Final Results - Part 7 of 8

RNS Number : 3780F

Standard Life plc

20 February 2015

Standard Life plc

Full Year Results 2014

Part 7 of 8

Independent auditors' report to the members of Standard Life plc

Our opinion

In our opinion the financial statements, defined below:

· Give a true and fair view of the state of the company's affairs as at 31 December 2014 and of its profit and cash flows for the year then ended

· Have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union

· Have been prepared in accordance with the requirements of the Companies Act 2006.

This opinion is to be read in the context of what we say in the remainder of this report.

What we have audited

The financial statements, which are prepared by Standard Life plc, comprise:

· The Company statement of financial position as at 31 December 2014

· The Company statement of comprehensive income for the year then ended

· The Company statement of cash flows for the year then ended

· The Company statement of changes in equity for the year then ended

· The accounting policies

· The notes to the financial statements, which include other explanatory information.

The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

Certain disclosures required by the financial reporting framework have been presented elsewhere in the Company financial statements (the 'Annual report'), rather than in the notes to the financial statements. These are cross-referenced from the financial statements and are identified as audited.

What an audit of financial statements involves

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) ('ISAs (UK & Ireland)'). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

· Whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed

· The reasonableness of significant accounting estimates made by the Directors

· The overall presentation of the financial statements.

We primarily focus our work in these areas by assessing the directors' judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial information.

We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.

In addition, we read all the financial and non-financial information in the Annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion:

· The information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements

· The part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

Other matters on which we are required to report by exception

Adequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:

· We have not received all the information and explanations we require for our audit

· Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us

· The financial statements and the part of the Directors' remuneration report to be audited are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Directors' remuneration

Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors' remuneration specified by law are not made, and under the Listing Rules we are required to review certain elements of the report to shareholders by the Board on directors' remuneration. We have no exceptions to report arising from these responsibilities.

Other information in the Annual report

Under ISAs (UK & Ireland) we are required to report to you if, in our opinion, information in the Annual report is:

· Materially inconsistent with the information in the audited financial statements

· Apparently materially incorrect based on, or materially inconsistent with, our knowledge of the company acquired in the course of performing our audit

· Is otherwise misleading.

We have no exceptions to report arising from this responsibility.

Responsibilities for the Company financial statements and the audit

Our responsibilities and those of the directors

As explained more fully in the Directors' responsibility statement set out on page 47, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other matters

We have reported separately on the Group financial statements of Standard Life plc for the year ended 31 December 2014.

Stephanie Bruce (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Edinburgh

20 February 2015

(a) The maintenance and integrity of the Standard Life website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdiction.

Company statement of comprehensive income

For the year ended 31 December 2014

		2014	2013
	Notes	£m	£m
Revenue
Investment return	A	697	714
Other income		1	2
Total revenue		698	716

Expenses
Administrative expenses	B	65	70
Finance costs		97	99
Total expenses		162	169

Profit before tax		536	547
Tax credit	F	17	19
Profit for the year		553	566
Other comprehensive income that may be reclassified subsequently to profit or loss
Net changes in financial assets designated as available-for-sale	R	28	(18)
Tax effect relating to items that may be reclassified subsequently to profit or loss	F	(6)	4
Total other comprehensive income for the year that may be reclassified subsequently to profit or loss		22	(14)
Total comprehensive income for the year		575	552

The Notes on pages 270 to 284 are an integral part of these financial statements.

Company statement of financial position

As at 31 December 2014

		2014	2013 restated¹
	Notes	£m	£m
Assets
Investments in subsidiaries	G	5,833	5,413
Investments in associates and joint ventures	H	150	135
Loans to subsidiaries	J	634	644
Derivative financial assets	J	24	54
Debt securities	J	492	724
Receivables and other financial assets	J	40	55
Other assets	M	10	23
Cash and cash equivalents	J	34	40
Total assets		7,217	7,088

Equity
Share capital	O	239	238
Shares held by trusts	P	(3)	(10)
Share premium reserve		1,115	1,110
Retained earnings	Q	785	601
Other reserves	R	3,405	3,383
Total equity		5,541	5,322

Liabilities
Subordinated liabilities	S	1,612	1,632
Deferred tax liabilities	I	1	1
Derivative financial liabilities	K	25	53
Other financial liabilities	U	38	80
Total liabilities		1,676	1,766
Total equity and liabilities		7,217	7,088

¹ Comparatives for the year ended 31 December 2013 have been restated to reflect retrospective application of changes to accounting policies as a result of new IFRSs adopted during the year. Refer to Company accounting policies - (a) Basis of preparation.

The financial statements on pages 259 to 284 were approved by the Board of Directors on 20 February 2015 and signed on its behalf, by the following Directors:

Sir Gerry Grimstone, Chairman Luke Savage, Chief Financial Officer

The Notes on pages 270 to 284 are an integral part of these financial statements.

Company statement of changes in equity

For the year ended 31 December 2014

		Share capital	Shares held by trusts	Share premium reserve	Retained earnings	Other reserves	Total equity
2014	Notes	£m	£m	£m	£m	£m	£m
1 January		238	(10)	1,110	601	3,383	5,322
Profit for the year		-	-	-	553	-	553
Other comprehensive income for the year		-	-	-	-	22	22
Total comprehensive income for the year		-	-	-	553	22	575
Distributions to equity holders		-	-	-	(386)	-	(386)
Issue of share capital	O	1	-	5	-	-	6
Reserves credit for employee share-based payment schemes	R	-	-	-	-	27	27
Transfer to retained earnings for vested employee share-based payment schemes	Q, R	-	-	-	27	(27)	-
Shares acquired by employee trusts		-	(3)	-	-	-	(3)
Shares distributed by employee trusts	Q	-	10	-	(10)	-	-
31 December		239	(3)	1,115	785	3,405	5,541

		Share capital	Shares held by trusts	Share premium reserve	Retained earnings	Other reserves	Total equity
2013	Notes	£m	£m	£m	£m	£m	£m
1 January		236	(11)	1,110	650	3,418	5,403
Profit for the year		-	-	-	566	-	566
Other comprehensive income for the year		-	-	-	-	(14)	(14)
Total comprehensive income for the year		-	-	-	566	(14)	552
Distributions to equity holders		-	-	-	(636)	(20)	(656)
Issue of share capital	O	2	-	-	-	-	2
Reserves credit for employee share-based payment schemes	R	-	-	-	-	32	32
Transfer to retained earnings for vested employee share-based payment schemes	Q, R	-	-	-	33	(33)	-
Shares acquired by employee trusts		-	(11)	-	-	-	(11)
Shares distributed by employee trusts	Q	-	12	-	(12)	-	-
31 December		238	(10)	1,110	601	3,383	5,322

The Notes on pages 270 to 284 are an integral part of these financial statements.

Company statement of cash flows

For the year ended 31 December 2014

		2014	2013 restated¹
	Notes	£m	£m
Cash flows from operating activities
Profit before tax		536	547
Gains on financial instruments	A	(2)	(4)
Dividend income from subsidiaries	A	(613)	(629)
Interest income on loans to subsidiaries	A	(36)	(37)
Interest income on available-for-sale securities	A	(10)	(8)
Distributions from equity instruments	A	(34)	(34)
Interest payable on subordinated liabilities		97	99
Movements in operating assets and liabilities		25	89
Net cash flows from operating activities		(37)	23

Cash flows from investing activities
Loans issued to subsidiaries		(9)	(5)
Capital injections into existing subsidiaries		(431)	(97)
Interest received on loans to subsidiaries	A	36	37
Interest received on available-for-sale securities		7	10
Distributions from equity instruments	A	34	34
Dividends received from subsidiaries	A	613	629
Disposal of subsidiaries at FVTPL	G	12	600
Sale of debt securities and derivatives		262	(433)
Capital injections into associates and joint ventures		(14)	(19)
Net cash flows from investing activities		510	756

Cash flows from financing activities
Dividends paid		(386)	(656)
Interest paid		(97)	(96)
Proceeds from exercise of share options		5	-
Shares acquired by trusts		(1)	(9)
Net cash flows from financing activities		(479)	(761)

Net (decrease)/increase in cash and cash equivalents		(6)	18
Cash and cash equivalents at the beginning of the year	N	40	22
Cash and cash equivalents at the end of the year	N	34	40

Supplemental disclosures on cash flows from operating activities
Interest received	A	2	2

The Notes on pages 270 to 284 are an integral part of these financial statements.

Company accounting policies

(a) Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as endorsed by the European Union (EU), with interpretations issued by the IFRS Interpretations Committee and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared on a going concern basis and under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The principal accounting policies set out below have been consistently applied to all financial reporting periods presented in these financial statements.

(a)(i) New standards, interpretations and amendments to published standards that have been adopted by the Company

The Company has adopted the following new IFRSs, International Accounting Standards (IASs), interpretations and amendments to existing standards which are effective by EU endorsement for annual periods beginning on or after 1 January 2014 unless otherwise stated:

IAS 27 Separate Financial Statements and IFRS 10 Consolidated Financial Statements

The amendment to IAS 27 requires companies to adopt a new definition of control as set out in IFRS 10. IFRS 10 defines control, determines how to identify if an investor controls an investee and requires an investor to consolidate entities it controls under the new standard. IFRS 10 identifies three elements, all of which must be present for an investor to control an investee, which are as follows:

· Power over the investee

· Exposure, or rights, to variable returns from its involvement with the investee

· The ability to use that power over the investee to affect the amount of the returns.

The standard has been adopted retrospectively subject to the transition guidance which permits retrospective application only in circumstances when the outcome of the control assessment for individual entities at the date of initial application differs from the outcome under the previous accounting policy.

The impact of the adoption of IAS 27 is that investment vehicles such as open-ended investment companies (OEIC's), unit trusts and limited partnerships over which the Company is deemed to have control must be classified as investments in subsidiaries. The Company has elected to measure this category of investment in subsidiaries at fair value through profit and loss (FVTPL). This results in an investment in a highly liquid short-term investment fund being reclassified from cash and cash equivalents to investments in subsidiaries at FVTPL.

The impact on the statement of financial position at 31 December 2013 as a result of the retrospective application of the amendment to IAS 27 (2011), is a decrease in cash and cash equivalents of £142m and an increase in investments in subsidiaries of £142m. There is no impact from this new standard on the statement of comprehensive income for the year ended 31 December 2013.

In addition to the above, the Company has restated the statement of cash flows for the year ended 31 December 2013. The overall impact is a decrease in net cash flows from operating activities for the year ended 31 December 2013 of £1m, and an increase in net cash flows from investing activities for the year ended 31 December 2013 of £600m and a decrease in cash and cash equivalents at the beginning of the year of £741m due to the classification of a highly liquid short term investment fund being reclassified from cash and cash equivalents to investments in subsidiaries at FVTPL. There was no impact on cash flows from financing activities.

IAS 28 Investments in Associates and Joint Ventures (2011)

IAS 28 (2011) is revised to include joint ventures as well as associates. Additionally, the scope exception within IAS 28 for investments in associates held by venture capital organisations, or mutual funds, unit trusts and similar entities, including investment linked insurance funds, has been removed and as a result the scope of the standard has been widened to include all investments in any entity over which the Company has significant influence. The standard has been revised to allow an entity to elect to measure an investment in associate at fair value through profit or loss (FVTPL) where that investment is held by, or indirectly through, venture capital organisations, or mutual funds, unit trusts and similar entities, including investment linked insurance funds.

The impact of the adoption of IAS 28 (2011) is that an equity investment in an entity over which the Company has significant influence which was previously out of scope of IAS 28 has now been brought into scope resulting in the reclassification of this investment as an investments in associates on the statement of financial position. The Company has elected to continue to measure this investment at FVTPL.

The impact on the statement of financial position at 31 December 2013 as a result of the retrospective application of IAS 28 (2011), is a decrease in equity securities and interests in pooled investment funds of £12m and an increase in investments in associates and joint ventures of £12m.

