RNS Number:4624Q
Irish Life & Permanent PLC
25 August 2005
Irish Life & Permanent plc
Restatement of Interim 2004 Results
Under International Financial Reporting Standards (IFRS)
and European Embedded Value (EEV)
Irish Life & Permanent today published the restatement of its preliminary
Interim 2004 results under International Financial Reporting Standards ("IFRS")
and European Embedded Value ("EEV"). The impact of the restatements is
summarised below.
ROI GAAP EEV * IFRS
Eurom Eurom Eurom
Profit after Tax
Banking 43 48 48
Life 105 112 58
Associate and other 15 22 22
Total 163 182 128
Shareholders Equity 2,170 2,136 1,643
Life New Business Contribution 24 28 -
Commenting on the restatements Group Finance Director Peter Fitzpatrick said
"today's release continues our programme of providing the market with
comprehensive information on the impact of the changes in accounting rules and
practices on our reported financial results. Following the detailed restatement
and explanation of our 2004 full year results on both an EEV and IFRS basis in
July, we are now providing restated figures for the first half of 2004. This
restatement provides the comparative numbers against which our Interim 2005
results - to be announced on September 7th next - will be measured".
Full details of the restatements are set out in the attached documents, which
form part of this announcement.
"Transition to IFRS - Restatement of Interim 2004 Financial Information"
"Transition to EEV - Restatement of Interim 2004 Financial Information"
To further assist users of our financial statements in better understanding our
results we are also publishing today a "Guide to Financial Reporting in Irish
Life & Permanent", based on the restated full year 2004 results. The guide is
available on the group's web site, www.irishlifepermanent.ie/ipm/ir/.
For further information contact:
Name Telephone No. Mobile No. Email address
Barry Walsh 353 1 7042678 087 681 8157 barry.walsh@irishlife.ie
Head of
Investor Relations
David McCarthy 353 1 8563050 087 256 7292 david.mccarthy@irishlife.ie
Group CFO
Media:
Ray Gordon 353 1 6788099 087 241 7373 ray@mrpakinman.ie
MRPA Kinman
Transition to IFRS
Restatement of Interim 2004 financial information
25 August 2005
Basis of preparation of Preliminary Interim 2004 comparatives
From 1 January 2005 Irish Life & Permanent plc ('the group'), together with all
other European Union listed groups, is required to prepare its consolidated
annual financial statements in accordance with International Financial Reporting
Standards ('IFRS') as adopted for use in the European Union.
IFRS brings into force phase 1 of the International Accounting Standard Board's
("IASB") insurance accounting project. In view of the phased implementation of
IFRS for insurance business, the group believes that shareholders will continue
to place considerable reliance on embedded value information relating to the
life assurance business. The IFRS preliminary interim financial information
includes insurance contracts written in the life assurance business based on
embedded value earnings calculated using the EEV principles developed by the
European CFO forum. The supplementary information published separately extends
these principles to investment contracts written in the life assurance business.
On 21 July 2005 the group issued a document which set out the accounting
policies under IFRS and the key adjustments required to restate the ROI GAAP
published financial information for the group for the year ended 31 December
2004 in accordance with the recognition and measurement principles of IFRS. This
document is available on the group's website (www.irishlifepermanent.ie).
The interim 2004 restatements have been prepared on a consistent basis with 2004
year end restatements.
The preliminary consolidated interim financial information presented comprises
the preliminary consolidated interim balance sheet as at 30 June 2004, the
preliminary consolidated interim income statement and the preliminary
consolidated interim statement of recognised income and expenses for the period
ended 30 June 2004.
The preliminary consolidated interim information has been prepared based on the
recognition and measurement requirements of the IFRS issued by the IASB and
adopted by the EU which are expected to apply at 31 December 2005. Certain IFRS
that will be effective or available for early adoption at 31 December 2005 are
still subject to change and to the issue of additional interpretations.
Previously published ROI GAAP information has been reformatted to assist in the
presentation of the IFRS information.
The IFRS preliminary interim financial information is shown on two separate
bases, the first basis ("statutory basis") shows the 2004 interim financial
information adopting all the recognition and measurement principles of the IFRS
standards in accordance with IFRS 1 with the exception of IAS 32, IAS 39 and
IFRS 4 where a deferred transitional date has been permitted by the IASB. This
concession allows the group to continue to report comparatives for areas covered
by these standards on a ROI GAAP basis for 2004 only. The second basis
("pro-forma basis") provides more meaningful comparative information by showing
the 2004 IFRS preliminary interim financial information including the impact on
the financial information of the recognition and measurement principles of IAS
32, IAS 39 and IFRS 4, with the exception of the income statement impact of
derivative hedge accounting where the necessary documentation was not in place
prior to the standard being agreed in late 2004.
Under IFRS 4, existing accounting policies continue to apply to insurance
contracts but there is an option to make improvements to accounting policies if
the resulting financial statements are more relevant to the needs of the user.
Accordingly, earnings generated on insurance contracts are prepared in
accordance with the European Embedded Value (EEV) principles issued in May 2004
by the European CFO Forum. The group has also adopted FRS 27 'Life Assurance'
which was issued by the UK Accounting Standards Board (ASB) in December 2004.
In October 2004, the EU adopted a carved out version of IAS 39 which restricted
the use of the fair value option for financial liabilities. It is expected that
recent amendments made to IAS39 will result in the EU endorsing a revised
version of IAS39 which would allow the use of the fair value option in certain
circumstances and the group would avail of this option. In the meantime the
group has followed the guidance issued which clarifies that liabilities which
under the EU insurance accounts directive were permitted to be measured at fair
value can continue to be measured on this basis.
Estimates and assumptions
Certain amounts recorded include estimates and assumptions made by management
about insurance liability reserves, investment valuations, interest rates,
demographic and other factors. Actual results may differ from the estimates
made. Where estimates had been made under ROI GAAP, consistent estimates (after
adjustments to reflect any difference in accounting policies) have been made on
transition to IFRS. Judgements affecting the group's balance sheet have not been
revisited with the benefit of hindsight.
First time adoption of IFRS
The group is required to determine its IFRS accounting policies and apply them
retrospectively to establish its opening balance sheet under IFRS. However, as
explained above, IFRS 1 "First-time Adoption of International Financial
Reporting Standards" allows a number of exemptions on adoption of IFRS for the
first time. The date of transition to IFRS for the group is 1 January 2004.
The group has taken advantage of the following exemptions as permitted by IFRS
1:
Business combinations
For business combinations before 1 January 2004 the group has elected not to
apply the provisions of IFRS 3 "Business Combinations" retrospectively.
