Final Results - Part 7 of 7

RNS Number : 5263P

Standard Life plc

19 February 2016

 

Standard Life plc

Full year results 2015

Part 7 of 7

12.1 Report from the With Profits Committee of Standard Life Assurance Limited

Whilst the management of its with profits business is the direct responsibility of the board of Standard Life Assurance Limited (SLAL), FCA regulations require that a with profits firm's governance arrangements should make provision for independent judgement and advice. The SLAL board has established a With Profits Committee (WPC) for this purpose.

Clifton Melvin,
Chairman, With Profits Committee of Standard Life Assurance Limited

Membership

All members of the WPC are independent of Standard Life. Their attendance at WPC meetings was:

Member	Attendance
Clifton Melvin*, Chairman	10/10
Graham Aslet	10/10
Ross Ainslie	10/10
Former member
Niall Franklin*, Chairman	5/5

*the Chairmanship changed on 1 June 2015

The members are appointed by the SLAL Board on the recommendation of the Nomination and Governance Committee. Directors of the Standard Life plc and SLAL Boards, the UK and Europe Chief Risk Officer and senior actuaries, in particular the With Profits Actuary and the UK and Europe Actuarial Director, routinely attend these meetings.

SLAL has had a WPC since demutualisation. Its role is to monitor and advise the SLAL Board on the management of with profits business, providing independent judgement on the fair treatment of with profits policyholders, and to take a proactive role in raising any issues that merit further consideration. The Committee reviews all proposals that are material to the interests of SLAL's with profits policyholders. The Committee has the authority to engage external advisers and has engaged an actuary from Milliman LLP to routinely provide the members with advice. The Chairman has a right of access at all times to the Chairman of the Risk and Capital Committee but saw no requirement during the year to exercise this right.

The Committee's routine formal interaction with the SLAL Board is by the minutes of its meetings together with feedback on its advice, and by an annual report to the SLAL Board in which it reviews the management of with profits business having regard to SLAL's duty to treat its with profits policyholders fairly and to meet their reasonable benefit expectations. The Committee has authority to make a report to the with profits policyholders. It did not do so during 2015 and would not expect to do so unless it disagreed materially with SLAL's own annual report to its with profits policyholders (which is required by FCA regulations) on the management of the with profits business. The directors of SLAL and of the Company have an open invitation to attend any of the Committee meetings and two Directors of the Company attended WPC meetings during 2015. Minutes of the Committee meetings are submitted to the Board and, in May 2015, the outgoing and incoming Committee Chairmen attended a meeting of the Board which focused on three key with profits issues - the investment strategy framework, the closure to new business in the German with profits fund, and changes to discretionary practices in UK pensions business.

The Committee's work in 2015

An indicative breakdown as to how the Committee spent its time is shown below:  Diagram removed for the purposes of this announcement.  However it can be viewed in full in the pdf document.

During 2015, the Committee's work focussed on these key areas:

Customer

Policy Values - the WPC approved management's recommendations regarding regular bonus rates and asked that the algorithm used to set these bonus rates be reviewed in 2016 so that they can ensure that it remains appropriate.

Pension freedoms - the WPC has been keen to understand how Standard Life's with profits customers have been reacting to the recent legislative changes in the UK and reviewed this in two sessions during the year.

Pensions discretionary practices - the WPC reviewed SLAL's initial proposals for extending its discretionary practices following these legislative changes, and after proposing an amendment to the approach, was supportive

Service - the WPC reviewed an annual paper summarising with profits customer complaints and was pleased to note a reducing trend.

Balance of Interests

A fundamental responsibility of the WPC is to ensure an appropriate balance of interests between the shareholder and the with profits customers, as well as between different cohorts of customers.

The WPC approved the transfers to shareholder funds, in accordance with the Demutualisation Scheme, for the year ended 31 December 2014 of some £195m.

The WPC also reviewed the With Profits Actuary's advice relating to expense allocation within SLAL and agreed with his conclusion that the methodology had no material bias against policyholders' interests.

