annual-report-FY2020

343 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2019-20 (b) Interest Rate Risk The Group uses a mix of cash and borrowings to manage the liquidity & fund requirements of its day-to-day operations. Further, certain interest bearing liabilities carry variable interest rates. Interest Rate risk on variable rate borrowings is managed by way of interest rate swaps. Hedge Accounting : Interest Rate Swaps Interest Rate swaps entered into by the Group meet the requirements for hedge accounting under Ind AS 109 -Financial Instruments, and thus are accounted as such. Details of Interest Rate Swaps outstanding at the end of reporting period Rupees crores 2020 2019 Outstanding Contracts Notional value Carrying amount of hedging instrument included in Other Financial Assets/ (Liabilities) Notional value Carrying amount of hedging instrument included in Other Financial Assets/ (Liabilities) Cash Flow Hedges Floating to fixed Interest Rate Swaps Maturing in 1+ years — EUR............................................................... 414.10 (1.19) 388.30 0.43 — USD............................................................... 188.34 (4.02) — — (c) The movements in Cash Flow Hedge Reserve for instruments designated in a cash flow hedge are as follows: Rupees crores Particulars 2020 2019 Exchange Rate Risk hedges Interest Rate Risk hedges Total Exchange Rate Risk hedges Interest Rate Risk hedges Total Balance at the beginning of the year.... (36.31) (0.29) (36.60) (88.46) 2.32 (86.14) (Gains)/Losses transferred to Profit or Loss on occurrence of the forecast transaction.. (36.08) — (36.08) 25.93 — 25.93 (Gains)/Losses transferred to Profit or Loss due to cash flows no longer expected to occur..................................... (0.08) — (0.08) — — — Change in Fair Value of Effective Portion of cash flow hedges................... 3.84 (4.78) (0.94) 4.80 (4.01) 0.79 Deferred Tax on the above # .................... 11.40 0.15 11.55 (12.70) 1.40 (11.30) Balance at the end of the year............... (57.23) (4.92) (62.15) (70.43) (0.29) (70.72) Add: Share of Associate/Joint Venture.... (102.07) — (102.07) 47.50 — 47.50 Deferred Tax on share of associates/ joint ventures............................................ 15.03 — 15.03 (15.03) — (15.03) Add/(Less) : Non Controlling interest...... (0.67) — (0.67) 1.65 — 1.65 Total ........................................................... (144.94) (4.92) (149.86) (36.31) (0.29) (36.60) Of the above: Balance relating to continuing hedges.. (144.94) (4.92) (149.86) (36.31) (0.29) (36.60) # Impact of deferred tax on opening balance due to changes in tax rate is Rs. 8.69 crores (2019: Rs. Nil crores). 33. Financial Instruments (contd.):