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OLD MUTUAL PLC - Old Mutual plc preliminary results for the year ended 31 December 2014 - Part II

Release Date: 27/02/2015 09:01
Code(s): OML     PDF:  
Wrap Text
Old Mutual plc preliminary results for the year ended 31 December 2014 - Part II

Old Mutual 
ISIN CODE: GB00B77J0862
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSURE CODE: OLOML

Part 4 – Financial information

Index to the financial information
For the year ended 31 December 2014

Statement of directors' responsibilities in respect of the preliminary announcement of the Annual                    50
Report and the financial statements

Consolidated income statement                                                                                        51

Consolidated statement of comprehensive income                                                                       52

Reconciliation of adjusted operating profit to profit after tax                                                      53

Consolidated statement of financial position                                                                         54

Consolidated statement of cash flows                                                                                 55

Consolidated statement of changes in equity                                                                          56

Notes to the consolidated financial statements

     A: Significant accounting policies                                                                              60

     B: Segment information                                                                                          64

     C: Other key performance information                                                                            74

     D: Other income statement notes                                                                                 80

     E: Financial assets and liabilities                                                                             81

     F: Other statement of financial position notes                                                                  84

     G: Other notes                                                                                                  86

     H: Discontinued operations and disposal groups held for sale                                                    88

Statement of directors' responsibilities
in respect of the preliminary announcement of the Annual Report and the financial statements

The directors confirm that to the best of their knowledge:

-    The results in this preliminary announcement have been taken from the Group's 2014 Annual Report and Accounts, which will be available on
     the Company's website on 31 March 2015
-    The financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets,
     liabilities, financial position and profit or loss of the Group and the undertakings included in the consolidation taken as a whole, and
-    The Annual Report includes a fair review of the development and performance of the business and the position of Old Mutual plc and the
     undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Julian Roberts                           Ingrid Johnson
Group Chief Executive                    Group Finance Director

27 February 2015

Consolidated income statement                                                                                     
For the year ended 31 December 2014                                                                               
                                                                                                           GBPm   
                                                                                       Year ended    Year ended   
                                                                                      31 December   31 December   
                                                                              Notes          2014          2013   
Revenue                                                                                                           
Gross earned premiums                                                            B2         3,209         3,701   
Outward reinsurance                                                                         (308)         (317)   
Net earned premiums                                                                         2,901         3,384   
Investment return (non-banking)                                                             6,304         9,986   
Banking interest and similar income                                                         3,057         3,050   
Banking trading, investment and similar income                                                197           195   
Fee and commission income, and income from service activities                               2,894         3,095   
Other income                                                                                  125           100   
Total revenue                                                                              15,478        19,810   
Expenses                                                                                                          
Claims and benefits (including change in insurance contract provisions)                   (4,098)       (5,410)   
Reinsurance recoveries                                                                        215           246   
Net claims and benefits incurred                                                          (3,883)       (5,164)   
Change in investment contract liabilities                                                 (3,544)       (5,873)   
Losses on loans and advances                                                                (252)         (368)   
Finance costs                                                                                (54)          (81)   
Banking interest payable and similar expenses                                             (1,672)       (1,616)   
Fee and commission expenses, and other acquisition costs                                    (863)         (976)   
Change in third-party interest in consolidated funds                                        (322)         (564)   
Other operating and administrative expenses                                               (3,548)       (3,653)   
Total expenses                                                                           (14,138)      (18,295)   
Share of associated undertakings' and joint ventures' profit after tax                         26            21   
Loss on disposal of subsidiaries, associated undertakings and strategic                                           
investments                                                                   C1(c)           (2)           (4)   
Profit before tax                                                                           1,364         1,532   
Income tax expense                                                               D1         (462)         (552)   
Profit from continuing operations after tax                                                   902           980   
Discontinued operations                                                                                           
(Loss)/profit from discontinued operations after tax                             H1          (50)             3   
Profit after tax for the financial year                                                       852           983   
Attributable to                                                                                                   
Equity holders of the parent                                                                  582           705   
Non-controlling interests                                                                                         
Ordinary shares                                                            F1(a)(i)           252           259   
Preferred securities                                                      F1(a)(ii)            18            19   
Profit after tax for the financial year                                                       852           983   
Earnings per share                                                                                                
Basic earnings per share based on profit from continuing                                                          
operations (pence)                                                                           13.5          14.9   
Basic earnings per share based on profit from discontinued                                                        
operations (pence)                                                                          (1.1)           0.1   
Basic earnings per ordinary share (pence)                                     C2(a)          12.4          15.0   
Diluted basic earnings per share based on profit from continuing                                                  
operations (pence)                                                                           12.5          13.8   
Diluted basic earnings per share based on profit from discontinued                                                
operations (pence)                                                                          (1.0)           0.1   
Diluted basic earnings per ordinary share (pence)                             C2(b)          11.5          13.9   
Weighted average number of ordinary shares (millions)                         C2(a)         4,485         4,442   

Consolidated statement of comprehensive income                                                                         
For the year ended 31 December 2014                                                                                   
                                                                                                                GBPm   
                                                                                            Year ended    Year ended   
                                                                                           31 December   31 December   
                                                                                   Notes          2014          2013   
Profit after tax for the financial year                                                            852           983   
Other comprehensive income for the financial year                                                                      
Items that will not be reclassified subsequently to profit or loss                                                     
Fair value movements                                                                                                   
Property revaluation                                                                                22            23   
Measurement movements on defined benefit plans                                                       2            70   
Income tax on items that will not be reclassified subsequently to profit or loss   D1(c)             6          (12)   
                                                                                                    30            81   
Items that may be reclassified subsequently to profit or loss                                                          
Fair value movements                                                                                                   
Net investment hedge                                                                               (9)            43   
Available-for-sale investments                                                                                         
Fair value gains/(losses)                                                                           21           (5)   
Recycled to profit or loss                                                                        (20)           (9)   
Exchange difference recycled to profit or loss on disposal of business                            (85)             -   
Shadow accounting                                                                                  (5)             -   
Currency translation differences on translating foreign operations                                (68)       (1,257)   
Other movements                                                                                   (18)             9   
Income tax on items that may be reclassified subsequently to profit or loss        D1(c)           (5)             2   
                                                                                                 (189)       (1,217)   
Total other comprehensive income for the financial year                                          (159)       (1,136)   
Total comprehensive income for the financial year                                                  693         (153)   
Attributable to                                                                                                        
Equity holders of the parent                                                                       441          (96)   
Non-controlling interests                                                                                              
Ordinary shares                                                                                    234          (76)   
Preferred securities                                                                                18            19   
Total comprehensive income for the financial year                                                  693         (153)   

Reconciliation of adjusted operating profit to profit after tax
For the year ended 31 December 2014

                                                                                    GBPm   
                                                                Year ended    Year ended   
                                                               31 December   31 December   
                                                       Notes          2014          2013   
Core operations                                                                            
Emerging Markets                                          B3           617           594   
Nedbank                                                   B3           770           797   
Old Mutual Wealth                                         B3           227           217   
Institutional Asset Management                            B3           131           111   
                                                                     1,745         1,719   
Finance costs                                             B3          (78)          (92)   
Long-term investment return on excess assets                            24            43   
Net interest payable to non-core operations                            (5)          (11)   
Corporate costs                                                       (55)          (54)   
Other net (costs)/income                                              (26)             7   
Adjusted operating profit before tax                      B3         1,605         1,612   
Adjusting items                                        C1(a)         (301)         (286)   
Non-core operations                                       B3             1            32   
Profit before tax (net of policyholder tax)                          1,305         1,358   
Income tax attributable to policyholder returns        D1(d)            59           174   
Profit before tax                                                    1,364         1,532   
Total tax expense                                      D1(a)         (462)         (552)   
Profit from continuing operations after tax                            902           980   
(Loss)/profit from discontinued operations after tax      H1          (50)             3   
Profit after tax for the financial period                              852           983   

Adjusted operating profit after tax attributable to ordinary equity holders of the parent
                                                                                                        GBPm   
                                                                                    Year ended    Year ended   
                                                                                   31 December   31 December   
                                                                           Notes          2014          2013   
Adjusted operating profit before tax                                          B3         1,605         1,612   
Tax on adjusted operating profit                                           D1(d)         (439)         (424)   
Adjusted operating profit after tax                                                      1,166         1,188   
Non-controlling interests – ordinary shares                           F1(a)(iii)         (280)         (279)   
Non-controlling interests – preferred securities                       F1(a)(ii)          (18)          (19)   
Adjusted operating profit after tax attributable to ordinary equity                                            
holders of the parent                                                         B3           868           890   
Adjusted weighted average number of shares (millions)                      C2(c)         4,845         4,836   
Adjusted operating earnings per share (pence)                              C2(c)          17.9          18.4   


Basis of preparation of adjusted operating profit
Adjusted operating profit (AOP) reflects the directors' view of the underlying long-term performance of the Group. AOP is a measure of profitability
which adjusts the IFRS profit measures for the specific items detailed in note C1 and, as such, it is a non-GAAP measure. The reconciliation set out
above explains the differences between AOP and profit after tax as reported under IFRS.

For core life assurance and property & casualty businesses, AOP is based on a long-term investment return, including returns on investments held
by life funds in Group equity and debt instruments, and is stated net of income tax attributable to policyholder returns. For all core businesses, AOP
excludes goodwill impairment, the impact of accounting for intangibles acquired in a business combination and costs related to completed
acquisitions, revaluations of put options related to long-term incentive schemes, profit/(loss) on acquisition/disposal of subsidiaries, associated
undertakings and strategic investments, fair value profits/(losses) on certain Group debt instruments and costs related to the fundamental
restructuring of continuing businesses. AOP includes dividends declared to holders of perpetual preferred callable securities. Old Mutual Bermuda
and Nordic are treated as non-core and discontinued operations in the AOP disclosure. As such they are not included in AOP. Refer to note B1 for
further information on the basis of segmentation.

Adjusted operating earnings per share is calculated on the same basis as AOP. It is stated after tax attributable to AOP and non-controlling
interests. It excludes income attributable to Black Economic Empowerment trusts of listed subsidiaries. The calculation of the adjusted weighted
average number of shares includes own shares held in policyholders' funds and Black Economic Empowerment trusts.

Consolidated statement of financial position
At 31 December 2014

                                                                                             GBPm   
                                                                                 At            At   
                                                                        31 December   31 December   
                                                                Notes          2014          2013   
Assets                                                                                              
Goodwill and other intangible assets                                          2,763         2,835   
Mandatory reserve deposits with central banks                                   829           759   
Property, plant and equipment                                                   765           722   
Investment property                                                           1,678         1,811   
Deferred tax assets                                                             283           303   
Investments in associated undertakings and joint ventures                       518           168   
Deferred acquisition costs                                                      862         1,211   
Reinsurers' share of policyholder liabilities                                 2,314         1,875   
Loans and advances                                                           34,857        33,583   
Investments and securities                                                   87,547        88,220   
Current tax receivable                                                           92           128   
Trade, other receivables and other assets                                     2,362         2,583   
Derivative financial instruments                                              1,227         1,259   
Cash and cash equivalents                                                     4,944         4,869   
Non-current assets held for sale                                   H2         1,475             5   
Total assets                                                                142,516       140,331   
Liabilities                                                                                         
Long-term business insurance policyholder liabilities                        10,519        12,126   
Investment contract liabilities                                              68,841        69,015   
Property & casualty liabilities                                                 319           332   
Third-party interests in consolidated funds                                   5,986         5,478   
Borrowed funds                                                     E1         3,044         2,644   
Provisions and accruals                                                         284           195   
Deferred revenue                                                                330           628   
Deferred tax liabilities                                                        454           491   
Current tax payable                                                             189           237   
Trade, other payables and other liabilities                                   4,276         4,300   
Amounts owed to bank depositors                                              36,243        34,370   
Derivative financial instruments                                              1,201         1,478   
Non-current liabilities held for sale                              H2         1,285             -   
Total liabilities                                                           132,971       131,294   
Net assets                                                                    9,545         9,037   
Shareholders' equity                                                                                
Equity attributable to equity holders of the parent                           7,406         7,270   
Non-controlling interests                                                                           
Ordinary shares                                              F1(b)(i)         1,867         1,502   
Preferred securities                                        F1(b)(ii)           272           265   
Total non-controlling interests                                               2,139         1,767   
Total equity                                                                  9,545         9,037   

Consolidated statement of cash flows
For the year ended 31 December 2014

                                                                                         GBPm   
                                                                     Year ended    Year ended   
                                                                    31 December   31 December   
                                                                           2014          2013   
Cash flows from operating activities                                                            
Profit before tax                                                         1,364         1,532   
Non-cash movements in profit before tax                                   2,058         1,423   
Net changes in working capital                                              739           447   
Taxation paid                                                             (402)         (458)   
Net cash inflow from operating activities                                 3,759         2,944   
Cash flows from investing activities                                                            
Net acquisitions of financial investments                               (2,873)       (1,658)   
Acquisition of investment properties                                       (48)          (47)   
Proceeds from disposal of investment properties                             115            22   
Acquisition of property, plant and equipment                              (154)         (113)   
Proceeds from disposal of property, plant and equipment                      14             6   
Acquisition of intangible assets                                           (76)          (86)   
Acquisition of interests in subsidiaries, associated undertakings                               
joint ventures and strategic investments                                  (429)         (119)   
Disposal of interests in subsidiaries, associated undertakings                                  
joint ventures and strategic investments(1)                                  95             8   
Net cash outflow from investing activities                              (3,356)       (1,987)   
Cash flows from financing activities                                                            
Dividends paid to                                                                               
Ordinary equity holders of the Company                                    (394)         (336)   
Non-controlling interests and preferred security interests                (177)         (183)   
Dividends received from associated undertakings                               5            13   
Interest paid (excluding banking interest paid)                            (48)          (51)   
Proceeds from issue of ordinary shares (including by subsidiaries                               
to non-controlling interests)                                                12            11   
Net disposal of treasury shares                                              72            55   
Disposal of non-controlling interests in OM Asset Management plc            184             -   
Issue of subordinated and other debt                                        584           586   
Subordinated and other debt repaid                                        (290)         (578)   
Net cash outflow from financing activities                                 (52)         (483)   
Net increase in cash and cash equivalents                                   351           474   
Effects of exchange rate changes on cash and cash equivalents             (193)         (828)   
Cash and cash equivalents at beginning of the year                        5,628         5,982   
Cash and cash equivalents at end of the period                            5,786         5,628   
Consisting of                                                                                   
Cash and cash equivalents                                                 4,944         4,869   
Mandatory reserve deposits with central banks                               829           759   
Cash and cash equivalents included in assets held for sale                   13             -   
Total                                                                     5,786         5,628   

(1) Included in disposal of interests in subsidiaries, associated undertakings, joint ventures and strategic investments is GBP76 million relating to disposal of subsidiaries. 

