insurance result 1 844 84 244 2 172 - 2 172 (244) 1 928
Other income(2) 84 43 - 127 - 127 - 127
Other expenses(2) (86) (43) - (129) - (129) - (129)
Operating result before non-controlling
interest and tax 1 842 84 244 2 170 - 2 170 (244) 1 926
Reallocation of operating result(3) - - (244) (244) - (244) 244 -
Investment income net of
investment-related fees - 563 84 647 575 1 222 - 1 222
Investment return allocated to cell owners
and structured insurance products - (563) - (563) - (563) - (563)
Finance costs - - - - (295) (295) - (295)
Income from associates and joint ventures
including profit on sale and impairment - - 65 65 47 112 - 112
Gain on dilution of associate - - 18 18 - 18 - 18
Reclassification of foreign currency
translationn reserve on dilution of associate - - (90) (90) - (90) (90)
Santam BEE costs - - - - - - (3) (3)
Amortisation and impairment of intangible
assets(1) (31) - - (31) - (31) - (31)
Profit before tax 1 811 84 77 1 972 327 2 299 (3) 2 296
1 Amortisation of computer software included as part of management expenses. Santam's share of the costs to manage the SEM portfolio of R33 million has
been included in management expenses.
2 Includes other operating income and expenses not related to underwriting results.
3 Reconciling items consist of the reallocation of net insurance results relating to the underlying investments of the SEM target shares and SAN JV
(Saham Finances) for management reporting purposes.
5.2 FOR THE YEAR ENDED 31 DECEMBER 2018
ADDITIONAL INFORMATION ON INSURANCE ACTIVITIES
The group's conventional insurance activities are spread over various classes of general insurance.
Gross written Underwriting
premium result
R million R million
Accident and health 535 82
Crop 729 54
Engineering 1 335 296
Guarantee 301 (69)
Liability 1 250 (20)
Miscellaneous 8 (1)
Motor 12 801 1 176
Property 10 031 519
Transportation 721 29
Total 27 711 2 066
Comprising:
Commercial insurance 15 809 920
Personal insurance 11 902 1 146
Total 27 711 2 066
R million
ADDITIONAL INFORMATION ON INVESTMENT ACTIVITIES
The group's return on investment-related activities can be analysed as follows:
Investment income 895
Net losses on financial assets and liabilities at fair value through income (223)
Income from associates and joint ventures 53
Investment-related revenue 725
Expenses for investment-related activities (67)
Finance costs (331)
Net total investment-related transactions 327
For detailed analysis of investment activities, refer to notes 6 and 9.
5.2 FOR THE YEAR ENDED 31 DECEMBER 2017
ADDITIONAL INFORMATION ON INSURANCE ACTIVITIES
The group's conventional insurance activities are spread over various classes of general insurance.
Gross written Underwriting
premium result
R million R million
Accident and health 482 58
Crop 829 114
Engineering 1 290 296
Guarantee 182 (18)
Liability 1 227 85
Miscellaneous 4 2
Motor 12 125 860
Property 9 000 (165)
Transportation 714 28
Total 25 853 1 260
Comprising:
Commercial insurance 14 589 513
Personal insurance 11 264 747
Total 25 853 1 260
R million
ADDITIONAL INFORMATION ON INVESTMENT ACTIVITIES
The group's return on investment-related activities can be analysed as follows:
Investment income 557
Net gains on financial assets and liabilities at fair value through income 85
Income from associates including profit on sale 47
Investment-related revenue 689
Expenses for investment-related activities (67)
Finance costs (295)
Net total investment-related transactions 327
For detailed analysis of investment activities, refer to notes 6 and 9.
FOR THE YEAR ENDED 31 DECEMBER 2018
ADDITIONAL INFORMATION ON SANTAM'S SHARE OF SEM
The group's return on Santam's share of SEM activities can be analysed as follows:
SAN JV
(Saham
SEM Finances)(3) Total
R million R million R million
Revenue 1 265 1 282 2 547
Net earned premium 923 1 071 1 994
Net claims incurred 679 675 1 354
Net commission 49 112 161
Management expenses (excluding BEE costs) 248 205 453
Net underwriting result (53) 79 26
Investment return on insurance funds 183 74 257
Net insurance result 130 153 283
Other income - 4 4
Operating result before non-controlling interest and tax(2) 130 157 287
Reallocation of operating result(1) (130) (157) (287)
Investment income net of investment-related fees 234 - 234
Income from associates and joint ventures - 266 266
Loss on dilution of associate - (88) (88)
Reclassification of foreign currency translation reserve on dilution of associate - 19 19
Profit before tax 234 197 431
1 Reconciling items consist of the reallocation of net operating results relating to the underlying investments of the SEM target shares and SAN JV (Saham
Finances) for management reporting purposes.
