131 Corporate Overview Performance Overview Financial Statements Governance Overview Statutory Reports Note 27.7 Financial risk management (continued) a) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Credit risk arises from cash and cash equivalents, financial assets measured at amortised cost or fair value through profit and loss and deposits with banks and financial institutions, as well as credit exposures to trade | non-trade customers including outstanding receivables. i) Credit risk management Credit risk is managed through the policy surrounding Credit Risk Management. ii) Provision for expected credit losses The Company provides for expected credit loss based on the following: Trade receivables Credit risk with respect to trade receivables is limited. As trade receivables consist of few customers, for which ongoing credit evaluation is performed on the financial condition of the account receivables. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low. Of the trade receivables balance at the end of the year, ` 260.17 lakh (March 31, 2024: ` 178.26 lakh) is due from related parties. Apart from this, the Company does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Company defines counterparties as having similar characteristics if they are related entities. b) Liquidity risk Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has approved an appropriate liquidity risk management framework for short, medium and long-term funding and liquidity management requirements of the Company. The Management monitors rolling forecasts of the liquidity position of the Company and cash and cash equivalents on the basis of expected cash flows and manages liquidity risk by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities. The following table shows the maturity analysis of financial liabilities of the Company based on contractually agreed undiscounted cash flows including contractual interest payment, as at the Standalone Balance Sheet date: (` lakh) Contractual maturities of financial liabilities as at March 31, 2025 Note Less than 1 year More than 1 year Total Trade payables 13 433.34 - 433.34 Creditors for capital goods 14 31.69 - 31.69 Security deposits payable 14 93.90 - 93.90 Employee benefits payable 14 59.94 - 59.94
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