Preliminary Results Part 2 IF

RNS Number : 4101I

Old Mutual PLC

11 March 2010

 



Statement of directors' responsibilities in respect of the preliminary announcement of the Annual Report and the financial statements

We confirm that to the best of our knowledge:

Ÿ      The financial statements, prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit of the Group and the undertakings included in the consolidation taken as a whole;

Ÿ      The Group Finance Director's review and the Business review include a fair view of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the important events, principal risks and uncertainties that they face.

Julian Roberts                                                                                                                             Philip Broadley

Group Chief Executive                                                                                                                Group Finance Director

11 March 2010                                                                                                                            11 March 2010

Consolidated income statement

For the year ended 31 December 2009

£m
	Notes	Year ended 31 December 2009	Year ended 31 December 2008
Revenue
Gross earned premiums	B3	3,820	5,156
Outward reinsurance		(369)	(335)
Net earned premiums		3,451	4,821
Investment return (non-banking)		11,616	(11,578)
Banking interest and similar income		3,989	4,059
Banking trading, investment and similar income		168	162
Fee and commission income, and income from service activities		2,422	2,313
Other income		202	270
Total revenues		21,848	47
Expenses
Claims and benefits (including change in insurance contract provisions)		(5,069)	(3,610)
Reinsurance recoveries		328	262
Net claims and benefits incurred		(4,741)	(3,348)
Change in investment contract liabilities		(8,345)	10,051
Losses on loans and advances		(511)	(319)
Finance costs		(322)	392
Banking interest payable and similar expenses		(2,627)	(2,853)
Fee and commission expenses, and other acquisition costs		(806)	(937)
Other operating and administrative expenses		(3,139)	(2,834)
Goodwill impairment	C1(b)	(266)	(74)
Change in third party interest in consolidated funds		(470)	779
Amortisation of PVIF and other acquired intangibles	C1(b)	(326)	(361)
Total expenses		(21,553)	496
Share of associated undertakings' profit/(loss) after tax		2	(1)
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments	C1(c)	(50)	53
Profit before tax		247	595
Income tax (expense)/credit	D1(a)	(365)	88
(Loss)/profit after tax for the financial year		(118)	683
Attributable to
Equity holders of the parent		(340)	441
Non-controlling interests
Ordinary shares	F2(a)	158	188
Preferred securities	F2(a)	64	54
(Loss)/profit after tax for the financial year		(118)	683
Earnings per share
Basic earnings per ordinary share (pence)	C3(a)	(7.8)	8.6
Diluted earnings per ordinary share (pence)	C3(a)	(7.8)	8.1
Weighted average number of shares - millions	C3(a)	4,758	4,755

Consolidated statement of comprehensive income

For the year ended 31 December 2009

			£m
	Notes	Year ended 31 December 2009	Year ended 31 December 2008
(Loss)/profit after tax for the financial year		(118)	683
Other comprehensive income for the financial year
Fair value (losses)/gains
Property revaluation		(10)	16
Net investment hedge		(41)	281
Available-for-sale investments
Fair value gains/(losses)		1,087	(1,635)
Recycled to the income statement		239	414
Shadow accounting		27	26
Currency translation differences/exchange differences on translating foreign operations		302	429
Other movements		21	68
Income tax relating to components of other comprehensive income	D1(c)	(397)	366
Total other comprehensive income for the financial year		1,228	(35)
Total comprehensive income for the financial year		1,110	648
Attributable to
Equity holders of the parent		709	305
Non-controlling interests
Ordinary shares		334	299
Preferred securities		67	44
Total comprehensive income for the financial year		1,110	648

Reconciliation of adjusted operating profit to profit after tax

For the year ended 31 December 2009

£m
	Notes	Year ended 31 December 2009	Year ended 31 December 2008
Core operations
Long Term Savings	B2	685	452
Nedbank	B2	470	575
M&F	B2	70	76
USAM	B2	83	97
		1,308	1,200
Finance costs		(104)	(140)
Long term investment return on excess assets		91	108
Interest payable to non-core operations - Bermuda		(40)	-
Other shareholders' expenses		(85)	(32)
Adjusted operating profit	B2	1,170	1,136
Adjusting items	C1(a)	(1,137)	60
Non core operations - Bermuda		22	(365)
Profit before tax (net of policyholder tax)		55	831
Income tax attributable to policyholder returns		192	(236)
Profit before tax		247	595
Total income tax (expense)/credit	D1(a)	(365)	88
(Loss)/profit after tax for the financial year		(118)	683

Adjusted operating profit after tax attributable to ordinary equity holders

£m
	Notes	Year ended 31 December 2009	Year ended 31 December 2008
Adjusted operating profit		1,170	1,136
Tax on adjusted operating profit	D1(d)	(292)	(86)
Adjusted operating profit after tax		878	1,050
Non-controlling interests - ordinary shares	F2(a)	(180)	(218)
Non-controlling interests - preferred securities	F2(a)	(65)	(54)
Adjusted operating profit after tax attributable to ordinary equity holders		633	778
Adjusted weighted average number of shares - (millions)	C3(b)	5,229	5,230
Adjusted operating earnings per share - (pence)	C3(b)	12.1	14.9

Basis of preparation

The reconciliation of adjusted operating profit has been prepared so as to reflect the Directors' view of the underlying long-term performance of the Group. The statement reconciles adjusted operating profit to profit after tax as reported under IFRS as adopted by the EU.

For core life assurance and general insurance businesses, adjusted operating profit is based on a long-term investment return, including investment returns on life funds' investments in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For the US Asset Management business it includes compensation costs in respect of certain long-term incentive schemes defined as non-controlling interests in accordance with IFRS. For all core businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long-term incentive schemes, the impact of closure of unclaimed shares trusts, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, and fair value profits/(losses) on certain Group debt movements. Bermuda, which is non-core, is not included in adjusted operating profit.

Adjusted operating earnings per ordinary share is calculated on the same basis as adjusted operating profit. It is stated after tax attributable to adjusted operating profit and non-controlling interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.

Consolidated statement of financial position

At 31 December 2009

£m
		At 31 December 2009	At 31 December 2008
			Restated
Assets
Goodwill and other intangible assets		5,159	5,882
Mandatory reserve deposits with central banks		882	734
Property, plant and equipment		828	682
Investment property		1,759	1,478
Deferred tax assets		570	1,590
Investments in associated undertakings and joint ventures		135	111
Deferred acquisition costs		3,138	3,199
Reinsurers' share of life assurance policyholder liabilities		1,296	1,148
Reinsurers' share of general insurance liabilities		120	115
Deposits held with reinsurers		146	164
Loans and advances		42,393	35,745
Investments and securities		98,461	83,522
Current tax receivable		169	118
Client indebtedness for acceptances		170	220
Trade, other receivables and other assets		3,051	3,137
Derivative financial instruments - assets		2,546	3,228
Cash and cash equivalents		2,982	3,203
Non-current assets held-for-sale		1	7
Total assets		163,806	144,283
Liabilities
Life assurance policyholder liabilities		93,876	81,269
General insurance liabilities		372	344
Third party interests in consolidated funds		2,906	2,591
Borrowed funds	E1	3,309	2,295
Provisions		263	477
Deferred revenue		654	598
Deferred tax liabilities		905	1,452
Current tax payable		210	219
Trade, other payables and other liabilities		4,305	4,074
Liabilities under acceptances		170	220
Amounts owed to bank depositors		44,135	38,171
Derivative financial instruments - liabilities		1,990	2,990
Non-current liabilities held-for-sale		-	6
Total liabilities		153,095	134,706
Net assets		10,711	9,577
Shareholders' equity
Equity attributable to equity holders of the parent		8,464	7,737
Non-controlling interests
Ordinary shares	F2(b)	1,537	1,147
Preferred securities	F2(b)	710	693
Total non-controlling interests		2,247	1,840
Total equity		10,711	9,577

Consolidated statement of cash flows

For the year ended 31 December 2009

£m
		Year ended 31 December 2009	Year ended 31 December 2008
			Restated
Cash flows from operating activities
Profit before tax		247	595
Capital (gains)/losses included in investment income		(9,762)	14,183
Loss on disposal of property, plant and equipment		1	3
Depreciation of property, plant and equipment		86	74
Amortisation and impairment of goodwill and other intangible assets		648	504
Impairment of loans and receivables		770	320
Share-based payment expense		21	21
Share of associated undertakings' (profit)/loss after tax		(2)	1
Loss/(profit) arising on disposal of subsidiaries, associated undertakings and strategic investments		50	(53)
Other non-cash amounts in profit		(465)	(294)
Non-cash movements in profit before tax		(8,653)	14,759
Reinsurers' share of life assurance policyholder liabilities		(148)	486
Reinsurers' share of general insurance liabilities		(5)	(49)
Deferred acquisition costs		62	(370)
Loans and advances		(6,589)	(5,206)
Insurance liabilities		(652)	282
Investment contracts		13,163	(10,260)
Amounts owed to bank depositors		5,964	6,110
Other operating assets and liabilities		(1,798)	(3,901)
Changes in working capital		9,997	(12,908)
Taxation paid		(373)	(458)
Net cash inflow from operating activities		1,218	1,988
Cash flows from investing activities
Net acquisitions of financial investments	(2,674)		(1,170)
Acquisition of investment properties	(82)		(145)
Proceeds from disposal of investment properties	57		13
Acquisition of property, plant and equipment	(138)		(99)
Proceeds from disposal of property, plant and equipment	29		11
Acquisition of intangible assets	(43)		(18)
Acquisition of interests in subsidiaries	(5)		(93)
Disposal of interests in subsidiaries, associated undertakings and strategic investments	40		1,138
Net cash outflow from investing activities	(2,816)		(363)
Cash flows from financing activities
Dividends paid to
Equity holders of the Company	-		(352)
Non-controlling interests and preferred security interests	(190)		(208)
Interest paid (excluding banking interest paid)	(57)		(87)
Proceeds from issue of ordinary shares (including by subsidiaries to non-controlling interests)	100		31
Net sale of treasury shares	38		5
Shares repurchased in buyback programme	-		(175)
Issue of subordinated and other debt	1,049		374
Subordinated and other debt repaid	(441)		(225)
Net cash inflow/(outflow) from financing activities	499		(637)

£m
	Year ended 31 December 2009	Year ended 31 December 2008
		Restated
Net increase/(decrease) in cash and cash equivalents	(1,099)	988
Effects of exchange rate changes on cash and cash equivalents	160	399
Cash and cash equivalents at beginning of the year	4,983	3,596
Cash and cash equivalents at end of the year	4,044	4,983
Consisting of
Coins and bank notes	263	221
Money at call and short notice	2,412	2,794
Balances with central banks (other than mandatory reserve deposits)	307	188
Cash and cash equivalents in the statement of financial position	2,982	3,203
Mandatory reserve deposits with central banks	882	734
Short term cash balances held in policy holder funds	897	2,043
Cash and cash equivalents subject to consolidation of funds	(717)	(997)
Total	4,044	4,983
Other supplementary cash flow disclosures
Interest income received (including banking interest)	5,394	5,384
Dividend income received	335	493
Interest paid (including banking interest)	2,544	3,078

The 31 December 2008 cash flows have been restated as detailed in note A.

Cash flows presented in this statement include all cash flows relating to policyholders' funds for life assurance.

Except for mandatory reserve deposits with central banks and cash and cash equivalents subject to consolidation of funds, management do not consider that there are any material amounts of cash and cash equivalents which are not available for use in the Group's day to day operations. Mandatory reserve deposits are, however, included in cash and cash equivalents for the purposes of the cash flow statement in line with market practice in South Africa.

