Prudential Funding (Asia) PLC

Registered

No. 14645212

PRUDENTIAL FUNDING (ASIA) PLC

Annual Report and Accounts

For the year to

31 December 2024

Annual report and accounts for the year to 31 December 2024

Contents

COMPANY INFORMATION

Directors

K J Devlin

S D Rich

R L Wyatt

Secretary

Prudential Group Secretarial Services Limited

Auditor

Ernst & Young LLP, London

Incorporated and registered in England and Wales. Registered no. 14645212.

Registered office: 1 Angel Court, London EC2R 7AG.

STRATEGIC REPORT

The directors of Prudential Funding (Asia) plc (‘the Company’) present their strategic report for the

year to 31 December 2024.

Principal activities

Prudential Funding (Asia) plc (‘the Company’) is a public limited company incorporated and registered

in England and Wales with registered number 14645212. The ultimate controlling party of the

Company is Prudential plc. The principal activity of the Company throughout the year was to operate

as a finance company.

The objective of the company is to provide funding to Prudential plc and its subsidiaries (the

‘Prudential Group’).

Developments in the year

The operations of the Company, including sources of income and financing have continued

unchanged from the prior period, and there has been no change during the year in the internal loan

assets or external borrowings.

Key Performance Indicators

The key performance indicators used by the directors to monitor the performance of the business are

profit before tax and net assets.

The profit before tax for the year of $23.2 million (period from 7 February to 31 December 2023: $12.7

million) reflects finance income from other group companies less the finance cost of borrowing due to

external bondholders. The net assets of the company at 31 December 2024 were $445.4 million (31

December 2023: $429.5 million).

Principal risks and uncertainties

•

Market Risk

The Company holds financial assets and liabilities denominated in currencies other than US Dollars,

its functional currency. Assets and liabilities denominated in foreign currencies are closely matched in

terms of value, timing and duration, with net exposure only arising from the additional margin applied

to the interest rate on debt receivables from Prudential plc.

The interest rates on the Company’s listed debt liabilities, and backing receivables from Prudential plc

are fixed. The interest rate on the Company’s loan receivable from Prudential International Treasury

Limited reflects current market interest rates.

•

Credit and Liquidity Risk

The Company’s assets consist of amounts due from Prudential plc and other Prudential Group

Companies. The Company’s financial position, and ability to meet its obligations as they fall due is

therefore dependent on the ability of these companies to meet their obligations on a timely basis. At

31 December 2024 Prudential plc had consolidated IFRS shareholders’ equity of $17.5 billion (2023:

$17.8 billion).

•

Global economic and geopolitical conditions

The macroeconomic landscape and financial markets are expected to remain challenging and highly

uncertain. Ad-hoc events can disrupt market conditions unexpectedly. The capital and liquidity

position of the Prudential Group, and consequential implications for the Company, continues to be

actively monitored as concerns remain from policymakers and regulators around liquidity and

solvency of the financial system. Challenging macroeconomic conditions could also negatively impact

the Prudential Group’s financial performance.

•

Sustainability risks

The sustainability risks of the Prudential Group are set out in the Prudential plc 2024 Annual Report.

The activities of the Company, being to provide funding to Prudential plc and other Group companies,

are such that its exposure to sustainability risks, including climate change risks, are limited to

scenarios in which the sustainability risks of the Prudential Group impact the Company’s operations,

and hence it is currently not material.

Section 172 and Stakeholder engagement statement

Section 172 of the UK Companies Act requires each Director to act in a way that he or she considers,

in good faith, would be most likely to promote the success of the Company for the benefit of its

members as a whole. In doing this, Section 172 requires a Director to have regard (among other

matters) to the needs of employees, suppliers, customers and other wider stakeholder interests.

The Directors are regularly reminded of their statutory duties under Section 172.

Due to the nature of the Company’s principal activity as a finance company within the Prudential

Group, the stakeholders and strategic business activities of the Company are aligned with the

Prudential Group and engagement occurs at the Group level. Details of how the Group engaged with

stakeholders and the outcome of that engagement is detailed in the Prudential plc 2024 Annual

Report and Accounts.

During the year the Directors have continued the operations of the Company unchanged from the

prior period.

