|
 |
| Notes forming part of the group financial statements 1 Principal activities and segmental information RTÉ is a not-for-profit organisation whose principal public service activity is the broadcast of a comprehensive range of free-to-air television and radio channels and schedules. These services serve all demographic categories in Irish society with a wide variety of output and genres, irrespective of commercial audience attraction, and with specific emphasis on indigenously produced programmes. RTÉ’s other public service activities include the operation of the RTÉ National Symphony Orchestra, the RTÉ Concert Orchestra and other performing groups and, within its Publishing division, RTÉ provides extensive, free, web-based on-line services broadly aimed at Irish audiences. The annual cost to RTÉ of providing and financing these public service activities is substantially in excess of the amount of public funding received in the form of Licence Fee revenue. Accordingly RTÉ also engages in ancillary commercial activities, primarily within the Republic of Ireland, to support its public service activities. These include the sale of advertising and sponsorship, the publication of the RTÉ Guide, the licensing and/or sale of content, programme related merchandising sales, the rental of production facilities and telecoms/text revenue shares. In addition RTÉ Transmission Network Limited (RTÉNL) operates a national analogue broadcast transmission network within the Republic of Ireland, which it makes available to both local and national broadcasters, including RTÉ’s own services, on an arm’s length basis. RTÉNL also rents surplus tower/mast space to a variety of third party non-broadcast users. RTÉ’s operations and management are organised into six Integrated Business Divisions (IBDs): Television, Radio, News and Current Affairs, Performing Groups, Publishing and Network, together with a Corporate HQ and Central Shared Services. Network IBD is entirely located within RTÉ’s wholly owned and separately managed subsidiary company RTÉ Transmission Network Limited (see above). Corporate HQ consists of general administrative and other activities that arise at the entity level relating to the governance of RTÉ as a Public Service Broadcaster. Central Shared Services encompass activities which are carried out centrally on behalf of the IBDs. Only those costs relating to Central Shared Services activities, and therefore incurred centrally on behalf of the IBDs, are reported at IBD, channel or service level. The cost of the corporate HQ, together with interest charged and interest received are not allocated to IBDs. (In addition, the exceptional building impairment depreciation charge and the gain on the disposal of the Beaumont site in 2004 were not allocated to IBDs). A detailed list of RTÉ’s activities, together with the IBD in which they are carried out and the legal entity in which they are reported, an appreciation of which are necessary to interpret this segmental information, is set out in note 11 to these financial statements. Analysis of revenues, costs and surplus/(deficit) by IBD In the schedules set out at 1(a), commercial revenues are reported in the IBD where they are earned. With the exception of the News and Current Affairs IBD, the reporting of Licence Fee revenue within each IBD is a function of the attribution of it to each individual channel and service (see below). In the case of the News and Current Affairs IBD, all of the costs, with the exception of the value of news output supplied to RTÉ 2fm, are covered by attributed Licence Fee revenue. RTÉNL invoices all IBDs on the basis of a published tariff model, inclusive of margin. The information presented in respect of the Television and News and Current Affairs IBDs includes costs and charges in relation to RTÉ’s statutory obligation to provide programmes to TG4 in accordance with Government policy (see 1(b) below). Analysis of revenues, costs and surplus/(deficit) by channel, service and broadcasting genre and between public service and non-public service activities In the schedules set out at 1(b), costs and commercial revenues are reported within channels, services and broadcasting genres in a manner that is consistent with the same principles used to report IBD revenues and costs. For the purposes of this channel, service and broadcasting genre segment analysis, News and Current Affairs IBD costs are fully allocated to the relevant Television and Radio channels on an appropriate usage basis and in accordance with consistently applied and objectively justified cost accounting principles. With the exception of the allocated costs of news output supplied to RTÉ 2fm, all of the costs of the News and Current Affairs IBD are covered by attributed Licence Fee revenue. Licence Fee revenue is simultaneously attributed to those public service channels and services that have a limited capacity to generate commercial revenue in their own right and therefore are, of necessity, primarily funded by Licence Fee revenue in order to facilitate continued delivery of the public service. The services at issue comprise RTÉ Performing Groups, RTÉ Raidió na Gaeltachta, RTÉ lyric fm and the cost of the support provided to TG4. In 2005, a deficit was reflected in the accounts of Seirbhísí Theilifís na Gaeilge Teoranta. In conformity with the principle of attributing Licence Fee revenue to activities that have a limited capacity to generate commercial revenue in their own right, Licence Fee revenue has been attributed to fund the Group effect of this deficit. No Licence Fee revenue is attributed to RTÉ 2fm as this public service channel generates sufficient commercial revenue to fully cover its costs and to generate a surplus.
with the balance being made up of an attribution of Licence Fee revenue consisting of two elements:
After deduction of the attributions described above, the remaining Licence Fee revenue is attributed as a contribution towards the production costs of indigenous programming on RTÉ’s two public service television channels, RTÉ One and RTÉ Two. The amount attributed to each channel is computed by reference to the proportionate costs of indigenous programming for each channel. No element of Licence Fee revenue is attributed to funding the cost of acquired programmes or to the funding of non-programme public service operating costs incurred by the channels. Licence Fee revenue is not directly attributed to RTÉ Publishing, RTÉ Network, Corporate HQ or to any other non-channel activity or service. Consequently, no element of Licence Fee revenue is attributed to RTÉ’s free, web based, on-line public services, which are currently solely financed by surpluses generated from commercial activities within the Publishing IBD. The residual non-channel and non-service activities are aggregated together under the category “Other” and include RTÉ Network IBD, RTÉ Publishing IBD (excluding “on-line” activities), non channel activities within RTÉ Television or RTÉ Radio IBDs, together with applicable consolidation adjustments. In addition, the schedules set out at 1(b) are re-ordered so that the costs and revenues associated with RTÉ’s various public service and non-public service activities are clearly delineated and separated for reporting purposes. As indicated earlier in this report, because of the cost to RTÉ of providing the full range of public service activities is substantially in excess of the amount of Licence Fee revenue, it is unavoidable that a considerable amount of RTÉ’s public service activity is funded by commercial revenue rather than by public funding. Free, web based, on-line public services are currently financed entirely by commercial revenues generated from other activities within RTÉ Publishing IBD and therefore attract no attribution of Licence Fee revenue. Analysis of TG4 revenues, costs and surplus/(deficit) In 1(c) below, the separate segmental information set out in respect of TG4 reflects both the revenues and costs included in the income and expenditure statement of STnaG itself, combined with those arising in other parts of RTÉ in relation to the supports provided to TG4. This RTÉ support includes the costs and charges arising in relation to the statutory provision of programmes and other services in accordance with Government policy. The costs included in the income and expenditure statement of STnaG, net of advertising and other commercial revenue, are primarily funded on a yearly basis by way of grants-in-aid received directly from the Exchequer and by way of the amortisation of grants-in-aid previously received. The support costs and charges provided to TG4 arising from within other parts of RTÉ, together with the Group effect of the deficit incurred by STnaG in 2005, are funded by attribution of Licence Fee revenue, as referred to earlier.
In 1(d) below, the amounts charged by RTÉNL to each of the RTÉ services (including TG4) are separately identified. Analysis of net assets by IBD In 1(e) below, net assets by IBD are stated after the elimination of inter-company assets and liabilities and any inter-company profit resulting from internal transfers. Included in unallocated net assets are those fixed assets, net current assets and provisions, which cannot be attributed on a meaningful basis between IBDs, together with the net assets of the RTÉ subsidiary company, STnaG, which holds the assets associated with TG4.
(c) Segment Information – TG4
(e) Segmental Net Assets
|
