TIDMSL.
RNS Number : 7406X
Standard Life plc
24 February 2017
Standard Life plc
Full Year Results 2016
Part 7 of 8
9. Independent auditors' report to the members of Standard Life
plc
Report on the company financial statements
Our opinion
In our opinion, Standard Life plc's company financial statements
(the 'financial statements'):
-- Give a true and fair view of the state of the company's
affairs as at 31 December 2016 and of its cash flows for the year
then ended
-- Have been properly prepared in accordance with International
Financial Reporting Standards ('IFRSs') as adopted by the European
Union and as applied in accordance with the provisions of the
Companies Act 2006
-- Have been prepared in accordance with the requirements of the Companies Act 2006
What we have audited
The financial statements, included within the Annual report and
accounts (the 'Annual Report'), comprise:
-- The Company statement of financial position as at 31 December 2016
-- The Company statement of cash flows for the year then ended
-- The Company statement of changes in equity for the year then ended
-- The accounting policies
-- The notes to the financial statements, which include other explanatory information
Certain required disclosures have been presented elsewhere in
the Annual Report, rather than in the notes to the financial
statements. These are cross-referenced from the financial
statements and are identified as audited.
The financial reporting framework that has been applied in the
preparation of the financial statements is IFRSs as adopted by the
European Union, and applicable law, and as applied in accordance
with the provisions of the Companies Act 2006.
Other required reporting
Consistency of other information and compliance with applicable
requirements
Companies Act 2006 reporting
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
-- The Strategic report and the Directors' report have been
prepared in accordance with applicable legal requirements
In addition, in light of the knowledge and understanding of the
company and its environment obtained in the course of the audit, we
are required to report if we have identified any material
misstatements in the Strategic report and the Directors' report. We
have nothing to report in this respect.
ISAs (UK & Ireland) reporting
Under International Standards on Auditing (UK and Ireland)
('ISAs (UK & Ireland)') we are required to report to you if, in
our opinion, information in the Annual Report is:
-- Materially inconsistent with the information in the audited financial statements
-- Apparently materially incorrect based on, or materially
inconsistent with, our knowledge of the company acquired in the
course of performing our audit
-- Otherwise misleading
We have no exceptions to report arising from this
responsibility.
Adequacy of accounting records and information and explanations
received
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- We have not received all the information and explanations we require for our audit
-- Adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us
-- The financial statements and the part of the Directors'
remuneration report to be audited are not in agreement with the
accounting records and returns
We have no exceptions to report arising from this
responsibility.
Directors' remuneration
Directors' remuneration report - Companies Act 2006 opinion
In our opinion, the part of the Directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
Other Companies Act 2006 reporting
Under the Companies Act 2006 we are required to report to you
if, in our opinion, certain disclosures of directors' remuneration
specified by law are not made. We have no exceptions to report
arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors'
responsibilities set out on page 103, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and ISAs (UK
& Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK &
Ireland). An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of:
-- Whether the accounting policies are appropriate to the
company's circumstances and have been consistently applied and
adequately disclosed
-- The reasonableness of significant accounting estimates made by the directors
-- The overall presentation of the financial statements
We primarily focus our work in these areas by assessing the
directors' judgements against available evidence, forming our own
judgements, and evaluating the disclosures in the financial
statements.
We test and examine information, using sampling and other
auditing techniques, to the extent we consider necessary to provide
a reasonable basis for us to draw conclusions. We obtain audit
evidence through testing the effectiveness of controls, substantive
procedures or a combination of both.
In addition, we read all the financial and non-financial
information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired
by us in the course of performing the audit. If we become aware of
any apparent material misstatements or inconsistencies we consider
the implications for our report. With respect to the Strategic
report and Directors' report, we consider whether those reports
include the disclosures required by applicable legal
requirements.
Other matter
We have reported separately on the group financial statements of
Standard Life plc for the year ended 31 December 2016.
Stephanie Bruce (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
24 February 2017
a) The maintenance and integrity of the Standard Life plc
website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
10. Company financial statements
Company statement of financial position
As at 31 December 2016
2016 2015
Notes GBPm GBPm
--------------------------------------------- ------ ----- -------
Assets
Investments in subsidiaries A 4,769 4,591
Investments in associates and joint ventures B 134 150
Loans to subsidiaries C 323 322
Debt securities C 605 743
Receivables and other financial assets C 54 48
Other assets F 8 19
Cash and cash equivalents C 55 61
--------------------------------------------- ------ ----- -------
Total assets 5,948 5,934
----------------------------------------------------- ----- -------
Equity
Share capital H 242 241
Shares held by trusts I (2) (6)
Share premium reserve H 634 628
Retained earnings
Brought forward retained earnings 837 785
Profit for the year 351 1,090
Other movements in retained earnings 163 (1,038)
----------------------------------------------------- ----- -------
Total retained earnings 1,351 837
Other reserves K 2,393 2,860
--------------------------------------------- ------ ----- -------
Total equity 4,618 4,560
----------------------------------------------------- ----- -------
Liabilities
Subordinated liabilities L 1,319 1,318
Deferred tax liabilities N 3 1
Derivative financial liabilities L - 2
Other financial liabilities L 8 52
Other liabilities P - 1
--------------------------------------------- ------ ----- -------
Total liabilities 1,330 1,374
----------------------------------------------------- ----- -------
Total equity and liabilities 5,948 5,934
----------------------------------------------------- ----- -------
The financial statements on pages 222 to 235 were approved by
the Board and signed on its behalf, by the following Directors:
Sir Gerry Grimstone Luke Savage
Chairman Chief Financial Officer
24 February 2017 24 February 2017
Company statement of changes in equity
For the year ended 31 December 2016
Shares Share
Share held premium Retained Other Total
capital by trusts reserve earnings reserves equity
2016 Notes GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------ -------- ---------- -------- --------- --------- --------
1 January 241 (6) 628 837 2,860 4,560
Profit for the year - - - 351 - 351
-------------------------------------- -------- ---------- -------- --------- --------- --------
Other comprehensive
income that may be
reclassified subsequently
to profit or loss
Fair value gains
on available-for-sale
financial assets - - - - 17 17
Tax effect relating
to items that may
be reclassified subsequently
to profit or loss - - - - (3) (3)
-------------------------------------- -------- ---------- -------- --------- --------- --------
Total other comprehensive
income for the year
that may be reclassified
subsequently to profit
or loss - - - - 14 14
-------------------------------------- -------- ---------- -------- --------- --------- --------
Total comprehensive
income for the year - - - 351 14 365
Dividends paid on
ordinary shares - - - (370) - (370)
Issue of share capital H 1 - 6 - - 7
Expiry of unclaimed
asset trust claim
period J - - - 36 - 36
Reserves credit for
employee share-based
payment schemes K - - - - 30 30
Transfer to retained
earnings for vested
employee share-based
payment schemes K - - - 23 (23) -
Shares acquired by
employee trusts - (3) - - (3)
Shares distributed
or sold by employee
trusts - 7 - (7) - -
Cancellation of capital
redemption reserve - - - 488 (488) -
Aggregate tax effect
of items recognised
directly in equity - - - (7) - (7)
-------------------------------------- -------- ---------- -------- --------- --------- --------
31 December 242 (2) 634 1,351 2,393 4,618
-------------------------------------- -------- ---------- -------- --------- --------- --------
Shares Share
Share held premium Retained Other Total
capital by trusts reserve earnings reserves equity
2015 Notes GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------- ------ -------- ---------- -------- --------- --------- --------
1 January 239 (3) 1,115 785 3,405 5,541
Profit for the year - - - 1,090 - 1,090
------------------------------------------- -------- ---------- -------- --------- --------- --------
Other comprehensive
income that may be
reclassified subsequently
to profit or loss
Fair value (losses)
on available-for-sale
financial assets - - - - (7) (7)
Loss on sale of available-for-sale
financial assets
recycled to profit
and loss - - - - (2) (2)
Tax effect relating
to items that may
be reclassified subsequently
to profit or loss - - - - 2 2
------------------------------------------- -------- ---------- -------- --------- --------- --------
Total other comprehensive
income/(expense)
for the year that
may be reclassified
subsequently to profit
or loss - - - - (7) (7)
------------------------------------------- -------- ---------- -------- --------- --------- --------
Total comprehensive
income for the year - - - 1,090 (7) 1,083
Dividends paid on
ordinary shares - - - (343) - (343)
Issue of share capital H 2 - 1 - - 3
Issue of 'B' shares 488 - (488) - - -
Issue of 'C' shares - - - - - -
Redemption of 'B'
shares (488) - - (488) 488 (488)
Dividends paid on
'C' shares - - - (1,261) - (1,261)
Purchase of 'C' shares - - - - - -
Reserves credit for
employee share-based
payment schemes K - - - - 34 34
Transfer to retained
earnings for vested
employee share-based
payment schemes K - - - 32 (32) -
Transfer between
reserves on disposal
of subsidiary K - - - 1,028 (1,028) -
Shares acquired by
employee trusts - (9) - - - (9)
Shares distributed
or sold by employee
trusts - 6 - (6) - -
------------------------------------------- -------- ---------- -------- --------- --------- --------
31 December 241 (6) 628 837 2,860 4,560
------------------------------------------- -------- ---------- -------- --------- --------- --------
Company statement of cash flows
For the year ended 31 December 2016
2016 2015
Notes GBPm GBPm
---------------------------------------- ------ ----- -------
Cash flows from operating activities
Profit before tax 334 1,073
Impairment of subsidiary undertakings 49 1,415
Impairment of associate undertaking 3 -
Gains on financial instruments (4) (1)
Dividend income from subsidiaries (458) (2,585)
Interest income on loans to
subsidiaries (20) (20)
Interest income on available-for-sale
debt securities (12) (15)
Distributions from equity instruments (34) (34)
Interest payable on subordinated
liabilities 82 82
Movements in operating assets
and liabilities 5 49
Taxation paid - -
---------------------------------------- ------ ----- -------
Net cash flows used in operating
activities (55) (36)
------------------------------------------------ ----- -------
Cash flows from investing activities
Loans repaid by subsidiaries - 301
Capital injections into existing
subsidiaries A (208) (35)
Acquisition of subsidiaries
measured at cost A - (12)
Interest received on loans to
subsidiaries 20 20
Interest received on available-for-sale
debt securities 17 6
Distributions from equity instruments 34 34
Dividends received from subsidiaries 457 2,585
Acquisition of subsidiaries
at FVTPL (18) (200)
Disposal of subsidiaries at
FVTPL A - 75
Sale of debt securities and
derivatives 147 (235)
Disposal of investment in associates
and joint ventures 13 -
------------------------------------------------ ----- -------
Net cash flows generated from
investing activities 462 2,539
------------------------------------------------ ----- -------
Cash flows from financing activities
Repayment of subordinated liabilities - (294)
Dividends paid (370) (343)
Interest paid on subordinated
liabilities (82) (82)
Proceeds from issue of shares 6 1
Shares acquired by trusts (3) (9)
Return of cash to shareholders
under 'B/C' share scheme - (1,749)
Expiry of unclaimed asset trust
claim period 36 -
------------------------------------------------ ----- -------
Net cash flows used in financing
activities (413) (2,476)
------------------------------------------------ ----- -------
Net (decrease)/increase in cash
and cash equivalents (6) 27
Cash and cash equivalents at
the beginning of the year G 61 34
---------------------------------------- ------ ----- -------
Cash and cash equivalents at
the end of the year G 55 61
---------------------------------------- ------ ----- -------
Supplemental disclosures on
cash flows from operating activities
Interest received - 2
------------------------------------------------ ----- -------
Company accounting policies
(a) Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) as endorsed by the
European Union (EU), with interpretations issued by the IFRS
Interpretations Committee and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS. The financial
statements have been prepared on a going concern basis and under
the historical cost convention, as modified by the revaluation of
available-for-sale financial assets (AFS) and financial assets and
financial liabilities (including derivative instruments) at fair
value through profit or loss (FVTPL).
