Joint Lead Managers. With this Prospectus, Chairman s letter and forms. Change of details form. Pre-paid envelope

Transcription

1 P R O S P E C T U S

2 Joint Lead Managers Credit Suisse First Boston Deutsche Morgan Grenfell Australia Limited With this Prospectus, you received: Chairman s letter and forms Letter from the Chairman, containing your Share confirmation statement; Sell Form; and Buy Form Change of details form Pre-paid envelope New Zealand investment statement (if applicable). If you have misplaced any of these items, please ring the AMP Shareholder Information Line. Who should you contact for advice on what to do? If you would like advice, you should contact a stockbroker or financial adviser. AMP Limited is not permitted to advise you whether to choose to keep, buy or sell AMP Shares. If you live in the United Kingdom, you should consult a person authorised under the Financial Services Act 1986 (UK) who specialises in advising on buying and selling shares and other securities. This Prospectus is dated 22 April AMP Limited ACN an Australian limited liability company AMP Shareholder Information Line: Australia New Zealand United Kingdom

3 1 You are now a Shareholder in AMP Limited You became a Shareholder when the AMP Society demutualised. You did not have to pay any money for your AMP Shares. This Prospectus contains important information to help you choose what to do with your AMP Shares: Section 1 Key Information about the Facility (through which you can buy or sell AMP Shares) and AMP, page 2 2 Owning Shares answers to questions about owning AMP Shares, page 6 3 The Facility a detailed explanation of the Facility, page 9 4 AMP s Business a description of AMP s business and also its Directors and key executives, page 17 5 Financial Information including 1996 and 1997 Pro-forma Financial Information, the Board s Forecast for 1998, AMP Limited s dividend policy and a report by the Investigating Accountant, page 33 6 Risks some factors affecting the price of AMP Shares and the amount and timing of any dividend, page 45 7 Taxation including information about the cost base of your AMP Shares, page 49 8 Regulatory Environment details of the regulatory environment under which AMP operates, page 51 9 Additional Information including details of the AMP Founding Member Account, page Glossary an explanation of words and terms used in this Prospectus, page Directors Statement and Directory, page 64 As the final step of the proposal to demutualise, the Board will apply to have AMP Limited listed on the Australian and New Zealand stock exchanges. Your choice to keep, buy or sell AMP Shares will not affect your policy.

4 2 Section 1 Key Information What will you do? You should read this Prospectus carefully; and choose whether to keep or sell your Shares. If you keep your Shares, you may wish to consider buying more. If you sell your Shares, you can use the proceeds for any purpose. Regardless of your choice, your policy will not be affected and you will remain a valued customer of AMP. If you choose to buy or sell Shares, AMP Limited invites you to consider using the Facility. You don t have to use the Facility. After AMP Limited is listed, you will be able to buy and sell Shares through a stockbroker or privately. You will have to pay brokers fees and stamp duty, if applicable. Estimated Base Price range A$12.50 A$16.00 per Share This range is an estimate only based on preliminary indications from institutions who may bid for Shares. It could be updated by AMP Limited. No assurance can be given that the Base Price will be in this range, or any updated range. The Facility Price, or the price of Shares on the stockmarket, may not be within this range or any updated range. The estimated Base Price range is higher than the Board s estimate of market price at 10 September 1997 set out in the Explanatory Memorandum prepared in connection with the demutualisation. The possibility of a higher price was explained in the Explanatory Memorandum. The estimated Base Price range reflects a number of factors including the substantial increase in stockmarket values of Australian and United Kingdom financial services companies since 10 September The Facility The Facility is designed to assist those Shareholders who wish to sell their Shares on or near the Listing Date. It makes those Shares available for purchase by Shareholders and other categories of buyers selected by AMP Limited. The availability of Shares to buy through the Facility will depend on how many Shares are sold through the Facility. Shares are bought or sold at the Facility Price. All buyers will also pay Transaction Costs on a pro-rata basis. The Facility Price will take account of the stockmarket price of Shares in the first five days of trading. It will be a price per Share made up of: the Base Price set by AMP Limited on 15 June 1998, after Institutions bid for Shares. The estimated Base Price range is shown in the box on this page; plus 50% of the amount (if any) by which the Average Market Price of AMP Shares in the first five days of stockmarket trading after Listing is higher than the Base Price. There is a limit on the Facility Price. It will not exceed the Base Price by more than 20%. The Facility Price will not be less than the Base Price as finally determined on 15 June The Facility is discussed in detail in Section 3. However, if you use the Facility to sell your Shares, the amount you receive could be lower than if you had waited and sold your Shares on the stockmarket after Listing see Section 3.6.

5 3 Keep To keep your Shares, you do not need to do anything. Buy You can invest A$1,000 to buy more Shares through the Facility. If you wish to buy more Shares, you should complete and return your Sell You can sell your Shares through the Facility. If you wish to sell some or all of your Shares, you should complete and return your Sell Form so it is received by AMP Limited by: 5pm on 3 June Buy Form with a cheque You will not have to pay for A$1,000 made payable brokers fees or stamp to AMP Share Facility. duty, if applicable. You now own AMP Shares Buy Form This form needs to reach AMP Limited by: 5pm on 3 June Transaction Costs of no more than A$17.50 will be deducted. AMP Limited reserves the right to reduce the amount you can invest (but only if there are insufficient Shares available for purchase). If this occurs, you will be sent a refund. You can choose to receive a cheque or (if you are resident in Australia or New Zealand) to have the proceeds of sale paid into an AMP Founding Member Account opened in your name (see page 60). Sell Form Important Dates Last date for Sell Forms and Buy Forms to be received 5pm on 3 June 1998 Base Price announced on 15 June 1998 Trading of Shares on the stockmarket is expected to start on 15 June 1998 Facility Price announced on 22 June 1998 Dispatch of sale proceeds from 1 July 1998 AMP Limited reserves the right to change these and other dates referred to in this Prospectus.

