STANDARD LIFE PLC (TO BE RENAMED STANDARD LIFE ABERDEEN PLC)

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. This Prospectus, which comprises a prospectus relating to Standard Life and the New Shares, has been prepared in accordance with the Prospectus Rules made under section 73A of FSMA. This Prospectus has been approved by the FCA in accordance with section 87A of FSMA and has been filed with the FCA and made available to the public in accordance with PR 3.2. This Prospectus has been prepared in order to provide details of the New Shares to be issued and allotted pursuant to the Merger. The release, publication or distribution of this Prospectus, in whole or in part, in, into or from jurisdictions other than the UK may be restricted by the laws of those jurisdictions and, therefore, persons into whose possession this Prospectus comes should inform themselves about and observe any applicable requirements. Any failure to comply with these restrictions may constitute a violation of the securities laws of one or more of such jurisdictions. In particular, this Prospectus should not be released, published, distributed, forwarded or transmitted, in whole or in part, in, into or from any Restricted Jurisdiction. INVESTORS SHOULD READ THE WHOLE OF THIS PROSPECTUS (INCLUDING ALL THE INFORMATION INCORPORATED INTO IT BY REFERENCE) CAREFULLY AND IN ITS ENTIRETY. IN PARTICULAR, INVESTORS SHOULD TAKE ACCOUNT OF PART II (RISK FACTORS) WHICH CONTAINS A DISCUSSION OF THE RISKS WHICH MAY MATERIALLY AFFECT THE VALUE OF AN INVESTMENT IN STANDARD LIFE, THE COMBINED GROUP AND/ OR THE NEW SHARES. INVESTORS SHOULD NOT RELY SOLELY ON THE INFORMATION SUMMARISED IN PART I (SUMMARY). STANDARD LIFE PLC (TO BE RENAMED STANDARD LIFE ABERDEEN PLC) (a public company incorporated with limited liability in Scotland with registered number SC286832) Proposed issue of up to 999,848,295 New Shares of pence each to be issued by Standard Life in connection with the recommended all-share merger of Standard Life and Aberdeen and application for admission of such New Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange s main market for listed securities The Existing Standard Life Shares are listed on the premium listing segment of the Official List and traded on the London Stock Exchange s main market for listed securities. Applications will be made to: (i) the FCA for the New Shares to be admitted to the premium listing segment of the Official List; and (ii) the London Stock Exchange for the New Shares to be admitted to trading on its main market for listed securities. It is expected that, subject to the satisfaction or waiver (if capable of waiver) of certain Conditions (including the sanction of the Scheme by the Court but not including those Conditions which relate to Admission), the New Shares will be admitted to listing on the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange and that dealings in the New Shares will commence by 8.00 a.m. on 14 August 2017.

2 The New Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Standard Life Shares, including in relation to the right to receive notice of, and to attend and vote at, general meetings of Standard Life, the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date and to participate in the assets of Standard Life upon a winding-up of Standard Life. No application has been made or is currently intended to be made by Standard Life for the New Shares to be admitted to listing or trading on any other exchange. Prospective investors should only rely on the information contained in this Prospectus. No person has been authorised to give any information or make any representation other than those contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been so authorised by Standard Life, the Standard Life directors, the Standard Life Group, Goldman Sachs International, Fenchurch or any other person involved in the Merger. In particular, the contents of Standard Life s and Aberdeen s websites, the contents of any website accessible from hyperlinks on such websites or any other website referred to in this Prospectus do not form part of this Prospectus and prospective investors should not rely on them. Without prejudice to any legal or regulatory obligation on Standard Life to publish a supplementary prospectus pursuant to section 87G of FSMA and PR 3.4, neither the delivery of this Prospectus nor Admission shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Standard Life Group, the Aberdeen Group and/or the Combined Group, each taken as a whole since the date of this Prospectus or that the information in it is correct as of any time after the date of this Prospectus. Standard Life will comply with its obligation to publish supplementary prospectuses containing further updated information as required by law or by a regulatory authority and, in particular, its obligations under the Prospectus Rules, the Listing Rules and the Disclosure Guidance and Transparency Rules (as appropriate) but assumes no further obligation to publish additional information. Goldman Sachs International, which is authorised by the PRA and regulated by the FCA and PRA in the UK, is acting exclusively as sponsor and lead financial adviser for Standard Life and no one else in connection with the Merger, Admission and other matters referred to in this Prospectus and will not be responsible to anyone other than Standard Life for providing the protections afforded to its clients or for providing any advice in connection with the Merger and will not regard any other person (whether or not a recipient of this Prospectus) as its client in relation to the Merger, the contents of this Prospectus or any matter referred to in this Prospectus. Fenchurch, which is authorised and regulated by the FCA, is acting exclusively as financial adviser for Standard Life and no one else in connection with the Merger and will not be responsible to anyone other than Standard Life for providing the protections afforded to its clients or for providing any advice in connection with the Merger and will not regard any other person (whether or not a recipient of this Prospectus) as its client in relation to the Merger, the contents of this Prospectus or any matter referred to in this Prospectus. Apart from the responsibilities and liabilities, if any, which may be imposed on Goldman Sachs International or Fenchurch by FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, Goldman Sachs International, Fenchurch and any person affiliated with them assume no responsibility whatsoever and make no representation or warranty, express or implied, in respect of the contents of this Prospectus including its accuracy, completeness or verification or for any other statement made or purported to be made by them or on their behalf or by or on behalf of Standard Life in connection with Standard Life and the Merger and nothing in this Prospectus shall be relied upon as a promise or representation in this respect whether as to the past, present or future. Goldman Sachs International and Fenchurch accordingly disclaim, to the fullest extent permitted by i

