REG - Phoenix Grp Hldgs - Phoenix Group Holdings - 2015 Annual Results <Origin Href="QuoteRef">PHNX.L</Origin> - Part 18
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£m £m
Investment income
Dividend income from other Group entities 487 94
Interest income from other Group entities 58 48
545 142
Reversal of impairment losses on loans and receivables 75 -
Fair value gains on financial instruments - 5
Net investment income 620 147
5. ADMINISTRATIVE EXPENSES
The accounting policy for administrative expenses is included in note C2.
2015 2014
£m £m
Employee costs1 1 1
Professional fees 1 7
Office costs - 1
Write down of loans due from other Group entities 8 10
Other 9 3
Administrative expenses 19 22
1 In addition to the Non-Executive Directors, one employee was employed by Phoenix Group Holdings during the period (2014:
one). Other Group employees are employed by other Group entities.
6. BORROWINGS
The accounting policy for borrowings is included in note E5.
Carrying value Fair value
2015 2014 2015 2014
£m £m £m £m
Loans due to Impala Holdings Limited 3 3 3 3
Amount due for settlement after 12 months - 3
All borrowings are due to Group entities and are measured at amortised cost using the effective interest method.
On 16 July 2010, the Company was granted a loan from Impala Holdings Limited of £3 million. The loan accrues interest at
six month LIBOR plus a margin of 3.25% (2014: 3.25%) which is capitalised semi-annually on 7 April and 7 October. The loan
has a maturity date of 31 December 2016. Interest of £0.1 million (2014: £0.1 million) was accrued during the year. The
balance outstanding at 31 December 2015 was £3 million (2014: £3 million).
All borrowings are categorised as Level 3 financial instruments. The fair value of borrowings with no external market is
determined by internally developed discounted cash flow models using a risk adjusted discount rate corroborated with
external market data where possible.
7. INVESTMENTS IN GROUP ENTITIES
2015 2014
£m £m
Cost
At 1 January 1,317 1,308
Additions 10 9
Return of share capital (90) -
At 31 December 1,237 1,317
Impairment
At 1 January - -
Charge for the year (437) -
At 31 December (437) -
Carrying amount at 31 December 800 1,317
On 27 April 2015, the Company received a £10 million dividend (2014: £9 million) from Opal Reassurance Limited ('Opal Re')
in the form of preference shares. During the year, the Company received £90 million as a result of a return of share
capital from Opal Re.
Following a restructure of the Company's holdings in PGH (LCA) Limited, PGH (LCB) Limited, PGH (TC1) Limited and PGH (TC2)
Limited, the Company received dividends of £205 million and £232 million from PGH (TC1) Limited and PGH (TC2) Limited
respectively, settled by the novation of intragroup loan receivables to the Company. The Company impaired its investments
in PGH (TC1) Limited and PGH (TC2) Limited to the extent of dividends received.
For a list of principal Group entities, refer to note H3 of the consolidated financial statements. The entities directly
held by Phoenix Group Holdings are separately identified.
8. COLLECTIVE INVESTMENT SCHEMES
The accounting policy for collective investment schemes is included in note E1.
Carrying value Fair value
2015 2014 2015 2014
£m £m £m £m
Investment in collective investment schemes 11 5 11 5
Amount due for settlement after 12 months - -
All investments are categorised as Level 1 financial instruments. Details of the factors considered in determination of the
fair value are included in note E2 to the consolidated financial statements.
9. LOANS AND RECEIVABLES
Carrying value Fair value
2015 2014 2015 2014
£m £m £m £m
Loans due from PGH (LCA) Limited and PGH (LCB) Limited 626 164 791 257
Loans due from PGH (MC1) Limited and PGH (MC2) Limited 113 99 262 194
Loans due from Employee Benefit Trust 5 7 5 7
Notes due from Phoenix Life Holdings Limited 75 - 74 -
819 270 1,132 458
Amounts due after 12 months 814 270
The accounting policy for loans and receivables is included in note E1.
All loans and receivables balances are due from Group entities and are measured at amortised cost using the effective
interest method. The fair value of these loans and receivables are also disclosed.
