Half Yearly Report - Part 4 o

RNS Number : 8976W

Standard Life plc

05 August 2009

Standard Life plc

Interim Results 2009

Part 4 of 4

Notes to the IFRS financial information continued

4.10 Insurance contract liabilities, non-participating investment contract liabilities,

participating investment contract liabilities and reinsurance assets

	30 June	30 June	31 December
	2009	2008	2008
	£m	£m	£m
Non-participating contract liabilities
Non-participating insurance contracts	19,241	19,692	19,635
Non-participating investment contracts	52,573	57,204	52,273
	71,814	76,896	71,908
Participating contract liabilities
Participating insurance contracts	15,663	17,618	17,625
Participating investment contracts	14,697	15,934	15,674
Unallocated divisible surplus	792	848	864
	31,152	34,400	34,163

Non-participating insurance contracts include £172m (30 June 2008: £177m; 31 December 2008: £160m) relating to Standard Life Healthcare Limited and £4m (30 June 2008: £5m; 31 December 2008: £3m) relating to general insurance.

Due to changes in economic and non-economic factors certain assumptions used in estimating insurance and investment contract liabilities have been revised. Therefore the change in liabilities reflects both actual performance over the period, changes in assumptions and to a limited extent improvements in modelling techniques.

The movements in participating and non-participating insurance and investment contracts and reinsurers' share of liabilities during the six months ended 30 June 2009 arising from changes in estimates are set out below:

			Non-		Non-	Reinsurers'
Participating			participating	Participating	participating	share of
insurance			insurance	investment	investment	liabilities
	contract		contract	contract	contract	(reinsurance
liabilities			liabilities	liabilities	liabilities	asset)	Net
		£m	£m	£m	£m	£m	£m
Changes in:
Methodology/modelling changes(42)			53	4	-	(94)	(79)
Non-economic assumptions		(1)	-	(4)	-	-	(5)
Economic assumptions		(190)	(164)	67	-	(47)	(334)

The movements in participating and non-participating insurance and investment contracts and reinsurers' share of liabilities during the six months ended 30 June 2008 arising from changes in estimates are set out below:

		Non-		Non-	Reinsurers'
Participating		participating	Participating	participating	share of
insurance		insurance	investment	investment	liabilities
	contract	contract	contract	contract	(reinsurance
liabilities		liabilities	liabilities	liabilities	asset)	Net
	£ m	£m	£m	£m	£m	£m
Impact of annuity reinsurance transaction 49		(1)	64	-	(6,573)	(6,461)
Changes in:
Methodology/modelling changes (66)		45	21	-	-	-
Non-economic assumptions	(13)	-	(18)	-	-	(31)
Economic assumptions	44	(1,072)	(9)	-	509	(528)

Standard Life Assurance Limited (SLAL) entered into a reinsurance arrangement with Canada Life International Re on 14 February 2008 in respect of certain annuity contracts. For the gross participating insurance and investment liabilities the impact of the annuity reinsurance transaction shown reflects the change in the residual estate which therefore impacts the value of the planned enhancements (on an FSA realistic basis) included within these liabilities as covered by the Scheme of Demutualisation. The increase in the reinsurance asset associated with the transaction represents the increase in the value of the reinsurance assets with external reinsurers due to this new arrangement.

Economic assumptions reflect the reduction in non-participating insurance contracts due to an increase in the valuation interest rates.

The total movements in participating insurance and investments contract liabilities, non-participating insurance contract liabilities and reinsurers share during the year to 31 December 2008 are set out below. This includes the movements arising from changes in estimates.

		Non-			Reinsurers'
Participating		participating	Participating	Total	share of
insurance		insurance	investment	insurance and	liabilities
contract		contract	contract	participating	(reinsurance	Net
liabilities		liabilities	liabilities	contracts	asset)	2008
	£m	£m	£m	£m	£m	£m
At 1 January 2008	19,446	20,980	17,491	57,917	(476)	57,441
Annuity reinsurance impact 49		(1)	64	112	(6,573)	(6,461)
Expected change	(1,078)	(341)	(1,047)	(2,466)	234	(2,232)
Methodology/modelling changes 93		(73)	(117)	(97)	51	(46)
Effect of changes in:
Economic assumptions	402	(1,357)	455	(500)	757	257
Non-economic assumptions	(61)	8	(9)	(62)	(44)	(106)
Effect of:
Economic experience	(2,314)	(728)	(1,591)	(4,633)	15	(4,618)
Non-economic experience	33	(308)	149	(126)	2	(124)
New business	45	706	-	751	(1)	750
Total change in contract liabilities	(2,831)	(2,094)	(2,096)	(7,021)	(5,559)	(12,580)
Foreign exchange adjustment 1,010		749	279	2,038	(41)	1,997
At 31 December 2008	17,625	19,635	15,674	52,934	(6,076)	46,858

The change in non-participating investment contract liabilities during the year ended 31 December 2008 is set out below:

	£m
At 1 January 2008	58,762
Contributions	10,170
Initial charges and reduced allocations	(50)
Account balances paid on surrender and other terminations in the year (6,584)
Investment return credited and related benefits	(10,907)
Foreign exchange adjustment	1,314
Recurring management charges	(333)
Other	(99)
At 31 December 2008	52,273

Reinsurance contracts are generally structured to match liabilities on a class of business basis. This has a mixture of terms. The reinsurance assets are therefore broadly expected to be realised in line with the settlement of liabilities (as per the terms of the particular treaty) within a reinsured class of business.

Notes to the IFRS financial information continued

4.11 Borrowings

	30 June 2009 £m	30 June 2008 £m	31 December 2008 £m
paper and medium term notes	1,034	1,659	573
Securitisations - mortgage backed floating rate notes	2,126	3,827	2,411
Bank overdrafts	86	364	101
Other	147	85	142
Total borrowings	3,393	5,935	3,227

(a) Certificates of deposit, commercial paper and medium term notes

The Group has issued certificates of deposit through its subsidiary Standard Life Bank plc (Standard Life Bank). The Group has also issued commercial paper and medium term notes through Standard Life Funding B.V., a wholly owned subsidiary of Standard Life Bank. Standard Life Bank has guaranteed the liabilities of its subsidiary in relation to the issuance of this debt. The guarantee is in respect of notes issued and is for a maximum of US$2bn and €4bn in relation to the US commercial paper and Euro commercial paper programmes respectively, and €4bn in respect of the medium term note programme. This guarantee is considered a financial guarantee contract under IAS 39 Financial Instruments: Recognition and Measurement.

On 11 February 2009 Standard Life Bank launched its Euro Medium Term Note programme under which it can issue debt, including debt covered by the Credit Guarantee Scheme (CGS). Under the terms of the CGS, HM Treasury guarantees specific bank and building society debt instruments issued during the period beginning from the announcement of the CGS (13 October 2008) and ending on 31 December 2009. On 18 February 2009 Standard Life Bank issued £500m of debt under the CGS.

	Average interest rates			Carrying amount
	30 June 2009 %	30 June 2008 %	31 December 2008 %	30 June 2009 £m	30 June 2008 £m	31 December 2008 £m
Due within 1 year
Standard Life Bank certificates of deposit- GBP	1.41%	5.73%	4.13%	150	766	228
Standard Life Bank certificates of deposit- USD	1. 20%	-		31	-	-
Standard Life Funding B.V. Commercial paper- GBP	2.22%	5.91%	6.20%	248	228	144
Standard Life Funding B.V. Commercial- paper - USD	-	3.40%	-	-	134	-
Standard Life Funding B.V. Commercial- paper- EUR	-	4.77%	5.26%	-	422	84
Standard Life Funding B.V. Medium -Term Notes -- GBP	-	6.56%	-	-	9	-
				429	1,559	456
Due between 1 and 5 years
Standard Life Funding B.V. Medium -Term Notes - GBP	-	6.38%	-	-	4	-
Standard Life Bank Medium Term Notes--GBP	2. 38%	-	-	502	-	-
				502	4	-
Due after 5 years
Standard Life Funding B.V. Medium Term Notes- EUR	1.52%	5.03%	4.10%	103	96	117
				103	96	117
Total certificates of deposit, commercial paper and medium term loan notes				1,034	1,659	573

The carrying amounts disclosed above reasonably approximate the fair values as at the period end.

(b) Securitisations - mortgage backed floating rate notes

Loans are issued by the Group, which are subject to securitisations. Under this arrangement, the beneficial interest in these mortgages is transferred to special purpose entities (SPEs). The issue of mortgage backed floating rate notes by the SPEs funded the purchase of the mortgages.

Although the Group does not directly or indirectly own any of the share capital of the SPEs, the nature of these entities, which are in substance controlled by the Group, means that the Group retains substantially all of the risks and rewards of the securitised mortgages. The Group is not obliged to support any losses suffered by the note holders and does not intend to provide such support. The notes were issued on the basis that note holders are only entitled to obtain payment, of both principal and interest, to the extent that the available resources of the respective SPEs, including funds due from customers in respect of the securitised mortgages, are sufficient and that note holders have no recourse whatsoever to the Group. This has been clearly stated in the legal agreements with note holders.