The Company’s key stakeholders are set out below, with a summary of engagement in the period:

•

Customers and Employees: As the Company’s principal activity is to act as a financing

company for the Prudential Group it has no external customers or employees and therefore

the Directors consider it appropriate that customer and employee engagement is undertaken

at a Group level. The Company supports the Group’s engagement with these stakeholders

through provision of finance for Group entities.

•

Investors: The operations of the Company were undertaken considering the interest of the

Company’s investors, in meeting the Group’s overall financial objectives, and the holders of

the Company’s listed borrowings by ensuring that the Company has the necessary financial

resources to meet its payment obligations as they fall due.

•

Communities: Direct engagement with wider communities is undertaken at a Group level.

However, ensuring compliance with the laws and regulations of the applicable jurisdictions in

which the Group and Company operate is a key priority in the Directors’ decision making

process.

Signed on behalf of the Board of Directors

K J Devlin

Director

25 March 2025

DIRECTORS’ REPORT

The directors of Prudential Funding (Asia) plc (‘the Company’) present their report for the year to 31

December 2024.

Accounts and dividend

The state of affairs of the Company at 31 December 2024 is shown in the statement of financial position

on page 16. The statement of comprehensive income is shown on page 15. No dividend was paid in

2024 (2023: nil) and the directors do not recommend the payment of a dividend.

Going concern

The Directors’ assessment of Going concern is set out on page 17.

Directors

The directors who held office during the year to 31 December 2024 are set out on page 3.

Directors' and officers' protection

Prudential plc has arranged appropriate insurance cover in respect of legal action against directors and

senior managers of companies within the Prudential Group.

In addition, the Articles of Association of

the Company permit the directors, officers and employees of the Company to be indemnified in respect

of liabilities incurred as a result of their office.

Risk Management and internal control

The Directors have overall responsibility for the Company’s systems of risk management and internal

controls. The Company operates within the risk management framework under the policies, procedures

and internal controls maintained by the Prudential Group.

The Prudential Group’s risk governance comprises the Group board organisational structures, reporting

relationships, delegation of authority, roles and responsibilities, and risk and compliance policies that

have been established to enable business decision making with respect to control activities and risk-

related matters. Risk culture is a strategic priority of the Group board, which recognises its importance

in the way the Group conducts business. Prudential’s Group Risk Framework and underlying policies

support sound risk management practices by requiring a focus on customers, longer-term goals and

sustainability, the avoidance of excessive risk-taking, and highlighting acceptable and unacceptable

behaviours. This is supported through the inclusion of risk and sustainability considerations in

performance management and remuneration for key executives; the building of appropriate skills and

capabilities in risk management; and by ensuring that employees understand and care about their role

in managing risk through open discussions, collaboration and engagement.

Disclosure of information to the auditor

The Directors who held office at the date of approval of this Directors’ report confirm that, so far as they

are aware, there is no relevant audit information of which the Company’s auditor is unaware; and that

each Director has taken all reasonable 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.

Political and charitable donations

The Company did not make any political or charitable donations or incur any political or charitable

expenditure during the year.

Auditor

The auditor, Ernst & Young LLP (“EY”) has expressed their willingness to continue in office until the

next annual general meeting (“AGM”). Pursuant to section 489 of the Companies Act 2006, a

resolution for the reappointment of EY will be proposed at the forthcoming AGM of the Company.

Signed on behalf of the Board of Directors.

S Edwards

On behalf of

Prudential Group Secretarial Services Limited

Secretary

25 March 2025

Statement of Director’s responsibilities

The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial

statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that

law they have elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards including FRS 101 ‘Reduced

Disclosure Framework’, and applicable law) Under company law the Directors must not approve the

financial statements unless they are satisfied that they give a true and fair view of the state of affairs of

the Company and of the profit or loss of the Company for that period. In preparing these financial

statements, the Directors are required to:

•

select suitable accounting policies and then apply them consistently;

•

make judgements and estimates that are reasonable and prudent;

•

state whether applicable UK accounting standards, including FRS 101, have been followed, subject

to any material departures disclosed and explained in the financial statements;