On 22 March 2010, the Company subscribed for £325 million of Eurobonds which were issued equally by PGH (LCA) Limited and
PGH (LCB) Limited. On 23 March 2010, the Eurobonds were listed on the Channel Islands Stock Exchange. Interest accrues on
these Eurobonds at a rate of LIBOR plus a margin of 2.5% and the final maturity date to 30 June 2025. The Eurobonds were
initially recognised at fair value and are accreted to par over the period to 2025. At 31 December 2015, £175 million was
due (2014: £160 million).
On 12 December 2011, the Company, PGH (LCA) Limited and PGH (LCB) Limited, became party to a joint £77 million loan
agreement to formalise an inter-company balance which had arisen in 2009 relating to fees payable to a syndicate of
external banks. The loan accrues interest at a rate of LIBOR plus a margin of 1.25% and matures on 30 June 2016. Interest
of £0.1 million was capitalised during the year (2014: £0.1 million) and £nil was repaid (2014: £nil). At 31 December 2015,
£5 million was due (2014: £4 million).
In June 2015, the Company was assigned loans of £436 million issued equally by PGH (LCA) Limited and PGH (LCB) Limited.
These loans accrue interest at a rate of LIBOR plus a margin of 2.9% and mature on 5 June 2020. Interest of £10 million was
capitalised during the year. At 31 December 2015, £446 million was due.
On 22 March 2010, the Company subscribed for £250 million of Eurobonds which were issued equally by PGH (MC1) Limited and
PGH (MC2) Limited. On 23 March 2010, the Eurobonds were listed on the Channel Islands Stock Exchange. Interest accrues on
these Eurobonds at a rate of LIBOR plus a margin of 2.5% and the final maturity date to 30 June 2025. The Eurobonds were
initially recognised at fair value and are accreted to par over the period to 2025. At 31 December 2015, £113 million was
due (2014: £99 million).
On 16 July 2010, the Company entered into an interest free facility arrangement with Phoenix Group Holdings' Employee
Benefit Trust ('EBT'). In 2015, an additional £6 million was drawn down against this facility (2014: £6 million). The loan
is recoverable until the point the awards held by the EBT vest to the participants, at which point the loan is reviewed for
impairment. Any impairments are determined by comparing the carrying value to the estimated recoverable amount of the loan.
Following the vesting of awards in 2015, £8 million of the loan (2014: £10 million) has been written off. At 31 December
2015, £5 million was due (2014: £7 million).
On 22 April 2010, Pearl Group Holdings (No.1) Limited issued a balancing instrument under which notes with a principal of
£75 million were issued to Phoenix Group Holdings. During January 2015 the notes were transferred from PGH1 to Phoenix Life
Holdings Limited ('PLHL'). The notes have no fixed maturity date and are included in the Company's financial statements at
a value of £75 million (2014: £nil). Phoenix Group Holdings paid no consideration for the notes and has waived its right to
receive a coupon on the notes. In November 2015, PLHL agreed, subject to obtaining approvals, to repay the notes in full in
2016.
No other loans are considered to be past due or impaired.
For the purposes of the additional fair value disclosures for assets recognised at amortised cost, all loans and
receivables are categorised as Level 3 financial instruments. The fair value of loans and receivables with no external
market is determined by internally developed discounted cash flow models using a risk adjusted discount rate corroborated
with external market data where possible.
Details of the factors considered in determination of fair value are included in note E2 to the consolidated financial
statements.
10. CASH AND CASH EQUIVALENTS
The accounting policy for cash and cash equivalents is included in note G11.
2015 2014
£m £m
Short-term deposits (including demand and time deposits) - 3
11. CASH FLOWS FROM OPERATING ACTIVITIES
2015 2014
£m £m
Profit for the year before tax 164 125
Adjustments to reconcile profit for the year to cash flows from operating activities:
Interest income from other Group entities (58) (48)
Reversal of impairment losses on loans and receivables (75) -
Fair value gains on financial instruments - (5)
Dividends received (487) (94)
Write down of loans to Group entities 8 10
Impairment of investment in subsidiaries 437 -
Share-based payment charge 4 7
Net (increase)/decrease in investment assets (29) 26
Net decrease/(increase) in working capital 8 (6)
Cash (utilised)/generated by operations (28) 15
12. CAPITAL AND RISK MANAGEMENT
The Company's capital comprises share capital and all reserves. At 31 December 2015, total capital was £1,504 million
(2014: £1,454 million). The movement in capital in the year comprises the total comprehensive income for the year
attributable to owners of £164 million (2014: £125 million), proceeds from the issue of ordinary share capital of £2
million (2014: £1 million) and a credit to equity for equity-settled share-based payments of £4 million (2014: £7 million),
partly offset by payment of dividends of £120 million (2014: £120 million).
