Annual Report Uniphar_Accounts_2016 | Page 88

Notes to the Financial Statements Notes to the Financial Statements continued continued 32 Financial instruments - continued 32 Financial instruments - continued Trade receivables Individual receivables which are known to be uncollectible are written off by reducing the carrying amount directly. The other receivables are assessed collectively to determine whether there is objective evidence that an impairment has been incurred but not yet identified. For these receivables the estimated impairment losses are recognised in a separate provision for impairment. The Group considers that there is evidence of impairment if any of the following indicators are present: Fair value measurements using significant unobservable inputs (level 3) The following table presents the changes in level 3 items for the years ended 31 December 2016 and 31 December 2015: Shares in unlisted companies Opening balance 1 January 2015 Additions Derivative financial instruments Total €’000 Shares in retail holding and management companies €’000 €’000 €’000 347 15 (9,151) (8,789) 25 - - 25 - - (275) (275) 372 15 (9,426) (9,039) Additions - - - - Unwinding of discount - - (283) (283) Unwinding of discount Closing balance 31 December 2015 Reclassification on consolidation Disposals Closing balance 31 December 2016 - (15) - (15) (347) - - (347) 25 - (9,709) (9,684) • significant financial difficulties of the receivable; • probability that the receivable will enter bankruptcy or financial reorganisation; and • default or delinquency in payments (more than 30 days overdue). Receivables for which an impairment provision was recognised are written off against the provision when there is no expectation of recovering additional cash. Impairment losses are recognised in the Income Statement within other expenses. Subsequent recoveries of amounts previously written off are credited against other expenses. Movements in the provision for impairment of trade receivables that are assessed for impairment collectively are as follows: At 1 January  The available-for-sale financial instruments comprise investments in unlisted entities. As the fair value for these investments do not have a quoted market price in an active market and fair value cannot be reliably measured, they are measured at cost less provision for impairment. Provision for impairment recognised during the year Acquisitions Receivables written off during the year as uncollectible Unused amount reversed Financial risk management  The Group’s operations expose it to various financial risks. The Group has a risk management programme in place which seeks to limit the impact of these risks on the financial performance of the Group and it is the policy to manage these risks in a non-speculative manner. The Group has exposure to the following risks from its use of financial instruments: credit risk, liquidity risk, currency risk, interest rate risk and price risk. This note presents information about the Group’s exposure to each of the above risks and the Group’s objectives, policies and processes for measuring and managing the risk. Further quantitative disclosures are included throughout this note. At 31 December The Group’s risk management is carried out by a central finance department under policies approved by the Board of directors. Group finance identifies, evaluates and manages financial risks in close co-operation with the Group’s operating units. The Board approves written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. 2015 €’000 4,648 14,215 831 37 2,101 - (470) (4,973) (453) (4,631) 6,657 4,648 2016 €’000 2015 €’000 110,271 91,755 6,555 16,229 840 7,225 The ageing of trade receivables at 31 December 2016 and 2015 was: Not past due Past due: 0 - 30 days 30 - 60 days Credit risk Credit risk arises from credit to customers, loans to customers, loans to IPOS entities, loans to retail holding companies, deferred consideration receivable, as well as cash and cash equivalents including deposits with banks and financial institutions. The Group manages credit risk through the use of credit limits for customers, regular review of ageing and review of customer and bank credit ratings. 2016 €’000 60 days Total past due Total trade receivables 329 8,201 7,724 31,655 117,995 123,410 Provision for impairment in long term receivables is outlined in note 14. 86 | Annual Report 2016 Annual Report 2016 | 87