Page 166 - flipbook-ubp-IR

INTRODUCTION ABOUT US MANAGEMENT APPROACH
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2022
4.
(a) (ii)
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Market risk (Continued) Currency profile (Continued)
Foreign currency risk (Continued)
Equity price risk
The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities.
The following table demonstrates the impact of a reasonably possible change in the equity prices, with all other variables held constant, on the Group’s and the Company’s profit after tax or equity, depending on whether the decline is significant or prolonged.
(b)
Increase / (decrease) in equity prices
+ 5% - 10%
Credit risk
2021 Rs’000 Rs’000
734 677 (1,468) (1,353)
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities and from its financing activities, including trade and other receivables and cash at bank.
Trade receivables
Customer credit risk is managed to the Group’s established policy, procedures and control relating to customer credit risk management. The Group has established internal policies to determine the credit worthiness and reliability of potential customers.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product type, customer type and rating, and coverage by letters of credit or other forms of credit insurance). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 15.
Set out below is the information about the credit risk exposure on the Group’s and the Company’s trade receivables using a provision matrix:
THE GROUP
2022
Expected credit loss rate
Total gross carrying amount (Rs’000)
Expected credit loss (Rs’000) *
Total
580,305 160,470
Current
3.29% 10,537 306
1-30 days
31-60 days
61-90 days
9.64% 51,737 1,967
91-180 days
32.68% 86,440 6,357
>180 days
100.00% 187,817 148,432
164
UBP INTEGRATED REPORT 2022
* Adjusted taking into consideration bank guarantees
4.40% 6.94% 144,895 98,879 1,998 1,410
THE GROUP
2022
2021
THE COMPANY
2022
Rs’000
1,039
(2,079)
Rs’000
998
(1,997)