REG - 3i Group PLC - Financial results for the year to 31 March 2015 <Origin Href="QuoteRef">III.L</Origin> - Part 4
15/07/2015 17:33
- Part 4: For the preceding part double click ID:nRSN1280Nc
aggregated into the single "Fairvalue movement on investment entity subsidiaries" line. This is the most significant reduction of
information in our IFRS accounts.
3 Foreign exchange movements have been reclassified under the Investment basis as foreign currency asset and liability movements within the investment entity subsidiaries are included within fair value movements on investment entities.
4 Other items also aggregated into the "Fair value movements on investment entity subsidiaries" line include fees receivable from externalfunds, audit fees, custodian fees, bank charges, other general and administration expenses, carried interest and tax.
Reconciliation of CONSOLIDATED Statement of financial position
IFRS IFRS
Investment IFRS IFRS Investment adjustments basis
basis adjustments basis basis (restated) (restated)
2015 2015 2015 2014 2014 2014
Note £m £m £m £m £m £m
Assets
Non-current assets
Investments
Quoted investments 1 763 (364) 399 554 (296) 258
Unquoted investments 1 3,114 (1,842) 1,272 3,011 (1,687) 1,324
Investments in investment entities 1,3 - 2,079 2,079 - 1,909 1,909
Investment portfolio 3,877 (127) 3,750 3,565 (74) 3,491
Carried interest and performancefees receivable 1 43 - 43 17 - 17
Intangible assets 1 19 - 19 26 (1) 25
Retirement benefit surplus 136 - 136 137 - 137
Property, plant and equipment 4 - 4 5 - 5
Deferred income taxes 1 3 - 3 3 - 3
Total non-current assets 4,082 (127) 3,955 3,753 (75) 3,678
Current assets
Carried interest and performancefees receivable 45 - 45 - - -
Other current assets 1 85 (31) 54 92 (16) 76
Derivative financial instruments - - - 2 - 2
Cash and cash equivalents 1,2 864 (3) 861 697 (23) 674
Total current assets 994 (34) 960 791 (39) 752
Total assets 5,076 (161) 4,915 4,544 (114) 4,430
Liabilities
Non-current liabilities
Carried interest and performance fees payable 1 (214) 142 (72) (106) 76 (30)
Acquisition related earn-out charges payable (10) - (10) (18) - (18)
Loans and borrowings (815) - (815) (849) - (849)
B shares - - - (6) - (6)
Retirement benefit deficit (19) - (19) (14) - (14)
Deferred income taxes (3) 2 (1) (2) - (2)
Provisions 1 (5) - (5) (5) - (5)
Total non-current liabilities (1,066) 144 (922) (1,000) 76 (924)
Current liabilities
Trade and other payables 1 (169) 17 (152) (198) 32 (166)
Carried interest and performance fees payable 1 (13) - (13) (11) 5 (6)
Acquisition related earn-out charges payable (17) - (17) (10) - (10)
Derivative financial instruments - - - (4) - (4)
Current income taxes 1 (2) - (2) (4) - (4)
Deferred income taxes 1 - - - (1) 1 -
Provisions 1 (3) - (3) (8) - (8)
Total current liabilities (204) 17 (187) (236) 38 (198)
Total liabilities (1,270) 161 (1,109) (1,236) 114 (1,122)
Net assets 3,806 - 3,806 3,308 - 3,308
Equity
Issued capital 719 - 719 718 - 718
Share premium 784 - 784 782 - 782
Other reserves 4 2,382 - 2,382 1,897 - 1,897
Own shares (79) - (79) (89) - (89)
Total equity 3,806 - 3,806 3,308 - 3,308
Notes:
1 Applying IFRS 10 to the Statement of financial position aggregates the line items into the single line item "Investment in investmententities". In the Investment basis we have disaggregated these items to analyse our net assets as if the investment entity
subsidiarieswere consolidated. The adjustment reclassifies items in the Statement of financial position. There is no change to the net assets, althoughfor reasons explained below, gross assets and gross liabilities are different. The disclosure relating to
portfolio companies is significantly reduced by the aggregation, as the fair value of all investments held byinvestment entity subsidiaries is aggregated into the "Investments in investment entities" line. We have disaggregated this fair value anddisclosed
the underlying portfolio holding in the relevant line item, ie, quoted equity investments, unquoted equity investments or loansand receivables. Other items which may be aggregated are carried interest and other payables, and the Investment basis
presentation again disaggregatesthese items.
