REG - 3i Group PLC - Half-year Report <Origin Href="QuoteRef">III.L</Origin> - Part 3
10/11/2016 07:07
- Part 3: For the preceding part double click ID:nRSJ8052Ob
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve Reserve1 reserve reserve shares Equity
£m £m £m £m £m £m £m £m £m
Total equity at the start of 719 784 43 32 229 2,080 622 (54) 4,455
the period
Profit for the period - - - - - 937 86 - 1,023
Exchange differences on translation of foreign operations from continuing operations - - - - (3) - - - (3)
Re-measurements of defined benefit plans from continuing operations - - - - - (19) - - (19)
Other comprehensive income from discontinued operations - - - - 5 - - - 5
Total comprehensive incomefor the period - - - - 2 918 86 - 1,006
Share-based payments - - - 12 - - - - 12
Release on exercise/forfeiture of share awards - - - (18) - - 18 - -
Loss on sale of own shares - - - - - (15) - 15 -
Ordinary dividends - - - - - - (52) - (52)
Additional dividends - - - - - (102) - - (102)
Issue of ordinary shares - 1 - - - - - - 1
Total equity at the end of 719 785 43 26 231 2,881 674 (39) 5,320
the period
1 Translation reserve balance at 30 September 2016 included £12 million (31 March 2016: £7 million) in relation to discontinued operations.
For the six months to Share-
30 September 2015
(unaudited)1
Capital based
Share Share redemption payment Translation Capital Revenue Own Total
capital premium reserve reserve reserve reserve reserve shares Equity
£m £m £m £m £m £m £m £m £m
Total equity at the start of 719 784 43 31 216 1,519 573 (79) 3,806
the period
Profit for the period - - - - - 108 47 - 155
Exchange differences on translation of foreign operations from continuing operations - - - - 14 - - - 14
Re-measurements of defined benefit plans from continuing operations - - - - - (1) - - (1)
Other comprehensive income from discontinued operations - - - - - - - - -
Total comprehensive income for the period - - - - 14 107 47 - 168
Share-based payments - - - 10 - - - - 10
Release on exercise/forfeiture of share awards - - - (14) - - 14 - -
Loss on sale of own shares - - - - - (26) - 26 -
Ordinary dividends - - - - - - (51) - (51)
Additional dividends - - - - - (82) - - (82)
Issue of ordinary shares - - - - - - - - -
Total equity at the end of 719 784 43 27 230 1,518 583 (53) 3,851
the period
1 Comparatives for the six months ended 30 September 2015 have been re-presented to reflect the classification of the Group's Debt Management business as discontinued operations. See Note 11.
Condensed consolidated cash flow statement
Six months to Six months to
30 September 30 September
2016 2015
(unaudited) (unaudited)
£m £m
Cash flow from operating activities
Purchase of investments (286) (88)
Proceeds from investments 208 179
Net cash flow from/(to) investment entity subsidiaries 151 (24)
Portfolio interest received 4 3
Portfolio dividends received 34 32
Portfolio fees received 2 4
Fees received from external funds 46 37
Carried interest and performance fees received 29 49
Carried interest and performance fees paid (12) (17)
Acquisition related earn-out charges (1) (11)
Operating expenses paid (70) (76)
Income taxes (paid)/received (1) 1
Net cash flow from operating activities 104 89
Cash flow from financing activities
Issue of shares 1 -
Repurchase of short-term borrowings (15) -
Dividend paid (154) (133)
Interest received 1 2
Interest paid (11) (11)
Net cash flow from financing activities (178) (142)
Cash flow from investing activities
Purchase of property, plant and equipment - (1)
Net cash flow to deposits - (140)
Net cash flow from investing activities - (141)
Change in cash and cash equivalents (74) (194)
Cash and cash equivalents at the start of the period 957 861
Effect of exchange rate fluctuations 51 (5)
Cash held within assets held for sale (14) -
Cash and cash equivalents at the end of the period 920 662
Notes to the financial statements
Basis of preparation and accounting policies
A Compliance with International Financial Reporting Standards ("IFRS")
The Half-yearly condensed consolidated financial statements of 3i Group plc have been prepared in accordance with the
Disclosure Rules and Transparency Rules of the Financial Conduct Authority and IAS 34 'Interim Financial Reporting' as
issued by the International Accounting Standards Board ('IASB') and as endorsed by the EU. These Half-yearly condensed
consolidated financial statements should be read in conjunction with the Annual report and accounts 2016.
