Aviva 2006 Annual Report Download - page 149

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 145
17 – Investments in joint ventures
(a) Carrying amount
Goodwill and Equity
intangibles interests Loans Total
£m £m £m £m
At 1 January 2005 – 1,255 – 1,255
Share of results before tax – 332 – 332
Share of tax – (6) – (6)
Share of profit after tax – 326 – 326
Acquisitions and additions 167 587 – 754
Disposals and reduction in Group interests – (43) – (43)
Reclassification to subsidiaries – (8) – (8)
Dividends received – (34) – (34)
Additional loans – – 128 128
Foreign exchange rate movements – 1 – 1
Other movements and reclassifications as held for sale (167) (83) – (250)
Movements in carrying amount – 746 128 874
At 31 December 2005 –2,001 128 2,129
Share of results before tax – 465 – 465
Shareof tax –(3) – (3)
Share of profit after tax – 462 – 462
Acquisitions and additions – 372 – 372
Disposals and reduction in Group interests – (127) – (127)
Reclassification to subsidiaries – (93) – (93)
Dividends received – (59) – (59)
Additional loans – – 113 113
Foreign exchange rate movements – (2) – (2)
Movements in carrying amount –553 113 666
At 31 December 2006 – 2,554 241 2,795
The loans are not secured and no guarantees were received in respect thereof. They are interest-bearing and are repayable on termination
of the relevant partnership.
(b) Property management undertakings
(i) As part of their investment strategy, the UK and certain European long-term business policyholder funds have invested in a number
of property limited partnerships (PLPs), either directly or via property unit trusts (PUTs), through a mix of capital and loans. The PLPs are
managed by general partners (GPs), in which the long-term business shareholder companies hold equity stakes and which themselves
hold nominal stakes in the PLPs. The PUTs are managed by a Group subsidiary.
Most of the PLPs have raised external debt, secured on their respective property portfolios. The lenders are only entitled to obtain
payment, of both interest and principal, to the extent that there are sufficient resources in the respective PLPs. The lenders have no
recourse whatsoever to the policyholder or shareholders’ funds of any company in the Aviva Group.
Accounting for the PUTs and PLPs as subsidiaries, joint ventures or other financial investments depends on the shareholdings in the GPs
and the terms of each partnership agreement. Where the Group exerts control over a PLP, it has been treated as a subsidiary and its
results, assets and liabilities have been consolidated. Where the partnership is managed by a contractual agreement such that no party
exerts control, notwithstanding that the Group’s partnership share in the PLP (including its indirect take via the relevant PUT and GP) may
be greater than 50%, such PUTs and PLPs have been classified as jointly-controlled entities. These are accounted for as joint ventures, and
are covered in this note. Where the Group holds minority stakes in PLPs, with no disproportionate influence, the relevant investments are
included in financial investments at their fair value.