The WPC approved SLAL's proposal that no changes were required to the rates of deduction from with profits policies in respect of the cost of guarantees.

Annuity Rates for GAO/GMP Buyouts

The Committee has continued to review and challenge management on the competitiveness of SLAL's immediate annuity rates, insofar as they are used when buying out guaranteed liabilities of the HWPF.

Germany

SLAL took the decision to close the German WP Fund to new business in March. The WPC had been closely involved in the discussions and rationale leading to this major step and was fully supportive, recognising that keeping the fund open to new with profits business would have run the risk of conferring unfair advantage on new customers at the expense of existing customers.

Capital and Risk management

During the year the WPC approved a number of proposals to manage the finances of the with profits funds and to control risks appropriately. These included setting distribution rates for the Inherited Estate, adjusting Equity Backing Ratios, reviewing the effectiveness of hedging strategies and making changes to German interest rate and equity hedges, and reviewing the scenarios for testing investment risk.

Regulatory and Governance

Principles and Practices of Financial Management (PPFM)

The WPC sought and obtained assurance that the with profits businesses in the UK have been managed in accordance with the published PPFM.

Solvency II

The introduction of Solvency II on 1 January 2016 has necessitated a number of changes to the Demutualisation Scheme. The WPC approved the first tranche of these changes (those not requiring Court approval) and during the early part of 2016 will be reviewing more substantial changes prior to SLAL seeking Court approval.

Investments

The WPC receives quarterly presentations from Standard Life Investments regarding the performance of the with profits funds. The Committee was pleased to note the generally strong performance against benchmark, but raised some questions regarding the performance of particular asset classes which it will continue to keep under review.

Conclusion

Looking back on 2015, the WPC concluded that:

·   The management of SLAL's with profits business has paid due regard to its duty to treat its with profits policyholders fairly and to meet their reasonable benefit expectations

·   The UK Smoothed Managed With Profits Fund and the HWPF PPFMs have been complied with

·   It had continued to challenge management on the exercise of discretion

Effectiveness

The Committee reviews its remit and effectiveness annually. The 2015 review was carried out by means of a self-assessment questionnaire and the Committee discussed the results of the review formally at one of its meetings. The WPC members concluded that they had used their available time effectively, focusing on the key issues and providing appropriate challenge.

The Committee provides information on its composition and how the Committee protects the interests of policyholders and makes its views known at the following website www.standardlife.co.uk/c1/funds/with-profits-committee.page

12.2 Report from the Independent Governance Committee of Standard Life Assurance Limited

During 2015, the board of Standard Life Assurance Limited (SLAL) established its Independent Governance Committee (IGC). The Committee acts solely in the interests of scheme members by providing credible and effective challenge on the value for money of workplace personal pension schemes

Rene Poisson
Chairman, Independent Governance Committee of Standard Life Assurance Limited

Independent Governance Committees have been established as a response to:

·   The market review undertaken in 2013 by the Office of Fair Trading which identified that competition was not having the expected impact in improving value for policyholders in workplace pension schemes and that change was required to ensure that they received Value for Money (VfM)

·   The results of a subsequent 2014 report (the legacy audit) by the Independent Project Board (the IPB) which looked at legacy pension schemes at risk of being exposed to charges over an equivalent of one percent annual management charge (AMC)

The IGC intends to meet at least four times a year but as often as necessary to fulfil its obligations. This first year has required more meetings than would be expected on an ongoing basis, in terms of establishing the Committee and its operations, considering how to assess VfM, understanding the Standard Life business and products, reviewing how Standard Life conducts its relationship with relevant members, and reaching agreement on the steps to be taken in response to the IPB legacy audit

Membership 

The majority of the members of the Independent Governance Committee are independent of Standard Life. Their attendance at meetings to the year ending 31 December 2015 was:

Member	Attendance
Rene Poisson, Chairman	12/12
Richard Butcher	12/12
Ingrid Kirby	12/12
Roger Mattingly	12/12
Michael Craig (non-independent member)	12/12

The members are appointed by the SLAL Board on the recommendation of the Nomination and Governance Committee. The IGC's first meeting was in May 2015. The Head of Pensions Strategy routinely attends these meetings and the Managing Director for Corporate, Retail and Wholesale has had regular interactions with the Committee.

