20. Financial instruments

An explanation of the objectives and policies for the holding and issuing of financial instruments and the strategies for achieving these objectives are given in the Financial Review section.

Financial assets 2006	Financial assets at floating rate of up to 5.2% Total £m
Currency

Sterling	24.7
US dollar	69.5
Other	3.0
	97.2

Financial assets 2005
Currency

Sterling	16.5
US dollar	49.5
Other	1.0
	67.0

Financial liabilities 2006	Weighted average interest rate %	Fixed rate financial liabilities Number of years for which rate is fixed	Amount £m	Floating rate financial liabilities £m	Total £m
Currency

US dollar	Nil	-	17.9	-	17.9
US dollar	Nil	-	12.6	-	12.6
US dollar	Nil	-	2.9	-	2.9
Euro	Nil	-	3.3	-	3.3
Sterling	4.9	1	10.5	-	10.5
			47.2	-	47.2

Financial liabilities 2005
Currency

US dollar	Nil	-	23.6	-	23.6
US dollar	Nil	-	2.9	-	2.9
US dollar	Nil	-	2.3	-	2.3
Australian dollar	Nil	-	0.9	-	0.9
Australian dollar	Nil	-	0.1	-	0.1
Sterling	4.9	1	52.3	-	52.3
Sterling	6.6	-	-	10.0	10.0
			82.1	10.0	92.1

Short term debtors and creditors are excluded from the above. Floating rate financial assets and liabilities are at interest rates determined in advance for periods of up to one month based on LIBOR equivalents.

Included in the fixed rate borrowings as at 31 July 2006 are in respect of a bank loan of £10.8m (2005: £53.6m). These borrowings are gross of unamortised fees of £0.3m (2005: £1.3m).

The floating rate borrowings as at 31 July 2006 of £nil (2005: £10.0m) are in respect of a bank loan bearing an interest rate of 1.25% above LIBOR.

There were no significant differences between book amounts and fair values of any of the Group’s financial assets and liabilities.

Floating rate financial assets of £97.2m at 31 July 2006 (2005: £67.0m) comprise cash held on deposits bearing interest at call rates.

Maturity of financial liabilities	Contingent and deferred consideration 2006 £m	Bank loans and overdrafts 2006 £m	Total 2006 £m
In one year or less	18.3	10.5	28.8
In more than one year but no more than two years	13.0	-	13.0
In more than two years	5.4	-	5.4
	36.7	10.5	47.2

Maturity of financial liabilities	Contingent and deferred consideration 2005 £m	Bank loans and overdrafts 2005 £m	Finance leases 2005 £m	Total 2005 £m
In one year or less	3.2	41.5	0.1	44.8
In more than one year but no more than two years	-	20.8	-	20.8
In more than two years	26.5	-	-	26.5
	29.7	62.3	0.1	92.1

Borrowing facilities	2006 £m	2005 £m

The Group had undrawn committed borrowing facilities at 31 July 2006, as follows:

Expiring in one year or less	15.0	-
Expiring in more than one year but not more than two years	-	5.0
	15.0	5.0

Currency exposures
As explained within the Financial Review, the Group’s objectives in managing the currency exposures arising from its net investments overseas (in other words, its structural currency exposures) are to maintain a low cost of borrowings and to retain some potential for currency-related appreciation while partially hedging against currency depreciation. Gains and losses arising from these structural currency exposures are recognised in the statement of total recognised gains and losses.

The table in Note 21 shows the Group’s currency exposures; in other words, those transactional (or nonstructural) exposures that give rise to the net currency gains and losses recognised in the profit 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 overseas operations. As at 31 July 2006 those exposures were as follows:

Functional currency of Group operation	US dollar £m	Euro £m	Australian dollar £m	Danish krone £m	Other £m	Total £m
	Net foreign monetary assets
Sterling	1.9	0.6	1.4	2.1	2.4	8.4

The exposures at 31 July 2005 for comparison purposes were as follows:

Functional currency of Group operation	US dollar £m	Euro £m	Australian dollar £m	Danish krone £m	Other £m	Total £m
	Net foreign monetary assets
Sterling	0.3	4.2	3.5	-	0.4	8.4

Narrative disclosures on the Group treasury policy are given in the Financial Review section.

20. Financial instruments

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