D Other notes
D1 Sale of Korea life business
On 18 May 2017, the Group announced that it had completed the sale of its life insurance subsidiary in Korea, PCA Life Insurance Co. Ltd. to Mirae Asset Life Insurance Co. Ltd., following regulatory approvals. The transaction, announced on 10 November 2016, was for a consideration of KRW170 billion (equivalent to £117 million at 17 May 2017 closing rate). The proceeds, net of £9 million of related expenses, were £108 million. This has changed by £3 million from the £105 million carrying value recorded at 31 December 2016 due to exchange rate movement.
On completion of the sale, the cumulative foreign exchange translation gain of the Korea life business of £61 million, that had arisen from 2004 (the year of the Group’s conversion to IFRS) to disposal, was recycled from other comprehensive income through the profit and loss account in 2017, as required by IAS 21. This amount is included within ‘Cumulative exchange gain on the sold Korea life business recycled from other comprehensive income’ in the supplementary analysis of profit of the Group as shown in note B1.1. The adjustment has no net effect on shareholders’ equity. The net contribution for Korea life business to the half year 2017 profit after tax, is the £61 million gain for foreign exchange translation recycling with other elements in the various line items, including a £5 million remeasurement adjustment, netting to nil.
The full year 2016 income statement recorded a charge for remeasurement of Korea Life business classified as held for sale of £(238) million. To facilitate comparisons of businesses retained by the Group, the supplementary analysis of profit shown in note B1.1 shows separately the results of the Korea life business. For full year 2016, the result for the year, including short-term fluctuations in investment returns, together with the adjustment to the carrying value, gave rise to an aggregate loss of £(227) million (half year 2016: profit of £40 million).
D2 Contingencies and related obligations
In addition to the matters set out in note B4(b) in relation to the Financial Conduct Authority review of past annuity sales, the Group is involved in various litigation and regulatory issues. These may from time to time include class actions involving Jackson. While the outcome of such matters cannot be predicted with certainty, Prudential believes that the ultimate outcome of such litigation and regulatory issues will not have a material adverse effect on the Group’s financial condition, results of operations or cash flows.
There have been no material changes to the Group’s contingencies and related obligations in the six month period ended 30 June 2017.
D3 Post balance sheet events
First interim ordinary dividend
The 2017 first interim ordinary dividend approved by the Board of Directors after 30 June 2017 is as described in note B7.
D4 Related party transactions
There were no transactions with related parties during the six months ended 30 June 2017 which have had a material effect on the results or financial position of the Group.
The nature of the related party transactions of the Group has not changed from those described in the Group’s consolidated financial statements for the year ended 31 December 2016.