The Committee's role is to advance the Financial Conduct Authority's (FCA) statutory objectives of securing an appropriate degree of protection for consumers by assessing the value for money of relevant schemes, raising concerns, where necessary, and reporting on the VfM of the relevant schemes operated by SLAL. The Committee acts solely in the interests of scheme members by providing credible and effective challenge on the VfM of workplace personal pension schemes.

The Committee's key duties are to:

·   Act solely in the interests of relevant policyholders (both active and deferred scheme members)

·   Assess the ongoing VfM that relevant policyholders obtain from SLAL's relevant schemes

·   As part of this assessment, where the Committee finds problems, to raise concerns (as it sees fit) with the SLAL board

·   After giving the SLAL board an opportunity to address those concerns, if the Committee remains concerned, it can escalate these to the FCA, and has the option to alert relevant scheme members and employers, and make its concerns public as it sees fit

·   Produce an annual report of its findings by 5 April 2016 and annually thereafter

The Committee's routine formal interaction with the SLAL board is by the minutes of its meetings. The directors of SLAL and of the Company have an open invitation to attend any of the Committee meetings. Minutes of the Committee meetings are submitted to the Board.

The Chairman is responsible for the production of an annual report which will be publicly available on the website below by 5 April 2016.

The Committee provides information on its composition at the following website www.standardlife.co.uk/igc

The Committee's work in 2015

An indicative breakdown as to how the Committee spent its time is shown below:  Diagram removed for the purposes of this announcement.  However it can be viewed in full in the pdf document.

Legacy Audit

The IGC focused initially on the results of the legacy audit, reviewing the IPB report and requiring the business to conduct some further analysis to identify at a member level how many members were experiencing ongoing charges in excess of 1% and, if so, why this was the case. The IGC reviewed the Standard Life proposals provided by 30 June 2015, and challenged the business to ensure these proposals delivered value. Following this process an implementation plan was agreed with the SLAL board and in place by the end of 2015.

Value for Money (VfM)

The IGC considered the ongoing VfM provided to policyholders by the relevant schemes.  In this review, the IGC focused on the default investment offerings of the schemes together with the other items noted in 19.5.5 of the FCA's Code of Business rules, recognising that the vast majority of policyholders and assets were invested in those offerings. The IGC considered whether the default strategies were designed in the interests of relevant members with clear statements of aims, objectives and structure, and reviewed the governance processes and reporting used by Standard Life to ensure that the default and other investment strategies remained in the interests of scheme members.

Compliance with 2014 Pensions Act

The IGC has also undertaken an initial assessment of Standard Life's compliance with the charges measures introduced by the 2014 Pensions Act and which came into effect on 6 April 2015.

Feedback

The IGC recognises the importance of gathering the views of scheme members as customers and is trialling a number of channels for gathering feedback, including a dedicated web page with a link to email the IGC. The IGC has also encouraged Standard Life to publicise the IGC via direct policyholder communications. The IGC has engaged with policyholders directly by IGC attendance at workplace seminars and retirement roadshows. The IGC has also discussed with Standard Life the commissioning of research with representative groups of policyholders from different workplace schemes.

Other services and communications

A core element of Standard Life's proposition to workplace members is the support services and communication materials that are designed to inform members of their pension plan and the steps they should take to achieve their retirement goals. The IGC reviewed these materials and how they form part of the online and offline experiences of members. 

As noted above, more detail on the IGC's work since its formation, its conclusions on the Standard Life proposals responding to the legacy audit and VfM will be available in its first annual report.

Standard Life Master Trust Co. Ltd.

During 2015, Standard Life Master Trust Co. Ltd (SLMTC) was established as a subsidiary of Standard Life Assurance Limited.  Its role is to act as trustee and to work in the interests of members of the Standard Life Defined Contribution Master Trust and Stanplan A pension schemes, both of which are trust based schemes designed for multiple employers.

