Notes to the Standalone Financial Statements as at and for the year ended March 31, 2024
Notes to the Standalone Financial Statements as at and for the year ended March 31, 2024
(a) Financial instruments by category
Cash and cash equivalents C redit risk on cash and cash equivalents and other deposits with banks is limited as the Company generally invests in deposits with banks with high credit ratings assigned by external credit rating agencies, accordingly the Company considers that the related credit risk is low. Trade receivables The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. A default on a financial asset is when the counterparty fails to make contractual payments when they fall due. This definition of default is determined by considering the business environment in which Company operates and other macro-economic factors. C redit quality of a customer is assessed based on its credit worthiness and historical dealings with the Company, market intelligence and goodwill. Outstanding customer receivables are regularly monitored. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables and other receivables. The Company's exposure to customers is diversified and one customer contributes more than 10% of outstanding trade receivables (including unbilled receivables) as at March 31, 2024 (one customer as at March 31, 2023). The movement in the allowance for expected credit loss in respect of trade receivables is as follows:
(in Rupees million)
(i) Fair value through profit and loss
Level
March 31, 2024 March 31, 2023
Assets Investments
2 2
4,174
2,753
Derivative asset - Forward contract receivable
27
6
Total assets
4,201
2,759
Liabilities Derivative liability - Forward contract receivable
2
-
30
Total liabilities
-
30 (in Rupees million)
(ii) Fair value through other comprehensive income
Level
March 31, 2024 March 31, 2023
Assets Derivative asset - Forward contract receivable
2
43 43
-
Total assets
- (in Rupees million)
(iii) Amortised cost
March 31, 2024 March 31, 2023
Assets Investments
53
145
Trade receivables
6,798
6,523
Cash and cash equivalents
123 164 358
79
Loans
116 336
Other financial assets
(in Rupees million)
Total assets Liabilities Trade payables
7,496
7,199
Particulars
March 31, 2024
March 31, 2023
Balance at the beginning of the period Acquired on account of business combination
17
1 8 8
263
680 876
-
Other financial liabilities
1,000 1,263
Movement during the year
32 49
Total liabilities 1,556 N ote: Carrying amounts of cash and cash equivalents, bank balances, trade receivables, unbilled receivables and trade payables as at March 31, 2024 and March 31, 2023 approximate their fair value due to their short-term nature. Valuation technique for financial assets categorised at level 2 : Fair value of current investments is considered based on the valuation quotes received from mutual fund house for investments and bankers for derivative instruments. Note : There are no transfers between any of these levels during the year. 32 Financial Risk Management Framework The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board is responsible for developing and monitoring the Company’s risk management policies. The Board holds regular meetings on its activities. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The Board oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. a) Credit risk C redit 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. Financial instruments that are subject to concentration of credit risk principally consist of trade receivables, investments, loans and other receivbles from subsidiaries, cash and cash equivalents and other balances with banks. None of the financial instruments of the Company result in material concentration of credit risk.
Balance at the end of the period
17
b) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Maturities of financial liabilities The below table analyses the Company’s financial liabilities into relevant maturity based on their contractual maturities. The amounts disclosed in the table are contractual undiscounted cash flows.
(in Rupees million)
Undiscounted amount
Particulars
Carrying amount
<12months
1- 2 Years
> 2 Years
March 31, 2024 Non Derivative financial instruments Trade payables
263 890
263 245 965
-
-
Lease liabilities
212
641
Other financial liabilities
1,000
21
13
March 31, 2023 Non Derivative financial instruments Trade payables
680 271 876
680 243 876
-
- - -
Lease liabilities
47
Other financial liabilities
-
Derivative financial instruments Derivative liability -- forward contracts
30 - The Company has given guarantee to financial institution on behalf loan taken by one of its subsidiary amounting to C 5,750 million (March 31, 2023 : C 5,693 million). The loan is repayable in December 2026. 30 -
172
173
Fractal Analytics Limited | Annual Report 2023-24
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