REG - 3i Group PLC - Results for the year to 31 March 2017 <Origin Href="QuoteRef">III.L</Origin> - Part 4
18/05/2017 07:06
- Part 4: For the preceding part double click ID:nRSR4818Fc
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 as detailed above. £26 million was received in the year
(2016: £31 million) from continuing and discontinued operations.
· 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 presentational 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 Consolidated statement of
comprehensive income.
The statements of financial position 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 Consolidated statement of comprehensive income in the period in which the subsidiary or associate
is disposed of.
Exchange movements in relation to forward foreign exchange contracts are included within exchange movements in the
Consolidated statement of comprehensive income, where appropriate. No forward foreign exchange contracts were held in the
current year and in 2016 a £14 million loss was recognised in exchange movements.
(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, short-term deposits and amounts held in money market funds, which are
readily convertible into cash and there is an insignificant risk of changes in value. 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 Group whose results are regularly reviewed by the Group'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, managed the Group on the basis of business
divisions determined with reference to market focus, geographic focus, investment funding model and the Group's management
hierarchy. A description of the activities, including products and services offered by these divisions and the allocation
of resources, is given in the Strategic report. For the geographical segmental split, revenue information is based on the
locations of the assets held.
The segmental information that follows is presented on the basis used by the Chief Executive to monitor the performance of
the Group. The reported segments are Private Equity, Infrastructure and other, where other comprises the residual
investments retained following the sale of our Debt Management business.
1 Segmental analysis
Investment basis Total
Private continuing Discontinued
Equity Infrastructure Other1 operations operations1 Total
Year to 31 March 2017 £m £m £m £m £m £m
Realised profits/(losses) over value on the disposal of investments 38 (1) 1 38 - 38
Unrealised profits on the revaluation of 1,274 59 9 1,342 3 1,345
investments
Portfolio income
Dividends 8 23 19 50 16 66
Interest income from investment portfolio 50 --- - 50 3 53
Fees receivable 6 - - 6 - 6
Foreign exchange on investments 248 6 15 269 16 285
Gross investment return 1,624 87 44 1,755 38 1,793
Fees receivable from external funds 10 36 - 46 25 71
Operating expenses (76) (41) - (117) (13) (130)
Interest receivable 2 - 2
Interest payable (49) - (49)
Exchange movements 28 (9) 19
Other income 10 2 12
Operating profit before carry 1,675 43 1,718
Carried interest
Carried interest and performance 275 4 - 279 1 280
fees receivable
Carried interest and performance (431) (3) - (434) - (434)
fees payable
Operating profit 1,520 44 1,564
Profit on disposal of Debt Management business before tax - 48 48
Income taxes 3 (1) 2
Other comprehensive income
Re-measurements of defined benefit plans (22) - (22)
Total return 1,501 91 1,592
Net divestment/(investment)
Realisations2 982 12 11 1,005 270 1,275
Cash investment (478) (131) (29) (638) (51) (689)
504 (119) (18) 367 219 586
Balance sheet
Opening portfolio value at 1 April 20163 3,741 527 92 4,360 137 4,497
Investment4 548 131 29 708 51 759
Value disposed (944) (13) (10) (967) (191) (1,158)
Unrealised value movement 1,274 59 9 1,342 3 1,345
Other movement5 212 2 18 232 - 232
Closing portfolio value at 31 March 2017 4,831 706 138 5,675 - 5,675
1 Discontinued operations relate to the Debt Management business sold to Investcorp. Other relates to the residual Debt Management investments retained by 3i.
2 Private Equity does not include proceeds paid from investee holding companies of £33 million. Total proceeds from the sale of the Debt Management business were £270 million, of which £17 million related to the investment made by 3i Group plc on behalf of Debt Management Investments Ltd and £16 million related to an intercompany loan provided by 3i Group plc to Debt Management US LLC and not included within the consolidated Group.
3 The opening portfolio values have been re-presented to reflect the classification of the Group's Debt Management business sold to Investcorp as discontinued operations. See Note 8. The residual Debt Management stakes are included within Other.