6 4 Section 1 Key Information Description of AMP Building on the best of the past, AMP is ready and confident for the challenges that lie ahead. AMP s great strengths are its brands, its customers, its people and its substantial capital and funds under management. These are the foundations for AMP s future. George Trumbull Chief Executive Officer, April 1998 AMP is a major provider of life insurance, superannuation, pensions and other financial services in Australia, New Zealand and the United Kingdom. Its brands and four main areas of business are shown in the following table: Australasian Financial Services United Kingdom Financial Services General Insurance Asset Management Life and risk insurance Life and risk insurance Home and contents Asset management Superannuation Pensions Motor vehicle Property services Savings and investments PEPs Professional indemnity Private capital Annuities Unit trusts Lenders mortgage insurance Infrastructure Banking Access to banking services Listed trusts Financial planning Custody services Virgin Direct is a 50:50 joint venture with the Virgin Group.

7 5 Financial information The following table sets out key items from AMP Limited s 1996 and 1997 Pro-forma Financial Information, and the Board s Forecast for For an explanation of the basis on which this information has been prepared, see Section 5. AMP Limited Consolidated (1) Pro-forma (2) Board s Forecast (3) Year ending 31 December A$M Low High Shareholder operating profit after income tax before extraordinary loss Earnings per Share before extraordinary loss (4) A$0.67 A$0.85 A$0.74 A$0.94 Extraordinary loss (5) (1,673) (1,673) Note: (1) Excludes Henderson plc which AMP acquired in March (2) The Pro-forma Financial Information for 1996 and 1997 has been derived from the Audited Statements of the AMP Society adjusted to reflect the post demutualisation structure and associated accounting policies of AMP and to eliminate non-recurring material items see Section 5 for details. (3) The Board s Forecast is based on many assumptions, the most material of which are set out in Section 5. The Board has prepared the Board s Forecast with proper care and attention and considers all assumptions to be reasonable at the date of this Prospectus. However, no assurance can be given that the actual results for 1998 will fall within the Board s Forecast. (4) The earnings per Share before extraordinary loss reflects the 1,042,073,136 fully paid Shares issued to 31 March (5) The extraordinary loss, which comprises once only adjustments, will be recognised in the consolidated financial statements of AMP Limited in Accordingly, if the actual Shareholder operating profit after income tax and before extraordinary loss for 1998 is within the Forecast Range of A$774 million to A$977 million, the reported net result will be a loss of between A$696 million and A$899 million. Dividends The Board intends to declare a dividend of around A$0.16 per Share payable in April 1999 and expects this dividend to be fully franked. AMP Limited has sufficient retained earnings to pay this dividend. This dividend is equivalent to an annualised amount of A$0.32 per Share. The Board intends that AMP Limited will pay an interim dividend in October each year (commencing in 1999) and a final dividend in April of each following year. No dividend will be paid in October 1998.

8 6 Section 2 Owning Shares Owning Shares What can you do with Shares? Shares are a form of property you can deal with them in a range of ways. You can: keep them as an investment; buy more; or sell them. What does it mean to own Shares? When you own Shares, you are a part-owner, or Shareholder, of AMP Limited. Being a Shareholder gives you various rights they are quite distinct from your rights as a policy owner or a customer. Your rights as a Shareholder include: the right to receive dividend payments that the Board decides will be paid from time to time (see below What is a dividend? ); the right to attend and vote at meetings which must take place at least once a year you don t have to attend or vote; the right to vote in the election of Directors you don t have to vote; and if AMP Limited is wound up while you are a Shareholder, the right to be paid your portion of any amount left over after various debts and claims against AMP Limited have been satisfied in accordance with the Australian Corporations Law. The rights of Shareholders are more fully explained in Section 9. You have these rights for as long as you remain a Shareholder. If you sell all your Shares, your rights as a Shareholder are transferred to the buyer. You do not have to pay any money to AMP Limited now or in the future in relation to the Shares you already own. What is a dividend? A dividend is an amount per share that a company decides to pay from its profits or retained earnings to its shareholders from time to time. The level of dividends will vary. AMP Limited s dividend policy is explained in Section 5. Are there any risks in owning Shares? The price of Shares on the stockmarket may change frequently. A wide range of factors will affect the price many of these factors are beyond the control of AMP Limited and the Board. These factors will also affect AMP Limited s financial position and whether AMP Limited pays dividends or not and the amount of dividends. These risks are discussed in Section 6. What about your policy? Your policy is not affected by your choice to keep, buy more or sell Shares. Regardless of your choice, you will remain a valued customer of AMP.