Except for mandatory reserve deposits with central banks of GBP829 million (2013: GBP759 million) and cash and cash equivalents subject to
consolidation of funds of GBP1,639 million (2013: GBP1,667 million), management do not consider that there are any material amounts of cash and
cash equivalents which are not available for use in the Group's day-to-day operations. Mandatory reserve deposits are, however, included in cash
and cash equivalents for the purposes of the statement of cash flows in line with market practice in South Africa.

Consolidated statement of changes in equity
For the year ended 31 December 2014

                                                                                        Millions                                              
                                                                                       Number of                                              
                                                                                          shares                                 Available-   
                                                                                      issued and     Share     Share    Merger     for-sale   
Year ended 31 December 2014                                                   Notes   fully paid   capital   premium   reserve      reserve   
Shareholders' equity at beginning of the period                                            4,897       560       845     1,717           52   
Profit after tax for the financial period                                                      -         -         -         -            -   
Other comprehensive income                                                                                                                    
Items that will not be reclassified subsequently to                                                                                           
profit or loss                                                                                                                                
Fair value gains                                                                                                                              
Property revaluation                                                                           -         -         -         -            -   
Measurement gains on defined benefit plans                                                     -         -         -         -            -   
Income tax on items that will not be reclassified                                                                                             
subsequently to profit or loss                                                D1(c)            -         -         -         -            -   
                                                                                               -         -         -         -            -   
Items that may be reclassified subsequently to profit                                                                                         
or loss                                                                                                                                       
Fair value gains/(losses)                                                                                                                     
Net investment hedge                                                                           -         -         -         -            -   
Available-for-sale investments                                                                                                                
Fair value gains                                                                               -         -         -         -           21   
Recycled to profit or loss(1)                                                                  -         -         -         -         (20)   
Exchange differences recycled to profit or loss
 on disposal of business(1,2)                                                                  -         -         -         -            -   
Shadow accounting                                                                              -         -         -         -            -   
Currency translation differences on translating foreign                                                                                       
operations                                                                                     -         -         -         -            -   
Other movements                                                                                -         -         -         -            -   
Income tax on items that may be reclassified                                                                                                  
subsequently to profit or loss                                                D1(c)            -         -         -         -          (5)   
Total comprehensive income for the financial period                                            -         -         -         -          (4)   
Dividends for the period                                                         C3            -         -         -         -            -   
Equity share-based payment transactions                                                        -         -         -         -            -   
Other movements in share capital                                                              10         1        11         -            -   
Expiry of Skandia AB shareholder claims                                                        -         -         -         -            -   
Merger reserve released1                                                                       -         -         -     (375)            -   
Disposal of non-controlling interests in                                                                                                      
OM Asset Management plc                                                          A2            -         -         -         -            -   
Non-controlling interests in subsidiaries acquired                               A2            -         -         -         -            -   
Change in participation in subsidiaries                                                        -         -         -         -            -   
Transactions with shareholders                                                                10         1        11     (375)            -   
Shareholders' equity at end of the period                                                  4,907       561       856     1,342           48   

(1) Following the disposal of Old Mutual Wealth's European businesses, as discussed in note A2, available-for-sale reserves of GBP20 million and foreign currency
    translation reserves of GBP46 million have been recycled to profit or loss. In addition, merger reserves of GBP375 million relating to these businesses have been
    released directly to retained earnings.
(2) In addition to the above, foreign currency translation reserves of GBP39 million have been recycled directly to retained earnings following the OM Asset
    Management plc initial public offering.

                                                                                                               GBPm   
                                           Foreign               Perpetual                           Total            
   Property   Share-based                 currency               preferred   Attributable to          non-            
revaluation      payments      Other   translation   Retained     callable    equity holders   controlling    Total   
    reserve       reserve   reserves       reserve   earnings   securities     of the parent     interests   equity   
        161           316         37       (1,234)      4,290          526             7,270         1,767    9,037   
          -             -          -             -        557           25               582           270      852   
         22             -          -             -        (5)            -                17             5       22   
          -             -          -             -          2            -                 2             -        2   
          -             -          -             -        (1)            7                 6             -        6   
         22             -          -             -        (4)            7                25             5       30   
          -             -          -           (9)          -            -               (9)             -      (9)   
          -             -          -             -          -            -                21             -       21   
          -             -          -             -          -            -              (20)             -     (20)   
          -             -          -          (85)          -            -              (85)             -     (85)   
        (5)             -          -             -          -            -               (5)             -      (5)   
          -             -          -          (45)          -            -              (45)          (23)     (68)   
          -             -          -             3       (21)            -              (18)             -     (18)   
          -             -          -             -          -            -               (5)             -      (5)   
         17             -          -         (136)        532           32               441           252      693   
          -             -          -             -      (394)         (32)             (426)         (145)    (571)   
          -            21          -             -        (3)            -                18             4       22   
          -             -          -             -         72            -                84             1       85   
          -             -          -             -         11            -                11             -       11   
          -             -          -             -        375            -                 -             -        -   
          -             -          -             -         52            -                52           163      215   
          -             -          -             -          -            -                 -            53       53   
          -             -          -             -       (44)            -              (44)            44        -   
          -            21          -             -         69         (32)             (305)           120    (185)   
        178           337         37       (1,370)      4,891          526             7,406         2,139    9,545   

Retained earnings were reduced in respect of own shares held in policyholder's funds, ESOP trusts, Black Economic Empowerment trusts and
other undertakings at 31 December 2014 by GBP338 million. (2013: GBP428 million).

Consolidated statement of changes in equity
For the year ended 31 December 2014

                                                                    Millions                                                   
                                                                   Number of                                                   
                                                                      shares                                                   
                                                                  issued and     Share     Share     Merger   Available-for-   
Year ended 31 December 2013                               Notes   fully paid   capital   premium    reserve     sale reserve   
Shareholders' equity at beginning of the year                          4,892       559       835      1,717               65   
Profit after tax for the financial year                                    -         -         -          -                -   
Other comprehensive income                                                                                                     
Items that will not be reclassified subsequently                                                                               
to profit or loss                                                                                                              
Fair value movements                                                                                                           
Property revaluation                                                       -         -         -          -                -   
Measurement movements on defined benefit plans                             -         -         -          -                -   
Income tax on items that will not be reclassified                                                                              
subsequently to profit or loss                            D1(c)            -         -         -          -                -   
                                                                           -         -         -          -                -   
Items that may be reclassified subsequently                                                                                    
to profit or loss                                                                                                              
Fair value movements                                                                                                           
Net investment hedge                                                       -         -         -          -                -   
Available-for-sale investments                                                                                                 
Fair value gains                                                           -         -         -          -              (6)   
Recycled to profit or loss                                                 -         -         -          -              (9)   
Currency translation differences on translating foreign                                                                        
operations                                                                 -         -         -          -                -   
Other movements                                                            -         -         -          -                -   
Income tax on items that may be reclassified                                                                                   
subsequently to profit or loss                            D1(c)            -         -         -          -                2   
Total comprehensive income for the financial year                          -         -         -          -             (13)   
Dividends for the year                                       C3            -         -         -          -                -   
Equity share-based payment transactions                                    -         -         -          -                -   
Other movements in share capital                                           5         1        10          -                -   
Preferred securities purchased                                             -         -         -          -                -   
Change in participation in subsidiaries                                    -         -         -          -                -   
Transactions with shareholders                                             5         1        10          -                -   
Shareholders' equity at end of the year                                4,897       560       845      1,717               52   

                                                                                                                GBPm   
                                           Foreign               Perpetual                           Total             
   Property   Share-based                 currency               preferred   Attributable to          non-             
revaluation      payments      Other   translation   Retained     callable    equity holders   controlling     Total   
    reserve       reserve   reserves       reserve   earnings   securities     of the parent     interests    equity   
        144           268         33         (378)      3,891          682             7,816         1,957     9,773   
          -             -          -             -        668           37               705           278       983   
         17             -          -             -          -            -                17             6        23   
          -             -          -             -         52            -                52            18        70   
          -             -          -             -       (14)           10               (4)           (8)      (12)   
         17             -          -             -         38           10                65            16        81   
          -             -          -            43          -            -                43             -        43   
          -             -          -             -          -            -               (6)             1       (5)   
          -             -          -             -          -            -               (9)             -       (9)   
          -             -          -         (899)          -            -             (899)         (358)   (1,257)   
          -             -          4             -        (1)            -                 3             6         9   
          -             -          -             -          -            -                 2             -         2   
         17             -          4         (856)        705           47              (96)          (57)     (153)   
          -             -          -             -      (336)         (47)             (383)         (136)     (519)   
          -            48          -             -         13            -                61          (17)        44   
          -             -          -             -         55            -                66             3        69   
          -             -          -             -       (21)        (156)             (177)             -     (177)   
          -             -          -             -       (17)            -              (17)            17         -   
          -            48          -             -      (306)        (203)             (450)         (133)     (583)   
        161           316         37       (1,234)      4,290          526             7,270         1,767     9,037   

Notes to the consolidated financial statements
For the year ended 31 December 2014

A: Significant accounting policies
A1: Basis of preparation

The Group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and as endorsed by the European Union (EU), and those parts of the
Companies Act 2006 applicable to those reporting under IFRS. The accounting policies adopted by the Group, unless otherwise stated, have been
applied consistently with those applied in the preparation of the Group's 2014 Annual Report and Accounts.

The Group 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 assets and liabilities designated as fair value through profit or loss, or as available-for-sale, owner-
occupied property and investment property. Non-current assets and disposal groups held for sale are stated at the lower of the previous carrying
amount and the fair value less costs to sell.

The Group financial statements have been prepared on the going concern basis which the directors believe to be appropriate.

The financial statements contained herein do not constitute the Company's statutory accounts for the financial years ended 31 December 2014 and
31 December 2013 within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the financial year ended 31 December
2013 have been reported on by the Company's auditor and delivered to the Registrar of Companies. The statutory accounts for the financial year
ended 31 December 2014 will be delivered in due course. The report of the auditor for the financial year ended 31 December 2013 was (i)
unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and
(iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

Translation of foreign operations
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. Other than in respect of cumulative translation
gains and losses up to 1 January 2004, cumulative unrealised gains or losses resulting from translation of functional currencies to the presentation
currency are included as a separate component of shareholders' equity. To the extent that these gains and losses are effectively hedged, the
cumulative effect of such gains and losses arising on the hedging instruments are also included in that component of shareholders' equity. Upon the
disposal of subsidiaries the cumulative amount of exchange differences deferred in shareholders' equity, net of attributable amounts in relation to
net investments, is recognised in profit or loss. Cumulative translation gains and losses up to 1 January 2004 were reset to zero.

                                  Year ended                        Year ended   
                            31 December 2014                  31 December 2013   
                                Statement of                      Statement of   
                     Income        financial           Income        financial   
                  statement         position        statement         position   
             (average rate)   (closing rate)   (average rate)   (closing rate)   
Rand                17.8712          17.9976          15.0959          17.4284   
US dollars           1.6474           1.5581           1.5650           1.6566   
Euro                 1.2399           1.2877           1.1782           1.2014   

A2: Significant corporate activity and business changes during the period

Acquisitions completed during the year

Acquisition of Faulu Kenya DTM LTD
On 1 April 2014, the Group completed the acquisition of a controlling stake in the micro-lender Faulu Kenya DTM LTD for GBP20 million. Goodwill
of GBP3 million has been recognised on this transaction. No other intangible assets have been recognised. In addition, non-controlling interests of
GBP9 million have been recognised on this transaction.

Acquisition of a significant interest in Banco Unico
On 12 June 2014, the Group announced that it had completed the acquisition of a 36.4% stake in Banco Unico for USD24 million. Banco Unico is
equity accounted as a joint venture in these financial statements.

Acquisition of Intrinsic Financial Services Limited
On 1 July 2014, the Group announced that it had completed the acquisition of 100% of Intrinsic Financial Services Limited (Intrinsic), a financial
advisors group of companies for total consideration of GBP98m.The financial results and position of Intrinsic have been consolidated with effect
from 1 July 2014.

The purchase price allocation has been finalised and allocated to goodwill (GBP59 million) and other intangible assets (GBP41 million).

Acquisition of Old Mutual Finance (Pty) Ltd
On 1 September 2014, the Group completed the acquisition of an additional 25% stake in Old Mutual Finance (Pty) Ltd (OMF) for R1,115 million
(GBP63 million). As the Group now has a controlling shareholding of 75%, the financial results and position of OMF have been consolidated with
effect from 1 September 2014.

The accounting related to the step up in ownership from 50% to 75% effectively involved a simultaneous sale of 50% of the business, followed by
an acquisition of the fair value of 75% of the business. Consequently a profit of approximately R1,112 million (GBP62 million) was realised on the
transaction. Consistent with usual Group practice, this profit was recognised in the IFRS profit or loss, but excluded from AOP. Goodwill of GBP93
million, intangible assets of GBP27 million, and non-controlling interest of GBP44 million have been recognised on this transaction.

