Governance
Financial Statements
Additional Information
Strategic Report
25. Risk management / Continued The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group’s maximum exposure to credit risk. The Board continues to monitor the Group’s overall exposure to credit risk. The Group has a panel of banks with which it makes deposits, based on credit ratings assigned by international credit rating agencies and with set counterparty limits that are reviewed regularly. The Group’s main cash balances are held with National Westminster Bank Plc (NatWest), Nationwide International Limited (Nationwide), Santander plc (Santander) and Lloyds Bank Plc (Lloyds). Insolvency or resolution of the bank holding cash balances may cause the Group’s recovery of cash held by them to be delayed or limited. The Group manages its risk by monitoring the credit quality of its bankers on an ongoing basis. NatWest, Nationwide, Santander and Lloyds are rated by all the major rating agencies. If the credit quality of any of these banks were to deteriorate, the Group would look to move the relevant short-term deposits or cash to another bank. Procedures exist to ensure that cash balances are split between banks to reduce overall exposure to credit risk. At 31 March 2024 and at 31 March 2023, Standard & Poor’s short-term credit rating for each of the Group’s bankers was A-1. There has been no change in the fair values of cash or receivables as a result of changes in credit risk in the current or prior periods, due to the actions taken to mitigate this risk, as stated above. Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board, which has put in place 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’s liquidity risk is managed on an ongoing basis by senior management and monitored on a quarterly basis by the Board by maintaining adequate reserves and loan facilities, continuously monitoring forecasts, loan maturity profiles and actual cash flows and matching the maturity profiles of financial assets and liabilities for a period of at least 12 months. The table below has been drawn up based on the undiscounted contractual maturities of the financial assets/(liabilities), including interest that will accrue to maturity.
Less than 1 year £000 20,366 7,349 (185) (9,262) (1,117) (10,760) Less than 1 year £000 20,652 4,023
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2024
– –
– –
20,366 7,349 (9,637)
Cash and cash equivalents
Debtors
(740)
(8,712)
Obligations under head leases Fixed interest rate loans Floating interest rate loans Creditors and accruals
(37,049) (224,367) (270,678)
(16,571)
– –
(17,688)
– (10,760) 6,391 (54,360) (233,079) (281,048)
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2023
Cash and cash equivalents
– –
– –
20,652 4,023 (9,823)
Debtors
Obligations under head leases Fixed interest rate loans Floating interest rate loans Creditors and accruals
(185) (9,262) (690) (9,035)
(740)
(8,898)
(37,049) (233,629) (279,940)
(12,696)
– –
(13,386)
– (9,035) 5,503 (50,485) (242,527) (287,509)
The Group expects to meet its financial liabilities through the various available liquidity sources, including a secure rental income profile, asset sales, undrawn committed borrowing facilities and, in the longer-term, debt refinancing.
Picton Property Income Limited / Annual Report 2024
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