TIDMGACA
RNS Number : 3721S
General Accident PLC
09 March 2023
9 March 2023
GENERAL ACCIDENT PLC
2022 ANNUAL REPORT AND FINANCIAL STATEMENTS
On 9 March 2023, General Accident plc (the "Company") released
its Results Announcement for the year ended 31 December 2022. The
Company announces it has today issued the 2022 Annual Report and
Financial Statements.
The document is available to view on the Company's website at
https://www.aviva.com/investors/reports/ and copies have been
submitted to the National Storage Mechanism and will shortly be
available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Printed copies of the 2022 Annual Report and Financial
Statements can be requested free of charge by shareholders by
contacting the Company's Registrar, Computershare Investor Services
PLC, on 0371 495 0105 or at AvivaSHARES@computershare.co.uk, or by
writing to the Group Company Secretary, Aviva plc, St Helen's, 1
Undershaft, London EC3P 3DQ.
Enquiries:
Kirsty Cooper, Group General Counsel and Company Secretary
Telephone - 020 7662 6646
Roy Tooley, Head of Secretariat - Corporate
Telephone - +44 (0)7800 699781
Information required under Disclosure & Transparency Rule
6.3
This announcement should be read in conjunction with the
Company's preliminary results announcement issued on 9 March 2023.
Together these constitute the material required by DTR 6.3 to be
communicated to the media in full unedited text through a
Regulatory Information Service. This material is not a substitute
for reading the Company's 2022 Annual report and financial
statements. Page and note references in the text below refer to
page numbers and notes in the 2022 Annual report and financial
statements.
Statement of directors' responsibilities in respect of the
financial statements
The directors are responsible for preparing the strategic
report, directors' report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the financial statements in accordance with
UK-adopted international accounting standards. Under company law,
directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for
that period. In preparing the financial statements, the directors
are required to:
- select suitable accounting policies and then apply them consistently;
- state whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
- make judgements and accounting estimates that are reasonable and prudent; and
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006.
The directors are responsible for the maintenance and integrity
of the company's financial statements published on the ultimate
parent company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
Each of the directors, whose names and functions are listed in
Directors and officers confirm that, to the best of their
knowledge:
- the company financial statements, which have been prepared in
accordance with UK-adopted international accounting standards, give
a true and fair view of the assets, liabilities, financial position
and profit of the company; and
- the Strategic report includes a fair review of the development
and performance of the business and the position of the company,
together with a description of the principal risks and
uncertainties that it faces.
Corporate governance
The Company is a wholly-owned subsidiary of Aviva plc, a company
with a premium listing on the London Stock Exchange, and as such is
subject to Aviva plc's system of risk management, internal control
and financial reporting. Aviva plc is subject to the UK Corporate
Governance Code. The Aviva plc Annual Report and Accounts set out
details of how the Aviva Group has applied the principles and
complied with the provisions of the UK Corporate Governance Code
during 2022. Further information on the Code can be found on the
Financial Reporting Council's website, www.frc.org.uk .
13. Risk management
(a) Risk management framework
The Company operates a risk management framework that forms an
integral part of the management and Board processes and
decision-making framework, aligned to the Group's risk management
framework.
The Company's risk management approach is aimed at actively
identifying, measuring, managing, monitoring and reporting
significant existing and emerging risks. Risks are managed
considering the significance of the risk to the business and its
internal and external stakeholders.
To promote a consistent and rigorous approach to risk management
across all businesses, the Group has a set of risk policies and
business standards which set out the risk strategy, appetite,
framework and minimum requirements for the Group's worldwide
operations, including the Company.
For the purposes of risk identification and measurement, and
aligned to the Company's risk policies, risks are usually grouped
by risk type: credit, market, liquidity and operational risk. Risks
falling within these types may affect a number of metrics including
those relating to statement of financial position strength,
liquidity and profit.
The directors recognise the critical importance of having
efficient and effective risk management systems in place and
acknowledge that they are responsible for the Company's framework
of internal control and of reviewing its effectiveness. The
framework is designed to manage rather than eliminate the risk of
failure to achieve the Company's objectives and can only provide
reasonable assurance against misstatement or loss. The directors of
the Company are satisfied that their adherence to this Group
framework provides an adequate means of managing risk in the
Company.
Further information on the types and management of specific risk
types is given in sections (b) to (f) below.
(b) Credit risk
Credit risk is the risk of financial loss as a result of the
default or failure of third parties to meet their payment
obligations to the Company, or variations in market values as a
result of changes in expectation related to these risks.
The credit quality of receivables and other financial assets is
monitored by the Company, and provisions are made for expected
credit losses. Expected credit losses on receivables and other
assets are calculated with reference to the Company's historical
experience of losses adjusted for forward looking information.
Short term financial assets (where all amounts are receivable
within 12 months from the reporting date) do not generally attract
an expected credit loss charge.
The Company's financial assets primarily comprise loans and
receivables due from its parent, Aviva plc, which has an external
issuer credit rating of A (issuer credit ratings represent an
issuer's ability to meet its overall financial commitments as they
fall due), and as such the credit risk arising from the
counterparty failing to meet all or part of their obligations is
considered remote. There are no material expected credit losses
recognised in relation to loans due from Aviva plc.
In addition, the loan amounting to GBP9,439 million (2021:
GBP9,484 million) is secured by a legal charge against the ordinary
share capital of Aviva Group Holdings Limited. Due to the nature of
the financial assets, and the fact that the loans are intended to
be held until settled, by the issuer (on maturity or earlier if
redeemed before maturity), and not traded, the Company is not
exposed to the risk of changes to the market value caused by
changing perceptions of the credit worthiness of Aviva plc.