There is no impact from this new standard on the statement of comprehensive income or statement of cash flows for the year ended 31 December 2013.

Company accounting policies continued

(a) Basis of preparation continued

(a)(i) New standards, interpretations and amendments to published standards that have been adopted by the Company continued

Additionally, the Company has adopted the following amendments to existing standards which are effective by EU endorsement from 1 January 2014 and the implementation the implementation of these amendments has had no significant impact on the Company's financial statements:

· IFRS 11 Joint Arrangements

· IFRS 12 Disclosure of Interests on Other Entities

· Amendments to IAS 39 Financial Instruments: Recognition and Measurement and amendments to IAS 32 Financial Instruments: Presentation and IAS 36 Impairment of Assets.

(a)(ii) Standards, interpretations and amendments to published standards that are not yet effective and have not been early adopted by the Company

Certain new standards, interpretations and amendments to existing standards have been published that are mandatory for the Company's annual accounting periods beginning on or after 1 January 2015. The Company has not early adopted the standards, interpretations and amendments described below:

IFRS 9 Financial Instruments(effective for annual periods beginning on or after 1 January 2018)

IFRS 9 will replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 allows only two measurement categories for financial assets: amortised cost and fair value. All equity instruments are measured at fair value. A debt instrument is measured at amortised cost only if it is held to collect contractual cash flows and the cash flows represent principal and interest, otherwise it is measured at fair value through other comprehensive income or FVTPL depending on the business model it is held within or whether the option to adopt FVTPL has been applied. IFRS 9 also introduces a new impairment model, an expected credit loss model which will replace the current incurred loss model in IAS 39. An impairment loss may now be recognised prior to a loss event occurring. Financial liabilities may be designated as at FVTPL. The amortised cost measurement basis is applied to most other financial liabilities. For financial liabilities designated as at FVTPL, changes in the fair value due to changes in the liability's credit risk are recognised directly in other comprehensive income.

Additionally, IFRS 9 removes and replaces the current requirements for hedge effectiveness in IAS 39 and therefore the requirements for the application of hedge accounting. The new requirements change what qualifies as a hedged item and some of the restrictions on the use of some hedging instruments. The accounting and presentation requirements remain largely unchanged. However, entities will now be required to reclassify the gains and losses accumulated in equity on a cash flow hedge to the carrying amount of a non-financial hedged item when it is initially recognised. Additional disclosures on hedge accounting are also required.

As well as presentation and measurement changes, IFRS 9 also introduces additional disclosure requirements. The standard has not yet been endorsed by the EU.

The adoption of IFRS 9 is expected to have an impact on the measurement and presentation of financial instruments and related balances in the consolidated financial statements of the Company.

(a)(iii) Standards, interpretations and amendments to existing standards that are not yet effective and are not expected to have a significant impact on the Company's operations or to the preparation of separate financial statements

• IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2017)

• IFRIC 21 Levies (effective for annual periods beginning on or after 17 June 2014)

• Amendments to IAS 19 Defined Benefit Plans: Employee Contributions (effective for annual periods beginning on or after 1 July 2014)

• Annual improvements 2010-2012 cycle and annual improvements 2011-2013 cycle (effective for annual periods beginning on or after 1 July 2014)

• Amendment to IAS 16 Property, Plant & Equipment and IAS 38 Intangible Assets: Depreciation and Amortisation (effective for annual periods beginning on or after 1 January 2016)

• Amendments to IAS 27 Separate Financial Statements: Equity Method in Separate Financial Statements (effective for annual periods beginning on or after 1 January 2016)

• Amendment to IFRS 11 Joint arrangements: Accounting for Acquisitions of Interests in Joint Operations (effective for annual periods beginning on or after 1 January 2016)

• Annual improvements 2012-2014 cycle (effective for annual periods beginning on or after 1 January 2016)

• Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities, IAS 28 Investments in Associates and Joint Ventures: Applying the Consolidation Exception (effective for annual periods beginning on or after 1 January 2016)

• Amendments to IAS 1Presentation of Financial Instruments: Disclosure Initiative (effective for annual periods beginning on or after 1 January 2016).

(a)(iv) Critical accounting estimates and judgement in applying accounting policies

The preparation of financial statements requires management to make estimates and assumptions and exercise judgements in applying the accounting policies that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses arising during the year. Estimates and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The areas where judgements, estimates and assumptions have the most significant effect on the amounts recognised in the consolidated financial statements are as follows:

Financial statement area	Critical accounting judgements, estimates or assumptions	Related accounting policies and notes
Assets whose carrying value is subject to impairment testing	Determination of the recoverable amount	(b), (e), (g) and Notes G, H and V

(b) Subsidiaries, associates and joint arrangements

Subsidiaries are all entities, including structured entities, over which the Company has control.

The Company has certain subsidiaries which are investment vehicles such as open-ended investment companies (OEIC's), unit trusts and limited partnerships whose primary function is to generate capital or income growth through holding investments. This category of subsidiary is held at FVTPL since they are managed on a fair value basis.

Investments in subsidiaries include loans to subsidiaries that meet the definition of equity instruments. Refer to (g) for more information on the measurement of loans to subsidiaries.

Associates are entities over which the Company has significant influence but not control. Significant influence is the power to participate in the financial and operating policy decisions of the investee either directly or through another Group company acting as a defacto agent.

Where the Company has an investment in associate, a portion of which is held indirectly through a mutual fund, unit trust or similar entity, including investment-linked insurance funds, that portion of the investment is measured at fair value through profit or loss (FVTPL) in accordance with IAS 39.

Joint arrangements are classified as joint ventures when the Company and other parties have joint control of the rights to the net assets of the joint arrangement.

Investments in subsidiaries (other than those measured at FVTPL), associates (other than those measured at FVTPL) and joint ventures are initially recognised at cost and subsequently held at cost less any impairment charge. An impairment charge is recognised when the carrying amount of the investment exceeds its recoverable amount. Any gain or loss on disposal of a subsidiary, associate or joint venture is recognised in the statement of comprehensive income.

These financial statements are presented in millions pound Sterling, which is the Company's functional currency.

Foreign currency transactions are translated at the exchange rate prevailing at the date of the transaction. Gains and losses arising from such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Translation differences on non-monetary items, such as equity securities held at FVTPL, are reported as part of the fair value gain or loss within investment return in the statement of comprehensive income. Translation differences on financial assets and liabilities held at amortised cost are included in the relevant line in the statement of comprehensive income.

(d) Revenue recognition

Gains and losses resulting from changes in both market value and foreign exchange on investments classified as at FVTPL, including investment income received (such as dividends and interest payments), are recognised in the statement of comprehensive income in the period in which they occur.

Changes in the fair value of derivative financial instruments that are not hedging instruments are recognised immediately in the statement of comprehensive income.

For debt securities classified as available-for-sale (AFS), interest income recognised in the statement of comprehensive income is calculated using the effective interest rate (EIR) method.

Unrealised gains and losses on AFS financial assets are recognised in other comprehensive income unless an impairment loss is recognised. On disposal any accumulated gain or loss previously recognised in other comprehensive income is recycled to the income statement.

For loans measured at amortised cost, interest income recognised in the statement of comprehensive income is calculated using the EIR method.

Dividend income and distributions from securities that are classified by the issuer as equity instruments are recognised in the statement of comprehensive income when the right to receive payment is established.

Company accounting policies continued

(e) Impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, at least at each reporting date. An impairment loss is recognised in the statement of comprehensive income for the amount by which the asset's carrying amount exceeds its recoverable amount.

The recoverable amount of an asset is the greater of its net selling price (fair value less costs to sell) and the value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit, or group of units, to which the asset belongs.

(f) Income tax

The income tax expense is based on the taxable profits for the year, after adjustments in respect of prior years.

Deferred tax is provided using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities.

Temporary differences arising from investments in subsidiaries and associates give rise to deferred tax only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and the timing of the reversal of that difference cannot be controlled.

Current and deferred tax is recognised in the income statement except when it relates to items recognised in other comprehensive income or directly in equity, in which case it is credited or charged to other comprehensive income or directly in equity respectively.

The income tax expense is determined using rates enacted or substantively enacted at the reporting date.

(g) Loans

Loans are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Management determines the classification of loans at initial recognition. Certain loans are designated as at FVTPL as they are part of groups of assets which are managed and whose performance is evaluated on a fair value basis so as to maximise returns either for policyholders or equity holders. All other loans are classified as loans and receivables. Loans classified as at FVTPL are measured at fair value with changes in fair value recognised in the consolidated income statement.

Loans classified as loans and receivables are initially measured at fair value plus directly attributable transaction costs. Subsequently, they are measured at amortised cost, using the EIR method, less any impairment losses. Revenue from financial assets classified as loans are recognised in the consolidated income statement on an EIR basis.

Impairment on individual loans is determined at each reporting date. Objective evidence that a financial asset or group of assets is impaired includes observable data that comes to the attention of the Company. This would include a measurable decrease in the estimated future cash flow from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the Company. The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant.

If there is objective evidence that an impairment loss has been incurred on loans carried at amortised cost, the amount of the impairment loss is calculated as the difference between the present value of future cash flows, discounted at the loan's original effective rate, and the loan's current carrying value. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the consolidated income statement. Subsequent recoveries are credited to the consolidated income statement.

If there is no evidence of impairment on an individual basis, a collective impairment review is undertaken whereby the assets are grouped together, on the basis of similar credit risk characteristics, in order to calculate a collective impairment loss. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

Loans which are subject to collective impairment assessment and whose terms have been renegotiated are no longer considered to be past due but are treated as new loans after the minimum number of payments under the renegotiated terms have been collected. Individually significant loans whose terms have been renegotiated are subject to on-going review to determine whether they remain impaired or past due.

(h) Debt securities and derivatives

Management determines the classification of debt securities and derivatives at initial recognition.

Certain debt securities are designated as at FVTPL as they are part of groups of assets which are managed and whose performance is evaluated on a fair value basis so as to maximise returns either for policyholders or equity holders. All other debt securities are designated as AFS.

All derivative instruments are classified as held for trading (HFT).

Debt securities and derivatives are recognised at fair value on the trade date of the transaction. In the case of derivatives, where no initial premium is paid or received, the initial measurement value is nil. For instruments classified as HFT or designated as at FVTPL, directly attributable transaction costs are not included in the initial measurement value but are recognised in the consolidated income statement. AFS debt securities are initially recognised at fair value plus directly related transaction costs.

Where a valuation technique is used to establish the fair value of a financial instrument, a difference could arise between the fair value at initial recognition and the amount that would be determined at that date using the valuation technique. When unobservable market data has an impact on the valuation of derivatives, the entire initial change in fair value indicated by the valuation technique is recognised over the life of the transaction on an appropriate basis, or when the inputs become observable, or when the derivative matures or is closed out.

Instruments classified as HFT or as at FVTPL are measured at fair value with changes in fair value recognised in the statement of comprehensive income.

Debt securities designated as AFS are measured at fair value. For these instruments interest calculated using the effective interest method is recognised in the consolidated income statement. Other changes in fair value and any related tax are recognised in other comprehensive income and recorded in a separate reserve within equity until disposal or impairment, when the cumulative gain or loss is recognised in the consolidated income statement with a corresponding movement through other comprehensive income. An AFS debt security is impaired if there is objective evidence that a loss event has occurred which has impaired the expected cash flows.

(i) Financial guarantee contracts

A financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

The Company recognises and measures financial guarantee contracts in accordance with IAS 39 Financial Instruments: Recognition and Measurement. The Company initially recognises and measures a financial guarantee contract at its fair value. At each subsequent reporting date, the Company measures the financial guarantee contract at the higher of the initial fair value recognised less, when appropriate, cumulative amortisation recognised in accordance with IAS 18 Revenue and the best estimate of the expenditure required to meet the obligations under the contract at the reporting date, determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

(j) Cash and cash equivalents

Cash and cash equivalents include demand and term deposits and other short-term investments with less than three months to maturity from the date of acquisition. Cash and cash equivalents are categorised for measurement purposes as loans and receivables and are therefore measured at amortised cost.

