Annual report - Viscofan

19. Trade payables, Other Payables and Other Current LiabilitiesDetails of trade and other payables are as followsThousands of Euros2006 2005Trade payables 44,281 35,583Other current liabilitiesSalaries payable 9,414 5,303Public entities 8,229 5,950Other payables 9,954 7,39127,597 18,644Other payables mainly comprise fixed asset suppliers.20. Risk Management20.1 Financial risksThe Group’s activities are exposed to various financial risks: market risk (including exchange rate risk, fair value interest raterisk and price risk), credit risk, liquidity risk, and interest rate risk in cash flows. The Group’s global risk management programmefocuses on the uncertainty of financial markets and aims to minimise the potential adverse effects on the Group’s profitability.Certain risks are hedged by derivative instruments.Risk is managed by the Group in accordance with policies approved by the board of directors.(a) Market risks• Exchange rate risksAs the Group operates internationally, it is exposed to variations in exchange rates, particularly the US Dollar. Theexchange rate risk arises from future commercial transactions, recognised assets and liabilities and net investmentsabroad.Group entities use forward currency contracts negotiated with the Treasury Department of several Groupcompanies to control exchange rate risks which arise from future commercial transactions, recognised assets andliabilities. Exchange rate risks arise where future commercial transactions, recognised assets and liabilities aredenominated in a currency which is not the functional currency of the Company.The risk management policy of the Group is to cover the net balance between collections and payments incurrencies other than the functional currency through short-term currency contracts (of approximately 2 months).113