The board of SLMTC consists of five members, all of whom are independent of Standard Life. They also meet regularly throughout the year. Pitmans Trustees Limited have been appointed as chair of the board of directors of the Company. Richard Butcher is their representative.

Similar to the IGC, SLMTC has a duty to assess whether members of these schemes are receiving good value.  Alongside their trustee duties, they are following a similar programme to the IGC to carry out this assessment.

A report with their findings will be published at the end of July 2016.

13.   Glossary

13.1  Product related terms

Annuity

A periodic payment made for an agreed period of time (usually up to the death of the recipient) in return for a cash sum. The cash sum can be paid as one amount or as a series of premiums. If the annuity commences immediately after the payment of the sum, it is called an immediate annuity. If it commences at some future date, it is called a deferred annuity.

Auto enrolment

The UK Government introduced auto enrolment to help people save for their retirement. Employers have to automatically enrol eligible employees into a qualifying workplace pension scheme (QWPS). This pension scheme needs to meet the standards set by the Pensions Regulator.

Flexible income (drawdown)

Flexible income, also known as drawdown, allows the policyholder to withdraw pension income as and when they request it. The remainder of the pension fund remains invested, giving it the potential for growth.

Global absolute return strategies (GARS)
A discretionary multi-asset fund provided under several regulated pooled and segregated structures globally by Standard Life Investments. The investment objective is to target a level of return over a rolling 3 year period equivalent to cash plus 5% a year (gross of fees), and to do so with as little risk as possible.

Mutual fund

A collective investment vehicle enabling investors to pool their money, which is then invested in a diverse portfolio of stocks or bonds, enabling investors to achieve a more diversified portfolio than they otherwise might have done by making an individual investment.

Non-participating/non-profit policy

A policy, including a unit linked policy, which is not a participating/with profits policy.

Participating/with profits policy

A policy where, in addition to guaranteed benefits specified in the policy, additional bonuses may be payable from relevant surplus. The declaration of such bonuses (usually annually) reflects, amongst other things, the overall investment performance of the fund of which the policy forms part.

Personal pension plan

An individual pension arrangement with particular tax advantages whereby individuals who are self-employed or those who are not members of employer-sponsored pension scheme arrangements can make provision for retirement or provide benefits for their dependents in a tax efficient manner.

SICAV

A SICAV (société d'investissement à capital variable) is an open-ended collective investment scheme common in Western Europe. SICAVs can be cross-border marketed in the EU under the Undertakings for Collective Investment in Transferable Securities (UCITS) directive.

SIPP

A self invested personal pension which provides the policyholder with greater choice and flexibility as to the range of investments made, how those investments are managed, the administration of those assets and how retirement benefits are taken.

Unit linked policy

A policy where the benefits are determined by reference to the investment performance of a specified pool of assets referred to as the unit linked fund.

Wrap platform

An investment platform which is essentially a trading platform enabling investment funds, pensions, direct equity holdings and some life assurance contracts to be held in the same administrative account rather than as separate holdings.

13.2  Key financial terms

Assets under administration (AUA)

A measure of the total assets that the Group administers on behalf of individual customers and institutional clients. It includes those assets for which the Group provides investment management services, as well as those assets that the Group administers where the customer has made a choice to select an external third party investment manager. Assets under administration reflect the value of the IFRS gross assets of the Group adjusted, where appropriate, for consolidation adjustments, inter-company assets and intangible assets. In addition, the definition includes third party assets administered by the Group which are not included on the consolidated statement of financial position.

Assets under management (AUM)

A measure of the total assets that Standard Life Investments manages on behalf of individual customers and institutional clients, for which it receives a fee.

Business unit underlying performance

Business unit underlying performance is operating profit before tax after excluding the impact of spread/risk operating actuarial assumption changes, specific management actions, group centre costs and group centre capital management in the reporting period.

Earnings before interest, tax, depreciation and amortisation (EBITDA)

EBITDA is defined as earnings before interest, taxation, depreciation, amortisation, foreign exchange gains and losses, fair value movements on certain derivatives, restructuring costs and non-controlling interest.