Accordingly no adjustments have been made for historical business combinations
and accumulated amortisation on goodwill arising before 1 January 2004 has not
been reversed.
Cumulative translation differences
Cumulative translation differences of foreign operations have not been restated
on an IFRS basis. These are deemed to be zero at the date of transition.
Employee defined benefit obligations
All cumulative actuarial gains and losses have been recognised in equity at 1
January 2004, the group has adopted the corridor approach from that date
forward.
IAS 32, IAS 39 and IFRS 4
In preparing the statutory information the group has availed of the exemptions
under IAS 32, IAS 39 and IFRS 4 not to restate comparative amounts for 2004.
IFRS 2
The provisions of IFRS 2 in respect of share-based payment plans have not been
applied to options and awards granted on or before 7 November 2002 which had not
vested by 1 January 2005.
Consolidated Preliminary Interim Income Statement
Six months ended 30 June 2004
ROI GAAP as IFRS IFRS
reformatted Statutory Pro-forma
Eurom Eurom Eurom
Interest receivable 434 432 431
Interest payable (263) (259) (259)
171 173 172
Fees and commission income 23 29 29
Fees and commission expenses (21) (21) (3)
Net trading income - - -
Premiums on insurance contracts 1,402 1,373 260
Reinsurers share of premiums on insurance - - (32)
contracts
Net investment return 814 769 765
Fees from investment contracts and fund - 7 79
management
Change in shareholder value of in-force 66 125 45
business
Other income 5 5 4
Net operating income 2,460 2,460 1,319
Claims on insurance contracts (641) (587) (195)
Reinsurers share of claims on insurance - - 48
contracts
Change in insurance contracts liabilities (1,388) (1,392) (115)
Change in investment contract liabilities - (648)
Administrative and acquisition expenses (256) (234) (239)
Depreciation and amortisation
Tangible fixed assets - (15) (15)
Intangible assets - software - (4) (4)
Intangible assets - goodwill impairment/ (6) - -
amortisation
Impairment losses on loans and advances (4) (4) (5)
Taxation attributable to life assurance (9) - -
activities
Net operating expenses (2,304) (2,236) (1,173)
Tax attributable to the profit on life 8 - -
assurance activities
Operating profit 164 224 146
Share of operating profits of associated 26 22 22
undertakings
Profit on the sale of property and 2 2 2
equipment
Profit on ordinary activities before 192 248 170
taxation
Total taxation expense (28) (73) (42)
Profit for the period on continuing 164 175 128
activities
Profit on discontinued activities after - 2 1
taxation
Profit for the period 164 177 129
Minority interests share of profit (1) (1) (1)
Profit attributable to shareholders 163 176 128
Earnings per share on continuing 62.2 66.9 48.6
activities (cent)
Fully diluted earnings per share on 61.8 66.4 48.3
continuing activities (cent)
Consolidated Preliminary Interim Balance
Sheet
As at 30 June 2004
ROI GAAP as reformatted
Life IFRS IFRS
Banking Assurance Total Statutory Pro-forma
Eurom Eurom Eurom Eurom Eurom
Assets
Cash and balances with central banks 136 56 192 86 86
Items in course of collection - - - 119 119
Loans and receivables to banks 3,667 547 4,214 5,233 5,233
Loans and receivables to customers 18,078 3 18,081 19,008 19,186
Debt securities 2,730 1,697 4,427 7,138 7,138
Equity shares - 156 156 8,843 8,843
Investment properties 24 97 121 1,632 1,632
Derivatives - - - 106 106
Interest in associated undertakings 107 - 107 112 112
Goodwill and other intangible assets - - 192 224 224
Property and equipment 213 46 259 319 319
Shareholder value of in-force business - 947 947 1,115 553
Deferred acquisition costs - - - - 173
Reinsurance assets - 1,241 1,241 1,241 1,531
Net post retirement benefit asset - - - 66 66
Other assets 49 249 298 161 161
Prepayments and accrued income 228 67 295 335 266
Assets held to cover linked liabilities - 14,159 14,159 - -
Securitised assets - mortgage assets 1,013 - 1,013 - -
Less non-recourse funding (990) - (990) - -
Total assets 25,255 19,265 44,712 45,738 45,748
Liabilities
Deposits by banks 1,894 - 1,894 2,071 2,071
Customer accounts 11,518 - 11,518 11,171 11,171
Debt securities in issue 10,441 - 10,441 10,425 10,425
Non-recourse funding - - - 990 990
Derivatives - - - 14 14
Insurance contract liabilities - 17,473 17,473 17,423 3,770
Investment contract liabilities - - - - 13,879
Outstanding insurance and investment claims - - - 118 118
Net post retirement benefit liability - - - 165 165
Current tax liabilities - - - 38 38
Deferred tax liabilities 20 - 20 171 106
Other liabilities 60 181 241 248 240
Deferred front end fees - - - - 210
Accruals and deferred income 89 31 120 120 120
Subordinated liabilities 782 - 782 782 782
Dividends 45 - 45 - -
24,849 17,685 42,534 43,736 44,099
Shareholders' Equity
Share capital 86 86 86
Share premium 52 52 52
Retained profits 2,000 1,734 1,383
Other reserves 86 122 122
2,224 1,994 1,643
Own shares held for the benefit of life assurance (54) - -
policyholders
Shareholders' equity excluding minority interest 2,170 1,994 1,643
Minority interest 8 8 6
Shareholders' equity including minority interest 2,178 2,002 1,649
Total liabilities and equity 44,712 45,738 45,748
Consolidated Preliminary Interim Statement of Recognised Income and Expenses
Six months 30 June 2004
ROI GAAP as IFRS IFRS
reformatted Statutory Pro-forma
Eurom Eurom Eurom
Net amount recognised directly in equity - - -
Profit for the period after tax 164 177 129
Total recognised income and expenses for the 164 177 129
period
Minority interests (1) (1) (1)
Attributable to equityholders 163 176 128
Movement in cost of own shares - - -
Dividends paid (45) (97) (97)
118 79 31
Summarised Preliminary Interim Segmental Analysis (Pro-forma)
Six months ended 30 June 2004
Investment & Consolidation
Banking Insurance Associate Other Adjustments Total
Eurom Eurom Eurom Eurom Eurom Eurom
Net interest receivable 171 - - - 1 172
Other non-interest income 20 - - 12 (6) 26
Net premiums on insurance - 228 - - - 228
contracts
Net investment return 1 765 - - (1) 765
Fees from investment - 66 - 7 6 79
contracts and fund
management
Change in shareholder value - 45 - - - 45
of in-force
Other income - - - 4 - 4
Net operating income 192 1,104 - 23 - 1,319
Net claims on insurance - (147) - - - (147)
contracts
Change in insurance/ - (763) - - - (763)
investment
contract liabilities
Administrative and (110) (105) - (24) - (239)
acquisition expenses
Depreciation and (12) (6) - (1) - (19)
amortisation
Impairment losses on loans (5) - - - - (5)
and advances
Net operating expenses (127) (1,021) - (25) - (1,173)
Operating profit 65 83 - (2) - 146
Share of operating profits of - 22 - - 22
associated undertakings
Profit on the sale of - - - 2 - 2
property and equipment
Profit on ordinary 65 83 22 - - 170
