RWS AR 23 Final Single pages - Flipbook - Page 143
Provisions for future severance liabilities, totalling £6.8m have arisen from redundancies to be incurred as part of the Group's
continuing transformation and cost reduction programmes. These amounts have been recorded in accordance with the criteria
de昀椀ned in IAS37 and are expected to be settled within the next 12 months.
Included within Other Provisions are the following:
£4.3m related to recognition of an ongoing historic agreement with the former owners of the business and their respective
families. This expense was previously recognised as incurred. The Directors have concluded that it is appropriate to recognise a
provision for the future liability, in the current period. No restatement is required as it is not considered material to prior periods.
£1.2m related to long term employment bene昀椀ts in certain countries the Group operates in. This amount includes £1.0m for TFR
severance liabilities required under article 2120 of the Italian Civil Code. This provision has been valued in accordance with the
requirements of IAS 19 as it represents long term bene昀椀ts payable to employees of the Group’s Italian subsidiary. The timing of the
payment is uncertain at the reporting date.
£0.2m related to legal and other costs that the Group expects to incur over an extended period, in respect of past events for which
a provision has been recorded, none of which are individually material.
20. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
Categories of 昀椀nancial instruments
All 昀椀nancial assets and liabilities, other than derivatives and contingent consideration, are held at amortised cost (“AC”).
All derivatives are classi昀椀ed as fair value through pro昀椀t and loss (“FVTPL”), other than derivatives designated in a cash
昀氀ow hedging relationship.
FVOCI
2023
£m
FVTPL
2022
£m
2023
£m
AC
2022
£m
2023
£m
2022
£m
Financial Assets
Trade and other receivables
-
-
-
-
197.3
207.4
Cash and cash equivalents
-
-
-
-
76.2
101.2
-
-
-
-
273.5
308.6
Financial Liabilities
Loans
-
-
-
-
52.6
29.3
Trade and other payables
-
-
-
-
97.7
112.1
Lease liabilities
-
-
-
-
33.5
46.7
Foreign exchange derivatives
-
0.6
-
-
-
-
-
0.6
-
-
183.8
188.1
The Group’s foreign exchange derivatives are fair valued using readily available market information so therefore are
Level 2 of the fair value hierarchy. The fair value of contingent consideration is determined through discounting the
expected future cash昀氀ows based on management’s assessment of expected performance against speci昀椀c terms of the
sale and purchase agreement; these are Level 3 of the fair value hierarchy. There have been no transfers between levels
of the fair value hierarchy.
The carrying amount of the Group’s trade and other receivables and accrued income, trade and other payables and
cash and cash equivalents are considered to be a reasonable approximation of their fair value. The fair value of the
Group’s loan at 30 September 2023 is £54.7m (2022: £32.2m), this is as per Level 2 of the fair value hierarchy.
Financial risk management objectives and policies
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and,
whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the e昀昀ective implementation of the objectives and policies to the Group’s CFO.
The overall objective of the Board is to set policies that seek to reduce risk, as far as possible, without unduly a昀昀ecting
the Group’s competitiveness and 昀氀exibility. Group borrowings have a number of 昀椀nancial covenants which are tested
bi-annually. The principal 昀椀nancial risks to which the Group is exposed are those of liquidity, interest rate, credit, foreign
currency and capital. Each of these is managed as set out below.
NOTES TO THE CONSOLIDATED STATEMENTS
RWS Holdings plc — Annual Report 2023
143
