69 Finsbury Food Group Annual Report & Accounts 2019
Notes to the Consolidated Financial Statements
13. Other Financial Assets and Liabilities
2019 £000
Non-current Investments in equity accounted investees At the beginning of the financial year Impairment
At the end of the financial year Other financial assets
Current assets – derivatives Fair value of interest rate swaps
Fair value of foreign exchange contracts Total of derivatives with positive fair values
Current liabilities – derivatives Fair value of interest rate swaps
Fair value of foreign exchange contracts Total of derivatives with negative fair values
2018 £000
- - -
28
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(218) (218)
Investment in Associates During the prior year the Group assessed the carrying value of its investment in Dr Zaks and in the challenging economic environment the carrying value has been fully impaired.
Interest Rate Swaps at Fair Value The Group has two forward dated interest rate swap arrangements to hedge its risks associated with interest rate fluctuations:
• £20.0 million for five years from 3 July 2017 (fixed) at 0.455% • £5.0 million for three years from 28 March 2019 (fixed) at 1.002%
There was £25.0 million coverage in place at the year end (2018: £20.0 million). A charge of £382,000 (2018: credit £143,000) is shown in finance income for the period reflecting changes in the fair values of interest rate swaps.
Forward Foreign Exchange Contracts at Fair Value The Group has entered into a number of forward foreign exchange contracts to minimise the impact of fluctuations in exchange rates. A charge of £178,000 (2018: credit £49,000) is shown in administrative expenses for the period reflecting changes in their fair value.
14. Pension Schemes A number of companies within the Group operate Defined Contribution Pension Schemes with one company also operating a Defined Benefit Scheme.
Defined Contribution Scheme The Group made contributions in respect of its defined contribution pension arrangements of £1,681,000 (2018: £1,372,000).
Defined Benefit Scheme The Group’s Defined Benefit Scheme is the Memory Lane Cakes Pension Scheme, which is a separately administered plan. At the financial year end, the Scheme had no active members accruing benefits (2018: nil), 175 deferred pensioner members (2018: 186) and 227 pensioner members (2018: 218).
The Scheme was closed to future accrual on 31 May 2010. The assets of the Scheme are held separately from those of the Company. The amounts in the Financial Statements for the 52 weeks ended 29 June 2019 relating to Defined Benefit Pension are based on a full actuarial valuation dated 31 December 2015, alongside the initial results from the 31 December 2018.
A £200,000 contribution was paid during the financial year by Memory Lane Cakes Limited (2018: £393,000). The Group’s contribution has been agreed based on the outcome of the full actuarial valuation dated 31 December 2015. The valuation of the Scheme on an equity/bond basis and projected unit method, showed that there was a deficit at 31 December 2015 of £2,505,000 equivalent to an 11% deficit of liabilities over assets. The valuation was conducted by a qualified independent actuary. This deficit is payable at a rate of £200,000 per annum until September 2020, and £100,000 thereafter until September 2023. The next full valuation will be prepared as at 31 December 2018 and will be an opportunity to challenge the appropriateness of this recovery plan taking into consideration the deficit recovery contributions and actual returns realised on the pension Scheme assets. The Group has until 31 March 2020 to agree a valuation and a contribution schedule.
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