Notes to the accounts

15 Non-current financial assets

	2007 £m	2006 £m
TI Automotive Limited preference shares
– at 1 August 2005		325.0
– impairment charged in period		(325.0)

Other trade investments	0.7	0.8
	0.7	0.8

Period ended 31 July 2007

During 2007, the Group sold its interest in TI Automotive for a consideration of £15.0m. The prior year impairment charge of £325m had reduced the carrying value of this financial asset to nil. As a result of the sale, therefore, a gain of £24.0m has been recorded, comprising the consideration received, together with the release of certain provisions held against TI Automotive-related exposures.

Period ended 5 August 2006

Recognising continued deterioration in the automotive market, particularly in the US, an impairment review of the preference share investment in TI Automotive was undertaken, as required by IAS 39.

The preference shares had not borne any dividends and it was considered unlikely that dividends would be paid in the foreseeable future. Similarly there was no current prospect of the preference share interest being redeemed. The directors also considered the possibility that cash flows could accrue from the investment in TI Automotive in the event that the enterprise was sold; such a sale was not considered sufficiently probable to take into account any cash flows which could accrue in such an event. As a result, the directors decided to write down the carrying value of the investment in the TI Automotive preference shares from £325m to nil value in those accounts.

The Company also held 19.99% of the issued ordinary share capital of TI Automotive Limited. The shares conferred 19.99% of the voting rights attaching to ordinary shares, and additionally conferred the right to appoint the Chairman and to benefit from compulsory transfer provisions which obliged the other shareholders to sell their shares to a purchaser making an offer accepted by Smiths subject to certain conditions. The ordinary shares were recorded at nil value in those accounts.

Smiths Group divisions:
Smiths Detection, Smiths Medical, Smiths Specialty Engineering