Independent auditors’ report To the Directors of Legal & General Group Plc on the Supplementary Financial Statements – European Embedded Value Basis

Our Opinion

In our opinion, Legal & General Group plc’s supplementary financial statements – European Embedded Value basis (the “supplementary financial statements”) for the year ended 31 December 2014 have been properly prepared in all material respects in accordance with the European Embedded Value (“EEV”) basis set out in Note 1 – Methodology.

What we have audited

Legal & General Group plc’s supplementary financial statements comprise:

  • the Group Embedded Value – Summary as at 31 December 2014; and
  • the notes to the supplementary financial statements.

The financial reporting framework that has been applied in the preparation of the supplementary financial statements is the European Embedded Value (“EEV”) basis as set out in Note 1 – Methodology. The supplementary financial statements should be read in conjunction with the group’s financial statements.

In applying the EEV basis, the directors have made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

What an audit of supplementary financial statements involves

The directors are responsible for the preparation of the supplementary financial statements on the EEV basis in accordance with the EEV basis set out in Note 1 – Methodology.

Our responsibility is to audit and express an opinion on the supplementary financial statements in accordance with applicable law and International Standards on Auditing (“ISAs (UK & Ireland)”). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinion, has been prepared for and only for the group’s board of directors in conformity with the methodology and disclosure requirements contained in the document “Supplementary Reporting for Long Term Insurance Business (the European Embedded Value Method)” issued by the CFO forum, in accordance with our engagement letter dated 29 January 2015 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come, including without limitation under any contractual obligations of the company, save where expressly agreed by our prior consent in writing.

Responsibilities for the Supplementary financial statements

Our responsibilities and those of the directors

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the supplementary financial statements sufficient to give reasonable assurance that the supplementary financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

  • whether the accounting policies are appropriate to the group’s circumstances and have been consistently applied and adequately disclosed;
  • the reasonableness of significant accounting estimates made by the directors; and
  • the overall presentation of the supplementary financial statements.

We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the supplementary financial statements.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual Report and Accounts to identify material inconsistencies with the audited supplementary financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Signature PricewaterhouseCoopers LLP, Chartered Accountants (handwriting)

PricewaterhouseCoopers LLP
Chartered Accountants
3 March 2015