3 applicable law, all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have to any person, other than Standard Life, in respect of this Prospectus or any such statement. Persons accessing this Prospectus are authorised solely to use it for the purpose of considering the terms of the Merger and are prohibited from reproducing or distributing this Prospectus, in whole or in part, disclosing any of its contents or using any information herein for any purpose other than considering the terms of the Merger and an investment in the New Shares. Neither the contents of this Prospectus nor any subsequent communication from Standard Life, the Standard Life directors, the Standard Life Group, Goldman Sachs International, Fenchurch any other person involved in the Merger or any of their respective affiliates, officers, directors, employees or agents are to be construed as legal, financial or tax advice. If you are in any doubt about the contents of this Prospectus or the action you should take, it is recommended that you seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser (who is, if you are resident in the UK, duly authorised under FSMA or, if you are not resident in the UK, an appropriately authorised independent financial adviser). NOTICE TO OVERSEAS SHAREHOLDERS General The availability of New Shares under the Merger to Aberdeen Shareholders who are not resident in the UK may be affected by the laws of the relevant jurisdictions in which they are resident. This Prospectus has been prepared for the purpose of complying with English law and applicable regulations and the information disclosed may not be the same as that which would have been disclosed if this Prospectus had been prepared in accordance with the laws of jurisdictions outside the UK. Unless otherwise determined by Standard Life or required by the City Code, and permitted by applicable law and regulation, the Merger will not be implemented and documentation relating to the Merger or the Consideration shall not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction. Accordingly, copies of this Prospectus are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction and persons with access to such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. This Prospectus does not constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of Standard Life in any Restricted Jurisdiction or to any person to whom it is unlawful to make such offer or solicitation. None of the securities referred to in this Prospectus shall be sold, issued or transferred in any jurisdiction in contravention of applicable law and/or regulation. It is the responsibility of each person into whose possession this Prospectus comes to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdiction in connection with the distribution of this Prospectus, the receipt of the Consideration and the implementation of the Merger and to obtain any governmental, exchange control or other consents which may be required, comply with other formalities which are required to be observed and pay any issue, transfer or other taxes due in such jurisdiction. To the fullest extent permitted by applicable law, Standard Life, the Standard Life directors, the Standard Life Group, Goldman Sachs International, Fenchurch and all other persons involved in the Merger disclaim any responsibility or liability for the failure to satisfy any such laws, regulations or requirements. Further details relevant for Aberdeen Shareholders in overseas jurisdictions are contained in the Scheme Document. ii