Acquisition of 20.7% shareholding in Ecobank Transnational Incorporated (ETI)
On 7 October 2014, Nedbank Group Limited, the majority-owned South African banking subsidiary of the Group, announced that it has exercised its
rights to subscribe for a 20.7% shareholding in ETI for a cash consideration of USD494 million (GBP305 million). The acquisition of the 20.7% stake
has resulted in ETI being an associate for Group reporting purposes. ETI has been equity accounted from 1 October 2014.

Disposals completed during the year

Disposal of Skandia Poland
On 30 May 2014, the Group completed the disposal of Skandia Poland, part of Old Mutual Wealth. A loss on disposal of GBP21 million has been
recognised in profit or loss.

Disposal of Skandia Austria and Skandia Germany

On 1 October 2014, the Group announced that it had completed the sale of two of its Old Mutual Wealth businesses, Skandia Austria and Skandia
Germany. A loss on disposal of GBP43 million has been recognised in profit or loss.

OM Asset Management plc initial public offering

On 15 October 2015, the Group announced the closing of the initial public offering of 20.4% of OM Asset Management at a price to the public of
USD14.00 per share. As a result of the IPO, the Group has recognised a profit on disposal of GBP13 million directly in equity. At 31 December 2014,
non-controlling interests of GBP163 million have been recognised in the statement of financial position. In addition to the above, GBP39m of the
foreign currency translation reserve has been transferred to retained earnings.

Disposal of Skandia Liechtenstein

On 6 November 2014, the Group completed the sale of Skandia Liechtenstein, part of Old Mutual Wealth. A total loss on disposal of GBP6 million
has been recognised in profit or loss.

Financing activities during the year

Nedbank Group Limited

On 10 July 2014, Nedbank Group Limited announced its intention to issue new preference shares which will be utilised to raise funding for
Nedbank's business activities in general. No new preference shares were issued during the year.

Emerging Markets

On 27 November 2014, Old Mutual Life Assurance Company (South Africa) Limited (OMLAC(SA)) issued R300 million Unsecured Subordinated
Callable Fixed Rate Notes under its R10 billion Unsecured Callable Notes Programme. Interest is payable in arrears at a fixed rate of 9.255 per cent
on 27 May and 27 November each year up to the first call date of 27 November 2019 or until the maturity date of 27 November 2024.

On 27 November 2014, OMLAC(SA) also issued R700 million Unsecured Subordinated Callable Floating Rate Notes under the same programme.
Interest is payable at a floating rate of 3 month ZAR-JIBAR + 2.2 per cent on 27 November, 27 February, 27 May and 27 August each year until 27
November 2019. From this date the floating rate increases to 3 month ZAR-JIBAR + 3.3 per cent until the maturity date of 27 November 2024. The
notes have an optional redemption date of 27 November 2019 and each subsequent floating interest payment date until maturity.

Transactions announced during the year that will complete after 31 December 2014

Disposal of Skandia Luxembourg and Skandia France

On 3 September 2014, the Group announced that terms have been agreed to sell Skandia Luxembourg and Skandia France, part of Old Mutual
Wealth.

For the year ended 31 December 2014, the net asset value of goodwill and intangible assets of these businesses has been written down to the fair
value (less costs to sell) given expected losses on disposal. As a result, an impairment loss of GBP14 million has been recognised in profit or loss.

The disposal of these businesses completed on 2 February 2015.

Acquisition of Quilter Cheviot

On 17 October 2014, the Group announced that Old Mutual Wealth had agreed the acquisition of Quilter Cheviot, a leading UK-based discretionary
investment manager, for a total consideration of up to GBP585 million. The transaction completed on 25 February 2015. The Group awaits the
transaction completion financial statements of Quilter Cheviot in order to finalise its purchase price accounting.

Acquisition of UAP Holdings Limited

On 9 January 2015, the Group announced that it acquired a 23.3% stake in UAP Holdings Limited (UAP), an investment, retirement and insurance
group that operates in East Africa, for a consideration of KES 9 billion (GBP64 million). UAP will be treated as an associated undertaking from
9 January 2015.

Subsequently, on 26 January 2015, the Group announced it acquired an additional 37.3% (second tranche) of UAP for a consideration of KES 14
billion (GBP103 million), subject to regulatory approval. The transaction will increase the Group's total holding to 60.7% and will result in the Group
consolidating UAP. The acquisition of the second tranche is expected to be completed in the first half of 2015.

A3: Critical accounting estimates and judgements

In the preparation of these financial statements, the Group is required to make estimates and judgements that affect items reported in the
consolidated income statement, statement of financial position, other primary statements and related supporting notes.

Critical accounting estimates and judgements are those which involve the most complex or subjective judgements or assessments. Where
applicable the Group applies estimation and assumption setting techniques that are aligned with relevant actuarial and accounting guidance based
on knowledge of the current situation. This requires assumptions and predictions of future events and actions. There have been no significant
methodology changes to the critical accounting estimates and judgements that the Group applied at 31 December 2014. The significant accounting
policies are described in the relevant notes.

(a) Loans and advances

Provisions for impairment of loans and advances
The majority of loans and advances are in respect of Nedbank, which assesses its loan portfolios for impairment at each financial reporting date.
Nedbank actively manages its exposure to loans and advances through robust credit approval processes. The credit loss ratio at year ended 31
December 2014 was 0.79% (2013: 1.06%). The impairment for performing loans is calculated on a portfolio basis, based on historical loss
experience, adjusted for national and sector specific economic conditions and other indicators present at the reporting date that correlate with
defaults on the portfolio. These include early arrears, such as changes in macro-economic conditions and legislation affecting credit recovery.
These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

For portfolios of loans and advances which comprise large numbers of small homogeneous assets with similar risk characteristics where credit
scoring techniques are generally used, statistical techniques are used to calculate impairment allowances on the portfolio, based on historical
recovery rates and assumed emergence periods. There are a number of models in use, each tailored to a product, line of business or client
category. Judgement and knowledge are needed in selecting the statistical methods to use when the models are developed or revised. Additional
impairment provisions may be raised for issues which the Group believes is not specifically covered by statistical models.

For wholesale (larger) exposures impairment allowances are calculated on an individual basis and all relevant considerations that have a bearing
on the expected future cash flows are taken into account. The level of impairment allowance is the difference between the value of the discounted
expected future cash flows and its carrying amount. Subjective judgements are made in the calculations of future cash flows and change with time
as new information becomes available or as strategies evolve, resulting in frequent revisions to the impairment provision as individual decisions are
taken.

Emerging Markets has lending exposure in South Africa, Kenya and Zimbabwe through non-wholly owned subsidiaries of GBP909 million (2013:
GBP255 million). Credit loss ratios are monitored on each individual business unit and have generally improved in the current year.

Further detail is provided in note E3 in the Annual Report and Accounts.

(b) Policyholder liabilities
Emerging Markets discretionary reserves
Technical provisions in South Africa are determined as the aggregate of:

-    Best estimate liabilities, with assumptions allowing for the best estimate of future experience and a market-consistent valuation of financial
     options and guarantees
-    Compulsory margins, prescribed in terms of the Long Term Insurance Act, 1988 and South African professional actuarial guidance note (SAP
     104) as explicit changes to actuarial assumptions that increase the level of technical provisions held, and
-    Discretionary margins, permitted by the Long Term Insurance Act, 1988 and SAP 104, to allow for the uncertainty inherent in estimates of
     future experience after considering available options of managing that experience over time, or to defer the release of profits consistent with
     policy design or company practice.

Discretionary margins are held as either implicit or explicit margins. Explicit discretionary margins are derived as conscious changes to assumptions
used to project future experience to increase technical provisions. Implicit discretionary margins arise where the method used to calculate overall
technical provisions results in liabilities that are greater than the sum of best estimate liabilities and compulsory margins.

Explicit discretionary margins of GBP459 million (1.7% of total technical provisions) were held at 31 December 2014 (2013: GBP489 million, 1.9%
of total technical provisions). This consisted largely of:

-    Margins held for Mass Foundation Cluster protection business, which allow for the uncertainty related to mortality experience in South Africa,
     as well as future lapse experience and future investment returns, and to ensure that profit is released appropriately over the term of the
     policies
-    Margins to allow for the uncertainty inherent in the assumptions used to value financial options and guarantees, implied volatility assumptions
     in particular, which are difficult to hedge due to the short term nature of the equity option market in South Africa
-    Margins on non-profit annuities, due to the inability to fully match assets to liabilities as a result of the limited availability of long-dated bonds,
     and to provide for longevity risk, and
-    A margin set up in 2013 to allow for the uncertainty inherent in future economic assumptions used to calculate, mainly protection product
     liabilities, in the Retail Affluent business. Although interest rate hedging is used to manage interest rate risk on these products, the volatility of
     bond yields in South Africa means that it is difficult to maintain appropriate hedging positions without incurring significant trading costs. The
     discretionary margin therefore caters for the residual uncertainty present after allowing for the hedge programme that is in place. A similar
     margin was set up for the Mass Foundation Cluster savings book in 2014.

Emerging Markets Financial Soundness Valuation discount rate
The calculation of the Group's South African life assurance contract liabilities is sensitive to the discount rate used to value the liabilities. The
methodology applied by the Group requires discount rates to be set according to the South African professional guidance note (SAP 104). In line
with these principles, the reference rate is selected as the Bond Exchange of South Africa (BESA) par bond 10-year yield.

The reference rate was relatively volatile over 2014, ranging from 7.6% to 9.0% during the year ended 31 December 2014 (2013: 6.2% to 8.5%). At
31 December 2014 the reference discount rate was 8.0% (2013: 8.1%). The volatile interest rate environment continued to have a negligible impact
on the operating profit for the South African life assurance businesses in 2014, given the continuance of the hedging program and discretionary
margins put in place to mitigate these impacts.

The Group estimates that a 1% reduction in the reference discount rate will result in an increase in policyholder liabilities of GBP2 million (2013:
GBP6 million), allowing for the impact of the hedging program.

Further disclosure of the policyholder sensitivity to interest rates is provided in note E8(g) of the Annual Report and Accounts.

Old Mutual Bermuda guarantees
Since the closure of Old Mutual Bermuda to new business in March 2009, management's key priorities have been to de-risk the business, manage
the risk and solvency position and preserve shareholder value. The run-off of the book and hedging of the guarantees has significantly reduced the
Group's risk exposure. The active contracts for which reserves are recognised are deferred and fixed index annuity investments and variable
annuity products, which include guaranteed minimum accumulation benefits (GMAB) and guaranteed minimum death benefits (GMDB).

The key risk to the Group relates to the GMAB policies which were sold with Universal Guarantee Options (UGOs).

UGOs guarantee policyholders the return of 120% of invested premiums and, subject to policyholder election, they may include a Highest
Anniversary Value (HAV) guarantee. These guarantees are effective on the 10 year anniversary of policies, 10 year anniversaries will be reached in
2017 and 2018. The risk attaching to the guarantee of 120% of invested premium, and relating to equity and foreign exchange downside risks, is
managed by a dynamic tail hedging strategy, which progressively increases hedge coverage if the value of underlying policyholder investments
decreases.

The Old Mutual Bermuda business has also implemented a series of structured ‘look back' options for the HAV risk of markets rising above the
120% guarantee and then subsequently falling below 120%, having reset the guarantees amount above 120%.

GMAB reserves have reduced from USD84 million at 31 December 2013 to USD82 million at 31 December 2014.

There are no significant risks to the Group associated with GMDB and management continues to operate strong oversight over the business.

(c) Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it
relates to items recognised directly in other comprehensive income, in which case it is recognised in other comprehensive income.

The Group is subject to income taxes in numerous jurisdictions and the calculation of the Group's tax charge and worldwide provisions for income
tax necessarily involves a degree of estimation and judgement. At any given time the Group typically has a number of open tax returns with various
tax authorities and engages in active dialogue to resolve this. Provisions relating to these open items are recognised based on the Group's estimate
of the mostly likely outcome, after taking into account external advice where appropriate. Where the final tax outcome of these matters is different
from the amounts that were initially recorded such differences will impact profit or loss, current and deferred income tax assets and liabilities in the
period such determination is made.

(d) Consolidation set of standards
The Group has applied the following key judgements in the application of the requirements of the consolidation set of standards (IFRS 10
‘Consolidated Financial Statements' and IFRS 11 ‘Joint Arrangements'):

Consolidation of investment funds and securitisation vehicles
The Group acts as a fund manager to a number of investment funds. In determining whether the Group controls such a fund, it will focus on an
assessment of the aggregate economic interests of the Group (comprising any carried interests and expected management fees) and the investor's
rights to remove the fund manager. The Group assesses, on an annual basis, such interests to determine if the fund will be consolidated. See note
G3(b) in the Annual Report and Accounts for disclosures in respect of the investment funds in which the Group has an interest.

The Group has sponsored certain asset backed financing (securitisation) vehicles under its securitisation programme which are run according to
pre-determined criteria that are part of the initial design of the vehicles. The Group is exposed to variability of returns from the vehicles through its
holding of junior debt securities in the vehicles. It has concluded that it controls these vehicles and therefore has consolidated these asset backed
financing vehicles.

Structured entities
The Group is required to make judgements on what constitutes a structured entity. Accounting standards define a structured entity as an entity
designed so that its activities are not governed by way of voting rights. In assessing whether the Group has power over such investees in which it
has an interest, the Group considers factors such as the purpose and design of the investee, its practical ability to direct the relevant activities of the
investee, the nature of its relationship with the investee and the size of its exposure to the variability of returns of the investee. The Group has
evaluated all exposures and has concluded that all investments in investment funds as well as certain securitisation vehicles and other funding
vehicles represent investments in structured entities.

B: Segment information
B1: Basis of segmentation

The Group's segmental results are analysed and reported on a basis consistent with the way that management and the Board of directors of Old Mutual
plc assesses performance of the underlying businesses and allocates resources. Information is presented to the Board on a consolidated basis in pounds
sterling (the presentation currency) and in the functional currency of each business.

