Notes to the consolidated financial statements

16 Available for sale financial assets

  2008
£m
2007
£m
At 1 January 22 23
Exchange differences 7 1
Income for the year 1 1
Changes in market value 3
Disposal of subsidiaries (1)
Transfer to retirement benefit obligations (2) (2)
At 31 December 31 22
   
Non current assets 30 21
Current assets 1 1
At 31 December 31 22

Available for sale financial assets at 31 December 2008 include £30m (2007: £21m) of investments used to satisfy certain US retirement obligations, of which £28m (2007: £21m) comprises fixed rate listed investments, the fair values of which are determined directly by reference to published price quotations in an active market, and £2m (2007: £nil) comprises cash and cash equivalents. Also included in available for sale financial assets at 31 December 2008 are unlisted investments of £1m (2007: £1m).

The carrying amounts of available for sale financial assets are denominated in the following currencies, which are the functional currencies of the respective subsidiaries.

  2008
£m
2007
£m
US dollar 30 21
Euro 1 1
  31 22

17 Inventories

  2008
£m
2007
restated
£m
Raw materials, stores and consumables 257 148
Work in progress 28 13
Finished goods 329 230
  614 391

An analysis of provisions against inventories is set out below.

  2008
£m
2007
£m
At 1 January (21) (38)
Exchange differences (7) (1)
Disposal of subsidiaries 15
Charge for the year (10) (5)
Released in the year 2 4
Utilised 6 4
At 31 December (30) (21)

Provisions released in the year comprise £1m (2007: £1m) relating to sales of spare parts in Beverage Cans, £1m (2007: £1m) relating to various provisions in Plastic Packaging and £nil (2007: £2m) on the sale of glass containers to an independent customer at original cost and for the use of consumables that were fully provided in the discontinued Glass segment.

18 Trade and other receivables

  2008
£m
2007
£m
Non current assets    
Trade receivables 4 3
Provision for impairment (4) (3)
Net trade receivables
Prepayments 37 30
Taxes 3 3
Other receivables 23 24
  63 57
Current assets    
Trade receivables 616 443
Provision for impairment (7) (3)
Net trade receivables 609 440
Prepayments 46 23
Taxes 66 37
Collateral deposits 42
Other receivables 70 63
  833 563
     
Total trade and other receivables 896 620

Collateral deposits relate to funds placed with derivative counterparties in respect of certain commodity contracts where the market value of the contract exceeded a predetermined threshold in favour of the derivative counterparties.

An analysis of provision for impairment of trade and other receivables is set out below.

  2008
£m
2007
£m
At 1 January (6) (6)
Exchange differences (3)
Impairment in the year (4) (1)
Released in the year 2
Disposal of subsidiaries 1
At 31 December (11) (6)

An analysis of total trade and other receivables including those which are past due but not impaired is set out below.

  2008
£m
2007
£m
Not yet due 806 569
Past due less than 1 month 72 42
Between 1 and 2 months 12 6
Between 2 and 3 months 4 2
Between 3 and 6 months 2 1
  896 620

The maximum amount of credit risk with respect to customers is represented by the carrying amount on the balance sheet. Customer credit facilities for new customers must be approved by designated managers at business level or by senior sector management. Credit limits are set with reference to trading history and reports from credit rating agencies. Customer credit facilities are reviewed at the sales order entry stage and at the time of shipment so as not to exceed customer limits. Overdue accounts are regularly reviewed and impairment provisions are created where necessary. As a matter of policy, all outstanding trade balances greater than three months are fully provided except as approved by senior sector management and with due regard to the historical risk profile of the customer. The Group has extremely low historical levels of customer credit defaults, due in part to the blue chip multinational nature of many of its customers and the long term relationships it has with them. There were no new customers in 2008 where the Group considered there was a risk of significant credit default. There are no trade and other receivables that would otherwise be past due or impaired whose terms have been renegotiated.

The carrying amounts of total trade and other receivables are denominated in the following currencies, which in most instances are the functional currencies of the respective subsidiaries.

  2008
£m
2007
£m
US dollar 337 232
Euro 260 191
Brazilian real 121 99
Russian rouble 46
Sterling 32 27
Chinese renminbi 30 19
Swedish krona 22 20
Other 48 32
  896 620

19 Cash and cash equivalents

  2008
£m
2007
£m
Cash at bank and in hand 62 73
Short term bank deposits 13 40
  75 113

The carrying amounts of cash and cash equivalents are denominated in the following currencies.

  2008
£m
2007
£m
Brazilian real 17 44
Russian rouble 17 3
Chinese renminbi 13 14
Sterling 10 12
US dollar 9 31
Other 9 9
  75 113

20 Assets and liabilities classified as held for sale

An analysis of the assets and liabilities classified as held for sale at 31 December is set out below.

  2008 Petainer
£m
2008 Other
£m
2008 Total
£m
2007 Petainer and total
£m
Property, plant and equipment 20 4 24 15
Deferred tax assets 1 1 1
Inventories 9 9 9
Trade receivables 5 5 5
Total assets 35 4 39 30
     
Trade payables (14) (14) (11)
Retirement benefit obligations (1) (1) (1)
Total liabilities (15) (15) (12)
     
Carrying value 20 4 24 18

The Petainer plastic bottle business is in the process of being sold. Offers have been received for the business consistent with its carrying value and advanced discussions are now being held with a preferred bidder. In accordance with IFRS5 ‘Non Current Assets Held for Sale and Discontinued Operations’, the related assets and liabilities of the business are separately classified in the consolidated balance sheet as held for sale. No depreciation or amortisation has been charged for the year. An impairment of £3m has been recognised in 2008 in order to align the carrying value with fair value less costs to sell. The impairment has been disclosed in the consolidated income statement within operating expenses.

Other assets classified as held for sale of £4m (2007: £nil) comprise a property deemed surplus to requirements resulting from the restructuring of the North American Beverage Can business.