(k) Equity

(k)(i) Share capital and shares held by trusts

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Shares are classified as equity instruments when there is no contractual obligation to deliver cash or other assets to another entity on terms that may be unfavourable. The difference between the proceeds received on issue of the shares and the nominal value of the shares issued is recorded in the share premium reserve. Incremental costs directly attributable to the issue of new equity instruments are shown in the share premium reserve as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the issue of equity instruments in a business combination are excluded from the consideration transferred.

If the Company purchases any of its equity instruments the consideration paid is treated as a deduction from total equity. Where such shares are sold, if the proceeds are equal to or less than the purchase price paid, the proceeds are treated as a realised profit in equity. If the proceeds exceed the purchase price, the excess over the purchase price is transferred to the share premium account.

(k)(ii) Merger reserve

If the Company issues shares at a premium in connection with the acquisition of an equity holding in another entity and the conditions for merger relief under section 612 of the UK Companies Act 2006 are met, which permits the difference between the issue value and nominal value of the shares issued to be transferred to a reserve other than the share premium account, such differences are transferred to the merger reserve. A component of the merger reserve attached to the acquisition of an entity is released to retained earnings on disposal, part disposal or impairment of the interest in that entity.

(l) Subordinated liabilities

Subordinated liabilities are initially recognised at the value of proceeds received net of issue expenses. The total finance costs are charged to the statement of comprehensive income over the relevant term of the instrument using the EIR method. The carrying amount of the debt is increased by the finance cost in respect of the reporting period and reduced by payments made in respect of the debt in the period.

Company accounting policies continued

(m) Pension costs and other post-retirement benefits

The Group operates a number of defined benefit and defined contribution plans, the assets of which are held in separate trustee administered funds. The pension plans are funded by payments from employees and by the Group companies, determined by periodic actuarial calculations.

The sponsoring employer for the defined benefit plan is Standard Life Assurance Limited (SLAL), and therefore the net defined benefit cost of the plan is recognised by SLAL. As a result, the Company treats its participation in the defined benefit plan as a defined contribution plan. Consequently the costs of this plan and the UK defined contribution plan represent the contributions payable for the accounting period.

For the defined contribution plan, the Company pays contributions to separately administered pension insurance plans. The contributions are recognised in staff costs and other employee-related costs when they are due.

(n) Provisions and contingent liabilities

Provisions for restructuring costs and legal claims are recognised when the Company has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole.

Contingent liabilities are disclosed if the future obligation is less than probable but greater than remote or if the obligation is probable but the amount cannot be reasonably estimated.

(o) Dividend distribution

Final dividends on share capital classified as equity instruments are recognised in equity when they have been approved by equity holders. Interim dividends on these shares are recognised in equity in the period in which they are paid.

(p) Employee share-based payments

The Company operates share incentive plans for all employees, share-based long-term incentive plans for senior employees and may award annual performance shares to all eligible employees when the Group's profit targets are met. Further details of the plans are set out in Note 48 of the Group financial statements. For share-based payment employee transactions, services received are measured at fair value.

Fair value of options granted under share incentive plans is determined using a relevant valuation technique, such as the Black Scholes option pricing model. For cash-settled share-based payment transactions, services received are measured at the fair value of the liability using an option pricing model. The fair value of the liability is remeasured at each reporting date and any changes in fair value are recognised in the statement of comprehensive income for the year.

For equity-settled share-based payment transactions, the fair value of services received is measured by reference to the fair value of the equity instruments granted. The fair value of those equity instruments is measured at the grant date, which is the date that the Group and the employees have a shared understanding of the terms and conditions of the award. If that award is subject to an approval process then the grant date is the date when that approval is obtained. Market vesting conditions and non-vesting conditions, such as the requirement of employees to save in the Save-as-you-earn scheme, are included in the calculation of the fair value of the instruments at the date of grant. Vesting conditions which are not market conditions are included in assumptions about the number of instruments that are expected to vest. The charge in respect of the services received is recharged by the Company to the subsidiary which receives the services of the employees.

If the equity instruments granted vest immediately, the employees become unconditionally entitled to those equity instruments. Therefore, the Company immediately recognises an amount due from subsidiaries in respect of the services received in full with a corresponding credit to the equity compensation reserve in equity.

If the equity instruments do not vest until the employee has fulfilled specified vesting conditions, the Group presumes that the services to be rendered by the employee as consideration for those equity instruments will be received in the future, during the period of those vesting conditions (vesting period). Therefore, the Company recognises an amount due from subsidiaries in respect of those services as they are rendered during the vesting period with a corresponding credit to the equity compensation reserve in equity.

Cancellations of awards granted arise where non-vesting conditions attached to the award are not met during the vesting period. Cancellations are accounted for as an acceleration of vesting and the remaining unrecognised expense in respect of the fair value of the award is recognised immediately.

At each period end the Company reassesses the number of equity instruments expected to vest and recognises any difference between the revised and original estimate in the statement of comprehensive income with a corresponding adjustment to the equity compensation reserve.

At the time the equity instruments vest, the amount recognised in the equity compensation reserve in respect of those equity instruments is transferred to retained earnings.

(q) Derecognition and offset of financial assets and liabilities

A financial asset (or a part of a group of similar financial assets) is derecognised where:

· The rights to receive cash flows from the asset have expired

· The Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass through' arrangement

· The Company has transferred its rights to receive cash flows from the asset and has either transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Financial assets and liabilities are offset and the net amount reported on the statement of financial position only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. When financial assets and liabilities are offset, any related interest income and expense is offset in the company statement of comprehensive income.

Notes to the Company financial statements

A. Investment return

	2014	2013 restated¹
	£m	£m
Interest and similar income
Cash and cash equivalents	2	2
Loans to subsidiaries	36	37
Debt securities	10	8
	48	47

Income from subsidiary undertakings
Dividend income	613	629
Distributions from equity instruments	34	34
	647	663
Gains on financial instruments
Subsidiaries at FVTPL	1	1
Associates at FVTPL	1	1
Debt securities	-	1
Derivative financial instruments	-	1
	2	4
Investment return	697	714

B. Administrative expenses

		2014	2013
	Notes	£m	£m
Staff costs and other employee-related costs	C	46	51
Other administrative expenses		19	19
Total administrative expenses		65	70

C. Staff costs and other employee-related costs

		2014	2013
	Notes	£m	£m
The aggregate remuneration payable in respect of employees was:
Wages and salaries		35	41
Social security costs		5	5
Pension costs	D	4	4
Employee share-based payments		2	1
Total staff costs and other employee-related costs		46	51

		2014	2013
The average number of staff during the year was:
Group corporate centre		443	456
Asia and Emerging Markets¹		-	31
Total average number of staff		443	487

¹ Staff who work in the Group's Asia and Emerging Markets business based in the UK.

The staff who manage the affairs of the Company are employed by Standard Life Employee Services Limited (SLESL), a wholly owned subsidiary of the Company. These costs are recharged to the Company and the amounts recharged are set out above.

Information in respect of compensation of key management personnel is provided in Note 49 of the Group financial statements and the audited section of the Directors' remuneration report. Details of the employee share-based payment schemes operated by the Company are given in Note 48 of the Group financial statements.

D. Pension and other post-retirement benefit provisions

The staff who manage the affairs of the Company are members of a defined benefit pension plan and/or a defined contribution pension scheme operated by the Group for its employees in the UK. There is no contractual agreement or policy for charging the net defined benefit cost of the defined benefit plan across the participating UK companies. The sponsoring employer for the defined benefit plan is SLAL, and therefore the net defined benefit cost of the plan is recognised by SLAL. As a result, the Company treats its participation in the defined benefit plan as a defined contribution plan. Contributions to defined contribution plans are expensed when employees have rendered services in exchange for such contributions, generally in the year of contribution. The contributions to the defined contribution and the defined benefit plans recognised as an expense for the year ended 31 December 2014 were £4m (2013: £4m).

Further information on the Group's pension plans and the changes agreed during the year to the employee pension the Group provides, is given in Note 38 of the Group financial statements.

E. Auditors' remuneration

In 2014 auditors' remuneration amounted to £0.3m (2013: £0.3m) in respect of the audit of the Company's individual and Group financial statements. Auditors' remuneration for services other than the statutory audit of the Company is disclosed in Note 9 of the Group financial statements.

F. Tax credit

(a) Current year tax credit

	2014	2013
	£m	£m
Current tax credit	17	19
Total income tax credit	17	19

The standard rate of corporation tax in the UK changed from 23% to 21% with effect from 1 April 2014. Accordingly, the Company's UK profits for this accounting period are subject to tax at a rate of 21.5%.

The Finance Act 2013 further reduced the UK corporation tax rate to 20% with effect from 1 April 2015. This rate has been applied in calculating the UK deferred tax position at 31 December 2014.

(b) Tax relating to components of other comprehensive income

				2014	2013
		Notes		£m	£m
Current tax (charge)/credit on net change of financial assets designated as available-for-sale	R		(6)		4
Tax relating to each component of other comprehensive income that may be reclassified subsequently to profit or loss			(6)		4

	2014	2013
	£m	£m
Profit before tax	536	547
Tax at UK corporation tax rate of 21.5% (2013: 23.25%)	(115)	(127)
Dividends not subject to UK corporation tax	132	146
Total income tax credit	17	19

G. Investments in subsidiaries

		2014	2013 restated¹
	Notes	£m	£m
Investments in subsidiaries measured at cost		5,702	5,271
Investments in subsidiaries measured at FVTPL	J	131	142
Investments in subsidiaries		5,833	5,413

G. Investments in subsidiaries continued

	2014	2013 restated¹
	£m	£m
At 1 January	5,413	5,915
Investment into existing subsidiaries measured at cost	554	97
Disposal of subsidiaries measured at cost	(123)	-
Gains on subsidiaries at FVTPL	1	1
Disposal of subsidiaries at FVTPL	(12)	(600)
At 31 December	5,833	5,413

Details of the Company's principal subsidiaries are given in Note 1 of the Group financial statements. On 19 June 2014 the Company sold 100% of the share capital of Standard Life Wealth Limited (SLW) to Standard Life Investments (Holdings) Limited (SLIH), another wholly owned subsidiary of the Company. The consideration received was equal to 123,200,000 newly issued £1 ordinary shares of SLIH. As the carrying value of SLW on the Company's statement of financial position at the date of disposal was £123m no gain or loss was recognised in the statement of comprehensive income.

Investments in subsidiaries at FVTPL are £131m (2013: £142m) which relates to a 10% (2013:13%) holding in a short term investment fund, Seabury Assets Fund plc, over which the Company is deemed to have control by virtue of 100% holding by Group entities. Seabury Assets Fund plc was incorporated in the Republic of Ireland.

H. Investments in associates and joint ventures

		2014	2013
	Notes	£m	£m
Investments in associates measured at cost		13	13
Investments in associates measured at FVTPL	J	13	12
Investments in joint ventures measures at cost		124	110
Investments in associates and joint ventures		150	135

(a) Investments in associates

The Company's investment in associates measured at cost relates to a 25.3% (2013: 25.3%) interest in Tenet Group Limited, a company incorporated in England. The reporting date for Tenet Group Limited is 30 September as this is its year end date. This is different from the Company's year end date of 31 December. In addition to the above the Company has investments in associates measured at FVTPL of £13m (2013: £12m).

(b) Investments in joint ventures

The Company has a 50% (2013: 50%) interest in Heng An Standard Life Insurance Company Limited, a company incorporated in China. Further details on this joint venture are provided in Note 18 of the Group financial statements.

I. Tax assets and liabilities

	2014	2013
	£m	£m
Deferred tax liabilities	1	1
Total tax liabilities	1	1

The amount of deferred tax liabilities expected to be settled after more than 12 months is £1m (2013: £1m).

There are no tax assets or current tax liabilities.

