Heritage Foods Limited | 30th Annual Report 2021-22

Financial Statements Company Overview Statutory Reports 173 Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ` 630.32 and ` 454.07 as of 31 March 2022 and 31 March 2021 respectively, representing carrying amount of all financial assets with the Company. Financial assets that are neither past due nor impaired None of the Company’s cash equivalents, including fixed deposits, were either past due or impaired as at 31 March 2022 and 31 March 2021. Financial assets that are past due but not impaired The Company’s credit period for customers generally ranges from 0 - 30 days. The aging of trade receivables, net of those provided for in the books of account, is given below: As at 31 March 2022 As at 31 March 2021 0-30 days 163.20 143.41 31-60 days 16.56 1.92 61-90 days - - Greater than 90 days - - 179.76 145.33 Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each date of Balance Sheet whether a financial asset or a group of financial assets are impaired. Expected credit losses are measured at an amount equal to 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial assets have increased significantly since the initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information. B. Liquidity risk Liquidity risk refers to the risk that the Company cannot meet its financial obligations as and when they become due. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that funds are available for meeting due obligations of the Company. The Company manages liquidity risk by maintaining adequate reserves, banking facilities, continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of the financial assets and financial liabilities. The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments: Particulars As at 31 March 2022 As at 31 March 2021 On demand Up to 1 year More than 1 year Total On demand Up to 1 year More than 1 year Total Financial guarantees # 199.95 - - 199.95 265.15 - - 265.15 Borrowings - - - - 4.69 242.33 223.23 470.25 Deferred payment liabilities - 16.37 21.10 37.47 - 15.99 37.48 53.47 Lease liabilities - 33.65 53.17 86.82 - 26.33 27.03 53.36 Trade payables - 482.04 - 482.04 - 327.77 - 327.77 Other ¿ nancial liabilities - 1,014.23 - 1,014.23 - 1,167.14 - 1,167.14 199.95 1,546.29 74.27 1,820.51 269.84 1,779.56 287.74 2,337.14 # Represents loan amount outstanding to the bankers by the entities, against which financial guarantees were extended by the Company as at 31 March 2022 and 31 March 2021. 40. Financial risk management objectives and policies (continued) C. Market risk Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in the market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and Summary of the significant accounting policies and other explanatory information (All amounts in ` millions, except share data and where otherwise stated) Standalone