Interim Results - Part 2

3i Group PLC 23 November 2000 Part 2 BASIS OF PREPARATION AND INDEPENDENT REVIEW REPORT BASIS OF PREPARATION The accounting policies used in the preparation of this Interim report are the same as those used in the statutory accounts for the year to 31 March 2000. The Group adopted Financial Reporting Standard 16 - Current Tax - (FRS16) for the year to 31 March 2000. This gave rise to a change in accounting policy. The implementation of FRS16 had no effect on the brought forward reserves of the Group. Certain comparative figures within the consolidated revenue statement for the six months to 30 September 1999 have been restated to reflect the adoption of FRS16. The six month period is treated as a discrete period except in so far as tax in the revenue account is charged on the basis of an estimated annual effective rate. The figures for the year to 31 March 2000 have been extracted from the accounts filed with the Registrar of Companies on which the auditors issued an unqualified report. This Interim report does not constitute statutory accounts. INDEPENDENT REVIEW REPORT TO 3i GROUP PLC INTRODUCTION We have been instructed by the Company to review the financial information and we have read the other information contained in the Interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. DIRECTORS' RESPONSIBILITIES The Interim report, including the financial information contained therein, is the responsibility of, and has been approved by the Directors. The Listing Rules of the Financial Services Authority require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. REVIEW WORK PERFORMED We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. REVIEW CONCLUSION On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2000. ERNST &YOUNG LONDON 22 November 2000 NOTE 1 The statutory accounts for the year to 31 March 2000 were filed with the Registrar of Companies on 9 October 2000. The auditors' report on those statutory accounts was unqualified and did not contain any statements under Section 237 (2) or (3) of the Companies Act 1985. NOTE 2 The Interim report 2000 will be posted to shareholders on 4 December 2000 and thereafter copies will be available from the Company Secretary, 3i Group plc, 91 Waterloo Road, London SE1 8XP. NOTE 3 The interim dividend will be payable on 10 January 2001 to holders of shares on the register on 8 December 2000. The ex- dividend date will be 4 December 2000. NOTE 4 Investment statistics referred to in this announcement relate to investments made by 3i Group and third party co-investment funds unless otherwise stated. TEN LARGEST INVESTMENTS At 30 September 2000, the Directors' valuation of the ten largest investments was a total of £1,021 million. The cost of these equity investments was £27 million. Investment Description of First Cost Proportion Directors' business investe £m of equity valuation d in shares held £m TeleCity Internet and 1998 plc* telecoms engineering services Equity 1 30.4% 329 shares Morse plc* Leading 1995 technology integrator Equity 10 23.1% 163 shares Bookham Integrated 1996 Technology silicon plc* optical circuitry Equity 3 3.3% 110 shares Actelion AG* Research and 1998 development of advanced medicines Equity 1 7.9% 81 shares Biosearch Research and 1998 Italia SpA* development of anti-infective drugs Equity 6 21.9% 65 shares Virata Electronic 1994 Incorpor- component ated* manufacturer Equity 2 2.5% 63 shares Content Content 1989 Technologies security and Holdings policy Limited management services Equity - 17.8% 57 shares Weston Needle-free 1993 Medical medical device Group plc* manufacture Equity 1 20.5% 52 shares Indigo- Networked 1995 Vision video Group plc* technology supplier Equity 2 15.8% 52 shares TTP Wireless 1988 Communica- communications tions plc Equity 1 12.7% 49 shares The investment information is in respect of 3i's holding and excludes any co-investment by 3i managed funds. *Quoted company (including secondary markets). NEW INVESTMENT ANALYSIS Analysis of the equity, fixed income and loan investments made by 3i Group (excluding third party unquoted funds). This analysis excludes investments in joint ventures and non-venture capital investments made in FTSE 350 companies. The tabular representations below are for the 6 months to 30 September 2000. Investment by FTSE category (£m) 6 months to 6 months to 30 September 30 September 2000 1999 1 Resources 43 7 2 Industrials 67 62 3 Consumer goods 117 78 4 Services and utilities 145 152 5 Financials 19 7 6 Information technology 310 94 Total 701 400 Investment by product (£m) 1 