•

assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters

related to going concern; and

•

use the going concern basis of accounting unless they either intend to liquidate the Company or to

cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and

explain the Company’s transactions and disclose with reasonable accuracy at any time the financial

position of the Company and enable them to ensure that the financial statements comply with the

Companies Act 2006. They are responsible for such internal control as they determine is necessary to

enable the preparation of financial statements that are free from material misstatement, whether due

to fraud or error, and have general responsibility for taking such steps as are reasonably open to them

to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Responsibility statement of the directors in respect of the annual financial report

The directors of Prudential Funding (Asia) plc, whose names are set out on page 3, confirm that to the

best of their knowledge:

•

The financial statements, prepared in accordance with the applicable set of accounting standards,

give a true and fair view of the assets, liabilities, financial position and profit or loss of the

company taken as a whole; and

•

The strategic report includes a fair review of the development and performance of the business

and the position of the company taken as a whole, together with a description of the principal risks

and uncertainties that it faces.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRUDENTIAL FUNDING (ASIA)

PLC

Opinion

We have audited the financial statements of Prudential Funding (Asia) Plc (“the company”) for the

year ended 31 December 2024 which comprise the statement of comprehensive income, the

statement of changes in equity, the statement of financial position and the related notes 1 to 12

including material accounting policy information. The financial reporting framework that has been

applied in their preparation is applicable law and United Kingdom Accounting Standards including

FRS 101 “Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

•

give a true and fair view of the company’s affairs as at 31 December 2024 and of its profit for

the year then ended;

•

have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and

•

have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditor’s

responsibilities for the audit of the financial statements section of our report. We are independent of

the company in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,

and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern

basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the

directors’ assessment of the company’s ability to continue to adopt the going concern basis of

accounting included assessing the going concern status and forecast liquidity position of the ultimate

parent company Prudential plc as the payment of interest and repayment of principal on the

company’s external loan obligations is dependent upon the receipt of corresponding amounts on the

related loan to Prudential plc. This assessment included:

•

Confirming our understanding of management’s going concern assessment process and

obtaining management’s going concern assessment for both the company and Prudential plc

which covers the period to 31 March 2026;

•

Making inquiries of management and those charged with governance to identify risks or

events that may impact the company’s ability to continue as a going concern;

•

Determining the availability of liquid resources in Prudential plc to enable it to meet its loan

interest and principal payments to the company under base and stressed positions during the

going concern period, and hence ascertaining whether the company will be able to service its

external loan obligations;

•

Obtaining information regarding post-balance sheet events to determine their impact on the

assessment.

Based on the work we have performed, we have not identified any material uncertainties relating to

events or conditions that, individually or collectively, may cast significant doubt on the company’s

ability to continue as a going concern for a period to 31 March 2026

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report. However, because not all future events or conditions

can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going

concern.

Overview of our audit approach

Key audit

matters

•

Recoverability of loan balances due from Prudential plc

Materiality

•

Overall materiality of $21m which represents 0.5% of the Company’s total

assets.

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance

materiality

determine our audit scope for the company. This enables us to form an opinion on the financial

statements. We take into account size, risk profile, the organisation of the company and effectiveness

of controls, the potential impact of climate change and changes in the business environment when

assessing the level of work to be performed

All audit work was performed directly by the audit

engagement team.

Climate change

The company has determined that there is no material impact from climate change on its operations.

Our audit effort in considering the impact of climate change on the financial statements was focused

on evaluating management’s assessment of the impact of climate risk disclosed in the Basis of

Preparation on page 17.

We also challenged the Directors’ considerations of climate change risks in their assessment of going

concern and associated disclosures. Where considerations of climate change were relevant to our

assessment of going concern, these are described above.

Based on our work we have not identified the impact of climate change on the financial statements to

be a key audit matter or to impact a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the financial statements of the current period and include the most significant assessed

risks of material misstatement (whether or not due to fraud) that we identified. These matters included

those which had the greatest effect on the overall audit strategy, the allocation of resources in the

audit; and directing the efforts of the engagement team. These matters were addressed in the context

of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide

a separate opinion on these matters.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of

identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably

be expected to influence the economic decisions of the users of the financial statements. Materiality

provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the company to be $21 million (2023: $21 million), which is 0.5% (2023:

0.5%) of Total Assets. We believe that Total Assets provides us with an appropriate materiality basis

as the users of the financial statements, including the Parent company, directors, external

bondholders and regulators are interested in the assets of the company being the intercompany loans

due from Prudential plc and other Prudential Group Companies as the financial position of the entity

and its ability to service the external loans are dependent on these companies meeting their

obligations on a timely basis.