activities before taxation
Total taxation expense (17) (25) - - - (42)
Profit for the period on 48 58 22 - - 128
continuing activities
Profit on discontinued - 1 - - - 1
activities after taxation
Minority interests share of - (1) - - - (1)
profit
Profit attributable to 48 58 22 - - 128
shareholders
Special purpose review report of KPMG to Irish Life & Permanent plc ("the
Company") on it Preliminary International Financial Reporting Standards ("IFRS")
Interim Financial Information
Introduction
In accordance with the terms of our engagement letter we have reviewed the
following items (together they are referred to as the "preliminary IFRS interim
financial information") set out on pages 1 to 5 and which have been prepared in
accordance with the IFRS measurement and recognition principles:
* the consolidated preliminary IFRS balance sheet of Irish Life & Permanent
plc and subsidiary undertakings the Group") as at 30 June 2004, together
with the consolidated preliminary IFRS income statement and the
consolidated preliminary IFRS statement of recognised income and expenses
for the period then ended;
* the consolidated preliminary proforma IFRS balance sheet as at 30 June 2004
together with the consolidated preliminary proforma IFRS income statement
and the consolidated preliminary proforma IFRS statement of recognised
income and expenses for the period ended 30 June 2004;
* the basis of preparation and related notes;
As described on pages 1 to 2 and as part of the Group's transition to IFRS, the
preliminary IFRS interim financial information has been prepared by the
Directors of the Company in advance of preparing the Group's first consolidated
interim report in accordance with IFRS measurement and recognition principles,
for the six month period to 30 June 2005.
Our report has been prepared for the Company solely in connection with the
Group's conversion to IFRS. Our report was designed to meet the agreed
requirements of the Company determined by the Company's needs at the time. Our
report should not therefore be regarded as suitable to be used or relied on by
any party wishing to acquire rights against us other than the Company for any
purpose or in any context. Any party other than the Company who chooses to rely
on our report (or any part of it) will do so at its own risk. To the fullest
extent permitted by law, KPMG will accept no responsibility or liability in
respect of our report to any other party.
Directors' responsibilities
The Directors of the Company have accepted responsibility for the preparation of
the preliminary IFRS interim financial information which has been prepared as
part of the Group's conversion to IFRS. As explained in the basis of preparation
note on pages 1 to 2 the preliminary IFRS interim financial information has been
prepared on the basis of the recognition and measurement criteria of the IFRS in
issue that are either adopted by the EU and effective, or are expected to be
adopted and effective (or available for early adoption) at 31 December 2005.
As disclosed in basis of preparation note on pages 1 to 2 of the preliminary
IFRS interim financial information, the next annual financial statements of the
Group will be prepared in accordance with IFRS adopted for use in the European
Union.
The accounting policies that have been adopted in preparing the preliminary IFRS
interim financial information are consistent with those that the Directors
currently intend to use in the next annual financial statements.
There is, however, a possibility that the directors may determine that some
changes to these policies are necessary when preparing the full annual financial
statements for the first time in accordance with those IFRS adopted for use by
the European Union. This is because, as disclosed in the basis of preparation
note, the directors have anticipated that certain standards, which have yet to
be formally adopted for use in the EU will be so adopted in time to be
applicable to the next annual financial statements.
Review work performed
Our responsibilities as independent auditors are established in Ireland by the
Auditing Practices Board, our professions ethical guidance and the terms of our
engagement. Under the terms of engagement we are required to report to you our
review conclusions as to whether we are aware of any material modifications that
should be made to the preliminary IFRS interim financial information which has
been prepared, in all material respects, in accordance with the accounting
policy notes to the preliminary IFRS interim financial information.
We conducted our review in accordance with guidance contained in Bulletin 1999/4
Review of interim financial information issued by the Auditing Practices Board
for use in Ireland and the United Kingdom. A review consists principally of
making enquiries of Group management and applying analytical procedures to the
preliminary IFRS interim financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the preliminary IFRS interim
financial information.
Emphasis of matters
Without qualifying our review conclusions, we draw your attention to the
following matters:
* The Group has prepared the preliminary IFRS interim financial information
for the six month period ended 30 June 2004 to establish comparative
figures for the Group's interim report for the six month period ended 30
June 2005. The preliminary IFRS interim financial information does not
itself include comparative financial information for the prior period.
* As explained in the basis of preparation, no adjustments have been made for
any changes in estimates made at the time of approval of the previous Irish
GAAP interim report for the six month period ended 30 June 2004 on which
the preliminary IFRS interim financial information is based, as permitted
by IFRS 1.
* IAS 32 'Financial Instruments: Disclosure and Presentation', IAS 39
'Financial Instruments: Recognition and Measurement' and IFRS 4 'Insurance
Contracts' have not been applied to the preliminary IFRS interim financial
information relating to 30 June 2004 as permitted by IFRS 1 'First-time
Adoption of International Financial Reporting Standards'. Any adjustments
will be shown as an equity movement on 1 January 2005.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the preliminary IFRS interim financial information on pages 3
to 5 which has been prepared, in all material respects, in accordance with the
basis of preparation note on pages 1 to 2, which describes how the measurement
and recognition principles of IFRS have been applied under IFRS 1, including the
assumptions made by the Directors about the standards and interpretations
expected to be effective, and the policies expected to be adopted, when they
prepare the first complete set of consolidated IFRS financial statements of the
Group for the year 31 December 2005.
