Merseyside Passenger Transport Executive


Merseyside Passenger Transport Executive

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Merseyside Passenger Transport Executive


Notes To The Financial Statements (Cont’d)

(c) Market risk


(i) Interest rate risk
The Executive is exposed to marginal risk in terms of its exposure to interest rate movements on its borrowings and investments.
Borrowings are not carried at fair value, so nominal gains and losses on fixed rate borrowings would not impact on the Income & Expenditure Account or Statement of Recognised Gains and Losses. However, changes in interest payable and receivable on variable rate borrowings and investments will be posted to the Income & Expenditure Account. Movements in the fair value of fixed rate investments will be reflected in the Statement of Recognised Gains and Losses.
(ii) Price risk
The Executive does not generally invest in equity shares but the Group Accounts do reflect shareholdings in a number of subsidiaries. The Group is consequently exposed to losses arising from movements in the prices of the shares.
As the shareholdings have arisen in the acquisition of specific interests, the Group is not in a position to limit its exposure to price movements by diversifying its portfolio.
The shares are all classified as ‘available for sale’, meaning that all movements in price will impact on gains and losses recognised in the Statement of Recognised Gains and Losses.
(iii) Foreign exchange risk
The Executive has no financial assets or liabilities denominated in foreign currencies and thus has no exposure to loss arising from movements in exchange rates.
In all cases, the carrying value of financial instruments is a reasonable approximation to fair value.
Financial Instruments

The borrowings and investments in the balance sheet are made up of the following categories:-


2007/08




2008/09

MPTE

Group




MPTE

Group

£000

£000




£000

£000






















Long Term







(4,500)

(4,500)

Financial Liabilities at amortised cost

(4,302)

(4,302)

-

-

Financial Liabilities at fair value through profit and loss


-

-

(4,500)

(4,500)

Total Borrowings

(4,302)

(4,302)































-

-

Loans & Receivables

-

-

-

-

Available-for-Sale financial assets

-

-

4,501

1

Unquoted equity investment at cost

4,303

230

4,501

1

Total Investments


4,303

230






















Current







-

-

Minority Shareholding

-

299

-

427

Financial Liabilities at amortised cost (TBS)

-

955

-

-

Financial Liabilities at amortised cost

101

101

-

427

Total Borrowings

101

1,056





























22700

22,700

Loans & Receivables

23,400

23,400

-

-

Available-for-Sale financial assets

-

-

-

-

Unquoted equity investment at cost

101

101

22,700

22,700

Total Investments

23,501

23,501
































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