9 7 QUESTIONS and ANSWERS How do you buy Shares? For a short time, you can invest A$1,000 to buy more Shares through the Facility. To do this, you must complete and return your Buy Form, so that it is received by 5pm on 3 June You must attach a cheque for A$1,000 made payable to AMP Share Facility. Transaction Costs of no more than A$17.50 will be deducted. AMP Limited reserves the right to reduce the amount you can invest (but only if there are insufficient Shares available for purchase) and send you a refund. The Facility is discussed in detail in Section 3. After AMP Limited is listed, you can buy Shares on the Australian and NZ stock exchanges (through a stockbroker) or privately. How do you sell Shares? For a short time, you can sell your Shares through the Facility. To do this, you must complete and return your Sell Form so that it is received by 5pm on 3 June You will not have to pay brokers fees or stamp duty, if applicable. The Facility is discussed in detail in Section 3. After AMP Limited is listed, you can sell Shares on the Australian and NZ stock exchanges (through a stockbroker) or privately. There are costs involved in using a stockbroker. What if you own Shares jointly with someone else? If you own Shares jointly with someone else, special rules apply. In April 1998, AMP Limited sent you a letter explaining those rules. You can call the AMP Shareholder Information Line to arrange to receive another free copy of that information, or you can contact a stockbroker or financial adviser. Are there any tax or social security issues? Some of the tax issues related to owning, buying and selling Shares are explained in Section 7. For information about how your choice may affect social security entitlements: in Australia, contact Centrelink on (in relation to pensions) or (in relation to Newstart and other allowances), (in relation to family and other payments) or other appropriate call centre numbers listed under Centrelink in the telephone directory; in relation to Veterans Affairs, contact your local office; in New Zealand ( NZ ), contact the New Zealand Income Support Service on ; and in the United Kingdom ( UK ), contact your local office of the Department of Social Security. What is this document for? This Prospectus contains important information to help you choose what to do with your AMP Shares.

10 8 Section 2 Important Information Important legal notices This is a prospectus for the purposes of the Australian Corporations Law. Under modifications to the Corporations Law made by the Australian Securities Commission ( ASC ), this Prospectus includes by reference parts of the Institutional Offer Memorandum (called the IOM ). This Prospectus and the IOM were lodged with the ASC on 23 April The ASC and Australian Stock Exchange Limited ( ASX ) take no responsibility for the contents of either document. AMP Limited is permitted to issue this Prospectus, subject to the IOM being made available to Shareholders, AMP Employees, AMP Advisers, Directors, securities dealers and advisers on request. References in this paragraph to this Prospectus do not include the slightly modified version of the Prospectus issued to Shareholders, AMP Employees and Directors resident in the UK (the UK version ). In NZ, by virtue of the Securities Act (Australian Issuers) Exemption Notice 1997, AMP Limited is exempted from any requirement to register a prospectus in NZ. This exemption is subject to the conditions specified in the Exemption Notice, all of which have been, or will be, complied with by AMP Limited (including the distribution of an investment statement). AMP Limited will apply to the ASX before the date which is three days after the date of issue of this Prospectus for the admission of AMP Limited to the Official List of the ASX and for all Shares to be listed for official quotation. Application has been made to the NZ Stock Exchange ( NZSE ) for permission to list the Shares. All the requirements of the NZSE relating to the listing that can be complied with on or before the date of this Prospectus have been complied with. However, the NZSE accepts no responsibility for any statement in this Prospectus. The IOM will be registered as a prospectus in accordance with the UK Public Offers of Securities Regulations Copies of it are available in the UK from London Life, Spectrum, Bond Street, Bristol BS1 3AL. In the UK, this Prospectus is being distributed only to persons of a kind described in Article 3(1) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or to any other person it is lawful to give it to. If you receive this document in the UK, you must not distribute, publish, reproduce or disclose it (in whole or in part) to anyone except for the purpose of seeking professional advice. This Prospectus is not an offer or invitation to any person to whom, or in any place where, it would not be lawful to make an offer or invitation. This Prospectus is only addressed to Shareholders resident in Australia, NZ or (for the UK version) the UK and AMP Employees, AMP Advisers and Directors resident in Australia and NZ. It must not be construed as an offer or invitation to any other person. The distribution of this Prospectus (including the UK version) outside Australia, NZ and the UK is restricted by law. AMP Employees resident in the UK will be invited to participate in the Facility by a separate document. The trustee of the AMP Overseas Members Trust (see Section 9.3) is obliged to use the Facility to sell Shares referable to Overseas Members. Need more information? The IOM has been prepared in connection with the Listing of AMP Limited. It is a document of about 200 pages which includes additional information that is not in this Prospectus. Parts of the IOM are included by reference in this Prospectus. AMP Limited believes those references sufficiently identify the additional information in the IOM to enable you to make an informed decision about whether to obtain a copy of the IOM. AMP Limited believes on reasonable grounds that the additional information in the IOM is primarily of interest to professional advisers and investors with specialist information needs. If you have any doubt about whether you need the additional information, you should obtain a copy of the IOM or contact a stockbroker or financial adviser. If you call the AMP Shareholder Information Line, AMP Limited will send you a copy of the IOM free of charge.

