“We would also like to address the key point which underlines this quarter’s performance. As
you are aware, we work with a lot of municipalities and government agencies in over 14
municipalities to provide integrated solid waste management solutions. This sometimes
increases are receivables challenges. The company under the guidance of its Board has initiated
a process of creating a receivable reserve to reflect the nature of our business, which is aimed at
providing comfort to the balance sheet and some cushion thereof. We have initiated disposal by
creating a reserve of INR 14.2 crores in the quarter. As we go along, we hope to refine this
receivable reserve calculation based on historical track record of managing receivables and
adopting a credit default strategy in this limited space. “
Can someone share their views on this? How should we think about this provisioning? Does this mean that they expect a default on the receivables or is this just a safety measure?
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