Investor Presentaiton
ANNUAL REPORT
175
(c)
Liquidity risk
P
Private Power and Infrastructure Board
ANNUAL REPORT
Private Power and Infrastructure Board
Liquidity risk is the risk that PPIB will not be able to meet its financial obligations as they fall due. PPIB's approach to
managing liquidity is to ensure, 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 risking damage to it's reputation.
PPIB follows an effective cash management and planning policy to ensure availability of funds and to take measures for new
requirements.
The maturity profile of PPIB's financial liabilities based on the contractual amounts is as follows:
30.2 Fair value of financial instruments
The carrying value of all financial assets and liabilities reflected in the financial statements approximates their fair
values except for held to maturity financial assets which are carried at amortized cost whose fair value in
comparison with carrying amount is as follows:
2020
2019
Contractual
Carrying
amount
cash flows
(within one
year)
Carrying
amount
Contractual
cash flows
(within one
year)
(Rupees in thousand) -
Provision against performance guarantees encashed
Other payables having maturity up to one year
846,231
846,231
828,466
828,466
21,612
867,843
21,612
867,843
19,238
847,704
19,238
847,704
30
FINANCIAL INSTRUMENTS
30.1 Financial assets and liabilities
30 June 2020
Financial assets:
Maturity upto one year
Advances and other receivables
Short term investments
Cash and bank balances
Maturity after one year
Long term investments
Loans and advances
Financial liabilities:
Maturity upto one year
Provision against performance guarantees encashed
Accrued and other liabilities
30 June 2019
Financial assets:
Maturity upto one year
Advances and other receivables
Short term investments
Cash and bank balances
Maturity after one year
Long term investments
Loans and advances
Financial liabilities:
Maturity upto one year
Provision against performance guarantees encashed
Accrued and other liabilities
Amortized
cost
FVTOCI
------------- (Rupees in thousand)
Total
101,446
1,898,883
146,703
101,446
1,898,883
146,703
90,066
90,066
38,846
2,185,878
38,846
90,066
2,275,944
2020
2019
Carrying
amount
Carrying
Fair Value
amount
(Rupees in thousand)-
Fair Value
Assets carried at amortized cost
Short term investments
1,898,883
1,898,883
1,749,897
1,749,897
The basis for determining fair values is as follows:
30.3 Interest rates used for determining the fair value
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield
curve at the reporting date plus an adequate credit spread.
30.4 Fair value hierarchy
Judgments and estimates are made in determining the fair values of the financial instruments that are recognized
and measured at fair value in these financial statements. To provide an indication about the reliability of the
inputs used in determining fair value, the Board has classified its financial instruments into the following three
levels. An explanation of each level follows underneath the table.
30 June 2020
Assets carried at fair value
Level 1
Level 2
Level 3
(Rupees in thousand)-
Total
Other financial liabilities
Fair value through other comprehensive income
90,066
90,066
(Rupees in thousand)
30 June 2019
846,231
21,612
867,843
846,231
21,612
Assets carried at fair value
867,843
Fair value through other comprehensive income
85,034
85,034
Amortized
cost
FVTOCI
Total
(Rupees in thousand)
94,521
1,749,897
103,672
94,521
1,749,897
103,672
85,034
85,034
39,319
1,987,409
85,034
39,319
2,072,443
Other financial liabilities
(Rupees in thousand)
828,466
828,466
19,238
847,704
847,704
19,238
The carrying value of the financial assets and liabilities reflected in the financial statements approximates their
respective fair values.
The above table does not include fair value information for financial assets and financial liabilities not measured at
fair value if the carrying amounts are a reasonable approximation of fair value. Due to short term nature, carrying
amounts of certain financial assets and financial liabilities are considered to be the same as their fair value.
There were no transfers between levels 1 and 2 for recurring fair value measurements during the year. Further,
there was no transfer in and out of level 3 measurements as the Board has no investments which are classified
under level 3 of fair value hierarchy table.
The Board's policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the
reporting period.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and
trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The
quoted market price used for financial assets held by the Board is the current bid price. These instruments are
included in level 1.
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