Reconciliation of Preliminary Interim IFRS Statutory Basis Income Statement for
the six months ended 30 June 2004
ROI GAAP
as Discontinued Investment Property
reformatted Consolidation activities Associate property equipment
Eurom Eurom Eurom Eurom Eurom
Interest 434 (2) - - - -
receivable
Interest (263) 4 - - - -
payable
Fees and 23 6 - - - -
commission
income
Fees and (21) - - - - -
commission
expenses
Net trading - - - - - -
income
Premiums on 1,402 - (29) - - -
insurance
contracts
Reinsurers - - - - - -
share of
premiums on
insurance
contracts
Net investment 814 (21) (23) - (2) 1
return
Fees from - 7 - - - -
investment
contracts and
fund
management
Change in 66 - - - - -
shareholder
value of
in-force
Other income 5 - - - - -
Net operating 2,460 (6) (52) - (2) 1
income
Claims on (641) - 54 - - -
insurance
contracts
Reinsurers - - - - - -
share of
claims on
insurance
contracts
Change in (1,388) - (8) - - -
insurance
contracts
liabilities
Change in - - - - - -
investment
contract
liabilities
Administrative (256) 6 2 - 2 18
and
acquisition
expenses
Depreciation
and
amortisation
Tangible fixed - - - - - (19)
assets
Intangible - - - - - -
assets -
software
Intangible (6) - - - - -
assets -
goodwill
impairment/
amortisation
Impairment (4) - - - - -
losses on
*loans and
advances
Taxation (9) (1) - - - -
attributable
to life
assurance
activities
Net operating (2,304) 5 48 - 2 (1)
expenses
Tax 8 - - - - -
attributable
to the profit
on life
assurance
activities
Operating 164 (1) (4) - - -
profit
Share of 26 - - (4) - -
operating
profits of
associated
undertakings
Profit on the 2 - - - - -
sale of
property and
equipment
Profit on 192 (1) (4) (4) - -
ordinary
activities
before
taxation
Total taxation (28) 1 2 4
expense
Profit for the 164 - (2) - - -
period on
continuing
activities
Profit on - - 2 - - -
discontinued
activities
after taxation
Profit for the 164 - - - - -
period
Minority (1) - - - - -
interests
share of
profit
Profit 163 - - - - -
attributable
to shareholders
Goodwill & Pension Own IFRS
intangibles costs Taxation EEV shares Statutory
Eurom Eurom Eurom Eurom Eurom Eurom
Interest receivable - - - - - 432
Interest payable - - - - - (259)
Fees and commission - - - - - 29
income
Fees and commission - - - - - (21)
expenses
Net trading income - - - - - -
Premiums on insurance - - - - - 1,373
contracts
Reinsurers share of - - - - - -
premiums on insurance
contracts
Net investment return - - - - - 769
Fees from investment - - - - - 7
contracts and fund
management
Change in shareholder - - 49 10 - 125
value of in-force
Other income - - - - - 5
Net operating income - - 49 10 - 2,460
Claims on insurance - - - - - (587)
contracts
Reinsurers share of - - - - - -
claims on insurance
contracts
Change in insurance - - 2 - 2 (1,392)
contracts liabilities
Change in investment - - - - - -
contract liabilities
Administrative and - (6) - - - (234)
acquisition expenses
Depreciation and - - -
amortisation
Tangible fixed assets 4 - - - - (15)
Intangible assets - (4) - - - - (4)
software
Intangible assets - 6 - - - - -
goodwill impairment/
amortisation
Impairment losses on - - - - - (4)
loans and advances
Taxation attributable - - 10 - - -
to life assurance
activities
Net operating 6 (6) 12 - 2 (2,236)
expenses
Tax attributable to - - (8) - - -
the profit on life
assurance activities
Operating profit 6 (6) 53 10 2 224
Share of operating - - - - - 22
profits of associated
undertakings
Profit on the sale of - - - - - 2
property and
equipment
Profit on ordinary 6 (6) 53 10 2 248
activities before
taxation
Total taxation 1 (53) - - (73)
expense
Profit for the period 6 (5) - 10 2 175
on continuing
activities
Profit on - - - - - 2
discontinued
activities after
taxation
Profit for the period 6 (5) - 10 2 177
Minority interests - - - - - (1)
share of profit
Profit attributable 6 (5) - 10 2 176
to shareholders
Reconciliation of Preliminary Interim IFRS Pro-forma Basis Income Statement for
the six months ended 30 June 2004
IFRS Effective IFRS
Statutory Impairment interest IFRS 4 Pro-forma
Eurom Eurom Eurom Eurom Eurom
Interest receivable 432 1 (2) - 431
Interest payable (259) - - - (259)
Fees and commission income 29 - - - 29
Fees and commission expenses (21) - 18 - (3)
Net trading income - - - - -
Premiums on insurance 1,373 - - (1,113) 260
contracts
Reinsurers share of premiums on - - - (32) (32)
insurance contracts
Net investment return 769 - 1 (5) 765
Fees from investment contracts and 7 - - 72 79
fund management
Change in shareholder value 125 - - (80) 45
of in-force
Other income 5 - (1) - 4
Net operating income 2,460 1 16 (1,158) 1,319
Claims on insurance (587) - - 392 (195)
contracts
Reinsurers share of claims on - - - 48 48
insurance contracts
Change in insurance (1,392) - - 1,277 (115)
contracts liabilities
Change in investment - - - (648) (648)
contract liabilities
Administrative and (234) - (7) 2 (239)
acquisition expenses
Depreciation and
amortisation
Tangible fixed assets (15) - - - (15)
Intangible assets - software (4) - - - (4)
Intangible assets - goodwill - - - - -
impairment/amortisation
Impairment losses on loans (4) (1) - - (5)
and advances
Taxation attributable to life - - - - -
assurance activities
Net operating expenses (2,236) (1) (7) 1,071 (1,173)
Tax attributable to the profit on - -
life assurance activities
Operating profit 224 - 9 (87) 146
Share of operating profits of 22 - - - 22
associated undertakings
Profit on the sale of 2 - - - 2
property and equipment
Profit on ordinary 248 - 9 (87) 170
activities before taxation
Total taxation expense (73) (2) 33 (42)
Profit for the period on 175 - 7 (54) 128
continuing activities
Profit on discontinued activities 2 (1) 1
after taxation
Profit for the period 177 - 7 (55) 129
Minority interests share of (1) - (1)
profit
Profit attributable to 176 - 7 (55) 128
shareholders
Reconciliation of Preliminary Interim IFRS Statutory Basis Balance Sheet as at
30 June 2004
ROI GAAP
as reformatted Consolidation Investment Property,
Total Other Linked Associate property equipment
Eurom Eurom Eurom Eurom Eurom
Assets
Cash and balances with 192 (116) 10 - - -
central banks
Items in course of - 119 - - - -
collection
Loans and receivables 4,214 (307) 1,326 - - -
to banks
Loans and receivables 18,081 (88) 2 - - -
to customers
Debt securities 4,427 (82) 2,793 - - -
Equity shares 156 59 8,628 - - -
Investment properties 121 - 1,593 - (82) -
Derivatives - - 106 - - -
Interest in associated 107 - - 5 - -
undertakings
Goodwill and other 192 - - - - 25
intangible assets
Property and equipment 259 - - - 82 (22)
Shareholder value of 947 - - - - -
in-force business
Deferred acquisition - - - - - -
costs
Reinsurance assets 1,241 - - - - -