4 Includes capitalised interest and other non-cash investment.
5 Other movement relates to foreign exchange and the provisioning of capitalised interest.
Investment basis Total
Private continuing Discontinued
Equity Infrastructure Other1 operations Operations1 Total
Year to 31 March 2016 £m £m £m £m £m £m
Realised profits over value on the disposal 69 3 - 72 - 72
of investments
Unrealised profits/(losses) on the revaluation of investments 690 22 (22) 690 (21) 669
Portfolio income
Dividends 18 21 10 49 22 71
Interest income from investment portfolio 59 - - 59 4 63
Fees receivable/(payable) 7 - - 7 (1) 6
Foreign exchange on investments 168 1 5 174 14 188
Gross investment return 1,011 47 (7) 1,051 18 1,069
Fees receivable from external funds 13 28 - 41 38 79
Operating expenses2 (75) (32) - (107) (27) (134)
Interest receivable 4 - 4
Interest payable (47) - (47)
Exchange movements (31) - (31)
Operating profit before carry 911 29 940
Carried interest
Carried interest and performance 58 20 - 78 5 83
fees receivable
Carried interest and performance (171) (15) - (186) (2) (188)
fees payable
Acquisition related earn-out charges - - - - (5) (5)
Operating profit 803 27 830
Income taxes - - -
Other comprehensive income
Re-measurements of defined benefit plans (6) - (6)
Total return 797 27 824
Net divestment/(investment)
Realisations3 743 51 - 794 2 796
Cash investment4 (365) - (68) (433) (20) (453)
378 51 (68) 361 (18) 343
Balance sheet
Opening portfolio value at 1 April 2015 3,148 553 51 3,752 125 3,877
Investment5 464 - 68 532 20 552
Value disposed (674) (48) - (722) (2) (724)
Unrealised value movement 690 22 (22) 690 (21) 669
Other movement6 113 - (5) 108 15 123
Closing portfolio value at 31 March 2016 3,741 527 92 4,360 137 4,497
1 Discontinued operations comprise the Debt Management business sold to Investcorp on 3 March 2017. Operating expenses have been re-presented to reflect only direct expenses relating to Debt Management within discontinued operations. Other relates to the residual Debt Management investments retained by 3i.
2 Includes restructuring costs of £5 million for Private Equity.
3 £25 million in Private Equity relates to proceeds held back in the holding company of the investee company.
4 Includes £4 million of Debt Management investment awaiting settlement at 31 March 2016.
5 Includes capitalised interest and other non-cash investment.
6 Other movement relates to foreign exchange and the provisioning of capitalised interest. Within discontinued operations, £9 million relates to capital withdrawn from the Palace Street I portfolio.
Investment basis Northern North Rest of
UK Europe America World Total
Year to 31 March 2017 £m £m £m £m £m
Gross investment return
Realised (losses)/ profits over value on the (33) 51 12 8 38
disposal of investments
Unrealised profits/(losses) on the 160 1,183 12 (10) 1,345
revaluation of investments
Portfolio income/(expense) 34 77 15 (1) 125
Foreign exchange on investments 1 196 43 45 285
162 1,507 82 42 1,793
Net divestment/(investment)
Realisations 239 818 179 39 1,275
Cash investment (131) (488) (69) (1) (689)
108 330 110 38 586
Balance sheet
Closing portfolio value at 31 March 2017 1,309 3,639 349 378 5,675
Investment basis Northern North Rest of
UK Europe America World Total
Year to 31 March 2016 £m £m £m £m £m
Gross investment return
Realised profits over value on the 8 49 4 11 72
disposal of investments
Unrealised profits/(losses) on the 11 707 (50) 1 669
revaluation of investments
Portfolio income 59 66 12 3 140
Foreign exchange on investments 2 175 11 - 188
80 997 (23) 15 1,069
Net divestment/(investment)
Realisations 62 586 96 52 796
Cash investment (121) (272) (60) - (453)
(59) 314 36 52 343
Balance sheet
Closing portfolio value at 31 March 2016 1,240 2,498 385 374 4,497
2 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 Consolidated statement of comprehensive income, except where it relates to items charged or credited
directly to equity, in which case the tax is also dealt within equity.
The tax currently payable is based on the taxable profit for the year. This may differ from the profit included in the
Consolidated 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, where appropriate, in
accordance with the provisions of IAS 12.
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.
The main rate of UK corporation tax is to be reduced from 20% to 19% from 1 April 2017, and further to 17% from 1 April
2020. These changes will affect future UK corporate taxes payable and the rate at which deferred tax assets are expected to
reverse.
