Page 194 - UBP - IR2020

FINANCIAL STATEMENTS
Notes to the financial statements
For the year ended June 30 2020
4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (a) Market risk (Continued)
(iv) Equity price risk The Group’s listed 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 the the impact of a a a a a a a a a a reasonably possible change in in the the the equity prices with all other variables held constant on on on the the the the Group’s and the the the the Company’s profit after tax or equity depending on on on whether the the the the decline is significant or prolonged THE GROUP
THE COMPANY
2019 Rs’000 1 1 160 (2 320)
2020
Rs’000 704
(1 409)
2020
Rs’000 645
(1 291)
Increase/(decrease) in equity prices + 5%
- 10%
(b) Credit risk 2019 Rs’000 1 309
(2 618)
Credit risk risk is is is the risk risk that counterparty will not meet its obligations under a a a a a a a financial instrument or customer contract leading to to a a a a a a a a a financial loss The Group is is exposed to to credit risk from from its its operating activities activities and from from its its financing activities activities including trade and and other receivables and and cash at bank Trade receivables Customer credit credit risk risk is is is is managed to to to to the Group’s established policy procedures and control relating to to to to customer credit credit risk risk management The Group has established internal policies to determine the credit worthiness and reliability of potential customers An impairment analysis is is is performed at at at each reporting date using a a a a a a a a a provision matrix to measure expected credit losses The provision rates are based on on days
past due for groupings of various customer segments with similar loss patterns (i e e e e e e e e e e e e by by geographical region product type type customer type type and and rating and and coverage by by letters of of credit or or other forms of of credit insurance) The calculation reflects the the probability-weighted outcome the the time value of money and and reasonable and and supportable information that is available at at at at the reporting date about past events current conditions and forecasts of future economic conditions Generally trade receivables are are written-off if past due for more than one year and are are not subject to to enforcement activity The maximum exposure to to credit risk at at the the reporting date is is the the carrying value of of each class of of financial assets disclosed fin in note 16 194 - UBP INTEGRATED REPORT 2020