Consolidated statement of changes in equity

For the year ended 31 December 2009

		Millions				£m
Year ended 31 December 2009	Notes	Number of shares issued and fully paid		Attributable to equity holders of the parent	Total  non-controlling interests	Total equity
Shareholders' equity at beginning of the year		5,516		7,737	1,840	9,577
Profit after tax for the financial year		-		(340)	222	(118)
Other comprehensive income
Fair value gains/(losses)
Property revaluation		-		(12)	2	(10)
Net investment hedge		-		(41)	-	(41)
Available-for-sale investments
Fair value gains		-		1,087	-	1,087
Recycled to the income statement		-		239	-	239
Shadow accounting		-		27	-	27
Currency translation differences/exchange differences on translating foreign operations		-		124	178	302
Other movements		-		22	(1)	21
Income tax relating to components of other comprehensive income	D1(c)	-		(397)	-	(397)
Total comprehensive income for the financial year		-		709	401	1,110
Dividends for the year	C4	-		(45)	(145)	(190)
Net sale of treasury shares		-		39	-	39
Issue of ordinary share capital by the Company		-		2	-	2
Change in participation in subsidiaries		-		-	150	150
Exercise of share options		2		3	-	3
Change in share-based payments reserve		-		19	1	20
Transactions with shareholders		2		18	6	24
Shareholders' equity at end of the year		5,518		8,464	2,247	10,711

								£m
Year ended 31 December 2009	Notes	Share capital	Share premium	Other reserves	Translation reserve	Retained earnings	Perpetual preferred callable securities	Total
Attributable to equity holders of the parent at beginning of the year		552	766	2,130	386	3,215	688	7,737
Profit for the financial year attributable to equity holders of the parent		-	-	-	-	(372)	32	(340)
Other comprehensive income
Fair value gains/(losses)
Property revaluation		-	-	(12)	-	-	-	(12)
Net investment hedge		-	-	-	(41)	-	-	(41)
Available-for-sale investments
Fair value gains		-	-	1,087	-	-	-	1,087
Recycled to income statement		-	-	239	-	-	-	239
Shadow accounting		-	-	27	-	-	-	27
Currency translation differences/exchange differences on translating foreign operations		-	-	-	124	-	-	124
Other movements		-	-	7	-	15	-	22
Income tax relating to components of other comprehensive income		-	-	(410)	-	-	13	(397)
Total comprehensive income for the financial year		-	-	938	83	(357)	45	709
Dividends for the year	C4	-	-	-	-	-	(45)	(45)
Net sale of treasury shares		-	-	-	-	39	-	39
Issue of ordinary share capital by the Company		-	2	-	-	-	-	2
Exercise of share options		-	3	-	-	-	-	3
Change in share-based payments reserve		-	-	19	-	-	-	19
Transactions with shareholders		-	5	19	-	39	(45)	18
Attributable to equity holders of the parent at end of the year		552	771	3,087	469	2,897	688	8,464

							£m
Other reserves attributable to equity holders of the parent		Merger reserve	Available-for-sale reserve	Property revaluation reserve	Share-based payments reserve	Other reserves	Total
At the beginning of the year		2,716	(844)	85	171	2	2,130
Fair value gains/(losses)
Property revaluation		-	-	(12)	-	-	(12)
Available-for-sale investments
Fair value gains		-	1,087	-	-	-	1,087
Recycled to income statement		-	239	-	-	-	239
Shadow accounting		-	9	18	-	-	27
Other movements		-	1	(4)	1	9	7
Income tax relating to components of other comprehensive income		-	(410)	-	-	-	(410)
Change in share-based payments reserve		-	-	-	19	-	19
At end of the year		2,716	82	87	191	11	3,087

Retained earnings were reduced by £379 million at 31 December 2009 in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.

Consolidated statement of changes in equity

For the year ended 31 December 2009 continued

		Millions				£m
Year ended 31 December 2008	Notes	Number of shares issued and fully paid		Attributable to equity holders of the parent	Total  non-controlling interests	Total equity
Shareholders' equity at beginning of the year		5,510		7,961	1,636	9,597
Profit after tax for the financial year		-		441	242	683
Other comprehensive income
Fair value gains/(losses)
Property revaluation		-		16	-	16
Net investment hedge		-		281	-	281
Available-for-sale investments
Fair value losses		-		(1,635)	-	(1,635)
Recycled to the income statement		-		414	-	414
Shadow accounting		-		26	-	26
Currency translation differences/exchange differences on translating foreign operations		-		419	10	429
Other movements		-		(23)	91	68
Income tax relating to components of other comprehensive income	D1(c)	-		366	-	366
Total comprehensive income for the financial year		-		305	343	648
Dividends for the year	C4	-		(395)	(165)	(560)
Net sale of treasury shares		-		5	-	5
Shares repurchased in the buyback programme		-		(175)	-	(175)
Issue of ordinary share capital by the Company		-		5	-	5
Change in participation in subsidiaries		-		-	26	26
Exercise of share options		6		5	-	5
Change in share-based payments reserve		-		26	-	26
Transactions with shareholders		6		(529)	(139)	(668)
Shareholders' equity at end of the year		5,516		7,737	1,840	9,577

								£m
Year ended 31 December 2008	Notes	Share capital	Share premium	Other reserves	Translation reserve	Retained earnings	Perpetual preferred callable securities	Total
Attributable to equity holders of the parent at beginning of the year		551	757	2,908	(304)	3,361	688	7,961
Profit for the financial year attributable to equity holders of the parent		-	-	-	-	410	31	441
Other comprehensive income
Fair value gains/(losses)
Property revaluation		-	-	16	-	-	-	16
Net investment hedge		-	-	-	281	-	-	281
Available-for-sale investments
Fair value losses		-	-	(1,635)	-	-	-	(1,635)
Recycled to income statement				414	-	-	-	414
Shadow accounting		-	-	26	-	-	-	26
Currency translation differences/exchange differences on translating foreign operations		-	-	-	419	-	-	419
Other movements		-	-	8	3	(34)	-	(23)
Income tax relating to components of other comprehensive income		-	-	367	(13)	-	12	366
Total comprehensive income for the financial year		-	-	(804)	690	376	43	305
Dividends for the year	C4	-	-	-	-	(352)	(43)	(395)
Net sale of treasury shares		-	-	-	-	5	-	5
Shares repurchased in the buyback Programme		-	-	-	-	(175)	-	(175)
Issue of ordinary share capital by the Company		-	5	-	-	-	-	5
Exercise of share options		1	4	-	-	-	-	5
Change in share-based payments reserve		-	-	26	-	-	-	26
Transactions with shareholders		1	9	26	-	(522)	(43)	(529)
Attributable to equity holders of the parent at end of the year		552	766	2,130	386	3,215	688	7,737

							£m
Other reserves attributable to equity holders of the parent		Merger reserve	Available-for-sale reserve	Property revaluation reserve	Share-based payments reserve	Other reserves	Total
At beginning of the year		2,716	(30)	75	147	-	2,908
Fair value gains/(losses)
Property revaluation		-	-	16	-	-	16
Available-for-sale investments
Fair value losses		-	(1,635)	-	-	-	(1,635)
Recycled to income statement		-	414	-	-	-	414
Shadow accounting		-	41	(15)	-	-	26
Other movements		-	(1)	9	(2)	2	8
Income tax relating to components of other comprehensive income		-	367	-	-	-	367
Change in share-based payments reserve		-	-	-	26	-	26
At end of the year		2,716	(844)	85	171	2	2,130

Retained earnings were reduced by £280 million at 31 December 2008 in respect of own shares held in policyholders' funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.

Notes to the consolidated financial statements

For the year ended 31 December 2009

A: Accounting policies

Basis of preparation

The consolidated financial information contained herein has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards adopted by the EU. The Group's results for the year ended 31 December 2009 and the position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2008 Annual Report and Accounts, except for the revised IAS 1 set out below.

The consolidated financial statements have been prepared on the going concern basis which the directors believe to be appropriate.

The 31 December 2008 financial position has been restated to reduce both derivative financial assets and liabilities by an amount of £1,405 million and to increase both cash and cash equivalents and other liabilities by £305 million on a consistent basis to 31 December 2009, with a corresponding restatement made to the cash flows where applicable. In addition certain comparative information including segmentation has been revised in accordance with changes to presentation made in the current year. There was no impact on the consolidated net assets at 31 December 2008 as a result of the restatement. The 31 December 2007 statement of financial position has not been presented on the basis that there were no changes required to that statement as a consequence of the 2008 restatements.

The financial information set out herein does not constitute the Company's statutory accounts for the years ended 31 December 2009 or 2008. Statutory accounts for 2008 have been delivered to the Registrar of Companies, and those for 2009 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports, and (iii) did not contain statements under section 498(2) or (3) of the Companies Act 2006.

Implementation of revised IAS 1 'Presentation of Financial Statements'

The financial information set out herein incorporates changes introduced as a result of the publication of a revised version of IAS 1 'Presentation of Financial Statements', effective for accounting periods commencing on or after 1 January 2009. The principal change is the inclusion of a new statement, a consolidated statement of comprehensive income, separately from the consolidated statement of changes in equity. Comparative information has been restated accordingly. There were no impacts on the Group's results or net assets as a result of the introduction of the revised standard.

Segment presentation

The Group's results are analysed and reported consistent with the way that management and the Board of Directors considers information when making operating decisions and the basis on which resources are allocated and performance assessed by management and the Board of Directors. The operating segments are Emerging Markets, Nordic, Retail Europe, Wealth Management and US Life (collectively being the newly formed Long Term Savings) plus Nedbank, Mutual & Federal (M&F), US Asset Management and Other operating segments (comprising the Group head office functions). The Bermuda segment is treated as a non-core operation. The above reported segments have been revised during the year to reflect the change in the way that management and the Board of Directors consider information, with the comparative information having been revised to report on a consistent basis to the amended structure.

There are four principal business activities from which the Group generates revenues. These are life assurance (premium income), asset management business (fee and commission income), banking (banking interest receivable) and general insurance (premium income). The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B.

The information reflected in note B reflects the measures of profit and loss, assets and liabilities for each operating segment as regularly provided to management and the Board of Directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that reported for the segments. A reconciliation between the segment revenues and expenses and the Group's revenues and expenses is shown in note B.

In line with internal reporting, assets, liabilities, revenues or expenses that are not directly attributable to a particular segment are allocated between segments where appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. Given the nature of the operations, there are no major customers within any of the segments.

Reclassifications of comparative segment information have been made to align segment information to the Group's revised management reporting structure described above. There was no impact on net profit or net assets.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information

B1: Basis of segmentation

The Group's core operations are Emerging Markets, Nordic, Retail Europe, Wealth Management and US Life (collectively Long Term Savings), Nedbank, Mutual & Federal, US Asset Management and Other operating segments (comprising the Group head office functions). The Bermuda operating segment is regarded as non core. This represents a change in structure from that reported in the previous financial year end is consistent with the revised way that management and the Board of Directors considers information when making operating decisions and is the basis on which resources are allocated and performance assessed by management and the Board of Directors. Comparative segment information has been changed accordingly. The Group generates revenue from four principal business activities: life assurance, asset management, banking and general insurance. The types of products and services from which each operating segment derives its revenues are as follows:

Core operations

Emerging Markets - life assurance and asset management

Nordic - life assurance, asset management and banking

Retail Europe - life assurance and asset management

Wealth Management - life assurance and asset management

US Life - life assurance

Nedbank - banking and asset management

Mutual & Federal - general insurance

US Asset Management - asset management

Other operating segments

Non core operations

Bermuda - life assurance

Adjusted operating profit is one of the key measures reported to the Group's management and Board of Directors for their consideration in the allocation of resources to and the review of performance of the segments. The Group utilises additional measures to assess the performance of each of the segments, in particular the level of funds under management. Additional performance measures considered by management and the Board of Directors in assessing the performance of the segments can be found in the Old Mutual Market Consistent Embedded Value information presented on pages 84 to 132.

