20. financial instRuments and RisK manaGement continued
20.2 foreign exchange Risk continued
20.2.1 analysis of the Balance sheet by currency continued
A significant proportion of the group's financial assets and liabilities are denominated in euros, which minimises the group's
exposure to foreign exchange risk. management do not consider the impact of possible exchange rate movements based
on current market conditions to be material to the net result for the year.
20.3 interest Rate Risk
the group earns interest from bank deposits. During the year, the group held cash on deposits with a range of maturities
of less than three months. the group had no committed borrowing facilities as at 31 December 2014 (2013: €nil).
management do not consider the impact of possible interest rate movements based on current market conditions to be
material to the net result for the year or the equity position at the year end for either the year ended 31 December 2013 or
31 December 2014.
20.4 credit Risk
the group has seldom any significant concentrations of credit risk with exposure spread over a large number of customers.
the group grants credit facilities to its customers and the maximum exposure to credit risk is represented by the carrying
amount of each financial asset in the balance sheet.
the group has material exposure to credit risk through amounts owed by payment processors (third party collection
agencies) of €22.2 million (2013: €18.3 million) and cash balances held with banking institutions of €17.8 million (2013:
€18.8 million). the group considers the credit risk associated with these balances to be low, having assessed the credit
ratings and financial strength of the counter-parties involved. the group is seeking to diversify its banking deposits to further
reduce credit risk.
no provision for impairment has been made at 31 December 2014 (2013: €nil). no receivable amounts were past due date
at 31 December 2014 (2013: €nil).
20.5 liquidity Risk
At 31 December 2014, the group had cash and cash equivalents of €17.8 million (2013: €18.8 million) and considers liquidity
risk to be low for the business. All financial liabilities at the year-end are due within one year, with the exception of the
deferred consideration on Betboo.
20.6 fair Values
the carrying amounts of the financial assets and liabilities, including deferred consideration in the Balance sheet at
31 December 2014 and 2013 for the group and company are a reasonable approximation of their fair values. All trade and
other receivables and payables have a maturity of less than one year.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three
Levels of a fair value hierarchy. the three Levels are defined based on the observability of significant inputs to the
measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
• Level 3: unobservable inputs for the asset or liability.
ANNUAL REPORT 2014 56
notes to the consolidated financial statements continued
for the year ended 31 december 2014