Net post retirement - - - - - -
benefit asset
Other assets 298 (43) (9) - - -
Prepayments and 295 (43) 84 - - -
accrued income
Assets held to cover 14,159 - (14,159) - - -
linked liabilities
Securitised assets - 1,013 - - - - -
mortgage assets
Less non-recourse (990) - - - - -
funding
Total assets 44,712 (501) 374 5 0 3
Goodwill & Pension Own Securitised IFRS
intangibles costs Taxation EEV shares assets Statutory
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Assets
Cash and balances with central banks - - - - - - 86
Items in course of collection - - - - - - 119
Loans and receivables to banks - - - - - - 5,233
Loans and receivables to customers - - - - - 1,013 19,008
Debt securities - - - - - - 7,138
Equity shares - - - - - - 8,843
Investment properties - - - - - - 1,632
Derivatives - - - - - - 106
Interest in associated undertakings - - - - - - 112
Goodwill and other intangible assets 7 - - - - - 224
Property and equipment - - - - - - 319
Shareholder value of in-force business - - 200 (32) - - 1,115
Deferred acquisition costs - - - - - - -
Reinsurance assets - - - - - - 1,241
Net post retirement benefit asset - 66 - - - - 66
Other assets - (85) - - - - 161
Prepayments and accrued income (1) - - - - - 335
Assets held to cover linked liabilities - - - - - - -
Securitised assets - mortgage assets - - - - - (1,013) -
Less non-recourse funding - - - - - 990 -
Total assets 6 (19) 200 (32) 0 990 45,738
Reconciliation of Preliminary Interim IFRS Statutory Basis Balance Sheet as at
30 June 2004
ROI GAAP
as reformatted Consolidation Investment Property,
Total Other Linked Associate property equipment
Eurom Eurom Eurom Eurom Eurom
Liabilities
Deposits by banks 1,894 (94) 271 - - -
Customer accounts 11,518 (347) - - - -
Debt securities in issue 10,441 (16) - - - -
Non-recourse funding - - - - - -
Derivatives - - 14 - - -
Insurance contract liabilities 17,473 (118) - - - -
Investment contract liabilities - - - - - -
Outstanding insurance and investment - 118 - - - -
claims
Net post retirement benefit liability - - - - - -
Current tax liabilities - 38 - - - -
Deferred tax liabilities 20 - - - - -
Other liabilities 241 (82) 89 - - -
Deferred front end fees - - - - - -
Accruals and deferred income 120 - - - - -
Other provisions - - - - - -
Subordinated liabilities 782 - - - - -
Dividends 45 - - - - -
42,534 (501) 374 - - -
Shareholders Equity
Share capital 86 - - - - -
Share premium 52 - - - - -
Retained earnings 2,000 - - 5 (41) -
Other reserves 86 - - 41 - 3
2,224 - - 5 - 3
Own shares held for the benefit of (54) - - - - -
the life assurance policyholders
Shareholders equity excluding 2,170 - - 5 - 3
minority interest
Minority interest 8 - - - - -
Shareholders equity including 2,178 - - 5 - 3
minority interest
Total liabilities and equity 44,712 (501) 374 5 - 3
Goodwill & Pension Own Dividend Securitised IFS
intangibles costs Taxation EEV shares recognition assets Statutory
Eurom Eurom Eurom Eurom Eurom Eurom Eurom
Eurom
Liabilities
Deposits by banks - - - - - - - 2,071
Customer accounts - - - - - - - 11,171
Debt securities in issue - - - - - - - 10,425
Non-recourse funding - - - - - - 990 990
Derivatives - - - - - - - 14
Insurance contract liabilities - - 42 - 26 - - 17,423
Investment contract liabilities - - - - - - - -
Outstanding insurance and investment claims - - - - - - - 118
Net post retirement benefit liability - 165 - - - - - 165
Current tax liabilities - - - - - - - 38
Deferred tax liabilities - (15) 166 - - - - 171
Other liabilities - - - - - - - 248
Deferred front end fees - - - - - - - -
Accruals and deferred income - - - - - - - 120
Other provisions - - - - - - - -
Subordinated liabilities - - - - - - - 782
Dividends - - - - - (45) - -
- 150 208 - 26 (45) 990 43,736
Shareholders Equity
Share capital - - - - - - - 86
Share premium - - - - - - - 52
Retained earnings 6 (169) - (32) (80) 45 - 1,734
Other reserves - - (8) - - - - 122
6 (169) (8) (32) (80) 45 - 1,994
Own shares held for the benefit of the life - - - - 54 - - -
assurance policyholders
Shareholders equity excluding minority 6 (169) (8) (32) (26) 45 - 1,994
interest
Minority interest - - - - - - - 8
Shareholders equity including minority 6 (169) (8) (32) (26) 45 - 2,002
interest
Total liabilities and equity 6 (19) 200 (32) - - 990 45,738
Reconciliation of Preliminary Interim IFRS Pro-forma Basis Balance Sheet as at
30 June 2004
IFRS Effective IFRS
Statutory Impairment interest IFRS 4 Pro-forma
Eurom Eurom Eurom Eurom Eurom
Assets
Cash and balances 86 - - - 86
with central Banks
Items in course of 119 - - - 119
collection
Loans and advances 5,233 - - - 5,233
to banks
Loans and advances 19,008 56 122 - 19,186
to customers
Debt securities 7,138 - - - 7,138
Equity shares 8,843 - - - 8,843
Investment 1,632 - - - 1,632
properties
Derivatives 106 - - - 106
Interest in 112 - - - 112
associated
undertakings
Goodwill and other 224 - - - 224
intangible assets
Property and 319 - - - 319
equipment
Shareholder value of 1,115 - - (562) 553
in-force business
Deferred acquisition - - - 173 173
costs
Reinsurance assets 1,241 - - 290 1,531
Net post retirement 66 - - - 66
benefit asset
Other assets 161 - - - 161
Prepayments and 335 - (69) - 266
accrued income
Assets held to cover - - - - -
linked liabilities
Securitised assets - - - - - -
mortgage assets
Less non-recourse - - - - -
funding
Total assets 45,738 56 53 (99) 45,748
Reconciliation of Preliminary Interim IFRS Pro-forma Basis Balance Sheet as at
30 June 2004
IFRS Effective IFRS
Statutory Impairment interest IFRS 4 Pro-forma
Eurom Eurom Eurom Eurom Eurom
Liabilities
Deposits by banks 2,071 - - - 2,071
Customer accounts 11,171 - - - 11,171
Debt securities in issue 10,425 - - - 10,425
Non-recourse funding 990 - - - 990
Derivatives 14 - - - 14
Insurance contract liabilities 17,423 - - (13,653) 3,770
Investment contract liabilities - - - 13,879 13,879
Outstanding insurance and investment 118 - - - 118
claims
Net post retirement benefit liability 165 - - - 165
Current tax liabilities 38 - - - 38
Deferred tax liabilities 171 9 (8) (66) 106
Other liabilities 248 (2) (6) - 240
Deferred front end fees - - - 210 210
Accruals and deferred income 120 - - - 120
Subordinated liabilities 782 - - - 782
Dividends - - - - -
43,736 7 (14) 370 44,099
Shareholders Equity
Share capital 86 - - - 86
Share premium 52 - - - 52
Retained earnings 1,734 49 67 (467) 1,383
Other reserves 122 - - - 122
1,994 49 67 (467) 1,643
Own shares held for the benefit of the - - - - -
life assurance policyholders
Shareholders equity excluding minority 1,994 49 67 (467) 1,643
interest
Minority interest 8 - - (2) 6
Shareholders equity including minority 2,002 49 67 (469) 1,649
interest
