22  Financial instruments

The Group’s financial instruments comprise; cash and cash equivalents, finance leases, borrowings and various trade and other receivables and trade and other payables that arise directly from its operations. The Group’s policies and additional disclosures relating to the management of foreign exchange, credit, cashflow and liquidity and pricing risk are set out in note 3. Trade and other receivables and trade and other payables have been excluded from all of the following disclosures other than currency risk disclosures.

The Group had the following financial instruments at 30 June each year:

Assets

Liabilities

2009

£’000

2008

£’000

2009

£’000

2008

£’000

Other non-current assets

89

317

–

–

Cash and cash equivalents

88

1,052

–

–

Bank overdraft

–

–

1,685

1,406

Trade and other receivables

8,765

13,185

–

–

Trade and other payables

–

–

9,077

11,240

Other non-current liabilities

–

–

239

–

Borrowings – Finance leases

–

–

126

336

Borrowings – Bank loans

–

–

5,679

5,372

Borrowings – Other

–

–

845

134

8,942

14,554

17,651

18,488

Interest rate risk

Fixed and floating rate instant access deposits earned interest at prevailing bank rates as set out below.

Interest rate risk profile

2009

2008

Financial assets

Fixed

£’000

Floating

£’000

Fixed

£’000

Floating

£’000

Cash

GBP

–

15

–

1

Cash

Euro

–

65

–

1,022

Cash

US$

–

–

–

26

Cash

SEK

2

6

–

3

2

86

–

1,052

Fixed rate

The weighted average interest rate on fixed rate financial assets is 0% (2008: nil).

Floating rate

The weighted average interest rate on floating rate financial assets is stated in the table below:

2009 Weighted

average rate

2008 Weighted

average rate

Sterling

–

2.5%

Euro

0.2%

1.3%

US dollars

–

1.7%

2009

2008

Financial liabilities

Fixed

£’000

Floating

£’000

Fixed

£’000

Floating

£’000

Bank overdraft

Euro

–

1,340

–

1,406

Bank overdraft

GBP

–

345

–

–

Borrowings – Finance leases

Euro

88

–

132

–

Borrowings – Finance leases

GBP

38

–

204

–

Borrowings – loans

Euro

3,688

1,991

3,044

2,462

Borrowings – other loans

GBP

492

236

–

–

Borrowings – other loans

Euro

62

55

–

–

4,368

3,967

3,380

3,868

Floating rate

The interest rates on floating rate financial liabilities are stated in the table below:

2009

Interest rate

2008

Interest rate

Euro – bank overdrafts and loans

8.6%

7.0%

Sterling – bank overdrafts and loans

10.9%

–

Euro – other loans

8.3%

–

Sterling – other loans

8.3%

–

Fixed rate

The interest rates on fixed rate financial liabilities are stated in the table below:

2009

Interest rate

2008

Interest rate

Sterling – Finance leases

7.4%-14.8%

10.3%-17.9%

Euro – Finance leases

10.0%

5.0%-14.2%

Euro – loans

6.0%

6.0%

Euro – other loans

0.0%

–

Sterling – other loans

8.0%

–

Trade and other receivables, trade and other payables and other non-current liabilities are not interest bearing.

In accordance with IAS 39 ‘Financial instruments: Recognition and measurement’ the Group has reviewed all contacts for embedded derivatives that are required to be separately accounted for. There were no such derivatives at 30 June 2009 or 30 June 2008.

The Directors consider that the fair value of the Group’s financial instruments do not differ significantly from their book values, other than bank loans, as set out in note 20.

Foreign currency exposure

At 30 June 2009 the Group’s operating companies have financial instrument assets of £2,039,000 (2008: £2,642,000) and financial instruments liabilities of £489,000 (2008: £376,000) denominated in US dollars, financial instrument assets of £6,765,000 (2008: £12,230,000) and financial instrument liabilities of £14,007,000 (2008: £14,852,000) denominated in Euros.

Company

The Company had the following financial instruments at 30 June each year:

Assets

Liabilities

2009

£’000

2008

£’000

2009

£’000

2008

£’000

Cash and cash equivalents

17

–

–

–

Bank overdraft

–

–

108

383

Trade and other payables

–

–

791

685

Other non-current liabilities

–

–

–

547

Borrowings – Bank loans

–

–

1,961

1,596

Borrowings – Other loans

–

–

728

–

17

–

3,588

3,024

Bank overdrafts and loans are subject to floating rates of interest. The weighted average interest rate on bank overdrafts and loans was 6.4% (2008: 6.0%). There was no interest in the year due to the net overdraft position throughout the year (2008: weighted average interest rate of 2.5%).

Other loans are subject to fixed and floating rates of interest. £492,000 is subject to fixed rate of interest at 8%, and the remaining £236,000 is subject to a floating rate of 5% above the Barclays base rate, and the weighted average interest rate on these floating rate financial liabilities is 10.2%.

Trade and other payables and other non-current liabilities are non-interest bearing.

Foreign currency exposure

At 30 June 2009 the Company had financial instrument assets of £nil (2008: £nil) and financial instruments liabilities of £1,961,000 (2008: £2,351,000) denominated in Euros.