Annual Report 2011 - T-Hrvatski Telekom
Annual Report 2011 - T-Hrvatski Telekom
Annual Report 2011 - T-Hrvatski Telekom
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117<br />
29 Financial risk management objectives<br />
and policies<br />
The Group is exposed to international service-based<br />
markets. As a result, the Group can be affected by<br />
changes in foreign exchange rates. The Group also<br />
extends credit terms to its customers and is exposed<br />
to a risk of default. The significant risks, together<br />
with the methods used to manage these risks, are<br />
described below. The Group does not use derivative<br />
instruments either to manage risk or for speculative<br />
purposes.<br />
a) Credit risk<br />
The Group has no significant concentration of<br />
credit risk with any single counter party or group of<br />
counterparties with similar characteristics. The Group<br />
procedures are in force to ensure on a permanent<br />
basis that sales are made to customers with an<br />
appropriate credit history and do not exceed an<br />
acceptable credit exposure limit.<br />
The Group does not guarantee obligations of other<br />
parties.<br />
The Group considers that its maximum exposure<br />
is reflected by the amount of debtors (see Note 16)<br />
net of provisions for impairment recognized at the<br />
statement of financial position date.<br />
Additionally, the Group is exposed to risk through<br />
cash deposits in the banks. As at 31 December <strong>2011</strong><br />
the Group had business transactions with thirteen<br />
banks (2010: eight banks). The Group held cash and<br />
deposits in five banks almost exclusively. For those<br />
five domestic banks with foreign ownership the Group<br />
received guarantees for deposits given from parent<br />
banks which have a minimum rating of BBB+. The<br />
management of this risk is focused on dealing with<br />
the most reputable banks in foreign and domestic<br />
ownership at the domestic and foreign markets and<br />
on contacts with the banks on a daily basis.<br />
The credit quality of financial assets that are neither<br />
past due nor impaired can be assessed by historical<br />
information about counterparty default rates:<br />
Consolidated financial statements<br />
Trade receivables for rendered telecom services to domestic customers<br />
Trade receivables for rendered telecom services to foreign customers<br />
Other trade receivables<br />
31 December<br />
<strong>2011</strong><br />
HRK millions<br />
775<br />
30<br />
91<br />
896<br />
31 December<br />
2010<br />
HRK millions<br />
794<br />
20<br />
69<br />
883