2 Santam's share of SAN JV's non-controlling interest and tax of R47 million resulted in net results of R49 million.
3 Santam held an effective interest of 7% until 9 October 2018, after which the effective interest increased to 10%. Refer to note 11.
FOR THE YEAR ENDED 31 DECEMBER 2017
ADDITIONAL INFORMATION ON SANTAM'S SHARE OF SEM
The group's return on Santam's share of SEM activities can be analysed as follows:
SAN JV
(Saham
SEM Finances)(3) Total
R million R million R million
Revenue 1 267 1 115 2 382
Net earned premium 881 909 1 790
Net claims incurred 723 621 1 344
Net commission 30 95 125
Management expenses (excluding BEE costs) 236 197 433
Net underwriting result (108) (4) (112)
Investment return on insurance funds 234 122 356
Net insurance result/operating result before non-controlling interest and tax(2) 126 118 244
Reallocation of operating result(1) (126) (118) (244)
Investment income net of investment-related fees 84 - 84
Income from associates and joint ventures - 65 65
Gain on dilution of associate - 18 18
Reclassification of foreign currency translation reserve on dilution of associate - (90) (90)
Profit before tax 84 (7) 77
1 Reconciling items consist of the reallocation of net insurance results relating to the underlying investments of the SEM target shares and SAN JV
(Saham Finances) for management reporting purposes.
2 Santam's share of SAN JV's non-controlling interest and tax of R30 million resulted in net results of R32 million.
3 Santam held an effective interest of 7.5%, until 10 May 2017, after which the effective interest decreased to 7%.
5.3 GEOGRAPHICAL ANALYSIS
Gross written premium Non-current assets
31 December 31 December 31 December 31 December
2018 2017 2018 2017
R million R million R million R million
South Africa 29 742 26 520 1 109 1 125
Rest of Africa(1) 3 684 3 810 3 109 1 967
Southeast Asia, India and Middle East 1 969 1 549 1 059 886
Other 261 223 - -
35 656 32 102 5 277 3 978
Reconciling items(2) (2 547) (2 382) - -
Group total 33 109 29 720 5 277 3 978
1 Includes gross written premium relating to Namibia of R1 110 million (Dec 2017: R1 197 million).
2 Reconciling items relate to the underlying investments included in SEM and SAN JV (Saham Finances) activities for management reporting purposes.
5.4 ANALYSIS OF SAN JV (SAHAM)'S RESULTS
The Saham Finances contribution was impacted by corporate activity in 2018 and 2017. The tables included in this note provides an analysis of the Saham Finances
earnings on a 100% basis for both years, which eliminates the distortion caused by changes in shareholding. Santam's share of the net underwriting results for
the year amounted to R79 million (2017: R4 million loss).
SAHAM FINANCES NET RESULT FROM FINANCIAL SERVICES FOR THE YEAR ENDED 31 DECEMBER 2018 (100%)
2018 2017
R million R million
Gross written premiums 16 569 15 975
Net earned premiums 13 843 12 723
Net claims incurred (9 448) (8 537)
Net commission (1 454) (1 289)
Management expenses (2 645) (2 572)
Net underwriting result 296 325
Investment return on insurance funds 951 1 734
Non-insurance earnings 52 116
Operating result before taxation and non-controlling interest 1 299 2 175
Taxation and non-controlling interest (609) (1 078)
Operating result after taxation and non-controlling interest 690 1 097
Net investment income 172 110
Finance costs (160) (76)
Attributable earnings 702 1 131
Foreign currency translation differences (124) 151
Total comprehensive income for the year 578 1 282
Analysis of SAN JV (Saham)'s gross written premium (100%)
Life insurance General insurance Reinsurance Total
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2018 2017 2018 2017 2018 2017 2018 2017
R million R million R million R million R million R million R million R million
Morocco 1 481 1 420 6 708 6 000 - - 8 189 7 420
Lebanon 736 680 791 871 - - 1 527 1 551
Mauritius (Saham Re) - - - - 1 108 1 061 1 108 1 061
Ivory Coast 585 547 1 251 1 220 - - 1 836 1 767
Angola 35 42 968 1 415 - - 1 003 1 457
Other 462 363 2 335 2 246 1 305 1 267 4 102 3 876
Consolidation adjustment (23) (30) (145) (164) (1 028) (963) (1 196) (1 157)
3 276 3 022 11 908 11 588 1 385 1 365 16 569 15 975
Analysis of SAN JV (Saham)'s underwriting results (100%)
Life insurance General insurance Reinsurance Total
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2018 2017 2018 2017 2018 2017 2018 2017
R million R million R million R million R million R million R million R million
Morocco (135) (191) 439 488 - - 304 297
Lebanon (117) (78) 58 28 - - (59) (50)
Mauritius (Saham Re) - - - - 311 289 311 289
Ivory Coast (111) (72) 77 100 - - (34) 28
Angola 1 18 (29) (40) - - (28) (22)
Other (86) (96) (58) (64) (54) (57) (198) (217)
(448) (419) 487 512 257 232 296 325
6. FINANCIAL ASSETS AND LIABILITIES
Audited at Audited at
31 December 31 December
2018 2017
R million R million
The group's financial assets are summarised below by measurement category.
