MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2021-22

259 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2021-22 The Company’s foreign currency exposures are managed in accordance with its Foreign Exchange Risk Management Policy which has been approved by its Board of Directors. The Company hedges its foreign currency risk mainly by way of Forward Covers. Other derivative instruments may be used if deemed appropriate. The carrying amounts of the Company’s foreign currency exposure at the end of the reporting period are as follows: Rupees crores US Dollar Euro KRW Others Total As at 31 st March, 2022 Financial assets. ................................................. 1,202.32 1,563.90 454.72 281.03 3,501.97 Financial liabilities............................................. 404.61 51.56 22.31 113.74 592.22 As at 31 st March, 2021 Financial assets. ................................................. 1,068.14 1,552.88 1.14 143.97 2,766.13 Financial liabilities............................................. 332.19 510.66 363.68 80.55 1,287.08 Hedge Accounting - Forwards Contracts that meet the requirements for hedge accounting are accounted as per the hedge accounting requirements of Ind AS 109 - Financial Instruments, while other contracts are accounted as derivatives measured through profit or loss (FVTPL). Details of Forward Foreign Currency Contracts outstanding at the end of reporting period Rupees crores Outstanding Contracts 2022 2021 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 Buy currency — EUR. ...................................................................... — — 428.75 (62.94) Sell currency — USD....................................................................... 583.54 7.93 262.81 8.91 — EUR. ...................................................................... 1,487.41 189.37 1,514.77 65.77 — BRL........................................................................ 7.97 (0.42) — — — ZAR. ...................................................................... 368.33 (20.98) 269.33 (3.67) Total . ............................................................................. 175.90 8.07 There are no significant transactions of hedges which are ineffective. The Company also has outstanding forward exchange contracts that are not accounted as hedges. Notional value of the same is as given below:- Rupees crores Particulars 2022 2021 Sell currency — USD.................................................................................................................................................. 246.40 237.70 Cross Currency hedge — USD/JPY........................................................................................................................................... 28.02 — (b) Interest Rate Risk The Company 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 Company meet the requirements for hedge accounting under Ind AS 109 - Financial Instruments, and thus are accounted as such. 38. Financial instruments (contd.)