Airtel 2012 Annual Report Download - page 224

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BHARTI AIRTEL ANNUAL REPORT 2011-12
1) Trade receivables
Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control
relating to customer credit risk management. Trade receivables are non-interest bearing and are generally on 14-day to
30-day terms except in case of balances due from trade receivables in Airtel Business Segment which are generally on
credit terms upto 60 days. Credit limits are established for all customers based on internal rating criteria. Outstanding
customer receivables are regularly monitored. The Group and its joint venture has no concentration of credit risk as the
customer base is widely distributed both economically and geographically. The ageing analysis of trade receivables as of
the reporting date is as follows:
Particulars Neither past due
nor impaired Less Than 30 to 60 60 to 90 Above Total
(including unbilled) 30 days days days 90 days
Trade Receivables March 31, 2012 21,018 13,354 5,751 3,746 11,273 55,142
Trade Receivables March 31, 2011 20,034 10,977 6,609 3,929 5,069 46,618
The requirement for impairment is analyzed at each reporting date. Additionally, a large number of minor receivables is
grouped into homogenous groups and assessed for impairment collectively. Refer note 20 for details on the impairment of
trade receivables.
2) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by Group’s treasury in accordance with the
Board approved policy. Investments of surplus funds are made only with approved counterparties who meet the minimum
threshold requirements under the counterparty risk assessment process. The Group monitors ratings, credit spreads and
financial strength on at least a quarterly basis. Based on its on-going assessment of counterparty risk, the Group adjusts
its exposure to various counterparties. The Group’s and its joint ventures’ maximum exposure to credit risk for the
components of the statement of financial position as of March 31, 2012 and March 31, 2011 is the carrying amounts as
disclosed in Note 32 except for financial guarantees. The Group’s and its joint ventures’ maximum exposure for financial
guarantees is given in Note 35.
• Liquidity risk
The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
overdrafts, bank loans and debentures as also keeps a constant effort to continue to diversify its sources of financing
including bilateral financing or market based, both in loan and bond markets.
The table below summarizes the maturity profile of the Group’s and its joint ventures’ financial liabilities based on
contractual undiscounted payments:-
Past due but not impaired
(``
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` Millions)
Particulars As of March 31, 2012
Carrying On Less than 6 to 12 1 to 2 > 2 years Total
amount Demand 6 months months years
Interest bearing borrowings* 690,232 512 102,142 118,513 105,955 455,481 782,603
Financial derivatives 567 - 82 84 80 321 567
Other liabilities 23,076 - - - 10,893 12,183 23,076
Trade and other payables 232,650 - 232,650 - - - 232,650
946,525 512 334,874 118,597 116,928 467,985 1,038,896
(``
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` Millions)