Strategic Review


38 Finsbury Food Group Annual Report & Accounts 2018


Directors’ Report


Corporate Governance


Financial Statements


Financial Instruments


The Group’s financial instruments comprise revolving a credit facility, cash and liquid resources, and various items arising directly from its operations, such as trade creditors. The main purpose of these financial instruments is to finance the Group’s acquisitions and operations. It is the Group’s policy that no trading in financial instruments shall be undertaken.


During the year the Group refinanced its debt facilities. The new facility is a £45.0 million revolving credit facility provided by a club of three banks – HSBC, Rabo Bank and RBS. The facility is on improved terms, is available for five years and also includes scope for the facility to be increased by up to a further £45.0 million.


The main risks arising from the Group’s financial instruments are interest rate risk and liquidity risk. The Board reviews and agrees policies for managing these risks, which have remained substantially unchanged for the year under review. The policies are summarised below:


Interest Rate Risk The new facility totalling £45.0 million plus a further £45.0 million accordion is available of which £25.0 million was drawn at the balance sheet date leaving a headroom of £29.4 million, which comprise of £20.0 million on the facility plus a cash balance of £9.4 million with a further approved accordion of £45.0 million. The interest rate risk is managed through interest rate swap transactions. The Group entered into a swap for £20.0 million for five years from 3 July 2017 (fixed) at 0.455%. The total balance of swaps at 30 June 2018 is £20.0 million (2017: £nil). The counterparty to these transactions is HSBC Bank Plc.


Liquidity Risk Short-term flexibility is available through existing bank facilities and the netting off of surplus funds. Full details of the Group’s financial assets and liabilities are given in Note 21.


Foreign Exchange Risk The Group uses forward foreign exchange contracts to manage its exposure to fluctuations in foreign currency rates. Full details are given in Note 21.


Diversity


Finsbury Food Group is committed to encouraging diversity, promoting a diverse culture where everyone is treated with respect and valued for their individual contribution and creating a work environment free of bullying, harassment, victimisation and unlawful discrimination. We have a Diversity Policy in place to ensure that selection for employment, promotion, development or any other benefit is on the basis of merit and ability and does not impact negatively upon diversity. It is a key objective to ensure that all employees are helped and encouraged to fulfil their potential.


Equal Opportunities


It is our policy to ensure equal opportunity in recruitment, selection, promotion, employee development, training and reward policies and we have an equal opportunities and diversity policy in place. It is a key objective to ensure that successful candidates for appointment and promotion are selected taking account of individual ability, skills and competencies without regard to age, gender, race, religion, disability or sexual orientation.


Involvement of Employees


Employees are key to the Company’s success and we rely on a committed workforce to help us achieve our business objectives. Employees are encouraged to operate in an open environment, embracing teamwork and aligning personal development with the strategy of the business and their behaviours with Company Values. We are keen to engage our employees by providing an environment where they can contribute their own ideas and challenge those of others. We are committed to involving employees and consider that good communication helps to achieve this. All sites have regular briefings, employee forums and communication mechanisms which are designed to keep colleagues informed of, amongst other things, the financial and economic factors that affect the Company’s performance. Many sites also hold open days to allow employees’ families to see the environment in which their family members work.


Political and Charitable Contributions During the year charitable donations amounting to £9,000 (2017: £75,000) were made. No political donations were made.


Going Concern


On the basis of current financial projections and available funds and facilities, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and, therefore, consider it appropriate to prepare the Financial Statements on the going concern basis. Further details are set out in the basis of preparation.


Auditor


In accordance with Section 489 of the Companies Act 2006, a resolution for the reappointment of KPMG LLP as auditor is to be proposed at the forthcoming AGM.


• So far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and • Each Director has taken all the steps that they ought to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.


The Directors’ Report was approved by the Board of Directors on 14 September 2018 and was signed on its behalf by:


Stephen Boyd Director


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