Financial assets
Strategic investment - unquoted SEM target shares 1 323 1 089
Financial assets at fair value through income (restated, please refer to note 14) 22 454 19 178
Loans and receivables 6 274 5 253
Receivables arising from insurance and reinsurance contracts 5 168 4 279
Loans and receivables excluding insurance receivables 1 106 974
30 051 25 520
Expected to be realised after 12 months 17 400 18 085
Expected to be realised within 12 months 12 651 7 435
Financial liabilities
Financial liabilities at fair value through income 3 604 3 759
Financial liabilities at amortised cost (restated, please refer to note 14) 917 661
Trade and other payables 5 921 4 953
10 442 9 373
Expected to be realised after 12 months 3 508 3 614
Expected to be realised within 12 months 6 934 5 759
Financial instruments measured at fair value on a recurring basis
The table below analyses financial instruments, carried at fair value through income, by valuation method. There were no significant changes in the valuation
methods applied since 31 December 2017. The different levels have been defined as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: Input other than quoted prices included within level 1 that is observable for the asset or liability, either directly (that is, by prices) or
indirectly (that is, derived from prices). The fair value of level 2 instruments are determined as follows:
- Quoted equity securities are valued using quoted prices with the main assumption that quoted prices might require adjustments due to an inactive market.
- Unquoted equity securities are valued using the discounted cash flow (DCF) or net asset value method based on market input.
- Quoted debt securities are valued using yield of benchmark bond, DCF benchmarked against similar instruments with the same issuer, price quotations of JSE
interest rate market or issue price of external valuations based on market input.
- Unquoted debt securities are valued using DCF, real interest rates, benchmark yield plus fixed spread or deposit rates based on market input.
- Quoted unitised investments with underlying equity securities are valued using quoted prices with the main assumption that quoted prices might require
adjustments due to an inactive market.
- Quoted unitised investments with underlying debt securities are valued using DCF, external valuations and published price quotations on the JSE equity and
interest rate market or external valuations that are based on published market input with the main assumptions being market input, uplifted with inflation.
- Derivatives are valued using the Black-Scholes model, net present value of estimated floating costs less the performance of the underlying index over
contract term, DCF (using fixed contract rates and market-related variable rates adjusted for credit risk, credit default swap premiums, offset between
strike price and market projected forward value, yield curve of similar market-traded instruments) with the main assumptions being market input, credit
spreads and contract inputs.
- Level 3: Input for the asset or liability that is not based on observable data (that is, unobservable input).
There were no significant transfers between level 1 and level 2 during the current or prior year.
