Annual Report and Accounts 2010

4Investments

The cost and net book value of interests in Group undertakings held by the Company was £590,815,000 at 31 December 2010 and £563,686,000 at 31 December 2009. 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.

 

Investments
in subsidiary
undertakings
£000

Cost and net book value

 

At 1 January 2010

563,686

Capital contributions arising from share-based compensation charges

27,129

At 31 December 2010

590,815

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

Interests in Group undertakings

Details of subsidiary undertakings are as follows:

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 and physical IP components. 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.