16. Fixed asset investments | |
| Shares in associated undertakings (note a) £m | Interests in own shares (note b) £m | Interests in shares in Burberry Group (note c) £m | Other investments (note d) £m | Total £m | |
|---|---|---|---|---|---|
| Group Cost or valuation At 1 April 2003 | 78 | 58 | 3 | 8 | 147 |
| Differences on exchange | (12) | – | – | (1) | (13) |
| Additions | 32 | 23 | 7 | – | 62 |
| Share of profit after taxation (after goodwill charge of £3m (2003 £2m)) | 41 | – | – | – | 41 |
| Dividends received | (45) | – | – | – | (45) |
| Reclassification | – | 5 | 3 | – | 8 |
| Disposals | (1) | (14) | – | (6) | (21) |
| At 31 March 2004 | 93 | 72 | 13 | 1 | 179 |
| Amounts written off At 1 April 2003 | – | 15 | 3 | 1 | 19 |
| Amortisation of shares | – | 14 | 1 | – | 15 |
| Disposals | – | (5) | – | (1) | (6) |
| At 31 March 2004 | – | 24 | 4 | – | 28 |
Net Book Value at 31 March 2003 | 78 | 43 | – | 7 | 128 |
| Net Book Value at 31 March 2004 | 93 | 48 | 9 | 1 | 151 |
| Group undertakings (note e) £m | Interests in own shares (note b) £m | |
|---|---|---|
| Company Cost At 1 April 2003 | 3,164 | 58 |
| Additions | – | 23 |
| Reclassification | – | 5 |
| Disposals | (2) | (14) |
| At 31 March 2004 | 3,162 | 72 |
| Amounts written off At 1 April 2003 | 5 | 15 |
| Amortisation of own shares | – | 14 |
| Disposals | – | (5) |
| At 31 March 2004 | 5 | 24 |
Net Book Value at 31 March 2003 | 3,159 | 43 |
| Net Book Value at 31 March 2004 | 3,157 | 48 |
(a) Shares in associated undertakings
The additions in the year ended 31 March 2004 are principally in respect of First American Real Estate Solutions LLC. The Group’s share of cumulative retained profits of associated undertakings at 31 March 2004 is £31m (2003 £35m).
The principal associated undertakings are as follows:
| Name | Country of incorporation |
Class of shares held |
% interest |
Nature of business |
|---|---|---|---|---|
| First American Real Estate Solutions LLC | USA | * | 20 | Information services |
| Motorfile Limited | Great Britain | Ordinary | 50 | Information services |
| AAGUS Financial Services Group NV | Holland | Ordinary | 33.3 | Consumer lending |
* First American Real Estate Solutions LLC (‘FARES’) is a US partnership.
All interests in associated undertakings are held by subsidiary undertakings. The Company’s holding of shares in GUS Finance Limited was sold during the year at book value as part of the disposal of the home shopping and Reality businesses.
Interests in own shares held as fixed asset investments and, at 31 March 2003, as current asset investments represent the cost of 11.7m (2003 12.2m) of the Company’s Ordinary shares (nominal value of £3m (2003 £3m)) which amounts to 1.2% (2003 1.2%) of the called up share capital. These shares have been acquired by four trusts in the open market using funds provided by the Company principally to meet obligations (including, at 31 March 2003, Employer’s National Insurance) under the Performance Share Plan, Long Term Incentive Plans, the North America Stock Option Plan and the Co-Investment Plan. The trusts have waived their entitlement to dividends in respect of 11.2m (2003 11.9m) Ordinary shares. At 31 March 2004 the market value of the shares was £87m (2003 £59m). The costs of administering the trusts are charged to the Group profit and loss account.
Of the above 11.7m (2003 12.2m) Ordinary shares held, 11.7m (2003 10.7m) Ordinary shares were held as fixed asset investments by:
(i) The GUS plc ESOP Trust which holds 1.5m (2003 2.1m) Ordinary shares to meet obligations under The GUS plc Performance Share Plan and The GUS plc Executive Long Term Incentive Plans. These shares may subsequently be transferred to certain directors and senior executives and the purchase price of the shares is being charged to the profit and loss account so as to spread the cost evenly over the relevant performance periods.
(ii) The GUS plc ESOP Trust No. 2 which holds 6.0m (2003 7.4m) Ordinary shares principally to meet obligations under the North America Stock Option Plan. These shares may be transferred to certain senior executives employed in North America, including one director of the Company. The cost to the Company, being the difference between the purchase price and the option price, is being charged to the profit and loss account so as to spread the cost evenly over the relevant performance periods.
(iii) The GUS plc ESOP Trust No. 3 which holds 4.1m (2003 1.2m) Ordinary shares principally to meet obligations under The GUS plc Co-Investment Plan. These shares may be subsequently transferred to certain directors and senior executives. The cost of the shares is charged to the profit and loss account in the periods in which the award is earned.
(iv) The GUS plc ESOP Trust No. 4 which holds 0.1m Ordinary shares principally to meet obligations under The GUS plc Co-Investment Plan. These shares may be subsequently transferred to certain directors and senior executives. The cost of the shares is charged to the profit and loss account in the periods in which the award is earned.
Of the above 12.2m Ordinary shares held at 31 March 2003, 1.5m Ordinary shares were held by The GUS plc ESOP Trust No. 3 principally to meet National Insurance liabilities arising in connection with the Company's share based incentive plans and accordingly were classified as current asset investments (see Note 19). During the year ended 31 March 2004, the Company purchased a further 1.0m Ordinary shares to hedge these liabilities. On 30 March 2004 these arrangements were restructured and 1.7m Ordinary shares were sold with the balance of 0.8m Ordinary shares retained to meet obligations under The GUS plc Co-Investment Plan and reclassified as fixed asset investments. The Company then entered into equity swap transactions covering 1.8m Ordinary shares to hedge the National Insurance liabilities.
Details of awards and options in respect of the Company's shares are given in Note 34(a).
(c) Interests in ordinary shares of Burberry Group plc
These comprise shares in Burberry Group plc held by that company and, at 31 March 2004, the interest represents the cost of 3.4m (2003 1.4m) ordinary shares (nominal value of £1,719 (2003 £707)) which amounts to 0.7% (2003 0.3%) of its called up share capital. These shares have been acquired by trusts in the open market using funds provided by Burberry Group companies to meet the share award obligations arising on certain Burberry share incentive schemes (see Note 34(b)). Entitlement to dividends of £167,998 (2003 £16,741) has been waived. These shares were classified as current asset investments at 31 March 2003.
In addition shares are held by trusts to meet obligations in respect of awards made under an All Employee Share Plan. The total number of shares held for these purposes at 31 March 2004 is 1.5m (2003 0.9m). The cost of these shares has been written off as they have been or will be gifted unconditionally to employees. The costs of funding and administering the trusts are charged to the profit and loss account of Burberry Limited in the period to which they relate. The market value of all Burberry Group plc shares held at 31 March 2004 was £17m (2003 £5m).
Other investments comprise investments held by Experian North America. At 31 March 2004 the market and redemption value of these investments was £1m (2003 £7m).
View Group’s principal subsidiary undertakings.