Financial instruments

12 Months Ended

Mar. 31, 2018

Disclosure of detailed information about financial instruments [abstract]

Disclosure of financial instruments [text block]

35.	Financial instruments

Financial instruments by category

The carrying value and fair value of financial instruments by each category as at March 31, 2018 were as follows:

Particulars	Note	Financial assets/ liabilities at amortised costs		Financial assets / liabilities at FVTPL		Financial assets / liabilities at FVTOCI		Total carrying value		Total fair value
Assets
Cash and cash equivalents	7		2,288,121		-		-		2,288,121		2,288,121
Other assets	9		360,378		-		-		360,378		360,378
Trade receivables	12		8,820,579		-		-		8,820,579		8,820,579
Other receivables	12		48,141		-		-		48,141		48,141
Other investments	14		144,008		-		1,710		145,718		145,718
Liabilities
Bank overdraft	7		2,121,537		-		-		2,121,537		2,121,537
Finance lease liabilities	16		185,965		-		-		185,965		185,965
Other liabilities	18		207,046		-		-		207,046		207,046
Borrowings from banks	19		2,021,228		-		-		2,021,228		2,021,228
Borrowings from others	19		1,464,637		-		-		1,464,637		1,464,637
Trade and other payables	20		6,779,018		-		-		6,779,018		6,779,018
Derivative financial liabilities	20		-		1,729		-		1,729		1,729

The carrying value and fair value of financial instruments by each category as at March 31, 2017 were as follows:

Particulars	Note	Financial assets/ liabilities at amortised costs		Financial assets / liabilities at FVTPL		Financial assets / liabilities at FVTOCI		Total carrying value		Total fair value
Assets
Cash and cash equivalents	7		1,884,265		-		-		1,884,265		1,884,265
Other assets	9		213,424		-		-		213,424		213,424
Trade receivables	12		6,950,563		-		-		6,950,563		6,950,563
Other receivables	12		101,098		-		-		101,098		101,098
Other investments	14		72,943		-		1,710		74,653		74,653
Liabilities
Bank overdraft	7		991,161		-		-		991,161		991,161
Finance lease liabilities	16		519,219		-		-		519,219		519,219
Other liabilities	18		201,679		-		-		201,679		201,679
Borrowings from banks	19		2,567,076		-		-		2,567,076		2,567,076
Borrowings from others	19		844,002		-		-		844,002		844,002
Trade and other payables	20		5,648,740		-		-		5,648,740		5,648,740
Derivative financial liabilities	20		-		36,160		-		36,160		36,160

Details of financial assets hypothecated as collateral

The carrying amount of financial assets as at March 31, 2018 and 2017 that the Group has provided as collateral for obtaining borrowings and other facilities from its bankers are as follows:

	As of
	March 31, 2018		March 31, 2017
Cash and cash equivalents		2,067,397		1,654,634
Other assets		358,106		209,742
Trade receivables		8,713,161		6,856,976
Other receivables		41,007		100,457
		11,179,671		8,821,809

Derivative financial instruments

(a)

Forwards and options

Foreign exchange forward contracts and options are purchased to mitigate the risk of changes in foreign exchange rates associated with certain payables, receivables and forecasted transactions denominated in certain foreign currencies. These derivative contracts do not qualify for hedge accounting under IFRS 9, and are initially recognized at fair value on the date the contract is entered into and subsequently re-measured at their fair value. Gains or losses arising from changes in the fair value of the derivative contracts are recognized immediately in profit or loss. The counterparties for these contracts are generally banks or financial institutions. The following table gives details in respect of the notional amount of outstanding foreign exchange contracts as at March 31, 2018 and 2017.

	As of
	March 31, 2018		March 31, 2017
Forward contracts
In U.S. Dollars (Sell)		-		3,000
In U.S. Dollars (Buy)		-		9,800

The Company recognized a net loss on the forward contracts of ₹ 7,479 (March 31, 2017: ₹ 14,338 – Net Loss) for the year ended March 31, 2018.