Total liabilities and equity 45,738 56 53 (99) 45,748
Supplementary Information
Transition to Pro-forma EEV
Restatement of Interim 2004 financial information
Basis of Preparation
Earnings generated by the group's life assurance business, including both
investment contracts and insurance contracts, were previously presented in the
primary financial statements in accordance with the Association of British
Insurers' paper of December 2001 'Supplementary Reporting for Long Term
Insurance Business (The Achieved Profits Method)', referred to in this note as
the "ROI GAAP" basis. These earnings are now included in the primary financial
statements on an IFRS basis, which means that while insurance contracts are
accounted for on an European Embedded Value basis (see below), investment
contracts are not and are accounted for in accordance with IAS 39. It is the
view of the directors that additional information is required in order to
provide shareholders with more realistic information on the financial position
and current performance of the group than is provided within the primary
financial statements. Accordingly, supplementary preliminary interim financial
information ("supplementary interim information") has been prepared in relation
to the group's consolidated balance sheet and consolidated income statement. For
insurance and investment business interim supplementary information is based on
European Embedded Value principles ("EEV") and for all other businesses the
recognition and measurement principles applied in this supplementary interim
information are as in the IFRS preliminary interim financial statements.
The Group prepared EEV supplementary information for the year ended 31 December
2004 in order to provide the comparative supplementary information expected to
be included as comparatives in the Group's annual report for the year ending 31
December 2005. This information was published on 21 July 2005 and a full copy of
the information is available on the group's website (www.irishlifepermanent.ie).
The methodology applied to produce the supplementary interim information for the
period ended 30 June 2004 is consistent with the methodolgy used to produce the
supplementary information for the year to 31 December 2004 as outlined in the
transition to EEV document issued on 21 July 2005. The directors acknowledge
their responsibility for the preparation of the supplementary information. The
statements have been prepared in accordance with the European Embedded Value
(EEV) Principles issued in May 2004 by the European Chief Financial Officers'
Forum.
The methodology produces an Embedded Value (EV) as a measure of the consolidated
value of shareholders' interests in the business covered by the EEV Principles,
which in this supplementary interim information incorporates both insurance and
investment contracts issued by the Group's life business
In accordance with IFRS 1, First Time Adoption of International Financial
Reporting Standards, in arriving at the underlying IFRS preliminary Interim
information that forms the starting point for the supplementary information, no
adjustments have been made to any estimates at the time of approval of the ROI
GAAP interim financial statements on which the IFRS preliminary interim
financial information is based.
Previously published ROI GAAP information has been reformatted to assist in the
presentation of the supplementary information.
Consolidated Income Statement - Supplementary Interim Information
Six months to 30 June 2004
ROI GAAP as EEV
reformatted basis
Eurom Eurom
Operating profit on continuing operations
Insurance & investment business 100 102
Banking 59 65
Other (2) (2)
157 165
Share of associate 26 22
Operating profit before tax on continuing operations 183 187
Short term investment fluctuations 10 15
Effect of economic assumption changes 1 -
Goodwill amortisation (6) -
Other charges/credits 2 2
Profit before tax 190 204
Taxation (28) (23)
Profit for the period on continuing operations 162 181
Profit after tax on discontinued operations 2 2
Profit for the year after income tax 164 183
Minority interest (1) (1)
Profit attributable to equity holders 163 182
Earnings per share including own shares held for the 60.7 68.0
benefit of
life assurance policyholders (cent)
Operating earnings per share including own shares held 55.8 59.0
for the
benefit of life assurance policyholders (cent)
Consolidated Balance Sheet - Supplementary Interim Information
As at 30 June 2004
ROI GAAP as EEV
reformatted basis
Eurom Eurom
Assets
Cash and balances with central banks 192 205
Investments 4,704 17,719
Loans and receivables 22,318 24,419
Interest in associate undertakings 107 112
Reinsurer's share of provisions 1,241 1,531
Shareholder value of in-force business 947 916
Net post retirement asset - 66
Other assets 451 543
Other debtors 593 427
Assets held to match unit-linked 14,159 -
liabilities
Total assets 44,712 45,938
Liabilities
Customer accounts 13,412 13,243
Debt securities in issue 10,441 10,425
Non-recourse funding - 990
Derivatives - 14
Insurance contracts liabilities 17,473 3,770
Investment contract liabilities - 13,903
Outstanding insurance and investment - 118
claims
Net post retirement benefit liability - 165
Other liabilities 381 174
Subordinated liabilities 782 782
Dividends 45 -
42,534 43,794
Share capital 86 86
Share premium 52 52
Retained profits 2,000 1,931
Other reserves 86 122
Own shares held for the benefit of life (54) (54)
assurance policyholders
Shareholders' equity 2,170 2,136
Minority interest 8 8
2,178 2,144
Total liabilities and equity 44,712 45,938
Consolidated Supplementary Interim Statement of Recognised Income and Expense
Six months to 30 June 2004
ROI GAAP as
reformatted EEV basis
Eurom Eurom
Net amount recognised directly in equity - -
Profit for the year after income tax 164 183
Total recognised income and expense for the year 164 183
Minority interests (1) (1)
Attributable to equityholders 163 182
Movement in cost of own shares - -
Dividends paid (45) (97)
118 85
Insurance and investment business continuing operations
Six months to 30 June 2004
Profit before tax
ROI GAAP EEV basis
Eurom Eurom
New business contribution 24 28
Profit from existing business
- Expected return 47 35
- Experience variances 12 12
- Operating assumption changes 16 17
Expected investment return 1 10
Operating profit before tax 100 102
Short term investment fluctuations 10 15
Effect of economic assumption changes 1 -
Profit before tax 111 117
The expected investment return on the EEV basis includes the expected return on
required capital. This was previously included in the expected return from
existing business on the ROI GAAP basis.