The mortgage backed floating rate notes at the period end are as follows:

	Average interest rates				Carrying amount
	30 June 2009 %	30 June %	31 December 2008 %	30 June 2009 £m	30 June 2008 £m	31 December 2008 £m
Lothian Mortgages No. 1 plc - USD - Maturity 2017	-	3.25%	-	-	57	-
Lothian Mortgages No. 1 plc - GBP - Maturity 2035	-	6.43%	-	-	571	-
Lothian Mortgages No. 2 plc - GBP - Maturity 2038	-	6.28%	-	-	192	-
Lothian Mortgages No. 2 plc - USD - Maturity 2038	-	3.70%	-	-	8	-
Lothian Mortgages No. 2 plc - EUR - Maturity 2038	-	5.30%	-	-	578	-
Lothian Mortgages No. 3 plc - GBP - Maturity 2039	1.79%	6.30%	6.47%	669	778	730
Lothian Mortgages No. 4 plc - EUR - Maturity 2040	1.50% -	5.00%	5.12%	87	210	175
Lothian Mortgages No. 4 plc - GBP - Maturity 2040	1.63% -	6.15%	6.25%	564	571	571
Lothian Mortgages Master Issuer plc- USD- Maturity 2028		2.66%	0.61%		81	59
Lothian Mortgages Master Issuer plc- USD- Maturity 2050	1.22%	3.07%	3.71%	30	25	35
Lothian Mortgages Master Issuer plc- EUR- Maturity 2050	1.54%	5.04%	5.16%	398	375	460
Lothian Mortgages Master Issuer plc- GBP- Maturity 2050	1.65%	6.17%	6.25%	378	381	381
Total mortgage backed floating rate notes				2,126	3,827	2,411

4.12 Defined benefit and defined contribution plans

(a) Analysis of amounts recognised in the income statement

The amounts recognised in the income statement for defined contribution and defined benefit schemes are as follows:

	6 months 2009 £m	6 months 2008 £m	Full year 2008 £m
Current service cost	(27)	(30)	(64)
Interest costbenefitobligation	(47)	(46)	(91)
Expected return on plan assets	46	44	88
Past service cost	(1)	-	-
Expense recognised in the income statement	(29)	(32)	(67)

Notes to the IFRS financial information continued

4.12 Defined benefit and defined contribution plans continued

(b) Analysis of amounts recognised in the condensed consolidated statement of financial position

The present value of the defined benefit obligation less the fair value of gross scheme assets is as follows:

	30 June 2009					30 June 2008				31 December 2008
						United Kingdom £m	Canada £m	Ireland £m	Total £m	United Kingdom £m	Canada £m	Ireland £m	Total £m
Present value of funded obligation	(1,451)	(117)	(54)	(1,622)	(1,386)		(124)	(1,558)	(48)	(1,309)	(105)	(62)	(1,476)
Present value of unfunded obligation	-	(35)	-	(35)	-		(35)	-	(35)	-	(32)	-	(32)
Fair value of plan assets	1,398	120	40	1,558		1,216	129	42	1,387	1,462	123	44	1,629
Adjustment for unrecognised past
service costs	-	(5)	-	(5)		-	-	-	-	-	(5)	-	(5)
Surplus not recognised	-	-	-	-		-	-	-	-	(153)	-	-	(153)
Net liability on the condensed
consolidated statement of financial position (53)		(37)	(14)	(104)		(170)	(30)	(6)	(206)	-	(19)	(18)	(37)

The net liability is included in 'Other liabilities' in the condensed consolidated statement of financial position. The Group also recognises a net liability of £4m (30 June 2008: £4m; 31 December 2008: £5m) arising from a scheme with a total defined benefit obligation of £4m (30 June 2008: £4m; 31 December 2008: £5m) administered for the benefit of employees in Germany, resulting in a net liability on the condensed consolidated statement of financial position of £108m (30 June 2008: £210m; 31 December 2008: £42m).

The surplus which arose in respect of the UK scheme as at 31 December 2008 was not recognised as the Group did not consider that it had an unconditional right to a refund of contributions from the UK scheme, nor did the Group consider that it had the ability, under the guidance contained in IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction, to anticipate a reduction in the level of future contributions that would enable the Group to recover this surplus.

The principal economic assumptions used in determining pension benefit obligation for the Group's plans are as follows:

	30 June 2009			30 June 2008	31 December 2008
	United Kingdom %	Canada %	Ireland %
	United Kingdom %	Canada %	Ireland %	United Kingdom %	Canada %	Ireland %	United Kingdom %		Canada %	Ireland %
Rate of increase in salaries	4.85-5.85	3.50	4.83	5.00-6.00	3.50	4.55	4.35-5.35	3.50		4.83
Rate of increase in pensions	3.85	1.33	2.00	4.00	1.33	2.81	3.35		1.33	2.00
Discount rate	6.20	6.25	5.75	6.40	5.50	5.50	6.10		7.25	5.70
Inflation assumption	3.85	2.00	2.00	4.00	2.00	2.81	3.35		2.00	2.00
Rate of return on plan assets	5.50	7.00	5.93	6.20	7.50	6.20	6.20		7.00	5.90

4.13 Related party transactions

(a) Transactions with/from related parties

Transactions with related parties carried out by the Group were as follows:

	6 months 2009 £m	6 months 2008 £m	Ful year 2008 £m
Sale to:
Associates	8,186	8,444	17,022
Joint ventures	-	8	3
	8,186	8,452	17,025
Purchase from:
Associates	6,928	8,955	17,095
Joint ventures	70	26	62
	6,998	8,981	17,157

Transactions with associates shown above relate primarily to the sales and purchases of holdings in investment funds managed by the Group.

In addition to the amounts shown above, the Group's defined benefit pension schemes have assets of £384m (30 June 2008: £317m; 31 December 2008: £340m) invested in investment vehicles managed by the Group.

(b) Transactions with key management personnel

All transactions between key management and the Group are on commercial terms which are equivalent to those available to all employees of the Group.

During the six months ended 30 June 2009, the key management personnel contributed £10.5m (30 June 2008: £0.4m; 31 December 2008: £0.5m) to products sold by the Group.

4.14 Contingencies

(a) Legal proceedings and regulations

The Group, like other financial organisations, is subject to legal proceedings and complaints in the normal course of its business. While it is not practicable to forecast or determine the final results of all pending or threatened legal proceedings, the Directors do not believe that such proceedings (including litigations) will have a material effect on the results and financial position of the Group.

The Group is subject to insurance solvency regulations in all the territories in which it issues insurance and investment contracts, and it has complied with all the local solvency regulations. Therefore, there are no contingencies in respect of these regulations.

(b) Joint ventures and associates

The Group has entered into agreements to share in the assets and liabilities of joint venture and associate investments. The Directors do not anticipate any material losses from such investments and the operations of such investments are not material in relation to the operations of the Group.

The Group's share of contingent liabilities of the joint ventures and associates is not significant in relation to the operations of the Group.

The Scheme of Demutualisation sets a 10 year time limit, ending in 2016, for those eligible members of The Standard Life Assurance Company who were not allocated shares at the date of demutualisation to claim their entitlement. As future issues of these shares are dependent upon the actions of eligible members, it is not practical to estimate the financial effect of this potential obligation.

Notes to the IFRS financial information continued

4.14 Contingencies continued

(d) Guarantees

During the year ended 31 December 2007 the Company issued a guarantee to Standard Life Investments (Global Liquidity Funds) plc to cover the difference between amortised cost and marked to market value of the underlying assets of a sub-fund, should there be a need for Standard Life Investments (Global Liquidity Funds) plc to sell the assets of the sub-fund at an amount below amortised cost to meet investor withdrawals. The guarantee was for a maximum of £5m and was released during the six months ended 30 June 2009 as it was no longer required.

(e) Other

(i)	In the ordinary course of business, Standard Life Trust Company enters into agreements, which contain guarantee provisions for clearing system arrangements related to investment activities. Under such arrangements, the company, together with other participants in the clearing systems, may be required to guarantee certain obligations of a defaulting member. The guarantee provisions and amounts vary based upon the agreement. The company cannot estimate the amount, if any, that may be payable upon default. To facilitate its participation in the clearing system Standard Life Trust Company has provided as security a bank credit facility to a maximum of Canadian $84m.

(ii)	Under the Financial Services Compensation Scheme (FSCS), which covers business conducted by firms authorised by the Financial Services Authority (FSA), consumers can claim compensation where a firm is unable to pay claims against it. These costs are levied on the industry by the FSCS with each firm's contribution calculated based on the tariff base of the relevant sub class of financial activities it undertakes. Each sub class meets the claims in their class up to an annual threshold. During 2008, FSCS involvement was triggered to protect deposits in several firms and maintain market confidence. At 30 June 2009 and 31 December 2008, a provision is recognised, under 'Other liabilities' in respect of Standard Life Bank in relation to potential compensation levies due under the FSCS based on FSA guidance issued to the British Bankers Association on 31 December 2008 and subsequently updated on 4 February 2009. This provision is intended to cover the management expense levies for 2008/09, 2009/10 and 2010/11 in relation to interest and other costs incurred on the loans taken out by the FSCS to recompense savers with banks which defaulted during 2008 (the provision recognised as at 31 December 2008 intended to cover the management expense levies for 2008/09 and 2009/10). Uncertainty exists over the total market FSCS levies and therefore the Standard Life Bank proportion to provide for, which will bedependent on the period of recovery, FSCS funding costs and potential capital write-offs.

A contingent liability also exists in relation to future FSCS levies, including the actual compensation costs due in relation to the banks which defaulted during 2008. As this liability cannot be reliably calculated and is dependent on a determination at some point in the future, the Group has not attempted to quantify this amount. The Group will continue to monitor this position and a provision will be made if and when a determinable outflow becomes probable in relation to this liability.

4.15 Commitments

(a) Capital commitments

The Group's capital commitments as at the period end are:

	30 June 2009 £m	30 June 2008 £m	31 December 2008 £m
Authorised and contracted for but not provided and incurred:
Investment1 properties	364	93	127
Property, plant1 and equipment	-	383	357
Funding of associates	-	-	1

1 Improvements to IFRS effective from 1 January 2009 have resulted in the recategorisation of property under development from Property, plant and equipment accounted for under IAS 16 Property, plant and equipment to Investment properties accounted for under IAS 40 Investment property. These changes have been applied prospectively. Refer to Note 4.1(a) (ii).

