 |
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| |
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| NOTES TO THE GROUP FINANCIAL STATEMENTS CONTINUED |
| for the year ended 31 March |
| |
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|
2006
US$m |
2005
US$m |
|
| 31 |
RETIREMENT BENEFIT PLANS |
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Most of the group’s
employees are members of its defined contribution retirement
funds. The group does not have any defined benefit plans.
The majority of the group’s employees also participate
in various disability and group life assurance benefits.
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| 32 |
CONTINGENT LIABILITIES,COMMITMENTS AND SUBORDINATED LOANS |
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|
|
| 32.1 |
Contingencies |
0,2 |
1,7 |
|
|
Sureties and guarantees |
0,2 |
0,2 |
|
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Other contingent liabilities |
– |
1,5 |
|
| 32.2 |
Commitments |
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|
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|
Commitments to invest in funds and proprietary investments
(to be funded primarily from cash from operations and,
if necessary, through debt capital raised – refer
note
25) |
34,9 |
9,3 |
|
|
Other |
1,1 |
– |
|
|
Commitments to acquire shares (including employee share schemes) |
– |
10,8 |
|
|
Rental commitments |
5,1 |
0,3 |
|
|
Within one year |
1,1 |
0,3 |
|
|
Between one and five years |
4,0 |
– |
|
|
More than five years |
– |
– |
|
| 32.3 |
Subordinated loans |
5,3 |
6,8 |
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| |
|
46,6 |
28,9 |
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| 33 |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
|
The accounting policies of the group prescribe that all financial assets and liabilities are measured at fair value. |
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| |
Fair values have been determined using available market information and appropriate valuation methodologies. |
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| 34 |
DERIVATIVE FINANCIAL INSTRUMENTS |
|
The group utilises currency
derivatives to hedge the tangible capital of its non-US
dollar subsidiaries into its measurement currency. It
does this by means of foreign currency call options. |
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|
The notional principal disclosed
below is the gross value of derivative contracts outstanding
at the year-end and serves only as an indicator of the
extent of the group’s derivative activities. The
notional principal does not necessarily reflect the amount
payable or receivable under a derivative contract. |
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|
The fair value of a financial instrument represents the present value of the positive or negative cash flows which would have occurred if the rights and obligations arising from that instrument were closed out by the group in an orderly marketplace transaction at year-end. |
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2006 |
|
|
2005 |
|
|
|
|
Gross |
Positive |
Negative |
Gross |
Positive |
Negative |
|
|
|
notional |
fair |
fair |
notional |
fair |
fair |
|
|
|
principal |
value |
value |
principal |
value |
value |
|
| |
|
US$m |
US$m |
US$m |
US$m |
US$m |
US$m |
|
| |
Hedging derivatives |
|
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|
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|
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Foreign exchange derivatives |
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| |
Forward foreign exchange |
|
|
|
|
|
|
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| |
contract/currency swaps |
– |
– |
– |
30,0 |
1,6 |
– |
|
| |
Currency put option |
– |
– |
– |
30,0 |
0,7 |
– |
|
| |
Currency call option |
35,0 |
3,6 |
– |
– |
– |
– |
|
| |
Total derivatives |
35,0 |
3,6 |
– |
60,0 |
2,3 |
– |
|
| |
There are
no gains or losses on hedging instruments deferred in
the balance sheet, nor were there any reclassifications
of hedging instruments resulting in gains or losses arising
in prior years being recognised in subsequent years. The
above foreign exchange derivative matures on 25 March
2011. |
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