10th Aug 2005 07:03
Old Mutual PLC10 August 2005 Part 3 Notes to the Consolidated Financial Statements for the six months ended 30 June 2005 1 BASIS OF PREPARATION European Union (EU) law (IAS Regulation EC 1606/2002) requires that the next annual consolidated financial statements of the company, for the year ending 31 December 2005, be prepared in accordance with International Financial Reporting Standards (IFRSs) adopted for use in the EU ("adopted IFRSs"). This interim financial information has been prepared on the basis of the recognition and measurement requirements of IFRSs in issue that either are endorsed by the EU and effective at 31 December 2005 or are expected to be endorsed and effective at 31 December 2005, the Group's first annual reporting date at which it is required to use adopted IFRSs. Based on these adopted and unadopted IFRSs, the directors have made assumptions about the accounting policies expected to be applied when the first annual IFRS financial statements are prepared for the year ending 31 December 2005. These are set out in the Group's Analyst and Investor Briefing and Restatement Document published on 3 May 2005. In particular, the directors have assumed that the IAS 19: Employee Benefits issued by the International Accounting Standards Board (IASB) will be adopted by the EU in sufficient time that they will be available for use in the annual IFRS financial statements for the year ending 31 December 2005. The financial statements do not reflect any changes in respect of recent amendments to IAS39: Financial Instruments Recognition and Measurement for the fair value option expected to be endorsed by the EU which will be available for early adoption in the consolidated financial statements for the year ending 31 December 2005. In addition, the adopted IFRSs that will be effective in the annual financial statements for the year ending 31 December 2005 are still subject to change, through additional interpretations or change to standards issued or endorsed by the EU and therefore cannot be determined with certainty. Accordingly, the accounting policies for the year ending 31 December 2005 will only be finally determined when the annual financial statements are prepared and the information presented within these financial statements are potentially subject to change. The comparative figures for the financial year ended 31 December 2004 are not the Company's statutory accounts for that financial year. Those accounts, which were prepared under UK Generally Accepted Accounting Practices (UK GAAP), have been reported on by the Company's auditors and delivered to the registrar of companies. The report of the auditors was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 2 FOREIGN CURRENCIES The principal exchange rates used to translate the operating results, assets and liabilities of key foreign business segments to Rand are: Sterling 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Income statement (average rate) 11.6325 12.1544 11.7986 Balance sheet (closing rate) 11.9624 11.3037 10.8482 US Dollar 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Income statement (average rate) 6.2104 6.7015 6.4380 Balance sheet (closing rate) 6.6760 6.2301 5.6625 Foreign currency revenue transactions are translated at average exchange rates for the year. Monetary foreign currency assets and liabilities are translated at year end exchange rates. Non-monetary foreign currency assets and liabilities are translated at historical exchange rates. The assets and liabilities of foreign operations are translated from their respective functional currencies into the Group's presentation currency using the year-end exchange rates, and their income and expenses using the average exchange rates. Unrealised gains or losses resulting from translation of functional currencies to the presentation currency are included as a separate component of shareholders' equity, net of applicable deferred income taxes. 