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83Marks and Spencer Group plc
23 FINANCIAL INSTRUMENTS – DISCLOSURES IN RESPECT OF COMPARATIVES continued
The floating rate sterling, US dollar and euro borrowings are linked to interest rates related to LIBOR. These rates are for periods
ranging from one month to six months. The fixed rate sterling borrowings are at a weighted average rate of 6.1% and the weighted
average time for which the rate is fixed is 11.4 years.
C Fair values of non-derivative financial assets and financial liabilities
Set out below is a comparison of fair and book values of all the Group’s financial instruments by category. Where market prices are
not available for a particular instrument, fair values have been calculated by discounting cash flows at prevailing interest rates and
exchange rates.
2005
Book value Fair value
Assets/(liabilities)
Current asset investments167.0 67.0
Fixed asset investments 0.3 0.3
Cash at bank and in hand1212.6 212.6
Other financial assets due after more than one year 4.2 4.2
Borrowings due within one year2(476.7) (476.4)
B shares (65.7) (65.7)
Financial liabilities due after more than one year2(1,901.9) (1,935.8)
Cross currency swaps2– 56.3
Interest rate swaps2– 3.7
Forward foreign currency contracts2– (0.4)
1Current asset investments and cash at bank are predominantly short-term deposits placed with banks, financial institutions and on money markets, and investments
in short-term securities. Therefore, these fair values closely approximate book values.
2Interest rate, cross currency swaps and forward currency contracts have been marked to market to produce a fair value figure.
Hedges of future transactions
Unrecognised gains and losses on instruments used for hedging and those recognised in the period ended 2 April 2005
are as follows:
2005
Gains Losses Net total
£m £m £m
Unrecognised gains/(losses) on hedges at beginning of the period 74.3 (34.1) 40.2
(Gains)/losses arising in previous years recognised in the period (12.7) 25.8 13.1
Gains/(losses) arising in previous years not recognised in the period 61.6 (8.3) 53.3
Gains/(losses) arising in the period 12.8 (6.5) 6.3
Unrecognised gains/(losses) on hedges at end of the period 74.4 (14.8) 59.6
Of which:
Gains/(losses) expected to be recognised within one year 2.9 (3.6) (0.7)
Gains/(losses) expected to be recognised after one year 71.5 (11.2) 60.3
Currency risk
The effect of currency exposures arising from the translation of overseas investments is mitigated by Group borrowings in local
currencies as appropriate. Gains and losses arising on net investments in overseas subsidiaries were recognised in the consolidated
statement of total recognised income and expenses.
After taking into account the effect of any hedging transactions that manage transactional currency exposures, no Group company
had any material monetary assets or liabilities in currencies other than their functional currencies at the balance sheet date.