Performance materiality

The application of materiality at the individual account or balance level.

It is set at an amount to

reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected

misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the company’s overall control

environment, our judgement was that performance materiality was 75% (2023: 50%) of our planning

materiality, namely $15.7m (2023: $10.5m).

We have set performance materiality at this percentage

Risk

Our response to the risk

Recoverability of loan balances due from

Prudential plc

The intercompany loan balances of $3.6bn (2023:

$3.6bn) represent a significant proportion of the

entity's assets. While their valuation is not subject to

significant judgment or complexity, their magnitude

and materiality are substantial, and the receipts of

interest and principal repayments in respect of the

loans are used by the company to meet its

obligations on its external borrowings.

The primary risk is that of expected credit loss on the

intercompany loan balances.

Our procedures included:

•

Assessing the recoverability of the loans

to Prudential plc by examining relevant

financial information including the most

recent financial statements, and cash

flow projections

for Prudential plc and

evaluating the availability of resources

within Prudential plc to repay amounts

owed to the company

•

We considered credit risk by examining

Prudential Plc’s credit ratings and any

external factors impacting the borrower's

financial stability

•

Determining whether the valuation of the

loans should include a provision for

expected credit losses.

Key observations communicated to the those charged with governance

We have determined that it is appropriate not to record an expected credit loss charge, as there has

been no deterioration in credit quality and Prudential plc is projected to have sufficient resources to pay

interest and principal amounts in respect of the loans as they fall due.

due to given that this is a second-year audit, we have more understanding of the company's

operations.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with those charged with governance that we would report to them all uncorrected audit

differences in excess of $1m (2023: $1m), which is set at 5% of planning materiality, as well as

differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality

discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report, other than the financial

statements and our auditor’s report thereon.

The directors are responsible for the other information

contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained in the

course of the audit or otherwise appears to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are required to determine whether this gives

rise to a material misstatement in the financial statements themselves. If, based on the work we have

performed, we conclude that there is a material misstatement of the other information, we are required

to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and

•

the strategic report and directors’ reports have been prepared in accordance with applicable

legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the

course of the audit, we have not identified material misstatements in the strategic report or directors’

report.

We have nothing to report in respect of the following matters in relation to which the Companies Act

2006 requires us to report to you if, in our opinion:

•

adequate accounting records have not been kept, or returns adequate for our audit have not been

received from branches not visited by us; or

•

the financial statements are not in agreement with the accounting records and returns; or

•

certain disclosures of directors’ remuneration specified by law are not made; or

•

we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 8, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true

and fair view,

and for such internal control as the directors determine is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or

error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using

the going concern basis of accounting unless the directors either intend to liquidate the company or to

cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of users

taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The

risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one

resulting from error, as fraud may involve deliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusion. The extent to which our procedures are capable

of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those

charged with governance of the company and management.

•

We obtained an understanding of the legal and regulatory frameworks that are applicable to

the company and determined that the most significant are the financial reporting framework,

tax legislation, and permissions and supervisory requirements of the listing authorities in the

UK (London Stock Exchange) and US (New York Stock Exchange) where the Company’s

debt is listed. We understood how the Company is complying with those frameworks by

making inquiries of management and those responsible for legal and compliance matters.

•

We assessed the susceptibility of the company’s financial statements to material

misstatement, including how fraud might occur by considering the controls that the company

has established to address the risks identified by the entity, or that otherwise seek to prevent,

deter or detect fraud.

•

Based on this understanding we designed our audit procedures to identify non-compliance

with such laws and regulations. Our procedures involved considering the fraud risk within the

valuation of the intercompany loan balances.

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities.

This

description forms part of our auditor’s report.

Other matters we are required to address

We were appointed by the company on 23 May 2024 to audit the financial statements for the year

ending 31 December 2023 and subsequent financial periods.