4 NOTICE TO US ABERDEEN SHAREHOLDERS This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. None of the securities referred to in this Prospectus have been approved or disapproved by the SEC, any state securities commission in the US or any other US regulatory authority, nor have such authorities passed upon or determined the fairness or merits of such securities or upon the adequacy or accuracy of the information contained in this Prospectus. Any representation to the contrary is a criminal offence in the US. The Merger is to be implemented by a scheme of arrangement provided for under the CA As such, the New Shares have not been and will not be registered under the US Securities Act and the New Shares are to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof and exemptions from registration and qualification under applicable state securities laws and also would not be subject to the proxy solicitation or tender offer rules under the US Exchange Act. The New Shares received by any Aberdeen Shareholders who will be deemed to constitute an affiliate of Standard Life after the Effective Date will be subject to the limitations on transfer imposed upon securities held by affiliates by US securities laws. For the purposes of qualifying for the exemption from the registration requirements of the US Securities Act afforded by Section 3(a)(10), Aberdeen will advise the Court that its sanctioning of the Scheme will be relied upon by Standard Life and Aberdeen as an approval of the Scheme following a hearing on its fairness which all Scheme Shareholders are entitled to attend in person or through counsel to support or oppose the sanctioning of the Scheme and with respect to which notification has been given to all such Scheme Shareholders. The Merger may, in the circumstances provided for in the Cooperation Agreement, be implemented by way of a takeover offer under the CA If so, any securities to be issued under the Merger may be registered under the US Securities Act or issued in reliance upon an exemption thereunder, if available. If the Merger is implemented by way of an Offer, it will be done in compliance with the applicable rules under the US Exchange Act, including any applicable exemptions provided thereunder. The Consideration comprises the shares of a UK company and the Merger and this Prospectus are subject to UK procedural and disclosure requirements that are different from those of the US. Any financial statements or other financial information included in this Prospectus may have been prepared in accordance with non-us accounting standards that may not be comparable to the financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US. It may be difficult for holders of New Shares located in the US to enforce their rights and any claims they may have arising under the US federal securities laws in connection with the Merger since Standard Life is located in a country other than the US and some or all of its officers and directors may be residents of countries other than the US. Holders of New Shares located in the US may not be able to sue Standard Life or its directors or officers in a non-us court for violations of US securities laws. Furthermore, it may be difficult to compel Standard Life and its respective affiliates to subject themselves to the jurisdiction or judgment of a US court. Investors should be aware that Standard Life may purchase or arrange to purchase Aberdeen Shares otherwise than under any takeover offer or scheme of arrangement related to the Merger, such as in open market or privately negotiated purchases. Aberdeen Shareholders are urged to read any documents related to the Merger filed, furnished or to be filed or furnished by Standard Life with the SEC because they will contain important information regarding iii

5 the Merger and any related offer of securities. Such documents will be available free of charge at the SEC s website at Nothing in this Prospectus shall be deemed as an acknowledgement that any SEC filing is required or that an offer requiring registration under the US Securities Act may ever occur in connection with the Merger. NOTICE TO SHAREHOLDERS RESIDENT IN JAPAN The New Shares have not been and will not be registered under the Financial Instruments and Exchange Act of Japan. Accordingly, the New Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into Japan, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act of Japan and other relevant laws and regulations of Japan. NOTICE TO SHAREHOLDERS RESIDENT IN SINGAPORE This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of shares in Standard Life may not be circulated or distributed, nor may the shares in Standard Life be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than pursuant to, and in accordance with, the conditions of an exemption in Section 273(1)(c) of the Securities and Futures Act, Chapter 289 of Singapore ( SFA ) or pursuant to, and in accordance with, the conditions of an exemption under any provision (other than Section 273(1)(c)) of Subdivision (4) of Division 1 of Part XIII of the SFA. Certain terms used in this Prospectus have the meanings ascribed to them in Part XVII (Definitions). The date of this Prospectus is 9 May iv

6 TABLE OF CONTENTS PART I SUMMARY 1 PART II RISK FACTORS 17 PART III PRESENTATION OF INFORMATION 55 PART IV DIRECTORS, COMPANY SECRETARY, REGISTERED AND HEAD OFFICES AND ADVISERS 60 PART V EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND INDICATIVE STATISTICS 62 PART VI INFORMATION ABOUT THE MERGER 65 PART VII INFORMATION ABOUT THE STANDARD LIFE GROUP 83 PART VIII INFORMATION ABOUT THE ABERDEEN GROUP 93 PART IX FINANCIAL INFORMATION IN RELATION TO STANDARD LIFE AND THE STANDARD LIFE GROUP 103 PART X OPERATING AND FINANCIAL REVIEW OF THE STANDARD LIFE GROUP 108 PART XI FINANCIAL INFORMATION IN RELATION TO ABERDEEN AND THE ABERDEEN GROUP 111 PART XII UNAUDITED PRO FORMA FINANCIAL INFORMATION 115 PART XIII REGULATORY OVERVIEW 123 PART XIV TAXATION 139 PART XV DIRECTORS, PROPOSED DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE 149 PART XVI ADDITIONAL INFORMATION 202 PART XVII DEFINITIONS 232 v

7 PART I SUMMARY Summaries are made up of disclosure requirements known as Elements. These Elements are numbered in Section A to Section E (A.1 to E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In this case, a short description of the Element is included in the summary with the mention of not applicable. Element Section A Introduction and warnings A.1 Introduction and warning to investors This summary should be read as an introduction to this Prospectus. Any decision to invest in the New Shares should be based on consideration of this Prospectus as a whole by the investor. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the EEA, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in the New Shares. A.2 Resale or final placement of securities through financial intermediaries Not applicable. No consent has been given by Standard Life or any person responsible for drawing up this Prospectus to use this Prospectus for subsequent resale or final placement of the New Shares by financial intermediaries. Section B Issuer Element B.1 Legal and commercial name B.2 Domicile/legal form/legislation under which the issuer operates/ country of incorporation Standard Life plc, which will be renamed Standard Life Aberdeen plc on or around the Effective Date. Standard Life is a public limited company incorporated under the laws of Scotland with registered number SC and is domiciled in the United Kingdom. Standard Life operates principally under the CA 2006 and the regulations made thereunder. 1