Audited at Level 1 Level 2 Level 3 Total
31 December 2018 R million R million R million R million
Financial assets at fair value through income
Equity securities
Quoted
Listed 2 377 - - 2 377
Irredeemable preference shares 1 - - 1
Unquoted - 28 1 390 1 418
Total equity securities 2 378 28 1 390 3 796
Debt securities
Quoted
Government and other bonds - 4 750 - 4 750
Collateralised securities - 370 - 370
Money market instruments more than one year - 3 344 - 3 344
Unquoted
Government and other bonds - 292 - 292
Money market instruments more than one year - 5 025 - 5 025
Redeemable preference shares - 70 61 131
Total debt securities - 13 851 61 13 912
Unitised investments
Quoted
Underlying equity securities - 615 - 615
Underlying debt securities - 2 501 - 2 501
Total unitised investments - 3 116 - 3 116
Derivative instruments
Interest rate swaps(1) - - - -
Foreign currency collar - 25 - 25
Total derivative instruments - 25 - 25
Short-term money market instruments - 2 928 - 2 928
Total financial assets at fair value through income 2 378 19 948 1 451 23 777
1 Carrying value as at 31 December 2018 is less than R1 million.
Financial liabilities at fair value through income
Debt securities - 2 072 - 2 072
Investment contracts - 1 528 - 1 528
Derivative instruments
Exchange traded futures - 4 - 4
Total derivative instruments - 4 - 4
Total financial liabilities at fair value through income - 3 604 - 3 604
Audited at Level 1 Level 2 Level 3 Total
31 December 2017 R million R million R million R million
Financial assets at fair value through income
Equity securities
Quoted
Listed 2 086 9 - 2 095
Irredeemable preference shares 2 - - 2
Unquoted - 36 1 143 1 179
Total equity securities 2 088 45 1 143 3 276
Debt securities
Quoted
Government and other bonds (restated, please refer to note 14) - 4 307 - 4 307
Collateralised securities - 541 - 541
Money market instruments more than one year - 4 094 - 4 094
Unquoted
Government and other bonds - 184 - 184
Money market instruments more than one year - 3 367 - 3 367
Redeemable preference shares - 157 25 182
Total debt securities - 12 650 25 12 675
Unitised investments
Quoted
Underlying equity securities - 1 765 - 1 765
Underlying debt securities - 369 - 369
Total unitised investments - 2 134 - 2 134
Derivative instruments
Exchange traded futures - 8 - 8
Interest rate swaps(1) - - - -
Total derivative instruments - 8 - 8
Short-term money market instruments - 2 174 - 2 174
Total financial assets at fair value through income 2 088 17 011 1 168 20 267
1 Carrying value as at 31 December 2017 is less than R1 million.
Financial liabilities at fair value through income
Debt securities - 2 056 - 2 056
Investment contracts - 1 703 - 1 703
Total financial liabilities at fair value through income - 3 759 - 3 759
The following table presents the changes in level 3 instruments:
Equity Debt
securities securities Derivatives Total
R million R million R million R million
31 December 2018
Opening balance 1 143 25 - 1 168
Acquisitions 12 36 - 48
Gains recognised in profit or loss 235 - - 235
Closing balance 1 390 61 - 1 451
31 December 2017
Opening balance 1 181 29 - 1 210
Acquisitions 2 - - 2
Business combination - (4) - (4)
Disposals (106) - - (106)
Settlements - - 58 58
Gains/(losses) recognised in profit or loss 66 - (58) 8
Closing balance 1 143 25 - 1 168
The unquoted equity instruments recognised as level 3 instruments consist mainly of the participation target shares issued by Sanlam Emerging Markets (Pty)
Ltd (SEM). The Sanlam Group entered into agreements in June 2017 to dispose of its various interests in the Enterprise Group in Ghana. In terms of the
co-investment arrangement with SEM, Santam, which had an economic interest of 14% in Enterprise Insurance Company Ltd (EIC), disposed of its interest in EIC
for R105 million.
Of the R235 million gain (Dec 2017: R66 million gain) recognised on equity securities, a R234 million gain (Dec 2017: R65 million gain) relates to the SEM
target shares, of which R104 million (Dec 2017: R57 million loss) relates to foreign exchange gains, and R130 million to an increase (Dec 2017: R122 million)
in fair value in local currency terms. A key driver of the fair value movements of Santam's share of the SEM investment portfolio was:
- An increase in the value of Shriram General Insurance Company Ltd of R120 million, in local currency terms, was mainly attributed to an improved underwriting
margin.
The fair value of the SEM target shares is determined using predominantly discounted cash flow (DCF) models, with the remainder valued at or within close
proximity of the latest available net asset value of the underlying company. The most significant assumptions used in these DCF models are the discount rate,
exchange rate and net insurance margin expectations. Should the discount rates increase or decrease by 10%, the cumulative value of the most significant target
shares (SGI and P&O) valued by way of DCF models would decrease by R146 million (Dec 2017: R140 million) or increase by R229 million (Dec 2017: R211 million),
respectively. If the relative foreign exchange rates increase or decrease by 10%, the cumulative fair values will increase or decrease by R106 million
(Dec 2017: R86 million). Should the net insurance margin profile (projected over a period of 10 years) increase or decrease by 10%, the cumulative fair values
will increase by R81 million (Dec 2017: R93 million) or decrease by R82 million (Dec 2017: R93 million), respectively. The remaining target shares are mostly
impacted by changes in exchange rates.
At 31 December 2018, the group had exchange traded futures with an exposure value of R459 million (Dec 2017: R235 million). The group also had interest rate
derivative assets as part of the international bond portfolio with a gross exposure asset and liability at 31 December 2018 of R38 million (Dec 2017: R33 million)
and R38 million (Dec 2017: R33 million) respectively.