The forward exchange contracts and option contracts mature between one and twelve months. The table below summarizes the notional amounts of derivative financial instruments into relevant maturity groupings based on the remaining period as at the end of the year:

	As of
	March 31, 2018		March 31, 2017
Sell:	(US $)		(US $)
Not later than one month		-		500
Later than one month and not later than three months		-		1,000
Later than three months and not later than six months		-		1,500
Later than six months and not later than one year		-		-

Buy:	(US $)		(US $)
Not later than one month		-		3,500
Later than one month and not later than three months		-		700
Later than three months and not later than six months		-		5,600
Later than six months and not later than one year		-		-

(b)

Cross Currency Swap:

In order to hedge against the variability in foreign currency cash flows, the company has entered into Cross Currency Swap (Principle Only Swap) arrangement with the bank where in, the Company pays fixed US $ and receives Fixed ₹ principal and interest cash flows. The period of the swap contract is co-terminus with the period of the underlying term loan. The Company has designated such derivative at Fair Value through profit or loss and the gains or loss arising on the fair valuation of the said derivative is recognized in the Statement of income.

The details of outstanding cross currency swap contracts as of March 31, 2018 are as under:

As of

March 31, 2018

March 31, 2017

Payable (US $)

Receivable (₹)

Payable (US $)

Receivable (₹)

Cross Currency Swap (US$)

2,213

137,500

The maturity of these contracts extends till five years. The table below summarizes the cash flows (principal and interest) of these derivative financial instruments into relevant maturity groupings based on the remaining period as at the end of the year:

	As of
	March 31, 2018				March 31, 2017
	Payable (US $)		Receivable (₹)		Payable (US $)		Receivable (₹)

Less than 1 year		-		-		946		65,101
One to two years		-		-		887		58,743
Two to three years		-		-		626		39,884
Three to four years		-		-		-		-
Four to five years		-		-		-		-
Total cash flows		-		-		2,459		163,728

The Group recognized a net loss on the cross currency swaps of ₹ 7,987 [March 31, 2017: ₹ 27,690 (Gain)] for the year ended March 31, 2018.

(c)

Interest Rate Swap:

During the current year, the Group has entered into Interest Rate Swaps in order to hedge the cash flows arising out of the Interest payments of the underlying US $ term loan. The period of the swap contract is co terminus with the period of the underlying term loan. As per the terms of the arrangement, the Group shall pay fixed rate of interest (ranging from 6.3% p.a. to 6.5% p.a.) and receive variable rate of interest equal to LIBOR + fixed rate (ranging from LIBOR + 3.5% to LIBOR + 4.5%) on notional amount. The swap arrangement is marked to market at the end of every period and gains and losses are recognised in the Statement of Income.

The maturity of these contracts extends till five years. The table below summarizes the cash flows (interest) of these derivative financial instruments into relevant maturity groupings based on the remaining period as at the end of the year:

	As of
	March 31, 2018				March 31, 2017
	Receivable (US $)		Payable (US $)		Receivable (US $)		Payable (US $)

Less than 1 year		210		283		288		419
One to two years		106		149		192		283
Two to three years		12		18		97		149
Three to four years		-		-		11		18
Four to five years		-		-		-		-
Total cash flows		328		450		588		869

Total notional amount outstanding as of March 31, 2018 is US $ 5,272 (March 31, 2017: US $ 7,381).

Net gain on account of interest rate swaps amount to ₹ 1,560 for the year ended March 31, 2018 (March 31, 2017: ₹ 7,073 – net Gain).

Fair value measurements:

The details of assets and liabilities that are measured on fair value on recurring basis are given below:

	Fair value as of March 31, 2018						Fair value as of March 31, 2017
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Derivative financial assets – gain on outstanding forward/options contracts		-		-		-		-		-		-
Liabilities
Derivative financial liabilities – loss on outstanding forward/options contracts		-		-		-		-		(18,079)		-
Derivative financial liabilities - loss on outstanding cross currency swaps		-		-		-		-		-		(7,987)
Derivative financial liabilities - loss on outstanding interest rate swaps		-		-		1,729		-		-		(10,094)

Level 1 – unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 – unobservable inputs for the asset or liability

Loss on cross currency swaps are valued using present value of cash flows from the swap contract estimated using swap rates calculated from respective countries’ yield curves.

Interest income/ (expenses), gains/ (losses) recognized on financial assets and liabilities

Recognized in profit or loss

	Year ended
	March 31, 2018		March 31, 2017		March 31, 2016
Financial assets at amortised cost
Interest income on bank deposits		25,168		26,463		28,015
Interest income from other financial assets		104,157		96,121		14,336
Impairment loss of trade receivables		(370,000)		(383,534)		(182,161)

Financial assets at fair value through profit or loss
Net change in fair value of derivative financial instruments gain/(loss)		8,365		10,828		(48,188)

Financial liabilities at amortised cost
Interest expenses on lease obligations		(31,169)		(88,138)		(126,433)
Interest expenses on borrowings from banks, others and overdrafts		(381,644)		(255,273)		(312,936)