Notes to the Group Financial Statements

1. Sales commissions

	2009 $m	2008 $m
Upfront sales commissions	240	216
Trail commissions	171	175
	411	391

2. Income statement presentation

The material items which the directors consider should be presented separately on the face of the income statement by virtue of their size or nature, in order to aid comparability from period to period, are as follows:

	2009 $m
Accelerated amortisation of MGS sales commissions	(107)
Restructuring costs	(37)
Gain on disposal of 50% of subsidiary	48
Impairment of Ore Hill investments and goodwill	(299)
Loss arising from residual interest in brokerage assets	(105)
	(500)

(a) Accelerated amortisation of MGS sales commissions

As a result of the MGS de-risking process, an accelerated amortisation charge of $107 million ($86 million after adjusting for variable compensation) has been recognised in respect of upfront sales commissions associated with MGS products. Following the decision to de-risk many of the MGS products, the useful economic life of these products was reviewed and reduced. Therefore the amortisation has been accelerated.

(b) Restructuring costs

In March 2009 the Group announced that it has implemented a plan to reduce the cost base of the business. The one-off compensation costs associated with this restructuring are reported as Restructuring costs.

(c) Gain on disposal of 50% of subsidiary/Impairment of Ore Hill investments and goodwill

On 8 May 2008, the Group acquired a 50% interest in Ore Hill, a major US-based credit specialist fund manager. Simultaneously the Ore Hill principals acquired a 50% interest in Pemba Credit Advisers (Pemba), the European credit manager subsidiary of the Group. A gain of $48 million arose on the disposal of 50% of Pemba, which is included in the income statement. Since this disposal, the credit markets have continued to deteriorate, which has severely affected the Pemba business. Accordingly, Pemba has been restructured and as part of this exercise, in February 2009, the Group took back its 50% shareholding from the Ore Hill principals at nil cost, with no further profit or loss arising.

As a result of the deterioration in market conditions since the date of the acquisition of Ore Hill and the decrease in assets under management arising from significant redemptions during the period, the Group has recognised an impairment charge of $214 million against the carrying value of the Ore Hill investment. The assumptions used in the impairment review are discussed in Note 14. The discount rates used to perform the impairment exercise are higher than the rates used at the time of the acquisition as the discount rates applied are determined based on the current market conditions and reflect the deterioration in the financial markets and debt rates and the higher risk of returns as at 31 March 2009.

The carrying value of the Group's interest in Ore Hill's Designated Investment (DI) portfolio was reviewed for impairment as at 31 March 2009. The impairment charge booked as a result of this review was $75 million, which is included with the impairment against the Ore Hill investment within Impairment of Ore Hill investments and goodwill, together with a further $10 million charge relating to the impairment of MTM Capital goodwill.

(d) Loss arising from residual interest in brokerage assets

As discussed in Note 12, following the disposal of its brokerage business the Group retained a residual investment in MF Global. These shares, which are classified as available-for-sale financial assets, have been reviewed for impairment as at 31 March 2009, following a significant decrease in the underlying share price, resulting in an impairment charge of $126 million being taken through the income statement. Other net gains of $21 million arose from the Group's residual interest in brokerage assets during the year.