Good Health Can’t Wait.

Consolidated Financial Statements
Annual Report 2014 - 15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)
2.37: FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company’s primary risk management
focus is to minimize potential adverse effects of market risk on its financial performance. The Company’s risk management assessment and policies and
processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and
compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and
the Company’s activities. The Board of Directors and the Audit Committee is responsible for overseeing Company’s risk assessment and management
policies and processes.
a. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
and arises principally from the Company’s receivables from customers. Credit risk is managed through credit approvals, establishing credit limits and
continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The Company
establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables.
Trade receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including
the default risk of the industry and country, in which the customer operates, also has an influence on credit risk assessment. As at 31 March 2015 and
31 March 2014, the maximum exposure to credit risk in relation to trade receivables is `41,012 and ` 33,253 respectively (net of allowances).
Trade receivables that are neither past due nor impaired
Trade receivables amounting to ` 33,473 and ` 24,422 were neither past due nor impaired as at 31 March 2015 and 31 March 2014, respectively.
Trade receivables that are past due but not impaired
The Company’s credit period for customers generally ranges from 20 – 180 days. The age analysis of the trade receivables has been considered from the
due date of the invoice. The ageing of trade receivables that are past due, but not impaired, is given below:
PERIOD (IN DAYS)
AS AT
31 MARCH 2015
AS AT
31 MARCH 2014
0 – 90 6,232 7,716
91 – 180 773 876
More than 180 535 239
Total 7,539 8,831
Trade receivables that are impaired
The age analysis of the trade receivables that are impaired is given below:
PERIOD (IN DAYS)
AS AT
31 MARCH 2015
AS AT
31 MARCH 2014
0 –90 - -
91 – 180 - -
More than 180 667 690
Total 667 690
Reconciliation of the allowance account for credit losses
The details of changes in provision for bad debts during the year ended 31 March 2015 and 31 March 2014 are as follows:
PARTICULARS 2014-15 2013-14
Balance as at 1 April 690 582
Provision made during the year 168 168
Trade receivables written off and exchange differences (191) (60)
Balance as at 31 March 667 690
215