Annual Report and Accounts 2006/7 - CEDA Repository

34 35 Annual Report and Accounts 2006/7
Financial review
Dividend payable
A dividend of £6.7 million is payable to
our Owner, the Ministry of Defence, in
respect of 2006/7 (2005/6 £6.3 million).
Both the 2004/5 and 2005/6 dividends
were paid during the year.
Payment policy
We pay suppliers direct from the Met
Office. Our policy is to pay within
contracted payment terms or, without
specifically agreed terms, within 30 days
of receiving a valid invoice (see Better
Payment Practice Code) or of the delivery
date, if later. In 2006, we paid 99.55% of
our bills on time (2005/06, 99.48%).
Treasury policy
Certain payments to international bodies
in respect of international subscriptions
and contribution to satellite programmes
are paid in foreign currency. To manage
the foreign exchange risk the Met Office
policy is to buy forward foreign currency
to meet these payments in accordance
with anticipated payment profile. The
Met Office follows Treasury rules by
investing all surplus funds on deposit
with the UK Debt Management Office at
HM Treasury.
The Met Office has limited exposure to
liquidity risk due to loan funding from the
Ministry of Defence.
Further details of our derivatives and
other financial instruments are contained
in note 26 to the Accounts.
Cash flows and liquidity
Cash balances totalled £31.3 million as at
31 March 2007, an increase of £0.6
million when compared to 31 March
2006. Of this balance £1.0m comprised
cash in transit at the year end (2005,
£4.0m). Net cash inflow from operating
activities was £31.3 million (2005,
£35.7 million).
Total debtor balances decreased by
£5.9 million compared to 2005. This was
due largely to the receipt in April 2006 of
the final instalment of sale proceeds
relating to the disposal of our site at
Shinfield Park, Reading, amounting to
£11.7 million. Average debtor days rose
from 40 days at 31 March 2006 to 45 days
at 31 March 2007. Total creditor balances
decreased by £18.8 million compared to
2005. This was largely the result of the
settlement of deferred payments in
respect of international subscriptions,
payments made in respect of finance
leases and dividend.
Disclosure of information to auditors
In accordance with the s234ZA of the
Companies Act 1985:
• so far as the Accounting Officer is
aware, there is no relevant audit
information of which the entity's
auditors are unaware, and
• the Accounting Officer has taken all
the steps that he ought to have taken
to make himself aware of any relevant
audit information and to establish that
the entity's auditors are aware of that
information.