Aviva 2007 Annual Report Download - page 220
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Please find page 220 of the 2007 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.53 – Group capital structure continued
Non-GAAP measure Non-GAAP measure
Internally- Internally-
IFRS generated EEV IFRS generated Restated EEV
net assets AVIF net assets net assets AVIF net assets
2007 2007 2007 2006 2006 2006
£m £m £m £m £m £m
Long-term savings 15,290 7,982 23,272 13,300 6,794 20,094
General insurance and health 5,487 – 5,487 5,176 – 5,176
Other business 1,056 – 1,056 1,059 – 1,059
Corporate (31) – (31) (19) – (19)
Total capital employed 21,802 7,982 29,784 19,516 6,794 26,310
Financed by
Equity shareholders’ funds and minority interests 15,402 7,982 23,384 12,874 6,794 19,668
Direct capital instrument 990 – 990 990 – 990
Preference shares 200 – 200 200 – 200
16,592 7,982 24,574 14,064 6,794 20,858
Subordinated debt 3,054 – 3,054 2,937 – 2,937
External debt 1,257 – 1,257 1,258 – 1,258
Net internal debt 899 – 899 1,257 – 1,257
21,802 7,982 29,784 19,516 6,794 26,310
At 31 December 2007 the Group had £29.8 billion (31 December 2006: £26.3 billion) of total capital employed,
measured on an EEV basis, in its trading operations which is efficiently financed by a combination of equity shareholders’
funds, preference capital, subordinated debt and borrowings.
In 2007, the total capital employed increased by £3.5 billion reflecting strong operational performance and foreign
exchange impacts.
(i) “Corporate” net liabilities represent the element of the pension scheme deficit held centrally.
(ii) In addition to our external funding sources, we have certain internal borrowing arrangements in place which allow
some of the assets that support technical liabilities to be invested in a pool of central assets for use across the Group.
These internal debt balances allow for the capital allocated to business operations to exceed the externally sources capital
resources of the Group. Although intra-group in nature, they are included as part of the capital base for the purpose of
capital management. These arrangements arise in relation to the following:
– Certain subsidiaries, subject to continuing to satisfy standalone capital and liquidity requirements, loan funds to corporate
and holding entities, these loans satisfy arms length criteria and all interest payments are made when due.
– Aviva International Insurance (AII) Ltd acts as both a UK general insurer and as the primary holding company for the
Group’s foreign subsidiaries. Internal capital management mechanisms in place allocate a portion of the total capital of
the company to the UK general insurance operations. These mechanisms also allow for some of the assets backing
technical liabilities to be made available for use across the Group. Balances in respect of these arrangements are also
treated as internal debt for capital management purposes.
Net internal debt represents the balance of the above amounts due from corporate and holding entities, less the tangible
net assets held by these entities.
Further disclosures on the Group’s regulatory capital position are also set out in the capital section of the business review
and in note 54, Capital Statement. The purpose of note 54, which is prepared in accordance with FRS27, is to set out the
financial strength of the Group and provide an analysis of the disposition and constraints over the availability of capital to
meet risks and regulatory requirements.
Aviva plc
Annual Report and
Accounts 2007
216
Financial
statements
Notes to the consolidated financial statements continued