MAHINDRA & MAHINDRA LTD. | Integrated Annual Report 2022-23

280 MAHINDRA & MAHINDRA LTD. Integrated Annual Report 2022-23 1. Market Risk Management (contd.) (c) The movements in Cash Flow Hedge Reserve for instruments designated in a cash flow hedge are as follows: Rupees crores Particulars 2023 2022 Exchange Rate Risk hedges Interest Rate Risk hedges Total Exchange Rate Risk hedges Interest Rate Risk hedges Total Balance as at the beginning of the year................................................................................... Gross (7.06) — (7.06) (12.43) (0.72) (13.15) Deferred tax 1.77 — 1.77 3.12 0.18 3.30 Balance as at the beginning of the year (net)................................................................................ (5.29) — (5.29) (9.31) (0.54) (9.85) (Gains)/Losses transferred to Profit or Loss on occurrence of the forecast transaction.... 6.24 — 6.24 (27.36) 0.72 (26.64) Change in Fair Value of Effective Portion of cash flow hedges.............................................................. 10.40 — 10.40 32.73 — 32.73 Total .......................................................................................... 16.64 — 16.64 5.37 0.72 6.09 Deferred tax effect on above.................................. (4.19) — (4.19) (1.35) (0.18) (1.53) Balance as at the end of the year.................................... Gross 9.58 — 9.58 (7.06) — (7.06) Deferred tax (2.42) — (2.42) 1.77 — 1.77 Balance as at the end of the year (net)...................... 7.16 — 7.16 (5.29) — (5.29) Of the above: Balance relating to continuing hedges......................... 7.16 — 7.16 (5.29) — (5.29) Total .......................................................................................... 7.16 — 7.16 (5.29) — (5.29) (d) Sensitivity Analysis (i) Foreign Currency Sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in exchange rates, with all other variables held constant. Rupees crores Particulars Currency Change in rate Effect on profit before tax Effect on pre-tax equity Year ended 31 st March, 2023 ........................................................................ USD 10% 13.78 (16.22) EUR 10% 2.45 — Year ended 31 st March, 2022............................................................................ USD 10% 35.91 (45.58) EUR 10% 2.65 — The sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. 38. Financial instruments (contd.)