In the analysis that follows, consolidation adjustments include the elimination of inter-segment revenues, expenses, assets and liabilities together with the impacts of the consolidation of the Group's interest in unit trusts, mutual funds and similar entities.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B2: Adjusted operating profit statement - segment information year ended 31 December 2009

	Long Term Savings
	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Revenue
Gross earned premiums	1,946	109	31	315	800
Outward reinsurance	(56)	(5)	(8)	(81)	(102)
Net earned premiums	1,890	104	23	234	698
Investment return (non-banking)	2,636	2,035	564	4,997	654
Banking interest and similar income	-	157	-	-	-
Banking trading, investment and similar income	-	-	-	-	-
Fee and commission income, and income from service activities	305	190	189	746	-
Other income	65	6	-	24	6
Inter-segment revenues	55	32	10	27	-
Total revenues	4,951	2,524	786	6,028	1,358
Expenses
Claims and benefits (including change in insurance contract provisions)	(2,551)	(72)	(37)	(255)	(1,283)
Reinsurance recoveries	76	2	5	46	128
Net claims and benefits incurred	(2,475)	(70)	(32)	(209)	(1,155)
Change in investment contract liabilities	(1,040)	(1,972)	(554)	(4,775)	-
Losses on loans and advances	-	(5)	(1)	-	-
Finance costs (including interest and similar expenses)	-	-	-	-	-
Banking interest payable and similar expenses	-	(70)	-	-	-
Fee and commission expenses, and other acquisition costs	(184)	(53)	(79)	(394)	(78)
Other operating and administrative expenses	(768)	(215)	(96)	(380)	(67)
Goodwill impairment	-	-	-	-	-
Change in third party interest in consolidated funds	-	-	-	-	-
Amortisation of PVIF and other acquired intangibles	-	-	-	-	-
Income tax attributable to policyholder returns	(37)	(39)	-	(116)	-
Inter-segment expenses	(5)	(38)	(2)	(48)	(9)
Total expenses	(4,509)	(2,462)	(764)	(5,922)	(1,309)
Share of associated undertakings' profit/(loss) after tax	4	-	-	-	-
Profit on disposal of subsidiaries, associated undertakings and strategic investments	-	-	-	-	-
Adjusted operating profit/(loss) before tax and non-controlling interests	446	62	22	106	49
Tax expense	(130)	9	(8)	(20)	(9)
Non-controlling interests	(2)	-	-	-	-
Adjusted operating profit/(loss) after tax and non-controlling interests	314	71	14	86	40
Adjusting items net of tax and non-controlling interests	(200)	(4)	(228)	(225)	(120)
Profit/(loss) after tax attributable to equity holders of the parent	114	67	(214)	(139)	(80)

Of the total revenues, excluding intercompany revenues, £5,544 million was generated in UK (2008: £5,826 million loss), £3,938 million in rest of Europe (2008: £3,045 million loss), £10,084 million in South Africa (2008: £6,676 million), £2,201 million in the United States (2008: £2,194 million) and £81 million relates to Other operating segments (2008: £48 million).

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B2: Adjusted operating profit statement - segment information year ended 31 December 2009 continued

									£m
Total Long Term Savings	Nedbank	M&F	USAM	Other operating segments	Consolidation adjustments	Adjusted operating profit	Adjusting  items (Note C1)	Non core operations - Bermuda	IFRS Income statement
3,201	-	612	-	-	-	3,813	-	7	3,820
(252)	-	(117)	-	-	-	(369)	-	-	(369)
2,949	-	495	-	-	-	3,444	-	7	3,451
10,886	-	58	13	91	509	11,557	(425)	484	11,616
157	3,832	-	-	-	-	3,989	-	-	3,989
-	168	-	-	-	-	168	-	-	168
1,430	663	22	429	-	(6)	2,538	(116)	-	2,422
101	70	1	7	-	1	180	-	22	202
124	31	29	6	21	(251)	(40)	-	40	-
15,647	4,764	605	455	112	253	21,836	(541)	553	21,848
(4,198)	-	(412)	-	-	-	(4,610)	-	(459)	(5,069)
257	-	72	-	-	-	329	-	(1)	328
(3,941)	-	(340)	-	-	-	(4,281)	-	(460)	(4,741)
(8,341)	-	-	-	-	-	(8,341)	-	(4)	(8,345)
(6)	(505)	-	-	-	-	(511)	-	-	(511)
-	-	-	-	(104)	-	(104)	(218)	-	(322)
(70)	(2,557)	-	-	-	-	(2,627)	-	-	(2,627)
(788)	(2)	(106)	(18)	-	(12)	(926)	167	(47)	(806)
(1,526)	(1,167)	(64)	(354)	(84)	(22)	(3,217)	97	(19)	(3,139)
-	-	-	-	-	-	-	(266)	-	(266)
-	-	-	-	-	(470)	(470)	-	-	(470)
-	-	-	-	-	-	-	(326)	-	(326)
(192)	-	-	-	-	-	(192)	192	-	-
(102)	(65)	(25)	-	(58)	251	1	-	(1)	-
(14,966)	(4,296)	(535)	(372)	(246)	(253)	(20,668)	(354)	(531)	(21,553)
4	2	-	-	(4)	-	2	-	-	2
-	-	-	-	-	-	-	(50)	-	(50)
685	470	70	83	(138)	-	1,170	(945)	22	247
(158)	(96)	(15)	(19)	(4)	-	(292)	(84)	11	(365)
(2)	(193)	(16)	-	(34)	-	(245)	23	-	(222)
525	181	39	64	(176)	-	633	(1,006)	33	(340)
(777)	15	-	(3)	(241)	-	(1,006)	1,006	-	-
(252)	196	39	61	(417)	-	(373)	-	33	(340)

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B2: Adjusted operating profit statement - segment information year ended 31 December 2008

	Long Term Savings
	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Revenue
Gross earned premiums	1,687	92	22	186	1,269
Outward reinsurance	(48)	(4)	(7)	(78)	(106)
Net earned premiums	1,639	88	15	108	1,163
Investment return (non-banking)	(420)	(2,317)	(997)	(6,610)	211
Banking interest and similar income	-	266	-	-	-
Banking trading, investment and similar income	-	24	-	-	-
Fee and commission income, and income from service activities	252	184	178	775	-
Other income	98	20	1	14	3
Inter-segment revenues	237	104	18	108	-
Total revenues	1,806	(1,631)	(785)	(5,605)	1,377
Expenses
Claims and benefits (including change in insurance contract provisions)	(721)	(68)	(26)	(94)	(1,478)
Reinsurance recoveries	42	4	2	34	106
Net claims and benefits incurred	(679)	(64)	(24)	(60)	(1,372)
Change in investment contract liabilities	204	2,390	1,011	6,442	-
Losses on loans and advances	-	(4)	-	-	-
Finance costs	-	-	-	-	-
Banking interest payable and similar expenses	-	(183)	-	-	-
Fee and commission expenses, and other acquisition costs	(174)	(49)	(72)	(401)	(158)
Other operating and administrative expenses	(563)	(193)	(82)	(388)	(68)
Goodwill impairment	-	-	-	-	-
Change in third party interest in consolidated funds	-	-	-	-	-
Amortisation of PVIF and other acquired intangibles	-	-	-	-	-
Income tax attributable to policyholder returns	6	(52)	(1)	283	-
Inter-segment expenses	(188)	(126)	(18)	(121)	(9)
Total expenses	(1,394)	1,719	814	5,755	(1,607)
Share of associated undertakings' profit/(loss) after tax	3	-	-	-	-
Profit on disposal of subsidiaries, associated undertakings and strategic investments	-	-	-	-	-
Adjusted operating profit/(loss) before tax and non-controlling interests	415	88	29	150	(230)
Tax expense	(138)	(11)	(10)	(57)	76
Non-controlling interests	(5)	-	-	-	-
Adjusted operating profit/(loss) after tax and non-controlling interests	272	77	19	93	(154)
Adjusting items net of tax and non-controlling interests	147	(122)	(28)	50	(341)
Profit/(loss) after tax attributable to equity holders of the parent	419	(45)	(9)	143	(495)

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B2: Adjusted operating profit statement - segment information year ended 31 December 2008

									£m
Total Long Term Savings	Nedbank	M&F	USAM	Other operating segments	Consolidation adjustments	Adjusted operating profit	Adjusting  items (Note C1)	Non core operations - Bermuda	IFRS Income statement
3,256	-	570	-	-	-	3,826	-	1,330	5,156
(243)	-	(91)	-	-	-	(334)	-	(1)	(335)
3,013	-	479	-	-	-	3,492	-	1,329	4,821
(10,133)	-	56	(3)	94	(713)	(10,699)	(108)	(771)	(11,578)
266	3,793	-	-	-	-	4,059	-	-	4,059
24	138	-	-	-	-	162	-	-	162
1,389	533	16	473	-	(1)	2,410	(97)	-	2,313
136	85	-	17	-	13	251	-	19	270
467	19	26	8	66	(586)	-	-	-	-
(4,838)	4,568	577	495	160	(1,287)	(325)	(205)	577	47
(2,387)	-	(401)	-	-	-	(2,788)	-	(822)	(3,610)
188	-	72	-	-	-	260	-	2	262
(2,199)	-	(329)	-	-	-	(2,528)	-	(820)	(3,348)
10,047	-	-	-	-	-	10,047	-	4	10,051
(4)	(315)	-	-	-	-	(319)	-	-	(319)
-	-	-	-	(140)	-	(140)	532	-	392
(183)	(2,684)	-	-	-	-	(2,867)	14	-	(2,853)
(854)	-	(101)	(10)	-	(44)	(1,009)	178	(106)	(937)
(1,294)	(928)	(59)	(388)	(38)	(34)	(2,741)	(77)	(16)	(2,834)
-	-	-	-	-	-	-	(74)	-	(74)
-	-	-	-	-	779	779	-	-	779
-	-	-	-	-	-	-	(361)	-	(361)
236	-	-	-	-	-	236	(236)	-	-
(462)	(71)	(12)	-	(37)	586	4	-	(4)	-
5,287	(3,998)	(501)	(398)	(215)	1,287	1,462	(24)	(942)	496
3	5	-	-	(9)	-	(1)	-	-	(1)
-	-	-	-	-	-	-	53	-	53
452	575	76	97	(64)	-	1,136	(176)	(365)	595
(140)	(123)	(17)	2	192	-	(86)	174	-	88
(5)	(227)	(19)	-	(21)	-	(272)	30	-	(242)
307	225	40	99	107	-	778	28	(365)	441
(294)	29	(49)	1	341	-	28	(28)	-	-
13	254	(9)	100	448	-	806	-	(365)	441

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B3: Gross earned premiums

Year ended 31 December 2009	Long Term Savings
	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Life assurance - insurance contracts	1,287	109	31	315	800
Life assurance - investment contracts with discretionary participation features	659	-	-	-	-
General insurance	-	-	-	-	-
Gross earned premiums	1,946	109	31	315	800
Life assurance - other investment contracts recognised as deposits	2,726	1,199	733	4,906	171
	Long Term Savings
Year ended 31 December 2008	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Life assurance - insurance contracts	1,163	92	22	186	1,269
Life assurance - investment contracts with discretionary participation features	524	-	-	-	-
General insurance	-	-	-	-	-
Gross earned premiums	1,687	92	22	186	1,269
Life assurance - other investment contracts recognised as deposits	1,409	976	690	5,236	115

B4: Impairments of financial assets

				£m
			Year ended  31 December 2009		Year ended 31 December 2008
Nordic			5		5
US Life			248		384
Total Long Term Savings			253		389
Nedbank			504		315
Bermuda			13		30
Total			770		734

B5: Funds under management

						£m
	Long Term Savings
As at 31 December 2009	Emerging Markets	Nordic	Retail Europe	Wealth Management			US Life
Life assurance policyholder funds	25,454	9,221	3,569	34,721			6,689
Unit trusts and mutual funds	7,686	1,428	391	11,308			-
Third party client funds	8,229	-	-	-			-
Total client funds under management	41,369	10,649	3,960	46,029			6,689
Shareholder funds	2,130	360	210	830			-
Total funds under management	43,499	11,009	4,170	46,859			6,689
	Long Term Savings
As at 31 December 2008	Emerging Markets	Nordic	Retail Europe	Wealth Management			US Life
Life assurance policyholder funds	20,599	6,605	2,881	29,200			241
Unit trusts and mutual funds	7,678	1,000	416	8,777			-
Third party client funds	10,325	-	-	-			-
Total client funds under management	38,602	7,605	3,297	37,977			241
Shareholder funds	1,672	418	213	943			-
Total funds under management	40,274	8,023	3,510	38,920			241