Of the amounts above, £351m (30 June 2008: £74m; 31 December 2008: £115m) and £13m (30 June 2008: £19m; 31 December 2008: £12m) relates to the contractual obligations to purchase, construct or develop investment property and repair, maintain or enhance investment property respectively.

(b) Unrecognised instruments

The following indicates the contractual amounts of the Group's unrecognised financial instruments that commit it to customers and third parties, as at the period end:

	30 June 2009 £m	30 June 2008 £m	31 December 2008 £m
Guarantees and standby letters of credit	3	4	4
Commitments to extend credit:
Original term to maturity of less than one year	9	108	83
Original term to maturity of more than one year	2,041	2,209	2,165
Other commitments	737	860	964

Guarantees and standby letters of credit include guarantees in relation to the Group's Canadian operations. The application of the requirements of IAS 39 Financial Instruments: Recognition and Measurement results in these guarantees being considered to be financial guarantee contracts.

Included in 'Other commitments' is £718m (30 June 2008: £835m; 31 December 2008: £942m) committed by certain subsidiaries which are not fully owned by the Group. These commitments are funded through (contractually agreed) additional investments in the subsidiary by the Group and the non-controlling interests. The levels of committed funding are not necessarily in line with the relevant percentage holdings.

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5 Independent auditors' review report

Independent auditors' review report to Standard Life plc

Introduction

We have been engaged by Standard Life plc (the Company) to review the financial information in the Interim Results for the six months ended 30 June 2009, which comprises:

the European Embedded Value (EEV) consolidated income statement, the EEV earnings per share statement, the EEV consolidated statement of comprehensive income, and the EEV consolidated balance sheet and associated notes prepared on the EEV basis set out in Note 3.1 (the 'EEV financial information'); and

the IFRS condensed consolidated income statement, the IFRS consolidated statement of comprehensive income, the IFRS condensed consolidated statement of financial position, the IFRS condensed consolidated statement of changes in equity, the IFRS condensed consolidated statement of cash flows and associated notes prepared in accordance with the IFRS accounting policies set out in Note 4.1 (the 'IFRS financial information').

We have read the other information contained in the Interim Results and considered whether it contains any apparent misstatements or material inconsistencies with the financial information in the Interim Results.

Directors' responsibilities

The Interim Results, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Results in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in Note 4.1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The IFRS financial information included in the Interim Results has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting, as adopted by the European Union. The Directors are responsible for preparing the EEV financial information in accordance with the EEV basis set out in Note 3.1.

Our responsibility

Our responsibility is to express to the Company a conclusion on the financial information included in the Interim Results based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that:

the IFRS financial information in the Interim Results for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority; and

the EEV financial information in the Interim Results for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with the EEV basis set out in Note 3.1.

PricewaterhouseCoopers LLP

Chartered Accountants Edinburgh 5 August 2009

(a) The maintenance and integrity of the Standard Life website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

6 Supplementary information

Supplementary information

6.1 Group assets under administration and net flows

Group assets under administration (AUA) represent the IFRS gross assets of the Group adjusted to include third party AUA, which are not included in the statement of financial position. In addition, certain assets are excluded from the definition, for example deferred acquisition costs, intangibles and reinsurance assets.

Analysis of Group AUA For the six months ended 30 June 2009	Opening at 1 January 2009 £bn	Gross inflows £bn	Redemptions £bn	Net flows £bn	Market and other movements £bn	Closing at 30 June 2009 £bn



UK
Individual SIPP (a)	8.7	1.5	(0.5)	1.0	-	9.7
Individual pensions	20.7	0.5	(1.2)	(0.7)	-	20.0
Group pensions (a)	14.4	1.2	(0.5)	0.7	(0.4)	14.7
Institutional pensions	8.6	1.0	(0.4)	0.6	0.1	9.3
Pensions	52.4	4.2	(2.6)	1.6	(0.3)	53.7
Investment bonds	8.9	0.2	(1.0)	(0.8)	(0.1)	8.0
Mutual funds(b)	2.4	0.4	(0.1)	0.3	-	2.7
Savings and investments	11.3	0.6	(1.1)	(0.5)	(0.1)	10.7
Annuities (c)	11.9	0.4	(0.6)	(0.2)	0.2	11.9
Legacy life	10.2	0.2	(1.0)	(0.8)	(0.2)	9.2
Assets not backing products	9.0	-	-	-	(1.6)	7.4
UK life and pensions (d)	94.8	5.4	(5.3)	0.1	(2.0)	92.9
Europe
Ireland (d)	4.7	0.4	(0.3)	0.1	(0.5)	4.3
Germany	3.6	0.4	(0.1)	0.3	(0.5)	3.4
Europe life and pensions	8.3	0.8	(0.4)	0.4	(1.0)	7.7
Canada
Group savings and retirement	9.8	0.6	(0.5)	0.1	(0.2)	9.7
Individual insurance, savings and retirement	5.9	0.3	(0.3)	-	(0.1)	5.8
Group insurance	0.4	0.2	(0.1)	0.1	-	0.5
Mutual funds(b)	1.2	0.1	(0.1)	-	-	1.2
Assets not backing products	0.7	-	-	-	(0.2)	0.5
Canada life and pensions	18.0	1.2	(1.0)	0.2	(0.5)	17.7
Asia life and pensions	0.5	-	-	-	-	0.5
Total worldwide life and pensions	121.6	7.4	(6.7)	0.7	(3.5)	118.8
Non-life businesses	13.0	0.1	(1.0)	(0.9)	0.2	12.3
Standard Life Investments third party assets
under management(a)	45.5	5.2	(2.1)	3.1	(1.3)	47.3
Consolidation and elimination adjustments(e)	(23.3)	(1.7)	0.9	(0.8)	2.2	(21.9)
Group assets under administration	156.8	11.0	(8.9)	2.1	(2.4)	156.5
Group assets under administration managed by:
Standard Life Group entities	138.5					135.9
Other third party managers	18.3					20.6
Total	156.8					156.5

(a) Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.

(b) The mutual funds net flows are also included within mutual funds net flows in the third party Investment operations figures.

(d) The offshore bond business is shown within Ireland AUA in 2009. This was previously included within UK life and pensions. Opening balances for UK and Ireland have been restated by £1.0bn to reflect this.

(e) In order to be consistent with the presentation of new business information certain products are included in both life and pensions AUA and investment operations. Therefore, at a Group level an elimination adjustment is required to remove any duplication, in addition to other necessary consolidation adjustments.

Insurance operations net flows (regulatory basis)
6 months ended 30 June 2009

Gross inflows 6 months to		Redemptions 6 months to	Net inflows 6 months to	Gross inflows 6 months to	Redemption 6 months to	Net inflows 6 months to
30 June 2009		30 June 2009	30 June 2009	30 June 2008	30 June 2008	30 June 2008
	£m	£m	£m	£m	£m	£m
UK
Individual SIPP (a)	1,464	(505)	959	1,853	(418)	1,435
Individual pensions	529	(1,127)	(598)	665	(1,595)	(930)
Group pensions (a)	1,222	(551)	671	1,445	(560)	885
Institutional pensions	953	(393)	560	881	(656)	225
Pensions	4,168	(2,576)	1,592	4,844	(3,229)	1,615
Investment bonds	183	(1,008)	(825)	1,073	(800)	273
Mutual (b)funds(c)	438	(102)	336	332	(172)	160
Savings and investments	621	(1,110)	(489)	1,405	(972)	433
Annuities	353	(578)	(225)	320	(559)	(239)
Protection	49	(31)	18	56	(39)	17
Legacy life	206	(967)	(761)	240	(1,025)	(785)
UK life and pensions (d) (e)	5,397	(5,262)	135	6,865	(5,824)	1,041
Europe
Ireland (d)	391	(329)	62	467	(281)	186
Germany	395	(69)	326	343	(32)	311
Europe life and pensions	786	(398)	388	810	(313)	497
Canada
Group savings and retirement676		(513)	163	878	(572)	306
Individual insurance, savings277 and(347)retirement(70)				222	(326)	(104)
Group insurance	173	(142)	31	151	(90)	61
Mutual (b)funds	102	(87)	15	131	(90)	41
Canada life and pensions	1,228	(1,089)	139	1,382	(1,078)	304
Total worldwide life and pensions
excluding Asia	7,411	(6,749)	662	9,057	(7,215)	1,842

(a) Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.

(b) The mutual funds net flows are also included within mutual fund net flows in the third party Investment operations figures.

(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated to reflect inclusion of these mutual funds. The total net outflow for the period was £9m (2008: £122m outflow).

(d) The offshore business is shown within the total Ireland result. This was previously included within UK life and pensions. The total net inflow for the period was £77m (2008: £265m inflow).

(e) UK life and pensions include a total net outflow of £1,159m in relation to conventional with profits business (2008: £1,184m outflow).

Supplementary information continued

6.1 Group assets under administration and net flows continued

Insurance operations net flows (regulatory basis)
3 months ended 30 June 2009
Gross inflows		Redemptions	Net inflows	Gross inflows	Redemptions	Net inflows
3 months to		3 months to	3 months to	3 months to	3 months to	3 months to
30 June 2009		30 June 2009	30 June 2009	30 June 2008	30 June 2008	30 June 2008
	£m	£m	£m	£m	£m	£m
UK
Individual SIPP (a)	772	(254)	518	911	(219)	692
Individual pensions	309	(537)	(228)	379	(789)	(410)
Group pensions (a)	653	(275)	378	672	(285)	387
Institutional pensions	502	(223)	279	491	(291)	200
Pensions	2,236	(1,289)	947	2,453	(1,584)	869
Investment bonds	78	(387)	(309)	371	(351)	20
Mutual (b)funds(c)	228	(56)	172	181	(99)	82
Savings and investments	306	(443)	(137)	552	(450)	102
Annuities	154	(290)	(136)	164	(285)	(121)
Protection	24	(13)	11	28	(20)	8
Legacy life	101	(393)	(292)	117	(568)	(451)
UK life and pensions (d) (e)	2,821	(2,428)	393	3,314	(2,907)	407
Europe
Ireland (d)	217	(164)	53	226	(165)	61
Germany	187	(25)	162	169	(17)	152
Europe life and pensions	404	(189)	215	395	(182)	213
Canada
Group savings and retirement320		(237)	83	569	(257)	312
Individual insurance, savings147 and(174)retirement(27)				95	(165)	(70)
Group insurance	87	(72)	15	76	(46)	30
Mutual (b)funds	49	(38)	11	56	(37)	19
Canada life and pensions	603	(521)	82	796	(505)	291
Total worldwide life and pensions
excluding Asia	3,828	(3,138)	690	4,505	(3,594)	911

(a) Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.

