Carphone Warehouse 2003 Annual Report Download - page 36

Notes to the Financial Statements continued
34
The Carphone Warehouse Group PLC Annual Report 2003
20 Derivatives and other financial instruments
The Operating and Financial Review on pages 4 to 9 provides an explanation of the role that financial instruments have in managing the currency
and interest rate risks the Group faces in its activities. The disclosures below deal with financial assets and financial liabilities as defined in FRS13
‘Derivatives and other financial instruments’.
As permitted by FRS13, short-term trade debtors and creditors have been excluded from the disclosures. This has no material effect on the
currency disclosures. Certain financial assets such as investments in subsidiaries are also excluded from the scope of these disclosures.
(i) Interest rate and currency profile of financial assets and liabilities
The Group’s financial assets include cash and short-term deposits, mainly denominated in Sterling, Euro and US Dollars. Foreign exchange swaps,
used for hedging purposes, create an asset and a liability. For the purposes of this note, foreign exchange assets and liabilities have been netted
against each other. The Group’s financial liabilities, other than currency hedges, consist of committed and uncommitted loans in Sterling and Euro
as well as local overdraft facilities, which are denominated in a variety of European currencies.
The Group does not trade in financial assets and liabilities.
2003 2002
Sterling Euro Other Total Sterling Euro Other Total
£m £m £m £m £m £m £m £m
Financial assets
By instrument
Cash 32.8 10.2 4.0 47.0 10.1 8.1 2.5 20.7
Short-term investments 26.3 – – 26.3 49.1 0.1 – 49.2
Tota l 59.1 10.2 4.0 73.3 59.2 8.2 2.5 69.9
By interest rate
Floating rate 59.1 10.2 4.0 73.3 44.8 8.2 2.5 55.5
Fixed rate ––––14.4––14.4
Tota l 59.1 10.2 4.0 73.3 59.2 8.2 2.5 69.9
Financial liabilities
By instrument
Loans and overdrafts (0.2) (43.2) (0.7) (44.1) (10.6) (24.7) – (35.3)
Tota l (0.2) (43.2) (0.7) (44.1) (10.6) (24.7) – (35.3)
By interest rate
Floating rate (0.2) (38.6) (0.7) (39.5) (10.6) (19.0) – (29.6)
Fixed rate – (4.6) – (4.6) – (5.7) – (5.7)
Tota l (0.2) (43.2) (0.7) (44.1) (10.6) (24.7) – (35.3)
Financial assets earning interest at fixed rates are investments in gilts and bonds, which bear interest at a variety of market rates.
Fixed rate financial liabilities, bear weighted average interest rates of 4.84% (2002 – 4.81%) for weighted average periods of 0.7 years (2002 – 1.1 years).
The interest rate on floating rate financial assets and liabilities is linked to market interest rates, mainly on an overnight basis for one, two or three
month periods.
(ii) Currency exposures
The extent to which Group companies have financial assets or liabilities in currencies other than their own functional currencies is as follows:
2003 2002
Sterling Euro Other Total Sterling Euro Other Total
£m £m £m £m £m £m £m £m
Functional currency of Group operation
Sterling – 4.2 3.1 7.3 – 1.0 0.2 1.2
Other 1.2 0.4 – 1.6 0.1 1.0 – 1.1
Tota l 1.2 4.6 3.1 8.9 0.1 2.0 0.2 2.3
(iii) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 29 March 2003 was as follows:
2003 2002
£m £m
In one year or less (14.3) (10.6)
In more than one year but not more than two years (2.4) (24.7)
In more than two years but less than five years (27.4) –
Tota l (44.1) (35.3)
(iv) Borrowing facilities
The Group had undrawn committed borrowing facilities at 29 March 2003, in respect of which all conditions precedent had been met, as follows:
2003 2002
£m £m
Expiring in more than one year but not more than two years – (117.8)
Expiring in more than two years (152.6) –
Tota l (152.6) (117.8)