2017 2016
£m £m
Current taxes
Current year 1 4
Prior year (4) (1)
Deferred taxes
Deferred income taxes - (1)
Total income tax (credit)/charge in the Consolidated statement of comprehensive income (3) 2
Reconciliation of income taxes in the Consolidated statement of comprehensive income
The tax charge for the year is different to the standard rate of corporation tax in the UK, currently 20% (2016: 20%), and
the differences are explained below:
2017 2016
£m £m
Profit before tax 1,524 794
Profit before tax multiplied by rate of corporation tax in the UK of 20% (2016: 20%) 305 159
Effects of:
Non-taxable capital profits due to UK approved investment trust company status (309) (165)
Non-taxable dividend income (6) (5)
(10) (11)
Other differences between accounting and tax profits:
Permanent differences - non-deductible items - 4
Temporary differences on which deferred tax is not recognised 4 2
Overseas countries taxes (3) 2
Excess unutilised tax losses arising in the period 6 5
Total income tax (credit)/charge in the Consolidated statement of comprehensive income (3) 2
The affairs of the Group's parent company are directed so as to allow it to meet the requisite conditions to continue to
operate as an approved investment trust company for UK tax purposes. An approved investment trust company is a UK
investment company which is required to meet certain conditions set out in the UK tax rules to obtain and maintain its tax
status. This approval allows certain investment profits of the Company, broadly its capital profits, to be exempt from tax
in the UK. Approved investment trust companies are particularly suited for investment vehicles as their tax status allows
them to ensure that their shareholders do not suffer double taxation of their returns.
Including a net tax charge of nil (2016: £2 million credit) in the fair valued entities, the Group recognised a total tax
credit of £3 million (2016: nil) under the Investment basis.
Deferred income taxes
2017 2016
£m £m
Opening deferred income tax asset
Tax losses 7 7
Income in accounts taxable in the future (7) (7)
Other 3 2
3 2
Recognised through Consolidated statement of comprehensive income
Tax losses recognised 1 -
Income in accounts taxable in the future (1) -
Other - 1
- 1
Recognised within discontinued operations
Deferred tax asset transferred with discontinued operations (3) -
(3) -
Closing deferred income tax asset
Tax losses 8 7
Income in accounts taxable in the future (8) (7)
Other - 3
- 3
At 31 March 2017, the Group had carried forward tax losses of £1,390 million (31 March 2016: £1,375 million), capital
losses of £93 million (31 March 2016: £88 million) and other temporary differences of £94 million (31 March 2016: £69
million). It is uncertain that the Group will generate sufficient or relevant 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 19% (2016: 19%).
3 Per share information
The calculation of basic earnings 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 2017 20161
Earnings per share (pence)
Basic earnings per share 169.2 85.6
- of which from continuing operations 159.0 83.0
- of which from discontinued operations 10.2 2.6
Diluted earnings per share 168.4 85.2
- of which from continuing operations 158.3 82.6
- of which from discontinued operations 10.1 2.6
Earnings (£m)
Profit for the year attributable to equity holders of the Company 1,625 817
- of which from continuing operations 1,527 792
- of which from discontinued operations 98 25
1 Comparatives for the year ended 31 March 2016 have been re-presented to reflect the classification of the Group's Debt Management business which was sold on 3 March 2017 as discontinued operations. See Note 8.
As at 31 March 2017 2016
Weighted average number of shares in issue
Ordinary shares 972,734,609 972,569,633
Own shares (12,580,145) (18,427,460)
960,154,464 954,142,173
Effect of dilutive potential ordinary shares
Share options and awards 4,710,808 4,735,616
Diluted shares 964,865,272 958,877,789
As at 31 March 2017 2016
Net assets per share (£)
Basic 6.07 4.66
Diluted 6.04 4.63
Net assets (£m)
Net assets attributable to equity holders of the Company 5,836 4,455
Basic NAV per share is calculated on 961,458,801 shares in issue at 31 March 2017 (31 March 2016: 956,417,466). Diluted NAV
per share is calculated on diluted shares of 966,553,549 at 31 March 2017 (31 March 2016: 961,323,047).
4 Dividends
2017 2017 2016 2016
pence per share £m pence per share £m
Declared and paid during the year
Ordinary shares
Final dividend 16.0 154 14.0 133
Interim dividend 8.0 76 6.0 57
24.0 230 20.0 190
Proposed final dividend 18.5 178 16.0 154
The Group's dividend policy was updated in May 2016. The Group will pay a base dividend of 16 pence per share and an
additional final dividend which is based on cash realisations, the investment pipeline and the balance sheet at year end.
The Group will only pay an additional final dividend if gross debt is less than £1 billion and gearing is less than 20%, to
maintain its conservative approach.
The distribution policy covers the Group's total annual dividend, which is split between a base dividend (16 pence per
share) and an additional dividend. The dividend can be paid out of either the capital reserve or the revenue reserve
subject to the investment trust rules which state that at least 85% of revenue must be distributed by the Company.
5 Fair values of assets and liabilities
Accounting policy:
Financial instruments, other than those held at amortised cost, are held at fair value and are designated irrevocably at
inception. In particular, 3i designates groups of financial instruments as being at fair value when they are managed, and
their performance evaluated, on a fair value basis in accordance with a documented risk management or investment strategy,
and where information about the groups of financial instruments is reported to management on that basis.