The principal accounting policies adopted are the same as those
set out in the Group financial statements, together with the
Company specific policies set out below, and have been consistently
applied to all financial reporting periods presented in these
financial statements.
The Company has taken advantage of the exemption in section 408
of the Companies Act 2006 not to present its own income statement
in these financial statements. This is a change from the treatment
adopted in 2015 when an income statement was presented. The Company
has no employees.
(a)(i) Standards, interpretations and amendments to existing
standards that are not yet effective and have not been early
adopted by the Company
IFRS 9 Financial Instruments (effective for annual periods
beginning on or after 1 January 2018 with option to defer for
certain insurance entities)
IFRS 9 will replace IAS 39 Financial Instruments: Recognition
and Measurement. Details of the Group's assessment of IFRS 9 are
given in the basis of preparation of the Group financial
statements. Management are assessing the impact of the standard in
relation to the Company financial statements. The impact of the
standard is not expected to be significant.
(a)(ii) Investment in subsidiaries, associates and joint ventures
The Company has certain subsidiaries which are investment
vehicles such as open-ended investment companies , unit trusts and
limited partnerships whose primary function is to generate capital
or income growth through holding investments. This category of
subsidiary is held at FVTPL since they are managed on a fair value
basis.
Investments in subsidiaries (other than those measured at
FVTPL), associates (other than those measured at FVTPL) and joint
ventures are initially recognised at cost and subsequently held at
cost less any impairment charge. An impairment charge is recognised
when the carrying amount of the investment exceeds its recoverable
amount. Any gain or loss on disposal of a subsidiary, associate or
joint venture is recognised in the statement of comprehensive
income.
(a)(iii) Financial guarantee contracts
The Company recognises and measures financial guarantee and
indemnity contracts initially at fair value. The Company must
reassess the value at each subsequent reporting date by estimating
the expenditure required to settle the contract and comparing this
to the fair value (net of any amortisation). The higher of these
values is recognised on the statement of financial position.
(a)(iv) Pension costs and other post-retirement benefits
The Group operates a number of defined benefit and defined
contribution plans, the assets of which are held in separate
trustee administered funds. The pension plans are funded by
payments from employees and by the Group companies, determined by
periodic actuarial calculations.
The sponsoring employer for the UK defined benefit plan is
Standard Life Assurance Limited (SLAL), and therefore the net
defined benefit cost of the plan is recognised by SLAL. As a
result, the Company treats its participation in the defined benefit
plan as a defined contribution plan. Consequently the costs of this
plan and the UK defined contribution plan represent the
contributions payable for the accounting period.
For the defined contribution plan, the Company pays
contributions to separately administered pension insurance plans.
The contributions are recognised in staff costs and other
employee-related costs when they are due.
(b) Critical accounting estimates and judgement in applying accounting policies
The preparation of financial statements requires management to
make estimates and assumptions and exercise judgements in applying
the accounting policies that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses arising during the year.
Estimates and judgements are continually evaluated and based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. The area where estimates and assumptions have the
most significant effect on the amounts recognised in the financial
statements is as follows:
Financial statement Critical accounting
area estimates or assumptions Related notes
--------------------------- ------------------------- -------------
Investments in subsidiaries Determination of Notes A and B
and joint ventures the recoverable amount
held at cost
--------------------------- ------------------------- -------------
Notes to the Company financial statements
A. Investments in subsidiaries
2016 2015
Notes GBPm GBPm
---------------------------------------------- ------ ----- -----
Investments in subsidiaries measured at cost 4,493 4,334
Investments in subsidiaries measured at FVTPL C 276 257
---------------------------------------------- ------ ----- -----
Investments in subsidiaries 4,769 4,591
------------------------------------------------------ ----- -----
2016 2015
GBPm GBPm
----------------------------------------------- ----- -------
At 1 January 4,591 5,833
Investment into existing subsidiaries measured
at cost 220 35
Acquisition of subsidiaries at cost - 12
Disposal of subsidiaries measured at cost (12) -
Impairment of subsidiaries measured at cost (49) (1,415)
Acquisition of subsidiaries at FVTPL 19 200
Gains on subsidiaries at FVTPL - 1
Disposal of subsidiaries at FVTPL - (75)
------------------------------------------------ ----- -------
At 31 December 4,769 4,591
------------------------------------------------ ----- -------
Details of the Company's subsidiaries are given in Note 50 of
the Group financial statements.
On 11 February 2016 the Company increased its investment in
Standard Life Employee Services Limited through the purchase of
8,000 ordinary shares for a cash consideration of GBP8m.
On 11 April 2016 the Company increased its investment in
Standard Life (Mauritius Holdings) 2006 Limited through the
purchase of 250,300,000 ordinary shares for a cash consideration of
GBP177m.
On 30 June 2016 the Company increased its investment in Standard
Life Assurance Limited through the purchase of 10,000,000 ordinary
shares for a cash consideration of GBP10m.
On 22 December 2016 the Company further increased its investment
in Standard Life Assurance Limited through the purchase of
13,000,000 ordinary shares for a cash consideration of GBP13m.
On 14 December 2016 the Company transferred its 100% holding in
Pearson Jones plc to 1825 Financial Planning Limited, the Group's
UK-wide financial advice business. The consideration received was
11,600,000 GBP1 ordinary shares in Standard Life Assurance
Limited.
Included within the impairment charge of GBP49m in 2016 (2015:
GBP1,415m) is an impairment of GBP31m (2015: GBPnil) in the
Company's investment in its subsidiary Focus Solutions Group
Limited. The recoverable amount is GBP18m which is its value in use
and has been determined using a discount rate of 12% (2015: 12%).
This impairment is as a result of a decrease in projected future
revenues of the entity. Additionally, an impairment charge of
GBP18m (2015:GBP70m) has been recognised in the Company's
investment in its subsidiary Standard Life Oversea Holdings
Limited. This was primarily in relation to an impairment of
Standard Life Oversea Holdings Limited's investment in Standard
Life (Asia) Limited. In 2015 the impairment was primarily as a
result of a review of expense and reserving assumptions following
regulatory change.
On 30 January 2015 Standard Life Oversea Holdings Limited sold
its Canadian business to The Manufacturers Life Insurance Company
(MLC), a subsidiary of Manulife Financial Corporation (Manulife),
for a fixed consideration of CAD $4bn (GBP2.1bn). Following the
sale, a dividend of GBP2,230m was paid to the Company from Standard
Life Oversea Holdings Limited which resulted in an impairment in
the Company's investment in this subsidiary in 2015 of
GBP1,345m.
Investments in subsidiaries at FVTPL are GBP276m (2015: GBP257m)
which relate to holdings in money market and absolute return
investment funds over which the Group has control.
