FINANCIAL HIGHLIGHTS CHAIRMAN'S STATEMENT CHIEF EXECUTIVE'S STATEMENT BROADENING OUR INTERNATIONAL PROFILE GROUP FINANCE DIRECTOR'S REPORT BOARD OF DIRECTORS CORPORATE CITIZENSHIP CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 Accounting policies 2 Foreign currencies 3 Segment information 4 Operating profit adjusting items 5 Income tax expense 6 Minority interests - Income statement 7 Earnings and earnings per share 8 Investment income (net of investment losses) 9 Banking interest and similar income 10 Fee and commission income, and income from service activities 11 Finance costs (including interest and similar expenses) 12 Banking interest expense 13 Fees and commission expense, and other acquisition costs 14 Other operating and administrative expenses 15 Acquisition of subsidiaries 16 Goodwill and other intangible assets 17 Investments in associated undertakings 18 Investment property 19 Property, plant and equipment 20 Operating lease arrangements 21 Finance lease arrangements 22 Deferred tax assets and liabilities 23 Insurance contract provisions 24 Deferred acquisition costs 25 Loans, receivables and advances 26 Derivative financial instruments - assets and liabilities 27 Financial assets fair valued through income statement 28 Other financial assets 29 Short-term securities 30 Other assets 31 Assets and liabilities held-for-sale 32 Financial liabilities fair valued through income statement 33 Borrowed funds 34 Provisions 35 Deferred revenue 36 Amounts owed to depositors 37 Other liabilities 38 Equity 39 Minority interests - balance sheet 40 Post balance sheet events 41 Post employment benefits 42 Share-based payments 43 Dividends 44 Contingent liabilities 45 Commitments 46 Related parties 47 Principal subsidiaries and Group enterprises 48 Financial risk 49 Insurance risk

COMPANY FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS EUROPEAN EMBEDDED VALUE SUPPLEMENTARY INFORMATION NOTICE OF ANNUAL GENERAL MEETING SHAREHOLDER INFORMATION

Notes to the consolidated financial statements

For the year ended 31 December 2006

5 Income tax expense

(i) Analysis of total income tax expense

		£m
	Year ended 31 December 2006	Year ended 31 December 2005
Current tax
United Kingdom tax
Corporation tax	61	50
Double tax relief	(26)	(45)
Overseas tax
South Africa	282	256
United States	16	-
Europe	54	1
Secondary Tax on Companies (STC)	36	17
Prior year adjustments	(3)	27
Total current tax	420	306

Deferred tax
Origination of temporary differences	203	201
Changes in tax rates/bases	-	6
Write down/(recognition) of deferred tax assets	(2)	(29)
Total deferred tax	201	178
Total income tax expense	621	484

(ii) Reconciliation of total income tax expense

		£m
	Year ended 31 December 2006	Year ended 31 December 2005
Profit before tax	1,714	1,606
Tax at standard rate of 30% (2005: 30%)	514	482
Different tax rate or basis on overseas operations	(21)	(4)
Untaxed and low taxed income	(141)	(142)
Disallowable expenses	61	34
Net movement on deferred tax assets not recognised	19	9
STC	37	21
Income tax attributable to policyholder returns	173	89
Other	(21)	(5)
Total income tax expense	621	484

(iii) Income tax on adjusted operating profit

		£m
	Year ended 31 December 2006	Year ended 31 December 2005
Income tax expense	621	484
Tax on adjusting items
Impact of acquisition accounting	52	6
Profit on disposal of subsidiaries, associated undertakings and strategic investments	8	1
Short-term fluctuations in investment return	(43)	(55)
Initial costs of Black Economic Empowerment schemes	-	5
Income tax attributable to policyholders returns	(239)	(127)
Tax on dividends declared to holders of perpetual preferred callable securities recognised in equity	(4)	-
Income tax on adjusted operating profit	395	314