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B3: Gross earned premiums continued

						£m
Total Long Term Savings	Nedbank	M&F	USAM	Total core operations	Non-core operations - Bermuda	Total
2,542	-	-	-	2,542	7	2,549
659	-	-	-	659	-	659
-	-	612	-	612	-	612
3,201	-	612	-	3,813	7	3,820
9,735	-	-	-	9,735	8	9,743
Total Long Term Savings	Nedbank	M&F	USAM	Total core operations	Non-core operations - Bermuda	Total
2,732	-	-	-	2,732	1,330	4,062
524	-	-	-	524	-	524
-	-	570	-	570	-	570
3,256	-	570	-	3,826	1,330	5,156
8,426	-	-	-	8,426	115	8,541

 

B5: Funds under management

						£m
Total Long Term Savings	Nedbank	M&F	USAM	Total core operations	Non-core operations - Bermuda	Total
79,654	658	-	6,789	87,101	2,913	90,014
20,813	3,775	-	4,095	28,683	-	28,683
8,229	3,800	-	150,423	162,452	-	162,452
108,696	8,233	-	161,307	278,236	2,913	281,149
3,530	-	162	169	3,861	-	3,861
112,226	8,233	162	161,476	282,097	2,913	285,010
						£m
Total Long Term Savings	Nedbank	M&F	USAM	Total core operations	Non-core operations - Bermuda	Total
59,526	425	-	13,623	73,574	2,401	75,975
17,871	2,617	-	3,127	23,615	-	23,615
10,325	3,375	-	147,956	161,656	-	161,656
87,722	6,417	-	164,706	258,845	2,401	261,246
3,246	-	145	177	3,568	-	3,568
90,968	6,417	145	164,883	262,413	2,401	264,814

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2009

		Long Term Savings
At 31 December 2009	Notes	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Assets
Goodwill and other intangible assets		106	1,035	563	1,602	94
Goodwill		91	219	204	656	-
Present value of acquired in-force business		-	624	265	671	89
Software development		6	1	3	35	5
Other intangibles		9	191	91	240	-
Mandatory reserve deposits with central banks		-	-	-	-	-
Property, plant and equipment		336	7	4	19	1
Investment property		1,518	-	-	2	-
Deferred tax assets		54	108	17	23	183
Investments in associated undertakings and joint ventures		20	2	-	-	-
Deferred acquisition costs		123	49	275	778	1,671
Insurance contracts		-	2	-	50	1,671
Investment contracts		107	47	271	654	-
Asset management		16	-	4	74	-
Reinsurers' share of life assurance policyholder liabilities		11	10	6	772	475
Insurance contracts		11	7	4	45	450
Unit-Linked investment contracts and similar contracts		-	-	-	717	-
Outstanding claims		-	3	2	10	25
Reinsurers share of general insurance liabilities		-	-	-	-	-
Deposits held with reinsurers		-	108	-	-	35
Loans and advances		340	4,209	2	148	54
Policyholder loans		58	2	2	148	53
Other loans and advances		282	4,207	-	-	1
Investments and securities		27,603	10,836	3,693	35,120	10,045
Government and government-guaranteed securities		3,586	150	60	251	302
Listed other debt securities, preference shares and debentures		1,825	1,453	53	-	6,766
Unlisted other debt securities, preference shares and debentures		2,989	-	2	104	2,439
Listed equity securities		8,854	1	10	-	-
Unlisted equity securities		1,223	15	-	-	-
Listed pooled investments		457	547	-	437	3
Unlisted pooled investments		6,123	8,670	3,568	34,327	16
Short-term funds and securities treated as investments		2,543	-	-	1	519
Other securities		3	-	-	-	-
Current tax receivable		4	4	16	86	-
Client indebtedness for acceptances		-	-	-	-	-
Trade, other receivables and other assets		630	155	58	232	213
Derivative financial instruments - assets		327	9	-	-	187
Cash and cash equivalents		189	344	81	278	4
Non-current assets held-for-sale		-	-	-	-	-
Inter-segment assets		1,352	59	23	277	74
Total assets		32,613	16,935	4,738	39,337	13,036

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2009

							£m
Total Long Term Savings	Nedbank	M&F	USAM	Bermuda	Other operating segments	Consolidation adjustments	Total
3,400	543	30	1,171	2	13	-	5,159
1,170	393	11	1,142	-	13	-	2,729
1,649	-	-	-	-	-	-	1,649
50	150	19	1	2	-	-	222
531	-	-	28	-	-	-	559
-	882	-	-	-	-	-	882
367	417	23	19	-	2	-	828
1,520	18	-	-	-	-	221	1,759
385	24	6	147	-	8	-	570
22	82	-	7	-	24	-	135
2,896	2	17	29	194	-	-	3,138
1,723	-	17	-	194	-	-	1,934
1,079	-	-	-	-	-	-	1,079
94	2	-	29	-	-	-	125
1,274	22	-	-	-	-	-	1,296
517	22	-	-	-	-	-	539
717	-	-	-	-	-	-	717
40	-	-	-	-	-	-	40
-	-	120	-	-	-	-	120
143	-	3	-	-	-	-	146
4,753	37,638	2	-	-	-	-	42,393
263	-	-	-	-	-	-	263
4,490	37,638	2	-	-	-	-	42,130
87,297	5,501	425	162	2,942	43	2,091	98,461
4,349	2,044	-	-	-	-	1,775	8,168
10,097	2,532	2	-	461	-	1,729	14,821
5,534	-	4	-	167	-	-	5,705
8,865	41	87	-	-	-	9,503	18,496
1,238	209	6	-	37	-	-	1,490
1,444	675	41	122	2,059	-	1,400	5,741
52,704	-	-	40	-	-	(12,678)	40,066
3,063	-	285	-	218	-	293	3,859
3	-	-	-	-	43	69	115
110	51	-	-	-	8	-	169
-	170	-	-	-	-	-	170
1,288	432	96	126	878	111	120	3,051
523	1,067	-	-	-	154	802	2,546
896	660	79	173	32	425	717	2,982
-	1	-	-	-	-	-	1
1,785	148	48	1	564	1,363	(3,909)	-
106,659	47,658	849	1,835	4,612	2,151	42	163,806

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2009 continued

		Long Term Savings
At 31 December 2009	Notes	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Liabilities
Life assurance policyholder liabilities		28,655	9,514	3,689	35,554	11,625
Insurance contracts		11,783	74	121	901	10,787
Unit-Linked investment contracts and similar contracts		9,838	9,335	3,560	34,639	-
Other investment contracts		115	-	-	-	788
Discretionary participating investment contracts		6,639	-	-	-	-
Outstanding claims		280	105	8	14	50
General insurance liabilities		-	-	-	-	-
Third party interests in consolidated funds		-	-	-	-	-
Borrowed funds	E1	272	26	-	-	-
Senior debt securities		-	26	-	-	-
Mortgage backed securities		-	-	-	-	-
Subordinated debt securities		272	-	-	-	-
Provisions		147	11	8	33	-
Deferred revenue		23	5	160	456	-
Life assurance		16	5	155	379	-
Asset management		7	-	5	77	-
General insurance		-	-	-	-	-
Deferred tax liabilities		200	113	124	167	126
Current tax payable		70	20	2	37	-
Trade, other payables and other liabilities		1,512	203	79	550	359
Liabilities under acceptances		-	-	-	-	-
Amounts owed to bank depositors		-	5,448	-	-	-
Derivative financial instruments - liabilities		141	22	-	-	9
Non-current liabilities held-for-sale		-	-	-	-	-
Inter-segment liabilities		51	37	-	181	170
Total liabilities		31,071	15,399	4,062	36,978	12,289
Net assets		1,542	1,536	676	2,359	747
Equity
Equity attributable to equity holders of the parent		1,540	1,536	676	2,359	747
Non-controlling interests		2	-	-	-	-
Non-controlling interests - ordinary shares	F2(b)	2	-	-	-	-
Non-controlling interests - preference shares	F2(b)	-	-	-	-	-
Total equity		1,542	1,536	676	2,359	747

The net assets of Emerging Markets are stated after eliminating investments in Group equity and debt instruments of £340 million (2008: £236 million) held in policyholder funds. These include investments in the Company's ordinary shares and subordinated liabilities and preferred securities issued by the Group's banking subsidiary Nedbank Limited. All Emerging Markets debt relates to life assurance. All other debt relates to other shareholders' net assets.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2009 continued

							£m
Total Long Term Savings	Nedbank	M&F	USAM	Bermuda	Other operating segments	Consolidation adjustments	Total
89,037	661	-	-	4,178	-	-	93,876
23,666	95	-	-	3,788	-	-	27,549
57,372	-	-	-	-	-	-	57,372
903	566	-	-	390	-	-	1,859
6,639	-	-	-	-	-	-	6,639
457	-	-	-	-	-	-	457
-	-	372	-	-	-	-	372
-	-	-	-	-	-	2,906	2,906
298	1,614	-	-	-	1,397	-	3,309
26	484	-	-	-	636	-	1,146
-	118	-	-	-	-	-	118
272	1,012	-	-	-	761	-	2,045
199	1	21	2	-	40	-	263
644	1	9	-	-	-	-	654
555	1	-	-	-	-	-	556
89	-	-	-	-	-	-	89
-	-	9	-	-	-	-	9
730	148	2	-	-	25	-	905
129	21	-	10	5	45	-	210
2,703	897	118	221	(9)	120	255	4,305
-	170	-	-	-	-	-	170
5,448	38,687	-	-	-	-	-	44,135
172	969	-	-	-	59	790	1,990
-	-	-	-	-	-	-	-
439	697	-	1,202	-	1,571	(3,909)	-
99,799	43,866	522	1,435	4,174	3,257	42	153,095
6,860	3,792	327	400	438	(1,106)	-	10,711
6,858	2,084	265	371	438	(1,552)	-	8,464
2	1,708	62	29	-	446	-	2,247
2	1,444	62	29	-	-	-	1,537
-	264	-	-	-	446	-	710
6,860	3,792	327	400	438	(1,106)	-	10,711

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2008

		Long Term Savings
At 31 December 2008	Notes	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Assets
Goodwill and other intangible assets		111	1,183	865	1,814	132
Goodwill		95	222	420	742	-
Present value of acquired in-force business		(2)	742	326	764	120
Software development		4	1	5	23	12
Other intangibles		14	218	114	285	-
Mandatory reserve deposits with central banks		-	-	-	-	-
Property, plant and equipment		277	4	6	25	1
Investment property		1,282	-	-	2	-
Deferred tax assets		68	78	45	172	1,036
Investments in associated undertakings and joint ventures		33	-	-	-	-
Deferred acquisition costs		116	34	253	698	1,896
Insurance contracts		-	2	-	49	1,896
Investment contracts		96	32	248	585	-
Asset management		20	-	5	64	-
Reinsurers' share of life assurance policyholder liabilities		6	13	5	607	505
Insurance contracts		6	10	3	42	477
Unit-Linked investment contracts and similar contracts		-	-	-	551	-
Outstanding claims		-	3	2	14	28
Reinsurers share of general insurance liabilities		-	-	-	-	-
Deposits held with reinsurers		-	121	-	-	40
Loans and advances		59	3,846	2	139	62
Policyholder loans		59	-	2	138	61
Other loans and advances		-	3,846	-	1	1
Investments and securities		22,447	7,595	2,958	29,477	10,284
Government and government-guaranteed securities		3,769	214	-	699	97
Listed other debt securities, preference shares and debentures		1,805	813	26	2	7,021
Unlisted other debt securities, preference shares and debentures		2,113	-	45	22	2,488
Listed equity securities		6,932	-	-	1	-
Unlisted equity securities		885	12	5	26	-
Listed pooled investments		411	155	-	649	8
Unlisted pooled investments		4,263	6,401	2,882	28,078	18
Short-term funds and securities treated as investments		2,264	-	-	-	652
Other securities		5	-	-	-	-
Current tax receivable		6	-	6	81	-
Client indebtedness for acceptances		-	-	-	-	-
Trade, other receivables and other assets		455	138	67	228	252
Derivative financial instruments - assets		209	-	-	-	36
Cash and cash equivalents		467	372	134	236	(18)
Non-current assets held-for-sale		7	-	-	-	-
Inter-segment assets		1,326	264	10	238	46
Total assets		26,869	13,648	4,351	33,717	14,272

