GSK_ Annual_Report_2021-22

GlaxoSmithKline Pharmaceuticals Limited | Annual Report 2021-22 Notes to the Standalone Financial Statements for the year ended March 31, 2022 156 Trade and other receivables The Company’s trade receivables are largely from sales made to wholesale customers and direct sales to hospitals with a smaller proportion of sales to Indian Government Institutions. The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer, demographics of the customer and the default risk of the industry. The Company manages credit risk through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. Exposures to customers outstanding at the end of each reporting period are reviewed to determine incurred and expected credit losses and the Company establishes an allowance for doubtful debts and impairment that represents its estimate of expected losses in respect of trade receivables. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators have undergone change, it has not affected the customers of the Company substantially, hence the Company expects the historical trend of minimal credit losses to continue. The impairment loss as at March 31, 2022 relates to customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, mainly due to economic circumstances. In case of receivables from wholesale customers and hospitals, the Company has followed a provision approach consistent with expected credit loss approach as per IndAS 109. Summary of the Company’s ageing of outstanding from various customers and impairment for expected Credit Loss is as follows: ( ` in lakhs) As at March 31, 2022 Gross Carrying amount Expected Credit Losses Carrying amount of trade receivables (net of Expected Credit loss) Not due 191,81.13 6.39 191,74.74 Past due 0-180 days 8,00.25 45.15 7,55.10 Past due 181-365 days 1,82.56 93.85 88.71 Past due 366-730 days 1,11.67 11.88 99.79 Past due 731-1095 days 4,69.21 2,51.44 2,17.77 Past due more than 3 years 18,02.31 16,14.53 1,87.78 Total 225,47.13 20,23.24 205,23.89 ( ` in lakhs) As at March 31, 2021 Gross Carrying amount Expected Credit Losses Carrying amount of trade receivables (net of Expected Credit loss) Not due 142,11.27 5.01 142,06.26 Past due 0-180 days 68,65.75 61.26 68,04.49 Past due 181-365 days 96.79 31.93 64.86 Past due 366-730 days 5,97.67 1,56.96 4,40.71 Past due 731-1095 days 1,95.43 1,51.29 44.14 Past due more than 3 years 16,00.62 16,00.62 - Total 235,67.53 20,07.07 215,60.46 Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.