ITF

NOTES (FORMING PART OF THE FINANCIAL STATEMENTS) 69 ITF FINANCIAL STATEMENTS 2013 2012 Carrying Expected 1 year Carrying Expected 1 year amount cash flows or less amount cash flows or less $000 $000 $000 $000 $000 $000 Forward exchange contracts: Assets 1,370 1,370 1,370 371 371 371 Liabilities (91) (91) (91) (109) (109) (109 1,279 1,279 1,279 262 262 262 2013 2012 Carrying Expected 1 year Carrying Expected 1 year amount cash flows or less amount cash flows or less $000 $000 $000 $000 $000 $000 Forward exchange contracts: Assets 1,370 1,370 1,370 371 371 371 Liabilities (91) (91) (91) (109) (109) (109 1,279 1,279 1,279 262 262 262 31. Financial instruments (cont.) (d) Cash flow hedges Cash flow hedges The following table indicates the periods in which the cash flows associated with cash flow hedging instruments are expected to occur: (e) Market risk Financial risk management Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The Group's financial risk management objective is to control the exposure to foreign exchange fluctuations especially in sterling and to a lesser extent the euro and Australian dollar, against the US dollar. Sterling: The Group has entered into forward currency contracts to buy £12,200,000 (2012: £10,240,000) at an average exchange rate of US$1.538/£1 (2012: US$1.588/£1). These contracts mature at various dates throughout 2014 and 2015 to match budgeted sterling expenditure. The fair value of these hedges, based on the mark to market valuations of the contracts at the balance sheet date, using prices on that date to purchase the same forward contracts, was an asset of $1,370,000 (2012: Asset of $371,000) with a corresponding entry in reserves. Euro: The Group entered into forward currency contracts to sell €1,480,000 (2012: €1,425,000) at an average exchange rate of US$/€1.316 (2012: US$1.295/€1). The fair value of these hedges, based on the mark to market valuations of the contracts at the balance sheet date, using prices on that date to purchase the same forward contracts, was a liability of $91,000 (2012: Liability of $34,000) with a corresponding entry in reserves. The following table indicates the periods in which the cash flows associated with cash flow hedging instruments are expected to affect profit or loss: 68 Gross Fair value Gross Fair value 2013 2013 2012 2012 $000 $000 $000 $000 Not past due 6,772 6,772 8,785 8,785 Past due (0-30 days) 207 207 154 154 Past due (31-180 days) 571 571 629 629 More than 180 days 331 331 679 679 7,881 7,881 10,247 10,247 2013 2012 Carrying Contractual 1 year Carrying Contractual 1 year amount cash flows or less amount cash flows or less $000 $000 $000 $000 $000 $000 Non-derivative financial liabilities Trade and other payables* (1, 598) (1, 598) (1,598) (1,888) (1,888) (1,758) Derivative financial liabilities Forward exchange contracts used for hedging: Outflow (20,712) (20,712) (20,712) (15,167) (15,167) (15,167) Inflow 21,991 21,991 21,991 15,429 15,429 15,429 (319) (319) (319) (1,626) (1,626) (1,626) 31. Financial instruments (cont.) (b) Credit risk The group trades only with recognised, creditworthy third parties and its debtor balances are monitored on an ongoing basis with a result that the Group's exposure to bad debts is not significant. The maximum exposure is the carrying amount as disclosed in section (a), above. Based on the contractual conditions trade and other payables are due within one month. Credit quality of financial assets and impairment losses The ageing of trade receivables at the balance sheet date was: (c) Liquidity risk Financial risk management Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group has substantial cash balances and does not require any external funding of its operations. Processes are in place to issue invoices on a timely basis, monitor cash collection closely and chase overdue balances promptly, in order to minimise liquidity risk. This is particularly the case in respect of sponsorship income collection, where the amounts involved can be significant. Liquidity risk: The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements: * Excludes derivatives (shown separately above). ITF FINANCIAL STATEMENTS

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