REG - 3i Group PLC - Financial results for the year to 31 March 2015 <Origin Href="QuoteRef">III.L</Origin> - Part 5
15/07/2015 17:33
- Part 5: For the preceding part double click ID:nRSN1280Nd
Interpretations Committee,
endorsed by the European Union ("EU").
In the year the Group adopted the following amendment:
IFRS 10 (Revised) - Consolidated Financial Statements
The IASB issued a narrow scope amendment to IFRS 10 in December 2014, and subsequently the Group has revisited and is now
consolidating two Debt Management entities and a small number of subsidiaries rather than fair valuing them in the IFRS
financial statements. This is due to additional guidance in the narrow scope amendment clarifying the treatment of entities
which invest for capital appreciation but also provide investment related services. The Group has chosen to adopt the
changes provided in the narrow scope amendment early, and has applied the change retrospectively. The change has no effect
on total return or net asset value as reported in the Group's prior year IFRS financial statements. Comparative information
has been restated and the effect is shown in Note 9.
The following standards, amendments and interpretations have been issued with implementation dates, subject to EU
endorsement in some cases, which do not impact on these financial statements:
Effective for annual periods beginning on or after
IFRS Annual improvements 2010 to 2012 and 2011 to 2013 1 July 2014
IFRS Annual improvements 2012 to 2014 1 July 2016
IFRS 15 Revenue from contracts with customers 1 January 2017
IFRS 9 Financial instruments 1 January 2018
The impact of future standards and amendments on the financial statements is being assessed by the Group and the Company.
B Basis of preparation
The financial statements are prepared on a going concern basis as disclosed in the Directors' Report.
C Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed,
or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Subsidiaries are fully consolidated from the date on which the Group effectively
obtains control. They are de-consolidated from the date that control ceases.
3i Group plc is an investment entity and, as such, does not consolidate the investment entities it controls. Most of the
Group's interests in subsidiaries are recognised at fair value through profit or loss. Those subsidiaries which provide
investment related services, such as advisory, management or employment services are not classified at fair value through
profit and loss and continue to be consolidated unless they are deemed investment entities, in which case they are fair
valued.
The acquisition method of accounting is used to account for the acquisition of subsidiaries. Under the acquisition method
of accounting, with some limited exceptions, the assets, liabilities and contingent liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any non-controlling interest is measured either at fair value or
at the non-controlling interest's proportion of the net assets acquired. Acquisition related costs are accounted for as
expenses when incurred, unless directly related to the issue of debt or equity securities. Any excess of the cost of
acquisition over net assets is capitalised as goodwill. All intra-group balances, transactions, income and expenses are
eliminated.
(ii) Associates
Associates are those entities in which the Group has significant influence, but not control, over the financial and
operating policies. Investments that are held as part of the Group's investment portfolio are carried in the statement of
financial position at fair value even though the Group may have significant influence over those companies.
(iii) Joint ventures
Interests in joint ventures that are held as part of the Group's investment portfolio are carried in the balance sheet at
fair value.
(iv) Composition of the Group
The Group is made up of several different types of subsidiaries. The Group re-assesses the function performed by each type
of subsidiary to determine its treatment under the IFRS 10 exception from consolidation. The types of subsidiaries and
their treatment under IFRS 10 are as follows:
General Partners (GPs) - Consolidated
§ General Partners provide investment management services and do not hold any direct investments in portfolio assets. These
entities are not investment entities.
Investment managers/advisers - Consolidated
§ These entities provide investment related services through the provision of investment management or advice. They do not
hold any direct investments in portfolio assets. These entities are not investment entities.
Investment managers/advisers which also hold investments - Consolidated
§ These entities provide investment related services through the provision of investment management or advice and also hold
investments in managed assets, typically due to regulatory reasons or investor expectations. The primary purpose of these
entities is to provide investment related services and therefore they are not classified as investment entities.
Holding companies of investment managers/advisers - Consolidated
§ These entities provide investment related services through their subsidiaries. They do not hold any direct investment in
portfolio assets and these entities are not investment entities.