2 Cash balances held in investment entity subsidiaries are also aggregated into the "Investment in investment entities" line. At 31 March2015 £3 million (2014 restated: £23 million) of cash was held in subsidiaries that are now classified as investment
entity subsidiaries and istherefore included in the "Investment in investment entities" line.
3 Intercompany balances between investment entity subsidiaries and trading subsidiaries also impact the transparency of our results under the IFRS basis. If an investment entity subsidiary has an intercompany balance with a consolidated trading subsidiary
of the Group, then the asset or liability of the investment entity subsidiary will be aggregated into its fair value, while the asset or liability of the consolidated trading subsidiary will be disclosed as an asset or liability in the Statement of
financial position for the Group. Prior to the adoption of IFRS 10, these balances would have been eliminated on consolidation.
4 Investment basis financial statements are prepared for performance measurement and therefore reserves are not analysed separatelyunder this basis.
Reconciliation of CONSOLIDATED Cash flow statement
IFRS IFRS
Investment IFRS IFRS Investment adjustments basis
basis adjustments basis basis (restated) (restated)
2015 2015 2015 2014 2014 2014
Note £m £m £m £m £m £m
Cash flow from operating activities
Purchase of investments 1 (474) 358 (116) (337) 189 (148)
Proceeds from investments 1 841 (571) 270 677 (223) 454
Cash divestment from traded portfolio 1 21 (21) - 14 (14) -
Cash inflow from fair value subsidiaries 1 - 272 272 - 62 62
Portfolio interest received 1 26 (12) 14 9 (3) 6
Portfolio dividends received 1 44 (9) 35 44 (19) 25
Portfolio fees received 10 - 10 4 2 6
Fees received from external funds 1 78 (1) 77 75 - 75
Carried interest and performance fees received 1 6 - 6 5 - 5
Carried interest and performance fees paid 1 (13) (1) (14) (25) 10 (15)
Acquisition related earn-out charges paid (10) - (10) - - -
Operating expenses (117) 1 (116) (128) (3) (131)
Interest received 3 - 3 3 - 3
Interest paid (54) - (54) (57) - (57)
Income taxes paid 1 (5) - (5) (7) - (7)
Net cash flow from operating activities 356 16 372 277 1 278
Cash flow from financing activities
Dividend paid (183) - (183) (114) - (114)
Repayment of short-term borrowings - - - (164) - (164)
Issue of shares 3 - 3 - - -
Repurchase of B shares (6) - (6) - - -
Net cash flow from derivatives 9 - 9 (32) - (32)
Net cash flow from financing activities (177) - (177) (310) - (310)
Cash flow from investing activities
Acquisition of management contracts 1 - - - 2 (2) -
Net cash flow from deposits - - - 90 - 90
Net cash flow from investing activities - - - 92 (2) 90
Change in cash and cash equivalents 2 179 16 195 59 (1) 58
Cash and cash equivalents at the start of year 2 697 (23) 674 656 (23) 633
Effect of exchange rate fluctuations 1 (12) 4 (8) (18) 1 (17)
Cash and cash equivalents at the end of year 2 864 (3) 861 697 (23) 674
Notes:
1 The Consolidated cash flow statement is impacted by the application of IFRS 10 as cash flows to and from Investment entity subsidiariesare disclosed, rather than the cash flows to and from the underlying portfolio. Therefore in our Investment basis financial statements, we have disclosed our cash flow statement on a "look through" basis, in order toreflect the underlying sources and uses of cash flows and disclose the underlying investment activity.
2 There is a difference between the change in cash and cash equivalents of the Investment basis financial statements and the IFRS financialstatements because there are cash balances held in investment entity subsidiary vehicles. Cash held within investment entity subsidiarieswill not be shown in the IFRS statements but will be seen in the Investment basis statements.