(b) The mutual funds net flows are also included within mutual fund net flows in the third party Investment operations figures.

(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated to reflect inclusion of these mutual funds. The total net outflow for the period was £5m (2008: £67m outflow).

(d) The offshore business is shown within the total Ireland result. This was previously included within UK life and pensions. The total net inflow for the period was £54m (2008: £128m inflow).

(e) UK life and pensions include a total net outflow of £503m in relation to conventional with profits business (2008: £646m outflow).

6.2 Analysis of new business
Insurance operations new business
6 months ended 30 June 2009
	Single Premiums		New Regular Premiums		PVNBP
	6 months to 30 June 2009	6 months to 30 June 2008	6 months to 30 June 2009	6 months to 30 June 2008	6 months to 30 June 2009	6 months to 30 June 2008	Change (g)	Change in Constant currency (g) (h)
	£m	£m	£m	£m	£m	£m	%	%
UK
Individual SIPP (a)	1,389	1,873	33	40	1,537	2,074	(26%)	(26%)
Individual pensions (b)	248	354	14	19	282	435	(35%)	(35%)
Group pensions (a) (b)	404	665	287	268	1,527	1,803	(15%)	(15%)
Institutional pensions907		820	18	60	944	964	(2%)	(2%)
Pensions	2,948	3,712	352	387	4,290	5,276	(19%)	(19%)
Investment bonds	154	1,025	-	-	154	1,025	(85%)	(85%)
Mutual (c)funds	423	332	15	5	542	364	49%	49%
Savings and investments	577	1,357	15	5	696	1,389	(50%)	(50%)
Annuities	258	252	-	-	258	252	2%	2%
Protection	-	-	1	1	2	4	(50%)	(50%)
UK life and pensions (d)	3,783	5,321	368	393	5,246	6,921	(24%)	(24%)
Europe
Ireland (d)	350	396	5	7	372	427	(13%)	(18%)
Germany	10	20	14	23	185	262	(29%)	(39%)
Europe life and pensions	360	416	19	30	557	689	(19%)	(27%)
Canada
Group savings and retirement208		438	37	25	750	767	(2%)	(11%)
Individual insurance, savings
and retirement	226	169	1	1	240	180	33%	21%
Group insurance(e)	1	-	15	17	260	123	111%	92%
Mutual funds	102	131	-	-	102	131	(22%)	(30%)
Canada life and pensions	537	738	53	43	1,352	1,201	13%	2%
Asia
India (f)	6	10	40	47	203	180	13%	2%
China(f)	29	33 (i)	6	1 (i)	56	42	33%	(1%)
Hong Kong	1	6	6	3	37	18	106%	56%
Asia life and pensions	36	49	52	51	296	240	23%	6%
Total worldwide life
and pensions	4,716	6,524	492	517	7,451	9,051	(18%)	(20%)

(a) Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.

(b) Single premiums include Department of Work and Pensions rebate premiums of £171m (2008: £179m),
comprising Individual pension rebates of £93m (2008: £99m) and Group pensions rebates of £78m (2008:
£80m).

(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated to reflect inclusion of these
mutual funds. The 2009 impact in PVNBP is £78m (2008: £40m).

(d) The offshore business is shown within the total Ireland result, comprising single premiums of £173m (2008:
£270m), new regular premiums of £nil (2008: £nil) and PVNBP of £173m (2008: £270m). This was
previously included within UK life and pensions.

(e) Canada Group insurance includes £1.0m (2008 £2.4m) of regular premiums in respect of Consultaction
policies, representing the comparable full premium of £0.1m (2008: £0.3m) of new annualised fee income.

(f) Standard Life's share of the Joint Venture Company's new business.

(g) % change is calculated on the figures rounded to millions.

(h) Calculated using constant rates of exchange.

(i) Regular premiums in China of £2m for Group protection business have been reclassified to single
premiums for the six months to 30 June 2008.

(j) New business gross sales for overseas operations are calculated using average exchange rates. The principal
average rates for the six months to 30 June 2009 were £1: C$1.80 (2008: £1: C$1.99) and £1: €1.11 (2008:
£1: €1.30).

Supplementary information continued

6.2 Analysis of new business continued

Investment operations 6 months ended 30 June 2009

		Opening					Market	Net
		FUM		Gross		Net	and other	movement	Closing FUM
	1 Jan 2009			inflows	Redemptions	inflows	movements	in FUM	30 June 2009
		£m		£m	£m	£m	£m	£m	£m
UK	Mutual (a)funds	4,237		744	(431)	313	155	468	4,705
	Private equity	3,859		52	(2)	50	(495)	(445)	3,414
	Segregated funds	11,312		482	(800)	(318)	1	(317)	10,995
	Pooled property funds	917		48	-	48	(133)	(85)	832
Total UK		20,325		1,326	(1,233)	93	(472)	(379)	19,946
Canada	Mutual (a)funds	1,295		99	(85)	14	(42)	(28)	1,267
	Separate (d)mandates	1,375		312	(61)	251	29	280	1,655
Total Canada		2,670		411	(146)	265	(13)	252	2,922
International	Europe	840		753	(10)	743	(83)	660	1,500
	Asia (excluding India)		79	3	(4)	(1)	9	8	87
	India	2,717		855	-	855	4	859	3,576
Total International		3,636		1,611	(14)	1,597	(70)	1,527	5,163
Total worldwide investment products
excluding money market funds		26,631		3,348	(1,393)	1,955	(555)	1,400	28,031
	Money market(f) funds	4,977		434	-	434	(641)	(207)	4,770
Total worldwide investment products		31,608		3,782	(1,393)	2,389	(1,196)	1,193	32,801

Total third party assets under management comprise the investment business noted above together with third party insurance contracts. New business relating to third party insurance contracts is disclosed as insurance business for reporting purposes. An analysis of total third party funds under management is shown below.

	Opening				Market		Net
	FUM	Gross		Net	and other		movement	Closing FUM
	1 Jan 2009	inflows	Redemptions	inflows		movements	in FUM	30 June 2009
	£m	£m	£m	£m	£m		£m	£m
Third party investment products	31,608	3,782	(1,393)	2,389	(1,196)		1,193	32,801
Third party insurance contracts
(new business classified as
insurance products)	13,861	1,428	(704)	724	(62)		662	14,523
Total third party assets
under management	45,469	5,210	(2,097)	3,113	(1,258)		1,855	47,324
Standard Life Investments -
total assets under management	123,835							121,552

(a) Included within mutual funds are cash inflows which have also been reflected in UK and Canada mutual fund new business sales.

(b) In the six months to 30 June 2008 UK mutual funds gross inflows were £573m and net inflows were £4m.

(d) Separate mandates refers to investment funds products sold in Canada exclusively to institutional customers. These products contain no insurance risk and consist primarily of defined benefit pension plan assets for which Standard Life Investments exclusively provides portfolio advisory services.

(e) International gross inflows include India where, due to the nature of the Indian investment sales market, the new business is shown as the net of sales less redemptions.

(f) Due to the nature of the Money market funds the flows shown are calculated using average net client balances. Other movements are derived as the difference between these average net inflows and the movement in the opening and closing AUM.

(g) Funds denominated in foreign currencies have been translated to Sterling using the closing exchange rates at 30 June 2009. Investment fund flows are translated at average exchange rates. Gains and losses arising from the translation of funds denominated in foreign currencies are included in the market and other movements column. The principal closing exchange rates used as at 30 June 2009 were £1: C$1.91 (31 December 2008: £1: C$1.77) and £1: €1.17 (31 December 2008: £1: €1.03). The principal average exchange rates for the six months to 30 June 2009 were £1: C$1.80 (2008: £1: C$1.99) and £1: €1.11 (2008: £1: €1.30).

Insurance operations new business
3 months ended 30 June 2009

		Single Premiums		New Regular Premiums		PVNBP
		3 months to	3 months to	3 months to	3 months to	3 months to	3 months to		Change in
		30 June	30 June	30 June	30 June	30 June	30 June		constant
		2009	2008	2009	2008	2009	2008	Change (g)	currency (g) (h)
		£m	£m	£m	£m	£m	£m	%	%
UK
Individual SIPP (a)		695	918	2	18	696	1,015	(31%)	(31%)
Individual pensions (b)		173	227	8	10	191	276	(31%)	(31%)
Group pensions (a) (b)		235	281	175	126	911	907	-	-
Institutional pensions	503		460	12	60	525	604	(13%)	(13%)
Pensions		1,606	1,886	197	214	2,323	2,802	(17%)	(17%)
Investment bonds	70		373	-	-	70	373	(81%)	(81%)
Mutual (c)funds		223	181	5	3	266	202	32%	32%
Savings and investments		293	554	5	3	336	575	(42%)	(42%)
Annuities		110	132	-	-	110	132	(17%)	(17%)
Protection		-	-	1	-	1	-	-	-
UK life and pensions (d)		2,009	2,572	203	217	2,770	3,509	(21%)	(21%)
Europe
Ireland (d)		199	204	2	3	208	215	(3%)	(7%)
Germany		3	8	7	12	86	141	(39%)	(45%)
Europe life and pensions		202	212	9	15	294	356	(17%)	(23%)
Canada
Group savings and retirement	105		361	20	7	393	455	(14%)	(22%)
Individual insurance,
savings and retirement	122		69	-	1	130	75	73%	58%
Group insurance(e)	1		-	9	8	145	59	146%	125%
Mutual funds		49	56	-	-	49	56	(13%)	(21%)
Canada life and pensions		277	486	29	16	717	645	11%	1%
Asia
India (f)		1	2	11	14	58	51	14%	5%
China(f)		8	17 (i)	4	1	23	23	-	(19%)
Hong Kong		1	2	4	3	23	13	77%	33%
Asia life and pensions		10	21	19	18	104	87	20%	3%
Total worldwide life
and pensions		2,498	3,291	260	266	3,885	4,597	(15%)	(17%)

(a) Included within non-insured SIPP is an element which is also included within UK mutual funds net flows in the third party Investment operations figures.

