Go Fashion (India) Limited {formerly known as Go Fashion (India) Private Limited}
Notes to the restated consolidated financial information

(Amount in Millions

Note
No.
40

@

ci)

ii)

@v)

)

 

except for share data or as otherwise stated)

Financial instruments

‘The management reviews and agrees policies for managing cach of these risks which are summarized as below:

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices
sk and other price risks, such as equity price risk. Financial instruments affected by market
and foreign currency receivables and payables. The sensitivity analyses in the following sections
relate to the position as on respective Balance Sheet dates. The analyses exclude the impact of movements in market variables on; the carrying values of
gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities. The sensitivity of the relevant Profit and Loss item is
the effect of the assumed changes in the respective market risks, This is based on the financial assets and financial liabilities held as on Balance Sheet
date.

comprises three types of risk: currency rate risk, interest rate
s include borrowings, security deposits, investments

 

   

   

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign 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 currency). The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk
management policies.

 

    

Foreign currency risk sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and AED exchange rates, with all other variables held constant.
The impact on the profit before tax is due to changes in the fair 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:

 

  

 

Particulars ‘Asat
‘31/Mar/2019
‘Amount ‘Amount
in FC in?

 

 

 

‘ade Payables
usD - -
Trade re
AED - -
usb 0.09 631
Loan receivable
AED - -
Advance paid to supplier
Usb 0.17 11.88
Net Assets/(Net Liabilities) 18.19

   

 

 

Sensitivity

 

 

 

 

 

Impact on profit before tax and equity Asat
31/Mar/2019
5% 5%
increase decrease
USD 091 (91)

 

Interest Rate Risk

Interest rate is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Company’s financial liabilities comprises of interest bearing cash credit facility; however these are not exposed to risk of fluctuation in market interest
rate as the rates are fixed at the time of contract/agreement and do not change for any market fluctuation. Moreover, the cash credit facility is used to

 

facilitate the cash flow movement of the Company during the year, and the Company prefers to generally maintain a positive balance, hence controlling
the interest costs pertaining to the cash credit facility.

Credit risk

Credit risk is the risk that the counter party will not meet its obligation under a financial instrument, leading to a financial loss. The Company is
to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, fore

     

transactions and other financial instruments.

 

‘ade receivables

   

Customer credit risk is managed by each bu
management. Credit quality of a customer
with this asses:

unit subject to the Company's established policy, procedures and control relating to customer credit risk
ssessed based on an extensive credit rating review and individual credit limits are defined in accordance
ment. The Company regularly monitors its outstanding customer receivables

     

 

 

An impairment analysis is performed at each reporting date on trade receivables by lifetime expected credit loss method based on provision matrix. The
maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company evaluates the concentration of
risk with respect to trade receivables as low, as a majority of its trade receivable balance is receivable from Large Format Stores (‘LES’), who are well

 

established business entities, and have been regular in their payments over the history of the business.

 

297
