Annual Report and Accounts 2010-11 - Manchester Airport

64Notes to the Consolidated Financial Statements for the year ended 31 March 201122. Financial instruments continuedFinancial assetsInterest rate profile of financial assets2011 2010£m £mShort term fixed rate, sterling deposits 7.8 1.27.8 1.2All financial assets are denominated in sterling.The fixed rate assets held at the end of the year will earn interest at an annual equivalent rate of 0.625%. Non-interest bearing assetsprimarily relate to long term trading receivables or current asset investments.(d) Fair value of financial instrumentsThe following table provides a comparison, by category, of the carrying amounts and the fair values of the Group’s financialinstruments as at 31 March 2011 and 2010. Fair value is defined as the amount at which a financial instrument could be exchanged inan arm’s length transaction between informed and willing parties, other than in a forced or liquidation sale and excludes accruedinterest. Where available, market values have been used to determine fair values. Where market values are not available, fair valueshave been calculated by discounting expected cash flows at prevailing interest rates.2011 2010Book value Fair value Book value Fair value£m £m £m £mBank loans and overdrafts (217.0) (217.0) (183.8) (183.8)Trade payables (28.3) (28.3) (33.3) (33.3)Other borrowings (163.1) (163.1) (163.2) (163.2)Short and long term finance leases (1.3) (1.3) (3.2) (3.2)(409.7) (409.7) (383.5) (383.5)Cash at bank and in hand 0.7 0.7 1.4 1.4Cash on short term deposit 7.8 7.8 1.2 1.2Trade receivables 17.0 17.0 12.4 12.425.5 25.5 15.0 15.0Net financial liabilities (384.2) (384.2) (368.5) (368.5)Summary of methods and assumptionsBank loansThe bank debt is stated net of unamortised issue costs of £3.0m (2010: £0.5m), whichwould be charged in full to the income statement in the event of an immediaterefinancing of this debt.Trade receivables and payables The directors consider that the carrying value of trade receivables and payables approximatesto their fair value.Other borrowingsFair value, which is determined for disclosure purposes, is calculated based on the presentvalue of future principal and interest cash flows, discounted at the market rate of interest at thereporting date.Short term finance leases The fair value of short-term finance leases (that is finance leases that are due to expire inless than one year) approximates to the book values of such instruments due to their shortmaturity dates.Long term finance leases The fair values of the Group's fixed rate long-term finance leases have been calculated byreference to discounted cash flows at prevailing market rates.Cash at bank, in hand and The fair values of these instruments are equal to their book values, as eachon depositinstrument has a short-term maturity date.The Manchester Airport Group PLC Annual Report and Accounts 2010-11