Section image

Cherries
oil on canvas
22 x 20 in
1981

Penny Machines
oil on canvas
23¾ x 29¾ in
1961

Stack of Books
oil on canvas
30 x 24 in
n.d.

Seven Suckers
oil on canvas
19 x 23 in
1970

Twin Jackpots
oil on canvas
30 x 46 in
1962

Ties
oil on canvas
20 x 26 in
1980

Cake Slices
oil on canvas
20 x 16 in
n.d.

Notes 11 - 15

14. Interests in associates, joint ventures and other investments

The movements in 2009 and 2008 were as follows:
  Net
assets of
associates
and joint
ventures
£m
Goodwill
and other
intangibles
of
associates
and joint
ventures
£m
Total
associates
and joint
ventures
£m
Other
invest-
ments
£m
1 January 2008 235.5 304.6 540.1 268.6
Additions 42.1 42.1 50.0
Goodwill arising on acquisition of new associates 52.8 52.8
Share of results of associate undertakings (note 4) 46.0 46.0
Dividends and other movements (36.2) 10.1 (26.1)
Exchange adjustments 76.5 76.8 153.3 73.9
Disposals (18.5) (63.7) (82.2) (1.1)
Reclassification from associates to other investments (0.1) (0.1) 0.1
Reclassification to subsidiaries (3.7) (0.3) (4.0)
Revaluation of other investments (51.3)
Goodwill impairment (4.4) (4.4)
Amortisation of other intangible assets (2.0) (2.0)
Write-downs (1.2) (1.2) (29.3)
31 December 2008 340.4 373.9 714.3 310.9
Additions 17.9 17.9 52.4
Goodwill arising on acquisition of new associates 26.5 26.5
Share of results of associate undertakings (note 4) 57.0 57.0
Dividends and other movements (56.1) 29.8 (26.3) 1.0
Exchange adjustments (19.8) (9.2) (29.0) (27.2)
Disposals (0.7) (0.2) (0.9) (17.9)
Reclassification to subsidiaries (1.6) (3.9) (5.5)
Revaluation of other investments (13.5)
Goodwill impairment (22.7) (22.7)
Amortisation of other intangible assets (2.0) (2.0)
Write-downs (11.1)
31 December 2009 337.1 392.2 729.3 294.6

The investments included above as ‘other investments’ represent investments in equity securities that present the Group with opportunity for return through dividend income and trading gains. They have no fixed maturity or coupon rate. The fair values of the listed securities are based on quoted market prices. For unlisted securities, where market value is not available, the Group has estimated relevant fair values on the basis of publicly available information from outside sources or on the basis of discounted cash flow models where appropriate.

The carrying values of the Group’s associates and joint ventures are reviewed for impairment in accordance with the Group’s accounting policies.

The Group’s principal associates and joint ventures at 31 December 2009 included:
  %
owned
Country of
incorporation
Asatsu-DK 24.3 Japan
CHI & Partners Limited 49.9 UK
Chime Communications PLC 16.4 UK
Dentsu, Young & Rubicam Inc. 49.0 Japan
GIIR, Inc 20.0 Korea
High Co S.A. 34.1 France
Ibope Latinoamericana SA 44.2 Brazil
Kinetic Worldwide Limited 50.0 UK
Ooh! Media Group Limited 32.1 Australia
Singleton, Ogilvy & Mather (Holdings) Pty Limited 33.3 Australia
STW Communications Group Limited 20.6 Australia
The Jupiter Drawing Room Pty Limited 49.0 South Africa
The Grass Roots Group PLC 44.8 UK

The market value of the Group’s shares in its principal listed associate undertakings at 31 December 2009 was as follows: Asatsu-DK: £125.6 million, Chime Communications PLC: £24.3 million, High Co S.A.: £23.8 million, GIIR, Inc: £21.2 million, STW Communications Group Limited: £31.3 million and Ooh! Media Group Limited: £6.6 million (2008: Asatsu-DK: £155.9 million, Chime Communications PLC: £5.8 million, High Co S.A.: £18.5 million, GIIR, Inc.: £18.1 million, STW Communications Group Limited: £13.2 million and Ooh! Media Group Limited: £5.2 million).

The carrying value (including goodwill and other intangibles) of these equity interests in the Group’s balance sheet at 31 December 2009 was as follows: Asatsu-DK: £189.9 million, Chime Communications PLC: £22.0 million, High Co S.A.: £29.9 million, GIIR, Inc: £14.3 million, STW Communications Group Limited: £57.6 million and Ooh! Media Group Limited: £14.4 million (2008: Asatsu-DK: £242.8 million, Chime Communications PLC: £19.0 million, High Co S.A.: £31.9 million, GIIR, Inc: £14.4 million, STW Communications Group Limited: £37.3 million and Ooh! Media Group Limited: £11.6 million).

Where the market value of the Group’s listed associates is less than the carrying value, an impairment review is performed utilising the discounted cash flow methodology discussed in note 12.

The Group’s investments in its principal associate undertakings are represented by ordinary shares.

Summarised financial information
The following tables present a summary of the aggregate financial performance and net asset position of the Group’s associate undertakings and joint ventures. These have been estimated and converted, where appropriate, to an IFRS presentation based on information provided by the relevant companies at 31 December 2009.
  2009
£m
2008
£m
2007
£m
Income statement      
Revenue 1,968.9 1,588.3 1,171.5
Operating profit 219.2 221.3 181.0
Profit before taxation 237.0 221.3 204.7
Profit for the year 166.0 147.6 136.9
  2009
£m
2008
£m
Balance sheet    
Assets 3,929.4 3,985.1
Liabilities (2,236.3) (2,386.8)
Net assets 1,693.1 1,598.3

The application of equity accounting is ordinarily discontinued when the investment is reduced to zero and additional losses are not provided for unless the investor has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee.

At the end of the year, capital commitments contracted, but not provided for in respect of interests in associates and other investments were £22.3 million (2008: £32.4 million).

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