Annual report and accounts 2008

14Available-for-sale financial assets

Available-for-sale financial assets
	Short-term investments £000	Short-term marketable securities £000	Listed short-term investments £000	Total £000
At 1 January 2008	232	1,582	1,180	2,994
Net cash invested in the year	233	−	−	233
Disposals	−	−	(1,180)	(1,180)
Revaluation through equity	−	(285)	−	(285)
Exchange differences	6	519	−	525
At 31 December 2008	471	1,816	−	2,287

Available-for-sale financial assets
	Short-term investments £000	Short-term marketable securities £000	Listed short-term investments £000	Total £000
At 1 January 2007	18,600	19,151	–	37,751
Reclassification from long-term investments	–	–	1,885	1,885
Net cash maturing in the year	(18,363)	(17,395)	–	(35,758)
Impairment charge to income statement	–	–	(1,174)	(1,174)
Revaluation through equity	–	7	469	476
Exchange differences	(5)	(181)	–	(186)
At 31 December 2007	232	1,582	1,180	2,994

Available-for-sale financial assets
	Other long-term investments £000	Total £000
Net book value
At 1 January 2008	3,701	3,701
Additions	1,029	1,029
Disposals	(4,813)	(4,813)
Exchange differences	1,250	1,250
At 31 December 2008	1,167	1,167

Available-for-sale financial assets
	Listed long-term investments £000	Other long-term investments £000	Total £000
Net book value
At 1 January 2007	1,885	1,970	3,855
Reclassification to short-term investments	(1,885)	–	(1,885)
Additions	–	2,657	2,657
Impairment charge to income statement	–	(926)	(926)
At 31 December 2007	–	3,701	3,701

Investments in listed companies

The fair value of listed investments is determined with reference to prices quoted on the relevant exchange at the balance sheet date. The Group had no listed investments at 31 December 2008, following the disposal of its investment in Superscape Group plc during the year. The cost and market value of Superscape at 31 December 2007 were £2,652,000 and £1,180,000 respectively.

Other long-term investments

Those unlisted companies in which the Group has invested are early-stage development enterprises, which are generating value for shareholders through research and development activities, and most do not currently report profits. The directors do not consider it possible to estimate with precision the fair value of the Group’s investments in these companies (carrying value at 31 December 2008: £1,167,000; 2007: £3,701,000) as they are, by definition, not traded on an organised market and are unique in their activities. However, based on recent fundraising transactions by these companies and, where possible, following review of relevant financial information prepared by the companies, the directors are of the opinion that the fair value of these investments approximates to carrying value. Provisions have been made against other investments to reflect any impairment in value.

Included in other investments are the Group’s less than 1% investment in the share capital of Palmchip Corporation (a private fabless chip company based in California); a less than 1% investment in the share capital of Pixim Inc. (also a private fabless chip company based in California); a 1.4% holding in Reciva Limited (an internet radio company based in the UK); and a minority holding in Embest Info & Tech Co. Ltd (a niche developer of embedded hardware and software based in China). The Group also has an investment in the preference share capital of CoWare Inc. (a company which develops system-on-chip software for a wide range of applications); and an investment in the preference shares of Luminary Micro Inc. (a private fabless semiconductor company based in Texas which develops pioneering ARM architecture-based SoC products). Neither investment in CoWare or Luminary confers any voting rights.

In 2007, the Group invested $5,000,000 (£2,534,000) in W&W Communications Inc. (an unlisted US company) by way of an interest-bearing convertible loan note; and a further $2,000,000 (£1,029,000) during 2008. W&W was acquired in December 2008, at which time the loan notes were repaid including the accrued interest. The exchange gain noted in the above table results from this US dollar denominated loan note.

Available-for-sale financial assets include the following:

Available-for-sale financial assets include the following:
	2008 £000	2007 £000
Listed equity securities – UK	−	1,180
Short-term investments – Korea	471	232
Unlisted short-term marketable securities – US	1,816	1,582
Total current financial assets	2,287	2,994
Unlisted equity securities – UK	50	50
Unlisted equity securities – China	123	123
Unlisted equity securities – US	994	994
Convertible loan notes – US	−	2,534
Total non-current financial assets	1,167	3,701
Total financial assets	3,454	6,695