During 2007, the company issued unsecured subordinated callable notes to the value of R1 billion in two tranches. The fixed effective rate for the R600 million
issue was 8.6% and 9.6% for the second tranche of R400 million, representing the R203 companion bond plus an appropriate credit spread at the time of the issues.
The fixed coupon rate, based on the nominal value of the issues, amounts to 8.25% and for both tranches the optional redemption date was 15 September 2017.
Between the optional redemption date and final maturity date of 15 September 2022, a variable interest rate (JIBAR-based plus additional margin) would have
applied. Both tranches were, however, redeemed on 15 September 2017, resulting in the realisation of the initial discount of R45 million.
During April 2016, the company issued additional unsecured subordinated callable notes to the value of R1 billion in two equal tranches of fixed and floating
rate notes. The effective rate for the floating rate notes represents the three-month JIBAR plus 245 basis points, while the rate for the fixed rate notes
amounted to 11.77%. The floating rate notes have an optional redemption date of 12 April 2021 with a final maturity date of 12 April 2026, and the fixed rate
notes have an optional redemption date of 12 April 2023 with a final maturity date of 12 April 2028.
During June 2017, the company issued additional unsecured subordinated callable floating rate notes to the value of R1 billion in anticipation of the
redemption of the R1 billion subordinated debt issued in 2007. The effective interest rate for the floating rate notes represents the three-month JIBAR plus
210 basis points. The notes have an optional redemption date of 27 June 2022 with a final maturity date of 27 June 2027.
Per the conditions set by the Prudential Authority, Santam is required to maintain liquid assets equal to the value of the callable notes until maturity.
The callable notes are therefore measured at fair value to minimise undue volatility in the statement of comprehensive income. The fair value of the fixed
rate notes is calculated using the yield provided by BESA and adding accrued interest. The fair value of the floating rate notes is calculated using the price
provided by BESA and adding accrued interest.
On 31 July 2017, a zero cost collar structure on equities to the value of R1.2 billion was entered into based on the SWIX 40, providing full downside
protection from the implementation level of 10 972, with upside participation (excluding dividends) of 2.2%. The structure matured on 21 December 2017
(resulting in a realised loss of R58 million) and was not renewed.
On 10 September 2018 Santam entered into a foreign currency collar against the US dollar. As at 31 December, the instrument's valuation amounted to
R24.8 million. The collar expired in two equal tranches on 4 January 2019 and 7 January 2019 and realised a total profit of R36.5 million.
7. INSURANCE LIABILITIES AND REINSURANCE ASSETS
Audited at Audited at
31 December 31 December
2018 2017
R million R million
Gross insurance liabilities
Long-term insurance contracts
- claims reported and loss adjustment expenses 32 75
- claims incurred but not reported 41 62
General insurance contracts
- claims reported and loss adjustment expenses 8 465 8 273
- claims incurred but not reported 2 868 2 310
- unearned premiums 9 256 7 128
Total gross insurance liabilities 20 662 17 848
Expected to be settled after 12 months 2 339 1 789
Expected to be settled within 12 months 18 323 16 059
Recoverable from reinsurers
Long-term insurance contracts
- claims reported and loss adjustment expenses 14 18
- claims incurred but not reported 10 15
General insurance contracts
- claims reported and loss adjustment expenses 4 138 3 918
- claims incurred but not reported 667 496
- unearned premiums 1 658 1 377
Total reinsurers' share of insurance liabilities 6 487 5 824
Expected to be realised after 12 months 505 202
Expected to be realised within 12 months 5 982 5 622
Net insurance liabilities
Long-term insurance contracts
- claims reported and loss adjustment expenses 18 57
- claims incurred but not reported 31 47
General insurance contracts
- claims reported and loss adjustment expenses 4 327 4 355
- claims incurred but not reported 2 201 1 814
- unearned premiums 7 598 5 751
Total net insurance liabilities 14 175 12 024
8. NON-CURRENT ASSETS HELD FOR SALE
Non-current assets held for sale relates to the winding up of the Santam International group. The winding up also resulted in the release
of the foreign currency translation reserve relating to the investment of R175 million in the prior year (refer to note 9).