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2008 continued

							£m
Total Long Term Savings	Nedbank	M&F	USAM	Bermuda	Other operating segments	Consolidation adjustments	Total
4,105	425	29	1,305	5	13	-	5,882
1,479	308	10	1,271	-	13	-	3,081
1,950	-	-	-	-	-	-	1,950
45	117	19	1	5	-	-	187
631	-	-	33	-	-	-	664
-	734	-	-	-	-	-	734
313	316	24	26	-	3	-	682
1,284	15	-	-	-	-	179	1,478
1,399	25	8	158	-	-	-	1,590
33	75	-	-	-	3	-	111
2,997	2	15	40	145	-	-	3,199
1,947	-	15	-	145	-	-	2,107
961	-	-	-	-	-	-	961
89	2	-	40	-	-	-	131
1,136	9	-	-	3	-	-	1,148
538	9	-	-	3	-	-	550
551	-	-	-	-	-	-	551
47	-	-	-	-	-	-	47
-	-	115	-	-	-	-	115
161	-	3	-	-	-	-	164
4,108	31,634	2	-	-	1	-	35,745
260	-	-	-	-	-	-	260
3,848	31,634	2	-	-	1	-	35,485
72,761	5,043	322	177	3,676	88	1,455	83,522
4,779	2,255	-	-	-	-	1,942	8,976
9,667	2,172	1	-	534	-	1,695	14,069
4,668	-	2	-	202	-	175	5,047
6,933	38	67	-	-	-	7,938	14,976
928	152	5	-	118	-	-	1,203
1,223	426	36	135	2,085	-	1,310	5,215
41,642	-	-	42	-	-	(11,853)	29,831
2,916	-	211	-	737	-	125	3,989
5	-	-	-	-	88	123	216
93	25	-	-	-	-	-	118
-	220	-	-	-	-	-	220
1,140	486	68	139	789	96	419	3,137
245	1,627	-	-	21	226	1,109	3,228
1,191	631	56	220	29	79	997	3,203
7	-	-	-	-	-	-	7
1,884	19	46	99	377	1,339	(3,764)	-
92,857	41,286	688	2,164	5,045	1,848	395	144,283

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2008 continued

		Long Term Savings
At 31 December 2008	Notes	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Liabilities
Life assurance policyholder liabilities		23,261	6,884	2,973	29,603	13,337
Insurance contracts		10,619	71	92	694	12,365
Unit-Linked investment contracts and similar contracts		6,690	6,704	2,874	28,893	-
Other investment contracts		105	-	-	-	914
Discretionary participating investment contracts		5,646	-	-	-	-
Outstanding claims		201	109	7	16	58
General insurance liabilities		-	-	-	-	-
Third party interests in consolidated funds		-	-	-	-	-
Borrowed funds	E1	237	-	-	1	-
Senior debt securities		-	-	-	1	-
Mortgage backed securities		-	-	-	-	-
Subordinated debt securities		237	-	-	-	-
Provisions		132	203	8	29	-
Deferred revenue		31	3	128	428	-
Life assurance		17	3	122	347	-
Asset management		14	-	6	81	-
General insurance		-	-	-	-	-
Deferred tax liabilities		176	93	173	256	578
Current tax payable		98	22	-	28	(15)
Trade, other payables and other liabilities		1,197	198	88	573	267
Liabilities under acceptances		-	-	-	-	-
Amounts owed to bank depositors		-	4,622	-	-	-
Derivative financial instruments - liabilities		31	-	-	1	-
Non-current liabilities held-for-sale		6	-	-	-	-
Intersegment liabilities		66	174	40	258	1
Total liabilities		25,235	12,199	3,409	31,178	14,169
Net assets		1,634	1,449	942	2,539	103
Equity
Equity attributable to equity holders of the parent		1,626	1,449	942	2,539	103
Non-controlling interests		8	-	-	-	-
Non-controlling interests - ordinary shares	F2(b)	8	-	-	-	-
Non-controlling interests - preference shares	F2(b)	-	-	-	-	-
Total equity		1,634	1,449	942	2,539	103

The 31 December 2008 financial position has been restated to reduce both derivative financial instruments assets and liabilities by an amount of £1,405 million and to increase both cash and cash equivalents and other liabilities by £305 million on a consistent basis to 31 December 2009. There was no impact on the consolidated net assets at 31 December 2008 as a result of the restatement.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

B: Segment information continued

B6: Statement of financial position - segment information year ended 31 December 2008 continued

							£m
Total Long Term Savings	Nedbank	M&F	USAM	Bermuda	Other operating segments	Consolidation adjustments	Total
76,058	426	-	-	4,785	-	-	81,269
23,841	-	-	-	4,265	-	-	28,106
45,161	-	-	-	-	-	-	45,161
1,019	426	-	-	520	-	-	1,965
5,646	-	-	-	-	-	-	5,646
391	-	-	-	-	-	-	391
-	-	344	-	-	-	-	344
-	-	-	-	-	-	2,591	2,591
238	960	-	-	-	1,097	-	2,295
1	-	-	-	-	556	-	557
-	104	-	-	-	-	-	104
237	856	-	-	-	541	-	1,634
372	1	21	3	-	80	-	477
590	-	8	-	-	-	-	598
489	-	-	-	-	-	-	489
101	-	-	-	-	-	-	101
-	-	8	-	-	-	-	8
1,276	162	2	-	-	12	-	1,452
133	18	2	8	19	39	-	219
2,323	747	71	299	9	160	465	4,074
-	220	-	-	-	-	-	220
4,622	33,549	-	-	-	-	-	38,171
32	1,731	-	-	-	124	1,103	2,990
6	-	-	-	-	-	-	6
539	427	(1)	1,452	3	1,344	(3,764)	-
86,190	38,241	447	1,762	4,815	2,856	395	134,706
6,667	3,045	241	402	230	(1,008)	-	9,577
6,659	1,717	193	365	230	(1,427)	-	7,737
8	1,328	48	37	-	419	-	1,840
8	1,081	48	37	-	(27)	-	1,147
-	247	-	-	-	446	-	693
6,667	3,045	241	402	230	(1,008)	-	9,577

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information

C1: Operating profit adjusting items

(a) Summary of adjusting items

In determining the adjusted operating profit of the Group for core operations certain adjustments are made to profit before tax to reflect the directors' view of the underlying long-term performance of the Group. The following table shows an analysis of those adjustments from adjusted operating profit to profit before and after tax.

£m
Year ended 31 December 2009	Notes	Long Term Savings
		Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Income/(expense)
Goodwill impairment and impact of acquisition accounting	C1(b)	(1)	(12)	(243)	(167)	(14)
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments	C1(c)	(51)	-	-	(7)	-
Short-term fluctuations in investment return	C1(d)	(38)	(1)	1	(88)	(150)
Investment return adjustment for Group equity and debt instruments held in life funds	C1(e)	(109)	-	-	-	-
Dividends declared to holders of perpetual preferred callable securities	C1(f)	-	-	-	-	-
US Asset Management equity plans and non-controlling interests	C1(g)	-	-	-	-	-
Credit-related fair value losses on Group debt instruments	C1(h)	-	-	-	-	-
Total adjusting items		(199)	(13)	(242)	(262)	(164)
Tax on adjusting items	D1(d)	(1)	9	14	37	44
Non-controlling interest in adjusting items	F2(a)(ii)	-	-	-	-	-
Total adjusting items after tax and non-controlling interests		(200)	(4)	(228)	(225)	(120)

£m
Year ended 31 December 2008	Notes	Long Term Savings
		Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life
Income/(expense)
Goodwill impairment and impact of acquisition accounting	C1(b)	(1)	(195)	(46)	(100)	(96)
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments	C1(c)	(11)	55	-	-	-
Short-term fluctuations in investment return	C1(d)	(95)	4	1	140	(248)
Investment return adjustment for Group equity and debt instruments held in life funds	C1(e)	234	-	-	-	-
Dividends declared to holders of perpetual preferred callable securities	C1(f)	-	-	-	-	-
US Asset Management equity plans and non-controlling interests	C1(g)	-	-	-	-	-
Credit-related fair value gains on Group debt instruments	C1(h)	-	-	-	-	-
Total adjusting items		127	(136)	(45)	40	(344)
Tax on adjusting items	D1(d)	20	14	17	10	3
Non-controlling interest in adjusting items	F2(a)(ii)	-	-	-	-	-
Total adjusting items after tax and non-controlling interests		147	(122)	(28)	50	(341)

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information continued

C1: Operating profit adjusting items continued

(a) Summary of adjusting items continued

					£m
Total Long Term Savings	Nedbank	M&F	USAM	Other	Total
(437)	(4)	-	(2)	-	(443)
(58)	-	-	1	7	(50)
(276)	-	(10)	-	(30)	(316)
(109)	-	-	-	-	(109)
-	-	-	-	45	45
-	-	-	(1)	-	(1)
-	-	-	-	(263)	(263)
(880)	(4)	(10)	(2)	(241)	(1,137)
103	-	3	2	-	108
-	19	7	(3)	-	23
(777)	15	-	(3)	(241)	(1,006)

					£m
Total Long Term Savings	Nedbank	M&F	USAM	Other	Total
(438)	-	-	-	-	(438)
44	1	(10)	1	17	53
(198)	-	(72)	-	(72)	(342)
234	-	-	-	-	234
-	-	-	-	43	43
-	-	-	7	-	7
-	14	-	-	489	503
(358)	15	(82)	8	477	60
64	(4)	14	-	(136)	(62)
-	18	19	(7)	-	30
(294)	29	(49)	1	341	28

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information continued

C1: Operating profit adjusting items continued

(b) Goodwill impairment and impact of acquisition accounting

Acquisition date deferred acquisition costs and deferred revenues are not recognised. These are reversed in the acquisition statement of financial position and replaced by goodwill, other intangible assets and the value of the acquired present value of in-force business ('acquired PVIF'). In determining its adjusted operating profit the Group recognises deferred revenue and acquisition costs in relation to policies sold by acquired businesses pre-acquisition, and excludes the impairment of goodwill and the amortisation of acquired other intangibles and acquired PVIF and the movements in certain acquisition date provisions.

Goodwill impairment and acquisition accounting adjustments to adjusted operating profit are summarised below:

Year ended 31 December 2009	£m
	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life	Nedbank	USAM	Total
Amortisation of acquired PVIF	-	(106)	(37)	(86)	(14)	-	-	(243)
Amortisation of acquired deferred costs and revenue	1	21	(5)	34	-	-	-	51
Amortisation of other acquired intangible assets	(2)	(25)	(14)	(36)	-	(4)	(2)	(83)
Change in acquisition date provisions	-	98	-	-	-	-	-	98
Goodwill impairment	-	-	(187)	(79)	-	-	-	(266)
	(1)	(12)	(243)	(167)	(14)	(4)	(2)	(443)

Year ended 31 December 2008	£m
	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life	Nedbank	USAM	Total
Amortisation of acquired PVIF	-	(105)	(49)	(97)	(35)	-	-	(286)
Amortisation of acquired deferred costs and revenue	1	22	16	42	-	-	-	81
Amortisation of other acquired intangible assets	(1)	(24)	(13)	(37)	-	-	-	(75)
Change in acquisition date provisions	-	(76)	-	(8)	-	-	-	(84)
Goodwill impairment	(1)	(12)	-	-	(61)	-	-	(74)
	(1)	(195)	(46)	(100)	(96)	-	-	(438)

C: Other key performance information continued

C1: Operating profit adjusting items continued

(c) (Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments

On 6 March 2009 the Group disposed of its interest in Old Mutual Australia at a loss of £8 million.

