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Notes forming part of onancial statements (Contd.)
272
•
Annual Report 2016-17
The following table gives details in respect of outstanding foreign currency forward contracts:
As at March 31, 2017
As at March 31, 2016
Foreign
currency
(million)
Average
rate
`
(million)
Foreign
currency
(million)
Average
rate
`
(million)
Derivatives designated as
cash pow hedges
Forward contracts
USD
90.00
70.67 6,360.30
104.00
69.74 7,252.54
The foreign exchange forward contracts mature within twelve months. The table below analyses the derivative onancial
instruments into relevant maturity groupings based on the remaining period as of the balance sheet date:
As at March 31, 2017
As at March 31, 2016
Foreign
currency
(million)
Average
rate
`
(million)
Foreign
currency
(million)
Average
rate
`
(million)
Not later than 3 months
29.00
70.75 2,051.61
30.00
68.15 2,044.50
/ater than 3 months and not
later than 6 months
30.00
70.72 2,121.67
29.00
69.59
2,018.11
/ater than 6 months and not
later than 9 months
24.00
70.53 1,692.64
27.00
70.26
1,897.02
/ater than 9 months and not
later than 12 months
7.00
70.63 494.38
18.00
71.83
1,292.91
Total
90.00
6,360.30
104.00
7,252.54
Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a onancial loss. The maximum
exposure to the credit risk at the reporting date is primarily from trade receivables amounting to
`
4,781.35 million
and
`
3,815.07 million as at March 31, 2017 and March 31, 2016, respectively. Trade receivables are typically unsecured
and are derived from revenue earned from customers primarily located in the United States. Credit risk is managed by
the Company by Credit Task Force through credit approvals, establishing credit limits and continuously monitoring the
recovery status of customers to which the Company grants credit terms in the normal course of business. On account
of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company
uses a provisioning policy approved by the Board of Directors to compute the expected credit loss allowance for trade
receivables. The policy takes into account available external and internal credit risk factors and the Company’s historical
experience for customers.
Credit risk is perceived mainly in case of receivables overdue for more than 90 days. The following table gives details of
risk concentration in respect of percentage of receivables overdue for more than 90 days:
As at
March 31, 2017
March 31, 2016
Receivables overdue for more than 90 days (
`
million)*
528.22
373.08
Total receivables (gross) (
`
million)
5,004.94
4,030.02
Overdue for more than 90 days as a % of total receivables
11%
9%
* Out of this amount,
`
223.59 million (March 31, 2016:
`
214.95 million) have been provided for.