Standards applied during the half year to 30 September 2016
There were no new standards applied during the half year to 30 September 2016. During the period, 3i Group plc applied a
number of interpretations and amendments to standards as part of the IFRS lifecycle proposals which had an insignificant
effect on these Half-yearly condensed consolidated financial statements.
The financial information for the year ended 31 March 2016 contained within this Half-yearly report does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006. The statutory accounts for the year to
31 March 2016, prepared under IFRS as endorsed by the EU, have been reported on by Ernst & Young LLP and delivered to the
Registrar of Companies. The report of the Auditor on these statutory accounts was unqualified and
did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
B Use of estimates and judgements
The preparation of the Half-yearly report requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods. The most significant techniques for estimation are described in the
accounting policies on pages 100 to 139 and in "Portfolio valuation - an explanation" on pages 148 to 149 of the Annual
report and accounts 2016. There was no change in the current period to the critical accounting estimates and judgements
applied in 2016, which are stated on pages 101 to 102 of the Annual report and accounts 2016.
C Composition of the Group
3i announced the sale of its Debt Management business to Investcorp on 25 October 2016. The transaction is expected to
complete by 31 March 2017. At 30 September 2016, the Debt Management business was classified as discontinued operations
with the associated assets and liabilities held for sale. The rest of the Group was materially unchanged at 30 September
2016.
D Future accounting developments
Information on future accounting developments and their potential effect on the financial statements of 3i are provided on
page 100 of the Annual report and accounts 2016.
E Going concern
The financial statements are prepared on a going concern basis.
F Accounting policies
The accounting policies applied by 3i Group plc for these Half-yearly condensed consolidated financial statements are
consistent with those described on pages 100 to 139 of the Annual report and accounts 2016, as are the methods of
computation.
1 Segmental analysis
The tables below are presented on the Investment basis which is the basis used by the chief-operating-decision-maker, the
Chief Executive, to monitor the performance of the Group. A description of the Investment basis is provided in the
Financial review and a reconciliation of the Investment basis to the IFRS financial statements is provided earlier in this
document. Further detail on the Group's segmental analysis can be found on pages 103 to 105 of the Annual report and
accounts 2016. The remaining Notes are prepared on an IFRS basis.
Investment basis Total
Private continuing Discontinued
Equity Infrastructure operations operations1 Total
Six months to 30 September 2016 £m £m £m £m £m
Realised profits/(losses) over value on the disposal of investments 52 (1) 51 2 53
Unrealised profits on the revaluation of investments 643 76 719 13 732
Portfolio income
Dividends 6 10 16 24 40
Income from loans and receivables 19 - 19 3 22
Fees receivable/(payable) 1 - 1 - 1
Foreign exchange on investments 268 5 273 27 300
Gross investment return 989 90 1,079 69 1,148
Fees receivable from external funds 5 18 23 24 47
Operating expenses (35) (19) (54) (12) (66)
Interest received 1 - 1
Interest paid (25) - (25)
Exchange movements 10 3 13
Other income/(expense) 8 (1) 7
Operating profit before carried interest 1,042 83 1,125
Carried interest and performance fees
Receivable 203 - 203 1 204
Payable (302) - (302) - (302)
Operating profit 943 84 1,027
Income taxes (2) - (2)
Other comprehensive income
Re-measurements of defined benefit plans (19) - (19)
Total return 922 84 1,006
Net divestment/(investment)
Realisations2 654 12 666 3 669
Cash investment2 (291) (131) (422) (50) (472)
363 (119) 244 (47) 197
Balance sheet
Opening portfolio value at 1 April 2016 3,741 527 4,268 229 4,497
Investment 320 131 451 50 501
Value disposed (602) (13) (615) (1) (616)
Unrealised value movement 643 76 719 13 732
Other movement (including foreign exchange) 249 1 250 28 278
Closing portfolio value at 30 September 2016 4,351 722 5,073 319 5,392
1 Discontinued operations relates to the Debt Management business held for sale at 30 September 2016.
2 Investment basis Cash flow statement differs due to timing of investment and realisation cash flows in Private Equity and Debt Management.