Key risks and mitigations
Effective risk assessment underpins the successful delivery of our strategy. Integrity and responsibility are central to
our values at 3i and are embedded in our approach to risk management.
This section explains how we control and manage the risks in our business. It outlines the key risks, our assessment of
their potential impact on our business in the context of the current environment and how we mitigate them.
Approach to risk governance
The Board seeks to achieve an appropriate balance between taking risk and generating returns for shareholders and is
responsible for risk assessment, the risk management process and for the protection of the Group's reputation and brand
integrity. It considers the most significant risks facing the Group and uses quantitative analyses, such as the vintage
control and weekly liquidity reporting, where appropriate. Non-executive oversight of the risk management process is
exercised through the Audit and Compliance Committee with respect to standards of integrity, financial reporting, risk
management, going concern and internal control.
The Board has delegated the responsibility for risk oversight to the Chief Executive. He is assisted by the Group Risk
Committee ("GRC") in managing this responsibility, guided by the Board's appetite for risk and any specific limits set. The
GRC maintains the Group risk review, which summarises the Group's principal risks, associated mitigating actions and key
risk indicators, and identifies any changes to the Group's risk profile. The risk review is updated quarterly and the Chief
Executive provides an update at each Audit and Compliance Committee meeting where the Committee members contribute views
and raise questions. The last risk appraisal was completed in early May 2015.
Following the implementation of AIFMD in July 2014, we further augmented risk governance with a separate Risk Management
Function. This group meets ahead of the GRC meetings to consider separate risk reports for each AIF managed by the Group,
including areas such as portfolio composition, operational updates and team changes, which are then also considered by the
GRC.
Assurance on the robustness and effectiveness of the Group's overarching risk management processes and compliance with
relevant policies is provided to the Audit and Compliance Committee through the independent assessment by Internal Audit
and the work of Group Compliance on regulatory risks.
3i Group's Pillar 3 document can be found at www.3i.com
Risk management framework
The Group's risk management framework is designed to support the delivery of the Group's strategic objectives.
The key principles that underpin risk management in the Group are:
§ The Board and Group Executive Committee promote a culture in which risks are identified, assessed and reported in an
open, transparent and objective manner; and
§ The over-riding priority is to protect the Group's long-term viability and reputation and produce sustainable, medium to
long-term cash-to-cash returns.
Managing the Group's Environmental, Social and Governance risks is central to how we do business and is integral to our
risk management framework.
Risk management is embedded within all areas of the business. Members of the Executive Committee have responsibility for
their own business areas and the Group expects individual behaviours to mirror the culture and core values of the Group.
All employees share the responsibility of upholding 3i's control culture and supporting effective risk management to enable
us to deliver our strategy. Senior managers are required to confirm their individual and business area compliance. In
addition, all staff are assessed on their awareness of the Group's values and compliance with them as part of their annual
appraisal.
In practice, the Group operates a "three lines of defence" framework for managing and identifying risk. The first line of
defence against undesirable outcomes is the business function and the respective Managing Partners across Private Equity,
Infrastructure and Debt Management. Line management is supported by oversight and control functions such as Compliance,
Finance and Legal which constitute the second line of defence. The Compliance monitoring programme reviews the effective
operation of our processes in meeting regulatory requirements.
Internal Audit provides retrospective, independent assurance over the operation of controls and is the third line of
defence. The internal audit programme includes the review of risk management processes and recommendations to improve the
control environment.
Risk review process
The Group risk review process includes the monitoring of key strategic and financial metrics considered to be indicators of
potential changes in its risk profile. The review includes, but is not limited to, the following reference data:
§ Financial performance and strategic dashboards;
§ Vintage control and asset allocation analysis;
§ Macroeconomic and M&A market overview;
§ Liquidity management;
§ Capital adequacy, including stress testing;
§ Operating expenses;
§ Portfolio performance reports for Private Equity, Infrastructure and Debt Management;
§ Risk reports for managed Alternative Investment Funds; and
§ Quarterly Group risk log.
