Good Health Can’t Wait.

Consolidated Financial Statements
Annual Report 2014 - 15
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in Indian Rupees millions, except share data and where otherwise stated)
2.37: FINANCIAL RISK MANAGEMENT (CONTINUED)
The following table analyzes foreign currency risk from non derivative financial instruments as at 31 March2015:
(All figures in equivalent Rupees millions)
PARTICULARS U.S. DOLLARS EURO ROUBLES OTHERS (1) TOTAL
Assets:
Cash and bank balances 3,575 409 249 2,462 6,695
Trade receivables 26,214 1,369 4,376 3,780 35,739
Loans and advances and other assets 92 1 61 181 335
Total 29,881 1,779 4,686 6,423 42,769
Liabilities:
Trade payables 2,232 409 66 624 3,331
Long term borrowings 19,701 - 140 - 19,841
Short term borrowings 14,875 2,116 3,866 - 20,857
Other liabilities and provisions 7,809 191 1,598 870 10,468
Total 44,617 2,716 5,670 1,494 54,497
(1)
Others include currencies such as British pounds sterling, Swiss franc, South African rand, Mexican pesos, Venezuelan bolivars, etc.
The following table analyzes foreign currency risk from non derivative financial instruments as at 31 March 2014:
(All figures in equivalent Rupees millions)
PARTICULARS U.S. DOLLARS EURO ROUBLES OTHERS (1) TOTAL
Assets:
Cash and bank balances 4,341 109 345 1,283 6,078
Trade receivables 18,080 1,558 5,772 2,982 28,392
Loans and advances and other assets 221 1 212 181 615
Total 22,642 1,668 6,329 4,446 35,085
Liabilities:
Trade payables 1,688 490 144 213 2,535
Long term borrowings 22,185 - 124 - 22,309
Short term borrowings 7,519 4,258 6,179 - 17,956
Other liabilities and provisions 5,694 252 1,497 905 8,348
Total 37,086 5,000 7,944 1,118 51,148
(1)
Others include currencies such as British pounds sterling, Swiss franc, South African rand, Mexican pesos, Venezuelan bolivars, etc.
For the year ended 31 March 2015 and 2014, every 10% depreciation / appreciation in the exchange rate between the Indian rupee and the respective
currencies in the above mentioned financial assets / liabilities would affect the Company’s net profit by approximately ` 1,173 and ` 1,606, respectively,
from such financial assets / liabilities.
Further, the Company is exposed to a potential adverse devaluation risk on its monetary assets of VEF 245 million in Venezuela, which are currently
recorded at the CENCOEX preferential rate of VEF 6.3 per U.S. dollar. Refer to Note 2.43 for further details.
Interest rate risk
As of 31 March 2015, the Company had foreign currency loans of ` 37,419 carrying a floating interest rate of LIBOR plus 7.5 -130 bps whereas as of 31
March 2014, the Company had foreign currency loans of ` 34,375 carrying a floating interest rate of LIBOR plus 20 - 179 bps and ` 846 carrying a floating
interest rate of Moscow Prime Offered Rate plus 60 bps. These loans expose the Company to risk of changes in interest rates. The Company’s treasury
department monitors the interest rate movement and manages the interest rate risk based on its policies, which include entering into interest rate swaps
as considered necessary. An increase or decrease of 10% in the floating interest rate component applicable to its loans and borrowings would affect the
Company’s net profit by approximately ` 6 and `13 for the years ended 31March2015 and 31March2014, respectively.
The Company’s investments in term deposits with banks and short term liquid mutual funds are for short durations, and therefore do not expose the
Company to significant interest rates risk.
Commodity rate risk
Exposure to market risk with respect to commodity prices primarily arises from the Company’s purchases and sales of active pharmaceutical ingredients,
including the raw material components for such active pharmaceutical ingredients. These are commodity products, whose prices may fluctuate significantly
over short periods of time. The prices of the Company’s raw materials generally fluctuate in line with commodity cycles, although the prices of raw
materials used in the Company’s active pharmaceutical ingredients business are generally more volatile. Cost of raw materials forms the largest portion of
the Company’s operating expenses. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. The
Company has historically not entered into any material derivative contracts to hedge exposure to fluctuations in commodity prices.
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