Investment basis Total
Private continuing Discontinued
Equity Infrastructure operations operations1 Total
Six months to 30 September 2015 £m £m £m £m £m
Realised profits over value on the disposal of investments 26 3 29 - 29
Unrealised profits/(losses) on the revaluation of investments 174 11 185 (18) 167
Portfolio income
Dividends 11 11 22 14 36
Income from loans and receivables 26 - 26 2 28
Fees receivable/(payable) 6 - 6 (1) 5
Foreign exchange on investments 3 (2) 1 6 7
Gross investment return 246 23 269 3 272
Fees receivable from external funds 6 14 20 17 37
Operating expenses (34) (16) (50) (13) (63)
Interest received 2 - 2
Interest paid (24) - (24)
Exchange movements (10) - (10)
Operating profit before carried interest 207 7 214
Carried interest and performance fees
Receivable from external funds (8) - (8) 5 (3)
Payable (36) - (36) (3) (39)
Acquisition related earn-out charges - - - (4) (4)
Operating profit 163 5 168
Income taxes 1 - 1
Other comprehensive income
Re-measurements of defined benefit plans (1) - (1)
Total return 163 5 168
Net divestment/(investment)
Realisations 307 51 358 1 359
Cash investment (208) - (208) (86) (294)
99 51 150 (85) 65
Balance sheet
Opening portfolio value at 1 April 2015 3,148 553 3,701 176 3,877
Investment 252 - 252 86 338
Value disposed (281) (48) (329) (1) (330)
Unrealised value movement 174 11 185 (18) 167
Other movement (including foreign exchange) (18) (3) (21) 6 (15)
Closing portfolio value at 30 September 2015 3,275 513 3,788 249 4,037
1 Discontinued operations relates to the elements of the Debt Management business held for sale at 30 September 2016.
2 Realised profits over value on the disposal of investments
Six months to 30 September 2016 Unquoted Quoted
investments investments Total
£m £m £m
Realisations 186 20 206
Valuation of disposed investments (180) (19) (199)
6 1 7
Of which:
- profit recognised on realisations 7 1 8
- losses recognised on realisations (1) - (1)
6 1 7
Six months to 30 September 20151 Unquoted Quoted
investments investments Total
£m £m £m
Realisations 147 31 178
Valuation of disposed investments (137) (29) (166)
10 2 12
Of which:
- profit recognised on realisations 10 2 12
- losses recognised on realisations - - -
10 2 12
1 Comparatives for the six months ended 30 September 2015 have been re-presented to reflect the classification of the Group's Debt Management business as discontinued operations. See Note 11.
3 Unrealised profits/(losses) on the revaluation of investments
Six months to 30 September 2016 Unquoted Quoted
investments investments Total
£m £m £m
Movement in the fair value of investments 32 48 80
Of which:
- unrealised gains 80 48 128
- unrealised losses (48) - (48)
32 48 80
Six months to 30 September 20151 Unquoted Quoted
investments investments Total
£m £m £m
Movement in the fair value of investments 4 15 19
Of which:
- unrealised gains 44 15 59
- unrealised losses (40) - (40)
4 15 19
1 Comparatives for the six months ended 30 September 2015 have been re-presented to reflect the classification of the Group's Debt Management business as discontinued operations. See Note 11.
4 Per share information
The calculation of basic earnings per share is based on the profit attributable to shareholders and the average number of
basic 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.
6 months 6 months
to 30 September to 30 September
2016 20151
Earnings per share (pence)
Basic earnings per share 106.7 16.3
- of which from continuing operations 98.5 15.8
- of which from discontinued operations 8.2 0.5
Diluted earnings per share 106.2 16.2
- of which from continuing operations 98.0 15.7
- of which from discontinued operations 8.2 0.5
Earnings (£m)
Profit for the period attributable to equity holders of the Company 1,023 155
- of which from continuing operations 944 150
- of which from discontinued operations 79 5
1 Comparatives for the six months ended 30 September 2015 have been re-presented to reflect the classification of the Group's Debt Management business as discontinued operations. See Note 11.
6 months 6 months
to 30 September to 30 September
2016 2015
Number Number
Weighted average number of shares in issue
Ordinary shares 972,696,599 972,524,749
Own shares (13,810,391) (20,757,426)
Basic shares 958,886,208 951,767,323
Effect of dilutive potential ordinary shares
Share options and awards 4,403,571 3,987,648
Diluted shares 963,289,779 955,754,971
30 September 30 September
2016 2015
Net assets per share (pence)
Basic 554 403
Diluted 551 401
Net assets (£m)
Net assets attributable to equity holders of the Company 5,320 3,851
Basic NAV per share is calculated on 961,105,293 shares in issue at 30 September 2016 (30 September 2015: 956,477,854).
