BOC Report and accounts 2005 - Alle jaarverslagen

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122 The BOC Group plc Annual report and accounts 2005 Notes to the financial statements 21. Financial instruments continued b) Fair value information i) Fair values of financial instruments Set out below is a comparison of the carrying amount and the fair value of the Group’s financial instruments (excluding short-term debtors and creditors) at 30 September 2005. Further details of the Group’s financial instruments are given in note 21 d). 2005 2004 Carrying Carrying amount Fair value amount Fair value Notes £ million £ million £ million £ million Primary financial instruments Loans to joint ventures and associates 1 227.1 209.3 202.6 202.6 Other fixed asset investments 2 14.6 14.6 34.5 41.8 Current asset investments 3 16.4 16.4 20.8 20.8 Cash at bank and in hand 4 191.0 191.0 228.2 228.2 Borrowings and finance leases (excluding swap agreements) 5 (1,024.4) (1,098.9) (1,218.5) (1,286.9) Other creditors: amounts falling due after more than one year 6 (17.0) (17.0) (26.8) (26.8) Provisions for liabilities and charges 6 (7.7) (7.7) (10.5) (10.5) Derivative financial instruments Foreign currency and interest rate swap agreements 7 (6.3) (11.2) 27.9 18.4 Forward foreign exchange and other contracts 8 – 7.1 – 7.5 Net financial instruments (606.3) (696.4) (741.8) (804.9) Financial assets 449.1 486.1 Financial liabilities 9 (1,055.4) (1,227.9) Net financial instruments (606.3) (741.8) 1. For those bearing either no interest or a floating rate of interest it is deemed that the carrying amount approximates to the fair value. For those bearing a fixed rate of interest an assessment of the interest rate at which the Group could make the same loan under current market conditions has been made. Unless this differs significantly from the fixed rate it is also deemed that the carrying amount approximates to the fair value.Where this does differ significantly, the fair value is based on the discounted value of future cash flows. 2. For equity instruments listed on a recognised stock exchange the fair value is the quoted market price. For other equity instruments it is deemed that the carrying amount approximates to the fair value. 3. The fair value is the quoted market price.Where no quoted market price exists, it is deemed that the carrying amount approximates to the fair value. 4. As all bear either no interest or a floating rate of interest it is deemed that the carrying amount approximates to the fair value. 5. For those bearing a floating rate of interest it is deemed that the carrying amount approximates to the fair value. For those bearing a fixed rate of interest the fair value is either the quoted market price where a liquid market exists or has been calculated using well established pricing models. 6. The carrying amount is deemed to approximate to the fair value. 7. The fair value is based on market valuations at the balance sheet date. 8. This category of derivative financial instruments includes: the fair value of forward foreign exchange contracts of £0.2 million (2004: £7.5 million) and the fair value of natural gas futures contracts of £6.9 million (2004: £nil).The fair values are based on market prices and forward exchange rates at the balance sheet date. 9. Includes foreign currency and interest rate swap agreements. ii) Hedges As explained on page 56 of the financial review under the heading ‘management of financial risks’, the Group’s policies are to use forward foreign exchange contracts to hedge transactional currency exposures (principally arising through anticipated sales and purchase transactions) and swap agreements to manage interest rate risks and hedge structural currency exposures. Currency swaps are only held to change the currency of the Group’s borrowings to match better its net investments in its overseas subsidiaries. In accordance with the Group’s accounting policies,the assets and liabilities arising from these swap agreements are translated into sterling at the spot rate ruling at the balance sheet date.The resulting exchange gains or losses are recognised in the statement of total recognised gains and losses (to match the exchange gains or losses on the net investments in the overseas subsidiaries). The carrying amount of the swap agreements (as shown in note 21 b) i)) is the result of the exchange gains and losses recognised in the statement of total recognised gains and losses, and is analysed in the deferred gains and losses table shown below. Swap agreements Gains Losses Net £ million £ million £ million Deferred gains and losses Deferred gains and losses on hedges at 1 October 2004 34.9 (7.0) 27.9 Gains and losses on hedges maturing in 2005 (31.7) 6.9 (24.8) Deferred gains and losses on hedges recognised in the statement of total recognised gains and losses in 2005 (0.8) (8.6) (9.4) Deferred gains and losses on hedges at 30 September 2005 2.4 (8.7) (6.3)
Notes to the financial statements 123 21. Financial instruments continued The unrecognised difference between the carrying amount and the fair value of the forward foreign exchange and other contracts and the swap agreements (as shown in note 21 b) i)) is analysed in the unrecognised gains and losses table below. Forward foreign exchange and other contracts Swap agreements Gains Losses Gains Losses Net total £ million £ million £ million £ million £ million Unrecognised gains and losses Unrecognised gains and losses on hedges at 1 October 2004 8.4 (0.9) 1.2 (10.7) (2.0) Gains and losses arising in previous years that were recognised in 2005 (7.9) 0.7 (0.6) 0.5 (7.3) Gains and losses arising before 2004 that were not recognised in 2005 0.5 (0.2) 0.6 (10.2) (9.3) Gains and losses arising in 2005 that were not recognised in 2005 9.2 (2.4) 1.6 3.1 11.5 Unrecognised gains and losses on hedges at 30 September 2005 9.7 (2.6) 2.2 (7.1) 2.2 Of which Gains and losses expected to be recognised in 2006 8.1 (2.1) 0.1 (2.3) 3.8 Gains and losses expected to be recognised in 2007 or later 1.6 (0.5) 2.1 (4.8) (1.6) Under US GAAP, hedge accounting is not used in respect of the derivative financial instruments included in the table above. c) Currency exposures As outlined on page 56 in the financial review under the heading ‘currency risk’, it is the Group’s policy to hedge against the potential impact on its profit and loss account of the currency gains and losses arising from monetary assets and liabilities not denominated in the operating or functional currency of the operating unit involved. After taking account of the hedging transactions, there was no significant net profit and loss account exposure to currency gains and losses arising from monetary assets and liabilities at 30 September 2005. d) Financial instruments i) Financial assets The interest rate and currency profile of the Group’s financial assets (excluding short-term debtors) at 30 September 2005 is shown below. The categories of the Group’s financial assets are shown in note 21 b) i). 