B. Investments in associates and joint ventures
2016 2015
Notes GBPm GBPm
----------------------------------- ------ ---- ----
Investment in associate measured
at cost 10 13
Investments in associates measured
at FVTPL C - 13
Investment in joint venture
measured at cost 124 124
------------------------------------------- ---- ----
Investments in associates and
joint ventures 134 150
------------------------------------------- ---- ----
(a) Investments in associates
The Company's investment in associate measured at cost relates
to a 25.3% (2015: 25.3%) interest in Tenet Group Limited, a company
incorporated in England. The year end date for Tenet Group Limited
is 30 September which is different from the Company's year end date
of 31 December. For the purposes of the preparation of the
Company's financial statements, financial information for the year
ended 31 December is used.
(b) Investment in joint venture
The Company has a 50% (2015: 50%) interest in Heng An Standard
Life Insurance Company Limited, a company incorporated in China.
Further details on this joint venture are provided in Note 18 of
the Group financial statements.
C. Financial investments
Designated
as at fair
value through
profit Held for Available- Loans
or loss trading for-sale and receivables Total
2016 Notes GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ --------------- ------------- ---------------- ---------------- -----
Investments in subsidiaries
at FVTPL 276 - - - 276
Loans to subsidiaries - - - 323 323
Debt securities - - 605 - 605
Receivables and other financial
assets E - - - 54 54
Cash and cash equivalents G - - - 55 55
-------------------------------- ------ --------------- ------------- ---------------- ---------------- -----
Total 276 - 605 432 1,313
---------------------------------------- --------------- ------------- ---------------- ---------------- -----
Designated
as at fair
value through
profit Held for Available Loans
or loss trading - for-sale and receivables Total
2015 Notes GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------ --------------- ----------- --------------- ---------------- -----
Investments in subsidiaries
at FVTPL 257 - - - 257
Investments in associates at
FVTPL 13 - - - 13
Loans to subsidiaries - - - 322 322
Debt securities - - 743 - 743
Receivables and other financial
assets E - - - 48 48
Cash and cash equivalents G - - - 61 61
-------------------------------- ------ --------------- ----------- --------------- ---------------- -----
Total 270 - 743 431 1,444
---------------------------------------- --------------- ----------- --------------- ---------------- -----
The amount of debt securities expected to be recovered or
settled after more than 12 months is GBP297m (2015: GBP290m).
The amount of loans to subsidiaries expected to be recovered or
settled after more than 12 months is GBP323m (2015: GBP322m).
D. Derivative financial instruments
The Company uses derivative financial instruments in order to
reduce the risk from potential movements in foreign exchange rates.
These instruments are designated as held for trading in the
Company's financial statements.
2016 2015
Contract Fair value Fair value Contract Fair value Fair value
amount assets liabilities amount assets liabilities
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- -------- ---------- ------------ -------- ---------- ------------
Foreign exchange
forwards 6 - - 40 - 2
----------------- -------- ---------- ------------ -------- ---------- ------------
The derivative liabilities of GBPnil (2015: GBP2m) are expected
to be settled within 12 months.
The maturity profile of the contractual undiscounted cash flows
in relation to derivative financial instruments is as follows:
Within 1
year 2-5 years Total
2016 GBPm GBPm GBPm
------------------------------------- -------- --------- -----
Cash inflows
Derivative financial liabilities 6 - 6
------------------------------------- -------- --------- -----
Total 6 - 6
------------------------------------- -------- --------- -----
Cash outflows
Derivative financial liabilities 6 - 6
------------------------------------- -------- --------- -----
Total 6 - 6
------------------------------------- -------- --------- -----
Net derivative financial instruments
cash flows - - -
------------------------------------- -------- --------- -----
Within 1
year 2-5 years Total
2015 GBPm GBPm GBPm
------------------------------------- -------- --------- -----
Cash inflows
Derivative financial assets 18 - 18
Derivative financial liabilities 22 - 22
------------------------------------- -------- --------- -----
Total 40 - 40
------------------------------------- -------- --------- -----
Cash outflows
Derivative financial assets 18 - 18
Derivative financial liabilities 24 - 24
------------------------------------- -------- --------- -----
Total 42 - 42
------------------------------------- -------- --------- -----
Net derivative financial instruments
cash flows (2) - (2)
------------------------------------- -------- --------- -----
E. Receivables and other financial assets
2016 2015
GBPm GBPm
------------------------- ---- ----
Due from related parties 52 44
Collateral pledged in
respect of derivatives
contracts - 2
Other financial assets 2 2
-------------------------- ---- ----
Total receivables and
other financial assets 54 48
-------------------------- ---- ----
The carrying amounts disclosed above reasonably approximate the
fair values at the year end.
Receivables and other financial assets are expected to be
recovered within 12 months.
F. Other assets
Other assets of GBP8m (2015: GBP19m) comprise amounts due from
related parties in respect of Group relief, which are expected to
be recovered within 12 months.
G. Cash and cash equivalents
2016 2015
GBPm GBPm
-------------------------------- ---- ----
Money at call and term deposits
with original maturity of less
than three months 55 61
--------------------------------- ---- ----
Total cash and cash equivalents 55 61
--------------------------------- ---- ----
Money at call and term deposits with original maturity of less
than three months are subject to variable interest rates.
H. Share capital
Details of the Company's share capital are given in Note 28 of
the Group financial statements.
Details of the dividends paid on ordinary shares and the 73p per
ordinary share returned to the shareholders in 2015 through a 'B/C'
share scheme by the Company are provided in Notes 15 and 28 of the
Group financial statements. Note 15 also includes information
regarding the final dividend proposed by the Directors for the year
ended 31 December 2016.
I. Shares held by trusts
Shares held by trusts relates to shares in Standard Life plc
that are held by the Employee Share Trust (EST) and the Unclaimed
Asset Trust (UAT).
The EST purchases shares in the Company for delivery to
employees under employee incentive plans. Purchased shares are
recognised as a deduction from equity at the price paid for them.
Where new shares are issued to the EST the price paid is the
nominal value of the shares. When shares are distributed from the
trust their corresponding value is released to retained
earnings.
In July 2006 Standard Life demutualised and former members of
the mutual company were allocated shares in the new listed Company.
Some former members were yet to claim their shares and the UAT held
these on their behalf.
On expiry of the claim period on 9 July 2016, the entitlement to
the unclaimed shares remaining in the UAT transferred to the
Company and they became classified as shares held by trusts. These
shares are measured at GBPnil. Unclaimed shares and unclaimed cash
referred to in Note J will be used to fund the charitable
activities of the Standard Life Foundation.
The number of shares held in trust at 31 December 2016 was as
follows:
2016 2015
------------------------------- ---------- ---------
Number of shares held in trust
Employee Share Trust 1,287,431 1,637,419
Unclaimed Asset Trust 12,999,801 -
---------------------------------- ---------- ---------
J. Retained earnings
Included in retained earnings is an amount related to the expiry
of the UAT claim period. In addition to unclaimed shares, which are
referred to in Note I, the UAT holds cash in relation to unclaimed
cash entitlements arising from both cash entitlements which were
allocated to eligible members of the mutual company at the date of
demutualisation and dividends received on shares held in the UAT.
On expiry of the UAT claim period on 9 July 2016, the entitlement
to the unclaimed cash remaining in the UAT transferred partly to
the Company and partly to the Standard Life Foundation. The
transfer of the cash entitlement to the Company resulted in the
recognition of a cash asset of GBP36m, the impact of which was
recognised directly in retained earnings in equity.
K. Reconciliation of movements in other reserves
Equity Capital Available-for-sale
Merger compensation Special redemption financial
reserve reserve reserve reserve assets Total
2016 GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ -------- ------------- -------- ----------- ------------------ -------
At 1 January 2,080 50 241 488 1 2,860
Reserves credit for
employee share-based
payment schemes - 30 - - - 30
Transfer to retained
earnings for vested
employee
share-based payments - (23) - - - (23)
Cancellation of capital
redemption reserve - - - (488) - (488)
Fair value gains on
available-for-sale financial
assets - - - - 17 17
Tax effect relating
to items that may be
reclassified subsequently
to profit or loss - - - - (3) (3)
------------------------------- -------- ------------- -------- ----------- ------------------ -------
At 31 December 2,080 57 241 - 15 2,393
------------------------------- -------- ------------- -------- ----------- ------------------ -------
2015
------------------------------ -------- ------------- -------- ----------- ------------------ -------
At 1 January 3,108 48 241 - 8 3,405
Reserves credit for
employee share-based
payment schemes - 34 - - 34
Transfer to retained
earnings for vested
employee
share-based payments - (32) - - - (32)
Redemption of 'B' shares - - - 488 - 488
Transfer between reserves
on disposal of subsidiary (1,028) - - - - (1,028)
Loss on sale of AFS
financial assets recycled
to profit
and loss - - - - (2) (2)
Fair value losses on
available-for-sale financial
assets - - - - (7) (7)
Tax effect relating
to items that may be
reclassified subsequently
to profit or loss - - - - 2 2
------------------------------- -------- ------------- -------- ----------- ------------------ -------
At 31 December 2,080 50 241 488 1 2,860
------------------------------- -------- ------------- -------- ----------- ------------------ -------
Further information on the merger reserve and special reserve is
given in Note 31 of the Group financial statements.
