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IMI plc
What you will find in this section
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result.
Liabilities relating to the Group’s financing activities are addressed in Section 4. Deferred tax assets and liabilities
are shown in Section 2.4.7. On the following pages there are sections covering working capital, non-current assets,
acquisitions, other payables due after more than one year, provisions and pensions.
3.1
Working capital
Working capital represents the assets and liabilities the Group generates
through its trading activities. The Group therefore defines working capital
as trade and other receivables, inventory and trade and other payables.
Working capital is managed very carefully to ensure that the Group can
meet its trading and financing obligations within its ordinary operating cycle.
To provide the Executive Committee with insight into the management
of working capital, an important measure monitored is cash conversion.
Cash conversion is defined as the operating cash flow (as defined in the
commentary on the cash flow statement) divided by the segmental operating
profit which therefore represents the proportion of segmental operating profit
generated during the year that has been converted into cash.
3.1.1
Trade and other receivables
2014
2013
£m
£m
Current
Trade receivables
318.0
293.5
Other receivables
34.8
33.0
Prepayments and accrued income
16.1
18.8
368.9
345.3
Receivables are stated after:
Allowance for impairment
7.1
8.1
The Group’s exposure to credit and market risks related to trade and other
receivables is disclosed in section 4.4.
3.1.2
Inventories
2014
2013
£m
£m
Raw materials and consumables
87.0
85.3
Work in progress
71.9
86.4
Finished goods
67.4
73.8
226.3
245.5
In 2014 the cost of inventories recognised as an expense within segmental
cost of sales amounted to £919.9m (2013: £948.8m). In 2014 the write-down
of inventories to net realisable value amounted to £7.9m (2013: £7.1m).
The reversal of write-downs amounted to £3.9m (2013: £2.1m). Write-downs
and reversals in both years relate to on-going assessments of inventory
obsolescence, excess inventory holding and inventory resale values across
all of the Group’s businesses.
3.1.3
Trade and other payables
2014
2013
£m
£m
Current
Trade payables
164.4
187.5
Social security and other taxation
26.1
23.1
Other payables
7.5
7.9
Accruals and deferred income
135.9
137.1
333.9
355.6
SECTION 3 – OPERATING ASSETS AND LIABILITIES
