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Notes to the Consolidated Financial Statements

19. Trade and other receivables

All figures in millions 2007 2006
Trade receivables 750 768
Royalty advances 84 91
Prepayments and accrued income 48 34
Other receivables 59 58
Receivables from related parties 5 2
946 953
Royalty advances 68 80
Prepayments and accrued income 4 4
Other receivables 57 40
129 124

Trade receivables are stated at fair value, net of provisions for bad and doubtful debts and anticipated future sales returns. The movements on the provision for bad and doubtful debts are as follows:

All figures in millions 2007 2006
At beginning of year (46) (45)
Exchange differences (1) 3
Income statement movements (19) (23)
Utilised 15 21
Acquisition through business combination (3) (2)
Disposal through business disposal 2
At end of year (52) (46)

Concentrations of credit risk with respect to trade receivables are limited due to the Group’s large number of customers, who are internationally dispersed.

The ageing of the Group’s trade receivables is as follows:

All figures in millions 2007 2006
Within due date 811 810
Up to three months past due date 161 177
Three to six months past due date 43 62
Six to nine months past due date 7 6
Nine to 12 months past due date 13 8
More that 12 months past due date 4 1
Total trade receivables 1,039 1,064
Less: provision for sales returns (281) (243)
Transfer to non-current assets held for sale (8) (53)
Net trade receivables 750 768

The Group’s provision for bad and doubtful debts is specific to individual debts identified during the bad debt review process. Consequently the ageing analysis above is presented after deducting the associated specific bad debt provision. The Group reviews its bad debt provision at least twice a year following a detailed review of receivable balances and historic payment profiles. Management believe all the remaining receivable balances are fully recoverable.

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