8 B.3 Current operations and principal activities and markets B.4a Significant recent trends of the company and its industry The Standard Life Group is an insurance and investment management business that administers approximately 362 billion 1 of assets on behalf of its customers and clients. It employs approximately 6,300 people internationally through businesses in the UK, Europe, North America, Asia and Australia. The Standard Life Group s business was established in Edinburgh in 1825 and aims to manage, administer and advise on assets for customers and clients. Standard Life Investments specialises in active asset management and provides a wide range of investment solutions and funds to customers and clients in 45 countries around the world. These are available to institutional clients and also to retail investors through wholesale distributors and platforms. Long-term savings and investment propositions are provided by the Standard Life Group s Pensions and Savings business. This business is primarily based in the UK, with operations in Ireland and Germany and serves around 4.5 million customers and clients. The Standard Life Group s associate businesses in India, HDFC Asset Management and HDFC Life, provide mutual funds and individual and group life insurance. The Standard Life Group s joint venture in China, Heng An Standard Life, has 82 offices offering life and health insurance products. The following trends will continue to shape the global asset management, savings and investment landscape in which Standard Life and Aberdeen operate. Democratisation of financial risk Customers and clients are having to take more responsibility for their and their families financial futures driving the need for financial guidance, advice and simpler products and services. Standard Life s and Aberdeen s client landscape is changing, forcing Standard Life and Aberdeen to broaden their focus. There continues to be a gradual withdrawal of governments as pension providers and increasingly the buyers of asset management services are individuals, rather than the institutions of the past. Changes in legislation have also empowered retirees to make more of their own investment decisions and individuals are increasingly demanding immediacy, simplicity, transparency and personalisation. Rebuilding trust in financial services The global financial crisis damaged trust in financial services organisations. This drives the need for investment companies to be transparent in the way they operate, and through the products and services they provide. Investment companies will need to adapt to an environment of increased regulation. Globally, regulators are focused on protecting investors and trying to restore confidence in the integrity of markets. The increase in regulatory scrutiny is adding to industry complexity and requiring managers to be agile in responding to change. The cost of meeting expanding regulatory requirements also makes scale increasingly important within the asset management industry. Innovation, technology and digitalisation Innovation of products and services is becoming more important to allow investment companies to work more efficiently while improving the ways customers and clients can access, invest and keep track of their assets. 1 Pursuant to the Standard Life Group s unaudited internal records, it had billion of assets under administration as at 31 March

9 Demand also continues to grow for next generation investment products, including multi-asset solutions and alternative asset classes such as private equity, infrastructure and private debt. Slow growth, low inflation, compressed return environment In these market conditions, customers and clients are looking for simple and transparent products, with clear outcomes that will meet their investment needs. The macro environment has a significant impact on the demand for Standard Life s and Aberdeen s products and their investment performance. Recent macroeconomic trends include low growth, low inflation, low interest rates, ageing populations in the West, excess of savings over investment and weak productivity. The combination of Aberdeen and Standard Life offers investors a wide range of high quality investment solutions to address investor needs. With a strong focus on active management, the company seeks to enhance investor returns over the medium / long term. B.5 Group structure Standard Life is currently the ultimate holding company of the Standard Life Group. If the Merger completes, Standard Life will be the ultimate holding company of the Combined Group. B.6 Major shareholders As at the Latest Practicable Date, Standard Life had been notified in accordance with DTR 5 of the direct and/or indirect interests of the following underlying investors in 3% or more of the issued ordinary share capital of Standard Life (being the threshold of notification under the Disclosure Guidance and Transparency Rules): MAJOR SHAREHOLDERS (AS AT THE LATEST PRACTICABLE DATE) Anticipated % of Standard Life Name Number of Standard Life Shares % of Existing Standard Life Shares Shares immediately following Admission BlackRock Inc. 118,749, % 3.9% Henderson Global Investors 77,742, % 2.6% None of Standard Life s major shareholders has different voting rights attached to the Existing Standard Life Shares that they hold. Standard Life is not aware of any persons who, as at the Latest Practicable Date, directly or indirectly, jointly or severally, exercise or could exercise control over Standard Life. 3