3 SEGMENT INFORMATION (i) Basis of segmentation Geographical segments For management purposes the Group is organised on a geographical basis into the following segments: Africa, North America and United Kingdom & Rest of World. This is the basis on which the Group reports its primary segment information. Business segments Although the Group is managed on a geographical basis, it operates in four principle areas of business: long term business, general insurance, banking and asset management. These businesses operate independently within each geographical sector. Financial information about the Group's geographic and business segments is presented in notes 3(ii) below. Where financial information is required for both primary and secondary segments, this information is shown in the format of a matrix. The segment information is presented in accordance with the profit format used in preparation of the consolidated income statement. Notes 3(iii) to 3(ix) provide additional supplemental information for each business segment and has been presented in accordance with the adjusted operating profit format used in preparation of the summary consolidated income statement. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. There are no significant differences between the geographical location of assets and operations and the associated external revenues. Business transacted with South African residents in terms of their personal offshore allowances is conducted by the Group's offshore companies and is therefore disclosed under the Rest of World segment. Inter-segment pricing is determined on an arm's length basis. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (ii) Income statement Total United before inter Kingdom segment North & (revenue) Six months to 30 June 2005 Africa America Rest of World / expense Revenue Long term business 33,224 14,731 751 48,706 General insurance 4,024 - - 4,024 Banking 15,924 - 617 16,541 Asset management 1,286 2,218 663 4,167 Other shareholders' income 13 - 136 149 Consolidation of funds 732 - 187 919 Inter segment revenue (832) (69) (62) (963) 54,371 16,880 2,292 73,543 Expenses Long term business (29,844) (13,890) (721) (44,455) General insurance (3,181) - - (3,181) Banking (14,081) - (450) (14,531) Asset management (864) (1,630) (576) (3,070) Debt service costs and other shareholders' expenses (55) - (447) (502) Consolidation of funds (732) - (187) (919) Inter segment expenses 815 63 85 963 (47,942) (15,457) (2,296) (65,695) Net revenue / (expense) Long term business 3,380 841 30 4,251 General insurance 843 - - 843 Banking 1,843 - 167 2,010 Asset management 422 588 87 1,097 Other shareholders' income / (expenses) (42) - (311) (353) Inter segment (revenue) / expense (17) (6) 23 - 6,429 1,423 (4) 7,848 Share of associated undertakings' profit after tax 66 - - 66 Goodwill impairments (19) - - (19) Loss on disposal of investment in subsidiaries (9) (38) - (47) Profit before tax 6,467 1,385 (4) 7,848 Rm Total Inter after inter segment segment (revenue) (revenue) Six months to 30 June 2005 expense / expense Revenue Long term business (602) 48,104 General insurance - 4,024 Banking (15) 16,526 Asset management (346) 3,821 Other shareholders' income - 149 Consolidation of funds - 919 Inter segment revenue 963 - - 73,543 Expenses Long term business 335 (44,120) General insurance 23 (3,158) Banking 91 (14,440) Asset management 403 (2,667) Debt service costs and other shareholders' expenses 111 (391) Consolidation of funds - (919) Inter segment expenses (963) - - (65,695) Net revenue / (expense) Long term business (267) 3,984 General insurance 23 866 Banking 76 2,086 Asset management 57 1,154 Other shareholders' income / (expenses) 111 (242) Inter segment (revenue) / expense - - - 7,848 Share of associated undertakings' profit after tax - 66 Goodwill impairments - (19) Loss on disposal of investment in subsidiaries - (47) Profit before tax - 7,848 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (ii) Income statement continued Total United before inter Kingdom segment North & (revenue) Six months to 30 June 2004 Africa America Rest of World / expense Revenue Long term business 10,586 15,254 122 25,962 General insurance 3,239 - - 3,239 Banking 14,448 - 660 15,108 Asset management 984 2,151 741 3,876 Other shareholders' income - - 377 377 Consolidation of funds 207 - 61 268 Inter segment revenue (486) (12) (292) (790) 28,978 17,393 1,669 48,040 Expenses Long term business (8,592) (14,452) (122) (23,166) General insurance (2,791) - - (2,791) Banking (13,875) - (523) (14,398) Asset management (730) (2,176) (650) (3,556) Debt service costs and other shareholders' expenses - - (717) (717) Consolidation of funds (207) - (61) (268) Inter segment expenses 462 170 158 790 (25,733) (16,458) (1,915) (44,106) Net revenue / (expense) Long term business 1,994 802 - 2,796 General insurance 448 - - 448 Banking 573 - 137 710 Asset management 254 (25) 91 320 Other shareholders' income / (expenses) - - (340) (340) Inter segment (revenue) / expense (24) 158 (134) - 3,245 935 (246) 3,934 Share of associated undertakings' profit after tax 109 - - 109 Goodwill impairments (401) - - (401) Loss on disposal of investment in subsidiaries - 12 137 149 Profit before tax 2,953 947 (109) 3,791 Rm Total Inter after inter segment segment (revenue) (revenue) Six months to 30 June 2004 expense / expense Revenue Long term business (365) 25,597 General insurance - 3,239 Banking (12) 15,096 Asset management (182) 3,694 Other shareholders' income (231) 146 Consolidation of funds - 268 Inter segment revenue 790 - - 48,040 Expenses Long term business 280 (22,886) General insurance - (2,791) Banking 73 (14,325) Asset management 352 (3,204) Debt service costs and other shareholders' expenses 85 (632) Consolidation of funds - (268) Inter segment expenses (790) - - (44,106) Net revenue / (expense) Long term business (85) 2,711 General insurance - 448 Banking 61 771 Asset management 170 490 Other shareholders' income / (expenses) (146) (486) Inter segment (revenue) / expense - - - 3,934 Share of associated undertakings' profit after tax - 109 Goodwill impairments - (401) Loss on disposal of investment in subsidiaries - 149 Profit before tax - 3,791 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (ii) Income statement continued Total United before inter Kingdom segment North & (revenue) Year ended 31 December 2004 Africa America Rest of World / expense Revenue Long term business 58,691 29,449 519 88,659 General insurance 7,731 - - 7,731 Banking 31,373 - 1,321 32,694 Asset management 2,040 4,318 1,380 7,738 Other shareholders' income 35 - 1,026 1,061 Consolidation of funds 861 - 130 991 Inter segment revenue (1,121) (142) (260) (1,523) 99,610 33,625 4,116 137,351 Expenses Long term business (52,496) (27,621) (448) (80,565) General insurance (6,112) - - (6,112) Banking (29,115) - (1,044) (30,159) Asset management (1,404) (3,888) (1,437) (6,729) Debt service costs and other shareholders' expenses (260) - (1,361) (1,621) Consolidation of funds (861) - (130) (991) Inter segment expense 1,122 153 248 1,523 (89,126) (31,356) (4,172) (124,654) Net revenue / (expense) Long term business 6,195 1,828 71 8,094 General insurance 1,619 - - 1,619 Banking 2,258 - 277 2,535 Asset management 636 430 (57) 1,009 Other shareholders' income / (expenses) (225) - (335) (560) Inter segment (revenue) / expense 1 11 (12) - 10,484 2,269 (56) 12,697 Share of associated undertakings' profit after tax 214 - - 214 Goodwill impairments (401) - - (401) Loss on disposal of investment in subsidiaries (110) - (201) (311) Profit before tax 10,187 2,269 (257) 12,199 Rm Total Inter after inter segment segment (revenue) (revenue) Year ended 31 December 2004 expense / expense Revenue Long term business (791) 87,868 General insurance - 7,731 Banking (24) 32,670 Asset management (578) 7,160 Other shareholders' income (130) 931 Consolidation of funds - 991 Inter segment revenue 1,523 - 137,351 Expenses Long term business 685 (79,880) General insurance - (6,112) Banking 94 (30,065) Asset management 661 (6,068) Debt service costs and other shareholders' expenses 83 (1,538) Consolidation of funds - (991) Inter segment expense (1,523) - - (124,654) Net revenue / (expense) Long term business (106) 7,988 General insurance - 1,619 Banking 70 2,605 Asset management 83 1,092 Other shareholders' income / (expenses) (47) (607) Inter segment (revenue) / expense - - - 12,697 Share of associated undertakings' profit after tax - 214 Goodwill impairments - (401) Loss on disposal of investment in subsidiaries - (311) Profit before tax - 12,199 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (iii) Long term business Gross premiums and investment contract deposits written Rm United North Kingdom Six months to 30 June 2005 Africa America & Rest of World Total Individual business Single 4,144 12,621 907 17,672 Recurring 6,017 1,512 63 7,592 10,161 14,133 970 25,264 Group business Single 3,572 - - 3,572 Recurring 1,770 - - 1,770 5,342 - - 5,342 Total gross premiums and investment