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.

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:

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.