Aviva 2006 Annual Report Download - page 221

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 217
F – Borrow ings
The Company’s borrowings comprise:
2006 2005
£m£m
Subordinated debt 2,937 2,808
9.5% guaranteed bonds 2016 198 198
Commercial paper 733 499
3,868 3,505
Maturity analysis of contractual undiscounted cash flows:
2006 2005
Principal Interest Total Principal Interest Total
£m £m £m £m £m £m
Within 1 year 733 222 955 499 205 704
1 – 5 years – 773 773 – 742 742
5 – 10 years 200 966 1,166 – 928 928
10 – 15 years 692 834 1,526 200 852 1,052
Over 15 years 2,275 260 2,535 2,841 788 3,629
Total contractual undiscounted cash flow s 3,900 3,055 6,955 3,540 3,515 7,055
Where subordinated debt is undated, the interest payments have not been included beyond 15 years. Annual interest payments for these
borrowings are £68 million (2005: £69 million).
The fair value of the subordinated debt at 31 December 2006 was £3,076 million (2005: £3,148 million).The fair value of the 9.5%
guaranteed bonds 2016 at 31 December 2006 was £257 million (2005: £275 million).The fair value of the commercial paper is
considered to be the same as its carrying value.
Further details of these borrowings can be found in note 43.
G – Derivative financial instruments
Non-hedge derivatives
The Company’s non-hedge derivative activity at 31 December 2006 was as follows:
2006 2005
Contract/ Contract/
notional Fair value Fair value notional Fair value Fair value
amount asset liability amount asset liability
£m £m £m £m £m £m
Foreign exchange contracts
OTC
Forwards 73 – (2) 40 – (1)
Total 73 – (2) 40 – (1)
H – Contingent liabilities
Details of the Company’scontingent liabilities aregiven in note 46(f).
I – Risk management policies
The business of the Company is managing its investments in subsidiary operations. Its risks are considered to be the same as those
in the operations themselves and full details of the risk management policies are given in note 50. The fair values of the subsidiaries
themselves are estimated using applicable valuation models, underpinned by the Company’s market capitalisation. This uses a three
month rolling average of the Company’s share price and is therefore sensitive to movements in that price.