Aviva 2005 Annual Report Download - page 133

17 – Investments in joint ventures
(a) Carrying amount
Goodwill and
intangibles
(see notes Equity Total Total
15(a) and 16) interests Loans 2005 2004
£m £m £m £m £m
At 1 January – 1,255 – 1,255 871
Share of results before tax – 332 – 332 234
Share of tax – (6) – (6) –
Share of profit after tax – 326 – 326 234
Acquisitions and additions 167 587 – 754 272
Disposals and reductions in group interests – (43) – (43) –
Reclassification to subsidiaries – (8) – (8) (89)
Dividends received – (34) – (34) (33)
Additional loans – – 128 128 –
Foreign exchange rate movements –1–1–
Other movements and amounts classified as held for sale (167) (83) – (250) –
Movements in carrying amount – 746 128 874 384
At 31 December – 2,001 128 2,129 1,255
The loans are not secured and no guarantees were received in respect thereof. They are interest-bearing and are repayable on termination
of the relevant partnership.
(b) Property management undertakings
(i) As part of their investment strategy, the UK and certain European long-term business policyholder funds have invested in a number
of property limited partnerships (PLPs), either directly or via property unit trusts (PUTs), through a mix of capital and loans. The PLPs are
managed by general partners (GPs), in which the long-term business shareholder companies hold equity stakes and which themselves
hold nominal stakes in the PLPs. The PUTs are managed by a Group subsidiary.
Most of the PLPs have raised external debt, secured on their respective property portfolios. The lenders are only entitled to obtain
payment, of both interest and principal, to the extent that there are sufficient resources in the respective PLPs. The lenders have no
recourse whatsoever to the policyholder or shareholders’ funds of any company in the Aviva Group.
Accounting for the PUTs and PLPs as subsidiaries, joint ventures or other financial investments depends on the shareholdings in the GPs
and the terms of each partnership agreement. Where the Group exerts control over a PLP, it has been treated as a subsidiary and its
results, assets and liabilities have been consolidated. Where the partnership is managed by a contractual agreement such that no party
exerts control, notwithstanding that the Group’s partnership share in the PLP (including its indirect take via the relevant PUT and GP) may
be greater than 50%, such PUTs and PLPs have been classified as jointly-controlled entities. These are accounted for as joint ventures, and
are covered in this note. Where the Group holds minority stakes in PLPs, with no disproportionate influence, the relevant investments are
included in financial investments at their fair value.
(ii) The principal joint ventures are as follows:
Company GP proportion held PLP proportion held
Airport Property Partnership 50.0% 50.0%
Apia Regional Office Fund 50.0% 70.0%
Ashtenne Industrial Fund Limited Partnership 66.7% 40.2%
The Global Switch Limited Partnership 25.0% 25.0%
The Junction Limited Partnership 50.0% 48.8%
The Mall Limited Partnership 50.0% 38.2%
Paddington Central 1 Limited Partnership 50.0% 50.0%
Queensgate Limited Partnership 50.0% 50.0%
Quercus Property Partnership Limited 50.0% 66.4%
All the above entities perform property ownership and management activities, and are incorporated and operate in Great Britain.
The Global Switch Limited Partnership has subsidiaries in several European countries which carry out property ownership and
management activities locally. All these investments are held by subsidiary entities.
Financial statements
Aviva plc 2005
131