The total expenses recognised for the period arising from
equity-settled share-based payments are as follows:
2014 2013
GBP000 GBP000
-------------------- ------ ------
LTIP 82 -
Share option scheme - 22
-------------------- ------ ------
82 22
-------------------- ------ ------
26 Financial instruments
a) Fair values of financial instruments
The carrying values for each class of financial assets and
financial liabilities in the balance sheet, which are given below,
are not considered to be materially different to their fair
values.
As at 31 March 2014, the Group had derivative contracts, which
were measured at Level 2 fair value subsequent to initial
recognition, to the value of a liability of GBP692,000 (2013:
liability of GBP505,000).
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the balance sheet date if the effect is
material. Doubtful receivable provisions are established based upon
the difference between the receivable value and the estimated net
collectible amount.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the balance sheet date if the effect is
material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the balance sheet date.
Interest-bearing borrowings
Fair value, which after initial recognition is determined for
disclosure purposes only, is calculated based on the present value
of future principal and interest cash flows, discounted at the
market rate of interest at the balance sheet date. For finance
leases the market rate of interest is determined by reference to
similar lease agreements.
Derivative financial instruments
The fair value of forward exchange contracts is based on their
market price.
Fair value hierarchy
Financial instruments which are recognised at fair value
subsequent to initial recognition are grouped into Levels 1 to 3
based on the degree to which the fair value is observable. The
three levels are defined as follows:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities;
Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair value are observable,
either directly or indirectly; and
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data.
2014 2013
---------------- -----------------
Carrying Fair Carrying Fair
amount value amount value
Notes GBP000 GBP000 GBP000 GBP000
------------------------------------------------------------ ----- -------- ------ -------- -------
Cash and cash equivalents 16 8,111 8,111 2,301 2,301
Trade receivables 15 16,078 16,078 18,799 18,799
Other receivables 15 1,699 1,699 2,012 2,012
------------------------------------------------------------ ----- -------- ------ -------- -------
Total financial assets 25,888 25,888 23,112 23,112
------------------------------------------------------------ ----- -------- ------ -------- -------
Bank loans and overdrafts 16 40,622 40,622 43,215 43,215
Finance lease liability 20 4,689 4,689 1,777 1,777
Other financial liabilities 20 9,325 9,325 8,475 8,475
Trade payables 21 25,031 25,031 28,291 28,291
Other payables 21 787 787 704 704
------------------------------------------------------------ ----- -------- ------ -------- -------
Total financial liabilities measured at amortised cost 80,454 80,454 82,462 82,462
------------------------------------------------------------ ----- -------- ------ -------- -------
Financial liabilities at fair value through profit or loss 20 115 115 54 54
Financial liabilities at fair value through hedging reserve 20 577 577 451 451
------------------------------------------------------------ ----- -------- ------ -------- -------
Total financial liabilities at fair value 692 692 505 505
------------------------------------------------------------ ----- -------- ------ -------- -------
Total financial liabilities 81,146 81,146 82,967 82,967
------------------------------------------------------------ ----- -------- ------ -------- -------
Net financial liabilities 55,258 55,258 59,855 59,855
------------------------------------------------------------ ----- -------- ------ -------- -------
b) Credit risk
Financial risk management
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 and investment securities.
The Group's exposure to credit risk is managed by dealing only
with banks and financial institutions with strong credit ratings.
The Group's financial credit risk is primarily attributable to its
trade receivables.
The Group has no significant concentration of credit risk
exposure as revenues are split across a large number of customers
in different geographical areas. The main customers of the Group
are large and mid-sized retailers, other manufacturers and
wholesalers of greetings products, service merchandisers and
trading companies. The Group has established procedures to minimise
the risk of default of trade receivables including detailed credit
checks undertaken before new customers are accepted and rigorous
credit control procedures after sale. These processes have proved
effective in minimising the level of impairments required.
The amounts presented in the balance sheet are net of allowances
for doubtful receivables estimated by the Group's management, based
on prior experience and their assessment of the current economic
environment.
Exposure to credit risk
The carrying amount of financial assets represents the maximum
credit exposure. Therefore, the maximum exposure to credit risk at
the balance sheet date was GBP25,888,000 (2013: GBP23,122,000)
being the total of the carrying amount of financial assets,
excluding equity investments, shown in the table above.
The maximum exposure to credit risk for trade receivables at the
balance sheet date by geographic region was:
2014 2013
GBP000 GBP000
------------ ------ ------
UK and Asia 6,850 7,357
USA 4,237 4,796
Europe 2,306 2,709
Australia 2,685 3,937
------------ ------ ------
16,078 18,799
------------ ------ ------
Credit quality of financial assets and impairment losses
The ageing of trade receivables at the balance sheet date
was:
2014 2013
------------------ ------------------
Gross Impairment Gross Impairment
GBP000 GBP000 GBP000 GBP000
------------------- ------ ---------- ------ ----------
Not past due 11,408 (5) 12,616 (43)
Past due 0-90 days 4,025 (46) 5,790 (94)
More than 90 days 926 (230) 857 (327)
------------------- ------ ---------- ------ ----------
16,359 (281) 19,263 (464)
------------------- ------ ---------- ------ ----------
There were no unimpaired balances outstanding at 31 March 2014
(2013: GBPnil) where the Group had renegotiated the terms of the
trade receivable.
The movement in the allowance for impairment in respect of trade
receivables during the year was as follows:
2014 2013
GBP000 GBP000
------------------------------- ------ ------
Balance at 1 April 464 565
Charge for the year 310 964
Unused amounts reversed (211) (262)
Amounts written off (270) (813)
Effects of movement in foreign
exchange (12) 10
------------------------------- ------ ------
Balance at 31 March 281 464
------------------------------- ------ ------
The allowance account for trade receivables is used to record
impairment losses unless the Group is satisfied that no recovery of
the amount owing is possible; at that point the amounts considered
irrecoverable are written off against the trade receivables
directly.
c) Liquidity risk
Financial risk management
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