Old Mutual plc ("the Company") is a company incorporated in the UK .
These interim financial statements consolidate the results of the Company and its subsidiaries (together referred to as the "Group") and equity account the Group's interest in associates and jointly controlled entities.
The Group's results for the six months ended 30 June 2006 and the position at that date have been prepared using accounting policies consistent with those applied in the preparation of the Group's 2005 Annual Report, except as set out below. The information presented in these interim financial statements is consistent with that presented in the Group's financial statements for the year ended 31 December 2005 except for revised segment presentation.
The interim financial statements have been prepared on the basis of presentation, recognition and measurement requirements of International Financial Reporting Standards as adopted by the EU ("Adopted IFRS").
The interim financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments, financial instruments classified as fair valued through income statement, available-for-sale financial instruments and investment property. Non-current assets and disposal groups held for sale are stated at the lower of previous carrying amount and fair value less costs to sell.
The results for the six months ended 30 June 2006 and 2005 are unaudited, but have been reviewed by the Auditors whose report is presented on page 28. The Auditors have reported on the statutory accounts for the year ended 31 December 2005 and the accounts have been delivered to the Registrar of Companies. The Auditors' report in respect of the year ended 31 December 2005 was unqualified and did not contain a statement under section 237(2) or (3) of the UK Companies Act 1985. These interim financial statements do not constitute statutory accounts as described in section 240 of the UK Companies Act 1985. Consequently these interim financial statements should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2005.
Segment information presented in the summary consolidated income statement on page 26 and note 3 to the interim financial statements on pages 41 to 49, has been amended to facilitate the reporting of the enlarged operations of the Group following the acquisition of Skandia, which was effective on 1 February 2006.
The Group's results are now analysed across four geographic segments. This segmentation is consistent with the Group's management structure. The primary geographic segments are South Africa , United States , Europe and Other. The Europe and Other segments principally comprise the operations of Skandia. 'Europe' includes Skandia operations in the UK , Nordic, Continental Europe, Latin America and pre-existing Old Mutual UK life operations. 'Other' includes Skandia operations in China , Australia and the pre-existing Old Mutual UK asset management and India operations. The United States segment remains as previously stated in the segmental analysis presented in the audited financial statements for the year ended 31 December 2005. Reallocations of certain comparative information have been made to include the Nedbank and OMI UK operations in the South Africa segment. This geographic segmentation better reflects the management and customer bases of these businesses.
The Group continues to manage its business across four principal lines of business. These are the basis of the secondary segmentation. The lines of business are long-term business, asset management, banking and general insurance.
Revised and new reporting standards
No revised disclosures and measurements have been required as a result of new or amended international standards and interpretations that the Group had not previously chosen to adopt in preparing the financial statements for the year ended 31 December 2005. The most notable change to IFRS since the last reporting period was the amendment to IAS19, Employee Benefits, which introduced an option to recognise all actuarial gains and losses on defined benefit arrangements through a separate statement of recognised income and expense. The Group has chosen not to apply this option and continues to account for actuarial gains and losses in the income statement using the 'corridor approach'.
Restatement of comparative information
The Group has made restatements to reflect South African banking business comparative information on a consistent basis in all reported periods. This follows disclosure adjustments in the 31 December 2005 financial statements. It has required adjustments to previously stated information for the period ended 30 June 2005. Balance sheet adjustments were made to reclassify banking assets and liabilities fair valued through income statement, and certain banking provisions as other liabilities. Income statement adjustments were made to reclassify bank interest income between interest income and revenue. None of these restatements impacted the net profit, total assets or total liabilities as previously stated.
Alignment of accounting policiesFollowing the acquisition of Skandia, the Group's insurance and investment contract accounting policies have been extended to include the 'unbundling' approach to unit-linked assurance contracts, previously adopted by Skandia in its own financial statements. This is in accordance with IFRS4, and requires that the insurance and investment elements of unit-linked contracts are separated and accounted for independently in accordance with the relevant policies for insurance contracts and financial liabilities.