The period of total uninterrupted engagement including previous renewals and reappointments is 2

years, covering the years ending 31 December 2023 and 31 December 2024.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the company

and we remain independent of the company in conducting the audit.

The audit opinion is consistent with the additional report to those charged with governance.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of

Part 16 of the Companies Act 2006.

Our audit work has been undertaken so that we might state to

the company’s members those matters we are required to state to them in an auditor’s report and for

no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the company and the company’s members as a body, for our audit work, for this

report, or for the opinions we have formed.

John Headley (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

25 March 2025

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR TO 31 DECEMBER 2024

Year to 31

December

Period from 7

February to

31 December

2024

2023

Note

$000

Finance income from loans to ultimate parent company

207,569

170,378

Finance income from loans to other group companies

22,415

11,811

Finance Costs

(206,734)

(169,648)

(Loss)/ Gain on foreign exchange translation

(42)

154

Administrative costs

(25)

Profit before tax

23,183

12,695

Income tax expense

(7,324)

(112)

Profit for the period and total comprehensive profit

15,859

12,583

All of the above items relate to continuing operations.

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR TO 31 DECEMBER 2024

Note

capital

$000

premium

$000

Profit and

loss account

$000

Total

$000

Balance at 7 February 2023

New Share Capital Subscribed

400,000

400,060

Other Capital Contributions

16,863

Total comprehensive income

for the period

12,583

Balance at 31 December 2023

400,000

29,446

429,506

Total comprehensive income

for the period

15,859

Balance at 31 December 2024

400,000

45,305

445,365

The notes on pages 17 to 23 form part of these financial statements.

STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2024

31 December

2024

31 December

2023

Notes

$000

FIXED ASSETS

Financial Investments - Loans to ultimate parent

company

3,637,338

3,609,934

3,637,338

3,609,934

CURRENT ASSETS

Amounts owed by fellow group undertakings

393,985

400,060

Accrued interest on intercompany loans

73,231

49,066

467,216

449,126

LIABILITIES: AMOUNTS FALLING DUE WITHIN

ONE YEAR

Payables due to fellow group undertakings

1,388

114

Interest payable

34,706

34,938

36,094

35,052

NET CURRENT ASSETS

431,122

414,074

LIABILITIES: AMOUNTS FALLING DUE AFTER

MORE THAN ONE YEAR

Subordinated liabilities

2,087,898

2,071,387

Debenture loans

1,535,197

1,523,115

3,623,095

3,594,502

TOTAL NET ASSETS

445,365

429,506

CAPITAL AND RESERVES

Called up share capital

Share premium

400,000

Profit and loss account

45,305

29,446

TOTAL SHAREHOLDERS’ FUNDS

445,365

429,506

The financial statements on pages 15 to 23 were approved by the Board of Directors on 25 March

2025 and signed on its behalf by

K J Devlin

Director

The notes on pages 17 to 23 form part of these financial statements.

NOTES TO THE ACCOUNTS

Accounting policies

Basis of presentation

Prudential Funding (Asia) plc (the “Company”) is a public company incorporated, domiciled and

registered in England and Wales.

The Company has no subsidiaries. These financial statements therefore present information about the

Company as an individual undertaking.

These financial statements are prepared in accordance with Financial Reporting Standard 101 Reduced

Disclosure Framework (“FRS 101”), Part 15 of the Companies Act 2006 and Schedule 1 of The Large

and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

In preparing these financial statements, the Company applies the recognition, measurement and

disclosure requirements in accordance with international accounting standards adopted for use in the

UK but makes amendments where necessary, in order to comply with the Companies Act 2006, and

has set out below where advantages of the FRS 101 disclosure exemptions have been taken.

The Company’s ultimate parent undertaking, Prudential plc, includes the Company in its consolidated

financial statements. Those consolidated financial statements are prepared in accordance with

International Financial Reporting Standards and are available to the public. Copies of the accounts can

be obtained from the Company Secretary, 1 Angel Court, London EC2R 7AG.