(b) Single premiums include Department of Work and Pensions rebate premiums of £167m (2008: £170m), comprising Individual pension rebates of £91m (2008: £94m) and Group pensions rebates of £76m (2008: £76m).

(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated to reflect inclusion of these mutual funds. The 2009 impact in PVNBP is £41m (2008: £26m).

(d) The offshore business is shown within the total Ireland result, comprising single premiums of £90m (2008: £152m), new regular premiums of £nil (2008: £nil) and PVNBP of £90m (2008: £152m). This was previously included within UK life and pensions.

(e) Canada Group insurance includes £1.0m (2008: £2.4m) of regular premiums in respect of Consultaction policies, representing the comparable full premium of £0.1m (2008: £0.3m) of new annualised fee income.

(f) Standard Life's share of the Joint Venture Company's new business.

(g) % change is calculated on the figures rounded to millions.

(h) Calculated using constant rates of exchange.

(i) Regular premiums in China of £1m for Group protection business have been reclassified to single premiums for the three months to 30 June 2008.

(j) New business gross sales for overseas operations are calculated using average exchange rates. The principal average rates for the six months to 30 June 2009 were £1: C$1.80 (2008: £1: C$1.99) and £1: €1.11 (2008: £1: €1.30).

Supplementary information continued

6.2 Analysis of new business continued

Investment operations

3 months ended 30 June 2009

			Opening						Market		Net
			FUM		Gross			Net	and other		movement		Closing FUM
	1 April 2009			inflows		Redemptions	inflows movements			in FUM		30 June 2009
			£m		£m	£m		£m	£m		£m		£m
UK		Mutual (a)funds	4,158		359	(230)		129	418		547		4,705
		Private equity	3,695		30	-		30	(311)		(281)		3,414
		Segregated funds	10,207		340	(429)		(89)	877		788		10,995
		Pooled property funds	866		48	-		48	(82)		(34)		832
Total UK			18,926		777	(659)		118	902		1,020		19,946
Canada		Mutual (a)funds	1,187		45	(35)		10	70		80		1,267
		Separate (d)mandates	1,391		273	(35)		238	26		264		1,655
Total Canada			2,578		318	(70)		248	96		344		2,922
International		Europe	1,088		477	(10)		467	(55)		412		1,500
		Asia (excluding India)	84		2	(1)		1	2		3		87
		India	2,616		838	-		838	122		960		3,576
Total International			3,788		1,317	(11)		1,306	69		1,375		5,163
Total worldwide investment products
excluding money market funds			25,292		2,412	(740)		1,672	1,067		2,739		28,031
		Money market(f) funds	5,441		138	-		138	(809)		(671)		4,770
Total worldwide investment products			30,733		2,550	(740)		1,810	258		2,068		32,801

		Opening				Market	Net
		FUM	Gross		Net	and other	movement	Closing FUM
		1 April 2009	inflows	Redemptions	inflows movements		in FUM	30 June 2009
		£m	£m	£m	£m	£m	£m	£m
Third party investment products		30,733	2,550	(740)	1,810	258	2,068	32,801
Third party insurance contracts
(new business classified as
insurance products)		13,456	763	(368)	395	672	1,067	14,523
Total third party assets
under management		44,189	3,313	(1,108)	2,205	930	3,135	47,324
Standard Life Investments -
total assets under management	117,734							121,552

(a) Included within mutual funds are cash inflows which have also been reflected in UK and Canada mutual funds new business sales.

(b) In the three months to 30 June 2008 UK mutual funds gross inflows were £280m and net outflows were £17m.

(e) International gross inflows include India where, due to the nature of the Indian investment sales market, the new business is shown as the net of sales less redemptions.

(g) Funds denominated in foreign currencies have been translated to Sterling using the closing exchange rates at 30 June 2009. Investment fund flows are translated at average exchange rates. Gains and losses arising from the translation of funds denominated in foreign currencies are included in the market and other movements column. The principal closing exchange rates used as at 30 June 2009 were £1: C$1.91 (31 March 2009: £1: C$1.80) and £1: €1.17 (31 March 2009: £1: €1.08). The principal average exchange rates for the six months to 30 June 2009 were £1: C$1.80 (2008: £1: C$1.99) and £1: €1.11 (2008: £1: €1.30).

Insurance operations new business
15 months ended 30 June 2009

		Present Value of New Business Premiums (PVNBP)
	3 months to	3 months to	3 months to		3 months to	3 months to
30 June		200931 Mar 2009	31 Dec 2008(d)		30 Sep 2008	30 June 2008
	£m	£m		£m	£m	£m
UK
Individual SIPP	696	841		870	815	1,015
Individual pensions	191	91		87	136	276
Group pensions	911	616		464	489	907
Institutional pensions	525	419		272	590	604
Pensions	2,323	1,967		1,693	2,030	2,802
Investment bonds	70	84		112	161	373
Mutual (a)funds	266	276		172	195	202
Savings and investments	336	360		284	356	575
Annuities	110	148		110	109	132
Protection	1	1		1	2	-
UK life and pensions (b)	2,770	2,476		2,088	2,497	3,509
Europe
Ireland (b)	208	164		417	234	215
Germany	86	99		178	140	141
Europe life and pensions	294	263		595	374	356
Canada
Group savings and retirement 393		357		204	176	455
Individual insurance, savings and retirement 130		110		110	72	75
Group insurance	145	115		62	64	59
Mutual funds	49	53		49	49	56
Canada life and pensions	717	635		425	361	645
Asia
India (c)	58	145		70	95	51
China(c)	23	33		43	24	23
Hong Kong	23	14		9	14	13
Asia life and pensions	104	192		122	133	87
Total worldwide life and pensions	3,885	3,566		3,230	3,365	4,597

(a) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated to reflect inclusion of these mutual funds.

(b) 2008 comparatives have been restated to reflect the inclusion of offshore business within the total Ireland result. The impact on the three months to 31 December 2008: £228m; 30 September 2008: £163m; 30 June 2008: £152m. This was previously included within UK life and pensions.

(d) The three month period to 31 December 2008 excludes the full impact of 2008 year end changes to non-economic assumptions. The effect of changes to year end non-economic assumptions was an increase in total PVNBP of £33m in the final PVNBP results published in the 2008 Preliminary results.

Supplementary information continued

6.3 Exposure to investment property and financial assets

Group exposure to investment property and financial assets

The total Group exposure to investment property and financial assets has been segmented below based on the stakeholder sub-group with which the market and credit risk relating to those assets lies.

		Exposure
		Policyholder	Policyholder	TPICF and
	Shareholder	(participating)	(unit linked)	NCI*	Total
30 June 2009	£m	£m	£m	£m	£m
Investment property	713	2,866	2,982	376	6,937
Equity securities	433	6,457	31,833	1,077	39,800
Debt securities	8,817	29,183	12,902	376	51,278
Loans and receivables	10,644	228	155	-	11,027
Other financial assets	1,486	6,981	846	97	9,410
Cash and cash equivalents	3,297	3,556	3,663	128	10,644
Total	25,390	49,271	52,381	2,054	129,096
		Exposure
		Policyholder	Policyholder	TPICF and
	Shareholder	(participating)	(unit linked)	NCI*	Total
31 December 2008	£m	£m	£m	£m	£m
Investment property	856	3,344	3,186	352	7,738
Equity securities	413	7,806	30,452	1,078	39,749
Debt securities	8,272	28,880	13,442	373	50,967
Loans and receivables	11,670	250	149	-	12,069
Other financial assets	1,981	7,919	842	86	10,828
Cash and cash equivalents	3,518	3,173	3,221	140	10,052
Total	26,710	51,372	51,292	2,029	131,403

* Third party interests in consolidated funds and non-controlling interests.

Shareholder exposure to investment property and financial assets

The total shareholder exposure to investment property and financial assets of £25.4bn includes £8.8bn of assets held by non-segregated funds of the Group's Canadian operations. The effective exposure of shareholders to assets of the non-segregated funds in Canada was significantly lower than the nominal level of exposure presented below because changes in the value of assets are typically accompanied by offsetting changes in the value of related liabilities. The shareholder exposure is limited to the net impact on the shareholder surplus and the value of any guarantees which may be triggered.