Start ups 118 27 2 Management buy-outs 164 70 3 Management buy-ins 21 44 4 Growth capital 350 186 5 Share purchase 35 56 6 Rescues 13 17 Total 701 400 Number of investments by product 1 Start ups 120 39 2 Management buy-outs 36 23 3 Management buy-ins 9 18 4 Growth capital 212 166 5 Share purchase 26 19 6 Rescues 37 36 Total 440 301 Investment by geography - including co-investment funds (£m) 1 UK own investment 425 264 2 UK co-investment 86 65 3 Continental Europe own 239 128 investment 4 Continental Europe co- 113 67 investment 5 Asia Pacific own investment 8 8 6 Asia Pacific co-investment 2 - 7 USA own investment 29 - Total 902 532 PORTFOLIO ANALYSIS The Group's equity, fixed income and loan investments (excluding third party unquoted funds) total £7,091 million at 30 September 2000. The analyses below exclude investments in joint ventures and non-venture capital investments made in FTSE 350 companies, 30 September 2000, £198 million (March 2000: £201 million). The tabular representations are as at 30 September 2000. Portfolio value by FTSE classification (£m) At 30 At 31 March September 2000 2000 1 Resources 237 185 2 Industrials 1,215 1,247 3 Consumer goods 1,400 1,138 4 Services and utilities 1,980 1,648 5 Financials 274 251 6 Information technology 1,787 1,501 Total 6,893 5,970 Portfolio value by product (£m) 1 Start ups 635 429 2 Management buy-outs 1,507 1,523 3 Management buy-ins 557 645 4 Growth capital 3,164 2,333 5 Share purchase 957 936 6 Rescues 73 104 Total 6,893 5,970 Portfolio value by geography (£m) 1 UK 5,161 4,668 2 Continental Europe 1,430 1,049 3 Asia Pacific 56 63 4 US 246 190 Total 6,893 5,970 US comprises mainly technology investments made by our offices there together with investments in US companies acquired through the realisation of European companies. Continental Europe portfolio value by location of business (£m) 1 Germany 492 459 2 France 256 203 3 Spain 206 135 4 Italy 170 71 5 Switzerland 157 72 6 Benelux 57 59 7 Nordic 16 8 8 Other European* 76 42 Total 1,430 1,049 *Other European includes investments in countries where 3i did not have an office at the period end. Portfolio value by valuation method (£m) 1 Imminent sale or flotation 259 241 2 Listed 1,671 1,103 3 Secondary market 608 483 4 Earnings 1,087 1,226 5 Cost 853 626 6 Further advance 259 143 7 Net assets 153 144 8 Other 136 118 9 Loans and preference shares 1,867 1,886 Total 6,893 5,970 Analysis of total investment portfolio owned or managed by 3i (£m) At 30 At 31 March September 2000 2000 1 UK - owned* 5,368 4,878 2 UK - managed** 1,945 1,394 3 Continental Europe - owned 1,430 1,049 4 Continental Europe - managed 588 463 5 Asia Pacific - owned* 85 134 6 Asia Pacific - managed 3 1 7 USA - owned* 272 241 Total 9,691 8,160 * Includes investments in joint ventures, FTSE 350 companies and investment properties held as investment assets as well as equity, fixed income and loan investments. ** UK managed funds includes unquoted funds and other funds managed by 3i. TECHNOLOGY PORTFOLIO ANALYSIS Analysis of the Group's equity, fixed income and loan investments (excluding third party unquoted funds). The tabular representations below are as at 30 September 2000 Investment made during the period by sector (£m) 6 months to 6 months to 30 September 30 September 2000 1999 1 Life sciences and healthcare 49 42 2 Communications and networking 74 57 3 Electronics and other 35 18 technologies 4 e Business 86 30 5 Software and computer 221 66 services Total 465 213 Number of investments made during the period by sector 1 Life sciences and healthcare 60 49 2 Communications and networking 43 27 3 Electronics and other 46 22 technologies 4 e Business 58 18 5 Software and computer 106 55 services Total 313 171 Portfolio value by sector (£m) At 30 At 31 March September 2000 2000 1 Life sciences and healthcare 719 434 2 Communications and networking 878 457 3 Electronics and other 346 286 technologies 4 e Business 204 158 5 Software and computer 1,255 1,044 services Total 3,402 2,379 Number of portfolio investments by sector 1 Life sciences and healthcare 164 164 2 Communications and networking 100 88 3 Electronics and other 186 192 technologies 4 e Business 89 60 5 Software and computer 273 244 services Total 812 748 Technology portfolio value by valuation method (£m) 1 Imminent sale or flotation 197 171 2 Listed 1,157 603 3 Secondary market 581 471 4 Earnings 142 168 5 Cost 673 449 6 Further advance 238 143 7 Net assets 2 2 8 Other 25 28 9 Loans and preference shares 387 344 Total 3,402 2,379

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