(A) Classification
The following tables analyse the Group's assets and liabilities in accordance with the categories of financial instruments
in IAS 39:
Group Group Group Group
2017 2017 2016 2016
Designated Other Designated Other
at fair value financial at fair value financial
through instruments Group through instruments Group
profit and at amortised 2017 profit and at amortised 2016
loss cost Total loss cost Total
At 31 March £m £m £m £m £m £m
Assets
Quoted investments 390 - 390 297 - 297
Unquoted investments 1,316 - 1,316 1,243 - 1,243
Investments in investment entities 3,483 - 3,483 2,680 - 2,680
Other financial assets - 425 425 - 185 185
Total 5,189 425 5,614 4,220 185 4,405
Liabilities
Loans and borrowings - 575 575 - 837 837
Other financial liabilities - 274 274 - 232 232
Total - 849 849 - 1,069 1,069
Company Company Company Company
2017 2017 2016 2016
Designated Other Designated Other
at fair value financial at fair value financial
through instruments Company through instruments Company
profit and at amortised 2017 profit and at amortised 2016
loss cost Total loss cost Total
At 31 March £m £m £m £m £m £m
Assets
Quoted investments 390 - 390 297 - 297
Unquoted investments 1,295 - 1,295 1,103 - 1,103
Other financial assets - 384 384 - 113 113
Total 1,685 384 2,069 1,400 113 1,513
Liabilities
Loans and borrowings - 575 575 - 837 837
Other financial liabilities - 522 522 - 419 419
Total - 1,097 1,097 - 1,256 1,256
Within the Company £3,483 million (31 March 2016: £2,680 million) of the Interest in Group entities is held at fair value.
(B) Valuation
The fair values of the Group's financial assets and liabilities are not materially different from their carrying values
with the exception of loans and borrowings. The fair value of the loans and borrowings is £741 million (31 March 2016: £967
million), determined with reference to their published market prices. The carrying value of the loans and borrowings is
£575 million (31 March 2016: £837 million).
Valuation hierarchy
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) Fixed rate loan notes
Level 3 Inputs that are not based on observable market data Unquoted equity instruments and loan instruments
Unquoted equity instruments and debt instruments are measured in accordance with the IPEV Guidelines with reference to the
most appropriate information available at the time of measurement.
The tables below show the classification of financial instruments held at fair value into the valuation hierarchy at 31
March 2017:
Group Group Group Group Group Group Group Group
2017 2017 2017 2017 2016 2016 2016 2016
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m £m £m
Assets
Quoted investments 390 - - 390 297 - - 297
Unquoted investments - - 1,316 1,316 - - 1,243 1,243
Investment in investment entity subsidiaries - - 3,483 3,483 - - 2,680 2,680
Total 390 - 4,799 5,189 297 - 3,923 4,220
The above disclosure only relates to the investment portfolio and the investments in our investment entity subsidiaries. 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.
Movements in the directly held investment portfolio categorised as Level 3 during the year:
Group Group Company Company
2017 2016 2017 2016
£m £m £m £m
Opening book value 1,243 1,272 1,103 1,082
Additions from continuing operations 213 164 228 95
- of which loan notes with nil value (10) (13) (10) (13)
Additions from discontinued operations 70 - 18 -
Disposals, repayments and write-offs from continuing operations (292) (166) (288) (165)
Disposals, repayments and write-offs from discontinued operations (191) - (24) -
Fair value movement from continuing operations1 224 72 218 98
Fair value movement from discontinued operations 3 - - -
Other movements and net cash movements from continuing operations 75 (86) 69 6
Other movements and net cash movements from discontinued operations (19) - (19) -
Closing book value 1,316 1,243 1,295 1,103
1 All fair value movements relate to assets held at the end of the period.
Other movements include the effects of foreign exchange.
On a continuing basis, unquoted investments valued using Level 3 inputs also had the following impact on the Consolidated
statement of comprehensive income: realised losses over value on disposal of investment of £26 million (2016: £10 million
(realised profit)), dividend income of £24 million (2016: £46 million) and foreign exchange gains of £63 million (2016: £40
million).
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 assets held at 31 March 2017, classified as Level 3, 33% (31 March 2016: 28%)
were valued using a multiple of earnings and the remaining 67% (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 earnings multiple used when
valuing the portfolio at 31 March 2017 was 10.23x (2016: 9.83x).
If the multiple used to value each unquoted investment valued on an earnings multiple basis as at 31 March 2017 decreased
by 5%, the investment portfolio would decrease by £18 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 entities, this would have a negative impact
of £224 million (31 March 2016: £173 million) or 6% (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 entities, this
would have a positive impact of £215 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.