There are no externally imposed capital requirements on the Company. The Company's capital is monitored by the Directors
and managed on an on-going basis via a monthly close process to ensure that it remains positive at all times.
Details of the Group risk management policies are outlined in notes E6 and F4 to the consolidated financial statements.
The primary operation of the Company is to manage its investment in subsidiaries. The Company's other assets and
liabilities mainly consist of receivables due from and borrowings owed to other Group entities.
The principal risks and uncertainties facing the Company are:
· interest rate risk, since the movement in interest rates will impact the value of interest receivable and payable by the
Company;
· liquidity risk, exposure to liquidity risk as a result of normal business activities, specifically the risk arising from
an inability to meet short-term cash flow requirements; and
· credit risk, arising from the default of the counterparty to a particular financial asset and is significantly reduced
as assets are primarily inter-company receivables from other Group entities.
The Company's exposure to all these risks is monitored by the Directors, who agree policies for managing each of these
risks on an ongoing basis.
13. SHARE-BASED PAYMENTS
For detailed information on the long-term incentive plans, sharesave schemes and deferred bonus share schemes refer to note
I2 in the consolidated financial statements.
14. DIRECTORS' REMUNERATION
Details of the remuneration of the Directors' of Phoenix Group Holdings is included in the Directors' remuneration report
on pages 57 to 80 of the Annual Report and Accounts.
15. RELATED PARTY TRANSACTIONS
The Company has related party transactions with Group entities and its key management personnel. Details of the total
compensation of key management personnel, being those having authority and responsibility for planning, directing and
controlling the activities of the Group, including the Executive and Non-Executive Directors, are included in note I5 of
the consolidated financial statements.
During the year ended 31 December 2015, the Company entered into the following transactions with Group entities:
2015 2014
£m £m
Dividends received 487 94
Interest received on loans and receivables due from Group entities 58 48
545 142
Amounts due from related parties at the end of the year:
2015 2014
£m £m
Loans due from Group entities 819 270
Other amounts due from Group entities - 8
819 278
Amount due for settlement after 12 months 814 270
Amounts due to related parties at the end of the year:
2015 2014
£m £m
Loans due to Group entities 3 3
Other amounts due to Group entities 123 146
126 149
Amount due for settlement after 12 months - 3
The Company guarantees certain borrowings of PGH Capital Limited as detailed in note E5 to the consolidated financial
statements.
16. AUDITOR'S REMUNERATION
Details of auditor's remuneration, for Phoenix Group Holdings subsidiary undertakings, is included in note C3 to the
consolidated financial statements.
17. EVENTS AFTER THE REPORTING PERIOD
Details of events after the reporting date are included in note I9 to the consolidated financial statements.
H Staunton
C Bannister
J McConville
A Barbour
R P Azria
I Cormack
T Cross Brown
I Hudson
D Woods
K Sorenson
St Helier, Jersey
22 March 2016
ASSET DISCLOSURES
ASSET DISCLOSURES
ADDITIONAL LIFE COMPANY
ASSET DISCLOSURES
The analysis of the asset portfolio provided below comprises the assets held by the Group's life companies. It excludes
other Group assets such as cash held in the holding and service companies; the assets held by the non-controlling interests
in consolidated collective investment schemes and UK Commercial Property Trust; and is stated net of derivative
liabilities.