Limited Partnerships and other intermediate investment holding structures - Fair valued
§ The Group makes investments in portfolio assets through its ultimate parent company as well as through other limited
partnership and corporate subsidiaries which the Group has created to align the interests of the investment teams with the
performance of the assets through the use of various carried interest schemes. The purpose of these limited partnerships
and corporate holding vehicles, many of which also provide investment related services, is to invest for investment income
and capital appreciation. These partnerships meet the definition of an investment entity and are classified at fair value
through the profit and loss.
Portfolio investments - Fair valued
Following the introduction of IFRS 10, the test for accounting subsidiaries has been altered to take wider factors of
control as well as actual equity ownership into account. This has resulted in 30 investments being classified as accounting
subsidiaries. In accordance with the investment entity exception, these entities have been held at fair value with
movements in fair value going through the Statement of comprehensive income. With one exception (Palace Street I) none of
these subsidiaries is a UK Companies Act subsidiary.
Structured entities - Fair valued
§ The Group has interests in a number of unconsolidated structured entities, their current carrying value and a description
of their activities is included in Note 8.
D Critical accounting estimates and judgements
The reported results of the Group are sensitive to the accounting policies, assumptions and estimates that underlie the
preparation of its financial statements. UK company law and IFRS require the Directors, in preparing the Group's financial
statements, to select suitable accounting policies, apply them consistently and make judgements and estimates that are
reasonable and prudent. The Group's estimates and assumptions are based on historical experience and expectation of future
events and are reviewed periodically. The actual outcome may be materially different from that anticipated.
The judgements and assumptions involved in the Group's accounting policies that are considered by the Board to be the most
important to the portrayal of its financial condition are the fair valuation of the investment portfolio and the fair
valuation of each investment entity subsidiary. The investment portfolio is held at fair value. Given the importance of
this area, the Board has a separate Valuations Committee to review the valuations policies, process and application to
individual investments. A report on the activities of the Valuations Committee is included in the Governance section of the
Annual report.
Further detail on the assessment as an investment entity is as follows:
a) Assessment as an investment entity
Entities that meet the definition of an investment entity within IFRS 10 are required to account for most investments in
controlled entities, as well as investments in associates and joint ventures, at fair value through profit and loss.
The Board has concluded that the Company continues to meet the definition of an investment entity as its strategic
objective of investing in portfolio investments and providing investment management services to investors for the purpose
of generating returns in the form of investment income and capital appreciation remains unchanged.
The Group is required to determine the degree of control or influence the Group exercises and the form of any control to
ensure that the financial treatment is accurate. Following the IASB's narrow scope amendment to IFRS 10, issued in
December 2014, the Company revisited its assessment of all of its subsidiaries and has consolidated two Debt Management
entities and reclassified a small number of subsidiaries. Comparative information has been restated to reflect the adoption
of the amendment to IFRS 10 and the impact is shown in Note 9. Further detail on our detailed review of our application of
IFRS 10, including the amendment, can be found at the end of the Financial Review section.
b) Valuation of the defined benefit scheme
The Group also considers the valuation of the IAS 19 defined benefit scheme to be a significant estimate. The Group reviews
its assumptions annually with its independent actuaries.
E Other accounting policies
A) Revenue Recognition
Gross investment return is equivalent to "revenue" for the purposes of IAS 1. It represents the overall increase in net
assets from the investment portfolio net of deal-related costs and includes foreign exchange movements in respect of the
investment portfolio. Investment income is analysed into the following components:
i. Realised profits or losses over value on the disposal of investments are the difference between the fair value of the
consideration received less any directly attributable costs, on the sale of equity and the repayment of loans and
receivables, and its carrying value at the start of the accounting period, converted into sterling using the exchange rates
in force at the date of disposal.
ii. Unrealised profits or losses on the revaluation of investments are the movement in the carrying value of investments
between the start and end of the accounting period converted into sterling using the exchange rates in force at the date of
the movement.
iii. Fair value movements on investment entity subsidiaries are the movements in the carrying value of Group subsidiaries
which are classified as investment entities under IFRS 10. The Group makes investments in portfolio assets through these
entities which are usually limited partnerships or corporate subsidiaries.
iv. Portfolio income is that portion of income that is directly related to the return from individual investments. It is
recognised to the extent that it is probable that there will be economic benefit and the income can be reliably measured.
