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20
Financial instruments
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Short-term debtors and creditors have been excluded
from all the following disclosures, other than the currency
risk disclosures. Policies in respect of financial instruments
are contained within the Treasury
section of the financial review.
(a) Cash at bank and in hand
|
 |
| |
 Group |
|
2002
£million |
2001
£million |
|
| Sterling cash deposits |
14.5 |
17.3 |
|
| US dollar cash deposits |
- |
1.4 |
|
| Cash at bank |
29.9 |
20.8 |
|
| |
44.4 |
39.5 |
|
Sterling and US dollar cash deposits are placed on the UK money
markets at floating bank deposit interest rates for periods
of up to three months. Cash at bank is primarily held in sterling
and US dollars. |
(b) Borrowings
|
|
| |
Group |
Company |
|
2002
£million |
2001
£million |
2002
£million |
2001
£million |
|
| Borrowings repayable within one year |
5.0 |
5.8 |
10.2 |
5.6 |
|
| Borrowings repayable after one year |
76.8 |
73.7 |
- |
- |
|
| |
81.8 |
79.5 |
10.2 |
5.6 |
|
| Bank borrowings - repayable |
|
|
|
|
|
| In one year or less,or on demand |
0.7 |
0.2 |
5.9 |
- |
|
| In more than one and less than two years |
76.8 |
- |
- |
- |
|
| In more than two and less than five years |
- |
73.7 |
- |
- |
|
| |
77.5 |
73.9 |
5.9 |
- |
|
| Borrowings other than bank borrowings |
|
|
|
|
|
| Loan notes |
4.3 |
5.6 |
4.3 |
5.6 |
|
| |
4.3 |
5.6 |
4.3 |
5.6 |
|
Bank borrowings are unsecured.
Borrowings other than bank borrowings are repayable in one year
or less or on demand. Loan notes bear interest at six monthly
intervals at one per cent below sterling LIBOR; these are redeemable
at par at the option of holders on any interest payment date,
and in any event on 30 April 2005.
The Group had undrawn committed facilities available to it at
31 December 2002 of £174.5 million (2001:£178.0 million); these
expire in more than one year,and less than two years. |
All borrowings at 31 December 2002 and 31 December
2001 were at floating rates. The currency profile of the borrowings
was:
|
|
| |
2002 |
2001 |
|
£million |
£million |
|
| Sterling |
4.3 |
5.6 |
|
| US dollar |
55.9 |
54.5 |
|
| Euro |
19.6 |
18.4 |
|
| Other |
2.0 |
1.0 |
|
| |
81.8 |
79.5 |
|
The majority of floating rate borrowings are for periods of
up to six months and bear interest at the relevant inter bank
rates plus a margin. |
(c) Fair values and
hedges
The fair value of cash at bank and in hand and borrowings for
the Group and the Company at 31 December 2002 was approximately
equal to the book value at that date. There were no unrecognised
gains/(losses) on hedges at the start, end or during the year.
(d)
Monetary assets and liabilities
The value of monetary assets and liabilities of the Group not
held in functional currencies and not hedged at 31 December
was as follows:
|
|
| |
2002 |
|
Sterling
£million |
US
£million |
Euro
£million |
Other
£million |
|
Total
£million |
|
|
| Functional currency |
|
|
|
|
|
|
|
|
| Sterling |
- |
5.2 |
7.3 |
0.1 |
|
12.6 |
|
|
| US dollar |
- |
- |
- |
- |
|
- |
|
|
| Euro |
- |
- |
- |
- |
|
- |
|
|
| Other |
- |
2.6 |
- |
- |
|
2.6 |
|
|
| |
- |
7.8 |
7.3 |
0.1 |
|
15.2 |
|
|
| |
|
|
|
|
|
|
|
|
| |
2001 |
| |
Sterling
£million |
US
£million |
Euro
£million |
Other
£million |
|
Total
£million |
|
|
| Functional currency |
|
|
|
|
|
|
|
|
| Sterling |
- |
2.5 |
8.5 |
0.1 |
|
11.1 |
|
|
| US dollar |
- |
- |
- |
0.5 |
|
0.5 |
|
|
| Euro |
- |
- |
- |
- |
|
- |
|
|
| Other |
- |
0.6 |
0.6 |
(0.2 |
) |
1.0 |
|
|
| |
- |
3.1 |
9.1 |
0.4 |
|
12.6 |
|
|
21 Provisions
for liabilities and charges
|
|
| |
Deferred
tax |
|
|
|
|
|
Self |
|
Total |
|
|
restated |
|
Environmental |
|
Restructuring |
|
insurance |
|
restated |
|
| |
£million |
|
£million |
|
£million |
|
£million |
|
£million |
|
|
| Group |
|
|
|
|
|
|
|
|
|
|
|
| At 1 January 2002 |
6.3 |
|
20.9 |
|
1.9 |
|
5.4 |
|
34.5 |
|
|
| Charge/(credit) to profit and loss account |
(5.7 |
) |
1.5 |
|
6.5 |
|
1.7 |
|
4.0 |
|
|
| Utilised during the year |
– |
|
(1.3 |
) |
(1.9 |
) |
(1.8 |
) |
(5.0 |
) |
|
| Acquisition of business |
– |
|
0.2 |
|
– |
|
– |
|
0.2 |
|
|
| Currency translation differences |
1.3 |
|
(1.4 |
) |
(0.1 |
) |
(0.4 |
) |
(0.6 |
) |
|
| At 31 December 2002 |
1.9 |
|
19.9 |
|
6.4 |
|
4.9 |
|
33.1 |
|
|
Environmental provisions relate to chemical manufacturing and
distribution sites including certain sites no longer owned by
the Group; these provisions have been made where the Group believes
that it is probable that expenditure will be incurred and have
been derived using a discounted cash flow methodology.
