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Together good things happen - Airtel

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Service Revenues includes access charges passed on to<br />

other operators, and is net of discounts and waivers.<br />

Enterprise Services (Erstwhile Enterprise Services –<br />

Carrier Segment and Enterprise Services - Corporate<br />

Segment)<br />

Revenue, net of discount, from sale of <strong>good</strong>s is recognised<br />

on transfer of all significant risks and rewards to the<br />

customer and when no significant uncertainty exists<br />

regarding realisation of consideration. Revenue on<br />

account of bandwidth service is recognised on time<br />

proportion basis in accordance with the related contracts.<br />

Service Revenues includes access charges passed on to<br />

other operators, revenues from registration, installation<br />

and provision of Internet and Satellite services. Registration<br />

fees is recognised at the time of dispatch and invoicing of<br />

Start up Kits. Installation charges are recognised as revenue<br />

on satisfactory completion of installation of hardware and<br />

service revenue is recognised from the date of satisfactory<br />

installation of equipment and software at the customer site<br />

and provisioning of Internet and Satellite services.<br />

Activation Income<br />

Activation revenue and related direct activation costs, not<br />

exceeding the activation revenue, are deferred and<br />

amortised over the related estimated customer<br />

relationship period, as derived from the estimated<br />

customer churn period.<br />

Investing and other Activities<br />

Income on account of interest and other activities are<br />

recognised on an accrual basis. Dividends are accounted<br />

for when the right to receive the payment is established.<br />

Provision for doubtful debts<br />

The Company provides for amounts outstanding for more<br />

than 90 days in case of active subscribers, roaming<br />

receivables and for entire outstanding from deactivated<br />

customers net off security deposits or in specific cases<br />

where management is of the view that the amounts from<br />

certain customers are not recoverable.<br />

For receivables due from the other operators on account<br />

of their National Long Distance (NLD) and International<br />

Long Distance (ILD) traffic and Interconnect Usage<br />

charges (IUC), the Company provides for amounts<br />

outstanding for more than 120 days from the date of<br />

billing, net of any amounts payable to the operators or in<br />

specific cases where management is of the view that the<br />

amounts from these operators are not recoverable.<br />

Accrued Billing revenue<br />

Accrued billing revenue represent revenue recognised in<br />

respect of Mobile, Broadband and Telephone, and Long<br />

Distance services provided from the bill cycle date to the end<br />

of each month. These are billed in subsequent periods as per<br />

the terms of the billing plans.<br />

6. INVENTORY<br />

Inventory is valued at the lower of cost and net realisable<br />

value. Cost is determined on First in First out basis. Net<br />

realisable value is the estimated selling price in the<br />

ordinary course of business, less estimated costs of<br />

completion and the estimated costs necessary to make<br />

the sale.<br />

The Company provides for obsolete and slow-moving<br />

inventory based on management estimates of the<br />

usability of inventory.<br />

7. INVESTMENT<br />

Current Investments are valued at lower of cost and fair<br />

market value determined on individual basis.<br />

Long term Investments are valued at cost. Provision is<br />

made for diminution in value to recognise a decline, if any,<br />

other than that of temporary nature.<br />

8. LICENSE FEES – REVENUE SHARE<br />

With effect from August 1, 1999, the variable Licence fee<br />

computed at prescribed rates of revenue share is charged<br />

to the Profit and Loss Account in the year in which the<br />

related revenues are recognised. Revenue for this purpose<br />

identified as adjusted gross revenue as per the respective<br />

license agreements.<br />

9. FOREIGN CURRENCY TRANSLATION, ACCOUNTING FOR<br />

FORWARD CONTRACTS & DERIVATIVES<br />

Initial Recognition<br />

Foreign currency transactions are recorded in the<br />

reporting currency, by applying to the foreign currency<br />

amount the exchange rate between the reporting<br />

currency and the foreign currency at the date of the<br />

transaction.<br />

Conversion<br />

Foreign currency monetary items are reported using the<br />

closing rate. Non-monetary items which are carried in<br />

terms of historical cost denominated in a foreign<br />

currency are reported using the exchange rate at the date<br />

of the transaction; and non-monetary items which are<br />

carried at fair value or other similar valuation<br />

denominated in a foreign currency are reported using<br />

the exchange rates that existed when the values<br />

were determined.<br />

Exchange Differences<br />

Exchange differences arising on the settlement of<br />

monetary items or on restatement of the Company's<br />

monetary items at rates different from those at which they<br />

were initially recorded during the year, or reported in<br />

previous financial statements, are recognised as income<br />

or as expenses in the year in which they arise as<br />

mentioned below.

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