Page 163 - Kolte Patil AR 2019-20
P. 163

Notes forming part of the standalone financial statements

            Interest rate risk:
            Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
            interest rates. The Company is not exposed to the risk of changes in market interest rates as the Company does not have any long-term debt
            obligations with floating interest rates.

            Other price risk:
            The Company is not exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than
            trading purposes. The Company does not actively trade these investments.

            IV) Interest risk management
            The Company’s interest rate exposure is mainly related to debt obligations. The Company obtains debt to manage the liquidity and fund
            requirements for its day to day operations. The rate of interest is fixed and thus there is no risk of interest rates fluctuating.
            V) Credit risk management

            Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations.
            Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks.
            Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been
            granted after obtaining necessary approvals for credit.
            Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, investments,
            derivative financial instruments, cash and cash equivalents, bank deposits and other financial assets. None of the financial instruments of the
            Company result in material concentration of credit risk.

            VI) Liquidity risk
            Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain
            sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining
            adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by
            matching the maturity profiles of financial assets and liabilities.
            The table below provides details regarding the contractual maturities of financial liabilities, including estimated interest payments as at March
            31, 2020:
                                                                                                        (H in Lakhs)
                                                              Carrying              Due after one   Total contractual
             Financial liabilities                                    Due in one Year
                                                              amount                       Year        cash flows
             (a) Trade payables                                                                                
             -March 31, 2020                                    17,082       16,407          675           17,082
             -March 31, 2019                                    16,505       15,477        1,028           16,505
             (b) Borrowings and interest thereon                                                               
             -March 31, 2020                                    38,192       17,373        20,819          38,192
             -March 31, 2019                                    46,572       23,131        23,441          46,572
             (c) Other financial liabilities                                                                   
             -March 31, 2020                                    11,221       11,154          67            11,221
             -March 31, 2019                                     2,205        2,105          100           2,205
             -March 31, 2020                                    66,495       44,934       21,561          66,495
             -March 31, 2019                                    65,282       40,713       24,569          65,282

                                                                                          Annual Report 2019-20 | 161
   158   159   160   161   162   163   164   165   166   167   168