The Company has surrendered the benefit of its tax losses to underlying subsidiaries for a consideration of £11m (2013: £23m) which will be receivable within one year. The Company has provided for deferred tax amounting to £1m (2013: £1m) in respect of unrealised gains on equity securities.

Recognised deferred tax

	2014	2013
	£m	£m
Deferred tax liabilities comprise:
Unrealised gains on investments	(1)	(1)
Net deferred tax liabilities	(1)	(1)

Movements in deferred tax liabilities comprise:
At 1 January	(1)	(1)
Amounts credited to net profit	-	-
At 31 December	(1)	(1)

J. Financial investments

		Designated as at fair value through profit or loss	Held for trading	Available-for-sale	Loans and receivables	Total
2014	Notes	£m	£m	£m	£m	£m
Investments in subsidiaries at FVTPL		131	-	-	-	131
Investments in associates at FVTPL		13	-	-	-	13
Loans to subsidiaries		-	-	-	634	634
Derivative financial assets	K	-	24	-	-	24
Debt securities		135	-	357	-	492
Receivables and other financial assets	L	-	-	-	40	40
Cash and cash equivalents	N	-	-	-	34	34
Total		279	24	357	708	1,368

		Designated as at fair value through profit or loss	Held for trading	Available-for-sale	Loans and receivables	Total
2013 (restated¹)	Notes	£m	£m	£m	£m	£m
Investments in subsidiaries at FVTPL		142	-	-	-	142
Investments in associates at FVTPL		12	-	-	-	12
Loans to subsidiaries		-	-	-	644	644
Derivative financial assets	K	-	54	-	-	54
Debt securities		391	-	333	-	724
Receivables and other financial assets	L	-	-	-	55	55
Cash and cash equivalents	N	-	-	-	40	40
Total		545	54	333	739	1,671

The amount of debt securities expected to be recovered or settled after more than 12 months is £357m (2013: £333m). Due to the nature of investments in associates at FVTPL, there is no fixed term associated with these securities.

The amount of loans and receivables expected to be recovered or settled after more than 12 months is £634m (2013: £644m).

K. Derivative financial instruments

The Company uses derivative financial instruments in order to reduce the risk from potential movements in foreign exchange rates, equity indices and interest rates, to reduce credit risk or to achieve efficient portfolio management. These instruments are designated as held for trading in the Company's financial statements.

Included within derivative financial instruments held for trading are certain forward foreign exchange contracts which for the Group hedge part of the currency translation risk of net investments in foreign operations and a portion of the expected cash proceeds for the sale of the Canadian business on 30 January 2015. For details refer to Note 24 of the Group financial statements.

K. Derivative financial instruments continued

	2014			2013
	Contract amount	Fair value assets	Fair value liabilities	Contract amount	Fair value assets	Fair value liabilities
	£m	£m	£m	£m	£m	£m
Foreign exchange forwards	8,511	24	25	1,706	54	53

The derivative liabilities of £25m (2013: £53m) are expected to be settled within 12 months. The derivative assets of £24m (2013: £54m) are expected to be recovered within 12 months.

The maturity profile of the contractual undiscounted cash flows in relation to derivative financial instruments is as follows:

	Within 1 year	2-5 years	Total
2014	£m	£m	£m
Cash inflows
Derivative financial assets	4,262	-	4,262
Derivative financial liabilities	4,245	4	4,249
Total	8,507	4	8,511

Cash outflows
Derivative financial assets	4,237	-	4,237
Derivative financial liabilities	4,270	4	4,274
Total	8,507	4	8,511

Net derivative financial instruments cash flows	-	-	-
	Within 1 year	2-5 years	Total
2013	£m	£m	£m
Cash inflows
Derivative financial assets	880	5	885
Derivative financial liabilities	821	-	821
Total	1,701	5	1,706

Cash outflows
Derivative financial assets	829	5	834
Derivative financial liabilities	872	-	872
Total	1,701	5	1,706
Net derivative financial instruments cash flows	-	-	-

L. Receivables and other financial assets

	2014	2013
	£m	£m
Due from related parties	39	54
Other	1	1
Total receivables and other financial assets	40	55

The carrying amounts disclosed above reasonably approximate the fair values at the year end.

Receivables and other financial assets are expected to be recovered within 12 months.

M. Other assets

Other assets comprise amounts due from related parties in respect of Group relief, which are expected to be received within 12 months.

N. Cash and cash equivalents

	2014	2013 restated¹
	£m	£m
Demand and term deposits with original maturity of less than three months	34	40
Total cash and cash equivalents	34	40

Demand and term deposits with original maturity of less than three months are subject to variable interest rates.

O. Share capital and share premium

Details of the Company's share capital and share premium are given in Note 29 of the Group financial statements.

P. Shares held by trusts

Shares held by trusts represents the Company's funding of the Employee Share Trust (EST) in relation to the acquisition of shares of the Company for delivery to employees under various employee share schemes.

Q. Retained earnings

		2014	2013
	Notes	£m	£m
At 1 January		601	650
Profit for the year attributable to equity holders		553	566
Dividends and appropriations		(386)	(636)
Transfer from equity compensation reserve for vested employee share-based payments	R	27	33
Shares distributed by employee trusts		(10)	(12)
At 31 December		785	601

Details of the dividends paid during the year by the Company are provided in Note 15 of the Group financial statements. Note 15 also includes information regarding the final dividend proposed by the Directors for the year ended 31 December 2014.

In 2014, the total dividends and appropriations paid were £386m (2013: £656m). Of this, £386m (2013: £636m) was treated as a deduction from retained earnings and £nil (2013: £20m) was treated as a deduction from the special reserve.

R. Reconciliation of movements in other reserves

	Merger reserve	Equity compensation reserve	Special reserve	Available-for-sale financial assets	Total
2014	£m	£m	£m	£m	£m
At 1 January	3,108	48	241	(14)	3,383
Reserves credit for employee share-based payment schemes	-	27	-	-	27
Vested employee share-based payments	-	(27)	-	-	(27)
Fair value gains on available-for-sale financial assets	-	-	-	28	28
Tax effect relating to items that may be reclassified subsequently to profit or loss	-	-	-	(6)	(6)
At 31 December	3,108	48	241	8	3,405
2013
At 1 January	3,108	49	261	-	3,418
Reserves credit for employee share-based payment schemes	-	32	-	-	32
Vested employee share-based payments	-	(33)	-	-	(33)
Dividends and appropriations	-	-	(20)	-	(20)
Fair value losses on available-for-sale financial assets	-	-	-	(18)	(18)
Tax effect relating to items that may be reclassified subsequently to profit or loss	-	-	-	4	4
At 31 December	3,108	48	241	(14)	3,383

Further information on the merger reserve and special reserve is given in Note 32 of the Group financial statements.

S. Financial liabilities

		Held for trading	Financial liabilities measured at amortised cost	Total
2014	Notes	£m	£m	£m
Subordinated liabilities	T	-	1,612	1,612
Derivative financial liabilities	K	25	-	25
Other financial liabilities	U	-	38	38
Total		25	1,650	1,675

		Held for trading	Financial liabilities measured at amortised cost	Total
2013	Notes	£m	£m	£m
Subordinated liabilities	T	-	1,632	1,632
Derivative financial liabilities		53	-	53
Other financial liabilities	U	-	80	80
Total		53	1,712	1,765

T. Subordinated liabilities

	2014		2013
	Principal	Carrying value	Principal	Carrying value
	amount	£m	amount	£m
Subordinated notes:
5.5% Sterling fixed/floating rate	£500,000,000	499	£500,000,000	499

Subordinated guaranteed bonds:
6.75% Sterling fixed rate perpetual	£500,000,000	502	£500,000,000	502

Mutual Assurance Capital Securities:
6.546% Sterling fixed rate perpetual	£300,000,000	317	£300,000,000	316
5.314% Euro fixed/floating rate perpetual	€360,000,000	294	€360,000,000	315
Subordinated liabilities		1,612		1,632

Subordinated liabilities are considered current if the contractual repricing or maturity dates are within one year. On 6 January 2015 the Company redeemed in full the 5.314% Euro fixed/floating rate perpetual Mutual Assurance Capital Securities at their outstanding principal amount of €360,000,000. Accrued interest of £15m relating to these securities was also settled. The principal amount of all other subordinated liabilities is expected to be settled after more than 12 months. The accrued interest on the remaining subordinated liabilities, which are not classified as held for sale, of £37m (2013: £56m) is expected to be settled within 12 months.

Further information on the terms and conditions of the subordinated liabilities is given in Note 37 of the Group financial statements.

U. Other financial liabilities

	2014	2013
	£m	£m
Collateral accepted in respect of derivative contracts	3	47
Loan notes arising on acquisition of subsidiary	6	6
Other	29	27
Total other financial liabilities	38	80

The amount of other financial liabilities expected to be settled after more than 12 months is £6m (2013: £6m).

V. Risk management

(a) Overview

An overview of the Group risk management framework and policies is provided in Note 42 of the Group financial statements.

The Company is exposed to market, credit and liquidity risks.

(b) Market risk

The Group defines market risk as the risk that arises from the Group's exposure to market movements which could result in the value of income, or the value of financial assets and liabilities, or the cash flows relating to these, fluctuating by different amounts.

The most significant element of market risk for the Company arises from its exposure to fluctuations in interest rates and equity markets. The Company is exposed to fluctuations in the fair value of future cash flows of financial instruments caused by changes in market interest rates. Financial assets and liabilities which are subject to the most significant exposure to interest rate risk include corporate bonds, money market instruments, derivative financial instruments and subordinated liabilities. The Company is also exposed to fluctuations in the equity securities markets, and as a result, changes in the value of its holdings and the return on those holdings.

Market risk is managed through the Group market risk policy. The Company is required to manage risk in accordance with the policy and to take mitigating action as appropriate to operate within defined risk appetites. The Company ensures that risks remain within the approved market risk appetite through the use of a number of specific controls and techniques, including defined lists of permitted securities and/or application of investment constraints and the active use of derivatives to improve the matching characteristics of assets and liabilities.

The Company's investments and liabilities are generally held in its functional currency. However, for strategic and capital reasons the Company may hold investments and liabilities in other currencies. In these cases, derivative financial instruments may be employed to manage currency exposure so that the Company has no remaining significant exposure to foreign exchange fluctuations.

Derivative instruments may also be utilised to reduce risk arising from exposure to fluctuations in interest rates and equity indices. Transactions in derivatives are undertaken on a regulated market or are with an approved counterparty. In employing derivatives, the Company must always have sufficient cash and cash equivalents or underlying assets to cover any potential obligation or exercise right following reasonably foreseeable adverse variations.

(b)(i) Market risk concentrations

The Group manages market risk concentrations by ensuring that exposure is divided among a number of instruments. For each type of asset within a portfolio, responsibility for setting adequately diversified benchmarks and for limiting the structure of market risk exposure is set by the Company.

The following table provides information regarding the market risk exposure of the Company at 31 December 2014 and 31 December 2013, showing diversification by asset type and geographic region.

The geographic classification for loans and cash and cash equivalents is determined by the currency of the underlying financial instruments.

	Geography
	UK		Europe		Other		Total
	2014	2013 restated¹	2014	2013	2014	2013 restated¹	2014	2013 restated¹
	£m	£m	£m	£m	£m	£m	£m	£m
Investments in subsidiaries at FVTPL	131	142	-	-	-	-	131	142
Investments in associates at FVTPL	-	-	-	-	13	12	13	12
Loans to subsidiaries	317	316	294	315	23	13	634	644
Derivative financial assets	24	54	-	-	-	-	24	54
Debt securities	277	519	181	150	34	55	492	724
Cash and cash equivalents	30	23	4	17	-	-	34	40
	779	1,054	479	482	70	80	1,328	1,616
Receivables and other financial assets							40	55
Financial investments							1,368	1,671

The market risk exposure to foreign currency assets is either matched by liabilities held in the same currency or managed using derivative financial instruments.

