Atul Ltd 2017-18

Atul Ltd | Annual Report 2017-18 Particulars As at March 31, 2017 US$ mn ` cr € mn ` cr £mn ` cr Financial assets Trade receivables 37.67 244.26 2.43 16.80 0.10 0.77 Dividends receivable – – – – 0.65 5.25 Less: Hedged through derivatives 1 Currency range options 7.65 49.60 – – – – Net exposure to foreign currency risk (assets) 30.02 194.66 2.43 16.80 0.75 6.02 Financial liabilities Borrowings 10.67 69.15 – – – – Trade payables 8.07 52.33 0.22 1.52 0.01 0.04 Less: Hedged through derivatives 1 Foreign exchange forward contracts 9.00 58.35 – – – – Currency swaps 1.67 10.80 – – – – Net exposure to foreign currency risk (liabilities) 8.07 52.33 0.22 1.52 0.01 0.04 1 Includes hedges for highly probable transactions up to next 12 months c) Management of credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty fails to meet its contractual obligations. Trade receivables Concentrations of credit risk with respect to trade receivables are limited, due to the customer base being large, diverse and across sectors and countries. All trade receivables are reviewed and assessed for default on a quarterly basis. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low. Reconciliation of loss allowance provision – Trade receivables ( ` cr) Particulars Loss allowance on Trade receivables Loss allowance as on March 31, 2016 3.80 Changes in loss allowance (0.64) Loss allowance as on March 31, 2017 3.16 Changes in loss allowance (0.56) Loss allowance as on March 31, 2018 2.60 Other financial assets The Company maintains exposure in cash and cash equivalents, term deposits with banks, investments in Government securities, preference shares and loans to subsidiary companies. The Company has diversified portfolio of investment with various number of counterparties which have secure credit ratings, hence the risk is reduced. Individual risk limits are set for each counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by the treasury department of the Company. Notes to the Financial Statements Note 27.8 Financial Risk Management (continued)