The following table provides an overview of the exposure by asset category of the Group's life companies' shareholder and
policyholder funds:
31 December 2015
Carrying value Shareholder and Participating Participating Unit-linked2 Total3
non-profit funds1 supported1 non-supported2 £m £m
£m £m £m
Cash and cash equivalents 1,236 2,498 3,921 1,065 8,720
Debt securities - gilts 1,262 818 7,275 602 9,957
Debt securities - bonds 5,203 1,380 6,263 724 13,570
Equity securities 186 62 5,231 7,294 12,773
Property investments 140 74 821 336 1,371
Other investments4 266 (31) 767 (1) 1,001
At 31 December 2015 8,293 4,801 24,278 10,020 47,392
Cash and cash equivalents in Group holding companies 706
Cash and financial assets in other Group companies 328
Financial assets held by the non-controlling interest in the consolidated UKCPT 838
Financial assets held by the non-controlling interest in consolidated collective investment schemes 5,473
Total Group consolidated assets 54,737
Comprised of:
Investment property 1,942
Financial assets 50,066
Cash and cash equivalents 3,940
Assets held for sale 149
Derivative liabilities (1,360)
54,737
1 Includes assets where shareholders of the life companies bear the investment risk.
2 Includes assets where policyholders bear most of the investment risk.
3 This information is presented on a look through basis to underlying funds where available.
4 Includes equity release mortgages of £268 million, policy loans of £11 million, other loans of £15 million, net
derivative assets of £139 million and other investments of £568 million.
31 December 2014
Carrying value Shareholder and non-profit funds Participating supported Participating Unit-linked Total
£m £m non-supported £m £m
£m
Cash and cash equivalents 1,429 728 2,861 1,176 6,194
Debt securities - gilts 1,485 2,348 8,756 661 13,250
Debt securities - bonds 6,379 1,936 7,082 815 16,212
Equity securities 367 67 5,613 7,787 13,834
Property investments 191 67 997 346 1,601
Other investments1 402 (22) 806 - 1,186
At 31 December 2014 10,253 5,124 26,115 10,785 52,277
Cash and cash equivalents in Group holding companies 988
Cash and financial assets in other Group companies 116
Financial assets held by the non-controlling interest in the consolidated UKCPT 736
Financial assets held by the non-controlling interest in consolidated collective investment schemes 4,652
Adjustments on consolidation (14)
Total Group consolidated assets 58,755
Comprised of:
Investment property 1,858
Financial assets 54,022
Cash and cash equivalents 5,067
Derivative liabilities (2,192)
58,755
1 Includes policy loans of £12 million, other loans of £24 million, net derivative assets of £362 million and other
investments of £788 million.
The following table analyses by type the debt securities of the life companies:
31 December 2015
Analysis by type of debt securities Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked Total
£m £m £m £m £m
Gilts 1,262 818 7,275 602 9,957
Other government and supranational2 713 673 2,058 88 3,532
Corporate - financial institutions 1,859 367 1,588 153 3,967
Corporate - other 2,079 164 2,121 441 4,805
Asset backed securities ('ABS') 552 176 496 42 1,266
At 31 December 2015 6,465 2,198 13,538 1,326 23,527
2 Includes debt issued by governments; public and statutory bodies; government backed institutions and supranationals.
31 December 2014
Analysis by type of debt securities Shareholder and non-profit funds Participating supported Participating Unit-linked Total
£m £m non-supported £m £m
£m
Gilts 1,485 2,348 8,756 661 13,250
Other government and supranational 1,196 753 2,432 116 4,497
Corporate - financial institutions 2,185 506 2,192 196 5,079
Corporate - other 2,394 346 1,889 445 5,074
Asset backed securities ('ABS') 604 331 569 58 1,562
At 31 December 2014 7,864 4,284 15,838 1,476 29,462
The life companies' debt portfolio was £23.5 billion at 31 December 2015. Shareholders had direct exposure to £8.7 billion
of these assets (including supported participating funds), of which 99% of rated securities were investment grade. The
shareholders' credit risk exposure to the non-supported participating funds is primarily limited to the shareholders' share
of future bonuses. Shareholders' credit risk exposure to the unit-linked funds is limited to the level of asset management
fee, which is dependent on the underlying assets.
Sovereign and supranational debt represented 40% of the debt portfolio in respect of shareholder exposure, or £3.5 billion,
at 31 December 2015. The vast majority of the life companies' exposure to sovereign and supranational debt holdings is to
UK gilts.
