BOC Report and accounts 2005 - Alle jaarverslagen

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.