104


John Lewis Partnership plc Annual Report and Accounts 2014


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED


20 Management of financial risks The principal financial risks that we are exposed to are: liquidity risk, interest rate risk, foreign currency risk, credit risk, capital risk and energy risk. This note details how each of these risks are managed.


20.1 Liquidity risk


Liquidity requirements are managed in line with short and long-term cash flow forecasts and reviewed against the Partnership’s debt portfolio and maturity profile. Surplus cash held over and above balances required for working capital management is invested in interest bearing current accounts, term deposits and money market funds with appropriate maturities or sufficient liquidity determined by the above mentioned forecasts. In January 2014, the Partnership repaid a £100m bond and entered into an 18 month £150m bilateral borrowing facility. At the year end the Partnership had undrawn committed revolving borrowings facilities of £475m (2013: £325m). In addition to these facilities, the Partnership has listed bonds totalling £575m (2013: £675m) of which £275m mature in 2019 and £300m in 2025 and the Partnership bond issued in April 2011 and maturing in 2016, which raised gross proceeds of £58m. The bonds are not subject to repricing, and their interest rates and maturity profiles are set out in note 23.


The Partnership’s bank borrowing facilities contain financial covenants. Throughout the year the Partnership maintained comfortable headroom against its covenants and is expected to do so into the foreseeable future.


The Partnership’s total committed sources of available funds at the date of signing these accounts are £1,108m.


The following analysis shows the contractual undiscounted cash flows payable under financial liabilities and derivative financial liabilities at the balance sheet date:


Due within 1 year £m


Non-derivative financial liabilities Borrowings and overdrafts


Interest payments on borrowings* Finance lease liabilities Trade and other payables


Derivative financial liabilities Derivative contracts – receipts Derivative contracts – payments At 25 January 2014


(75.6) (44.0) (4.8)


(1,285.4) 185.0 (190.8) (1,415.6)


Due within 1 year £m


Non-derivative financial liabilities Borrowings and overdrafts


Interest payments on borrowings* Finance lease liabilities Trade and other payables


Derivative financial liabilities Derivative contracts – receipts Derivative contracts – payments At 26 January 2013


(156.3) (54.5) (4.6)


(1,156.6) 163.0 (166.7) (1,375.7)


Due between 1 and 2 years £m


–


(44.0) (4.4) (0.6)


28.7


(29.1) (49.4)


Due between 1 and 2 years £m


–


(44.0) (4.6) (0.7)


– –


(49.3)


* Excludes annual interest of £0.3m on cumulative preference stock which have no fixed redemption date. Interest on borrowings is calculated based on the borrowing position at the financial year end without taking account of future issues.


For the purposes of this note, the foreign currency element of forward foreign currency contracts is translated at spot rates prevailing at the year end.


Due 2 years and beyond £m


(734.6) (260.1) (53.3) –


– –


(1,048.0)


Due 2 years and beyond £m


(722.2) (304.1) (58.0) –


– –


(1,084.3)


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