	Canada non-segregated funds exposure		Standard Life Other Bank exposure		shareholder exposure		Total shareholder exposure
	30 June 2009	31 Dec 2008	30June 2009	31 Dec 2008	30June 2009	31 Dec 2008	30June 2009	31 Dec 2008
	£m	£m	£m	£m	£m	£m	£m	£m
Investment property	713	854	-	-	-	2	713	856
Equity securities	350	347	-	-	83	66	433	413
Debt securities	5,170	5,420	662	60	2,985	2,792	8,817	8,272
Loans and receivables	2,018	2,137	8,599	9,517	27	16	10,644	11,670
Other financial assets	520	435	238	376	728	1,170	1,486	1,981
Cash and cash equivalents	20	23	1,071	1,470	2,206	2,025	3,297	3,518
Total	8,791	9,216	10,570	11,423	6,029	6,071	25,390	26,710

Standard Life Bank exposure to financial assets consists primarily of exposure to a very high quality retail mortgage book as well as highly rated short-term debt securities and cash and cash equivalents.

Shareholder exposure to debt securities excluding Canada non-segregated funds and Standard Life Bank consists primarily of debt securities backing annuity liabilities, subordinated debt liabilities and the stock lending programme. The increase in exposure can be attributed to new annuity business written in the period.

Group exposure to debt securities

The Group's exposure to debt securities has been further analysed in the tables below. The high quality of the debt security portfolio has been maintained with 61% of debt securities rated AAA (31 December 2008: 65%) and 96% (31 December 2008: 97%) being rated as investment grade.

	Exposure
		Policyholder	Policyholder	TPICF and
	Shareholder	(participating)	(unit linked)	NCI*	Total
30 June 2009	£m	£m	£m	£m	£m
Government	3,717	18,845	6,604	225	29,391
Corporate - financial institutions	2,735	7,253	3,881	114	13,983
Corporate - other	2,110	2,571	1,975	30	6,686
Other	255	514	442	7	1,218
Total	8,817	29,183	12,902	376	51,278
	Exposure
		Policyholder	Policyholder	TPICF and
	Shareholder	(participating)	(unit linked)	NCI*	Total
31 December 2008	£m	£m	£m	£m	£m
Government	3,682	18,990	6,165	144	28,981
Corporate - financial institutions	2,331	6,870	5,432	211	14,844
Corporate - other	1,940	2,110	1,397	14	5,461
Other	319	910	448	4	1,681
Total	8,272	28,880	13,442	373	50,967

* Third party interests in consolidated funds and non-controlling interests.

Shareholder exposure to debt securities

Further details of the shareholder exposure to debt securities, including credit ratings, are presented below.

	Credit rating
					Below BBB
	AAA	AA	A	BBB	or not rated	Total
30 June 2009	£m	£m	£m	£m	£m	£m
Government	1,545	1,149	1,023	-	-	3,717
Corporate - financial institutions	934	665	971	96	69	2,735
Corporate - other	315	150	1,113	378	154	2,110
Other	242	-	4	9	-	255
Total	3,036	1,964	3,111	483	223	8,817
	Credit rating
					Below BBB
	AAA	AA	A	BBB	or not rated	Total
31 December 2008	£m	£m	£m	£m	£m	£m
Government	1,448	1,208	1,023	-	3	3,682
Corporate - financial institutions	1,116	431	634	89	61	2,331
Corporate - other	400	115	926	305	194	1,940
Other	259	-	49	11	-	319
Total	3,223	1,754	2,632	405	258	8,272

Debt securities classified as corporate include securities issued by corporate entities which carry government guarantees. Debt securities classified as other consist primarily of securities issued by supranational institutions.

Supplementary information continued

6.3 Exposure to investment property and financial assets continued

Shareholder exposure to loans and receivables

Shareholders are directly exposed to loans and receivables of £10.6bn which comprise the Standard Life Bank retail mortgage book and the Canadian non-segregated funds commercial mortgage book. Both mortgage books are deemed to be of very high quality.

	30 June 2009	31 Dec 2008
	£m	£m
Canada non-segregated funds commercial mortgage book	2,018	2,137
Standard Life Bank retail mortgage book	8,599	9,517
Other	27	16
Total	10,644	11,670

The Canadian mortgage book has an average loan to value of 44%, has no loans in arrears by three or more months and has experienced no impairments during the first half of 2009.

Standard Life Bank's high quality mortgage portfolio continues to perform well despite the adverse economic conditions, with arrears figures remaining low in comparison to the Council of Mortgage Lenders' (CML) average. Only 0.68% of total mortgages were three or more months in arrears or in repossession at the end of H1 2009, approximately a quarter of the CML industry average of 2.61% (as at Q1 2009). The average indexed loan to value ratio increased slightly to 48% (31 December 2008: 46%). Impairment charges, which reflect market factors including rising unemployment and falling house prices, increased to £8m in H1 2009 (H1 2008: £1m). However, net write-offs for H1 2009 were only £2m (H1 2008: £1m), further demonstrating the high quality of this mortgage portfolio. The reduction in the Standard Life Bank mortgage book is consistent with the strategy of managing the mortgage exposure.

6.4 Fair value hierarchy of financial instruments

To provide further information on the approach used to determine the fair value of financial assets and derivative financial liabilities measured at fair value on the Group's IFRS statement of financial position, the fair value of these financial instruments has been categorised below on an indicative basis, consistent with the basis used in the supplementary information presented in the Preliminary Results 2008, to reflect the following fair value hierarchy.

Level 1: fair values measured using quoted prices in active markets for the same instrument (i.e. without modification
or repackaging).
Level 2: fair values measured using quoted prices in active markets for similar assets or liabilities or other valuation techniques
for which all significant inputs are based on observable market data.
Level 3: fair values measured using valuation techniques for which any significant input is not based on observable market data.

The amendments to IFRS 7 Financial Instruments: Disclosures issued in March 2009 which require the presentation of a fair value hierarchy analysis and related disclosures will be incorporated in the Group's financial statements for the year to 31 December 2009. The implementation of the IFRS 7 requirements may result in some reclassifications compared to the indicative fair value hierarchy information provided below.

Total
	Fair value hierarchy
	Level 1		Level 2			Level 3		Total
	30 June	31 Dec	30 June	31 Dec		30 June	31 Dec	30 June	31 Dec
	2009	2008	2009	2008		2009	2008	2009	2008
	£m	£m	£m	£m		£m	£m	£m	£m
Equity securities	38,625	38,369	-	-		1,175	1,380	39,800	39,749
Debt securities	30,426	30,311	19,695	19,338		1,157	1,318	51,278	50,967
Derivative financial assets	468	507	978	2,283		28	10	1,474	2,800
Derivative financial liabilities	(23)	(44)	(954)		(1,304)	(10)	-	(987)	(1,348)
Total	69,496	69,143	19,719	20,317		2,350	2,708	91,565	92,168

Level 1 financial instruments principally include equity instruments listed on a recognised exchange, government and certain supranational institution bonds and exchange traded futures and options.

Level 2 financial instruments principally include listed corporate bonds, commercial paper, certificates of deposit and derivative instruments which are not exchange traded, with the exception of credit default swaps. Corporate bonds have generally been classified as Level 2 as the composite price provided by third party pricing providers may include, as an input, quotes provided by some banks that are not based on actual transaction prices.

Level 3 financial instruments principally include unlisted equity instruments, being predominantly interests in private equity funds, listed corporate bonds for which prices are not available from third party pricing providers or where such prices are considered to be stale (including some asset backed securities), unquoted bonds where credit spreads, being a significant input to the valuation technique, are obtained from a broker or estimated internally and credit default swaps.

Shareholder exposure

	Fair value hierarchy
	Level 1		Level 2		Level 3				Total
	30 June	31 Dec	30 June	31 Dec		30 June	31 Dec	30 June		31 Dec
	2009	2008	2009	2008	2009		2008		2009	2008
	£m	£m	£m	£m	£m		£m		£m	£m
Equity securities	423	399	-	-	10		14		433	413
Debt securities	3,838	3,983	4,652	3,969	327		320		8,817	8,272
Derivative financial assets	-	-	439	784	-		-		439	784
Derivative financial liabilities	-	-	(180)	(230)	-		-		(180)	(230)
Total	4,261	4,382	4,911	4,523	337		334		9,509	9,239

Policyholder (participating) exposure

	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
	30 June	31 Dec	30 June	31 Dec	30 June	31 Dec	30 June	31 Dec
	2009	2008	2009	2008	2009	2008	2009	2008
	£m	£m	£m	£m	£m	£m	£m	£m
Equity securities	5,853	7,092	-	-	604	714	6,457	7,806
Debt securities	19,340	19,588	9,324	8,880	519	412	29,183	28,880
Derivative financial assets	453	496	320	1,152	-	9	773	1,657
Derivative financial liabilities	(19)	(29)	(538)	(560)	(6)	-	(563)	(589)
Total	25,627	27,147	9,106	9,472	1,117	1,135	35,850	37,754

Policyholder (unit linked) exposure

				Fair value hierarchy
		Level 1		Level 2		Level 3		Total
		30 June	31 Dec	30 June	31 Dec	30 June	31 Dec	30 June	31 Dec
		2009	2008	2009	2008	2009	2008	2009	2008
		£m	£m	£m	£m	£m	£m	£m	£m
Equity securities		31,763	30,359	-	-	70	93	31,833	30,452
Debt securities		7,018	6,594	5,597	6,286	287	562	12,902	13,442
Derivative financial assets	13		11	190	324	24	1	227	336
Derivative financial liabilities	(4)		(14)	(213)	(448)	(4)	-	(221)	(462)
Total		38,790	36,950	5,574	6,162	377	656	44,741	43,768

Third party interests in consolidated funds and non-controlling interests exposure

	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
	30 June	31 Dec	30 June	31 Dec	30 June	31 Dec		30 June	31 Dec
	2009	2008	2009	2008	2009	2008	2009		2008
	£m	£m	£m	£m	£m	£m	£m		£m
Equity securities	586	519	-	-	491	559	1,077		1,078
Debt securities	230	146	122	203	24	24	376		373
Derivative financial assets	2	-	29	23	4	-	35		23
Derivative financial liabilities	-	(1)	(23)	(66)	-	-	(23)		(67)
Total	818	664	128	160	519	583	1,465		1,407

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7 Glossary

Glossary

Annuity

A periodic payment made for an agreed period of time (usually up to the death of the recipient) in return for a cash sum. The cash sum can be paid as one amount or as a series of premiums. If the annuity commences immediately after the payment of the sum it is termed an immediate annuity. If it commences at some future date it is termed a deferred annuity.