Audited at Audited at
31 December 31 December
2018 2017
R million R million
Assets that are classified as held for sale
Financial assets at fair value through income
Opening balance - 8
Settlements - (8)
Closing balance - -
9. INVESTMENT INCOME AND NET (LOSSES)/GAINS ON FINANCIAL ASSETS AND LIABILITIES
Audited Audited
Year ended Year ended
31 December 31 December
2018 2017
R million R million
Investment income 2 819 1 335
Interest income derived from: 2 296 1 320
Financial assets measured at amortised cost 91 136
Financial assets mandatorily measured at fair value through income 2 205 1 184
Other investment income 523 15
Dividend income 147 131
Foreign exchange differences 376 (116)
Net (losses)/gains on financial assets and liabilities at fair value through income
Net fair value (losses)/gains on financial assets mandatorily at fair value through income (1 171) 370
Net realised gains on financial assets excluding derivative instruments 377 121
Net fair value (losses)/gains on financial assets excluding derivative instruments (1 571) 283
Net realised/fair value gains/(losses) on derivative instruments 23 (34)
Net fair value gains/(losses) on financial liabilities designated as at fair value through income 35 57
Net fair value (losses)/gains on debt securities (16) 19
Net realised losses on debt securities - (45)
Net realised gains on investment contracts 51 83
Investment income and net losses on financial assets held for sale(1) - 175
Foreign exchange differences - 175
1 683 1 937
1 The release of the foreign currency translation reserve of R175 million for the group related to Santam International.
10. INCOME TAX
Normal taxation
Current year 980 535
Prior year (3) 32
Recovered from cell owners(1) - (80)
Other taxes 12 -
Foreign taxation - current year 71 88
Total income taxation for the year 1 060 575
Deferred taxation
Current year (70) (34)
Prior year - (52)
Total deferred taxation for the year (70) (86)
Total taxation as per statement of comprehensive income 990 489
Income tax recovered from cell owners and structured insurance products(1) (106) -
Total tax expense attributable to shareholders 884 489
Profit before taxation per statement of comprehensive income 3 519 2 296
Adjustment for income tax recovered from cell owners and structured insurance products(1) (106) -
Total profit before tax attributable to shareholders 3 413 2 296
1 As part of the alternative risk transfer business, the Santam group incurs taxation on behalf of cell owners and policyholders of certain structured
insurance products which are fully recovered from these parties. With the acquisition of SSI in the 2017 financial year, the tax on cell owners and
structured insurance products is more significant. As a result, the tax on cell owners and structured insurance products in the current year has been
separately disclosed in the financial statements. In the prior year, this tax was disclosed as part of tax expense.
Audited Audited
Year ended Year ended
31 December 31 December
2018 2017
R million R million
Reconciliation of taxation rate (%)
Normal South African taxation rate 28.0 28.0
Adjusted for:
Disallowable expenses 0.1 0.3
Foreign tax differential 0.8 0.4
Exempt income (0.8) (2.4)
Investment results 0.1 (1.1)
Income from associates and joint ventures (1.8) (1.5)
Exempt foreign currency translation - (1.0)
Previous years' overprovision (0.1) (0.8)
Non-current assets held for sale and discontinued operations - (0.4)
Other permanent differences (0.8) (0.4)
Other taxes 0.4 0.2
Net reduction (2.1) (6.7)
Effective rate attributable to shareholders (%) 25.9 21.3
11. CORPORATE TRANSACTIONS
2018
Acquisitions
SAN JV (RF) (Pty) Ltd
Effective 9 October 2018, SEM and Santam, through its investment in SAN JV (RF) (Pty) Ltd (SAN JV), acquired a further 53.3% interest in Saham Finances for
US$1 045 million. Santam's share of the purchase price, including transaction costs, was US$64 million (R957 million), before applying hedge accounting.
Santam's interest in SAN JV therefore diluted to 10% (previously 15%) due to limited participation in this transaction. As part of this transaction, a cash
flow hedge was implemented to cover Santam's foreign currency exposure by designating US dollar-denominated cash balances to the transaction. The impact of
this was that foreign currency gains of R46 million recognised on the designated cash balances since implementation date were not recognised in the statement
of comprehensive income, but were accounted for as part of the investment in SAN JV. As a result of the dilution, R19 million of the foreign currency translation
reserve relating to SAN JV was released to profit or loss. A loss on dilution of R88 million was also recognised.
Professional Provident Society Short-term Insurance Company Ltd (PST)
During March, June and September 2018, pro rata recapitalisations took place in terms of which Santam injected a further total of R15 million into the company.
Ctrl Investment Holdings (Pty) Ltd
On 30 November 2018, Santam subscribed for a 25% equity stake in Ctrl Investment Holdings (Pty) Ltd for an amount of R12.5 million.
Snyman en Van der Vyver Finansiele Dienste (Pty) Ltd Group
During November 2018, the Santam group acquired a shareholding of 100% in Snyman en Van der Vyver Finansiele Dienste (Pty) Ltd for R90 million in cash. Due to
the limited time available to perform a purchase price allocation, a provisional allocation to goodwill was recorded based on the IFRS historical cost values.