V. Risk management continued

(b) Market risk continued

(b)(ii) Sensitivity analysis - market risk

The table below illustrates the sensitivity of profit after tax and equity to reasonably possible variations in the key assumptions made in relation to the Company's most significant market risk exposures. The sensitivity analysis has been performed by calculating the sensitivity of profit after tax and equity to changes in equity security prices and to changes in interest rates as at the reporting date, assuming other assumptions remain unchanged. When illustrating the impact of equity risk, the expectations of corporate earnings remain unchanged. Correlation between the different risks and/or other factors may mean that experience would differ from that expected if more than one risk event occurred simultaneously.

	Equity								Interest
	+20%		-20%		+10%		-10%		+1%		-1%
	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
Impact on profit after tax	3	2	(3)	(2)	1	1	(1)	(1)	1	1	1	(1)

Equity sensitivity to market risk

The company classifies certain debt securities which back subordinated debt liabilities as AFS. These debt securities are measured at fair value. Interest is calculated using the effective interest method and recognised in the income statement. Other changes in fair value and the related tax are recognised in other comprehensive income. As a result, the sensitivity of the Company's equity to variations in interest rate risk exposures differs from the sensitivity of the Company's profit after tax to variations in interest rate risk exposures.

The Company's equity sensitivity to a 1% increase in interest rates is (£17m) (2013: (£17m)) and to a 1% decrease in interest rates is £17m (2013: £17m).

The sensitivity of the Company's total equity to variations in equity markets in respect of each of the scenarios shown in the preceding tables is the same as the sensitivity of the Company's profit after tax.

Limitations

The sensitivity analysis is non-linear and larger or smaller impacts should not be derived from these results. The sensitivity analysis represents the impact on profit at the year end that the changes in assumptions can have. The sensitivity will vary with time, both due to changes in market conditions and changes in the actual asset mix, and this mix is being actively managed. The results of the sensitivity analysis may also have been different from those illustrated had the tests been applied at a date other than the reporting date.

The Group defines credit risk as the risk of exposure to loss if a counterparty fails to perform its financial obligations, including failure to perform these obligations in a timely manner. It also includes the risk of a reduction in the value of assets due to widening of mortgage, bond and swap spreads.

Credit risk is managed through the Group credit risk policy. The Company is required to manage risk in accordance with the Group policy and to take mitigating action as appropriate to operate within defined risk appetites.

In managing credit risk, maximum counterparty exposure limits are used for financial instruments where the Company has significant credit risk.

For cash and cash equivalents, the Company maintains exposures within limits that are set with reference to internal credit assessments. For derivative financial instruments, maximum counterparty exposure limits, net of collateral, are set with reference to internal credit assessments. The forms of collateral that may be accepted are also specified and minimum transfer amounts in respect of collateral transfers are documented. No credit limits are set in respect of loans to subsidiaries, where the main exposure is to SLAL, a wholly owned subsidiary undertaking, with long-term ratings of A+ from Standard & Poor's and A1 from Moody's. Any loans to subsidiaries require approval from the Group Enterprise Risk Management Committee prior to being transacted.

(c)(i) Credit exposure of financial assets

The following table provides an analysis of the quality of financial assets that are neither past due nor impaired at the reporting date and are exposed to credit risk. For those financial assets with credit ratings assigned by external rating agencies, classification is within the range of AAA to BBB. AAA is the highest possible rating and rated financial assets that fall outside the range of AAA to BBB have been classified as below BBB. For those financial assets that do not have credit ratings assigned by external rating agencies but where the Company has assigned internal ratings for use in managing and monitoring credit risk, the assets have been classified in the analysis that follows as 'internally rated'. If a financial asset is neither rated by an external agency nor 'internally rated', it is classified as 'not rated'. The total amounts presented represent the Company's maximum exposure to credit risk at the reporting date without taking into account any collateral held. The analysis also provides information on the concentration of credit risk.

The total amount in the table below represents the Company's credit exposure to financial investments at the year end without taking into account any collateral held.

	Investments in subsidiaries at FVTPL		Investments in associates at FVTPL		Loans to subsidiaries		Derivative financial assets		Debt Securities		Receivables and other financial assets		Cash and cash equivalents		Total
	2014	2013 restated¹	2014	2013 restated¹	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013 restated¹	2014	2013 restated¹
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
AAA	-	-	-	-	-	-	-	-	36	33	-	-	-	-	36	33
AA	-	-	-	-	-	-	-	-	121	122	-	-	7	2	128	124
A	-	-	-	-	-	-	-	-	235	478	-	-	25	36	260	514
BBB	-	-	-	-	-	-	-	-	99	90	-	-	2	2	101	92
Not rated	131	142	13	12	634	644	24	54	1	1	40	55	-	-	843	908
Total	131	142	13	12	634	644	24	54	492	724	40	55	34	40	1,368	1,671

Investments in subsidiaries at FVTPL includes £131m (2013: £142m) relating to a holding in a money market fund managed by a subsidiary company. This fund was previously internally rated as AAA, as it followed the guidelines prescribed by external rating agencies for money market funds seeking to achieve a AAA rating. The fund ceased to follow these guidelines in 2012 and, as a result, it is no longer considered appropriate to designate a AAA rating for this fund. However, the fund continues to invest in a range of counterparties that are externally rated, and uses concentration limits and maturity limits in managing its exposures.

Assets are deemed to be past due when a counterparty has failed to make a payment when contractually due. An allowance account is not used by the Company to record separately the impairment of assets by credit losses. Instead, the carrying amount of an asset subject to any impairment charge is directly reduced by the amount of the impairment. At 31 December 2014 and 31 December 2013, all financial assets were neither past due nor impaired.

(c)(ii) Collateral accepted and pledged in respect of financial instruments

Collateral in respect of derivative financial instruments is accepted from and provided to certain market counterparties to mitigate counterparty risk in the event of default. The use of collateral in respect of derivative financial instruments is governed by formal bilateral agreements between the parties. The amount of collateral required by either party is calculated daily based on the value of derivative transactions in accordance with these agreements and collateral is moved on a daily basis to ensure there is full collateralisation. Any collateral moved under the terms of these agreements is transferred outright. With regard to either collateral pledged or accepted the Company may request the return of, or be required to return, collateral to the extent it differs from that required under the daily margin calculations.

Where there is an event of default under the terms of the agreements, any collateral balances will be included in the close-out calculation of net counterparty exposure. At 31 December 2014, the Company had pledged £9m (2013: £nil) of debt securities as collateral for derivative financial liabilities and accepted £3m (2013: £47m) of cash as collateral for derivative financial assets.

None of the collateral accepted has been sold or repledged at the year end.

(c)(iii) Offsetting financial assets and liabilities

The Company offsets loans to/from subsidiaries where there is both an unconditional right of set off and an intention to settle on a net basis. The Company does not offset any other financial assets and liabilities in the statement of financial position, as there are no unconditional rights to set off.

The Company's over-the-counter (OTC) derivatives are all subject to an International Swaps and Derivative Association (ISDA) master agreement, which provide a right of set off that is enforceable only in the event of default, insolvency, or bankruptcy. An ISDA master agreement is considered a master netting agreement. The Company does not hold any other financial instruments which are subject to master netting agreements or similar arrangements.

V. Risk management continued

(c)(iii) Offsetting financial assets and liabilities continued

				Related amounts not offset in the Company statement of financial position
As at 31 December 2014	Gross amounts of financial instruments recognised	Gross amounts of financial instruments offset in the Company statement of financial position	Net amounts of financial instruments as presented in the Company statement of financial position	Financial Instruments	Financial collateral pledged/ (received)	Net position
As at 31 December 2014	£m	£m	£m	£m	£m	£m
Financial assets
Derivatives¹	24	-	24	-	(10)	14
Total financial assets	24	-	24	-	(10)	14
Financial liabilities
Derivatives¹	(25)	-	(25)	-	16	(9)
Total financial liabilities	(25)	-	(25)	-	16	(9)

¹ Only derivatives subject to master netting agreements have been included above.

² Only loans to/from subsidiaries that are offset are included above.

				Related amounts not offset in the Company statement of financial position
As at 31 December 2013	Gross amounts of financial instruments recognised	Gross amounts of financial instruments offset in the Company statement of financial position	Net amounts of financial instruments as presented in the Company statement of financial position	Financial Instruments	Financial collateral pledged/ (received)	Net position
As at 31 December 2013	£m	£m	£m	£m	£m	£m
Financial assets
Derivatives¹	54	-	54	-	(47)	7
Loans to subsidiaries²	72	(72)	-	-	-	-
Total financial assets	126	(72)	54	-	(47)	7
Financial liabilities
Derivatives¹	(53)	-	(53)	-	-	(53)
Loans from subsidiaries²	(72)	72	-	-	-	-
Total financial liabilities	(125)	72	(53)	-	-	(53)

¹ Only derivatives subject to master netting agreements have been included above.

² Only loans to/from subsidiaries that are offset are included above.

(d) Liquidity risk

The Group defines liquidity risk as the risk that the business units are unable to realise investments and other assets in order to settle their financial obligations when they fall due, or can do so only at excessive cost.

Liquidity risk is managed through the Group liquidity and capital management policy. The Company is required to manage risk in accordance with the Group policy and to take mitigating action as appropriate to operate within defined risk appetites.

Liquidity risk is managed by the Company in consultation with the central Group capital management function, which incorporates treasury management. Liquidity risk is primarily managed by placing limits on the value of financial assets held which are neither quoted nor regularly traded on a recognised exchange and by maintaining a portfolio of committed bank facilities. The Company maintains a £500m syndicated revolving credit facility which is currently undrawn and was renewed on 5 March 2013 with maturity due in March 2018. The Company is also responsible for the definition and management of the contingency funding plan which operates on a continuous basis and is fully documented.

(d)(i) Maturity analysis

The cash flows payable by the Company under its financial liabilities are analysed in the table that follows by remaining contractual maturities at the reporting date. The amounts shown are the contractual undiscounted cash flows.

	Within 1 year	2-5 years	6-10 years	11-15 years	16-20 years	Greater than 20 years	Total
2014	£m	£m	£m	£m	£m	£m	£m
Subordinated liabilities	390	324	375	341	206	449	2,085
Other financial liabilities	40	-	-	-	-	-	40
Total	430	324	375	341	206	449	2,125

2013
Subordinated liabilities	97	363	427	408	278	757	2,330
Other financial liabilities	81	-	-	-	-	-	81
Total	178	363	427	408	278	757	2,411

Refer to Note Z for events after the reporting date regarding the redemption of the Mutual Assurance Capital Securities.

The principal amounts of financial liabilities where the counterparty has no right to repayment are excluded from the table along with interest payments on such instruments after 20 years.

The Company ensures that it can meet its financial obligations as they fall due by maintaining suitable levels of liquid assets. The obligations arising from subordinated liabilities are offset by receipts arising from loans to subsidiaries and investments in subsidiaries. Refer to Note K - Derivative financial instruments, for the maturity profile of undiscounted cash flows of derivative financial instruments.

W. Contingent liabilities, indemnities and guarantees

(a) Legal proceedings and regulations

The Company, like other financial organisations, is subject to legal proceedings and complaints in the normal course of its business. While it is not practicable to forecast or determine the final results of all pending or threatened legal proceedings, the Directors do not believe that such proceedings (including litigation) will have a material effect on the results and financial position of the Company.

(b) Issued share capital

The Scheme of Demutualisation of The Standard Life Assurance Company (SLAC) sets a 10-year time limit, ending in 2016, for those eligible members of SLAC who were not allocated shares at the date of demutualisation to claim their entitlement. As future issues of these shares are dependent upon the actions of eligible members, it is not practical to estimate the financial effect of this potential obligation.

During 2009, the Company provided an indemnity to the Standard Life Unclaimed Asset Trust (UAT) to cover any expenses, damages, losses and costs that cannot be recovered from the assets held within the UAT. The indemnity is for a maximum of £30m and gave rise to a liability of £nil at 31 December 2014 (2013: £nil).