11 9 The Facility What is the Facility? What is the Facility Price? Shareholders buying through the Facility Shareholders selling through the Facility AMP Employees, AMP Advisers and Directors buying through the Facility Factors you should consider How does the Facility work? Facility Terms Using the Facility to buy or sell Shares

12 10 Section 3 The Facility The Facility 3.1 What is the Facility? The Facility allows Shareholders (by 5pm on 3 June 1998) to sell some or all of their Shares at the Facility Price without paying brokers fees or stamp duty, if applicable. The Facility makes those Shares available for purchase at the Facility Price, by: Shareholders: they may apply to buy more Shares with an investment of A$1,000. Shares in the Facility will be applied as first priority to satisfy applications from Shareholders; Institutions: they will be requested (under the IOM) to bid for Shares. Their participation as Shareholders will help to provide an informed and active trading market in Shares for the benefit of all Shareholders; and AMP Employees, AMP Advisers and Directors: they may apply to buy Shares (restricted to a maximum total allocation of 10 million Shares see Section 3.5). AMP Advisers are mainly AMP life insurance agents operating in Australia and NZ. All buyers will also pay Transaction Costs on a pro-rata basis to the number of Shares they buy through the Facility. Availability of Shares for buyers (including Shareholders) will depend on how many Shares are sold through the Facility. The proposed allocation to Shareholders, AMP Employees, AMP Advisers and Directors recognises their existing commitment to, and involvement in, AMP. However, Directors will only be able to buy through the Facility the number of Shares necessary to meet the initial minimum Shareholding requirement of 2,000 Shares per Director contained in the Articles of Association (see page 30). How the Facility works is described in Section 3.7 and the detailed Facility Terms are explained in Section What is the Facility Price? The Facility Price has been designed to enable Selling Shareholders to benefit if the Average Market Price in the first five days of stockmarket trading is higher than the Base Price. The Facility Price is not yet known. It will be a price per Share calculated after Shares have been trading on the stockmarket for five days. The Facility Price will be made up of: the Base Price set by AMP Limited, following consultation with the Joint Lead Managers, after Institutions bid for Shares. It will be announced before stockmarket trading of Shares begins, plus 50% of the amount (if any) by which the Average Market Price of AMP Shares in the first five days of stockmarket trading after Listing is higher than the Base Price. There is a limit on the Facility Price. It will not exceed the Base Price by more than 20%. The Base Price may not be the highest price at which all the Shares in the Facility could be sold. This is because, when setting the Base Price, AMP Limited s objectives will include: achieving a fair price for Selling Shareholders, while recognising that obtaining bids from Institutions will be assisted if Institutions have an expectation that there will be orderly stockmarket trading of Shares; and having enough bids at, or above, the Base Price to enable AMP Limited to implement its policy of allocation between Institutions see Section 3.7. An estimated Base Price range is set out on page 2. The estimated Base Price range for your Shareholding is set out in the Chairman s letter and forms you received with this Prospectus.

13 Shareholders buying through the Facility Although applications from Shareholders will be given first priority, there is no assurance that there will be sufficient Shares to meet applications to buy in full. Availability of Shares will depend on how many Shares are sold through the Facility. How do you buy Shares? Can you buy Shares in someone else s name? How much can you invest? How many Shares will your investment buy? What are the costs? When will you receive your Shares? Can you change your mind? Can you buy Shares without using the Facility? Complete and return the Buy Form, with a cheque for A$1,000 payable to AMP Share Facility, so it is received by 5pm on 3 June You can use the pre-paid envelope supplied. The Buy Form is attached to the Chairman s letter sent to you with this Prospectus. If you have lost your Buy Form, please call the AMP Shareholder Information Line. You can only buy Shares in the name (or names) printed on your Buy Form. The Buy Form will not be valid if the printed name has been crossed out and another name substituted. You can invest A$1,000 Transaction Costs of no more than A$17.50 will be deducted and paid out at the direction of AMP Limited. AMP Limited reserves the right to reduce the amount you can invest (but only if there are insufficient Shares available for purchase). If this occurs, AMP Limited will send you a refund. If the Facility Price plus your pro-rata share of the Transaction Costs cannot be neatly divided into A$1,000 to give a whole number of Shares: there will be a rounding down of the number of Shares; and you will be entitled to a refund in your local currency (either A$, NZ$ or ) based on the exchange rate at 22 June If your refund is less than A$2, it will be donated equally to the Leukaemia Foundation and the Salvation Army. As the Facility Price will not be known until after the Listing Date, it is not possible at this stage to indicate how many Shares you will receive for your investment. AMP expects to announce this number by newspaper advertisements on 22 June If the Facility Price is within the estimated Base Price range see page 2, you would receive between 61 and 78 Shares for your A$1,000 investment (assuming sufficient Shares are available for purchase). It is your responsibility to determine your allocation of Shares prior to trading these Shares. If you buy Shares through the Facility, you must pay your pro-rata share of the Transaction Costs incurred in organising and implementing the Facility. These costs are detailed in the Glossary. They will be no more than A$17.50 out of your A$1,000 investment. If the total amount of Transaction Costs paid by buyers through the Facility is less than the total Transaction Costs, AMP Limited will (to the extent permitted by law) pay the remainder of those costs. Interest earned on the money that buyers send with their Buy Forms will be paid either to the AMP Foundation see Section 9.3 or in satisfaction of bank transaction costs in such amounts as determined by AMP. AMP expects that you will be allocated your Shares on 22 June AMP Limited will operate an issuer sponsored subregister and will not issue share certificates. A holding statement setting out the number of Shares allocated to you will be sent to you in early July. If you sell these Shares before you receive that holding statement you will do so at your own risk. You are committed to investing A$1,000 for the purchase of Shares once you complete and return your Buy Form. You can buy Shares on the Australian and NZ stock exchanges (through a stockbroker) or privately after the Listing of AMP Limited. If you are a UK resident you will have to make arrangements with a stockbroker for your Shares to be traded on the ASX or NZSE.