Per IFRS 3 requirements, a detailed valuation and allocation will be performed within 12 months of the purchase.
R million
Details of the assets and liabilities acquired (based on provisional purchase price allocation) are as follows:
Property, equipment and intangible assets 1
Loans and receivables including insurance receivables 3
Cash and cash equivalents 4
Deferred income tax 1
Provisions for other liabilities and charges (3)
Trade and other payables including insurance payables (2)
Current income tax liabilities (3)
Net asset value acquired 1
Goodwill 89
Purchase consideration paid 90
2018
Disposals
Professional Provident Society Short-term Insurance Company Ltd (PST)
During December 2018, the group sold its 49% shareholding in Professional Provident Society Short-term Insurance Company Ltd for R114 million. The net profit
realised was R40 million and capital gains tax of R3 million was recognised.
Western Group Holdings Ltd
On 31 October 2018, Santam restructured its investment in the Western Group. Santam effectively sold its 40% shareholding in Western Group Holdings Ltd and
received a cash component of R54 million as well as 40% shareholding of R215 million in Western National Insurance Ltd. An immaterial profit was recognised
on the disposal. Santam Ltd recognised capital gains tax of R10 million.
2017
Acquisitions
Santam Structured Insurance (Pty) Ltd
During March 2017, the Santam group acquired a shareholding of 100% in RMB-SI Investments (Pty) Ltd (now Santam Structured Insurance (Pty) Ltd (SSI)) for
R193 million in cash. Key SSI management obtained a 10% economic participation interest in SSI at acquisition date for R20 million. The 10% participatory
interest is included as a liability under provisions.
R million
Details of the assets and liabilities acquired are as follows:
Property and equipment 15
Investment in associates and joint ventures 17
Financial assets at fair value through income (restated, please refer to note 14) 4 845
Reinsurance assets 391
Deferred acquisition costs 9
Loans and receivables including insurance receivables 519
Cash and cash equivalents 1 045
Deferred income tax (86)
Cell owners' and policyholders' interest (1 849)
Financial liabilities at fair value through income (1 551)
Financial liabilities at amortised cost (restated, please refer to note 14) (504)
Insurance liabilities (2 242)
Deferred reinsurance acquisition revenue (2)
Provisions for other liabilities and charges (30)
Trade and other payables including insurance payables (350)
Current income tax liabilities (14)
Net asset value acquired 213
Long-term incentive provision (20)
Purchase consideration paid 193
SAN JV (RF) (Pty) Ltd
Effective 10 May 2017, SEM and Santam, through its investment in SAN JV (RF) (Pty) Ltd (SAN JV), acquired a further 16.6% interest in Saham Finances via a
subscription for new shares for US$351 million. Santam's share of the purchase price, including transaction costs, was U$11 million (R152 million). Santam's
interest in SAN JV therefore diluted to 15% (previously 25%). As a result of the dilution, R90 million of the foreign currency translation reserve relating to
SAN JV was released to profit or loss. An R18 million gain on dilution was also recognised.
Professional Provident Society Short-term Insurance Company Ltd (PST)
During March, June, September and December 2017, pro rata recapitalisations took place in terms of which Santam injected a further total of R23 million into
the company.
Disposals
Paladin Underwriting Managers (Pty) Ltd
During January 2017, the group sold its 40% shareholding in Paladin Underwriting Managers (Pty) Ltd for R23 million. The net profit realised was R5 million
and capital gains tax of R2 million was recognised.