Annual premium equivalent (APE)

An industry measure of new business. The total of new annualised regular premiums plus 10% of single premiums written during the applicable period.

Assumptions

Variables applied to data used to project expected outcomes.

Acquisition costs

Expenses related to the procurement and processing of new business written including a share of overheads.

Back book management

We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Back book management includes all non-expense related operating variances and assumption changes for covered business plus those development costs directly related to back book management initiatives and, for non-covered business, specific costs attributed to back book management.

Board

The board of Directors of the Company.

Capital Resources (CR)

Capital resources include the assets in excess of liabilities, valued on a regulatory basis, and certain other components of capital. If the Capital Resources fall to a level that is too close to the Capital Resources Requirement intervention from the FSA can be expected.

Capital Resources Requirement (CRR)

A company must hold Capital Resources in excess of the Capital Resources Requirement. The CRR represents the total of the individual capital resources requirements (ICRR) of each regulated company in the Group.

CFO Forum

A high-level discussion group formed and attended by the Chief Financial Officers of major European listed, and some non-listed, insurance companies.

Company

Standard Life plc.

Core

We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Core includes new business contribution, expected return and development costs for covered business excluding those development costs directly related to back book management initiatives and, for non-covered business, IFRS underlying profit excluding specific costs attributable to back book management.

Cost income ratio

The ratio of total costs to total income for the year expressed as a percentage. This KPI indicates how much of total income is being employed to meet the cost base and measures the strategic driver of cost effectiveness in the banking business within UK financial services (UKFS).

Covered business

The business covered by the EEV methodology. This should include any contracts that are regarded by local insurance supervisors as long-term or life insurance business and may cover other long-term life insurance, short-term life insurance such as group risk business and long-term accident and health business. Where short-term healthcare is regarded as part of or ancillary to a company's long-term life insurance business, then it may be regarded as long-term business. For covered business within the Standard Life Group please refer to the EEV methodology within the EEV supplementary information.

Deferred acquisition costs (DAC)

The method of accounting whereby acquisition costs on long-term business are deferred in the statement of financial position as an asset and amortised over the life of those contracts. This leads to a smoothed recognition of up front expenses instead of the full cost in the year of sale.

Deferred income reserve (DIR)

The method of accounting whereby front end fees that relate to services to be provided in future periods are deferred in the statement of financial position as a liability and amortised over the life of those contracts. This leads to a smoothed recognition of up front income instead of the full income in the year of sale.

Demutualisation

The process by which a mutual organisation owned by its members, such as a building society or insurance company, converts to a public limited company owned by its equity holders. The Standard Life Assurance Company demutualised and shares of Standard Life plc, the new holding company for the Standard Life Group, were listed on the London Stock Exchange on 10 July 2006.

Development costs

Costs that are considered to be non-recurring and are reported separately from other expenses in the EEV movement analysis.

Director

A director of the Company.

Discounted pay back period

A measure of capital efficiency that measures the time at which the value of expected cash flows (after tax) is sufficient to recover the capital invested to support the writing of new business. Cash flows are discounted at the appropriate risk discount rate.

Discounting

The reduction to present value at a given date of a future cash transaction at an assumed rate, using a discount factor reflecting the time value of money. The choice of a discount rate will usually greatly influence the value of insurance provisions, and may give indications on the conservatism of provisioning methods.

Dividend cover

This is a measure of how easily a company can pay its dividend from profit. It is calculated as IFRS underlying profit after tax and minority interest divided by the total dividend for that financial year. The dividend for the financial year is the current year interim dividend plus the proposed final dividend.

Earnings before interest and tax (EBIT)

EBIT is defined as earnings before interest, taxation, foreign exchange gains and losses, profit on partial disposal of investments in associates, divergence on financial guarantee costs, movement on contract for differences and restructuring costs. This KPI measures directly the underlying operating profitability.

EBIT margin

This is an industry measure of performance for investment management companies. It is calculated as EBIT divided by total revenue.

Earnings per share (EPS)

EPS is a commonly used financial metric which can be used to measure the profitability and strength of a company over time. EPS is calculated by dividing profit by the number of ordinary shares. Basic EPS uses the weighted average number of ordinary shares outstanding during the year. Diluted EPS adjusts the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares, for example, share awards and share options awarded to employees.

Economic assumptions

Assumptions in relation to future interest rates, investment returns, inflation and tax. These assumptions and variances in relation to these assumptions are treated as non-operating profits/(losses) under EEV.

Efficiency

We choose to analyse our EEV operating profit before tax in the three components which reflect the focus of our business effort - core, efficiency and back book management. Efficiency includes covered business maintenance expense variances and assumption changes.

European Embedded Value (EEV)

The value to equity shareholders of the net assets plus the expected future profits on in-force business from a life assurance and pensions business. Prepared in accordance with the EEV Principles and Guidance issued in May 2004 by the CFO Forum and the Additional Guidance issued in October 2005. EEV reports the value of business in-force based on a set of best estimate assumptions, allowing for the impact of uncertainty inherent in future assumptions, the costs of holding required capital, the value of free surplus and TVOG.

EEV operating profit

Covered business EEV operating profit represents profit generated from new business sales and the in-force book of business, based on closing noneconomic and opening economic assumptions. Covered business is defined within this glossary.

Non-covered business EEV operating profit generally represents IFRS normalised underlying profit. Non-covered business is defined within this glossary.

EEV operating profit capital and

cash generation

This is a measure of the underlying shareholder capital and cash flow of the Group.

Covered business EEV operating capital and cash generation represents the EEV operating profit net worth (free surplus and required capital) on an after tax basis.

Glossary continued

Non-covered business EEV operating capital and cash generation represents EEV operating profit after tax (as defined within this glossary).

Expected return on EEV

Anticipated results based on applying opening assumptions to the opening EEV.

Experience variances

Current period differences between the actual experience incurred over the period and the assumptions used in the calculation of the embedded value excluding new business non-economic experience variances which are captured in new business contribution.

Financial options and guarantees

Terms relating to covered business conferring potentially valuable guarantees underlying, or options to change, the level and nature of policyholder benefits and exercisable at the discretion of the policyholder, whose potential value is impacted by the behaviour of financial variables.

Free surplus

The amount of capital and any surplus allocated to, but not required to support, the in-force business covered by the EEV.

Group assets under administration (AUA)

A measure of the total assets that the Group administers on behalf of customers and institutional clients, it includes those assets for which the Group provides investment management services, as well as those assets that the Group administers where the customer has made a choice to select an external third party investment manager. Assets under administration reflect the value of the IFRS gross assets of the Group adjusted, where appropriate, for consolidation adjustments, inter-company assets and intangible assets. In addition, the definition includes third party assets administered by the Group which are not included in the consolidated statement of financial position.

Group capital surplus

This is a regulatory measure of our financial strength and compares the Group's capital resources to its capital resource requirements in accordance with the Financial Groups Directive.

Group, Standard Life Group or Standard Life

Prior to demutualisation on 10 July 2006, SLAC and its subsidiaries and, from demutualisation on 10 July 2006, the Company and its subsidiaries.

Heritage With Profits Fund (HWPF)

The Heritage With Profits Fund contains all existing business - both with profits and non profit - written before demutualisation in the UK, Irish or German branches, with the exception of the classes of business which the Scheme of Demutualisation allocated to the Proprietary Business Fund. This HWPF also contains increments to existing business.

Individual Capital Assessment (ICA)

The process by which the Financial Services Authority (FSA) requires insurance companies to make an assessment of the regulated company's own capital requirements, which is then reviewed and agreed by the FSA.

In-force

Long-term business which has been written before the period end and which has not terminated before the period end.

Interest margin

Net interest income for the year as a percentage of average total assets during the year disclosed in basis points (1/100th of 1%). This is a measure of how much margin the Group is making on its banking assets and measures the driver of income generation for this business.

Internal rate of return (IRR)

A measure of rate of return on an investment and so an indicator of capital efficiency. The IRR is equivalent to the discount rate at which the present value of the after tax cash flows expected to be earned over the lifetime of new business written is equal to the capital invested to support the writing of the business.

International Financial Reporting

Standards (IFRS)

International Financial Reporting Standards are accounting standards issued by the International Accounting Standards Board (IASB). The Group's consolidated financial statements are required to be prepared in accordance with IFRS.

IFRS tangible equity per share

Total IFRS equity, less non-controlling interests and intangible assets, divided by the diluted number of issued shares at the end of the period.

IFRS underlying profit

An IFRS profit measure the Group uses to provide a more meaningful analysis of the underlying business performance. Underlying profit is calculated by adjusting profit attributable to equity holders before tax for items such as volatility arising from accounting mismatches, impairment of intangibles and certain restructuring expenses.

Investment third party net new business

Represents investment management third party investment and insurance gross inflows less redemptions.

Key performance indicator (KPI)

These are measures by reference to which the development, performance or position of the business can be measured effectively.

Maintenance expenses

Expenses related to the servicing of the in-force book of business (including investment and termination expenses and a share of overheads).

Market Consistent Embedded Value (MCEV)

The European Insurance CFO Forum Market Consistent Embedded Value Principles ©¹ (MCEV Principles) were issued by the CFO Forum on 4 June 2008 to replace the current EEV Principles and Additional Guidance and were designed to improve the transparency and comparability of embedded value reporting. On 19 December 2008, the CFO Forum announced that it would undertake further work to seek to improve the consistency of certain MCEV Principles, particularly in light of volatile economic markets.

