74 | FINANCIAL STATEMENTS | Notes to the Consolidated Financial Statements


18. Financial instruments


(a) Analysis of assets and liabilities at the reporting date Financial investments held in relation to the activities of the Group’s insurance subsidiary have been classified as fair value through profit or loss within current assets.


Stocks of units and shares are held in relation to fund management activities and are classified as held for trading within current assets.


Financial investments included within non-current assets are classified as available for sale and are carried at fair value (or at amortised cost if fair value cannot be measured reliably). Other loans and receivables included within non-current assets are carried at amortised cost. (i) Designated as fair value through profit or loss


Notes


Financial investments in respect of unit-linked contracts Other financial investments


(1) Financial investments in respect of unit-linked contracts


31 December 31 December 2011 £m


2010 £m


Equity securities: Listed


OEICs and unit trusts Total equity securities


Debt and fixed income securities: Government bonds


Other listed fixed interest securities Index-linked gilts


Participation in pooled investments Total debt and fixed income securities Total unit-linked financial investments designated as fair value through profit or loss


116.0 124.7


240.7


46.8 80.4 69.7 10.2


207.1 447.8


232.4 106.9


339.3


59.2 87.2 42.8 10.3


199.5 538.8


Financial instruments relating to unit-linked contracts The Group’s insurance subsidiary, F&C Managed Pension Funds Limited, provides unit-linked pension wrappers. From F&C’s perspective, the risks and rewards of managing these assets are the same as other assets under management, as the financial risks and rewards attributable to the assets invested fall to be borne by, or to the benefit of, the Group’s clients. Hence, while a number of significant financial instruments are recognised in the Statement of Financial Position in respect of this subsidiary, the key risk to the Group is the impact on the level of management fees which are earned from this entity and which are directly affected by the underlying value of policyholder assets. While F&C Managed Pension Funds Limited has some insurance risks, these risks are fully reinsured, thereby negating any net insurance risk to the Group’s equity holders.


The amounts included in the Statement of Financial Position in respect of assets and liabilities held within unit-linked funds are as follows:


31 December 31 December 2011 £m


2010 £m


Fair value through profit or loss: Financial investments


Loans and receivables: Deferred acquisition costs Trade and other receivables


Payables: Trade and other payables


Cash and cash equivalents* Total unit-linked assets less liabilities


* This does not include £3.0m of non-linked policyholders’ cash (31 December 2010: £3.2m). These unit-linked assets are matched by the associated investment contract liabilities disclosed in note 29.


447.8 0.1


0.1


(0.3) 25.1


472.8


538.8 0.1


0.1 –


20.2 559.2


(1) (2)


31 December 31 December 2011 £m


2010 £m


447.8 6.6


454.4


538.8 9.9


548.7


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