14 12 Section 3 The Facility How do you sell your Shares? 3.4 Shareholders selling through the Facility Complete and return the Sell Form so it is received by 5pm on 3 June You can use the pre-paid envelope supplied. The Sell Form is attached to the Chairman s letter sent to you with this Prospectus. If you have lost your Sell Form, please call the AMP Shareholder Information Line. The Sell Form will not be valid if the printed name has been crossed out and another name substituted. How many Shares can you sell? You can choose to sell some or all of your Shares. How will you be paid? You will be paid in your local currency (either A$, NZ$ or ) based on the exchange rate at 25 June You can choose to receive the sale proceeds either by cheque or (if you are resident in Australia or NZ) deposit into an AMP Founding Member Account see page 60. When will you receive the sale proceeds? Shortly after 1 July 1998, your sale proceeds will be sent to you by cheque or deposited into your AMP Founding Member Account. Can you change your mind? You are committed to selling the number of Shares you have specified once you complete and return your Sell Form. Can you sell your Shares without using the Facility? You can sell your Shares on the Australian and NZ stock exchanges (through a stockbroker) or privately after the Listing of AMP Limited. If you are a UK resident you will have to make arrangements with a stockbroker for your Shares to be traded on the ASX or NZSE. Will your policy be affected if you sell Shares? No. Your policy will not be affected if you sell Shares, and you will remain a valued customer of AMP. 3.5 AMP Employees, AMP Advisers and Directors buying through the Facility AMP Employees, AMP Advisers and Directors will participate in the Facility on the same terms as Shareholders, except that: there will be a maximum 10 million Shares in total allocated to them (but only after applications from Shareholders have been satisfied in full and AMP Limited has considered allocating to Institutions such number of Shares as it considers appropriate see Section 3.7); AMP Employees and AMP Advisers can apply to invest multiples of A$1,000 up to a maximum of A$10,000; participation by Directors is restricted (see Section 3.1); applications from each of these groups of buyers will be scaled back (in the same manner) on such basis as AMP Limited determines; and the Chief Executive Officer and certain other senior executives, who will be involved in decisions by AMP concerning the Facility, have agreed not to participate in the Facility. The Board estimates that, if there are enough Shares in the Facility to allocate in total 10 million Shares to AMP Employees, AMP Advisers and Directors, and every AMP Employee, AMP Adviser and Director entitled to participate in this part of the Facility took up the opportunity, each of them would be allocated approximately 600 Shares. Information for AMP Employees, AMP Advisers and Directors about their entitlement to participate in the Facility is set out in the letter and forms they received with this Prospectus.

15 Factors you should consider The board of directors of the AMP Society undertook in the Explanatory Memorandum to provide the Facility. AMP Limited believes it should provide the Facility, especially for Shareholders who wish to sell Shares. However, AMP Limited does not make any recommendation about whether you should use the Facility. You need to take account of your own particular circumstances in making a decision. There are two main ways you can sell your Shares or buy more Shares you can use the Facility or you can buy, or sell, on the Australian or NZ stock exchanges (through a stockbroker) after AMP Limited is listed. To assist you in choosing whether to use the Facility, AMP Limited sets out below a number of factors which you may wish to consider. If you choose to buy or sell on the stockmarket, the amount you pay or receive could be higher or lower than if you had used the Facility. Many factors will affect both the Facility Price and the price of AMP Shares following Listing including: importantly, the total number of Shares which is made available for sale, the level of demand for Shares and the extent to which Shares are sold either through the Facility or on the stockmarket; the fundamental value which investors place on AMP Shares; and the timing of movements in the stockmarket and whether those movements occur before, after or during the period of the Facility. Some other factors are set out under the heading Share price movements on page 48 and elsewhere in Section 6, Risks. If you are in any doubt about what you should do, the Board urges you to contact a stockbroker or financial adviser. If you choose to buy more Shares Buying method: Using the Facility On the stockmarket Applicable price: Facility Price Market price Pricing period: June 1998 At time of transaction Stockbroker fees: Included in Transaction Costs As negotiated with a stockbroker Stamp duty: Included in Transaction Costs On ASX, 0.15% of purchase amount. On NZSE, nil (1) Transaction Costs: Up to A$17.50 Nil Limit on purchases: A$1,000 No limit Document needed: Buy Form (attached to the Chairman s letter) Provided by stockbroker Timing: Apply by 5pm 3 June 1998 Any time after Listing If you choose to sell your Shares Selling method: Using the Facility On the stockmarket Applicable price: Facility Price Market price Pricing period: June 1998 At time of transaction Stockbroker fees: Nil As negotiated with a stockbroker Stamp duty: Nil On ASX, 0.15% of sale proceeds. On NZSE, nil (1) Transaction Costs: Nil Nil Document needed: Sell Form (attached to the Chairman s letter) Provided by stockbroker Timing: Apply by 5pm 3 June 1998 Any time after Listing (1) For transactions not involving Australian residents. You need not sell all of your Shares at the same time however, if you deal through a stockbroker this may be required if you have a small number of Shares. Whichever way you choose to sell, you may make a capital gain or a capital loss. The tax consequences depend on the taxation laws applying to you see page 49 to 50 for more information. Your taxation liability (if any) will arise in the tax year in which you make the capital gain. If you are an Australian resident individual for tax purposes, and you sell before 30 June 1998, this will be the 1998 tax year.