Adjusted operating profit (AOP) is one of the key measures reported to the Group's management and Board of directors for their consideration in
the allocation of resources to and the review of performance of the segments. As appropriate to the business line, the Board reviews additional
measures to assess the performance of each of the segments. These typically include sales, net client cash flows, funds under management, gross
earned premiums, underwriting results, net interest income and non-interest revenue and credit losses.

A reconciliation between segment revenues and expenses and the Group's revenues and expenses is shown in note B3. Consistent with internal
reporting, assets, liabilities, revenues and expenses that are not directly attributable to a particular segment are allocated between segments where
appropriate and where there is a reasonable basis for doing so. The Group accounts for inter-segment revenues and transfers as if the transactions
were with third parties at current market prices. Given the nature of the operations, there are no major trading activities between the segments.

The revenues generated in each reported segment can be seen in the analysis of profits and losses in note B3. The segmental information in notes
B3 and B4, reflects the adjusted and IFRS measures of profit or loss and the assets and liabilities for each operating segment as provided to management
and the Board of directors. There are no differences between the measurement of the assets and liabilities reflected in the primary statements and that
reported for the segments.

There are four primary business activities from which the Group generates revenue. These are life assurance (premium income), asset
management business (fee and commission income), banking (banking interest receivable and investment banking income) and property &
casualty (premium income). Other revenue includes gains and losses on investment securities.

The principal lines of business from which each operating segment derives its revenues are as follows:

Core operations
Emerging Markets – life assurance, property & casualty, asset management and banking
Nedbank – banking, asset management and life assurance
Old Mutual Wealth – life assurance and asset management
Institutional Asset Management – asset management

Non-core operations
Old Mutual Bermuda – life assurance

Segment presentation
The results of the property & casualty business were previously disclosed separately. However, following changes in management oversight, these
have been included in the Emerging Markets segment with effect from 1 January 2014. This change has been applied to all periods presented and
comparative information has been re-presented accordingly.

The USAM segment has been renamed to Institutional Asset Management and consists of OM Asset Management plc, a listed subsidiary of the
Group and Rogge Global Partners plc, a fixed income asset management affiliate of the Group.

There have been no other changes to the presentation of segment information.

The Group's reported segments are now Emerging Markets, Nedbank, Old Mutual Wealth and Institutional Asset Management. The Other segment
includes Group Head Office. For all reporting periods, Old Mutual Bermuda is classified as a continuing operation in the IFRS income statement, but
as non-core in determining the Group's adjusted operating profit.

As set out in the 2013 Annual Report and Accounts, the Group continues to incur costs related to the sale of its Nordic business in 2012. These
costs largely relate to the transition of IT information and support services that were previously provided by the Nordic business to the wider Group,
back to the Group. These costs are included in the expenses related to the discontinued operations in the IFRS consolidated income statement for
the year ended 31 December 2014 and as non-core for determining the Group's AOP for the year ended 31 December 2014. Further information on
the results of discontinued operations is provided in note H1.

All other businesses have been classified as continuing operations for all reporting periods.

B2: Gross earned premiums and deposits to investment contracts                                   
                                                                                          GBPm   
                                                                 Emerging   Old Mutual           
Year ended 31 December 2014                                       Markets       Wealth   Total   
Life assurance – insurance contracts                                1,299          280   1,579   
Life assurance – investment contracts with discretionary                                         
participation features                                                961            -     961   
General insurance                                                     669            -     669   
Gross earned premiums                                               2,929          280   3,209   
Life assurance – other investment contracts recognised                                           
as deposits                                                         1,981        6,442   8,423 
  
                                                                                          GBPm   
                                                                 Emerging   Old Mutual           
Year ended 31 December 2013                                       Markets       Wealth   Total   
Life assurance – insurance contracts                                1,616          336   1,952   
Life assurance – investment contracts with discretionary                                         
participation features                                              1,025            -   1,025   
General insurance                                                     724            -     724   
Gross earned premiums                                               3,365          336   3,701   
Life assurance – other investment contracts recognised                                           
as deposits                                                         2,015        5,889   7,904   

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2014 

                                                                                  Emerging             
                                                                          Notes    Markets   Nedbank   
Revenue                                                                                                
Gross earned premiums                                                        B2      2,929         -   
Outward reinsurance                                                                  (223)         -   
Net earned premiums                                                                  2,706         -   
Investment return (non-banking)                                                      3,422         -   
Banking interest and similar income                                                    116     2,941   
Banking trading, investment and similar income                                           7       190   
Fee and commission income, and income from service activities                          506       919   
Other income                                                                            80        22   
Inter-segment revenues                                                                  86        11   
Total revenue                                                                        6,923     4,083   
Expenses                                                                                               
Claims and benefits (including change in insurance contract provisions)            (3,707)         -   
Reinsurance recoveries                                                                  79         -   
Net claims and benefits incurred                                                   (3,628)         -   
Change in investment contract liabilities                                          (1,208)         -   
Losses on loans and advances                                                             -     (252)   
Finance costs (including interest and similar expenses)                                  -         -   
Banking interest payable and similar expenses                                         (42)   (1,628)   
Fee and commission expenses, and other acquisition costs                             (318)       (8)   
Change in third-party interest in consolidated funds                                     -         -   
Other operating and administrative expenses                                        (1,074)   (1,387)   
Income tax attributable to policyholder returns                                       (36)         -   
Inter-segment expenses                                                                (11)      (47)   
Total expenses                                                                     (6,317)   (3,322)   
Share of associated undertakings' and joint ventures' profit after tax                  11         9   
Loss on disposal of subsidiaries, associated undertakings                                              
and strategic investments                                                 C1(c)          -         -   
Adjusted operating profit/(loss) before tax and non-controlling                                        
interests                                                                              617       770   
Income tax expense                                                           D1      (189)     (195)   
Non-controlling interests                                                             (18)     (274)   
Adjusted operating profit/(loss) after tax and non-controlling                                         
interests                                                                              410       301   
Adjusting items after tax and non-controlling interests                   C1(a)       (15)        14   
Profit/(loss) after tax from continuing operations                                     395       315   
Loss from discontinued operations after tax                                  H1          -         -   
Profit/(loss) after tax attributable to equity holders of the parent                   395       315   

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2014 was GBP1 million. Non-core operations
    also include GBP31 million relating to the disposal of Nordic in 2012 and GBP19 million relating to the disposal of US Life in 2011. Further information on discontinued
    operations is provided in note H1.

Of the total revenues, GBP2,997 million was generated in the UK (2013: GBP4,947), GBP1,029 million in the rest of Europe (2013: GBP864
million), GBP10,977 million in Southern Africa (2013: GBP13,446 million), GBP377 million in the United States (2013: GBP439 million) and GBP98
million relates to other operating segments (2013: GBP114 million).

                                                                                                 GBPm   
             Institutional                            Adjusted   Adjusting   Discontinued        IFRS   
Old Mutual           Asset           Consolidation   operating       items   and non-core      Income   
    Wealth      Management   Other     adjustments      profit   (note C1)  operations(1)   statement   
       280               -       -               -       3,209           -              -       3,209   
      (85)               -       -               -       (308)           -              -       (308)   
       195               -       -               -       2,901           -              -       2,901   
     2,493               -      28             438       6,381        (91)             14       6,304   
         -               -       -               -       3,057           -              -       3,057   
         -               -       -               -         197           -              -         197   
     1,085             422       -               9       2,941        (47)              -       2,894   
         8              11       -               1         122           -              3         125   
         2               -       2           (105)         (4)           -              4           -   
     3,783             433      30             343      15,595       (138)             21      15,478   
     (385)               -       -               -     (4,092)           -            (6)     (4,098)   
       136               -       -               -         215           -              -         215   
     (249)               -       -               -     (3,877)           -            (6)     (3,883)   
   (2,336)               -       -               -     (3,544)           -              -     (3,544)   
         -               -       -               -       (252)           -              -       (252)   
         -               -    (78)               -        (78)          24              -        (54)   
         -               -       -               -     (1,670)         (2)              -     (1,672)   
     (479)             (4)       -           (108)       (917)          58            (4)       (863)   
         -               -       -           (322)       (322)           -              -       (322)   
     (429)           (303)    (86)            (18)     (3,297)       (241)           (10)     (3,548)   
      (23)               -       -               -        (59)          59              -           -   
      (40)             (1)     (6)             105           -           -              -           -   
   (3,556)           (308)   (170)           (343)    (14,016)       (102)           (20)    (14,138)   
         -               6       -               -          26           -              -          26   
         -               -       -               -           -         (2)              -         (2)   
       227             131   (140)               -       1,605       (242)              1       1,364   
      (48)            (29)      22               -       (439)        (23)              -       (462)   
         -             (6)       -               -       (298)          28              -       (270)   
       179              96   (118)               -         868       (237)              1         632   
     (216)            (19)     (1)               -       (237)         237              -           -   
      (37)              77   (119)               -         631           -              1         632   
         -               -       -               -           -           -           (50)        (50)   
      (37)              77   (119)               -         631           -           (49)         582   

B3: Adjusted operating profit statement - segment information for the year ended 31 December 2013 

                                                                                    Emerging             
                                                                            Notes    Markets   Nedbank   
Revenue                                                                                                  
Gross earned premiums                                                          B2      3,365         -   
Outward reinsurance                                                                    (230)         -   
Net earned premiums                                                                    3,135         -   
Investment return (non-banking)                                                        5,184         -   
Banking interest and similar income                                                        -     3,050   
Banking trading, investment and similar income                                             -       195   
Fee and commission income, and income from service activities                            552     1,048   
Other income                                                                              39        31   
Inter-segment revenues                                                                    61        11   
Total revenue                                                                          8,971     4,335   
Expenses                                                                                                 
Claims and benefits (including change in insurance contract provisions)              (5,061)         -   
Reinsurance recoveries                                                                   201         -   
Net claims and benefits incurred                                                     (4,860)         -   
Change in investment contract liabilities                                            (1,952)         -   
Losses on loans and advances                                                              -     (368)   
Finance costs (including interest and similar expenses)                                    -         -   
Banking interest payable and similar expenses                                              -   (1,616)   
Fee and commission expenses, and other acquisition costs                               (341)      (12)   
Change in third-party interest in consolidated funds                                       -         -   
Other operating and administrative expenses                                          (1,165)   (1,495)   
Income tax attributable to policyholder returns                                         (62)         -   
Inter-segment expenses                                                                  (11)      (49)   
Total expenses                                                                       (8,391)   (3,540)   
Share of associated undertakings' and joint ventures' profit after tax                    14         2   
Loss on disposal of subsidiaries, associated undertakings                                                
and strategic investments                                                   C1(c)          -         -   
Adjusted operating profit/(loss) before tax and non-controlling interests                594       797   
Income tax expense                                                             D1      (155)     (200)   
Non-controlling interests                                                               (16)     (282)   
Adjusted operating profit/(loss) after tax and non-controlling interests                 423       315   
Adjusting items after tax and non-controlling interests                     C1(a)       (84)        12   
Profit/(loss) after tax from continuing operations                                       339       327   
Profit from discontinued operations after tax                                  H1          -         -   
Profit/(loss) after tax attributable to equity holders of the parent                     339       327   

(1) Non-core operations relate to Old Mutual Bermuda. Old Mutual Bermuda profit after tax for the year ended 31 December 2013 was GBP32 million. Non-core
    operations also include a net gain of GBP3 million divestment cost and additional proceeds received in relation to the Nordic business sold in 2012. Further information
    on discontinued operations is provided in note H1.

                                                                                                 GBPm   
             Institutional                            Adjusted   Adjusting   Discontinued        IFRS   
Old Mutual           Asset           Consolidation   operating       items   and non-core      Income   
    Wealth      Management   Other     adjustments      profit   (note C1)  operations(1)   statement   
       336               -       -               -       3,701           -              -       3,701   
      (87)               -       -               -       (317)           -              -       (317)   
       249               -       -               -       3,384           -              -       3,384   
     4,159               -      68             634      10,045        (94)             35       9,986   
         -               -       -               -       3,050           -              -       3,050   
         -               -       -               -         195           -              -         195   
     1,173             381       -               8       3,162        (67)              -       3,095   
        21               3     (2)               2          94           -              6         100   
         1               -       8            (92)        (11)           -             11           -   
     5,603             384      74             552      19,919       (161)             52      19,810   
     (347)               -       -               -     (5,408)           -            (2)     (5,410)   
        45               -       -               -         246           -              -         246   
     (302)               -       -               -     (5,162)           -            (2)     (5,164)   
   (3,921)               -       -               -     (5,873)           -              -     (5,873)   
         -               -       -               -       (368)           -              -       (368)   
         -               -    (92)               -        (92)          11              -        (81)   
         -               -       -               -     (1,616)           -              -     (1,616)   
     (622)             (4)       -            (70)     (1,049)          78            (5)       (976)   
         -               -       -           (564)       (564)           -              -       (564)   
     (408)           (274)    (78)            (10)     (3,430)       (210)           (13)     (3,653)   
     (112)               -       -               -       (174)         174              -           -   
      (21)               -    (11)              92           -           -              -           -   
   (5,386)           (278)   (181)           (552)    (18,328)          53           (20)    (18,295)   
         -               5       -               -          21           -              -          21   
         -               -       -               -           -         (4)              -         (4)   
       217             111   (107)               -       1,612       (112)             32       1,532   
      (40)            (27)     (2)               -       (424)       (128)              -       (552)   
         -               -       -               -       (298)          20              -       (278)   
       177              84   (109)               -         890       (220)             32         702   
     (139)            (30)      21               -       (220)         220              -           -   
        38              54    (88)               -         670           -             32         702   
         -               -       -               -           -           -              3           3   
        38              54    (88)               -         670           -             35         705   