EBITDA margin

This is an industry measure of performance for investment management companies. It is calculated as EBITDA divided by net revenue.

Fee based business

Fee based business is a component of operating profit and is made up of products where we generate revenue primarily from asset management charges (AMCs), premium based charges and transactional charges. AMCs are earned on products such as SIPP, corporate pensions and mutual funds, and are calculated as a percentage fee based on the assets held. Investment risk on these products rests principally with the customer, with the major indirect Group exposure to rising or falling markets coming from higher or lower AMCs.

Group capital surplus

This is a regulatory measure of our financial strength.

From 1 January 2016 our Group capital surplus is measured on a Solvency II basis. Prior to 1 January 2016, our Group capital surplus compared the Group's capital resources to its capital resources requirements in accordance with the Insurance Groups Directive.

Group underlying cash generation

This is a non-Generally Accepted Accounting Principles (GAAP) measure which presents a shareholder view of underlying cash generation. The IFRS Consolidated statement of cash flows includes policyholder cashflows, and does not exclude non-recurring and non-operating items.

Group underlying cash generation adjusts Group underlying performance for non-cash items. Adjustments are made for deferred acquisition costs/deferred income reserve, fixed/intangible assets and the Asian joint ventures and associates. Depreciation/ amortisation that would normally be included in operating profit is replaced with the cash movement in the period. The measure is stated net of current (cash) tax on Group underlying performance. A reconciliation of Group underlying performance to Group underlying cash generation is included in the Strategic report. Reconciliations between Group underlying performance, Group operating profit and profitability on an IFRS basis are also included in this report.

Group underlying performance

Group underlying performance is Group operating profit before tax after excluding the impact of spread/risk operating actuarial assumption changes and specific management actions in the reporting period.

Growth channels

We aim to drive the increase in our assets, revenue and profit via our growth channels. This comprises Standard Life Investments Institutional and Wholesale, UK Workplace and Retail, Europe (excluding Germany with profits), Hong Kong, Standard Life Wealth and Ignis.

International Financial Reporting Standards (IFRS)

International Financial Reporting Standards are accounting standards issued by the International Accounting Standards Board (IASB). The Group's consolidated financial statements are required to be prepared in accordance with IFRS.

Mature book / business

Mature books are expected to provide a stable and consistent contribution to our profit. This includes UK Mature Retail, Standard Life Investments third party Strategic Partner Life books and spread/risk based business. It also includes the with profits business in Germany which closed to new business in April 2015.

Net flows

Net flows represent gross inflows less redemptions. For long-term savings business, gross inflows are premiums and deposits recognised in the period on a regulatory basis (excluding any switches between funds). Redemptions are claims and annuity payments (excluding any reinsurance transactions and switches between funds).

Operating profit

The Group's chosen supplementary measure of performance is operating profit and is a non-GAAP measure. Operating profit excludes impacts arising from short-term fluctuations in investment return and economic assumption changes. It is calculated based on expected returns on investments backing equity holder funds, with consistent allowance for the corresponding expected movements in equity holder liabilities. Impacts arising from the difference between the expected return and actual return on investments, and the corresponding impact on equity holder liabilities except where they are directly related to a significant management action, are excluded from operating profit and are presented within profit before tax. The impact of certain changes in economic assumptions is also excluded from operating profit and is presented within profit before tax.

Operating profit also excludes the impact of the following items:

·   Restructuring costs and significant corporate transaction expenses. Restructuring includes the impact of major regulatory change.

·   Impairment of intangible assets

·   Profit or loss arising on the disposal of a subsidiary, joint venture or associate

·   Amortisation of intangibles acquired in business combinations and fair value movements in contingent consideration

·   Items which are one-off in nature and outside the control of management and which, due to their size or nature, are not indicative of the long-term operating performance of the Group

Operating return on equity (RoE)

The annualised post-tax operating profit expressed as a percentage of the opening IFRS equity, adjusted for time apportioned dividends paid to equity holders.

