Aviva 2001 Annual Report Download - page 71

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16 – Subsidiary undertakings continued
(d) Discontinued operation – United States general insurance
(i) The overall pre-tax loss on sale, after retranslation to the exchange rate prevailing at 1 June 2001, was £996 million. This has been
reported in the Group accounts as follows:
Reported within
statement of total
recognised gains Total loss
Reported in profit and loss account and losses on disposal
Exchange rate
2000 2001 movements Total
£m £m £m £m
Proceeds, net of transaction costs 2,092 –108 2,200
Net assets to which proceeds apply, including capital injection 3,092 (125) 159 3,126
Goodwill write back 70 ––70
3,162 (125) 159 3,196
Pre-tax (loss)/profit on sale (1,070) 125 (51) (996)
Tax attributed to loss on sale 81 –4 85
Loss on sale after tax and goodwill write back (989) 125 (47) (911)
During 2000 and 2001, the Group hedged its exposure to $1 billion of the sale proceeds through the purchase of foreign currency
options and forward contracts. The closure of these reduced the exchange gain from £108 million disclosed above to £84 million.
(ii) An analysis of the sale proceeds is as follows:
US$m £m
Comprising:
Loan notes 260 183
Value of businesses and investments retained 630 443
Cash proceeds 2,233 1,574
Proceeds, net of transaction costs, including repayment of inter-company loan 3,123 2,200
The net cash received on completion by the Group was US$2,033 million (£1,433 million), comprising the cash proceeds identified
above less the pre-closing capital injection of US$200 million (£141 million).
(e) The Company’s subsidiary undertakings
Movements in the Company’s shares in subsidiary undertakings are set out below:
2001 2000
£m £m
Net asset value
At 1 January 13,655 10,224
Additions 1,238 6,832
Disposals –(540)
Movement in net asset value (1,194) (2,861)
At 31 December 13,699 13,655
Shares in subsidiary undertakings are valued at net asset value computed in accordance with the Company’s accounting policies.
The resulting gain over book value of £3,199 million (2000: £4,393 million) has been credited to the Company’s revaluation reserve
(see note 33). The directors are satisfied that the aggregate value of all such investments is not less than the aggregate amount at
which they are stated in the balance sheet.
(f) Principal subsidiary undertakings at 31 December 2001 are listed on page 99.
69 CGNU plc