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130
Notes to the consolidated financial
statements, REC Group
REC Annual Report 2011
Analysis of aging of receivables at December 31, 2011
AGING OF RECEIVABLES THAT ARE NOT IMPAIRED
PAST DUE
(NOK INMILLION)
TOTAL CARRYING
AMOUNT
NOT DUE < 30 DAYS >30<90 DAYS >90<365 DAYS >365 DAYS
IMPAIRED
Trade receivables and accrued revenues
2 145
1 657
254
157
66
2
9
Provision for loss on trade recivables
-9
0
0
0
0
0
-9
Other non-current and current receivables
1 131
1 128
0
2
0
0
0
Finance receivables and short-term loans
165
165
0
0
0
0
0
Total
3 432
2 951
255
158
66
2
0
Analysis of aging of receivables at December 31, 2010
AGING OF RECEIVABLES THAT ARE NOT IMPAIRED
PAST DUE
(NOK INMILLION)
TOTAL CARRYING
AMOUNT
NOT DUE
< 30 DAYS >30<90 DAYS >90<365 DAYS >365 DAYS
IMPAIRED
Trade receivables and accrued revenues
2 412
1 900
234
40
0
0
240
Provision for loss on trade recivables
-102
0
0
0
0
0
-102
Other non-current and current receivables
1 277
1 277
0
0
0
0
0
Finance receivables and short-term loans
215
215
0
0
0
0
0
Total
3 803
3 392
235
40
0
0
138
Approximately 40 percent of trade receivables not due and
approximately 30 percent of trade receivables overdue were
secured by bank guarantees, letters of credits, prepayments,
credit insurance or pledge of assets at December 31, 2011.
Approximately 21 percent of trade receivables not due, 17 percent
of trade receivables overdue and 90 percent of trade receivables
regarded as impaired were secured by bank guarantees or
prepayments at December 31, 2010. RECWafer had at December
31, 2010 requested the bank to draw on a bank guarantee for the
largest receivable regarded as impaired. This customer had
disputed REC’s right to draw on the bank guarantee and REC had
at December 31, 2010 not received payment under the guarantee.
In 2011, RECWafer settled the dispute with this customer. See
note 12 and 31 for more information.
In some cases REC is involved in legal proceedings with its customers.
Any legal proceedings in relation to the contracts and bank
guarantees encounter procedural risk andmay take time to resolve.
NOK 1.016million of other non-current and current receivables at
December 31, 2011 (NOK 1,185million at December 31, 2010)
are receivables for VAT and other taxes (not income taxes, as these
are not included here as financial assets) and government grants.
These are regarded to have a low credit risk.
Finance receivables and short-term loans at December 31, 2011
and 2010 are primarily unsecured loans to a vendor of RECWafer
(NOK 90million in 2011 and NOK 112million in 2010). REC has
significant committed future purchase, financial and operating
lease contracts with this vendor. The loans and receivables should
be regarded as a part of the total contractual agreements, and the
credit risk should be evaluated in this context. It also includes
municipality bonds in Moses Lake, Washington (NOK 75million in
2011 and NOK 80million in 2010) that are serviced by property tax
payments by REC Silicon and in 2010 a receivable on a customer in
the REC Systems business in Europe (NOK 23million), secured by
shares in the company that owns the relevant PV system.
Derivative counterparties and cash transactions are limited to high-
credit-quality financial institutions (see note 3). Positive values in
embedded derivatives relate to contractually committed future
sales of wafers. Parts of these long term contracts are secured by
bank guarantees from high-credit-quality banks and/or
prepayments. REC had insignificant positive fair values in
embedded derivatives at December 31, 2011 and 2010.
SENSITIVITIES
Convertible EUR bond – sensitivity to changes
in REC ASA share price
At December 31, 2011 it is estimated that a ten percent increase
(decrease) in REC ASA’s share price will not change the estimated
fair value of the convertible bond.
At December 31, 2010 it is estimated that a ten percent increase
(decrease) in REC ASA’s share price will change the estimated fair
value of the convertible bond with an effect to profit or loss by
NOK -26 (19) million.
The currency and interest rate sensitivities related to the
convertible bond are included in the calculations below.
Interest rate sensitivity
Interest bearing assets and liabilities are accounted for at
amortized cost, except for derivatives, the EUR convertible bond
and the fair value component with regards to changes in discount
interest rates in the Norwegian bonds REC01 and REC03.