Page 50 - InterloopAnnualReport2020

Risks Source Nature Mitigation Strategies

When managing capital, it is our prime objective to safeguard the
Internal
Capital Impact: M Company’s ability to continue as a going concern in order to provide
returns for shareholders. Therefore, the Company management
Risk Likelihood: L diligently opts optimal capital structure to reduce the cost of capital.
The Company maintains low leveraged capital structure and monitors
the capital structure on the basis of the gearing ratio

The Company’s interest rate risk arises from long term financing, short
term borrowings, loans and advances to subsidiary companies and
Monetary Impact: M bank balances in saving accounts. The Company management pro-
Policy Likelihood: M actively manages its financial planning and carefully crafted its portfolio
Changes
of borrowing through utilizing LTFF/ILTFF and ERF in order to avoid any
adverse impact of monetary policy

Financial Currency Impact: L The company is net exporter so devaluation of PKR has a positive

impact overall. However, in order to manage it effectively, the company
closely monitors sentiments and market moves and from time to time
Risk
Likelihood: M
uses different kinds of derivatives to minimize the risk
External

Credit The Company’s credit exposure to credit risk and impairment losses
relates to its trade debts. This risk is mitigated by the fact that majority
Risk/ Impact: M of our customers have a strong financial standing and we have a
Market Likelihood: L long-standing business relationship with all our customers. We do not
Risk expect non-performance by our customers; hence, the credit risk is
minimal

The Company management is diligently managing its cash flow stream
and carefully crafted its portfolio of investment and borrowing. The
Liquidity Impact: L management diligently review key financial ratios and adjust its strategy
Risk Likelihood: L which keeps the Company in financial discipline. Additionally, the
Company maintains enough reserve along with sufficient funded lines
from the Financial Institutions

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