contract deposits written 15,503 14,133 970 30,606 Insurance contracts 6,407 11,969 24 18,400 Investment contracts with discretionary participation features 2,686 - - 2,686 Other investment contracts 6,410 2,164 946 9,520 15,503 14,133 970 30,606 Less: Other investment contracts (6,410) (2,164) (946) (9,520) Total gross written premiums 9,093 11,969 24 21,086 Rm United North Kingdom Six months to 30 June 2004 Africa America & Rest of World Total Individual business Single 3,646 13,747 644 18,037 Recurring 5,676 1,143 97 6,916 9,322 14,890 741 24,953 Group business Single 2,638 - - 2,638 Recurring 1,884 - - 1,884 4,522 - - 4,522 Total gross premiums and investment contract deposits written 13,844 14,890 741 29,475 Insurance contracts 6,151 12,471 24 18,646 Investment contracts with discretionary participation features 2,321 - - 2,321 Other investment contracts 5,372 2,419 717 8,508 13,844 14,890 741 29,475 Less: Other investment contracts (5,372) (2,419) (717) (8,508) Total gross written premiums 8,472 12,471 24 20,967 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (iii) Long term business Gross premiums and investment contract deposits written continued Rm North United Kingdom Year ended 31 December 2004 Africa America Rest of World Total Individual business Single 7,586 25,591 1,475 34,652 Recurring 11,527 2,419 153 14,099 19,113 28,010 1,628 48,751 Group business Single 5,333 - - 5,333 Recurring 3,740 - - 3,740 9,073 - - 9,073 Total gross premiums and investment contract deposits written 28,186 28,010 1,628 57,824 Insurance contracts 12,411 23,869 23 36,303 Investment contracts with discretionary participation features 4,743 - - 4,743 Other investment contracts 11,032 4,141 1,605 16,778 28,186 28,010 1,628 57,824 Less: Other investment contracts (11,032) (4,141) (1,605) (16,778) Total gross written premiums 17,154 23,869 23 41,046 Gross new business premiums and investment contract deposits written United Rm Six months to 30 June North Kingdom & 2005 Africa America Rest of World Total Individual business Single 4,144 12,621 907 17,672 Recurring 985 454 2 1,441 5,129 13,075 909 19,113 Group business Single 3,572 - - 3,572 Recurring 105 - - 105 3,677 - - 3,677 Total gross new business premiums and investment contract deposits written 8,806 13,075 909 22,790 Insurance contracts 2,024 10,911 - 12,935 Investment contracts with discretionary participation features 1,133 - - 1,133 Other investment contracts 5,649 2,164 909 8,722 8,806 13,075 909 22,790 Less: Other investment contracts (5,649) (2,164) (909 ) (8,722) Total gross new business premiums written 3,157 10,911 - 14,068 Annual premium equivalent 1,862 1,716 93 3,671 Annual premium equivalent is defined as one tenth of single premiums plus recurring premiums (including investment contract deposits written). Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (iv) Long term business Gross new business premiums and investment contract deposits written continued Rm North United Kingdom Six months to 30 June 2004 Africa America Rest of World Total Individual business Single 3,646 13,747 644 18,037 Recurring 887 304 12 1,203 4,533 14,051 656 19,240 Group business Single 2,638 - - 2,638 Recurring 109 - - 109 2,747 - - 2,747 Total gross new business premiums and investment contract deposits written 7,280 14,051 656 21,987 Insurance contracts 1,512 11,632 - 13,144 Investment contracts with discretionary participation features 1,051 - - 1,051 Other investment contracts 4,717 2,419 656 7,792 7,280 14,051 656 21,987 Less: Other investment contracts (4,717) (2,419) (656) (7,792) Total gross new business premiums written 2,563 11,632 - 14,195 Annual premium equivalent 1,624 1,679 76 3,379 Rm North United Kingdom Year to 31 December 2004 Africa America Rest of World Total Individual business Single 7,586 25,591 1,475 34,652 Recurring 1,935 684 12 2,631 9,521 26,275 1,487 37,283 Group business Single 5,333 - - 5,333 Recurring 201 - - 201 5,534 - - 5,534 Total gross new business premiums and investment contract deposits written 15,055 26,275 1,487 42,817 Insurance contracts 3,764 22,134 - 25,898 Investment contracts with discretionary participation features 1,970 - - 1,970 Other investment contracts 9,321 4,141 1,487 14,949 15,055 26,275 1,487 42,817 Less: Other investment contracts (9,321) (4,141) (1,487) (14,949) Total gross new business premiums written 5,734 22,134 - 27,868 Annual premium equivalent 3,433 3,245 153 6,831 Annual premium equivalent is defined as one tenth of single premiums plus recurring premiums (including investment contract deposits written). Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (iv) Long term business Rm United North Kingdom & Six months to 30 June 2005 Africa America Rest of World Total Individual business 1,160 581 27 1,768 Group business 607 - - 607 1,767 581 27 2,375 Long term investment return 675 - 4 679 Share of associated undertakings' profit after tax 29 - - 29 Adjusted operating profit 2,471 581 31 3,083 Short term fluctuations in investment returns 1,023 260 (1) 1,282 Investment return adjustment for Group equity and debt instruments held in life funds (329) - - (329) Profit before tax (net of income tax attributable to policyholder returns) 3,165 841 30 4,036 Rm United North Kingdom & Six months to 30 June 2004 Africa America Rest of World Total Individual business 1,252 486 - 1,738 Group business 571 - - 571 1,823 486 - 2,309 Long term investment return 912 - - 912 Share of associated undertakings' profit after tax 36 - - 36 Adjusted operating profit 2,771 486 - 3,257 Short term fluctuations in investment returns (705) 316 - (389) Investment return adjustment for Group equity and debt instruments held in life funds (316) - - (316) Profit before tax (net of income tax attributable to policyholder returns) 1,750 802 - 2,552 Rm United North Kingdom & Year to 31 December 2004 Africa America Rest of World Total Individual business 2,714 1,144 71 3,929 Group business 1,026 - - 1,026 3,740 1,144 71 4,955 Long term investment return 1,711 - - 1,711 Share of associated undertakings' profit after tax 59 - - 59 Adjusted operating profit 5,510 1,144 71 6,725 Short term fluctuations in investment returns 1,180 684 - 1,864 Investment return adjustment for life companies investments in Group equity and debt instruments held in life funds (1,168) - - (1,168) Profit before tax (net of income tax attributable to policyholder returns) 5,522 1,828 71 7,421 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (iv) Long term business continued Rm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Investment return adjustment for Group equity and debt instruments held in life funds Dividend income 132 134 212 Realised gains on investment return (17) 36 59 Unrealised gains / (losses) on investment 214 146 897 Total investment return 329 316 1,168 Adjusted operating profit includes investment returns on life fund investments in Group equity and debt instruments.These include investments in the Company's ordinary shares and Nedbank Limited subordinated liabilities and preferred securities. The investment returns are eliminated within the consolidated income statement in arriving at profit for the financial period, but included in adjusted operating profit. Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (v) General insurance Gross Earned premiums premiums net Six months to 30 June 2005 written of reinsurance Commercial 1,919 1,556 Personal lines 1,559 1,502 Risk financing 489 422 3,967 3,480 Long term investment return Share of associated undertakings' operating profit after tax Adjusted operating profit Goodwill impairments Short term fluctuations in investment returns Profit before tax Rm Claims Profit incurred Before Six months to 30 June 2005 net of reinsurance Tax Commercial 913 245 Personal lines 1,101 18 Risk financing 204 36 2,218 299 Long term investment return 272 Share of associated undertakings' operating profit after tax 2 Adjusted operating profit 573 Goodwill impairments (19) Short term fluctuations in investment returns 272 Profit before tax 826 Gross Earned premiums premiums Six months to 30 June 2004 written net of reinsurance Commercial 1,720 1,384 Personal lines 1,483 1,412 Risk financing 389 342 3,592 3,138 Long term investment return Adjusted operating profit Short term fluctuations in investment returns Profit before tax Rm Claims Profit incurred Before Six months to 30 June 2004 net of reinsurance Tax Commercial 804 216 Personal lines 965 88 Risk financing 196 32 1,965 336 Long term investment return 303 Adjusted operating profit 639 Short term fluctuations in investment returns (191) Profit before tax 448 Rm Gross Earned premiums premiums Year