Own funds

Under Solvency II, the capital resources available to meet solvency capital requirements are called own funds. 

Solvency capital requirement

Under Solvency II, insurers are required to identify their key risks - for example that equity markets fall - and hold sufficient capital to withstand adverse outcomes from those risks. This amount of capital is referred to as the Solvency capital requirement or SCR.

Spread/risk based business

Spread/risk based business mainly comprises products where we provide a guaranteed level of income for our customers in return for an investment, for example, Annuities. The 'spread' referred to in the title primarily relates to the difference between the guaranteed amount we pay to customers and the actual return on the assets over the period of the contract.

Spread/risk margin

Spread/risk margin is a component of operating profit and reflects the margin earned on spread/risk business. This includes net earned premiums, claims and benefits paid, net investment return using long-term assumptions and reserving changes.

Standard Life Investments Institutional

Standard Life Investments institutional business sell to institutions (including corporates, pension schemes, local authorities, government agencies and insurance companies) either directly or through intermediaries.

Standard Life Investments Wholesale

Standard Life Investments wholesale sell retail products through wholesale distributors including third party fund supermarkets, global financial institutions and private banks.

Strategic partner life business

A measure of the assets that Standard Life Investments manages on behalf of Standard Life Group companies and under other long-term life book partnership agreements, such as Phoenix Group.

Technical provisions

The best estimate market consistent value of our policyholder liabilities is referred to as technical provisions. The calculation is discounted to recognise the time value of money and includes a risk margin, calculated in accordance with Solvency II regulations.

Third party (excluding strategic partner life business)

A measure of the assets that Standard Life Investments manages on behalf of individual customers and institutional clients, for which it receives a fee. This measure excludes the assets that are managed on behalf of strategic partners in life assurance books.

Transitional relief

Solvency II regulations allow insurers to smooth the introduction of new rules for calculating policyholder liabilities. This relief includes a deduction from the amount of Solvency II technical provisions, based on the difference between technical provisions under the previous regulatory framework and Solvency II. The deduction decreases over the course of 16 years from 1 January 2016.

UK retail

This relates to business where we have a relationship with the customer either directly or through an independent financial adviser. We analyse this type of business into growth and mature categories. Retail growth includes the products, platforms, investment solutions and services of our UK retail business that we continue to market actively to our customers. Retail mature includes business that was predominantly written before demutualisation.

UK workplace

UK workplace pensions, savings and benefits to UK employers and employees. These are sold through corporate benefit consultants, independent financial advisers, or directly to employers.

13.3  Other terms

B/C share scheme

Following the completion of the sale of the Canadian business on 30 January 2015 the Company returned 73 pence per share to shareholders via a B/C share scheme. Eligible shareholders were able to elect to receive one B share or one C share for each ordinary share that they held on 13 March 2015. The B shares were redeemable and had a nominal value of 73 pence each. The Company redeemed all outstanding B shares on 20 March 2015 giving rise to a capital receipt for shareholders. The C shares were non-redeemable and had a negligible nominal value. A dividend was declared on the C shares of 73 pence per share on 20 March 2015, giving rise to an income receipt for shareholders. Thereafter C shares were automatically reclassified as deferred shares.

Board

The Board of Directors of the Company.

Canadian business

On 3 September 2014 the Group announced its intention to sell its Canadian business to The Manufacturers Life Insurance Company (MLC), a subsidiary of Manulife Financial Corporation (Manulife). The assets and liabilities of the Canadian business were classified as held for sale at 31 December 2014 and the results of this business were classified as discontinued operations for the year then ended. The comparative consolidated income statement, statement of comprehensive income and related notes were restated on this basis. The Canadian business comprises the Canadian long-term savings and retirement, individual and group insurance business (Standard Life Financial Inc. and its subsidiaries), the Canadian investment management business (Standard Life Investments Inc. and its subsidiaries) and the business of the Canadian branch of Standard Life Assurance Limited (SLAL Canada branch).