On 17 June 2016 the Company's capital redemption reserve was
cancelled in accordance with section 649 of the Companies Act 2006
resulting in a transfer of GBP488m to retained earnings.
L. Financial liabilities
Financial
liabilities
measured at
amortised
Held for trading cost Total
2016 Notes GBPm GBPm GBPm
---------------- ------ ---------------- -------------------- -----
Subordinated
liabilities M - 1,319 1,319
Other financial
liabilities O - 8 8
---------------- ------ ---------------- -------------------- -----
Total - 1,327 1,327
------------------------ ---------------- -------------------- -----
Financial
liabilities
measured at
amortised
Held for trading cost Total
2015 Notes GBPm GBPm GBPm
---------------- ------ ---------------- --------------------- -----
Subordinated
liabilities M - 1,318 1,318
Derivative
financial
liabilities D 2 - 2
Other financial
liabilities O - 52 52
---------------- ------ ---------------- --------------------- -----
Total 2 1,370 1,372
------------------------ ---------------- --------------------- -----
M. Subordinated liabilities
2016 2015
Principal Carrying Principal Carrying
amount value amount value
GBPm GBPm GBPm GBPm
------------------------- --------- -------- -------------------- --------
Subordinated notes:
5.5% Sterling fixed
rate due 4 December
2042 500 499 500 499
Subordinated guaranteed
bonds:
6.75% Sterling fixed
rate perpetual 500 502 500 502
Mutual Assurance Capital
Securities:
6.546% Sterling fixed
rate perpetual 300 318 300 317
------------------------- --------- -------- -------------------- --------
Subordinated liabilities 1,319 1,318
------------------------- --------- -------- -------------------- --------
Subordinated liabilities are considered current if the
contractual re-pricing or maturity dates are within one year. The
principal amount of all the subordinated liabilities is expected to
be settled after more than 12 months. The accrued interest on the
subordinated liabilities of GBP37m (2015: GBP37m) is expected to be
settled within 12 months.
Further information on the terms and conditions of the
subordinated liabilities is given in Note 36 of the Group financial
statements.
N. Deferred tax liabilities
2016 2015
GBPm GBPm
------------------------- ---- ----
Deferred tax liabilities 3 1
Total tax liabilities 3 1
-------------------------- ---- ----
The amount of deferred tax liabilities expected to be settled
after more than 12 months is GBP3m (2015: GBP1m).
There are no tax assets or current tax liabilities.
The Company has surrendered the benefit of its tax losses to
underlying subsidiaries for a consideration of GBP8m (2015:
GBP19m). The Company has provided for deferred tax amounting to
GBP3m (2015: GBP1m) in respect of unrealised gains on assets held
as available for sale.
Recognised deferred tax
2016 2015
GBPm GBPm
--------------------------------------- ---- ----
Deferred tax liabilities comprise:
Unrealised gains on assets held
as available-for-sale (3) (1)
---------------------------------------- ---- ----
Net deferred tax liabilities (3) (1)
---------------------------------------- ---- ----
Movements in deferred tax liabilities
comprise:
At 1 January (1) (1)
Amounts credited to net profit 1 -
Amounts charged to other comprehensive
income (3) -
---------------------------------------- ---- ----
At 31 December (3) (1)
---------------------------------------- ---- ----
O. Other financial liabilities
The amount of other financial liabilities expected to be settled
after more than 12 months is GBPnil (2015: GBPnil).
P. Other liabilities
The amount of other liabilities expected to be settled after
more than 12 months is GBPnil (2015: GBPnil).
Q. Risk management
(a) Overview
The Company is principally involved in the management of its
investments in subsidiaries, and is responsible for the raising and
allocation of capital to ensure that the operational funding and
regulatory capital needs of its subsidiaries are met at all times.
The Group's capital management policies are explained in Note 49 of
the Group financial statements.
Through the management of its investment in subsidiaries and
capital position the Company holds financial instruments and is
principally exposed to market, credit and liquidity risks.
The risk management processes of the Company are aligned with
those of the Group as a whole. Details of the Group's risk
management processes are outlined in the 'Risk Management' section
within the Strategic report and in Note 41 of the Group financial
statements.
(b) Market risk
The most significant element of market risk for the Company
arises from its exposure to fluctuations in interest rates and
equity markets. The Company is exposed to fluctuations in the fair
value of future cash flows of financial instruments caused by
changes in market interest rates. Financial assets and liabilities
which are subject to the most significant exposure to interest rate
risk include corporate bonds and money market instruments. The
Company is also exposed to fluctuations in the equity securities
markets, and as a result, changes in the value of its holdings and
the return on those holdings.
The Company's investments and liabilities are generally held in
its functional currency. However, for strategic and capital reasons
the Company may hold investments and liabilities in other
currencies. In these cases, derivative financial instruments may be
employed to manage currency exposure so that the Company has no
remaining significant exposure to foreign exchange
fluctuations.
The market risk exposure to foreign currency assets is matched
by liabilities held in the same currency or managed using
derivative financial instruments.
Derivative instruments may also be utilised to reduce risk
arising from exposure to fluctuations in interest rates and equity
indices. Transactions in derivatives are undertaken on a regulated
market or are with an approved counterparty. In employing
derivatives, the Company must always have sufficient cash and cash
equivalents or underlying assets to cover any potential obligation
or exercise right following reasonably foreseeable adverse
variations.
The following table provides information regarding the market
risk exposure to debt securities of the Company at 31 December 2016
and
31 December 2015, showing diversification by geographic
region.
Geography
----------------------------------------------
UK Europe Other Total
2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ---- ---- ---- ---- ---- ---- ---- ----
Debt securities 215 183 254 521 136 39 605 743
---------------- ---- ---- ---- ---- ---- ---- ---- ----
(b) Market risk continued
(b)(ii) Sensitivity analysis - market risk
The table below illustrates the sensitivity of profit after tax
to changes in equity security prices and to changes in interest
rates as at the reporting date, assuming other assumptions remain
unchanged.
Equity security prices Interest rates
----------------- ---------------------------------- ----------------------------------
+20% -20% +10% -10% +1% -1%
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Impact on profit
after tax 4 5 (4) (5) 2 2 (2) (2) (2) - 2 -
----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Equity sensitivity to market risk
The Company classifies certain debt securities as
available-for-sale. These debt securities are measured at fair
value. Interest is calculated using the effective interest method
and recognised in the income statement. Other changes in fair value
and the related tax are recognised in other comprehensive income.
As a result, the sensitivity of the Company's equity to variations
in interest rate risk exposures differs from the sensitivity of the
Company's profit after tax to variations in interest rate risk
exposures.
The Company's equity sensitivity to a 1% increase in interest
rates is (GBP17m) (2015: (GBP16m)) and to a 1% decrease in interest
rates is GBP17m (2015: GBP16m).
The sensitivity of the Company's total equity to change in
equity security prices in respect of each of the scenarios shown in
the preceding tables is the same as the sensitivity of the
Company's profit after tax.
(c) Credit risk
The Company is exposed to credit risk from the risk of exposure
to loss if a counterparty fails to perform its financial
obligations, including failure to perform these obligations in a
timely manner. Exposure also includes the risk of a reduction in
the value of assets due to widening of credit spreads. Any loans to
subsidiaries require approval from the Group Enterprise Risk
Management Committee prior to being transacted.
(c)(i) Credit exposure of financial assets
The following table provides an analysis of the quality of
financial assets that are neither past due nor impaired at the
reporting date and are exposed to credit risk. An explanation of
credit ratings is included in Note 41(c) of the Group financial
statements.
The total amount in the table below represents the Company's
credit exposure to financial investments at the year end without
taking into account any collateral held.
Investments Receivables
in Investments Loans Derivative and other Cash
subsidiaries in associates to financial Debt financial and cash
at FVTPL at FVTPL subsidiaries assets Securities assets equivalents Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------ ---- -------- ---- ------- ---- -------- ----- ----- ----- ----- ----- ------ ----- ------ ----- -----
AAA - - - - - - - - 36 35 - - - - 36 35
AA - - - - - - - - 127 64 - - 2 9 129 73
A - - - - - - - - 295 537 - - 10 4 305 541
BBB - - - - - - - - 131 92 - - 43 48 174 140
Below
BBB - - - - - - - - 15 - - - - - 15 -
Not
rated 276 257 - 13 323 322 - - 1 15 54 48 - - 654 655
------ ---- -------- ---- ------- ---- -------- ----- ----- ----- ----- ----- ------ ----- ------ ----- -----
Total 276 257 - 13 323 322 - - 605 743 54 48 55 61 1,313 1,444
------ ---- -------- ---- ------- ---- -------- ----- ----- ----- ----- ----- ------ ----- ------ ----- -----
Investments in subsidiaries at FVTPL of GBP276m (2015: GBP257m)
includes GBP201m (2015: GBP200m) invested in absolute return funds
and GBP75m (2015: GBP57m) relating to a holding in a money market
fund. These funds are managed by a subsidiary company and are not
rated. The money market fund invests in a range of counterparties
that are externally rated, and uses concentration limits and
maturity limits in managing its exposures.
At 31 December 2016 and 31 December 2015, all financial assets
were neither past due nor impaired.
