Aviva 2013 Annual Report Download - page 290

Aviva plc
Annual report and accounts 2013
288
Shareholder information continued
Related party disclosures
Related party transactions
For more information relating to related party transactions,
including more information about the transactions described
below, please see ‘IFRS Financial Statements – note 61 – Related
party transactions’.
Subsidiaries
Transactions between the Company and its subsidiaries are
eliminated on consolidation.
Key management compensation
The total compensation to those employees classified as key
management, being those having authority and responsibility
for planning, directing and controlling the activities of the
Group, including the executive and non-executive directors is
as follows:
2013
£m
2012
£m
2011
£m
Salary and other short-term benefits 5.3 4.7 6.7
Post-employment benefits 1.1 1.9 1.7
Equity compensation plans 3.3 4.8 5.9
Termination benefits 1.1 1.5 0.7
Other long term benefits 1.6 0.4 2.8
Total 12.4 13.3 17.8
Various directors and key management of Aviva may from time
to time purchase insurance, asset management or annuity
products from Aviva Group companies in the ordinary course of
business on substantially the same terms, including interest rates
and security requirements, as those prevailing at the time for
comparable transactions with other persons.
Apart from the disclosed transactions discussed above and
in the ‘Governance’ section of this report, no director had an
interest in shares, transactions or arrangements that requires
disclosure under applicable rules and regulations.
Other related parties
The Group received income from and paid expenses to other
related parties from transactions made in the normal course of
business. Loans to other related parties are made on normal
arm’s length commercial terms.
Services provided to other related parties
2013 20121 2011
Income
earned
in year
£m
Receivable
at year
end
£m
Income
earned
in year
£m
Receivable
at year
end
£m
Income
earned
in year
£m
Associates 3 11 — 9 —
Joint ventures 51 56 23 54 23
Employee pension schemes 12 9 12 6 13
66 76 35 69 36
1 Comprises the impact of the adoption of IFRS 10 on the prior year comparative and the resulting consolidation
and deconsolidation of entities based on the revised definition and criteria of control outlined in accounting
Policy (D). See ‘IFRS Financial statements – note 1’ for further details.
In addition to the amounts disclosed for associates and joint
ventures above, at 31 December 2013 amounts payable at year-
end were £nil (2012: £nil), and expenses incurred during the
period were £3 million (2012: £5 million).
Transactions with joint ventures in the UK relate to the
property management undertakings, the principal ones of which
are listed in note 19(a)(iii) of the IFRS Financial statements. Our
interest in these joint ventures comprises a mix of equity and
loans, together with the provision of administration services and
financial management to many of them. Our UK life insurance
companies earn interest on loans advanced to these entities,
movements in which may be found in note 19(a)(i) of the IFRS
Financial statements.
Our fund management companies also charge fees to these
joint ventures for administration services and for arranging
external finance.
Our UK fund management companies manage most of the
assets held by the Group’s main UK staff pension scheme, for
which they charge fees based on the level of funds under
management. The main UK scheme holds investments in Group-
managed funds and insurance policies with other Group
companies, as explained in ‘IFRS Financial statements –
note 49(b)(ii)’.
The related parties’ receivables are not secured and no
guarantees were received in respect thereof. The receivables will
be settled in accordance with normal credit terms. Details of
guarantees, indemnities and warranties provided on behalf of
related parties are given in ‘IFRS Financial statements –
note 53(f)’.
Loans to joint ventures
We make loans to our property management joint ventures to
fund property developments which we undertake with our joint
venture partners. Movements in these loans may be found in
‘IFRS Financial Statements – note 19 – Interests in, and loans to,
joint ventures’. Total loans at 31 December 2013 and 2012 are
shown in the table below:
2013
£m
20121
£m
Loans to joint ventures 24 43
1 Comprises the impact of the adoption of IFRS 10 on the prior year comparative and the resulting consolidation
and deconsolidation of entities based on the revised definition and criteria of control outlined in accounting
policy (D). See note ‘IFRS Financial Statements – note 1’ for further details.
Dividend data
The Company has a policy to pay a progressive dividend with
reference to growth in cash flows and earnings. Under UK
company law, we may only pay dividends if the company has
‘distributable profits’ available. ‘Distributable profits’ are
accumulated, realised profits not previously distributed or
capitalised, less accumulated, unrealised losses not previously
written off based on IFRS. Even if distributable profits are available,
we pay dividends only if the amount of our net assets is not less
than the aggregate of our called-up share capital and
undistributable reserves and the payment of the dividend does not
reduce the amount of our net assets to less than that aggregate.
As a holding company, the Company is dependent upon
dividends and interest from our subsidiaries to pay cash
dividends. Many of the Company’s subsidiaries are subject to
insurance regulations that restrict the amount of dividends that
they can pay to us.
Historically, the Company has declared an interim and a final
dividend for each year (with the final dividend being paid in the
year following the year to which it relates). Subject to the
restrictions set out above, the payment of interim dividends on
ordinary shares is made at the discretion of our Board, whilst
payment of any final dividend requires the approval of the
Company’s shareholders at a general meeting. Preference
shares are irredeemable and dividends on preference shares are
made at the discretion of our Board.
The Company pays cash dividends in pounds sterling,
although the articles of association permit payment of dividends
on ordinary shares in other currencies and in forms other than
cash, such as ordinary shares. If dividends on ordinary shares
held by the American Depositary Shares (ADS) depositary are
paid in pounds sterling, the ADS depositary will convert the
pounds sterling that it receives on behalf of the ADS holders
into US dollars according to the prevailing market rate on the
date that the ADS depositary actually receives the dividends.
For the 2007 final dividend and previous final and interim
dividends, shareholders on record were provided with the
opportunity to elect to receive dividends in the form of newly
issued ordinary shares through the Aviva Scrip Dividend Scheme.
For the 2008 interim dividend, the Aviva Scrip Dividend Scheme
was replaced by a dividend reinvestment plan (DRIP). For those
shareholders participating in the DRIP, the Company paid a cash