The following specific recognition criteria must be met before the income is recognised:
§ Dividends from equity investments are recognised in the Statement of comprehensive income when the shareholders' rights
to receive payment have been established. Income received on the investment in the most junior ranked level of CLO capital
is recognised as a dividend. £16 million was received in the year (2014: £10 million).
§ Income from loans and receivables is recognised as it accrues by reference to the principal outstanding and the effective
interest rate applicable, which is the rate that exactly discounts the estimated future cash flows through the expected
life of the financial asset to the asset's carrying value. When the fair value of an investment is assessed to be below the
principal value of a loan the Group recognises a provision against any interest accrued from the date of the assessment
going forward until the investment is assessed to have recovered in value. Income received on the instruments in the most
junior level of CLO capital is recognised as a dividend. £16 million was received in the year (2014: £10 million).
§ Fee income is earned directly from investee companies when an investment is first made and through the life of the
investment. Fees that are earned on a financing arrangement are considered to relate to a financial asset measured at fair
value through profit or loss and are recognised when that investment is made. Fees that are earned on the basis of
providing an ongoing service to the investee company are recognised as that service is provided.
v. Foreign exchange on investments arises on investments made in currencies that are different from the functional
currency of the Group entity. Investments are translated at the exchange rate ruling at the date of the transaction. At
each subsequent reporting date investments are translated to sterling at the exchange rate ruling at that date.
B) Foreign currency translation
For the Company and those subsidiaries whose balance sheets are denominated in sterling which is the Company's functional
and presentation currency, monetary assets and liabilities denominated in foreign currencies are translated into sterling
at the closing rates of exchange at the balance sheet date. Foreign currency transactions are translated into sterling at
the average rates of exchange over the year and exchange differences arising are taken to the income statement.
The balance sheets of subsidiaries and associates denominated in foreign currencies are translated into sterling at the
closing rates. The Statements of comprehensive income for these subsidiaries and associates are translated at the average
rates and exchange differences arising are taken to other comprehensive income. Such exchange differences are reclassified
to the Income statement in the period in which the subsidiary or associate is disposed of.
C) Treasury assets and liabilities
Short-term treasury assets and short and long-term treasury liabilities are used in order to manage cash flows and minimise
the overall costs of borrowing.
Cash and cash equivalents comprise cash at bank and short-term deposits. Financial assets and liabilities are recognised in
the balance sheet when the relevant Group entity becomes a party to the contractual provisions of the instrument.
De-recognition occurs when rights to cash flows from a financial asset expire, or when a liability is extinguished.
Notes to the accounts
1 Segmental analysis
Operating segments are the components of the entity whose results are regularly reviewed by the entity's chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance.
The Chief Executive, who is considered to be the chief operating decision maker, manages the Group on two bases. Firstly,
as business divisions determined with reference to market focus, geographic focus, investment funding model and the Group's
management hierarchy. Secondly, in line with the strategy of the Group, he considers separate Proprietary Capital and Fund
Management businesses focused on investment returns and Fund Management profits respectively. A description of the
activities, including products and services offered by these divisions and the allocation of resources, is given in the
Strategic report.
The segmental information that follows is presented on the Investment basis which is the basis used by the Chief Executive
to monitor the performance of the Group. The remaining Notes are prepared on the IFRS basis.