10 B.7 Selected historical key financial information Financial information in relation to the Standard Life Group Selected historical financial information which summarises the results of operations and financial condition of the Standard Life Group for the three financial years ended 31 December 2016, 31 December 2015 and 31 December 2014, prepared in accordance with IFRS issued by the IASB as adopted by the EU, is set out in the following tables. Information provided for the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014, is audited and has been extracted without material adjustment from the Standard Life 2016 Annual Report, the Standard Life 2015 Annual Report and the Standard Life 2014 Annual Report, respectively. CONSOLIDATED INCOME STATEMENT 2016 m 2015 m 2014 m Revenue Net earned premium 2,092 2,228 2,343 Investment return 15,376 5,460 13,179 Fee income 1,186 1, Other income Total revenue 18,729 8,892 16,588 Total expenses 18,003 8,386 15,952 Share of profit from associates and joint ventures Profit before tax Tax expense attributable to policyholders returns Profit before tax expense attributable to equity holders profits Total tax expense Less: Tax attributable to policyholders returns (302) (134) (250) Tax expense attributable to equity holders profits Profit for the year from continuing operations Profit for the year from discontinued operations - 1, Profit for the year 419 1, Attributable to: Equity holders of Standard Life plc From continuing operations From discontinued operations - 1, Equity holders of Standard Life plc 368 1, Non-controlling interests , Earnings per share from continuing operations Basic(pence per share) Diluted (pence per share) Earnings per share Basic (pence per share) Diluted (pence per share)

11 SUMMARISED CONSOLIDATED BALANCE SHEET 2016 m 2015 m 2014 m Assets Intangible assets Deferred acquisition costs Investments in associates and joint ventures 7,948 5,719 4,508 Investment property 9,929 9,991 9,041 Property, plant and equipment Pension and other post-retirement benefit assets 1, Deferred tax assets Reinsurance assets 5,386 5,515 6,036 Loans Derivative financial assets 3,534 2,444 4,021 Equity securities and interests in pooled investment funds 83,307 71,679 71,327 Debt securities 67,933 66,657 64,441 Receivables and other financial assets 1,255 1,447 1,248 Current tax recoverable Other assets Assets held for sale ,338 Cash and cash equivalents 7,938 9,640 10,617 Total assets 190, , ,599 Equity attributable to equity holders of Standard Life plc 4,347 4,002 4,672 Non-controlling interests Total equity 4,644 4,349 4,950 Liabilities Non-participating insurance contract liabilities 23,422 21,206 21,841 Non-participating investment contract liabilities 102,063 92,894 88,207 Participating contract liabilities 31,273 29,654 31,276 Deposits received from reinsurers 5,093 5,134 5,642 Third party interest in consolidated fund 16,835 17,196 15,805 Subordinated liabilities 1,319 1,318 1,612 Pension and other post-retirement benefit provisions Deferred income Deferred tax liabilities Current tax liabilities Derivative financial liabilities 965 1,254 1,693 Other financial liabilities 3,916 2,900 3,734 Provisions Other liabilities Liabilities of operations held for sale ,033 Total liabilities 185, , ,649 Total equity and liabilities 190, , ,599 SUMMARISED CONSOLIDATED CASH FLOW STATEMENT 2016 m 2015 m 2014 m Net cash flows from operating activities 736 (2,264) (1,261) Net cash flows from investing activities (233) 1,714 (373) Net cash flows from financing activities (2,406) (1,010) 2,764 Net (decrease)/increase in cash and cash equivalents (1,903) (1,560) 1,130 Cash and cash equivalents at the beginning of the year 9,591 11,243 10,253 Effects of exchange rate changes on cash and cash equivalents 212 (92) (140) Cash and cash equivalents at the end of the year 7,900 9,591 11,243 The following significant changes to the financial condition and operating results of the Standard Life Group occurred during or subsequent to these periods: On 26 March 2014, the Standard Life Group announced the acquisition of Ignis for 390 million from the Phoenix Group. The acquisition completed on 1 July