The following table sets out a breakdown of the life companies' sovereign and supranational debt security holdings by
country:
31 December 2015
Analysis of sovereign and supranational debt security holdings by country Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked£m Total
£m £m £m £m
UK 1,400 905 7,560 609 10,474
Supranationals 310 195 553 17 1,075
USA 1 12 15 24 52
Germany 211 232 593 14 1,050
France 31 50 64 4 149
Netherlands - - 1 1 2
Italy - - - 5 5
Spain - - - 3 3
Other - non-Eurozone 22 87 511 13 633
Other - Eurozone - 10 36 - 46
At 31 December 2015 1,975 1,491 9,333 690 13,489
31 December 2014
Analysis of sovereign and supranational debt security holdings by country Shareholder and non-profit funds Participating supported Participating Unit-linked£m Total
£m £m non-supported £m
£m
UK 1,605 2,424 9,200 670 13,899
Supranationals 571 327 661 24 1,583
USA 3 7 119 26 155
Germany 425 263 787 22 1,497
France 49 50 59 5 163
Netherlands - - 4 2 6
Italy - - - 4 4
Spain - 5 - 3 8
Other - non-Eurozone 18 10 282 14 324
Other - Eurozone 10 15 76 7 108
At 31 December 2014 2,681 3,101 11,188 777 17,747
At 31 December 2015, the life companies had £nil (2014: £5 million) shareholder exposure to sovereign debt of the
Peripheral Eurozone, defined as Portugal, Italy, Ireland, Greece and Spain.
All of the life companies' debt securities are held at fair value through profit or loss under IAS 39, and therefore
already reflect any reduction in value between the date of purchase and the reporting date.
The life companies have in place a comprehensive database that consolidates credit exposures across counterparties,
geographies and business lines. This database is used for credit monitoring, stress testing and scenario planning. The life
companies continue to manage their balance sheets prudently and have taken extra measures to ensure their market exposures
remain within risk appetite.
The following table sets out a breakdown of the life companies' financial institution corporate debt security holdings by
country:
31 December 2015
Analysis of financial institution corporate debt security holdings by country Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked£m Total
£m £m £m £m
UK 845 151 566 71 1,633
USA 449 39 298 16 802
Germany 16 18 86 3 123
France 58 - 43 3 104
Netherlands 189 52 238 30 509
Italy 7 - 7 - 14
Ireland 28 1 12 - 41
Spain 3 - 12 - 15
Other - non-Eurozone 208 94 272 29 603
Other - Eurozone 56 12 54 1 123
At 31 December 2015 1,859 367 1,588 153 3,967
31 December 2014
Analysis of financial institution corporate debt security holdings Shareholder and non-profit funds Participating supported Participating Unit-linked£m Total
by country £m £m non-supported £m
£m
UK 1,181 301 959 95 2,536
USA 397 84 420 14 915
Germany 46 3 44 - 93
France 126 10 115 10 261
Netherlands 218 50 272 31 571
Italy 3 - 13 - 16
Spain 2 - 20 - 22
Other - non-Eurozone 177 54 305 45 581
Other - Eurozone 35 4 44 1 84
At 31 December 2014 2,185 506 2,192 196 5,079
The life companies had £39 million (2014: £5 million) shareholder exposure to financial institution corporate debt of the
Peripheral Eurozone at 31 December 2015. The £2,226 million (2014: £2,691 million) total shareholder exposure comprised
£1,742 million (2014: £1,644 million) senior debt, £4 million (2014: £215 million) Tier 1 debt and £480 million (2014: £832
million) Tier 2 debt.
The £2,226 million shareholder exposure to financial institution corporate debt comprised £1,281 million (2014: £1,556
million) bank debt and £945 million (2014: £1,135 million) non-bank debt.
For each of the life companies' significant financial institution counterparties, industry and other data has been used to
assess the exposure of the individual counterparties. As part of the Group's risk appetite framework and analysis of
shareholder exposure to a potential worsening of the economic situation, this assessment has been used to identify
counterparties considered to be most at risk from defaults. The financial impact on these counterparties, and the contagion
impact on the rest of the shareholder portfolio, is assessed under various scenarios and assumptions. This analysis is
regularly reviewed to reflect the latest economic outlook, economic data and changes to asset portfolios. The results are
used to inform the Group's views on whether any management actions are required.
