BT 2000 Annual Report Download - page 99

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32. Financial instruments and risk management (continued)
Currency exposures
The table below shows the currency exposures of the group's net monetary assets (liabilities), in terms of those
transactional exposures that give rise to net currency gains and losses recognised in the pro¢t and loss account. Such
exposures comprise the monetary assets and monetary liabilities of the group that are not denominated in the operating (or
``functional'') currency of the operating unit involved, other than certain non-sterling borrowings treated as hedges of net
investments in non-UK operations. At 31 March, these exposures were as follows:
2000 1999
Sterling
£m
US dollar
£m
Euro
£m
Other
£m
Total
£m
Sterling
£m
US dollar
£m
Euro
£m
Other
£m
Total
£m
Functional currency of
group operation:
Sterling ± 13 117 29 159 ± 517 38 25 580
Euro 6 (1) ± ± 5 (6) ± ± (18) (24)
Other (10) ± ± ± (10) (16) 5 ± ± (11)
Total (4) 12 117 29 154 (22) 522 38 7 545
The amounts shown in the table above take into account the e¡ect of any currency swaps, forward contracts and other
derivatives entered into to manage those currency exposures.
At 31 March 2000, the group also held various forward currency contracts that the group had taken out to hedge
expected future foreign currency purchases and sales.
Fair values of ®nancial assets held for trading
2000
£m
1999
£m
Net gain included in pro®t and loss account 51 104
Fair value of ®nancial assets held for trading at 31 March 980 1,944
The net gain was derived from government bonds, commercial paper and similar debt instruments. The average fair value
of ¢nancial assets held during the year ended 31 March 2000 did not di¡er materially from the year end position.
Hedges
Gains and losses on instruments used for hedging are not recognised until the exposure that is being hedged is itself
recognised. Unrecognised and deferred gains and losses on instruments used for hedging and those recognised in the years
ended 31 March 2000 and 31 March 1999 are as follows:
2000 1999(b)
Gains
£m
Losses
£m
Gains
£m
Losses
£m
Gains and losses:
recognised in the year but arising in previous years (a) 51 23 28 26
unrecognised at the balance sheet date 23 193 38 279
carried forward in the year end balance sheet, pending recognition in the
pro®t and loss account (a) 99 15 40 6
expected to be recognised in the following year (a) 35 31 27 26
(a) Excluding gains and losses on hedges accounted for by adjusting the carrying amount of a ®xed asset.
(b) Comparative ®gures have been restated.
Notes to the financial statements
98 Annual report and Form 20-F