Diluted NAV per share is calculated on diluted shares of 966,208,027 at 30 September 2016
(30 September 2015: 960,746,598).
5 Dividends
6 months to 6 months to 6 months to 6 months to
30 September 30 September 30 September 30 September
2016 2016 2015 2015
pence pence
per share £m per share £m
Declared and paid during the period
Final dividend 16.0 154 14.0 133
16.0 154 14.0 133
Proposed interim dividend 8.0 77 6.0 57
6 Investment portfolio
The basis for measuring the fair value of the investment portfolio is explained on page 110 of the Annual report and
accounts 2016.
6 months to Year to
30 September 2016 31 March 2016
Non-current £m £m
Opening book value 1,540 1,671
Additions from continuing operations 205 164
- of which loan notes with nil value (8) (13)
Additions from discontinued operations 60 -
Disposals and repayments from continuing operations (199) (225)
Disposals and repayments from discontinued operations (1) -
Fair value movement from continuing operations 80 92
Fair value movement from discontinued operations 13 -
Non-current assets classified as held for sale (311) -
Other movements and net cash movements from continuing operations 52 (149)
Other movements and net cash movements from discontinued operations 17 -
Closing book value 1,448 1,540
Quoted investments 401 297
Unquoted investments 1,047 1,243
Closing book value 1,448 1,540
The holding period of 3i's investment portfolio is on average greater than one year. For this reason the portfolio is
classified as non-current. It is not possible to identify with certainty investments that will be sold within one year.
Additions include £8 million (31 March 2016: £35 million) in capitalised interest received by way of loan notes, of which
£8 million (31 March 2016: £13 million) has been written down in the period to nil. Included within the Consolidated
statement of comprehensive income is £2 million (31 March 2016: £26 million) of interest income (Debt Management interest
income of £3 million is included within profit from discontinued operations), which reflects the net additions after write
downs noted above, £1 million (31 March 2016: £5 million) of cash income (Debt Management cash income of £3 million is
included within profit from discontinued operations) and the capitalisation of prior year accrued income and
non-capitalised accrued income is £1 million (31 March 2016: £(1) million).
Other movements and net cash movements include the effects of foreign exchange, conversions from one instrument into
another and £10 million relating to cash returned (31 March 2016: £38 million cash returned) from Debt Management
warehouses.
Quoted investments are classified as Level 1 in the fair value hierarchy and unquoted investments are classified as Level 3
in the fair value hierarchy, see Note 8 for details.
7 Investments in investment entity subsidiaries
Investments in investment entity subsidiaries are accounted for as financial instruments at fair value through profit and
loss. We determine that in the ordinary course of business, the net asset values of an investment entity subsidiary are
considered to be the most appropriate to determine fair value. At each reporting period, we consider whether any additional
fair value adjustments need to be made to the net asset values of the investment entity subsidiaries. These adjustments may
be required to reflect market participants' considerations about fair value that may include, but are not limited to,
liquidity and the portfolio effect of holding multiple investments within the investment entity subsidiary. There was no
particular circumstance to indicate that a fair value adjustment was required and after due consideration we concluded that
the net asset values were the most appropriate reflection of fair value at 30 September 2016.
6 months to Year to
30 September 2016 31 March 2016
Non-current £m £m
Opening book value 2,680 2,079
Net cash flow from investment entity subsidiaries (151) (206)
Fair value movement on investment entity subsidiaries from continuing operations 670 591
Fair value movement on investment entity subsidiaries from discontinued operations 1 -
Assets held for sale (8) -
Transfer of assets (from)/to investment entity subsidiaries (12) 216
Closing book value 3,180 2,680
All investment entity subsidiaries are classified as Level 3 in the fair value hierarchy, see Note 8 for details.
A 5% movement in the closing book value of investments in investment entity subsidiaries would have an impact of £159
million (31 March 2016: £134 million).
Support
3i Group plc provides ongoing support to its investment entity subsidiaries for the purchase of portfolio investments.
During the period, there were net cash flows to the Group as noted in the table above.
8 Fair values of assets and liabilities
This section should be read in conjunction with Note 12 on pages 112 to 114 of the Annual report and accounts 2016 which
provides more detail about accounting policies adopted, the definitions of the three levels of fair value hierarchy,
valuation methods used in calculating fair value, and the valuation framework which governs oversight of valuations. There
have been no changes in the accounting policies adopted or the valuation methodologies used.