Restructuring provisions at 31 December 2002 primarily related
to the Corpus Christi plant in Chromium and the Birtley site
in Pigments & Specialties.
Self insurance provisions at 31 December 2002 represent the
aggregate of outstanding claims plus a projection of losses
incurred but not reported.
Restructuring provisions are expected to be utilised during
2003 and self insurance provisions are expected to be utilised
within five years. |
Deferred tax provision comprises:
|
|
|
|
|
|
|
2002
£million |
|
2001
restated
£million |
|
|
| Accelerated capital allowances |
39.7 |
|
37.7 |
|
|
| Other timing differences |
(37.8 |
) |
(31.4 |
) |
|
| |
1.9 |
|
6.3 |
|
|
At 31 December 2002 the full amount of surplus ACT previously
written off, available for offset against future UK profits,
was £18.7 million (2001:£22.7 million) before allowing for amounts
set against deferred tax liabilities of £6.3 million (2001:£2.6
million). Deferred tax assets not recognised in respect of tax
losses carried forward at 31 December 2002 were £23.9 million
(2001:£nil). |
22 Pensions and other
post-retirement benefits
The Group has a number of contributory and non-contributory pension
schemes providing retirement benefits for the majority of employees
and all executive directors. The main schemes in the UK and US are
of the defined benefit type, the benefits being based on years of
service and either the employee’s final remuneration or the
employee’s average remuneration during a period of years before
retirement. The assets of these schemes are held in separate trustee
administered funds or are unfunded but with provisions maintained
on the Group balance sheet. In addition, the Group operates an unfunded
post-retirement medical benefit (PRMB) scheme in the US. The entitlement
to these benefits is usually based on the employee remaining in
service until retirement age and completion of a minimum service
period. At 31 December 2002, approximately 581 (2001: 589) current
and retired employees were potentially eligible to receive benefits.
The Group has adopted in full the requirements of FRS17 and the
effect of this change of accounting policy is set out in note
29. The total cost of post-retirement health care and pensions
to the Group was £5.4 million (2001: £6.5 million),
of which £2.7 million (2001: £4.1 million) related to
overseas schemes.
A full actuarial valuation was carried out at 30 September 2002
for the UK scheme and at 1 January 2002 for the US schemes. The
actuaries updated these valuations to 31 December 2002. The major
assumptions used by the actuaries were:
|
| |
2002 |
2002 |
2001 |
2001 |
2000 |
2001 |
|
UK |
US |
UK |
US |
UK |
US |
| |
schemes |
schemes |
schemes |
schemes |
schemes |
schemes |
|
| Rate of increase in salaries |
4.30% |
4.70% |
4.50% |
4.70% |
4.50% |
4.70% |
|
| Rate of increase in pensions in payment |
2.30% |
– |
2.50% |
– |
2.50% |
– |
|
| Discount rate |
5.75% |
6.50% |
6.00% |
6.75% |
6.50% |
7.00% |
|
| Inflation assumption |
2.30% |
3.50% |
2.50% |
3.50% |
2.50% |
3.50% |
|
The main assumptions for the PRMB scheme are a discount rate of
6.50% per annum (2001: 6.50%) and a health care cost trend of 10.00%
and 11.00% per annum for claims pre age 65 and post 65 respectively,
reducing to 4.50% per annum by 2009 (2001: 5.40%).
Actuarial valuations of pension schemes in other jurisdictions
have not been updated for FRS17 purposes because of the costs involved
and the considerably smaller scheme size and number of employees
involved.
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