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39 – Provisions for other risks and charges
Movements in provisions for other risks and charges were:
Pensions and Deferred tax Provision for
similar obligations (note 13c) integration costs Other Total
£m £m £m £m £m
At 1 January 2001 161 429 261 1,235 2,086
Exchange rate movements on opening provisions 1 (2) (1) (5) (7)
Movement during the year:
Additional provisions made in the year 58 30
Amounts utilised (296) (1,084)
Amounts released unutilised – (15)
Total movement (92) (63) (238) (1,069) (1,462)
At 31 December 2001 70 364 22 161 617
The provision for integration costs includes amounts relating to staff reductions, vacant properties and integration of the businesses
following the merger of Norwich Union plc and CGU plc.“Other”provisions comprise many small provisions throughout the Group
for such obligations as costs of litigation and staff entitlements, while the opening balance also included the provision for loss on sale
of the US operations.
40 – Debenture loans, amounts due to credit institutions and commercial paper
(a) The analysis by business segment is:
Amounts owed to
Debenture loans credit institutions Commercial paper Total
2001 2000 2001 2000 2001 2000 2001 2000
£m £m £m £m £m £m £m £m
Long-term business 51 16 ––––51 16
General business ––11 11 ––11 11
Other 785 893 180 384 1,686 1,304 2,651 2,581
Non-long-term business 785 893 191 395 1,686 1,304 2,662 2,592
836 909 191 395 1,686 1,304 2,713 2,608
“Other”comprises borrowings by holding companies within the Group which are not allocated to operating companies. The amounts
shown above are net of related derivative contracts.
(b) Debenture loans comprise:
Long-term business Other
2001 2000 2001 2000
£m £m £m £m
9.125% US$100 million subordinated debentures 2026 –––61
9.5% guaranteed bonds 2016 ––145 150
11.9% C$24 million mortgage 2005 ––89
8.625% guaranteed bonds 2005 ––145 149
1.5% FF2.8 billion exchangeable bonds 2003 ––281 304
10.75% guaranteed bonds 2002 ––100 100
2.5% subordinated perpetual loan notes ––106 108
Institutional borrowings (average rate 5%) 51 16 ––
Institutional borrowings 2000/2001 (average rate 3%) –––12
51 16 785 893
Repayable as follows:
One year or less 11100 73
Between one and two years 66281 100
Between two and five years 44 9153 462
After five years ––251 258
51 16 785 893
The interest charge for the year on the above loans was: 2156 63
The 9.125% US$100 million subordinated debentures 2026 were issued by the Canadian General Insurance Group Limited in 1996,
and redeemed at the option of the company on 31 March 2001.
The 9.5% and the 8.625% guaranteed bonds were issued at a discount of £1.1 million and £0.2 million respectively. These amounts,
together with the issue expenses, are being amortised over the full term of the bonds. Although these bonds were issued in
sterling, the loans have been converted into French franc and deutschmark liabilities through the use of financial instruments in
a subsidiary undertaking.
83 CGNU plc