4Fixed asset investments

The cost and net book value of interests in Group undertakings held by the Company was £544,685,000 at 31 December 2008 and £529,276,000 at 31 December 2007. The Company took advantage of merger relief in 2004 and did not record the premium on the issue of shares for the acquisition of Artisan Components Inc. (now ARM Inc.) and thus did not record the premium within the value of the investment in the company balance sheet at that time.

Fixed asset investments

	Investments in subsidiary undertakings £000
Cost and net book value
At 1 January 2008	529,276
Capital contributions arising from FRS 20 charges	15,409
At 31 December 2008	544,685

Where options over the Company’s shares have been issued to the employees of subsidiary undertakings, the fair value of employee services performed (equal to the FRS 20 charge) has been recorded as a capital contribution.

Interests in Group undertakings Details of subsidiary undertakings are as follows:

Details of subsidiary undertakings

Name of undertaking	Country of registration	Description of shares held	Proportion of nominal value of issued shares held
ARM Limited	England and Wales	Ordinary £1 shares	less than 0.01%
ARM Finance UK Limited	England and Wales	Ordinary $1 shares	100%

The principal activity of ARM Limited is the marketing, research and development of RISC-based microprocessors. The remaining shares in ARM Limited were held at the balance sheet date by ARM Finance UK Limited (AFL) and ARM Finance UK Three Limited (AFL3) (with AFL3 itself being an indirect wholly owned subsidiary of AFL). The principal activities of both AFL and AFL3 are as intermediate holding companies.

Nominees of the Company hold 100% of the ordinary share capital of ARM Employee Benefit Trustee Ltd, a company which acts as trustee to the Group’s ESOP.

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