Valuation
The Group classifies financial instruments measured at fair value in the investment portfolio according to the following
hierarchy:
Level Fair value input description Financial instruments
Level 1 Quoted prices (unadjusted) from active markets Quoted equity instruments
Level 2 Inputs other than quoted prices included in Level 1 that are observable either directly (ie as prices) or indirectly (ie derived from prices) No Level 2 financial instruments
Level 3 Inputs that are not based on observable market data Unquoted equity instruments and loan instruments
The table below shows the classification of financial instruments held at fair value into the valuation hierarchy at
30 September 2016:
As at 30 September 2016 As at 31 March 2016
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Quoted investments 401 - - 401 297 - - 297
Unquoted investments - - 1,047 1,047 - - 1,243 1,243
Investment in investment entity subsidiaries - - 3,180 3,180 - - 2,680 2,680
Total 401 - 4,227 4,628 297 - 3,923 4,220
The above disclosure only relates to the investment portfolio and the investments in our investment entity subsidiaries,
and does not include assets held for sale (see note 11). We determine that in the ordinary course of business, the net
asset values of an investment entity subsidiary are considered to be the most appropriate to determine fair value. The
underlying portfolio is valued under the same methodology as directly held investments, with any other assets or
liabilities within investment entity subsidiaries fair valued in accordance with the Group's accounting policies. Note 7
details the Directors' considerations about the fair value of the underlying investment entity subsidiaries.
The fair values of the Group's other financial assets and liabilities are not materially different from their carrying
values with the exception of loans and borrowings. The fair value of loans and borrowings is £1,053 million (31 March 2016:
£967 million), determined with reference to their published market prices. The carrying value of the loans and borrowings
is £844 million (31 March 2016: £837 million).
Level 3 fair value reconciliation
Six months to Year to
30 September 31 March
2016 2016
£m £m
Opening book value 1,243 1,272
Additions from continuing operations 128 164
- of which loan notes with nil value (8) (13)
Additions from discontinued operations 60 -
Disposals and repayments from continuing operations (180) (166)
Disposals and repayments from discontinued operations (1) -
Fair value movement from continuing operations 32 72
Fair value movement from discontinued operations 13 -
Non-current assets classified as held for sale (311) -
Other movements and net cash movements from continuing operations 54 (86)
Other movements and net cash movements from discontinued operations 17 -
Closing book value 1,047 1,243
Unquoted investments valued using Level 3 inputs also had the following impact on the Statement of comprehensive income:
realised profits over value on disposal of investment of £6 million (September 2015: £10 million), dividend income of £4
million (September 2015: £11 million) and foreign exchange gain of £55m (September 2015: £6 million loss).
Level 3 inputs are sensitive to assumptions made when ascertaining fair value as described in the Portfolio valuation - an
explanation section. On an IFRS basis, of the unquoted assets held at 30 September 2016 classified as Level 3, 30% (31
March 2016: 28%) were valued using a multiple of earnings and the remaining 70%
(31 March 2016: 72%) were valued using alternative valuation methodologies.
Assets move between Level 1 and Level 3 primarily due to an increase or decrease in observable market activity related to
an input which is primarily when an unquoted equity investment lists on a quoted market exchange.
Valuation multiple - The valuation multiple is the main assumption applied to a multiple of earnings based valuation. The
multiple is derived from comparable listed companies or relevant market transaction multiples. Companies in the same
industry and geography and, where possible, with a similar business model and profile are selected and then adjusted for
factors including liquidity risk, growth potential and relative performance. They are also adjusted to represent our longer
term view of performance through the cycle or our exit assumptions. The value weighted average multiple used when valuing
the portfolio at 30 September 2016 was 10.45x (31 March 2016: 9.83x).
If the multiple used to value each unquoted investment valued on an earnings multiple basis as at 30 September 2016
decreased by 5%, the investment portfolio would decrease by £16 million (31 March 2016: £19 million) or 1% (31 March 2016:
1%). If the same sensitivity was applied to the underlying portfolio held by investment entity subsidiaries, this would
have a negative impact of £193 million (31 March 2016: £173 million) or 5% (31 March 2016: 6%).
If the multiple increased by 5% then the investment portfolio would increase by £16 million (31 March 2016: £19 million) or
1% (31 March 2016: 1%). If the same sensitivity was applied to the underlying portfolio held by investment entity
subsidiaries, this would have a positive impact of £189 million (31 March 2016: £172 million) or 5% (31 March 2016: 6%).