1 Segmental analysis
Private Debt Proprietary Fund
Equity Infrastructure Management Total Capital Management Total
Year to 31 March 2015 £m £m £m £m £m £m £m
Realised profits over value on the disposal of investments 161 1 - 162 162 - 162
Unrealised profits/(losses) on the revaluation of investments 641 68 (25) 684 684 - 684
Portfolio income
Dividends 9 20 16 45 45 - 45
Income from loans and receivables 56 - 6 62 62 - 62
Fees receivable/(payable) 8 (1) (1) 6 6 - 6
Foreign exchange on investments (156) 8 (6) (154) (154) - (154)
Gross investment return 719 96 (10) 805 805 - 805
Fees receivable from external funds 16 30 34 80 - 80 80
Synthetic fees - - - - (45) 45 -
Operating expenses1 (66) (31) (34) (131) (32) (99) (131)
Interest receivable 3 3 - 3
Interest payable (49) (49) - (49)
Movement in the fair value of derivatives (1) (1) - (1)
Exchange movements 40 40 - 40
Operating profit before carry 747 721 26 747
Carried interest
Carried interest and performance fees receivable 28 45 7 80 80
Carried interest and performance fees payable (103) (35) (4) (142) (142)
Acquisition related earn-out charges - - (8) (8) (8)
Operating profit 677 677
Income taxes (4) (4)
Other comprehensive income
Re-measurements of defined benefit plans (14) (14)
Total return 659 659
Net divestment/
(investment)
Realisations 831 10 - 841 841 841
Cash investment (369) - (105) (474) (474) (474)
462 10 (105) 367 367 367
Balance sheet
Opening portfolio value at 1 April 2014 2,935 487 143 3,565 3,565 3,565
Investment2 509 - 105 614 614 614
Value disposed (670) (9) - (679) (679) (679)
Unrealised value movement 641 68 (25) 684 684 684
Other movement3 (267) 7 (47) (307) (307) (307)
Closing portfolio value at 31 March 2015 3,148 553 176 3,877 3,877 3,877
1. Includes restructuring costs of nil, nil and £1 million for Private Equity, Infrastructure and Debt Management, respectively, and nil and £1 million for Proprietary Capital and Fund Management, respectively.
2. Includes capitalised interest and other non-cash investment.
3. Other relates to foreign exchange and the provisioning of capitalised interest. In Debt Management, £41 million relates to capital withdrawn from the Palace Street I portfolio.
Private Debt Proprietary Fund
Equity Infrastructure Management Total Capital Management Total
Year to 31 March 2014 £m £m £m £m £m £m £m
Realised profits over value on the disposal of investments 201 1 - 202 202 - 202
Unrealised profits/(losses) on the revaluation of investments 478 (13) 10 475 475 - 475
Portfolio income
Dividends 13 21 10 44 44 - 44
Income from loans and receivables 46 - 4 50 50 - 50
Fees receivable/(payable) 9 - (2) 7 4 3 7
Foreign exchange on investments (100) (7) (6) (113) (113) - (113)
Gross investment return 647 2 16 665 662 3 665
Fees receivable from external funds 17 24 32 73 - 73 73
Synthetic fees - - - - (51) 51 -
Operating expenses1 (79) (23) (34) (136) (28) (108) (136)
Interest receivable 3 3 - 3
Interest payable (54) (54) - (54)
Movement in the fair value of derivatives 10 10 - 10
Exchange movements (3) (3) - (3)
Operating profit before carry 558 539 19 558
Carried interest
Carried interest and performance fees receivable (1) - 4 3 3
Carried interest and performance fees payable (82) - (3) (85) (85)
Acquisition related earn-out charges - - (6) (6) (6)
Operating profit 470 470
Income taxes (3) (3)
Other comprehensive income
Re-measurements of defined benefit plans 11 11
Total return 478 478
Net divestment/
(investment)
Realisations 669 2 6 677 677 677
Cash investment (276) - (61) (337) (337) (337)
393 2 (55) 340 340 340
Balance sheet
Opening portfolio value at 1 April 2013 2,707 507 81 3,295 3,295 3,295
Investment2 443 - 61 504 504 504
Value disposed (468) (1) (6) (475) (475) (475)
Unrealised value movement 478 (13) 10 475 475 475
Other movement3 (225) (6) (3) (234) (234) (234)
Closing portfolio value at 31 March 2014 2,935 487 143 3,565 3,565 3,565
1. Includes restructuring costs of £7 million, £1 million and £1 million for Private Equity, Infrastructure and Debt Management, respectively, and
£1 million and £8 million for Proprietary Capital and Fund Management, respectively.
