Details of the Group's policies on the use of financial instruments are given in note 28 and in the accounting policies on notes 1 and 2.

The carrying values of other financial assets and liabilities held by the Group are as follows:

	2006
	Foreign exchange contracts £m	Commodity contracts £m	Interest rate contracts £m	Financial RRSPs £m	B Shares £m	Total £m
Assets	578	39	27	—	—	644
Liabilities	(24)	—	(12)	(324)	(13)	(373)
	554	39	15	(324)	(13)	271

	2005
	Foreign exchange contracts £m	Commodity contracts £m	Interest rate contracts £m	Financial RRSPs £m	B Shares £m	Total £m
Assets	364	31	69	—	—	464
Liabilities	(136)	—	(7)	(423)	(7)	(573)
	228	31	62	(423)	(7)	(109)

Other financial liabilities are analysed as follows:

	2006	2005
£m		£m
Current liabilities	(37)	(234)
Non-current liabilities	(336)	(339)
	(373)	(573)

The Group uses various financial instruments to manage its exposure to movements in foreign exchange rates. The Group uses commodity swaps to manage its exposure to movements in the price of commodities (jet fuel and base metals). From January 1, 2005, the Group has not included foreign exchange or commodity financial instruments in any cash flow hedging relationships for accounting purposes. To hedge the currency risk associated with a borrowing denominated in US$, the Group has currency derivatives designated as part of a fair value hedge.

Movements in the fair values of foreign exchange financial instruments were as follows:

Foreign exchange financial instruments

	2006				2005
	Total £m	Included in transition hedging reserve £m	Included in income statement £m		Total £m	Included in transition hedging reserve £m	Included in income statement £m
1 Additionally £10m relating to derivatives settled prior to transition to IFRS was included in the transition hedging reserve and transferred to the income statement.
2 Included in financing income/(costs).
At January 1	228	538			986	9861
Fair value changes to derivative contracts not in accounting hedging relationships 2	696	—	696		(399)	—	(399)
Fair value changes to fair value hedges 2	(26)	—	(26)		5	—	5
Fair value of contracts settled	(344)	—	—		(364)	—	—
Transferred to revenue	—	(284)	284		—	(448)1	448
At December 31	554	254			228	538

Movements in the fair values of commodity and interest rate financial instruments were as follows:

Commodity financial instruments

			2006				2005
	Total £m	Included in transition hedging reserve £m	Included in income statement £m		Total £m	Included in transition hedging reserve £m	Included in income statement £m
1 Included in financing income/(costs).
At January 1	31	5			9	9
Fair value changes to derivative contracts not in accounting hedging relationships 1	34	—	34		54	—	54
Fair value of contracts settled	(26)	—	—		(32)	—	—
Transferred to cost of sales	—	(5)	5		—	(4)	4
At December 31	39	—			31	5

Where applicable, market values have been used to determine fair values. Where market values are not available, fair values have been calculated by discounting expected future cash flows at prevailing interest rates and translating at prevailing exchange rates.

The Group uses interest rate swaps, forward rate agreements and interest rate caps to manage its exposure to movements in interest rates. Where the effectiveness of the hedge relationship in a cash flow hedge is demonstrated, changes in the fair value that are deemed effective are included in the hedging reserve and released to match actual payments on the hedged item.

Interest rate financial instruments

	2006
	Total £m	Included in fair value hedging relationships £m	Other interest rate financial instruments £m	Included in cash flow hedging reserve £m	Included in income statement £m
At January 1	62	69	(7)	—
Changes deemed effective for cash flow hedge accounting purposes	—	—	—	—	—
Changes deemed ineffective for cash flow hedge accounting purposes 1	4	—	4	—	4
Other changes 1	(51)	(51)	—	—	(51)
Transferred to interest payable	—	—	—	—	—
At December 31	15	18	(3)	—

	2005
	Total £m	Included in fair value hedging relationships £m	Other interest rate financial instruments £m	Included in cash flow hedging reserve £m	Included in income statement £m
1 Included in financing income/(costs).
At January 1	110	121	(11)	(3)
Changes deemed effective for cash flow hedge accounting purposes	—	—	—	—	—
Changes deemed ineffective for cash flow hedge accounting purposes 1	4	—	4	—	4
Other changes 1	(52)	(52)	—	—	(52)
Transferred to interest payable	—	—	—	3	(3)
At December 31	62	69	(7)	—

Financial risk and revenue sharing partnerships (RRSPs)

The Group has financial liabilities arising from financial RRSPs. These financial liabilities are valued at each reporting date using the amortised cost method. This involves calculating the present value of the forecast cash flows of the arrangements using the internal rate of return at the inception of the arrangements as the discount rate.

Movements in the amortised cost values of financial RRSPs were as follows:

	2006 £m	2005 £m
1 Included in financing income/(costs).
At January 1	423	468
Cash paid to partners	(87)	(58)
Financing charge 1	27	43
Excluded from underlying profit:
Exchange adjustments 1	(42)	56
Restructuring of financial RRSP agreements and changes in forecast payments 1	3	(86)
At December 31	324	423

Total return swaps

The Group entered into forward contracts to purchase its own shares for the purposes of meeting obligations to issue shares under employee share schemes. Under IAS 32, these contracts were categorised as financial liabilities and accounted for on the amortised cost basis. These contracts were settled during 2005.

	2005 £m
At January 1	142
On collapse of forward purchase contracts	(141)
Transferred to other financing charges	(1)
At December 31	—

B Shares

Since July 2004, the Company has issued non-cumulative redeemable convertible preference shares (B Shares) as an alternative to paying a cash dividend. B Shares in respect of a year are issued in the following year. Shareholders are able to redeem any number of their B Shares for cash or convert them into ordinary shares. Any B Shares retained attract a dividend of 75 per cent of LIBOR on the 0.1p nominal value of each share, paid on a twice-yearly basis, and have limited voting rights. In certain circumstances the Company has the option to compulsorily redeem the B Shares, at any time, if the aggregate number of B Shares in issue is less than ten per cent of the aggregate number of B Shares issued, or on the acquisition or capital restructuring of the Company.

On a return of capital on a winding-up, the holders of B Shares shall be entitled, in priority to any payment to the holders of ordinary shares, to the repayment of the nominal capital paid-up or credited as paid-up on the B Shares held by them, together with a sum equal to the outstanding preferential dividend which will have been accrued but not been paid until the date of return of capital.

Movements in the B Shares during the year were as follows:

	2006			2005
	B Shares of 0.1p each	Nominal value £m		B Shares of 0.1p each	Nominal value £m
Authorised
At January 1, and December 31	1,000,000,000,000	1,000		1,000,000,000,000	1,000
Issued and fully paid
At January 1	6,551,040,200	7		4,600,710,064	5
Issued	153,945,251,668	154		141,013,817,330	141
Converted into ordinary shares	(54,671,075,799)	(55)		(87,425,228,890)	(87)
Redeemed	(93,208,746,349)	(93)		(51,638,258,304)	(52)
At December 31	12,616,469,720	13		6,551,040,200	7