Notes to the Group Financial Statements
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| 15. Other non-current investments | |||||||||
| Available- for-sale financial assets $m |
Financial assets at fair value through profit or loss $m |
Held to maturity $m |
Restated Total $m |
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| At 1 April 2006 | 166 | 58 | 1,927 | 2,151 | |||||
| Currency translation differences | (1) | – | – | (1) | |||||
| Additions | 17 | 130 | 261 | 408 | |||||
| Disposals | (79) | (27) | – | (106) | |||||
| Reclassification | (2) | 2 | (1,927) | 1,927 | |||||
| Impairment | (1) | – | – | (1) | |||||
| Fair value adjustment | 136 | 13 | – | 149 | |||||
| Transfers to discontinued operations | (233) | – | (261) | (484) | |||||
| At 31 March 2007 | 13 | 176 | – | 189 | |||||
| At 1 April 2005 | 76 | 29 | – | 105 | |||||
| Currency translation differences | (1) | – | – | (1) | |||||
| Businesses and subsidiaries acquired | 105 | – | – | 105 | |||||
| Additions | 2 | 30 | 1,927 | 1,959 | |||||
| Disposals | (99) | (2) | – | (101) | |||||
| Reclassification | (2) | (1) | – | (1) | |||||
| Impairment | (3) | – | – | (3) | |||||
| Fair value adjustment | 88 | – | – | 88 | |||||
| At 31 March 2006 | 166 | 58 | 1,927 | 2,151 | |||||
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The reclassification of held to maturity assets in the year relates to a transfer to short-term investments. The cumulative amount written off against other non-current investments at 31 March 2007 was $3 million (2006: $2 million). |
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| Included in other non-current investments are the following: | |||||||||
| 2007 | Restated 2006 | ||||||||
| Available- for-sale financial assets $m |
Financial assets at fair value through profit or loss $m |
Total $m |
Available- for-sale financial assets $m |
Financial assets at fair value through profit or loss $m |
Held to maturity $m |
Total $m |
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| Listed securities: | |||||||||
| Equity investments in market seats | 7 | – | 7 | 43 | – | – | 43 | ||
| Treasury bills and notes | – | – | – | – | – | 1,927 | 1,927 | ||
| 7 | – | 7 | 43 | – | 1,927 | 1,970 | |||
| Unlisted securities: | |||||||||
| Private equity investments | – | 1 | 1 | – | 18 | – | 18 | ||
| Equity investments in US Limited Liability Partnerships | 6 | – | 6 | 7 | – | – | 7 | ||
| Equity investments in market seats | – | – | – | 115 | – | – | 115 | ||
| Investments in fund products | – | 132 | 132 | – | 20 | – | 20 | ||
| Collateralised debt and fund obligations | – | 42 | 42 | – | 17 | – | 17 | ||
| Other investments | – | 1 | 1 | 1 | 3 | – | 4 | ||
| 6 | 176 | 182 | 123 | 58 | – | 181 | |||
| 13 | 176 | 189 | 166 | 58 | 1,927 | 2,151 | |||
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Brokerage’s seat memberships are classified as equity instruments as they provide the holder the same rights to an exchange as a market seat share. The fair values of listed market seat shares are determined by the quoted bid price at the balance sheet date. The fair values of unlisted market seat shares and memberships are determined using the exchange’s internal auction process, where the last traded price is used to establish the fair value. Other non-current investments of $484 million attributable to Brokerage operations have been reclassified as discontinued operations (Note 8) in the year ended 31 March 2007. Financial assets held at fair value through profit or loss are designated as such upon initial recognition. The fair values of private equity investments are determined using the fair values of the underlying investments provided by the General Partner of the Limited Partnership. The fair values of collateralised debt obligation investments are provided by third party investment banks and are determined using financial models that take into account a number of factors, including general interest rate and market conditions, macroeconomic and deal-specific credit fundamentals, and the use of cash flow projections based on assumptions regarding default and recovery. The fair values of equity investments in US limited liability partnerships are determined by using the fair values of the underlying investments, which may include private placements and other securities for which values are not readily available, and these are determined by the investment advisors of the respective underlying portfolio funds. Investments in treasury bills and notes are held as collateral against repurchase contracts that are held to maturity. The investments are held at amortised cost and the fair values of the investments are determined by discounting to present value the future interest and principal cash payments. In the comparative period the fair value was $1,909 million. |
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| The carrying amount of the Group’s other non-current investments are unhedged and are denominated in the following currencies: | |||||||||
| 2007 $m |
2006 $m |
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| US dollars | 143 | 2,126 | |||||||
| Sterling | 1 | 2 | |||||||
| Euros | 42 | 20 | |||||||
| Other currencies | 3 | 3 | |||||||
| 189 | 2,151 | ||||||||
| Other non-current investments attract the following types of interest rates: | |||||||||
| 2007 $m |
2006 $m |
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| Fixed rate | – | 1,927 | |||||||
| Non-interest bearing | 189 | 224 | |||||||
| 189 | 2,151 | ||||||||
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In the comparative period, the weighted average effective interest rate applicable to fixed rate loans is 4.7% and the weighted average maturity date of non-current investments is 1.6 years. The maximum credit risk exposure of non-current investments is equivalent to the fair value of the investments. Concentrations of credit risk with respect to non-current investments are not significant. |
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