2. Includes capitalised interest and other non-cash investment.
3. Other relates to foreign exchange and the provisioning of capitalised interest.
Continental Rest of
UK Europe The Americas Asia World Total
Year to 31 March 2015 £m £m £m £m £m £m
Gross investment return
Realised profits over value on the disposal of investments 2 121 29 10 - 162
Unrealised profits/(losses) on the revaluation of investments 106 531 36 12 (1) 684
Portfolio income 56 42 13 2 - 113
Foreign exchange on investments (2) (218) 40 25 1 (154)
162 476 118 49 - 805
Net divestment/(investment)
Realisations 70 532 161 77 1 841
Cash Investment (109) (186) (179) - - (474)
(39) 346 (18) 77 1 367
Balance sheet
Value of investment portfolio at the end of the year 1,148 1,947 483 297 2 3,877
Continental Rest of
UK Europe The Americas Asia World Total
Year to 31 March 2014 £m £m £m £m £m £m
Gross investment return
Realised profits over value on the disposal of investments 77 89 28 7 1 202
Unrealised profits/(losses) on the revaluation of investments 33 357 124 (39) - 475
Portfolio income 47 36 16 2 - 101
Foreign exchange on investments (1) (38) (36) (38) - (113)
156 444 132 (68) 1 665
Net divestment/(investment)
Realisations 218 343 70 43 3 677
Cash Investment (41) (238) (58) - - (337)
177 105 12 43 3 340
Balance sheet
Value of investment portfolio at the end of the year 1,058 1,817 361 325 4 3,565
2 Realised profits over value on the disposal of investments
2015 2015
Unquoted Quoted 2015
investments investments Total
£m £m £m
Realisations 155 115 270
Valuation of disposed investments (136) (80) (216)
19 35 54
Of which:
- - profit recognised on realisations 21 35 56
- losses recognised on realisations (2) - (2)
19 35 54
2014 2014
Unquoted Quoted 2014
investments investments Total
(restated)£m (restated)£m (restated)£m
Realisations 442 12 454
Valuation of disposed investments (298) (10) (308)
144 2 146
Of which:
- - profit recognised on realisations 148 2 150
- losses recognised on realisations (4) - (4)
144 2 146
3 Unrealised profits/(losses) on the revaluation of investments
2015 2015
Unquoted Quoted 2015
investments investments Total
£m £m £m
Movement in the fair value of investments 117 119 236
Of which:
- unrealised gains 193 119 312
- unrealised losses (76) - (76)
117 119 236
2014 2014
Unquoted Quoted 2014
Investments(restated) Investments(restated) Total(restated)
£m £m £m
Movement in the fair value of investments 67 14 81
Of which:
- unrealised gains 126 14 140
- unrealised losses (59) - (59)
67 14 81
4 Income taxes
Accounting policy:
Income taxes represent the sum of the tax currently payable, withholding taxes suffered and deferred tax. Tax is charged or
credited in the Statement of comprehensive income, except where it relates to items charged or credited directly to equity,
in which case the tax is also dealt with in equity.
The tax currently payable is based on the taxable profit for the year. This may differ from the profit included in the
Statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible.
To enable the tax charge to be based on the profit for the year, deferred tax is provided in full on temporary timing
differences, at the rates of tax expected to apply when these differences crystallise. Deferred tax assets are recognised
only to the extent that it is probable that sufficient taxable profits will be available against which temporary
differences can be set off. All deferred tax liabilities are offset against deferred tax assets in accordance with the
provisions of IAS 12 "Income taxes".
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
2015 2014(restated)
£m £m
Current taxes
Current year (3) (6)
Deferred taxes
Deferred income taxes 1 3
Total income taxes in the Statement of comprehensive income (2) (3)
Reconciliation of income taxes in the Statement of comprehensive income
The tax charge for the year is different to the standard rate of corporation tax in the UK, currently 21% (2014: 23%), and
the differences are explained below:
2015 2014(restated)
£m £m
Profit before tax 702 520
Profit before tax multiplied by rate of corporation tax in the UK of 21% (2014: 23%) (147) (120)
Effects of:
Utilisation of previously unrecognised deferred tax 3 7
Non-taxable dividend income 6 6
Permanent differences (6) -
Foreign tax (2) (4)
Capital profits 145 137
Excess tax losses arising in the period (1) (29)
Total income taxes in the Statement of comprehensive income (2) (3)
The Group's realised profits, fair value adjustments and impairment losses are primarily included in the Company, the
affairs of which are directed so as to allow it to be approved as an investment trust. An investment trust is exempt from
tax on capital gains, therefore the Group's capital return is substantially non-taxable.
