Telkom AR front.qxp

13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)
13.3 Credit risk management (continued)
The movement in the allowance for impairment in respect of trade receivables during the year is disclosed in note 19.
Telkom Annual Report 2009 183
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
Included in the allowance for doubtful debts are individually impaired receivables with a balance of R49 million (2008: R32 million; 2007:
R49 million) which have been identified as being unable to service their debt obligation. The impairment recognised represents the
difference between the carrying amount of these trade receivables and the present value of the expected liquidation proceeds. The Group
does not hold any collateral over these balances.
During the 2009 year end the Group renegotiated the terms of trade receivables amounting to R1,9 million from a long outstanding
customer. No impairment losses were recognised.
13.4 Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group is exposed to liquidity
risk as a result of uncertain cash flows as well as capital commitments. Liquidity risk is managed by the Group’s various Corporate Finance
divisions in accordance with policies and guidelines formulated by the Group’s executive committees. In terms of its borrowing requirements
the Group ensures that sufficient facilities exist to meet its immediate obligations. In terms of its long-term liquidity risk, the Group maintains
a reasonable balance between the period over which assets generate funds and the period over which the respective assets are funded.
Short-term liquidity gaps may be funded through repurchase agreements and commercial paper bills.
There were no material changes in the exposure to liquidity risk and its objectives, policies and processes for managing and measuring
the risk from the previous period.
The table below summarises the maturity profile of the Group’s financial liabilities based on undiscounted contractual cash flow at the
balance sheet date:
Carrying Contractual 0 – 12 1 – 2 2 – 5 > 5
amount cash flows months years years years
Note Rm Rm Rm Rm Rm Rm
2009
Non-derivative financial liabilities
Finance lease liabilities
Interest-bearing debt (excluding
38 986 1,848 165 172 516 995
finance leases) 28 17,291 18,866 7,670 1,817 5,621 3,758
Trade and other payables 31 5,538 5,778 5,778 – – –
Credit facilities utilised
Derivative financial liabilities
21 127 127 127 – – –
Other financial liabilities 20 228 228 156 72 – –
Interest rate swaps 72 72 – 72 – –
Forward exchange contracts 156 156 156 – – –
24,170 26,847 13,896 2,061 6,137 4,753