Financial statements

	Notes	2006 £m	2005 £m
Cash generated from operations	31	(20.2)	(447.4)
Income taxes paid		(50.4)	(17.6)
Net cash flows from operations		(70.6)	(465.0)
Cash flows from investing activities
Interest received		97.5	65.3
Dividends received		4.5	2.0
Acquisition of subsidiary, net of cash acquired		–	(0.2)
Purchase of property and equipment		(3.6)	(1.9)
Net cash used in investing activities		98.4	65.2
Cash flows from financing activities
Proceeds from issue of ordinary shares		4.6	223.5
Proceeds from borrowings		227.7	266.1
Repayment of borrowings		(238.0)	(32.0)
Dividends paid to shareholders		(47.4)	(30.6)
Interest paid		(24.1)	(9.2)
Net cash flows from financing activities		(77.2)	417.8
Net (decrease)/increase in cash and cash equivalents		(49.4)	18.0
Cash and cash equivalents at beginning of year		65.6	47.6
Effect of rate changes on cash and cash equivalents		0.3	–
Cash and cash equivalents at end of year	14	16.5	65.6

The Group classifies the cash flows for the purchase and disposal of financial assets in its operating cash flows, as the purchases are funded from the cash flows associated with the origination of insurance contracts or the capital required to support underwriting, net of £271.8 million (2005: £756.3 million) being cash generated in the period that has been used to purchase financial investments.

Cash flows relating to participations on syndicates not managed by the Group are included only to the extent that cash is transferred between the Premium Trust Funds and the Group.

© Copyright Amlin 2006