Under the trust deed in respect of the Group's UK defined benefit pension plan, Standard Life Employee Services Limited (SLESL), the principal employer, must pay contributions to the pension plan as the trustees' actuary may certify necessary. The Company has guaranteed the obligations of SLESL to the UK defined benefit pension plan for a period of 15 years from 10 July 2006, which gave rise to a liability of £nil at 31 December 2014 (2013: £nil).

X. Related party transactions

(a) Transactions with and balances from/(to) related parties

In the normal course of business, the Company enters into transactions with related parties. The year end balances arising from such transactions are as follows:

	2014	2013 restated¹
	£m	£m
Due from related parties:
Subsidiaries	49	77
Loans to subsidiaries	634	644
	683	721

Transactions with related parties carried out by the Company during the year were as follows:

	2014	2013
	£m	£m
Revenues from related parties:
Subsidiaries	684	701
Associates	1	1
	685	702
Expenses to related parties:
Subsidiaries	64	66
	64	66

Where financial instruments arising from transactions with related parties are offset in the statement of financial position, the net position is presented in the tables above.

(b) Compensation of key management personnel

The Directors and key management personnel of the Company are considered to be the same as for the Group. Information on both Company and Group compensation paid to Directors and key management personnel can be found in Note 49 of the Group financial statements. Information on transactions with/from and balances from/to key management personnel and their close family members can also be found in Note 49 of the Group financial statements.

Y. Fair value of assets and liabilities

(a) Determination of fair value hierarchy

To provide further information on the approach used to determine and measure the fair value of certain assets and liabilities, the following fair value hierarchy categorisation has been used:

Level 1 Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities. An active market exists where transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 Fair values measured using inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 Fair values measured using inputs that are not based on observable market data (unobservable inputs).

(b) Financial investments and financial liabilities

An analysis of the Company's financial investments and financial liabilities in accordance with the categories of financial instrument set out in IAS 39 Financial Instruments: Recognition and Measurement is presented in Notes J and S and includes those financial assets and liabilities held at fair value.

Information on the methods and assumptions used to determine fair values for each major category of instrument measured at fair value is given in the following note:

Derivative financial assets - 2014: £24m (2013: £54m) and derivative financial liabilities - 2014: £25m (2013: £53m)

The Company's derivatives are over-the-counter investments which are fair valued using valuation techniques based on observable market data and are therefore treated as level 2 investments within the fair value hierarchy.

Non-performance risk arising from the credit risk of each counterparty has been considered on a net exposure basis in line with the Group's risk management policies. At 31 December 2014 the residual credit risk is considered immaterial and no credit risk adjustment has been made.

Investments in subsidiaries at FVTPL - 2014: £131m (2013: £142m)
Investments in subsidiaries at FVTPL primarily comprises an investment in a short term investment fund which is valued daily at net asset value (NAV) adjusted for accrued interest. Although the price is not quoted in an active market the valuation is based on observable market data and as a result has been classified as level 2 in the fair value hierarchy.

Investments in associates at FVTPL - 2014: £13m (2013: £12m)
Investments in associates at FVTPL listed on a recognised exchange are valued using prices sourced from the primary exchange on which they are listed. These instruments are generally considered to be quoted in an active market and are therefore treated as level 1 investments within the fair value hierarchy.

Debt securities - 2014: £492m (2013: £724m)
For debt securities, the Company has determined a hierarchy of pricing sources. The hierarchy consists of reputable external pricing providers who generally use observable market data. If prices are not available from these providers or are considered to be stale, the Company has established procedures to arrive at an internal assessment of the fair value. These procedures are based largely on inputs that are not based on observable market data. A further analysis by category of debt security is as follows:

· Government, including provincial and municipal, and supranational institution bonds
These instruments are valued using prices received from external pricing providers who generally base the price on quotes received from a number of market participants. They are treated as level 1 or level 2 instruments within the fair value hierarchy depending upon the nature of the underlying pricing information used for valuation purposes.

· Corporate bonds (listed or quoted in an established over the counter market including asset backed securities)
These instruments are generally valued using prices received from external pricing providers who generally consolidate quotes received from a panel of banks into a composite price. As the market becomes less active the quotes provided by some banks may be based on modelled prices rather than on actual transactions. These sources are based largely on observable market data, and therefore these instruments are treated as level 2 instruments within the fair value hierarchy. When prices received from external pricing providers are based on a single broker indicative quote the instruments are treated as level 3 instruments.

For instruments for which prices are either not available from external pricing providers or the prices provided are considered to be stale, the Company performs its own assessment of the fair value of these instruments. This assessment is largely based on inputs that are not based on observable market data, principally single broker indicative quotes, and accordingly these instruments are treated as level 3 instruments within the fair value hierarchy.

· Other corporate bonds including unquoted bonds, commercial paper and certificates of deposit
These instruments are valued using models. For unquoted bonds, the model uses inputs from comparable bonds and includes credit spreads which are obtained from brokers or estimated internally. Commercial paper and certificates of deposit are valued using standard valuation formulas. The classification of these instruments within the fair value hierarchy will be either level 2 or 3 depending upon the nature of the underlying pricing information used for valuation purposes.

(c)(i) Fair value hierarchy for financial instruments measured at fair value in the statement of financial position

The following table sets out an analysis of financial assets and liabilities measured at fair value by level of the fair value hierarchy.

	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
	2014	2013 restated¹	2014	2013 restated¹	2014	2013	2014	2013 restated¹
Assets	£m	£m	£m	£m	£m	£m	£m	£m
Investment in subsidiaries at FVTPL	-	-	131	142	-	-	131	142
Investment in associates at FVTPL	13	12	-	-	-	-	13	12
Derivative financial assets	-	-	24	54	-	-	24	54
Debt securities	78	71	413	652	1	1	492	724
Total	91	83	568	848	1	1	660	932

Liabilities
Derivative financial liabilities	-	-	25	53	-	-	25	53
Total	-	-	25	53	-	-	25	53

There were no significant transfers between level 1 and level 2 in the year.

Y. Fair value of assets and liabilities continued

(c)(ii) Reconciliation of movements in level 3 instruments

During the year, there were no disposals (2013: £4m) of level 3 equity securities.

(c)(iii) Sensitivity of level 3 financial instruments measured at fair value to changes in key assumptions

There is no significant sensitivity of level 3 financial instruments measured at fair value in relation to changes in key assumptions.

(d) Fair value of financial assets and liabilities measured at amortised cost

The table below presents estimated fair values of financial assets and liabilities whose carrying value does not approximate fair value. Fair values of financial assets and financial liabilities are based on observable market inputs where available, or are estimated using other valuation techniques.

		2014	2013	2014	2013
		Carrying value	Carrying value	Fair value	Fair value
	Notes	£m	£m	£m	£m
Assets
Loans to subsidiaries	J	634	644	666	687
Liabilities
Subordinated notes	T	499	499	561	557
Subordinated guaranteed bonds	T	502	502	580	571
Mutual Assurance Capital Securities	T	611	631	643	674

The estimated fair values of loans to subsidiaries are determined with reference to quoted market prices determined using observable market inputs. The fair values of subordinated liabilities are based on the quoted market offer price. The Company does not consider its loans to subsidiaries to be impaired.

The carrying value of all other financial assets and liabilities measured at amortised cost approximates their fair value.

The table below presents the instruments as detailed above measured at fair value by level of the fair value hierarchy.

	Level 1		Level 2		Level 3		Total
	2014	2013	2014	2013	2014	2013	2014	2013
	£m	£m	£m	£m	£m	£m	£m	£m
Assets
Loans to subsidiaries	-	-	643	674	23	13	666	687
Liabilities
Subordinated notes	-	-	561	557	-	-	561	557
Subordinated guaranteed bonds	-	-	580	571	-	-	580	571
Mutual Assurance Capital Securities	-	-	643	674	-	-	643	674

Z. Events after the reporting date

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 sale of the Group's Canadian long-term savings and retirement, individual and group insurance business (Standard Life Financial Inc.) and Canadian investment management business (Standard Life Investments Inc.) completed on 30 January 2015 for a fixed consideration of CA$4bn (£2.1bn). A further £0.1bn was received from the settlement of related hedging derivative contracts.

Following completion of the sale, the Company received a dividend of £2.2bn from its subsidiary Standard Life Oversea Holdings Limited.

The Company proposes to return to shareholders 73 pence per Ordinary Share (approximately £1.75bn). This will be through an issue of B Shares and/or C Shares which is intended to enable the majority of shareholders to receive their cash proceeds as capital, income or a combination of the two. In conjunction with the return of value, the Company will undertake a share consolidation.

On 6 January 2015 the Company redeemed in full the Euro denominated 5.314% fixed/floating rate perpetual Mutual Assurance Capital Securities at their outstanding principal amount of €360,000,000.

Supplementary information

1. Group assets under administration and net flows

Group assets under administration (AUA) represent the IFRS gross assets of the Group adjusted to include third party AUA, which are not included on the consolidated statement of financial position. In addition, certain assets are excluded, for example deferred acquisition costs, intangibles and reinsurance assets.

Standard Life Investments third party assets includes Ignis assets acquired on 1 July 2014 (£60.5bn) and is reflected within market and other movements.

Group assets under administration (summary)

12 months ended 31 December 2014

		Opening AUA at 1 Jan 2014	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUA at 31 Dec 2014
		£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	Fee business:
	Standard Life Investments third party (excl. strategic partner life business)²	89.8	23.8	(22.1)	1.7	26.0	117.5
	Standard Life Investments third party strategic partner life business	-	-	(1.6)	(1.6)	45.4	43.8
	Standard Life Investments total third party	89.8	23.8	(23.7)	0.1	71.4	161.3
	UK retail new²	33.8	5.9	(3.0)	2.9	0.6	37.3
	UK retail old	33.5	0.6	(2.8)	(2.2)	2.2	33.5
	Corporate	29.2	4.0	(1.8)	2.2	0.6	32.0
	UK retail and corporate	96.5	10.5	(7.6)	2.9	3.4	102.8
	Conventional with profits	2.9	0.1	(1.1)	(1.0)	0.2	2.1
	UK³	99.4	10.6	(8.7)	1.9	3.6	104.9
	Europe^2,3	14.9	2.2	(1.1)	1.1	1.2	17.2
	Asia and Emerging Markets (wholly owned)	0.3	0.1	-	0.1	-	0.4
	Consolidation/eliminations^2,3,4	(13.7)	(3.4)	1.9	(1.5)	-	(15.2)
	Total fee business	190.7	33.3	(31.6)	1.7	76.2	268.6
	Spread/risk business:
	UK	14.6	0.3	(1.2)	(0.9)	1.8	15.5
	Europe	0.5	-	-	-	0.1	0.6
	Total spread/risk business	15.1	0.3	(1.2)	(0.9)	1.9	16.1
	Other (incl. joint ventures)	8.9	0.4	(0.2)	0.2	2.8	11.9
	Group AUA - continuing operations¹	214.7	34.0	(33.0)	1.0	80.9	296.6
Discontinued operations AUA¹		29.5	4.5	(4.1)	0.4	1.9	31.8
Group assets under administration		244.2	38.5	(37.1)	1.4	82.8	328.4

Group assets under administration - total

12 months ended 31 December 2014

		Opening AUA at 1 Jan 2014	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUA at 31 Dec 2014
		£bn	£bn	£bn	£bn	£bn	£bn
Group AUA - continuing operations¹		214.7	34.0	(33.0)	1.0	80.9	296.6
Discontinued operations AUA¹:
Canada fee	F	17.3	2.9	(2.4)	0.5	1.4	19.2
Canada spread/risk	S/R	8.4	1.0	(1.2)	(0.2)	0.5	8.7
SLI Canada - third party	F	12.6	2.4	(1.9)	0.5	0.4	13.5
Canada other		1.7	-	-	-	-	1.7
Consolidation/eliminations	F	(10.5)	(1.8)	1.4	(0.4)	(0.4)	(11.3)
Total Canada		29.5	4.5	(4.1)	0.4	1.9	31.8
Group assets under administration		244.2	38.5	(37.1)	1.4	82.8	328.4

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

² From 1 January 2014, Standard Life Wealth is reported as part of Standard Life Investments, previously it was reported in UK and Europe. Comparatives have been restated.