B4: Statement of financial position – segment information at 31 December 2014 

                                                                        Emerging             
                                                                Notes    Markets   Nedbank   
Assets                                                                                       
Goodwill and other intangible assets                                         275       452   
Mandatory reserve deposits with central banks                                  -       829   
Property, plant and equipment                                                304       432   
Investment property                                                        1,290         7   
Deferred tax assets                                                           87        17   
Investments in associated undertakings and joint ventures                     61       426   
Deferred acquisition costs                                                   100         -   
Reinsurers' share of policyholder liabilities                                132         7   
Loans and advances                                                           909    33,773   
Investments and securities                                                29,584     6,359   
Current tax receivable                                                        11        16   
Trade, other receivables and other assets                                    622       585   
Derivative financial instruments                                             239       849   
Cash and cash equivalents                                                  1,024       741   
Non-current assets held for sale                                   H2        155         1   
Inter-segment assets                                                         644       305   
Total assets                                                              35,437    44,799   
Liabilities                                                                                  
Long-term business insurance policyholder liabilities                      9,276       232   
Investment contract liabilities                                           19,956       653   
Property & casualty liabilities                                              319         -   
Third-party interests in consolidated funds                                    -         -   
Borrowed funds                                                     E1        420     1,833   
Provisions and accruals                                                      198         1   
Deferred revenue                                                              22         -   
Deferred tax liabilities                                                     203        42   
Current tax payable                                                          107         7   
Trade, other payables and other liabilities                                1,845       790   
Amounts owed to bank depositors                                              385    35,858   
Derivative financial instruments                                             286       843   
Non-current liabilities held for sale                              H2          -         -   
Inter-segment liabilities                                                    384       615   
Total liabilities                                                         33,401    40,874   
Net assets                                                                 2,036     3,925   
Equity                                                                                       
Equity attributable to equity holders of the parent                        1,929     2,067   
Non-controlling interests                                                    107     1,858   
Ordinary shares                                              F1(b)(i)        107     1,586   
Preferred securities                                        F1(b)(ii)          -       272   
Total equity                                                               2,036     3,925   

The net assets of Emerging Markets are stated after eliminating investments in Group equity and debt instruments of GBP227 million (2013:
GBP302 million) held in policyholder funds. These include investments in the Company's ordinary shares, subordinated liabilities and preferred
securities issued by the Group's banking subsidiary Nedbank Limited.  

                                                                     GBPm   
             Institutional                                                  
Old Mutual           Asset           Consolidation     Non-core             
    Wealth      Management   Other     adjustments   operations     Total   
     1,197             839       -               -            -     2,763   
         -               -       -               -            -       829   
        13              16       -               -            -       765   
         -               -       -             381            -     1,678   
         6             172       -               -            1       283   
         -              21      10               -            -       518   
       746              16       -               -            -       862   
     2,175               -       -               -            -     2,314   
       175               -       -               -            -    34,857   
    46,631              40     554           4,038          341    87,547   
        64               1       -               -            -        92   
       385             134      36             302          298     2,362   
         -               -      71              60            8     1,227   
       689             130     696           1,639           25     4,944   
     1,319               -       -               -            -     1,475   
       154               -     321         (1,615)          191         -   
    53,554           1,369   1,688           4,805          864   142,516   
       291               -       -               -          720    10,519   
    48,188               -       -               -           44    68,841   
         -               -       -               -            -       319   
         -               -       -           5,986            -     5,986   
         -             114     677               -            -     3,044   
        40               3      42               -            -       284   
       308               -       -               -            -       330   
       190               -      19               -            -       454   
        35               3      37               -            -       189   
       913             278      76             364           10     4,276   
         -               -       -               -            -    36,243   
         -               -       1              70            1     1,201   
     1,285               -       -               -            -     1,285   
       179             144     293         (1,615)            -         -   
    51,429             542   1,145           4,805          775   132,971   
     2,125             827     543               -           89     9,545   
     2,125             653     543               -           89     7,406   
         -             174       -               -            -     2,139   
         -             174       -               -            -     1,867   
         -               -       -               -            -       272   
     2,125             827     543               -           89     9,545   


B4: Statement of financial position – segment information at 31 December 2013 

                                                                        Emerging             
                                                                Notes    Markets   Nedbank   
Assets                                                                                       
Goodwill and other intangible assets                                         134       446   
Mandatory reserve deposits with central banks                                  -       759   
Property, plant and equipment                                                303       391   
Investment property                                                        1,443        11   
Deferred tax assets                                                          104        11   
Investments in associated undertakings and joint ventures                     76        63   
Deferred acquisition costs                                                   107         -   
Reinsurers' share of policyholder liabilities                                174        11   
Loans and advances                                                           255    33,145   
Investments and securities                                                28,592     5,387   
Current tax receivable                                                        12        32   
Trade, other receivables and other assets                                    713       585   
Derivative financial instruments                                             349       791   
Cash and cash equivalents                                                    702     1,196   
Non-current assets held for sale                                   H2          -         -   
Inter-segment assets                                                         635        77   
Total assets                                                              33,599    42,905   
Liabilities                                                                                  
Long-term business insurance policyholder liabilities                      9,467       191   
Investment contract liabilities                                           18,576       661   
Property & casualty liabilities                                              332         -   
Third-party interests in consolidated funds                                    -         -   
Borrowed funds                                                     E1        187     1,813   
Provisions and accruals                                                      133       (1)   
Deferred revenue                                                              18         -   
Deferred tax liabilities                                                     182        34   
Current tax payable                                                          125        17   
Trade, other payables and other liabilities                                1,932       873   
Amounts owed to bank depositors                                              280    34,083   
Derivative financial instruments                                             466       974   
Non-current liabilities held for sale                              H2          -         -   
Inter-segment liabilities                                                    197       567   
Total liabilities                                                         31,895    39,212   
Net assets                                                                 1,704     3,693   
Equity                                                                                       
Equity attributable to equity holders of the parent                        1,654     1,976   
Non-controlling interests                                                     50     1,717   
Ordinary shares                                              F1(b)(i)         50     1,452   
Preferred securities                                        F1(b)(ii)          -       265   
Total equity                                                               1,704     3,693   

                                                                     GBPm   
             Institutional                                                  
Old Mutual           Asset           Consolidation     Non-core             
    Wealth      Management   Other     adjustments   operations     Total   
     1,461             794       -               -            -     2,835   
         -               -       -               -            -       759   
        12              15       1               -            -       722   
         -               -       -             357            -     1,811   
        20             167       -               -            1       303   
         -              19      10               -            -       168   
     1,094              10       -               -            -     1,211   
     1,690               -       -               -            -     1,875   
       183               -       -               -            -    33,583   
    49,868              33     378           3,502          460    88,220   
        84               -       -               -            -       128   
       426             113      43             351          352     2,583   
         -               -      62              49            8     1,259   
       687             117     457           1,667           43     4,869   
         5               -       -               -            -         5   
        93              21     976         (2,083)          281         -   
    55,623           1,289   1,927           3,843        1,145   140,331   
     1,613               -       -               -          855    12,126   
    49,714               -       -               -           64    69,015   
         -               -       -               -            -       332   
         -               -       -           5,478            -     5,478   
         -               2     642               -            -     2,644   
        32               2      29               -            -       195   
       610               -       -               -            -       628   
       254               -      21               -            -       491   
        52               3      40               -            -       237   
       786             248      40             412            9     4,300   
         7               -       -               -            -    34,370   
         -               -       -              36            2     1,478   
         -               -       -               -            -         -   
       312             487     520         (2,083)            -         -   
    53,380             742   1,292           3,843          930   131,294   
     2,243             547     635               -          215     9,037   
     2,243             547     635               -          215     7,270   
         -               -       -               -            -     1,767   
         -               -       -               -            -     1,502   
         -               -       -               -            -       265   
     2,243             547     635               -          215     9,037   

C: Other key performance information
C1: Operating profit adjusting items

(a) Summary of adjusting items for determination of adjusted operating profit (AOP)
In determining the AOP of the Group for core operations, certain adjustments are made to profit before tax to reflect the directors' view of the
underlying long-term performance of the Group. The following table shows an analysis of those adjustments from AOP to profit before and after tax.

                                                                                                          GBPm   
                                                                                      Year ended    Year ended   
                                                                                     31 December   31 December   
                                                                             Notes          2014          2013   
(Expense)/income                                                                                                 
Goodwill impairment and impact of acquisition accounting                     C1(b)         (128)         (141)   
Loss on disposal of subsidiaries, associated undertakings and                                                    
strategic investments                                                        C1(c)           (2)           (4)   
Short-term fluctuations in investment return                                 C1(d)          (49)             6   
Investment return adjustment for Group equity and debt instruments held in                                       
life funds                                                                   C1(e)          (42)         (100)   
Dividends declared to holders of perpetual preferred callable securities     C1(f)            32            42   
Institutional Asset Management equity plans                                  C1(g)          (42)          (38)   
Credit-related fair value losses on Group debt instruments                   C1(h)          (10)          (31)   
Restructuring costs                                                          C1(i)          (60)          (20)   
Total adjusting items                                                                      (301)         (286)   
Tax on adjusting items                                                       D1(d)            36            46   
Non-controlling interest in adjusting items                                                   28            20   
Total adjusting items after tax and non-controlling interests                              (237)         (220)   

(b) Goodwill impairment and impact of acquisition accounting
When applying acquisition accounting, deferred acquisition costs and deferred revenues existing at the point of acquisition are not recognised under
IFRS. These are reversed on acquisition in the statement of financial position and replaced by goodwill, other intangible assets and the value of the
acquired present value of in-force business (acquired PVIF). In determining AOP, the Group recognises deferred revenue and acquisition costs and
deferred revenue in relation to policies sold by acquired businesses pre-acquisition. The Group excludes the impairment of goodwill, the
amortisation and impairment of acquired other intangibles and acquired PVIF as well as the movements in certain acquisition date provisions. Costs
incurred on completed acquisitions are also excluded from AOP. If the intangible assets recognised as a result of a business combination are
subsequently impaired, this is excluded from AOP. The effect of these adjustments to determine AOP are summarised below:

                                                                               GBPm   
                                                      Emerging   Old Mutual           
Year ended 31 December 2014                            Markets       Wealth   Total   
Amortisation of acquired PVIF                              (3)         (67)    (70)   
Amortisation of acquired deferred costs and revenue          -           11      11   
Amortisation of other acquired intangible assets           (7)         (47)    (54)   
Change in acquisition date provisions                        -          (1)     (1)   
Impairment of goodwill and other intangible assets           -         (14)    (14)   
                                                          (10)        (118)   (128) 
  
                                                                               GBPm   
                                                      Emerging   Old Mutual           
Year ended 31 December 2013                            Markets       Wealth   Total   
Amortisation of acquired PVIF                                -         (76)    (76)   
Amortisation of acquired deferred costs and revenue          -           11      11   
Amortisation of other acquired intangible assets           (2)         (46)    (48)   
Impairment of goodwill and other intangible assets         (8)         (20)    (28)   
                                                          (10)        (131)   (141)   

(c) Loss on disposal of subsidiaries, associated undertakings and strategic investments
Loss on disposal of subsidiaries, associated undertakings and strategic investments is analysed below: 

                                                                                 GBPm   
                                                             Year ended    Year ended   
                                                            31 December   31 December   
                                                                   2014          2013   
Emerging Markets                                                     66             -   
Old Mutual Wealth                                                  (70)             -   
Institutional Asset Management                                        2           (4)   
Loss on disposal of subsidiaries, associated undertakings                               
and strategic investments                                           (2)           (4)   

Emerging Markets
On 30 April 2014, following the termination of the management agreement with SA Corporate Real Estate Fund, a JSE listed real estate trust, the
Group agreed to sell and transfer the business to the new manager once the transaction became unconditional. A profit of GBP4 million has been
recognised in profit or loss.

On 1 September 2014, the Group completed the acquisition of an additional 25% stake in Old Mutual Finance (Pty) Ltd. The accounting related to
the step up in ownership from 50% to 75% effectively involved a simultaneous sale of 50% of the business, followed by an acquisition of the fair
value of 75% of the business. Consequently a profit of GBP62 million has been realised on the transaction, calculated as the difference between the
fair value of the initial 50% and the carrying amount of the investment in Old Mutual Finance (Pty) Ltd at 1 September 2014.

Old Mutual Wealth
On 30 May 2014, the Group completed the disposal of Skandia Poland, part of Old Mutual Wealth. A loss on disposal of GBP21 million has been
recognised in profit or loss.

On 1 October 2014, the Group announced that it had completed the sale of Skandia Austria and Skandia Germany. A loss on disposal of GBP43
million has been recognised in profit or loss.

On 6 November 2014, the Group completed the sale Skandia Liechtenstein. A loss on disposal of GBP6 million has been recognised in profit of
loss.

Institutional Asset Management
During the year ended 31 December 2014, the Group received additional earn-out income of GBP2 million from affiliates disposed of in the prior
year.

On 2 January 2013, the Group completed the sale of five of its affiliates and recognised a loss of GBP1 million.

On 11 October 2013, Institutional Asset Management committed to a plan to cease the operations of Echo Point. The incremental cost of GBP3
million associated with discontinuing the entity was recognised in full during October 2013.

(d) Short-term fluctuations in investment return
Profit before tax, as disclosed in the consolidated IFRS income statement, includes actual investment returns earned on the shareholder assets of
the Group's life assurance and property & casualty businesses. AOP is stated after recalculating shareholder asset investment returns based on a
long-term investment return rate. The difference between the actual and the long-term investment returns is referred to as the short-term fluctuation
in investment return.

Long-term rates of return are based on achieved rates of return appropriate to the underlying asset base, adjusted for current inflation expectations,
default assumptions, costs of investment management and consensus economic investment forecasts. The underlying rates are principally derived
with reference to 10-year government bond rates, cash and money market rates and an explicit equity risk premium for South African businesses.
The rates set out below reflect the apportionment of underlying investments in cash deposits, money market instruments and equity assets. Long-
term rates of return are reviewed frequently by the Board, usually annually, for appropriateness. The review of the long-term rates of return seeks to
ensure that the returns credited to AOP are consistent with the actual returns expected to be earned over the long-term.