(d) Liquidity risk
Liquidity risk is the risk that the Company is unable to realise
investments and other assets in order to settle its financial
obligations when they fall due, or can do so only at excessive
cost. The Company ensures that it can meet its financial
obligations as they fall due by maintaining suitable levels of
liquid assets. The obligations arising from subordinated
liabilities are mostly offset by receipts arising from loans to
subsidiaries and investments in subsidiaries. Refer to Note D for
the maturity profile of undiscounted cash flows of derivative
financial instruments.
Liquidity risk is managed through the Group liquidity and
capital management policy which is outlined in Note 41 (e) of the
Group financial statements. The Company is required to manage risk
in accordance with the Group policy and to take mitigating action
as appropriate to operate within defined risk appetites.
Liquidity risk is managed by the Company in consultation with
the central Group Treasury function. Liquidity risk is primarily
managed by placing limits on the value of financial assets held
which are neither quoted nor regularly traded on a recognised
exchange and by maintaining a portfolio of committed bank
facilities. In May 2015, the Company reduced its syndicated
revolving credit facility which it held as part of its contingency
funding plans, to GBP400m (from GBP500m) in line with a lower risk
profile following the sale of the Canadian business. In 2016 the
maturity date of this facility was extended for a further year to
2021 and it is currently undrawn. The Company is also responsible
for the definition and management of the contingency funding plan
which operates on a continuous basis and is fully documented.
(d)(i) Maturity analysis
A cash flow analysis by remaining contractual maturities for
subordinated liabilities (all of which are issued by the Company)
is included in the shareholder business section of Note 41(e)(i) of
the Group financial statements. Other financial liabilities have a
contractual maturity of within 1 year.
R. Contingent liabilities, contingent assets, indemnities and guarantees
(a) Legal proceedings and regulations
The Company, like other financial organisations, is subject to
legal proceedings and complaints in the normal course of its
business. All such material matters are periodically reassessed,
with the assistance of external professional advisers where
appropriate, to determine the likelihood of the Company incurring a
liability. Where it is concluded that it is more likely than not
that a material outflow will be made a provision is established
based on management's best estimate of the amount that will be
payable. In some cases it will not be possible to form a view, for
example because the facts are unclear or because further time is
needed to properly investigate, and no provisions are held for such
matters. It is not possible to predict with certainty the extent
and timing of the financial impact of legal proceedings, complaints
and related regulatory matters.
(b) Indemnities and guarantees
Under the trust deed in respect of the Group's UK defined
benefit pension plan, Standard Life Employee Services Limited
(SLESL), the principal employer, must pay contributions to the
pension plan as the trustees' actuary may certify necessary. The
Company has guaranteed the obligations of SLESL to the UK defined
benefit pension plan for a period of 15 years from 10 July 2006,
which gave rise to a liability of GBPnil at 31 December 2016 (2015:
GBPnil).
S. Related party transactions
(a) Transactions with and balances from/(to) related parties
In the normal course of business, the Company enters into
transactions with related parties. The year end balances arising
from such transactions are as follows:
2016 2015
GBPm GBPm
---------------------- ---- ----
Due from related
parties:
Subsidiaries 60 63
Loans to subsidiaries 323 322
----------------------- ---- ----
383 385
---------------------- ---- ----
Transactions with related parties carried out by the Company
during the year were as follows:
2016 2015
GBPm GBPm
---------------------- ---- -----
Revenues from related
parties:
Subsidiaries 512 1,295
Associates 4 -
----------------------- ---- -----
516 1,295
---------------------- ---- -----
Expenses to related
parties:
Subsidiaries 109 156
Associates 3 -
----------------------- ---- -----
112 156
---------------------- ---- -----
Where financial instruments arising from transactions with
related parties are offset in the statement of financial position,
the net position is presented in the tables above.
(b) Compensation of key management personnel
The Directors and key management personnel of the Company are
considered to be the same as for the Group. Information on both
Company and Group compensation paid to Directors and key management
personnel can be found in Note 48 of the Group financial statements
and the audited section of the Directors' remuneration report.
Information on transactions with/from and balances from/to key
management personnel and their close family members can also be
found in Note 48 of the Group financial statements. Details of the
employee share-based payment schemes operated by the Company are
given in Note 47 of the Group financial statements.
T. Fair value of assets and liabilities
The Company's approach to the fair value of assets and
liabilities is aligned with the Group policy detailed in Note 43 of
the Group financial statements. An analysis of the Company's
financial investments and financial liabilities in accordance with
the categories of financial instrument set out in IAS 39 Financial
Instruments: Recognition and Measurement is presented in Notes C
and L and includes those financial assets and liabilities held at
fair value.
(a) Methodology used to determine fair value of assets and liabilities
The fair value hierarchy, and the methods and assumptions used
to determine fair value by the Company are aligned with the Group,
as detailed in Note 43 of the Group financial statements, with the
following exceptions:
Investments in subsidiaries at FVTPL
Investments in subsidiaries at FVTPL comprises GBP201m (2015:
GBP200m) of investments on a recognised exchange which are valued
using prices sourced from the primary exchange on which they are
listed. These instruments are generally considered to be quoted in
an active market and are therefore treated as level 1 investments
within the fair value hierarchy.
The remaining investments in subsidiaries at FVTPL relate to a
short term investment fund which is valued daily at net asset value
(NAV) adjusted for accrued interest. Although the price is not
quoted in an active market the valuation is based on observable
market data and as a result has been classified as level 2 in the
fair value hierarchy.
(b) Fair value hierarchy for financial instruments measured at
fair value in the statement of financial position
The following table sets out an analysis of financial assets and
liabilities measured at fair value by level of the fair value
hierarchy.
Fair value hierarchy
----------------------------------
Level 1 Level 2 Level 3 Total
2016 2015 2016 2015 2016 2015 2016 2015
Assets GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ---- ---- ---- ---- ---- ---- ---- -----
Investments
in subsidiaries
at FVTPL 201 200 75 57 - - 276 257
Investment
in associate
at FVTPL - 13 - - - - - 13
Debt securities 32 31 572 711 1 1 605 743
----------------- ---- ---- ---- ---- ---- ---- ---- -----
Total 233 244 647 768 1 1 881 1,013
----------------- ---- ---- ---- ---- ---- ---- ---- -----
Liabilities
-----------------------
Derivative
financial liabilities ---2---2
-----------------------
Total ---2---2
-----------------------
There were no significant transfers between level 1 and level 2
in the year. During the year, there were no disposals (2015: none)
of level 3 securities. There is no significant sensitivity of level
3 financial instruments measured at fair value in relation to
changes in key assumptions.
(c) Fair value of financial assets and liabilities measured at amortised cost
The fair value of subordinated liabilities is set out in Note
43(e) of the Group financial statements.
The table below presents estimated fair values of other
financial assets and liabilities held by the Company whose carrying
value does not approximate fair value.
2016 2015 2016 2015
Carrying Carrying
value value Fair value Fair value
Notes GBPm GBPm GBPm GBPm
-------------- ------ -------- -------- ---------- ----------
Loans to
subsidiaries C 323 322 340 348
-------------- ------ -------- -------- ---------- ----------
The estimated fair values of loans to subsidiaries are
determined with reference to quoted market prices determined using
observable market inputs. The Company does not consider its loans
to subsidiaries to be impaired.
The carrying value of all other financial assets and liabilities
measured at amortised cost approximates their fair value.
The table below presents the loans to subsidiaries as detailed
above measured at fair value by level of the fair value
hierarchy.
Level 1 Level 2 Level 3 Total
2016 2015 2016 2015 2016 2015 2016 2015
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- ---- ---- ---- ---- ---- ---- ---- ----
Loans to subsidiaries - - 334 343 6 5 340 348
---------------------- ---- ---- ---- ---- ---- ---- ---- ----
11. Supplementary Information
11.1 Alternative performance measures
We assess our performance using a variety of measures that are
not defined under IFRS and are therefore termed alternative
performance measures (APMs). The APMs that we use may not be
directly comparable with similarly named measures used by other
companies.
We have presented below reconciliations from these APMs to the
most appropriate measure prepared in accordance with IFRS.
Full definitions for APMs are included in the Glossary
Operating profit
Operating profit is a key APM used by our management to evaluate
performance.
Operating profit reporting provides further analysis of the
results reported under IFRS and the Directors believe it helps to
give shareholders a fuller understanding of the performance of the
business by identifying and analysing non-operating items.
Operating profit is a key performance indicator, and is consistent
with the way that financial performance is measured by management
and reported to the Board and strategic executive committee.
2016 2015
GBPm GBPm
----------------------------------- ------- -------
Fee based revenue 1,651 1,579
Spread/risk margin 134 145
------------------------------------- ------- -------
Total operating income 1,785 1,724
Total operating expenses (1,159) (1,124)
Capital management 21 9
Share of associates' and
joint ventures' profit
before tax 76 56
------------------------------------- ------- -------
Operating profit before
tax from continuing operations 723 665
------------------------------------- ------- -------
Tax on operating profit (127) (114)
Share of associates' and
joint ventures' tax expense (13) (13)
------------------------------------- ------- -------
Operating profit after
tax from continuing operations 583 538
------------------------------------- ------- -------
Singapore included in discontinued
operations segment - (42)
Total non-operating items (274) (257)
Tax on non-operating items 59 37
------------------------------------- ------- -------
IFRS profit from continuing
operations 368 276
IFRS profit from discontinued
operations - 1,147
------------------------------------- ------- -------
Total IFRS profit attributable
to equity holders of Standard
Life plc 368 1,423
------------------------------------- ------- -------
Operating profit excludes impacts arising from short-term
fluctuations in investment return and economic assumption changes.