12 On 3 September 2014, the Standard Life Group announced its intention to sell its Canadian business to a subsidiary of Manulife Financial Corporation. The sale of the Standard Life Group s Canadian long-term savings and retirement, individual and group insurance business and Canadian investment management business completed on 30 January The assets and liabilities of the Canadian branch of Standard Life Assurance Limited were transferred on 31 December The consideration, which was received on 30 January 2015, was CA$4.0 billion ( 2.1 billion) and a further 0.1 billion was received from the settlement of hedging derivative contracts. The Standard Life Group recognised a gain on disposal of 1.1 billion in respect of the sale which was included in profit from discontinued operations in the consolidated income statement for the year ended 31 December On 6 January 2015, Standard Life redeemed in full the Euro denominated 5.314% fixed/floating rate perpetual Mutual Assurance Capital Securities subordinated debt at their outstanding principal amount of 360 million. On 20 March 2015, following the sale of the Canadian business, the Standard Life Group returned 73 pence per ordinary share ( 1,749 million) to shareholders through a B/C share scheme. In conjunction with this return of value, Standard Life undertook a share consolidation on 13 March Nine new ordinary shares of 12 2 / 9 pence each were issued for each holding of 11 existing ordinary shares of 10 pence each. On 25 June 2015, the Standard Life Group announced the closure of its Singapore insurance business. In August 2015, a member of the Standard Life Group entered into a sale and purchase agreement to purchase an additional 9% of the issued share capital of HDFC Standard Life Insurance Company Limited (HDFC Life), an associate of the Standard Life Group. The transaction completed in April 2016, after satisfactory regulatory approvals were obtained, for a consideration of Rs 1,706 crore ( 179 million), increasing the Standard Life Group s interest in HDFC Life to 35%. In September 2015, Standard Life established 1825 to compete in the wealth and financial planning sector is a financial planning business providing financial advice, including specialist advice on tax planning, trusts and wills. In February 2016, Standard Life announced 2015 IFRS profit for the year ended 31 December 2015 from continuing operations attributable to equity holders of Standard Life of 276 million, compared to 376 million for the year ended 31 December This IFRS profit for the year included a 46 million loss in Hong Kong mainly due to an impairment of deferred acquisition costs following regulatory change, and a 31 million loss relating to the closure of the Singapore business. In May 2016, the Standard Life Group announced the acquisition of the Elevate adviser platform from AXA UK plc. The acquisition completed on 31 October On 8 August 2016, HDFC Life, an associate of the Standard Life Group, announced that it had agreed terms with Max Life Insurance Company Limited, Max Financial Services Limited and Max India Limited for the combination of the life insurance businesses of HDFC Life and Max Life. The transaction is intended to be effected through a composite scheme of arrangement and remains subject to regulatory, court and other necessary approvals. 6

13 On 12 October 2016, Standard Life Investments announced the opening of its new Singapore investments business. In February 2017, Standard Life announced IFRS profit for the year ended 31 December 2016 from continuing operations attributable to equity holders of Standard Life of 368 million. This IFRS profit for the year included a post-tax provision for annuity sales practices of 140 million relating to the FCA s enhanced annuity thematic review. There has been no significant change in the financial condition and operating results of the Standard Life Group since 31 December 2016, the date to which the Standard Life Group s last published audited financial statements were prepared. Financial information in relation to the Aberdeen Group Selected historical financial information which summarises the financial results and financial condition of the Aberdeen Group for the three financial years ended 30 September 2016, 30 September 2015 and 30 September 2014 and for the six months ended 31 March 2017 and 31 March 2016 prepared in accordance with IFRS as adopted by the EU, is set out in the following tables. Information provided for the financial years ended 30 September 2016, 30 September 2015 and 30 September 2014, is audited and information for the six months ended 31 March 2017 (and comparative information for the six months ended 31 March 2016) is unaudited. SUMMARISED CONSOLIDATED INCOME STATEMENT Six months ended 31 March 2017 Six months ended 31 March Net revenue 534.9m 483.6m 1,007.1m 1,169.0m 1,117.6m Underlying results: before amortisation, restructuring and acquisition-related costs: Underlying operating profit 188.6m 155.9m 328.1m 498.7m 490.4m Underlying profit before tax 195.2m 162.9m 352.7m 491.6m 490.3m Underlying diluted EPS 11.5p 9.6p 20.7p 30.0p 31.1p Statutory results: Statutory profit before tax 115.0m 98.8m 221.9m 353.7m 354.6m Statutory diluted EPS 6.1p 5.4p 12.6p 21.8p 22.8p SUMMARISED CONSOLIDATED BALANCE SHEET Six months ended 31 March 2017 m Six months ended 31 March 2016 (restated) m (restated 2 ) m m Assets Non-current assets Intangible assets 1, , , , ,552.2 Property, plant & equipment Investments Deferred tax assets Pension surplus Trade and other receivables Total non-current assets 1, , , , ,676.1 Current assets Assets backing investment contract liabilities 1, , , , ,472.9 Trade and other receivables m 2 Restated to reflect gross position for cash pooling arrangements. 7

