Additional disclosures

The following additional disclosures are made in compliance with the Companies Act 2006, the Disclosure and Transparency Rules issued by the FCA and the UK and HK Codes.

Financial reporting

The directors have a duty to report to shareholders on the performance and financial position of the Group and are responsible for preparing the financial statements and the supplementary information. It is the responsibility of the auditor to form independent opinions, based on its audit of the financial statements and its audit of the EEV basis supplementary information, and to report its opinions to the Company’s shareholders and to the Company. Its opinions are given in the Independent auditor’s report to the members of Prudential plc only and the Independent auditor’s report to Prudential plc on the European Embedded Value (EEV) basis supplementary information.

Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and of the Group. The criteria applied in the preparation of the financial statements are set out in the statement of directors’ responsibilities in respect of the annual report and the financial statements and in respect of the European Embedded Value (EEV) basis supplementary information.

Company law also requires the Board to approve the strategic report. In addition, the UK Code requires the directors’ statement to state that they consider the annual report and financial statements, taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.

The directors are further required to confirm that the strategic report includes a fair review of the development and performance of the business, with a description of the principal risks and uncertainties. Such confirmation is included in the statement of directors’ responsibilities in respect of the annual report and the financial statements and in respect of the European Embedded Value (EEV) basis supplementary information.

The strategic report provides a description of the Group’s risk and capital management, which includes a description of the Group’s liquidity position. These risks are also discussed in the audited sections of the Group Chief Risk Officer’s report on the risks facing our business and our capital strength.

The directors who held office at the date of approval of this directors’ report confirm that, so far as they are each aware, there is no relevant audit information of which the Company’s auditor is unaware and that each director has taken all the steps that he or she ought to have taken as a director to make himself or herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.

Going concern

In accordance with the requirements of the guidance issued by the Financial Reporting Council in October 2009 ‘Going Concern and Liquidity Risk: Guidance for directors of UK companies 2009’, after making sufficient enquiries the directors have a reasonable expectation that the Company and the Group have adequate resources to continue their operations for the foreseeable future. In support of this expectation, the Company’s business activities, together with the factors likely to affect its future development, successful performance and position in the current economic climate are set out in the Chief Financial Officer’s report. The risks facing the Group’s capital and liquidity positions and their sensitivities are referred to in the Group Chief Risk Officer’s report. Specifically, the Group’s borrowings are detailed in Note C6 in Notes to Primary statements, the market risk and liquidity analysis associated with the Group’s assets and liabilities can be found in Note C3.5(a) in Notes to Primary statements, policyholder liability maturity profile by business units in Notes C4.1(b), C4.1(c) and C4.1(d) in Notes to Primary statements, cash flow details in the consolidated statement of cash flows and provisions and contingencies in Note C12. The directors, therefore, have continued to adopt the going concern basis of accounting in preparing the financial statements for the year ended 31 December 2013.

Post-balance sheet events

Significant events affecting the Group which have taken place after the end of the financial year are detailed in Note D4 in Notes to Primary statements.

Change of control

Under the agreements governing Prudential Corporation Holdings Limited’s life insurance and fund management joint ventures with China International Trust & Investment Corporation (‘CITIC’), if there is a change of control of the Company, CITIC may terminate the agreements and either (i) purchase the Company’s entire interest in the joint venture or require the Company to sell its interest to a third party designated by CITIC, or (ii) require the Company to purchase all of CITIC’s interest in the joint venture. The price of such purchase or sale is to be the fair value of the shares to be transferred, as determined by the auditor of the joint venture.

Significant contracts

At no time during the year did any director hold a material interest in any contract of significance with the Company or any subsidiary undertaking.

Compensation for loss of office

None of the terms of employment of the directors includes provisions for payment of compensation for loss of office or employment that occurs as a result of a change of control. Terms applying on a termination of their office are set out in the directors’ remuneration report. In the US, senior executives participate on a discretionary basis in a plan which entitles them to compensation, in the event that their employment is terminated or adversely affected as a result of a change of control.


The five largest customers of the Group constituted in aggregate less than 30 per cent of its total sales for each of 2012 and 2013.

For the year ended 31 December 2013, none of the directors, their associates or any shareholders of the Company (which have, to the knowledge of the directors of the Company, owned more than 5 per cent of the issued share capital) had any interest in the Group’s major customers.

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