16 14 Section 3 The Facility Whatever you choose The market price of Shares can fall as well as rise. The Board expects that the price of Shares at the end of each day of trading on the stockmarket will be published the following day in the business section of major daily Australian and NZ newspapers. The Facility Price will not be known until 22 June 1998 (even though, if you choose to buy or sell Shares through the Facility, you will have to apply by 3 June 1998). This is because the Facility Price takes account of the stockmarket trading price in the first five days after Listing. The Facility Price includes 50% of the amount (if any) by which the Average Market Price of AMP Shares in the first five days of stockmarket trading is higher than the Base Price. There is a limit on the Facility Price. It will not exceed the Base Price by more than 20%. 3.7 How does the Facility work? Facility Terms: By signing and returning either your Sell Form or Buy Form, you accept the detailed Facility Terms (see Section 3.8). Facility committee: Decisions by AMP Limited concerning the operation of the Facility, including the determination of the Base Price, will be made through committees established by the Board. The committees comprise the Chief Executive Officer and certain other senior executives. Availability of Shares: Shares become available for purchase as Selling Shareholders return their Sell Forms (see Section 3.4). Sell Forms marked with a stockbroker s stamp will result in a 1% handling fee being paid to that stockbroker, as part of the Transaction Costs. Shareholders (see Section 3.3), AMP Employees, AMP Advisers and Directors (see Section 3.5) apply for Shares by returning their Buy Forms. Announcement of Shares in the Facility: AMP Limited intends to announce on or around 9 June 1998: the number of Shares in the Facility; the number of Shares provisionally available for bids from Institutions; and the number of Shares provisionally reserved (using the lowest estimated Base Price) for Shareholders, AMP Employees, AMP Advisers and Directors. Institutional Offer: AMP Limited intends that, subject to the priority allocation to Shareholders, a minimum of approximately 75 million Shares will be available for bids from Institutions. AMP Limited believes that having Institutions as Shareholders will benefit AMP and other Shareholders. Obtaining bids will be assisted if Institutions believe an appropriate number of Shares will be available for purchase by them. If there are insufficient Shares to meet this objective, AMP Limited reserves the right to issue new Shares up to a maximum of 5% of the total current issued capital. During the Institutional Offer Period, AMP Limited and the Joint Lead Managers will receive bids from Institutions and compile them into a single book of demand. This will enable AMP Limited to set, after consultation with the Joint Lead Managers, the Base Price (see Section 3.2) and allocate Shares to Institutions. Allocation between Institutions: Broadly, AMP Limited s allocation policy will be influenced by the following factors: the price and number of Shares bid for by each Institution; AMP Limited s desire for an informed and active trading market of Shares; ensuring a wide spread of Institutional Shareholders; the size and type of the funds under the management of the Institution; the likelihood that the Institution will be a long-term holder of Shares; and any other factors AMP Limited in its sole discretion considers appropriate. In the conduct of its asset management business, AMP may obtain the economic benefit of Shares by contractual arrangements with third parties, without acquiring legal or beneficial ownership. Up to an aggregate of 6.5% of the total number of Shares allocated to Institutions may be allocated in accordance with these arrangements at the Facility Price (plus a pro-rata share of Transaction Costs). On the Listing Date, expected to be 15 June 1998, AMP Limited will announce the Base Price (see Section 3.2) and notify Institutions of their allocation of Shares. It is expected that ASX trading of Shares will commence on a deferred settlement basis and that NZSE trading of Shares will commence on a delayed delivery basis. Announcement and payment of Facility Price: AMP Limited expects to announce on 22 June 1998, the Facility Price and the number of Shares allocated to each category of buyer. It is expected that the Shares in the Facility will be transferred to the JLM Brokers acting as principals at the Facility Price and then by the

