RBS 2005 Annual Report Download - page 154

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Notes on the accounts
Notes on the accounts continued
4 Operating profit before tax
Operating profit before tax is stated after taking account of the following: Group
2005 2004
£m £m
Income Sales of available-for-sale securities
– Gross gains 683
– Gross losses (16)
– Net profit 667
Sales of investment securities
– Gross gains 197
– Gross losses (30)
– Net profit 167
Dividend income 108 79
Share of associated undertakings’ net profit 41 24
Rental income from investment properties 250 241
Net gains on financial assets and liabilities
designated as at fair value through profit or loss 364
Expenses Interest on subordinated liabilities 1,271 681
Direct operating expenses of investment properties 61 72
Integration expenditure* relating to:
– acquisition of NatWest 129 280
– other acquisitions 329 240
* Integration expenditure comprises:
Staff costs 148 83
Premises and equipment 39 35
Other administrative expenses 131 149
Depreciation and amortisation 140 253
458 520
3 Pension costs (continued)
Main Scheme All Schemes
Major plan assets as a percentage of total plan assets 2005 2004 2005 2004
Equities 61.3% 56.7% 61.6% 57.2%
Index-linked bonds 18.1% 16.5% 16.8% 15.3%
Government fixed interest bonds 1.8% 2.1% 2.6% 2.8%
Corporate and other bonds 14.6% 12.5% 14.6% 12.7%
Property 3.6% 3.1% 3.7% 3.2%
Cash and other assets 0.6% 9.1% 0.7% 8.8%
The pension plan assets include a holding of the company’s ordinary shares with a fair value of £78 million (2004 – £73 million), of
which £76 million (2004 – £71 million) are held in the Main Scheme which also holds financial instruments issued by the Group with a
value of £299 million (2004 – £726 million).
Cumulative net actuarial losses of £2,400 million (2004 – £1,601 million) have been recognised in the statement of recognised
income and expense, of which £2,150 million (2004 – £1,433 million) relate to the Main Scheme.
Main Scheme All Schemes
2005 2004 2003 2005 2004 2003
History of defined benefit schemes £m £m £m £m £m £m
Present value of defined benefit obligations 19,118 16,051 13,594 21,123 17,738 14,898
Fair value of plan assets 15,914 13,569 11,797 17,388 14,798 12,862
Net deficit 3,204 2,482 1,797 3,735 2,940 2,036
Experience losses on plan liabilities (41) (624) (68) (631)
Experience gains on plan assets 1,556 392 1,660 408
Actual return on pension schemes assets 2,486 1,230 2,677 1,328