Notes to the Standalone Financial Statements as at and for the year ended March 31, 2024
Notes to the Standalone Financial Statements as at and for the year ended March 31, 2024
(c) Market risk M arket risk is the risk arising from changes in market prices – such as foreign exchange rates and interest rates – that will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of the investments. Thus, the exposure to market risk is a function of investing, revenue generating and operating activities in foreign currency. (i) Currency risk The Company is exposed to currency risk on account of foreign currency transactions including recognized assets and liabilities denominated in a currency that is not the Company's functional currency ( C ), primarily in respect of Euros and United States Dollar. The Company ensures that the net exposure is kept to an acceptable level. Exposure to currency risk The Company's exposure to foreign currency risk at the end of the reporting period expressed in INR, are as follows:
Sensitivity analysis of currency risk A reasonably possible strengthening (weakening) of the Indian Rupee against all other currencies would have affected the measurement of financial instruments denominated in a foreign currency profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
(in Rupees Million)
Impact on profit after tax and equity March 31, 2024 March 31, 2023
Particulars
USD - Increase by 5% - Decrease by 5% EUR - Increase by 5% - Decrease by 5%
222
201
(222)
(201)
16
11
As at March 31, 2024
(16)
(11)
(in Rupees Million)
Outstanding Derivative contracts The Company hedges exposures to changes in foreign currency. The counterparty for these contracts is a bank. All instruments of forward contracts are valued at fair value through profit or loss and other comprehensive income. The following table gives details in respect of outstanding hedge contracts:
Particulars
USD
EUR
Others*
Financial assets Trade receivables
5,924
416
-
Other financial assets*
0
-
1 1
Net exposure to foreign currency (assets)
5,924
416
Financial liabilities Trade payables
As at March 31, 2024
As at March 31, 2023
1
- -
-
Notional amount of contracts (in million)
Notional amount of contracts ( E in million)
Notional amount of contracts (in million)
Notional amount of contracts ( E in million)
Particulars
Employee benefit obligation
-
3 3
Net exposure to foreign currency (liabilities)
1
-
Net exposure to foreign currency
5,923
416
(2)
(fair valuation through profit and loss) USD
*Denotes amount less than C 1 Million.
17
1,411
51
4,282
As at March 31, 2023
EUR
-
-
6
501
(in Rupees Million)
(fair valuation through other com- prehensive income) USD
Particulars
USD
EUR
Others*
Financial assets Trade receivables
61
5,184
- -
- -
5,829 5,829
303 303
-
EUR
7
634
Net exposure to foreign currency (assets)
-
Financial liabilities Trade payables
Sensitivity analysis of Outstanding derivative contracts A reasonably possible strengthening (weakening) of the Indian Rupee against USD and EUR currencies would have affected the measurement of financial instruments denominated in a foreign currency profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.
469 469
- -
- -
Net exposure to foreign currency (liabilities)
Net exposure to foreign currency
5,360
303
-
(in Rupees Million)
Impact on profit after tax and equity March 31, 2024 March 31, 2023
Particulars
(fair valuation through profit and loss) USD - Increase by 5%
53
160
-
Decrease by 5%
(53)
(160)
EUR -
Increase by 5% Decrease by 5%
- -
19
-
(19)
(fair valuation through other comprehensive income)
174
175
Fractal Analytics Limited | Annual Report 2023-24
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