³ Institutional pensions assets previously included in both life and pensions AUA and investment operations have now been excluded from UK and Europe and are only included in Standard Life Investments third party. Eliminations have been adjusted and there is a nil impact on Group AUA. Comparatives have been restated.

⁴ In order to be consistent with the presentation of new business information, certain products are included in both life and pensions AUA and investment operations. Therefore, at a Group level an elimination adjustment is required to remove any duplication, in addition to other necessary consolidation adjustments.

1. Group assets under administration and net flows continued

Group assets under administration (summary)

12 months ended 31 December 2013

		Opening AUA at 1 Jan 2013	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUA at 31 Dec 2013
		£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	Fee business:
	Standard Life Investments third party (excl. strategic partner life business)²	72.6	20.6	(11.0)	9.6	7.6	89.8
	Standard Life Investments third party strategic partner life business	-	-	-	-	-	-
	Standard Life Investments total third party	72.6	20.6	(11.0)	9.6	7.6	89.8
	UK retail new²	27.6	5.5	(2.7)	2.8	3.4	33.8
	UK retail old	31.7	0.6	(3.2)	(2.6)	4.4	33.5
	Corporate	24.5	4.3	(2.3)	2.0	2.7	29.2
	UK retail and corporate	83.8	10.4	(8.2)	2.2	10.5	96.5
	Conventional with profits	4.1	0.1	(1.6)	(1.5)	0.3	2.9
	UK³	87.9	10.5	(9.8)	0.7	10.8	99.4
	Europe^2,3	13.0	2.2	(1.1)	1.1	0.8	14.9
	Asia and Emerging Markets (wholly owned)	0.2	0.1	(0.1)	-	0.1	0.3
	Consolidation/eliminations^2,3,4	(10.9)	(3.3)	1.2	(2.1)	(0.7)	(13.7)
	Total fee business	162.8	30.1	(20.8)	9.3	18.6	190.7
	Spread/risk business:
	UK	15.3	0.6	(1.3)	(0.7)	-	14.6
	Europe	0.5	-	-	-	-	0.5
	Total spread/risk business	15.8	0.6	(1.3)	(0.7)	-	15.1
	Other (incl. joint ventures)	9.7	0.4	(0.2)	0.2	(1.0)	8.9
	Group AUA - continuing operations¹	188.3	31.1	(22.3)	8.8	17.6	214.7
Discontinued operations AUA¹		29.8	4.6	(3.8)	0.8	(1.1)	29.5
Group assets under administration		218.1	35.7	(26.1)	9.6	16.5	244.2

Group assets under administration - total

12 months ended 31 December 2013

		Opening AUA at 1 Jan 2013	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUA at 31 Dec 2013
		£bn	£bn	£bn	£bn	£bn	£bn
Group AUA - continuing operations¹		188.3	31.1	(22.3)	8.8	17.6	214.7
Discontinued operations AUA¹:
Canada fee	F	15.9	2.8	(2.2)	0.6	0.8	17.3
Canada spread/risk	S/R	9.9	1.0	(1.2)	(0.2)	(1.3)	8.4
SLI Canada - third party	F	12.2	2.6	(1.8)	0.8	(0.4)	12.6
Canada other		2.0	-	-	-	(0.3)	1.7
Consolidation/eliminations	F	(10.2)	(1.8)	1.4	(0.4)	0.1	(10.5)
Total Canada		29.8	4.6	(3.8)	0.8	(1.1)	29.5
Group assets under administration		218.1	35.7	(26.1)	9.6	16.5	244.2

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

² From 1 January 2014, Standard Life Wealth is reported as part of Standard Life Investments, previously it was reported in UK and Europe. Comparatives have been restated.

Group assets under administration

12 months ended 31 December 2014

	Fee (F) - Spread/risk (S/R)	Opening AUA at 1 Jan 2014	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUA at 31 Dec 2014
	Fee (F) - Spread/risk (S/R)	£bn	£bn	£bn	£bn	£bn	£bn
Standard Life Investments
Third party (excl. strategic partner life business) from continuing operations¹		89.8	23.8	(22.1)	1.7	26.0	117.5
Third party strategic partner life business		-	-	(1.6)	(1.6)	45.4	43.8
Standard Life Investments total third party		89.8	23.8	(23.7)	0.1	71.4	161.3
UK
UK retail new fee business²	F	33.8	5.9	(3.0)	2.9	0.6	37.3
UK retail old fee business	F	33.5	0.6	(2.8)	(2.2)	2.2	33.5
UK retail fee business		67.3	6.5	(5.8)	0.7	2.8	70.8
Corporate pensions	F	29.2	4.0	(1.8)	2.2	0.6	32.0
UK retail and corporate fee business		96.5	10.5	(7.6)	2.9	3.4	102.8
Conventional with profits	F	2.9	0.1	(1.1)	(1.0)	0.2	2.1
UK total fee business³	F	99.4	10.6	(8.7)	1.9	3.6	104.9
Annuities	S/R	14.6	0.3	(1.2)	(0.9)	1.8	15.5
Assets not backing products		5.7	- -	-	-	2.0	7.7
UK long-term savings		119.7	10.9	(9.9)	1.0	7.4	128.1
Europe
Fee^2,3	F	14.9	2.2	(1.1)	1.1	1.2	17.2
Spread/risk	S/R	0.5	-	-	-	0.1	0.6
Europe long-term savings		15.4	2.2	(1.1)	1.1	1.3	17.8
UK and Europe long-term savings		135.1	13.1	(11.0)	2.1	8.7	145.9

Asia and Emerging Markets
Wholly owned long-term savings	F	0.3	0.1	-	0.1	-	0.4
Joint ventures long-term savings		1.6	0.4	(0.2)	0.2	0.3	2.1
Asia and Emerging Markets long-term savings		1.9	0.5	(0.2)	0.3	0.3	2.5

Other corporate assets		2.0	-	-	-	0.5	2.5
Consolidation and elimination adjustments^1,2,3,4		(14.1)	(3.4)	1.9	(1.5)	-	(15.6)
Group AUA - continuing operations¹		214.7	34.0	(33.0)	1.0	80.9	296.6
Discontinued operations AUA¹		29.5	4.5	(4.1)	0.4	1.9	31.8
Group assets under administration		244.2	38.5	(37.1)	1.4	82.8	328.4

¹Continuing operations exclude our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

²From 1 January 2014, Standard Life Wealth is reported as part of Standard Life Investments, previously it was reported in UK and Europe. Comparatives have been restated.

³Institutional pensions assets previously included in both life and pensions AUA and investment operations have now been excluded from UK and Europe and are only included in Standard Life Investments third party. Eliminations have been adjusted and there is a nil impact on Group AUA. Comparatives have been restated.

2. Standard Life Investments assets under management and net flows

12 months ended 31 December 2014

			Opening AUM at 1 Jan 2014	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUM at 31 Dec 2014
			£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	UK	Wholesale	19.6	8.0	(4.9)	3.1	0.5	23.2
		Institutional	42.9	5.6	(6.8)	(1.2)	4.5	46.2
		Wealth	5.8	0.7	(0.7)	-	0.3	6.1
			68.3	14.3	(12.4)	1.9	5.3	75.5
	Europe	Wholesale	3.8	1.8	(1.3)	0.5	(0.5)	3.8
		Institutional	6.6	1.0	(0.2)	0.8	0.1	7.5
			10.4	2.8	(1.5)	1.3	(0.4)	11.3
	North America	Wholesale	0.3	0.2	-	0.2	0.5	1.0
		Institutional	4.9	2.7	(1.4)	1.3	0.9	7.1
			5.2	2.9	(1.4)	1.5	1.4	8.1
	Asia Pacific	Wholesale	1.1	0.9	(0.4)	0.5	(0.2)	1.4
		Institutional	0.7	0.1	(0.2)	(0.1)	-	0.6
			1.8	1.0	(0.6)	0.4	(0.2)	2.0
	India	Wholesale²	4.1	0.9	-	0.9	1.1	6.1
	Ignis		-	1.9	(6.2)	(4.3)	18.8	14.5
	Total	Wholesale²	28.9	11.8	(6.6)	5.2	1.4	35.5
		Institutional	55.1	9.4	(8.6)	0.8	5.5	61.4
		Wealth	5.8	0.7	(0.7)	-	0.3	6.1
		Ignis	-	1.9	(6.2)	(4.3)	18.8	14.5
	Third party AUM (excl. strategic partner life business)		89.8	23.8	(22.1)	1.7	26.0	117.5

12 months ended 31 December 2014		Opening AUM at 1 Jan 2014	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUM at 31 Dec 2014
		£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	Equities	15.1	2.8	(4.1)	(1.3)	1.7	15.5
	Fixed Income	20.2	2.3	(3.3)	(1.0)	2.8	22.0
	Multi Asset³	31.4	11.4	(6.3)	5.1	2.1	38.6
	Real Estate	6.1	1.1	(0.4)	0.7	0.6	7.4
	MyFolio	4.0	2.2	(0.6)	1.6	0.3	5.9
	Other⁴	13.0	2.1	(1.2)	0.9	(0.3)	13.6
	Ignis⁵	-	1.9	(6.2)	(4.3)	18.8	14.5
	Third party AUM (excl. strategic partner life business)	89.8	23.8	(22.1)	1.7	26.0	117.5
	Standard Life Group	80.3	3.8	(6.2)	(2.4)	6.7	84.6
	Phoenix Group	-	-	(1.6)	(1.6)	45.4	43.8
	Strategic partner life business AUM	80.3	3.8	(7.8)	(4.0)	52.1	128.4
	AUM - continuing operations¹	170.1	27.6	(29.9)	(2.3)	78.1	245.9
Discontinued operations AUM¹		19.0	3.3	(3.0)	0.3	1.1	20.4
Total assets under management		189.1	30.9	(32.9)	(2.0)	79.2	266.3

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

²In the year to 31 December 2014, India cash funds have been reclassified as Wholesale. Comparatives have been restated.

³Comprises suite of global absolute return strategies and balanced funds.

⁴Comprises cash, private equity and Wealth. Net inflows from India cash funds £0.3bn.

⁵Net outflows from Ignis liquidity funds £1.0bn.

