137
FINANCIAL STATEMENTS
20 CASH AND CASH EQUIVALENTS
2020 £m
2019 £m
1,496.3 1,128.5 2,624.8
Cash available on demand Units in liquidity funds
267.0
1,384.0 1,651.0
Cash and cash equivalents in the Consolidated statement of cash flows
21 SHARE CAPITAL The allotted and issued ordinary share capital of the Group at 31 December 2020 is detailed below:
Share capital £m
Share premium £m
Merger reserve £m
Number of £0.10 ordinary shares
Total £m
1,035,081,664 103.5
94.5
597.1 795.1
At 1 January 2020
3,046,892
0.3
–
–
0.3
Shares issued in respect of employee share schemes
At 31 December 2020
1,038,128,556 103.8
94.5 94.5
597.1 795.4
At 1 January 2019
941,068,882 94,012,782 1,035,081,664
94.1
532.7 64.4 597.1
721.3
Shares issued
9.4
–
73.8
At 31 December 2019
103.5
94.5
795.1
On 14 March 2019, the Company completed the placing of 94,012,782 ordinary shares of 10 pence each at a price of 80 pence per share to both existing and new ordinary equity shareholders, raising gross proceeds of £75m. The placing price represents a discount of 6.7% on the market price of 85.3 pence per share at the time of the placing. The placing was achieved by the Company acquiring 100% of the equity of a limited company for consideration of the 94,012,782 new ordinary shares issued. Accordingly, merger relief under section 612 of the Companies Act 2006 applies, and share premium has not been recognised in respect of this issue of shares. Amerger reserve has been recognised representing the premium over the nominal value of the shares issued. Consideration for the acquisition of 100% of the equity shares of Partnership Assurance Group plc in 2016 consisted of a new issue of shares in the Company. Accordingly, merger relief under section 612 of the Companies Act 2006 applies, and share premium has not been recognised in respect of this issue of shares. Amerger reserve has been recognised representing the difference between the nominal value of the shares issued and the net assets of Partnership Assurance Group plc acquired.
22 TIER 1 NOTES
Year ended 31 December 2020 £m
Year ended 31 December 2019 £m
294.0
At 1 January
–
– –
Issued in the period Issue costs, net of tax
300.0
(6.0)
At 31 December
294.0
294.0
In March 2019, the Group completed the issue of £300m fixed rate perpetual restricted Tier 1 contingent convertible notes, incurring issue costs of £6.0m, net of tax. The notes bear interest on the principal amount up to 26 April 2024 (the first call date) at the rate of 9.375% per annum, and thereafter at a fixed rate of interest reset on the first call date and on each fifth anniversary thereafter. Interest is payable on the notes semi-annually in arrears on 26 April and 26 October each year, commencing on 26 April 2019. During the year, interest of £28.1m (2019: £16.8m) was paid to noteholders. The Group has the option to cancel the coupon payment at its discretion and cancellation of the coupon payment becomes mandatory upon non- compliance with the solvency capital requirement or minimum capital requirement or where the Group has insufficient distributable items. Cancelled coupon payments do not accumulate or become payable at a later date and do not constitute a default. In the event of non-compliance with specific solvency requirements, the conversion of the Tier 1 notes into ordinary shares could be triggered. The Tier 1 notes are treated as a separate category within equity and the coupon payments are recognised outside of the profit after tax result and directly in shareholders’ equity.
23 INSURANCE CONTRACTS AND RELATED REINSURANCE Insurance liabilities
2020 £m
2019 £m
21,118.4 (2,865.5) 18,252.9
Gross insurance liabilities Net reinsurance assets Net insurance liabilities
19,003.7 (3,732.0) 15,271.7
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