14 Six months ended 31 March 2017 m Six months ended 31 March 2016 (restated) m 2016 m 2015 (restated) m 2014 m Investments Derivative financial assets Cash and cash equivalents Total current assets 3, , , , ,702.8 Total assets 5, , , , ,378.9 Total equity attributable to shareholders of the parent 1, , , , ,714.2 Non-controlling interest (0.8) (0.5) (0.6) (0.1) % Perpetual cumulative capital notes % Preference Shares Total equity 2, , , , ,075.9 Liabilities Non-current liabilities Deferred contingent consideration Pension deficit Provisions Deferred tax liabilities Total non-current liabilities Current liabilities Investment contract liabilities 1, , , , ,472.9 Interest bearing loans and borrowings Trade and other payables Deferred contingent consideration Other liabilities Current tax payable Derivative financial liabilities Total current liabilities 2, , , , ,114.2 Total liabilities 3, , , , ,303.0 Total equity and liabilities 5, , , , ,378.9 SUMMARISED CONSOLIDATED CASH FLOW STATEMENT Six Six months months ended ended 31 March 31 March 2017 m 2016 m (restated 3 ) m m 2014 m Net cash generated from operating activities Net cash generated (used) in Investing activities 12.4 (85.0) (69.8) (259.9) 69.6 Net cash used in financing activities (194.1) (203.2) (323.9) (265.6) (286.0) Net (decrease) increase in cash and cash equivalents (58.5) (197.9) (87.6) (79.1) Cash and cash equivalents at 1 October Exchange rate fluctuations on cash and cash equivalents (7.1) (11.5) Cash and cash equivalents at 30 September The following significant changes to the financial condition and operating results of the Aberdeen Group occurred during these periods: On 18 November 2013, Aberdeen announced the acquisition of Scottish Widows Investment Partnership Group Limited and its related private equity businesses from the Lloyds Banking Group (Lloyds), which completed on 31 March The connected purchase of Scottish Widows Investment Partnership Group Limited s infrastructure fund management business was completed on 1 May Total consideration for the transaction was million comprising 3 Restated to reflect gross position for cash pooling arrangements. 8

15 (i) million new Aberdeen Shares issued to Lloyds at an average price of pence; (ii) a deferred top-up payment of 38.3 million payable on 31 March 2015; and (iii) contingent deferred consideration of up to 100 million under an earn-out agreement with Lloyds. Total equity consideration recognised was million. The contingent deferred consideration of up to 100 million is payable in cash and the actual payable amount will be determined according to the growth over the five-year period to 31 March 2019 of recurring revenue generated from the strategic relationship with Lloyds. On 27 May 2015, Aberdeen announced the acquisition of FLAG Capital Management. Total consideration for the acquisition, which completed on 31 August 2015, was 62.6 million comprising cash consideration of 52.0 million and contingent deferred consideration of 10.6 million under an earn-out agreement. On 7 July 2015, Aberdeen announced the issue of 200 million 5.0% nonvoting, perpetual, non-cumulative, redeemable preference shares to Mitsubishi UFJ Trust & Banking Corporation (Mitsubishi) for consideration of 100 million (the Issuance ). The Issuance was approved by Aberdeen s shareholders on 6 July 2015 and completed on 7 July On 4 September 2015, Aberdeen announced the acquisition of Parmenion Capital Partners LLP and its sister company, Self Directed Holdings Limited. Total consideration for the acquisition, which completed on 11 January 2016, was 50.2 million comprising cash consideration of 40.1 million and contingent consideration of 10.1 million under an earn-out agreement. The fair value of the earn-out at completion was 10.1 million, determined by the probability-weighted expected return and growth over the period from acquisition to 30 September 2017, subject to a maximum of 16.8 million, and discounted to present value. There has been no significant change in the financial condition and operating results of the Aberdeen Group since 31 March 2017, the date to which the Aberdeen Group s last published unaudited interim financial statements were prepared. B.8 Selected key pro forma financial information The unaudited consolidated pro forma income statement and net assets statement for the Combined Group have been prepared in accordance with Annex II to the PD Regulation on a basis consistent with the accounting policies and presentation adopted in relation to the Standard Life consolidated financial statements for the year ended 31 December The unaudited consolidated pro forma financial information has been prepared to illustrate the effect on the Standard Life Group s income statement of the Merger as if it had taken place on 1 January The unaudited consolidated pro forma financial information has been prepared to illustrate the effect on the Standard Life Group s net assets of the Merger as if it had taken place on 31 December Due to its nature, the unaudited pro forma income statement and net assets statement address a hypothetical situation. They do not represent the Standard Life Group s actual financial position or results or what the Combined Group s actual financial position or results would have been if the Merger had been completed on the dates indicated. The unaudited consolidated pro forma profit before tax for the year ended 31 December 2016 is 916 million. The unaudited consolidated pro forma net assets as at 31 December 2016 is 8,759 million. 9