In light of these developments, which may result in significant amendments to MCEV, the CFO Forum announced on 22 May 2009 that it believed that it was sensible to defer the mandatory MCEV reporting for all member firms until 2011. A further update on the work of the CFO Forum will be provided later this year.

Mutual fund

A collective investment vehicle enabling investors to pool their money, which is then invested in a diverse portfolio of stocks or bonds, enabling investors to achieve a more diversified portfolio than they otherwise might have done by making an individual investment.

Net flows

Life and pensions net flows represents gross inflows less redemptions. Gross inflows are premiums and deposits recognised in the period on a regulatory basis (excluding any switches between funds). Redemptions are claims and annuity payments (excluding any reinsurance transactions and switches between funds).

Net worth

The market value of equity holders' funds and the shareholders' interest in the surplus held in the non profit component of the long-term business funds, determined on a statutory solvency basis and adjusted to add back any non-admissible assets per regulatory returns.

New business contribution (NBC)

The expected present value of all future cash flows attributable to the equity holder from new business, as included within EEV operating profit.

New business strain (NBS)

Costs involved in acquiring new business (such as commission payments to intermediaries, expenses, reserves) affecting the insurance company's financial position at that point and where all of the income from that new business (including premiums and investment income) has not yet been received and will not be received until a point in the future. To begin with, therefore, a strain may be created where cash outflows exceed inflows.

NBS margin

New business strain as a percentage of PVNBP

sales (see PVNBP below).

Non-covered business

Mainly includes third party Global investment management, banking, healthcare and other businesses not associated with the life assurance and pensions business. Non-covered business excludes the Global investment management look through profits and the return on mutual funds which are recognised in covered business. Non-covered business is excluded from the EEV methodology and is included within the Group

EEV on an IFRS basis.

Non-economic assumptions

Assumptions in relation to future levels of mortality, morbidity, persistency and expenses. These assumptions and variances in relation to these assumptions are treated as operating profits/(losses) under EEV.

Non profit policy

A policy, including a unit linked policy, which is not a with profits policy.

Personal pension plan

An individual pension arrangement with particular tax advantages whereby individuals who are self-employed or those who are not members of employer-sponsored pension scheme arrangements can make provision for retirement or provide benefits for their dependants in a tax efficient manner.

Present value of in-force business (PVIF)

The present value of the projected future distributable profits after tax attributable to equity holders from the covered business in force at the valuation date, adjusted where appropriate, to take account of TVOG.

Glossary continued

Present value of new business

premiums (PVNBP)

The industry measure of insurance new business sales under the EEV methodology. It is calculated as 100% of single premiums plus the expected present value of new regular premiums.

Pro forma profit

Pre-demutualisation IFRS and EEV mutual figures adjusted to calculate a profit figure for the Group as if the holding company, Standard Life plc, had been listed at the beginning of that period. This information, where included, is unaudited and is prepared for illustrative purposes only.

Proprietary Business Fund

The Proprietary Business Fund in SLAL contains, among other things, certain classes of business - pension contribution insurance policies, income protection plan policies and a number of SIPP policies written before demutualisation, as well as most new insurance business written after demutualisation in the UK, Ireland and Germany.

PVNBP margin

PVNBP margin is NBC expressed as a percentage of PVNBP. This measures whether new business written is adding value or eroding value.

Recourse cash flow (RCF)

Certain cash flows arising in the HWPF on specified blocks of UK and Irish business, which are transferred out of the fund on a monthly basis and accrue to the ultimate benefit of equity holders, as determined by the Scheme of Demutualisation.

Regular premium

A regular premium contract (as opposed to a single premium contract), is one where the policyholder agrees at inception to make regular payments throughout the term of the contract.

Required capital

The amount of assets, over and above the value placed on liabilities in respect of covered business, whose distribution to equity holders is restricted.

Return on EEV (RoEV)

The annualised post-tax operating profit on an EEV basis expressed as a percentage of the opening embedded value, adjusted for dividends paid to equity holders.

Return on equity (RoE)

Calculated as IFRS underlying profit after tax divided by opening net assets.

Scheme of Demutualisation (the Scheme)

The scheme pursuant to Part VII of, and Schedule 12 to, the Financial Services and Markets Act 2000, under which substantially all of the long-term business of SLAC was transferred to Standard Life Assurance Limited on 10 July 2006.

Single premium

A single premium contract (as opposed to a regular premium contract (see above)), involves the payment of one premium at inception with no obligation for the policyholder to make subsequent additional payments.

SIPP

A self invested personal pension which provides the policyholder with greater choice and flexibility as to the range of investments made, how those investments are managed, the administration of those assets and how retirement benefits are taken.

SLAC

The Standard Life Assurance Company (renamed The Standard Life Assurance Company 2006 on 10 July 2006).

Time value of options and guarantees (TVOG)

Represents the potential additional cost to equity holders where a financial option or guarantee exists which affects policyholder benefits and is exercisable at the option of the policyholder.

Total shareholder return

This is a measure of the overall return to shareholders and includes the movement in the share price and any dividends paid and reinvested.

Underwriting profit

The earned premium remaining after losses have been paid and administrative expenses have been deducted. It does not include any investment income earned on held premiums.

Unit linked policy

A policy where the benefits are determined by reference to the investment performance of a specified pool of assets referred to as the unit linked fund.

With profits policy

A policy where, in addition to guaranteed benefits specified in the policy, additional bonuses may be payable from relevant surplus. The declaration of such bonuses (usually annually) reflects, amongst other things, the overall investment performance of the fund of which the policy forms part. Also known as a 'participating policy'.

Wrap platform

An investment platform which is essentially a trading platform enabling investment funds, pensions, direct equity holdings and some life assurance contracts to be held in the same administrative account rather than as separate holdings.

8 Shareholder information

Shareholder information

Dividends

It is intended that interim dividends will be paid in November and final dividends in May each year.

You can choose to receive your dividends in one of the following ways:

1. Receive new Standard Life plc shares

instead of cash

Standard Life has arranged a Scrip dividend scheme. This gives shareholders the opportunity to receive new shares in Standard Life plc - and means you will receive additional shares instead of cash.

2. Receive a cash dividend payment in your bank or building society account

You can have your dividend paid directly into the bank or building society account of your choice. This means the money will usually be available to use more quickly than if you receive your dividends in the form of a cheque. The money will be transferred straight into your bank account on the day the dividend is paid.

3. Receive a cash dividend payment by cheque

If you don't choose to receive your dividends as shares, or paid directly into your bank account, you will be sent a cheque for the relevant amount. You may be charged a fee to present this cheque, particularly if you live outside of the UK.

If you would like to change your dividend payment method, please visit

www.standardlife.com/shareholders and

follow the links to find out how to register or call Capita - the contact details are on the last page.

Receive shareholder communications by email and website

You can choose to receive future shareholder communications by email and website. Registering is easy, secure and free. Please visit www.standardlife.com/shareholders and follow the links to find out how to register. The service allows you to:

• Choose to receive an email when the Annual Report and Accounts and AGM guide are available on our website. You can then

read these online instead of receiving paper copies in the post

• Check your Standard Life shareholding

• Find out information about your dividends

• Work out the value of your shareholdings

• Change your address details

• Set up a new dividend mandate, or change your existing details

• Send your Annual General Meeting voting instructions electronically

When you register you can choose if you'd like us to keep in touch with you by email. Any information you receive electronically will be the same as the paper version. This will help us save your money - and conserve natural resources.

Preventing unsolicited mail

By law, Standard Life has to make its share register publicly available. Because of this, some registered shareholders may receive unsolicited mail. You could also be targeted by fraudulent 'investment specialists' using high-pressure cold calling sales techniques - these are sometimes called 'boiler room scams'. You can find more information at the Office of Fair Trading website

www.oft.gov.uk

Using a nominee company can help protect your privacy. You can transfer your shares into the company sponsored nominee - the Standard Life Share Account - by contacting Capita, or get in touch with your broker to find out about their nominee services.

If you want to limit the amount of unsolicited mail you receive, please contact:

The Mailing Preference Service (MPS), DMA House, 70 Margaret Street, London W1W 8SS. Or register online at www.mpsonline.org.uk

Analysis of registered shareholdings as at 30 June 2009
	Number of	% of total	Number of	% of total
Range of shares	holders	holders	shares	shares
1 - 1000	67,637	54.58%	32,502,053	1.47%
1,001 - 5,000	49,852	40.23%	103,409,294	4.67%
5,001 - 10,000	3,674	2.97%	25,328,050	1.15%
10,001 - 100,000	2,256	1.82%	48,067,809	2.17%
* 100,001 +	497	0.40%	2,003,721,855	90.54%
Total	123,916	100.00%	2,213,029,061	100.00%

* Standard Life Share Account currently has 1,343,495 participants holding a total of 1,067,421,469 shares

Financial calendar

Ex-dividend date for 2009 interim dividend	12 August 2009
Record date for 2009 interim dividend	14 August 2009
2009 Q3 trading results and interim management statement announcement	29 October 2009
2009 interim dividend payment date	16 November 2009
2009 Q4 trading results announcement	2 February 2010
2009 Preliminary results	10 March 2010
2010 Q1 trading results and interim management statement announcement	29 April 2010
2010 Annual General Meeting	14 May 2010
Analyst and Investor Day	20 May 2010
2010 Interim results and Q2 trading results	11 August 2010
2010 Q3 trading results and interim management statement announcement	3 November 2010

Directors
Gerry Grimstone (Chairman)	Crawford Gillies
Sir Sandy Crombie* (Group Chief Executive)	Baroness McDonagh
Kent Atkinson	David Nish*
Lord Blackwell	Keith Skeoch*
Colin Buchan
* Executive Director