In addition to the above, the GRC considers the impact of any changes and developments on its risk profile, strategic
delivery and reputation quarterly.
The GRC uses the above to identify a number of key risks. It then evaluates the impact and likelihood of each key risk,
with reference to associated measures and key performance indicators. The adequacy of the mitigation plans is then assessed
and, if necessary, additional actions are agreed and then reviewed at the subsequent meeting.
A number of focus topics are also agreed in advance of each meeting. In FY2015 the GRC covered topics such as business
continuity; cyber and physical security; Responsible Investing ("RI")/Environmental, Social and Governance ("ESG")
reporting; investment concentration risk; and the Group's progress on implementing regulatory changes.
There were no significant changes to the Group's approach to risk governance or its operation in FY2015 but we have
continued to refine our framework for risk management and reporting further to the implementation of AIFMD and the Group's
approach to RI/ESG.
Further details on 3i's approach as a responsible investor are available at www.3i.com
Review of principal risks
The disclosures on the following pages are not an exhaustive list of risks and uncertainties faced by the Group, but rather
a summary of those principal risks which are under active review by the GRC and Board, and have the potential to affect
materially the achievement of the Group's strategic objectives and impact its financial performance, reputation and brand
integrity.
The Group's risk profile and appetite remains broadly stable. While there have been a number of emerging external risks
separately identified this year, for example cyber crime, the Group believes that its consistent strategy, institutional
approach to investment and strong culture have helped it to maintain its stable risk profile.
External
The external environment remains challenging. The key economies in which the Group operates are showing signs of recovery
against a background of low interest rates and the effects of quantitative easing in the Eurozone. The potential for
increased volatility or shocks, however, remains; for example, from increased geopolitical instability. In addition the
regulatory environment continues to evolve and conduct of business risk remains in sharp focus.
The Group is subject to a range of additional regulatory and tax reporting requirements. These include the European
Alternative Investment Fund Management Directive ("AIFMD"), regulations under the European Market Infrastructure Regulation
("EMIR"), Capital Requirements Directive IV ("CRDIV"), revisions to the Client Asset rules ("CASS") and the introduction of
the Foreign Account Tax Compliance Act ("FATCA"). These changes have resulted in a significant increase in reporting
requirements, operational complexity and cost to the business. However, they have had limited practical effect on 3i's
ability to deliver its strategy. Managing these changes has been a key priority and the subject of regular updates to
Executive Committee and the Board. Future developments include possible changes to the international tax system arising
from the OECD G20 Base Erosion and Profit Shifting ("BEPS") project.
Investment
The most significant risks are our ability to source attractive investment opportunities, maximise the value available from
our portfolio and manage the timings of exits and cash returns. These risks are closely linked to the economic environment
noted above. We continue to focus on sectors and geographies where our expertise and network can drive significant
outperformance. The ability to invest and realise successfully and to minimise the risk of issues in the portfolio is also
key to maintaining the Group's reputation and networks in its markets.
The Executive Committee actively monitors investments from origination to realisation with robust monthly management
information supported by Valuation Committee and Board oversight.
In addition there are a number of risks specific to each business line as follows:
Private Equity
As the investment portfolio becomes more concentrated, additional steps have been taken to increase the frequency and scope
of monitoring of the more material assets. Individual portfolio company failures could have adverse reputational
consequences for the Group, even if the value impact is not material.
Infrastructure
Strong investor demand for yield is challenging the business' ability to maintain investment rates in quality assets. The
business is adapting its strategy but remains focused on pursuing new investments while considering fund raising options
and inorganic opportunities. Many of the investments in the infrastructure portfolio provide essential services to their
community and the rigorous management of their performance is therefore critical.
Debt Management
The principal risk is the ability to grow AUM profitably, in line with its business plan. The business is also exposed to
potential volatility in the fixed income markets and the effects of regulatory changes, including the Risk Retention and
Volcker rules (effective from 2016 and 2017 respectively) which will impact the structure of the US CLO funds.
Specifically, during the warehouse phase of establishing CLOs, we are exposed to market volatilities and potential for
further capital calls.