12 months ended 31 December 2013

			Opening AUM at 1 Jan 2013	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUM at 31 Dec 2013
			£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	UK	Wholesale	14.9	6.8	(3.6)	3.2	1.5	19.6
		Institutional	39.4	5.9	(4.6)	1.3	2.2	42.9
		Wealth	1.8	0.7	(0.2)	0.5	3.5	5.8
			56.1	13.4	(8.4)	5.0	7.2	68.3
	Europe	Wholesale	2.4	2.2	(1.0)	1.2	0.2	3.8
		Institutional	5.6	1.2	(0.6)	0.6	0.4	6.6
			8.0	3.4	(1.6)	1.8	0.6	10.4
	North America	Wholesale	0.2	-	-	-	0.1	0.3
		Institutional	2.6	2.7	(0.5)	2.2	0.1	4.9
			2.8	2.7	(0.5)	2.2	0.2	5.2
	Asia Pacific	Wholesale	0.4	1.0	(0.3)	0.7	-	1.1
		Institutional	0.8	-	(0.2)	(0.2)	0.1	0.7
			1.2	1.0	(0.5)	0.5	0.1	1.8
	India	Wholesale²	4.5	0.1	-	0.1	(0.5)	4.1
	Ignis		-	-	-	-	-	-
	Total	Wholesale²	22.4	10.1	(4.9)	5.2	1.3	28.9
		Institutional	48.4	9.8	(5.9)	3.9	2.8	55.1
		Wealth	1.8	0.7	(0.2)	0.5	3.5	5.8
		Ignis	-	-	-	-	-	-
	Third party AUM (excl. strategic partner life business)		72.6	20.6	(11.0)	9.6	7.6	89.8

12 months ended 31 December 2013		Opening AUM at 1 Jan 2013	Gross flows	Redemptions	Net flows	Market and other movements	Closing AUM at 31 Dec 2013
		£bn	£bn	£bn	£bn	£bn	£bn
Continuing operations¹	Equities	13.9	1.9	(2.6)	(0.7)	1.9	15.1
	Fixed Income	20.8	3.1	(2.6)	0.5	(1.1)	20.2
	Multi Asset³	22.1	12.0	(4.4)	7.6	1.7	31.4
	Real Estate	5.9	0.6	(0.3)	0.3	(0.1)	6.1
	MyFolio	2.2	1.9	(0.4)	1.5	0.3	4.0
	Other⁴	7.7	1.1	(0.7)	0.4	4.9	13.0
	Ignis	-	-	-	-	-	-
	Third party AUM (excl. strategic partner life business)	72.6	20.6	(11.0)	9.6	7.6	89.8
	Standard Life Group	77.2	4.6	(7.8)	(3.2)	6.3	80.3
	Phoenix Group	-	-	-	-	-	-
	Strategic partner life business AUM	77.2	4.6	(7.8)	(3.2)	6.3	80.3
	AUM - continuing operations¹	149.8	25.2	(18.8)	6.4	13.9	170.1
Discontinued operations AUM¹		19.7	3.5	(2.8)	0.7	(1.4)	19.0
Total assets under management		169.5	28.7	(21.6)	7.1	12.5	189.1

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

²In the year to 31 December 2014, India cash funds have been reclassified as Wholesale. Comparatives have been restated.

³Comprises suite of global absolute return strategies and balanced funds.

⁴Comprises cash, private equity and Wealth. Net inflows from India cash funds £0.1bn.

3. Additional analysis - 15 months net flows

Group assets under administration net flows

15 months ended 31 December 2014

		3 months to 31 Dec 2014	3 months to 30 Sept 2014	3 months to 30 Jun 2014	3 months to 31 Mar 2014	3 months to 31 Dec 2013
		£bn	£bn	£bn	£bn	£bn
Continuing operations¹	Fee business:
	Standard Life Investments third party (excl. strategic partner life business)²	(2.9)	0.6	2.1	1.9	1.3
	Standard Life Investments third party strategic partner life business	(0.9)	(0.7)	-	-	-
	Standard Life Investments total third party	(3.8)	(0.1)	2.1	1.9	1.3
	UK retail new²	0.8	0.6	0.7	0.8	0.4
	UK retail old	(0.5)	(0.6)	(0.5)	(0.6)	(0.6)
	Corporate	0.6	0.7	0.4	0.5	1.1
	UK retail and corporate	0.9	0.7	0.6	0.7	0.9
	Conventional with profits	(0.3)	(0.2)	(0.3)	(0.2)	(0.3)
	UK³	0.6	0.5	0.3	0.5	0.6
	Europe^2,3	0.3	0.2	0.3	0.3	0.3
	Asia and Emerging Markets (wholly owned)	-	0.1	-	-	(0.1)
	Consolidation/eliminations^2,3,4	(0.2)	(0.5)	(0.4)	(0.4)	(0.5)
	Total fee business	(3.1)	0.2	2.3	2.3	1.6
	Spread/risk business:
	UK	(0.3)	(0.2)	(0.2)	(0.2)	(0.2)
	Europe	-	-	-	-	-
	Total spread/risk business	(0.3)	(0.2)	(0.2)	(0.2)	(0.2)
	Other (incl. joint ventures)	0.1	-	-	0.1	-
	Group net flows - continuing operations¹	(3.3)	-	2.1	2.2	1.4
Discontinued operations net flows¹		-	0.1	0.1	0.2	0.5
Total Group net flows		(3.3)	0.1	2.2	2.4	1.9

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

² From 1 January 2014, Standard Life Wealth is reported as part of Standard Life Investments, previously it was reported in UK and Europe. Comparatives have been restated.

Standard Life Investments assets under management net flows

15 months ended 31 December 2014

		3 months to 31 Dec 2014	3 months to 30 Sep 2014	3 months to 30 Jun 2014	3 months to 31 Mar 2014	3 months to 31 Dec 2013
		£bn	£bn	£bn	£bn	£bn
Continuing operations¹	UK	0.4	(0.3)	1.4	0.4	0.6
	Europe	0.5	0.2	0.1	0.5	0.2
	North America	0.3	0.1	0.4	0.7	0.3
	Asia Pacific	0.1	0.2	-	0.1	0.1
	India	0.3	0.2	0.2	0.2	0.1
	Ignis	(4.5)	0.2	-	-	-
	Third party net flows (excl. strategic partner life business )	(2.9)	0.6	2.1	1.9	1.3
	Equities	(1.0)	(0.5)	-	0.2	(0.2)
	Fixed income	-	(0.9)	(0.1)	-	(0.5)
	Multi asset²	1.4	1.0	1.4	1.3	1.1
	Real estate	0.3	0.2	0.2	-	0.1
	MyFolio	0.5	0.3	0.4	0.4	0.4
	Other³	0.4	0.3	0.2	-	0.4
	Ignis	(4.5)	0.2	-	-	-
	Third party net flows (excl. strategic partner life business)	(2.9)	0.6	2.1	1.9	1.3
	Wholesale⁴	1.5	1.2	1.1	1.4	1.1
	Institutional	0.1	(0.8)	0.9	0.6	0.2
	Wealth	-	-	0.1	(0.1)	-
	Ignis	(4.5)	0.2	-	-	-
	Third party net flows (excl. strategic partner life business)	(2.9)	0.6	2.1	1.9	1.3
Standard Life Group		(0.5)	(0.8)	(0.7)	(0.4)	(0.7)
Phoenix Group		(0.9)	(0.7)	-	-	-
Strategic partner life business net flows		(1.4)	(1.5)	(0.7)	(0.4)	(0.7)
Asset management net flows - continuing operations¹		(4.3)	(0.9)	1.4	1.5	0.6
Discontinued operations net flows¹		0.1	0.1	0.1	-	0.4
Total asset management net flows		(4.2)	(0.8)	1.5	1.5	1.0

¹ Continuing operations excludes our Canadian business which was sold on 30 January 2015. Comparatives have been restated.

²Comprises suite of global absolute return strategies and balanced funds.

³Comprises cash, private equity and Wealth.

⁴In the year to 31 December 2014, India cash funds have been reclassified as Wholesale. Comparatives have been restated.

4. Long-term savings operations new business

12 months ended 31 December 2014

			Single premiums		New regular premiums		PVNBP^1,2
		Fee (F) - Spread/risk (S/R)	12 months to 31 Dec 2014	12 months to 31 Dec 2013	12 months to 31 Dec 2014	12 months to 31 Dec 2013	12 months to 31 Dec 2014	12 months to 31 Dec 2013	Change	Change in constant currency
		Fee (F) - Spread/risk (S/R)	£m	£m	£m	£m	£m	£m	%	%
Continuing operations³	UK
	Retail new fee business	F	5,456	5,277	76	71	5,870	5,666	4%	4%
	Retail old fee business	F	209	197	20	18	260	243	7%	7%
	UK retail fee business		5,665	5,474	96	89	6,130	5,909	4%	4%
	Corporate pensions	F	1,329	1,956	856	882	5,065	5,885	(14%)	(14%)
	UK retail and corporate fee business		6,994	7,430	952	971	11,195	11,794	(5%)	(5%)
	Institutional pensions	F	3,920	4,871	-	12	3,921	4,918	(20%)	(20%)
	UK total fee business		10,914	12,301	952	983	15,116	16,712	(10%)	(10%)
	Spread/risk	S/R	143	334	-	-	144	335	(57%)	(57%)
	UK long-term savings		11,057	12,635	952	983	15,260	17,047	(10%)	(10%)
	Europe
	Fee	F	1,652	1,567	40	39	2,064	2,003	3%	7%
	Spread/risk	S/R	11	26	-	-	11	26	(58%)	(58%)
	Europe long-term savings		1,663	1,593	40	39	2,075	2,029	2%	6%
	UK and Europe long-term savings		12,720	14,228	992	1,022	17,335	19,076	(9%)	(9%)

	Asia and Emerging Markets
	Wholly owned long-term savings	F	18	14	43	62	300	434	(31%)	(26%)
	Joint ventures long-term savings		69	70	86	89	449	465	(3%)	5%
	Asia and Emerging Markets long-term savings		87	84	129	151	749	899	(17%)	(11%)
	Total worldwide long-term savings - continuing operations³		12,807	14,312	1,121	1,173	18,084	19,975	(9%)	(9%)
Discontinued operations long-term savings³			1,998	1,849	82	68	3,107	2,928	6%	19%
Total worldwide long-term savings			14,805	16,161	1,203	1,241	21,191	22,903	(7%)	(6%)

¹ Present value of new business premiums (PVNBP) is the industry measure of insurance new business sales under the EEV methodology, calculated as 100% of single premiums plus the expected present value of new regular premiums.

²PVNBP includes the impact of year end changes to non-economic assumptions of decrease £98m (2013: decrease £518m).

³Continuing operations exclude our Canadian business which was sold on 30 January 2015 and our Dubai business, the closure of which was announced in November 2014. Comparatives have been restated.

New business gross sales for overseas operations are calculated using average exchange rates.

5. Analysis of Group underlying cash generation

	Standard Life Investments	UK and Europe	Asia and Emerging Markets	Other	Total continuing operations¹	Discontinued operations¹	Total
31 December 2014	£m	£m	£m	£m	£m	£m	£m
Group underlying performance before tax	257	347	19	(62)	561	131	692
Exclude share of associates and JVs' PBT	(21)	-	(18)	-	(39)	-	(39)
Exclude current tax on underlying performance	(51)	(27)	-	5	(73)	(14)	(87)
DAC/DIR adjustment	-	(18)	(3)	-	(21)	(20)	(41)
Fixed and intangible assets adjustment	(15)	(4)	-	(1)	(20)	-	(20)
Group underlying cash generation	170	298	(2)	(58)	408	97	505

	Standard Life Investments	UK and Europe	Asia and Emerging Markets	Other	Total continuing operations¹	Discontinued operations¹	Total
31 December 2013	£m	£m	£m	£m	£m	£m	£m
Group underlying performance before tax	197	331	-	(66)	462	176	638
Exclude share of associates and JVs' PBT	(22)	-	(5)	-	(27)	-	(27)
Exclude current tax on underlying performance	(41)	(2)	-	1	(42)	(23)	(65)
DAC/DIR adjustment	-	(6)	(26)	-	(32)	(25)	(57)
Fixed and intangible assets adjustment	(1)	(3)	(1)	(20)	(25)	-	(25)
Group underlying cash generation	133	320	(32)	(85)	336	128	464

	Standard Life Investments	UK and Europe	Asia and Emerging Markets	Other	Total continuing operations¹	Discontinued operations¹	Total
31 December 2012	£m	£m	£m	£m	£m	£m	£m
Group underlying performance before tax	145	304	3	(27)	425	109	534
Exclude share of associates and JVs' PBT	(18)	-	(8)	-	(26)	-	(26)
Exclude current tax on underlying performance	(32)	(24)	-	-	(56)	(31)	(87)
DAC/DIR adjustment	-	(5)	(15)	-	(20)	(11)	(31)
Fixed and intangible assets adjustment	-	(3)	-	(16)	(19)	(1)	(20)
Group underlying cash generation	95	272	(20)	(43)	304	66	370

¹Continuing operations exclude our Canadian business which was sold on 30 January 2015 and our Dubai business, the closure of which was announced in November 2014. Comparatives have been restated.

This information is provided by RNS

The company news service from the London Stock Exchange

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