All of the cash-generating units' values in use were determined
to be higher than fair value less costs to sell, thus this was used
as the recoverable amount. In all businesses the carrying value of
the goodwill was supported by the recoverable amount and there are
currently no reasonably foreseeable changes to assumptions that
would give rise to an impairment of the carrying value.
The Directors do not believe a reasonably possible change to the
assumptions would give rise to an impairment.
The Directors have considered a 3% movement in the discount rate
and a flat budget growth rate assumption in their assessment.
13 Deferred tax assets and liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the
following:
Assets Liabilities Net
-------------- ---------------- --------------
2014 2013 2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------------ ------ ------ ------- ------- ------ ------
Property, plant and equipment 1,317 1,204 (1,304) (884) 13 320
Capital gains deferred - - (294) (472) (294) (472)
Tax loss carried forward 2,488 3,278 - (1) 2,488 3,277
Other temporary differences 1,458 1,125 - - 1,458 1,125
------------------------------ ------ ------ ------- ------- ------ ------
Net tax assets/(liabilities) 5,263 5,607 (1,598) (1,357) 3,665 4,250
------------------------------ ------ ------ ------- ------- ------ ------
The deferred tax asset in respect of tax losses carried forward
at 31 March 2014 of GBP2,219,000 (2013: GBP2,819,000) is comprised
of UK tax losses of GBP530,000 (2013: GBP29,000) and US losses of
GBP1,689,000 (2013: GBP2,790,000). US tax losses carried forward
will become irrecoverable in March 2027. UK tax losses may be
carried forward indefinitely. The deferred tax assets have been
recognised where the Board considers there is sufficient evidence
that taxable profits will be available against which the tax losses
can be utilised. The Board expects that the tax losses will be
recoverable against future profits but given the level of tax
losses brought forward, recoverability has been assessed on the
basis of expected profits currently forecast. Deferred tax assets
in respect of taxable losses that are expected to be recovered
outside this forecast period have not been recognised. This
includes unrecognised deferred tax assets in respect of brought
forward UK losses of GBP310,000 (2013: GBP858,000) and GBP2,194,000
(2013: GBP2,153,000) in respect of brought forward US tax
losses.
No deferred tax is recognised on unremitted earnings of overseas
subsidiaries. Overseas reserves can now be repatriated to the UK
with no tax cost. If all overseas earnings were repatriated with
immediate effect, no tax charge (2013: GBPnil) would be
payable.
The Finance Act 2013, which provides for reductions in the main
rate of corporation tax from 23% to 21% effective from 1 April 2014
and to 20% effective from 1 April 2015, was substantively enacted
on 2 July 2013. These rate reductions have been reflected in the
calculation of deferred tax at the balance sheet date.
There are no deferred tax balances with respect to cash flow
hedges.
Movement in deferred tax during the year
1 April Recognised Recognised 31 March
2013 in income in equity 2014
GBP000 GBP000 GBP000 GBP000
Property, plant and equipment 320 (635) 328 13
Capital gains deferred (472) 322 (144) (294)
Tax loss carried forward 3,277 (504) (285) 2,488
Other temporary differences 1,125 579 (246) 1,458
Net tax assets 4,250 (238) (347) 3,665
Movement in deferred tax during the prior year
1 April Recognised Recognised 31 March
2012 in income in equity 2013
GBP000 GBP000 GBP000 GBP000
Property, plant and equipment (1,466) 1,778 8 320
Capital gains deferred (494) 22 - (472)
Tax loss carried forward 3,817 (671) 131 3,277
Other temporary differences 2,783 (1,732) 74 1,125
Net tax assets 4,640 (603) 213 4,250
14 Inventory
2014 2013
GBP000 GBP000
------------------------------ ------ ------
Raw materials and consumables 4,531 5,488
Work in progress 9,435 9,100
Finished goods 34,494 35,526
------------------------------ ------ ------
48,460 50,114
------------------------------ ------ ------
Of the GBP48,460,000 (2013: GBP50,114,000) stock value
GBP43,870,000 (2013: GBP44,074,000) is held at cost and
GBP4,590,000 (2013: GBP6,040,000) is held at net realisable value.
The write down of inventories to net realisable value amounted to
GBP2,963,000 (2013: GBP2,931,000). The reversal of previous write
downs amounted to GBP226,000 (2013: GBP1,116,000). The reversal is
due to the inventory being either used or sold.
Materials, consumables, changes in finished goods and work in
progress recognised as a cost of sale amounted to GBP158,590,000
(2013: GBP159,525,000).
Part of the Group's funding is via asset backed loans from our
bankers. These loans are secured on part of the inventory and trade
receivables of the UK, European and American businesses. The amount
of the inventory that is used to secure an asset backed loan is
GBP42,298,000 (2013: GBP31,544,000). In addition bank loans to
Hoomark and International Greetings USA are secured on a freehold
property and contents, including inventory, therein.
Refer to note 17 for outstanding balance on asset backed loans
and details of the secured bank loans.
15 Trade and other receivables
2014 2013
GBP000 GBP000
------------------------------- ------ ------
Trade receivables 16,078 18,799
Prepayments and accrued income 1,770 1,486
Other receivables 1,699 2,012
VAT receivable 143 988
------------------------------- ------ ------
19,690 23,285
------------------------------- ------ ------
Part of the Group's funding is via asset backed loans from our
bankers. These loans are secured on part of the inventory and trade
receivables of the UK, European and American businesses. The amount
of the trade receivables that is used to secure the asset backed
loans is GBP12,469,000 (2013: GBP9,684,000).
Refer to note 17 for outstanding balance on asset backed
loans.
There are no trade receivables in the current year (2013:
GBPnil) expected to be recovered in more than twelve months.
The Group's exposure to credit and currency risks and impairment
losses related to trade and other receivables is disclosed in note
26.
16 Cash and cash equivalents/bank overdrafts
2014 2013
Note GBP000 GBP000
------------------------------- ------ -------- -------
Cash and cash equivalents 8,111 2,301
Bank overdrafts (2,529) (336)
--------------------------------------- -------- -------
Cash and cash equivalents per
cash flow statement 5,582 1,965
--------------------------------------- -------- -------
Net debt
2014 2013
GBP000 GBP000
----------------------------------------- --------- --------
Cash and cash equivalents 8,111 2,301
Bank loans and overdrafts 17 (40,622) (43,215)
Loan arrangement fees 253 553
Finance leases (4,689) (1,777)
----------------------------------------- --------- --------
Net debt as used in the financial review (36,947) (42,138)
----------------------------------------- --------- --------
The Group's exposure to interest rate risk and sensitivity
analysis for financial assets and liabilities are disclosed in note
26.
The bank overdrafts are secured by a fixed charge on certain of
the Group's land and buildings, a fixed charge on certain of the
Group's book debts and a floating charge on certain of the Group's
other assets.
17 Loans and borrowings
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