RBS 2012 Annual Report Download - page 484

6 Derivatives
The following table shows the notional amounts and fair values of the company's derivatives.
2012 2011 2010
Notional Notional Notional
amount Assets Liabilities amount Assets Liabilities amount Assets Liabilities
£bn £m £m £bn £m £m £bn £m £m
Exchange rate contracts 3 214 2 71,182 266 1,195 231
Interest rate contracts 6 297 5 4320 —4 280—
Credit derivatives — — — 10 — 53 — — —
511 7 1,502 79 1,475 231
Included above are derivatives held for hedging purposes as follows:
2012 2011 2010
Fair value hedging Assets
£m
Liabilities
£m Assets £m
Liabilities
£m
Assets
£m
Liabilities
£m
Interest rate contracts 291 — 279 — 252 —
7 Debt securities
The company holds debt securities issued by a Group undertaking of £1,522 million (2011 - £1,568 million; 2010 - £1,454 million) classified as loans and
receivables.
8 Investments in Group undertakings
Investments in Group undertakings are carried at cost less impairment. Movements during the year were as follows:
2012 2011 2010
£m £m £m
At 1 January 53,871 49,125 64,766
Currency translation and other adjustments (37) (2)(49)
Additional investments in Group undertakings 3,710 4,607 1,884
Additions — 761 —
Redemption of investments in Group undertakings (29) (50)(12,346)
Disposals (735) — (6)
Impairment of investments (1,785) (570) (5,124)
At 31 December 54,995 53,871 49,125
The principal subsidiary undertakings of the company are shown below. Their capital consists of ordinary and preference shares which are unlisted with
the exception of certain preference shares issued by NatWest and RBS Holdings N.V..
The Royal Bank of Scotland plc, Direct Line Insurance Group plc and RFS Holdings B.V. are directly owned by the company, and all of the other
subsidiary undertakings are owned directly, or indirectly through intermediate holding companies, by these companies. All of these subsidiaries are
included in the Group's consolidated financial statements and have an accounting reference date of 31 December.
Nature of business
Country of incorporation and
principal area of operation Group interest
The Royal Bank of Scotland plc BankingGreat Britain 100%
National Westminster Bank Plc (1) BankingGreat Britain 100%
RBS Citizens Financial Group, Inc. BankingUS100%
Coutts & Company (2) Private bankingGreat Britain 100%
RBS Securities Inc. Broker deale
r
US 100%
Direct Line Insurance Group plc Insurance Great Britain 65%
Ulster Bank Limited (3) BankingNorthern Ireland100%
RBS Holdings N.V. (4) BankingThe Netherlands98%
Notes:
(1) The company does not hold any of the NatWest preference shares in issue.
(2) Coutts & Company is incorporated with unlimited liability. Its registered office is 440 Strand, London WC2R 0QS.
(3) Ulster Bank Limited and its subsidiaries also operate in the Republic of Ireland.
(4) RFS Holdings B.V. (RFS) owns 100% of the outstanding shares of RBS Holdings N.V. (ABN AMRO Holding N.V. prior to 1 April 2010). RBS Holdings N.V. has one direct subsidiary, The Royal Bank
of Scotland N.V. (RBS N.V.), a fully operational bank within the Group. RBS N.V. is independently rated and regulated by the Dutch Central Bank. On the division of an entity by demerger, Dutch law
establishes a cross liability between surviving entities in respect of the creditors at the time of the demerger. RBS N.V.’s cross liability is limited by law to the lower of its equity and the debts of ABN
AMRO Bank N.V. on 1 April 2010. The likelihood of any cross liability crystallising is considered remote.
The above information is provided in relation to the principal related undertakings as permitted by Section 410(2) of the Companies Act 2006. Full
information on all related undertakings is included in the Annual Return delivered to the Registrar of Companies for Scotland.
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Parent company financial statements and notes continued