In these financial statements, the Company has applied the exemptions available under FRS 101 in

respect of the following disclosures:

•

A cash flow statement and related notes

•

Disclosures in respect of transactions between wholly owned subsidiaries within the

Prudential Group

•

Disclosure in respect of capital management

•

The effects of new but not yet effective IFRSs

•

Disclosures in respect of the compensation of key management personnel

As the consolidated financial statements of Prudential plc include the equivalent disclosures, the

Company has also taken the exemptions under FRS 101 available in respect of the following

disclosures:

•

Certain disclosures required by IFRS 13 “Fair Value Measurement” and the disclosures

required by IFRS 7 “Financial Instrument Disclosures”

As noted in the strategic report, there is currently no material climate risk exposure for the Company.

The accounting policies set out below have, unless otherwise stated, been applied consistently to all

periods presented in these financial statements.

The Company’s functional and presentational currency is United States Dollars. Figures are presented

to the nearest $1,000.

Going Concern

The directors have made an assessment of the Company’s going concern, considering both its

current performance and its outlook using the information available up to the date of issue of the 2024

annual report. This included consideration of the ability of Prudential plc to meet its obligations to the

Company, together with the stress and scenario testing conducted by the Prudential Group. As a

result of such assessment and after making enquiries, the directors have a reasonable expectation

that the Company has adequate resources to continue in operational existence for the foreseeable

future, being a period of at least 12 months from 25 March 2025 approval date of the annual report

until 31 March 2026.

NOTES TO THE ACCOUNTS (continued)

Accounting policies (Continued)

Amounts owed by Group undertakings

Amounts owed by Group undertakings are initially stated at fair value and subsequently measured at

amortised cost using the effective interest rate method. Any difference between the value initially

recognised and the redemption value is recognised as part of finance income in the Statement of

Comprehensive Income over the term of the loan as part of the effective interest rate method.

The Company assesses impairment on its loans and receivables using the expected credit loss

approach. The expected credit loss on the Company’s loans and receivables, the majority of which

represent loans to fellow Group companies, have been assessed by taking into account the

probability of defaults on those loans. In all cases, the Group companies are expected to have

sufficient resources to repay the loans either now or over time based on projected earnings. For loans

recallable on demand, the expected credit loss has been limited to the impact of discounting the value

of the loan between the balance sheet date and the anticipated recovery date. For loans with a fixed

maturity date the expected credit loss has been determined with reference to the historic experience

of loans with equivalent credit characteristics. No expected credit losses have been recognised in the

year (2023:nil).

Lifetime expected credit losses would be recognised on term loans due from Prudential plc if the

credit risk on that financial instrument had increased significantly since initial recognition. Available

published credit ratings on Prudential plc Group debt are used as a measure of the credit risk on

loans due from Prudential plc. No significant increase in the year has been noted.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs, and subsequently accounted

for on an amortised cost basis using the effective interest rate method. Under the effective interest

rate method, the difference between the redemption value of the borrowing and the amount initially

recognised is amortised as finance costs in the Statement of Comprehensive Income over the term of

the loan or, for subordinated debt, over the expected life of the instrument.

Interest receivable and payable

Interest receivable and payable are recognised on an accruals basis, in accordance with the effective

interest rate method.

Administration expenses

Administrative expenses represent amounts directly incurred by the Company as the issuer of listed

debt instruments. Other administration expenses are borne by other Prudential Group companies.

Foreign currency translation

Transactions not denominated in the Company’s functional currency, US dollars, are initially recorded

in the functional currency at the exchange rate prevailing on the date of the transaction. Monetary

assets and liabilities not denominated in the Company’s functional currency are translated to the

Company’s functional currency at year end spot rates. The impact of these currency translations is

recorded within the income statement.

NOTES TO THE ACCOUNTS (continued)

Taxation

Current tax expense is charged or credited based upon amounts estimated to be payable or recoverable

as a result of taxable amounts for the current year and adjustments made in relation to prior years.

Current tax recoverable (payable) recognised in the balance sheet is measured at the amount expected

to be either recovered from (paid to) relevant tax authorities or Group undertakings in relation to the

surrender (claim) of tax losses.

Deferred taxes are provided under the liability method for all relevant temporary differences. Deferred

tax is measured at the tax rates that are expected to apply to the period when the asset is realised or

the liability settled, based on tax rates (and laws) that have been enacted or are substantively enacted

at the end of the reporting period. The Group has applied the IAS 12 paragraph 4A mandatory exception

from recognising and disclosing information on deferred tax assets and liabilities related to Pillar Two

income taxes at 31 December 2024.