New Business Margin
Life Institutional Total
Eurom Eurom Eurom
Present value of new business premiums
Single Premium 496 337 833
Regular premium 111 111
Regular premium capitalisation factor 4.7 4.7
PVNBP 1,022 337 1,359
Annual Premium Equivalent (APE) 161 34 195
New business contribution (EEV basis) 25 3 28
New business margin
PVNBP 2.5% 0.9% 2.1%
APE 15.6% 9.1% 14.5%
New business includes Euro81m single premiums in respect of inflows to
institutional off-balance sheet funds which are included under covered business
under EEV.
Insurance and investment business continuing operations
Six months to 30 June 2004
Profit after tax
EEV basis ROI GAAP
Gross Tax Net Net
Eurom Eurom Eurom Eurom
Operating profit 102 (11) 91 86
Short term investment fluctuations 15 6 21 18
117 (5) 112 104
Operating profit after tax
Net Worth VIF Total
Eurom Eurom Eurom
New business contribution (51) 74 23
Profit from existing business
- Expected return 68 (34) 34
- Experience variances (1) 11 10
- Operating assumption changes 4 11 15
Expected investment return 8 1 9
Operating profit after tax 28 63 91
Shareholders' Equity
As at 30 June 2004
ROI GAAP as EEV
reformatted basis
Eurom Eurom
Insurance and Investment business 1,633 1,557
Banking 300 302
Other activities - 29
Associate Undertakings 107 112
Goodwill 192 198
2,232 2,198
Minority interest (8) (8)
Deduction in respect of own shares held (54) (54)
for the benefit
of life assurance policyholders
Shareholders' equity 2,170 2,136
Movement in shareholders' equity - Insurance and investment
business
Net Worth VIF Total
Eurom Eurom Eurom
Shareholders' equity as at 1 January 2004 750 837 1,587
Operating profit after tax on continuing operations 28 63 91
Short term investment fluctuations 6 15 21
Effect of economic assumption changes 0 0 0
Profit after tax on discontinued operations 3 (1) 2
Exchange rate movements (2) 2 0
Capital movements (144) 0 (144)
Shareholders' equity as at 30 June 2004 641 916 1,557
The shareholders' equity as at 30 June 2004 (1 January 2004) includes required
capital of Euro457m (Euro426m) within the net worth. The shareholders' value of
in-force is net of a deduction of Euro100m (Euro97m) in respect of the cost of
maintaining the required capital.
Assumptions
Principal economic assumptions
The assumed future pre-tax returns on fixed interest securities are set by
reference to gross redemption yields available in the market at the end of the
reporting period. The corresponding return on equities and property is equal to
the fixed interest gilt assumption plus the appropriate risk premium. An asset
mix based on the assets held at the valuation date within policyholder funds has
been assumed within the projections. The table includes the assumptions for the
EEV calculations and the comparable rates used for the ROI GAAP calculations
using the Achieved Profits Method for the relevant periods.
EEV ROI GAAP EEV ROI GAAP
2004 2004 2003 2003
Equity risk premium 3.0% 2.0% 3.0% 2.0%
Property risk premium 2.0% 2.0% 2.0% 2.0%
Risk free rate 4.2% 4.25% 4.2% 4.25%
Investment return
- Fixed interest 3.0% - 4.9% 3.0% - 4.9% 3.0% - 4.9% 3.0% - 4.9%
- Equities 7.2% 6.25% 7.2% 6.25%
- Property 6.2% 6.25% 6.2% 6.25%
Risk margin 3.1% 3.75% 3.1% 3.75%
Risk discount rate 7.3% 8.0% 7.3% 8.0%
Expense inflation 4.0% 4.0% 4.0% 4.0%
Other assumptions
The assumed future mortality, morbidity and persistency assumptions are based on
published tables of rates, adjusted by analyses of recent operating experience.
The management expenses attributable to life assurance business have been
analysed between expenses relating to the acquisition of new business and the
maintenance of business in-force. No allowance has been made for future
productivity improvements in the expense assumptions.
Projected tax has been determined assuming current tax legislation and rates.
EEV results are computed on a before and after tax basis.
UK business
The Group's UK business (City of Westminster Assurance) was sold in June 2005
and is being treated under discontinued operations in the Group's preliminary
financial information. The assumptions used for the UK business were left
unchanged from the previous basis as any difference would be immaterial in the
context of the Group's overall preliminary supplementary financial information.
The key assumptions used were:
EEV ROI GAAP EEV ROI GAAP
2004 2004 2003 2003
Risk free rate 5.15% 5.15% 4.75% 4.75%
Risk margin 3.25% 3.25% 3.25% 3.25%
Risk discount rate 8.4% 8.4% 8.0% 8.0%
Treatment of financial options and guarantees (FOGs)
The main options and guarantees for which FOG costs have been determined are:
(e) Investment guarantees on certain unit-linked funds, where the unit
returns to policyholders are smoothed subject to a minimum guaranteed
return (in the majority of cases the minimum guaranteed change in unit
price is 0%, usually representing a minimum return of the original
premium). An additional management charge is levied on policyholders
investing in these funds, compared to similar unit-linked funds
without this investment guarantee. This extra charge is allowed for in
calculating the FOG cost;
(f) Guaranteed Annuity Rates on a small number of products;
(g) Return of Premium death guarantees on certain unit-linked single
premium products;
(h) Guaranteed benefits for policies in the closed with-profit fund.