ended 31 December 2004 written net of reinsurance Commercial 3,305 2,808 Personal lines 2,938 2,878 Risk financing 1,117 1,050 7,360 6,736 Long term investment return Share of associated undertakings' operating profit after tax Adjusted operating profit Short term fluctuations in investment returns Profit before tax Claims Profit incurred Before Year ended 31 December 2004 net of reinsurance Tax Commercial 1,629 415 Personal lines 2,004 151 Risk financing 565 64 4,198 630 Long term investment return 530 Share of associated undertakings' operating profit after tax 30 Adjusted operating profit 1,190 Short term fluctuations in investment returns 459 Profit before tax 1,649 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (vi) Banking Rm United Kingdom Six months to 30 June 2005 Africa & Rest of World Total Interest and similar income 11,831 472 12,303 Interest expense and similar charges(7,968) (310) (8,278) Net interest income 3,863 162 4,025 Dividend income 177 - 177 Fees and commission receivable 2,989 14 3,003 Fees and commission payable (412) (14) (426) Other operating income 763 129 892 Foreign currency translation gain 165 - 165 Total operating income 7,545 291 7,836 Losses on loans and advances (618) (3) (621) Operating expenses (5,084) (121) (5,205) 1,843 167 2,010 Share of associated undertakings' operating profit after tax 35 - 35 Adjusted operating profit 1,878 167 2,045 Loss on disposal of investment in subsidiaries (9) - (9) Profit before tax 1,869 167 2,036 During the period the Group's banking subsidiary incurred a loss of R8 million in connection with the liquidation of certain joint venture operations. Rm United Kingdom Six months to 30 June 2004 Africa & Rest of World Total Interest and similar income 11,462 438 11,900 Interest expense and similar charges(8,229) (328) (8,557) Net interest income 3,233 110 3,343 Dividend income 49 - 49 Fees and commission receivable 2,382 109 2,491 Fees and commission payable (170) (24) (194) Other operating income 656 109 765 Foreign currency translation loss (97) - (97) Total operating income 6,053 304 6,357 Losses on loans and advances (401) - (401) Operating expenses (5,079) (167) (5,246) 573 137 710 Share of associated undertakings' operating profit after tax 73 - 73 Adjusted operating profit 646 137 783 Goodwill impairments (401) - (401) Profit on disposal of investment in subsidiaries - 137 137 Profit before tax 245 274 519 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (vi) Banking continued Rm United Kingdom Year to 31 December 2004 Africa & Rest of World Total Interest and similar income 23,215 723 23,938 Interest expense and similar charges (16,537) (454) (16,991) Net interest income 6,678 269 6,947 Dividend income 143 - 143 Fees and commission receivable 5,606 467 6,073 Fees and commission payable (690) (25) (715) Other operating income 2,674 138 2,812 Foreign currency translation loss (280) - (280) Total operating income 14,131 849 14,980 Losses on loans and advances (1,209) (21) (1,230) Operating expenses (10,664) (551) (11,215) 2,258 277 2,535 Share of associated undertakings' operating profit after tax 125 - 125 Adjusted operating profit 2,383 277 2,660 Goodwill impairments (401) - (401) Loss on disposal of investment in subsidiaries (110) - (110) Profit before tax 1,872 277 2,149 To reflect more accurately the banking margin on banking assets by excluding trading activities, certain trading revenues have been reclassified from net interest income to non-interest revenue. Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (vii) Asset management Rm Profit Six months to 30 June 2005 Revenue Expenses before tax Africa Fund management Old Mutual Asset Managers 332 (185) 147 Old Mutual Unit Trust 161 (111) 50 Other 293 (244) 49 786 (540) 246 Old Mutual Specialised Finance 286 (171) 115 Nedbank unit trusts and portfolio management 214 (153) 61 1,286 (864) 422 US asset management 2,218 (1,630) 588 United Kingdom & Rest of World Fund management 434 (329) 105 Fund investment platform 82 (106) (24) Other financial services 95 (95) - Nedbank unit trusts and portfolio management 52 (46) 6 663 (576) 87 Adjusted operating profit 4,167 (3,070) 1,097 Loss on disposal of investment in subsidiaries - (38) (38) Profit before tax 4,167 (3,108) 1,059 During March 2005, the Group disposed of its interests in UAM Japan