MedPlus Health Services Limited (formerly known as MedPlus Health Services
Annexure- VIL

Notes to Restated Consolidated Financial Information

(All amounts are it Rs in millions except as others stated)

 

45, Fair value hierarchy
‘The carrying amount of financial assets and financial liabilities measured at amortised cost in the consolidated financial statements are a reasonable approximation of their fair values since the Group does not anticipate
that the carrying amounts would be significantly different from the values that would eventually be received or settled

46, Financial risk management
‘The Group's principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations and to provide guarantees to
support its operations. The Group's principal financial assets include lease rental deposits, loans, trade receivables, cash and cash equivalents and other bank balances that derive directly from its operations.

‘The Groups activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Group's primary risk management focus is to minimize potential adverse effects of market risk on its
financial performance. The Group's risk management assessment and policies and processes are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor
such risks and compliance with the same.

Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Group's activities. The Board of Directors is responsible for overseeing the Group's risk
assessment and management policies and processes.

Market risk
‘Market risk isthe risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in
the credit, interest rate, liquidity and other market changes.

Interest rate risk
Interest rate risk isthe risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. The Group has both fixed and floating rate of borrowings. The
exposure to risk of changes in market interest rates in minimal, The Group has not used any interest rate derivatives.

‘The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Group's profit before taxis
affected through the impact on floating rate borrowings, as follows:

 

 

Particulars Increase/decrease in profit before tax
‘September 50,2021 September30, 2020 March 31, 202 March 31,2020 March 31,2019
Change in interest rate
Increase by 50 basis points 228 1a 371 528 3.60
= Decrease by 50 basis points (228) (1a) 7) (528) (360)
Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading toa financial loss. 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, loans, 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, except for trade receivables.

‘Trade aa other receivables
‘The customer credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on the individual credit
limits are defined in accordance with this assessment and outstanding customer receivables are regularly monitored. The Group's receivables turnover is quick and historically, there was no significant defaults on
account of those customer in the past. Ind AS requires an entity to recognise in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised in accordance with Ind AS 108.

‘The Group assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an amount equal to the 12 month expected
credit losses or at an amount equal tothe life time expected credit losses ifthe credit rik on the financial asset has increased significantly since initial recognition. The Group has usedl 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 adjusted for forward-looking information,

Before accepting any new customer, the Group uses an internal credit scoring system to assess the potential customers credit quality and defines credit limits by customer. Limits and scoring attributed to customers are
reviewed on periodic basis. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given inthe provision matrix

Exposure to credit risk
‘The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 7208 millions, Rs. 40,64 millions, Rs.53.67millions, Rs, 64.00 millions and Rs 87.54
millions as of September 30, 2021, September 30, 2020, March 31, 2021, March 31, 2020 and March 31, 2019 respectively, being the total ofthe carrying amount of balances with trade receivables.

The ageing analysis of trade receivables (net) as ofthe reporting date is as follows:

 

 

Particulars Less than 180 days More than 180 days, Total
“As at September 30, 2021 Ear) a0 7208
‘Asat September 30, 2020, 7 3353 40.64
Asat March 31, 2021 2611 2756 5367
Asat March 31, 2020 1937 463 64.00
Asat March 31, 2019 76.75 1079 8754

“The following table summarizes the changes in the allowances for doubtful accounts for trade receivables

 

 

Particulars September302021 September 30,2020 March 33, 2021 March 31,2080 March 31, 2019
"At the beginning of the period/year 720.73, 2747 a7 723 778
Provision for Impairment 082 042 029 2149 4158
Receivables writen off during the year as uncollectible 3 “ (0:36) (094) (1.28)
Unused amounts reversed (1456) (033) (647) (031) (ost)
At the end of the period/year 6.99 2726 2073 287 723

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