In August 2008, an agreement with ABN AMRO Asset Management Asia and their parent company, Fortis Bank was entered into to acquire the 49% stake that Fortis holds in AATEDA, a major Chinese asset management joint venture for €165 million. On 27 May 2009 the termination of this agreement with ABN AMRO Asset Management Asia and Fortis Bank was announced, with an exit fee of £41 million which has been accounted for as a loss on disposal.

On 11 June 2008, the Group completed the disposal of its controlling shareholding in Palladyne, an asset management business, resulting in a profit on disposal of £17 million.

Part of the Nordic segment's banking business, Skandia's Nordic vehicle finance operation, Skandiabanken Bilfinans, was sold in the previous financial year, resulting in a profit on disposal of £55 million.

In the previous financial year, the Group has closed its project to develop a direct financial services capability in South Africa due to adverse market conditions. Costs relating to the closure amounting to £25 million have been excluded from the adjusted operating profit. Emerging Markets realised a profit of £4 million on the sale of its administration business and Nedbank recognised a £1 million profit on the disposal of Bond Choice.

(Loss)/profits on the disposal of subsidiaries, associated undertakings and strategic investments are analysed below:

		£m
	Year ended 31 December 2009	Year ended 31 December 2008
Emerging Markets	(51)	(11)
Nordic	-	55
Wealth Management	(7)	-
US Life	-	-
Total Long Term Savings	(58)	44
Nedbank	-	1
M&F	-	(10)
USAM	1	1
Other	7	17
(Loss)/profit on disposal of subsidiaries, associated undertakings and strategic investments	(50)	53

(d) Long-term investment return

Profit before tax includes actual investment returns earned on the shareholder assets of the Group's life assurance and general insurance businesses. Adjusted operating profit is stated after recalculating shareholder asset investment returns based on a long-term investment return rate. The difference between the actual and the long-term investment returns are short-term fluctuations in investment return.

Long-term rates of return are based on achieved real rates of return appropriate to the underlying asset base, adjusted for current inflation expectations, default assumptions, costs of investment management and consensus economic investment forecasts, and are reviewed frequently, usually annually, for appropriateness. These rates of return have been selected with a view to ensuring that returns credited to adjusted operating profit are consistent with the actual returns expected to be earned over the long-term.

For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Nordic, Retail Europe, Wealth Management and US Life, the return is applied to average investible assets. For M&F general insurance business, the return is an average value of investible assets supporting shareholders' funds and insurance liabilities, adjusted for net fund flows.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information continued

C1: Operating profit adjusting items continued

(d) Long-term investment return continued

		%
Long-term investment rates	Year ended 31 December 2009	Year ended 31 December 2008
Emerging Markets	13.3	16.6
Nordic	1.8	3.5
Retail Europe	2.8	3.1
Wealth Management	5.0	5.0
US Life	5.9	5.9
M&F	13.3	16.6

Analysis of short-term fluctuations in investment return

									£m
	Long Term Savings
Year ended 31 December 2009	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life	Total Long Term Savings	M&F	Other	Total
Long-term investment return	126	1	1	109	539	776	60	91	927
Less: Actual shareholder investment return	88	-	2	21	389	500	50	61	611
Short-term fluctuations in investment return	38	1	(1)	88	150	276	10	30	316

									£m
	Long Term Savings
Year ended 31 December 2008	Emerging Markets	Nordic	Retail Europe	Wealth Management	US Life	Total Long Term Savings	M&F	Other	Total
Long-term investment return	133	1	-	65	440	639	60	108	807
Less: Actual shareholder investment return	38	5	1	205	192	441	(12)	36	465
Short-term fluctuations in investment return	95	(4)	(1)	(140)	248	198	72	72	342

The actual investment return attributable to shareholders for US life assurance reflects total investment income, as a distinction is not drawn between shareholder and policyholder funds.

C: Other key performance information continued

C1: Operating profit adjusting items continued

(e) Investment return adjustment for Group equity and debt instrument held in life funds

Adjusted operating profit includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life funds. These include investments in the Company's ordinary shares, and the subordinated liabilities and ordinary securities of Nedbank. These investment returns are eliminated within the consolidated income statement in arriving at profit before tax, but are included in adjusted operating profit. In 2009 the investment return adjustment increased adjusted operating profit by £109 million (2008: decrease of £234 million).

(f) Dividends declared to holders of perpetual preferred callable securities

Dividends declared to the holders of the Group's perpetual preferred callable securities were £45 million in the year ended 31 December 2009 (2008: £43 million). These are recognised in finance costs on an accruals basis for the purpose of determining adjusted operating profit. In the IFRS financial statements this cost is recognised in equity.

(g) US Asset Management equity plans and non-controlling interests

US Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.

In accordance with IFRS requirements the cost of these schemes is disclosed as being attributable to non-controlling interests. However, this is treated as a compensation expense in determining adjusted operating profit. The gain recognised in 2009 was £1 million (2008: loss £7 million).

The Group has issued put options to senior employees as part of some of its US affiliate incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from adjusted operating profit. As at 31 December 2009 these instruments were revalued, the impact of which was £nil (2008: £nil).

(h) Credit-related fair value gains and losses on Group debt instruments

The narrowing of credit spread of the Group's debt instruments in the market price has resulted in losses of £263 million (2008: gains due to widening of £489 million) on Other operating segments and £nil (2008: £14 million gain) in Nedbank being recorded in the Group's income statement for those instruments that are recorded at fair value.

In the directors' view, such movements are not reflective of the underlying performance of the Group and will reverse over time. They have therefore been excluded from adjusted operating profit.

C2 Foreign currencies

The principal exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to Sterling are:

	Income statement (average rate)	Statement of financial position (closing rate)
31 December 2009
Rand	13.1746	11.9172
US dollars	1.5655	1.6148
Swedish kronor	11.9743	11.5562
Euro	1.1227	1.1268
31 December 2008
Rand	15.2948	13.7194
US dollars	1.8524	1.4575
Swedish kronor	12.2209	11.4494
Euro	1.2594	1.0446

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information continued

C3: Earnings and earnings per share

(a) Basic and diluted earnings per share

Basic earnings per share is calculated by dividing the profit for the financial year attributable to ordinary equity shareholders by the weighted average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, ESOP trusts, Black Economic Empowerment trusts and other related undertakings.

	£m
	Year ended 31 December 2009	Year ended 31 December 2008
(Loss)/profit for the financial year attributable to equity holders of the parent	(340)	441
Dividends declared to holders of perpetual preferred callable securities	(32)	(31)
(Loss)/profit attributable to ordinary equity holders	(372)	410

Total dividends declared to holders of perpetual preferred callable securities of £45 million in 2009 (2008: £43 million) are stated net of tax credits of
£13 million (2008: £12 million).

Millions
	Year ended 31 December 2009	Year ended 31 December 2008
Weighted average number of ordinary shares in issue	5,277	5,294
Shares held in charitable foundations	(7)	(19)
Shares held in ESOP trusts	(41)	(45)
Adjusted weighted average number of ordinary shares	5,229	5,230
Shares held in life funds	(236)	(240)
Shares held in Black Economic Empowerment trusts	(235)	(235)
Weighted average number of ordinary shares	4,758	4,755
Basic earnings per ordinary share (pence)	(7.8)	8.6

Diluted earnings per share recognises the dilutive impact of share options held in ESOP trusts and Black Economic Empowerment trusts which are currently in the money in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

Millions
		Year ended 31 December 2009	Year ended 31 December 2008
Weighted average number of ordinary shares		4,758	4,755
Adjustments for share options held by ESOP trusts		-	61
Adjustments for shares held in Black Economic Empowerment trusts		-	235
	4,758		5,051
Diluted earnings per ordinary share (pence)		(7.8)	8.1

No adjustments to the weighted average number of ordinary shares have been effected for 2009 in order to calculate the diluted earnings per ordinary share as any adjustments would be antidilutive.

C: Other key performance information continued 

C3: Earnings and earnings per share continued

(b) Adjusted operating earnings per ordinary share

Adjusted operating earnings per ordinary share is determined based on adjusted operating profit. Adjusted operating profit represents the directors' view of the underlying performance of the Group. For long-term and general insurance business adjusted operating profit is based on a long-term investment return, includes investment returns on life funds' investments in Group equity and debt instruments and is stated net of income tax attributable to policyholder returns. For the US Asset Management business it includes compensation costs in respect of certain long-term incentive schemes defined as non-controlling interests in accordance with IFRS. For all businesses, adjusted operating profit excludes goodwill impairment, the impact of acquisition accounting, revaluations of put options related to long-term incentive schemes, the impact of closure of unclaimed shares trusts, profit/(loss) on disposal of subsidiaries, associated undertakings and strategic investments, dividends declared to holders of perpetual preferred callable securities, income/(expense) from closure of unclaimed shares trusts and fair value gains/(losses) on Group debt instruments.

The reconciliation of profit for the financial year to adjusted operating profit after tax attributable to ordinary equity holders is as follows:

£m
	Year ended 31 December 2009	Year ended 31 December 2008
(Loss)/profit for the financial year attributable to equity holders of the parent	(340)	441
Adjusting items	1,137	(60)
Non core operations - Bermuda	(33)	365
Tax on adjusting items	(108)	62
Non-controlling interest on adjusting items	(23)	(30)
Adjusted operating profit after tax attributable to ordinary equity holders	633	778
Adjusted weighted average number of ordinary shares - (millions)	5,229	5,230
Adjusted operating earnings per ordinary share - (pence)	12.1	14.9

(c) Headline earnings per share

In accordance with the JSE Limited (JSE) listing requirements, the Group is required to calculate a 'headline earnings per share' (HEPS), determined by reference to the South African Institute of Chartered Accountants' circular 8/2007 'Headline Earnings'. The table below sets out a reconciliation of basic earnings per ordinary share and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of International Financial Reporting Standards.

£m
	Year ended 31 December 2009		Year ended 31 December 2008
	Gross	Net	Gross	Net
(Loss)/profit for the financial year attributable to equity holders of the parent	(340)	(340)	441	441
Dividends declared to holders of perpetual preferred callable securities	(32)	(32)	(31)	(31)
(Loss)/profit attributable to ordinary equity holders	(372)	(372)	410	410
Adjustments:
Impairments of goodwill and intangible assets	266	266	100	100
Loss/(profit) on disposal of subsidiaries, associated undertakings and strategic investments	50	53	(53)	(67)
Realised gains/losses (including impairments) on available-for-sale financial assets	239	239	414	381
Headline earnings	183	186	871	824
Weighted average number of ordinary shares	4,758	4,758	4,755	4,755
Diluted weighted average number of ordinary shares	5,109	5,109	5,051	5,051
Headline earnings per share (pence)	3.8	3.9	18.3	17.3
Diluted headline earnings per share (pence)	3.6	3.6	17.2	16.3

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

C: Other key performance information continued 

C4: Dividends

Dividends paid were as follows:

			£m
	Note	Year ended 31 December 2009	Year ended 31 December 2008
2007 Final dividend paid - 4.55p per 10p share		-	227
2008 Interim dividend paid - 2.45p per 10p share		-	125
Dividends to ordinary equity holders		-	352
Dividends declared to holders of perpetual preferred callable securities		45	43
Dividend payments for the year		45	395

Dividends paid to ordinary equity holders, as above, are calculated using the number of shares in issue at the record date, less treasury shares held in ESOP trusts, life funds of Group companies, Black Economic Empowerment trusts and related undertakings.

As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts established for that purpose.

In March and November 2009, £22 million and £23 million respectively were declared and paid to holders of perpetual preferred callable securities (March 2008: £23 million and November 2008: £20 million).

