IAG annual report—Concise

NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2005
NOTE 1. BASIS OF PREPARATION OF CONCISE FINANCIAL REPORT
(a) The concise financial report has been prepared in accordance with the
Corporations Act 2001, Accounting Standard AASB 1039 Concise
Financial Reports and applicable Urgent Issues Group Consensus Views.
The financial statements and specific disclosures required by AASB 1039
have been derived from the consolidated entity’s full financial report for
the financial year. Other information included in the concise financial
report is consistent with the consolidated entity’s full financial report.
The concise financial report does not, and cannot be expected to, provide
as full an understanding of the financial performance, financial position
and financing and investing activities of the consolidated entity as the full
financial report.
(b) Insurance Australia Group Limited obtained an order, dated
14 February 2000, from the Australian Securities & Investments
Commission exempting the Company from compliance with certain
sections of the Corporations Act 2001. These exemptions allowed the
Company to acquire the shares in Insurance Australia Limited (formerly
NRMA Insurance Limited) at an amount equal to the sum of the carrying
amounts of the assets and liabilities as shown in the consolidated
statement of financial position of Insurance Australia Limited immediately
prior to the date of acquisition. This order also allows dividends paid by
Insurance Australia Limited to the Company out of distributable reserves
of Insurance Australia Limited at the time of acquisition of its shares by
the Company to be treated as income by the Company. However, the
order restricts the amount of such dividends that can be paid by
Insurance Australia Limited to the Company to $575 million, of which
$575 million in total (2004 – $575 million) has been paid by Insurance
Australia Limited from pre-demutualisation retained profits. During the year
ended 30 June 2005, the Company received dividends of $nil million
(2004 – $14 million) from Insurance Australia Limited from predemutualisation
retained profits. This amount has been fully eliminated
in the consolidated results.
The accounting policies adopted in the preparation of this concise
financial report have been consistently applied by each entity in the
consolidated entity and are consistent with those of the previous year
unless otherwise mentioned. These financial statements are presented in
Australian dollars.
A full description of the accounting policies adopted by the consolidated
entity can be found in the consolidated entity’s full financial report.
NOTE 2. PRINCIPLES OF CONSOLIDATION
The consolidated financial report incorporates the assets and liabilities of
all entities controlled by Insurance Australia Group Limited as at 30 June
2005 and the results of all controlled entities for the period then ended.
Where an entity either began or ceased to be controlled during the
financial year, the results are included only from the date control
commenced or up to the date control ceased. The balances and effects
of transactions between group entities are eliminated on consolidation.
Outside equity interests represent the equity interests held by external
parties in controlled entities of the IAG Group and are shown as a
separate item in the consolidated financial statements.
CONSOLIDATED
2005
$m
CONSOLIDATED
2004
$m
NOTE 3. REVENUE
Revenue from ordinary activities
(a) Sales revenue
Premium revenue 6,561 6,265
(b) Other general insurance revenue
Reinsurance and other recoveries 660 550
(c) Investment revenue
Investment income 505 485
Changes in net market values of investments
– realised gains 209 116
– unrealised gains 341 212
Total investment revenue 1,055 813
(d) Other operating revenue
Fee based business revenue 178 216
Life insurance business revenue - 70
Proceeds from disposal of plant and equipment 9 9
Total other operating revenue 187 295
Total revenue from operating and ordinary activities 8,463 7,923
NOTE 4. INDIVIDUALLY SIGNIFICANT ITEMS
Income:
Profit on sale of ClearView retirement services businesses and
NRMA Health Pty Limited - 59
Expenses:
Restructuring / integration costs 12 52
Insurance protection tax levied by the NSW State Government 20 20
Income tax credit:
Effect of resetting tax values on entering tax consolidation 4 13
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