Parent Company Financial Statements
Notes to the separate financial statements
Notes 7 to 11
- Current and deferred tax
- Dividends
- Cash generated from operations
- Related party transactions
- Share based payments
7. Current and deferred tax
Current income tax
| 2005 £m |
2004 £m |
|
|---|---|---|
| To be settled within 12 months | 27 | 63 |
| To be settled after 12 months | - | - |
| 27 | 63 |
Deferred tax
| 2005 £m |
2004 £m |
|
|---|---|---|
| Deferred tax assets | 2 | - |
| Deferred tax liabilities | - | (14) |
| Net deferred tax position at 31 December | 2 | (14) |
The movement for the year in the Company’s net deferred tax position was as follows:
| 2005 £m |
2004 £m |
|
|---|---|---|
| Net deferred tax position at 1 January | (14) | (1) |
| Charge to the Income Statement for the year | - | (13) |
| Net liability transferred to a subsidiary company | 16 | - |
| Net deferred tax position at 31 December | 2 | (14) |
The following are the major deferred tax liabilities and assets recognised by the Company and their movements during the year:
Deferred tax liabilities
| Other temporary differences £m |
|
|---|---|
| Deferred tax liabilities at 1 January 2004 | (1) |
| Charge to the Income Statement for the year | (13) |
| Deferred tax liabilities at 31 December 2004 | (14) |
| Transferred to a subsidiary company | 14 |
| Deferred tax liabilities at 31 December 2005 | - |
Deferred tax assets
| Accelerated capital allowances £m |
|
|---|---|
| Deferred tax assets at 1 January 2004 | - |
| Charge to the Income Statement for the year | - |
| Exchange adjustment | - |
| Deferred tax assets at 31 December 2004 | - |
| Charge to the Income Statement for the year | - |
| Transfers | 2 |
| Deferred tax assets at 31 December 2005 | 2 |
At the Balance Sheet date, the Company had unused tax losses of £4m (2004: £4m) available for offset against future profits. No deferred tax asset has been recognised in respect of the tax losses of £4m (2004: £4m) due to the unpredictability of future profit streams. The losses may be carried forward indefinitely.
The aggregate current tax relating to items that were charged or credited to equity is £2m (2004: £6m).
Top8. Dividends
| 2005 p |
2004 p |
2005 £m |
2004 £m |
|
|---|---|---|---|---|
| Ordinary dividend: | ||||
| Final paid in respect of prior year | 2.96 | 2.90 | 86 | 83 |
| Interim paid in respect of current year | 1.69 | 1.65 | 49 | 47 |
| 135 | 130 | |||
| Preference dividend | 9 | 9 | ||
| 144 | 139 |
At the AGM on 22 May 2006, a dividend in respect of 2005 of 3.05p per share amounting to a total dividend of £89m is to be proposed. The dividend will be paid and accounted for in shareholders’ equity as an appropriation of retained earnings in the year ending 31 December 2006.
The trustees of the Royal & SunAlliance ESOP Trust and the Royal & SunAlliance ESOP Trust No 2 waived their entitlement to dividends which reduced the total dividend paid by £1m (2004: £1m).
9. Cash generated from operations
| 2005 £m |
2004 £m |
|
|---|---|---|
| Net profit for the year before tax | 450 | 78 |
| Realised losses | 2 | - |
| Loss on disposal of subsidiaries | - | 3 |
| Foreign exchange loss/(gain) | 7 | (21) |
| Dividends received | (590) | (230) |
| Changes in operating assets/liabilities | 19 | (6) |
| Cash generated from operations | (112) | (176) |
10. Related party transactions
Royal & Sun Alliance Insurance Group plc (incorporated in England) is the ultimate Parent Company of the Royal & Sun Alliance Insurance Group.
The following transactions were carried out with related parties:
Provision of services and benefits
Royal & Sun Alliance Insurance Group plc provides services and benefits to its subsidiary companies operating within the UK and Overseas as follows:
- Provision of technical support in relation to risk management, information technology and reinsurance services. Services are charged for annually on a cost plus basis, allowing for a margin of 5% (2004: 4.1%).
- Issue of share options and share awards to employees of subsidiaries. Costs are charged for annually based on the underlying value of the awards granted calculated in accordance with the guidance set out within IFRS 2 ‘Share Based Payment’.
Key management compensation
| 2005 £m |
2004 £m |
|
|---|---|---|
| Salaries and other short term employee benefits | 5 | 4 |
| Bonus awards | 3 | 3 |
| Pension benefits | 1 | 1 |
| Share based awards | 1 | 1 |
| Total | 10 | 9 |
A number of the directors, other key managers, their close families and entities under their control have general insurance policies with subsidiary companies of the Group. Such policies are on normal commercial terms except that executive directors and key managers are entitled to special rates which are also available to other members of staff.
Year end balances with related parties are set out below
| 2005 £m |
2004 £m |
|
|---|---|---|
| Receivable from related parties: | ||
| Receivable from subsidiaries, interest bearing loans | 955 | 525 |
| Receivable from subsidiaries, non interest bearing | 194 | 388 |
| Total receivable from related parties | 1,149 | 913 |
| Payable to related parties: | ||
| Payable to subsidiaries, interest bearing loans | 369 | 673 |
| Payable to subsidiaries, non interest bearing | 105 | 135 |
| Total payable to related parties | 474 | 808 |
Interest is charged on interest bearing loans, which are repayable on 24 hours written notice, at three month LIBOR + 1.2%.
Additional loans to subsidiaries of £323m (2004: £323m) as disclosed within note 3 have been made. Of this, £294m (2004: £294m) is a subordinated loan on which interest is charged at 8.5% with the remaining loan balance interest free with no specified repayment date.
11. Share based payments
Full details of share based payment plans are provided in note 27 to the consolidated financial statements.
