Notes to the Financial Statements

for the year ended 31 December 2004

27 Equity Shareholders Funds

		£m
	At 31 December 2004	At 31 December 2003
Authorised
6,000,000,000 ordinary shares of 10p each	600	600

The movement in consolidated equity shareholders’ funds for the year is shown below:

	Millions							Rm
Allotted, called up and fully paid shares of 10p each	Note	Number of shares	Share capital	Share premium	Merger reserve	Profit and loss	Reserve in respect of own shares held in policyholders funds*	Total
Year to 31 December 2004
Opening equity shareholders funds		3,837	4,584	7,007	2,196	24,296	(3,908)	34,175
Prior year adjustment	1	-	-	-	-	(1,301)	-	(1,301)
		3,837	4,584	7,007	2,196	22,995	(3,908)	32,874
Shares issued under share incentive schemes		17	24	153	-	-	-	177
Net sale of shares from ESOP Trusts and policyholders funds		-	-	-	-	12	315	327
Retained profit for the financial year		-	-	-	-	3,703	-	3,703
Foreign exchange and other movements		-	(421)	(651)	(200)	(607)	-	(1,879)
Closing equity shareholders funds		3,854	4,187	6,509	1,996	26,103	(3,593)	35,202

Year to 31 December 2003 (restated)
Opening equity shareholders funds		3,783	5,222	7,625	2,542	22,010	(3,908)	33,491
Issue of new capital		50	62	395	-	-	-	457
Shares issued under share incentive schemes		4	12	37	-	-	-	49
Net sale of shares from ESOP Trusts		-	-	-	-	76	-	76
Retained profit for the financial year		-	-	-	-	1,375	-	1,375
Foreign exchange and other movements		-	(712)	(1,050)	(346)	(466)	-	(2,574)
Closing equity shareholders funds		3,837	4,584	7,007	2,196	22,995	(3,908)	32,874

* Represents original cost of shares in the Company held by policyholders’ funds.

Restatement of equity shareholders’ funds
As described in note 1, in accordance with UITF Abstract 38 “Accounting for ESOP Trusts”, shares in the Company held in ESOP Trusts previously included as an asset are now accounted for as a deduction from the profit and loss reserve in arriving at equity shareholders’ funds.