Including £2 million of tax charges incurred in fair valued entities, the total tax charge for the Group was £4 million
under the Investment basis presentation.
Deferred income taxes
2015 2014(restated)
£m £m
Opening deferred income tax asset
Tax losses 12 9
Income in accounts taxable in the future (12) (11)
Other 1 1
1 (1)
Recognised through Statement of comprehensive income
Tax losses utilisedIncome in accounts taxable in the futureOther (5)51 3--
1 3
Recognised on acquisition
Income in accounts taxable in the future - (1)
- (1)
Closing deferred income tax asset
Tax losses 7 12
Income in accounts taxable in the future (7) (12)
Other 2 1
2 1
At 31 March 2015, the Group had carried forward tax losses of £1,409 million (2014: £1,360 million), capital losses of £98
million (2014: £78 million) and other temporary differences of £12 million (2014: £12 million). It is uncertain that the
Group will generate sufficient taxable profits in the foreseeable future to utilise these amounts and therefore no deferred
tax asset has been recognised in respect of these losses. Deferred income taxes are calculated using an expected rate of
corporation tax in the UK of 20% (2014: 20%).
5 Per share information
The calculation of basic net assets per share is based on the profit attributable to shareholders and the number of basic
average shares. When calculating the diluted earnings per share, the weighted average number of shares in issue is adjusted
for the effect of all dilutive share options and awards.
As at 31 March 2015 2014
Earnings per share (pence)
Basic 73.9 54.8
Diluted 72.9 54.5
Earnings (£m)
Profit for the year attributable to equity holders of the Company 700 517
As at 31 March 2015 2014
Weighted average number of shares in issue
Ordinary shares 972,141,887 971,574,471
Own shares (24,825,193) (28,285,335)
947,316,694 943,289,136
Effect of dilutive potential ordinary shares
Share options and awards 12,293,543 5,627,447
Diluted shares 959,610,237 948,916,583
As at 31 March 2015 2014
Net assets per share (£)
Basic 4.01 3.50
Diluted 3.96 3.48
Net assets (£m)
Net assets attributable to equity holders of the Company 3,806 3,308
Basic NAV per share is calculated on 948,610,924 shares in issue at 31 March 2015 (31 March 2014: 945,028,804). Diluted NAV
per share is calculated on diluted shares of 961,432,940 at 31 March 2015 (31 March 2014: 951,531,950).
6 Dividends
2015 2015 2014 2014
pence per share £m pence per share £m
Declared and paid during the year
Ordinary shares
Final dividend 13.3 126 5.4 51
Interim dividend 6.0 57 6.7 63
19.3 183 12.1 114
Proposed final dividend 14.0 133 13.3 126
7 Loans and borrowings
Accounting policy:
All loans and borrowings are initially recognised at the fair value of the consideration received. After initial
recognition, these are subsequently measured at amortised cost using the effective interest method, which is the rate that
exactly discounts the estimated future cash flows through the expected life of the liabilities. Financial liabilities are
derecognised when they are extinguished.
Group Group Company Company
2015 2014 2015 2014
£m £m £m £m
Loans and borrowings are repayable as follows:
Within one year - - - -
In the second year 240 - 240 -
In the third year - 274 - 274
In the fourth year - - - -
In the fifth year - - - -
After five years 575 575 575 575
815 849 815 849
Principal borrowings include:
Group Group Company Company
2015 2014 2015 2014
Rate Maturity £m £m £m £m
Issued under the £2,000 million note issuance programme
Fixed rate
£200 million notes (public issue) 6.875% 2023 200 200 200 200
£400 million notes (public issue) 5.750% 2032 375 375 375 375
E350 million notes (public issue) 5.625% 2017 240 274 240 274
815 849 815 849
Committed multi-currency facilities
£350 million LIBOR+0.60% 2019 - - - -
£50 million LIBOR+1.50% 2016 - - - -
£450 million LIBOR+1.00% 2016 - - - -
- - - -
Total loans and borrowings 815 849 815 849
During the period, the £450 million syndicated multi-currency facility was replaced with a £350 million syndicated
multi-currency facility with a maturity date of September 2019. The Company has the option to request one year extensions
at the first and second year anniversary of the facility, which may be granted at the discretion of each lender
individually. The new £350 million facility has no financial covenants.