The main asset classes relating to products with options and guarantees are
European and International equities, Property, and government bonds of various
durations.
The Deloitte's TSM Streamline Market Consistent model is used to derive the cost
of FOGs. The model is calibrated to the yield curve and to the market prices of
equity options. Ten years of historical weekly data are used to derive the
correlation between the returns of different asset classes.
The model uses the difference between two inverse Gaussian distributions to
model the returns on each asset class. This allows the model to produce
fat-tailed distributions, and provides a good fit to historical asset return
distributions.
The statistics relating to the model used as at 30 June 2004 are set out in the
following table:
10-Year Return 20-Year Return
Mean1 StDev2 Mean StDev
European Assets (euro)
Bonds 4.7% 2.1% 5.1% 3.1%
Equities, Property 4.7% 22.8% 5.1% 23.8%
UK Assets (Sterling)
Bonds 5.2% 3.0% 5.0% 5.8%
Equities 5.2% 21.9% 5.0% 23.7%
3. The Market Consistent nature of the model means that that all asset classes
earn the risk free rate. No value is added by investing in riskier assets
with a higher expected rate of return. The Means quoted above reflect this.
4. Standard Deviations are calculated by accumulating a unit investment for n
years in each simulation, taking the natural logarithm of the result,
calculating the variance of this statistic, dividing by n and taking the
square root. The results are comparable to implied volatilities quoted in
investment markets.
Special purpose review report of KPMG to Irish Life & Permanent plc. ("the
Company") on its Preliminary European Embedded Value ("EEV") Supplementary
Interim Information
Introduction
In accordance with the terms of our engagement letter we have reviewed the
following items (together they are referred to as the "preliminary EEV
supplementary interim information") set out on pages 1 to 10 and which have been
prepared in accordance with the European Embedded Value Principles issued in May
2004 by the European CFO Forum ("the EEV Principles"):
* The consolidated preliminary EEV proforma balance sheet of Irish Life
& Permanent plc and subsidiary undertakings ("the Group") as at 30
June 2004, together with the consolidated preliminary EEV proforma
income statement and the consolidated preliminary EEV proforma
statement of recognised income and expenses for the period then ended;
* the basis of preparation and related notes;
The preliminary EEV supplementary interim information has been prepared by the
Group as part of its transition to International Financial Reporting Standards
("IFRS"). The preliminary IFRS financial information included in the preliminary
EEV Supplementary information has been prepared based on the recognition and
measurement principles of IFRS which are either adopted by the EU and effective
or expected to be adopted by the EU and effective by 31 December 2005 including
the "proforma" impact of IAS32 - "Financial Instruments Disclosure and
Presentation and IAS 39 - "Financial Instruments: Recognition and Measurement".
Our report has been prepared for the Company solely in connection with the
Group's preparation of its supplementary interim information on EEV basis. Our
report was designed to meet the agreed requirements of the Company determined by
the Company's needs at the time. Our report should not therefore be regarded as
suitable to be used or relied on by any party wishing to acquire rights against
us other than the Company for any purpose or in any context. Any party other
than the Company who chooses to rely on our report (or any part of it) will do
so at its own risk. To the fullest extent permitted by law, KPMG will accept no
responsibility or liability in respect of our report to any other party.
Directors' responsibilities
The Directors of the Company have accepted responsibility for the preparation of
the preliminary EEV supplementary interim information which has been prepared in
accordance with the EEV Principles.
As disclosed in the basis of preparation note to the preliminary EEV
supplementary interim information, the next annual financial statements of the
Group will be prepared in accordance with IFRSs adopted for use in the European
Union.
The accounting policies that have been adopted in preparing the preliminary EEV
supplemental interim information are consistent with those that the Directors
currently intend to use in the next annual financial statements.
There is, however, a possibility that the directors may determine that some
changes to these policies are necessary when preparing the full annual financial
statements for the first time in accordance with those IFRS adopted for use by
the European Union. This is because, as disclosed in the basis of preparation
note, the directors have anticipated that certain standards, which have yet to
be formally adopted for use in the EU will be so adopted in time to be
applicable to the next annual financial statements.
Review work performed
Our responsibilities as independent auditors are established in Ireland by the
Auditing Practices Board, our professions ethical guidance and the terms of our
engagement. Under the terms of engagement are to report to you our review
conclusions as to whether we are aware of any material modifications that should
be made to the preliminary EEV supplementary interim information.
We conducted our review in accordance with guidance contained in Bulletin 1999/4
Review of interim financial information issued by the Auditing Practices Board
for use in Ireland and the United Kingdom. A review consists principally of
making enquiries of Group management and applying analytical procedures to the
preliminary EEV supplementary interim information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the preliminary EEV
supplementary interim information.
Emphasis of matters
Without qualifying our review conclusions, we draw your attention to the
following matters:
The Group has prepared the preliminary EEV supplementary interim information for
the six month period ended 30 June 2004 to establish comparative figures for the
Group's interim report for the six month period ended 30 June 2005. The
preliminary EEV supplementary interim information does not itself include
comparative financial information for the prior period.
As explained in the basis of preparation, no adjustments have been made for any
changes in estimates made at the time of approval of the previous Irish GAAP
interim report for the six month period ended 30 June 2004 on which the
prelimxnary EEV supplementary interim information is based, as permitted by IFRS
1.
As explained in the basis of preparation, in accordance with IFRS 1, First Time
Adoption of International Financial Reporting Standards, in arriving at the
underlying preliminary IFRS financial information which forms the starting point
for the EEV supplementary information, no adjustments have been made for any
changes in estimates made at the time of approval of the ROI GAAP statutory
financial statements on which the preliminary IFRS financial information is
based.
The 1 January 2005 preliminary IFRS balance sheet has been prepared on the basis
("Proforma Basis") that IAS32 - "Financial Instruments Disclosure and
Presentation and IAS30 - Financial Instrument: Recognition and Measurement have
been applied.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the preliminary EEV supplementary interim information on pages
1 to 10 which has been prepared, in all material respects, in accordance with
the basis of preparation note on page 1, including the assumptions made by the
Directors about the standards and interpretations expected to be effective, and
the policies expected to be adopted, when they prepare the first complete set of
EEV supplementary information of the Group for the year 31 December 2005.
KPMG
Chartered Accountants
Dublin
25 August 2005
This information is provided by RNS
The company news service from the London Stock Exchange
END
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