Adoption of new accounting pronouncements

The following standards, interpretations and amendments have been issued by the IASB and have

been adopted by the Company, with no material impact on the Company’s financial position. This is not

intended to be a complete list as only those standards, interpretations and amendments that are most

relevant to the Company are presented.

•

Amendments to IAS 1 'Classification of liabilities as current or non-current' issued in January

2020 and October 2022 and ‘Non-current liabilities with covenants’ issued in October 2022;

•

Amendments to IAS 7 and IFRS 7 ‘Supplier finance arrangements’ issued in May 2023.

Significant accounting judgement

Valuation of debt transfer

The fair value of the external debt transferred from Prudential plc in March 2023 was determined by

reference to the externally observable prices of these quoted instruments.

The intercompany debt assets received as consideration for the transfer of the external debt liabilities

are for the same principal amounts and have identical terms to the external debt, with the exception of

an additional margin on the interest rate. It is judged that the most appropriate measure of the fair value

of these assets is the fair value of the external debt liabilities with an adjustment for the fair value of the

additional interest margin, which increased the fair value of the assets by $17 million on initial

recognition.

Following initial recognition these financial instruments are subsequently measured at amortised cost,

with interest income and expense recognised according to the instrument’s effective interest rate.

Cash and cash equivalents

The company holds a Sterling and US dollar denominated bank account with nil balances at the

period end.

NOTES TO THE ACCOUNTS (continued)

Segmental Disclosure

The Company has not made any segmental disclosure as its income is wholly attributable to its

principal activity and is generated in the UK.

Tax

(a)

Analysis of tax charge for the year

2024

$000

2023

$000

Current tax

UK corporation tax charge on profit for the year

UK domestic minimum top-up tax

(note 1)

(7,324)

(112)

Total current tax charge

(7,324)

(112)

Deferred tax

Origination and deferral of temporary differences

Tax charge

(7,324)

(112)

(1)

On 30 June 2023 legislation was substantively enacted in the UK to introduce the OECD’s Pillar Two qualified

domestic minimum top-up tax, with effect from 1 January 2024. No charge arises in the period.

(b)

Factors affecting tax charge for the year

The tax charge assessed in the year is different from the application of the standard rate of

corporation tax in the UK and the differences are explained below. The standard rate of tax has

been determined by using the UK rate of corporation tax enacted for the year for which the profit

of the Company will be taxed.

Year to 31

December

2024

$000

Period from 7

February to 31

December

2023

$000

Profit before tax

23,183

12,695

Profit multiplied by standard rate of corporation tax in

the UK of 25% (2023: 24.43%)

(5,796)

(3,101)

Amortisation of debt instruments not tax effective

(9,305)

(8,583)

Group losses claimed for no consideration

7,665

11,572

Adjustments in respect of prior years

112

Tax charge

(7,324)

(112)

The only factors that are expected to materially affect the future tax charges of the Company

are those detailed in (b) above.

NOTES TO THE ACCOUNTS (continued)

Loans to ultimate parent company

Carrying

Value

Carrying

Value

Maturity

Interest

rate

December

2024

December

2023

Year

$000

US$750m Notes

Perpetual

4.925

664,412

£435m Notes

2031

6.175

548,165

558,524

US$1,000m Notes

2033

3.000

885,657

859,365

£250m Notes

2029

5.925

319,676

327,001

US$1,000m Notes

2030

3.175

903,695

888,655

US$350m Notes

2032

3.675

315,733

311,977

Total Fixed Assets - Loans to

ultimate parent company

3,637,338

3,609,934

Accrued interest

39,004

37,254

Total including accrued interest

3,676,342

3,647,188

On 2 March 2023 Prudential plc, the Company’s ultimate parent company, transferred certain debt

instrument liabilities to the Company, as set out in note 7 below. In consideration for this transfer the

company was granted intercompany debt receivable instruments, which matched the terms and value

of the debt liability instruments, with an additional margin on the interest rate in excess of the interest

payable on the debt liability instruments.