A final dividend of 1.5 pence per 10p share has been recommended by the directors. Subject to shareholders' approval, the dividend will be paid on 25 June 2010 to shareholders on the register at the close of business on 14 May 2010. The dividend will absorb an estimated £81 million of shareholders' funds. The Company is planning to offer, for the first time, a scrip dividend alternative for eligible shareholders subject to finalising the associated logistics and timetable.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

D: Other income statement notes

D1: Income tax expense/(credit)

(a) Analysis of total income tax expense/(credit)

	£m
	Year ended 31 December 2009	Year ended 31 December 2008
Current tax
United Kingdom tax
Corporation tax	46	93
Double tax relief	-	(145)
Overseas tax
South Africa	257	264
United States	-	4
Europe	49	68
Secondary Tax on Companies (STC)	13	22
Prior year adjustments	14	1
Total current tax	379	307
Deferred tax
Origination and reversal of temporary differences	45	(548)
Changes in tax rates/bases	-	(1)
Write down/recognition of deferred tax assets	(59)	154
Total deferred tax	(14)	(395)
Total income tax expense/(credit)	365	(88)

(b) Reconciliation of total income tax expense/(credit)

		£m
	Year ended 31 December 2009	Year ended 31 December 2008
Profit before tax	247	595
Tax at standard rate of 28% (2008: 28.5%)	69	169
Different tax rate or basis on overseas operations	(9)	(23)
Untaxed and low taxed income	(86)	(218)
Disallowable expenses	180	8
Net movement on deferred tax assets not recognised	83	123
Effect on deferred tax of changes in tax rates	(2)	(5)
STC	19	53
Income tax attributable to policyholder returns	142	(169)
Other	(31)	(26)
Total income tax expense/(credit)	365	(88)

(c) Income tax relating to components of other comprehensive income

	£m
	Year ended 31 December 2009	Year ended 31 December  2008
Fair value gains/(losses)	428	(383)
Shadow accounting	(18)	16
Currency translation differences/exchange differences on translating foreign operations	-	13
Other	(13)	(12)
Income tax expense/(credit) relating to components of other comprehensive income	397	(366)

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

D: Other income statement notes continued

D1: Income tax expense/(credit) continued

(d) Income tax on adjusted operating profit

	£m
	Year ended 31 December 2009		Year ended 31 December  2008
Income tax expense/(credit)	365	(88)
Tax on adjusting items
Impact of acquisition accounting	40	46
Profit on disposal of subsidiaries, associated undertakings and strategic investments	(2)	12
Short-term fluctuations in investment return	83	35
Income tax attributable to policyholders returns	(192)	236
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity	(13)	(12)
Fair value gains and losses on group debt instruments	-	(143)
Tax on non-core operations	11	-
Income tax on adjusted operating profit	292	86

E: Borrowed funds

E1: Borrowed funds

							£m
	Notes	Group excluding Nedbank	Nedbank	At 31 December 2009	Group excluding Nedbank	Nedbank	At 31 December 2008
Senior debt securities and term loans	E9(a)	662	484	1,146	557	-	557
Mortgage backed securities	E9(b)	-	119	119	-	104	104
Subordinated debt securities (net of Group holdings)	E9(c)	1,034	1,010	2,044	779	855	1,634
Borrowed funds		1,696	1,613	3,309	1,336	959	2,295
Other issues treated as equity for accounting purposes
US$750 million cumulative preference securities	F11(b)	458			458
€500 million perpetual preferred callable securities	F10(b)	338			338
£350 million perpetual preferred callable securities	F10(b)	350			350
Gross debt (IFRS basis)		2,842			2,482
Nominal value of gross debt		3,162			3,154

The table below is a maturity analysis of liability cash flows based on contractual maturity dates for borrowed funds. Maturity analysis is undiscounted and based on year end exchange rates.

							£m
		Group excluding Nedbank	Nedbank	At 31 December 2009	Group excluding Nedbank	Nedbank	At 31 December 2008
Less than 1 year		219	156	375	495	104	599
Greater than 1 year and less than 5 years		1,413	1,226	2,639	1,397	774	2,171
Greater than 5 years		899	1,033	1,932	238	666	904
Total		2,531	2,415	4,946	2,130	1,544	3,674

E: Borrowed funds

E1: Borrowed funds

(a) Senior debt securities and term loans

							£m
		Group excluding Nedbank	Nedbank	At 31 December 2009	Group excluding Nedbank	Nedbank	At 31 December 2008
Floating rate notes1		114	265	379	85	-	85
Fixed rate notes2		548	219	767	152	-	152
Revolving credit facility3		-	-	-	294	-	294
Term loan and other loans		-	-	-	26	-	26
Total senior debt securities and term loan		662	484	1,146	557	-	557

Senior debt securities and term loan comprise:

1 Floating rate notes

£3 million note repayable in December 2010, with holders having the option to elect for early redemption every six months with coupon referenced against six month LIBOR less 0.50%.

US$50 million repayable September 2011 at 3 month LIBOR plus 0.50%.

US$10 million repayable September 2009 at 3 month LIBOR plus 0.35% - repaid.

SEK100 million repayable March 2009 at 3 month STIBOR plus 0.20% - repaid.

€22 million repayable January 2010 at 3 month EURIBOR plus 0.35%.

SEK50 million repayable March 2010 at 3 month STIBOR plus 0.38%.

R1,000 million unsecured senior debt repayable September 2012 at 3 month JIBAR + 1.5%.

R250 million unsecured senior debt repayable September 2015 at JIBAR + 2.20%.

R1,750 million unsecured senior debt repayable March 2013 inflation linked (3.9% real yield).

R98 million unsecured senior debt repayable March 2013 inflation linked (3.8% real yield).

R550 million repayable August 2010 at 3 month ZAR - JIBAR-SAFEX + 4.5%.

R100 million repayable February 2011 at 3 month ZAR - JIBAR-SAFEX + 4.5%.

2 Fixed rate notes

€30 million Euro bond repayable July 2010, capital and interest swapped into fixed rate US dollars at 5.28%.

€10 million Euro bond repayable December 2010, capital and interest swapped into floating rate US dollars at 3 month LIBOR + 0.95%.

€20 million Euro bond repayable August 2013, capital and interest swapped into floating rate US dollars at 3 month LIBOR + 1.30%.

€100 million Euro bond repayable December 2009 at 3.46% - repaid.

R130 million unsecured senior debt repayable October 2024 at zero coupon.

R2,000 million unsecured senior debt repayable September 2015 at 10.55%.

R400 million unsecured senior debt repayable September 2019 at 11.39%.

£500 million Euro bond repayable October 2016 at 7.125%.

The total fair value of the swap derivatives associated with the Senior notes is £12 million (2008: £11 million). These are recognised as assets.

3 Revolving credit facilities and irrevocable letters of credit

The Group has a £1,250 million five-year multi-currency revolving credit facility, which had an original maturity date of September 2010. On 18 August 2007 syndicate banks agreed to extend the maturity date of £1,232 million of the facility until September 2012. At 31 December 2009
£480 million (2008: £826 million) of this facility was utilised, £nil (2008: £294 million) in the form of drawn debt and £480 million (2008: £532 million) in the form of irrevocable letters of credit.

The Group has a SEK1,000 million revolving credit facility, which has a maturity date of 2 July 2010. At 31 December 2009 this facility was undrawn.

(b) Mortgage backed securities - Nedbank

	£m
	At 31 December 2009	At 31 December 2008
R291 million notes (class A1) repayable 18 November 2039 (11.467%)	25	22
R1.4 billion notes (class A2A) repayable 18 November 2039 (11.817%)	84	73
R98 million notes (class B note) repayable 18 November 2039 (12.067%)	6	5
R76 million notes (class C note) repayable 18 November 2039 (13.317%)	4	4
	119	104

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

E: Borrowed funds

E1: Borrowed funds

(c) Subordinated debt securities

	£m
	At 31 December 2009	At 31 December 2008
Nedbank
US$18 million repayable 31 August 2009 (6 month LIBOR less 1.5%) - repaid1	-	12
R1.5 billion repayable 24 April 2016 (7.85%)2	126	108
R1.8 billion repayable 20 September 2018 (9.84%)3	149	135
R515 million repayable on 4 December 2008 (13.5%)4 - repaid	-	-
R500 million repayable on 30 December 2010 (8.38%)5	41	36
R650 million repayable 8 February 2017 (9.03%)6	55	49
R1.7 billion repayable 8 February 2019 (8.9%)7	138	125
R2.0 billion repayable 6 July 2022 (3 month JIBAR plus 0.47%)8	171	150
R500 million repayable 15 August 2012 (3 month JIBAR plus 0.45%)9	42	37
R1.0 billion repayable 17 September 2015 (10.54%)10	84	77
R500 million repayable 14 December 2017 (3 month JIBAR plus 0.70%)11	42	37
R120 million repayable 14 December 2017 (10.38%)12	10	9
R487 million repayable 20 November 2018 (15.05%)13	41	40
R1,265 million repayable 20 November 2018 (JIBAR plus 4.75%)14	108	94
R300 million repayable on 4 December 2013 (JIBAR + 2.5%)15	13	11
US$100 million repayable on 3 March 2022 (3 month USD LIBOR)16	62	-
	1,082	920
Less: banking subordinated debt securities held by other Group companies	(72)	(65)
Banking subordinated debt securities (net of Group holdings)	1,010	855
Group excluding Nedbank
R3.0 billion repayable 27 October 2020 (8.9%)17	252	219
£300 million repayable 21 January 2016 (5.0%)18	252	239
R250 million preference shares repayable 9 June 201119	21	18
€750 million repayable 18 January 2017 (4.5%)20	509	303
	1,034	779
Total subordinated liabilities	2,044	1,634

The subordinated notes rank behind the claims against the Group depositors and other unsecured, unsubordinated creditors. None of the Group's subordinated notes are secured.

1.     This instrument is matched either by advances to clients or covered against exchange rate fluctuations - repaid.

2.     Unsecured secondary callable note was issued 24 April 2005 with a call date of 24 April 2011.

3.     Unsecured secondary callable note was issued 20 September 2006 at R1.5 billion with a call date of 20 September 2013. On 18 May 2007 an additional R0.3 billion was issued.

4.     Unsecured callable Bonds issued 10 June 2002.

5.     Unsecured callable Bonds issued 30 March 2006.

6.     Unsecured secondary callable note was issued 8 February 2007 with a call date of 8 February 2012.

7.     Unsecured secondary callable note was issued 8 February 2007 at R1.0 billion. On 19 March 2007 an additional R0.7 billion was issued.

8.     Unsecured secondary capital callable note issued 6 July 2007 and has a call date of 6 July 2017.

9.     This bond issued on 15 August 2007 is an unsecured secondary capital callable floating rate note with a call date 15 August 2012.

10.   This bond issued on 17 September 2007 is an unsecured fixed rate note with a term of 13 years (non-call 8 year).

11.   This bond issued on 14 December 2007 is a 10 year (non-call 5 year) floating rate note. After its call date on 14 December 2012 its terms become JIBAR plus 1.70% until maturity.

12.   This bond issued on 14 December 2007 is a 10 year (non-call 5 year) fixed rate note. After its call date its terms become floating 3 month JIBAR plus initial margin over mid swaps plus 1.0% until maturity.

13.   This bond issued on 20 May 2008 is a perpetual (non-call 10 year) fixed rate note with a call date on 20 November 2018.

14.   This bond issued on 20 May 2008 is a perpetual (non-call 10 year) floating rate note with a call date of 20 November 2018.

15.   This bond issued on 4 December 2008 is a floating rate note with a call date of 4 December 2013.

16.   Dated Tier 2 notes issued 3 March 2009 with call date 2 March 2017.

17.   These bonds have a maturity date of 27 October 2020 and pay a coupon of 8.92% to 27 October 2015 and 3 month JIBAR plus 1.59% thereafter. The Group has the option to repay the bonds at par on 27 October 2015 and at 3 monthly intervals thereafter.

18.   These bonds, issued on 20 January 2006, have a maturity date of 21 January 2016 and pay a coupon of 5.0% to 21 January 2011 and 6 month LIBOR plus 1.13% thereafter. The coupon on the bonds was swapped into floating rate of 6 month STIBOR plus 0.50%. The Group has the option to repay the bonds at par on 21 January 2011 and at 6 monthly intervals thereafter.