17 15 JLM Brokers acting as principals to all buyers at a price equal to the Facility Price. In addition buyers will pay their pro-rata share of Transaction Costs (which will be fully disbursed by the JLM Brokers). These transactions are expected to be completed by 25 June 1998, when Institutions will pay for their allocation of Shares. Unallocated Shares: If the Facility Price is higher than the Base Price, some Shares that had been reserved for purchase will not be sold through the Facility. The Joint Lead Managers have agreed, for no fee, to buy those unallocated Shares at the Facility Price (plus their pro-rata share of Transaction Costs), regardless of whether the Facility Price is higher or lower than the market price at the time. Accounting for Share transfers: Shortly after 1 July 1998, sale proceeds will be sent to Selling Shareholders and shareholder statements will be sent to buyers of Shares. 3.8 Facility Terms By signing and returning either the Buy Form or the Sell Form, you: (a) accept these Facility Terms; (b) accept that the Base Price will be determined by AMP Limited after consultation with the Joint Lead Managers; the Base Price may not be the highest price at which all the Shares in the Facility could be sold; and by participating in the Facility you accept that the Facility Price may be higher or lower than the price at which AMP Shares trade on the ASX or NZSE at a later point in time; (c) agree that AMP Limited may, in its sole discretion, at any time determine that any Sell Form or Buy Form is a valid acceptance of these Facility Terms even if the form is incomplete, contains errors, or is otherwise defective; (d) acknowledge that AMP Limited reserves the right (for any reason) to withdraw, cancel or modify the Facility (at any time) including, without limitation, the timetable for the Facility and to reject any bid to purchase Shares in whole or in part; (e) acknowledge that if permission for quotation of Shares is not granted by ASX within six weeks after the date of issue of this Prospectus or such longer period, not exceeding 12 weeks, as may be notified to AMP Limited by ASX, the Facility will be cancelled and application monies to buy Shares through the Facility will be refunded in full without interest, to the extent the law permits; (f ) appoint either of the JLM Brokers, or both jointly (at their election) as your agent (in your name, and on your behalf as a named principal in accordance with your Sell Form or Buy Form and Section 3 of the Prospectus) to: (i) effect the sale or purchase of Shares (including by the transfer of Shares to and from a nominee of the appointed JLM Broker and by acting as principals) and the payment of money, using information and data provided by AMP Limited through the Share Registrar; and (ii) execute any instrument and to take any other step as is appropriate to transfer Shares (or otherwise give effect to the sale or purchase of Shares on the Facility Terms); (g) acknowledge that AMP Limited: (i) will, through the Share Registrar, be obtaining and passing on to the JLM Brokers the information and data that is necessary for the administration of the Facility and for the sale or purchase of Shares by you; (ii) will, in particular, determine the Base Price, the Average Market Price, the Facility Price, the Transaction Costs and the allocation of Shares to Institutions and (including via a delegate) to applicants who complete Buy Forms; and (iii) will act as your sole authorised representative to give instructions in relation to these matters to the JLM Brokers and you acknowledge that you are giving up your right to instruct the JLM Brokers in relation to those matters in favour of AMP Limited; (h) acknowledge that you will have no recourse against the JLM Brokers in respect of the determination of the Base Price or the Facility Price; (i) acknowledge that if either of you or the appointed JLM Broker defaults in performing an obligation to the other then the non-defaulting party will only have recourse against the defaulting party for damages and not against AMP Limited; (j) acknowledge that AMP Limited will not acquire any legal or equitable interest in Shares and will not have any liability to pay or guarantee the payment of any money due to Selling Shareholders or buyers of Shares through the operation of the Facility;

18 16 Section 3 The Facility (k) authorise the appointed JLM Brokers to give you a contract note by electronically delivering the information for the contract note to the Share Registrar (or appointing the Share Registrar to maintain that information) who will issue it to you in documentary form upon your request or, if you make no such request, with a Shareholding Statement; (l) acknowledge that, if the JLM Brokers act jointly to execute buy and sell orders, they will hold monies on behalf of buyers and sellers in a trust account or accounts held and operated by them jointly and may transfer funds between those trust accounts. They would be jointly and severally liable to account for trust monies in that event; (m) authorise AMP Limited, before or after registration of the transfer of your Shares, to transmit the Shares to any register maintained by AMP Limited, which AMP Limited in its absolute discretion considers desirable; and (n) acknowledge that: neither the JLM Brokers nor AMP Limited has provided you with any investment advice, or has any obligation to provide such advice, concerning your decision to buy or sell Shares; and that the Joint Lead Managers (being related companies of the JLM Brokers) may give advice to AMP Limited which is solely for the benefit of AMP Limited concerning the Base Price and the calculation of the Facility Price and which may or may not be followed by AMP Limited and which will not be disclosed to you. By signing and returning the Buy Form, you: (a) will be bound irrevocably to buy Shares allocated to you in accordance with your Buy Form and this Prospectus; (b) agree to pay the Facility Price and agree that you are liable to pay, to the relevant service providers or stamp duty authorities, your pro-rata share of the Transaction Costs in respect of those Shares; (c) authorise the JLM Brokers to deduct your pro-rata share of Transaction Costs from the funds paid by you and to pay Transaction Costs, both deduction and payment, as directed by AMP Limited; (d) acknowledge that if the total of the Facility Price and Transaction Costs (per Share) does not divide neatly into the amount of your investment, the appointed JLM Broker may round the number of Shares allocated to you through the Facility down to the nearest whole number and refund any balance to you (except if it is less than A$2 in which case it will be donated to charity); (e) acknowledge that you will not offer or sell in the United States or to, or for the account or benefit of, United States persons, except to persons you reasonably believe are qualified institutional buyers in transactions meeting the requirements of Rule 144A under the Securities Act 1933 (US): (i) any Shares, however acquired, until 40 days after the payment date for the Shares in the Institutional Offer; or (ii) if you are engaged in the business of distributing or dealing in securities, any Shares purchased by you through the Facility; and (f) agree to be bound by the Memorandum of Association and the Articles of Association. By signing and returning the Sell Form, you: (a) will be bound irrevocably to sell, in accordance with this Prospectus, some or all of your Shares (as specified in the Sell Form), through the Facility and at the Facility Price; (b) represent and warrant to any buyer of your Shares through the Facility, and authorise each JLM Broker to make such representation and warranty on your behalf, that such buyer will acquire good title to the Shares and full beneficial ownership of them free from all mortgages, charges, liens, encumbrances (whether legal or equitable) and restrictions on transfer of any kind; (c) authorise each JLM Broker to cause your Shares to be transferred to one or more nominee companies that hold marketable securities (solely for the purpose of facilitating marketable security transactions settlements by a person who is a member of ASX) prior to and in connection with the allocation and ultimate transfer of the Shares to one or more buyers of Shares; (d) acknowledge that you will only be entitled to receive the Facility Price for each of your Shares, and that any Transaction Costs which have been paid by the buyers of Shares in addition to the Facility Price can be deducted from the proceeds of sale; and (e) accept the risk associated with payment being despatched to you by cheque to the address shown on the AMP share register.