Operational
The key areas of potential operational risk include the loss of key people and whether the investor skill sets and business
development capabilities can support the Group's strategic delivery. Detailed resource plans are in place at the business
line level and the Board conducts an annual review of the Group's organisational capability and succession assessment. The
last review was conducted in September 2014.
The GRC also received regular updates on regulation, currency risk and cyber security. In response to the growing threat
posed by cyber crime, we conducted a detailed review of the threat posed by the external environment, the adequacy of the
group's internal control framework and our ability to respond to such an event. The Group also conducted a review of its
business continuity capabilities. The findings and proposed enhancements were discussed and are being implemented across
the Group.
List of Directors and their functions
The Directors of the Company and their functions are listed below:
Sir Adrian Montague, Chairman and Chairman of the Nominations Committee
Simon Thompson, non-executive Director and Chairman Designate
Simon Borrows, Chief Executive and executive Director
Julia Wilson, Group Finance Director and executive Director
Jonathan Asquith, non-executive Director, Deputy Chairman and Chairman of the Remuneration Committee
Caroline Banszky, non-executive Director and Chairman of the Audit and Compliance Committee
Alistair Cox, non-executive Director
David Hutchison, non-executive Director and Chairman of the Valuations Committee
Martine Verluyten, non-executive Director
By order of the Board
K J Dunn
Company Secretary
13 May 2015
Registered Office: 16 Palace Street, London SW1E 5JD
Audited financial statements
Consolidated statement of comprehensive income
for the year to 31 March
2015 2014(restated)1
Notes £m £m
Realised profits over value on the disposal of investments 2 54 146
Unrealised profits on the revaluation of investments 3 236 81
Fair value movements on investment entity subsidiaries 530 433
820 660
Portfolio income
Dividends 36 25
Income from loans and receivables 38 29
Fees receivable 6 7
Foreign exchange on investments (49) (45)
Gross investment return 851 676
Fees receivable from external funds 80 75
Operating expenses (122) (136)
Interest received 3 3
Interest paid (49) (54)
Movement in the fair value of derivatives (1) 10
Exchange movements (61) (42)
Income from fair value subsidiaries 1 8
Carried interest
Carried interest and performance fees receivable 80 3
Carried interest and performance fees payableAcquisition related earn-out charges (72)(8) (17)(6)
Operating profit before tax 702 520
Income taxes 4 (2) (3)
Profit for the year 700 517
Other comprehensive expense that may be reclassified to the income statement
Exchange differences on translation of foreign operations (27) (50)
Other comprehensive income that will not be reclassified to the income statement
Re-measurements of defined benefit plans (14) 11
Other comprehensive income for the year (41) (39)
Total comprehensive income for the year ("Total return") 659 478
Earnings per share
Basic (pence) 5 73.9 54.8
Diluted (pence) 5 72.9 54.5
Dividend per share
Interim dividend per share paid (pence) 6 6.0 6.7
Final dividend per share (pence) 6 14.0 13.3
1 Restated. See Note 9.
Consolidated statement of financial position
as at 31 March
2015 2014
(restated)1
Notes £m £m
Assets
Non-current assets
Investments
Quoted investments 399 258
Unquoted investments 1,272 1,324
Investments in investment entities 2,079 1,909
Investment portfolio 3,750 3,491
Carried interest and performance fees receivable 43 17
Intangible assets 19 25
Retirement benefit surplus 136 137
Property, plant and equipment 4 5
Deferred income taxes 4 3 3
Total non-current assets 3,955 3,678
Current assets
Carried interest and performance fees receivable 45 -
Other current assets 54 76
Derivative financial instruments - 2
Cash and cash equivalents 861 674
Total current assets 960 752
Total assets 4,915 4,430
Liabilities
Non-current liabilities
Carried interest and performance fees payable (72) (30)
Acquisition related earn-out charges payable (10) (18)
Loans and borrowings 7 (815) (849)
B shares - (6)
Retirement benefit deficit (19) (14)
Deferred income taxes 4 (1) (2)
Provisions (5) (5)
Total non-current liabilities (922) (924)
Current liabilities
Trade and other payables (152) (166)
Carried interest and performance fees payable (13) (6)
Acquisition related earn-out charges payable (17) (10)
Derivative financial instruments - (4)
Current income taxes 4 (2) (4)
Provisions (3) (8)
Total current liabilities (187) (198)
Total liabilities (1,109) (1,122)
Net assets 3,806 3,308
Equity
Issued capital 719 718
Share premium 784 782
Capital redemption reserve 43 43
Share-based payment reserve 31 19
Translation reserve 216 243
Capital reserve 1,519 1,050
Revenue reserve 573 542
Own shares (79) (89)
