Annual Report and Accounts 2008
18 Investments accounted for using the equity method
Investments accounted for using the equity method are as follows:
| 2008 £m |
2007 £m |
|
|---|---|---|
| Joint ventures | 2.2 | 2.1 |
| Associates | 5.7 | 9.7 |
| Total investments accounted for under the equity method | 7.9 | 11.8 |
The Group’s share of post tax results from associates and joint ventures accounted for using the equity method is as follows:
| 2008 £m |
2007 £m |
|
|---|---|---|
| Share of joint ventures’ profit/(loss) | 0.1 | (0.2) |
| Share of associates’ (loss)/profit | (0.1) | 0.6 |
| Total share of results from associates and joint ventures | – | 0.4 |
(a) Investments in joint ventures
The Group’s interests in joint ventures are as follows:
| Name | Country of registration | Activity | Proportion held% | |
|---|---|---|---|---|
| Ibero – Eurosur SL | Spain | Holding company of Deutsche Touring | 20 | |
The financial information of this joint venture is summarised below:
| Ibero | Movelia* | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Share of joint venture’s balance sheet | 2008 £m |
2007 £m |
2008 £m |
2007 £m |
2008 £m | 2007 £m | |||
| Non-current assets | 4.2 | 3.2 | – | 0.5 | 4.2 | 3.7 | |||
| Current assets | 0.3 | 0.3 | – | 0.8 | 0.3 | 1.1 | |||
| Share of gross assets | 4.5 | 3.5 | – | 1.3 | 4.5 | 4.8 | |||
| Non-current liabilities | (2.0) | (2.0) | – | – | (2.0) | (2.0) | |||
| Current liabilities | (0.3) | – | – | (0.7) | (0.3) | (0.7) | |||
| Share of gross liabilities | (2.3) | (2.0) | – | (0.7) | (2.3) | (2.7) | |||
| Share of net assets | 2.2 | 1.5 | – | 0.6 | 2.2 | 2.1 | |||
| Ibero | Movelia* | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Share of joint ventures’ revenue and results | 2008 £m |
2007 £m |
2008 £m |
2007 £m |
2008 £m |
2007 £m |
|||
| Revenue | 0.3 | – | – | 0.3 | 0.3 | 0.3 | |||
| Profit/(loss) | 0.1 | (0.1) | – | (0.1) | 0.1 | (0.2) | |||
The carrying amount of the investment in joint ventures matches the Group’s share of the net assets.
*Due to an increase in the Group’s shareholding from 42% to 76%, Movelia Tecnologias SL, is now consolidated as a subsidiary.
(b) Investments in associates
The Group’s interests in associates are as follows:
| Name | Country of registration | Proportion held% |
|---|---|---|
| Inter-Capital and Regional Rail Limited | England and Wales | 40 |
| Spain associates | Spain | 20–50 |
Inter-Capital and Regional Rail Limited (“ICRRL”) is contracted to manage the operations of Eurostar UK until 2010. In 2006, an onerous contract provision was recognised in relation to the Group’s obligation to fund the losses of ICRRL (note 26). As a result, the Group has ceased to recognise the share of results of ICRRL.
Spain’s associates are generally involved in the operation of coach and bus services, management of bus stations and similar operations.
The associates’ financial information is summarised below:
| Held by Spain | ||
|---|---|---|
| Share of associates’ balance sheets | 2008 £m |
2007 £m |
| Non-current assets | 6.1 | 11.6 |
| Current assets | 8.7 | 12.6 |
| Share of gross assets | 14.8 | 24.2 |
| Non-current liabilities | (3.7) | (4.6) |
| Current liabilities | (5.4) | (9.9) |
| Share of gross liabilities | (9.1) | (14.5) |
| Share of net assets | 5.7 | 9.7 |
The Group’s net investment in associates is £5.7m (2007: £9.7m) which comprises associates held by Spain only. The decrease in the year stems from the acquisition of the remaining 75% share capital of Transportes Colectivos SA, which is now consolidated as a subsidiary (note 19).
| Revenue | Profit/(loss) | |||||
|---|---|---|---|---|---|---|
| Share of associates’ revenue and results | 2008 £m |
2007 £m |
2008 £m |
2007 £m |
||
| Spain associates | 18.2 | 14.4 | (0.1) | 0.6 | ||