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Note 20: Investments

a  Group

Investment in associates

  Group
£ million 2009 2008
Balance at April 1 227 125
Exchange movements 27 24
Additions*   57
Share of attributable results 4 23
Share of movements on other reserves (32) (2)
Dividends received (17)  
At March 31 209 227

* £3 million of the 2008 additions are non-cash, attributed to deferred tax liabilities recognised on Iberia’s unremitted earnings.

Market value of listed associates

  Group
£ million 2009 2008
At March 31 184 275

Details of the investments that the Group accounts for as associates using the equity method are set out below:

  Percentage of equity owned Principal activities Holding Country of incorporation and principal operations
Iberia, Lineas Aéreas de España, S.A. (Iberia)* 13.15 Airline operations Ordinary shares Spain

* Held by a subsidiary company.

The Group accounts for its investment in Iberia as an associate although the Group holds less than 20 per cent of the issued share capital as the Group has the ability to exercise significant influence over the investment due to the Group’s voting power (both through its equity holding and its representation on key decision-making committees) and the nature of its commercial relationships with Iberia.

In February 2008, the Group purchased 28.7 million additional shares in Iberia at an average price of €2.34 per share (£54 million), taking its holding from 9.95 per cent at March 31, 2007, to 13.15 per cent. The acquisition of these additional shares in Iberia resulted in goodwill of £9 million, which was reflected in investment in associates.

The following summarised financial information of the Group’s investment in associates is shown based on the Group’s share of results and net assets:

  Group
£ million 2009 2008
Non-current assets 300 218
Current assets 392 414
Current liabilities (284) (234)
Non-current liabilities (216) (188)
Share of net assets 192 210
Goodwill attributable to investments in associates 17 17
Revenues 574 556
Net profit after tax 4 26

b  Company

      Company
£ million Cost Provisions 2009 2008
Balance at April 1 3,219 (1,012) 2,207 1,185
Exchange movements 23   23 17
Additions 144   144 1,016
Intra-group transfer       (5)
Provision   (18) (18) (6)
At March 31 3,386 (1,030) 2,356 2,207

The provision of £18 million at March 31, 2009, relates to the £5 million impairment of the Company’s investment in OpenSkies, associated with goodwill arising on the acquisition of L’Avion and the £13 million impairment of the Group’s investment in The Plimsoll Line, which holds the investment in Flybe (2008: £6 million).

The Company accounts for its investments in subsidiaries and associates using the cost method.

The Group’s and Company’s principal investments in subsidiaries, associates and other investments are listed in principal investments.

During the prior year, the Company invested £999 million in a subsidiary whose primary purpose is to invest the Company’s excess cash. In addition, the Company invested £17 million in a subsidiary relating to the launch of a new airline, OpenSkies.

During the year, the Company invested £40 million in the subsidiary OpenSkies in order to fund the acquisition of L’Avion and £104 million in the subsidiary CityFlyer in order to fund operations.

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