12. EARNINGS PER SHARE
Audited Audited
Year ended Year ended
31 December 31 December
2018 2017
Basic earnings per share
Profit attributable to the company's equity holders (R million) 2 427 1 667
Weighted average number of ordinary shares in issue (million) 110.41 110.30
Earnings per share (cents) 2 198 1 511
Diluted earnings per share
Profit attributable to the company's equity holders (R million) 2 427 1 667
Weighted average number of ordinary shares in issue (million) 110.41 110.30
Adjusted for share options 0.82 1.13
Weighted average number of ordinary shares for diluted earnings per share (million) 111.23 111.43
Diluted basic earnings per share (cents) 2 182 1 496
Headline earnings per share
Profit attributable to the company's equity holders (R million) 2 427 1 667
Adjusted for:
Impairment of goodwill and other intangible assets - 8
Impairment of associates and joint ventures 12 3
Reclassification of foreign currency translation reserve on dilution of associate (19) 90
Loss/(gain) on dilution of associate 88 (18)
Profit on sale of associates (40) (5)
Tax charge on profit on sale of associates 13 2
Share of associates' profit on deemed disposal of associate (164) -
Foreign currency translation reserve reclassified to profit and loss - (175)
Headline earnings (R million) 2 317 1 572
Weighted average number of ordinary shares in issue (million) 110.41 110.30
Headline earnings per share (cents) 2 099 1 425
Diluted headline earnings per share
Headline earnings (R million) 2 317 1 572
Weighted average number of ordinary shares for diluted headline earnings per share (million) 111.23 111.43
Diluted headline earnings per share (cents) 2 084 1 411
13. DIVIDEND PER SHARE
Dividend per share (cents) 1 028 952
14. CHANGES IN PRESENTATION AND RESTATEMENTS
14.1 CURRENT/NON-CURRENT SPLIT OF AMOUNTS RECOGNISED ON THE STATEMENT OF FINANCIAL POSITION
Items on the statement of financial position have been reordered to reflect in the order of the least liquid to most liquid for assets and liabilities, as
allowed under IAS 1 Presentation of Financial Statements paragraph 60 to 63 in order to enable comparison to other industry participants. Doing away with the
current/non-current distinction resulted in the aggregation of some line items, but in total, no changes were made to the amounts previously presented, except
for investments in unquoted SEM target shares now separately disclosed. The "within 12 months"/"after 12 months" split is disclosed in each note to the
financial statements, where it is of relevance.
14.2 RESTATEMENT OF THE STATEMENT OF CASH FLOWS
As part of management's consideration of the impact of IFRS 9 on the classification and measurement of financial assets, the way in which the investment
portfolios are managed and how actively they are traded was assessed. As a result of this assessment, it was concluded that it is more appropriate to classify
the cash flows relating to the investment portfolios as part of operating activities rather than investing activities. The acquisition of and proceeds from
sales relating to strategic investments, equity portfolios and portfolios backing subordinated debt will remain as part of investing activities as these
portfolios are not considered part of the operations of the business. Comparative numbers have been restated.
The table below shows the impact of the change:
Previously
reported Restatement Restated
31 December 31 December 31 December
2017 2017 2017
R million R million R million
Net cash from operating activities
- Acquisition of financial assets - (18 482) (18 482)
- Proceeds from sale of financial assets - 17 229 17 229
Net cash (used in)/from investing activities
- Acquisition of financial assets (20 322) 18 482 (1 840)
- Proceeds from sale of financial assets 20 054 (17 229) 2 825
Net impact (268) - (268)
14.3 RESTATEMENT OF REPO LIABILITY
The SSI group entered into a repurchase agreement in August 2016. In prior years the underlying financial assets (bonds) were derecognised and only a liability
or asset to the extent of any differential between the value of the bonds and the repurchase liability was recognised. On reconsideration of the transaction,
it was determined that the risks and rewards relating to the bond assets had not sufficiently transferred. The 31 December 2017 comparatives have been restated
to recognise the underlying financial assets as well as repurchase liability. As SSI only became part of the group on 1 March 2017, there was no impact on the
1 January 2017 opening balances presented. It had no impact on the statement of comprehensive income or earnings per share.
Previously
reported Restatement Restated
31 December 31 December 31 December
2017 2017 2017
R million R million R million
Financial assets at fair value through income 18 647 531 19 178
Financial liabilities at amortised cost
Repo liability - (531) (531)
Net impact 18 647 - 18 647
15. EVENTS AFTER THE REPORTING PERIOD
There have been no material changes in the affairs or financial position of the company and its subsidiaries since the statement of financial position date.
ADMINISTRATION
NON-EXECUTIVE DIRECTORS
B Campbell, BTPKM Gamedze, VP Khanyile (chairman), IM Kirk, MLD Marole, NV Mtetwa, JJ Ngulube, MJ Reyneke, PE Speckmann, HC Werth
EXECUTIVE DIRECTORS
L Lambrechts (chief executive officer), HD Nel (chief financial officer)
COMPANY SECRETARY
M Allie
TRANSFER SECRETARIES
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank 2196
PO Box 61051, Marshalltown 2107
Tel: 011 370 5000
Fax: 011 688 7721
www.computershare.com
SANTAM HEAD OFFICE AND REGISTERED ADDRESS
1 Sportica Crescent
Tyger Valley, Bellville 7530
PO Box 3881, Tyger Valley 7536
Tel: 021 915 7000
Fax: 021 914 0700
www.santam.co.za
Registration number 1918/001680/06
ISIN ZAE000093779
JSE share code: SNT
NSX share code: SNM
A2X share code: SNT
SPONSOR
Investec Bank Ltd
Santam is an authorised financial services provider (licence number 3416).
Date: 28/02/2019 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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