Notes to the Consolidated Financial Statements as at and for the year ended March 31, 2024
Notes to the Consolidated Financial Statements as at and for the year ended March 31, 2024
(b) Reconciliation of fair value measurement of the investment categorised at level 3:
C redit quality of a customer is assessed based on its credit worthiness. Outstanding customer receivables are regularly monitored. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables. The Group's exposure to customers is diversified and two 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)
As at March 31, 2024
As at March 31, 2023
Particulars
At fair value through profit and loss Opening Balance
12
12
Addition during the year
- -
- - - -
Sale/reduction during the year
(in Rupees million)
Fair valuation gain of financial instruments (refer note 22)
67
Particulars
March 31, 2024
March 31, 2023
Exchange differences on translating the financial statements of foreign operations
-
Balance at the beginning of the period
66 34
22 44 66
Closing Balance 12 Sensitivity of level 3 financial instrument’s fair value to changes in significant unobservable inputs used in their fair valuation: 79
Movement during the year
Balance at the end of the period
100
Loans and other financial assets Loans and other financial assets mainly consists of security deposits and loan to related party. The security deposits pertains to rent deposits given to lessors. The Company does not expect any losses from non performance by these parties. Loans to related party is secured, accordingly the Group considers that the related credit risk is low. Investments Investments primarily include investment in liquid mutual fund units with high credit ratings assigned by external credit rating agencies, accordingly the Group considers that the related credit risk is low.
Investment in Commure Inc common stock/preferred stock - Increase by 5%
4
- -
- Decrease by 5%
(4)
Valuation is determined basis transaction price determined pursuant to merger. Note: There are no transfers between any of these levels during the current and previous year. 32 Financial Risk Management Framework
Derivatives The derivatives are entered into with banks with good credit ratings.
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 receivables 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. 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.
b) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’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. The Group has access to undrawn revolving credit facility at the year ended March 31, 2024 amounting to USD 18 million (USD 18 million at the year ended March 31, 2023) which could be used for the working capital needs as and when required. 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
512
512
-
- -
Other financial liabilities
2,764 1,131 2,501
2,454
310 277
Lease liabilities
317
807
Borrowings
-
-
2,623
March 31, 2023 Non Derivative financial instruments Trade payables
571
571
-
- -
Other financial liabilities
1,982
1,842
140 107
Lease liabilities
516
313
189
Borrowings
3,256
35
35
3,347
Derivative financial instruments Other Financial Liabilities -- forward contracts
24
24
-
-
234
235
Fractal Analytics Limited | Annual Report 2023-24
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