2005 2004 Financial Financial assets on assets on Floating rate Fixed rate which no Total Floating rate Fixed rate which no Total financial financial interest is financial financial financial interest is financial assets assets received assets assets assets received assets £ million £ million £ million £ million £ million £ million £ million £ million Sterling 39.2 – 2.2 41.4 81.0 – 2.3 83.3 US dollar 46.3 219.7 14.3 280.3 34.0 184.1 32.6 250.7 Australian dollar 15.2 – – 15.2 16.1 – – 16.1 South African rand 15.8 – 0.7 16.5 44.2 – 3.8 48.0 Japanese yen 12.1 – – 12.1 2.6 – – 2.6 Canadian dollar 1.3 – 0.3 1.6 1.7 – – 1.7 Thai baht 4.0 – – 4.0 5.1 – 0.7 5.8 Other 77.2 – 0.8 78.0 69.1 8.7 0.1 77.9 Total 211.1 219.7 18.3 449.1 253.8 192.8 39.5 486.1 2005 2004 Fixed rate financial assets Fixed rate financial assets Weighted Weighted average average Weighted period for Weighted period for average which rate average which rate interest rate is fixed interest rate is fixed % years % years US dollar 6.8 2.5 8.2 3.5 Other – – 5.2 0.3 Financial assets on which no interest is received comprise £13.2 million (2004: £24.3 million) of non-redeemable equity instruments in other companies and £5.1 million (2004: £15.2 million) of loans to joint ventures and associates which have no fixed date of repayment. The floating rate financial assets, which principally comprise cash and deposits, current asset investments and loans to joint ventures and associates, carry interest based on different benchmark rates depending on the currency of the balance. The principal benchmark rates for floating rate financial assets are LIBOR for sterling balances, US LIBOR for US dollar balances,Australian bank bill rate for Australian dollar balances, South African prime rate for South African rand balances and Japanese yen LIBOR for Japanese yen balances.
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BOC Report and accounts 2005
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01 The BOC Group plc is a public li
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Financial highlights 03 Dividends p
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Chairman’s statement 05 Conduct a
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Chief executive’s review 07 Indus
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Board of directors 09 08 09 10 11 1
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Executive management board 11 09 10
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Group five year record 13 Capital e
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Group profile 15 Analysis of result
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Group profile 17 Principal industri
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Group profile 19 In China, signific
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Group profile 21 Sales opportunitie
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Employees 23 At 30 September 2005 t
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Employees 25 Retirement benefit pla
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Social, environmental and ethical p
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Research, development and informati
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Risk factors 39 BOC relies on devel
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Operating review 41 Exceptional ite
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Operating review (comparing 2005 wi
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Financial review 55 Net debt/equity
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Financial review 57 The balance she
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Financial review 59 Manganese litig
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Financial review 61 Current asset p
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Financial review 63 Average exchang
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Corporate governance 65 During the
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Corporate governance 67 Performance
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Corporate governance 69 During the
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Page 75 and 76: Report on remuneration 73 Variable
Page 77 and 78: Report on remuneration 75 Current m
Page 79 and 80: Report on remuneration 77 Individua
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Page 83 and 84: Report on remuneration 81 Opening m
Page 85 and 86: Report on remuneration 83 Mr Médor
Page 87 and 88: Report by the independent auditors
Page 89 and 90: Group balance sheet At 30 September
Page 91 and 92: Total recognised gains and losses Y
Page 93 and 94: Accounting policies 91 General •
Page 95 and 96: Notes to the financial statements 9
Page 123: Notes to the financial statements 1
Page 141 and 142: Group undertakings 139 Principal Gr
Page 143 and 144: Shareholder information 141 The tab
Page 145 and 146: Shareholder information 143 Taxatio
Page 147 and 148: Shareholder information 145 Payment
Page 149 and 150: Glossary of terms 147 Terms used in
Page 151 and 152: ©The BOC Group plc 2005. Designed
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BOC Report and accounts 2005 - Alle jaarverslagen

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