for R48 million cash consideration, resulting in loss on disposal of R36 million. No tax was payable. Rm Profit Six months to 30 June 2004 Revenue Expenses before tax Africa Fund management 243 (134) 109 Old Mutual Asset Managers 122 (105) 17 Old Mutual Unit Trust 97 (82) 15 Other 462 (321) 141 Old Mutual Specialised Finance 267 (178) 89 Nedbank unit trusts and portfolio management 255 (231) 24 984 (730) 254 US asset management 2,151 (1,580) 571 United Kingdom & Rest of World Fund management 291 (194) 97 Fund investment platform 37 (73) (36) Other financial services 85 (146) (61) Nedbank unit trusts and portfolio management 328 (237) 91 741 (650) 91 Adjusted operating profit 3,876 (2,960) 916 Profit on disposal of investment in subsidiaries 12 - 12 Fines and penalties - (596) (596) Profit before tax 3,888 (3,556) 332 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (vii) Asset management continued Rm Profit Year ended 31 December 2004 Revenue Expenses before tax Africa Fund management Old Mutual Asset Managers 519 (283) 236 Old Mutual Unit Trust 271 (224) 47 Other 460 (354) 106 1,250 (861) 389 Old Mutual Specialised Finance 413 (260) 153 Nedbank unit trusts and portfolio management 377 (283) 94 2,040 (1,404) 636 US asset management 4,318 (3,292) 1,026 United Kingdom & Rest of World Fund management 767 (614) 153 Fund investment platform 106 (177) (71) Other financial services 106 (319) (213) Nedbank unit trusts and portfolio management 401 (327) 74 1,380 (1,437) (57) Adjusted operating profit 7,738 (6,133) 1,605 Loss on disposal of investments in subsidiaries - (201) (201) Fines and penalties - (596) (596) Profit before tax 7,738 (6,930) 808 Rm 6 months to 6 months to Year to 30 June 30 June 31 December US asset management 2005 2004 2004 Revenue Investment management fees 1,941 1,859 3,716 Transaction, performance and other fees 277 292 602 2,218 2,151 4,318 Expenses Staff costs - fixed and variable (1,251) (681) (1,428) Other (379) (899) (1,864) (1,630) (1,580) (3,292) Adjusted operating profit 588 571 1,026 (Loss) / profit on disposal of investments in subsidiaries (38) 12 (59) Fines and penalties - (596) (596) Profit before tax 550 (13) 371 Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (viii) Other shareholders income and expenses Rm 6 months to 6 months to Year to 30 June 30 June 31 December 2005 2004 2004 Distribution of unclaimed share trust 24 - 189 Provisions for contributions to public benefit and charitable organisations (24) - (189) Interest receivable 88 49 106 Net other income / (expenses) (29) 73 - Net corporate expenses (196) (231) (454) Adjusted operating loss (137) (109) (348) In accordance with proposals announced by the Company on 23 February 2004 and approved by its shareholders on 14 May 2004, during the period the Company received R21 million from Old Mutual South Africa Unclaimed Shares Trusts. This amount represents final settlement of accumulated dividends and interest accrued in respect of shares of the Company unclaimed at 12 July 2004, being five years after the demutualisation of the South Africa Mutual Life Assurance Society. It is the firm intention of the Board that all of this money will eventually be distributed to public benefit and charitable organisations and, therefore, full provision has been made for the cost of making such distributions. Notes to the Consolidated Financial Statements continued for the six months ended 30 June 2005 3 SEGMENT INFORMATION continued (ix) Funds under management North At 30 June 2005 Africa America Life investments 256,534 137,053 Africa Fund management Old Mutual Asset Managers 83,270 - Old Mutual Unit Trust 4,295 - Other 12,321 - 99,886 - Nedbank unit trusts and portfolio management 54,477 - 154,363 - US asset management - 1,196,685 United Kingdom & Rest of World Fund management - - Fund investment platform - - Other financial services - - Nedbank unit trusts and portfolio management - - - - Total funds under management 410,897 1,333,738 Rm United Kingdom & At 30 June 2005 Rest of World Total Life investments 25,600 419,187 Africa Fund management Old Mutual Asset Managers - 83,270 Old Mutual Unit Trust - 4,295 Other - 12,321 - 99,886 Nedbank unit trusts and portfolio management - 54,477 - 154,363 US asset management 63,831 1,260,516 United Kingdom & Rest of WorldRelated Shares:
Old Mutual PLC