19 17 AMP s Business Australasian Financial Services United Kingdom Financial Services General Insurance Asset Management Corporate Office Directors and Key Executives What are the main activities of AMP?

20 18 Section 4 AMP s Business Overview AMP is a leading financial services organisation. It has been the largest life insurer in Australia, and one of the largest in NZ, for most of the last century and is a major provider of superannuation and asset management products and services. AMP has a significant presence in the UK through Pearl, London Life, Virgin Direct and Henderson. In recent years, AMP has expanded by: making several financial services acquisitions in the UK; and offering a broader range of financial products and services. These include financial planning, retirement savings and superannuation products and selected retail banking products. AMP s four main areas of business are: Financial services markets Major changes are taking place, or are proposed, within the financial services markets in which AMP operates, including: rapid growth of long-term savings as governments encourage individuals to provide for their own retirement needs, and as the number of people approaching, or in, retirement increases; changes in regulatory supervision and, in Australia and the UK, changes in taxationbased incentives; continuation of change to the mix of long-term savings products sold, towards superannuation/pension and simple investment products and away from traditional participating life insurance; and In Australia, AMP is an official partner of the Sydney 2000 Olympic Games Australasian Financial Services AMP Location Australia New Zealand Products and Services Life and risk insurance Savings and investments Superannuation Annuities Banking Financial planning Customers Individuals Small businesses Corporate and industry superannuation funds United Kingdom Financial Services Pearl London Life Virgin Direct (a 50:50 joint venture with Virgin Group) Location United Kingdom Products and Services Life and risk insurance PEPs Pensions Unit trusts Access to banking services Customers Individuals Small businesses General Insurance AMP Pearl Location Australia New Zealand United Kingdom Products and Services Home and contents Motor vehicle Professional indemnity Lenders mortgage insurance Customers Individuals Corporates AMP Asset Management AMP Henderson Location Australia New Zealand United Kingdom Products and Services Asset management Property services Private capital Infrastructure Listed trusts Custody services Customers AMP Corporate and industry superannuation funds Pension funds Corporates Individuals

21 19 Funds Under Management 1.8% at 31 December % 4.2% 5.3% 25.1% 35.2% Australia New Zealand Virgin Direct Pearl London Life Asset Management s (1) external clients (1) Includes Henderson. increased competition arising from industry rationalisation (such as mergers), the entry of new competitors from outside the traditional financial services industry and from other markets, and blurring of distinctions between industry participants such as banks and insurers. AMP s strategy AMP s strategy takes account of AMP s key strengths and the rapid changes in financial services markets. AMP is being repositioned to be a leading provider of a broad range of personal superannuation, pension, investment management and complementary financial products and services, while remaining a leading provider of selected protection products. AMP plans to lead the Australian and NZ markets and have a significant presence in the UK. AMP will be active in other selected financial services markets (such as Europe, the US and Asian countries) where AMP can grow rapidly, earn superior returns and generate significant profits in acceptable time frames. AMP has three key strategic priorities: Continue to improve the performance of the main businesses: AMP intends to increase its focus on customers and further develop and better manage its brands. AMP is transforming its business to improve its profitability and cost competitiveness and expand its distribution channels. It is also making other changes designed to enable AMP to deliver excellent investment returns. Deploy surplus capital for expansion: AMP has a large amount of surplus capital and also has the capacity to borrow significant amounts of funds. It is investigating opportunities to increase the return on its surplus capital by making one or more large scale international acquisitions. AMP intends to build its presence in the UK, to enhance its position in Australia and NZ and to seek to enter the market in the US and Europe. AMP also plans to develop its business in selected Asian countries through strategic partnerships. AMP may also use some of its surplus capital to support and expand its existing business. AMP will consider other methods of transferring to Shareholders the benefit of the surplus capital if, within an acceptable time frame, AMP is unable to deploy this surplus capital in accordance with its strategy. Adopt additional financial and management practices to add shareholder value: AMP is developing and implementing new management practices in many aspects of its businesses (including financial management and human resource management) to maximise the value obtained from all AMP s resources. AMP aims to achieve world s best practice in these areas. Key Strengths AMP has a number of key strengths: Highly recognised brands AMP, Pearl, Virgin Direct and Henderson; Substantial funds under management over A$150 billion (includes Henderson); Financial strength including substantial capital surplus to the current requirements of its operating businesses; Extensive customer base in Australia, NZ and the UK; Extensive distribution network over 1,600 advisers in Australia and NZ, and a sales force of over 3,500 in the UK; and An experienced management team.