Annual Report and Accounts - Hemscott IR

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NOTES TO THE FINANCIAL STATEMENTS 18. Trade and other receivables THE GROUP THE COMPANY –––––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––––––– 2012 2011 2012 2011 £m £m £m £m Trade receivables 578.3 585.7 - - Allowance for doubtful debts (48.3) (54.5) - - 530.0 531.2 - - Amounts owed by subsidiaries - - 174.6 208.1 Other receivables, prepayments and accrued income 203.7 211.8 6.1 6.0 Trade and other receivables 733.7 743.0 180.7 214.1 The Group’s trade and other receivables at the balance sheet date comprise principally of amounts receivable from the sale of goods, together with amounts due in respect of rebates and sundry prepayments. The Directors consider the only class of asset containing significant credit risk is trade receivables. The average credit term taken for sales of goods is 59 days (2011: 55 days). The allowance for doubtful debts is estimated by the Group’s management based on prior experience and their assessment of the current economic environment. The Directors consider the carrying amount of trade and other receivables approximates their fair values. The business has provided fully for all receivables outstanding for more than 90 days beyond agreed terms. Trade receivables not receivable for up to 90 days are specifically provided for based on estimated irrecoverable amounts. No interest is charged on the trade receivable from the date of the invoice until the date the invoice is classified as overdue according to the trading terms agreed between the Group and the customer. Thereafter, the Group retains the right to charge interest at between 2% to 4% above the clearing bank base rate per annum on the outstanding balance. Movement in the allowance for doubtful debts THE GROUP –––––––––––––––––––––––––––––––––––––– 2012 2011 £m £m At 1 January 54.5 44.4 Amounts written off during the year (21.7) (10.2) Increase in allowance recognised in the income statement 15.5 20.3 At 31 December 48.3 54.5 In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade receivable that may have occurred between the date credit was initially granted and the reporting date. The concentration of credit risk is limited due to the customer base being large. Accordingly, the Directors believe that no further credit provision is required in excess of the allowance for doubtful debts. Included in the Group’s trade receivable balance are debtors unprovided against with a carrying amount of £57.4m (2011: £65.9m) which are past due at the reporting date for which the Group has not identified a significant change in credit quality and as such, the Group considers that the amounts are still recoverable and therefore there is no allowance for doubtful debts. Except for some instances of personal guarantees the Group does not hold any collateral over these balances. Ageing of past due but not impaired receivables THE GROUP –––––––––––––––––––––––––––––––––––––– Days overdue 2012 2011 £m £m 0 – 30 days 44.5 53.0 31 – 60 days 8.6 9.2 61 – 90 days 4.3 3.7 57.4 65.9 Included in the allowance for doubtful debts are specific trade receivables with a balance of £27.2m (2011: £30.7m) which have been placed into liquidation. The impairment represents the difference between the carrying amount of the specific trade receivable and the amount it is anticipated will be recovered. None of the Company’s debts are overdue. The directors do not consider there to be any significant credit risk, as the majority of the debt is due from subsidiaries. 19. Cash and cash equivalents Cash and cash equivalents comprise cash held by the Group and Company net of overdrafts. The carrying amount of these assets approximates their fair value. 110
TRAVIS PERKINS ANNUAL REPORT AND ACCOUNTS 2012 20. Share capital THE GROUP AND THE COMPANY ––––––––––––––––––––––––––––––––––––––––––––––––––– Issued and fully paid ––––––––––––––––––––––––––––––––––––––––––––––––––– No. £m Ordinary shares of 10p At 1 January 2011 241,701,917 24.2 Allotted in respect of acquisition of BSS 67,351 - Allotted under share option schemes 2,047,265 0.2 At 1 January 2012 243,816,533 24.4 Allotted under share option schemes 1,036,524 0.1 At 31 December 2012 244,853,057 24.5 The Company has one class of ordinary share that carries no right to fixed income. The holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. 21. Own shares THE GROUP AND THE COMPANY ––––––––––––––––––––––––––––––––––––––––––––––––––– 2012 2011 No. No. At 1 January 6,305,367 6,961,930 Re-issued during the year (991,576) (656,563) At 31 December 5,313,791 6,305,367 Allocated to grants of executive options 289,142 289,142 Not allocated to grants of executive options 5,024,649 6,016,225 5,313,791 6,305,367 The own shares are stated at cost and held by the Employee Share Ownership Trust to satisfy options under the Group’s share option schemes. All rights attaching to own shares are suspended until the shares are re-issued. 22. Reserves Details of all movements in reserves for both the Group and Company are shown in the Statement of Changes in Equity. A description of the nature and purpose of each reserve is given below. • The revaluation reserve represents the revaluation surplus that has arisen from property revaluations in 1999 and prior years; • The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments (net of tax) related to hedged transactions that have yet to occur; • The own shares reserve represents the cost of shares purchased in the market and held by the Employee Share Ownership Trust to satisfy options under the Group’s share option schemes; • The merger reserve represents the premium on equity instruments issued as consideration for the acquisition of BSS. The cumulative total of goodwill written off directly to reserves for acquisitions from December 1989 to December 1998 is £40.1m. The aggregate information for the accounting periods prior to this period is not available. FINANCIAL STATEMENTS 111
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T R A V I S P E R K I N S A N N U A
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Chairman’s Statement FOR THE YEAR
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Chief Executive’s Review of the Y
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C H I E F E X E C U T I V E ’ S R
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Post year end acquisition We expect
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Finance Director’s Review of the
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F I N A N C E D I R E C T O R ’ S
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Statement of Principal Risks and Un
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Environmental Report FOR THE YEAR E
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H E A L T H A N D S A F E T Y R E P
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Directors Robert Walker Geoff Coope
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Corporate Responsibility Statement
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