Financial statements
Notes to the financial statements
34 Related parties
The Group has various related parties stemming from relationships with limited partnerships managed by the Group, its investments and its key management personnel. In addition the Company has related parties in respect of its subsidiaries.
Limited partnerships
The Group manages a number of third-party funds. These funds invest through a number of 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:
| Income statement | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Carried interest receivable | 81 | 79 | 81 | 79 |
| Fund management fees | 37 | 24 | – | – |
| Balance sheet | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Carried interest receivable | 83 | 77 | 83 | 77 |
| Amount due from limited partnerships | – | 3 | – | – |
Investments
The Group makes minority investments in the equity of unquoted 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 IAS 28) but are related parties. The total amounts included for these investments are as follows:
| Income statement | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Realised profit over value on the disposal of investments | 715 | 374 | 346 | 292 |
| Unrealised profits on the revaluation of investments | 316 | 78 | 143 | 57 |
| Portfolio income | 195 | 203 | 144 | 72 |
| Balance sheet | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Quoted equity investments | 411 | 66 | 405 | 46 |
| Unquoted equity investments | 1,392 | 1,721 | 674 | 974 |
| Loans and receivables | 803 | 1,317 | 292 | 694 |
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. There has been no single transaction in the year with a material effect on the Group's financial statements and all such transactions are fully included in the above disclosure.
3i Infrastructure Limited
The Group acts as advisor to 3i Infrastructure Limited, a company listed on the London Stock Exchange, which invests in infrastructure businesses and assets. The following amounts have been included in respect of 3i Infrastructure Limited:
| Income statement | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Unrealised profits on the revaluation of investments | 9 | – | 9 | – |
| Balance sheet | Group 2007 £m |
Group 2006 £m |
Company 2007 £m |
Company 2006 £m |
|---|---|---|---|---|
| Investments: quoted equity investments | 334 | – | 334 | – |
Key management personnel
The Group's key management personnel comprises the members of Management Committee and the Board's non-executive Directors.
| Group 2007 £m |
Group 2006 £m |
|
|---|---|---|
| Salaries, fees, supplements and benefits in kind | 5 | 5 |
| Bonuses and deferred share bonuses | 8 | 6 |
| Increase in accrued pension | – | – |
| Carried interest payable within one year | 6 | 4 |
| Carried interest payable after one year | 12 | 5 |
| Share-based payments | 2 | 1 |
Carried interest paid in the year to key management personnel was £6 million (2006: £2 million).
Subsidiaries
Transactions between the Company and its 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 £39 million (2006: £26 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 £194 million (2006: £126 million) for this service.
Investment entities
The Company makes investments through a number of subsidiaries by providing funding in the form of capital contributions or loans depending on the legal form of the entity making the investment. The legal form of these subsidiaries may be limited partnerships or limited companies or equivalent depending on the jurisdiction of the investment. The Company receives interest on this funding, amounting in 2007 to £1 million (2006: £1 million).
Other subsidiaries
The Company borrows funds from certain subsidiaries and pays interest on the outstanding balances. The amounts that are included in the Company's income statement are £10 million (2006: £2 million).