Carphone Warehouse 2001 Annual Report Download - page 46

18 Derivatives and other financial instruments
The Financial review on pages 12 and 13 provides an explanation of the role that financial instruments have in managing the currency risks
the Group faces in its activities. The numerical disclosures in this note deal with financial assets and financial liabilities as defined in FRS
13 “ Derivatives and other financial instruments”. Certain financial assets such as investments in subsidiary and associated companies are
also excluded from the scope of these disclosures. As permitted by FRS 13, short-term debtors and creditors have been excluded, other
than the currency disclosures.
(i) Interest rate and currency profile of financial assets and liabilities
The Group’s financial assets include cash deposits, mostly denominated in sterling, as well as longer-term investments including bonds
and fixed rate notes (FRNs), again mainly denominated in sterling. There are also foreign exchange swaps used to hedge the Group’s
balance sheet translation risk. Whilst cash deposits tend to be placed at call, other investments are made with a view to maximising return
and matching future cashflow requirements. The Group has limited financial liabilities, other than currency hedges, and these mainly
consist of local overdraft facilities for cash management purposes and, as such, are denominated in a variety of European currencies. The
Group does not trade in financial assets and liabilities and no additional disclosures of net gains or losses from such a trade are required to
be reported.
After taking into account interest rate swaps and foreign exchange swaps entered into by the Group, the profile of the Group’s financial
assets and liabilities at 31 March 2001 was as follows:
Financial assets
Sterling Euro Other Total Sterling Euro Other Total
2001 2000
By instrument £m £m £m £m £m £m £m £m
Cash and deposits 50.8 12.6 4.1 67.5 22.3 2.6 0.4 25.3
Foreign exchange swaps 81.6 0.0 0.0 81.6 0.0 0.0 0.0 0.0
Other 46.4 0.0 0.0 46.4 11.1 0.0 0.0 11.1
Total 178.8 12.6 4.1 195.5 33.4 2.6 0.4 36.4
Sterling Euro Other Total Sterling Euro Other Total
2001 2000
By interest rate £m£m£m£m£m £m £m £m
Floating rate 164.3 12.6 4.1 181.0 33.4 2.6 0.4 36.4
Fixed rate 14.5 0.0 0.0 14.5 0.0 0.0 0.0 0.0
Total 178.8 12.6 4.1 195.5 33.4 2.6 0.4 36.4
Financial liabilities
Sterling Euro Other Total Sterling Euro Other Total
2001 2000
By instrument £m£m£m£m£m £m £m £m
Borrowings 0.0 (10.2) (0.3) (10.5) (12.4) (14.5) (4.4) (31.3)
Foreign exchange swaps 0.0 (63.7) (16.4) (80.1) 0.0 0.0 0.0 0.0
Other (0.1) (0.3) (0.0) (0.4) (0.3) 0.0 0.0 (0.3)
Total (0.1) (74.2) (16.7) (91.0) (12.7) (14.5) (4.4) (31.6)
Sterling Euro Other Total Sterling Euro Other Total
2001 2000
By interest rate £m£m£m£m£m £m £m £m
Floating rate (0.1) (66.9) (16.7) (83.7) (12.7) (5.9) (4.4) (23.0)
Fixed rate 0.0 (7.3) 0.0 (7.3) 0.0 (8.6) 0.0 (8.6)
Total (0.1) (74.2) (16.7) (91.0) (12.7) (14.5) (4.4) (31.6)
Financial assets earning interest at fixed rates are investments in FRNs, bonds etc, which bear interest at a variety of market rates
dependent on the instrument concerned and purchase date. Fixed financial liabilities, all of which are denominated in Euro, bear weighted
average interest rates of 4.79% (2000 – 4.78%) for weighted average periods of 1.4 years (2000 – 1.8 years).
Notes to the financial statements continued
44 The Carphone Warehouse Group PLC Annual Report 2001