The £50 million multi-currency facility was cancelled during the period.
All of the Group's borrowings are repayable in one instalment on the respective maturity dates. None of the Group's
interest-bearing loans and borrowings are secured on the assets of the Group.
The fair value of the loans and borrowings is £997 million (2014: £942 million), determined with reference to their
published market prices. The loans and borrowings are included in Level 1 of the fair value hierarchy.
Under AIFMD, the Group is required to calculate leverage in accordance with a set formula and disclose this to investors.
In line with AIFMD, leverage is 117% (2014: 127%) under the gross method and 120% (2014: 133%) under the commitment
method.
8 Related parties and interests in other entities
The Group has various related parties stemming from relationships with limited partnerships managed by the Group, its
investment portfolio (including unconsolidated subsidiaries), its advisory arrangements and its key management personnel.
In addition, the Company has related parties in respect of its subsidiaries. Some of these subsidiaries are held at fair
value (unconsolidated subsidiaries) due to the treatment prescribed in IFRS 10.
Related parties
Limited partnerships
The Group manages a number of external funds which invest through limited partnerships. Group companies act as the general
partners of these limited partnerships and exert significant influence over them. The following amounts have been included
in respect of these limited partnerships:
Group Group Company Company
2015 2014 2015 2014
Statement of comprehensive income £m £m £m £m
Carried interest receivable 28 (1) 28 (1)
Fees receivable from external funds 34 33 - -
Group Group Company Company
2015 2014 2015 2014
Statement of financial position £m £m £m £m
Carried interest receivable 33 8 33 8
Investments
The Group makes minority investments in the equity of unquoted and quoted investments. This normally allows the Group to
participate in the financial and operating policies of that company. It is presumed that it is possible to exert
significant influence when the equity holding is greater than 20%. These investments are not equity accounted for (as
permitted by IFRS 10) but are related parties. The total amounts included for these investments are as follows:
Group
Group 2014 Company Company
2015 (restated) 2015 2014
Statement of comprehensive income £m £m £m £m
Realised profit/(loss) over value on the disposal of investments 13 12 13 12
Unrealised profits on the revaluation of investments 3 62 15 59
Portfolio income 26 12 17 11
Group
Group 2014 Company Company
2015 (restated) 2015 2014
Statement of financial position £m £m £m £m
Unquoted investments 560 587 450 542
From time to time, transactions occur between related parties within the investment portfolio that the Group influences to
facilitate the reorganisation or recapitalisation of an investee company. These transactions are made on an arm's length
basis.
Advisory arrangements
The Group acts as an adviser to 3i Infrastructure plc, which is listed on the London Stock Exchange. The following amounts
have been included in respect of this advisory relationship:
Group Group Company Company
2015 2014 2015 2014
Statement of comprehensive income £m £m £m £m
Unrealised profits on the revaluation of investments 46 3 46 3
Fees receivable from external funds 12 10 - -
Performance fees receivable 45 - - -
Dividends 12 12 12 12
Group Group Company Company
2015 2014 2015 2014
Statement of financial position £m £m £m £m
Quoted equity investments 288 242 288 242
Performance fees receivable 45 - - -
Subsidiaries
Transactions between the Company and its fully consolidated subsidiaries, which are related parties of the Company, are
eliminated on consolidation. Details of related party transactions between the Company and its subsidiaries are detailed
below.
Management, administrative and secretarial arrangements
The Company has appointed 3i Investments plc, a wholly-owned subsidiary of the Company incorporated in England and Wales,
as investment manager of the Group. 3i Investments plc received a fee of £13 million (2014: £23 million) for this service.
The Company has appointed 3i plc, a wholly-owned subsidiary of the Company incorporated in England and Wales, to provide
the Company with a range of administrative and secretarial services. 3i plc received a fee of £145 million (2014: £98
million) for this service.
Other subsidiaries
The Company borrows funds from, and lends funds to certain subsidiaries and pays and receives interest on the outstanding
balances. The interest income that is included in the Company's Statement of comprehensive income is £1 million (2014: £2
million) and the interest expense included is
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