Annual Report 2008 in PDF - GKN

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102 Notes to the Financial Statements continued 17 Trade and other payables GKN plc Annual Report 2008 2008 2007 Current Non-current Current Non-current £m £m £m £m Trade and other payables (685) (1) (602) (1) Amounts owed to joint ventures (3) — (2) — Accrued interest (28) — (26) — Payroll taxes, indirect taxes and audit fees (43) (1) (36) (2) Amounts due to employees and employee benefit plans (122) (31) (119) (22) Government grants (1) (5) (1) (5) Customer advances and deferred income (90) — (51) (1) Non-current trade and other payables fall due within 2 years. 18 Net borrowings (a) Analysis of net borrowings (972) (38) (837) (31) Current Non-current Total Within One to two Two to five More than one year years years five years Total Notes £m £m £m £m £m £m 2008 Other borrowings £350 million 63/4% 2019 unsecured bond i — — — (346) (346) (346) £325 million 7% 2012 unsecured bond i — — (325) — (325) (325) Other secured US$ denominated loan (2) (1) (4) (5) (10) (12) Other long term borrowings (7) (37) (3) — (40) (47) Finance lease obligations iii (1) (1) (2) (1) (4) (5) Bank overdrafts (20) — — — — (20) Other short term bank borrowings (67) — — — — (67) Borrowings (97) (39) (334) (352) (725) (822) Bank balances and cash 102 — — — — 102 Short term bank deposits ii 12 — — — — 12 Cash and cash equivalents iv 114 — — — — 114 Net borrowings 2007 Other borrowings 17 (39) (334) (352) (725) (708) £350 million 63/4% 2019 unsecured bond i — — — (346) (346) (346) £325 million 7% 2012 unsecured bond i — — (325) — (325) (325) £30 million 123/8% 2008 Westland Group plc debenture i (30) — — — — (30) Other secured US$ denominated loan (1) (1) (6) (1) (8) (9) Other long term borrowings (2) (4) (2) — (6) (8) Finance lease obligations iii (1) (1) (2) (8) (11) (12) Bank overdrafts (32) — — — — (32) Other short term bank borrowings (26) — — — — (26) Borrowings (92) (6) (335) (355) (696) (788) Bank balances and cash 135 — — — — 135 Short term bank deposits ii 147 — — — — 147 Cash and cash equivalents iv 282 — — — — 282 Net borrowings 190 (6) (335) (355) (696) (506)
18 Net borrowings continued Financial Statements Notes to the Financial Statements Other borrowings include: Unsecured £350 million (2007 – £350 million) 63/4% bond maturing in 2019 less unamortised issue costs of £4 million (2007 – £4 million), unsecured £325 million (2007 – £325 million) 7% bond maturing in 2012 less unamortised issue costs of nil (2007 – nil) and secured term loans of £10 million (2007 – £39 million). These secured term loans include nil (2007 – £30 million) debenture stocks of Westland Group plc, redeemed in the year, which were secured by a floating charge on the undertaking and net assets including financial assets of nil (2007 – £88 million) of that company and certain of its subsidiaries and guaranteed by GKN Holdings plc, and £10 million (2007 – £9 million) secured by way of a fixed and floating charge on certain Aerospace fixed assets. Notes (i) Denotes borrowings at fixed rates of interest until maturity. All other borrowings and cash and cash equivalents are at variable interest rates. (ii) The average interest rate on short term bank deposits was 2.22% (2007 – 5.48%). Deposits at 31 December 2008 have no fixed maturity date (2007 – 2 days). (iii) Finance lease obligations gross of finance charges fall due as follows: £1 million within one year (2007 – £2 million); £4 million in one to five years (2007 – £8 million) and £2 million in more than five years (2007 – £12 million). (iv) £10 million (2007 – £18 million) of the Group’s cash and cash equivalents are held by the Group’s captive insurance company to maintain solvency requirements and as collateral for Letters of Credit issued to the Group’s principal external insurance providers. These funds, therefore, are not circulated within the Group on demand. (b) Fair values of borrowings and cash and cash equivalents 2008 2007 Book value Fair value Book value Fair value £m £m £m £m Other borrowings (730) (520) (718) (736) Finance lease obligations (5) (5) (12) (12) Bank overdrafts and other short term bank borrowings (87) (87) (58) (58) Bank balances and cash 102 102 135 135 Short term bank deposits 12 12 147 147 (708) (498) (506) (524) The following methods and assumptions were used in estimating fair values for financial instruments: Unsecured bank overdrafts, other short term bank borrowings, bank balances and cash and short term bank deposits approximate to book value due to their short maturities. For other borrowings and finance lease obligations carrying fixed rates of interest, the repayments which the Group is committed to make have been discounted at the relevant interest rates applicable at 31 December 2008. Bonds included within other borrowings have been valued using quoted closing market values. www.gkn.com 103
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GKN plc Annual Report and Accounts
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Our Objective GKN is committed to p
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2008 Performance* Group results sig
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Although we expect 2009 to be a ver
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Constant velocity joints (CVJs) rev
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Off-highway driveshaft Blended wing
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Strategy and business objectives Th
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Operating cash flow performance of
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Restructuring and impairment costs
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2008 2007 Tax charge analysis % % W
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Overseas pensions The principal cou
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GKN received the prestigious Nissan
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GKN Driveline manufactures across a
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2008 2007 GKN Driveline £m £m Sal
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Continuing evolution of powder meta
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Despite a £6 million positive impa
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GKN OffHighway is a first tier supp
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Trading profit of subsidiaries of
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In January 2009 GKN completed the a
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Divisional strategy GKN Aerospace
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Financing The following section des
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Competitive markets and competition
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Living the Values GKN is a group of
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Delivering advanced technology Deli
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Engaging more fully with our employ
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Accident frequency rate (AFR) Numbe
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Contributing to our communities We
Page 55 and 56: Andrew Reynolds Smith (42) Chief Ex
Page 57 and 58: Dividend An interim dividend of 4.5
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Page 61 and 62: Directors’ attendance record The
Page 63 and 64: Audit Committee Report Role of the
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Page 67 and 68: The companies making up the compara
Page 69 and 70: The arrangements for providing reti
Page 71 and 72: Governance Directors’ Remuneratio
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Page 79 and 80: Consolidated Statement of Recognise
Page 81 and 82: Consolidated Cash Flow Statement Fo
Page 83 and 84: charges relating to the Group-wide
Page 85 and 86: Financial Statements Notes to the F
Page 89 and 90: 2 Segmental analysis continued Prim
Page 91 and 92: 3 Operating profit continued (v) Au
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Page 95 and 96: 5 Taxation continued Financial Stat
Page 101 and 102: 11 Goodwill and other intangible as
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Page 111 and 112: Financial Statements 19 Financial r
Page 115 and 116: 24 Acquisitions There were no acqui
Page 117 and 118: 26 Post-employment obligations Fina
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Page 123 and 124: Independent Auditors’ Report to t
Page 125 and 126: Notes to the Financial Statements o
Page 127 and 128: Group Financial Record For the year
Page 129 and 130: OffHighway GKN OffHighway Ltd GKN W
Page 131 and 132: Unsolicited mail GKN is obliged by
Page 133 and 134: Contact Details GKN plc PO Box 55 I
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