Operating profit also excludes restructuring and corporate
transaction costs, amortisation and impairment of intangibles
acquired in business combinations, and certain one-off items.
Further details on operating profit and non-operating items are
included in Notes 2(b)(i) and 14 of the Group financial statements
section of this report.
As set out in the table above, the key components of operating
profit before tax are total operating income (which is broken down
into fee based revenue and spread/risk margin), total operating
expenses and share of associates' and joint ventures' profit before
tax. These components provide a meaningful analysis of our
operating results. A reconciliation of total operating income and
total operating expenses from continuing operations (as presented
in the analysis of operating profit above) to total revenue and
total expenses respectively (as presented in the Group consolidated
income statement) is included in Note 2(b)(ii) of the Group
financial statements section of this report.
Underlying performance
Underlying performance is calculated as operating profit before
tax after excluding the impact of spread/risk operating actuarial
assumption changes and specific management actions in the reporting
period. It therefore removes certain volatile items from operating
profit and supports an understanding of the underlying operating
performance of the business.
2016 2015
GBPm GBPm
-------------------------------- ---- ----
Operating profit before
tax from continuing operations 723 665
Underlying adjustments
Operating assumption
changes (42) (44)
Shareholder support
to the German with profits
business - 9
---------------------------------- ---- ----
Underlying performance
from continuing operations 681 630
---------------------------------- ---- ----
Underlying cash generation
This is an APM which presents a shareholder view of underlying
cash earnings. Underlying cash generation adjusts underlying
performance for certain non-cash items as set out below. It
provides insight into our ability to generate cash that supports
further investment in the business and the payment of dividends to
shareholders. The IFRS consolidated statement of cash flows
includes policyholder cash flows, and therefore does not present a
shareholder view, and does not exclude underlying adjustments and
non-operating items.
2016 2015
GBPm GBPm
-------------------------------- ---- ----- -----
Operating profit before
tax from continuing operations 723 665
Underlying adjustments (42) (35)
--------------------------------------- ----- -----
Underlying performance
from continuing operations 681 630
Associates and JVs adjustment (a) (60) (44)
Current tax on underlying
performance (b) (106) (114)
DAC/DIR adjustment (c) (2) 5
Fixed and intangible assets
adjustment (d) (11) (18)
-------------------------------- ----- ----- -----
Underlying cash generation 502 459
--------------------------------------- ----- -----
Further details on the reconciling items between underlying
performance and underlying cash generation are included below.
(a) Associates and Joint Ventures (JVs) adjustment
The calculation of underlying cash generation was changed during
H1 2016. Underlying cash generation now includes dividends received
from associates and joint ventures, previously no contribution was
included from these businesses. The revised approach reflects more
closely the underlying cash generated given the regular receipt of
dividends in recent years from our Indian associates HDFC Life and
HDFC Asset Management. Comparatives have been restated.
2016 2015
-----------
Notes
per Group
financial
statements GBPm GBPm
------------------------------- ----------- ---- ----
Exclude share of associates'
and joint ventures' profit
before tax 2 (76) (56)
Dividends received from
associates and joint ventures 18 16 12
------------------------------- ----------- ---- ----
Associates and JVs adjustment (60) (44)
------------------------------- ----------- ---- ----
(b) Current tax on underlying performance
Current tax on underlying performance excludes tax on
non-operating and underlying adjustments, excludes current tax
attributable to policyholders, and excludes deferred tax
charges/credits.
2016 2015
-----------
Notes
per Group
financial
statements GBPm GBPm
--------------------------------- ----------- ----- -----
Total current tax attributable
to continuing operations 11 (333) (222)
Current tax expense attributable
to policyholders' returns 264 168
Current tax credit relating
to non-operating profit
items (44) (68)
Current tax expense attributable
to underlying adjustments 7 8
--------------------------------- ----------- ----- -----
Current tax on underlying
performance (106) (114)
--------------------------------- ----------- ----- -----
(c) Deferred acquisition costs (DAC)/ Deferred income reserve (DIR) adjustment
The DAC/DIR non-cash adjustment adds back existing business
DAC/DIR amortisation included in underlying performance for the
period and deducts the equivalent new business DAC/DIR additions
for the period. The following table reconciles DAC/DIR movements in
the Group financial statements to the DAC/DIR adjustment.
2016 2015
-----------
Notes
per Group
financial
statements GBPm GBPm
--------------------------- ----------- ---- ----
Amortisation of deferred
acquisition costs 17 96 124
Acquisition costs deferred
during the period 17 (51) (83)
Amortisation of deferred
income 38 (61) (63)
Fee income deferred during
the period 38 15 25
Adjustments for HWPF and
GWPF DAC/DIR not included
in shareholder view (1) 2
--------------------------- ----------- ---- ----
DAC/DIR adjustment (2) 5
--------------------------- ----------- ---- ----
(d) Fixed and intangible assets adjustment
The fixed and intangible assets adjustment adds back
depreciation and amortisation that is included within underlying
performance for the period and deducts additions for the period
where the depreciation or amortisation of those additions will be
included within underlying performance. The following table
reconciles equipment and intangible asset movements in the Group
financial statements to the fixed and intangible asset
adjustment.
2016 2015
-----------
Notes
per Group
financial
statements GBPm GBPm
--------------------------------------- ----------- ---- ----
Depreciation of equipment 20 14 16
Amortisation of intangible
assets 16 64 51
Amortisation of intangible
assets acquired through
business combinations (non-operating) 16 (19) (20)
Additions of equipment(1) 20 (9) (7)
Additions of intangible
assets 16 (89) (64)
Additions of intangible
assets acquired through
business combinations (not
amortised through operating
profit) 16 28 6
--------------------------------------- ----------- ---- ----
Fixed and intangible assets
adjustment (11) (18)
--------------------------------------- ----------- ---- ----
(1) Excludes equipment acquired through business combinations.
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
EBITDA is an APM reported by Standard Life Investments, which is
commonly used by asset management businesses to measure
profitability and therefore provides useful information on
operating performance. EBITDA for Standard Life Investments adjusts
operating profit by removing net interest expense, depreciation and
amortisation.
2016 2015
Standard Life Investments GBPm GBPm
--------------------------------- ---- ----
EBITDA 395 352
Interest, depreciation
and amortisation (12) (10)
----------------------------------- ---- ----
Operating profit before
tax from continuing operations 383 342
Share of associates' and
joint ventures' tax expense (11) (11)
Total non-operating items (50) (53)
Total tax expense (63) (53)
----------------------------------- ---- ----
Profit for the year attributable
to equity holders of Standard
Life plc 259 225
----------------------------------- ---- ----
11.2 Financial ratios
We also use a number of financial ratios to help assess our
performance and these are also not defined under IFRS. Details of
our main financial ratios and how they are calculated are presented
below.
Operating return on equity
Operating return on equity is a measure that highlights our
ability to generate operating profit relative to our shareholder
capital. Operating return on equity represents the annualised
post-tax operating profit expressed as a percentage of the opening
IFRS equity, adjusted for time apportioned dividends paid to equity
holders.
2016 2015
------------------------------------- ----- -------
Operating profit after tax (GBPm) 583 541
Opening IFRS equity attributable
to equity holders of Standard
Life plc (GBPm) 4,002 4,672
External final dividend payment
- time apportioned (GBPm) (142) (131)
External interim dividend payment
- time apportioned (GBPm) (21) (20)
Canada: Sale proceeds less return
of value - time apportioned
(GBPm) - 397
Canada: Remove net asset value
at point of sale - time apportioned
(GBPm) - (1,106)
--------------------------------------- ----- -------
Adjusted IFRS equity (GBPm) 3,839 3,812
--------------------------------------- ----- -------
Operating return on equity (%) 15.2 14.2
--------------------------------------- ----- -------
Cost/income ratio
Cost/income ratio is a measure that highlights our efficiency
and is calculated as operating expenses divided by operating income
on a rolling 12 month basis, and includes the share of associates'
and joint ventures' profit before tax.
2016 2015 2014
----------------------------------- ------- ------- -------
Operating expenses from continuing
operations (GBPm) (1,159) (1,124) (1,045)
Fee based revenue (GBPm) 1,651 1,579 1,429
Spread/risk margin (GBPm) 134 145 183
Share of associates' and joint
ventures' profit before tax
(GBPm) 76 56 39
------------------------------------ ------- ------- -------
Total operating income and
share of associates' and joint
ventures' profit before tax
from continuing operations
(GBPm) 1,861 1,780 1,651
------------------------------------ ------- ------- -------
Cost/income ratio (%) 62 63 63
------------------------------------ ------- ------- -------
Fee revenue yield (bps)
The average revenue yield on fee based business is a measure
which illustrates the average margin earned on the assets that we
administer. It is calculated as a rolling 12 month fee based
revenue divided by a rolling 12 month monthly average AUA.
Standard Life Investments UK Pensions and
growth channels Savings
2016 2015 2016 2015
------------------------- ------------- ------------ -------- -------
Fee based revenue (GBPm) 680 624 664 631
Average fee based assets
under administration
(GBPbn)(1) 129.4 119.0 115.2 106.2
------------------------- ------------- ------------ -------- -------
Fee revenue yield (bps) 53 52 58 59
------------------------- ------------- ------------ -------- -------
(1) Excludes AUA from conventional with profits for the UK
Pensions and Savings business and HDFC Asset Management for
Standard Life Investments.