For Emerging Markets, the return is applied to an average value of investible shareholders' assets, adjusted for net fund flows. For Old Mutual
Wealth, the return is applied to average investible assets. 

                                                     %   
                              Year ended    Year ended   
                             31 December   31 December   
Long-term investment rates          2014          2013   
Emerging Markets               7.4 - 8.0     7.4 - 8.0   
Old Mutual Wealth                    1.0           1.0   


Analysis of short-term fluctuations in investment return

                                                                                GBPm   
                                               Emerging   Old Mutual                   
Year ended 31 December 2014                     Markets       Wealth   Other   Total   
Actual shareholder investment return                 64           23      16     103   
Less: Long-term investment return                   123            5      24     152   
Short-term fluctuations in investment return       (59)           18     (8)    (49) 
  
                                                                                GBPm   
                                               Emerging   Old Mutual                   
Year ended 31 December 2013                     Markets       Wealth   Other   Total   
Actual shareholder investment return                160           22      34     216   
Less: Long-term investment return                   137           30      43     210   
Short-term fluctuations in investment return         23          (8)     (9)       6   


(e) Investment return adjustment for Group equity and debt instruments held in policyholder funds
AOP includes investment returns on policyholder investments in Group equity and debt instruments held by the Group's life funds. These include
investments in the Company's ordinary shares and the subordinated liabilities and ordinary shares issued by the Group. These investment returns
are eliminated within the consolidated income statement in arriving at profit before tax in the IFRS income statement, but are included in AOP. This
ensures consistency of treatment with the measures in the related policyholder liability. During the year ended 31 December 2014, the investment
return adjustment increased AOP by GBP42 million (year ended 31 December 2013: increase of GBP100 million).

(f) Dividends declared to holders of perpetual preferred callable securities
Dividends declared to the holders of the Group's perpetual preferred callable securities on an AOP basis were GBP32 million for the year ended 31
December 2014 (year ended 31 December 2013: GBP42 million). For the purpose of determining AOP, these are recognised in finance costs on an
accrual basis. In accordance with IFRS, the total cash distribution is recognised directly in equity.

(g) Institutional Asset Management equity plans
Institutional Asset Management has a number of long-term incentive arrangements with senior employees in its asset management affiliates.

The Group has issued put options over the equity of certain affiliates to senior affiliate employees, as part of its Institutional Asset Management
incentive schemes. The impact of revaluing these instruments is recognised in accordance with IFRS, but excluded from AOP. At 31 December 2014,
these instruments were revalued, the impact of which was a loss of GBP42 million (year ended 31 December 2013: loss of GBP38 million).

(h) Credit-related fair value losses on Group debt instruments
The widening of the credit spread on the Group's debt instruments causes the market value of these instruments to decrease, resulting in gains
being recognised in profit or loss. Conversely, if the credit spread narrows the market value of debt instruments increases causing losses to be
recognised in the consolidated income statement. In the directors' view, such movements are not reflective of the underlying performance of the
Group and will reverse over time. Therefore they have been excluded from AOP. For the year ended 31 December 2014, due to narrowing of credit
spreads, a net loss of GBP10 million was recognised (year ended 31 December 2013: net loss of GBP31 million).

(i) Old Mutual Wealth restructuring expenditure
The Old Mutual Wealth business embarked on a significant programme of operational change in 2013. This will fundamentally restructure the way
in which its UK platform business operates. Over the next two years, it will migrate certain elements of service provision to International Financial
Data Services (IFDS). Costs related to decommissioning of existing technology and service provision and the migration of service to IFDS are
excluded from AOP. These costs comprise payments to IFDS and directly attributable internal project costs and totalled GBP60 million for the year
ended 31 December 2014 (year ended 31 December 2013: GBP20 million).

C2: Earnings and earnings per share

The Group calculates earnings per share (EPS) on a number of different bases as appropriate to prevailing international, UK and South African
practices and guidance. IFRS requires the calculation of basic and diluted EPS. Adjusted operating EPS reflects earnings per share that is
consistent with the Group's alternative profit measure. JSE Limited (JSE) listing requirements also require the Group to calculate headline EPS. The
Group's EPS on these different bases are summarised below:

                                                                                                            Pence   
                                                                                         Year ended    Year ended   
                                                                                        31 December   31 December   
                                                     Source of guidance         Notes          2014          2013   
Basic earnings per share                             IFRS                       C2(a)          12.4          15.0   
Diluted basic earnings per share                     IFRS                       C2(b)          11.5          13.9   
Adjusted operating earnings per share                Group policy               C2(c)          17.9          18.4   
Headline earnings per share (Gross of tax)           JSE Listing Requirements   C2(d)          12.3          15.6   
Headline earnings per share (Net of tax)             JSE Listing Requirements   C2(d)          12.6          15.2   
Diluted headline earnings per share (Gross of tax)   JSE Listing Requirements   C2(d)          11.4          14.4   
Diluted headline earnings per share (Net of tax)     JSE Listing Requirements   C2(d)          11.6          14.1   


(a) Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the financial period attributable to ordinary equity shareholders by the weighted
average number of ordinary shares in issue during the year excluding own shares held in policyholder funds, Employee Share Ownership Plan Trusts
(ESOP), Black Economic Empowerment trusts and other related undertakings.

The table below reconciles the profit attributable to equity holders of the parent to profit attributable to ordinary equity holders:

                                                                                                           GBPm   
                                                                                       Year ended    Year ended   
                                                                                      31 December   31 December   
                                                                                             2014          2013   
Profit for the financial period attributable to equity holders of the parent                                      
from continuing operations                                                                    632           702   
(Loss)/profit for the financial period attributable to equity holders of the parent                               
from discontinued operations                                                                 (50)             3   
Profit for the financial period attributable to equity holders of the parent                  582           705   
Dividends paid to holders of perpetual preferred callable securities,                                             
net of tax credits                                                                           (25)          (37)   
Profit attributable to ordinary equity holders                                                557           668   


Total dividends paid to holders of perpetual preferred callable securities of GBP25 million for the year ended 31 December 2014 (year ended 31
December 2013: GBP37 million) are stated net of tax credits of GBP7 million (year ended 31 December 2013: GBP10 million).

The table below summarises the calculation of the weighted average number of ordinary shares for the purposes of calculating basic earnings per
share:

                                                                                              Millions   
                                                                              Year ended    Year ended   
                                                                             31 December   31 December   
                                                                     Notes          2014          2013   
Weighted average number of ordinary shares in issue                                4,901         4,897   
Shares held in charitable foundations                                                (6)           (6)   
Shares held in ESOP trusts                                                          (50)          (55)   
Adjusted weighted average number of ordinary shares                  C2(c)         4,845         4,836   
Shares held in life funds                                                          (127)         (155)   
Shares held in Black Economic Empowerment trusts                                   (233)         (239)   
Weighted average number of ordinary shares used to calculate basic                                       
earnings per share                                                                 4,485         4,442   
Basic earnings per ordinary share (pence)                                           12.4          15.0   


(b) Diluted basic earnings per share
Diluted basic EPS recognises the dilutive impact of shares and options held in ESOP trusts and Black Economic Empowerment trusts, to the extent
they have value, in the calculation of the weighted average number of shares, as if the relevant shares were in issue for the full period.

The tables below reconcile the profit attributable to ordinary equity holders to diluted profit attributable to ordinary equity holders and summarises
the calculation of weighted average number of shares for the purpose of calculating diluted basic earnings per share:

                                                                                             Year ended    Year ended   
                                                                                            31 December   31 December   
                                                                                    Notes          2014          2013   
Profit attributable to ordinary equity holders (GBPm)                                               557           668   
Dilution effect on profit relating to share options issued by subsidiaries (GBPm)                  (10)          (10)   
Diluted profit attributable to ordinary equity holders (GBPm)                                       547           658   
Weighted average number of ordinary shares (millions)                               C2(a)         4,485         4,442   
Adjustments for share options held by ESOP trusts (millions)                                         48            45   
Adjustments for shares held in Black Economic Empowerment trusts (millions)                         233           239   
Weighted average number of ordinary shares used to calculate                                                            
diluted basic earnings per share (millions)                                                       4,766         4,726   
Diluted basic earnings per ordinary share (pence)                                                  11.5          13.9   


(c) Adjusted operating earnings per share
The following table presents a reconciliation of profit for the financial year to adjusted operating profit after tax attributable to ordinary equity holders
and summarises the calculation of adjusted operating earnings per share:

                                                                                        Year ended    Year ended   
                                                                                       31 December   31 December   
                                                                               Notes          2014          2013   
Profit for the financial period attributable to equity holders of the parent                   582           705   
Adjusting items                                                                C1(a)           301           286   
Tax on adjusting items                                                                        (36)          (46)   
Non-core operations                                                               B3           (1)          (32)   
Loss/(profit) from discontinued operations                                        H1            50           (3)   
Non-controlling interest on adjusting items                                                   (28)          (20)   
Adjusted operating profit after tax attributable to ordinary equity                                                
holders (GBPm)                                                                                 868           890   
Adjusted weighted average number of ordinary shares used to                                                        
calculate adjusted operating earnings per share (millions)                     C2(a)         4,845         4,836   
Adjusted operating earnings per share (pence)                                                 17.9          18.4   


(d) Headline earnings per share
The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Limited (JSE) Listing Requirements, determined
by reference to the South African Institute of Chartered Accountants' circular 02/2013 (Revised) 'Headline Earnings'. The table below sets out a
reconciliation of basic EPS and HEPS in accordance with that circular. Disclosure of HEPS is not a requirement of IFRS, but it is a commonly used
measure of earnings in South Africa. The table below reconciles the profit for the financial year attributable to equity holders of the parent to
headline earnings and summarises the calculation of basic HEPS:

                                                                                                                    GBPm
                                                                                            Year ended        Year ended
                                                                                      31 December 2014  31 December 2013
                                                                                   Notes   Gross     Net   Gross     Net   
Profit for the financial period attributable to equity holders of the parent                 582     582     705     705   
Dividends paid to holders of perpetual preferred callable securities                        (25)    (25)    (37)    (37)   
Profit attributable to ordinary equity holders                                               557     557     668     668   
Adjustments:                                                                                                               
Impairments of goodwill and intangible assets                                                 14      14      28      28   
Loss/(profit) on disposal of subsidiaries, associated undertakings and strategic                                           
investments                                                                                    2      14       4    (12)   
Realised gains (net of impairments) on available-for-sale financial assets                  (20)    (20)     (8)     (8)   
Headline earnings                                                                            553     565     692     676   
Dilution effect on earnings relating to share options issued                                                               
by subsidiaries (GBPm)                                                                      (10)    (10)    (10)    (10)   
Diluted headline earnings                                                                    543     555     682     666   
Weighted average number of ordinary shares (millions)                              C2(a)   4,485   4,485   4,442   4,442   
Diluted weighted average number of ordinary shares (millions)                      C2(b)   4,766   4,766   4,726   4,726   
Headline earnings per share (pence)                                                         12.3    12.6    15.6    15.2   
Diluted headline earnings per share (pence)                                                 11.4    11.6    14.4    14.1   

C3: Dividends                                                                                      
                                                                                            GBPm   
                                                                        Year ended    Year ended   
                                                                       31 December   31 December   
                                                                              2014          2013   
2012 Final dividend paid – 5.25p per 11 3/7p share                               -           238   
2013 Interim dividend paid – 2.10p per 11 3/7p share                             -            98   
2013 Final dividend paid – 6.00p per 11 3/7p share                             279             -   
2014 Interim dividend paid – 2.45p per 11 3/7p share                           115             -   
Dividends to ordinary equity holders                                           394           336   
Dividends paid to holders of perpetual preferred callable securities            32            47   
Dividend payments for the period                                               426           383   

Final and interim dividends paid to ordinary equity holders are calculated using the number of shares in issue at the record date less own shares
held in ESOP trusts, life funds of Group entities, Black Economic Empowerment trusts and related undertakings.

As a consequence of the exchange control arrangements in place in certain African territories, dividends to ordinary equity holders on the branch
registers of those countries (or, in the case of Namibia, the Namibian section of the principal register) are settled through Dividend Access Trusts
established for that purpose.

A final dividend of 6.25 pence (or its equivalent in other applicable currencies) per ordinary share in the Company has been recommended by the
directors. The final dividend will be paid on 29 May 2015 to shareholders on the register at the close of business on 17 April 2015 for the South
Africa, Zimbabwe, Namibia and Malawi registers and 22 April 2015 for the UK register. The dividend will absorb an estimated GBP293 million of
shareholders' funds. The Company is not planning to offer a scrip dividend alternative.

In March and November 2014, GBP17 million and GBP15 million respectively, were declared and paid to holders of perpetual preferred callable
securities (March 2013: GBP22 million, November 2013: GBP25 million). 

