Achieved Profits Basis Supplementary Information
for the year ended 31 December 2004
6 COMPONENTS OF ACHIEVED PROFITS EQUITY SHAREHOLDERS' FUNDS
| £m | ||
| At 31 December 2004 |
At 31 December 2003 (Restated)* |
|
| Shareholders' adjusted net worth | 2,525 |
2,178 |
| Equity shareholders' funds | 3,245 |
2,754 |
| Adjustment to include OMUSL on a statutory solvency basis | (716) |
(566) |
| Adjustment to include OMI life subsidiaries on a statutory solvency basis | (19) |
(17) |
| Adjustment for discounting CGT | 15 |
7 |
| Value of in-force business | 1,592 |
1,276 |
| Value of in-force business before cost of solvency capital | 1,871 |
1,450 |
| Cost of solvency capital | (279) |
(174) |
| Minority interest in value of in-force business | (2) |
(2) |
| Achieved profits equity shareholders' funds | 4,115 |
3,452 |
| Pro-forma adjustment to bring Group investments to market value | ||
| Achieved profits equity shareholders' funds | 4,115 |
3,452 |
| Adjustment to bring listed subsidiaries to market value | 876 |
288 |
| Adjustment to market value of own shares held in policyholders' funds | 368 |
275 |
| Adjusted embedded value | 5,359 |
4,015 |
p |
||
| Adjusted embedded value per share | 139.1 |
104.6 |
| Number of shares in issue at the end of the period including own shares held in policyholders' funds - millions | 3,854 |
3,837 |
* Comparative figures have been restated to reflect the adoption of Urgent Issues Taskforce Abstract 38 “Accounting for ESOP Trusts”. The effect of this restatement is that consolidated achieved profits equity shareholders’ funds of £3,561 million (R42,503 million) before prior year adjustments have been decreased by £109 million (R1,301 million).
Shareholders’ adjusted net worth includes goodwill relating to OMUSL of £56 million (R608 million) (December 2003: £63 million (R752 million)).
The table below sets out a geographical analysis of the value of in-force business.
| £m | ||
| At 31 December 2004 |
At 31 December 2003 |
|
| South Africa | 1,005 |
824 |
| Individual business | 698 |
507 |
| Group business | 307 |
317 |
| United States | 512 |
393 |
| United Kingdom and Rest of World | 75 |
59 |
| Value of in-force business | 1,592 |
1,276 |
The encumbered and unencumbered capital for South Africa and United States is shown in the table below.
| £m | ||
| At 31 December 2004 |
At 31 December 2003 |
|
| South Africa | 1,692 |
1,551 |
| Encumbered capital | 1,016 |
1,021 |
| Unencumbered capital | 676 |
530 |
| United States | 456 |
391 |
| Encumbered capital | 160 |
153 |
| Unencumbered capital | 296 |
238 |
For South Africa the average unencumbered capital applicable was £306 million (R3,606 million) (December 2003: £196 million (R2,419 million)). These average figures were used to determine the expected return on unencumbered capital.
