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Note 34: Other reserves and non-controlling interests

a  Group

  Group
£ million Retained earnings Unrealised gains and losses Currency translation Equity portion of convertible bond Total Non-controlling interests*
Balance at 31 March 2008: 1,583 213 22 1,818 200
Adoption of IFRIC 13 (206) (206)
Adoption of IFRIC 14 235       235  
Balance at 1 April 2008 1,612 213 22 1,847 200
Loss for the year attributable to shareholders (375) (375)
Exchange differences and other movements 38 38
Fair value of cash flow hedges transferred to passenger revenue   13 13
Fair value of cash flow hedges transferred to fuel and oil costs   (78) (78)
Fair value of cash flow hedges transferred to currency differences   (46) (46)
Net change in fair value of cash flow hedges (877) (877)
Exercise of share options (2) (2)
Cost of share-based payment 1 1
Share of other movements in reserves of associates (26) (26)
Held-to-maturity investments marked-to-market (5) (5)
Available-for-sale assets – realisation of fair value gains (4) (4)
Net dividends (56)       (56)  
Total income and expense for the year (458) (997) 38   (1,417)  
At 31 March 2009 1,154 (784) 60 430 200
Loss for the year attributable to shareholders (443) (443)
Exchange differences and other movements (18) (18)
Fair value of cash flow hedges transferred to passenger revenue   27 27
Fair value of cash flow hedges transferred to fuel and oil costs   (235) (235)
Fair value of cash flow hedges transferred to currency differences   4 4
Net change in fair value of cash flow hedges 791 791
Exercise of share options (5) (5)
Cost of share-based payment 1 1
Held-to-maturity investments marked-to-market 5 5
Share of other movements in reserves of associates 34 34
Equity portion of convertible bond 84 84
Net gain on available-for-sale financial assets   17     17  
Total income and expense for the year (413) 609 (18) 84 262  
At 31 March 2010 741 (175) 42 84 692 200

*Non-controlling interests comprise €300 million of 6.75 per cent fixed coupon euro perpetual preferred securities issued by British Airways Finance (Jersey) L.P. in which the general partner is British Airways Holdings Limited, a wholly-owned subsidiary of the Company. The holders of these securities have no rights against Group undertakings other than the issuing entity and, to the extent prescribed by the subordinated guarantee, the Company. The effect of the securities on the Group as a whole, taking into account the subordinate guarantee and other surrounding arrangements, is that the obligations to transfer economic benefits in connection with the securities do not go beyond those that would normally attach to preference shares issued by a UK company.

 b  Company

  Company
£ million Retained earnings Unrealised gains and losses Equity portion of convertible bond Total
Balance at 31 March 2008: 1,133 211 1,344
Adoption of IFRIC 13 (135) (135)
Adoption of IFRIC 14 235     235
Balance at 1 April 2008 1,233 211 1,444
Loss for the year attributable to shareholders (389) (389)
Cost of share-based payment (2) (2)
Deferred tax – rate change adjustment 1 1
Fair value of cash flow hedges transferred to passenger revenue   13 13
Fair value of cash flow hedges transferred to fuel and oil costs   (78) (78)
Fair value of cash flow hedges transferred to currency differences   (46) (46)
Net change in fair value of cash flow hedges (877) (877)
Net dividends (56)     (56)
Total income and expense for the year (446) (988)   (1,434)
At 1 April 2009 787 (777) 10
Loss for the year attributable to shareholders (407) (407)
Cost of share-based payment 1 1
Exercise of share options (1) (1)
Fair value of cash flow hedges transferred to passenger revenue   27 27
Fair value of cash flow hedges transferred to fuel and oil costs   (235) (235)
Fair value of cash flow hedges transferred to currency differences   4 4
Net change in fair value of cash flow hedges 790 790
Equity portion of convertible bond     84 84
Total income and expense for the year (407) 586 84 263
At 31 March 2010 380 (191) 84 273

The unrealised gains and losses reserve records fair value changes on available-for-sale investments and the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective hedge.

The currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries and associates.

The equity portion of convertible bond reserve represents the equity portion of the £350 million fixed rate 5.8 per cent convertible bond (note 27) after deduction of transaction costs of £2 million.

Total shareholders’ equity also includes the balance classified as share capital that includes the total net proceeds (both nominal value and share premium) on issue of the Company’s equity share capital, comprising 25 pence ordinary shares. Investment in own shares consists of shares held by British Airways Employee Benefits Trust (Jersey) Limited, a wholly-owned subsidiary, for the purposes of the Employee Share Ownership plans including the Long Term Incentive Plan. At 31 March 2010 the Group and Company held 1,086,001 shares for the Long Term Incentive Plan and other employee share schemes (2009: 2,134,461 shares).

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