EBITDA margin
EBITDA margin is a measure reported by Standard Life Investments
and is commonly used by asset management businesses to measure
profit in relation to revenue. It is calculated as EBITDA divided
by fee based revenue.
Standard Life
Investments 2016 2015
-------------------- ---- -----
EBITDA (GBPm) 395 352
Fee based revenue
(GBPm) 885 843
-------------------- ---- -----
EBITDA margin
(%) 45 42
-------------------- ---- -----
11.3 Assets under administration and net flows
Assets under administration (AUA) is a measure of the total
assets we administer. It includes Standard Life Investments assets
under management (AUM), as well as those assets that the Group
administers where the customer has made a choice to select an
external third party investment manager.
AUA represents the IFRS gross assets of the Group, adjusted to
include third party AUA which is not included on the consolidated
statement of financial position, and excluding certain assets which
do not constitute AUA. The assets excluded are primarily
reinsurance assets, deferred acquisition costs and intangible
assets.
As an investment company, AUA and net flows are key drivers of
shareholder value.
Assets under administration
12 months ended 31 December 2016
Opening Closing
AUA at Market AUA at
1 Jan Gross and other 31 Dec
2016 flows Redemptions Net flows movements 2016
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Total growth
channels 198.3 38.6 (34.5) 4.1 35.2 237.6
Total mature
books fee 82.0 2.5 (8.7) (6.2) 13.0 88.8
Total mature
books spread/risk 14.9 0.2 (1.1) (0.9) 2.1 16.1
Total other 12.2 0.8 (0.4) 0.4 2.0 14.6
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Total AUA 307.4 42.1 (44.7) (2.6) 52.3 357.1
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Institutional 67.0 15.6 (14.5) 1.1 18.9 87.0
Wholesale 45.9 12.1 (13.8) (1.7) 5.9 50.1
Wealth 6.5 0.8 (0.9) (0.1) 0.4 6.8
Ignis(1) 11.1 - - - (11.1) -
--------------------------- ------- ------ ----------- --------- ---------- -------
Standard Life Investments 130.5 28.5 (29.2) (0.7) 14.1 143.9
--------------------------- ------- ------ ----------- --------- ---------- -------
UK Workplace 33.0 4.1 (2.4) 1.7 2.7 37.4
UK Retail(2) 42.6 8.1 (4.4) 3.7 16.6 62.9
--------------------------- ------- ------ ----------- --------- ---------- -------
UK Pensions and
Savings 75.6 12.2 (6.8) 5.4 19.3 100.3
--------------------------- ------- ------ ----------- --------- ---------- -------
Europe growth fee(2) 9.6 1.3 (0.8) 0.5 1.1 11.2
--------------------------- ------- ------ ----------- --------- ---------- -------
Pensions and Savings 85.2 13.5 (7.6) 5.9 20.4 111.5
--------------------------- ------- ------ ----------- --------- ---------- -------
Hong Kong 0.5 0.1 (0.1) - 0.1 0.6
Eliminations(3) (17.9) (3.5) 2.4 (1.1) 0.6 (18.4)
--------------------------- ------- ------ ----------- --------- ---------- -------
Growth
Channels Total growth channels 198.3 38.6 (34.5) 4.1 35.2 237.6
------------------------- --------------------------- ------- ------ ----------- --------- ---------- -------
Mature
Books UK mature Retail 32.7 0.6 (3.1) (2.5) 4.1 34.3
-------------------------
Europe mature fee 8.4 0.7 (0.8) (0.1) 1.8 10.1
Third party strategic
partner life business 39.6 1.2 (3.9) (2.7) 6.9 43.8
Other fee including
CWP 1.3 - (0.9) (0.9) 0.2 0.6
--------------------------- ------- ------ ----------- --------- ---------- -------
Total mature books
fee 82.0 2.5 (8.7) (6.2) 13.0 88.8
--------------------------- ------- ------ ----------- --------- ---------- -------
Spread/risk 14.9 0.2 (1.1) (0.9) 2.1 16.1
--------------------------- ------- ------ ----------- --------- ---------- -------
Total mature books 96.9 2.7 (9.8) (7.1) 15.1 104.9
--------------------------- ------- ------ ----------- --------- ---------- -------
Associate and joint
venture life businesses(4) 2.3 0.8 (0.4) 0.4 1.3 4.0
Other(5) 10.4 - - - 0.8 11.2
Other Eliminations(3) (0.5) - - - (0.1) (0.6)
------------------------------------------------------ ------- ------ ----------- --------- ---------- -------
Total 307.4 42.1 (44.7) (2.6) 52.3 357.1
------------------------------------------------------ ------- ------ ----------- --------- ---------- -------
(1) During 2016 Ignis funds were merged into Standard Life
Investments funds and are now reported within Institutional and
Wholesale. This has resulted in a transfer of GBP11.1bn AUM out of
Ignis into Institutional (GBP9.8bn) and Wholesale (GBP1.3bn)
through Market and other movements.
(2) Platform AUA (Wrap, Elevate and Fundzone) of GBP44.2bn
(2015: GBP26.5bn) comprises GBP41.7bn (2015: GBP24.4bn) reported
within UK Retail and GBP2.5bn (2015: GBP2.1bn) relating to Wrap
International Bond reported within Europe growth fee.
(3) Certain products are included in both Pensions and Savings
growth AUA and Standard Life Investments growth AUM. Therefore, at
a Group level an elimination adjustment is required to remove any
duplication, in addition to other necessary consolidation
adjustments. Comprises GBP18.4bn (2015: GBP17.9bn) related to
growth channel business eliminations and GBP0.6bn (2015: GBP0.5bn)
related to other consolidation/eliminations.
(4) Market and other movements includes GBP0.8bn relating to
stake increase in HDFC Life in April 2016.
(5) Other comprises Assets that do not generate revenue from
products of GBP8.9bn (2015: GBP7.7bn) and Other corporate assets of
GBP2.3bn (2015: GBP2.7bn).
Assets under administration
12 months ended 31 December 2015
Opening Closing
AUA at Market AUA at
1 Jan Gross and other 31 Dec
2015 flows Redemptions Net flows movements 2015
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Total growth channels 180.7 40.8 (25.9) 14.9 2.7 198.3
Total mature books
fee 87.9 1.6 (9.5) (7.9) 2.0 82.0
Total mature books
spread/risk 16.1 0.2 (1.1) (0.9) (0.3) 14.9
Total other 11.9 0.4 (0.2) 0.2 0.1 12.2
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Total AUA 296.6 43.0 (36.7) 6.3 4.5 307.4
-------------------------- -------------------------- ------- ------ ----------- --------- ---------- -------
Growth
Channels Institutional 61.4 11.1 (7.8) 3.3 2.3 67.0
-------------------------
Wholesale 35.5 16.8 (7.5) 9.3 1.1 45.9
Wealth 6.1 0.9 (0.7) 0.2 0.2 6.5
Ignis 14.5 2.6 (5.1) (2.5) (0.9) 11.1
--------------------------- ------- ------ ----------- --------- ---------- -------
Standard Life Investments 117.5 31.4 (21.1) 10.3 2.7 130.5
--------------------------- ------- ------ ----------- --------- ---------- -------
UK Workplace 32.0 4.1 (2.2) 1.9 (0.9) 33.0
UK Retail(1) 37.3 7.5 (3.6) 3.9 1.4 42.6
--------------------------- ------- ------ ----------- --------- ---------- -------
UK Pensions and
Savings 69.3 11.6 (5.8) 5.8 0.5 75.6
--------------------------- ------- ------ ----------- --------- ---------- -------
Europe growth fee(1) 8.7 1.6 (0.7) 0.9 - 9.6
--------------------------- ------- ------ ----------- --------- ---------- -------
Pensions and Savings 78.0 13.2 (6.5) 6.7 0.5 85.2
--------------------------- ------- ------ ----------- --------- ---------- -------
Hong Kong 0.4 0.1 - 0.1 - 0.5
Eliminations(2) (15.2) (3.9) 1.7 (2.2) (0.5) (17.9)
--------------------------- ------- ------ ----------- --------- ---------- -------
Total growth channels 180.7 40.8 (25.9) 14.9 2.7 198.3
--------------------------- ------- ------ ----------- --------- ---------- -------
Mature
Books UK mature Retail 33.5 0.7 (3.1) (2.4) 1.6 32.7
-------------------------
Europe mature fee 8.5 0.7 (0.5) 0.2 (0.3) 8.4
Third party strategic
partner life business 43.8 0.2 (5.0) (4.8) 0.6 39.6
Other fee including
CWP 2.1 - (0.9) (0.9) 0.1 1.3
--------------------------- ------- ------ ----------- --------- ---------- -------
Total mature books
fee 87.9 1.6 (9.5) (7.9) 2.0 82.0
--------------------------- ------- ------ ----------- --------- ---------- -------
Spread/risk 16.1 0.2 (1.1) (0.9) (0.3) 14.9
--------------------------- ------- ------ ----------- --------- ---------- -------
Total mature books 104.0 1.8 (10.6) (8.8) 1.7 96.9
--------------------------- ------- ------ ----------- --------- ---------- -------
Associate and joint
venture life businesses 2.1 0.4 (0.2) 0.2 - 2.3
Other(3) 10.2 - - - 0.2 10.4
Other Eliminations(2) (0.4) - - - (0.1) (0.5)
------------------------------------------------------ ------- ------ ----------- --------- ---------- -------
Total 296.6 43.0 (36.7) 6.3 4.5 307.4
------------------------------------------------------ ------- ------ ----------- --------- ---------- -------
(1) Platform AUA (Wrap, Elevate and Fundzone) of GBP26.5bn
comprises GBP24.4bn reported within UK Retail and GBP2.1bn relating
to Wrap International Bond reported within Europe growth fee.
