77 Finsbury Food Group Annual Report & Accounts 2019
Notes to the Consolidated Financial Statements
23. 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 29 June 2019.
Contractual cash flows including estimated interest At year ended 29 June 2019
Non-derivative financial liabilities Revolving credit
Finance lease liabilities Trade creditors
Carrying amount £000
Total £000
1 year or less £000
1 to 2 years £000
2 to 5 years £000
5 years and over £000
(47,144) (828)
(37,162) (85,134)
At year ended 30 June 2018 Restated
Non-derivative financial liabilities Revolving credit Trade creditors
(47,394) (928)
(37,162) (85,484)
- (380)
(37,162) (37,542)
-
(272) -
(272)
(47,394) (276) -
(47,670) Contractual cash flows including estimated interest
Carrying amount £000
Total £000
1 year or less £000
1 to 2 years £000
2 to 5 years £000
5 years and over £000
- - - -
(25,000) (37,210) (62,210)
(25,037) (37,210) (62,247)
-
(37,210) (37,210)
- - -
(25,037) -
(25,037)
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.
In the prior year accounts, the secured bank loans of £25,000,000 were disclosed as “1 year or less”. Refer to “Presentation of Financial Statements – Basis of Preparation” on page 54 for more detail.
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 controlled by assessing the credit quality of the customer, taking into account its financial position, past experience and other factors and 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 more than 50% 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 £45.2 million (2018: £40.0 million) and the ageing of trade receivables at the period end date was:
2019 £000
Not past due
Past due 0-30 days Past due 31-120 days
Past due more than 120 days
39,666 4,407 626 508
45,207
The above numbers are net of impairment provisions. There was no impact recorded as a result of applying the ECL (expected credit loss) methodology under IFRS 9. The provision is netted off the gross receivable.
The Group’s strategy is to focus on supplying UK multiple grocers and foodservice distributors, the nature of these customers is such that there is a relatively low risk of them failing to meet their contractual obligations. There is no impairment necessary to the value of trade receivables at the period end date over and above the specific credit note provision and bad debt provision held at the year end. The balance of £1.1 million past due by more than 30 days is equivalent to less than two days sales (2018: £0.9 million, equivalent to less than 2 days). Details of the Company’s credit risk are not disclosed because the Financial Statements of the Group disclose such details on a consolidated basis.
2018 £000
35,806 3,248 869 44
39,967
- - -
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