19.   These preference shares are redeemable on 9 June 2011 and pay a variable cumulative coupon of 61.0% of the Prime Rate as quoted by Nedbank Limited. The Group has the option to redeem the shares at par at any time before the final redemption date but after giving an agreed period of notice.

20.   This bond, issued on 16 January 2007, has a maturity date of 18 January 2017 and pays a coupon of 4.5% to 17 January 2012 and 6 month EURIBOR plus 0.96% thereafter. The principal and coupon on the bond were swapped equally into Sterling and US Dollars with coupons of 6 month LIBOR plus 0.34% and 6 month US LIBOR plus 0.31% respectively. The Group has the option to repay the bonds at par on 17 January 2012 and at 6 monthly intervals thereafter.

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

F: Other statement of financial position notes

F1: Provisions

	£m
	At 31 December 2009	At 31 December 2008
Surplus property	20	23
Client compensation	30	27
Warranties on sale of business	17	111
Liability for long service leave	49	38
Provision for donations	84	80
Litigation claims	-	36
Other provisions	95	165
	295	480
Post employment benefits	(32)	(3)
Total	263	477

								£m
Year ended 31 December 2009	Surplus property	Client compensation	Warranties on sale of business	Liability for long service leave	Provision for donations	Litigation claims	Other	Total
Balance at beginning of the year	23	27	111	38	80	36	165	480
Unused amounts reversed	-	(2)	(54)	-	-	(11)	(41)	(108)
Unwind of discount	1	-	-	-	-	-	-	1
Charge to income statement	3	(3)	-	24	-	-	13	37
Utilised during the year	(7)	(2)	(26)	(20)	-	(6)	(59)	(120)
Foreign exchange and other movements	-	10	(14)	7	4	(19)	17	5
Balance at end of the year	20	30	17	49	84	-	95	295

								£m
Year ended 31 December 2008	Surplus property	Client compensation	Warranties on sale of business	Liability for long service leave	Provision for donations	Litigation claims	Other	Total
Balance at beginning of the year	29	19	87	34	82	64	183	498
Unused amounts reversed	(1)	(5)	(5)	-	-	-	(40)	(51)
Unwind of discount	1	-	-	-	-	-	-	1
Charge to income statement	-	8	22	4	-	37	20	91
Utilised during the year	(7)	(14)	(3)	1	(2)	(74)	(24)	(123)
Foreign exchange and other movements	1	19	10	(1)	-	9	26	64
Balance at end of the year	23	27	111	38	80	36	165	480

2009 provisions in relation to surplus property amounted to £20 million (2008: £23 million). These relate to the onerous costs of vacant properties leased by the Group of which £13 million (2008: £23 million) is estimated to be payable after more than 1 year.

Provisions in relation to client compensation were £30 million (2008: £27 million), primarily relating to possible mis-selling of guarantee contracts in Wealth Management. £5 million (2008: £6 million) is estimated to be payable after more than one year.

Provisions in relation to warranties on the sale of businesses amounted to £17 million (2008: £111 million). £9 million (2008: £9 million) is estimated to be payable after more than one year. During the year, settlement was reached in relation to certain outstanding litigations in connection with the acquisition of Skandia. Corresponding provisions have been accordingly utilised or released.

The liability for long service leave of £49 million (2008: £38 million) relates to provision for staff payments for long serving employees, all of which estimated to be payable in less than one year.

F: Other statement of financial position notes continued

F1: Provisions continued

The provision for donations is held by Emerging Markets. It relates to the payment of charitable donations in future periods to which the Group is committed, out of the funds made available on the closure of the Group's unclaimed shares trusts, which were set up as part of the demutualisation in 1999 and closed in 2006 of which £84 million (2008: £80 million) is estimated to be payable after more than one year.

Other provisions includes provisions for tax on long term staff benefits, restructuring and legal fees.

At 31 December 2009 provisions in relation to litigation claims amounted to £nil (2008: £36 million). During the year £36 million of the provision was utilised, principally in respect of payments made in connection with the outcome of the Skandia Liv arbitration.

Where material, provisions are discounted at discount rates specific to the risks inherent in the liability. The timing and final amounts of payments in respect of some of the provisions, particularly those in respect of litigation claims and similar actions against the Group, are uncertain and could be result in adjustments to the amounts recorded. Of the total provisions recorded above, £188 million (2008: £271 million) is estimated to be payable after more than one year.

F2: Non-controlling interests

(a) Income statement

(i) Non-controlling interests - ordinary shares

The non-controlling interests charge to profit for the financial year has been calculated on the basis of the Group's effective ownership of the subsidiaries in which it does not own 100% of the ordinary equity. The principal subsidiaries where a non-controlling interest exists are the Group's banking and general insurance businesses in South Africa. For the year ended 31 December 2009 the non-controlling interests attributable to ordinary shares was £158 million (2008: £188 million).

	£m
	At 31 December 2009	At 31 December 2008
R2,000 million non-cumulative preference shares	16	14
R792 million non-cumulative preference shares	6	5
R300 million non-cumulative preference shares	3	1
US$750 million cumulative preferred securities	38	32
R364 million non-cumulative preference shares	2	2
Non-controlling interests - preferred securities	65	54

(ii) Non-controlling interests - adjusted operating profit

The following table reconciles non-controlling interests' share of profit for the financial year to non-controlling interests' share of adjusted operating profit:

	£m
Reconciliation of non-controlling interests share of profit for the financial year	Year ended 31 December 2009	Year ended 31 December 2008
The non-controlling interests charge is analysed as follows:
Non-controlling interests - ordinary shares	158	188
Goodwill impairment and impact of acquisition accounting	1	-
Profit on disposal of subsidiaries, associated undertakings and strategic investments	-	2
Short-term fluctuations in investment return	1	11
Income attributable to Black Economic Empowerment trusts of listed subsidiaries	23	30
Fair value gains on group debt instruments	-	(6)
Income attributable to US Asset Management non-controlling interests	(3)	(7)
Non-controlling interests share of adjusted operating profit	180	218

The Group uses revised weighted average effective ownership interests when calculating the non-controllable interest applicable to the adjusted operating profit of its South Africa banking and general insurance businesses. This reflects the legal ownership of these businesses following the implementation for Black Economic Empowerment (BEE) schemes in 2005. In accordance with IFRS accounting rules the shares issued for BEE purposes are deemed to be, in substance, options. Therefore the effective ownership interest of the minorities reflected in arriving at profit after tax in the consolidated income statement is lower than that applied in arriving at adjusted operating profit after tax. In 2009 the increase in adjusted operating profit attributable to non-controlling interests as a result of this was £23 million (2008: £30 million).

Notes to the consolidated financial statements

For the year ended 31 December 2009 continued

F: Other statement of financial position notes

F2: Non-controlling interests

(b) Statement of financial position

(i) Ordinary shares

Reconciliation of movements in non-controlling interests	£m
	Year to 31 December 2009	Year to 31 December 2008
Balance at beginning of the year	1,147	933
Non-controlling interests' share of profit	158	188
Non-controlling interests' share of dividends paid	(80)	(111)
Net acquisition of interests	63	25
Foreign exchange and other movements	249	112
Balance at end of the year	1,537	1,147

(ii) Preferred securities

	£m
	At 31 December 2009	At 31 December 2008
R2,000 million non-cumulative preference shares1	140	140
R792 million non-cumulative preference shares2	71	71
R300 million non-cumulative preference shares3	12	12
US$750 million cumulative preferred securities4	458	458
R364 million non-cumulative preference shares5	25	25
R363 million non-cumulative preference shares6	17	-
	723	706
Unamortised issue costs	(13)	(13)
Total in issue at 31 December	710	693

Preferred securities are held at historic value of consideration received less unamortised issue costs.

1.   200 million R10 preference shares issued by Nedbank Limited (Nedbank), the Group's banking subsidiary. These shares are non-redeemable and non-cumulative and pay a cash dividend equivalent to 75% of the prime overdraft interest rate of Nedbank. Preference shareholders are only entitled to vote during periods when a dividend or any part of it remains unpaid after the due date for payment or when resolutions are proposed that directly affect any rights attaching to the shares or the rights of the holders. Preference shareholders will be entitled to receive their dividends in priority to any payment of dividends made in respect of any other class of Nedbank's shares.

2.   77.3 million R10 preference shares issued at R10.68 per share by Nedbank on the same terms as the securities described in (1) above.

3.   30 million R10 preference shares issued on 22 June 2006 by Imperial Bank Limited a subsidiary of Nedbank Limited, on the same terms as the securities described in (1) above.

4.   US$750 million Guaranteed Cumulative Perpetual Preference Securities issued on 19 May 2003 by Old Mutual Capital Funding L.P., a subsidiary of the Group. Subject to certain limitations, holders of these securities are entitled to receive preferential cash distributions at a fixed rate of 8.0% per annum payable in arrears on a quarterly basis. The Group may defer payment of distributions at its sole discretion, but such an act may restrict Old Mutual plc from paying dividends on its ordinary shares for a period of 12 months. Arrears of distributions are payable quarterly cumulatively only on redemption of the securities or at the Group's option. The securities are perpetual, but may be redeemed at the discretion of the Group from 22 December 2008. The costs of issue have been amortised over the period to 22 December 2008.

5.   35 million R10 preference shares issued in 16 April 2007 at R10.27 per share by Nedbank on the same terms as the securities described in (1) above.

6.   36.3 million R10 preference shares issued by Nedbank in seven instalments between September 09 and December 09 on the same terms as the securities described in (1) above.

G: Other notes 

G1: Contingent liabilities

£m
	At 31 December 2009	At 31 December 2008
Guarantees and assets pledged as collateral security	2,375	1,839
Irrevocable letters of credit	605	760
Secured lending	555	383
Other contingent liabilities	49	393

The Group has pledged debt securities amounting to £1,253 million (2008: £1,533 million) as collateral for deposits received under re-purchase agreements. These amounts represent assets that have been transferred but do not qualify for derecognition under IAS39.These transactions are entered into under terms and conditions that are standard industry practice to securities borrowing and lending activities.

Nedbank structured financing

Historically a number of the Group's South African banking businesses entered into structured finance transactions with third parties using the tax base of these companies. Pursuant to the terms of the majority of these transactions, the underlying third party has contractually agreed to accept the risk of any tax being imposed by the South African Revenue Service (SARS), although the obligation to pay in the first instance rests with the Group's companies. It is only in limited cases where, for example, the credit quality of a client becomes doubtful, or where the client has specifically contracted out of the re-pricing of additional taxes, that the recovery from a client could be less than the liability that could arise on assessment, in which case provisions are made. SARS has examined the tax aspects of some of these types of structures and SARS could assess these structures in a manner different to that initially envisaged by the contracting parties. As a result Group companies could be obliged to pay additional amounts to SARS and recover these from clients under the applicable contractual arrangements.

Nedbank litigation

There are a number of legal or potential claims against Nedbank and its subsidiary companies, the outcome of which cannot at present be foreseen. The largest of these potential actions is a claim in the High Court for R1.3 billion against Nedbank by certain shareholders in Pinnacle Point Group Limited, alleging that Nedbank had a legal duty of care to them arising from a share swap transaction. Nedbank and its legal advisers are of the opinion that the claim is without merit and will be defended vigorously.

G2: Events after the reporting date

On 8 February 2010, Nedbank announced that it had received regulatory approval of the acquisition of Imperial Holdings' 49.9% indirect interest in Imperial Bank Limited, thereby satisfying all conditions precedent for the acquisition. The purchase consideration, of approximately £153 million will be settled out the existing cash resources of Nedbank Limited over a period of six months, commencing from 8 February 2010. Nedbank intends to submit an application to the South African Reserve whereby it will amalgamate all the assets of Imperial Bank with those of Nedbank.

On 5 February 2010, the group announced the completion of the acquisition of the remaining minority shareholdings in Mutual & Federal Insurance Company Limited, following the fulfilment of all outstanding conditions precedent. On 8 February 2010, 147,313,449 new Old Mutual plc ordinary shares were listed on the London Stock Exchange in connection with the acquisition.

 

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