The sale of Standard Life Financial Inc. and Standard Life Investments Inc. completed on 30 January 2015. The assets and liabilities of the SLAL Canada branch were transferred on 31 December 2015 following the fulfilment of certain conditions to completion, including regulatory approval.

Capital resources (CR)

Capital resources include the assets in excess of liabilities, valued on a regulatory basis, and certain other components of capital.

Capital resources requirement (CRR)

A company must hold capital resources in excess of the capital resources requirement. The CRR represents the total of the individual capital resources requirements (ICRR) of each regulated company in the Group.

Chief Operating Decision Maker

The strategic executive committee.

Company

Standard Life plc.

Constant currency

Eliminates the effects of exchange rate fluctuations and is used when calculating financial performance on a range of measures.

Deferred acquisition costs (DAC)

The method of accounting whereby acquisition costs on long-term business are deferred on the consolidated statement of financial position as an asset and amortised over the life of those contracts. This leads to a smoothed recognition of up front expenses instead of the full cost in the year of sale.

Deferred income reserve (DIR)

The method of accounting whereby front end fees that relate to services to be provided in future periods are deferred on the consolidated statement of financial position as a liability and amortised over the life of those contracts. This leads to a smoothed recognition of up front income instead of the full income in the year of sale.  

Director

A director of the Company.

Discounting

The reduction to present value at a given date of a future cash transaction at an assumed rate, using a discount factor reflecting the time value of money. The choice of a discount rate will usually greatly influence the value of insurance provisions, and may give indications on the conservatism of provisioning methods.

Dividend cover

This is a measure of how easily a company can pay its dividend from profit. It is calculated as profit for the year attributable to equity holders of Standard Life plc divided by the total dividend for that financial period. 

Earnings per share (EPS)

EPS is a commonly used financial metric which can be used to measure the profitability and strength of a company over time. EPS is calculated by dividing profit by the number of ordinary shares. Basic EPS uses the weighted average number of ordinary shares outstanding during the year. Diluted EPS adjusts the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares, for example share awards and share options awarded to employees.

Effective tax rate

Tax expense/(credit) attributable to equity holders' profit divided by profit before tax attributable to equity holders' profits expressed as a percentage.

Fair value through profit or loss (FVTPL)

FVTPL is an IFRS measurement basis permitted for assets and liabilities which meet certain criteria. Gains or losses on assets or liabilities measured at FVTPL are recognised directly in the income statement.

Group, Standard Life Group or Standard Life

Prior to demutualisation on 10 July 2006, SLAC and its subsidiaries and, from demutualisation on 10 July 2006, the Company and its subsidiaries.

Heritage With Profits Fund (HWPF)

The Heritage With Profits Fund contains all business - both with profits and non-profit - written before demutualisation in the UK, Irish or German branches, with the exception of the classes of business which the Scheme of Demutualisation allocated to the Proprietary Business Fund. The HWPF also contains increments to this business.

Investment grade

Debt securities with a credit rating of BBB or higher.

Key performance indicators (KPI)

This is a measure by reference to which the development, performance or position of the business can be measured effectively.

Liability aware

Liability Aware is a framework for proactively managing the various liability risks and requirements that are faced by defined benefit pension schemes and insurance companies.

Proprietary Business Fund

The Proprietary Business Fund in Standard Life Assurance Limited (SLAL) contains, amongst other things, most new insurance business written after demutualisation in the UK, Ireland and Germany and certain classes of business written before demutualisation - pension contribution insurance policies, income protection plan policies and a number of SIPP policies.

Recourse cash flow (RCF)

Certain cash flows arising in the HWPF on specified blocks of UK and Irish business, which are transferred out of the fund on a monthly basis and accrue to the ultimate benefit of equity holders, as determined by the Scheme of Demutualisation.

Regular premium

A regular premium contract (as opposed to a single premium contract), is one where the policyholder agrees at inception to make regular payments throughout the term of the contract.

Single premium

A single premium contract (as opposed to a regular premium contract), involves the payment of one premium at inception with no obligation for the policyholder to make subsequent additional payments.

