Peachtree 2012 Annual Report Download - page 111

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Overview
Performance
Governance
Net debt and capital structure continued
13.5 Other financial liabilities
2012 2011
Assets
£m
Liabilities
£m
Assets
£m
Liabilities
£m
Current: Close period share buyback programme – (60.0) – (50.0)
Non-current: Put and call arrangement to acquire non-controlling interest – (68.3) ––
Total other financial liabilities – (128.3) – (50.0)
Current other financial liabilities relate to outstanding liabilities of £60.0m (2011: £50.0m) arising under an irrevocable close period buyback agreement for the
purchase of the Company’s own shares which was outstanding at 30 September. The fair value has been calculated based on the value of the contractual legal
agreement with Deutsche Bank AG, which is also equal to the book value. Refer to note 18.1 for further details of the buyback.
Non-current other financial liabilities relate to a put and call arrangement to acquire the remaining non-controlling interest’s 25% share in Folhamatic in Brazil
during 2015. The liability is estimated at £71.0m (2011: £nil), which is £68.3m (2011: £nil) after discounting to present value of the estimated redemption amount.
The redemption amount is calculated based on a multiple of expected EBITDA for the year ending 31 December 2014.
The present value of the estimated redemption amount was initially recognised at £68.0m (2011: £nil), movements on charging the discount of £0.3m (2011: £nil)
have been recognised within finance costs.
13.6 Sensitivity analysis
Financial instruments affected by market risks include borrowings and deposits.
The following analysis, required by IFRS 7, “Financial Instruments: Disclosures”, is intended to illustrate the sensitivity to changes in market variables, being
Sterling, US Dollar and Euro interest rates, and Sterling/US Dollar and Sterling/Euro exchange rates.
The sensitivity analysis assumes reasonable movements in foreign exchange and interest rates before the effect of tax. The Group considers a reasonable
interest rate movement in LIBOR to be 1%, based on interest rate history. Similarly, sensitivity to movements in Sterling/US Dollar and Sterling/Euro exchange
rates of 10% are shown reflecting changes of reasonable proportion in the context of movement in those currency pairs over the last year.
Using the above assumptions, the following table shows the illustrative effect on the Consolidated income statement and equity.
2012 2011
Income
(losses)/gains
£m
Equity
(losses)/gains
£m
Income
(losses)/gains
£m
Equity
(losses)/gains
£m
1% increase in market interest rates (1.9) (1.9) (2.0) (2.0)
1% decrease in market interest rates 1.9 1.9 2.0 2.0
10% strengthening of Sterling versus the US Dollar (5.4) (41.6) (5.1) (62.4)
10% strengthening of Sterling versus the Euro (6.0) (26.1) (7.4) (31.6)
10% weakening of Sterling versus the US Dollar 5.9 45.8 5.6 68.7
10% weakening of Sterling versus the Euro 6.6 28.7 8.1 34.8
13.7 The minimum lease payments under finance leases fall due as follows:
2012
£m
2011
£m
In less than one year 1.3 1.0
In more than one year but not more than five years 1.7 2.6
3.0 3.6
Future finance charges on finance leases (0.2) (0.3)
Present value of finance lease liabilities 2.8 3.3
Financial statements
109
The Sage Group plc | Annual Report & Accounts 2012