The following table sets out a breakdown of the life companies' corporate - other debt security holdings by country:
31 December 2015
Analysis of corporate - other debt security holdings by country Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked£m Total
£m £m £m £m
UK 1,073 76 1,607 363 3,119
USA 288 33 115 15 451
Germany 142 24 93 15 274
France 173 15 113 20 321
Netherlands 39 - 19 3 61
Italy 56 2 27 3 88
Ireland 1 - 2 2 5
Spain 45 - 24 2 71
Other - non-Eurozone 190 13 77 11 291
Other - Eurozone 72 1 44 7 124
At 31 December 2015 2,079 164 2,121 441 4,805
31 December 2014
Analysis of corporate - other debt security holdings by country Shareholder and non-profit funds Participating supported Participating Unit-linked£m Total
£m £m non-supported £m
£m
UK 1,122 166 1,022 350 2,660
USA 436 71 233 16 756
Germany 191 51 151 21 414
France 227 32 197 23 479
Netherlands 51 2 35 5 93
Portugal - - 1 - 1
Italy 42 2 62 2 108
Greece 3 - - - 3
Spain 30 - 28 2 60
Other - non-Eurozone 188 21 96 14 319
Other - Eurozone 104 1 64 12 181
At 31 December 2014 2,394 346 1,889 445 5,074
The following table sets out a breakdown of the life companies' ABS holdings by country:
31 December 2015
Analysis of ABS holdings by country Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked£m Total
£m £m £m £m
UK 499 172 399 41 1,111
USA 3 - 4 - 7
Germany - - 28 - 28
France - 1 - - 1
Netherlands 10 - 20 1 31
Italy - - 12 - 12
Spain - - 1 - 1
Other - non-Eurozone 40 - 10 - 50
Other - Eurozone - 3 22 - 25
At 31 December 2015 552 176 496 42 1,266
31 December 2014
Analysis of ABS holdings by country Shareholder and non-profit funds Participating supported Participating Unit-linked£m Total
£m £m non-supported £m
£m
UK 516 323 487 56 1,382
USA 43 - 5 - 48
Germany - 2 23 - 25
France - 2 - - 2
Netherlands 19 - 28 2 49
Italy - - 5 - 5
Ireland - - 8 - 8
Spain - - 2 - 2
Other - non-Eurozone 26 4 11 - 41
At 31 December 2014 604 331 569 58 1,562
The following table sets out the credit rating analysis of the debt portfolio:
31 December 2015
Credit rating analysis of debt portfolio Shareholder and non-profit funds Participating supported Participating non-supported Unit-linked£m Total
£m £m £m £m
AAA 746 625 1,740 72 3,183
AA 2,336 1,272 8,443 487 12,538
A 1,618 189 902 84 2,793
BBB 1,635 92 1,751 179 3,657
BB 100 11 205 21 337
B and below 1 - 327 - 328
Non-rated 29 9 170 483 691
At 31 December 2015 6,465 2,198 13,538 1,326 23,527
97% of rated securities were investment grade at 31 December 2015 (2014: 97%). The percentage of rated securities that were
investment grade in relation to the shareholder and policyholders' funds were 99% and 96% respectively (2014: 95% and 98%
respectively).
31 December 2014
Credit rating analysis of debt portfolio Shareholder and non-profit funds Participating supported Participating Unit-linked Total
£m £m non-supported £m £m
£m
AAA 1,168 699 1,769 62 3,698
AA 2,257 2,981 10,130 775 16,143
A 1,549 438 1,392 137 3,516
BBB 2,154 140 2,043 207 4,544
BB 284 3 129 17 433
B and below 284 - 191 2 477
Non-rated 168 23 184 276 651
At 31 December 2014 7,864 4,284 15,838 1,476 29,462
MCEV
SUPPLEMENTARY
INFORMATION
MCEV SUPPLEMENTARY INFORMATION
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE MARKET CONSISTENT EMBEDDED VALUE
When compliance with the CFO Forum MCEV principles published in June 2008 and amended in October 2009 is stated, those
principles require the Directors to prepare supplementary information in accordance with the MCEV principles and to
disclose and provide reasons for any non-compliance with the principles.