16 B.9 Profit forecast and estimates B.10 Qualifications in the audit reports B.11 Working capital qualifications Not applicable. Not applicable. There are no qualifications included in any audit report on the historical financial information included in this Prospectus. In the opinion of Standard Life, the working capital available to the Standard Life Group is sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus. In the opinion of Standard Life, the working capital available to the Combined Group is sufficient for its present requirements, that is for at least the next 12 months following the date of this Prospectus. Section C Securities Element C.1 Type and class of securities When admitted to trading, the New Shares will consist of up to 999,848,295 Standard Life Shares of 12 2 / 9 pence each in the capital of Standard Life. The New Shares will be registered with ISIN number GB00BVFD7Q58, SEDOL number BVFD7Q5, and will be traded on the London Stock Exchange under the ticker symbol SL. The New Shares will, on Admission, together with the Standard Life Shares, comprise the entire issued ordinary share capital of the Standard Life Group. C.2 Currency of issue The currency of the New Shares will be Pounds Sterling. C.3 Shares issued and par value C.4 Description of the rights attaching to the securities C.5 Restrictions on free transferability of the securities C.6 Admission/ regulated markets where the securities are traded As at the Latest Practicable Date, the nominal value of the total issued ordinary share capital of Standard Life is million divided into 1,979,413,496 ordinary shares of 12 2 / 9 pence each, which are issued fully paid. No Existing Standard Life Shares are held in treasury. The New Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Standard Life Shares, including in relation to the right to receive notice of, and to attend and vote at, general meetings of Standard Life, the right to receive and retain any dividends and other distributions declared, made or paid by reference to a record date falling after the Effective Date and to participate in the assets of Standard Life upon a winding-up of Standard Life. As with the Standard Life Shares in issue as at the Effective Date, the New Shares will not be subject to any redemption provisions. Not applicable. The New Shares will be freely transferable and there are no restrictions on transfer in the UK. Applications will be made to: (i) the FCA for the New Shares to be admitted to the premium listing segment of the Official List; and (ii) the London Stock Exchange for the New Shares to be admitted to trading on its main market for listed securities. No application has been made or is currently intended to be made by Standard Life for the New Shares to be admitted to listing or trading on any other exchange. C.7 Dividend policy The Standard Life Board and Aberdeen Board agreed on 6 March 2017 that, subject to approval at the Standard Life Annual General Meeting scheduled for 16 May 2017, Standard Life Shareholders would receive the final dividend of pence per Standard Life Share with respect to the financial period ended 31 December 2016 that was announced on 10

17 24 February 2017 (the First Permitted Standard Life Dividend ). On 2 May 2017 the Aberdeen Board announced that Aberdeen Shareholders will receive an interim dividend of 7.5 pence per Aberdeen share for the sixmonth period ended 31 March 2017 (the First Permitted Aberdeen Dividend ). If completion of the Merger occurs before the record date for Standard Life s interim dividend for 2017, shareholders in Standard Life would be entitled to receive such interim dividend. In the event that completion of the Merger occurs after the record date for Standard Life s interim dividend for 2017, Standard Life Shareholders would be entitled to receive such interim dividend (the Second Permitted Standard Life Dividend ). In this event, Aberdeen would expect to declare and pay a dividend to its shareholders prior to the Scheme Record Time equal to the Second Permitted Standard Life Dividend multiplied by the Exchange Ratio, therefore providing Aberdeen Shareholders with the sum they would have received had completion of the Merger taken place prior to the record date for Standard Life s interim dividend (such equalising dividend being the Second Permitted Aberdeen Dividend and when taken together with all permitted dividends referenced above, including the First Permitted Aberdeen Dividend and the First Permitted Standard Life Dividend, the Permitted Dividends ). The amount payable as the Second Permitted Aberdeen Dividend will be announced at or around the same time as the Second Permitted Standard Life Dividend and shall be an amount equal to the Second Permitted Standard Life Dividend multiplied by the Exchange Ratio. If either party announces, declares, makes or pays any dividend or other distribution on or after the date of this Prospectus and prior to completion of the Merger, other than the Permitted Dividends, or in excess of the Permitted Dividends, there will be no change to the Exchange Ratio. However, Standard Life and Aberdeen reserve the right to respectively pay an equalising dividend to their shareholders. Following the Merger and subject to the approval of the Board of the Combined Group, the Continuing Directors and Proposed Directors intend to adopt Standard Life s progressive dividend policy with the base dividend being the Standard Life full year dividend of pence for the financial year ended 31 December The increased diversification of the Combined Group, enhanced financial profile and material earnings accretion is expected to support the generation of attractive and sustainable returns for shareholders, including through dividends. Section D Risks Element D.1 Key information on key risks that are specific to the company or its industry Any sustained period of actual or perceived underperformance across a range of the Standard Life Group s and the Aberdeen Group s funds or by one or more of its larger funds, relative to peers, benchmarks or internal targets, could have a material adverse effect on the Standard Life Group s, the Aberdeen Group s and, if the Merger completes, the Combined Group s business, reputation and brand, sales, financial results, financial condition and growth prospects. The Standard Life Group s and the Aberdeen Group s results may be materially adversely affected by conditions in global capital markets and the economy generally. Economic uncertainty and volatility may 11