Each methodology is used for a proportion of assets by value, and at year end the following techniques were used under an
IFRS basis: 41% DCF (31 March 2016: 30%), 4% broker quotes (31 March 2016:18%), 2% imminent sale (31 March 2016: 11%), 10%
industry metric (31 March 2016: 10%), and 10% other (31 March 2016: 3%).
If the value of all of the investments valued under alternative methodologies moved by 5%, this would have an impact on the
investment portfolio of £44 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 entities, this would have an impact of £7 million (31 March 2016: £9
million) or 0.2% (31 March 2016: 0.3%).
6 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
2017 2016
£m £m
Loans and borrowings are repayable as follows:
Within one year - 262
Between the second and fifth year - -
After five years 575 575
575 837
Principal borrowings include:
Group Group Company Company
2017 2016 2017 2016
Rate Maturity £m £m £m £m
Issued under the £2,000 million note issuance programme
Fixed rate
E331 million notes (public issue) 5.625% 2017 - 262 - 262
£200 million notes (public issue) 6.875% 2023 200 200 200 200
£375 million notes (public issue) 5.750% 2032 375 375 375 375
575 837 575 837
Committed multi-currency facilities
£329 million LIBOR+0.60% 2021 - - - -
- - - -
Total loans and borrowings 575 837 575 837
The maturity of the Company's £329 million (31 March 2016: £350 million) syndicated multi-currency facility was extended by
one year to September 2021 in the current financial year, following an agreement with all but one of the participating
banks. The £329 million facility has no financial covenants.
During the year, the E331 million outstanding of the Company's E350 million fixed rate notes were repaid in full.
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 £741 million (31 March 2016: £967 million), determined with reference to
their published market prices. The loans and borrowings are included in Level 2 of the fair value hierarchy.
In accordance with the FCA Handbook (FUNDS 3.2.2. R and Fund 3.2.6. R), 3i Investments plc, as AIFM of the Company is
required to calculate leverage in accordance with a set formula and disclose this to investors. In line with the relevant
requirements, leverage for the Group is 115% (31 March 2016: 116%) and the Company is 107% (31 March 2016: 119%) under both
the gross method and the commitment method. The leverage for 3i Investments plc is 100% (31 March 2016: 100%) under both
the gross method and the commitment method.
Under the Securities Financing Transactions Regulation ("SFTR") and AIFMD, 3i is required to disclose certain information
relating to the use of securities financing transactions ("SFTs") and total return swaps. At 31 March 2017, 3i was not
party to any transactions involving SFTs or total return swaps.
7 Related parties and interests in other entities
Related-party transactions which took place in the year and have materially affected performance or the financial position
of the Group, are described below. There were no material changes in the Group's related parties as disclosed in the Annual
report and accounts 2016. The full list of all related-party transactions will be disclosed in the Annual report and
accounts 2017.
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
2017 2016 2017 2016
Statement of comprehensive income £m £m £m £m
Carried interest receivable 276 53 276 53
Fees receivable from external funds 26 28 - -
Group Group Company Company
2017 2016 2017 2016
Statement of financial position £m £m £m £m
Carried interest receivable 356 87 356 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. IFRS presumes 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 included for investments where the Group has significant influence but not control are as
follows:
Group Group Company Company
2017 20161 2017 20161
Statement of comprehensive income £m £m £m £m
Realised profit over value on the disposal of investments - 4 - 4
Unrealised profits on the revaluation of investments 57 (21) 51 (13)
Portfolio income 17 12 7 7
Profit for the year from discontinued operations 21 4 4 3
Group Group Company Company
2017 2016 2017 2016
Statement of financial position £m £m £m £m
Unquoted investments 429 480 407 341
1 Comparatives for the year ended 31 March 2016 have been re-presented to reflect the classification of the Group's Debt Management business which was sold on 3 March 2017 as discontinued operations. See Note 8.
From time to time, transactions occur between related parties within the investment portfolio that the Group influences to
facilitate the reorganisation or refinancing 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
2017 2016 2017 2016
Statement of comprehensive income
- More to follow, for following part double click ID:nRSR4818FeRecent news on 3i
See all newsREG - 3i Group PLC - Block listing Interim Review
AnnouncementREG - 3i Group PLC - Director/PDMR Shareholding
AnnouncementREG - 3i Group PLC - Director/PDMR Shareholding
AnnouncementREG - 3i Group PLC - Total Voting Rights
AnnouncementREG - 3i Group PLC - Director/PDMR Shareholding
Announcement