72 | FINANCIAL STATEMENTS | Notes to the Consolidated Financial Statements


17. Financial instruments continued (2) Other financial investments


Note NIC hedge


TRC Employee Benefit Trust assets Mutual funds


Purchased Equity Plan Bonus – investments Corporate bonds


25(h)(ii)


31 December 31 December 2012 £m


2011 £m


2.5 1.2 0.3 – – –


4.0


2.4 1.1 0.3 1.5 1.0 0.3


6.6


The ‘NIC hedge’ represents an investment in equities and other assets made via an Employee Benefit Trust for the purpose of funding future national insurance contributions (NIC) on legacy employee share plans. The provision for the NIC liability is separately recognised.


‘TRC Employee Benefit Trust assets’ represents investments held by an Employee Benefit Trust in TRC funds for the purpose of future settlement of TRC bonus awards. A corresponding liability is recognised in employee benefit liabilities.


‘Mutual funds’ represents investments in mainly fixed interest funds.


The ‘Purchased Equity Plan’ represented investments held by an Employee Benefit Trust in F&C funds and was used during 2012 to settle the liability in respect of Purchased Equity Plan awards. ‘Bonus – investments’ represented investments in managed funds. These were used during 2012 to settle deferred bonus liabilities. ‘Corporate bonds’ represented an investment in corporate bonds held by F&C Managed Pension Funds Limited.


(ii) Designated as held for trading


31 December 31 December 2012 £m


2011 £m


Stock of units and shares 0.3


The Group holds a stock of units and shares in respect of its OEIC and unit trust operations. This stock of units and shares is commonly referred to as the ‘Manager’s Box’. The Group’s stock of units and shares is valued using quoted market values. The Group is therefore exposed to market value movements in the value of these assets.


(iii) Designated as loans and receivables


31 December 31 December 2012 £m


2011 £m


Cash and cash equivalents


Trade and other receivables: Trade debtors


Accrued income Other debtors


OEIC and unit-trust debtors


Amounts owed by TRC related party entities Amounts owed by F&C REIT related party entities


(b) Fair values


(i) Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by category of valuation technique: Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.


165.2


32.0 30.6 5.2


10.6 0.7 0.1


244.4 225.0


13.3 29.0 4.8


29.5 0.6 0.1


302.3 0.9


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