Aviva 2006 Annual Report Download - page 127

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 123
3 – Subsidiaries continued
(vii) Unaudited pro forma combined revenues and profit
Shown below are unaudited pro forma figures for the Group’s combined revenues and profit as though the acquisition date for all
business combinations effected during the year had been 1 January 2006, after giving effect to purchase accounting adjustments and the
elimination of intercompany transactions. The pro forma financial information is not necessarily indicative of the combined results
that would have been attained had the acquisitions taken place at 1 January 2006, nor is it necessarily indicative of future results.
2006
£m
Revenues (net earned premiums and fee income) 30,670
Profit before tax attributable to shareholders 3,076
Of the above pre-tax profit, £83 million has arisen since acquisition. No adjustments have been made to the profit figure above for any
additional borrowing costs, integration costs or other synergies that might arise had the acquisitions been completed at 1 January 2006.
(viii) Non-adjusting post-balance sheet events
On 1 January 2007, the Group acquired 100% of the shares of the Eurolloyd companies (Eurolloyd Nederland BV and Eurolloyd Belgie
NV) for cash of £11 million. In view of the very recent timing and immaterial nature of this transaction, it is currently impractical to
comply with the requirements of paragraph 67 of IFRS 3, Business Combinations, and to state with any certainty the fair values of the
assets and liabilities acquired, and therefore to estimate the goodwill arising on this acquisition.
In addition to the above transaction, subsequent to year end, the Group has announced that it will acquiretwo of the units of
Bumiputra-Commerce Holdings Berhad (BCHB) – 49% of each of a Life and a Takaful business - for approximately £75 million.
This transaction is subject to signature and regulatory approval but completion is expected to occur by the second quarter of 2007.
On 8 February 2007, the Group announced that it planned to acquire 100% of the shares in Erasmus Groep BV in the Netherlands.
Erasmus writes both general insurance and long-term business and, at 31 December 2005, had gross assets of £648 million and net
assets of £29 million. The acquisition, when completed, will be effective from 1 January 2007, subject to the approval of the Dutch
regulator, the relevant works council and notification to the relevant competition authorities.
(b) Disposal of subsidiaries, joint ventures and associates
The profit on the disposal of subsidiaries and associates comprises:
2006 2005
£m £m
United Kingdom (see below) 69 10
Ireland (see note 3(a)(i)) 86 –
France (see note 18(b)) 79 –
Asia –165
Other small operations (12) (22)
Profit on disposal before tax 222 153
Tax on profit on disposal 13 (43)
Profit on disposal after tax 235 110
The tax credit on the profit on disposal reflects the benefit of prior year tax credits against charges on disposals in earlier years.
Sale of RAC non-core businesses
During 2006, the Group completed the disposal of the Manufacturer Support Services (MSS) and Lex Vehicle Leasing (LVL) divisions,
which had been acquired with the RAC Group in 2005. The decision to sell was part of the Group’s wider strategy to integrate RAC and
exit non-coreoperations.
2006
£m
Proceeds from sale 358
Net assets disposed of (310)
Transaction costs (15)
Profit before tax and pension curtailment gain 33
Pension curtailment gain 36
Profit on disposal beforetax 69
Tax attributable to profit on disposal (11)
Profit on disposal after tax 58