Aviva 2002 Annual Report Download - page 87

Download and view the complete annual report

Please find page 87 of the 2002 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

22 – Other financial investments continued
(b) Listed investments included in the carrying value above are:
2002 2001
£m £m
Shares and other variable yield securities and units in unit trusts 21,521 36,462
Debt securities and other fixed income securities 66,595 58,837
(c) The long-term debt securities and other fixed income securities, which are shown at amortised cost, are analysed below:
2002 2001
£m £m
Cost 42,201 33,756
Cumulative amortisation 520 373
Amortised cost 42,721 34,129
Market value 44,356 35,494
The redemption value of investments held at the year end was £536 million less (2001: £614 million less) than the amortised cost.
(d) In addition to the investments in participating interests detailed in note 21, the Group holds investments exceeding 20% of a class of
the equity capital in a number of other companies in the United Kingdom and elsewhere. These investments do not represent a material
part of the assets or investment income of the Group. These include the Group’s 8.3% (2001: 7.8%) shareholding in Delta Lloyd
Investment Fund NV. As this company invests mainly in equities and all dividends received are passed on to the shareholders, the Group’s
interest has been shown in other financial investments in these accounts. The economic benefits of ownership of an additional holding
of 21.2% (2001: 16.6%) belong to the Delta Lloyd Pension Fund.
(e) Included within other financial investments are shareholdings held on a long-term basis in the issued share capital of Société
Générale, a banking company incorporated in France, Münchener Rückversicherungs-Gesellschaft, a reinsurance company incorporated
in Germany and The Royal Bank of Scotland Group, a banking company incorporated in Scotland. The market values of these holdings
at 31 December 2002 were £595 million, £372 million and £956 million respectively (2001: £1,100 million, £1,203 million and
£1,546 million respectively) and represented 3.8%, 2.8% and 2.2% (2001: 6.6%, 3.6% and 3.2%) of the respective issued share
capitals of these companies. Of these holdings, the long-term business operations owned £355 million (2001: £453 million) of the
Société Générale shares, £211 million (2001: £509 million) of the Münchener Rückversicherungs-Gesellschaft shares and £911 million
(2001: £1,510 million) of The Royal Bank of Scotland Group shares.
(f) At 31 December 2002, the Group held equity index futures, forwards and options to buy a notional total of £1,480 million
(2001: £1,771 million) and to sell a notional total of £1,832 million (2001: £1,657 million) for long-term business operations.
These contracts have a net positive fair value of £331 million (2001: £86 million). No adjustment has been made to the classification
of existing investments to reflect the effect of the future settlement of these transactions.
In 1998, the Group purchased several swap options from a European bank to cover a possible future exposure to interest rates related
to guaranteed annuities in a subsidiary purchased prior to 1998. At 31 December 2002, the exposure hedged by these options was
£2,550 million (2001: £2,451 million) and the contracts had a fair market value of £167 million (2001: £132 million). These options have
varying expiry dates up to 2028.
(g) The Group has entered into stocklending arrangements in the United Kingdom and overseas during the year in accordance with
established market conventions. In the United Kingdom, investments are lent to locally-domiciled counterparties and governed by
agreements written under English law. Other investments are specifically deposited under local laws in various countries overseas as
security to holders of policies issued there.
Included within other financial investments are £295 million (2001: £336 million) of debt securities and other fixed income securities
which have been sold under stock repurchase arrangements. The obligations arising under these arrangements are included in other
creditors (see note 43).
73 Aviva plc
Annual report + accounts 2002