For the year ended 31 December 2006
| Notes | 2006 £m |
2005 £m |
|
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit from ordinary activities after income tax | 1,631 | 1,025 | |
| Adjustments for non cash movements in net profit for the period | |||
| Realised and unrealised gains on financial investments and investment properties | (9,505) | (20,962) | |
| Investment income | (6,630) | (5,646) | |
| Interest expense | 153 | 116 | |
| Income tax payable | 298 | 577 | |
| Other adjustments | 46 | 40 | |
| Net (increase)/decrease in operational assets | |||
| Investments designated as held for trading or fair value through profit or loss | (9,599) | (16,519) | |
| Investments designated as available-for-sale | (251) | 86 | |
| Other assets | 557 | (294) | |
| Net increase/(decrease) in operational liabilities | |||
| Insurance contracts | (1,893) | 3,071 | |
| Transfer to unallocated divisible surplus | 285 | 338 | |
| Investment contracts | 19,527 | 33,173 | |
| Value of in-force non-participating contracts | (12) | 55 | |
| Other liabilities | 596 | 536 | |
| Cash used in operations | (4,797) | (4,404) | |
| Interest paid | (146) | (96) | |
| Interest received | 3,478 | 2,967 | |
| Income tax paid | (315) | (240) | |
| Dividends received | 3,095 | 2,576 | |
| Net cash flows from operating activities | 1,315 | 803 | |
| Cash flows from investing activities | |||
| Net acquisition of plant and equipment | (24) | (22) | |
| Net proceeds from disposal of Ventures’ investments | 14 | 10 | 23 |
| Net proceeds from disposal of Gresham | 14 | – | 73 |
| Non-financial investments purchased | (3) | (19) | |
| Net cash flows from investing activities | (17) | 55 | |
| Cash flows from financing activities | |||
| Dividend distributions to ordinary equity holders of the Company during the year | (349) | (331) | |
| Distributions during the year on subordinated borrowings designated as equity | – | (16) | |
| Proceeds from issue of ordinary share capital | 15 | 1 | |
| Purchase of treasury shares | (11) | (15) | |
| Proceeds from borrowings | 1,062 | 764 | |
| Repayment of borrowings | (1,051) | (257) | |
| Other | – | (1) | |
| Net cash flows from financing activities | (334) | 145 | |
| Net increase in cash and cash equivalents | 964 | 1,003 | |
| Exchange (losses)/gains on cash and cash equivalents | (35) | 6 | |
| Cash and cash equivalents at 1 January | 4,001 | 2,992 | |
| Cash and cash equivalents at 31 December | 27 | 4,930 | 4,001 |
The Group’s consolidated cash flow statement includes all cash and cash equivalent flows, including those relating to the UK Long Term Funds.