Total equity 3,806 3,308
1 Restated. See Note 9.
Sir Adrian Montague
Chairman
13 May 2015
Consolidated statement of changes in equity
for the year to 31 March
Share-
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve reserve reserve reserve shares equity
2015 £m £m £m £m £m £m £m £m £m
Total equity at the start of the year1 718 782 43 19 243 1,050 542 (89) 3,308
Income for the year 599 101 700
Exchange differences on translation of foreign operations (27) (27)
Re-measurements of defined benefit plans (14) (14)
Total comprehensive income for the year - - - - (27) 585 101 - 659
Share-based payments 19 19
Release on forfeiture of share options (7) 7 -
Exercise of share awards (10) 10 -
Ordinary dividends (77) (77)
Additional dividends (106) (106)
Issue of ordinary shares 1 2 3
Total equity at the end of the year 719 784 43 31 216 1,519 573 (79) 3,806
Share-
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve reserve reserve reserve shares equity
2014 (restated)1 £m £m £m £m £m £m £m £m £m
Total equity at the start of the year 718 780 43 17 293 700 487 (104) 2,934
Income for the year 392 125 517
Exchange differences on translation of foreign operations (50) (50)
Re-measurements of defined benefit plans 11 11
Total comprehensive income for the year - - - - (50) 403 125 - 478
Share-based payments 8 8
Release on forfeiture of share options (6) 6 -
Exercise of share awards (15) 15 -
Ordinary dividends (76) (76)
Additional dividends (38) (38)
Issue of ordinary shares 2 2
Total equity at the end of the year 718 782 43 19 243 1,050 542 (89) 3,308
1 Restated. See Note 9.
Consolidated cash flow statement
for the year to 31 March
2015 2014
(restated)1
£m £m
Cash flow from operating activities
Purchase of investments (116) (148)
Proceeds from investments 270 454
Cash inflow from fair value subsidiaries 272 62
Portfolio interest received 14 6
Portfolio dividends received 35 25
Portfolio fees received 10 6
Fees received from external funds 77 75
Carried interest and performance fees received 6 5
Carried interest and performance fees paid (14) (15)
Acquisition related earn-out fees paid (10) -
Operating expenses (116) (131)
Interest received 3 3
Interest paid (54) (57)
Income taxes paid (5) (7)
Net cash flow from operating activities 372 278
Cash flow from financing activities
Issue of shares 3 -
Repurchase of B shares (6) -
Dividend paid (183) (114)
Repayment of short-term borrowings - (164)
Net cash flow from derivatives 9 (32)
Net cash flow from financing activities (177) (310)
Cash flow from investing activities
Net cash flow from deposits - 90
Net cash flow from investing activities - 90
Change in cash and cash equivalents 195 58
Cash and cash equivalents at the start of year 674 633
Effect of exchange rate fluctuations (8) (17)
