Setting new standards - Friends Life

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FINANCIAL STATEMENTS IFRS FINANCIAL STATEMENTS EEV SUPPLEMENTARY INFORMATION Notes to the consolidated accounts continued 42. Discontinued operations There were no discontinued operations during 2006. On 30 June 2005 the Group disposed of its controlling interest in the private equity operations of ISIS Equity Partners plc, a venture capital organisation which controlled a number of underlying unquoted companies primarily through investments by FPLP’s With-Profits Fund, to ISIS EP LLP. The net assets of the private equity operation at 30 June 2005 were £0.2m and the consideration received was a nominal amount of cash plus 19.99% of the voting A class ordinary capital in ISIS EP LLP. In addition, the Group subscribed £2.5m for non-voting, non-participating B class capital. ISIS EP LLP is considered to be an associate as the Group has the ability to exert significant influence and affect policy and decision making through the appointment of one out of the six members of the management board. The profit before tax in 2005 of the discontinued operation, up to the point of disposal was £11m (£8m after tax). The net cash outflow attributable to the discontinued operation was £3m. 43. Directors’ shareholdings The interest of directors, their spouses and children under the age of 18 in the shares of Friends Provident plc and its subsidiary F&C Asset Management plc are shown below: Friends Provident plc F&C Asset Management plc Ordinary shares of 10 pence Ordinary shares of 0.1 pence Movement in Movement in shareholdings shareholdings after 31 Dec 31 Dec 31 Dec after 31 Dec 31 Dec 31 Dec 2006 (ii) 2006 2005 (iii) 2006 (ii) 2006 2005 (iii) Executive Alain Grisay - - - - 326,153 726,297 Ben Gunn 175 105,546 38,773 - - - Philip Moore - 53,063 1,332 - 2,163 2,163 Keith Satchell 114 (i) 207,814 63,528 - 14,326 14,326 (retired on 31 January 2007) Jim Smart - - - - - - (appointed 1 January 2007) Non-executive Alison Carnwath - 10,000 10,000 - 8,651 8,651 Christopher Jemmett - 2,655 2,655 - 24,881 24,476 Lady Judge - 17,865 17,865 - - - Ray King - 10,000 10,000 - - - Lord MacGregor - 13,849 13,849 - - - Sir Adrian Montague - 6,018 5,781 - - - Sir Mervyn Pedelty - - - - - - (i) Including shares acquired in February 2007 through the Group’s share incentive plan in respect of January 2007 contributions. (ii) Changes to directors’ interests during the period 1 January 2007 to 19 March 2007 include shares acquired through the Group’s share incentive plans and options exercised under ESOS 2003 and LTIP 2003. (iii) Or date of appointment if later. 162 Friends Provident Annual Report & Accounts 2006
PARENT COMPANY ACCOUNTS ABBREVIATIONS AND DEFINITIONS Notes to the consolidated accounts continued 44. Related parties In the ordinary course of business, the Group and its subsidiary undertakings carry out transactions with related parties, as defined by IAS 24 Related party disclosures. Material transactions for the year are set out below. The principal subsidiary undertakings of the Group and its interest in associates and joint venture are shown in notes 19 and 20 respectively. (a) Key management personnel compensation Key management personnel consists of the Group’s directors, the Managing Directors and Chief Executives of the Group’s business units, the Group’s principal actuary and other key executive board directors of the Group’s listed subsidiary, F&C Asset Management plc. In aggregate the compensation paid to key management is as set out below: 2006 2005 Number £m £m Short-term employee benefits 19 6.5 7.1 Post-employment benefits (excluding defined benefit scheme) 3 2.0 0.1 Termination benefits - - 2.0 Share based payments 14 1.7 3.8 Total key management personnel compensation charged to the income statement 10.2 13.0 Post employment benefits – defined benefit schemes 8 3.3 3.1 Total key management personnel compensation 13.5 16.1 ‘Post-employment benefits – defined benefit schemes’ comprises the change in value of key management personnel accrued pension benefits from the beginning of the relevant financial year to the end of that year. This is consistent with the amounts disclosed as ‘increase in transfer value during the year’ in the table on page 66 of the Remuneration Report of the Board. Details of pension schemes and share schemes operated by the Group, and in which key management personnel participate are given in notes 10 and 11. There were no balances outstanding at the year-end with key management (2005: £nil). 2006 2005 Number £m £m Payments during the year by key management in respect of policies issued or managed by the Group 12 0.1 0.2 Payments during the year to key management in respect of policies issued or managed by the Group 1 (0.9) - The sum assured or fund balance of those policies at 31 December 12 2.7 2.8 All these transactions were completed on terms that were no better than those available to staff. Friends Provident Annual Report & Accounts 2006 163
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Setting new standards - Friends Life

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