(2) Certain products are included in both Pensions and Savings
growth AUA and Standard Life Investments growth AUM. Therefore, at
a Group level an elimination adjustment is required to remove any
duplication, in addition to other necessary consolidation
adjustments. Comprises (GBP17.9bn) related to growth channel
business eliminations and (GBP0.5bn) related to other
consolidation/eliminations.
(3) Other comprises Assets that do not generate revenue from
products of GBP7.7bn and Other corporate assets of GBP2.7bn.
11.4 Standard Life Investments assets under management and net
flows
Opening Closing
AUM at Market AUM at
1 Jan Gross and other 31 Dec
2016 flows Redemptions Net flows movements 2016
--------
12 months ended
31 December
2016 GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------------- ------- ------ ----------- --------- ---------- -------
Growth
AUM UK 83.2 17.3 (17.2) 0.1 17.3 100.6
--------
Europe 14.2 4.0 (5.5) (1.5) 3.5 16.2
North America 11.7 4.8 (5.5) (0.7) 1.7 12.7
Asia Pacific 3.3 0.9 (1.0) (0.1) 0.6 3.8
India 7.0 1.5 - 1.5 2.1 10.6
Ignis(1) 11.1 - - - (11.1) -
------------------------ ------- ------ ----------- --------- ---------- -------
By geography
of client 130.5 28.5 (29.2) (0.7) 14.1 143.9
------------------------ ------- ------ ----------- --------- ---------- -------
Equities 16.9 3.8 (4.1) (0.3) 1.3 17.9
Fixed income 21.8 5.4 (4.3) 1.1 9.1 32.0
Multi-asset(2) 50.3 11.3 (15.1) (3.8) 5.0 51.5
Real estate 8.6 1.1 (1.4) (0.3) 2.0 10.3
MyFolio 8.1 2.5 (0.9) 1.6 0.8 10.5
Other(3) 13.7 4.4 (3.4) 1.0 7.0 21.7
Ignis(1) 11.1 - - - (11.1) -
------------------------ ------- ------ ----------- --------- ---------- -------
By asset class 130.5 28.5 (29.2) (0.7) 14.1 143.9
------------------------ ------- ------ ----------- --------- ---------- -------
Institutional 67.0 15.6 (14.5) 1.1 18.9 87.0
Wholesale 45.9 12.1 (13.8) (1.7) 5.9 50.1
Wealth 6.5 0.8 (0.9) (0.1) 0.4 6.8
Ignis(1) 11.1 - - - (11.1) -
------------------------ ------- ------ ----------- --------- ---------- -------
By channel 130.5 28.5 (29.2) (0.7) 14.1 143.9
------------------------ ------- ------ ----------- --------- ---------- -------
Standard Life
Group 83.1 3.5 (5.6) (2.1) 9.2 90.2
Phoenix Group 39.6 1.2 (3.9) (2.7) 6.9 43.8
------------------------- ------- ------ ----------- --------- ---------- -------
Strategic partner
life business
AUM 122.7 4.7 (9.5) (4.8) 16.1 134.0
------------------------- ------- ------ ----------- --------- ---------- -------
Standard Life
Investments
AUM 253.2 33.2 (38.7) (5.5) 30.2 277.9
------------------------- ------- ------ ----------- --------- ---------- -------
Opening Closing
AUM at Market AUM at
1 Jan Gross and other 31 Dec
2015 flows Redemptions Net flows movements 2015
-------
12 months ended
31 December 2015 GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------------ ------- ------ ----------- --------- ---------- -------
Growth
AUM UK 75.5 15.2 (10.8) 4.4 3.3 83.2
-------
Europe 11.3 5.4 (2.0) 3.4 (0.5) 14.2
North America 8.1 5.3 (2.3) 3.0 0.6 11.7
Asia Pacific 2.0 2.1 (0.9) 1.2 0.1 3.3
India 6.1 0.8 - 0.8 0.1 7.0
Ignis 14.5 2.6 (5.1) (2.5) (0.9) 11.1
----------------------- ------- ------ ----------- --------- ---------- -------
By geography
of client 117.5 31.4 (21.1) 10.3 2.7 130.5
----------------------- ------- ------ ----------- --------- ---------- -------
Equities 15.5 2.6 (2.6) - 1.4 16.9
Fixed income 22.0 3.1 (2.8) 0.3 (0.5) 21.8
Multi-asset(2) 38.6 17.3 (7.8) 9.5 2.2 50.3
Real estate 7.4 1.1 (0.8) 0.3 0.9 8.6
MyFolio 5.9 2.6 (0.7) 1.9 0.3 8.1
Other(3) 13.6 2.1 (1.3) 0.8 (0.7) 13.7
Ignis 14.5 2.6 (5.1) (2.5) (0.9) 11.1
----------------------- ------- ------ ----------- --------- ---------- -------
By asset class 117.5 31.4 (21.1) 10.3 2.7 130.5
----------------------- ------- ------ ----------- --------- ---------- -------
Institutional 61.4 11.1 (7.8) 3.3 2.3 67.0
Wholesale 35.5 16.8 (7.5) 9.3 1.1 45.9
Wealth 6.1 0.9 (0.7) 0.2 0.2 6.5
Ignis 14.5 2.6 (5.1) (2.5) (0.9) 11.1
----------------------- ------- ------ ----------- --------- ---------- -------
By channel 117.5 31.4 (21.1) 10.3 2.7 130.5
----------------------- ------- ------ ----------- --------- ---------- -------
Standard Life
Group 84.6 4.1 (6.1) (2.0) 0.5 83.1
Phoenix Group 43.8 0.2 (5.0) (4.8) 0.6 39.6
------------------------ ------- ------ ----------- --------- ---------- -------
Strategic partner
life business
AUM 128.4 4.3 (11.1) (6.8) 1.1 122.7
------------------------ ------- ------ ----------- --------- ---------- -------
Standard Life
Investments AUM 245.9 35.7 (32.2) 3.5 3.8 253.2
------------------------ ------- ------ ----------- --------- ---------- -------
(1) During 2016 Ignis funds were merged into Standard Life
Investments funds, transferring GBP11.1bn AUM through Market and
other movements into the following categories - By geography: UK
(GBP11.1bn), By asset class: Fixed income (GBP5.3bn), Multi-asset
(GBP0.2bn), Real estate (GBP1.7bn) and Other (GBP3.9bn), By
channel: Institutional (GBP9.8bn) and Wholesale (GBP1.3bn).
(2) Comprises absolute return strategies, enhanced
diversification strategies, risk-based portfolios and traditional
balanced portfolios.
(3) Comprises cash, private equity, liquidity funds and Wealth.
Net inflows from India cash funds GBP0.4bn (2015: GBP0.6bn), net
inflows from liquidity funds of GBP0.3bn (2015: GBP0.7bn).
11.5 Assets under administration by reporting segment
An analysis of AUA by reportable segment is included below.
Standard Pensions India and
Life Investments and Savings China Other Eliminations(1) Total
31 December 2016 GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
---------------------------- ----------------- ------------ ------------ ----- --------------- -----
Assets under administration
Fee based 177.1 156.5 0.6 - (18.4) 315.8
Spread/risk - 16.1 - - - 16.1
Assets not generating
revenue from products - 8.9 - - - 8.9
Associate and joint
venture businesses 10.6 - 4.0 - - 14.6
Other corporate assets 1.1 - - 1.2 (0.6) 1.7
---------------------------- ----------------- ------------ ------------ ----- --------------- -----
Total assets under
administration 188.8 181.5 4.6 1.2 (19.0) 357.1
---------------------------- ----------------- ------------ ------------ ----- --------------- -----
Standard Pensions India
Life Investments and Savings and China Other Eliminations(1) Total
31 December 2015 GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
---------------------------- ----------------- ------------ ------------- ----- --------------- -----
Assets under administration
Fee based 163.1 127.6 0.5 - (17.9) 273.3
Spread/risk - 14.9 - - - 14.9
Assets not generating
revenue from products - 7.7 - - - 7.7
Associate and
joint venture
businesses 7.0 - 2.3 - - 9.3
Other corporate
assets 1.0 - - 1.6 (0.5) 2.1
---------------------------- ----------------- ------------ ------------- ----- --------------- -----
Total assets under
administration 171.1 150.2 2.8 1.6 (18.4) 307.4
---------------------------- ----------------- ------------ ------------- ----- --------------- -----
(1) In order to be consistent with the presentation of new
business information, certain products are included in both
Standard Life Investments AUA and other segments. Therefore, at a
Group level an elimination adjustment is required to remove any
duplication, in addition to other necessary consolidation
adjustments.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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