Tesco 2007 Annual Report Download - page 79

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Note 20 Financial instruments
An explanation of the objectives and policies for holding and issuing financial instruments is set out in the Operating and Financial
Review.
Carrying values of derivative financial instruments and other liabilities in the Balance Sheet:
2007 2006
Assets Liabilities Assets Liabilities
£m £m £m £m
Current
Interest rate swaps and similar instruments 12 (8) 11 (69)
Forward foreign currency contracts 96 (56) 59 (170)
Future purchases of minority interests – (23) – –
108 (87) 70 (239)
Non-current
Interest rate swaps and similar instruments – (116) – (46)
Forward foreign currency contracts – – – (2)
Future purchases of minority interests – (283) – (246)
– (399) – (294)
Amounts shown as liabilities for the future purchases of minority interests refer to Samsung Tesco – £220m (2006 – £246m);
Hymall – £48m (2006 – £nil) and dunnhumby – £38m (2006 – £nil).
Fair values
Fair values of financial assets and liabilities are disclosed below:
2007 2006
Carrying Fair Carrying Fair
value value value value
£m £m £m £m
Primary financial instruments held or issued to finance the Group’s operations:
Short-term borrowings (1,518) (1,509) (1,626) (1,641)
Long-term borrowings (3,999) (3,949) (3,658) (3,848)
Finance leases (Group as lessor – note 31) 12 12 17 17
Finance leases (Group as lessee – note 31) (183) (183) (104) (104)
Cash and cash equivalents 1,042 1,042 1,325 1,325
Derivative financial instruments held to manage the interest rate and currency profile:
Interest rate swaps and similar instruments (112) (112) (104) (104)
Forward foreign currency contracts 40 40 (113) (113)
Future purchases of minority interests (306) (306) (246) (246)
(5,024) (4,965) (4,509) (4,714)
The fair values of financial instruments and derivatives have been determined by reference to prices available from the markets on
which the instruments are traded. The fair value of all other items have been calculated by discounting expected future cash flows
at prevailing interest rates. The above table excludes trade and other receivables/payables, which have fair values equal to their
carrying value.
77
NOTES TO THE GROUP
FINANCIAL STATEMENTS