This document discusses customer debtors in the balance sheet of a company. It notes that debtors, or major customers from whom revenue is due, are classified as a current asset. Current assets can be further broken down into performing assets (customers paying within 180 days) and non-performing assets (those over 180 days overdue). Risks of performing assets turning non-performing include delays in project execution or documentation issues. The document provides an action plan for the Chennai region to reduce non-performing assets, including reconciliations, closing snag lists, identifying payments, and debt adjustments.

1. AR position & plan
Chennai Region

2. C.Balavivek - Executive, Commercial
Customer in our Balance Sheet
SCHEDULE VI — FORM OF BALANCE SHEET/PROFIT & LOSS
ACCOUNT
Figures for the
P.Y. (Rs.) LIABILITIES
Figures for the
C.Y. (Rs.)
Figures for the
P.Y. (Rs.) ASSETS
Figures for the
C.Y. (Rs.)
FIXED ASSETS (Refer Note G)
INVESTMENTS (Refer to Note No. H) Showing nature of
investment and the mode of valuation for example at cost or
market value and distinguishing between:
1. Investments in Govt. or Trust Securities
2. Investments in shares, debentures or bonds
3. Immovable properties
4. Investments in the capital of partnership firms
5. Balance of unutilized monies raised by Issue
CURRENT ASSETS, LOANS & ADVANCES
(Refer Note I)
A. Current Assets
1. Interest accrued on investments
2. Stores and spare parts
3. Loose tools
4. Stock-in-trade
5. Works-in-progress
6. Sundry debtors:
a. Debts outstanding for a period exceeding 6 months
b. Other debts
Less: Provision
7. a. Cash balance on hand

3. Asset Management
Customer are DEBTORS of a company
DEBTORS are listed under Asset side of Schedule VI (Balance Sheet) in a Company’s Books of
Accounts.
Assets are classified into two major kinds.
• Fixed Asset – Example, Land & Building, Machinery, Furniture & Fittings Etc.,
• Current Asset – Example, Major Customers where we execute projects and huge volume of
maintenance contracts, service charges, Annual maintenance contracted customer.
Further current asset can be sub listed as:
Performing Asset (PA)
A business's ability to take productive resources and manage them within its operations to
produce subsequent returns. Asset performance is typically used to compare one company's
performance over time or against its competition. Possessing strong asset performance is one of
the criteria for determining whether a company is considered a good investment.
Non-Performing Asset (NPA) (Debtors – O/s Exceeds more than 180 Days)
• A debt obligation where a debtor / customer has not paid any previously agreed upon payments to
the designated lender / supplier for an extended period of time. The nonperforming asset is
therefore not yielding any income to the lender / supplier in the form of principal and interest
payments.
• A loan or lease that is not meeting its stated principal and interest payments. Banks usually classify
as nonperforming assets any commercial loans which are more than 90 days overdue and any
consumer loans which are more than 180 days overdue.
• More generally, an asset which is not producing income.
C.Balavivek - Executive, Commercial

4. Risk of PA moving into NPA
Risk of PA moving into NPA is most likely
Major Project customers where the customer is not satisfied with our process of executing
the project
(Process includes all services like erection, technical and non technical)
 when project is not as per the customer’s schedule, Delivery Delay.
Where material supplied differs from ordered specification.
When Invoice submitted to customer does not meet their expectation level / does not match
their PO format (due to partial dispatch).
Value mismatch in the invoice raised (error in OC booking).
Handing over documents not as specified by customer in their PO.
Late invoice raised after the customer closing that project in their system (Back log invoice).
Major AMC customers where they do not / late receive the commercial documents to process
our payment
Customer misplace / lose the commercial documents submitted to them
Delay in execution of project from customer end and in-turn erection not completed by us.
Fund crunch from customers’ end
Non availability of signatories to release our payment
 change in the organizational / person responsible.
C.Balavivek - Executive, Commercial

5. Measures to Move NPA to PA
Material dispatch to be in line with customer PO.
Any change in our work plan due to fabrication or other reason should be
notified in advance with customer.
Frequent customer visit to have the overall feedback.
Submitting copy of commercial documents where ever possible to re-
ignite the customer to release our payment
Try and resolve unattended issues, if any and address and escalate the
technical issues to the respective team / person in-charge of.
If the project is delayed due to customer, completed portion of payment
to be discussed and released by the customer.
C.Balavivek - Executive, Commercial

6. Current Outstanding from Chennai
Running Project Customer O/s – 106.39 MINR
Dealers
AMC & Field Services – 1.99 MINR
NPA due to issues – 3.15 MINR
NPA due to LD and other reasons – 6.37 MINR
Breakup for Outstanding.
Total Outstanding for Chennai Region as on 28th
Feb 2013 is 145.37 MINR
Total DSO as on 28th
Feb 2013 is 102.28 Days.
C.Balavivek - Executive, Commercial
Dealers
Total Outstanding
in MINR
Actual Due for
March 2013
Vanavil Projects & Services 23.77 4.30
Motor Engineering Industries 1.58 0.67
Sakthi Material Handling 1.94 1.94
Fortune Enterprises 0.16 0.16

7. Demag Chennai – Customer Cluster
Current Assets
Project / Medium term Customers contributing
73.22% of total outstanding from Chennai Region
Short term Customers – 20.23% of total
outstanding from Chennai Region
 Dealers
AMC Customer
Customers due to service call
Non-Performing Assets – 6.55%
C.Balavivek - Executive, Commercial

8. Form – C from Chennai Region
C.Balavivek - Executive, Commercial

9. Action Plan against NPA of Chennai
Central / joint reconciliation with respective regions for customers like,
• M/s. Ashok Leyland Limited (Bangalore & Chennai),
• M/s. Tube Products of India (Pune & Chennai),
• M/s. TAFE (Bangalore & Chennai) and
• M/s. Areva T&D India Limited (Ahmadabad & Chennai)
HO may decide and impose further course of action on
• M/s. Leitner Shriram Mfg Ltd.,
• M/s. Global Wind Infrastructure and Services,
• M/s. VME Precast Pvt. Ltd, and
• M/s. RRB ENERGY LTD.
shall be conducted to arrive at the actual outstanding for the respective region.
Debit note against freight charges booked from HO shall be forwarded to Regional office
immediately. (Eg. M/s. KATSUSHIRO MATEX INDIA PRIVATE LIMITED)
Snag list from Daimler’s final buy off shall be closed by providing suitable revert immediately.
Unaccounted payments need to be identified from our bank statement and rectified internally for
old outstanding which are open more than 3 years.
Necessary adjustment entry to be passed where ever we have agreed as full and final settlement
by signing a formal MOM.
C.Balavivek - Executive, Commercial

10. C.Balavivek - Executive, Commercial
Thank you