Annual Reports - RTÃ

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RADIO TELEFÍS ÉIREANN Notes (continued) forming part of the group financial statements 21 Financial instruments (continued) (b) Credit risk (i) Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: Carrying amount Note 2007 2006 €’000 €’000 Forward exchange contracts - 80 Trade receivables 12 64,721 59,238 Cash and cash equivalents 13 16,730 11,870 Liquid investments 14 73,405 69,433 The maximum exposure to credit risk for trade receivables at the reporting date by geographic region was: Carrying amount 2007 2006 €’000 €’000 Ireland 61,000 56,603 United Kingdom 3,660 2,628 Other Regions 61 7 All other financial assets are held with counterparties in Ireland. The maximum exposure to credit risk for trade receivables at the reporting date by type of customer was: Carrying amount 2007 2006 €’000 €’000 Non agency debtors 15,823 13,123 Other debtors - agency 48,898 46,115 Trade receivables 12 64,721 59,238 An agency debtor represents an advertising agent or agency, being a person, firm or company which selects or books advertising space on behalf of the advertiser. The Group’s most significant debtor, an Irish company, accounts for €6.6 million (10%) of the trade receivables carrying amount at 31 December 2007 (2006: €4.9 million). (ii) Impairment losses The aging of trade receivables at the reporting date was: Gross Impairment Gross Impairment 2007 2007 2006 2006 €’000 €’000 €’000 €’000 Not past due 33,201 - 30,752 7 Past due 0-30 days 29,605 - 27,137 132 Past due 31-120 days 1,847 - 1,501 257 More than one year 4,239 4,171 4,209 3,965 68,892 4,171 63,599 4,361 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: 2007 2006 €’000 €’000 Balance at 1 January 4,361 4,463 Impairment loss recognised (81) (165) (Decrease)/increase in bad debt provision (109) 63 Balance at 31 December 4,171 4,361 74 The impairment loss at 31 December 2007 of €4.2 million (2006: €4.4 million) relates primarily to amounts owing from the DSFA in respect of Licence Fee income recognised in 2004. Negotiations have been ongoing since 2005 between DCENR an DSFA to reach agreement on the balance due to RTÉ.
ANNUAL REPORT & GROUP FINANCIAL STATEMENTS 2007 21 Financial instruments (continued) (c) Liquidity risk The following are the contractual maturities of financial liabilities: 31 December 2007 Carrying Contractual 6 mths Amount cash flows or less 6-12 mths €’000 €’000 €’000 €’000 Non-derivative financial liabilities Trade and other payables 70,055 70,055 70,055 - Derivative financial liabilities Forward exchange contracts: Outflow 984 17,193 9,819 7,374 71,039 87,248 79,874 7,374 31 December 2006 Carrying Contractual 6 mths Amount cash flows or less 6-12 mths €’000 €’000 €’000 €’000 Non-derivative financial liabilities Trade and other payables 70,987 70,987 70,987 - Derivative financial liabilities Forward exchange contracts: Outflow 261 11,030 7,127 3,903 71,248 82,017 78,114 3,903 (d) Currency risk (i) Exposure to currency risk The functional currency of all Group entities is euro. Due to the nature of certain aspects of its business, in particular acquired television programmes and rights from overseas, RTÉ is exposed to the effects of fluctuations in foreign currency exchange rates. The currencies that give rise to this risk are dollars and sterling. The group primarily uses forward exchange contracts to hedge its currency risk. Changes in the fair value of forward foreign exchange contracts are recognised in the income statement. The fair value of forward exchange contracts is based on their listed market price. At 31 December 2007 the fair value of forward contracts was €984,000 (2006: €261,000). The following significant exchange rates applied during the year: Average rate Reporting date spot rate 2007 2006 2007 2006 Euro Euro Euro Euro USD 1 1.3082 1.2477 1.4721 1.3170 GBP 1 0.68611 0.6857 0.73335 0.6715 (ii) Sensitivity analysis In managing currency risks, the Group aims to reduce the impact of short term fluctuations on the Group’s earnings. Foreign currency forward purchase contracts are used by the Group to reduce volatility arising from these foreign currency exposures. As a result the Group has no significant exposures to movements in foreign exchange rates. 75
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RADIO TELEFÍS ÉIREANN ANNUAL REPO
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