Peachtree 2015 Annual Report Download - page 142

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The Sage Group plc | Annual Report & Accounts 2015
140
Net debt and capital structure continued
12 Cash flow and net debt continued
12.2 Net debt continued
Analysis of change in net debt (inclusive of finance leases)
At
1 October
2014
£m
Cash flow
£m
Acquisitions
£m
Non-cash
movements
£m
Exchange
movement
£m
At
30 September
2015
£m
Cash and cash equivalents 144.6 89.6 29.6 – (0.4) 263.4
Bank overdrafts (0.9) 0.9 – – – –
Cash, cash equivalents and bank overdrafts 143.7 90.5 29.6 – (0.4) 263.4
Finance leases due within one year (1.1) 0.5 – – – (0.6)
Loans due within one year (123.4) 157.1 (22.2) (33.6) (10.9) (33.0)
Loans due after more than one year (415.4) (162.9) – 33.6 (26.3) (571.0)
Finance leases due after more than one year (0.4) – – – – (0.4)
Cash held on behalf of customers (40.6) (12.5) (28.7) – (2.0) (83.8)
Total (437.2) 72.7 (21.3) – (39.6) (425.4)
Included in cash above is £83.8m (2014: £40.6) relating to cash held on behalf of customers. This arises as a consequence of providing
payment transaction processing and electronic fund transfer services. The balance represents cash in transit from third parties to Sage
Customers. Accordingly, a liability for the same amount is included in trade and other payables on the balance sheet and is classified
within net debt.
12.3 Cash and cash equivalents (excluding bank overdrafts)
Accounting policy
For the purpose of preparation of the Consolidated statement of cash flows and the Consolidated balance sheet, cash and cash
equivalents include cash at bank and in hand and short-term deposits with an original maturity period of three months or less. Bank
overdrafts that are an integral part of a subsidiary’s cash management are included in cash and cash equivalents where they have
a legal right of set-off and there is an intention to settle net, against positive cash balances, otherwise bank overdrafts are classified
as borrowings.
2015
£m
2014
£m
Cash at bank and in hand 179.6 103.6
Cash held on behalf of customers 83.8 40.6
Short-term bank deposits –0.4
263.4 144.6
In line with contractual obligations or company practice, cash held on behalf of customers is held in separate bank accounts by the Group
until such time as these amounts are paid.
The credit risk on liquid funds is considered to be low, as the Board-approved Group treasury policy limits the value that can be invested with
each approved counterparty to minimise the risk of loss. The Group policy is to place cash and cash equivalents with counterparties which
are well established banks with high credit ratings where available. In some jurisdictions there is limited availability of such counterparties.
At 30 September 2015, 83% of the cash and cash equivalents balance was deposited with financial institutions rated at least A3 by Moody’s
Investors Service. The investment instruments utilised are money market funds, money market term deposits and bank deposits.