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

FR LFFVFFAIVFID

(END) Dow Jones Newswires

February 24, 2017 02:02 ET (07:02 GMT)

Abrdn (LSE:ABDN)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Abrdn Charts.
Abrdn (LSE:ABDN)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Abrdn Charts.