Cash and cash equivalents at the end of year 861 674
1 Restated. See Note 9.
Company statement of financial position
as at 31 March
2015 2014
Notes £m £m
Assets
Non-current assets
Investments
Quoted investments 399 258
Unquoted investments 1,163 1,283
Investment portfolio 1,562 1,541
Carried interest and performance fees receivable 33 8
Interests in Group and fair value entities 1,561 1,735
Total non-current assets 3,156 3,284
Current assets
Other current assets 341 303
Derivative financial instruments - 2
Cash and cash equivalents 735 605
Total current assets 1,076 910
Total assets 4,232 4,194
Liabilities
Non-current liabilities
Carried interest and performance fees payable (2) (2)
Acquisition related earn-out charges payable (10) (16)
Loans and borrowings 7 (815) (849)
B shares - (6)
Total non-current liabilities (827) (873)
Current liabilities
Trade and other payables (327) (292)
Acquisition related earn-out charges payable (11) (10)
Derivative financial instruments - (4)
Total current liabilities (338) (306)
Total liabilities (1,165) (1,179)
Net assets 3,067 3,015
Equity
Issued capital 719 718
Share premium 784 782
Capital redemption reserve 43 43
Share-based payment reserve 31 19
Capital reserve 1,400 1,368
Revenue reserve 90 85
Total equity 3,067 3,015
Sir Adrian Montague
Chairman
13 May 2015
Company statement of changes in equity
Share-
Capital based
Share Share redemption payment Capital Revenue Total
capital premium reserve reserve reserve reserve equity
2015 £m £m £m £m £m £m £m
Total equity at the start of the year 718 782 43 19 1,368 85 3,015
Profit for the year 138 75 213
Total comprehensive income for the year 138 75 213
Share-based payments 19 19
Release on forfeiture of share options (7) 7 -
Ordinary dividends (77) (77)
Additional dividends (106) (106)
Issue of ordinary shares 1 2 3
Total equity at the end of the year 719 784 43 31 1,400 90 3,067
Share-
Capital based
Share Share redemption payment Capital Revenue Total
capital premium reserve reserve reserve reserve equity
2014 £m £m £m £m £m £m £m
Total equity at the start of the year 718 780 43 17 1,336 144 3,038
Profit for the year 70 11 81
Total comprehensive income for the year 70 11 81
Share-based payments 8 8
Release on forfeiture of share options (6) 6 -
Ordinary dividends (76) (76)
Additional dividends (38) (38)
Issue of ordinary shares 2 2
Total equity at the end of the year 718 782 43 19 1,368 85 3,015
Company cash flow statement
for the year to 31 March
Company2015 Company2014
£m £m
Cash flow from operating activities
Purchase of investments (28) (108)
Proceeds from investments 270 454
Net distributions/(drawdowns) from subsidiaries 143 (217)
Portfolio interest received 11 6
Portfolio dividends received 29 25
Portfolio fees received (1) (2)
Carried interest and performance fees received 1 -
Carried interest and performance fees paid (11) -
Operating expenses (44) -
Interest received 3 3
Interest paid (54) (57)
Income taxes paid - -
Net cash flow from operating activities 319 104
Cash flow from financing activities
Dividend paid (183) (114)
Issue of shares 3 -
Repurchase of B shares (6) -
Net cash flow from derivatives 9 (32)
Net cash flow from financing activities (177) (146)
Cash flow from investing activities
Net cash flow from deposits - 90
Net cash flow from investing activities - 90
Change in cash and cash equivalents 142 48
Cash and cash equivalents at the start of year 605 573
Effect of exchange rate fluctuations (12) (16)
Cash and cash equivalents at the end of year 735 605
Significant accounting policies
Reporting entity
3i Group plc (the "Company") is a public limited company incorporated and domiciled in England and Wales. The Consolidated
financial statements ("the Group accounts") for the year to 31 March 2015 comprise the financial statements of the Company
and its consolidated subsidiaries (collectively, "the Group").
The Group accounts have been prepared and approved by the Directors in accordance with Section 395 of the Companies Act
2006 and the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008. The Company has taken
advantage of the exemption in Section 408 of the Companies Act 2006 not to present its Company Statement of comprehensive
income and related Notes.
A number of key accounting policies are disclosed below, but where possible, accounting policies have been shown as part of
the Note that they specifically relate to in order to assist the reader's understanding.
A Compliance with International Financial Reporting Standards ("IFRS")
The Group accounts have been prepared and approved by the Directors in accordance with all relevant IFRSs as issued by the
International Accounting Standards Board ("IASB"), and interpretations issued by the IFRS
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