20645_Scapa_AR_160504

NOTES ON THE ACCOUNTS CONTINUED
21. DERIVATIVE FINANCIAL INSTRUMENTS CONTINUED
– Interest rate risk
The Group is exposed to interest rate risk as it has borrowings at floating rates. Interest rate risk is evaluated periodically to consider interest rate
views and defined risk appetite; to seek to ensure that reasonable economic strategies are applied, by either positioning the Balance Sheet or
protecting interest expense through different interest rate cycles. Deposit risk is managed by spreading deposits across high credit rated
institutions, and capping the maximum deposit with an institution at one time.
– Commodity price risk
The Group is exposed to commodity price risk as it buys a number of commodity products that are vital to its production process. The Group
mitigates this risk by fixing pricing with its suppliers where possible. The contracts entered into continue to be held for the purpose of the
receipt of the commodity in accordance with the Group’s expected purchase or usage requirements. There is no intention to re-sell the
commodities bought.
– Liquidity risk
The Group maintains a mixture of committed long-term and short-term facilities designed to ensure that the Group has sufficient cash funds
available for operations and planned investment.
Liquidity tables
The following tables detail the Group’s contractual maturity for financial instruments. The tables are drawn up on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Group can be required to pay.
Due within
one year
£m
One to
two years
£m
Two to
five years
£m
2016
Trade payables and trade accruals 30.0 – –
Other taxes and social security 4.5 – –
Other creditors 10.7 0.2 –
Finance leases 0.1 0.1 –
Loans and overdrafts 0.9 – 20.2
46.2 0.3 20.2
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SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016
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Annual Report and Accounts 2016 Scapa Group plc