Our Accounts 105
Notes to the financial statements continued
31 December 2012
29. Investments in group undertakings
Accounting for investments in group undertakings
The subsidiaries are held in the Society’s Statement of Financial Position at cost less any provision for impairment. An assessment of
the realisable value is made at the year end and, if the Directors assess that there has been a permanent fall in that value below the
carrying value, a provision is made to bring the carrying value down to the assessed realisable value.
2012 2011
Society £m £m
Shares in subsidiaries
Cost less provisions at 1 January 723.2 748.3
Additions 399.6 4.0
Sale of LVGIG Group to subsidiary undertaking (484.6) -
Increase / (reduction) in buy out provision (refer to Note 40) 2.4 5.3
Impairment write-off (90.0) (34.4)
550.6 723.2
Loan stock in subsidiaries
Cost at 1 January 234.4 223.2
Additions 300.3 11.2
Redemption (183.0) -
351.7 234.4
Shares and loan stock in subsidiaries at 31 December 902.3 957.6
During the year the Society sold its investment in Liverpool Victoria General Insurance Group Limited (LVGIG) to LV Capital PLC,
a subsidiary undertaking at cost. In addition the Society invested in £300m of loan notes issued by LV Capital PLC.
The Society made capital contributions during 2012 of £nil to Liverpool Victoria General Insurance Group Limited (2011: £4m),
Statements and Reviews
these are disclosed within additions in the table above.
The Society has examined the carrying value of its subsidiaries and concluded that a provision for impairment of £90m was necessary
in regard to its investment in Liverpool Victoria Life Company Limited (2011: £28.1m), this impairment arose due to the payment of
dividends to the Society thereby reducing the value of the company.
Further details of the Group’s loan stock are given in Note 47 and the Group’s investments in Notes 43 and 44.
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