D: Other income statement notes
D1: Income tax expense

(a) Analysis of total income tax expense 

                                                                                                        GBPm   
                                                                                    Year ended    Year ended   
                                                                                   31 December   31 December   
                                                                                          2014          2013   
Current tax                                                                                                    
United Kingdom                                                                              19           (3)   
Overseas tax                                                                                                   
- Africa                                                                                   336           407   
- Europe                                                                                    32            19   
- Rest of the world                                                                          5             7   
Withholding taxes                                                                           16            16   
Adjustments to current tax in respect of prior years                                        31          (25)   
Total current tax                                                                          439           421   
Deferred tax                                                                                                   
Origination and reversal of temporary differences                                           43           142   
Effect on deferred tax of changes in tax rates                                               -          (15)   
Recognition of previously unrecognised deferred tax assets                                   -             1   
Adjustments to deferred tax in respect of prior years                                     (20)             3   
Total deferred tax                                                                          23           131   
Total income tax expense                                                                   462           552   
(b) Reconciliation of total income tax expense                                                                 
                                                                                                        GBPm   
                                                                                    Year ended    Year ended   
                                                                                   31 December   31 December   
                                                                                          2014          2013   
Profit before tax                                                                        1,364         1,532   
Tax at UK standard rate of 21.5% (2013: 23.25%)                                            293           356   
Different tax rate or basis on overseas operations                                          95            57   
Untaxed and low taxed income                                                              (56)          (76)   
Disallowable expenses                                                                       67            35   
Net movement on deferred tax assets not recognised                                           7            31   
Effect on deferred tax of changes in tax rates                                               -          (15)   
Withholding taxes                                                                            8            10   
Income tax attributable to policyholder returns                                             46           133   
Tax on Group equity held in life funds                                                       -            21   
Other                                                                                        2             -   
Total income tax expense                                                                   462           552   
(c) Income tax relating to components of other comprehensive income                                            
                                                                                                        GBPm   
                                                                                    Year ended    Year ended   
                                                                                   31 December   31 December   
                                                                                          2014          2014   
Preferred perpetual callable securities                                                    (7)          (10)   
Measurement gains on defined benefit plans                                                   1            22   
Income tax on items that will not be reclassified subsequently to profit or loss           (6)            12   
Income tax on items that may be reclassified subsequently to profit or loss                  5           (2)   
Income tax (credit)/expense relating to components of other comprehensive income           (1)            10   

(d) Reconciliation of income tax expense in the IFRS income statement to income tax on adjusted operating profit 

                                                                                                       GBPm   
                                                                                   Year ended    Year ended   
                                                                                  31 December   31 December   
                                                                                         2014          2013   
Income tax expense                                                                        462           552   
Tax on adjusting items                                                                                        
Goodwill impairment and impact of acquisition accounting                                   15            26   
(Loss)/profit on disposal of subsidiaries, associates and strategic investments          (11)            16   
Short-term fluctuations in investment return                                                6           (2)   
Tax on dividends declared to holders of perpetual preferred callable securities                               
recognised in equity                                                                      (7)          (10)   
Institutional Asset Management equity plans                                                20            11   
Restructuring costs                                                                        13             5   
Total tax on adjusting items                                                               36            46   
Income tax attributable to policyholders returns                                         (59)         (174)   
Income tax on adjusted operating profit                                                   439           424   

E: Financial assets and liabilities
E1: Borrowed funds

                                                                                                                  GBPm   
                                                                                  At                                At   
                                                        Non-             31 December      Non-             31 December   
                                             Notes   banking   Banking          2014   banking   Banking          2013   
Senior debt securities and term loans                    112     1,264         1,376       113     1,166         1,279   
Floating rate notes                       E1(a)(i)         -       563           563         -       673           673   
Fixed rate notes                         E1(a)(ii)       112       576           688       113       478           591   
Term loans                              E1(a)(iii)         -       125           125         -        15            15   
Revolving credit facilities                  E1(b)       114        72           186         -         -             -   
Mortgage-backed securities                   E1(c)         -        52            52         -        65            65   
Subordinated debt securities                 E1(d)       788       642         1,430       703       597         1,300   
Borrowed funds                                         1,014     2,030         3,044       816     1,828         2,644   
Other instruments treated as                                                                                             
equity for accounting                                                                                                    
purposes                                                                                                                 
EUR374 million perpetual preferred                                                                                         
callable securities at 5.00%                             253                               253                           
GBP273 million perpetual preferred                                                                                       
callable securities as 6.40%                             273                               273                           
Total: Book value                                      1,540                             1,342                           
Nominal value of the above                             1,512                             1,370                           

The table below is a maturity analysis of the liability cash flows based on contractual maturity dates for borrowed funds. Maturity analysis is
undiscounted and based on year-end exchange rates.

                                                                                                         GBPm   
                                                                         At                                At   
                                               Non-             31 December      Non-             31 December   
                                            banking   Banking          2014   banking   Banking          2013   
Less than 1 year                                392       633         1,025        98       392           490   
Greater than 1 year and less than 5 years       555     1,738         2,293       751     1,734         2,485   
Greater than 5 years                          1,116       302         1,418     1,099       242         1,341   
Total                                         2,063     2,673         4,736     1,948     2,368         4,316   

(a) Senior debt securities and term loans
(i) Floating rate notes (net of group holdings)

                                                                                                GBPm   
                                                                                    At            At   
                                                                           31 December   31 December   
                                                           Maturity date          2014          2013   
Banking - Floating rate unsecured senior debt                                                          
R2,563 million at JIBAR + between 0.94% to 1.05%                  Repaid             -           138   
R1,297 million at JIBAR + 1.00%                            February 2015            72            75   
R1,027 million at JIBAR + 1.75%                               April 2015            57            60   
R250 million at JIBAR + 1.00%                                August 2015            14            14   
R1,044 million at JIBAR + 2.20%                           September 2015            59            61   
R677 million at JIBAR + 1.25%                                 March 2016            38            39   
R3,056 million at JIBAR + 0.8%                                 July 2016           169           176   
R694 million at JIBAR + 0.75%                              November 2016            39            40   
R405 million at JIBAR + 1.30%                              February 2017            23            23   
R1,035 million at JIBAR + 0.85%                               March 2017            58             -   
R786 million at JIBAR + 1.30%                                August 2017            39            42   
R806 million at JIBAR + 0.9%                                   June 2017            45             -   
R241 million at JIBAR + 1.12%                              November 2017            14             -   
R80 million at JIBAR + 2.15%                                  April 2020             5             5   
R650 million at JIBAR + 1.3%                                   June 2021            36             -   
                                                                                   668           673   
Less: floating rate notes held by other Group companies                          (105)             -   
Total floating rate notes                                                          563           673   

All floating rate notes are non-qualifying for the purposes of regulatory tiers of capital. 

(ii) Fixed rate notes (net of Group holdings) 

                                                                                                                                GBPm   
                                                                                                                    At            At   
                                                                                                           31 December   31 December   
                                                                                           Maturity date          2014          2013   
Banking - Fixed rate unsecured senior debt                                                                                             
R450 million at 8.39%                                                                             Repaid             -            26   
R478 million at 9.68%                                                                         April 2015            27            28   
R3,244 million at 10.55%                                                                  September 2015           186           192   
R1,137 million at 9.36%                                                                       March 2016            65            67   
R151 million at 6.91%                                                                          July 2016             9             9   
R1,273 million at 11.39%                                                                  September 2019            77            80   
R1,888 million at 8.92%                                                                    November 2020           106           109   
R855 million at 9.38%                                                                         March 2021            49             -   
R500 million at 9.29%                                                                          June 2021            28             -   
R391 million at 9.73%                                                                         March 2024            22             -   
R660 million at zero coupon                                                                 October 2024            15            14   
                                                                                                                   584           525   
Less: Fixed rate notes held by other Group companies                                                               (8)          (47)   
Banking fixed rate unsecured senior debt (net of Group holdings)                                                   576           478   
Non-banking                                                                                                                            
USD2 million secured senior debt at 5.23%                                                           Repaid             -             1   
GBP112 million eurobond at 7.125%                                                           October 2016           112           112   
                                                                                                                   112           113   
Total fixed rate notes                                                                                             688           591   
All fixed rate notes are non-qualifying for the purpose of regulatory tiers of capital.                                                

(iii) Term loans                                                                  
                                                                           GBPm   
                                                               At            At   
                                                      31 December   31 December   
                                      Maturity date          2014          2013   
Banking - Floating rate loans                                                     
R1,500 million at JIBAR + 2.95%         August 2017            84             -   
Banking - Fixed rate loans                                                        
USD4 million at 9.5%                         Repaid             -             6   
USD6 million at 8%                      August 2017             4             -   
USD19 million at 8%                  September 2017            12             -   
USD10 million at 8%                        May 2020             7             -   
USD5 million at 11%                  September 2022             3             3   
USD10 million at 10%                  December 2023             6             6   
KES720 million at 14.00% to 14.75%     October 2015             5             -   
KES175 million at 11.70%               October 2016             1             -   
KES225 million at 11.70%                August 2017             2             -   
KES200 million at 5.00%                   July 2022             1             -   
Total term loans and other loans                              125            15   

These term loans are used to fund the lending operations of the Emerging Markets banking businesses.

(b) Revolving credit facilities 

                                                                                                                  GBPm   
                                                                                                      At            At   
                                                                                             31 December   31 December   
                                                                             Maturity date          2014          2013   
Banking                                                                                                                  
R1,000 million drawn of a R1,200 million facility at 3 month JIBAR + 2.95%     August 2017            44             -   
R500 million fully drawn at 3 month JIBAR + 3.1%                              October 2019            28             -   
                                                                                                      72             -   
Non-banking                                                                                                              
USD177 million drawn of a USD350 million facility at USD LIBOR + 1.5%         October 2019           114             -   
Total revolving credit facilities                                                                    186             -   

The Group also has access to a GBP800 million (2013: GBP800 million) five-year multi-currency revolving credit facility which matures in August
2019, with an optional further one year extension at both the first and second year anniversary. At 31 December 2014 and 31 December 2013,
none of this facility was drawn and there were no irrevocable letters of credit in issue against this facility.

(c) Mortgage-backed securities (net of Group holdings) 

                                                                                                                 GBPm   
                                                                                                     At            At   
                                                                                            31 December   31 December   
                                                                   Tier     Maturity date          2014          2013   
Banking                                                                                                                 
R480 million (class A1) at JIBAR + 1.10%                         Tier 2   25 October 2039             2            13   
R336 million (class A2) at JIBAR + 1.25%                         Tier 2   25 October 2039            19            20   
R900 million (class A3) at JIBAR + 1.54%                         Tier 2   25 October 2039            51            52   
R110 million (class B) at JIBAR + 1.90%                          Tier 2   25 October 2039             6             6   
                                                                                                     78            91   
Less: Mortgage backed securities held by other Group companies                                     (26)          (26)   
Total mortgage-backed securities                                                                     52            65   

(d) Subordinated debt securities (net of Group holdings) 

                                                                                                                                 GBPm
                                                                                                                     At            At
                                                                                                Maturity    31 December   31 December
                                                                                  Tier              date           2014          2013
Banking
R1,700 million at 8.90%                                                         Tier 2            Repaid              -           101
R1,265 million at JIBAR + 4.75%                                        Non-core Tier 1     November 2018             74            74
R487 million at 15.05%                                                 Non-core Tier 1     November 2018             32            32
R1,000 million at 10.54%                                                        Tier 2    September 2020             58            62
USD100 million at 3 month USD LIBOR                                   Tier 2 Secondary        March 2022             64            60
R2,000 million at JIBAR + 0.47%                                                 Tier 2         July 2022            113           116
R1,800 million at JIBAR + 2.75%                                                 Tier 2         July 2023            102           105
R1,200 million at JIBAR + 2.55%                                                 Tier 2     November 2023             67            69
R450 million at JIBAR plus 10.49%                                               Tier 2        April 2024             26             -
R1,737 million at 3 month JIBAR + 2.55%                                         Tier 2        April 2024             98             -
R300 million at JIBAR + 2.75%                                                   Tier 2        April 2024             17             -
                                                                                                                    651           619
Less: Banking subordinated debt securities held by other Group companies                                            (9)          (22)
Banking subordinated securities(1)                                                                                  642           597

Non-banking
R3,000 million at 8.92%                                                   Lower Tier 2     October 2020             167           172
GBP500 million at 8.00%                                                   Lower Tier 2        June 2021             565           531
                      
R300 million at 9.26%(2)                                                  Lower Tier 2    November 2024              17             -
                                    
R700 million at 3 month JIBAR + 2.2%(3)                                   Lower Tier 2    November 2024              39             -
                                                                                                                    788           703
Total subordinated debt securities                                                                                1,430         1,300

(1) The first call date of the R1,265 million and R487 million subordinated debt securities is November 2018. All other subordinated debt securities have a first call date
    five years before the maturity date.
(2) On 27 November 2014, Old Mutual Life Assurance Company (South Africa) Limited (OMLAC(SA)) issued R300 million Unsecured Subordinated Callable Fixed Rate
    Notes under its R10 billion Unsecured Callable Notes Programme. Interest is payable in arrears at a fixed rate of 9.255 per cent on 27 May and 27 November each
    year up to the first call date of 27 November 2019. If not called on the first call date, the rate increases to 3.3 per cent plus the relevant Government of South Africa
    benchmark rate, until the maturity date of 27 November 2024.
(3) On 27 November 2014, OMLAC(SA) also issued R700 million Unsecured Subordinated Callable Floating Rate Notes under its R10 billion Unsecured Callable Notes
    Programme. Interest is payable at a floating rate of 3 month ZAR-JIBAR + 2.2 per cent on 27 November, 27 February, 27 May and 27 August each year until 27
    November 2019. If not called on the first call date, the floating rate increases to 3 month ZAR-JIBAR + 3.3 per cent resettable quarterly, until the maturity date of 27
    November 2024.

F: Other statement of financial position notes
F1: Non-controlling interests

(a) Profit or loss
(i) Ordinary shares
The non-controlling interests share of profit for the financial year has been calculated on the basis of the Group's effective ownership of the
subsidiaries in which it does not own 100% of the ordinary equity. The principal subsidiaries where a non-controlling interest exists is Nedbank, the
Group's banking business in South Africa and OM Asset Management plc, the Group's asset management business. For the year ended 31
December 2014 the non-controlling interests attributable to ordinary shares was GBP252 million (2013: GBP259 million).