Alternative valuation methodologies - There are a number of alternative investment valuation methodologies used by the
Group, for reasons specific to individual assets. The details of such valuation methodologies, and the inputs that are
used, are given in the Portfolio valuation - an explanation section. Each methodology is used for a proportion of assets by
value, and at 30 September 2016 the following techniques were used under an IFRS basis: 41% DCF, 12% industry metric, and
17% other. If the value of all of the investments under these methodologies moved by 5%, this would have an impact on the
investment portfolio of £37 million (31 March 2016: £45 million) or 3% (31 March 2016: 3%). If the same sensitivity was
applied to the underlying portfolio held by investment entity subsidiaries, this would have an impact of £13 million (31
March 2016: £9 million) or 0.4% (31 March 2016: 0.3%).
9 Contingent liabilities
The Company has provided a guarantee to the Trustees of the 3i Group Pension Plan in respect of liabilities of 3i plc to
the Plan. 3i plc is the sponsor of the 3i Group Pension Plan. On 4 April 2012 the Company transferred eligible assets (£150
million of ordinary shares in 3i Infrastructure plc) as defined by the agreement to a wholly owned subsidiary of the Group.
The Company will retain all income and capital rights in relation to the 3i Infrastructure plc shares, as eligible assets,
unless the Company becomes insolvent or fails to comply with material obligations in relation to the agreement with the
Trustees, all of which are under its control. The fair value of eligible assets held by this subsidiary at 30 September
2016 was £272 million (31 March 2016: £187 million) of which £53 million relates to shares purchased as part of 3iN's
recent equity raise.
At 30 September 2016, there was no material litigation outstanding against the Company or any of its subsidiary
undertakings.
10 Related parties
All related party transactions that took place in the half year to 30 September 2016 are consistent with the disclosures in
Note 29 on pages 130 to 133 of the Annual report and accounts 2016. Related party transactions which have taken place in
the period and have materially affected performance or the financial position of the Group, and any material changes in
related party transactions described in the Annual report and accounts 2016 that could materially affect the performance or
the financial position of the Group are detailed below.
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
recognised in respect of these limited partnerships:
Statement of comprehensive income Six months to Six months to
30 September 30 September
2016 2015
£m £m
Carried interest and performance fees receivable 205 (15)
Fees receivable from external funds 14 14
Statement of financial position 30 September 31 March
2016 2016
£m £m
Carried interest and performance fees receivable 293 87
Investments
The Group makes investments in the equity of unquoted and quoted investments where it does not have control but may be able
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%. The Group has taken the investment entity exception as
permitted by IFRS 10 and has not equity accounted for these investments, in accordance with IAS 28, but they are related
parties. The total amounts recognised for investments where the Group has significant influence but not control are as
follows:
Statement of comprehensive income Six months to Six months to
30 September 30 September
2016 2015
£m £m
Realised profit over value on the disposal of investments - 3
Unrealised profits/(losses) on the revaluation of investments 20 (21)
Portfolio income - 1
Profits/(losses) for the period from discontinued operations 47 (2)
Statement of financial position 30 September 31 March
2016 2016
£m £m
Unquoted investments 342 480
Unquoted investments held for sale 258 -
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 recognised in respect of this advisory relationship:
Statement of comprehensive income Six months to Six months to
30 September 30 September
2016 2015
£m £m
Realised profits over value on the disposal of investments - 2
Unrealised profits on the revaluation of investments 48 11
Dividends 6 6
Fees receivable from external funds 9 6
Statement of financial position 30 September 31 March
2016 2016
£m £m
Quoted equity investments 401 277
Performance fees receivable - 20
The Group participated in 3iN's equity raise in June 2016 and invested £131 million at the offer price of 165 pence per
share to maintain its 34% stake. £53 million is held by a wholly owned investment entity subsidiary of the Group as
detailed in Note 9 with the balance held by the Company, 3i Group plc.
11 Discontinued operations
On 25 October 2016, the Group announced the sale of its Debt Management business to Investcorp for gross cash consideration
of £222 million subject to the finalisation of a number of completion adjustments which are dependent on the transaction's
completion date. The sale is expected to close by the end of 31 March 2017, contingent on the receipt of the required
regulatory approvals.
The disposal group fulfilled the requirement of IFRS 5 to be classified as "discontinued operations" in the Consolidated
statement of comprehensive income, the results of which are set out below:
Condensed consolidated statement of comprehensive income
Six months to Six months to
30 September 30 September
2016 2015
£m £m
Realised profits over value on the disposal
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