SLAC

The Standard Life Assurance Company (renamed The Standard Life Assurance Company 2006 on 10 July 2006).

SLAL

Standard Life Assurance Limited.

SLIL

Standard Life International Limited.

Solvency II

Solvency II is an EU-wide initiative that brings consistency to how EU insurers manage capital and risk. Solvency II was implemented on 1 January 2016.

Strategic executive committee

Responsible for the day-to-day running of the Group and comprises; Chief Executive, Chief Executive - UK and Europe, Chief Financial Officer, Chief Investment Officer, Chief Operating Officer, Chief People Officer, Chief Risk Officer and the Global Client Director.

Subordinated liabilities

Subordinated liabilities are debts of a Company which, in the event of liquidation, rank below its other debts but above share capital.

14. Shareholder information

Registered office

Company registration number: SC286832

Standard Life House

30 Lothian Road

Edinburgh

EH1 2DH

Scotland

Phone: [phone]* or
0131 225 2552*

For shareholder services call:
0345 113 0045*

Secretary

Kenneth A Gilmour

Registrar

Capita Registrars Limited

Auditors

PricewaterhouseCoopers LLP

Solicitors

Slaughter and May

Brokers

JP Morgan Cazenove

Goldman Sachs

Shareholder services

We offer a wide range of shareholder services. For more information, please:

·   Contact our registrar, Capita, on 0345 113 0045* if calling from the UK. International numbers can be found on the back cover of this report

·   Visit our share portal at www.standardlifeshareportal.com

* Calls may be monitored and/or recorded to protect both you and us and help with our training. Call charges will vary.

Sign up for Ecommunications

Signing up means:

·   You'll receive an email when documents like the Annual report and accounts, Half year results and AGM guide are available on our website

·   Voting instructions for the Annual General Meeting will be sent to you electronically

Set up a share portal account

Having a share portal account means you can:

·   Manage your account at a time that suits you

·   Download your documents when you need them  

To find out how to sign up, visit www.standardlifeshareportal.com 

Preventing unsolicited mail

By law, the Company has to make certain details from its share register publicly available. Because of this, it is possible that some registered shareholders could receive unsolicited mail or phone calls. You could also be targeted by fraudulent 'investment specialists'. Remember, if it sounds too good to be true, it probably is.

You can find more information about share scams at the Financial Conduct Authority website www.fca.org.uk/consumers/scams

If you are a certificated shareholder, your name and address may appear on a public register. Using a nominee company to hold your shares can help protect your privacy. You can transfer your shares into the Company-sponsored nominee - the Standard Life Share Account - by contacting Capita, or you could get in touch with your broker to find out about their nominee services.

If you want to limit the amount of unsolicited mail you receive generally, please visit www.mpsonline.org.uk

Financial calendar

Full year results 2015	19 February
Ex-dividend date for 2015 final dividend	14 April
Record date for 2015 final dividend	15 April
Last date for DRIP elections for 2015 final dividend	4 May
Annual General Meeting	17 May
Dividend payment date for 2015 final dividend	24 May
Half year results 2016	9 August
Ex-dividend date for 2016 interim dividend	8 September
Record date for 2016 interim dividend	9 September
Last date for DRIP elections for 2016 interim dividend	28 September
Dividend payment date for 2016 interim dividend	19 October

Analysis of registered shareholdings at 31 December 2015
Range of shares	Number of holders	% of total holders	Number of shares	% of total shares
1-1,000	63,650	60.81	27,421,274	1.39
1,001-5,000	36,108	34.50	73,473,243	3.73
5,001-10,000	2,874	2.75	19,563,915	0.99
10,001-100,000	1,582	1.50	35,782,666	1.82
#100,001+	456	0.44	1,813,696,277	92.07
Total	104,670	100	1,969,937,375	100

# These figures include the Company-sponsored nominee - the Standard Life Share Account - which had 1,074,753 participants holding 746,258,569 shares, and the Unclaimed Asset Trust, which holds 14,709,934 shares on behalf of eligible claimants.

 

END

 

 

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