Annual Report and Accounts 2006 - Notes To The Financial Statements
Notes to the financial statements (continued)
18 FINANCIAL INSTRUMENTS
Liquidity risk
The Group maintains sufficient liquid resources in its operating currencies to meet its immediate working capital needs. Liquid resources are deposited with mainstream authorised banks or institutions with an equivalent level of prudential supervision. Cash deposits generally have a maturity of three months or less.
Credit risk
The Group is exposed to credit risk through its customer loans. The Group manages this risk by the verification of customer's identity, confirmation of an acceptable credit history and daily reviews of the outstanding loan porfolio supported by procedures to monitor and manage the repayment process which include the use of reputable and well-established credit collection agencies.
Currency risk
The Group currently operates only within countries which either use its functional currency or whose currency is currently pegged to that currency. Foreign exchange risk is managed by ensuring any non-Euro cash receipts or payments are converted to Euros promptly.
Interest rate risk
The Group is exposed to interest rate risk primarily from its cash deposits which, because of their short maturities, earn interest on what is effectively a floating rate basis. Short-term borrowings are also arranged on a floating rate basis when required.
19 SUBSEQUENT EVENTS
On 4 January 2007 the Company re-registered as a public limited company with the name Mobile Credit Baltic Plc. On 10 January 2007 the Company issued 2,532,329 shares, raising €4.3m (net of expenses), and its shares were admitted to trading on the AIM market.
