Tesco 2003 Annual Report Download - page 43

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TESCO PLC 41
NOTE 20 Financial instruments continued
Analysis of interest rate exposure and currency of financial assets
The interest rate exposure and currency profile of the financial assets of the Group at 22 February 2003 were:
2003 2002
Cash at Cash at
bank and
Short-term bank and Short-term
in hand deposits Other Total in hand deposits Other Total
£m £m £m £m £m £m £m £m
Sterling 213 55 109 377 151 50 68 269
Other 186 184 – 370 294 175 – 469
Total financial assets 399 239 109 747 445 225 68 738
Other financial assets are in respect of amounts owed by undertakings in which the company has a participating interest, which
attract a rate of interest of 5.0% (2002 – 5.0%). Surplus funds are invested in accordance with approved limits on security and
liquidity and bear rates of interest based on relevant LIBOR equivalents. Cash at bank and in hand includes non-interest bearing
cash and cash in transit.
Borrowing facilities
The Group has the following undrawn committed facilities available at 22 February 2003 in respect of which all conditions
precedent had been met at that date:
2003 2002
£m £m
Expiring within one year 75 –
Expiring between one and two years 756 733
Expiring in more than two years 552 303
1,383 1,036
The facilities expiring within one year are annual facilities subject to review at various dates during the year ended 28 February 2004.
All facilities incur commitment fees at market rates and would provide funding at floating rates.
Currency exposures
Within the Group, the principal differences on exchange arising, which are taken to the profit and loss account, relate to purchases
made by Group companies in currencies other than their reporting currencies. After taking account of forward currency purchases
used to hedge these transactions, there were no significant balances on these exposures at year end. Also, rolling hedges of up to
18 months duration are maintained against the value of investments in, and long-term intercompany loans to, overseas subsidiaries
and, to the extent permitted in SSAP 20, differences on exchange are taken to the statement of total recognised gains and losses.
Fair values of financial assets and financial liabilities
2003 2002
Book value Fair value Book value Fair value
£m £m £m £m
Primary financial instruments held or issued to finance the Group’s operations:
Short-term borrowings (1,341) (1,341) (1,489) (1,496)
Long-term borrowings (4,034) (4,279) (2,741) (2,804)
Short-term deposits 239 239 225 225
Cash at bank and in hand 399 399 445 445
Derivative financial instruments held to manage the interest rate and currency profile:
Interest rate swaps and similar instruments – 94 – (18)
Forward foreign currency contracts –1–1
Swap profit crystallisation – – (2) (2)
(4,737) (4,887) (3,562) (3,649)