 

Zo Fashion (India) Limited {formerly known as
[Notes tothe restate financial infomation

 

0 Fashion (India) Private Limited)

(Amount in & Millions, except for share data or as otherwise stated)

440° Financial instruments
‘The management reviews and agrees polices for managing exch ofthese risks which are summarized as below:

 

(© Market risk
“Market risk isthe rik thatthe fir value of future cash flows ofa financial instrament will uctuate because of changes in market prices. Markt prices comprises thee types of risk: cureneyrate risk, interest ate isk and
‘other price risks, such a5 equity price risk Financial instruments affected by market risks include borrowings, security deposits, investments and foreign currency receivables and payables. The sensitivity analyses inthe
following sections relate to the position as on respective Balance Shect dates. The analyses exclude the impact of movements in market variables on; the carrying values of gratuity and other post-rtircment obligations:
provisions; andthe non-financial assets and liabilities. The sensitivity ofthe relevant Profit ad Loss item i the efet of the assumed changes inthe respective market risks, This is based onthe Financial asets and financial
liabilities held as on respective Balance Sheet dates.

(@)_ Foreign currency risk

Foreign currency isk isthe sk that the fir valu or future cash flows ofa financial instrument will Muctuate because of changes in frcign exchange rates. The Company's exposure to the risk of changes in foreign exchange
rates relates primarily to its operating activities (when revenue or expense is denominated in foreign curency), The Company evaluates exchange rate exposure arising from foreign eurency transactions and follows
‘stablished isk management policies.

Foreign currency risk sensitivity
‘The following tables demonstrat the seasitvty toa reasonably possible change in USD and AED exchange rates, with all other variables held constant. The impact on the profit before taxis due to changes in the fir value
‘of monetary assets and liabilities. Foreign currency exposures recognised by the Company that have not been hedged by a derivative instrument or otherwise are as under

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       

 

icalare Aat
SounioaT EET SUNar 2071 Shar TOa0 SIMO
mount] Amount) Amount —] Amount | Amount | Amount] Amount] Amount} Amount —] — Amount
inke ing inke ing inke ing inc ing inFC ing
Trade Payables
sD ‘ - « 008 ois 07 :
Trade receivables
AED 2 2 - é as 8 z 2 .
2 2 a - 009 631
Loan receivable
‘AED - - - . : - - - -
‘Advance paid to supplier
: 3 a = oa ous, 3at oar 1188,
‘Net Asseis/(Net Liabilities) : : 670) 18.19
Sensitivity
Impact on profit before tax and equity vat
SodanioaT ETT SiiMar 2077 Siihiari0a0 ETAEETIOD
we 7 5 me ™ Za me ee
increase | decrease_| increase _| decrease _| increase | decrease | increase _| decrease _| increase _| decrease
wp : : 7 zi 056 (05 ‘Os OF OT (OT)

 

 

 

 

 

 

 

 

 

 

 

(is) nerest Rate Risk
Interest rate is the risk thatthe fir value or future cashflows ofa financial instrument will fucuate because of changes in market intrest rates. Companys fina
facility; however these arent expose to risk of actuation in market interest eat asthe rate are fied tthe ime of contrac/agrecment and do not change for any market fhctuaton. Moreover, the ash credit facility is used

to facilitate the eash low movement ofthe Company during the year, andthe Company prefers to generally maintain a postive balance, hence controling the interest coss pertaining to the cash ere icity

cal liabilities comprises of interest bearing cash credit

 

 

(9), Credit risk
‘Crit isk isthe isk thatthe counterparty will not mec its obligation under a financial instrument, leading wo a financial loss. The Company i expose to credit ik fom its operating activities (primarily wade receivables)

and fom is financing activites, including deposits with banks, foreign exchange transactions and other fnanclal instruments.

“Trade receivables
Customer credit risk is managed by cach business unit subject tothe Companys established policy, procedures and contol relating to customer credit risk managemeat. Credit quality ofa customer is assessed based on an
«extensive erat rating review and individual credit its are define in accordance with this assessment. The Company regularly monitors its outstanding customer receivables.

An impairment analysis is perform at cach reporting date on trade receivables by lifetime expected credit loss method based on provision matrix, The maximum exposure to ret risk atthe reporting dae isthe carying
value of each class of financial asses. The Company evaluates the concentration of risk with respect o trade receivables a low, as @ majority ofits trade receivable balance is receivable from Large Format Stores (LFS),
‘who are well established business entities, and have been regular in their payments over the bistory ofthe business.

AAs per ind AS 109, the Company uses the Expected Credit Loss (ECL) model to assess any required allowances and uses a provision matrix to compute the ECL allowance fr trae receivables. In calulating ECL, the
‘company has also other related credit information for customers to estimate the probability of default in future and have taken into account estimates of possible eet from the COVID-19 pandemic:

 

Movement inthe expected credit loss

 

 

 

 

Particulars Avat
‘ounlTORT] —SorwniDO20] /MariD0zT] StiMariaO20] Su AtarDO1o
‘Opening balance 255 3 z = 0.16
Provision made during the year 073 279 1at . -
Amount writen of during the year - - aay (016)
Closing balance 336 9 = = :

 

 

 

 

 

 

(2) Financial instruments and cash & bank deposits
‘Credit risk fom balances with banks and financial institution is managed by the Company's finance deparment in accordance with the Companys policy. Investments of surplus funds are made in bank deposits ane mutu

finds, The limits ae eto minimize the concentration of sks and therefre mitigate financial loss thraigh counter party's potential failure to make payments,

 

 

‘The Company's maximum exposure to cet isk forthe components ofthe balance shect is the carying amounts which are given below. Trade Receivables and ther financial asses are writen off when ther is no
‘reasonable expectation of rcovery, suc as debtor filing to engage inthe repayment plan with the company.

 

 

 

 

 

 

 

 

 

Particulars Avat
‘rdun/TORT] —FoTFwniDORO] S/ManiBOzI] SA/Mar/aOR0] SA AtariDO1o
Now-curvent ane
(Other Financial Asset 240,31 202.40 23657 203.07 17948
Investments : - :
Current assets
Investments 7196 464.09 ass 2447
Trade receivables 346.70, 536.69 471.39 586.37 4400.77
Cash and eash equivalens #31 397 132.03 0.98 106.13
‘Hank balance other than cash and cash quivalents 1st 25293 26483, 32424 33042
Other Financial Asset, Toa 5234 Tht 55.43 17.50

 

Balances with Banks s subject fo Tow credit risks Gus to good erat aings aang to these banks
(©) Liquiaity isk
Liquidity risk is defined as the risk thatthe Company will nt he able to sete or mect its obligations on time or at reasonable price. The Company's objective i toa all imes maintain optimum levels of quit to mest ts
cash and liquidity roquiements. The Company closely monitors its liquidity positon and deploys a robust cash management system. It maintains adequate source of financing through the wseof short term investments and &
cash credit facility. Processes and polices related to such risks are overseen by senior management. Management monitors the Company’ liquidity position through oling forecasts on the basis of expected cashflows. The
‘Company assessed the concentration of isk with respect to its debt and concluded itt be very lv.

 

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