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Financial Statements
94 ITE Group plc Annual Report and Accounts 2012
21 Financial instruments continued
Ageing profile of trade receivables
Show start date Contract terms
2012
£000
2011
£000
2012
£000
2011
£000
Not past due 34,392 32,164 15,881 17,695
Past due 1–30 days 1,666 2,687 10,419 11,394
Past due 31–60 days 62 61 4,421 2,490
Past due 61–90 days 7 20 1,828 1,439
Past due 91–120 days 108 12 2,231 1,213
Past due more than 120 days 424 355 1,879 1,068
36,659 35,299 36,659 35,299
Management review debtors ageing on a contractual basis and also based on when an event has been held. The Group
raise invoices on events using stage payments. Any overdue amounts, after the stage payment due date, are reviewed
and chased. Management also review the debts due based on when an event has taken place, as this is typically when
the service is provided. Both measures are included in the table above as both are used by management to manage
outstanding debts.
The trade receivables amounts presented in the Balance Sheet are net of allowances for doubtful receivables, estimated by
the Group’s management based on prior experience, specific credit issues and their assessment of the current economic
environment. Trade receivables consist of a large number of customers spread across diverse industries and geographical
areas and the Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the Group’s customer base, including default risk of the industry and country, in which the customers
operate, has less of an influence on credit risk.
The Group establishes an allowance for doubtful debts that represents its estimate of incurred losses in respect of trade
receivables when there is objective evidence that the debt will not be collected in full. The allowance is recognised and
measured as the difference between the asset’s carrying amount and the present value of future cash flows. Where
material, it is discounted at the effective interest rate computed at initial recognition. The main component of this
allowance is a specific loss component that relates to individually significant exposure on shows which have taken place
but the debt has not been collected in full. This allowance is determined by reference to the specific circumstances of
each show and past experience.
The details of the movement in the allowance for doubtful receivables are shown below.
Allowance for doubtful receivables
2012
£000
2011
£000
At 1 October 660 500
Allowances made in the period 368 173
Amounts used and reversal of unused amounts (553) (13)
475 660
Ageing of impaired receivables
2012
£000
2011
£000
Past due 0–3 months 139 92
Past due 3–6 months 74 90
Past due more than 6 months 262 478
475 660
An allowance for doubtful receivables relating to venue loans of £0.3 million is held (2011: £0.5 million). During the period
£0.2 million was released (2011: £nil). No additional allowances were made in the period.
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due. Such risk may result from
inadequate market depth or disruption or refinancing problems. Ultimate responsibility for liquidity risk management rests
with the Board of Directors. They have built an appropriate liquidity risk management framework for the management of
the Group’s short, medium and long-term funding and liquidity management requirements.
The Group manages liquidity risk by ensuring continuity of funding for operational needs through cash deposits and debt
facilities as appropriate.
Notes to the consolidated accounts continued
For the year ended 30 September 2012