The MCEV methodology adopted by the Group is in accordance with these MCEV principles, with the exception of:
· risk-free rates have been defined as the annually compounded UK Government bond nominal spot curve plus ten basis points
rather than as the swap rate curve;
· the value of the asset management (prior to divestment on 1 July 2014) and the management service companies has been
included on an IFRS basis; and
· no allowance for the costs of residual non-hedgeable risk has been made.
Further detail on these exceptions is included in note 1, Basis of preparation.
Specifically, the Directors have:
· determined assumptions on a realistic basis, having regard to past, current and expected future experience and to
relevant external data, and then applied them consistently;
· made estimates that are reasonable and consistent; and
· provided additional disclosures when compliance with the specific requirements of the MCEV principles is insufficient to
enable users to understand the impact of particular transactions, other events and conditions and the Group's financial
position and financial performance.
CLIVE BANNISTER JAMES MCCONVILLE
Group Chief Executive Officer Group Finance Director
St Helier, Jersey
22 March 2016
MCEV SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR'S REPORT TO THE DIRECTORS OF PHOENIX GROUP HOLDINGS ON THE CONSOLIDATED GROUP MCEV
We have audited the Consolidated Phoenix Group MCEV ('Phoenix Group MCEV') supplementary information for the year ended 31
December 2015 which comprises the Summarised consolidated income statement - Group MCEV basis, MCEV earnings per ordinary
share, Statement of consolidated comprehensive income - Group MCEV basis, Reconciliation of movement in equity - Group MCEV
basis, Group MCEV analysis of earnings, Reconciliation of Group IFRS equity to MCEV net worth and related notes 1 to 7. The
Phoenix Group MCEV supplementary information has been prepared by the Directors of Phoenix Group Holdings ('the Group') in
accordance with the basis of preparation set out on pages 213 to 215.
DIRECTORS' RESPONSIBILITIES FOR THE PHOENIX GROUP MCEV SUPPLEMENTARY INFORMATION
The Directors are responsible for the preparation of the Phoenix Group MCEV supplementary information in accordance with
the basis of preparation set out on pages 213 to 215 and for such internal control as the Directors determine is necessary
to enable the preparation of supplementary information that is free from material misstatement, whether due to fraud or
error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on the Phoenix Group MCEV supplementary information based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require us to comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Phoenix Group MCEV
supplementary information is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Phoenix Group
MCEV supplementary information. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the Phoenix Group MCEV supplementary information, whether due to fraud or error. In
making those risk assessments, we consider internal control relevant to the Group's preparation of the Phoenix Group MCEV
supplementary information in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by the
Directors, as well as evaluating the overall presentation of the Phoenix Group MCEV supplementary information.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
OPINION
In our opinion the Phoenix Group MCEV supplementary information, for the year ended 31 December 2015, has been prepared, in
all material respects, in accordance with the basis of preparation set out on pages 213 to 215.
BASIS OF ACCOUNTING AND RESTRICTION ON USE
Without modifying our opinion, we draw attention to pages 213 to 215 of the Phoenix Group MCEV supplementary information,
which describe the basis of preparation. The Phoenix Group MCEV supplementary information is prepared by Phoenix Group
Holdings in accordance with the basis of preparation set out on pages 213 to 215. As a result, the Phoenix Group MCEV
supplementary information may not be suitable for another purpose. This report, including the opinion, has been prepared
for and only for the Group's Directors as a body in accordance with our letter of engagement dated 10 March 2016 and for no
other purpose. We do not, in
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AnnouncementREG - Phoenix Group Hldgs - Director/PDMR Shareholding
AnnouncementREG - Phoenix Group Hldgs - Total Voting Rights
AnnouncementREG - Phoenix Group Hldgs - Director/PDMR Shareholding
AnnouncementREG - Phoenix Group Hldgs - Director/PDMR Shareholding
Announcement