(ii) Preferred securities                                                     
                                                                       GBPm   
                                                           At            At   
                                                  31 December   31 December   
                                                         2014          2013   
Nedbank                                                                       
R3,560 million non-cumulative preference shares            18            19   

(iii) Non-controlling interests - adjusted operating profit
The following table reconciles non-controlling interests' share of profit for the financial year to non-controlling interests' share of adjusted operating
profit:

                                                                                                           GBPm   
                                                                                       Year ended    Year ended   
                                                                                      31 December   31 December   
Reconciliation of non-controlling interests' share of profit for the financial year          2014          2013   
The non-controlling interests share is analysed as follows:                                                       
Non-controlling interests – ordinary shares                                                   252           259   
Income attributable to Black Economic Empowerment trusts of listed subsidiaries                24            20   
Attributable to Institutional Asset Management equity plans                                     2             -   
Other items                                                                                     2             -   
Non-controlling interests share of adjusted operating profit                                  280           279   

The Group uses an adjusted weighted average effective ownership interests when calculating the non-controllable interest applicable to the
adjusted operating profit of its Southern African banking businesses. These reflect the legal ownership of this business following the implementation for Black
Economic Empowerment (BEE) schemes in 2005. In accordance with IFRS accounting rules the shares issued for BEE purposes are deemed to
be, in substance, options. Therefore the effective ownership interest of the minorities reflected in arriving at profit after tax in the consolidated
income statement is lower than that applied in arriving at adjusted operating profit after tax. In 2014 the increase in adjusted operating profit attributable to
non-controlling interests as a result of this was GBP24 million (2013: GBP20 million).

(b) Statement of financial position

(i) Ordinary shares                                                                                    
                                                                                                GBPm   
                                                                                    At            At   
                                                                           31 December   31 December   
Reconciliation of movements in non-controlling interests           Notes          2014          2013   
Balance at beginning of the year                                                 1,502         1,684   
Non-controlling interests' share of profit                                         252           259   
Non-controlling interests' share of dividends paid                               (127)         (117)   
Disposal of non-controlling interests in OM Asset Management plc      A2           163             -   
Acquisition of businesses                                             G2            53             -   
Net disposal of interests                                                           39            20   
Foreign exchange and other movements                                              (15)         (344)   
Balance at end of the year                                                       1,867         1,502   

(ii) Preferred securities                                                                              
                                                                                                GBPm   
                                                                                    At            At   
                                                                           31 December   31 December   
                                                                                  2014          2013   
Nedbank                                                                                                
R3,560 million non-cumulative preference shares                                    272           265   

R3,560 million R10 preference shares issued by Nedbank Limited (Nedbank), the Group's banking subsidiary. These shares are non-redeemable
and non-cumulative and pay a cash dividend equivalent to 75% of the prime overdraft interest rate of Nedbank. Preference shareholders are only
entitled to vote during periods when a dividend or any part of it remains unpaid after the due date for payment or when resolutions are proposed
that directly affect any rights attaching to the shares or the rights of the holders. Preference shareholders will be entitled to receive their dividends in
priority to any payment of dividends made in respect of any other class of Nedbank's shares. 

Preferred securities at 31 December 2014 are held at the value of consideration received less unamortised issue costs and are stated net of
securities held by Group companies. 

G: Other notes                                                                     
G1: Contingent liabilities                                                         
                                                                            GBPm   
                                                                At            At   
                                                       31 December   31 December   
                                                              2014          2013   
Guarantees and assets pledged as collateral security         1,325         2,052   
Irrevocable letters of credit                                  181           184   
Secured lending                                                455           304   
Other contingent liabilities                                     6            30   


The Group, through its South African banking business, has pledged debt securities amounting to GBP767 million (2013: GBP703 million) as
collateral for deposits received under re-purchase agreements. These amounts represent assets that have been transferred but do not qualify for
derecognition under IAS 39. These transactions are entered into under terms and conditions that are standard industry practice to securities
borrowing and lending activities.

Contingent liabilities – tax
The Revenue authorities in the principal jurisdictions in which the Group operates (South Africa, the United Kingdom and the United States)
routinely review historic transactions undertaken and tax law interpretations made by the Group The Group is committed to conducting its tax affairs
in accordance with the tax legislation of the jurisdictions in which they operate. All interpretations made by management are made with reference to
the specific facts and circumstances of the transaction and the relevant legislation.

There are occasions where the Group's interpretation of tax law may be challenged by the Revenue authorities. The financial statements include
provisions that reflect the Group's assessment of liabilities which might reasonably be expected to materialise as part of their review. The Board is
satisfied that adequate provisions have been made to cater for the resolution of tax uncertainties and that the resources required to fund such
potential settlements are sufficient.

Due to the level of estimation required in determining tax provisions amounts eventually payable may differ from the provision recognised.

South Africa
During the course of 2014 discussions have been ongoing with the South African Revenue Services (SARS) in relation to the tax treatment of
investments supporting Fixed Bond products sold by OMLAC(SA) between 2004 and 2013. SARS has submitted an assessment for amounts due.
OMLAC(SA) has appealed the assessments and discussions regarding the merits of the OMLAC(SA) treatment of these items are continuing with
SARS.

Nedbank litigation
There are a number of legal or potential claims against Nedbank Group Ltd and its subsidiary companies, the outcome of which cannot be foreseen
at present.

As previously disclosed, the largest of these potential actions are claims in the High Court against Nedbank by certain shareholders in Pinnacle
Point Group Ltd, alleging that Nedbank had a legal duty of care to them arising from a share swap transaction. In 2013 two of these claims of R147
million and of R802 million were dismissed by the North Gauteng High Court. The only claim remaining is for R355 million.

Originally these shareholders and others lodged proceedings with the Securities Regulation Panel (SRP) for an order declaring that an affected
transaction took place. The SRP ruled that no affected transaction took place. The last remaining claimant brought an application to the South
Gauteng High Court for the review of the SRP ruling. This application was dismissed with costs on 15 November 2013. The applicant filed a notice
to apply for leave to appeal this judgment, and on 16 July 2014 the Supreme Court of Appeal ruled in Nedbank's favour by refusing the application.

During 2011 further actions were instituted against Nedbank by other stakeholders for R210 million and by Absa Bank Limited for R773 million. In
both these actions Nedbank have filed exceptions against the claims. On 25 August 2014, the R210 million claim was withdrawn.

Nedbank and its legal advisers remain of the opinion that the remaining claims are ambitious, and that the remaining claimants will have great
difficulty succeeding.

Consumer protection
Old Mutual is committed to treating customers fairly and supporting its customers in meeting their lifetime goals and treating customers fairly is
central to how our businesses operate. We routinely engage with customers and regulators to ensure that we meet this commitment, but there is
the risk of regulatory intervention across various jurisdictions, giving rise to the potential for customer redress which can result in retrospective
changes to policyholder benefits, penalties or fines. The Group monitors the exposure to these actions and makes provision for the related costs as
appropriate.

G2: Businesses acquired during the year

The Group continued to expand operations in Africa and the United Kingdom through the following completed acquisitions:

                                                                            Consideration     Shares                      
Acquiree                       Country          Nature of business                 (GBPm)   acquired     Effective date   
Faulu Kenya DTM LTD            Kenya            Banking                                20        67%       1 April 2014   
Intrinsic Financial Services   United Kingdom   Financial adviser network              98       100%        1 July 2014   
Old Mutual Finance (Pty) Ltd   South Africa     Lending                                63        75%   1 September 2014   

The results from the above acquisitions have been consolidated for the 31 December 2014 financial year.

The table below sets out the consolidated assets and liabilities acquired as a result of these acquisitions:

                                                                    GBPm   
                                                 Acquirees'                
                                                   carrying                
                                                     amount   Fair value   
Assets                                                                     
Intangible assets                                         5          100   
Property, plant and equipment                            20           20   
Loans and advances                                      498          498   
Cash and cash equivalents                                75           75   
Trade, other receivables and other assets                15           15   
Total assets                                            613          708   
Liabilities                                                                
Borrowed funds                                        (335)        (335)   
Amounts owed to bank depositors                        (69)         (69)   
Deferred tax liabilities                                  -          (8)   
Trade, other payables and other liabilities           (130)        (129)   
Total liabilities                                     (534)        (541)   
Total net assets acquired                                79          167   
Total value of the business                                          322   
Consideration                                                        181   
Fair value of stake in investment already held                        88   
Non-controlling interests recognised                                  53   
Goodwill recognised                                                  155   

GBP171 million of the GBP181 million consideration was paid in cash.

Goodwill of GBP155 million has been recognised on these acquisitions. Goodwill arose on the acquisition of these businesses due to their ability to
add to the distribution footprint of the Group. These acquisitions are expected to facilitate the cross selling of Group markets into the client base of
the acquirees. A control premium of GBP19 million was paid on the acquisition of Old Mutual Finance (Pty) Ltd as it allows the full integration of the
business into the Group. The goodwill is not expected to be deductible for tax purposes. Refer to note F1 in the Annual Report and Accounts for
further analysis of the goodwill recognised.

The carrying value of assets and liabilities in the entities' statement of financial position on acquisition date approximates the fair value of these
items determined by the Group, with the exception of loans and advances and intangible assets.

The loans and advances recognised by the Group have been fair valued by GBP28 million, based on forecasted cash flows and a risk adjusted
interest rate curve, taking into account the nature of the loans and advances.

Additional intangible assets of GBP67 million have been recognised and relate to customer distribution channels (GBP41 million) and other
intangible assets (GBP26 million). The value of the intangible assets was determined by applying cash flows to standard industry valuation models.
An indemnification asset of GBP9 million has been recognised due to warranties granted by the sellers for future claims based on previous
business conducted.

Non-controlling interests of GBP53 million have been recognised as a result of the acquisition based on the full fair value of all the business
acquired. The Group has included GBP13 million in net profit attributable to equity holders of the parent since the effective date of the acquisitions
of the subsidiaries.

(b) Disposals of subsidiaries during the year
As discussed in note A2, Old Mutual Wealth disposed of a number of its European businesses during the year. The principal assets and liabilities
that were disposed of were goodwill (GBP86 million), intangible assets (GBP130 million), investments and securities (GBP4,469 million) and long-
term business policyholder liabilities (GBP4,438 million). In addition, the businesses disposed held cash of GBP76 million at the date of disposal.

G3: Events after the reporting date

Acquisition of UAP Holdings Limited
On 9 January 2015, the Group announced that it acquired a 23.3% stake in UAP Holdings Limited (UAP), an investment, retirement and insurance
group that operates in East Africa, for a consideration of KES 9 billion (GBP64 million). UAP will be treated an associated undertaking from
9 January 2015.

Subsequently, on 26 January 2015, the Group announced it acquired an additional 37.3% (second tranche) of UAP for a consideration of KES 14
billion (GBP103 million), subject to regulatory approval. The transaction will increase the Group's total holding to 60.7% and will result in the Group
consolidating UAP. The acquisition of the second tranche is expected to be completed in the first half of 2015.

Disposal of Skandia France and Luxembourg
On 2 February 2015, the Group announced that it had completed the disposal of Skandia France and Luxembourg. These businesses have been
treated as held for sale for year-end reporting purposes. Refer to note A2 for further information.

Acquisition of Quilter Cheviot
On 25 February 2015, the Group announced that it had completed the acquisition of Quilter Cheviot. The transaction was initially announced on 17
October 2014. There have been no significant changes to the terms initially announced and the Group awaits the transaction completion financial
statements of Quilter Cheviot in order to finalise its purchase price accounting.

Maturity of the Nedbank BEE schemes
The various BEE schemes that reached their maturity dates on 1 January 2015 will be rationalised through a specific repurchase of Nedbank Group
shares. The repurchased shares will not have a significant impact on the consolidated financial position of the Group and will be delisted, cancelled
and reinstated as authorised but unissued shares. Following this, the Community Trust, which matures in 2030, will subscribe for Nedbank Group
shares to maintain its shareholding in the Group.

Maturity of the Old Mutual South Africa (including Mutual & Federal) BEE schemes
The various BEE schemes that reached their maturity dates on 1 January 2015 will be concluded through the settlement of the notional loan
accounts. Furthermore, certain other schemes will reach their maturity dates on 1 May 2015 and will be concluded in a similar way. The treatment
of the shares will not have a significant impact on the consolidated financial position of the Group, however the Group expects to receive cash on
the settlement of these loans.

H: Discontinued operations and disposal groups held for sale
H1: Discontinued operations

Amounts disclosed in relation to discontinued operations relate to the sale, in 2012, of the Group's Swedish, Danish and Norwegian life businesses
(Nordic) and in 2011 of US Life. The Nordic disposal was completed on 21 March 2012 and the US Life disposal was completed on 7 April 2011.
The Group continued to incur costs directly related to the sale of these businesses relating to the transition of IT and other services, legal costs and
intellectual property.

Income statement from discontinued operations
                                                                                                    GBPm   
                                                                                Year ended    Year ended   
                                                                               31 December   31 December   
                                                                                      2014          2013   
Loss before tax from discontinued operations - trading activities (expenses)          (35)          (26)   
(Loss)/profit on disposal                                                             (19)            27   
(Loss)/profit before tax from discontinued operations                                 (54)             1   
Income tax credit                                                                        4             2   
(Loss)/profit after tax from discontinued operations                                  (50)             3   

H2: Non-current assets and liabilities

On 2 February 2015, the Group announced that it had completed the sale of Skandia France and Luxembourg, part of the Old Mutual Wealth
business. These businesses have been classified as held for sale at reporting date due to the imminence of the disposal. Total assets to the value
of GBP1,319 million (including GBP1,259 million of investments and securities), and total liabilities to the value of GBP1,285 million, (including
GBP1,263 million of long-term business policyholder liabilities) have been classified as held for sale.

A further loss of approximately GBP6 million will be reported on the disposal of the business as the proceeds received will be insufficient to recover
the net asset values of the businesses.

On 12 January 2015, the Group agreed to dispose of the remaining portion of the Menlyn Shopping Centre in South Africa for GBP156 million
(R2,800 million). This transaction is subject to Competition Commission approval and transfer by the South African Deeds Office. As part of the
transaction the Group agreed to acquire the remaining share of the Cavendish Shopping Centre for GBP61 million (R1,100 million). These assets
form part of the policyholder assets and therefore this transaction has no impact on profit or loss of the Group.

Sponsor
Merrill Lynch South Africa (Pty) Ltd 

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