These intercompany receivable instruments were measured at fair value on initial recognition, which

totalled $3,605 million, including accrued interest. The excess of the fair value of the intercompany

receivables over the fair value of the debt liability instruments of $17 million was recognised as an

additional capital contribution through the statement of changes in equity and recorded in the profit and

loss reserve. The fair value of these instruments was established by reference to the observable market

value of the debt liability instruments transferred on the same day, with an adjustment for the additional

interest margin.

These debt receivable assets are subsequently measured at amortised cost, applying the effective

interest rate method, to amortise the difference between the value initial recognised and redemption

value of the assets.

Receivables from other Group Companies

31 December

2024

31 December

2023

$000

Loan to Prudential International Treasury Limited

393,925

400,000

Loan to Prudential Corporation Asia Limited

393,985

400,060

Loans to Prudential International Treasury Limited are recallable on demand. Interest receivable on

these loans reflects current market interest rates. Accrued interest on these loans is included within

“Accrued interest on intercompany loans” in the balance sheet.

NOTES TO THE ACCOUNTS (continued)

Payables to fellow group undertakings

31 December

2024

31 December

2023

$000

Amounts due to Prudential Services Limited

1,388

114

1,388

114

Amounts due to Prudential Services Limited represent taxation that has been paid on behalf of the

company.

Borrowings

Carrying

Value

Carrying

Value

Maturity

Interest

rate

December

2024

December

2023

Year

$000

US$750m 4.875%

Perpetual

4.875

657,157

£435m 6.125% Notes 2031

2031

6.125

546,655

556,813

US$1,000m 2.95% Notes 2033

2033

2.950

884,086

857,417

Subordinated Liabilities – amounts

falling due more than one year

2,087,898

2,071,387

Senior Debt

£250m 5.875% Notes 2029

2029

5.875

319,084

326,278

US$1,000m 3.125% Notes 2030

2030

3.125

901,418

886,013

US$350m 3.625% Notes 2032

2032

3.625

314,695

310,824

Senior Debt – amounts falling due

more than one year

1,535,197

1,523,115

Total borrowings

3,623,095

3,594,502

Accrued interest on borrowings

34,706

34,938

Total borrowings and accrued

interest

3,657,801

3,629,440

On 2 March 2023 Prudential plc, the Company’s ultimate parent company, transferred the debt

instrument liabilities listed above to the Company. These instruments were measured at fair value on

initial recognition. The total fair value of these instruments at initial recognition was $3,588 million,

including accrued interest. The fair value of these instruments was established by reference to their

observable quoted market prices on active exchanges on the date of initial recognition.

These instruments are subsequently measured at amortised cost, applying the effective interest rate

method, to amortise the difference between the value initial recognised and their redemption value.

NOTES TO THE ACCOUNTS (continued)

Called up share capital

2024

2023

$000

Issued and fully paid: 50,001 ordinary shares of £1 each

At incorporation on 7 February 2023, the Company issued 50,000 shares with nominal value of Pounds

Sterling 50,000 to Prudential Corporation Asia Limited.

On 15 June 2023 the Company issued one ordinary share to Prudential Corporation Asia Limited in

consideration for cash of $400,000,000. $1 was credited to share capital and $399,999,999 was

credited to the share premium account.

Auditor’s remuneration

Auditor’s remuneration of $44,000 (2023: $63,000) was borne by the Company’s ultimate parent

company, Prudential plc. Amounts receivable by the Company’s auditor in respect of services rendered

to the Prudential Group, other than the audit of the Company’s financial statements, have not been

disclosed, as the information is required instead to be disclosed on a Group basis in the consolidated

financial statements of Prudential plc.

10.

Directors’ emoluments

The aggregate emoluments, including pension contributions, of the Directors of the Company for the

year in respect of services rendered to the Company were $nil.

11.

Immediate and ultimate parent company

The Company’s immediate parent company is Prudential Corporation Asia Limited, and the largest

group in which the results of the Company are consolidated is that headed by Prudential plc, its ultimate

parent company. No other group financial statements include the results of the Company. The

consolidated financial statements of the Group are available from the Company Secretary at 1 Angel

Court, London EC2R 7AG.

12.

Post balance sheet events

There have been no significant events affecting the Company since the balance sheet date.