25 Financial Risk Management (continued)
b) Liquidity The Group’s policy is to ensure that it has sufficient facilities to cover its future funding requirements. Short-term flexibility is available through the existing bank facilities and the netting off of surplus funds. The carrying amounts are the amounts due if settled at the period end date. The contractual undiscounted cash flows include estimated interest payments over the life of these facilities. The estimated interest payments are based on interest rates prevailing at the 27 June 2015.
At year ended 27 June 2015
Non-derivative financial liabilities Secured bank loans
Finance lease liabilities Invoice discounting
Deferred consideration Trade creditors
Derivative financial liabilities Interest rate swaps liabilities
Carrying amount £000
(17,163) (474)
(3,397) (50)
(37,457) (359) (58,900) At year ended 28 June 2014
Non-derivative financial liabilities Secured bank loans
Finance lease liabilities Invoice discounting Trade creditors
Derivative financial liabilities Interest rate swaps liabilities
The carrying amount relating to interest rate swaps is the fair value.
The information relating to the interest rate swaps shown in the tables above indicate the cash flows associated with these instruments. This also reflects the expected effect on the future profit. These amounts will change as interest rates change. Short-term flexibility is available through existing bank facilities and the netting off of surplus funds.
c) Credit Risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers. These trading exposures are monitored and managed at operating level and are also monitored at Group level. Whilst there is a concentration of credit risk arising from the profile of five customers accounting for 62% of total revenue, the Group deems this to be low risk due to the nature of these customers. The carrying amount of the financial assets represents the maximum credit exposure. Therefore, the maximum exposure to credit risk for the trade receivables at the period end date was £42.8 million (2014: £22.4 million) and the ageing of trade receivables at the period end date was:
2015 £000
Not past due
Past due 0 – 30 days Past due 31 – 120 days
Past due more than 120 days
39,445 2,263 1,097 40
42,845
2014 £000
21,052 1,167 144 47
22,410
The above numbers are net of impairment provisions. Group policy is to provide in full against all receivable balances whose full recovery is significantly in doubt. The provision is netted off the gross receivable.
68
Carrying amount £000
(5,517) (854)
(2,959) (387) £000 £000 £000 £000 £000
(18,412) (488)
(3,397) (50)
(6,026) (293)
(3,397) (50)
(37,457) (37,457) (377) (270) (60,181) (47,493) £000 £000 £000 £000 £000
(5,990) (892)
(2,959) (650)
(2,487) (403)
(2,959) (20,254) (20,253) (20,253) (271) (29,971) (30,744) (26,373)
(436) (294) - -
(271) (1,001)
(1,258) (195) - -
(108) (1,561)
(1,809) - - -
- (1,809) Total or less
(3,198) (137) - - -
(107) (3,442)
1 to 2 years
(7,785) (58) - - -
- (7,843)
Contractual cashflows including estimated interest 1 year
2 to 5 years
(1,403) - - - -
- (1,403) and over 5 years Total
Contractual cashflows including estimated interest 1 year
or less
1 to 2 years
2 to 5 years
and over 5 years
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