Expected credit losses at 31 December 2022 were GBPnil (2021:
GBPnil).
(c) Market risk
Market risk is the risk of an adverse financial impact resulting
directly or indirectly from fluctuations in interest rates,
inflation, foreign currency exchange rates, equity prices and
property values. At the statement of financial position date, the
Company did not have any material exposure to interest rates,
inflation, currency exchange rates, equity prices or property
values.
The inter-company loan receivable (see note 8) was on a fixed
interest rate during 2022 and 2021. Effective from 1 January 2023,
interest rate risk arises as the loan receivable is subject to a
floating interest rate based on the SONIA swap rate. The net asset
value of the Company's financial resources is not anticipated to be
materially affected by fluctuations in interest rates.
(d) Liquidity risk
Liquidity risk is the risk of not being able to make payments as
they become due because there are insufficient assets in cash
form.
The Company does not hold any material assets in cash form. Cash
settlements of its dividend obligations to holders of preference
shares, which are discretionary and subject to director resolution,
pass through an intercompany account.
(e) Operational risk
Operational risk is the risk of a direct or indirect loss,
arising from inadequate or failed internal processes, people and
systems, or external events, including changes in the regulatory
environment.
Given its limited activities, the key operational risks to the
Company are inadequate governance and lack of sufficiently robust
financial controls. The risks are mitigated by the Company's
implementation of the Group's risk management policies and
framework and compliance with the Group's Financial Reporting
Control Framework.
(f) Capital management
The Company's capital risk is determined with reference to the
requirements of the Company's stakeholders. In managing capital,
the Company seeks to maintain sufficient, but not excessive,
financial strength to support the payment of preference dividends
and the requirements of other stakeholders. The sources of capital
used by the Company are equity shareholders' funds and preference
shares. At 31 December 2022 the Company had GBP13,932 million
(2021: GBP13,932 million) of total capital employed.
14. Related party transactions
T he Company had the following transactions with related
parties, which include parent companies, subsidiaries, and fellow
Group companies in the normal course of business.
(a) Loans due from parent company
On 14 December 2017, the Company provided a loan to Aviva plc,
its parent company, of GBP9,990 million with a maturity date of 31
December 2022. From January 2021, as a result of LIBOR being
abolished, this loan was reset at a fixed interest rate. This rate
was set as follows; 5- year Gilt (-0.105% as of 1 January 2021) +
Basis adjustment 0.15% + 0.65% floor. A subsequent loan amendment
in December 2022 extended the loan maturity to 31 December 2027 and
changed the interest rate to a floating rate based on the SONIA
swap rate effective from 1 January 2023.
As at the statement of financial position date, the loan balance
outstanding was GBP9,439 million (2021: GBP9,484 million). This
facility has been secured against the ordinary share capital of
Aviva Group Holdings Limited. The loan agreement also includes a
penalty interest charge of 1% above the interest rate if any
amounts payable under the loan agreement remain outstanding. As at
31 December 2022, no amounts remain outstanding.
Loans from parent are made on normal arm's length commercial
terms. The maturity analysis of the related party loans receivable
is as follows:
2022 2021
GBPm GBPm
1-5 years 9,439 -
Over 5 years - 9,484
9,439 9,484
------------------------ --------------------------------
Effective interest rate 0.70% 0.70%
------------------------ --------------------------------
The interest received on these loans shown in the income
statement is GBP66 million (2021: GBP66 million). See note 1.
(b) Other transactions
(i) Services provided to related parties
Services
provided
to related
parties 2022 2021
---------- --------------------------------------------- ---------------------------------- ------------------------------------------------------------------ -------------------------------------------
Expenses incurred Receivable Expenses incurred Receivable
in the year at year end in the year at year end
GBP'000 GBPm GBP'000 GBPm
Immediate
parent 44 4,493 40 4,448
44 4,493 40 4,448
--------------------------------------------- ---------------------------------- ----------------------------------------------------------------------------- -------------------------------------------
The related parties' receivables are not secured and no
guarantees were received in respect thereof. The receivables will
be settled in accordance with normal credit terms.
(ii) Audit fees
Expenses incurred in the year represents audit fees. There were
no non-audit fees paid to the Company's auditors during the year
(2021: GBPnil). Audit fees as described in note 4 are borne by the
Company's ultimate parent, Aviva plc.
(iii) Dividends paid
Dividends paid relates to an intercompany transaction of GBP45
million (2021: GBP45 million) with the Company's parent, Aviva plc.
Preference dividends of GBP21 million (2021: GBP21 million) were
approved on behalf of the Company by its parent, Aviva plc. Refer
to note 6.
(c) Key management compensation
Key management, which comprises the directors of the Company,
are not remunerated directly for their services as directors of the
Company and the amount of time spent performing their duties is
incidental to their role across the Group. All such costs are borne
by Aviva plc and are not recharged to the Company. See note 3 for
details of directors' remuneration.
(d) Ultimate parent entity
The ultimate parent entity and controlling party is Aviva plc, a
public limited Group incorporated and domiciled in the United
Kingdom. This is the parent undertaking of the smallest and largest
Group to consolidate these financial statements. Copies of Aviva
plc consolidated financial statements are available on application
to the Group Company Secretary, Aviva plc, St Helen's, 1
Undershaft, London EC3P 3DQ, and on the Aviva plc website at
www.aviva.com .
15. Subsequent events
There are no subsequent events to report.
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END
ACSUKAAROUUORRR
(END) Dow Jones Newswires
March 09, 2023 03:00 ET (08:00 GMT)
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